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As filed with the Securities and Exchange Commission on July 3, 1997
Registration No.___-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
INDEPENDENCE COMMUNITY BANK CORP.
(Exact name of registrant as specified in its articles of incorporation)
------------
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Delaware 6711 Being applied for
(State or other jurisdiction of (Primary Standard (I.R.S. Employer
incorporation or organization) Industrial Classification Code Number) Identification No.)
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195 Montague Street
Brooklyn, New York 11201
(718) 722-5300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Charles J. Hamm
Chairman of the Board, President and Chief Executive Officer
195 Montague Street
Brooklyn, New York 11201
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
Raymond A. Tiernan, Esq.
Philip R. Bevan, Esq.
Hugh T. Wilkinson, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
12th Floor
Washington, D.C. 20005
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [ X ]
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AMOUNT
TITLE OF EACH CLASS OF TO BE PURCHASE PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
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Common Stock, $.01 par
value per share (1) 62,818,749 shares $10.00 $628,187,490(2) $190,359.85
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Participation interests 973,951 shares -- -- (3)
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(1) Includes shares of Common Stock to be issued to the Independence Community
Foundation, a private foundation.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) The securities of Independence Community Bank Corp. to be purchased by the
Independence Savings Bank 401(k) Savings Plan are included in the amount
shown for Common Stock. Accordingly, no separate fee is required for the
participation interests. In accordance with Rule 457(h) of the Securities
Act, as amended, the registration fee has been calculated on the basis of
the number of shares of Common Stock that may be purchased with the
current assets of such Plan.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS SUPPLEMENT
INDEPENDENCE COMMUNITY BANK CORP.
COMMON STOCK, $.01 PAR VALUE PER SHARE
INDEPENDENCE SAVINGS BANK 401(k)
------------SAVINGS PLAN
(_______ SHARES AND PARTICIPATIONS THEREIN)
This Prospectus Supplement relates to the offer and sale to employees
of Independence Savings Bank (the "Bank" or the "Employer") who are
participants ("Participants") in the Independence Savings Bank 401(k) Savings
Plan in RSI Retirement Trust ("Profit Sharing Plan" or the "Plan") of up to
_________ shares of Independence Community Bank Corp. (the "Company")common
stock, par value $.01 per share (the "Common Stock"), and participation
interests in the Profit Sharing Plan, as set forth herein.
In connection with the reorganization of the Bank and the mutual
holding company parent of the Bank (the "Mutual Holding Company") to the stock
form of organization (the "Conversion") pursuant to the Bank's and the Mutual
Holding Company's Plan of Conversion (the "Plan of Conversion"), the
Company and the Bank have amended the Profit Sharing Plan to provide, among
other things that Participants in the Profit Sharing Plan be able to direct the
investment of the vested portion of their account balances within the Profit
Sharing Plan into an investment fund consisting of Common Stock (the "Employer
Stock Fund"). The Profit Sharing Plan will permit Participants in the Profit
Sharing Plan to direct the trustee of the Profit Sharing Plan (the "Trustee")
to purchase Common Stock with amounts in the Profit Sharing Plan attributable
to such Participants. This Prospectus Supplement relates to the initial
election of a Participant to direct the purchase of Common Stock in the
Conversion. This Prospectus Supplement does not cover reoffers or resales of
the Common Stock. See "Restrictions on Resale."
The Prospectus dated ______________, 1997 of the Company (the
"Prospectus"), which is attached to this Prospectus Supplement, includes
detailed information with respect to the Company, the Conversion, the Common
Stock and the financial condition, results of operations, and business of the
Bank. This Prospectus Supplement, which provides detailed information with
respect to the Profit Sharing Plan, should be read only in conjunction with the
Prospectus.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
PARTICIPANT, SEE "RISK FACTORS" IN THE PROSPECTUS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK,
THE NEW YORK STATE BANKING BOARD, THE NEW YORK STATE BANKING DEPARTMENT,
THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER FEDERAL OR
STATE AGENCY OR STATE SECURITIES COMMISSION, NOR HAS SUCH
COMMISSION, SUPERINTENDENT, BOARD, DEPARTMENT,CORPORATION
OR ANY STATE SECURITIES COMMISSIONERS OR OTHER AGENCY
PASSED UPON THE ACCURACY OF THIS PROSPECTUS
SUPPLEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED OR GUARANTEED BY THE BANK INSURANCE FUND OR THE SAVINGS
ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY AND ARE NOT GUARANTEED BY THE COMPANY OR THE BANK.
The date of this Prospectus Supplement is ___________, 1997.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE PROSPECTUS OR THIS PROSPECTUS
SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE BANK OR THE PROFIT
SHARING PLAN. THIS PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO SELL
OR SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY, THE
BANK OR THE PROFIT SHARING PLAN SINCE THE DATE HEREOF OR THAT THE INFORMATION
HEREIN CONTAINED OR INCORPORATED BY REFERENCE IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT SHOULD BE READ ONLY
IN CONJUNCTION WITH THE PROSPECTUS THAT IS ATTACHED HERETO AND SHOULD BE
RETAINED FOR FUTURE REFERENCE.
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TABLE OF CONTENTS
PAGE
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The Offering.............................................................................................. 1
Securities Offered............................................................................... 1
Election to Purchase Common Stock in the Conversion.............................................. 1
Value of Participation Interests................................................................. 1
Method of Directing Transfer..................................................................... 1
Time for Directing Transfer...................................................................... 2
Irrevocability of Transfer Direction............................................................. 2
Direction to Purchase Common Stock After the Conversion.......................................... 2
Purchase Price of Common Stock................................................................... 2
Nature of Participant's Interest in the Common Stock............................................. 3
Voting and Tender Rights......................................................................... 3
Description of the Profit Sharing Plan.................................................................... 3
Introduction..................................................................................... 3
Eligibility and Participation.................................................................... 4
Contributions Under the Plan .................................................................... 5
Limitations on Contributions..................................................................... 6
Investment of Contributions...................................................................... 8
Vesting.......................................................................................... 11
Withdrawals and Distributions From the Sharing Plan.............................................. 11
Administration of the Profit Sharing Plan........................................................ 12
Reports to Profit Sharing Plan Participants...................................................... 12
Plan Administration.............................................................................. 13
Amendment and Termination........................................................................ 13
Merger, Consolidation or Transfer................................................................ 13
Federal Income Tax Consequences.................................................................. 14
ERISA and Other Qualifications................................................................... 16
Restrictions on Resale........................................................................... 16
SEC Reporting and Shortswing Profit Liability.................................................... 17
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Experts................................................................................................... 18
Legal Opinions............................................................................................ 18
Index to Financial Statements and Supplemental Schedules.................................................. F-1
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<PAGE> 5
THE OFFERING
SECURITIES OFFERED
Up to ___________ shares of Common Stock which may be acquired by the
Profit Sharing Plan for the accounts of employees participating in the Profit
Sharing Plan, as well as participation interests in the Profit Sharing Plan,
are offered hereby. Only employees of the Bank may participate in the Profit
Sharing Plan. Information with regard to the Profit Sharing Plan is contained
in this Prospectus Supplement and information with respect to the Company, the
Conversion and the financial condition, results of operations and business of
the Bank is contained in the attached Prospectus. The address of the principal
executive office of the Company is 195 Montague Street, Brooklyn, New York
11201. The Company's telephone number is (718) 722-5300. The address and
telephone number of the Bank's principal executive office are the same as the
Company's.
ELECTION TO PURCHASE COMMON STOCK IN THE CONVERSION
In connection with the Conversion, the Profit Sharing Plan has been
amended to permit each Participant to direct that all or part of the funds
which represent his or her beneficial interest in the assets of the Profit
Sharing Plan may be transferred to an investment fund that will invest in
Common Stock (the "Employer Stock Fund") and used to purchase Common Stock in
the Conversion. The Profit Sharing Plan permits this one-time election outside
the specific election dates as discussed below. The ability of a Participant to
purchase Common Stock in the Conversion pursuant to directions to transfer all
or a portion of their beneficial assets in the Profit Sharing Plan will be
based upon the Participant's status as an Eligible Account Holder and/or
Supplemental Eligible Account Holder and/or purchases by such Plan Participant
in the Community Offering and the availability of Common Stock. See
"Description of the Profit Sharing Plan - Investment of Contributions." The
Trustee of the Profit Sharing Plan will follow the Participants' directions to
purchase Common Stock in the Conversion. Funds not transferred to the Employer
Stock Fund will remain in the other investment funds of the Profit Sharing Plan
as directed by the Participants.
VALUE OF PARTICIPATION INTERESTS
The assets of the Profit Sharing Plan were valued as of March 31, 1997
and each Participant was informed of the value of his or her beneficial
interest in the Profit Sharing Plan. The value represented the market value as
of March 31, 1997 of past contributions to the Profit Sharing Plan by the Bank
and the Participants and any earnings thereon, less previous withdrawals.
METHOD OF DIRECTING TRANSFER
The last page of this Prospectus Supplement is a form to direct a
transfer among investment funds (the "Investment Form"). If a Participant
wishes to transfer all or part of his or her beneficial interest in the assets
of the Profit Sharing Plan to the purchase of Common Stock in the Conversion,
he or she should indicate that decision in Part 2 of the
<PAGE> 6
Investment Form. If a Participant does not wish to make such an election, he or
she does not need to take any action.
TIME FOR DIRECTING TRANSFER
The deadline for submitting a direction to transfer amounts to the
Employer Stock Fund to purchase Common Stock in the Conversion is ____________,
1997. The Investment Form should be returned to the Bank by _:__ p.m., Eastern
Time, on such date.
IRREVOCABILITY OF TRANSFER DIRECTION
A Participant's direction to transfer amounts credited in the Profit
Sharing Plan to his or her accounts to the Employer Stock Fund in order to fund
the purchase of Common Stock in the Conversion shall be irrevocable. Subsequent
to the Conversion, however, Participants will be able to direct transfers
within the Profit Sharing Plan, as explained below.
DIRECTION TO PURCHASE COMMON STOCK AFTER THE CONVERSION
After the Conversion, a Participant may direct that a certain
percentage of his or her interests in the trust fund established for the Profit
Sharing Plan (the "Trust Fund") be transferred to the Employer Stock Fund and
invested in Common Stock. Alternatively, a Participant may direct that a
certain percentage of his or her interest in the Employer Stock Fund be
transferred to the Trust Fund to be invested in accordance with the terms of
the Profit Sharing Plan. Participants will be permitted to direct that future
contributions made to the Profit Sharing Plan by or on their behalf be invested
in Common Stock. Following the initial election, the allocation of a
Participant's interest in the investment funds may be changed as allowed by the
Profit Sharing Plan. The initial election to invest a percentage of his or her
interest in the Employer Stock Fund shall not be counted as one of the changes
in investment direction that are otherwise permitted to be made by the Profit
Sharing Plan. Special restrictions apply to transfers directed by those
Participants who are officers, directors and principal stockholders of the Bank
who are subject to the provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended (the "1934 Act").
PURCHASE PRICE OF COMMON STOCK
The funds transferred to the Employer Stock Fund for the purchase of
Common Stock in the Conversion will be used by the Trustee to purchase Common
Stock through the exercise of subscription rights granted to participants as an
Eligible Account Holder and/or Supplemental Eligible Account Holder and/or
purchases by such Plan participant in the Community Offering under the Plan of
Conversion. The price paid for such shares of Common Stock will be the same
price as is paid by all other persons who purchase Common Stock in the
Conversion. The prices paid by the Trustee for shares of Common Stock will not
exceed "adequate consideration" as defined in Section 3(18) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
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NATURE OF A PARTICIPANT'S INTEREST IN THE COMMON STOCK
The Common Stock will be held in the name of the Trustee for the
Profit Sharing Plan. Each Participant has an allocable interest in the
investment funds of the Profit Sharing Plan but not in any particular assets of
the Profit Sharing Plan. Accordingly, a specific number of shares of Common
Stock will not be directly attributable to the account of any Participant.
Earnings, e.g. , gains and losses, are allocated to the Account of a
Participant based upon the particular investment designations of the
Participants. Therefore, earnings with respect to a Participant's Account
should not be affected by the investment designations (including investments in
Common Stock) of other Participants.
VOTING AND TENDER RIGHTS OF COMMON STOCK
The Trustee will generally exercise voting and tender rights
attributable to all Common Stock held by the Trust as directed by Participants
with interests in the Employer Stock Fund. With respect to each matter as to
which holders of Common Stock have a right to vote, each Participant will be
allocated a number of voting instruction rights reflecting his or her
proportionate interest in the Employer Stock Fund. The number of shares of
Common Stock held in the Employer Stock Fund that are voted in the affirmative
and negative on each matter shall be proportionate to the number of voting
instruction rights exercised in the affirmative and negative, respectively. In
the event of a tender offer for Common Stock, the Plan provides that each
Participant will be allotted a number of tender instruction rights reflecting
his or her proportionate interest in the Employer Stock Fund. The percentage of
shares of Common Stock held in the Employer Stock Fund that will be tendered
will be the same as the percentage of the total number of tender instruction
rights that are exercised in favor of tendering. The remaining shares of Common
Stock held in the Employer Stock Fund will not be tendered. The Profit Sharing
Plan makes provision for Participants to exercise their voting instruction
rights and tender instruction rights on a confidential basis.
DESCRIPTION OF THE PROFIT SHARING PLAN
INTRODUCTION
The Profit Sharing Plan was established September 1, 1973, as the
South Brooklyn Savings Bank Incentive Savings Plan. Subsequent to such date,
the Profit Sharing Plan became known as the Independence Savings Bank Incentive
Savings Plan. Effective January 1, 1991, the Profit Sharing Plan was amended
and restated in its entirety as the Independence Savings Bank 401(k) Savings
Plan in RSI Retirement Trust. The Profit Sharing Plan is a qualified retirement
plan which includes a cash or deferred arrangement established in accordance
with requirements under Section 401(a) and 401(k) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the trust pursuant to which the assets of
the Profit Sharing Plan are held is intended to be a qualified trust under
Section 501(a) of the Code.
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The Bank intends that the Plan, in operation, will comply with the
requirements under Section 401(a) and Section 401(k) of the Code. The Bank will
adopt any amendments to the Plan that may be necessary to ensure the qualified
status of the Plan under the Code and applicable Treasury Regulations.
The Profit Sharing Plan is an "individual account plan" other than a
"money purchase pension plan" within the meaning of ERISA. As such, the Profit
Sharing Plan is subject to all of the provisions of Title I (Protection of
Employee Benefit Rights) and Title II (Amendments to the Internal Revenue Code
Relating to Profit Sharing Plans) of ERISA, except the funding requirements
contained in Part 3 of Title I of ERISA, which by their terms do not apply to
an individual account plan (other than a money purchase plan). The Profit
Sharing Plan is not subject to Title IV (Plan Termination Insurance) of ERISA.
Neither the funding requirements contained in Part 3 of Title I of ERISA nor
the plan termination insurance provisions contained in Title IV of ERISA will
be extended to Participants (as defined below) or beneficiaries under the
Profit Sharing Plan.
Applicable federal law requires the Profit Sharing Plan to impose
substantial restrictions on the right of a Participant to withdraw amounts held
for his or her benefit under the Profit Sharing Plan prior to the Participant's
termination of employment with the Bank. A substantial federal tax penalty also
may be imposed on withdrawals made prior to the Participant's attainment of age
59 1/2, regardless of whether such a withdrawal occurs during his or her
employment with the Bank or after termination of employment.
The following statements are summaries of certain provisions of the
Profit Sharing Plan. They are not complete and are qualified in their entirety
by the full text of the Profit Sharing Plan, which is filed as an exhibit to
the Registration Statement of which this Prospectus Supplement is a part and
which is incorporated by reference herein. Terms not otherwise defined herein
are otherwise defined in the Profit Sharing Plan. Copies of the Profit Sharing
Plan are available to all employees upon request to the Plan Administrator.
Each employee is urged to read carefully the full text of the Profit Sharing
Plan.
ELIGIBILITY AND PARTICIPATION
Certain employees of the Employer are eligible to participate in the
Profit Sharing Plan on the first day of any payroll period the ("Participation
Date") following completion of one year of service (at least 1,000 hours during
a twelve consecutive month period) with the Bank. Employees compensated on a
daily, commission fee or retainer basis, leased employees (within the meaning
of Section 414(n) of the Code) and employees covered by a collective bargaining
agreement which does not expressly provide for their coverage under the Profit
Sharing Plan, are not eligible to participate in the Profit Sharing Plan.
As of March 31, 1997, there were approximately 522 employees
eligible to participate in the Profit Sharing Plan, and 498 employees had
elected to participate in the Plan.
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CONTRIBUTIONS UNDER THE PLAN
401(k) CONTRIBUTIONS. Each Participant in the Profit Sharing Plan is
permitted to elect to reduce his or her Compensation (as defined below)
pursuant to a "Compensation Reduction Agreement" by an amount not less than 1%
and not more than 15% and have that amount contributed to the Profit Sharing
Plan on his or her behalf. These amounts are credited to the Participant's
"Basic Contribution Account." The Profit Sharing Plan defines "Compensation" as
a Participant's "Base Compensation" from the Employer for the year prior to any
reduction pursuant to a Compensation Reduction Agreement. Base Compensation
includes salary, Basic Contributions (the contributions of the Employer made in
connection with the Participant's Compensation Reduction Agreement), and wage
and wage continuation payments to an employee who is absent due to illness or
disability of a short-term nature. The term Compensation does not include
overtime, commissions, expense allowances, severance pay, fees, bonuses,
incentive compensation, contributions other than Basic Contributions made by
the Employer to the Profit Sharing Plan, and contributions made by the Employer
to any other pension, insurance, welfare, or other employee benefit or deferred
compensation plan. The annual compensation of each Participant taken into
account under the Profit Sharing Plan is limited to $150,000 (adjusted for
increases in the cost of living as permitted by the Code). Generally, a
Participant may elect to modify the amount contributed to the Profit Sharing
Plan under his or her Compensation Reduction Agreement not more often than
twice in any Plan Year by filing the applicable form to a Profit Sharing Plan
representative at least 10 days prior to the first day of the payroll period
for which the change is to become effective. However, special restrictions
apply to persons subject to Section 16 of the 1934 Act. Basic Contributions are
transferred by the Employer to the Trustee of the Plan.
Notwithstanding the preceding, a Participant who receives a hardship
distribution under the terms of the Profit Sharing Plan, may not be eligible to
make additional contributions under a Compensation Reduction Agreement for a
period of twelve moths after the receipt of the hardship distribution.
EMPLOYER CONTRIBUTIONS. The Bank makes discretionary contributions to
the Profit Sharing Plan, subject to the limitations on the deductibility of
such contributions set forth in the Code. For Participants in the Plan for less
than 24 months, the Bank may contribute for each Plan Year 50% of the
Participants' Basic Contributions up to a maximum of 6% of the Participants'
Basic Contributions. However, the maximum annual amount of Matching
Contributions for Participants who have been in the Profit Sharing Plan for
less than 24 months will not exceed $1,500. For Participants who have been in
the Profit Sharing Plan for greater than 24 months, the Bank may contribute for
each Plan Year 100% of the Participants' Basic Contributions up to a maximum of
6% of the Participants' Basic Contributions. However, the maximum annual amount
of Matching Contributions for Participants who have been in the Profit Sharing
Plan for greater than 24 months will not exceed $3,000.
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Such amounts are credited to the "Participant's Matching
Contribution Account." After the Conversion, at the discretion of the Bank, the
Employer contributions made with respect to Participants who are Bank employees
will be credited to the Participant's Account in the Bank's Employee Stock
Ownership Plan. At its discretion, the Employer may make an additional
contribution to the Plan as of the end of the Plan Year in an amount determined
by the Employer for the purpose of ensuring that the Plan complies with Section
401(k) of the Code ("Special Contribution"). Such amounts are credited to the
Participants' Basic Contribution Accounts based on each Participant's
compensation. Special Contributions may be made only to the accounts of
non-highly compensated employees.
LIMITATIONS ON CONTRIBUTIONS
LIMITATIONS ON ANNUAL ADDITIONS AND BENEFITS. Pursuant to the
requirements of the Code, the Profit Sharing Plan provides that the amount of
contributions and forfeitures allocated to each Participant's Basic
Contribution Account and Matching Contribution Account during any plan year may
not exceed the lesser of 25% of the Participant's Section 415 Compensation for
the Plan Year or $30,000 (adjusted for increases in the cost of living as
permitted by the Code). A Participant's Section 415 Compensation is a
Participant's Compensation, excluding any Employer contribution to the Plan or
to any other plan of deferred compensation or any distributions from a plan of
deferred compensation. In addition, annual additions shall be limited to the
extent necessary to prevent the limitations set forth in the Code for all of
the qualified defined benefit plans and defined contribution plans maintained
by the Bank from being exceeded. To the extent that these limitations would be
exceeded by reason of excess annual additions with respect to a Participant,
such excess will be disposed of as follows:
(i) Any excess amount in the Participant's Account will be used to
reduce the Employer's contributions for such Participant in the next Limitation
Year, and each succeeding Limitation Year if necessary;
(ii) If, an excess amount still exists, and the Participant is not
covered by the Profit Sharing Plan at the end of the Limitation Year, the
excess amount will be held unallocated in a suspense account which will then be
applied to reduce future Employer contributions for all remaining Participants
in the next Limitation Year, and each succeeding Limitation Year if necessary;
(iii) If a suspense account is in existence at any time during the
Limitation Year, it will not participate in the allocation of investment gains
and losses.
LIMITATION ON 401(k) PLAN CONTRIBUTIONS. The annual amount of Deferred
Compensation under a Compensation Reduction Agreement of a Participant (when
aggregated with any elective deferrals of the Participant under a simplified
employee pension plan or a tax-deferred annuity) may not exceed $7,000 adjusted
for increases in the cost of living as permitted by the Code (the limitation
for 1997 is $9,500). Contributions in
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excess of this limitation ("excess deferrals") will be included in the
Participant's gross income for federal income tax purposes in the year they are
made. In addition, any such excess deferral will again be subject to federal
income tax when distributed by the Plan to the Participant, unless the excess
deferral (together with any income allocable thereto) is distributed to the
Participant not later than the first April 15th following the close of the
taxable year in which the excess deferral is made. Any income on the excess
deferral that is distributed not later than such date shall be treated, for
federal income tax purposes, as earned and received by the Participant in the
taxable year in which the excess deferral is made.
LIMITATION ON PLAN CONTRIBUTIONS FOR HIGHLY COMPENSATED EMPLOYEES.
Sections 401(k) and 401(m) of the Code limit the amount of Deferred
Compensation that may be made to the Profit Sharing Plan in any Plan Year on
behalf of Highly Compensated Employees (defined below) in relation to the
amount of Deferred Compensation made by or on behalf of all other employees
eligible to participate in the Profit Sharing Plan. Specifically, the actual
deferral percentage (i.e., the average of the ratios, calculated separately for
each eligible employee in each group, by dividing the amount of Deferred
Compensation credited to the Basic Contribution Account of such eligible
employee by such eligible employee's compensation for the Plan Year) of the
Highly Compensated Employees may not exceed the greater of (i) 125% of the
actual deferral percentage of all other eligible employees, or (ii) the lesser
of (x) 200% of the actual deferral percentage of all other eligible employees,
or (y) the actual deferral percentage of all other eligible employees plus two
percentage points. In addition, the actual contribution percentage for such
Plan Years (i.e., the average of the ratios calculated separately for each
eligible employee in each group, by dividing the amount of voluntary Employee
and Employer matching contribution credited to the Matching Contribution
Account and Special Contribution of such eligible employee by such eligible
employee's compensation for the Plan Year) of the Highly Compensated Employees
may not exceed the greater of (i) 125% of the actual contribution percentage of
all other eligible employees, or (ii) the lesser of (x) 200% of the actual
contribution percentage of all other eligible employees, or (y) the actual
contribution percentage of all other eligible employees plus two percentage
points.
In general, for years beginning after December 31, 1996, a Highly
Compensated Employee includes any employee who, during the Plan Year or the
preceding Plan Year, (1) was at any time a 5% owner (i.e., owns directly or
indirectly more than 5% of the stock of the Employer, or stock possessing more
than 5% of the total combined voting power of all stock of the Employer), or
(2) for the preceding year (i) had compensation from the employer in excess of
$80,000, and (ii) if the employer elects the application of this clause for
such preceding year, was in the top-group of employees for such preceding year.
An employee is in the top-paid group of employees for any year if such employee
is in the group consisting of the top 20 percent of employees when ranked on
the basis of compensation paid during such year. Such amounts are adjusted
annually to reflect increases in the cost of living.
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In order to prevent the disqualification of the Profit Sharing Plan,
any amount contributed by Highly Compensated Employees that exceeds the average
deferral limitation in any Plan Year ("excess contributions"), together with
any income allocable thereto, must be distributed to such Highly Compensated
Employees before the close of the following Plan Year. However, the Employer
will be subject to a 10% excise tax on any excess contributions unless such
excess contributions, together with any income allocable thereto, either are
recharacterized or are distributed before the close of the first 2 1/2 months
following the Plan Year to which such excess contributions relate.
TOP-HEAVY PLAN REQUIREMENTS. If for any Plan Year the Profit Sharing
Plan is a Top-Heavy Plan (as defined below), then (i) the Bank may be required
to make certain minimum contributions to the Profit Sharing Plan on behalf of
non-key employees (as defined below), and (ii) certain additional restrictions
would apply with respect to the combination of annual additions to the Profit
Sharing Plan and projected annual benefits under any defined benefit plan
maintained by the Bank.
In general, the Profit Sharing Plan will be regarded as a "Top-Heavy
Plan" for any Plan Year if, as of the last day of the preceding Plan Year, the
aggregate balance of the Accounts of Participants who are Key Employees exceeds
60% of the aggregate balance of the Accounts of all Participants. Key Employees
generally include any employee who, at any time during the Plan Year or any of
the four preceding Plan Years, is (1) an officer of the Employee having annual
compensation in excess of 50% of the amount under Section 415(b)(1)(A) of the
Code ($60,000 for 1997) or the amount in Section 415(c)(1)(A) of the Code
($39,000 for 1997), (2) one of the ten employees having annual compensation in
excess of $30,000 and owning, directly or indirectly, the largest interests in
the Company, (3) a 5% owner of the Company, (i.e., owns directly or indirectly
more than 5% of the stock of the Company, or stock possessing more than 5% of
the total combined voting power of all stock of the Bank) or (4) a 1% owner of
the Company having annual compensation in excess of $150,000. The dollar
amounts in the foregoing sentence are for 1997.
INVESTMENT OF CONTRIBUTIONS
GENERAL. All amounts credited to Participants' Accounts under the
Profit Sharing Plan are held in the Plan Trust (the "Trust") which is
administered by the Trustee appointed by the Bank's Board of Directors.
Prior to __________________, 1997, the Accounts of a Participant held
in the Trust have been invested by the Trustee at the direction of the
Participant in the following funds:
a. Core Equity Fund;
b. Emerging Growth Equity Fund;
c. Value Equity Fund;
d. Intermediate - Term Bond Fund;
e. Actively Managed Bond Fund;
f. International Equity Fund; and
g. Short-Term Investment Fund.
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<PAGE> 13
The Profit Sharing Plan, as amended effective _______________, now
provides that in addition to the Funds specified above, a Participant who is
employed by the Bank may direct the Trustee to invest all or a portion of his
Basic Contribution Account or Rollover Account in the Stock Fund. The Company
Contribution Account of Participants who are Bank employees will be entirely
invested in Employer Stock under the terms of Independence Savings Bank
Employee Stock Ownership Plan being implemented by the Bank.
At least once in each calendar quarter, but in no event more
frequently than two times each Plan Year, a Participant may elect (in
increments of 1%), to have both past and future contributions and additions to
the Participant's Basic Contribution Account and Rollover Account invested
either in the Employer Stock Fund or among such other Funds. Participants may
also elect to have past contributions to their Company Contribution Accounts
invested in either the Employer Stock Fund or among such other Funds. These
elections will be effective on the effective date of the Participant's written
notice to the plan administrator, provided such notice is filed with the
administrator at least 10 days before it is to become effective. Any amounts
credited to a Participant's Accounts for which investment directions are not
given will be invested in accordance with the terms of the Profit Sharing Plan.
Because investment allocations only are required to be made in increments of
1%, Participants can invest their Accounts in each of the eight available
investment funds.
A Participant who receives a loan from the Profit Sharing Plan has a
separate account established under the Profit Sharing Plan. The balance of a
Participant's loan account represents the unpaid principal and interest (if
any) of such participant's loan from the Profit Sharing Plan. Repayments of
principal and payments of interest on loans are invested by the Trustee as
directed by the Participant or, if no investment directions are given, in
accordance with the terms of the Plan.
The net gain (or loss) of the Funds from investments (including
interest payments, dividends, realized and unrealized gains and losses on
securities, and expenses paid from the Trust) will be determined at least
monthly during the Plan Year. For purposes of such allocations, all assets of
the Trust are valued at their fair market value.
PREVIOUS FUNDS. Prior to _______________, contributions under the Plan
were invested in the seven Funds specified above. The annual percentage return
on these funds for the prior three years was:
<TABLE>
<CAPTION>
1996 1995 1994
------------- ------------ ------------
<S> <C> <C>
a. Core Equity Fund 21.53% 40.17% 1.31%
b. Emerging Growth Equity Fund 27.09 42.83 2.53
c. Value Equity Fund 25.90 33.96 (1.14)
d. Intermediate -Term Bond Fund 4.02 13.99 (2.54)
e. Actively Managed Bond Fund 3.15 17.70 (4.21)
f. International Equity Fund 10.86 12.46 *
g. Short-term Investment Fund 4.70 5.39 3.40
</TABLE>
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<PAGE> 14
------------
* The International Equity Fund was added as an investment option in
1995.
THE EMPLOYER STOCK FUND. The Employer Stock Fund will consist of
investment in Common Stock made on and after the effective date of the
Conversion. Cash dividends, if any, paid on Common Stock held in the Employer
Stock Fund will be credited to a cash dividend subaccount for each Participant
investing in the Employer Stock Fund. The Board of Directors of the Company may
consider a policy of paying cash dividends on the Common Stock in the future;
however, no decision as to the amount or timing of cash dividends, if any, has
been made. The Trustee will, to the extent practicable, use all amounts held by
it in the Employer Stock Fund (except the amounts credited to cash dividend
subaccounts) to purchase shares of Common Stock of the Company. It is expected
that all purchases will be made at prevailing market prices. Under certain
circumstances, the Trustee may be required to limit the daily volume of shares
purchased. Pending investment in Common Stock, assets held in the Employer
Stock Fund will be placed in bank deposits and other short-term investments.
When Common Stock is purchased or sold, the cost or net proceeds are
charged or credited to the Accounts of Participants affected by the purchase or
sale. Participants' Accounts will also be adjusted for any brokerage
commissions, transfer fees and other expenses incurred in the sale and purchase
of Common Stock for the Employer Stock Fund. A Participant's Account will be
adjusted to reflect changes in the value of shares of Common Stock resulting
from stock dividends, stock splits and similar changes.
As of the date of this Prospectus Supplement, none of the shares of
Common Stock have been issued or are outstanding and there is no established
market for the Common Stock. Accordingly, there is no record of the historical
performance of the Employer Stock Fund. Performance will be dependent upon a
number of factors, including the financial condition and profitability of the
Company and the Bank and market conditions for the Common Stock generally.
INVESTMENTS IN THE EMPLOYER STOCK FUND MAY INVOLVE CERTAIN SPECIAL
RISKS IN INVESTMENT IN COMMON STOCK OF THE COMPANY. FOR A DISCUSSION OF THESE
RISK FACTORS, SEE "RISK FACTORS" IN THE PROSPECTUS.
VESTING
A Participant at all times has a fully vested nonforfeitable interest
in his Basic Contribution Account and the earnings thereon under the Plan.
Generally, a Participant vests in his Matching Contribution Account under the
Plan according to the following schedule:
-10-
<PAGE> 15
<TABLE>
<CAPTION>
Period of Service Vested Percentage
- --------------------------------------- -----------------------------------------
<S> <C>
less than 2 years 0%
2 years but less 3 years 50%
3 years or more 100%
</TABLE>
WITHDRAWALS AND DISTRIBUTIONS FROM THE PLAN
WITHDRAWALS PRIOR TO TERMINATION OF EMPLOYMENT. A Participant may make
a withdrawal from his Basic Contribution Account subject to the hardship
distribution rules under the Plan. These requirements are designed to ensure
that Participants have a true financial need before a withdrawal may be made.
A Participant may make a withdrawal from his or her "Rollover
Contribution Account (distributions from a prior employer's tax qualified
defined contribution plan), from After-Tax Contributions, if any (allowable
after-tax contributions made prior to January 1, 1991), and from his or her
Matching Contributions Account (but only if the Participant is 100% vested and
has been a Participant in the Profit Sharing Plan for at least 60 months) or his
or her Basic Contribution Account after he turns 59 1/2. A Participant may also
make withdrawals of certain amounts contributed to the Profit Sharing Plan
prior to June 15, 1995. However, such withdrawals generally may not be made
more often then two times during any Plan Year.
DISTRIBUTION UPON RETIREMENT, DISABILITY OR TERMINATION OF EMPLOYMENT.
Payment of benefits to a Participant who retires, incurs a disability, or
otherwise terminates employment generally shall be made in a lump sum cash
payment as soon as administratively feasible after such termination of
employment if the vested value of the Participant's Account is $3,500 or less.
If the vested portion of the Participant's Account balance is greater than
$3,500, the Participant may receive a distribution (subject to the minimum
distribution rules) in a lump sum payment: (a) as soon as administratively
possible after termination, (b) as of any Valuation Date up to 13 months after
termination or (c) as of the date the Participant attains normal retirement
age. Alternatively, a Participant may elect to receive benefits in the form of
quarterly, semi-annual, or annual installments over a period not to exceed 10
years. Benefit payments ordinarily shall be made not later than 60 days
following the end of the Plan Year in which occurs the latest of the
Participant's: (i) termination of employment; (ii) the attainment of age 65 or
(iii) the 10th anniversary of commencement of participation in the Plan; but in
no event later than the April 1 following the calendar year in which the
Participant attains age 70 1/2; or the calendar year in which the employee
retires. However, if the vested portion of the Participant's Account balances
exceeds $3,500, no distribution shall be made from the Plan prior to the
Participant's attaining age 65 unless the Participant elects to receive to an
earlier distribution.
DISTRIBUTION UPON DEATH. A Participant who dies before his or her
entire vested interest has been distributed shall have his or her benefits paid
to the surviving spouse in a lump sum as soon as administratively possible
following the date of his death. If however, the Participant elected prior to
his death to receive a deferred lump sum payment and had
-11-
<PAGE> 16
not yet received such distribution, such Beneficiary shall receive a lump sum
distribution as of the earlier of the Valuation Date in the Participant's
election or the last Valuation Date which occurs within one (1) year of the
Participant's death. If the Participant elected to and began receiving a
distribution in the form of installments, such Beneficiary shall receive
distributions over the remaining period, at the times set forth in such
election. With respect to an unmarried Participant, and in the case of a
married Participant with spousal consent to the designation of another
beneficiary, payment of benefits to the beneficiary of a deceased Participant
shall be made in the form of a lump-sum payment or in the same manner described
above as to a Participant with a surviving spouse.
NONALIENATION OF BENEFITS. Except with respect to federal income tax
withholdings and as provided with respect to a qualified domestic relations
order (as defined in the Code), benefits payable under the Profit Sharing Plan
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, and any attempt to anticipate, alienate,
sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any
rights to benefits payable under the Profit Sharing Plan shall be void.
ADMINISTRATION OF THE PROFIT SHARING PLAN
The Trustee with respect to the Profit Sharing Plan is the named
fiduciary of the Profit Sharing Plan for purposes of Section 402 of ERISA.
The Trustee is appointed by the Board of Directors of the Bank to
serve at its pleasure. The current Trustee of the Profit Sharing Plan is the
RSI Retirement Trust. However, an additional Trustee is being appointed to hold
funds invested in the Employer Stock Fund.
The Trustee receives, holds and invests the contributions to the
Profit Sharing Plan in trust and distributes them to Participants and
beneficiaries in accordance with the terms of the Profit Sharing Plan and the
directions of the Plan Administrator. The Trustee is responsible for investment
of the assets of the Trust.
REPORTS TO PROFIT SHARING PLAN PARTICIPANTS
The Administrator (as defined below) will furnish to each Participant
a statement at least quarterly showing (i) the balance in the Participant's
Account as of the end of that period, (ii) the amount of contributions
allocated to such Participant's Account for that period, and (iii) the
adjustments to such Participant's Account to reflect earnings or losses,
distributions, loans disbursed, loan repayments and/or transfers between
investment funds.
PLAN ADMINISTRATION
Pursuant to the terms of the Profit Sharing Plan, the Profit Sharing
Plan is administered by one or more persons who are appointed by and who serve
at the pleasure of the Bank (the "Administrator").
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<PAGE> 17
Currently, the Administrator is Independence Savings Bank. The address
and telephone number of the Administrator is 195 Montague Street, Brooklyn, New
York 11201; (718) 722-5377. The Administrator is responsible for the
administration of the Profit Sharing Plan, interpretation of the provisions of
the Profit Sharing Plan, prescribing procedures for filing applications for
benefits, preparation and distribution of information explaining the Profit
Sharing Plan, maintenance of Profit Sharing Plan records, books of account and
all other data necessary for the proper administration of the Profit Sharing
Plan, and preparation and filing of all returns and reports relating to the
Profit Sharing Plan which are required to be filed with the U.S. Department of
Labor and the IRS, and for all disclosures required to be made to Participants,
Beneficiaries and others under Sections 104 and 105 of ERISA.
AMENDMENT AND TERMINATION
It is the current intention of the Bank to continue the Profit Sharing
Plan indefinitely. Nevertheless, the Bank may terminate the Profit Sharing Plan
at any time. If the Profit Sharing Plan is terminated in whole or in part, then
regardless of other provisions in the Profit Sharing Plan, each Participant
affected by such termination shall have a fully vested interest in his Account.
The Bank reserves the rights to make, from time to time, any amendment or
amendments to the Profit Sharing Plan which do not cause any part of the Trust
to be used for, or diverted to, any purpose other than the exclusive benefit of
Participants or their beneficiaries; provided, however, that the Bank may make
any amendment it determines necessary or desirable, with or without retroactive
effect, or comply with ERISA.
MERGER, CONSOLIDATION OR TRANSFER
In the event of the merger or consolidation of the Profit Sharing Plan
with another plan, or the transfer of the Trust assets to another plan, the
Profit Sharing Plan requires that each Participant will (if either the Profit
Sharing Plan or the other plan were then terminated) receive a benefit
immediately after the merger, consolidation or transfer which is equal to or
greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (if the Plan had then terminated).
FEDERAL INCOME TAX CONSEQUENCES
GENERAL. The following is only a brief summary of certain federal
income tax aspects of the Profit Sharing Plan which are of general application
under the Code and is not intended to be a complete or definitive description
of the federal income tax consequences of participating in or receiving
distributions from the Profit Sharing Plan. The summary is necessarily general
in nature and does not purport to be complete. Moreover, statutory provisions
are subject to change, as are their interpretations, and their applicable may
vary in individual circumstances. Finally, the consequences under applicable
state and local income tax laws may not be the same as under the federal income
tax laws. PARTICIPANTS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO
ANY DISTRIBUTION FROM THE PLAN AND TRANSACTIONS INVOLVING THE PLAN.
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<PAGE> 18
The Profit Sharing Plan will be submitted to the IRS in a timely
manner for a determination that it is qualified under Section 401(a) and 401(k)
of the Code, and that the related Trust is exempt from tax under Section 501(a)
of the Code. A plan that is "qualified" under these sections of the Code is
afforded special tax treatment which include the following: (1) the sponsoring
employer is allowed an immediate tax deduction for the amount contributed to
the Profit Sharing Plan each year; (2) participants pay no current income tax
on amounts contributed by the employer on their behalf; and (3) earnings of the
plan are tax-exempt thereby permitting the tax-free accumulation of income and
gains on investments. The Profit Sharing Plan will be administered to comply in
operation with the requirements of the Code as of the applicable effective date
of any change in the law. The Bank expects to timely adopt any amendments to
the Profit Sharing Plan that may be necessary to maintain the qualified status
of the Profit Sharing Plan under the Code. Following such an amendment, the
Bank will submit the Profit Sharing Plan to the IRS for a determination that
the Profit Sharing Plan, as amended, continues to qualify under Sections 401(a)
and 501(a) of the Code and that it continues to satisfy the requirements for a
qualified cash or deferred arrangement under Section 401(k) of the Code. Should
the Profit Sharing Plan receive from the IRS an adverse determination letter
regarding its tax exempt status, all participants would generally recognize
income equal to their vested interest in the Profit Sharing Plan, the
participants would not be permitted to transfer amounts distributed from the
Profit Sharing Plan to an IRA or to another qualifies retirement plan, and the
Bank may be denied certain deductions taken with respect to the Profit Sharing
Plan.
LUMP SUM DISTRIBUTION. A distribution from a Profit Sharing Plan to a
Participant or the beneficiary of a Participant will qualify as a Lump Sum
Distribution if it is made: (i) within one taxable year to the Participant or
beneficiary; (ii) on account of the Participant's death, disability or
separation from service, or after the Participant attains age 59 1/2; and (iii)
consists of the balance to the credit of the Participant under this Profit
Sharing Plan and all other profit sharing plans, if any, maintained by the
Bank. The portion of any Lump Sum Distribution that is required to be included
in the Participant's or beneficiary's taxable income for federal income tax
purposes (the "total taxable amount") consists of the entire amount of such
Lump Sum Distribution less the amount of after-tax contributions, if any, made
by the Participant to any other profit sharing plans maintained by the Bank
which is included in such distribution.
AVERAGING RULES. The Small Business Job Protection Act of 1996
repealed five-year income averaging for lump sum distributions for taxable
years beginning after 1999. Ten-year averaging which was grandfathered for
individuals who attained the age of 50 before January 1, 1986 was retained. The
portion of the total taxable amount of a Lump Sum Distribution that is
attributable to participation after 1973 in this Profit Sharing Plan or in any
other profit sharing plan maintained by the Bank (the "ordinary income
portion") will be taxable generally as ordinary income for federal income tax
purposes. However for distributions prior to the effective date, a Participant
who has completed at least five years of participation in this Plan before the
taxable year in which the distribution is made, or a beneficiary who receives a
Lump Sum Distribution on account of the Participant's death (regardless of the
period of the Participant's participation in this Plan or any other profit
sharing plan maintained by the Employer), may elect to have the ordinary income
portion of such Lump Sum Distribution taxed according to a special averaging
rule ("five-year
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<PAGE> 19
averaging"). The election of the special averaging rules may apply only to one
Lump Sum Distribution received on or after the Participant turns 50 1/2 and the
recipient elects to have any other Lump Sum Distribution from a qualified plan
received in the same taxable year taxed under the special averaging rule. Under
a special grandfathering rule, individuals who turned 50 by 1986 may elect to
have their Lump Sum Distribution taxed under either the five-year averaging
rule or under the prior law ten-year averaging rule. Such individuals also may
elect to have that portion of the Lump Sum Distribution attributable to the
participant's pre-1974 participation in the Plan taxed at a flat 20% rate as
gain from the sale of a capital asset.
COMMON STOCK INCLUDED IN LUMP SUM DISTRIBUTION. If a Lump Sum
Distribution includes Common Stock, the distribution generally will be taxed in
the manner described above, except that the total taxable amount will be
reduced by the amount of any net unrealized appreciation with respect to such
Common Stock, i.e., the excess of the value of such Common Stock at the time of
the distribution over its cost of the Profit Sharing Plan. The tax basis of
such Common Stock, to the Participant or beneficiary for purposes of computing
gain or loss on its subsequent sale will be the value of the Common Stock at
the time of distribution less the amount of net unrealized appreciation. Any
gain on a subsequent sale or other taxable disposition of such Common Stock, to
the extent of the amount of net unrealized appreciation at the time of
distribution, will be considered long-term capital gain regardless of the
holding period of such Common Stock. Any gain on a subsequent sale or other
taxable disposition of the Common Stock in excess of the amount of net
unrealized appreciation at the time of distribution will be considered either
short-term capital gain or long-term capital gain depending upon the length of
the holding period of the Common Stock. The recipient of a distribution may
elect to include the amount of any net unrealized appreciation in the total
taxable amount of such distribution to the extent allowed by the regulations to
be issued by the IRS.
DISTRIBUTION: ROLLOVERS AND DIRECT TRANSFERS TO ANOTHER QUALIFIED PLAN
OR TO AN IRA. Pursuant to a change in the law, effective January 1, 1993,
virtually all distributions from the Profit Sharing Plan may be rolled over to
another qualified Profit Sharing Plan or to an Individual Retirement Account
("IRS") without regard to whether the distribution is a Lump Sum Distribution
or a Partial Distribution. Effective January 1, 1993, Participants have the
right to elect to have the Trustee transfer all or any portion of an "eligible
rollover distribution" directly to another plan qualified under Section 401(a)
of the Code or to an IRA. If the Participant does not elect to have an
"eligible rollover distribution" transferred directly to another qualified plan
or to an IRA, the distribution will be subject to a mandatory federal
withholding tax equal to 20% of the taxable distribution. The principal types
of distributions which do not constitute eligible rollover distributions are
(i) an annuity type distribution made over the life expectancy of the
Participant (or Participant and another) or for a period of 10 years or more,
(ii) a minimum distribution required by Section 409 (a) (9) of the Code, or
(iii) the portion of any distribution not includable in gross income, except
that unrealized appreciation in employee securities can be included in an
eligible rollover distribution. The tax law change described above did not
modify the special tax treatment of Lump Sum Distributions, that are not rolled
over or transferred i.e., forward averaging, capital gains tax treatment and
the nonrecognition of net unrealized appreciation, discussed earlier.
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<PAGE> 20
ERISA AND OTHER QUALIFICATION
As noted above, the Profit Sharing Plan is subject to certain
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and will be submitted to the IRS for a determination that it is qualified under
Section 401(a) of the Code.
THE FOREGOING IS ONLY A BRIEF SUMMARY OF CERTAIN FEDERAL INCOME TAX
ASPECTS OF THE PROFIT SHARING PLAN WHICH ARE OF GENERAL APPLICATION UNDER THE
CODE AND IS NOT INTENDED TO BE A COMPLETE OR DEFINITIVE DESCRIPTION OF THE
FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN OR RECEIVING DISTRIBUTIONS
FROM THE PLAN. ACCORDINGLY, EACH PARTICIPANT IS URGED TO CONSULT A TAX ADVISOR
CONCERNING THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN
AND RECEIVING DISTRIBUTIONS FROM THE PROFIT SHARING PLAN.
RESTRICTIONS ON RESALE
Any person receiving shares of Common Stock under the Profit Sharing
Plan who is an "affiliate" of the Company as the term "affiliate" is used in
Rules 144 and 405 under the Securities Act of 1933, as amended (the "Securities
Act"), (e.g., directors, officers and substantial shareholders of the Company)
may reoffer or resell such shares only pursuant to a registration statement
filed under the Securities Act assuming the availability thereof, pursuant to
Rule 144 or some other exemption of the registration requirements of the
Securities Act. Any person who may be an "affiliate" of the Company may wish to
consult with counsel before transferring any Common Stock owned by him. In
addition, Participants are advised to consult with counsel as to the
applicability of Section 16 of the 1934 Act which may restrict the sale of
Common Stock where acquired under the Profit Sharing Plan, or other sales of
Common Stock.
Persons who are not deemed to be "affiliates" of the Company at the
time of resale will be free to resell any shares of Common Stock to them under
the Plan, either publicly or privately, without regard to the Registration and
Prospectus delivery requirements of the Securities Act or compliance with the
restrictions and conditions contained in the exemptive rules thereunder. An
"affiliate" of the Bank is someone who directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control,
with the Bank. Normally, a director, principal officer or major shareholder of
a corporation may be deemed to be an "affiliate" of that corporation. A person
who may be deemed an "affiliate" of the Bank at the time of a proposed resale
will be permitted to make public resales of the Company's Common Stock only
pursuant to a "reoffer" Prospectus or in accordance with the restrictions and
conditions contained in Rule 144 under the Securities Act or some other
exemption from registration, and will not be permitted to use this Prospectus
in connection with any such resale. In general, the amount of the Company's
Common Stock which any such affiliate may publicly resell pursuant to Rule 144
in any three-month period may not exceed the greater of one percent of the
Company's Common Stock then outstanding or the average weekly trading volume
reported on the Nasdaq Stock Market during the four
-16-
<PAGE> 21
calendar weeks prior to the sale. Such sales may be made only through brokers
without solicitation and only at a time when the Company is current in filing
the reports required of it under the 1934 Act.
SEC REPORTING AND SHORT-SWING PROFIT LIABILITY
Section 16 of the 1934 Act imposes reports and liability requirements
on officers, directors and persons beneficially owning more than ten percent of
public companies such as the Company. Section 16(a) of the 1934 Act requires
the filing of reports of beneficial ownership. Within ten days of becoming a
person subject to the reporting requirements of Section 16(a), a Form 3
reporting initial beneficial ownership must be filed with the Securities and
Exchange Commission ("SEC"). Certain changes in beneficial ownership, such as
purchases, sales, gifts and participation in savings and retirement plans must
be reported periodically, either on a Form 4 within ten days after the end of
the month in which a change occurs, or annually on a Form 5 within 45 days
after the close of the Company's fiscal year. Participation in the Employer
Stock Fund of the Plan by Common Stock of the Company must be reported to the
SEC annually on a Form 5 by such individuals.
In addition to the reporting requirements described above, Section
16(b) of the 1934 Act provides for the recovery by the Holding Company of
profits realized by any officer, director or any person beneficially owning
more than ten percent of the Company's Common Stock ("Section 16(b) Persons")
resulting from the purchase and sale or sale and purchase of the Holding
Company's Common Stock within any six-month period.
The SEC has adopted rules that provide exemption from the profit
recovery provisions of Section 16(b) for participant-directed employer security
transactions within an employee benefit plan, such as the Plan, provided
certain requirements are met.
EXPERTS
The financial statements of the Profit Sharing Plan as of December 31,
1995 and 1994 on and for the years then ended have been included herein in
reliance upon the report of Ernst & Young LLP, independent certified public
accountant, appearing elsewhere wherein, and upon the authority of said firm as
experts in accounting and auditing.
LEGAL OPINIONS
The validity of the issuance of the Common Stock will be passed upon
by Elias, Matz, Tiernan & Herrick, L.L.P., Washington, D. C., which firm acted
as special counsel for the Company and the Bank in connection with the
Conversion.
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<PAGE> 22
THE INDEPENDENCE SAVINGS BANK
401(K) SAVINGS PLAN
FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1995 AND 1994
(WITH INDEPENDENCE AUDITORS' REPORT THEREON)
18
<PAGE> 23
THE INDEPENDENCE SAVINGS BANK
401(k) SAVINGS PLAN
Index to Financial Statements
INDEPENDENT AUDITORS' REPORT
FINANCIAL STATEMENTS:
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL SCHEDULES:
SCHEDULE OF INVESTMENT
SCHEDULE OF REPORTABLE TRANSACTIONS
F-1
<PAGE> 24
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
The Board of Directors
Independence Savings Bank
We have audited the accompanying statements of net assets available for plan
benefits of the Independence Savings Bank Incentive Savings Plan (the "Plan")
as of December 31, 1995 and 1994, and the related statements of changes in net
assets available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
at December 31, 1995 and 1994, and the changes in net assets available for plan
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedules
of investments as of December 31, 1995, and reportable transactions for the
year then ended are presented for the purpose of complying with the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974, and are not a required part of
the financial statements. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
October 8, 1996
F-2
<PAGE> 25
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
December 31
1995 1994
---- ----
<S> <C> <C>
ASSETS
Loans to participants $ 821,325 $ 731,798
Investments - at fair value 8,911,188 7,327,915
------------- -------------
Net assets available for plan benefits $ 9,732,513 $ 8,059,713
============= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 26
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994
---- ----
<S> <C> <C>
ADDITIONS
Contributions by:
Participating employees $ 648,855 $ 649,613
Employer 435,022 394,077
Interest on loans 51,743 42,932
Net realized and unrealized appreciation in
fair value of investments 1,231,108 127,161
DEDUCTIONS
Distributions and withdrawals 693,928 988,216
---------- ----------
Net Increase 1,672,800 225,567
Net assets available for plan benefits at:
Beginning of year 8,059,713 7,834,146
---------- ----------
End of year $9,732,513 $8,059,713
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 27
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements
December 31, 1995
1. DESCRIPTION OF THE PLAN
The following description of the Independence Savings Bank Incentive Savings
Plan (the "Plan") is presented for general information purposes only.
Participants should refer to the Plan document for more complete information.
GENERAL
The Plan is a defined contribution plan sponsored by Independence Savings Bank
(the "Bank"). Employees of the Bank are eligible for participation after one
year of service during which they have rendered 1,000 hours of service. The
Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"). The Plan was amended to comply with the provisions of
ERISA effective October 1, 1976. The Plan has also been amended to conform with
the current provisions of the Tax Equity and Fiscal Responsibility Act of 1982
("TEFRA"), the Deficit Reduction Act of 1984, the Retirement Equity Act of
1984, and the Tax Reform Act of 1986.
TRUST FUNDS
The Plan is administered by a committee (the "Committee") appointed by the
Board of Directors (the "Board") of the Bank. The Board has appointed
Retirement Systems Group, Inc. as Trustee (the "Trustee") of the Plan's assets.
Under the terms of the trust agreement between the Trustee and the Plan, the
Trustee manages trust funds on behalf of the Plan. The Trustee has been granted
discretionary authority concerning purchases and sales of investments in the
trust funds.
CONTRIBUTIONS
Participants may contribute up to 6% pre-tax of their annual salary. The Bank
will match 50% of these contributions up to a maximum of $1,500 annually during
the first two years of Plan participation, and 100% thereafter up to a maximum
of $3,000 annually. Participants may also contribute a supplemental pre-tax
amount of 9% of their annual salary to the Plan. Total pre-tax contributions
may not exceed 15% of the Participant's annual salary to a maximum of $9,240 in
1995 and 1994. The supplemental contributions are not matched by the Bank.
F-5
<PAGE> 28
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
A Participant may elect to direct the contributions to any of the Plan's
investment funds in multiples of 25% in accordance with any of the four
investment options. Under the trust agreement with the Trustee, a Participant
may change investment direction once in any calendar quarter, but not more than
twice a year, providing that such election has been filed at least ten days in
advance. Transfers are limited to once in any calendar quarter, but not more
than twice a year, providing that such election has been filed at least ten
days in advance.
Participants' contributions and all earnings from investment activities
allocable thereto are always fully vested. The Participant's interest in Bank
contributions and forfeitures credited to the Participant's account, plus any
earnings, appreciation or additions allocable thereto, will vest 50% upon
completion of two years of service and 100% upon completion of three years of
service.
A Participant whose participation in the Plan terminates before he is fully
vested, for any reason other than retirement, disability or death, shall
forfeit any portion of his interest in the Plan which is not vested. Under the
trust agreement with the Trustee, forfeitures are treated as matching
contributions and are applied to reduce the amount of subsequent matching
contributions required to be made by the Bank. At December 31, 1995 and 1994
forfeitures were $6,002 and $3,082, respectively.
FUND DESCRIPTIONS
The following is a description of the funds in which the Plan's assets are
invested under the agreement with the Trustee:
Core Equity Fund: This is a stock fund that invests in a broadly diversified
group of large, high quality, competitively strong companies that exhibit
sustainable growth in earnings and dividends. It offers investors the potential
for long-term capital appreciation, with income as a secondary goal.
Aggressive Equity: Contributions are allocated 50% to the Emerging Growth
Equity Fund and 50% to the Value Equity Fund.
Emerging Growth Equity Fund: The Emerging Growth Equity Fund is a growth stock
fund that seeks capital appreciation by investing primarily in smaller,
relatively new companies that, in the view of the investment manager, have
higher than average potential for earnings growth.
F-6
<PAGE> 29
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Value Equity Fund: This fund is a growth and income stock fund that seeks
capital appreciation over the longer term. It invests in financially strong
companies with medium to large market capitalizations. These companies are
currently out of favor with investors but have had good earnings growth records
in the past and offer prospects for significant earnings and dividend growth.
In the view of the investment manager, these stocks are currently undervalued
and selling below their potential value.
International Equity Fund: This fund seeks to achieve a total return in excess
of the Lipper International Mutual Funds Average, measured over a period of
three to five years. It invests primarily in equity securities of Non-United
States companies and at least 65% of its assets will be invested in equity
securities companies in at least three countries (other than the United
States). It may also invest in securities of Non-United States governments and
their agencies (no more than 25% of the funds total assets) and may also invest
in securities of United States companies which derive, or are expected to
derive, a substantial portion of their revenues from operations outside the
United States. Investments in such United States companies will normally be
less than 10% of the funds total assets.
Bond Portfolio: Contributions are allocated one-third to the Intermediate-Term
Bond Fund and two-thirds to the Actively Managed Bond Fund.
Intermediate-Term Bond Fund: This fund invests in high quality fixed income
securities that mature within 10 years, or have expected average lives of 10
years or less. At least 65% of the investments in this Fund are in United
States Government or United States Government Agency issues which have the
highest credit rating. At the time of purchase, at least 75% of the holdings
must have a quality rating of "AA" or better, with a minimum quality rating of
"A" for other holdings. This investment fund's goal is to achieve income and
price appreciation.
Actively Managed Bond Fund: This fund invests in high quality fixed-income
securities (bonds and other debt securities), with maturities out to 30 years.
The Fund's investment managers frequently adjust the maturity structure of the
portfolio to respond to perceived changes in the relative attractiveness of the
fixed-income market. At the time of purchase, at least 75% of the investments
in this fund must have a quality rating of "AA" or better, with a minimum
quality rating of "A" for other holdings, and at least 65% of the investments
in this Fund are in United States Government or United States Government Agency
issues. The Fund seeks to achieve both income and price appreciation.
Short-Term Investment Fund: This fund invests in high quality, cash equivalent
type of securities normally maturing in one year or less. While the fund may
invest in United States Government instruments with maturities of up to two
years, the maximum average maturity of the Fund's holding will not exceed one
year. This investment fund offers substantial liquidity and capital
preservation.
Loan Fund: The Loan Fund consists of Loans to Participants (see Loans to
Participants).
F-7
<PAGE> 30
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
WITHDRAWAL OF FUNDS
AFTER TERMINATION OF EMPLOYMENT
When a Participant terminates employment, the Participant or the Participant's
beneficiaries may elect to have the benefits distributed in a lump sum at the
next valuation date, in a lump sum at some other valuation date within thirteen
months of termination or in equal annual installments over a period not to
exceed ten years.
IN-SERVICE WITHDRAWALS
In-service withdrawals of pre-tax Participant contributions may be made only in
the event of hardship or if the Participant has attained age 59-1/2. Hardship
withdrawals are subject to regulations of the Internal Revenue Service.
Post-tax Participant contributions may be withdrawn as of any valuation date
after giving at least ten days written notice, but only twice every Plan year.
Bank contributions and earnings thereon, and earnings on Participant
contributions that are not pre-tax deferrals may be withdrawn as of any
valuation date, subject to certain restrictions.
LOANS TO PARTICIPANTS
All active employees who are Participants in the Plan are eligible to borrow
against their vested account balance once in a twelve-month period.
The Participant shall complete a loan application and a promissory note
provided by the Committee. The promissory note and other loan documentation
shall provide that the outstanding loan balance shall be secured by the
Participant's vested account balance. The minimum loan shall be $1,000 except
for residential loans, for which the minimum shall be $5,000. The maximum loan
shall not exceed 50% of the Participant's vested account balance, subject to a
maximum outstanding loan balance of $50,000. The $50,000 limit is reduced by
the Participant's highest outstanding loan balance during the prior twelve
months.
F-8
<PAGE> 31
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
The period of repayment shall be determined by the Committee, except that it
may not exceed five years, unless the loan is used to acquire the principal
residence of the Participant, in which case the loan term may not exceed 15
years. The interest on a loan shall be the commercial bank prime rate as set
forth in The Wall Street Journal on the first business day of the month in
which the loan is requested. Such rate shall remain in effect until maturity or
termination of the loan.
PLAN TERMINATION
While the Bank has not expressed any intent to terminate the Plan, it may do so
at any time, subject to the provisions set forth in ERISA. In the event of
termination of the Plan, all amounts credited to Participants' accounts become
fully vested and distributable as in the same manner as if the Participant's
service had been terminated.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the accrual basis.
INVESTMENT VALUATION - TRUSTEE'S FUNDS
The Trustee's valuation of the shares owned by the Plan is based upon quoted
redemption prices on the last business day of the year.
In the absence of an ascertainable market value, investments are valued at
their fair value as determined by the officers of the Trustee using methods and
procedures reviewed and approved by the trustees of the Trustee.
Securities transactions are recorded on a trade date basis. Realized gain and
loss from securities transactions are recorded on a specific cost basis.
Dividend income is recognized on the ex-dividend date or when the dividend
information is known; interest income, including, where applicable,
amortization of discount and premium on investments and zero coupon bonds, is
recognized on the accrual basis.
F-9
<PAGE> 32
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements (continued)
3. PLAN INVESTMENTS
The fair value of individual investments that represent 5% or more of the
Plan's net assets are as follows:
<TABLE>
<CAPTION>
INVESTMENTS AT FAIR VALUE
DECEMBER 31
1995 1994
---- ----
<S> <C> <C>
Core Equity Fund $2,388,715 $1,494,529
Emerging Growth Fund 590,164 303,013
Short-Term Investment Fund 4,430,232 4,321,176
Actively Managed Bond Fund 702,582 636,105
Loans to Participants 821,325 731,798
</TABLE>
4. ADMINISTRATIVE EXPENSES
Administrative expenses are paid directly by the Bank and are not included in
the accompanying financial statements.
5. TAX STATUS
The Plan has received a favorable determination letter dated May 18, 1995 from
the Internal Revenue Service stating that the Plan qualifies under 401(a) of
the Internal Revenue Code (the "IRC") and that the related Trust is exempt from
federal income taxes under the provisions of Section 501(a) of the IRC. The
Plan has been amended, and management of the Plan expects these amendments will
allow the Plan to remain qualified and the related Trust to maintain its tax
exempt status.
F-10
<PAGE> 33
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. FUND ACTIVITY
FUND ACTIVITY FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CORE EMERGING INTERNATIONAL
DESCRIPTIONS LOANS EQUITY GROWTH VALUE EQUITY EQUITY FUND
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1994 $731,798 $1,494,529 $303,013 $259,821 $0
Additions:
Employee contributions 0 174006 62940 55853 3507
Employer contributions 0 112755 36281 33052 1504
Interest on loans 0 15178 2839 2692 209
Net realized gains and unrealized
appreciation in fair value of
investments 0 609541 151685 101602 1333
----------------------------------------------------------------------------------------
Total additions 0 911480 253745 193199 6553
Distributions:
Payments to participants 0 -73000 -17171 -13610 0
----------------------------------------------------------------------------------------
Total distributions 0 -73000 -17171 -13610 0
Transfers between funds 89527 55706 50577 -2799 20651
----------------------------------------------------------------------------------------
Balances at December 31, 1995 $821,325 $2,388,715 $590,164 $436,611 $27,204
========================================================================================
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INTERMEDIATE ACTIVELY
DESCRIPTIONS INVESTMENT TERM BOND MANAGED BOND TOTAL
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balances at December 31, 1994 $4,321,176 $313,271 $636,105 $8,059,713
Additions:
Employee contributions 261578 30063 60908 648855
Employer contributions 188506 20783 42141 435022
Interest on loans 24256 2150 4419 51743
Net realized gains and unrealized
appreciation in fair value of
investments 226060 39441 101446 1231108
--------------------------------------------------------------------
Total additions 700400 92437 208914 2366728
Distributions:
Payments to participants -413823 -57477 -118847 -693928
--------------------------------------------------------------------
Total distributions -413823 -57477 -118847 -693928
Transfers between funds -177521 -12551 -23590 0
--------------------------------------------------------------------
Balances at December 31, 1995 $4,430,232 $335,680 $702,582 $9,732,513
====================================================================
</TABLE>
F-11
<PAGE> 34
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. FUND ACTIVITY (CONTINUED)
FUND ACTIVITY FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
CORE EMERGING SHORT-TERM
DESCRIPTIONS LOANS EQUITY GROWTH VALUE EQUITY INVESTMENT
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1993 $684,025 $1,328,503 $251,824 $214,603 $4,161,580
Additions:
Employee contributions - 158,115 53,445 53,187 283,771
Employer contributions - 92,406 26,445 26,430 187,500
Interest on loans - 10,332 1,691 1,691 23,642
Net realized gains (losses) and unreal-
ized appreciation (depreciation) in
fair value of investments - 17,502 11,871 (2,866) 143,160
------------------------------------------------------------------------------------
Total additions - 278,355 93,452 78,442 638,073
Distributions:
Payments to participants - (109,629) (20,054) (17,135) (617,375)
------------------------------------------------------------------------------------
Total distributions - (109,629) (20,054) (17,135) (617,375)
Transfers between funds 47,773 (2,700) (22,209) (16,089) 138,898
------------------------------------------------------------------------------------
Balances at December 31, 1994 $731,798 $1,494,529 $303,013 $259,821 $4,321,176
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE ACTIVELY
DESCRIPTIONS TERM BOND MANAGED BOND TOTAL
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balances at December 31, 1993 $387,205 $806,406 $7,834,146
Additions:
Employee contributions 33,698 67,397 649,613
Employer contributions 20,429 40,867 394,077
Interest on loans 1,859 3,717 42,932
Net realized gains (losses) and unreal-
ized appreciation (depreciation) in
fair value of investments (9,383) (33,123) 127,161
---------------------------------------------------
Total additions 46,603 78,858 1,213,783
Distributions:
Payments to participants (72,865) (151,158) (988,216)
---------------------------------------------------
Total distributions (72,865) (151,158) (988,216)
Transfers between funds (47,672) (98,001) -
---------------------------------------------------
Balances at December 31, 1994 $313,271 $636,105 $8,059,713
===================================================
</TABLE>
F-12
<PAGE> 35
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Notes to Financial Statements (continued)
7. SUBSEQUENT EVENTS
On June 26, 1995 a definitive agreement ("Agreement") was executed which
outlined the principal elements of a proposed acquisition by Independence
Community Bank Corp. ("ICBC"), the holding company of the Bank, of Bay Ridge
Bancorp Inc. ("BRB"), the holding company for Bay Ridge Federal Savings Bank
("BRFSB"). The acquisition was consummated on January 3, 1996.
Under the terms of the Agreement, employees of BRB or BRFSB who are employed by
ICBC or the Bank shall be entitled to full credit for each year of service with
BRFSB for purposes of determining eligibility for participation and vesting,
but not benefit accruals, in ICBC's or the Bank's employee benefit plans,
subject to applicable break-in-service rules. Notwithstanding the above, each
person employed by the BRB or BRFSB prior to acquisition who becomes an
employee of ICBC or the Bank immediately following the acquisition (each a "New
Employee") shall be entitled, as an employee of ICBC or the Bank, to
participate in such employee benefit plans as may be in effect generally for
employees of ICBC or the Bank and its subsidiaries from time to time ( the
"ICBC Plans"), if such New Employee shall be eligible or selected for
participation therein. New Employees will be eligible to participate on the
same basis as similarly situated employees of ICBC or the Bank. All such
participation shall be subject to the terms of the ICBC Plans as may be in
effect from time to time. As a result of the acquisition, total assets of
$2,248,519 were transferred from the Bay Ridge Federal Savings 401(k) plan to
the Plan.
F-13
<PAGE> 36
SUPPLEMENTAL SCHEDULES
F-14
<PAGE> 37
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Schedule of Investments
December 31, 1995
<TABLE>
<CAPTION>
SHARES FAIR VALUE
------ ----------
<S> <C> <C>
Core Equity Fund 48,072.342 $2,388,715
Emerging Growth Fund 11,095.399 590,164
Value Equity Fund 12,535.483 436,611
International Equity Fund 657.893 27,204
Short-Term Investment Fund 226,494.508 4,430,232
Intermediate-Term Bond Fund 11,639.377 335,680
Actively Managed Bond Fund 22,818.531 702,582
Loans to participants maturing < five years 764,119
Loans to participants maturing > five years 57,206
----------
Total Investments $9,732,513
==========
</TABLE>
F-15
<PAGE> 38
INDEPENDENCE SAVINGS BANK
INCENTIVE SAVINGS PLAN
Schedule of Reportable Transactions
Year ended December 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
SECURITY OR PARTY INVOLVED DESCRIPTION OF ASSETS PURCHASES
- --------------------------------------------------------------------------------------------------------------
<S> <C>
Category (i) - A single transaction in excess of 5% of the
current value of plan assets: N/A
Category (ii) - A series of transactions with or in
conjuction with the same person involving property
other than securities, which amount in the aggregate to
more than 5% of the current value of plan assets: N/A
Category (iii) - A series of transactions with respect to Short-term Investment Fund 55
securities of the same issue which amount in the
aggregate to more than 5% of the current value of Core Equity Fund 61
total plan assets:
Category (iv) - Any transaction with respect to securities
with or in conjuction with a person if a prior subsequent
single transaction has occurred with respect to securities
with or in conjuction with that same person in an
amount in excess of 5% of the current value of plan
assets: N/A
</TABLE>
<TABLE>
<CAPTION>
TOTAL PURCHASE NUMBER OF TOTAL SELLING
SECURITY OR PARTY INVOLVED PRICE SALES PRICE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Category (i) - A single transaction in excess of 5% of the
current value of plan assets:
Category (ii) - A series of transactions with or in
conjuction with the same person involving property
other than securities, which amount in the aggregate to
more than 5% of the current value of plan assets:
Category (iii) - A series of transactions with respect to $625,520 114 $742,524
securities of the same issue which amount in the
aggregate to more than 5% of the current value of 464,831 --- ---
total plan assets:
Category (iv) - Any transaction with respect to securities
with or in conjuction with a person if a prior subsequent
single transaction has occurred with respect to securities
with or in conjuction with that same person in an
amount in excess of 5% of the current value of plan
assets:
</TABLE>
F-16
<PAGE> 39
INDEPENDENCE SAVINGS BANK
401(k) SAVINGS PLAN IN RSI RETIREMENT TRUST
INVESTMENT FORM
---------------------
Name of Plan Participant: ___________________________
Social Security Number: ___________________________
1. INSTRUCTIONS. In connection with the proposed reorganization
of Independence Savings Bank and its parent mutual holding company (the
"Conversion"), the Independence Savings Bank 401(k) Savings Plan in RSI
Retirement Trust ("Profit Sharing") has been amended to permit participants to
direct their current account balances for their Basic Contribution Account and
Company Contribution Account and Rollover Account into a new fund: the Employer
Stock Fund. The percentage of a participant's account transferred at the
direction of the participant into the Employer Stock Fund will be used to
purchase shares of common stock of Independence Community Bank Corp. (the
"Common Stock").
To direct a transfer of all or part of the funds credited to your
Accounts to the Employer Stock Fund, you should complete and file this form
with the Human Resources Department, no later than ______________, 1997. A
representative for the Plan Administrator will retain a copy of this form and
return a copy to you. If you need any assistance in completing this form,
please contact _____________________. If you do not complete and return this
form to the Plan Administrator by _________, the funds credited to your
accounts under the Plan will continue to be invested in accordance with your
prior investment direction, or in accordance with the terms of the Plan if no
investment direction has been provided.
2. INVESTMENT DIRECTIONS. I hereby direct the Plan Administrator
to invest the following percentage (in multiples of not less than 1% ss.6.2
Amendment #6) of my Basic Contribution Account, Company Contribution Account
and Rollover Account.
<TABLE>
<S> <C>
a. Core Equity Fund ____%
b. Emerging Growth Fund ____%
c. Value Equity Fund ____%
d. Intermediate - Term Investment Fund ____%
e. Actively Managed Bond Fund ______%
f. International Equity Fund
g. Short-Term Investment Fund _____%
h. Employer Stock Fund ________%
NOTE: The total percentage of directed investments, above, may not exceed 100%.
</TABLE>
3. ACKNOWLEDGEMENT OF PARTICIPANT. I understand that this
Investment Form shall be subject to all of the terms and conditions of the
Plan. I acknowledge that I have received a copy of the Prospectus and the
Prospectus Supplement.
- ----------------------------------- ----------
Signature of Participant Date
- -------------------------------------------------------------------------------
ACKNOWLEDGEMENT OF RECEIPT BY ADMINISTRATOR. This Investment Form was received
by the Plan Administrator and will become effective on the date noted below.
- ----------------------------------- ----------
By: Date
<PAGE> 40
PROSPECTUS
INDEPENDENCE COMMUNITY BANK CORP.
(Proposed Holding Company for Independence Savings Bank)
Up to 50,578,704 Shares of Common Stock
Independence Community Bank Corp. (the "Company"), a Delaware
corporation, is offering up to 50,578,704 shares of its common stock, par value
$.01 per share (the "Common Stock"), in connection with the reorganization of
Independence Savings Bank (the "Bank") and the mutual holding company parent of
the Bank (the "Mutual Holding Company") to the stock form of organization
pursuant to the Bank's and the Mutual Holding Company's Plan of Conversion (the
"Plan" or "Plan of Conversion"). The simultaneous conversion of the Mutual
Holding Company to stock form, the cancellation of the shares owned by the
Mutual Holding Company in the Bank, the issuance of the Bank's common stock to
the Company and the offer and sale of the Common Stock by the Company are
collectively referred to herein as "Conversion." Under certain circumstances,
the Company may increase the amount of Common Stock offered hereby to up to
58,165,509 shares. (See Footnote 4 to the table below.)
(cover continued on following page)
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
PROSPECTIVE INVESTOR, SEE "RISK FACTORS" AT PAGE 16.
---------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, THE SUPERINTENDENT OF
BANKS OF THE STATE OF NEW YORK, THE NEW YORK STATE BANKING
BOARD, THE NEW YORK STATE BANKING DEPARTMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, OR ANY OTHER FEDERAL OR STATE
AGENCY OR STATE SECURITIES COMMISSION, NOR HAS SUCH
COMMISSION, SUPERINTENDENT, BOARD, DEPARTMENT, CORPORATION OR
ANY STATE SECURITIES COMMISSIONER OR OTHER AGENCY PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------------------------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS OR DEPOSITS AND ARE NOT INSURED OR GUARANTEED BY THE
BIF INSURANCE FUND OR THE SAVINGS ASSOCIATION INSURANCE FUND OF
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY AND ARE NOT GUARANTEED BY THE
COMPANY OR THE BANK.
<PAGE> 41
<TABLE>
<CAPTION>
=============================================================================================================
Estimated
Underwriting
Fees and Estimated
Subscription Conversion Net
Price(1) Expenses(2) Proceeds(3)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum Per Share $10.00 $0.28 $9.72
- -------------------------------------------------------------------------------------------------------------
Midpoint Per Share $10.00 $0.26 $9.74
- -------------------------------------------------------------------------------------------------------------
Maximum Per Share $10.00 $0.25 $9.75
- -------------------------------------------------------------------------------------------------------------
Maximum Per Share, as adjusted $10.00 $0.23 $9.77
- -------------------------------------------------------------------------------------------------------------
Total Minimum(1) $373,842,590 $10,507,697 $363,334,893
- -------------------------------------------------------------------------------------------------------------
Total Midpoint(1) $439,814,810 $11,493,981 $428,320,829
- -------------------------------------------------------------------------------------------------------------
Total Maximum(1) $505,787,040 $12,480,266 $493,306,774
- -------------------------------------------------------------------------------------------------------------
Total Maximum, as adjusted(4) $581,655,090 $13,614,494 $568,040,596
=============================================================================================================
</TABLE>
- ------------
(1) Determined in accordance with an independent appraisal prepared by RP
Financial, LC. ("RP Financial") dated as of June 20, 1997, which states
that the estimated pro forma market value of the Common Stock being
offered for sale in the Conversion ranged from $373.8 million to $505.8
million with a midpoint of $439.8 million (the "Valuation Range"). The
independent appraisal of RP Financial is based upon estimates and
projections that are subject to change and the valuation must not be
construed as a recommendation as to the advisability of purchasing the
Common Stock nor an assurance that a purchaser of Common Stock will
thereafter be able to sell the Common Stock at prices within the
Valuation Range. Based on the Valuation Range, the Boards of Directors
of the Bank and the Company established an estimated price range of the
Common Stock being offered for sale in the Conversion within the
Valuation Range of $373.8 million to $505.8 million (the "Estimated
Price Range") or between 37,384,259 and 50,578,704 shares of Common
Stock issued at the $10.00 per share price (the "Purchase Price") to be
paid for each share of Common Stock subscribed or purchased in the
Offerings. See "The Conversion--Stock Pricing."
(2) Consists of the estimated costs to the Bank and the Company to be
incurred in connection with the Conversion, including estimated fixed
expenses of approximately $5.0 million and marketing fees to be paid to
Sandler O'Neill and Partners, L.P. ("Sandler O'Neill" or the "Agent")
in connection with the Offerings, which fees are estimated to be
between $5.5 million and $7.5 million based on the minimum and the
maximum of the Estimated Price Range, respectively. See "The
Conversion - Marketing Arrangements." The actual fees and expenses may
vary from the estimates. Such fees paid to Sandler O'Neill may be
deemed to be underwriting fees. See "Pro Forma Data."
(3) Actual net proceeds may vary substantially from estimated amounts
depending on the number of shares sold in the Offerings and other
factors. Gives effect to the purchase of shares of Common Stock by the
Employee Stock Ownership Plan (the "ESOP"), which initially will be
deducted from the Company's stockholders' equity. For the effects of
such purchases, see "Capitalization," "Use of Proceeds" and "Pro Forma
Data."
(4) As adjusted to reflect the sale of up to an additional 15% of the
Common Stock which may be offered at the Purchase Price, without
resolicitation of subscribers or any right of cancellation, due to
regulatory considerations or changes in market or general financial and
economic conditions. See "Pro Forma Data" and "The Conversion--Stock
Pricing." For a discussion of the distribution and allocation of the
additional shares, if any , see "The Conversion--Subscription
Offering," "-Community Offering" and " -Limitations on Common Stock
Purchases."
SANDLER O'NEILL & PARTNERS, L.P.
The date of this Prospectus is , 1997.
----------
<PAGE> 42
Non-transferable rights to subscribe for the Common Stock in a
subscription offering (the "Subscription Offering") have been granted in the
following order of priority to: (1) the Bank's Eligible Account Holders
(defined as holders of deposit accounts totaling $100 or more as of March 31,
1996); (2) the Company's and the Bank's ESOP, which intends to subscribe for up
to 8% of the Common Stock issued in connection with the Conversion; and (3) the
Bank's Supplemental Eligible Account Holders (defined as holders of deposit
accounts totaling $100 or more as of _______, 1997). Subscription rights are
non-transferable. Persons found to be transferring subscription rights will be
subject to forfeiture of such rights and possible further sanctions and
penalties imposed by the New York State Banking Department ("Department").
Certificates representing shares of Common Stock purchased in the Subscription
Offering must be registered in the name of the Eligible Account or Supplemental
Eligible Account Holders, as the case may be. Upon completion of the
Subscription Offering, and subject to the other limitations described herein,
the Company will offer any shares of Common Stock not subscribed for in the
Subscription Offering for sale in a community offering (the "Community
Offering"). It is anticipated that shares of Common Stock not subscribed for
in the Subscription Offering and Community Offering, if any, will be offered by
the Company in a syndicated community offering through a syndicate of
registered broker-dealers to be formed (the "Syndicated Community Offering")
(the Subscription Offering, Community Offering and any Syndicated Community
Offering are referred to collectively as the "Offerings").
Except for the ESOP, no Eligible Account Holder or Supplemental
Eligible Account Holder may, in their respective capacities as such, purchase
in the Subscription Offering more than $500,000 of Common Stock; no person,
together with associates and persons acting in concert with such person, may
purchase in the Community Offering and Syndicated Community Offering more than
$500,000 of Common Stock; and no person, together with associates of and
persons acting in concert with such person, may purchase in the aggregate more
than the overall maximum purchase limitation of 1.0% of the total number of
shares of Common Stock offered in the Conversion (439,814 shares, based upon
the midpoint of the Valuation Range); provided, however, such overall purchase
limitation may be increased and the amount that may be subscribed for may be
increased or decreased at the sole discretion of the Bank and the Company
without further approval of subscribers or the Bank's depositors. The minimum
purchase is 25 shares. See "The Conversion -- Subscription Offering,"
"--Community Offering" and "-- Limitations on Common Stock Purchases."
The Bank and the Company have engaged Sandler O'Neill to consult with
and advise the Company and the Bank in the Offerings and Sandler O'Neill has
agreed to assist the Company and the Bank with the solicitation of
subscriptions and purchase orders for shares of Common Stock in the Offerings.
Sandler O'Neill is not obligated to take or purchase any shares of Common Stock
in the Offerings. The Bank and the Company will pay a fee to Sandler O'Neill
which will be based on the aggregate Purchase Price of the Common Stock sold in
the Offerings. The Company and the Bank have agreed to indemnify Sandler
O'Neill against certain liabilities arising under the Securities Act of 1933,
as amended (the "Securities Act"). See "The Conversion - Marketing
Arrangements."
Pursuant to the Plan, the Bank intends to establish the Independence
Community Bank Foundation, a private charitable foundation (the "Foundation"),
in connection with the
ii
<PAGE> 43
Conversion. The Plan provides that the Bank and the Company will create the
Foundation and fund it with shares of Common Stock contributed by the Company
from authorized but unissued shares in an amount equal to 8.0% of the number of
shares of Common Stock sold in the Offerings. The Foundation is intended to
complement the Bank's existing community reinvestment activities and will be
dedicated to the promotion of charitable purposes including, among other
things, health, education and welfare programs, community development
activities, cultural efforts, not-for-profit groups and other charitable
purposes within the communities served by the Bank. For a discussion of the
Foundation and its effects on the Conversion, see "Risk Factors --
Establishment of the Foundation," "Pro Forma Data," "Comparison of Valuation
and Pro Forma Information with No Foundation" and "The Conversion --
Establishment of the Foundation."
THE SUBSCRIPTION OFFERING WILL TERMINATE AT 12:00 NOON, EASTERN TIME,
ON ______, 1997 (THE "EXPIRATION DATE"), UNLESS EXTENDED BY THE BANK AND THE
COMPANY, WITH APPROVAL OF THE SUPERINTENDENT OF BANKS OF THE STATE OF NEW YORK
("SUPERINTENDENT") AND THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC"),
IF NECESSARY. THE COMMUNITY OFFERING AND/OR ANY SYNDICATED COMMUNITY OFFERING
MUST BE COMPLETED WITHIN 45 DAYS AFTER THE CLOSE OF THE SUBSCRIPTION OFFERING,
OR ______, 1997, UNLESS EXTENDED BY THE BANK AND THE COMPANY WITH THE APPROVAL
OF THE SUPERINTENDENT AND THE FDIC, IF NECESSARY. Orders submitted are
irrevocable until the completion of the Conversion; provided that, if the
Conversion is not completed within the 45-day period referred to above, unless
such period has been extended with the consent of the Department and the FDIC,
if necessary, all subscribers will have their funds returned promptly with
interest, and all withdrawal authorizations will be cancelled. The completion
of the Subscription Offering is subject to potential delay and subscribers will
have no access to funds used to subscribe for shares of Common Stock,
regardless of any such delay. In addition, orders for Common Stock submitted
by subscribers in the Subscription Offering or purchasers in the Community
Offering which aggregate $50,000 or more must be paid by official bank or
certified check or by a withdrawal authorization from a deposit account at the
Bank. See "The Conversion - The Offerings -Subscription Offering."
The consummation of the Conversion is subject to the receipt of
various regulatory approvals and the approval of Eligible Account Holders in
the manner set forth herein.
The Company has received approval from the National Association of
Securities Dealers, Inc. ("NASD"), conditioned on the consummation of the
Conversion, to have its Common Stock quoted on the Nasdaq National Market under
the symbol "ICBC." Prior to this offering there has not been a public market
for the Common Stock, and there can be no assurance that an active and liquid
trading market for the Common Stock will develop, or that resales of the Common
Stock can be made at or above the Purchase Price. To the extent an active and
liquid trading market does not develop, the liquidity and market value of the
Common Stock may be adversely affected. See "Risk Factors - Absence of Market
for Common Stock" and "Market for the Common Stock."
iii
<PAGE> 44
[MAP]
iv
<PAGE> 45
SUMMARY OVERVIEW
The following summary of the Conversion and the Offerings is qualified
in its entirety by the more detailed information appearing elsewhere in this
Prospectus.
The Bank . . . . . . . . . . . . . . Independence Savings Bank is a New
York-chartered savings bank.
The Company . . . . . . . . . . . . . Independence Community Bank Corp.
is a Delaware corporation organized
in June 1997 to become the savings
and loan holding company of the
Bank. To date, the Company has not
engaged in any business.
The Conversion . . . . . . . . . . . The Board of Directors of the Bank
and the Board of Trustees of the
Mutual Holding Company have adopted
a Plan of Conversion. The Company
is offering shares of its Common
Stock in the Offerings in
connection with the reorganization
of the Bank and the Mutual Holding
Company to the stock form of
organization.
The Independence Community
Foundation . . . . . . . . . . . The Plan of Conversion provides for
the establishment of a charitable
foundation in connection with the
Conversion. The Foundation, which
will be incorporated under Delaware
law as a nonstock corporation, will
be funded with a contribution of
Common Stock by the Company in an
amount equal to 8% of the Common
Stock sold in the Conversion. See
"The Conversion-Establishment of
the Foundation."
Terms of the Offerings . . . . . . . The shares of Common Stock to be
sold in connection with the
Conversion are being offered at the
Purchase Price of $10.00 per share
in the Subscription Offering
pursuant to subscription rights in
the following order of priority:
(i) Eligible Account Holders; (ii)
the Company's and the Bank's ESOP;
and (iii) Supplemental Eligible
Account Holders. Upon completion
of the Subscription Offering, any
shares of Common Stock not
subscribed for in the Subscription
Offering will be offered in the
Community Offering at $10.00 per
share to certain members of the
general public to whom a copy of
this Prospectus is delivered.
Subscription rights will expire if
not exercised by 12:00
1
<PAGE> 46
noon, Eastern Time, ___________,
1997 unless extended by the Bank
and the Company. See "The
Conversion-The Offerings-
Subscription Offering" and "-The
Offerings-Community Offering."
Exercise of Subscription
Rights . . . . . . . . . . . . . Persons desiring to subscribe for
shares must do so prior to the
Expiration Date by delivering to
the Bank a properly executed stock
order and certification form
together with full payment. Once
tendered, subscription orders
cannot be revoked or modified
without the consent of the Bank.
See "The Conversion - Procedure for
Purchasing Shares in the
Offerings."
Payment for Shares . . . . . . . . . Payment for subscriptions may be
made (i) in cash (if delivered in
person); (ii) by check or money
order; or (iii) by authorization of
withdrawal from deposit accounts
maintained at the Bank. Orders for
Common Stock submitted by
subscribers in the Subscription
Offering or by purchasers in the
Community Offering which aggregate
$50,000 or more must be paid by
official bank or certified check or
by withdrawal authorization from a
deposit account at the Bank. See
"The Conversion - Procedure for
Purchasing Shares in the Offerings.
Nontransferability of Subscription
Rights . . . . . . . . . . . . . The subscription rights of Eligible
Account Holders and Supplemental
Eligible Account Holders are
nontransferable. See "The
Conversion - Restrictions on
Transfer of Subscription Rights and
Shares."
Purchase Limitations . . . . . . . . No Eligible Account Holder or
Supplemental Eligible Account
Holder may purchase in the
Subscription Offering more than
$500,000 of Common Stock. No
person, together with associates
and persons acting in concert with
such person, may purchase in the
Community Offering and the
Syndicated Community Offering more
than $500,000 of Common Stock.
Except for the ESOP, no person,
together with associates or persons
acting in concert with such person,
may purchase in the aggregate more
than 1% of the Common Stock
offered. The minimum purchase is
25 shares of Common Stock.
2
<PAGE> 47
Securities Offered and Purchase
Price . . . . . . . . . . . . . The Company is offering between
37,384,259 and 50,578,704 shares of
Common Stock at a Purchase Price of
$10.00 per share. The maximum of
the Estimated Price Range may be
increased under certain
circumstances to up to 58,165,509
shares of Common Stock. See "The
Conversion - Stock Pricing and
Number of Shares to be Issued."
Appraisal . . . . . . . . . . . . . . The Purchase Price per share has
been fixed at $10.00. The total
number of shares to be issued in
the Conversion is based upon an
independent appraisal prepared by
RP Financial, dated as of June 20,
1997, which states that the
estimated pro forma market value of
the Common Stock ranged from $373.8
million to $505.8 million. The
final aggregate value will be
determined at the time of closing
of the Offerings and is subject to
change due to changing market
conditions and other factors. See
"The Conversion - Stock Pricing and
Number of Shares to be Issued."
Use of Proceeds . . . . . . . . . . . A portion of net proceeds retained
by the Company will be used for
general activities, including a
loan by the Company to the ESOP to
enable the ESOP to purchase up to
8% of the stock sold in the
Conversion. The Company intends to
initially invest the remaining net
proceeds primarily in investment
securities, mortgage-backed and
mortgage-related securities and
equity securities. The Bank
intends to utilize net proceeds for
general business purposes. See
"Use of Proceeds."
Dividend Policy . . . . . . . . . . . Upon Conversion, the Board of
Directors of the Company will have
the authority to declare dividends
on the Common Stock, subject to
statutory and regulatory
requirements. In the future, the
Board of Directors of the Company
may consider a policy of paying
cash dividends on the Common Stock.
However, no decision has been made
with respect to such dividends, if
any. See "Dividend Policy."
Benefits of the Conversion to
Management . . . . . . . . . . . . The Company's directors and
executive officers will receive
certain additional benefits as a
result of the Conversion. See
"Management - Change in Control
3
<PAGE> 48
Agreements," "-Benefits - Employee
Stock Ownership Plan," "-Stock
Option Plan" and "- Recognition
Plan.
Expiration Date for the Subscription
Offering . . . . . . . . . . . . . The expiration date of the
Subscription Offering is 12:00
noon, Eastern Time on ________,
1997 unless extended by the Bank
and the Company. See "The
Conversion - The Offering
-Subscription Offering."
Expiration Date for the Community
Offering . . . . . . . . . . . . . The expiration date for the
Community Offering is 12:00 noon,
Eastern Time on ______, 1997,
unless extended by the Bank and the
Company. See "The Conversion - The
Offerings-Community Offering."
Market for Stock . . . . . . . . . . The Company has received
conditional approval to have its
Common Stock quoted on the Nasdaq
National Market under the symbol
"_____". See "Market for the
Common Stock."
Board Recommendations . . . . . . . . The Company's and the Bank's Boards
of Directors make no recommendation
to depositors or other potential
investors regarding suitability of
investment in the Common Stock. An
investment in the Common Stock must
be made pursuant to each investor's
evaluation of his or her best
interests.
Risk Factors . . . . . . . . . . . . See "Risk Factors" for a discussion
of certain factors that should be
considered by prospective
investors.
Stock Conversion Center . . . . . . . If you have any questions regarding
the Conversion, call the Stock
Conversion Center at (718)
___-____.
4
<PAGE> 49
SUMMARY
This summary is qualified in its entirety by the more detailed
information regarding the Bank and the Company and the Consolidated Financial
Statements of the Bank appearing elsewhere in this Prospectus.
INDEPENDENCE COMMUNITY BANK CORP.
Independence Community Bank Corp. is a Delaware corporation organized
by the Bank in June 1997 for the purpose of holding all of the capital stock of
the Bank and in order to facilitate the Conversion. The Company will purchase
all of the common stock of the Bank to be issued upon Conversion in exchange
for 50% of the net Conversion proceeds, with the remaining net proceeds to be
retained by the Company for general business purposes, including making a loan
to the ESOP. Upon completion of the Conversion, the only significant assets of
the Company will be all of the outstanding common stock of the Bank, the note
evidencing the Company's loan to the ESOP and the portion of the net proceeds
from the Offerings retained by the Company. The business of the Company will
initially consist of the business of the Bank. See "Business" and "Regulation
- -The Company."
INDEPENDENCE SAVINGS BANK
Independence Savings Bank is a New York-chartered savings bank that
has been in operation since 1850. In April 1992, the Bank reorganized into the
mutual holding company form of organization pursuant to which the Bank became a
wholly-owned stock savings bank subsidiary of the Mutual Holding Company. At
March 31, 1997, the Bank had total assets of $3.73 billion, total liabilities
of $3.42 billion, including $3.33 billion of deposits, and total equity of
$309.1 million. The Bank reported net income of $17.2 million, $36.0 million
and $34.9 million during the years ended March 31, 1997, 1996 and 1995,
respectively. The Bank is subject to regulation by the Department, as its
chartering authority, and by the FDIC as its primary federal banking regulator
and as insurer of the Bank's deposits up to applicable limits.
Headquartered in Brooklyn, New York, the Bank maintains 33 full
service offices located within the greater New York City metropolitan area of
which 27 are located in the boroughs of Brooklyn and Queens with the remaining
offices located in Manhattan, the Bronx, Staten Island and Nassau County. The
Bank's customer base, like the urban neighborhoods which it serves, is racially
and ethnically diverse and is comprised of mostly middle-income households and
to a lesser degree, low to moderate income households. The Bank has sought to
set itself apart from its many competitors by tailoring its products and
services to meet the needs of its customers, by emphasizing customer service
and convenience and by being actively involved in community affairs in the
neighborhoods and communities which it serves. For example, as part of the
Bank's competitive strategy to attract loyal deposit customers, the Bank has
historically been a low service fee provider of a variety of savings and
checking account products. In furtherance of its commitment to the
5
<PAGE> 50
communities which it serves, Bank employees at all levels are encouraged and
afforded the opportunity to participate in community outreach programs.
Perhaps most indicative of the Bank's commitment to strengthen its bond with
customers and the communities it serves is the decision to form and fund the
Independence Community Foundation. The Bank believes that this commitment to
customer and community service has permitted it to build strong customer
identification and loyalty which is essential to the Bank's ability to compete
effectively.
In recent years, the Bank has pursued a plan of controlled growth as
part of its strategy to achieve long-term financial strength. Because the
neighborhoods and communities served by the Bank are fully developed and
experiencing little population growth and are highly competitive banking
markets, the Bank's ability to grow has been largely dependent on the
acquisition of other financial institutions or branch offices of financial
institutions located within the strategic geographic areas which the Bank has
made a commitment to serve throughout its history. The Bank also has sought to
increase the amount and stability of its net interest income and noninterest
income while maintaining a high level of asset quality. In pursuit of these
goals, the Bank has adopted a business strategy which emphasizes residential
lending and the offering of traditional retail deposit products and services
which meet the needs of its customers.
Highlights of the Bank's strategy include the following:
-Emphasis on Controlled Growth. In recent years the Bank has sought
to increase its assets and expand its operations. These efforts have included
the acquisition of Bay Ridge Bancorp., Inc. and its wholly owned subsidiary,
Bay Ridge Federal Savings Bank (collectively "Bay Ridge"), in January 1996 with
aggregate assets of approximately $558.6 million, deposits of $445.2 million
and six branch offices located in the borough of Brooklyn. In addition, the
Bank has completed several branch purchase transactions, including the March
1996 acquisition of five branch offices located in Brooklyn and Staten Island
involving the assumption of $615.6 million of deposit liabilities. These
efforts have contributed to the growth in the Bank's assets, which increased by
56.1% from $2.39 billion at March 31, 1993 to $3.73 billion at March 31, 1997.
The net proceeds from the Offerings will enhance significantly the capital base
of the Company and the Bank and will thereby support further growth and
expansion of operations consistent with the Bank's business strategies.
-Emphasis on Residential Lending. Management believes that the Bank
is more likely to achieve its goals of long-term financial strength and
profitability by continuing to emphasize residential loan products and
services. Given the concentration of multi-family housing units in the New
York City metropolitan area, the Bank's primary lending emphasis is the
origination of loans secured by first liens on multi-family (five or more
units) residential properties, which consist primarily of mortgage loans
secured by apartment buildings. Such loans totaled $1.37 billion or 53.7% of
the total loan portfolio at March 31, 1997. The Bank also emphasizes
originations of single-family (one- to four-units) residential mortgage loans,
which totaled $552.7 million or 21.8% of the total portfolio at March 31, 1997,
and cooperative apartment loans to individuals (loans secured by shares in a
6
<PAGE> 51
cooperative housing corporation), which totaled $348.0 million or 13.7% of the
total loan portfolio at March 31, 1997.
-Maintain Asset Quality. Management believes that high asset quality
is a key to long-term financial success and, as a result, the investments which
are emphasized by the Bank are intended to maintain a high level of asset
quality and moderate credit risk. At March 31, 1997, the Bank's non-performing
assets amounted to $19.2 million, or 0.51%, of total assets. At March 31,
1997, the Bank's allowance for loan losses amounted to $27.0 million or 144.9%
of the Bank's non-performing loans.
Stable Source of Liquidity and Earnings. The Bank purchases short-to
medium-term investment securities and mortgage-backed and mortgage-related
securities combining what management believes to be appropriate yield,
liquidity and credit quality in its efforts to achieve (1) a managed and
predictable source of liquidity to meet loan demand, (2) a stable source of
interest income and (3) diversification in the Bank's portfolio of
interest-earning assets. These portfolios, which totaled $548.5 million at
March 31, 1997, are comprised primarily of obligations of the U.S. Government
and federal agencies totaling $345.1 million and mortgage-backed and
mortgage-related securities totaling $191.0 million.
-Emphasis on Retail Deposits and Customer Service. The Bank's
liability strategy emphasizes retail deposits obtained through its branch
offices, rather than institutional or wholesale deposits. This strategy is
facilitated by the Bank's extensive branch network, which has enabled the Bank
to emphasize more stable savings accounts, negotiable order of withdrawal
("NOW") accounts, money market accounts and non-interest-bearing checking
accounts, which in the aggregate amounted to $1.58 billion or 47.6% of the
Bank's total deposits at March 31, 1997. The Bank also emphasizes customer
service and being a low service fee provider of various deposit and other
products.
THE CONVERSION
On April 18, 1997, the Board of Directors of the Bank and the Board of
Trustees of the Mutual Holding Company adopted the Plan pursuant to which the
Mutual Holding Company will convert to the stock-form of organization and
simultaneously merge with and into the Bank and all of the outstanding shares
of Bank common stock held by the Mutual Holding Company will be cancelled.
Pursuant to the Plan, the Company is offering shares of Common Stock in the
Offerings as part of the Conversion. See "- The Offerings" below and "The
Conversion - The Offerings."
The increased capital resulting from the Offerings will support the
future expansion of the retail banking operations of the Bank and the Company,
through acquisitions or otherwise, as well as possible diversification into
other businesses. Although there are no current arrangements, understandings
or agreements regarding such opportunities, the Bank and the Company will be in
a position after the Conversion, subject to regulatory limitations and their
financial position, to take advantage of additional opportunities for such
expansion that may arise in the future. Furthermore, the additional capital
resulting from the Conversion will facilitate the Bank's ability to sustain its
continued growth and development
7
<PAGE> 52
over the long-term while maintaining its status as a community-based,
independent financial institution serving Brooklyn, Queens and the greater New
York City metropolitan area.
In accordance with Department and FDIC regulations, consummation of
the Conversion is conditioned upon the approval of the Plan by the
Superintendent and the non-objection of the FDIC, as well as (i) the approval
of the holders of at least 75% in amount of deposit liabilities of Eligible
Account Holders represented in person or by proxy at a special meeting of
Eligible Account Holders called for the purpose of submitting the Plan for
approval (the "Special Meeting"), and (ii) the approval of at least a majority
of the total votes eligible to be cast by Eligible Account Holders at the
Special Meeting.
THE OFFERINGS
Pursuant to the Plan and in connection with the Conversion, the
Company is offering up to 50,578,704 shares of Common Stock in the Offerings.
Common Stock is first being offered in the Subscription Offering with
nontransferable subscription rights being granted, in the following order of
priority, to (i) Eligible Account Holders; (ii) the ESOP; and (iii)
Supplemental Eligible Account Holders. Subscription rights will expire if not
exercised by 12:00 noon, Eastern Time, on ________, 1997, unless extended.
Subscription rights are non-transferable. Persons found to be
transferring subscription rights will be subject to forfeiture of such rights
and possible further sanctions and penalties imposed by the Department.
Certificates representing shares of Common Stock purchased in the Subscription
Offering must be registered in the name of the Eligible Account or Supplemental
Eligible Account Holders, as the case may be.
Upon completion of the Subscription Offering and subject to other
limitations described herein, any shares of Common Stock not subscribed for in
the Subscription Offering will be offered by the Company in the Community
Offering to certain members of the general public to whom a copy of this
Prospectus is delivered, with preference given to natural persons residing in
counties in which the Bank maintains branch offices. It is anticipated that
shares not subscribed for in the Subscription and Community Offerings will be
offered to certain members of the general public in a Syndicated Community
Offering. The Bank and the Company reserve the absolute right to reject or
accept any orders in the Community Offering or the Syndicated Community
Offering, in whole or in part, either at the time of receipt of an order or as
soon as practicable following the Expiration Date.
The Bank and the Company have retained Sandler O'Neill as advisors in
connection with the Offerings and to assist in soliciting subscriptions in the
Offerings. See "The Conversion - The Offerings - Subscription Offering," "-
Community Offering," "-Syndicated Community Offering" and "- Marketing
Arrangements."
PURCHASE LIMITATIONS
With the exception of the ESOP, which intends to purchase up to an
aggregate of 8.0% of the number of shares of Common Stock to be issued in the
Offerings, no Eligible
8
<PAGE> 53
Account Holder or Supplemental Eligible Account Holder may purchase in their
capacity as such in the Subscription Offering more than $500,000 of Common
Stock; no person, individually or together with associates and persons acting
in concert, may purchase in each of the Community Offering and any Syndicated
Community Offering more than $500,000 of Common Stock; and no person,
individually or together with associates of or persons acting in concert with
such person, may purchase in the Offerings more than 1% of the total number of
shares of Common Stock issued in the Conversion exclusive of any shares issued
pursuant to an increase in the Estimated Price Range of up to 15% (373,842
shares and 505,787 shares at the minimum and maximum of the Estimated Price
Range, respectively). At any time during the Offerings, and without further
approval by the Eligible Account Holders or a resolicitation of subscribers,
the Bank and the Company may in their sole discretion increase any of the
individual or aggregate purchase limitations to a percentage which does not
exceed 5.0% of the Common Stock issued in the Conversion. Under certain
circumstances, certain subscribers may be resolicited in the event of such an
increase. The minimum purchase is 25 shares. See "The Conversion -
Limitations on Common Stock Purchases." In the event of an oversubscription,
shares will be allocated in accordance with the Plan, as described under "The
Conversion - The Offerings - Subscription Offering," "- Community Offering,"
and "-Syndicated Community Offering."
STOCK PRICING AND NUMBER OF SHARES TO BE ISSUED IN THE CONVERSION
New York State Banking Board ("Banking Board") regulations require the
aggregate Purchase Price of the Common Stock to be issued in the Conversion to
be consistent with an independent appraisal of the estimated pro forma market
value of the Common Stock. RP Financial's pro forma appraisal of the Common
Stock was $439.8 million as of June 20, 1997. In accordance with Banking Board
regulations, the minimum and maximum of the Valuation Range were set at 15%
below and above the midpoint, respectively, resulting in an offering of $373.8
million to $505.8 million. The full text of the appraisal report of RP
Financial describes the procedures followed, the assumptions made, limitations
on the review undertaken and matters considered. The appraisal report has been
filed as an exhibit to the Registration Statement and the Application for
Conversion of which this Prospectus is a part, and is available in the manner
set forth under "Additional Information." THIS APPRAISAL OF THE COMMON STOCK
IS NOT INTENDED AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION OF ANY KIND AS
TO THE ADVISABILITY OF PURCHASING SUCH STOCK. MOREOVER, BECAUSE SUCH
VALUATION IS NECESSARILY BASED UPON ESTIMATES AND PROJECTIONS OF A NUMBER OF
MATTERS, ALL OF WHICH ARE SUBJECT TO CHANGE FROM TIME TO TIME, NO ASSURANCE CAN
BE GIVEN THAT PERSONS PURCHASING COMMON STOCK IN THE CONVERSION WILL THEREAFTER
BE ABLE TO SELL SUCH SHARES AT PRICES AT OR ABOVE THE PURCHASE PRICE OR IN THE
RANGE OF THE FOREGOING VALUATION OF THE PRO FORMA MARKET VALUE THEREOF.
All shares of Common Stock will be sold at the Purchase Price of
$10.00 per share, which was established by the Boards of Directors of the Bank
and the Company. The actual number of shares to be issued in the Offerings
will be determined by the Bank and the Company based upon the final updated
valuation of the estimated pro forma market value of the Common Stock at the
completion of the Offerings. The number of shares of Common Stock to be issued
is expected to range from a minimum of 37,384,259 shares to
9
<PAGE> 54
a maximum of 50,578,704 shares. Subject to approval of the Department and
non-objection of the FDIC, the Valuation Range may be increased or decreased to
reflect market and economic conditions prior to the completion of the
Offerings, and under such circumstances the Bank and the Company may increase
or decrease the number of shares of Common Stock. No resolicitation of
subscribers will be made and subscribers will not be permitted to modify or
cancel their subscriptions unless (i) the gross proceeds from the sale of the
Common Stock are less than the minimum or more than 15% above the maximum of
the current Valuation Range or (ii) the Offerings are extended beyond _____,
1997. See "Pro Forma Data," "Risk Factors - Possible Dilutive Effect of
Issuance of Additional Shares" and "The Conversion - Stock Pricing and Number
of Shares to be Issued."
INDEPENDENCE COMMUNITY FOUNDATION
In furtherance of the Bank's commitment to the communities that it
serves, the Plan of Conversion provides for the establishment of a private
charitable foundation in connection with the Conversion. The Plan provides
that the Bank and the Company will create Independence Community Foundation,
which will be incorporated under Delaware law as a nonstock corporation, and
will fund the Foundation with shares of Common Stock contributed by the
Company, as further described below. The Company and the Bank believe that the
funding of the Foundation with Common Stock of the Company is a means of
establishing a common bond between the Bank and the communities that it serves
and thereby enable such communities to share in the potential growth and
success of the Company over the long term. By further enhancing the Bank's
visibility and reputation in the communities that it serves, the Bank believes
that the Foundation will enhance the long-term value of the Bank's community
banking franchise. See "The Conversion--Establishment of the Charitable
Foundation--Structure of the Foundation."
The authority for the affairs of the Foundation will be vested in the
Board of Directors of the Foundation, which will be comprised of members of the
Company's Board of Directors and certain other individuals chosen in light of
their commitment and service to charitable and community purposes. The
directors of the Foundation will be responsible for establishing the policies
of the Foundation with respect to grants or donations by the Foundation,
consistent with the purposes for which the Foundation was established, and will
also be responsible for directing the activities of the Foundation, including
matters related to ownership of the Common Stock held by the Foundation.
However, it is expected that establishment of the Foundation will be subject to
certain conditions, including, among others, a requirement that the Common
Stock of the Company held by the Foundation be voted in the same ratio as all
other shares of the Company's Common Stock on all proposals considered by
stockholders of the Company. See "The Conversion--Establishment of the
Charitable Foundation--Regulatory Conditions Imposed on the Foundation."
The Company proposes to fund the Foundation by contributing to the
Foundation immediately following the Conversion a number of shares of
authorized but unissued shares of Common Stock equal to 8.0% of the Common
Stock sold in the Offerings, or 2,990,740 and 4,046,296 shares at the minimum
and maximum of the Estimated Price Range, respectively. Such contribution,
once made, will not be recoverable by the Company or the
10
<PAGE> 55
Bank. Assuming the sale of shares at the maximum of the Estimated Price Range
and the issuance of shares to the Foundation, the Company will have 54,625,000
shares issued and outstanding, of which the Foundation will own 4,046,296
shares, or 7.4%. DUE TO THE ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK TO
THE FOUNDATION, PERSONS PURCHASING SHARES IN THE CONVERSION WILL HAVE THEIR
OWNERSHIP AND VOTING INTERESTS IN THE COMPANY DILUTED BY 7.4%. SEE "PRO FORMA
DATA."
As a result of the establishment of the Foundation, the Company will
recognize an expense of the full amount of the contribution, offset in part by
a corresponding tax benefit, during the quarter in which the contribution is
made, which is expected to be the third quarter of fiscal 1998. Such expense
will reduce earnings and have a material impact on the Company's earnings for
such quarter and for the year. Assuming a contribution of $40.5 million in
Common Stock in fiscal 1998, based on the maximum of the Estimated Price Range
and assuming a marginal tax rate of 47%, the Company estimates a net tax
effected expense of $21.4 million. In addition, the Bank does not anticipate
making future charitable contributions to the Foundation during the first five
years following the initial contribution to the Foundation. For further
discussion of the Foundation and its impact on purchasers in the Conversion,
see "Risk Factors--Establishment of the Foundation." "Pro Forma Data" and "The
Conversion--Establishment of the Foundation."
PROSPECTUS DELIVERY AND PROCEDURE FOR PURCHASING SHARES
To ensure that each purchaser receives a Prospectus at least 48 hours
prior to the Expiration Date in accordance with Rule 15c2-8 of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), no Prospectus will be mailed
any later than five days prior to such date or hand delivered any later than
two days prior to such date. Execution of the order form will confirm receipt
or delivery of the Prospectus in accordance with Rule 15c2-8. Order forms will
only be distributed with a Prospectus.
The Company and the Bank are not obligated to accept for processing
orders not submitted on original order forms. Order forms unaccompanied by an
executed certification form will not be accepted. Payment by check, money
order, cash or debit authorization to an existing account at the Bank must
accompany the order form. Orders for Common Stock submitted by subscribers in
the Subscription Offering or by purchasers in the Community Offering which
aggregate $50,000 or more must be paid by official bank or certified check or
by withdrawal authorization from a deposit account at the Bank.
In order to ensure that Eligible Account Holders and Supplemental
Eligible Account Holders are properly identified as to their stock purchase
priorities, depositors as of the close of business on the Eligibility Record
Date (March 31, 1996) or the Supplemental Eligibility Record Date (________,
1997), must list all accounts on the stock order form giving all names on each
account and the account numbers. See "The Conversion- Procedure for Purchasing
Shares in the Offerings."
11
<PAGE> 56
USE OF PROCEEDS
Net proceeds from the sale of the Common Stock are estimated to be
between $363.3 million and $493.3 million ($568.0 million assuming an increase
in the Valuation Range by 15%). See "Pro Forma Data." The Company plans to
use 50% of the net proceeds from the Offerings to purchase all the outstanding
common stock of the Bank to be issued in the Conversion and retain the
remainder of the net proceeds. The Company intends to use a portion of the net
proceeds retained by it to make a loan directly to the ESOP to enable the ESOP
to purchase 8.0% of the Common Stock sold in the Offerings. The amount of the
loan is expected to be between $29.9 million and $40.5 million at the minimum
and maximum of the Valuation Range, respectively. It is anticipated that the
loan to the ESOP will have a term of not less than 20 years and a fixed
interest rate at the Bank's prime rate as of the date of the loan. See
"Management of the Bank - Stock Benefit Plans - Employee Stock Ownership Plan."
The Company intends initially to invest the net proceeds not used to fund the
ESOP loan in investment securities and mortgage-backed and mortgage-related
securities. Funds received by the Bank from the Company's purchase of its
common stock will be used for general purposes, including investment in
investment securities, mortgage-backed and mortgage-related securities and
loans. The net proceeds from the Offerings will be available to the Company
and the Bank to support the future expansion of retail banking operations or
diversification into other businesses, through acquisition or otherwise,
including the potential acquisition of other financial institutions and/or
branch offices. There are no current plans, arrangements, understandings or
agreements regarding such diversification or acquisitions. Subject to
applicable limitations and then-existing circumstances, such funds also may be
used by the Company in the future to repurchase shares of Common Stock. See
"The Conversion - Certain Restrictions on Purchases or Transfer of Shares after
the Conversion." See "Use of Proceeds."
DIVIDEND POLICY
Following consummation of the Conversion, the Board of Directors of
the Company may consider a policy of paying cash dividends on the Common Stock.
However, no decision has been made as to the amount or timing of such
dividends, if any. See "Dividend Policy."
RISK FACTORS
See "Risk Factors" for a discussion of certain factors that should be
considered by prospective investors.
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<PAGE> 57
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in Thousands, Except Per Share Data)
The following selected historical consolidated financial data for the
five years ended March 31, 1997, is derived in part from the audited
consolidated financial statements of the Bank. The selected historical
consolidated financial data set forth below should be read in conjunction with,
and is qualified in its entirety by, the historical consolidated financial
statements of the Bank, including the related notes, included elsewhere herein.
<TABLE>
<CAPTION>
At March 31,
-----------------------------------------------------------------------
1997 1996 1995 1994 1993
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
Total assets $3,733,316 $3,869,782 $2,619,935 $2,549,180 $2,392,351
Cash and cash equivalents 374,636 103,192 110,394 37,667 66,366
Investment securities held to
maturity -- 39,995 29,427 355,886 372,088
Mortgage-backed and mortgage-related securities
held to maturity -- 120,702 305,545 376,704 423,506
Mortgage-backed and mortgage-related securities
available for sale 190,979 395,321 -- -- --
Investment securities available for sale 357,487 683,828 61,818 -- --
Loans receivable, net 2,503,089 2,322,808 2,020,262 1,693,994 1,461,931
Intangible assets(1) 60,499 80,268 1,023 1,728 2,592
Deposit accounts 3,325,558 3,396,890 2,236,422 2,207,441 2,163,761
FHLB advances 14,550 56,045 67,462 60,489 3,375
Other borrowings 2,682 1,250 1,286 1,100 1,600
Total equity 309,114 289,819 259,197 220,690 178,445
<CAPTION>
For the Year Ended March 31,
-----------------------------------------------------------------------
1997 1996 1995 1994 1993
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Interest income $255,303 $213,100 $191,539 $179,697 $180,698
Interest expense 140,187 110,619 80,562 75,633 86,297
------- -------- -------- -------- --------
Net interest income 115,116 102,481 110,977 104,064 94,401
Provision for loan losses 7,960 3,679 3,841 5,014 4,462
-------- -------- -------- -------- --------
Net interest income after
provision for loan losses 107,156 98,802 107,136 99,050 89,939
Net gain (loss) on sales of
loans and securities (3,347) 12,222 (3,952) 849 283
Other noninterest income 6,256 7,860 6,416 6,873 5,103
Amortization of intangible assets 8,278 1,842 905 864 859
Other noninterest expenses(2) 73,875 50,288 46,464 41,176 37,256
------ ------ ------ ------ ------
Income before income taxes 27,912 66,754 62,231 64,732 57,210
Income taxes 10,732 30,782 27,327 25,808 26,319
--------
Cumulative effect of
change in accounting principle (3) -- -- -- 3,321 --
-------- -------- -------- -------- --------
Net income $ 17,180 $ 35,972 $ 34,904 $ 42,245 $ 30,891
======== ======== ======== ======== ========
</TABLE>
13
<PAGE> 58
KEY OPERATING
RATIOS AND OTHER
DATA:
<TABLE>
<CAPTION>
At or For the Year Ended March 31,
------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:(4)
Return on assets (2) 0.46% 1.27% 1.37% 1.71% 1.36%
Return on equity (2) 5.69 13.13 14.81 21.80 19.23
Interest-earning assets to interest-
bearing liabilities 105.80 109.28 110.55 107.97 106.89
Interest rate spread (5) 3.09 3.39 4.18 4.13 4.00
Net interest margin (5) 3.32 3.77 4.52 4.38 4.27
Noninterest expenses, exclusive of
amortization of intangible assets, to
total assets(2) 1.99 1.77 1.83 1.67 1.64
Efficiency ratio (6) 53.82 45.58 39.79 37.12 37.44
ASSET QUALITY RATIOS:
Non-performing loans as a percent of
total loans at end of period .73 1.24 .77 .79 1.06
Non-performing assets to total assets
at end of period(7) 0.51 0.78 0.67 0.61 0.85
Allowance for loan losses to
nonperforming loans at end of period 144.92 70.55 75.01 64.92 40.83
Allowance for loan losses to total loans
at end of period 1.06 0.87 0.58 0.51 0.43
CAPITAL AND OTHER RATIOS (4):
Equity to assets at end of period 8.28 7.49 9.89 8.66 7.46
Leverage capital 6.83 6.13 9.54 8.52 7.31
Tangible equity to risk-weighted assets
at end of period 10.05 9.82 13.76 13.85 12.57
Total capital to risk-weighted assets at
end of period 11.15 10.82 14.43 14.41 13.05
NUMBER OF FULL SERVICE OFFICES 32(8) 33 21 20 20
</TABLE>
- ------------
(1) Represents the excess of cost over fair value of net assets acquired
which consists of goodwill and other intangibles which amounted to
$23.7 million and $36.8 million at March 31, 1997, respectively. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operation - Recent Acquisitions."
(2) At and for the year ended March 31, 1997, reflects the effects of a
special one-time assessment imposed on institutions which had deposits
insured by the Savings Association Insurance Fund ("SAIF"). The Bank,
as a result of the various acquisitions it has completed, is deemed to
have SAIF deposits. As a consequence, during fiscal 1997, it paid
$8.6 million in satisfaction of the special assessment. Had this
amount not been paid, for the year ended March 31, 1997, the Bank's
returns on assets and equity would have been .61% and 7.44%,
respectively, and the Bank's ratio of noninterest expenses, exclusive
of amortization of intangible assets, to total assets would have been
1.76%.
(3) Reflects adoption of Statement of Financial Accounting Standards
("SFAS") No. 109.
(4) With the exception of end of period ratios and the efficiency ratio,
all ratios are based on average daily balances during the respective
periods.
(5) Interest rate spread represents the difference between the weighted
average yield on interest-earning assets and the weighted average cost
of interest-bearing liabilities; net interest margin represents net
interest income as a percentage of average interest-earning assets.
(footnotes continued on following page)
14
<PAGE> 59
- ---------------
(6) Reflects adjusted operating expenses (net of amortization of
intangibles and the special Savings Association Insurance Fund
("SAIF") assessment) as a percent of the aggregate of net interest
income and adjusted non-interest income (excluding gains and losses on
the sales of loans and securities).
(7) Non-performing assets consist of non-accrual loans, loans past due 90
days or more as to interest and accruing and other real estate
acquired through foreclosure or by deed-in-lieu thereof.
(8) Does not include a branch office location in Astoria, New York which
was acquired in April 1997.
15
<PAGE> 60
RISK FACTORS
The following risk factors, in addition to those discussed elsewhere
in this Prospectus, should be carefully considered by investors in deciding
whether to purchase the Common Stock offered hereby.
POTENTIAL LOW RETURN ON EQUITY FOLLOWING THE CONVERSION; UNCERTAINTY AS TO
FUTURE GROWTH OPPORTUNITIES
At March 31, 1997, the Bank's ratio of equity to assets was 8.28%.
The Company's equity position will be significantly increased as a result of
the Conversion. On a pro forma basis as of March 31, 1997, assuming the sale
of Common Stock at the maximum and 15% above the maximum of the Valuation
Range, the Company's ratio of equity to assets would be 18.18% and 19.50%. The
Company's ability to leverage this capital will be significantly affected by
industry competition for loans and deposits. The Company currently anticipates
that it will take time to prudently deploy such capital. As a result, the
Company's return on equity initially is expected to be below the industry
average after the Conversion.
In an effort to fully deploy post-Conversion capital, in addition to
attempting to increase its loans and deposits through internal growth, the
Company may seek to expand its operations through acquisitions, particularly
through acquisitions of other financial institutions or branch offices and
deposits in the Bank's market area. The Company's ability to grow through
selective acquisitions will be dependent on successfully identifying, acquiring
and integrating such acquisition candidates. There can be no assurance the
Company will be able to generate internal growth or to identify attractive
acquisition candidates, acquire such candidates on favorable terms or
successfully integrate them into the Company. In addition, given the premiums
being paid, and the competitive environment for acquisitions in the recent
past, no assurance can be given that any such acquisitions by the Company may
not, at least initially, be dilutive to earnings. Neither the Company nor the
Bank has any specific plans, arrangements or understandings regarding any such
expansions or acquisitions at this time.
MARKET AREA AND CUSTOMER SERVICE PHILOSOPHY
The Bank maintains its headquarters in Brooklyn, New York and has had
long-standing and extensive ties to the borough of Brooklyn since the Bank's
organization in 1850. The Bank's retail banking presence is concentrated in
Brooklyn and Queens, where 27 of its 33 branch offices are located with more
than 75% of the Bank's total deposits at March 31, 1997. The boroughs of
Brooklyn and Queens are racially and ethnically diverse and include significant
numbers of recent immigrants to the United States and low-to moderate income
residents. The median household income for Brooklyn is below median household
incomes nationally, as well as for the State of New York, while the median
household income for Queens is slightly higher than national and New York State
median income levels. In addition, the unemployment rates in the markets
served by the Bank
16
<PAGE> 61
traditionally are higher than the surrounding suburbs and, in recent periods,
the boroughs of Brooklyn and Queens have had, with the exception of the Bronx,
the highest unemployment rates in New York City.
An integral part of the Bank's business and competitive strategy has
been to be a low-cost service provider in order to build a loyal and stable
customer base and to provide the banking services needed by the communities and
neighborhoods served by the Bank. Subsequent to the Conversion, the Bank
intends to maintain its headquarters in Brooklyn and to continue its strategy
of providing low-cost products and services to its customers in the boroughs of
Brooklyn and Queens as well as Manhattan, the Bronx, Staten Island and Nassau
County, New York. The Bank's commitment to maintain customer and community
service in its existing markets may result in the Bank incurring certain
increased operating which, in turn, may reduce profitability.
POTENTIAL INCREASED COMPENSATION EXPENSE AFTER THE CONVERSION
In November 1993, the American Institute of Certified Public
Accountants ("AICPA") issued Statement of Position 93-6 entitled "Employers'
Accounting for Employee Stock Ownership Plans" ("SOP 93-6"). SOP 93-6 requires
an employer to record compensation expense in an amount equal to the fair value
of shares committed to be released to employees from an employee stock
ownership plan instead of an amount equal to the cost basis of such shares. If
the shares of Common Stock appreciate in value over time, SOP 93-6 will result
in increased compensation expense with respect to the ESOP as compared with
prior guidance which required the recognition of compensation expense based on
the cost of shares acquired by the ESOP. It is impossible to determine at this
time the extent of such impact on future net income. See "Pro Forma Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Recent Accounting Pronouncements." In addition, after
consummation of the Conversion, the Company intends to implement, subject to
stockholder approval (which approval cannot be obtained earlier than six months
subsequent to the Conversion), the Recognition Plan. Upon implementation, the
award of shares of Common Stock from the Recognition Plan will result in
significant additional compensation expense. See "Pro Forma Data" and
"Management - Benefits - Recognition Plan."
POTENTIAL EFFECTS OF CHANGES IN INTEREST RATES
The operating results of the Bank are substantially dependent on its
net interest income, which is the difference between the interest income earned
on its interest-earning assets and the interest expense paid on its
interest-bearing liabilities. Like most savings institutions, the Bank's
earnings are affected by changes in market interest rates and other economic
factors beyond its control. If an institution's interest-earning assets have
longer effective maturities than its interest-bearing liabilities, the yield on
the institution's interest-earning assets generally will adjust more slowly
than the cost of its interest-bearing liabilities and, as a result, the
institution's net interest income generally would be adversely affected by
17
<PAGE> 62
material and prolonged increases in interest rates and positively affected by
comparable declines in interest rates. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Asset and Liability
Management." At March 31, 1997, the Bank's interest-bearing liabilities which
were estimated to mature or reprice within one year and three years exceeded
the Bank's interest-earning assets with the same characteristics by $1.7
billion and $946.7 million, respectively, or (45.6)% and (25.4)%, respectively,
of the Bank's total assets.
In addition to affecting interest income and expense, changes in
interest rates also can affect the value of the Bank's interest-earning assets,
which are comprised of fixed and adjustable-rate instruments, and the ability
to realize gains from the sale of such assets. Generally, the value of
fixed-rate instruments fluctuates inversely with changes in interest rates. At
March 31, 1997, all of the Bank's $357.5 million of investment securities (all
of which had fixed-rates of interest) and all $191.0 million of its
mortgage-backed and mortgage-related securities ($185.1 million of which had
fixed-rates of interest) were classified as available for sale and the Bank had
$368,000 of net unrealized gains with respect to such investment and
mortgage-backed and mortgage-related securities, which were included as a
separate component in the Bank's total equity, net of tax, as of such date.
Changes in interest rates also can affect the average life of loans
and mortgage-backed securities. Decreases in interest rates generally result
in increased prepayments of loans and mortgage-backed securities as borrowers
refinance to reduce borrowing costs, which may subject the Bank to reinvestment
risk to the extent that it is not able to reinvest such prepayments at rates
which are comparable to the rates on the maturing loans or securities. The
Bank's loan sale and servicing activity may also be adversely affected by a
declining interest rate environment to the extent such environment results in
increased loan prepayment activity of serviced loans. In this regard, at March
31, 1997, the Bank was servicing $314.6 million of loans for others.
See generally "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Asset and Liability Management" and
"Regulation - The Bank - Regulatory Capital Requirements."
IRREVOCABILITY OF ORDERS; POTENTIAL DELAY IN COMPLETION OF OFFERINGS
Orders submitted in the Subscription Offering, Community Offering
and/or any Syndicated Community Offering are irrevocable. Funds submitted in
connection with any purchase of Common Stock in the Offerings will be held by
the Company until the completion or termination of the Conversion, including
any extension of the Expiration Date. Because, among other factors, completion
of the Conversion will be subject to an update of the independent appraisal
prepared by RP Financial, there may be one or more delays in the completion of
the Conversion. Subscribers will have no access to subscription funds and/or
shares of Common Stock until the Conversion is completed or terminated.
18
<PAGE> 63
RISKS RELATED TO MULTI-FAMILY RESIDENTIAL AND COMMERCIAL REAL ESTATE LENDING
ACTIVITIES
In order to meet the needs of the various communities it serves, the
Bank has emphasized for many years the origination of multi-family residential
loans. In addition, the Bank also originates, to a lesser degree, commercial
real estate loans. At March 31, 1997, multi-family residential loans totaled
$1.37 billion or 53.7% of total loans and commercial real estate loans totaled
$158.3 million or 6.2% of total loans. In addition, at such date, the Bank had
commitments to fund multi-family residential and commercial and other real
estate loans totaling $64.5 million.
Multi-family residential and commercial real estate lending generally
is considered to involve a higher degree of risk than single-family residential
lending due to a variety of factors, including generally larger loan balances,
the dependency on successful operation of the project for repayment, and loan
terms which often do not require full amortization of the loan over its term
and, instead, provide for a balloon payment at stated maturity. There can be
no assurance that the Bank's multi-family residential and commercial real
estate lending activities will not be adversely affected by these and the other
risks related to such activities. At March 31, 1997, of the $16.7 million of
the Bank's non-performing loans, $11.1 million related to non-performing
multi-family residential and commercial real estate loans.
CERTAIN ANTI-TAKEOVER PROVISIONS
PROVISIONS IN THE COMPANY'S GOVERNING INSTRUMENTS AND DELAWARE LAW.
Certain provisions of the Company's Certificate of Incorporation and Bylaws, as
well as certain provisions in Delaware law, will assist the Company in
maintaining its status as an independent publicly-owned corporation.
Provisions in the Company's Certificate of Incorporation and Bylaws provide,
among other things, (i) that the Board of Directors of the Company shall be
divided into three classes; (ii) that special meetings of stockholders may only
be called by the Board of Directors of the Company; (iii) that stockholders
generally must provide the Company advance notice of stockholder proposals and
nominations for director and provide certain specified related information;
(iv) noncumulative voting for the election of directors; (v) that no person may
acquire more than 10% of the issued and outstanding shares of any class of
equity security of the Company; (vi) the authority to issue shares of
authorized but unissued Common Stock and preferred stock and to establish the
terms of any one or more series of Preferred Stock, including voting rights
(which may be waived by the Board of Directors under certain circumstances) and
(vii) supermajority voting requirements with respect to certain business
transactions involving the Company. Provisions under Delaware law applicable
to the Company provide, among other things, that the Company may not engage in
a business combination with an "interested shareholder" (generally a holder of
15% of a corporation's voting stock) during the three-year period after the
interested shareholder became such except under certain specified
circumstances. In addition, Department regulations prohibit, for a period of
one year following the date of Conversion, offers to acquire or the acquisition
of beneficial ownership of more than 10% of the outstanding voting stock of the
Company. The above
19
<PAGE> 64
provisions may discourage potential proxy contests and other potential takeover
attempts, particularly those which have not been negotiated with the Board of
Directors, and thus generally may serve to perpetuate current management. See
"Restrictions on Acquisition of the Company and the Bank."
VOTING POWER OF DIRECTORS AND EXECUTIVE OFFICERS. Directors and
executive officers of the Company expect to hold approximately 1.1% of the
shares of Common Stock outstanding upon consummation of the Conversion based
upon the midpoint of the Estimated Price Range. Executive officers of the
Company, as well as other eligible employees of the Company, also will hold
shares of Common Stock which are allocated to the accounts established for them
pursuant to the ESOP. The ESOP intends to purchase 8.0% of the Common Stock to
be issued in the Offerings (4,046,296 shares based on the maximum of the
Estimated Price Range). Under the terms of the ESOP, shares of Common Stock
which have not yet been allocated to the accounts of employee participants in
the ESOP will be voted by the trustees of the ESOP in the same ratio on any
matter as to those allocated shares for which instructions are given to the
trustees. In addition, the Foundation will be funded with a contribution by
the Company equal to 8.0% of the Common Stock sold in the Conversion, which
may, subject to receipt of a waiver from the FDIC of the voting restriction
expected to be imposed on such Common Stock, be voted as determined by the
directors of the Foundation, the substantial majority of whom will also be
directors and officers of the Company and the Bank. Management's potential
voting control could, together with additional stockholder support, defeat
stockholder proposals requiring 80% approval of stockholders. As a result,
this potential voting control may preclude takeover attempts that certain
stockholders deem to be in their best interest and may tend to perpetuate
existing management. See "Restrictions on Acquisition of the Company and the
Bank--Restrictions in the Company's Certificate of Incorporation and Bylaws"
and "The Conversion--Establishment of the Foundation."
In addition, and subject to stockholder approval following the
consummation of the Conversion, the Company expects to acquire Common Stock on
behalf of the Management Recognition and Retention Plan ("Recognition Plan"), a
non-tax qualified restricted stock plan, in an amount equal to 4.0% of the
Common Stock issued in the Offerings (2,023,148 shares based on the maximum of
the Estimated Price Range). Under the terms of the Recognition Plan, the
trustees of such plan, who will also be directors of the Company, will have
discretionary authority to vote all shares held by such plan. Subject to
stockholder approval, the Company also intends to reserve for future issuance
pursuant to a Stock Option Plan ("Stock Option Plan") a number of authorized
shares of Common Stock equal to an aggregate of 10% of the Common Stock issued
in the Offerings (5,057,870 shares, based on the maximum of the Estimated Price
Range). See "Management - Benefits."
Management's potential voting power could, together with additional
stockholder support, preclude or make more difficult takeover attempts which do
not have the support of the Company's Board of Directors and may tend to
perpetuate existing management.
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CHANGE IN CONTROL AGREEMENTS. The Bank and the Company expect to
enter into Change in Control Agreements with the current President and Chief
Executive Officer of the Company and the Bank and five other senior executive
officers of the Company and the Bank, which agreements provide for severance
payments if their respective employment is terminated in connection with a
change in control of the Company and/or the Bank. See "Restrictions on
Acquisition of the Company and the Bank" and "Management - Change in Control
Agreements."
ESTABLISHMENT OF THE FOUNDATION
Pursuant to the Plan, the Company intends to voluntarily establish a
charitable foundation in connection with the Conversion. The Plan provides
that the Bank and the Company will establish the Foundation, which will be
incorporated under Delaware law as a nonstock corporation and will be funded
with shares of Common Stock contributed by the Company. The contribution of
Common Stock to the Foundation will be dilutive to the interests of
stockholders and will have an adverse impact on the reported earnings of the
Company in fiscal 1998, the year in which the Foundation will be or is to be
established.
Dilution of Stockholders' Interests. The Company proposes to fund the
Foundation with Common Stock of the Company in an amount equal to 8.0% of the
Common Stock to be sold in the Conversion. At the minimum, midpoint and
maximum of the Estimated Price Range, the contribution to the Foundation would
equal 2,990,740, 3,518,518 and 4,046,296 shares of Common Stock, with a value
of $29.9 million, $35.2 million and $40.5 million, respectively, based on the
Purchase Price. Assuming the sale of Common Stock at the maximum of the
Estimated Price Range, upon completion of the Conversion and establishment of
the Foundation, the Company will have 54,625,000 shares issued and outstanding
of which the Foundation will own 4,046,296 shares of Common Stock, or 7.4%. As
a result, persons purchasing shares of Common Stock in the Conversion will have
their ownership and voting interests in the Company diluted by 7.4%. See "Pro
Forma Data."
Impact on Earnings. The contribution of Common Stock to the
Foundation will have an adverse impact on the Company's and the Bank's earnings
in the year in which the contribution is made. The Company will recognize the
full expense in the amount of the contribution of Common Stock to the
Foundation in the quarter in which it occurs, which is expected to be the
second quarter of fiscal 1998. The amount of the contribution will range from
$29.9 million to $40.5 million, based on the minimum and maximum of the
Estimated Price Range, respectively. The contribution expense will be
partially offset by the tax benefit related to the expense. The Company and
the Bank have been advised by their independent tax advisors that the
contribution to the Foundation will be tax deductible, subject to an annual
limitation based on 10% of the Company's annual taxable income. Assuming a
contribution of $40.5 million in Common Stock (based on the maximum of the
Estimated Price Range), the Company estimates a net tax effected expense of
$21.4 million (based on a 47% marginal tax rate). If the Foundation had been
established at March 31, 1997, the Bank would have reported a net loss of $4.2
million, rather than reporting net
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income of $17.2 million for the year ended March 31, 1997. Management cannot
predict earnings for fiscal 1998, but expects that the establishment and
funding of the Foundation will have an adverse impact on the Company's earnings
for such year. However, in light of the expected contribution to the
Foundation, the Bank does not expect in the future to make other than nominal
charitable contributions within the communities it serves. In addition, the
Company and the Bank do not currently anticipate making additional
contributions to the Foundation within the first five years following the
initial contribution.
Tax Considerations. The Company and the Bank have been advised by
their independent tax advisors that an organization created for the
above-described purposes would qualify as a Section 501(c)(3) exempt
organization under the Internal Revenue Code of 1986, as amended (the "Code"),
and would be classified as a private foundation. The Foundation will submit a
request to the Internal Revenue Service ("IRS") to be recognized as an exempt
organization. The Company and the Bank have received an opinion of their
independent tax advisors that the Foundation would qualify as a Section
501(c)(3) exempt organization under the Code, except that such opinion does not
consider the impact of the condition expected to be required by regulatory
authorities that Common Stock issued to the Foundation be voted in the same
ratio as all other shares of the Company's Common Stock on all proposals
considered by stockholders of the Company. See "The Conversion--Establishment
of the Foundation--Regulatory Conditions Imposed on the Foundation."
Consistent with this condition, in the event that the Company or the Foundation
receives an opinion of its legal counsel that compliance with the voting
restriction would have the effect of causing the Foundation to lose its
tax-exempt status, or otherwise have a material and adverse tax consequence on
the Foundation or subject the Foundation to an excise tax under Section 4941 of
the Code, the FDIC shall waive such voting restriction upon submission of a
legal opinion by the Company or the Foundation that is satisfactory to the
FDIC. The independent tax advisors' opinion further provides that there is
substantial authority for the position that the Company's contribution of its
own stock to the Foundation would not constitute an act of self-dealing, and
that the Company would be entitled to a deduction in the amount of the fair
market value of the stock at the time of the contribution, subject to an annual
limitation based on 10% of the Company's annual taxable income. The Company,
however, would be able to carry forward any unused portion of the deduction for
five years following the contribution. Thus, while the Company would have
received a tax benefit of approximately $19.0 million in fiscal 1997 (based
upon the sale of stock at the maximum of the Estimated Price Range and a
contribution of $40.5 million of Common Stock and the Bank's pre-tax income for
fiscal 1997), the Company is permitted under the Code to carry over the excess
contribution in the five following years. Assuming the sale of Common Stock at
the maximum of the Estimated Price Range, the Company estimates that for
federal income tax purposes, a substantial portion of the deduction should be
deductible over the six-year period. Although the Company and the Bank have
received an opinion of their independent tax advisors that the Company will be
entitled to the deduction of the charitable contribution, there can be no
assurances that the IRS will recognize the Foundation as a Section 501(c)(3)
exempt organization or that the deduction will be permitted. In such event,
the Company's tax benefit related to the
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<PAGE> 67
Foundation would have to be fully expensed, resulting in further reduction in
earnings in the year in which the IRS makes such a determination.
Comparison of Valuation and Other Factors Assuming the Foundation is
Not Established as Part of the Conversion. The establishment of the Foundation
was taken into account by RP Financial in determining the estimated pro forma
market value of the Common Stock. The aggregate price of the shares of Common
Stock being offered in the Subscription and Community Offerings is based upon
the independent appraisal conducted by RP Financial of the estimated pro forma
market value of the Common Stock. The pro forma aggregate price of the Common
Stock being offered for sale in the Conversion is currently estimated to be
between $373.8 million and $505.8 million, with a midpoint of $439.8 million.
The pro forma price to book ratio and the pro forma price to earnings ratio, at
and for the year ended March 31, 1997, are 67.7% and 16.7x, respectively, at
the midpoint of the Estimated Price Range. In the event that the Conversion
did not include the Foundation, RP Financial has estimated that the estimated
pro forma market value of the Common Stock would be $500.0 million at the
midpoint based on a pro forma price to book ratio and the pro forma price to
earnings ratio that are approximately the same as the independent appraisal at
67.9% and 17.0x, respectively. The amount of Common Stock that would be
offered in the Conversion at the midpoint of the Estimated Price Range is
approximately $60.2 million less than the estimated amount of Common Stock that
would be offered in the Conversion without the Foundation based on the estimate
provided by RP Financial. Accordingly, certain account holders of the Bank who
subscribe to purchase Common Stock in the Subscription Offering would receive
fewer shares depending on the size of a depositor's stock order and the amount
of his or her qualifying deposits in the Bank and the overall level of
subscriptions. See "Comparison of Valuation and Pro Forma Information with No
Foundation." This estimate by RP Financial was prepared solely for purposes of
providing Eligible Account Holders and subscribers with information with which
to make an informed decision on the Conversion.
The decrease in the amount of Common Stock being offered as a result
of the contribution of Common Stock to the Foundation will not have a
significant effect on the Company or the Bank's capital position. The Bank's
regulatory capital is in excess of its regulatory capital requirements and will
further exceed such requirements following the Conversion. The Bank's leverage
and risk-based capital ratios at March 31, 1997 would be 11.08% and 18.06%,
respectively. On a consolidated basis, the Company's pro forma stockholders'
equity would be $701.3 million, or approximately 17.0% of pro forma
consolidated assets, assuming the sale of shares at the midpoint of the
Estimated Price Range. Pro forma stockholders' equity per share and pro forma
net earnings per share would be $14.77 and $0.60, respectively. If the
Foundation was not being established in the Conversion, based on the RP
Financial estimate, the Company's pro forma stockholders' equity would be
approximately $736.8 million, or approximately 17.7% of pro forma consolidated
assets at the midpoint of the Estimated Price Range, and pro forma
stockholders' equity per share and pro forma net earnings per share would be
substantially
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similar with the Foundation as without the establishment of the Foundation.
See "Comparison of Valuation and Pro Forma Information with No Foundation."
Potential Anti-Takeover Effect. Upon completion of the Conversion,
the Foundation will own 7.4% of the total shares of the Common Stock
outstanding. Such shares will be owned solely by the Foundation; however,
pursuant to a condition expected to be required by regulatory authorities, it
is anticipated that the shares of Common Stock held by the Foundation will be
voted in the same ratio as all other shares of the Common Stock on all
proposals considered by the stockholders of the Company. As such, the Company
does not believe the Foundation will have an anti-takeover effect on the
Company. However, in the event that the FDIC were to waive this voting
restriction for the reasons described herein as provided in the condition, the
Foundation's Board of Directors would exercise sole voting power over such
shares and would no longer be subject to the restriction. See "The
Conversion--Establishment of the Foundation--Regulatory Conditions Imposed on
the Foundation." As a majority of the Foundation's Board of Directors will be
comprised of the members of the Board of Directors and officers of the Company
and the Bank, in the event the FDIC waived the voting restriction, management
of the Company and the Bank may benefit to the extent that the Board of
Directors of the Foundation determines to vote the shares of Common Stock held
by the Foundation in favor of proposals supported by the Company and the Bank.
Furthermore, in such an event, when the Foundation's shares are combined with
shares purchased directly by officers and directors of the Company, shares
expected to be held by the Recognition Plan, and shares held by the ESOP trust,
the aggregate of such shares will exceed 20% of the outstanding Common Stock,
which could enable management to defeat stockholder proposals requiring 80%
approval. Consequently, such potential voting control might preclude takeover
attempts that certain stockholders deem to be in their best interest, and might
tend to perpetuate management. However, since the ESOP shares are allocated to
all eligible employees of the Bank, and any unallocated shares will be voted by
the trustees in the same proportions as allocated shares are voted, and because
the Recognition Plan must first be approved by stockholders no sooner than six
months following completion of the Conversion, and awards under such proposed
plans may be granted to employees other than executive officers and directors,
management of the Company does not expect to have voting control of all shares
covered by the ESOP and other stock-based benefit plans. See"--Certain
Anti-Takeover Provisions--Voting Control of Directors and Executive Officers."
Moreover, as the Foundation sells its shares of Common Stock over time, its
ownership interest and voting power in the Company is expected to decrease.
Potential Challenges. To date, there has been limited precedent with
respect to the establishment and funding of a charitable foundation as part of
a conversion of a mutual savings institution to stock form. As such, the
Foundation and the Superintendent's approval and the FDIC's non-objection to
the Conversion may be subject to potential challenges notwithstanding that the
Boards of Directors of the Bank and the Company have carefully considered the
various factors involved in the establishment of the Foundation in reaching
their determination to establish the Foundation as part of the Conversion. See
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"The Conversion--Establishment of the Charitable Foundation--Purpose of the
Foundation." If challenges were to be instituted seeking to require the Bank
and the Company to eliminate establishment of the Foundation in connection with
the Conversion, no assurances can be made that the resolution of such
challenges would not result in a delay in the consummation of the Conversion or
that any objecting persons would not be ultimately successful in obtaining such
removal or other relief against the Bank and the Company. In addition, if the
Bank and the Company are forced to eliminate the Foundation, the Company may be
required to resolicit subscribers in the Offerings.
LOCAL ECONOMY
During the late 1980s and the early 1990s, the New York City
metropolitan area experienced reduced employment as a result of layoffs in the
financial services industry, corporate relocations and the general decline of
the local, regional and national economies. Additionally, during that period
the area experienced a general weakening of real estate values and a decline in
residential construction. As a result, loan delinquencies increased and the
underlying values of properties securing non-performing loans made by lending
institutions generally declined resulting in substantial losses to some
institutions. While the economy of the Bank's primary market area has, to a
certain extent, stabilized, local real estate values generally remain below the
values experienced in the late 1980s. At March 31, 1997, substantially all of
the Bank's real estate secured loans were secured by properties located in the
New York City metropolitan area.
There can be no assurances, however, that conditions in the local
economy, national economy, or real estate market in general will not
deteriorate and adversely affect the financial condition and results of
operations of the Bank. Based on information available to management at this
time, management believes the current allowance for possible loan losses is
adequate. Although management of the Bank believes that the current allowance
for loan losses is adequate in light of current economic conditions many
factors may require additions to the allowance for loan losses in future
periods above those reasonably anticipated. Future adjustments to the
allowance also may be necessary if economic or other conditions differ
substantially from those underlying the assumptions used in making such
estimates. In addition, the Bank's plan to continue to increase the amount of
its loan originations can be expected to increase the overall level of credit
risk inherent in the Bank's loan portfolio. The greater risk associated with
increased loan originations may require the Bank to increase its provisions for
loan losses and to maintain an allowance for loan losses as a percentage of
total loans that is in excess of the allowance currently maintained by the
Bank. Such provisions are charged against income; thus increases would
adversely affect the Company's consolidated net income during the period in
which such provision is taken.
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POSSIBLE DILUTIVE EFFECT OF ISSUANCE OF ADDITIONAL SHARES
Various possible and planned issuances of Common Stock could dilute
the interests of prospective stockholders of the Company following consummation
of the Conversion, as noted below.
The number of shares to be sold in the Conversion may be increased as
a result of an increase in the Estimated Price Range of up to 15% to reflect
changes in market and financial conditions following the commencement of the
Offerings. In the event that the Estimated Price Range is so increased, it is
expected that the Company will issue up to 58,165,509 shares of Common Stock at
the Purchase Price for an aggregate price of up to $581.7 million. An increase
in the number of shares will decrease net income per share and stockholders'
equity per share on a pro forma basis and will increase the Company's
consolidated stockholders' equity and net income. See "Capitalization" and
"Pro Forma Data."
The ESOP intends to purchase 8.0% of the Common Stock to be issued in
the Offerings. In the event that there are insufficient shares available to
fill the ESOP's order due to an oversubscription by Eligible Account Holders,
the Company may issue authorized but unissued shares of Common Stock to the
ESOP in an amount sufficient to fill the ESOP's order and/or the ESOP may
purchase such shares in the open market. In the event that additional shares
of Common Stock are issued to the ESOP to fill its order, stockholders would
experience dilution of their ownership interests (by up to 7.4% at the maximum
of the Estimated Price Range, assuming the ESOP purchased no shares in the
Offerings and excluding shares expected to be issued to the Foundation) and per
share stockholders' equity and per share net income would decrease as a result
of an increase in the number of outstanding shares of Common Stock. See
"Management - Benefits - Employee Stock Ownership Plan" and "The Conversion -
The Offerings - Subscription Offering."
If the Recognition Plan is approved by stockholders at an annual or
special meeting of the Company's stockholders held at least six months
following the consummation of the Conversion, the Recognition Plan intends to
acquire an amount of Common Stock equal to 4.0% of the shares of Common Stock
issued in the Offerings. Such shares of Common Stock may be acquired in the
open market with funds provided by the Company, if permissible, or from
authorized but unissued shares of Common Stock. In the event that additional
shares of Common Stock are issued to the Recognition Plan, stockholders would
experience dilution of their ownership interests (by 3.8% at the maximum of the
Estimated Price Range) and per share stockholders' equity and per share net
income would decrease as a result of an increase in the number of outstanding
shares of Common Stock. See "Pro Forma Data" and "Management - Benefits -
Recognition Plan."
If the Company's Option Plan is approved by stockholders at an annual
or special meeting of stockholders held more than six months after the
consummation of the
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Conversion, the Company will reserve for future issuance pursuant to such plan
a number of authorized shares of Common Stock equal to an aggregate of 10% of
the Common Stock issued in the Offerings (5,057,870 shares, based on the
maximum of the Estimated Price Range). See "Pro Forma Data" and "Management -
Benefits - Stock Option Plan."
REGULATORY OVERSIGHT AND LEGISLATION
The Bank is subject to extensive regulation, supervision and
examination by the Department, as its chartering authority and by the FDIC as
its primary federal regulator and insurer of its deposits up to applicable
limits. The Bank is a member of the Federal Home Loan Bank ("FHLB") System and
is subject to certain limited regulations promulgated by the Board of Governors
of the Federal Reserve System ("Federal Reserve Board"). As the holding
company of the Bank, the Company also will be subject to regulation and
oversight by the Office of Thrift Supervision ("OTS"). Regulatory authorities
have been granted extensive discretion in connection with their supervisory and
enforcement activities which are intended to strengthen the financial condition
of the banking and thrift industries, including the imposition of restrictions
on the operation of an institution, the classification of assets by the
institution and the adequacy of an institution's allowance for loan losses.
Any change in such regulation and oversight, whether by the Department, the
FDIC, the OTS or Congress, could have a material impact on the Company, the
Bank and their respective operations. See "Regulation."
On September 30, 1996, the Deposit Insurance Funds ("DIF") Act of 1996
was enacted into law. Among other things, the DIF Act authorized the FDIC to
impose a special one-time assessment on each depository institution with
SAIF-assessable deposits so that the SAIF may achieve its designated reserve
ratio. As a result of the various acquisitions completed by the Bank, it is
deemed to have SAIF-insured deposits and was subject to the special assessment.
The Bank's assessment was $8.6 million on a pre-tax basis. In addition, the
DIF Act provides for the merger of the Bank Insurance Fund ("BIF") and the SAIF
on January 1, 1999, but only if no insured depository institution is a savings
association on that date.
Various legislative proposals have been made in the past and there is
currently legislation that has been introduced in Congress that would (i) apply
the restrictions on activities applicable to "multiple savings and loan holding
companies" and bank holding companies to "unitary savings and loan holding
companies" and (ii) eliminate the savings association charter and require
savings associations to become banks and simultaneously abolish the OTS and its
supervisory role over savings and loan holding companies. The Bank and the
Company cannot predict which, if any, of the foregoing or other similar
proposals, if any, will ultimately be enacted or what the specific effect on
the Bank and the Company would be.
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LEGISLATION LIMITING DEDUCTION OF BAD DEBT RESERVES
Under Section 593 of the Code, thrift institutions such as the Bank,
which met certain definitional tests primarily relating to their assets and the
nature of their business, were permitted to establish a tax reserve for bad
debts and to make annual additions thereto, which additions could, within
specified limitations, be deducted in arriving at their taxable income. The
Bank's deduction with respect to "qualifying loans," which are generally loans
secured by certain interests in real property, prior to January 1, 1996 was
computed using an amount based on the Bank's actual loss experience (the
"experience method"), or a percentage equal to 8.0% of the Bank's taxable
income (the "percentage of taxable income method"), computed without regard to
this deduction and with additional modifications and reduced by the amount of
any permitted addition to the non-qualifying reserve. See "Business - Taxation
- - Federal - Bad Debt Reserves."
The Small Business Job Protection Act of 1996 provided for the repeal
of Section 593 of the Code. As a result, the Bank is permitted to deduct only
actual bad debts as they occur and cannot utilize the percentage of taxable
income method to make additions to its bad debt reserves in the future to
reduce its effective tax rate. In addition, the Bank is required to recapture
for tax purposes (i.e. take into income) over a six year period the excess of
the balance of its bad debt reserves as of December 31, 1995 over the balance
of such reserves as of December 31, 1987. The Bank's excess amounted to $3.6
million (for which deferred taxes have been provided). However, under the
legislation, such recapture requirements would be suspended for each of two
successive taxable years beginning January 1, 1996, in which the Bank
originates a minimum amount of certain residential loans based upon the average
of the principal amounts of such loans made by the Bank during its six taxable
years preceding 1996.
COMPETITION
The Bank faces significant competition both in making loans and in
attracting deposits. The New York City metropolitan area has a significant
concentration of financial institutions, many of which are branches of
significantly larger institutions which have greater financial resources than
the Bank. In addition, the boroughs of Brooklyn and Queens, in which the Bank
maintains its primary market presence, have experienced relatively stagnant
population growth in recent periods. Such stagnant population growth also has
been a factor in the increasing competition among financial institutions
operating in the Bank's market area. The Bank's competition for loans comes
principally from commercial banks, savings banks, savings and loan
associations, credit unions, mortgage banking companies and insurance
companies. Its most direct competition for deposits has historically come from
commercial banks, savings banks, savings and loan associations and credit
unions. The Bank faces additional competition for deposits from short-term
money market funds, other corporate and government securities funds and from
other financial institutions such as brokerage firms and insurance companies.
In addition, the Bank may face additional competition from commercial banks
headquartered outside of the State of
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New York as a result of the enactment of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994, which became fully effective on June 1, 1997
and which generally allows banks and bank holding companies headquartered
outside of New York to enter the Bank's market through acquisition, merger or
de novo branching.
ABSENCE OF MARKET FOR COMMON STOCK
The Company, as a newly organized company, has never issued capital
stock and, consequently, there is no established market for its Common Stock at
this time. The Company has received approval to have its Common Stock quoted
on the Nasdaq National Market under the symbol "ICBC" conditioned on the
consummation of the Conversion. A public trading market having the desirable
characteristics of depth, liquidity and orderliness depends upon the existence
of willing buyers and sellers at any given time, the presence of which is
dependent upon the individual decisions of buyers and sellers over which
neither the Company nor any market maker has control. Accordingly, there can
be no assurance that an active and liquid trading market for the Common Stock
will develop or that, if developed, will continue, nor is there any assurance
that purchasers of the Common Stock will be able to sell their shares at or
above the Purchase Price. In the event a liquid market for the Common Stock
does not develop or market makers for the Common Stock discontinue their
activities, such occurrences may have an adverse impact on the liquidity of the
Common Stock and the market value of the Common Stock.
POSSIBLE ADVERSE INCOME TAX CONSEQUENCES OF THE DISTRIBUTION OF SUBSCRIPTION
RIGHTS
The Bank and the Company have received a letter from RP Financial
advising them of its belief that subscription rights granted to Eligible
Account Holders and Supplemental Eligible Account Holders have no value. This
letter is not binding on the IRS. If the subscription rights granted to
Eligible Account Holders and Supplemental Eligible Account Holders are deemed
to have an ascertainable value, receipt of such rights likely would be taxable
only to those Eligible Account Holders and Supplemental Eligible Account
Holders, who exercise the subscription rights (either as capital gain or
ordinary income) in an amount equal to such value. Whether subscription rights
are considered to have ascertainable value is an inherently factual
determination. See "The Conversion - Effects of the Conversion" and "- Tax
Aspects."
INDEPENDENCE COMMUNITY BANK CORP.
The Company was organized in June 1997 at the direction of the Board
of Directors of the Bank for the purpose of holding all of the capital stock of
the Bank and in order to facilitate the Conversion. The Company has applied
for the approval of the OTS to become a savings and loan holding company and as
such will be subject to regulation by the OTS. After completion of the
Conversion the Company will conduct business initially as a unitary savings and
loan holding company. See "Regulation - The Company." Upon consummation
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of the Conversion, the Company will have no significant assets other than all
of the outstanding shares of common stock of the Bank, the portion of the net
proceeds from the Offerings retained by the Company and the Company's loan to
the ESOP, and the Company will have no significant liabilities. See "Use of
Proceeds." Initially, the management of the Company and the Bank will be
substantially identical and the Company will neither own nor lease any
property, but will instead use the premises, equipment and furniture of the
Bank. At the present time, the Company does not intend to employ any persons
other than officers who are also officers of the Bank, and the Company will
utilize the support staff of the Bank from time to time. Additional employees
will be hired as appropriate to the extent the Company expands or changes its
business in the future.
Management believes that the holding company structure will provide
the Company and the Bank with additional flexibility to diversify its business
activities through existing or newly-formed subsidiaries, or through
acquisitions of other entities, including potentially other financial
institutions and financial services related companies. Although there are no
current arrangements, understandings or agreements regarding any such
opportunities or transactions, the Company will be in a position after the
Conversion, subject to regulatory limitations and the Company's financial
position, to take advantage of any such acquisition and expansion opportunities
that may arise. The initial activities of the Company are anticipated to be
funded by the proceeds to be retained by the Company and earnings thereon, as
well as dividends from the Bank. See "Dividend Policy."
The Company's principal executive office is located at the executive
office of the Bank at 195 Montague Street, Brooklyn, New York 11201 and its
telephone number is (718) 722-5300.
INDEPENDENCE SAVINGS BANK
The Bank is a New York-chartered savings bank which conducts business
through 33 full service offices located in the boroughs of Brooklyn, Queens,
Manhattan, the Bronx, and Staten Island as well as Nassau County, New York.
At March 31, 1997, the Bank had $3.73 billion of assets, $3.42 billion of
liabilities, including $3.33 billion of deposits, and $309.1 million of total
equity. The Bank was reorganized into a stock company in April 1992 in
connection with the formation of the Mutual Holding Company.
The Bank has been in operation since 1850, originally serving the
borough of Brooklyn and later expanding its operations into the boroughs of
Queens, Manhattan, the Bronx and Staten Island as well as Nassau County. The
Bank's customer base, like the urban neighborhoods which it serves, is racially
and ethnically diverse and is comprised of mostly middle-income households and
to a lesser degree, low to moderate income households. The Bank is, and
intends to continue to be, a community-oriented savings institution whose
businesses primarily consist of accepting deposits from customers and investing
those funds primarily in residential loans, including those secured by
multi-family
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residential properties, cooperative apartment shares and single-family
residential properties. The increased capital resulting from the Offerings
will facilitate the Bank's ability to sustain its continued growth and
development over the long term while maintaining its status as a
community-based, independent financial institution serving Brooklyn, Queens and
the greater New York City metropolitan area.
The Bank has sought to set itself apart from its many competitors by
tailoring its products and services to meet the needs of its customers by
emphasizing customer service and convenience and by being actively involved in
community affairs in the neighborhoods and communities it serves. For example,
as part of the Bank's competitive strategy to attract loyal deposit customers,
the Bank has historically been a low service fee provider of a variety of
savings and checking account products. In furtherance of its commitment to the
communities which it serves, Bank employees at all levels are encouraged and
afforded the opportunity to participate in community outreach programs.
Perhaps most indicative of the Bank's commitment to strengthen its bond with
customers and the communities it serves is the decision to form and fund the
Independence Community Foundation. The Bank believes that this commitment to
customer and community service has permitted it to build strong customer
identification and loyalty which is essential to the Bank's ability to compete
effectively.
At March 31, 1997, the net loan portfolio amounted to $2.50 billion or
67.0% of the Bank's total assets. In addition, the Bank invests in investment
and mortgage-backed and mortgage-related securities consisting primarily of
U.S. Treasury notes and bills, mortgage-backed securities and collateralized
mortgage obligations ("CMOs") issued by government sponsored enterprises. At
March 31, 1997, the Bank's investment and mortgage-backed and mortgage-related
securities portfolio (all of which are classified available for sale) totaled
$548.5 million or 14.7% of total assets.
The Bank is subject to examination and comprehensive regulation by the
Department, which is the Bank's chartering authority and regulator, and by the
FDIC, as its primary federal regulator and as the administrator of the BIF and
the SAIF which insure the Bank's deposits up to applicable limits. The Bank
also is subject to certain reserve requirements established by the Federal
Reserve Board and is a member of the FHLB of New York, which is one of the 12
regional banks comprising the FHLB System. See "Regulation - The Bank."
The Bank's executive offices are located at 195 Montague Street,
Brooklyn, New York 11201 and its telephone number is (718) 722-5300.
31
<PAGE> 76
USE OF PROCEEDS
Net proceeds from the sale of the Common Stock are estimated to be
between $363.3 million and $493.3 million ($568.0 million assuming an increase
in the Estimated Price Range by 15%). See "Pro Forma Data" as to the
assumptions used to arrive at such amounts.
The Company plans to use 50% of the net proceeds from the Offerings to
purchase all the outstanding common stock of the Bank issued in the Conversion
and retain the remainder of the net proceeds. The net proceeds retained by the
Company will be initially used to invest primarily in investment securities and
mortgage-backed and mortgage-related securities. The Company intends to use a
portion of the net proceeds to make a loan directly to the ESOP to enable the
ESOP to purchase 8.0% of the Common Stock sold in the Offerings. Based upon
the issuance of 37,384,259 shares and 50,578,704 shares at the minimum and
maximum of the Estimated Price Range, respectively, the loan to the ESOP would
be $29.9 million and $40.5 million, respectively. It is anticipated that the
loan to the ESOP will have a term of not less than 20 years and a fixed
interest rate at the Bank's prime rate as of the date of the loan. See
"Management of the Bank - Stock Benefit Plans - Employee Stock Ownership Plan."
The net proceeds from the Offerings also may be used by the Company and the
Bank to support future expansion of retail banking operations or
diversification into other businesses, through acquisitions or otherwise,
including the potential acquisition of other financial institutions and/or
branch offices. There are no current plans, arrangements, understandings or
agreements regarding such diversification or acquisitions.
Subject to applicable regulatory limitations and then-existing
circumstances, the net proceeds also may be used by the Company to repurchase
shares of Common Stock, although the Company currently has no plans of
effecting any such transactions following consummation of the Conversion.
Pursuant to Department regulations, the Company may not repurchase any Common
Stock in the first year after Conversion and, during each of the next two
following years, may only repurchase up to 5% of its outstanding capital stock
during each 12 month period. In addition, the FDIC prohibits an institution
which has converted from mutual to stock form of ownership from repurchasing
its capital stock within one year following the date of its conversion to stock
form, except that stock repurchases of no greater than 5% of a bank's
outstanding capital stock may be repurchased during this one-year period where
compelling and valid business reasons are established to the satisfaction of
the FDIC. Based upon facts and circumstances following the Conversion and
subject to applicable regulatory requirements, the Board of Directors may
determine to repurchase shares of Common Stock in the future. Such facts and
circumstances may include but are not limited to: (i) market and economic
factors such as the price at which the Common Stock is trading in the market,
the volume of trading, the attractiveness of other investment alternatives in
terms of the rate of return and risk involved in the investment, the ability to
increase the book value and/or earnings per share of the remaining outstanding
shares, and the opportunity to improve the Company's return on
32
<PAGE> 77
equity; (ii) the avoidance of dilution to stockholders by not having to issue
additional shares to cover the exercise of stock options or to fund employee
stock benefit plans; and (iii) any other circumstances in which repurchases
would be in the best interests of the Company and its stockholders. In the
event the Company determines to repurchase stock, such repurchases may be made
at market prices which may be in excess of the Purchase Price. To the extent
that the Company repurchases stock at market prices in excess of the Purchase
Price, such repurchases may have a dilutive effect upon the interests of
existing stockholders. Any stock repurchases will be subject to the
determination of the Board of Directors that the Bank will be capitalized in
excess of all applicable regulatory requirements after any such repurchases and
that such capital will be adequate, taking into account, among other things,
the level of nonperforming and other risk assets, the Company's and the Bank's
current and projected results of operations and asset/liability structure, the
economic environment, tax and other considerations. See "The Conversion -
Certain Restrictions on Purchase or Transfer of Shares after the Conversion."
The portion of the net proceeds contributed to the Bank will be used for
general corporate purposes, including investment in loans and investment and
mortgage-backed securities.
DIVIDEND POLICY
Upon completion of the Conversion, the Board of Directors of the
Company will have the authority to declare dividends on the Common Stock,
subject to statutory and regulatory requirements. Following consummation of
the Conversion, the Board of Directors of the Company may consider a policy of
paying cash dividends on the Common Stock. However, no decision has been made
as to the amount or timing of such dividends. Declarations of dividends by the
Board of Directors will depend upon a number of factors, including the amount
of net proceeds from the Offerings retained by the Company, investment
opportunities available to the Company or the Bank, capital requirements,
regulatory limitations, the Company's and the Bank's financial condition and
results of operations, tax considerations, and general economic conditions.
Consequently, there can be no assurance that dividends will in fact be paid on
the Common Stock or that, if paid, such dividends will not be reduced or
eliminated in future periods.
Dividends from the Company will depend, in part, upon receipt of
dividends from the Bank, because the Company initially will have no source of
income other than dividends from the Bank and earnings from the investment of
the net Conversion proceeds retained by the Company.
Any payment of dividends by the Bank to the Company which would be
deemed to be a distribution from the Bank's bad debt reserves for federal
income tax purposes would require a payment of taxes at the then-current tax
rate by the Bank on the amount of earnings deemed to be removed from the
reserves for such distribution. The Bank has no current intention of making
any distribution that would create such a federal tax liability either before
or after the Conversion. See "Business - Taxation." Under the New York
33
<PAGE> 78
State Banking Law ("New York Banking Law"), dividends may be declared and paid
only out of the net profits of the Bank. The approval of the Department is
required if the total of all dividends declared in any calendar year will
exceed net profits for that year plus the retained net profits of the preceding
two years, less any required transfer to surplus or a fund for the retirement
of any preferred stock. In addition, no dividends may be declared, credited or
paid if the effect thereof would cause the Bank's capital to be reduced below
the amount required by the Department or the FDIC. As of March 31, 1997, the
Bank had $77.5 million available for the payment of dividends without prior
approval of the Department. Subsequent to the Conversion, the availability of
the Bank's funds for the payment of dividends may be limited by the liquidation
account. See "The Conversion--Liquidation Rights." In addition, no dividends
can be declared by the Bank without the prior notice to and the non-objection
of the OTS.
Unlike the Bank, the Company is not subject to the aforementioned
regulatory restrictions on the payment of dividends to its stockholders,
although the source of such dividends will be, in part, dependent upon
dividends from the Bank in addition to the net proceeds retained by the Company
and earnings thereon. The Company is subject, however, to the requirements of
Delaware law which generally limit dividends to an amount equal to the excess
of the net assets of the Company (the amount by which total assets exceed total
liabilities) over its statutory capital, or if there is no such excess, to its
net profits for the current and/or immediately preceding fiscal year.
MARKET FOR COMMON STOCK
The Company has never issued capital stock (other than 100 shares
issued to the Bank, which will be cancelled upon consummation of the
Conversion). Consequently, there is no established market for the Common Stock
at this time. The Company has applied to have its Common Stock quoted on the
Nasdaq National Market under the symbol "ICBC." Although under no obligation
to do so, Sandler O'Neill has informed the Company that it intends, upon the
completion of the Conversion, to make a market in the Common Stock by
maintaining bid and ask quotations and trading in the Common Stock so long as
the volume of trading activity and certain other market making considerations
justify it doing so. The Company will seek to encourage and assist at least one
other market maker to make a market in the common stock in order to fulfill the
requirement of having two market makers in order to have the Common Stock
quoted on the Nasdaq National Market. Making a market involves maintaining bid
and ask quotations and being able, as principal, to effect transactions in
reasonable quantities at those quoted prices, subject to various securities
laws and other regulatory requirements. In addition, the development of a
liquid public market depends on the existence of willing buyers and sellers,
the presence of which is not within the control of the Company, the Bank or any
market maker. Accordingly, there can be no assurance that an active and liquid
trading market for the Common Stock
34
<PAGE> 79
will develop or that, if developed, it will continue. The absence of an active
and liquid trading market for the Common Stock could affect the price and
liquidity of the Common Stock. Furthermore, there can be no assurance that
persons purchasing shares of Common Stock will be able to sell them at or above
the Purchase Price.
REGULATORY CAPITAL REQUIREMENTS
Under FDIC regulations, depository institutions such as the Bank are
required to maintain a minimum ratio of qualifying total capital to total
assets and off-balance sheet instruments, as adjusted to reflect their relative
credit risks, of 8.0%. At least one-half of total capital is to be comprised
of common equity, retained earnings, non-cumulative perpetual preferred stock
and a limited amount of cumulative perpetual preferred stock, less goodwill
("Tier I capital"). The remainder of total capital may consist of a limited
amount of subordinated debt, other preferred stock, certain other instruments
and a limited amount of general reserves for loan losses ("Tier II capital").
The FDIC also has established an additional capital adequacy guideline
referred to as the Tier I leverage capital ratio, which measures the ratio of
Tier I capital to total assets less goodwill. Although the highest rated
depository institutions are required to maintain a minimum Tier I leverage
capital ratio of 3.0%, most depository institutions are required to maintain
Tier I leverage capital ratios of 4.0% to 5.0% or more. The actual required
ratio is based on the FDIC's assessment of the individual depository
institution's asset quality, earnings performance, interest-rate risk and
liquidity. Although the FDIC has not advised the Bank of a specific Tier I
leverage capital ratio requirement, management of the Bank believes that for
purposes of complying with applicable federal regulations, the required Tier I
leverage capital ratio for the Bank is 3.0%, based upon published regulatory
criteria for establishing such minimum. There can be no assurance that the
Bank will not be required by the FDIC to maintain a higher Tier I leverage
capital ratio. However, for purposes of the table below, the Bank has assumed
a 4.0% Tier I leverage capital requirements. See "Regulation - The Bank
- -Capital Requirement."
35
<PAGE> 80
At March 31, 1997, the Bank exceeded all of the regulatory capital
requirements applicable to it. Set forth below is a summary of the Bank's
compliance with the applicable capital standards as of March 31, 1997 on a
historical basis and on a pro forma basis assuming that the indicated number of
shares were sold by the Company as of such date and receipt by the Bank of 50%
of net Conversion proceeds. Proceeds have been assumed to be initially
invested in interest-earning assets which have a 20% risk-weighting. For
purposes of the table below, the amount expected to be borrowed by the ESOP and
the cost of the shares expected to be acquired by the Recognition Plan are
deducted from pro forma capital.
<TABLE>
<CAPTION>
Pro Forma at March 31, 1997 Based on
--------------------------------------------------------------------------------
37,384,259 43,981,481 50,578,704
Shares Shares Shares
Historical at (Minimum (Mid-point (Maximum
March 31, 1997 of Range) of Range) of Range)(1)
------------------------- --------------------------- ---------------------- -------------------------
Percent Percent Percent Percent
Amount of Assets(2) Amount of Assets(2) Amount of Assets(2) Amount of Assets(2)
--------- -------------- ----------- -------------- -------- ------------- ---------- ---------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP capital (3) $309,114 8.28% $460,070 11.75% $487,127 12.34% $514,184 12.92%
======== ==== ======== ===== ======== ===== ======== =====
Tier I risk-based
level:(4)(5) $247,520 10.05% $398,476 15.94% $425,533 16.98% $452,590 18.02%
Requirement 98,525 4.00 99,972 4.00 100,231 4.00 100,490 4.00
-------- ---- -------- ----- -------- ----- -------- -----
Excess $148,995 6.05% $298,503 11.94% $325,302 12.98% $352,100 14.02%
======== ==== ======== ===== ======== ===== ======== =====
Total risk-based
level:(1)(4)(5) $274,544 11.15% $425,500 17.02% $452,572 18.06% $479,614 19.09%
Requirement 197,050 8.00 199,944 8.00 200,462 8.00 200,979 8.00
-------- ----- -------- ----- -------- ----- -------- -----
Excess $ 77,494 3.15% $225,555 9.02% $252,095 10.06% $278,635 11.09%
======== ===== ======== ===== ======== ===== ======== =====
Tier I leverage
level:(4)(5)(6) $247,520 6.83% $398,476 10.47% $425,533 11.08% $452,590 11.69%
Requirement 145,064 4.00 152,299 4.00 153,593 4.00 154,886 4.00
-------- ----- -------- ----- -------- ----- -------- -----
Excess $102,456 2.83% $246,177 6.47% $271,940 7.08% $297,704 7.69%
======== ===== ======== ===== ======== ===== ======== =====
</TABLE>
- ---------------------
(1) In the event of an oversubscription for shares of Common Stock, the
Company and the Bank may increase the total number of shares offered
in the Conversion by up to 15%. Assuming a full increase in the
number of shares, the Bank's Tier I risk-based, total risk-based and
Tier I leverage capital ratios would be 19.2%, 20.3% and 12.4%,
respectively, at the maximum of the Estimated Price Range, as
adjusted. See generally, "Capitalization " and "Pro Forma Data."
(2) Adjusted or risk-weighted assets, as appropriate.
(3) The difference between capital under generally accepted accounting
principles ("GAAP") and regulatory capital is an adjustment to
decrease regulatory capital by the amount of the net unrealized gain,
if any, on available-for-sale securities recognized for GAAP purposes,
as well as adjustments related to core deposit intangibles of the Bank
and the goodwill resulting from the Bay Ridge acquisition. Regulatory
risk-based capital reflects these adjustments plus the inclusion of
the allowance for loan losses.
(footnotes continued on following page)
36
<PAGE> 81
- ---------------
(4) Pro forma capital levels assume receipt by the Bank of 50% of the net
proceeds from the shares of Common Stock sold at the minimum, midpoint
and maximum of the Estimated Price Range. These levels also assume
funding by the Bank of the Recognition Plan equal to 4% of the Common
Stock issued and repayment of the Company's loan to the ESOP. See
"Management - Benefits" for a discussion of the Recognition Plan and
ESOP.
(5) The pro forma Tier 1 risk-based, total risk-based and Tier 1 leverage
capital amounts reflect the $93,000 of net assets to be acquired by
the Bank upon the merger of the Mutual Holding Company with and into
the Bank.
(6) The current leverage capital requirement for savings banks is 3% of
total adjusted assets for savings banks that receive the highest
supervisory rating for safety and soundness and that are not
experiencing or anticipating significant growth. The current leverage
capital ratio applicable to all other savings banks is 4% to 5%. The
Company will not be subject to regulatory capital requirements.
37
<PAGE> 82
CAPITALIZATION
The following table presents the historical consolidated
capitalization of the Bank at March 31, 1997, and the pro forma consolidated
capitalization of the Company after giving effect to the Conversion and
Reorganization, based upon the sale of the number of shares shown below and the
other assumptions set forth under "Pro Forma Data."
<TABLE>
<CAPTION>
The Company - Pro Forma
Based Upon Sale at $10.00 Per Share
--------------------------------------------------------------------
37,384,259 43,981,481 50,578,704 58,165,509
The Shares Shares Shares Shares(1) (15%
Bank-Historical (Minimum of (Midpoint of (Maximum of above Maximum of
Capitalization Range) Range) Range) Range)
----------------- ------------- ------------- ------------- -----------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Deposits(2) $3,325,558 $3,325,558 $3,325,558 $3,325,558 $3,325,558
Borrowings 17,232 17,232 17,232 17,232 17,232
---------- ---------- ---------- ---------- ----------
Total deposits and
borrowings $3,342,790 $3,342,790 $3,342,790 $3,342,790 $3,342,790
========== ========== ========== ========== ==========
Stockholders' equity:
Preferred Stock, $.01 par
value, 25,000,000 shares
authorized; none to
be issued $ -- $ -- $ -- $ -- $ --
Common Stock, $.01 par
value, 125,000,000 shares
authorized; shares issued
or to be issued as reflected(3) -- 404 475 546 628
Additional paid-in capital(3)(4) 52,670 392,823 463,016 533,208 613,930
Retained earnings(4)(5) 256,076 308,854 308,854 308,854 308,854
Net unrealized gain on
marketable securities 368 368 368 368 368
Less:
Expense of contribution to
Foundation, net(6) -- (15,851) (18,648) (21,445) (24,662)
Common Stock to be acquired
by the ESOP(7) -- (29,907) (35,185) (40,463) (46,532)
Common Stock to be
acquired by the Recognition
Plan(8) -- (14,954) (17,593) (20,231) (23,266)
-------- -------- -------- -------- --------
Total stockholders' equity $309,114 $641,752 $701,302 $760,852 $829,335
======== ======== ======== ======== ========
</TABLE>
- ------------
(1) As adjusted to give effect to an increase in the number of shares
which could occur due to an increase in the Valuation Price Range of
up to 15% to reflect changes in market and financial conditions
following the commencement of the Offerings.
(2) Does not reflect withdrawals from deposit accounts for the purchase of
Common Stock in the Offerings. Such withdrawals would reduce pro
forma deposits by the amount of such withdrawals.
(3) Reflects the issuance of the shares of Common Stock to be sold in the
Offerings and the issuance of Common Stock to the Foundation at $10.00
per share. No effect has been given to the issuance of additional
shares of Common Stock pursuant to the proposed Option Plan. See "Pro
Forma Data," "Management - Benefits - Stock Option Plan." Reflects
issuance of additional shares of Common Stock to the Foundation at the
Purchase Price.
(footnotes continued on following page)
38
<PAGE> 83
- ------------
(4) The pro forma additional paid-in capital reflects the $93,000 of net
assets to be acquired by the Company and the Bank upon the merger of
the Mutual Holding Company with and into the Bank. The pro forma
additional paid-in capital also reflects the addition of the Bank's
historical additional paid-in capital.
(5) The retained earnings of the Bank will be substantially restricted
after the Conversion by virtue of the liquidation account to be
established in connection with the Conversion. See "The Conversion -
Liquidation Rights." In addition, certain distributions from the
Bank's retained earnings may be treated as being from its accumulated
bad debt reserve for tax purposes, which would cause the Bank to have
additional taxable income. See "Business - Taxation."
(6) Net of the tax effect of the contribution of Common Stock based upon a
47% marginal tax rate. The realization of the deferred tax benefit is
limited annually to 10% of the Company's annual taxable income,
subject to the ability of the Company to carry forward any unused
portion of the deduction for five years following the year in which
the contribution is made.
(7) Assumes that 8.0% of the Common Stock sold in the Offerings will be
purchased by the ESOP, which is reflected as a reduction of
stockholders' equity. The ESOP shares will be purchased with funds
loaned to the ESOP by the Company. See "Pro Forma Data" and
"Management - Benefits - Employee Stock Ownership Plan."
(8) The Company intends to adopt the Recognition Plan and to submit such
plan to stockholders at an annual or special meeting of stockholders
held at least six months following the consummation of the Conversion.
If the plan is approved by stockholders, the Company intends to
contribute sufficient funds to the trust created under the Recognition
Plan to enable the trust to purchase a number of shares of Common
Stock equal to 4.0% of the Common Stock sold in the Offerings.
Assumes that stockholder approval has been obtained and that the
shares have been purchased in the open market at the Purchase Price.
However, in the event the Company issues authorized but unissued
shares of Common Stock to the Recognition Plan in the amount of 4.0%
of the Common Stock sold in the Offerings, the voting interests of
existing stockholders would be diluted approximately 3.8%. The shares
are reflected as a reduction of stockholders' equity. See "Pro Forma
Data" and "Management - Benefits - Recognition Plan."
39
<PAGE> 84
PRO FORMA DATA
The actual net proceeds from the sale of the Common Stock cannot be
determined until the Conversion is completed. However, net proceeds are
currently estimated to be between $363.3 million and $493.3 million (or $568.0
million in the event the Estimated Price Range is increased by 15%) based upon
the following assumptions: (i) all shares of Common Stock will be sold in the
Subscription Offering; (ii) no fees will be paid to the Sandler O'Neill on
shares purchased by (x) the ESOP and any other employee benefit plan of the
Company or the Bank, (y) officers, directors, employees and members of their
immediate families or (z) the Foundation; (iii) Sandler O'Neill will receive a
fee equal to 1.625% of the aggregate Purchase Price for sales in the
Subscription Offering (excluding the sale of shares to the ESOP, employee
benefit plans, officers, directors and their immediate families and the
Foundation); (iv) the Company will contribute to the Foundation an amount of
Common Stock equal to 8% of the Common Stock sold in the Conversion from
authorized but unissued shares; and (v) total expenses, including the marketing
fees paid to Sandler O'Neill, will be between $10.5 million and $12.5 million
(or $13.6 million in the event the Estimated Price Range is increased by 15%).
Actual expenses may vary from those estimated.
Pro forma consolidated net income and stockholders' equity of the
Company have been calculated for the year ended March 31, 1997 as if the Common
Stock to be issued in the Offerings had been sold at the beginning of the
period and the net proceeds had been invested at 6.0%, which represents the
yield on one-year U.S. Government securities at March 31, 1997 (which, in light
of changes in interest rates in recent periods, are deemed by the Company and
the Bank to more accurately reflect pro forma reinvestment rates than the
arithmetic average method). The effect of withdrawals from deposit accounts
for the purchase of Conversion Stock has not been reflected. A marginal tax
rate of 47% has been assumed for the period, resulting in an after-tax yield of
3.18% for the year ended March 31, 1997. Historical and pro forma per share
amounts have been calculated by dividing historical and pro forma amounts by
the indicated number of shares of Common Stock, as adjusted to give effect to
the shares purchased by the ESOP and the effect of the issuance of shares to
the Foundation. See Note 3 to the tables below. No effect has been given in
the pro forma stockholders' equity calculations for the assumed earnings on the
net proceeds. As discussed under "Use of Proceeds," the Company intends to
make a loan to fund the purchase of 8.0% of the Common Stock by the ESOP and
retain 50% of the net proceeds from the Offerings.
No effect has been given in the tables to the issuance of additional
shares of Common Stock pursuant to the proposed Option Plan. See "Management
of the Company - Benefits - Stock Option Plan" and "Management of the Bank -
Stock Benefit Plans." The table below gives effect to the Recognition Plan,
which is expected to be adopted by the Company following the Conversion and
presented (together with the Option Plan) to stockholders for approval at an
annual or special meeting of stockholders to be held at least six months
following the consummation of the Conversion. If the Recognition Plan is
40
<PAGE> 85
approved by stockholders, the Recognition Plan intends to acquire an amount of
Common Stock equal to 4.0% of the shares of Common Stock issued in the
Offerings, either through open market purchases or from authorized but unissued
shares of Common Stock. The table below assumes that stockholder approval has
been obtained, as to which there can be no assurance, and that the shares
acquired by the Recognition Plan are purchased in the open market at the
Purchase Price. No effect has been given to (i) the Company's results of
operations after the Conversion, (ii) the market price of the Common Stock
after the Conversion, or (iii) a less than 4.0% purchase by the Recognition
Plan.
The following pro forma information may not be representative of the
financial effects of the foregoing transactions at the dates on which such
transactions actually occur and should not be taken as indicative of future
results of operations. Pro forma stockholders' equity represents the
difference between the stated amount of assets and liabilities of the Company
computed in accordance with GAAP. The pro forma stockholders' equity is not
intended to represent the fair market value of the Common Stock and may be
different than amounts that would be available for distribution to stockholders
in the event of liquidation.
THE FOLLOWING TABLE GIVES EFFECT TO THE ISSUANCE OF AUTHORIZED BUT
UNISSUED SHARES OF THE COMPANY'S COMMON STOCK TO THE FOUNDATION CONCURRENTLY
WITH THE COMPLETION OF THE CONVERSION. THE VALUATION RANGE, AS SET FORTH
HEREIN AND IN THE TABLE BELOW, TAKES INTO ACCOUNT THE DILUTIVE IMPACT OF THE
ISSUANCE OF SHARES TO THE FOUNDATION.
41
<PAGE> 86
<TABLE>
<CAPTION>
At or For the Year Ended March 31, 1997
----------------------------------------------------------
37,384,259 43,981,481 50,578,704 58,165,509
Shares Sold Shares Sold Shares Sold Shares Sold
at $10.00 at $10.00 at $10.00 at $10.00 Per
Per Share Per Share Per Share Share (15%
(Minimum of (Midpoint (Maximum of above Maximum
Range) of Range) Range) of Range)(9)
----------- ----------- ----------- -------------
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Gross proceeds $373,843 $439,815 $505,787 $581,655
Plus: Shares acquired by Foundation (equal
to 8% of the shares issued in the
Conversion) 29,907 35,185 40,463 46,532
-------- -------- -------- --------
Pro forma market capitalization $403,750 $475,000 $546,250 $628,188
======== ======== ======== ========
Gross proceeds 373,843 439,815 505,787 581,655
Less offering expenses and commissions 10,508 11,494 12,480 13,614
-------- -------- -------- --------
Estimated net proceeds $363,335 $428,321 $493,307 $568,041
Less: Shares purchased by the ESOP (29,907) (35,185) (40,463) (46,532)
Shares purchased by the
Recognition Plan (14,954) (17,593) (20,231) (23,266)
-------- -------- -------- --------
Total estimated net proceeds, as adjusted(1) $318,473 $375,543 $432,613 $498,242
======== ======== ======== ========
Net income (2):
Historical $ 17,180 $ 17,180 $ 17,180 $17,180
Pro forma income on net proceeds 10,127 11,942 13,757 15,844
Pro forma ESOP adjustment(3) (793) (932) (1,072) (1,233)
Pro forma Recognition Plan
adjustment(4) (1,585) (1,865) (2,145) (2,466)
-------- -------- -------- --------
Pro forma net income $ 24,929 $ 26,325 $ 27,720 $ 29,325
======== ======== ======== ========
Net income per share(2)(5):
Historical $0.46 $ 0.39 $ 0.34 $ 0.29
Pro forma income on net proceeds 0.27 0.27 0.27 0.27
Pro forma ESOP adjustment(3) (0.02) (0.02) (0.02) (0.02)
Pro forma Recognition Plan
adjustment(4) (0.04) (0.04) (0.04) (0.04)
-------- -------- -------- --------
Pro forma net income per share(4)(6) $ 0.67 $ 0.60 $ 0.55 $ 0.50
======== ======== ======== ========
Offering price to pro forma net
income per share (5) 14.93x 16.67x 18.18x 20.00x
======== ======== ======== ========
Stockholders' equity:
Historical(7) $309,207 $309,207 $309,207 $309,207
Estimated net proceeds 363,335 428,321 493,307 568,041
Plus: Shares issued to Foundation 29,907 35,185 40,463 46,532
Less: Contribution to Foundation (29,907) (35,185) (40,463) (46,532)
Plus: Tax benefit of the contribution 14,056 16,537 19,018 21,870
to Foundation
Less: Common Stock acquired
by the ESOP(3) (29,907) (35,185) (40,463) (46,532)
Common Stock to be acquired by
the Recognition Plan(4) (14,954) (17,593) (20,231) (23,266)
-------- -------- -------- --------
Pro forma stockholders' equity(4)(6)(8) $641,737 $701,287 $760,837 $829,320
======== ======== ======== ========
Stockholders' equity per share(5):
Historical(7) $7.66 $6.51 $5.66 $4.92
Estimated net proceeds 9.00 9.02 9.03 9.04
Plus: Shares issued to Foundation 0.74 0.74 0.74 0.74
Less: Contribution to Foundation (0.74) (0.74) (0.74) (0.74)
Plus: Tax benefit of contribution to
Foundation 0.35 0.35 0.35 0.35
Less: Common Stock acquired
by the ESOP(3) (0.74) (0.74) (0.74) (0.74)
Common Stock to be acquired by
the Recognition Plan(4) (0.37) (0.37) (0.37) (0.37)
-------- -------- -------- --------
Pro forma stockholders' equity
per share(4)(6)(8) $ 15.90 $ 14.77 $ 13.93 $ 13.20
======== ======== ======== ========
Offering price as a percentage of pro
forma stockholders' equity per share(5) 62.89% 67.70% 71.79% 75.76%
======== ======== ======== ========
Offering price as a percentage of pro forma
tangible stockholders' equity per share(5) 69.44% 74.07% 78.00% 81.70%
======== ======== ======== ========
</TABLE>
(Footnotes on following page)
42
<PAGE> 87
- ------------
(1) Estimated net proceeds, as adjusted, consist of the estimated net
proceeds from the Offerings minus (i) the proceeds attributable to the
purchase by the ESOP and (ii) the value of the shares to be purchased
by the Recognition Plan, subject to stockholder approval, after the
Conversion at an assumed purchase price of $10.00 per share.
(2) Does not give effect to the non-recurring expense that will be
recognized in fiscal 1998 as a result of the establishment of the
Foundation. The Company will recognize an after-tax expense for the
amount of the contribution to the Foundation which is expected to be
$15.9 million, $18.6 million, $21.4 million and $24.7 million at the
minimum, midpoint, maximum and maximum, as adjusted, of the Estimated
Price Range, respectively. Assuming the contribution to the
Foundation was expensed during the year ended March 31, 1997, pro
forma net earnings per share would be $0.24, $0.17, $0.12, and $0.08,
at the minimum, midpoint, maximum and maximum as adjusted,
respectively. Per share net income data is based on 37,459,028,
44,069,444, 50,679,861 and 58,281,840 shares outstanding which
represents shares sold in the Offerings, shares contributed to the
Foundation and shares to be allocated or distributed under the ESOP
and Recognition Plan for the period presented.
(3) It is assumed that 8.0% of the shares of Common Stock sold in the
Offerings, will be purchased by the ESOP with funds loaned by the
Company. The Company and the Bank intend to make annual contributions
to the ESOP in an amount at least equal to the principal and interest
requirement of the debt. The pro forma net earnings assumes (i) that
the loan to the ESOP is payable over 20 years, with the ESOP shares
having an average fair value of $10.00 per share in accordance with
SOP 93-6, entitled "Employers' Accounting for Employee Stock Ownership
Plans," of the AICPA, and (ii) the effective tax rate was 47% for the
period. See "Management - Benefits - Employee Stock Ownership Plan."
(4) It is assumed that the Recognition Plan will purchase, following
stockholder approval of such plan, a number of shares of Common Stock
equal to 4.0% of the shares of Common Stock for issuance to directors,
officers and employees. Funds used by the Recognition Plan to
purchase the shares initially will be contributed to the Recognition
Plan by the Company. It is further assumed that the shares were
acquired by the Recognition Plan at the beginning of the period
presented in open market purchases at the Purchase Price and that 20%
of the amount contributed was an amortized expense during the year
ended March 31, 1997. The issuance of authorized but unissued shares
of Common Stock pursuant to the Recognition Plan in the amount of 4.0%
of the Common Stock issued in the Offerings would dilute the voting
interests of existing stockholders by approximately 3.8% and under
such circumstances pro forma net earnings per share for the year ended
March 31, 1997
43
<PAGE> 88
would be $0.65, $0.58, $0.54 and $0.49, at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Price Range,
respectively, and stockholders' equity per share at March 31, 1997
would be $15.69, $14.60, $13.80 and $13.10 at the minimum, midpoint,
maximum and 15% above the maximum of such range, respectively. There
can be no assurance that the actual purchase price of shares purchased
by or issued to the Recognition Plan will be equal to the Purchase
Price. See "Management - Benefits - Recognition Plan."
(5) The per share calculations are determined by adding the number of
shares assumed to be issued in the Conversion as well as contributed
to the Foundation and, in accordance with SOP 93-6, subtracting 97.5%
of the ESOP shares which have not been committed for release during
the year ended March 31, 1997. Thus, it is assumed at March 31, 1997
that 37,459,028, 44,069,444, 50,679,861 and 58,281,840 shares of
Common Stock are outstanding at the minimum, midpoint, maximum and 15%
above the maximum of the Estimated Price Range, respectively.
Assuming the uncommitted ESOP shares were not subtracted from the
number of shares of Common Stock outstanding at March 31, 1997, the
offering price as a multiple of pro forma net earnings per share would
be 16.13x, 18.18x, 19.61x and 21.28x at the minimum, midpoint, maximum
and 15% above the maximum of the Estimated Price Range, respectively.
(6) No effect has been given to the issuance of additional shares of
Common Stock pursuant to the Option Plan, which will be adopted by the
Company following the Conversion and presented for approval by
stockholders at an annual or special meeting of stockholders of the
Company held at least six months following the consummation of the
Conversion. If the Option Plan is approved by stockholders, an amount
equal to 10% of the Common Stock issued in the Offerings, or
3,738,426, 4,398,148, 5,057,870 and 5,816,551 shares at the minimum,
midpoint, maximum and 15% above the maximum of the Estimated Price
Range, respectively, will be reserved for future issuance upon the
exercise of options to be granted under the Option Plan. The issuance
of Common Stock pursuant to the exercise of options under the Option
Plan will result in the dilution of existing stockholders' interests.
Assuming stockholder approval of the Option Plan, that all these
options were exercised at the beginning of the period at an exercise
price of $10.00 per share and that the shares to fund the Recognition
Plan are acquired through open market purchases at the Purchase Price,
pro forma net earnings per share for the year ended March 31, 1997
would be $0.63, $0.57, $0.53 and $0.49 at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Price Range,
respectively, and stockholders' equity per share at March 31, 1997
would be $15.39, $14.36, $13.59 and $12.93 at the minimum, midpoint,
maximum and 15% above the maximum of such range, respectively. See
"Management - Benefits - Stock Option Plan."
(footnotes continued on the following page)
44
<PAGE> 89
- ------------
(7) Includes the $93,000 of net assets of the Mutual Holding Company to be
acquired by the Company and the Bank upon consummation of the
Conversion.
(8) The retained earnings of the Bank will be substantially restricted
after the Conversion by virtue of the liquidation account to be
established in connection with the Conversion. See "Dividend Policy"
and "The Conversion - Liquidation Rights." In addition, certain
distributions from the Bank's retained earnings may be treated as
being from its accumulated bad debt reserve for tax purposes, which
would cause the Bank to have additional taxable income. See "Taxation
- Federal Taxation." Pro forma stockholders' equity and pro forma
stockholders' equity per share do not give effect to the liquidation
account or the bad debt reserves established by the Bank for federal
income tax purposes in the event of a liquidation of the Bank.
(9) As adjusted to give effect to an increase in the number of shares
which could occur due to an increase in the Estimated Price Range of
up to 15% to reflect changes in market and financial conditions
following the commencement of the Offerings.
45
<PAGE> 90
COMPARISON OF VALUATION AND PRO FORMA INFORMATION WITH NO FOUNDATION
In the event that the Foundation was not being established as part of
the Conversion, RP Financial has estimated that the pro forma aggregate market
capitalization of the Company would be approximately $500.0 million at the
midpoint, which is approximately $25.0 million greater than the pro forma
aggregate market capitalization of the Company if the Foundation is included,
and would result in approximately $60.2 million increase in the amount of
Common Stock offered for sale in the Conversion. The pro forma price to book
ratio and pro forma price to earnings ratio would be the same under both the
current appraisal and the estimate of the value of the company without the
Foundation. Further, assuming the midpoint of the Estimated Price Range, pro
forma stockholders' equity per share and pro forma earnings per share would be
substantially the same at $14.77 and $14.73, respectively, and $0.60 and $0.59,
respectively, with the Foundation or without the Foundation. The pro forma
price to book ratio and the pro forma price to earnings ratio are substantially
the same with and without the Foundation at the midpoint at 67.7% and 67.9%,
respectively, and 16.67x and 16.95x, respectively. There is no assurance that
in the event the Foundation was not formed that the appraisals prepared at the
time would have concluded that the pro forma market value of the Company would
be the same as that estimated herein. Any appraisals prepared at that time
would be based on the facts and circumstances existing at that time, including,
among other things, market and economic conditions.
For comparative purposes only, set forth below are certain pricing
ratios and financial data and ratios, at the minimum, midpoint, maximum and
maximum, as adjusted, of the Estimated Price Range, assuming the Conversion was
completed at March 31, 1997.
<TABLE>
<CAPTION>
At the Minimum At the Midpoint
---------------------------- ----------------------------
With No With No
Foundation Foundation Foundation Foundation
------------- ------------ ------------- ------------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Estimated offering amount . . . . . . . $ 373,843 $ 425,000 $ 439,815 $ 500,000
Pro forma market capitalization . . . . 403,750 425,000 475,000 500,000
Total assets . . . . . . . . . . . . . 4,065,846 4,096,043 4,125,396 4,160,922
Total liabilities . . . . . . . . . . . 3,424,202 3,424,202 3,424,202 3,424,202
Pro forma stockholders' equity . . . . 641,737 671,934 701,287 736,813
Pro forma consolidated net earnings . . 24,929 26,012 26,325 27,598
Pro forma stockholders' equity per
share . . . . . . . . . . . . . . . . 15.90 15.81 14.77 14.73
Pro forma consolidated net earnings per
share . . . . . . . . . . . . . . . 0.67 0.66 0.60 0.59
Pro forma pricing ratios:
Offering price as a percentage of pro
forma stockholders' equity per
share . . . . . . . . . . . . . . 62.89% 63.25% 67.70% 67.89%
Offering price to pro forma net
earnings per share . . . . . . . . 14.93x(1) 15.15x 16.67x(1) 16.95x
Pro forma market capitalization to
assets . . . . . . . . . . . . . . 9.93% 10.38% 11.51% 12.02%
Pro forma financial ratios:
Return on assets . . . . . . . . . . 0.61%(2) 0.64% 0.64%(2) 0.66%
Return on stockholders' equity . . . 3.88%(3) 3.87% 3.75%(3) 3.75%
Stockholders' equity to assets . . . 15.78% 16.40% 17.00% 17.71%
</TABLE>
<TABLE>
<CAPTION>
At the Maximum,
At the Maximum As Adjusted
----------------------------- -------------------------
With No With No
Foundation Foundation Foundation Foundation
------------- ---------- ----------- ----------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Estimated offering amount . . . . . . . $ 505,787 $ 575,000 $ 581,655 661,250
Pro forma market capitalization . . . . 546,250 575,000 628,188 661,250
Total assets . . . . . . . . . . . . . 4,184,946 4,225,801 4,253,429 4,300,412
Total liabilities . . . . . . . . . . . 3,424,202 3,424,202 3,424,202 3,424,202
Pro forma stockholders' equity . . . . 760,837 801,692 829,320 876,303
Pro forma consolidated net earnings . . 27,720 29,184 29,325 31,008
Pro forma stockholders' equity per
share . . . . . . . . . . . . . . . . . 13.93 13.94 13.20 13.26
Pro forma consolidated net earnings per
share . . . . . . . . . . . . . . . 0.55 0.55 0.50 0.51
Pro forma pricing ratios:
Offering price as a percentage of pro
forma stockholders' equity per
share . . . . . . . . . . . . . . 71.79% 71.74% 75.76% 75.41%
Offering price to pro forma net
earnings per share . . . . . . . . 18.18x(1) 18.18x 20.00x(1) 19.61x
Pro forma market capitalization to
assets . . . . . . . . . . . . . . 13.05% 13.61% 14.77% 15.38%
Pro forma financial ratios:
Return on assets . . . . . . . . . . 0.66%(2) 0.69% 0.69%(2) 0.72%
Return on stockholders' equity . . . 3.64%(3) 3.64% 3.54%(3) 3.54%
Stockholders' equity to assets . . . 18.18% 18.97% 19.50% 20.38%
</TABLE>
- -----------------
(1) If the contribution to the Foundation had been expensed during the year
ended March 31, 1997, the offering price to pro forma net earnings per
share would have been 41.26x, 57.41x, 80.77x and 124.99x at the minimum,
midpoint, maximum and maximum, as adjusted, respectively.
(2) If the contribution to the Foundation had been expensed during the year
ended March 31, 1997, return on assets would have been 0.22%, 0.19%, 0.15%
and 0.11% at the minimum, midpoint, maximum and maximum, as adjusted,
respectively.
(3) If the contribution to the Foundation had been expensed during the year
ended March 31, 1997, return on stockholders' equity would have been
1.41%, 1.09%, 0.82% and 0.56% at the minimum, midpoint, maximum and
maximum, as adjusted, respectively.
46
<PAGE> 91
INDEPENDENCE SAVINGS BANK AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Set forth below are the consolidated statements of income of the Bank
and its subsidiaries for the periods indicated. The consolidated financial
statements of the Bank as of March 31, 1997, 1996 and 1995 and for the years
then ended were audited by Ernst & Young LLP, independent certified public
accountants.
<TABLE>
<CAPTION>
For the Year Ended
March 31,
---------------------------------------------
1997 1996 1995
-------------- ------------- --------------
(In Thousands)
<S> <C> <C> <C>
Interest income:
Loans:
Mortgage loans $161,638 $140,435 $128,008
Other loans 36,189 36,162 31,726
Investment securities 22,356 11,635 8,644
Mortgage-backed and mortgage-related securities 28,856 17,779 20,204
Other 6,264 7,089 2,957
-------- -------- --------
Total interest income 255,303 213,100 191,539
-------- -------- --------
Interest expense:
Deposits 138,840 106,379 76,443
Borrowings 1,347 4,240 4,119
-------- -------- --------
Total interest expense 140,187 110,619 80,562
-------- -------- --------
Net interest income 115,116 102,481 110,977
Provision for loan losses 7,960 3,679 3,841
-------- -------- --------
Net interest income after provision
for loan losses 107,156 98,802 107,136
-------- -------- --------
Other income:
Net gain (loss) on sales of loans and securities (3,347) 12,222 (3,952)
Service fees 5,708 4,086 4,103
Other 548 3,774 2,313
-------- -------- --------
Total other income 2,909 20,082 2,464
-------- -------- --------
Other expenses:
Compensation and employee benefits 26,879 22,311 20,155
Occupancy costs 10,981 7,656 5,948
Data processing fees 7,020 3,117 3,091
Advertising 3,625 3,229 2,175
FDIC insurance premiums 2,199 2,558 5,057
SAIF assessment 8,553 -- --
Amortization of intangible assets 8,278 1,842 905
Other 14,618 11,417 10,038
-------- -------- --------
Total other expenses 82,153 52,130 47,369
-------- -------- --------
Income before provision for income taxes 27,912 66,754 62,231
Provision for income tax 10,732 30,782 27,327
-------- -------- --------
Net income $ 17,180 $ 35,972 $ 34,904
======== ======== ========
</TABLE>
47
<PAGE> 92
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Bank's results of operations depend primarily on its net interest
income, which is the difference between interest income on interest-earning
assets, which principally consist of loans, mortgage-backed and
mortgage-related securities and investment securities, and interest expense on
interest-bearing liabilities, which principally consist of deposits and
borrowings. Net interest income is determined by an institution's interest
rate spread (i.e. the difference between the yields earned on its interest
earning assets and the rates paid on its interest-bearing liabilities) and the
relative amount of interest-earning assets and interest-bearing liabilities.
The Bank's results of operations also are affected by the provision
for loan losses, resulting from management's assessment of the adequacy of the
allowance for loan losses, the level of its non-interest income, including
service fees and related income, gains and losses from the sales of loans and
securities, the level of its non-interest expense, including compensation and
employee benefits, occupancy expense and FDIC insurance premiums, data
processing services and income tax expense.
The Bank is a community-oriented savings bank which emphasizes
customer service and convenience. As part of this strategy, the Bank offers
products and services designed to meet the needs of its customers. The Bank
generally has sought to achieve long-term financial strength and stability by
increasing the amount and stability of its net interest income and non-interest
income and by maintaining a high level of asset quality. In pursuit of these
goals, the Bank has adopted a business strategy emphasizing controlled growth,
residential lending, retail deposit products, customer service, maintaining
asset quality and a stable source of liquidity and earnings.
BUSINESS STRATEGY
Controlled Growth. In recent years, the Bank has sought to increase
its assets and expand its operations. The Bank purchased Bay Ridge in January
1996 as well as five branch offices located in Brooklyn and Staten Island in
March 1996 from a savings institution which was withdrawing from the market
area (the "1996 Branch Acquisition"). In addition, in earlier periods, the
Bank also completed several other acquisitions. These transactions have
contributed to the growth in the Bank's assets, which increased by $1.34
billion or 56.1% from $2.39 billion at March 31, 1993 to $3.73 billion at March
31, 1997. The net proceeds from the Offerings will significantly enhance the
capital base of the Company and the Bank and therefore support further growth
and expansion of the Bank's operations consistent with its business strategy.
Emphasis on Residential Lending. Management believes that the Bank is
more likely to achieve its goals of long-term financial strength and
profitability by continuing to emphasize residential loan products and
services. Given the concentration of multi-family housing units in the New
York City metropolitan area, the Bank's primary lending emphasis is the
origination of loans secured by first liens on multi-family residential
properties, which consist primarily of mortgage loans secured by apartment
buildings. Such loans totaled
48
<PAGE> 93
$1.37 billion or 53.7% of the total loan portfolio at March 31, 1997. The Bank
also emphasizes single-family (one-to-four units) residential mortgage loans,
which totaled $552.7 million or 21.8% of the total loan portfolio at March 31,
1997, and cooperative apartment loans (loans secured by an individual's shares
in a cooperative housing corporation), which loans totaled $348.0 million or
13.7% of the total loan portfolio at March 31, 1997.
Maintain Asset Quality. Management believes that high asset quality
is a key to long-term financial success. Accordingly, the Bank has sought to
maintain a high level of asset quality and moderate credit risk by using
underwriting standards which management believes are conservative and by
generally limiting its origination of mortgage loans to its market area. Total
non-performing assets have remained relatively stable even as the Bank's assets
have grown significantly. The Bank's ratio of non-performing assets to total
assets at March 31, 1997 was 0.51% and its allowance for loan losses to
non-performing loans was 144.9%.
Stable Source of Liquidity and Earnings. The Bank purchases short-to
medium-term investment securities and mortgage-backed and mortgage-related
securities combining what management believes to be appropriate yield,
liquidity and credit quality in its efforts to achieve (1) a managed and
predictable source of liquidity to meet loan demand, (2) a stable source of
interest income and (3) diversification in the Bank's portfolio of
interest-earning assets. These portfolios which totaled in the aggregate
$548.5 million at March 31, 1997 are comprised primarily of obligations of the
U.S. Government and federal agencies totaling $345.1 million (of which $334.1
million consists of U.S. Treasury notes and bills) and mortgage-backed and
mortgage-related securities totaling $191.0 million (of which $106.5 million
consists of mortgage-backed securities and $84.5 million of CMOs). In
accordance with the Bank's policy, investments purchased by the Bank generally
must be rated at least "investment grade" upon purchase.
Emphasis on Retail Deposits and Customer Service. The Bank, as a
traditional community-based savings bank, is largely dependent upon its base of
competitively priced core deposits to provide stable source of funding. The
Bank has retained many loyal customers over the years through a combination of
quality service, low service fees on various deposit and other products,
customer convenience, an experienced staff and a commitment to the communities
which it serves. Lower costing deposits totaled $1.58 billion or 47.6% of the
Bank's total deposits at March 31, 1997. In addition, the Bank does not accept
brokered deposits as a source of funds and has no plans to do so in the future.
RECENT ACQUISITIONS
The Bank significantly increased its asset size during fiscal 1996
through two acquisitions. In January 1996, the Bank completed the acquisition
of Bay Ridge, acquiring $558.6 million of assets and six branch offices located
in Brooklyn with total deposits of $445.2 million. As a result of such
acquisition, the Bank recorded goodwill totaling $26.1 million, as adjusted
which is being amortized on a straight line basis over a 14 year period. The
amount of goodwill related to the Bay Ridge acquisition was adjusted downward
during fiscal 1997 by $4.8 million primarily as the result of the receipt of
proceeds from the repayment of the Bay Ridge ESOP loan and the receipt of tax
refunds, offset in part by an additional accrual related to a Bay Ridge
qualified retirement plan. As of March 31, 1997, the Bank had $23.7 million of
remaining goodwill related to this acquisition.
49
<PAGE> 94
In March 1996, the Bank completed the 1996 Branch Acquisition,
providing the Bank with three additional branch offices in Brooklyn and two
branch offices in Staten Island. In connection with the transaction, the Bank
assumed approximately $615.6 million of deposits and other liabilities and
recorded $49.5 million of intangible assets. In consideration for the
assumption of deposits and other liabilities, the Bank received approximately
$557.9 million in cash and branch offices and other fixed assets valued at
approximately $8.1 million. In September 1996, the Bank discontinued
operations at one of the branch offices acquired in the 1996 Branch Acquisition
and sold deposits totaling $51.4 million for a premium of $3.6 million. The
remaining premium paid by the Bank which related to this branch office amounted
to $5.3 million at the time of disposition and was deducted from the $49.5
million of intangible assets recorded in the acquisition. In addition, the
Bank recognized a loss of $1.7 million on the sale of this branch office, which
loss was reflected in other income for fiscal 1997. The core deposit
intangible related to the 1996 Branch Acquisition, as adjusted, which totaled
$36.7 million at March 31, 1997, is being amortized on a straight line basis
over seven years.
In April 1997, the Bank continued its growth by completing another
branch acquisition (which will be reflected in the Bank's financial statements
at and for the year ended March 31, 1998). As a result, the Bank assumed $70.0
million of deposits, receiving $64.9 million in cash, an additional branch
office in Queens and other fixed assets with an aggregate value of
approximately $886,000. In connection with such acquisition, the Bank recorded
an intangible asset in the amount of $4.0 million which is being amortized on a
straight line basis over seven years.
CHANGES IN FINANCIAL CONDITION
GENERAL. Total assets decreased by $136.5 million, or 3.5%, from
$3.87 billion at March 31, 1996 to $3.73 billion at March 31, 1997. Investment
securities and mortgage-backed and mortgage-related securities decreased
substantially due to sales of $527.2 million of such securities during fiscal
1997. Such sales related primarily to the Bank's decision to restructure its
investments and mortgage-backed and mortgage-related securities portfolios to
improve the yield thereon and to reduce interest rate risk. The proceeds of
the sales, which were undertaken in large part in March 1997 and which resulted
in a net loss of $3.9 million, were primarily invested in short-term
investments. Offsetting in part the decline in the investment and
mortgage-backed and mortgage-related securities portfolios was a $180.3 million
increase in the net loan portfolio, the majority of which was accounted for by
a $157.1 million increase in multi-family residential loans.
CASH, COMMERCIAL PAPER AND FEDERAL FUNDS SOLD (COLLECTIVELY "CASH AND
CASH EQUIVALENTS"). During fiscal 1997, cash and cash equivalents increased by
$271.4 million, or 263.0%, to $374.6 million at March 31, 1997 from $103.2
million at March 31, 1996. Such increase in cash and cash equivalents was due
in large part to the proceeds from the sale of investment and mortgage-backed
and mortgage-related securities in March 1997, a substantial portion of which
was not re-invested until April 1997. Of the $374.6 million of cash and cash
equivalents at March 31, 1997, approximately $270.0 million were proceeds from
the sale of securities settled on or prior to such date. In addition, at March
31, 1997, the Bank had an account receivable totalling $107.6 million relating
to securities transactions executed in connection with the restructuring which
had not settled as of such date.
50
<PAGE> 95
Substantially all of these funds were invested in early April 1997 primarily in
U.S. Treasury notes and bills with maturities of two years or less.
INVESTMENT SECURITIES AND MORTGAGE-BACKED AND MORTGAGE-RELATED
SECURITIES. The Bank's investment securities and mortgage-backed and
mortgage-related securities portfolios declined by $691.4 million from an
aggregate of $1.24 billion at March 31, 1996 to an aggregate of $548.5 million
at March 31, 1997. This decline was primarily the result of the Bank's
determination to restructure these portfolios in order to improve the overall
yield and reduce the exposure to interest rate risk. In connection with this
restructuring, the Bank sold approximately $397.3 million of its investment
securities and mortgage-backed and mortgage-related securities (including CMOs)
in March 1997. The Bank reinvested substantially all of the proceeds of the
sales in U.S. Treasury notes and bills, most of which have maturities of two
years or less. The weighted average yield on the securities purchased was
approximately 60 basis points higher than the weighted average yield on the
securities sold.
As of March 31, 1997, the Bank's investment securities totaled $357.5
million, all of which were classified as available for sale. At March 31,
1996, the Bank's investment securities totaled $723.8 million of which $683.8
million were classified as available for sale. The Bank was required in fiscal
1995 to classify its investment and mortgage-backed and mortgage-related
securities portfolios as either held to maturity or available for sale in
accordance with the provisions of SFAS No. 115. See "-Recent Accounting
Pronouncements."
The Bank's mortgage-backed and mortgage-related securities, the
substantial majority of which at March 31, 1997 consisted of CMOs secured by
mortgage-backed securities issued by the Federal National Mortgage Association
("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC"), decreased
from $516.0 million at March 31, 1996 to $191.0 million at March 31, 1997 (all
of which were classified as available for sale) primarily as a result of the
restructuring. The bulk of the mortgage-backed and mortgage-related securities
sold consisted of CMOs, a portion of which were acquired in the acquisition of
Bay Ridge in fiscal 1996 and which did not conform to the Bank's investment
policy. At March 31, 1997, CMOs totaled $84.5 million, most of which are
secured by mortgage-backed securities issued by the FNMA or the FHLMC.
At March 31, 1997, the Bank had a $612,000 net unrealized gain on
available-for sale investment and mortgage-backed and mortgage-related
securities in accordance with SFAS No. 115. See "Business-Investment
Activities."
LOANS RECEIVABLE, NET. Loans receivable, net, increased by $180.3
million, or 7.8%, for the year ended March 31, 1997 due to the continued
emphasis by the Bank on the origination of multi-family residential mortgage
loans. Such loans increased 13.0% from $1.21 billion at March 31, 1996 to
$1.37 billion at March 31, 1997. See "Business - Lending Activities."
NON-PERFORMING ASSETS. The Bank's non-performing assets, which
primarily consist of non-accrual loans, loans past due 90 days or more as to
interest and accruing and other real estate owned acquired through foreclosure
or deed-in-lieu thereof decreased $10.9 million or 36.2% from $30.1 million at
March 31, 1996 to $19.2 million at March 31, 1997.
51
<PAGE> 96
The Bank's non-performing assets decreased primarily due to the return to
performing status of a $5.0 million non-accrual loan as well as the sale or
satisfaction of an aggregate of $2.3 million of loans acquired in the Bay Ridge
acquisition and charge-offs totalling $1.6 million. At March 31, 1997, the
Bank's non-performing assets amounted to 0.51% of total assets and consisted of
$16.9 million of non-accrual loans, $1.9 million of which were multi-family
residential loans and $11.2 million of which were commercial and other real
estate loans, $1.7 million of loans past due 90 days or more as to interest and
accruing and $540,000 of other real estate owned. See "Business - Asset
Quality."
ALLOWANCE FOR LOAN LOSSES. The Bank's allowance for loan losses
amounted to $27.0 million at March 31, 1997, as compared to $20.5 million at
March 31, 1996. It is management's policy to maintain an allowance for
estimated losses on loans based upon an assessment of prior loss experience,
the volume and type of lending conducted by the Bank, industry standards, past
due loans, general economic conditions and other factors related to the
collectibility of the loan portfolio. The Bank's allowance increased in fiscal
1997 primarily due to an $8.0 million provision for loan losses made in fiscal
1997. The Bank increased its provision for loan losses in fiscal 1997 as a
result of, among other factors, the increased investment in multi-family
residential loans (all of which are secured by properties in the New York City
metropolitan area), the increased number of larger multi-family and individual
cooperative apartment loans and the increased number of loans which exhibit
risk characteristics which were determined to require closer oversight. At
March 31, 1997, the Bank's allowance for loan losses amounted to 144.9% of
total non-performing loans as compared to 75.3% of total non-performing loans
at March 31, 1996. The Bank utilizes these percentages as only one of the
factors in assessing the adequacy of the allowance for loan losses at various
points in time. See "Business - Asset Quality."
INTANGIBLE ASSETS. The Bank's intangible assets consist of goodwill
and other intangibles resulting primarily from the Bay Ridge acquisition and
the 1996 Branch Acquisition. At March 31, 1997, intangibles totaled $60.5
million and were primarily comprised of $23.7 million related to the
acquisition of the Bay Ridge and $36.7 million related to the 1996 Branch
Acquisition. The intangible related to the 1996 Branch Acquisition was reduced
during fiscal 1996 by $5.3 million due to the transfer in September 1996 to
another institution of $51.4 million of deposits related to one of the branch
offices acquired. Amortization expense related to intangible assets amounted
to $8.3 million in fiscal 1997. Amortization of such intangibles will continue
to reduce net income until such intangible assets are fully amortized. See
"-Recent Acquisitions."
DEPOSITS. Deposits decreased by $71.3 million, or 2.1%, to $3.33
billion at March 31, 1997 from $3.40 billion at March 31, 1996 reflecting
deposit withdrawals and transfers totaling $210.2 million. This decrease was
primarily attributable to the outflow or transfer of $146.0 million of deposits
(primarily certificates of deposit) acquired in the 1996 Branch Acquisition and
$25.2 million of deposits acquired in the Bay Ridge acquisition. A significant
percentage of the higher-priced deposits assumed in the 1996 Branch Acquisition
were not reinvested in new certificates of deposit at the Bank.
BORROWINGS. The Bank has historically used borrowing only to a
limited extent although it may increase such use in the future. The Bank's
borrowings consist primarily of advances from the FHLB of New York. FHLB
advances and other borrowings decreased by $40.0 million, or 69.9%, to $17.2
million at March 31, 1997 from $57.3 million at March
52
<PAGE> 97
31, 1996. The Bank prepaid a large portion of its FHLB advances in April 1996,
which prepayments did not result in any prepayment penalties.
EQUITY. At March 31, 1997, total equity equaled $309.1 million,
compared to $289.8 million at March 31, 1996. This $19.3 million or 6.7%
increase was primarily the result of net income of $17.2 million for the year
ended March 31, 1997 combined with an increase in the Bank's unrealized gain on
marketable securities from a $1.7 million net unrealized loss, net of tax, at
March 31, 1996 to a $368,000 net unrealized gain, net of tax, at March 31,
1997 primarily as a result of the previously described securities restructuring.
53
<PAGE> 98
AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID
The following table sets forth, for the periods indicated, information
regarding (i) the total dollar amount of interest income of the Bank from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average rate; (iii) net interest income; (iv) interest rate spread; and (v) net
interest margin. Information is based on average daily balances during the
indicated periods.
<TABLE>
<CAPTION>
Year Ended March 31,
At March 31, ---------------------------------------
1997 1997
------------ ---------------------------------------
Average
Yield/ Average Yield/
Cost Balance Interest Cost
---- ------- -------- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable (1):
Mortgage loans 8.08% $2,007,670 $ 161,638 8.05%
Other loans:
Cooperative apartment loans 7.24 361,011 26,687 7.39
Other (2) 8.40 108,608 9,502 8.75
---------- ---------
Total loans 7.98 2,477,289 197,827 7.99
Mortgage-backed and mortgage-related
securities 6.34 475,967 28,856 6.06
Investment securities 5.61 395,677 22,356 5.65
Other interest-earning assets (3) 5.46 114,490 6,264 5.47
---------- ---------
Total interest-earning assets 7.39 3,463,423 255,303 7.37
---- --------- ----
Non-interest-earning assets 244,567
----------
Total assets $3,707,990
==========
Interest-bearing liabilities:
Deposits:
Demand deposits(4) 2.77 $ 469,833 $ 12,459 2.65
Savings deposits 2.88 1,055,807 30,728 2.91
Certificates of deposit 5.50 1,729,185 95,653 5.53
---------- ---------
Total deposits 4.27 3,254,825 138,840 4.27
---------- ---------
Total borrowings 7.36 18,581 1,347 7.25
---------- ---------
Total interest-bearing liabilities 4.29 3,273,406 140,187 4.28
---- --------- ----
Non-interest-bearing liabilities(5) 132,807
----------
Total liabilities 3,406,213
Total equity 301,777
----------
Total liabilities and equity $3,707,990
==========
Net interest-earning assets $ 190,017
==========
Net interest income/interest rate spread 3.10% $115,116 3.09%
==== ======== ====
Net interest margin 3.32%
====
Ratio of average interest-earning assets
to average interest-bearing liabilities 1.05x 1.06x
==== ====
</TABLE>
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------------------------------------------------------------
1996 1995
------------------------------------ -------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable (1):
Mortgage loans $1,648,009 $140,435 8.52% $1,447,776 $128,008 8.84%
Other loans:
Cooperative apartment loans 352,440 26,389 7.49 314,665 23,185 7.37
Other (2) 108,661 9,773 8.99 113,748 8,541 7.51
---------- -------- ---------- --------
Total loans 2,109,110 176,597 8.37 1,876,189 159,734 8.51
Mortgage-backed and mortgage-related
securities 286,317 17,779 6.21 335,128 20,204 6.03
Investment securities 204,862 11,635 5.68 196,928 8,644 4.39
Other interest-earning assets (3) 120,791 7,089 5.87 49,094 2,957 6.02
---------- -------- ---------- --------
Total interest-earning assets 2,721,080 213,100 7.83 2,457,339 191,539 7.79
-------- ---- -------- ----
Non-interest-earning assets 118,944 88,518
---------- ----------
Total assets $2,840,024 $2,545,857
========== ==========
Interest-bearing liabilities:
Deposits:
Demand deposits(4) $ 350,395 $ 9,362 2.67 $ 329,451 $ 7,776 2.36%
Savings deposits 834,374 25,097 3.01 957,017 27,985 2.92
Certificates of deposit 1,235,755 71,920 5.82 877,252 40,682 4.64
---------- -------- ---------- --------
Total deposits 2,420,524 106,379 4.39 2,163,720 76,443 3.53
---------- -------- ---------- --------
Total borrowings 69,402 4,240 6.11 70,176 4,119 5.87
---------- -------- ---------- --------
Total interest-bearing liabilities 2,489,926 110,619 4.44 2,233,896 80,562 3.61
-------- ---- -------- ----
Non-interest-bearing liabilities(5) 76,075 76,230
---------- ----------
Total liabilities 2,566,001 2,310,126
Total equity 274,023 235,731
---------- ----------
Total liabilities and equity $2,840,024 $2,545,857
========== ==========
Net interest-earning assets $ 231,154 $ 223,443
========== ==========
Net interest income/interest rate spread $102,481 3.39% $110,977 4.18%
======== ==== ======== ====
Net interest margin 3.77% 4.52%
==== ====
Ratio of average interest-earning assets
to average interest-bearing liabilities 1.09x 1.10x
==== ====
</TABLE>
- ------------
(1) The average balance of loans receivable includes non-performing loans,
interest on which is recognized on a cash basis.
(2) Includes home equity lines of credit and improvement loans, student
loans, automobile loans, passbook loans, credit card loans, personal
loans and commercial business loans.
(3) Includes federal funds sold, interest-earning bank deposits, FHLB
stock and overnight commercial paper.
(4) Includes NOW and money market accounts.
(5) Includes escrow accounts for the payment of taxes.
54
<PAGE> 99
RATE/VOLUME ANALYSIS
The following table sets forth the effects of changing rates and
volumes on net interest income of the Bank. Information is provided with
respect to (i) effects on interest income attributable to changes in volume
(changes in volume multiplied by prior rate) and (ii) effects on interest
income attributable to changes in rate (changes in rate multiplied by prior
volume). The combined effect of changes in both rate and volume has been
allocated proportionately to the change due to rate and the change due to
volume.
<TABLE>
<CAPTION>
Fiscal 1997 compared to 1996 Fiscal 1996 compared to 1995
-------------------------------------- ---------------------------------------
Increase (decrease) due to Increase (decrease) due to
-------------------------- --------------------------
Total Net Total Net
Increase Increase
Rate Volume (Decrease) Rate Volume (Decrease)
---------- ----------- ---------- ---------- ----------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable:
Mortgage loans $(8,088) $29,291 $21,203 $(4,766) $17,193 $12,427
Other loans:
Cooperative apartment loans (349) 647 298 383 2,821 3,204
Other loans (1) (266) (5) (271) 1,627 (395) 1,232
------- ------- ------- ------- ------- -------
Total loans receivable (8,703) 29,933 21,230 (2,756) 19,619 16,863
Mortgage-backed and mortgage-related
securities (439) 11,516 11,077 589 (3,014) (2,425)
Investment securities (61) 10,782 10,721 2,631 360 2,991
Other interest-earning assets (467) (358) (825) (76) 4,208 4,132
------- ------- ------- ------- ------- -------
Total net change in income on interest-
earning assets (9,670) 51,873 42,203 388 21,173 21,561
Interest-bearing liabilities:
Deposits:
Demand deposits (70) 3,167 3,097 1,069 517 1,586
Savings deposits (856) 6,487 5,631 828 (3,716) (2,888)
Certificates of deposit (3,739) 27,472 23,733 11,983 19,255 31,238
------- ------ ------ ------ ------ ------
Total deposits (4,665) 37,126 32,461 13,880 16,056 29,936
Borrowings 673 (3,566) (2,893) 166 (45) 121
------- ------- ------- ------- ------- -------
Total net change in expense on
interest-bearing liabilities (3,992) 33,560 29,568 14,046 16,011 30,057
------- ------- ------- ------- ------- -------
Net change in net interest income $(5,678) $18,313 $12,635 $(13,658) $ 5,162 $(8,496)
======= ======= ======= ======= ======= =======
</TABLE>
- ------------
(1) Includes home equity lines of credit and loans, student loans,
automobile loans, passbook loans, personal loans, credit card loans
and commercial business loans.
55
<PAGE> 100
COMPARISON OF RESULTS OF OPERATIONS FOR THE YEARS ENDED MARCH 31, 1997, 1996
AND 1995
GENERAL. The Bank reported net income of $17.2 million, $36.0
million and $34.9 million for the years ended March 31, 1997, 1996 and 1995,
respectively. Net income declined by $18.8 million from fiscal 1996 to fiscal
1997 due primarily to the recognition in fiscal 1996 of a $12.2 million net
gain on the sale of securities and loans as compared to a net loss on the sale
of securities and loans totaling $3.3 million in fiscal 1997. The Bank sold
$16.5 million of investment securities in fiscal 1996, recording a gain of
$12.1 million. Net income was also affected by the $6.4 million increase in
amortization of intangibles, reflecting a full year of amortization of the
intangible assets acquired from Bay Ridge and in the 1996 Branch Acquisition.
The decrease in net income in fiscal 1997 was also the result, in part, of the
increase in the Bank's provision for loan losses from $3.7 million for the year
ended March 31, 1996 to $8.0 million for the year ended March 31, 1997 as the
Bank increased its allowance for loan losses primarily in light of its
increased investment in multi-family residential loans, the increased number of
larger multi-family residential loans and individual cooperative apartment
loans and an increase in the number of loans which exhibit risk characteristics
which management determined would require closer oversight. See "Business -
Asset Quality." Net income was also adversely affected by the $8.6 million
special SAIF assessment. See "-- Other Expenses." Net income for fiscal 1997
was favorably affected by a reduction in the provision for income taxes due to
a reduction in the Bank's effective tax rate for the fiscal year. The slight
increase in net income from fiscal 1995 to fiscal 1996 reflected the effect of
the aforementioned gain on sale of securities and loans in fiscal 1996 offset
in part by a decrease in net interest income combined with increased other
expenses.
NET INTEREST INCOME. Net interest income is determined by interest
rate spread (i.e., the difference between the yields earned on its
interest-earning assets and the rates paid on its interest-bearing liabilities)
and the relative amounts of interest-earning assets and interest-bearing
liabilities. The Bank's interest rate spread was 3.09% for fiscal 1997 as
compared to 3.39% and 4.18% for fiscal years 1996 and 1995, respectively. The
Bank's net interest margin was 3.32%, 3.77% and 4.52% for the years ended March
31, 1997, 1996 and 1995, respectively. Net interest income increased by $12.6
million or 12.3% to $115.1 million in fiscal 1997 primarily due to a
significant increase in the Bank's average interest-earning assets as a result
of the Bay Ridge acquisition and the re-investment of the cash received in the
1996 Branch Acquisition completed during the fourth quarter of fiscal 1996. The
Bank's net interest income declined in fiscal 1996 by $8.5 million or 7.7%
compared to fiscal 1995 due primarily to a decline in the interest rate spread
from 4.18% for fiscal 1995 to 3.39% for fiscal 1996. The decrease in the
spread reflected in large part the effects of increased rates paid on deposits
with no corresponding increase in the yields earned on interest-earning assets.
Interest income increased by $42.2 million from fiscal 1996 to fiscal
1997 reflecting the increase in average balance of the Bank's interest-earning
assets as a result of the completion of the Bay Ridge acquisition and the 1996
Branch Acquisition. The average
56
<PAGE> 101
balance of the loan portfolio increased by $368.2 million both as a result of
the acquisition of loans from Bay Ridge as well as the Bank's investment of a
portion of the funds received in the 1996 Branch Acquisition in new loans.
Offsetting in part the effects of the increase in the average balance of loans
was the 38 basis point decline in the average yield earned on the loan
portfolio reflecting in part the repricing downward of adjustable-rate loans as
well as general market conditions which resulted in loans with lower yields at
the time of origination. Investment of cash received in the 1996 Branch
Acquisition as well as investment securities and mortgage-backed and
mortgage-related securities acquired from Bay Ridge were responsible for the
significant increase in the aggregate average balance of investment securities
and mortgage-backed and mortgage-related securities which increased from $491.1
million in fiscal 1996 to $871.6 million in fiscal 1997. Partially offsetting
the increase in the average balances of these portfolios were declines in the
average yield earned from 5.99% to 5.88%. Interest income also increased for
the year ended March 31, 1996 as compared to the prior fiscal year, although at
a more modest level, due primarily to growth in the Bank's interest-earning
assets, primarily loans. Average interest-earning assets increased by $263.7
million or 10.7% during fiscal 1996 primarily as a result of the Bay Ridge
acquisition and the 1996 Branch Acquisition completed in the fourth quarter of
fiscal 1996. Also contributing to the increase, but to a significantly lesser
degree, was a 4 basis point increase in the average yield earned on the Bank's
interest-earning assets.
Interest expense increased by $29.6 million or 26.7% to $140.2 million
from fiscal 1996 to fiscal 1997 reflecting a 34.5% increase in the average
balance of deposits, particularly certificates of deposit, as a result of the
Bay Ridge acquisition and the 1996 Branch Acquisition. The growth in the
average balance of deposits was offset in part by the decline in average rates
paid thereon from 4.39% to 4.27%. In particular, the average rate paid on
certificates of deposit decreased 29 basis points to 5.53% for fiscal 1997.
Such decline reflecting in part both the effect of deposit outflows as certain
higher costing deposits were not reinvested with the Bank, as well as the
transfer to another institution of $51.4 million of deposits. Interest expense
increased from fiscal 1995 to fiscal 1996 by $30.1 million to $110.7 million or
37.3% due to the growth in the average balance of deposits from $2.16 billion
to $2.42 billion and an increase in the average rate paid thereon from 3.53% to
4.39%. As in fiscal 1997, the bulk of the growth in interest-bearing
liabilities occurred in certificates of deposit, the average cost of which
increased from 4.64% in fiscal 1995 to 5.82% in fiscal 1996. The increase in
the average rate reflected both the effects of the higher interest rate
environment existing in fiscal 1996 as well as to the 1996 Branch Acquisition.
PROVISION FOR LOAN LOSSES. The provision for loan losses increased by
$4.3 million to $8.0 million in fiscal 1997. At March 31, 1997, the allowance
for loan losses represented 1.1% of total loans and 144.9% of total
non-performing loans as compared to 0.9% and 75.3%, respectively, at March 31,
1996. In management's judgment it was prudent to increase the allowance for
loan losses based upon, among other factors, the Bank's continuing emphasis on
multi-family residential loans secured by properties located in the
57
<PAGE> 102
New York City metropolitan area, the increased number of larger multi-family
residential loans and individual cooperative apartment loans and an increased
amount of loans which exhibit risk characteristics which require increased
management oversight. See "Business - Asset Quality." For the year ended
March 31, 1996, the provision amounted to $3.7 million as compared to $3.8
million for the prior fiscal year. At March 31, 1996 and March 31, 1995, the
Bank's allowance for loan losses as a percentage of total non-performing loans
remained relatively constant at 75.3% and 75.0%, respectively.
OTHER INCOME. Other income decreased by $17.2 million or 85.5% to
$2.9 million from fiscal 1996 to fiscal 1997. The decline reflected in large
part the $12.2 million net gain in fiscal 1996 on the sale of loans and
investment securities and mortgage-backed and mortgage-related securities as
compared to a $3.3 million net loss incurred in fiscal 1997. The net gain was
primarily due to a $12.1 million gain on the sale of $16.5 million of
investment securities which were sold in fiscal 1996 in anticipation of the
requirement to fund the SAIF special assessment (discussed below) while the net
loss incurred in fiscal 1997 resulted from a $3.9 million net loss on the sale
of $527.2 million of investment securities and mortgage-backed and
mortgage-related securities primarily as part of the Bank's asset
restructuring. The loss on loan and securities sales was partially offset by
an increase in service fees on deposit accounts and other depositor services
provided by the Bank from $4.1 million to $5.7 million. From fiscal 1995 to
fiscal 1996, the Bank's other income increased substantially due to the
previously mentioned net gain on sale of investment securities realized in
fiscal 1996. In addition, during fiscal 1995 the Bank incurred a $4.0 million
loss primarily as the result of loan sales. During the third quarter of
fiscal 1995, the Bank securitized and sold $119.7 million of multi-family loans
to the FNMA in order to provide additional liquidity to support its on-going
lending activity. The Bank incurred a loss of $2.7 million on the sale,
partially offset by the recognition of $1.5 million of deferred loan
origination fees related to these loans. In addition, during fiscal 1995 the
Bank sold approximately $11.6 million of long-term, fixed-rate loans to the
FHLMC, incurring a loss of $883,000. Other other income, ranged from $548,000
for the year ended March 31, 1997 to $3.8 million for the year ended March 31,
1996 to $2.3 million for the year ended March 31, 1995. The decline from
fiscal 1996 to fiscal 1997 reflected primarily the $1.7 million loss incurred
on the transfer of deposits related to a branch office acquired in the 1996
Branch Acquisition. See "-Recent Acquisitions."
OTHER EXPENSES. Other expenses increased substantially by $30.0
million or 57.6% to $82.2 million from fiscal 1996 to fiscal 1997. This
increase was primarily due to the effects of the Bay Ridge acquisition and the
1996 Branch Acquisition (including amortization of intangible assets ($6.4
million)), the imposition of the special SAIF assessment ($8.6 million) on that
portion of the Bank's deposits deemed to be SAIF-insured deposits and increased
data processing fees ($3.9 million) due, in part, to a data processing systems
conversion. As a result of the two acquisitions in 1996, the Bank added ten
offices to its branch network and increased its work force by approximately
20%. By comparison, the increase in other expenses from fiscal 1995 to fiscal
1996 was significantly less, only increasing by $4.8 million or 10.1% to $52.1
million in fiscal 1996. The increase during
58
<PAGE> 103
fiscal 1996 over fiscal 1995 was accounted for in large part by increases in
compensation and employee benefits and occupancy costs.
Compensation and employee benefits expense increased by $4.6 million
or 20.5% to $26.9 million in fiscal 1997 from $22.3 million in fiscal 1996.
The increase reflected in large part the effects of the Bay Ridge acquisition
and the 1996 Branch Acquisition, resulting in an increase of approximately 20%
in the number of employees. The $2.2 million or 10.7% increase in compensation
and employee benefit expense experienced between fiscal 1996 and 1995 primarily
reflected normal increases in compensation and employee benefit costs.
Occupancy costs increased by $3.3 million or 43.4% to $11.0 million in
fiscal 1997 from fiscal 1996 primarily due to the addition of ten additional
branch offices as a result of the Bay Ridge acquisition and the 1996 Branch
Acquisition. The increased cost also reflected expenses incurred in connection
with an on-going branch renovation and improvement program. Occupancy costs
totaled $7.7 million for fiscal 1996, a $1.7 million or 28.7% increase from
fiscal 1995, due primarily to the Bank's on going branch renovation program.
Data processing service expenses increased 125.2% from $3.1 million
for the year ended March 31, 1996 to $7.0 million for the year ended March 31,
1997. Once again, the primary reason for the increase was the significant
increase in the number of customer accounts at the Bank as a result of the Bay
Ridge acquisition and the 1996 Branch Acquisition. In addition, during fiscal
1997, the Bank determined to convert its data processing system. As a
consequence, the Bank expensed $2.6 million during fiscal 1997 in connection
with such conversion. The Bank expects to incur additional costs in connection
with the conversion of the Bank's data processing system which is expected to
be completed in fiscal 1998. Between fiscal 1996 and fiscal 1995, data
processing service expenses remained relatively stable, only increasing $26,000
or .8% to $3.1 million during the year ended March 31, 1996.
The Bank's advertising expenses amounted to $3.6 million, $3.2 million
and $2.2 million for the years ended March 31, 1997, 1996 and 1995,
respectively. The increase in fiscal years 1997 and 1996 reflected the Bank's
determination to increase its market presence through, in part, increased
advertising in print media and radio.
FDIC insurance premiums declined in fiscal years 1997 and 1996 from
the level experienced in fiscal 1995 even though the level of insurable
deposits increased substantially during such periods. Such expenses decreased
from $5.1 million during fiscal 1995 to $2.2 million in fiscal 1997. The
decrease reflects the reduction in the rate paid to the FDIC for deposit
insurance premiums combined with a refund from the FDIC in fiscal 1997 totaling
$961,000 related to the recapitalization of the SAIF. See "Regulation - The
Bank - FDIC Insurance Premiums."
59
<PAGE> 104
As a result of certain of its past acquisitions, the Bank is deemed to
have SAIF-insured deposits. During fiscal 1997, the FDIC imposed a one-time
special assessment in order to recapitalize the SAIF fund which, for
BIF-insured institutions like the Bank which also have deposits deemed to be
SAIF-insured, amounted to 65 basis points for each $100 of SAIF deposits as of
March 31, 1995. As a result, the Bank was assessed $8.6 million. The level of
deposit insurance expense for the Bank is and will remain higher than that of
an insured institution with a comparable amount of BIF only insured deposits
due to the significant amount of the Bank's deposits deemed to be SAIF-insured.
The Bank's deposits deemed SAIF-insured are assessed at a rate of 6.4 basis
points compared to 1.3 basis points for the Bank's BIF-insured deposits. At
March 31, 1997, $1.61 billion of the Bank's deposits were deemed to be SAIF
insured.
The amortization of intangibles increased by $6.4 million to $8.3
million in fiscal 1997 from fiscal 1996 reflecting a full year of amortization
of the intangibles recorded from the Bay Ridge acquisition and the 1996 Branch
Acquisition compared to amortization expense related to such intangibles only
during the fourth quarter of fiscal 1996. Amortization expense amounted to
$1.8 million in fiscal 1996. Amortization of intangibles amounted to $905,000
in fiscal 1995 and related to intangibles recorded in connection with branch
acquisitions completed in prior years.
Other expenses, including miscellaneous other items such as equipment
expenses, office supplies, postage, telephone expenses, maintenance and
security services contracts, increased $3.2 million or 28.0% to $14.6 million
primarily as a result of the significantly expanded branch operations resulting
from the purchase transactions completed in 1996. Once again, such expenses
increased at a much more modest rate from fiscal 1995 to fiscal 1996, only
increasing $1.4 million or 13.7% to $11.4 million in fiscal 1996.
INCOME TAXES. Income tax expense amounted to $10.7 million, $30.8
million and $27.3 million during fiscal 1997, 1996 and 1995, respectively. The
decrease experienced from fiscal 1996 to fiscal 1997 reflected in part the
decrease in the Bank's income before income taxes. In addition, the Bank's
effective tax rate was substantially reduced due to the establishment of a real
estate investment trust, Independence Community Realty Corporation ("ICRC" or
the "REIT"), during fiscal 1997. See "Business - Subsidiary Activities." The
Bank's effective tax rates for fiscal 1997, 1996 and 1995 were 38.4%, 46.1% and
43.9%, respectively.
As of March 31, 1997, the Bank had a net deferred tax asset of $17.8
million. No valuation allowance was deemed necessary with respect to such
asset.
ASSET AND LIABILITY MANAGEMENT
The ability to maximize net interest income is largely dependent upon
the achievement of a positive interest rate spread that can be sustained during
fluctuations in prevailing interest rates. Interest rate sensitivity is a
measure of the difference between
60
<PAGE> 105
amounts of interest-earning assets and interest-bearing liabilities which
either reprice or mature within a given period of time. The difference, or the
interest rate repricing "gap" provides an indication of the extent to which an
institution's interest rate spread will be affected by changes in interest
rates. A gap is considered positive when the amount of interest-rates
sensitive assets exceeds the amount of interest-rate sensitive liabilities, and
is considered negative when the amount of interest-rate sensitive liabilities
exceeds the amount of interest-rate sensitive assets. Accordingly, during a
period of rising interest rates, an institution with a negative gap position
would be in a worse position to invest in higher yielding assets which,
consequently, may result in the cost of its interest-bearing liabilities
increasing at a rate faster than its yield on interest-earning assets than if
it had a positive gap. During a period of falling interest rates, an
institution with a negative gap would tend to have its interest-bearing
liabilities repricing downward at a faster rate than its interest-earning
assets as compared to an institution with a positive gap which, consequently,
may tend to positively affect the growth of its net interest income.
The Bank's asset and liability management strategy is established by
the Asset/Liability Committee of the Bank and reviewed by the Bank's Board of
Directors periodically. The Asset/Liability Committee meets monthly.
Currently, the Bank manages the imbalance between its interest-earning assets
and interest-bearing liabilities within shorter maturities to ensure that such
relationships are within acceptable ranges given the Bank's business strategies
and objectives and its analysis of market and economic conditions.
The Bank's strategies to manage interest rate risk include (i)
increasing the interest sensitivity of its mortgage loan portfolio through the
use of adjustable-rate loans or relatively short-term (five to ten years)
balloon loans, (ii) selling most newly originated fixed-rate, single-family
residential mortgage loans with original terms to maturity of 15 years or more,
(iii) originating relatively short-term and adjustable-rate consumer and
commercial business loans, (iv) maintaining a high level of investment
securities and mortgage-backed and mortgage-related securities with maturities
or estimated average lives of less than five years, (v) promoting stable
savings, demand and other transaction accounts and (vi) maintaining a strong
capital position.
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<PAGE> 106
The following table summarizes the anticipated maturities or repricing
of the Bank's interest-earning assets and interest-bearing liabilities as of
March 31, 1997, based on the information and assumptions set forth in the notes
below.
<TABLE>
<CAPTION>
More Than
Three to More Than Three Years
Within Three Twelve One Year to to Five Over Five
Months Months Three Years Years Years Total
---------------- ------------ ------------ ------------ ------------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets (1):
Loans receivable:
Single-family residential loans 22,782 76,586 227,790 70,177 113,848 511,183
Multi-family residential 29,105 112,432 404,739 782,571 56,277 1,365,124
Commercial real estate and
mortgage loans 15,844 21,828 99,051 9,432 12,181 158,336
Other loans:
Cooperative apartment loans 17,752 67,629 178,163 54,418 30,067 348,029
Other loans(2) 77,224 19,653 9,492 8,151 2,541 117,061
Mortgage-backed and mortgage-
related securities 10,363 31,087 77,297 43,201 29,031 190,979
Investment securities 91,635 170,032 83,417 -- 1,522 346,606
Equity securities 10,861 10,881
Other interest-earning assets 361,665 361,665
----------- --------- ---------- --------- --------- ----------
Total $ 637,251 $ 499,247 $1,079,949 $ 947,950 $ 245,467 $3,409,864
=========== ========= ========== ========= ========= ==========
Interest-bearing liabilities:
Deposits (3):
NOW accounts $ 268,478 $ -- $ -- $ -- $ -- $ 268,478
Savings accounts 1,116,130 -- -- -- -- 1,116,130
Money market deposit accounts 218,230 -- -- -- -- 218,230
Certificates of deposit 545,103 779,379 334,013 84,904 431 1,743,830
Other borrowings -- -- 1,882 8,050 7,300 17,232
----------- --------- -------- --------- ---------- ----------
Total $ 2,147,941 $ 779,379 $335,895 $ 92,954 $ 7,731 $3,363,900
=========== ========= ======== ========= ========== ==========
Excess (deficiency) of interest-earning
assets over interest-bearing
liabilities $(1,417,259) $(284,428) $(755,015) $ 852,796 $237,642 $ 143,766
=========== ========= ======== ========= ======== =========
Cumulative excess (deficiency) of
interest-earning assets over interest-
bearing liabilities $(1,417,259) $(1,701,687) $(946,672) $ (93,876) $ 143,766
=========== =========== ======== ========= =========
Cumulative excess (deficiency) of
interest-earning assets over interest-
bearing liabilities as a percent of
total assets (38.1)% (45.6)% (25.4)% (2.5)% 3.9%
===== ===== ==== ==== ====
</TABLE>
- ------------
(1) Adjustable-rate loans are included in the period in which interest
rates are next scheduled to adjust rather than in the period in which
they are due, and fixed-rate loans are included in the periods in
which they are scheduled to be repaid, based on scheduled
amortization, in each case as adjusted to take into account estimated
prepayments based on certain assumptions.
(footnotes continued on next page)
62
<PAGE> 107
- ------------
(2) Includes student loans, home equity lines of credit and improvement
loans, automobile loans, passbook loans, personal loans, credit card
loans and commercial business loans.
(3) Does not include non-interest-bearing deposit accounts.
Management believes that the assumptions utilized by it to evaluate
the vulnerability of the Bank's operations to changes in interest rates
approximate actual experience and considers them reasonable; however, the
interest rate sensitivity of the Bank's assets and liabilities in the above
table could vary substantially if different assumptions were used or actual
experience differs from the historical experience on which they are based.
Certain shortcomings are inherent in the method of analysis presented
in the table above. For example, although certain assets and liabilities may
have similar maturities or periods to repricing, they may react in different
degrees to changes in market interest rates. Also, the interest rates on
certain types of assets and liabilities may fluctuate in advance of changes in
market interest rates, while interest rates on other types may lag behind
changes in market rates. Additionally, certain assets, such as adjustable-rate
loans, have features which restrict changes in interest rates both on a
short-term basis and over the life of the asset. Further, in the event of
changes in interest rates, prepayment and early withdrawal levels would likely
deviate significantly from those assumed in calculating the table. Finally,
the ability of many borrowers to service their adjustable-rate loans may
decrease in the event of an interest rate increase.
63
<PAGE> 108
REGULATORY CAPITAL REQUIREMENTS
The following table sets forth the Bank's compliance with applicable
regulatory capital requirements at March 31, 1997.
<TABLE>
<CAPTION>
Required Actual Excess
--------------------- --------------------- -------------------
Percent Amount Percent Amount Percent Amount
------- -------- ------- -------- ------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier I leverage capital
ratio(1) 4.0% $145,064 6.8% $247,520 2.8% $102,456
Risk-based capital
ratios:
Tier I 4.0 98,525 10.1 247,520 6.1 148,995
Total 8.0 197,050 11.2 274,544 3.2 77,494
</TABLE>
- ------------
(1) Reflects the 4.0% requirement to be met in order for an institution to
be "adequately capitalized" under applicable laws and regulations.
For additional information about the Bank's regulatory capital, see
"Regulatory Capital," and "Regulation - The Bank - Capital Requirements."
LIQUIDITY AND COMMITMENTS
The Bank's liquidity, represented by cash and cash equivalents, is a
product of its operating, investing and financing activities. The Bank's
primary sources of funds are deposits, amortization, prepayments and maturities
of outstanding loans, mortgage-backed and mortgage-related securities,
maturities of investment securities and other short-term investments and funds
provided from operations. While scheduled payments from the amortization of
loans, mortgage-backed and mortgage-related securities and maturing investment
securities and short-term investments are relatively predictable sources of
funds, deposit flows and loan prepayments are greatly influenced by general
interest rates, economic conditions and competition. In addition, the Bank
invests excess funds in federal funds sold and other short-term
interest-earning assets which provide liquidity to meet lending requirements.
The Bank has been able to generate sufficient cash through its deposits and has
only utilized borrowings to a limited degree as a source of funds during the
past five years.
Liquidity management is both a daily and long-term function of
business management. Excess liquidity is generally invested in short-term
investments such as federal funds sold or U.S. Treasury securities. On a
longer term basis, the Bank maintains a strategy of investing in various
lending products as described in greater detail under "Business - Lending
Activities." The Bank uses its sources of funds primarily to meet its
64
<PAGE> 109
ongoing commitments, to pay maturing certificates of deposit and savings
withdrawals, fund loan commitments and maintain a portfolio of mortgage-backed
and mortgage-related securities and investment securities. At March 31, 1997,
there were outstanding commitments and unused lines of credit by the Bank to
originate or acquire mortgage loans and other loans aggregating $96.9 million
and $33.2 million, respectively, consisting of fixed and adjustable-rate
residential loans and fixed-rate commercial real estate loans that are expected
to close during the year ended March 31, 1998. Certificates of deposit
scheduled to mature in one year or less at March 31, 1997, totaled $1.3
billion. Based on historical experience, management believes that a
significant portion of maturing deposits will remain with the Bank. The Bank
anticipates that it will continue to have sufficient funds, together with
borrowings, to meet its current commitments.
IMPACT OF INFLATION AND CHANGING PRICES
The consolidated financial statements and related financial data
presented herein have been prepared in accordance with generally accepted
accounting principles, which require the measurement of financial position and
operating results in terms of historical dollars, without considering changes
in relative purchasing power over time due to inflation. Unlike most
industrial companies, virtually all of the Bank's assets and liabilities are
monetary in nature. As a result, interest rates generally have a more
significant impact on a financial institution's performance than does the
effect of inflation.
IMPACT OF ACCOUNTING PRONOUNCEMENTS
In May 1993, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 115, which requires debt and equity securities to be classified in one
of three categories and to be accounted for as follows: debt securities which
the company has the positive intent and ability to hold to maturity are
classified as "securities held to maturity" and reported at amortized cost;
debt and equity securities that are bought and held principally for the purpose
of selling them in the near term are classified as "trading securities" and
reported at fair value with unrealized gains and losses included in earnings;
and debt and equity securities not classified as either held to maturity or
trading securities are classified as "securities available for sale" and
reported at fair value with unrealized gains and losses, net of related tax
effect, excluded from earnings and reported as a separate component of
shareholders' equity. The Bank adopted SFAS No. 115 as of April 1, 1994. The
cumulative effect of the adoption of SFAS No. 115 was increase in total equity
of $2.7 million as of April 1, 1994. However, on November 15, 1995, the FASB
issued a guide to implementation of SFAS No. 115 which permitted institutions
on a one time basis, to reclassify securities from one category to another
(i.e., from held to maturity to available for sale) until December 31, 1995.
Management of the Bank changed the classification of $169.1 million of the
Bank's securities in accordance with this pronouncement, resulting in an
unrealized loss of $3.5 million.
65
<PAGE> 110
In November 1993, the AICPA issued SOP 93-6, "Employers' Accounting
for Employee Stock Ownership Plans," which is effective for years beginning
after December 15, 1993. SOP 93-6 requires the application of its guidance for
shares acquired by ESOPs after December 31, 1992 but not yet committed to be
released as of the beginning of the year SOP 93-6 is adopted. SOP 93-6 changes
the measure of compensation expense recorded by employers for leveraged ESOPs
from the cost of ESOP shares to the fair value of ESOP shares. The Company has
adopted an ESOP in connection with the Conversion, which is expected to
purchase 8% of the Common Stock sold in the Conversion. Under SOP 93-6, the
Company will recognize compensation cost equal to the fair value of the ESOP
shares during the periods in which they become committed to be released. To
the extent that the fair value of the Company's ESOP shares differ from the
cost of such shares, this differential will be charged or credited to equity.
Employers with internally leveraged ESOPs such as the Company will not report
the loan receivable from the ESOP as an asset and will not report the ESOP debt
from the employer as a liability. However, the effects of SOP 93-6 on future
operating results cannot be determined at this time.
In March 1995, the FASB issued SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
This statement establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used for long-lived assets and certain identifiable
intangibles to be disposed of. This statement requires that long-lived assets
and certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Measurement of an
impairment loss for long-lived assets and identifiable intangibles that an
entity expects to hold and use should be based on the fair value of the asset.
This statement does not apply to financial instruments, long-term customer
relationships of a financial institution (for example, core deposit
intangibles), mortgage and other servicing rights, deferred policy acquisition
costs, or deferred tax assets. The Bank adopted SFAS No. 121 on April 1, 1996.
The adoption of SFAS No. 121 did not have a material impact on the financial
statements.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation," establishing financial accounting and reporting
standards for stock-based employee compensation plans. This statement
encourages all entities to adopt a new method of accounting to measure
compensation cost of all employee stock compensation plans based on the
estimated fair value of the award at the date it is granted. Companies are,
however, allowed to measure compensation cost of such plans using the intrinsic
value based method of accounting, which generally does not result in
compensation expense recognition for most plans. Companies that elect to
remain with the existing accounting are required to disclose in a footnote to
the financial statements pro forma net income and, if presented, earnings per
share, as if this statement had been adopted. The accounting requirements of
this statement are effective for transactions entered into during fiscal years
that begin after December 15, 1995; however, companies are required to disclose
information for awards granted in their first fiscal year beginning after
December 15, 1994.
66
<PAGE> 111
Management of the Bank has not analyzed the potential effects of this statement
on its financial condition or results of operations.
In June 1996, the FASB released SFAS No. 125, "Accounting for
Transfers and Extinguishment of Liabilities." SFAS No. 125 provides accounting
and reporting standards for transfers and servicing of financial assets and
extinguishment of liabilities. SFAS No. 125 requires a consistent application
of a financial-components approach that focuses on control. Under that
approach, after a transfer of financial assets, an entity is required to
recognize the financial and servicing assets it controls and the liabilities it
has incurred and to derecognize financial assets when control has been
surrendered in accordance with criteria provided in SFAS No. 125. SFAS No. 125
applies to transfers and extinguishments occurring after December 31, 1996.
The adoption of SFAS No. 125 did not have a material impact on the financial
condition or operations of the Bank.
67
<PAGE> 112
BUSINESS
GENERAL
The Bank's principal business is gathering deposits from
customers within its market area and investing those deposits, primarily in
multi-family residential mortgage loans, single-family residential loans
(including cooperative apartment loans), commercial real estate mortgage loans,
consumer loans and mortgage-backed and mortgage-related securities and
investment securities. The Bank's revenues are derived principally from
interest on its loan and securities portfolios while its primary sources of
funds are deposits, loan amortization and prepayments and maturities of
mortgage-backed and mortgage-related and investment securities. The Bank
offers a variety of loan and deposit products to its customers. The Bank also
makes available other financial instruments, such as annuity products and
mutual funds, through arrangements with a third party.
MARKET AREA AND COMPETITION
The Bank has been, and intends to continue to be, a
community-oriented financial institution providing financial services and loans
for housing within its market area. The Bank oversees its 33 branch office
network through its headquarters in the Brooklyn Heights section of Brooklyn.
The Bank operates 17 branch offices in the borough of Brooklyn and another 10
in the borough of Queens with the remainder spread among Manhattan, the Bronx,
Staten Island and Nassau County. The Bank gathers deposits primarily from the
communities and neighborhoods in close proximity to its branches. Although the
Bank lends throughout the New York City metropolitan area, the substantial
majority of its real estate loans are secured by properties located in the
boroughs of Brooklyn and Queens and, to a lesser extent, Manhattan. The Bank's
customer base, like the urban neighborhoods which it serves, is racially and
ethnically diverse and is comprised of mostly middle-income households and to a
lesser degree, low to moderate income households. The Bank has sought to set
itself apart from its many competitors by tailoring its products and services
to meet the needs of its customers, by emphasizing customer service and
convenience and by being actively involved in community affairs in the
neighborhoods and communities which it serves. As part of the Bank's
competitive strategy to attract loyal deposit customers, the Bank has
historically been a low service fee provider of a variety of savings and
checking account products. The Bank believes that its commitment to customer
and community service has permitted it to build strong customer identification
and loyalty which is essential to the Bank's ability to compete effectively.
In the past several years, the New York City metropolitan area
has benefitted from the resurgence and growth in employment and profitability
experienced by national securities and investment banking firms, many of which
are domiciled in Manhattan, as well as the growth and profitability of other
financial service companies, such as money center
68
<PAGE> 113
banks. The strength of the national economy and of the United States equities
markets has contributed significantly to the recent growth and increased
profitability of Wall Street securities and investment banking firms.
Historically, the metropolitan area has also benefitted from being the
corporate headquarters of many large industrial and commercial companies which
have, in turn, attracted many smaller companies, particularly within the
service industry. The metropolitan area also offers well developed
transportation and communication systems and a highly skilled and educated work
force. In spite of its size and diversity, the New York City metropolitan area
economy is affected by the level of business activity and profitability within
the securities and financial services industries. During the late 1980s and
early 1990s, the securities and financial services industries experienced a
significant decline in business activity and profitability which, when combined
with a period of weakness in the national economy, resulted in higher levels of
unemployment in the New York City metropolitan area. These conditions and
other factors contributed to an overall decline in the value of commercial and
residential real estate. While real estate values have substantially recovered,
no assurance can be given that such conditions could not reoccur.
The Bank faces significant competition both in making loans
and in attracting deposits. There are a significant number of financial
institutions located within the Bank's market area, many of which have greater
financial resources than the Bank. The Bank's competition for loans comes
principally from commercial banks, savings banks, savings associations and
mortgage-banking companies. Management anticipates that competition for both
multi-family residential mortgage loans and single-family residential loans
will continue to increase in the future. Accordingly, no assurance can be
given that the Bank will be able to maintain the volume of originations of such
loans at current levels. The Bank's most direct competition for deposits has
historically come from savings associations, savings banks, commercial banks
and credit unions. The Bank faces additional competition for deposits from
short-term money market funds and other corporate and government securities
funds, direct purchases of government securities, and from other financial
institutions such as brokerage firms and insurance companies. Competition may
also increase as a result of the elimination of restrictions on interstate
operations of financial institutions.
LENDING ACTIVITIES
GENERAL. At March 31, 1997, the Bank's loan portfolio totaled
$2.54 billion, which represented 68.1% of the Bank's $3.73 billion of total
assets. The single largest category of loans in the Bank's portfolio is
multi-family residential mortgage loans, which are secured primarily by
apartment buildings and which totaled $1.37 billion or 53.7% of the total loan
portfolio at March 31, 1997. The second and third largest categories are
single-family residential mortgage loans and cooperative apartment loans which
totaled $552.7 million or 21.8% and $348.0 million or 13.7%, respectively, of
the total loan portfolio at such date. These three categories accounted for
89.2% of the Bank's total loan portfolio at March 31, 1997. The remainder of
the Bank's loan portfolio was comprised primarily of $158.3 million
69
<PAGE> 114
of commercial real estate loans, $45.3 million of student loans, $25.2 million
of commercial business loans and $19.5 million of home equity loans and lines
of credit.
The types of loans that the Bank may originate are subject to
federal and state law and regulations. Interest rates charged by the Bank on
loans are affected principally by the demand for such loans and the supply of
money available for lending purposes and the rates offered by its competitors.
These factors are, in turn, affected by general and economic conditions, the
monetary policy of the federal government, including the Federal Reserve Board,
legislative tax policies and governmental budgetary matters.
70
<PAGE> 115
LOAN PORTFOLIO COMPOSITION. The following table sets forth
the composition of the Bank's loans at the dates indicated.
<TABLE>
<CAPTION>
At March 31,
---------------------------------------------------------------------------
1997 1996 1995
----------------------- ---------------------- -------------------------
Percent of Percent of Percent of
Amount Total Amount Total Amount Total
------ ---------- ------ --------- ------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
Single-family residential $ 552,745 21.8% $ 534,539 22.7% $ 376,047 18.4%
Multi-family residential (1) 1,365,124 53.7 1,208,039 51.3 1,076,969 52.7
Commercial and other real estate 158,336 6.2 162,799 6.9 119,890 5.9
---------- ------ ---------- ---- --------- -----
Total mortgage loans 2,076,205 81.7 1,905,377 80.9 1,572,906 77.0
Other loans:
Cooperative apartment
loans 348,029 13.7 340,507 14.4 360,434 17.6
Student loans 45,262 1.8 45,947 2.0 47,823 2.3
Home equity loans and
lines 19,545 0.8 23,458 1.0 27,232 1.3
Consumer and other loans 27,005 1.1 20,611 0.9 18,151 0.9
Commercial business loans 25,249 1.0 18,003 0.8 16,866 0.8
---------- ------ ---------- --- ---------- ---
Total other loans 465,090 18.3 448,526 19.1 470,506 23.0
---------- ------ ---------- ----- ---------- ----
Total loans receivable 2,541,295 100.0% 2,353,903 100.0% 2,043,412 100.0%
---------- ====== ---------- ===== ---------- =====
Less:
Discount on loans
purchased and
deferred fees 11,182 10,567 11,301
Allowance for loan losses 27,024 20,528 11,849
----------- ---------- ----------
Loans receivable, net $ 2,503,089 $2,322,808 $2,020,262
========== ========== ==========
<CAPTION>
At March 31,
-------------------------------------------------------
1994 1993
------------------------------------------------------
Percent of Percent of
Amount Total Amount Total
------ --------- ------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Mortgage loans:
Single-family residential $ 308,960 18.0% $ 315,219 21.3%
Multi-family residential (1) 896,605 52.3 651,488 44.1
Commercial and other real estate 95,172 5.6 82,033 5.6
--------- ----- --------- ---
Total mortgage loans 1,300,737 75.9 1,048,740 71.0
Other loans:
Cooperative apartment
loans 288,381 16.8 296,600 20.1
Student loans 47,609 2.8 47,853 3.2
Home equity loans and
lines 31,875 1.9 36,276 2.5
Consumer and other loans 28,100 1.6 30,953 2.1
Commercial business loans 17,694 1.0 16,900 1.1
----------- ----- ----------- ---
Total other loans 413,659 24.1 428,582 29.0
----------- ----- ----------- ----
Total loans receivable 1,714,396 100.0% 1,477,322 100.0%
----------- ===== --------- =====
Less:
Discount on loans
purchased and
deferred fees 11,632 8,976
Allowance for loan losses 8,770 6,415
----------- -----------
Loans receivable, net $1,693,994 $1,461,931
========== ==========
</TABLE>
- ---------------------
(1) Includes at March 31, 1997, $294.9 million of loans secured by mixed
use (combined residential and commercial use) properties.
71
<PAGE> 116
CONTRACTUAL PRINCIPAL REPAYMENTS AND INTEREST RATES. The following
table sets forth scheduled contractual amortization of the Bank's loans at
March 31, 1997, as well as the dollar amount of such loans which are scheduled
to mature after one year which have fixed or adjustable interest rates. Demand
loans, loans having no schedule of repayments and no stated maturity and
overdraft loans are reported as due in one year or less.
<TABLE>
<CAPTION>
Principal Repayments Contractually Due
in Year(s) Ended March 31,
Total at
March 31, 2002- 2008- There-
1997 1998 1999 2000 2001 2007 2013 after
---------- -------- -------- --------- --------- --------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage loans:
Single-family residential(1) $ 511,183 $ 5,018 $ 1,000 $ 1,032 $ 1,355 $ 95,785 $128,190 $278,803
Multi-family residential 1,365,124 101,711 118,262 155,903 250,914 713,996 24,216 122
Commercial and other
real estate 158,336 23,619 22,443 15,976 24,582 61,627 3,688 6,401
Other loans:
Cooperative apartment loans 348,029 54 182 98 462 40,349 38,508 268,376
Other (2) 117,061 84,559 4,641 6,911 4,388 12,459 4,103 --
---------- -------- -------- --------- --------- --------- -------- --------
Total(3) $2,499,733 $214,961 $146,528 $179,920 $ 281,701 $924,216 $198,705 $553,702
========= ======= ======= ======= ======== ======= ======= =======
</TABLE>
- -------------------
(1) Does not include $41.6 million of single-family residential loans
serviced by others.
(2) Includes student loans, home equity loans and lines of credit,
automobile loans, passbook loans, personal loans, credit card loans
and commercial business loans.
(3) Of the $2.29 billion of loan principal repayments contractually due
after March 31, 1998, $1.54 billion have fixed rates of interest and
$749.0 million have adjustable rates of interest.
72
<PAGE> 117
LOAN ORIGINATIONS, PURCHASES, SALES AND SERVICING. The Bank
originates both adjustable-rate mortgage loans and fixed-rate mortgage loans,
the volume of which is dependent upon customer demand and market rates of
interest. The Bank generally retains all adjustable-rate loans for its
portfolio. In the past, the Bank generally did not purchase whole mortgage
loans or loan participations. However, during the fourth quarter of fiscal
1996 the Bank entered into an agreement with a local mortgage-banking firm to
purchase conventional (loans not fully or partially guaranteed by the Federal
Housing Administration ("FHA") or the Department of Veterans' Affairs ("VA")),
single-family residential mortgage loans and cooperative apartment loans
originated by such mortgage banking firm on the Bank's behalf. During fiscal
1997, the Bank purchased $19.1 million and $11.7 million, respectively, of
conventional single-family residential mortgage loans and cooperative apartment
loans from such mortgage banker. See "-Single-Family Residential and
Cooperative Apartment Lending." In addition, as a result of the acquisition of
Bay Ridge during fiscal 1996, the Bank acquired $273.6 million of loans. In
anticipation of the acquisition of such loans from Bay Ridge and in order to
maintain liquidity in light of the need to fund the Bay Ridge acquisition, the
Bank reduced the amount of its loan originations during the fiscal year.
The Bank generally sells (with servicing retained by the Bank) newly
originated fixed-rate, single-family residential mortgage loans with
contractual terms of 15 years or more in the secondary market to the FNMA and
the FHLMC. It has also, on occasion, sold cooperative apartment loans and
multi-family residential mortgage loans. During fiscal 1997, the Bank sold
$67.7 million of cooperative apartment loans with servicing retained. During
fiscal 1995, the Bank sold $119.7 million of multi-family residential mortgage
loans to the FNMA with servicing retained by the Bank. As a credit
enhancement, the Bank provided limited recourse for the loans sold to the FNMA,
pledging $7.8 million of U.S. Treasury bills as collateral for potential losses
incurred by the purchasers. The sales of cooperative apartment loans in fiscal
1997 and of multi-family residential mortgage loans in fiscal 1995 were
undertaken by the Bank in order to provide additional liquidity to support the
Bank's on-going lending efforts. The Bank generally retains fixed-rate
residential mortgage loans with contractual terms of less than 15 years and
adjustable-rate loans. As of March 31, 1997, the Bank was servicing $314.6
million of loans for others. The Bank is generally paid a fee equal to .25% to
.375% of the outstanding principal balance for servicing loans sold.
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<PAGE> 118
ACTIVITY IN LOANS. The following table shows the activity in the
Bank's loans during the periods indicated.
<TABLE>
<CAPTION>
Year Ended March 31,
-----------------------------------------
1997 1996 1995
------------- ------------ ------------
(In Thousands)
<S> <C> <C> <C>
Total loans held at beginning of period $2,353,903 $2,043,412 $1,714,396
Originations of loans:
Single-family residential 106,688 31,296 201,877
Multi-family residential 225,906 144,560 359,343
Commercial and other real estate 49,924 18,055 33,426
Other:
Cooperative apartment loans 115,685 23,862 116,588
Other (1) 43,009 41,195 52,791
--------- ---------- ----------
Total originations 541,212 258,968 764,025
Purchases of loans:
Single-family residential 19,097 171,108 --
Multi-family residential -- 31,126 --
Commercial and other real estate -- 67,084 --
Other loans:
Cooperative apartment loans 11,724 2,317 --
Other (1) -- 2,525 --
---------- ----------- -----------
Total purchases 30,821 274,160(2) --
---------- ----------- -----------
Total originations and purchases 572,033 533,128 764,025
Loans sold:
Single-family residential 4,066 5,693 11,565
Multi-family residential -- -- 119,692
Commercial and other real estate 1,494(3) -- --
Other loans:
Cooperative apartment loans 67,658 1,123 82
Other (1) -- -- --
----------- ---------- ----------
Total sold 73,218 6,816 131,339
Repayments (4) 311,423 215,821 303,670
----------- ---------- ----------
Net loan activity 187,392 310,491 329,016
----------- ---------- ----------
Total loans held at end of period $ 2,541,295 $2,353,903 $2,043,412
- -------------- =========== ========== ==========
</TABLE>
(1) Includes student loans, home equity loans and lines of credit,
automobile loans, passbook loans, personal loans, credit card loans and
commercial business loans.
(2) Includes $273.6 million of loans acquired in connection with the
acquisition of Bay Ridge in January 1996 and $531,000 of loans acquired
in the 1996 Branch Acquisition.
(3) Reflects sale of certain non-performing loans acquired in the Bay Ridge
acquisition.
(4) Includes loans charged off or transferred to other real estate owned.
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<PAGE> 119
MULTI-FAMILY RESIDENTIAL AND COMMERCIAL REAL ESTATE LENDING. The Bank
originates multi-family (five or more units) residential mortgage loans which
are secured primarily by apartment buildings, cooperative apartment buildings
and mixed-use (combined residential and commercial) properties located in the
Bank's market area. At March 31, 1997, the Bank had multi-family residential
mortgage loans totaling $1.37 billion in its portfolio, comprising 53.7% of the
total loan portfolio. Historically, the Bank has been an active multi-family
residential mortgage lender and this portion of the Bank's loan portfolio has
grown (through origination and by purchase) during the last several years,
reflecting the Bank's emphasis on such lending. The Bank intends to continue
to emphasize multi-family residential mortgage lending within its market area.
The main competitors for loans in this market tend to be other local banks and
savings institutions. Multi-family residential mortgage loans in the Bank's
portfolio generally range in amount from $1.0 million to $3.0 million, and have
an average size of approximately $1.5 million. The Bank's multi-family
residential mortgage loans are comprised primarily of middle-income housing
located in the boroughs of Brooklyn and Queens and, to a lesser extent,
Manhattan.
When approving new multi-family residential mortgage loans, the Bank
follows a set of underwriting standards which it believes are conservative, and
which generally permit a maximum loan-to-value ratio of 75% based on an
appraisal performed by one of the Bank's in-house, state-certified appraisers,
and sufficient cash flow from the underlying property to adequately service the
debt. A minimum debt service ratio of 1.3 generally is required on multi-family
residential mortgage loans. The Bank also considers the financial resources of
the borrower, the borrower's experience in owning or managing similar
properties, the market value of the property and the Bank's lending experience
with the borrower. The Bank's current lending policy requires that loans in
excess of $300,000 be approved by two non-officer directors of the Mortgage and
Real Estate Committee of the Board of Directors.
The Bank's multi-family residential mortgage loans include loans secured by
cooperative apartment buildings. In underwriting these loans, the Bank applies
the normal underwriting criteria used with other multi-family properties. In
addition, the Bank generally will not make a loan on a cooperative apartment
building unless at least 65% of the total units in the building are
owner-occupied. At March 31, 1997, the Bank had $287.6 million of loans
secured by cooperative apartment buildings.
The Bank's typical multi-family residential mortgage loan is originated
with a term to maturity of 5 or 10 years (with principal due in full at such
time). These loans have a fixed-rate of interest and may be extended by the
borrower, upon payment of an additional fee, for five additional years at an
interest rate based on the 5-year FHLB of New York advance rate plus a margin,
which may not be below the initial interest rate of the loan. The Bank recently
has been offering loans which have fixed-rates for the first five years then
adjust at the end of the fifth year and again at the end of the seventh or
eighth year to pre-set rates established at the time of origination. Under the
terms of the Bank's multi-family residential mortgage
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<PAGE> 120
loans, the principal balance generally is amortized at the rate of 1% per year.
Prepayment penalties are generally assessed on these loans.
In addition to multi-family residential mortgage loans, the Bank
originates commercial real estate loans which, at March 31, 1997, amounted to
$158.3 million or 6.2% of total loans. This portfolio is comprised primarily
of loans secured by commercial and industrial properties, nursing homes,
funeral homes, churches and synagogues, schools and small shopping centers
located within the Bank's market area. The Bank's commercial real estate loans
generally range in amount from $50,000 to $1.5 million, and have an average
size of approximately $600,000. The Bank originates commercial real estate
loans following similar underwriting standards as applied to multi-family
residential mortgage loans. In addition, the Bank reviews rent or lease
income, rent rolls, business receipts, the borrower's credit history and
business experience, and comparable values when underwriting commercial real
estate loans.
Loans secured by apartment buildings and other multi-family residential and
commercial properties generally are larger and considered to involve a greater
degree of risk than single-family residential mortgage loans. Payments on
loans secured by multi-family residential and commercial properties are often
dependent on the successful operation or management of the properties and are
subject to a greater extent to adverse conditions in the real estate market or
the economy. The Bank seeks to minimize these risks through its underwriting
policies, which generally limit origination of such loans to the Bank's market
area and require such loans to be qualified on, among other things, the basis
of the property's income and debt service ratio. See "Risk Factors--Risks
Related to Multi-family Residential and Commercial Lending Activities."
SINGLE-FAMILY RESIDENTIAL AND COOPERATIVE APARTMENT LENDING. The Bank
offers residential first mortgage loans secured primarily by owner-occupied,
single-family (one-to- four units) residences. The Bank also originates loans
to individuals secured by shares of individual cooperative apartments. At
March 31, 1997, $552.7 million or 21.8% and $348.0 million or 13.7% of the
Bank's total loan portfolio consisted of single-family residential mortgage
loans and cooperative apartment loans, respectively. The substantial majority
of these loans are secured by properties located in the boroughs of Brooklyn,
Queens and Manhattan. The Bank offers conforming and non-conforming fixed-rate
and adjustable-rate loans with maturities of up to 30 years and a maximum loan
amount generally not exceeding $500,000. At March 31, 1997, adjustable-rate
loans represented $584.5 million of the aggregate total of single-family
residential mortgage loans and cooperative apartment loans. In an effort to
enhance its ability to originate greater volumes of loans without increasing
its staff, during the fourth quarter of fiscal 1996, the Bank entered into
agreements with a mortgage-banking firm and with a mortgage broker with respect
to the origination of single-family residential mortgage loans and cooperative
apartment loans for the Bank. Under the terms of the agreement with the
mortgage-banker, the mortgage banker originates and sells loans to the Bank
while the broker originates loans on the Bank's behalf using the Bank's loan
documents. In both cases, the loans are originated and underwritten in
accordance
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<PAGE> 121
with the Bank's underwriting policies, and the Bank retains approval authority
with respect to loans it considers for its portfolio. The mortgage banker and
the broker receive a fee upon the purchase or funding of the loan, as the case
may be. During fiscal 1997, the Bank purchased $19.1 million and $11.7 million
of single-family residential mortgage loans and cooperative apartment loans,
respectively, from the mortgage-banking firm. During the same period,
single-family residential mortgage loans and cooperative apartment loans
totaling $17.6 million and $62.3 million, respectively, were originated by the
Bank under the terms of the brokerage agreement. The substantial majority of
the cooperative apartment loans purchased or originated under these
arrangements relate to properties located in Manhattan.
The Bank's residential loan originations are generally obtained from
existing or past loan customers, depositors of the Bank, members of the local
community and referrals from attorneys, realtors and independent mortgage
brokers who refer members of the communities located in the Bank's market area.
The Bank also conducts extensive print and radio advertising, the majority of
which advertises its mortgage products. The Bank is a participating
seller/servicer with the FNMA and the FHLMC, and generally underwrites its
fixed-rate single-family residential mortgage loans to conform with standards
required by these agencies. Included in single-family residential loans is a
modest amount of loans partially or fully guaranteed by the FHA or the VA.
The Bank is an active lender in the cooperative apartment loan market.
Although the collateral for cooperative apartment loans is comprised of shares
in a cooperative housing corporation (a corporation whose primary asset is the
underlying real estate), cooperative apartment loans generally are treated as
single-family residential mortgage loans. At March 31, 1997, such loans
amounted to $348.0 million or 13.7% of the Bank's total portfolio. Although
the Bank's cooperative apartment loans have in the past related to properties
located in the boroughs of Manhattan, Brooklyn and Queens, in recent periods
substantially all of such loans have related to properties located in
Manhattan, with a significant number of such loans having original loan
balances in excess of $300,000.
The Bank's single-family residential mortgage loans and cooperative
apartment loans include adjustable-rate loans ("ARMs") and fixed-rate loans.
The Bank currently offers a variety of ARMs, all of which have a 30-year term
to maturity, certain of which can convert to fixed-rate loans. The Bank's ARMs
currently include loans which adjust every one, two or three years as well as
loans with an established rate for the initial four, five or seven years and
which adjust every three years thereafter. The interest rate on the Bank's
ARMs fluctuates based upon a spread above the average yield on United States
Treasury securities, adjusted to a constant maturity which corresponds to the
adjustment period of the loan (the "U.S. Treasury constant maturity index") as
published weekly by the Federal Reserve Board. In addition, ARMs generally are
subject to limitations on interest rate increases of 2% per adjustment period
and an interest rate cap during the life of the loan established at the time of
origination. For the year ended March 31, 1997, the Bank originated $148.0
million of ARMs.
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<PAGE> 122
The retention of ARMs in the Bank's loan portfolio helps reduce the Bank's
exposure to increases in interest rates. However, ARMs generally pose credit
risks different from the risks inherent in fixed-rate loans, primarily because
as interest rates rise, the underlying payments of the borrower rise, thereby
increasing the potential for defaults. At the same time, the marketability of
the underlying property may be adversely affected. In order to minimize risks,
ARM borrowers are qualified at the rate which would be in effect after the
first interest rate adjustment, if that rate is higher than the initial rate.
The Bank has not in the past, nor does it currently, originate negative
amortization ARMs.
The Bank's fixed-rate, single-family residential mortgage loans and
cooperative apartment loans have terms of up to 30 years. Interest rates
charged on fixed-rate loans are competitively priced based on market
conditions. The Bank generally originates fixed-rate loans with terms and in
amounts conforming to the maximum guidelines of the FNMA and the FHLMC,
currently $214,600 for one-family houses and $412,450 for four-family houses.
For the year ended March 31, 1997, the Bank originated an aggregate of $34.2
million of fixed-rate, single-family residential mortgage and cooperative
apartment loans.
The Bank generally sells its newly originated fixed-rate, single-family
residential mortgage loans with contractual terms of 15 years or more in the
secondary market to agencies such as the FNMA and the FHLMC. The Bank
generally retains the servicing rights on all such loans sold. For the year
ended March 31, 1997, the Bank sold single-family residential mortgage loans
totaling $4.1 million.
Under the Bank's underwriting guidelines, ARMs can be originated with
loan-to-value ratios of up to 75%. Fixed-rate cooperative apartment loans can
be originated with loan-to-value ratios of up to 75% while fixed-rate,
single-family residential mortgage loans can be originated with loan-to-value
ratios of up to 90%, provided, however, that private mortgage insurance is
required for loans with loan-to-value ratios in excess of 80%.
In order to provide financing for low and moderate income home buyers, the
Bank participates in residential mortgage programs and products sponsored by,
among others, the State of New York Mortgage Authority, the Community
Preservation Corporation, Neighborhood Housing Services and the New York City
Co-op Pilot Program. Various programs sponsored by these groups provide low
and moderate income households with fixed-rate mortgage loans which are
generally below prevailing fixed-rate mortgages and which allow below market
down payments.
The Bank's mortgage loans generally include due-on-sale clauses which
provide the Bank with the contractual right to deem the loan immediately due
and payable in the event that the borrower transfers ownership of the property
without the Bank's consent. It is the Bank's policy to enforce due-on-sale
provisions within the applicable regulations and guidelines imposed by New York
law.
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<PAGE> 123
CONSUMER LENDING ACTIVITIES. The Bank offers a variety of consumer loans
including student loans, home equity loans and lines of credit, automobile
loans, passbook loans and credit card loans in order to provide a full range of
financial services to its customers. Such loans are obtained primarily through
existing and walk-in customers and direct advertising. At March 31, 1997, $91.8
million or 3.6% of the Bank's total loan portfolio was comprised of consumer
loans.
The largest component of the Bank's consumer loan portfolio is student
loans. The Bank has been and continues to be an active originator of student
loans. Substantially, all of these loans are originated under the auspices of
the New York State Higher Education Services Corporation ("NYSHESC"). Under
the terms of these loans, no repayment is due until the student's graduation,
with 98% of the principal guaranteed by the NYSHESC. The terms and rates of
these loans are established by the NYSHESC. At March 31, 1997, such loans
amounted to $45.3 million or 1.8% of the total loan portfolio.
The second largest component of the Bank's consumer loan portfolio is home
equity loans and lines which consist primarily of home equity lines of credit.
Home equity lines of credit are a form of revolving credit and are secured by
the underlying equity in the borrower's primary or secondary residence. The
Bank's home equity lines of credit have interest rates that adjust or float
based on the Wall Street Journal Prime, loan-to-value ratios of 75% or less,
and are generally for amounts of less than $100,000 but can be as high as
$300,000. Interest only payments are made during the first five years with
repayment of principal and interest required during the final 15 years. The
Bank also offers fixed-rate, fixed-term home improvement loans, which are also
secured by the underlying equity in the borrower's primary or secondary
residence. At March 31, 1997, home equity lines and loans amounted to $19.5
million, or 0.8% of the Bank's total loan portfolio and the Bank had $4.5
million of unused commitments pursuant to such equity lines of credit.
At March 31, 1997, the remaining $27.0 million of the Bank's consumer loan
portfolio, which amounted to 1.0% of the Bank's total loan portfolio, was
comprised primarily of loans secured by new and used automobiles, passbook
loans and credit card loans (the Bank offers VISA cards on an issuer basis).
At March 31, 1997, the Bank had $12.3 million of automobile loans, most of
which financed the purchase of new automobiles. The terms of automobile loans
cannot exceed 60 months with a maximum loan amount of the lesser of $50,000 or
80% of the value of the automobile. The Bank generally does not participate
in indirect automobile lending and substantially all of such loans are financed
directly with the Bank. Passbook loans, which are loans secured by the
borrower's deposits in the Bank, totaled $9.7 million at March 31, 1997, while
credit card loans amounted to $2.1 million at such date.
Consumer loans generally have shorter terms and higher interest rates than
residential mortgage loans but generally involve more credit risk than
residential mortgage loans because of the type and nature of the collateral
and, in certain cases, the absence of collateral. These risks are not as
prevalent in the case of the Bank's consumer loan
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<PAGE> 124
portfolio, however, because a high percentage of the portfolio is comprised of
home equity loans and lines of credit which are secured by real estate and
underwritten in a manner such that they result in a lending risk which is
similar to single-family residential mortgage loans.
COMMERCIAL BUSINESS LENDING ACTIVITIES. The Bank makes commercial business
loans directly to businesses located in its market area. The Bank targets
small and medium sized businesses with the bulk of the loans being less than
$750,000. Applications for commercial business loans are obtained primarily
from existing customers, branch referrals and direct inquiry. As of March 31,
1997, commercial business loans totaled $25.2 million, or 1.0%, of the Bank's
total loan portfolio.
Commercial business loans originated by the Bank generally have terms of
five years or less and adjustable interest rates tied to the Wall Street
Journal Prime plus a margin. Such loans are generally secured by real estate,
receivables or inventory and are backed by the personal guarantees of the
principals of the borrower. Commercial business loans generally have shorter
terms to maturity and provide higher yields than residential mortgage loans.
Although commercial business loans generally are considered to involve greater
credit risk than certain other types of loans, management intends to continue
to offer commercial business loans to small and medium sized businesses in its
market area. Furthermore, the Bank intends to moderately expand its commercial
business lending program. In furtherance of such strategy, the Bank recently
increased advertising and direct mail solicitations with respect to commercial
business loans and is in the process of adding an additional commercial
business loan officer.
LOAN APPROVAL AUTHORITY AND UNDERWRITING. The Board of Directors
establishes lending authorities for individual officers as to its various types
of loan products. For multi-family residential mortgage loans, commercial real
estate loans, single-family residential mortgage loans and cooperative
apartment loans, the Executive Vice President and Mortgage Officer and a Vice
President have the authority to approve loans in amounts up to $300,000. Any
mortgage loan or cooperative apartment loan in excess of $300,000, however,
must also be approved by the President and at least two members of the Mortgage
and Real Estate Committee of the Board of Directors, which consists of various
directors, the composition of which is changed periodically. Consumer loans
and commercial business loans of less than $50,000 can be approved by an
individual loan officer, while loans between $50,000 and $300,000 must be
approved by a Vice President and the Director of Consumer and Commercial
Lending. Any commercial business loans in excess of $300,000 must also be
approved by at least two members of the Commercial Loan Committee of the Board
of Directors, which consists of various directors, the composition of which is
changed periodically.
The Bank's policy limits the amount of credit related to mortgage loans and
cooperative share loans that can be extended to any one borrower to 15% of the
Bank's net worth. In addition, the Bank's policy limits the amount of
commercial business loans that can be extended to any one borrower to the
greatest of $2.0 million, 5% of the Bank's net
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<PAGE> 125
worth or 10% of total commercial business loans. With certain limited
exceptions, a New York state-chartered savings bank may not make loans or
extend credit for commercial, corporate or business purposes (including lease
financing) to a single borrower, the aggregate amount of which would be in
excess of 15% of the bank's net worth if the loan is unsecured, or 25% of net
worth if the loan is secured.
For all single-family residential mortgage loans and cooperative apartment
loans originated by the Bank, upon receipt of a completed loan application from
a prospective borrower, a credit report is ordered, income, assets and certain
other information are verified by an independent credit agency, and if
necessary, additional financial information is required to be submitted by the
borrower. An appraisal of the real estate is required, which is performed by
an independent appraiser except with respect to multi-family residential and
commercial real estate loans for which the appraisals are conducted by
state-certified in-house appraisers. It is the Bank's policy to require
appropriate insurance protection, including title and hazard insurance, on all
mortgage loans prior to closing. Other than cooperative apartment loans,
borrowers generally are required to advance funds for certain items such as
real estate taxes, flood insurance and private mortgage insurance, when
applicable.
LOAN ORIGINATION AND LOAN FEES. In addition to interest earned on loans,
the Bank receives loan origination fees or "points" for many of the loans it
originates. Loan points are a percentage of the principal amount of the
mortgage loan and are charged to the borrower in connection with the
origination of the loan. The Bank currently offers a number of residential
loan products on which no points are charged.
In accordance with SFAS No. 91, which addresses the accounting for
non-refundable fees and costs associated with originating or acquiring loans,
the Bank's loan origination fees and certain related direct loan origination
costs are offset, and the resulting net amount is deferred and amortized as
interest income over the contractual life of the related loans as an adjustment
to the yield of such loans. At March 31, 1997, the Bank had $9.1 million of
such deferred loan fees.
ASSET QUALITY
With the exception of guaranteed student loans and FHA or VA loans, the
Bank, commencing in fiscal 1997, generally places loans on non-accrual status
when they are more than 90 days past due as to interest. Loans may be placed
on non-accrual status earlier if management believes that collection of
interest is doubtful. For periods prior to fiscal 1997, the Bank continued to
accrue interest on loans more than 90 days past due if, in management's
judgment, the full collection of interest was probable. When a loan is placed
on non-accrual status, previously accrued but unpaid interest is deducted from
interest income.
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Real estate acquired by the Bank as a result of foreclosure or by
deed-in-lieu of foreclosure is classified as other real estate owned until
sold. Pursuant to SOP 92-3, such assets are carried at the lower of fair value
minus estimated costs to sell the property, or cost (generally the balance of
the loan on the property at the date of acquisition). After the date of
acquisition, all costs incurred in maintaining the property are expensed and
costs incurred for the improvement or development of such property are
capitalized up to the extent of their net realizable value.
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DELINQUENT LOANS. The following table sets forth delinquencies in the
Bank's loan portfolio as of the dates indicated:
<TABLE>
<CAPTION>
At March 31, 1997 At March 31, 1996
-------------------- ----------------- ------------------- ----------------------
60-89 Days 90 Days or More 60-89 Days 90 Days or More
-------------------- ----------------- ------------------- ----------------------
Principal Principal Principal Principal
Number Balance of Number Balance Number Balance Number Balance of
of Loans Loans of Loans of Loans of Loans of Loans of Loans Loans
--------- --------- ------- -------- --------- -------- --------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage loans:
Single-family residential 13 $ 535 56 $ 3,311 19 $1,007 53 $ 3,504
Multi-family residential -- -- 3 1,918 4 486 4 3,379
Commercial and Other
mortgage loans -- -- 5 9,209 1 200 14 19,277
Other loans:
Cooperative apartment
loans 4 196 13 427 3 183 8 355
Other (1) 225 1,004 300 1,757 204 888 243 1,571
--- ------ --- ------- --- ------ --- -------
Total 242 $1,735 377 $16,622 231 $2,764 322 $28,086(2)
=== ===== === ====== === ===== === ======
Delinquent loans to total
loans (3) .07% .65% 0.12% 1.19%
=== === ==== ====
<CAPTION>
At March 31, 1995
-------------------- --------------------
60-89 Days 90 Days or More
-------------------- --------------------
Principal Principal
Number Balance Number Balance of
of Loans of Loans of Loans Loans
--------- --------- -------- ----------
<S> <C> <C> <C> <C>
Mortgage loans:
Single-family residential 15 $ 409 40 $ 4,761
Multi-family residential -- -- 8 2,251
Commercial and Other
mortgage loans -- -- 6 1,975
Other loans:
Cooperative apartment
loans 2 97 6 401
Other (1) 229 793 499 2,593
--- ------ --- -------
Total 246 $1,229 559 $11,981
=== ===== === ======
Delinquent loans to total
loans (3) 0.06% 0.59%
==== ====
</TABLE>
- ------------------------
(1) Includes student loans, home equity loans and lines of credit,
automobile loans, passbook loans, personal loans, credit card loans
and commercial business loans.
(2) Includes $9.5 million of loans acquired in the Bay Ridge
acquisition.
(3) Total loans includes loans receivable less deferred loan
fees and unamortized discounts, net.
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NON-PERFORMING ASSETS. The following table sets forth information with
respect to non-performing assets identified by the Bank, including
non-performing loans and other real estate owned at the dates indicated.
<TABLE>
<CAPTION>
At March 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ --------------- ----------- ----------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Non-accrual loans(1):
Mortgage loans:
Single-family residential............ $ 2,474 $ 2,890 $ 2,074 $ 2,438 $ 2,905
Multi-family residential............. 1,918 3,379 2,018 2,095 1,953
Commercial and Other................. 11,155 12,600 1,975 2,033 3,183
Other loans:
Cooperative apartment loans.......... 427 355 451 606 1,068
Other (2) ........................... 956 1,135 1,590 1,621 1,597
-------- ------- ------- ------- -------
Total non-accruing loans......... 16,930 20,359(3) 8,108 8,793 10,706
Loans past due 90 days or more as to
interest and accruing....................... 1,718 8,737 7,564 4,715 5,004
-------- ------- ------- ------- -------
Total non-performing loans................... 18,648 29,096 15,672 13,508 15,710
-------- ------- ------- ------- -------
Other real estate owned, net (4)............. 540 973 1,691 2,024 4,534
-------- ------- ------- ------- -------
Total non-performing assets (5).............. $ 19,188 $30,069 $17,363 $15,532 $20,244
======= ====== ====== ====== ======
Allowance for loan losses as a
percent of total loans...................... 1.06% 0.87% 0.58% 0.51% 0.43%
Allowance for loan losses as a percent of
non-performing loans........................ 144.92 70.55 75.01 64.92 40.83
Non-performing loans as a percent of
total loans................................. 0.73 1.24 0.77 0.79 1.06
Non-performing assets as a percent of
total assets................................ 0.51 0.78 0.67 0.61 0.85
</TABLE>
(1) Does not include $14.4 million of loans more than 90 days or more past
maturity which continue to make payments on a basis consistent with
the original repayment schedule.
(2) Consists primarily of commercial business loans and home equity lines
of credit.
(3) Includes $9.5 million of loans acquired in the Bay Ridge acquisition.
(4) Net of related loss allowances.
(5) Non-performing assets consist of non-performing loans and other real
estate owned. Non-performing loans consist of non-accrual loans and
loans 90 days or more past due as to interest and other loans which
have been identified by the Bank as presenting uncertainty with
respect to the collectibility of interest or principle.
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At March 31, 1997, the Bank's non-performing assets totaled $19.2
million compared to $30.1 million and $17.4 million at March 31, 1996 and 1995,
respectively. The Bank's total non-performing assets as a percentage of total
assets was 0.51%, 0.78% and 0.67% at March 31, 1997, 1996 and 1995,
respectively. A primary emphasis in the Bank's underwriting practices is to
maintain high asset quality in the origination of loans.
The $10.9 million, or 36.2%, decline in non-performing assets from
March 31, 1996 to March 31, 1997 was due in large part to the return to
performing status of a $5.0 million loan to a partnership which owns the
building housing the Bank's executive offices (see "- Classified Assets"), the
sale or satisfaction of an aggregate of $2.3 million of non-performing loans
acquired in the Bay Ridge acquisition and aggregate charge-offs of $1.6
million. The Bank recognized an immaterial loss upon the sale of non-performing
loans acquired from Bay Ridge.
The Bank's total non-accruing loans amounted to $16.9 million at March
31, 1997 compared to $20.4 million at March 31, 1996. The primary reason for
the $3.4 million decrease in total non-accruing loans at March 31, 1997
compared to March 31, 1996 was the aforementioned sales and charge-offs.
At March 31, 1997, the Bank had $11.2 million of non-accrual
commercial and other real estate mortgage loans. At such date, an aggregate of
$8.7 million of the outstanding non-accrual commercial and other real estate
loans related to two projects sponsored by one Brooklyn-based real estate
developer. One of such projects, on which the Bank had two loans with an
aggregate outstanding balance of $6.7 million at March 31, 1997 is for the
renovation and improvement on an existing commercial property located in
Brooklyn. The initial loan, which was originated in September 1990 and had an
original maturity date of October 1995, was placed on non-accrual status in
February 1997. In May 1994, the Bank extended a construction loan in order to
renovate the building to permit its use as a supermarket. In July 1993, a
national supermarket entered into lease with the borrower to occupy a portion
of this property upon completion of construction, which is expected to occur by
July 31, 1997. The borrower has entered into a commitment with another lender
to refinance the entire project upon completion of construction. The other
project sponsored by such developer related to a $2.0 million non-accrual
commercial real estate loan originated by the Bank in August 1995 which was
placed on non-accrual status in February 1997. The loan is for the conversion
of an existing commercial property located in Brooklyn to a public school. The
local school board has entered into a lease with respect to the property,
subject to completion of construction, which is expected by August 1997. The
developer who is the sponsor for these two projects also is, together with
affiliates, the Bank's largest single borrower with outstanding loans totaling
approximately $41.9 million at March 31, 1997, of which $10.5 million is
considered non-performing and/or classified substandard and $14.1 million is
classified special mention. Such developer also is the general partner of the
partnership which owns the building in which the Bank's executive offices are
located. See "-Classified Assets."
85
<PAGE> 130
At March 31, 1997, the Bank's non-accrual multi-family residential
mortgage loans amounted to $1.9 million and was comprised primarily of one loan
with an outstanding balance of $1.7 million. Such loan, which is secured by a
136-unit cooperative apartment building located in Kew Gardens, New York, was
originated by Bay Ridge in November 1986. At March 31, 1997, the loan was
approximately 720 days past due and the Bank has commenced foreclosure
proceedings on the property securing the loan.
At March 31, 1997, the Bank's $2.5 million of non-accrual
single-family residential mortgage loans consisted of 21 loans which had an
average balance of $118,000. At such date, non-accrual loans also included 13
cooperative apartment loans with an aggregate balance of $427,000 and four home
equity lines of credit with an aggregate balance of $166,000. In addition, at
March 31, 1997, the Bank had three commercial business loans totaling $790,000
on non-accrual. However, one of such commercial business loans in the amount
of $634,000 was satisfied subsequent to March 31, 1997.
The interest income that would have been recorded during the year
ended March 31, 1997, if all of the Bank's non-performing loans at the end of
such period had been current in accordance with their terms during such periods
was $1.7 million. The actual amount of interest recorded as income on such
loans during the period amounted to $224,000.
At March 31, 1997, the Bank's other real estate owned consisted of a
$540,000 investment in one single-family residential property and six
individual cooperative apartment loans.
A savings institution's determination as to the classification of its
assets and the amount of its valuation allowances is subject to review by the
FDIC and the Department, which can order the establishment of additional
general or specific loss allowances. The FDIC, in conjunction with the other
federal banking agencies, has adopted an interagency policy statement on the
allowance for loan and lease losses. The policy statement provides guidance
for financial institutions on both the responsibilities of management for the
assessment and establishment of adequate allowances and guidance for banking
agency examiners to use in determining the adequacy of general valuation
guidelines. Generally the policy statement recommends that institutions have
effective systems and controls to identify, monitor and address asset quality
problems; that management has analyzed all significant factors that affect the
collectibility of the portfolio in a reasonable manner; and that management has
established acceptable allowance evaluation processes that meet the objectives
set forth in the policy statement. While the Bank believes that it has
established an adequate allowance for possible loan losses, there can be no
assurance that the regulators, in reviewing the Bank's loan portfolio, will not
request the Bank to materially increase at that time its allowance for possible
loan losses, thereby negatively affecting the Bank's financial condition and
earnings at that time. Although management believes that adequate specific and
general loan loss allowances have been established, actual losses are dependent
upon future events and, as such, further additions to the allowances for loan
losses may become necessary. In addition, if the Bank's involvement in
multi-family
86
<PAGE> 131
residential and commercial real estate lending continues to increase,
additional provisions may be required due to the generally greater risk
engendered by such lending. See "-Asset Quality - Allowance for Loan Losses"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Changes in Financial Condition - Allowance for Loan Losses."
CLASSIFIED AND CRITICIZED ASSETS. Federal regulations require that
each insured institution classify its assets on a regular basis. Furthermore,
in connection with examinations of insured institutions, federal examiners have
authority to identify problem assets and, if appropriate, classify them. There
are three classifications for problem assets: "substandard," "doubtful" and
"loss." Substandard assets have one or more defined weaknesses and are
characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that
the weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
possibility of loss. An asset classified loss is considered uncollectible and
of such little value that continuance as an asset of the institution is not
warranted. Another category designated "special mention" also must be
established and maintained for assets which do not currently expose an insured
institution to a sufficient degree of risk to warrant classification as
substandard, doubtful or loss.
At March 31, 1997, the Bank had an aggregate of $28.8 million of
classified assets ( a substantial portion of which were also considered
non-performing assets), including $14.0 million of loans acquired from Bay
Ridge. In addition, at such date the Bank had $53.3 million of assets which
were deemed special mention. At March 31, 1997, a major component of the
Bank's assets deemed special mention was a loan of $15.0 million to the
partnership which owns the building in which the Bank's executive offices are
located. A wholly owned subsidiary of the Bank, Wiljo Development Corporation
("Wiljo"), has a 17% limited partnership interest in the partnership. See
"-Subsidiaries." The general partner of the partnership, together with
affiliates, is the Bank's single largest borrower. See "-Non-Performing
Assets." The loan was originated in 1993 in the amount of $5.0 million to help
fund the partnership's purchase of the building. Due to a variety of factors,
there were delays in fully leasing out the building due in part, to the need to
effect extensive renovations and tenant improvements, including asbestos
removal. As a consequence, payments on the initial loan were not made and the
loan was placed on non-accrual status in fiscal 1996. The Bank refinanced the
loan in early 1997 and increased the principal balance to $15.0 million. The
$10.0 million of additional funds were used in part to repay advances (plus
interest) made to the partnership by Wiljo for construction costs and other
expenses. The Bank's executive offices and a branch office occupy
approximately 40% of the building. As of March 31, 1997, substantially all the
remaining space in the building was leased with lease terms generally of ten
years or more, and the new loan is performing in accordance with its terms.
87
<PAGE> 132
ALLOWANCE FOR LOAN LOSSES. The Bank's allowance for loan losses
amounted to $27.0 million at March 31, 1997 as compared to $20.5 million at
March 31, 1996. At March 31, 1997, the Bank's allowance amounted to 1.1% of
total loans and 144.9% of total non-performing loans. It is management's
policy to maintain an allowance for loan losses based upon total loans
outstanding, the volume of loan originations, the type, size and geographic
concentration of loans held by the Bank, general economic conditions, the level
of past due and non-accrual loans, and the number of loans requiring heightened
management oversight.
The Bank's allowance for loan losses increased in fiscal 1997 by $6.5
million as compared to March 31, 1996 due to provisions relating to mortgage
loans of $8.4 million, partially offset by charge-offs, net of recoveries, of
$1.5 million. The increase was due to several factors, including the Bank's
increased investment in multi-family residential loans, all of which were
concentrated in the New York City metropolitan area, an increase in the number
of larger multi-family residential and individual cooperative apartment loans
as compared to prior years, and an increase in the number of loans, which,
while not delinquent, exhibit risk characteristics which require heightened
management oversight.
The Bank will continue to monitor and modify its allowance for
possible loan losses as conditions dictate. While management believes that,
based on information currently available, the Bank's allowance for possible
loan losses is sufficient to cover losses inherent in its loan portfolio at
this time, no assurances will be given that the Bank's level of allowance for
loan losses will be sufficient to absorb future possible loan losses incurred
by the Bank or that future adjustments to the allowance for possible loan
losses will not be necessary if economic and other conditions differ
substantially from the economic and other conditions used by management to
determine the current level of the allowance for possible loan losses.
Management may in the future further increase the level of its allowance for
loan losses as a percentage of total loans and non-performing loans in the
event the level of multi-family residential and commercial real estate loans
(which generally are considered to have a greater risk of loss than
single-family residential mortgage loans) as a percentage of its total loan
portfolio continues to increase. In addition, the FDIC and the Department as
an integral part of their examination process periodically review the Bank's
allowance for possible loan losses. Such agencies may require the Bank to make
additional provisions for estimated possible loan losses based upon judgments
different from those of management.
88
<PAGE> 133
The following table sets forth the activity in the Bank's allowance
for loan losses during the periods indicated.
<TABLE>
<CAPTION>
Year Ended March 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Allowance at beginning of
period $20,528 $11,849 $ 8,770 $6,415 $6,374
------ ------ ------ ----- -----
Allowance from
acquisition(1) -- 6,910 -- -- --
Provision:
Mortgage loans(2) 8,425 3,300 3,300 3,075 1,925
Other loans(3) (465)(4) 379 292 750 1,862
------- ------ ------ ------ ------
Total provision 7,960 3,679 3,592 3,825 3,787
Charge-offs:
Mortgage loans(2) 1,636 1,634 842 1,049 2,371
Other loans(3) 509 751 220 1,259 2,066
------- ------ ------ ------ ------
Total charge-offs 2,145 2,385 1,062 2,308 4,437
------- ------ ------ ------ ------
Recoveries:
Mortgage loans(2) 545 176 294 28 41
Other loans 136 299 255 810 650
------- ------ ------ ------ ------
Total recoveries 681 475 549 838 691
------- ------ ------ ------ ------
Allowance at end of
period $27,024 $20,528 $11,849 $8,770 $6,415
====== ====== ====== ===== =====
</TABLE>
- --------------------------
(1) Reflects allowance for loan losses acquired in the Bay Ridge
acquisition in January 1996.
(2) Includes individual cooperative apartment loans.
(3) Includes student loans, home equity loans and lines of credit,
automobile loans, secured and unsecured personal loans, and commercial
business loans.
(4) Reflects adjustment to allowance related to commercial business loans.
89
<PAGE> 134
The following table sets forth information concerning the allocation
of the Bank's allowance for loan losses by loan category at the dates
indicated.
<TABLE>
<CAPTION>
At March 31,
----------------------------------------------------------------------------------------------------------
1997 1996 1995 1994
------------------------ --------------------------- ------------------------ -----------------------
Percent of Percent of Percent of Percent of
Loans in Loans in Loans in Loans in
Each Each Each Each
Category to Category to Category to Category to
Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans
-------- -------------- ---------- -------------- ---------- ------------- -------- --------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage loans(1).......$23,370 95.4% $ 16,036 95.4% $ 7,284 94.6% $4,532 92.7%
Other loans(2).......... 3,654 4.6 4,492 4.6 4,565 5.4 4,238 7.3
------- ----- ------- ----- ------- ----- ----- ---
Total $27,024 100.0% $ 20,528 100.0% $11,849 100.0% $8,770 100.0%
====== ===== ======= ===== ====== ===== ===== =====
<CAPTION>
At March 31,
--------------------------
1993
--------------------------
Percent of
Loans in
Each
Category to
Amount Total Loans
--------- --------------
(Dollars in Thousands)
<S> <C> <C>
Mortgage loans(1) $2,478 91.1%
Other loans(2)........ 3,937 8.9
----- ---
Total............ $6,415 100.0%
===== =====
</TABLE>
- -----------------
(1) Includes individual cooperative apartment loans.
(2) Includes student loans, home equity loans, lines of credit, automobile
loans, and secured and unsecured personal loans and commercial
business loans.
90
<PAGE> 135
ENVIRONMENTAL ISSUES
The Bank encounters certain environmental risks in its lending
activities. Under federal and state environmental laws, lenders may become
liable for costs of cleaning up hazardous materials found on property securing
their loans. In addition, the existence of hazardous materials may make it
unattractive for a lender to foreclose on such properties. Although
environmental risks are usually associated with loans secured by commercial
real estate, risks also may be substantial for loans secured by residential
real estate if environmental contamination makes security property unsuitable
for use. This could also have a negative effect on nearby property values.
The Bank attempts to control its risk by requiring a phase one environmental
assessment be completed as part of its underwriting review for all
non-residential mortgage applications.
The Bank believes its procedures regarding the assessment of
environmental risk are adequate and the Bank is unaware of any environmental
issues which would subject it to any material liability at this time. However,
no assurance can be given that the values of properties securing loans in the
Bank's portfolio will not be adversely affected by unforeseen environmental
risks.
INVESTMENT ACTIVITIES
INVESTMENT POLICIES. The investment policy of the Bank, which is
established by the Board of Directors, is designed to help the Bank achieve its
fundamental asset/liability management objectives. Generally, the policy calls
for the Bank to emphasize principal preservation, liquidity, diversification,
short maturities and/or repricing terms, and a favorable return on investment
when selecting new investments for the Bank's investment and mortgage-backed
and mortgage-related securities portfolios. In addition, the policy sets forth
objectives which are designed to limit new investments to those which further
the Bank's goals with respect to interest rate risk management. The Bank's
current securities investment policy permits investments in various types of
liquid assets including obligations of the U.S. Treasury and federal agencies,
investment grade corporate obligations, various types of mortgage-backed and
mortgage-related securities, including CMOs, commercial paper, and insured
certificates of deposit. As a New York-chartered savings bank, the Bank is
permitted to make certain investments in equity securities and stock mutual
funds. At March 31, 1997, these equity investments totaled $10.6 million and
were comprised primarily of mutual funds and common and preferred stocks of
publicly traded companies.
The Bank currently does not participate in hedging programs, interest
rate swaps, or other activities involving use of off-balance sheet derivative
financial instruments. Similarly, the Bank does not invest in mortgage-related
securities which are deemed to be "high risk," or purchase bonds which are not
rated investment grade.
MORTGAGE-BACKED AND MORTGAGE-RELATED SECURITIES. Mortgage-backed
securities (which also are known as mortgage participation certificates or
pass-through certificates)
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<PAGE> 136
represent a participation interest in a pool of single-family or multi-family
mortgages, the principal and interest payments on which are passed from the
mortgage originators, through intermediaries (generally U.S. Government
agencies and government sponsored enterprises) that pool and repackage the
participation interests in the form of securities, to investors such as the
Bank. Such U.S. Government agencies and government sponsored enterprises,
which guarantee the payment of principal and interest to investors, primarily
include the FHLMC, the FNMA and the Government National Mortgage Association
("GNMA").
Mortgage-backed securities generally increase the quality of the
Bank's assets by virtue of the insurance or guarantees that back them, are more
liquid than individual mortgage loans and may be used to collateralize
borrowings or other obligations of the Bank. However, the existence of the
guarantees or insurance generally results in such securities bearing yields
which are less than the loans underlying such securities.
The FHLMC is a private corporation chartered by the U.S. Government.
The FHLMC issues participation certificates backed principally by conventional
mortgage loans. FHLMC guarantees the timely payment of interest and the
ultimate return of principal on participation certificates. The FNMA is a
private corporation chartered by the U.S. Congress with a mandate to establish
a secondary market for mortgage loans. The FNMA guarantees the timely payment
of principal and interest on FNMA securities. The FHLMC and FNMA securities
are not backed by the full faith and credit of the United States, but because
the FHLMC and the FNMA are U.S. Government-sponsored enterprises, these
securities are considered to be among the highest quality investments with
minimal credit risks. The GNMA is a government agency within the Department of
Housing and Urban Development which is intended to help finance
government-assisted housing programs. GNMA securities are backed by FHA-insured
and VA-guaranteed loans, and the timely payment of principal and interest on
GNMA securities are guaranteed by the GNMA and backed by the full faith and
credit of the U.S. Government. Because the FHLMC, the FNMA and the GNMA were
established to provide support for low-and middle-income housing, there are
limits to the maximum size of loan that qualify for these programs.
The Bank's mortgage-related securities consist of $84.5 million of
CMOs. CMOs have been developed in response to investor concerns regarding the
uncertainty of cash flow associated with the prepayment option of the
underlying mortgage and are typically issued by governmental agencies,
government-sponsored enterprises and special purpose entities, such as trusts,
corporations or partnerships, established by financial institutions or other
similar institutions. A CMO can be collaterized by loans or securities which
are insured or guaranteed by the FNMA, the FHLMC or the GNMA. In contrast to
pass-through mortgage-related securities, in which cash flow is received pro
rata by all security holders, the cash flow from the mortgages underlying a CMO
is segmented and paid in accordance with a predetermined priority to investors
holding various CMO classes. By allocating the principal and interest cash
flows from the underlying collateral among the separate CMO classes, different
classes of bonds are created, each with its own stated maturity, estimated
average life, coupon rate and prepayment characteristics. At March 31, 1997,
none of the
92
<PAGE> 137
CMOs held by the Bank were interest only or principal only CMOs, but were
primarily planned amortization CMOs.
The Bank adopted SFAS No. 115, as of April 1, 1994. In accordance
with this Statement, the Bank segregated its mortgage-backed and
mortgage-related investment securities into two categories: those held to
maturity and those available for sale. Held to maturity securities are
recorded at amortized cost and available-for sale securities are recorded at
fair value, with unrealized gains and losses, net of related tax effects,
excluded from earnings and reported as a separate component of stockholders'
equity. The effect of the adoption was to increase equity by $2.7 million at
April 1, 1994. In November 1995, the FASB issued a special report, "A Guide to
Implementation of Statement 115 on Accounting for Certain Investments in Debt
and Equity Securities" which allowed institutions to effect a one-time
reclassification of its securities from held to maturity to available for sale
without requiring that all securities held to maturity be reclassified to
available for sale. As a result, in December 1995 the Bank reclassified
$169.1 million of securities from held to maturity to available for sale,
resulting in net unrealized losses of $1.8 million in fiscal 1996. Upon
further consideration, the Bank determined during the fourth quarter of fiscal
1997 to reclassify the remainder of its mortgage-related and investment
securities held to maturity (which at the time totaled $131.0 million) as
available for sale. The Bank subsequently sold in March 1997 $397.3 million of
these securities at a net loss of $4.5 million in order to improve the yield on
and reduce the interest rate volatility of the Bank's investment securities and
mortgage-backed and mortgage-related securities. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Changes in
Financial Condition - Investment Securities and Mortgage-Backed and
Mortgage-Related Securities." The Bank reinvested the proceeds primarily into
U.S. Treasury notes and bills with maturities of two years or less, resulting
in an increase in the yield of approximately 70 basis points by comparison to
the securities sold.
At March 31, 1997, the Bank's $191.0 million of mortgage-backed and
mortgage-related securities, representing 5.1% of the Bank's total assets, were
comprised of $106.5 million of mortgage-backed securities, which were issued or
guaranteed by the FHLMC, the FNMA or the GNMA, and $84.5 million of CMOs,
substantially all of which are secured by FNMA and FHLMC mortgage-backed
securities.
At March 31, 1997, the contractual maturity of approximately 44.7% of
the Bank's mortgage-backed and mortgage-related securities was in excess of ten
years. The actual maturity of a mortgage-related security is less than its
stated maturity due to prepayments of the underlying mortgages. Prepayments
that are different than anticipated will affect the yield to maturity. The
yield is based upon the interest income and the amortization of any premium or
discount related to the mortgage-backed security. In accordance with GAAP,
premiums and discounts are amortized over the estimated lives of the loans,
which decrease and increase interest income, respectively. The prepayment
assumptions used to determine the amortization period for premiums and
discounts can significantly affect the yield of the mortgage-backed security,
and these assumptions are reviewed periodically to reflect actual
93
<PAGE> 138
prepayments. If prepayments are faster than anticipated, the life of the
security may be shortened and may result in a loss of any premium paid, thus
reducing the net yield on such security. Although prepayments of underlying
mortgages depend on many factors, including the type of mortgages, the coupon
rate, the age of mortgages, the geographical location of the underlying real
estate collateralizing the mortgages and general levels of market interest
rates, the difference between the interest rates on the underlying mortgages
and the prevailing mortgage interest rates generally is the most significant
determinant of the rate of prepayments. During periods of falling mortgage
interest rates, if the coupon rate of the underlying mortgages exceeds the
prevailing market interest rates offered for mortgage loans, refinancing
generally increases and accelerates the prepayment of the underlying mortgages
and the related security. Under such circumstances, the Bank may be subject to
reinvestment risk because to the extent that the Bank's mortgage-backed and
mortgage-related securities amortize or prepay faster than anticipated, the
Bank may not be able to reinvest the proceeds of such repayments and
prepayments at a comparable rate.
94
<PAGE> 139
The following table sets forth the activity in the Bank's aggregate
mortgage-backed and mortgage-related securities portfolio during the periods
indicated.
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------------------------------
1997 (1) 1996 1995 (2)
-------------- ------------- -----------
(In Thousands)
<S> <C> <C> <C>
Mortgage-backed and mortgage-related securities at
beginning of period $516,023 $305,545 $376,704
Purchases 132,587 276,777(3) --
Sales (310,252) -- (345)
Repayments and prepayments (146,836) (60,920) (67,849)
Accretion of premium (4,307) (2,624) (3,160)
Amortization of discounts 385 189 195
Unrealized gains (losses) on available-for-sale
mortgage-backed and mortgage-related securities 3,379 (2,944) --
-------- --------- --------
Mortgage-backed and mortgage-related securities at end
of period $190,979 $516,023 $305,545
======= ======= =======
</TABLE>
- -----------------------------
(1) All mortgage-backed and mortgage-related securities at March 31, 1997
were classified available for sale.
(2) All mortgaged-backed and mortgage-related securities were classified
held to maturity at March 31, 1995 and were reflected at their
carrying value.
(3) Includes $80.4 million of mortgage-backed and mortgage-related
securities acquired from Bay Ridge.
INVESTMENT SECURITIES. The Bank has the authority to invest in
various types of liquid assets, including United States Treasury obligations,
securities of various Federal agencies and of state and municipal governments,
mutual funds, equity securities and corporate obligations. At March 31, 1997,
the Bank had U.S. Government and federal agency obligations totaling $345.2
million or 9.2% of total assets at such date. Of such amount, $253.6 million
consisted of U.S. Treasury bills with a maturity of less than one year and
$80.1 million consisted of U.S. Treasury bills with maturities of one to five
years.
95
<PAGE> 140
The following table sets forth the activity in the Bank's aggregate
investment securities portfolio during the periods indicated.
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------------------------------
1997 (1) 1996 1995
---------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Investment securities at beginning of period $723,823 $ 91,245 $355,886
Purchases 775,115 1,154,428(2) 62,364
Sales (335,340) (213,010) (242,057)
Maturities (825,002) (307,512) (92,471)
Accretion of premium (85) (25) (1,624)
Amortization of discounts 11,551 5,945 2,253
Unrealized gains (losses) on available-for-sale
investment securities 7,425 (7,248) 6,894
-------- ------- --------
Investment securities at end of period $357,487 $723,823 $ 91,245
======= ======= ========
</TABLE>
- -----------------------------
(1) All investment securities at March 31, 1997 were deemed available for
sale.
(2) Includes $179.9 million of investment securities acquired from Bay
Ridge.
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<PAGE> 141
The following table sets forth information regarding the amortized
cost and market value of the Bank's investment and mortgage-backed and
mortgage-related securities at the dates indicated.
<TABLE>
<CAPTION>
At March 31,
-------------------------------------------------------------------------
1997 1996 1995
------------------------ ---------------------- -----------------------
Amortized Market Amortized Market Amortized Market
Cost Value Cost Value Cost Value
---- ----- ---- ----- ---- -----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Held to maturity:
Investment securities:
U.S. Government and federal
agency obligations $ -- $ -- $ 38,890 $38,803 $22,580 $ 21,718
Corporate securities -- -- 3,339 3,177
Municipal securities -- -- 1,105 1,128 1,106 1,127
Other -- -- -- -- 2,402 2,441
Mortgage-backed and
mortgage-related securities:
FNMA -- -- 5,492 5,486 6,463 6,322
GNMA -- -- 98,303 99,859 108,352 108,042
FHLMC -- -- 16,907 16,353 78,521 74,835
CMOs -- -- -- -- 112,209 108,187
-------- -------- ---------- -------- -------- --------
Total $ -- $ -- $ 160,697 $161,629 $334,972 $325,849
======== ======== ========== ======== ======== ========
Available for sale:
Investment securities:
U.S. Government and federal
agency obligations $345,229 $345,144 $ 670,224 $669,281 $ 7,433 $ 7,468
Corporate securities 363 358 3,220 3,685 5,000 5,000
Municipal securities 1,104 1,104 -- -- -- --
Stocks:
Preferred 281 280 450 455 19,500 19,500
Common 10,333 10,601 10,288 10,417 22,991 29,850
Mortgage-related securities:
FNMA 7,319 7,175 3,108 3,091 -- --
GNMA 79,684 80,757 -- -- -- --
FHLMC 18,780 18,594 60,493 59,819 -- --
CMOs 84,761 84,453 334,664 332,411 -- --
-------- -------- ---------- ---------- -------- --------
Total $547,854 $548,466 $1,082,447 $1,079,149 $ 54,924 $ 61,818
======= ======= ========= ========= ======= =======
</TABLE>
97
<PAGE> 142
The following table sets forth certain information regarding the
maturities of the Bank's investment and mortgage-backed and mortgage-related
securities at March 31, 1997, all of which were classified as available for
sale.
<TABLE>
<CAPTION>
At March 31, 1997 Contractually Maturing
--------------------------------------------------------------------------------------------
Weighted Weighted Weighted Weighted
Under 1 Average 1-5 Average 6-10 Average Over 10 Average
Year Yield Years Yield Years Yield Years Yield Total
---- ----- ----- ----- ----- ----- ----- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Securities:
U.S. Government
obligations $253,564 5.45% $ 80,081 6.15% $ 418 8.28% $ -- --% $334,063
Agency securities 8,103 4.39 2,978 5.95 -- -- -- -- 11,081
Corporate securities -- -- 358 9.00 -- -- -- -- 358
Municipal securities -- -- -- -- 1,104 7.25 -- -- 1,104
Mortgage-backed and
mortgage-related
securities:
FNMA -- -- 2,443 5.94 674 5.40 4,058 5.37 7,175
GNMA 4 8.50 1,606 5.46 15,057 5.70 64,090 6.70 80,757
FHLMC 4,063 5.33 2,531 5.72 4,993 5.34 7,007 5.81 18,594
CMOs -- -- 35,179 6.31 39,132 6.63 10,142 5.84 84,453
------- -------- -------- -------- --------
Total $265,734 $ 125,176 $ 61,378 $ 85,297 $537,585
======= ======== ======= ======= =======
</TABLE>
98
<PAGE> 143
SOURCES OF FUNDS
GENERAL. Deposits are the primary source of the Bank's funds for
lending and other investment purposes. In addition to deposits, the Bank
derives funds from loan principal repayments and prepayments, advances from the
FHLB of New York and certain other borrowings. Loan repayments are a
relatively stable source of funds, while deposit inflows and outflows are
influenced by general interest rates and money market conditions. Borrowings
may be used on a short-term basis to compensate for reductions in the
availability of funds from other sources. They may also be used on a longer
term basis for general business purposes.
DEPOSITS. The Bank's deposit products include NOW accounts (including
the "Active Management" NOW account), money market accounts,
non-interest-bearing checking accounts, passbook savings accounts and term
certificate accounts. Deposit account terms vary, with the principal
differences being the minimum balance required, the time periods the funds must
remain on deposit and the interest rate. See Note 11 of Notes to Consolidated
Financial Statements set forth elsewhere herein.
The Bank's deposits are obtained primarily from the areas in which its
branch offices are located, and management of the Bank estimates that only a
minimal amount of the Bank's deposits are obtained from customers residing
elsewhere. The Bank does not pay fees to brokers to solicit funds for deposit
with the Bank or actively solicit negotiable-rate certificates of deposit with
balances of $100,000 or more.
The Bank attracts deposits through a network of convenient office
locations by offering a variety of accounts and services, competitive interest
rates and convenient customer hours. Currently the offices of the Bank consist
of 33 traditional full-service offices. As part of its commitment to the
community, the Bank intends to establish one additional limited service office
in fiscal 1998 located in the Red Hook section of Brooklyn.
In addition to the Bank's extensive branch network, the Bank currently
maintains 38 automated teller machines ("ATM") in its branch offices and plans
to install an additional five ATMs in its offices by the end of fiscal 1998.
Deposit account terms offered by the Bank vary according to the
minimum balance required, the time periods the funds must remain on deposit and
the interest rate, among other factors. In determining the characteristics of
its deposit accounts, consideration is given to the profitability to the Bank,
matching terms of the deposits with loan products, the attractiveness to
customers and the rates offered by the Bank's competitors.
The Bank's focus on customer service has facilitated its retention of
lower-costing NOW accounts, money market account, non-interest bearing checking
accounts and savings accounts, which generally have rates substantially less
than certificates of deposit. At March 31, 1997, these types of deposits
amounted to $1.58 billion or 47.6% of the Bank's total
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<PAGE> 144
deposits. During fiscal 1997, the weighted average rate paid on the Bank's
demand deposits and passbook savings deposits amounted to 2.65% and 2.91%,
respectively, as compared to a weighted average rate 5.53% paid on the Bank's
certificates of deposit during this period.
The Bank's deposits declined by $71.3 million from March 31, 1996 to
March 31, 1997. The decline was due primarily to the sale of $51.4 million of
deposits in September 1996 which related to one of the branch offices acquired
in the 1996 Branch Acquisition combined with outflows of deposits totaling
approximately $94.6 million at the remaining branch offices purchased in the
1996 Branch Acquisition as well as $25.2 million of deposits related to the Bay
Ridge acquisition. A significant portion of such deposits consisted of above
market rate certificates of deposit which were not reinvested at the Bank at
maturity.
100
<PAGE> 145
The following table sets forth the activity in the Bank's deposits
during the periods indicated.
<TABLE>
<CAPTION>
Year Ended March 31,
-------------------------------------------
1997 1996 1995
----------- --------------- -------------
(Dollars in Thousands)
<S> <C> <C> <C>
Beginning balance $3,396,890 $2,236,422 $ 2,207,441
Increase due to acquisitions -- 1,058,984 20,432
Decrease due to disposition (51,407)
Other net decrease
before interest credited (158,765) (4,895) (67,884)
Interest credited 138,840 106,379 76,433
---------- ---------- ----------
Net increase (decrease)
in deposits (71,332) 1,160,468 28,981
----------- ---------- ----------
Ending balance $3,325,558 $3,396,890 $2,236,422
========= ========= =========
</TABLE>
The following table sets forth by various interest rate categories the
certificates of deposit with the Bank at the dates indicated.
<TABLE>
<CAPTION>
At March 31,
--------------------------------------------
1997 1996 1995
----------- ---------------- -------------
(Dollars in Thousands)
<S> <C> <C> <C>
2.00% to 3.99% $ 2,666 $ 6,775 $121,160
4.00% to 4.99% 215,992 413,348 216,568
5.00% to 5.99% 1,260,417 798,536 258,688
6.00% to 6.99% 174,972 457,039 403,209
7.00% to 8.99% 89,701 121,542 78,638
9.00% to 10.99% 8 8 94
-------- -------- ---------
$1,743,756 $1,797,248 $1,078,357
========= ========= =========
</TABLE>
The following table sets forth the amount and remaining maturities of
the Bank's certificates of deposit at March 31, 1997.
<TABLE>
<CAPTION>
Over Six Months Over One Year Over Two Years
Six Months Through One Through Two Through Three Over Three
and Less Year Years Years Years Total
------------- --------------- ------------- -------------- ------------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
2.00% to 3.99% $ 679 $ 1,979 $ -- $ 8 $ -- $ 2,666
4.00% to 4.99% 192,937 17,898 4,898 125 134 215,992
5.00% to 5.99% 738,319 266,826 193,487 32,067 29,718 1,260,417
6.00% to 6.99% 70,246 32,906 8,171 21,832 41,817 174,972
7.00% to 8.99% 4,827 6,450 5,895 56,569 15,960 89,701
9.00% to 10.99% 8 -- -- -- -- 8
---------- --------- -------- ---------- -------- ----------
Total $1,007,016 $ 326,059 $212,451 $ 110,601 $ 87,629 $1,743,756
========= ======== ======= ========= ======= =========
</TABLE>
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<PAGE> 146
As of March 31, 1997, the aggregate amount of outstanding time
certificates of deposit in amounts greater than or equal to $100,000 was
approximately $189.8 million. The following table presents the maturity of
these time certificates of deposit at such date.
<TABLE>
<CAPTION>
Amount
(In Thousands)
<S> <C>
3 months or less . . . . . . . . . . . . . . . . . . . . $ 57,714
Over 3 months through 6 months . . . . . . . 46,933
Over 6 months through 12 months. . . . . . . 29,318
Over 12 months . . . . . . . . . . . . . . . . . . . . 55,788
------
$189,753
=======
</TABLE>
BORROWINGS. The Bank may obtain advances from the FHLB of New York
upon the security of the common stock it owns in that bank and certain of its
residential mortgage loans, provided certain standards related to
creditworthiness have been met. Such advances are made pursuant to several
credit programs, each of which has its own interest rate and range of
maturities. Such advances are generally available to meet seasonal and other
withdrawals of deposit accounts and to permit increased lending. At March 31,
1997, the Bank had $14.6 million of advances from the FHLB of New York with
maturities ranging between one year and 15 years with the substantial majority
having a maturity of less than seven years. The other borrowings outstanding
at March 31, 1997 consisted primarily of two mortgages extended to the Bank in
connection with the purchase of two of its branch offices.
EMPLOYEES
The Bank had 677 full-time employees and 157 part-time employees at
March 31, 1997. None of these employees are represented by a collective
bargaining agent and the Bank considers its relationship with its employees to
be good.
OFFICES AND PROPERTIES
At March 31, 1997, the Bank conducted its business from its executive
offices in Brooklyn and 32 full service offices. In April 1997, the Bank
completed the purchase of a branch office located in Astoria, New York,
increasing the number of its full service offices to 33. In addition, the Bank
has entered into a lease for space that its new branch in Red Hook will occupy.
102
<PAGE> 147
The following table sets forth certain information relating to the
Bank's offices at March 31, 1997.
<TABLE>
<CAPTION>
Net Book Value
of Property and
Lease Leasehold Deposits at
Owned or Expiration Improvements at March 31,
Location Leased Date March 31, 1997 1997
- -------------------------------------- ----------- ---------------- ------------------- ---------------
(In Thousands)
<S> <C> <C> <C> <C>
EXECUTIVE AND ADMINISTRATIVE OFFICES:
-------------------------------------
195 Montague Street Owned $17,256 $87,324
Brooklyn, New York 11201(1)
BRANCH OFFICES:
--------------
130 Court Street Owned 5,818 190,457
Brooklyn, New York 11201 (2)
6424-18th Avenue Owned 966 353,874
Brooklyn, New York 11204
23 Newkirk Plaza Owned 2,372 122,970
Brooklyn, New York 11226
443 Hillside Avenue Owned 2,208 205,011
Williston Park, New York 11596
23-56 Bell Boulevard Leased 9/30/1998(3) 399 212,113
Bayside, New York 11360
250 Lexington Avenue Leased 12/31/2001(4) 65 62,617
New York, New York 10016
1416 East Avenue Leased (5) 481 116,142
Bronx, New York 10462
1108 Northern Boulevard Leased month to month (6) 22 74,423
Manhasset, New York 11030
1769-86th Street Owned 1,616 168,499
Brooklyn, New York 11214
Pratt Institute Campus Leased (7) -- 3,315
200 Willoughby Avenue
Brooklyn, New York 11205
</TABLE>
103
<PAGE> 148
<TABLE>
<CAPTION>
Net Book Value
of Property and
Lease Leasehold Deposits at
Owned or Expiration Improvements at March 31,
Location Leased Date March 31, 1997 1997
- -------------------------------------- ----------- ---------------- ------------------- ---------------
(In Thousands)
<S> <C> <C> <C> <C>
2357-59 86th Street Owned 2,018 81,974
Brooklyn, New York 11214
4514 16th Avenue Owned 2,032 123,559
Brooklyn, New York 11204
37-10 Broadway Owned 1,146 105,865
Long Island City, New York 11103
22-59 31st Street Owned 682 90,791
Long Island City, New York 11105
24-28 34th Avenue Leased 6/30/1997 326 67,146
Long Island City, New York 11106
51-12 31st Avenue Leased 10/31/1997 318 41,957
Woodside, New York 11377
83-20 Roosevelt Avenue Leased 1/31/2005 1,085 58,855
Jackson Heights, New York 11372
75-15 31st Avenue Leased 4/30/2004 380 78,235
Jackson Heights, New York 11370
89-01 Northern Boulevard Leased 7/31/2004 328 74,753
Jackson Heights, New York 11372
150-28 Union Turnpike Leased 5/31/2012 176 47,262
Flushing, New York 11367
234 Prospect Park West Owned 1,864 31,353
Brooklyn, New York 11215
7500 Fifth Avenue Owned 596 67,724
Brooklyn, New York 11209
440 Avenue P Owned 706 83,304
Brooklyn, New York 11223
4703 13th Avenue Owned 1,158 85,913
Brooklyn, New York 11219
</TABLE>
104
<PAGE> 149
<TABLE>
<CAPTION>
Net Book Value
of Property and
Lease Leasehold Deposits at
Owned or Expiration Improvements at March 31,
Location Leased Date March 31, 1997 1997
- -------------------------------------- ----------- ---------------- ------------------- ---------------
(In Thousands)
<S> <C> <C> <C> <C>
301 Avenue U Owned 555 69,897
Brooklyn, New York 11223
8808 Fifth Avenue Owned 2,169 60,986
Brooklyn, New York 11209
1310 Kings Highway Owned 415 68,645
Brooklyn, New York 11229
4823 13th Avenue Owned 1,468 114,376
Brooklyn, New York 11219
1302 Avenue J Owned 795 113,483
Brooklyn, New York 11230
1550 Richmond Road Owned 1,101 139,762
Staten Island, New York 10304
1460 Forest Avenue Leased 8/27/2011 12 122,973
Staten Island, New York 10302
OTHER PROPERTY:
--------------
6820 Bay Parkway Owned 644 --
Brooklyn, New York 11204(8)
-------- ----------
Totals $ 51,177 $3,325,558
======= =========
</TABLE>
- ---------------
(1) The Bank operates a full-service branch on the ground floor of the
building.
(2) Designated as the Bank's main office.
(3) The Bank has an option to extend this lease for an additional 10 year
term.
(4) The Bank has an option to extend this lease for two additional 10 year
terms.
(5) Consists of two leases. The original lease executed March 1972
expires in March 2002. In February 1987, the Bank entered into a lease
for additional space in the adjacent lot which expires in November
2002.
(6) The Bank has entered a lease for space in a building under
construction. Upon completion, the Bank will relocate the branch
office into the new building.
(7) The Bank executed a "Memorandum of Understanding" with the Pratt
Institute to occupy the space; no expiration date was stated in the
Memorandum.
(Footnotes continued on following page)
105
<PAGE> 150
- ---------------
(8) Consists of a former branch office the deposits of which were
transferred to another institution in September 1996. The building
was sold subsequent to March 31, 1997.
SAVINGS BANK LIFE INSURANCE
The Bank, through its Savings Bank Life Insurance ("SBLI") department,
engages in group life insurance coverage per individual under SBLI's Financial
Institution Group Life Insurance policy. The SBLI Department's activities are
segregated from the Bank and, while they do not directly affect the Bank's
earnings, management believes that offering SBLI is beneficial to the Bank's
relationship with its depositors and the general public. The SBLI Department
pays its own expenses and reimburses the Bank for expenses incurred on its
behalf. At March 31, 1997, the SBLI Department had policies totaling $412.1
million in force.
SUBSIDIARIES
At March 31, 1997, the Bank's two active subsidiaries were ICRC and
Wiljo.
INDEPENDENCE COMMUNITY REALTY CORPORATION. ICRC was established in
September 1996 as a real estate investment trust. On October 1, 1996, the Bank
transferred to ICRC real estate loans with a fair market value of approximately
$834.0 million in return for all 1,000 shares of ICRC's common stock and all
10,000 shares of ICRC's 8% junior preferred stock. In January 1997, 111
officers and employees of the Bank each received one share of 8% junior
preferred stock of ICRC. At March 31, 1997, ICRC held and serviced $804.0
million of loans.
WILJO DEVELOPMENT CORP. The assets of Wiljo consist primarily of the
office space in the building in which the Bank's executive offices are located
and its limited partnership interest in the partnership which owns the
remaining portion of the building. At March 31, 1997, Wiljo had total assets
of $8.3 million and the Bank's equity investment in Wiljo amounted to $7.5
million.
LEGAL PROCEEDINGS
The Bank is involved in routine legal proceedings occurring in the
ordinary course of business which in the opinion of management, in the
aggregate, will not have a material adverse effect on the consolidated
financial condition and results of operations of the Bank.
On May 17, 1995 and October 19, 1995, the purported class actions
captioned Simon v. Bay Ridge Bancorp., Inc., Dicunto, Ayoub, Christiansen,
Canade, Kasler, Mihailos, Apel and Cordano, and Pinkowitz v. Bay Ridge
Bancorp., Inc., Dicunto, Ayoub, Christansen, Canade, Kasler, Mihilos, Apel,
Cordano, Independence Community Bank Corp. and Hamm were filed in the Court of
Chancery of the State of Delaware in and for New Castle County. Such actions
allege, among other things, that the directors of Bay Ridge breached their
fiduciary duties in connection with the acquisition of Bay Ridge by the Mutual
Holding
106
<PAGE> 151
Company. In addition, the Pinkowitz complaint alleges that the Mutual Holding
Company aided and abetted the breaches of fiduciary duty allegedly committed by
the directors of Bay Ridge. The plaintiffs did not specify or claim a
particular amount of damages in such actions. The Mutual Holding Company and
the Bank (as the successor to Bay Ridge) intend to vigorously defend against
the claims against the Mutual Holding Company. The Bank believes plaintiffs'
claims are without merit.
REGULATION
Set forth below is a brief description of certain laws and regulations
which are applicable to the Company and the Bank. The description of the laws
and regulations hereunder, as well as descriptions of laws and regulations
contained elsewhere herein, does not purport to be complete and is qualified in
its entirety by reference to applicable laws and regulations.
THE COMPANY
GENERAL. Upon consummation of the Conversion, the Company will become
subject to regulation as a savings and loan holding company under the Home
Owners' Loan Act, as amended ("HOLA"), instead of being subject to regulation
as a bank holding company under the Bank Holding Company Act of 1956 because
the Bank has made an election under Section 10(l) of HOLA to be treated as a
"savings association" for purposes of Section 10(e) of HOLA. As a result, the
Company will be required to register with the OTS and will be subject to OTS
regulations, examinations, supervision and reporting requirements relating to
savings and loan holding companies. The Company will also be required to file
certain reports with, and otherwise comply with the rules and regulations of,
the Department and the SEC. As a subsidiary of a savings and loan holding
company, the Bank will be subject to certain restrictions in its dealings with
the Company and affiliates thereof.
ACTIVITIES RESTRICTIONS. Upon consummation of the Conversion, the
Bank will be the sole savings association subsidiary of the Company. There are
generally no restrictions on the activities of a savings and loan holding
company which holds only one subsidiary savings institution. However, if the
Director of the OTS determines that there is reasonable cause to believe that
the continuation by a savings and loan holding company of an activity
constitutes a serious risk to the financial safety, soundness or stability of
its subsidiary savings institution, he may impose such restrictions as are
deemed necessary to address such risk, including limiting (i) payment of
dividends by the savings institution; (ii) transactions between the savings
institution and its affiliates; and (iii) any activities of the savings
institution that might create a serious risk that the liabilities of the
holding company and its affiliates may be imposed on the savings institution.
Notwithstanding the above rules as to permissible business activities of
unitary savings and loan holding companies, if the savings institution
subsidiary of such a holding company fails to meet the qualified thrift lender
("QTL") test, as discussed under "- Qualified Thrift Lender Test," then such
unitary holding company also shall become subject to the activities
restrictions applicable to multiple savings
107
<PAGE> 152
and loan holding companies and, unless the savings institution requalifies as a
QTL within one year thereafter, shall register as, and become subject to the
restrictions applicable to, a bank holding company. See "- Qualified Thrift
Lender Test."
If the Company were to acquire control of another savings institution,
other than through merger or other business combination with the Bank, the
Company would thereupon become a multiple savings and loan holding company.
Except where such acquisition is pursuant to the authority to approve emergency
thrift acquisitions and where each subsidiary savings institution meets the QTL
test, as set forth below, the activities of the Company and any of its
subsidiaries (other than the Bank or other subsidiary savings institutions)
would thereafter be subject to further restrictions. Among other things, no
multiple savings and loan holding company or subsidiary thereof which is not a
savings institution shall commence or continue for a limited period of time
after becoming a multiple savings and loan holding company or subsidiary
thereof any business activity other than: (i) furnishing or performing
management services for a subsidiary savings institution; (ii) conducting an
insurance agency or escrow business; (iii) holding, managing, or liquidating
assets owned by or acquired from a subsidiary savings institution; (iv) holding
or managing properties used or occupied by a subsidiary savings institution;
(v) acting as trustee under deeds of trust; (vi) those activities authorized by
regulation as of March 5, 1987 to be engaged in by multiple savings and loan
holding companies; or (vii) unless the Director of the OTS by regulation
prohibits or limits such activities for savings and loan holding companies,
those activities authorized by the FRB as permissible for bank holding
companies. Those activities described in clause (vii) above also must be
approved by the Director of the OTS prior to being engaged in by a multiple
savings and loan holding company.
QUALIFIED THRIFT LENDER TEST. Under Section 2303 of the Economic
Growth and Regulatory Paperwork Reduction Act of 1996, a savings association
can comply with the QTL test by either meeting the QTL test set forth in the
HOLA and implementing regulations or qualifying as a domestic building and loan
association as defined in Section 7701(a)(19) of the Internal Revenue Code of
1986, as amended. A savings bank subsidiary of a savings and loan holding
company that does not comply with the QTL test must comply with the following
restrictions on its operations: (i) the institution may not engage in any new
activity or make any new investment, directly or indirectly, unless such
activity or investment is permissible for a national bank; (ii) the branching
powers of the institution shall be restricted to those of a national bank;
(iii) the institution shall not be eligible to obtain any advances from its
FHLB; and (iv) payment of dividends by the institution shall be subject to the
rules regarding payment of dividends by a national bank. Upon the expiration of
three years from the date the savings institution ceases to meet the QTL test,
it must cease any activity and not retain any investment not permissible for a
national bank and immediately repay any outstanding FHLB advances (subject to
safety and soundness considerations).
108
<PAGE> 153
The QTL test set forth in the HOLA requires that qualified thrift
investments ("QTIs") represent 65% of portfolio assets of the savings
institution and its consolidated subsidiaries. Portfolio assets are defined as
total assets less intangibles, property used by a savings association in its
business and liquidity investments in an amount not exceeding 20% of assets.
Generally, QTIs are residential housing related assets. The 1996 amendments
allow small business loans, credit card loans, student loans and loans for
personal, family and household purposes to be included without limitation as
qualified investments. At March 31, 1997, approximately 69.0% of the Bank's
assets were invested in QTIs, which was in excess of the percentage required to
qualify the Bank under the QTL test in effect at that time.
LIMITATIONS ON TRANSACTIONS WITH AFFILIATES. Transactions between
savings institutions and any affiliate are governed by Sections 23A and 23B of
the Federal Reserve Act. An affiliate of a savings institution is any company
or entity which controls, is controlled by or is under common control with the
savings institution. In a holding company context, the parent holding company
of a savings institution (such as the Company) and any companies which are
controlled by such parent holding company are affiliates of the savings
institution. Generally, Sections 23A and 23B (i) limit the extent to which the
savings institution or its subsidiaries may engage in "covered transactions"
with any one affiliate to an amount equal to 10% of such institution's capital
stock and surplus, and contain an aggregate limit on all such transactions with
all affiliates to an amount equal to 20% of such capital stock and surplus and
(ii) require that all such transactions be on terms substantially the same, or
at least as favorable, to the institution or subsidiary as those provided to a
non-affiliate. The term "covered transaction" includes the making of loans,
purchase of assets, issuance of a guarantee and other similar transactions.
In addition, Sections 22(g) and (h) of the Federal Reserve Act place
restrictions on loans to executive officers, directors and principal
stockholders. Under Section 22(h), loans to a director, an executive officer
and to a greater than 10% stockholder of a savings institution, and certain
affiliated interests of either, may not exceed, together with all other
outstanding loans to such person and affiliated interests, the savings
institution's loans to one borrower limit (generally equal to 15% of the
institution's unimpaired capital and surplus). Section 22(h) also requires that
loans to directors, executive officers and principal stockholders be made on
terms substantially the same as offered in comparable transactions to other
persons unless the loans are made pursuant to a benefit or compensation program
that (i) is widely available to employees of the institution and (ii) does not
give preference to any director, executive officer or principal stockholder, or
certain affiliated interests of either, over other employees of the savings
institution. Section 22(h) also requires prior board approval for certain
loans. In addition, the aggregate amount of extensions of credit by a savings
institution to all insiders cannot exceed the institution's unimpaired capital
and surplus. Furthermore, Section 22(g) places additional restrictions on
loans to executive officers. At March 31, 1997, the Bank was in compliance
with the above restrictions.
109
<PAGE> 154
RESTRICTIONS ON ACQUISITIONS. Except under limited circumstances,
savings and loan holding companies are prohibited from acquiring, without prior
approval of the Director, (i) control of any other savings institution or
savings and loan holding company or substantially all the assets thereof or
(ii) more than 5% of the voting shares of a savings institution or holding
company thereof which is not a subsidiary. Except with the prior approval of
the Director, no director or officer of a savings and loan holding company or
person owning or controlling by proxy or otherwise more than 25% of such
company's stock, may acquire control of any savings institution, other than a
subsidiary savings institution, or of any other savings and loan holding
company.
The Director may only approve acquisitions resulting in the formation
of a multiple savings and loan holding company which controls savings
institutions in more than one state if (i) the multiple savings and loan
holding company involved controls a savings institution which operated a home
or branch office located in the state of the institution to be acquired as of
March 5, 1987; (ii) the acquiror is authorized to acquire control of the
savings institution pursuant to the emergency acquisition provisions of the
Federal Deposit Insurance Act ("FDIA"); or (iii) the statutes of the state in
which the institution to be acquired is located specifically permit
institutions to be acquired by the state-chartered institutions or savings and
loan holding companies located in the state where the acquiring entity is
located (or by a holding company that controls such state-chartered savings
institutions).
FEDERAL SECURITIES LAWS. The Company has filed with the Securities
and Exchange Commission ("SEC") a registration statement under the Securities
Act, for the registration of the Common Stock to be issued pursuant to the
Conversion. Upon completion of the Conversion, the Company's Common Stock will
be registered with the SEC under Section 12(g) of the Exchange Act. The
Company will then be subject to the proxy and tender offer rules, insider
trading reporting requirements and restrictions, and certain other requirements
under the Exchange Act.
The registration under the Securities Act of shares of the Common
Stock to be issued in the Conversion does not cover the resale of such shares.
Shares of Common Stock purchased by persons who are not affiliates of the
Company may be sold without registration. Shares purchased by an affiliate of
the Company will be subject to the resale restrictions of Rule 144 under the
Securities Act. If the Company meets the current public information
requirements of Rule 144 under the Securities Act, each affiliate of the
Company who complies with the other conditions of Rule 144 (including those
that require the affiliate's sale to be aggregated with those of certain other
persons) would be able to sell in the public market, without registration, a
number of shares not to exceed, in any three-month period, the greater of (i)
1% of the outstanding shares of the Company or (ii) the average weekly volume
of trading in such shares during the preceding four calendar weeks.
110
<PAGE> 155
THE BANK
GENERAL. The Bank is subject to extensive regulation and examination
by the Department, as its chartering authority, and by the FDIC, as the insurer
of its deposits, and, upon Conversion, will be subject to certain requirements
established by the OTS as a result of the Company's savings and loan holding
company status. The federal and state laws and regulations which are
applicable to banks regulate, among other things, the scope of their business,
their investments, their reserves against deposits, the timing of the
availability of deposited funds and the nature and amount of and collateral for
certain loans. The Bank must file reports with the Department and the FDIC
concerning its activities and financial condition, in addition to obtaining
regulatory approvals prior to entering into certain transactions such as
establishing branches and mergers with, or acquisitions of, other depository
institutions. There are periodic examinations by the Department and the FDIC
to test the Bank's compliance with various regulatory requirements. This
regulation and supervision establishes a comprehensive framework of activities
in which an institution can engage and is intended primarily for the protection
of the insurance fund and depositors. The regulatory structure also gives the
regulatory authorities extensive discretion in connection with their
supervisory and enforcement activities and examination policies, including
policies with respect to the classification of assets and the establishment of
adequate loan loss reserves for regulatory purposes. Any change in such
regulation, whether by the Department, the FDIC or as a result of the enactment
of legislation, could have a material adverse impact on the Company, the Bank
and their operations.
CAPITAL REQUIREMENTS. The FDIC has promulgated regulations and
adopted a statement of policy regarding the capital adequacy of state-chartered
banks which, like the Bank, will not be members of the Federal Reserve System.
The FDIC's capital regulations establish a minimum 3.0% Tier 1
leverage capital requirement for the most highly-rated state-chartered,
non-member banks, with an additional cushion of at least 100 to 200 basis
points for all other state-chartered, non-member banks, which effectively will
increase the minimum Tier 1 leverage ratio for such other banks to 4.0% to 5.0%
or more. Under the FDIC's regulation, the highest-rated banks are those that
the FDIC determines are not anticipating or experiencing significant growth and
have well diversified risk, including no undue interest rate risk exposure,
excellent asset quality, high liquidity, good earnings and, in general, which
are considered a strong banking organization and are rated composite 1 under
the Uniform Financial Institutions Rating System. Leverage or core capital is
defined as the sum of common stockholders' equity (including retained
earnings), noncumulative perpetual preferred stock and related surplus, and
minority interests in consolidated subsidiaries, minus all intangible assets
other than certain qualifying supervisory goodwill and certain mortgage
servicing rights.
The FDIC also requires that savings banks meet a risk-based capital
standard. The risk-based capital standard for savings banks requires the
maintenance of total capital (which is defined as Tier 1 capital and
supplementary (Tier 2) capital) to risk-weighted
111
<PAGE> 156
assets of 8%. In determining the amount of risk-weighted assets, all assets,
plus certain off-balance sheet assets, are multiplied by a risk-weight of 0% to
100%, based on the risks the FDIC believes are inherent in the type of asset or
item. The components of Tier 1 capital are equivalent to those discussed above
under the 3% leverage capital standard. The components of supplementary
capital include certain perpetual preferred stock, certain mandatory
convertible securities, certain subordinated debt and intermediate preferred
stock and general allowances for loan and lease losses. Allowance for loan and
lease losses includable in supplementary capital is limited to a maximum of
1.25% of risk-weighted assets. Overall, the amount of capital counted toward
supplementary capital cannot exceed 100% of core capital. At March 31, 1997,
the Bank met each of its capital requirements.
In August 1995, the FDIC, along with the other federal banking
agencies, adopted a regulation providing that the agencies will take account of
the exposure of a bank's capital and economic value to changes in interest rate
risk in assessing a bank's capital adequacy. According to the agencies,
applicable considerations include the quality of the bank's interest rate risk
management process, the overall financial condition of the bank and the level
of other risks at the bank for which capital is needed. Institutions with
significant interest rate risk may be required to hold additional capital.
The agencies recently issued a joint policy statement providing guidance on
interest rate risk management, including a discussion of the critical factors
affecting the agencies' evaluation of interest rate risk in connection with
capital adequacy. The agencies have determined not to proceed with a
previously issued proposal to develop a supervisory framework for measuring
interest rate risk and an explicit capital component for interest rate risk.
See "Regulatory Capital Requirements" for information with respect to
the Bank's historical leverage and risk-based capital at March 31, 1997 and pro
forma after giving effect to the issuance of shares in the Offerings.
ACTIVITIES AND INVESTMENTS OF NEW YORK-CHARTERED SAVINGS BANKS. The
Bank derives its lending, investment and other authority primarily from the
applicable provisions of New York State Banking Law and the regulations of the
Department, as limited by FDIC regulations and other federal laws and
regulations. See "--Activities and Investments of Insured State - Chartered
Banks." These New York laws and regulations authorize savings banks, including
the Bank, to invest in real estate mortgages, consumer and commercial loans,
certain types of debt securities, including certain corporate debt securities
and obligations of federal, State and local governments and agencies, certain
types of corporate equity securities and certain other assets. Under the
statutory authority for investing in equity securities, a savings bank may
directly invest up to 7.5% of its assets in certain corporate stock and may
also invest up to 7.5% of its assets in certain mutual fund securities.
Investment in stock of a single corporation is limited to the lesser of 2% of
the outstanding stock of such corporation or 1% of the savings bank's assets,
except as set forth below. Such equity securities must meet certain tests of
financial performance. A savings bank's lending powers are not subject to
percentage of asset limitations, although there are limits applicable to single
borrowers. A savings bank may also, pursuant to the "leeway"
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authority, make investments not otherwise permitted under the New York State
Banking Law. This authority permits investments in otherwise impermissible
investments of up to 1% of the savings bank's assets in any single investment,
subject to certain restrictions and to an aggregate limit for all such
investments of up to 5% of assets. Additionally, in lieu of investing in such
securities in accordance with the reliance upon the specific investment
authority set forth in the New York State Bank Law, savings banks are
authorized to elect to invest under a "prudent person" standard in a wider
range of debt and equity securities as compared to the types of investments
permissible under such specific investment authority. However, in the event a
savings bank elects to utilize the "prudent person" standard, it will be unable
to avail itself of the other provisions of the New York State Banking Law and
regulations which set forth specific investment authority. A New
York-chartered stock savings bank may also exercise trust powers upon approval
of the Department.
New York-chartered savings banks may also invest in subsidiaries under
their service corporation investment power. A savings bank may use this power
to invest in corporations that engage in various activities authorized for
savings banks, plus any additional activities which may be authorized by the
Department. Investment by a savings bank in the stock, capital notes and
debentures of its service corporations is limited to 3% of the bank's assets,
and such investments, together with the bank's loans to its service
corporations, may not exceed 10% of the savings bank's assets.
With certain limited exceptions, a New York-chartered savings bank may
not make loans or extend credit for commercial, corporate or business purposes
(including lease financing) to a single borrower, the aggregate amount of which
would be in excess of 15% of the bank's net worth. The Bank currently complies
with all applicable loans-to-one-borrower limitations.
ACTIVITIES AND INVESTMENTS OF FDIC-INSURED STATE-CHARTERED BANKS. The
activities and equity investments of FDIC-insured, state-chartered banks are
generally limited to those that are permissible for national banks. Under
regulations dealing with equity investments, an insured state bank generally
may not directly or indirectly acquire or retain any equity investment of a
type, or in an amount, that is not permissible for a national bank. An insured
state bank is not prohibited from, among other things, (i) acquiring or
retaining a majority interest in a subsidiary, (ii) investing as a limited
partner in a partnership the sole purpose of which is direct or indirect
investment in the acquisition, rehabilitation or new construction of a
qualified housing project, provided that such limited partnership investments
may not exceed 2% of the bank's total assets, (iii) acquiring up to 10% of the
voting stock of a company that solely provides or reinsures directors',
trustees' and officers' liability insurance coverage or bankers' blanket bond
group insurance coverage for insured depository institutions, and (iv)
acquiring or retaining the voting shares of a depository institution if certain
requirements are met. In addition, an FDIC-insured state-chartered bank may
not directly, or indirectly through a subsidiary, engage as "principal" in any
activity that is not permissible for a national bank unless the FDIC has
determined that such
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activities would pose no risk to the insurance fund of which it is a member and
the bank is in compliance with applicable regulatory capital requirements.
Excluded from the foregoing proscription is the provision of savings
bank life insurance by an FDIC-insured state-chartered bank that is located in
New York or certain other states and is otherwise authorized to sell such
insurance, provided that (i) the FDIC does not alter its determination pursuant
to the FDIA that such activities do not pose a significant risk to the
insurance fund of which the Bank is a member, (ii) the insurance underwriting
is conducted through a division of the bank that meets the definition of
"department" contained in FDIC regulations and (iii) the bank discloses to
purchasers of life insurance policies and other products that they are not
insured by the FDIC, among other things. At March 31, 1997, the Bank's SBLI
Department had $412.1 million of insurance in force.
Also excluded from the foregoing proscription is the investment by a
state-chartered FDIC-insured bank in common and preferred stock listed on a
national securities exchange and in shares of an investment company registered
under the Investment Company Act of 1940. In order to qualify for the
exception, a state-chartered FDIC-insured bank must (i) have held such types of
investments during the 14-month period from September 30, 1990 through November
26, 1992, (ii) be chartered in a state that authorized such investments as of
September 30, 1991 and (iii) file a one-time notice with the FDIC in the
required form and receive FDIC approval of such notice. In addition, the total
investment permitted under the exception may not exceed 100% of the bank's tier
one capital as calculated under FDIC regulations. The Bank received FDIC
approval of its notice to engage in this investment activity on February 26,
1993. As of March 31, 1997, the book value of the Bank's investments under
this exception was $10.4 million, which equalled 4.2% of its tier one capital.
Such grandfathering authority is subject to termination upon the FDIC's
determination that such investments pose a safety and soundness risk to the
Bank or in the event the Bank converts its charter or undergoes a change in
control.
REGULATORY ENFORCEMENT AUTHORITY. Applicable banking laws include
substantial enforcement powers available to federal banking regulators. This
enforcement authority includes, among other things, the ability to assess civil
money penalties, to issue cease-and-desist or removal orders and to initiate
injunctive actions against banking organizations and institution-affiliated
parties, as defined. In general, these enforcement actions may be initiated
for violations of laws and regulations and unsafe or unsound practices. Other
actions or inactions may provide the basis for enforcement action, including
misleading or untimely reports filed with regulatory authorities.
Under the New York State Banking Law, the Department may issue an
order to a New York-chartered banking institution to appear and explain an
apparent violation of law, to discontinue unauthorized or unsafe practices and
to keep prescribed books and accounts. Upon a finding by the Department that
any director, trustee or officer of any banking organization has violated any
law, or has continued unauthorized or unsafe practices in
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conducting the business of the banking organization after having been notified
by the Department to discontinue such practices, such director, trustee or
officer may be removed from office by the Department after notice and an
opportunity to be heard. The Bank does not know of any past or current
practice, condition or violation that might lead to any proceeding by the
Department against the Bank or any of its directors or officers. The
Department also may take possession of a banking organization under specified
statutory criteria.
PROMPT CORRECTIVE ACTION. Section 38 of the Federal Deposit Insurance
Act ("FDIA") provides the federal banking regulators with broad power to take
"prompt corrective action" to resolve the problems of undercapitalized
institutions. The extent of the regulators' powers depends on whether the
institution in question is "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" or "critically
undercapitalized." Under regulations adopted by the federal banking
regulators, an institution shall be deemed to be (i) "well capitalized" if it
has total risk-based capital ratio of 10.0% or more, has a Tier I risk-based
capital ratio of 6.0% or more, has a Tier I leverage capital ratio of 5.0% or
more and is not subject to specified requirements to meet and maintain a
specific capital level for any capital measure; (ii) "adequately capitalized"
if it has a total risk-based capital ratio of 8.0% or more, a Tier I risk-based
capital ratio of 4.0% or more and a Tier I leverage capital ratio of 4.0% or
more (3.0% under certain circumstances) and does not meet the definition of
"well capitalized," (iii) "undercapitalized" if it has a total risk-based
capital ratio that is less than 8.0%, a Tier I risk-based capital ratio that is
less than 4.0% or a Tier I leverage capital ratio that is less than 4.0% (3.0%
under certain circumstances), (iv) "significantly undercapitalized" if it has a
total risk-based capital ratio that is less than 6.0%, a Tier I risk-based
capital ratio that is less than 3.0% or a Tier I leverage capital ratio that is
less than 3.0%, and (v) "critically undercapitalized" if it has a ratio of
tangible equity to total assets that is equal to or less than 2.0%. The
regulations also provide that a federal banking regulator may, after notice and
an opportunity for a hearing, reclassify a "well capitalized" institution as
"adequately capitalized" and may require an "adequately capitalized"
institution or an "undercapitalized" institution to comply with supervisory
actions as if it were in the next lower category if the institution is in an
unsafe or unsound condition or engaging in an unsafe or unsound practice. The
federal banking regulator may not, however, reclassify a "significantly
undercapitalized" institution as "critically undercapitalized."
An institution generally must file a written capital restoration plan
which meets specified requirements, as well as a performance guaranty by each
company that controls the institution, with an appropriate federal banking
regulator within 45 days of the date that the institution receives notice or is
deemed to have notice that it is "undercapitalized," "significantly
undercapitalized" or "critically undercapitalized." Immediately upon becoming
undercapitalized, an institution becomes subject to statutory provisions which,
among other things, set forth various mandatory and discretionary restrictions
on the operations of such an institution.
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At March 31, 1997, the Bank had capital levels which qualified it as a
"well-capitalized" institution.
FDIC INSURANCE PREMIUMS. The Bank is a member of the BIF administered
by the FDIC but has accounts insured by both the BIF and the SAIF. The
SAIF-insured accounts are held by the Bank as a result of certain acquisitions
and branch purchases and amounted to $1.6 billion, as of March 31, 1997. As
insurer, the FDIC is authorized to conduct examinations of, and to require
reporting by, FDIC-insured institutions. It also may prohibit any FDIC-insured
institution from engaging in any activity the FDIC determines by regulation or
order to pose a serious threat to the FDIC.
The FDIC may terminate the deposit insurance of any insured depository
institution, including the Bank, if it determines after a hearing that the
institution has engaged or is engaging in unsafe or unsound practices, is in an
unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, order or any condition imposed by an agreement with
the FDIC. It also may suspend deposit insurance temporarily during the hearing
process for the permanent termination of insurance, if the institution has no
tangible capital. If insurance of accounts is terminated, the accounts at the
institution at the time of the termination, less subsequent withdrawals, shall
continue to be insured for a period of six months to two years, as determined
by the FDIC. Management is aware of no existing circumstances which would
result in termination of the Bank's deposit insurance.
On September 30, 1996, President Clinton signed into law legislation
to eliminate the premium differential between SAIF-insured institutions and
BIF-insured institutions by recapitalizing the SAIF's reserves to the required
ratio of 1.25% of insured deposits. The legislation provided that the holders
of SAIF-assessable deposits pay a one-time special assessment to recapitalize
the SAIF.
Effective October 8, 1996, the FDIC imposed a one-time special
assessment equal to 65.7 basis points for all SAIF-assessable deposits as of
March 31, 1995, which was collected on November 27, 1996. Certain BIF members,
including the Bank, qualified for a 20% reduction of its SAIF-assessable
deposits for purposes of calculating the one-time special assessment. The
Bank's one-time special assessment amounted to $8.6 million. Net of related
tax benefits, the one-time special assessment amounted to $5.3 million. The
payment of the special assessment reduced the Bank's capital by the amount of
the assessment.
Following the imposition of the one-time special assessment, the FDIC
lowered assessment rates for SAIF members to reduce the disparity in the
assessment rates paid by BIF and SAIF members. Beginning October 1, 1996,
effective SAIF rates range from zero basis points to 27 basis points which is
the same range of premiums as the BIF rates. From 1997 through 1999,
FDIC-insured institutions will pay 6.4 basis points of their SAIF-assessable
deposits and approximately 1.3 basis points of their BIF-assessable deposits to
fund the Financing Corporation. The Bank's insurance premiums, which had
amounted to 23 basis points for its SAIF-insured deposits, were reduced to 6.4
basis points. The Bank
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insurance premiums, which had amounted to the minimum $2,000 annual fee for its
BIF-insured deposits, were increased to 1.3 basis points. Based upon the $1.7
billion of BIF-assessable deposits and $1.6 billion of SAIF-assessable deposits
at March 31, 1997, the Bank would expect to pay $308,000 in insurance premiums
per quarter during 1997.
BROKERED DEPOSITS. The FDIA restricts the use of brokered deposits by
certain depository institutions. Under the FDIA and applicable regulations,
(i) a "well capitalized insured depository institution" may solicit and accept,
renew or roll over any brokered deposit without restriction, (ii) an
"adequately capitalized insured depository institution" may not accept, renew
or roll over any brokered deposit unless it has applied for and been granted a
waiver of this prohibition by the FDIC and (iii) an "undercapitalized insured
depository institution" may not (x) accept, renew or roll over any brokered
deposit or (y) solicit deposits by offering an effective yield that exceeds by
more than 75 basis points the prevailing effective yields on insured deposits
of comparable maturity in such institution's normal market area or in the
market area in which such deposits are being solicited. The term
"undercapitalized insured depository institution" is defined to mean any
insured depository institution that fails to meet the minimum regulatory
capital requirement prescribed by its appropriate federal banking agency. The
FDIC may, on a case-by-case basis and upon application by an adequately
capitalized insured depository institution, waive the restriction on brokered
deposits upon a finding that the acceptance of brokered deposits does not
constitute an unsafe or unsound practice with respect to such institution. The
Bank had no brokered deposits outstanding at March 31, 1997.
COMMUNITY INVESTMENT AND CONSUMER PROTECTION LAWS. In connection with
its lending activities, the Bank is subject to a variety of federal laws
designed to protect borrowers and promote lending to various sectors of the
economy and population. Included among these are the federal Home Mortgage
Disclosure Act, Real Estate Settlement Procedures Act, Truth-in-Lending Act,
Equal Credit Opportunity Act, Fair Credit Reporting Act and Community
Reinvestment Act ("CRA").
The CRA requires insured institutions to define the communities that
they serve, identify the credit needs of those communities and adopt and
implement a "Community Reinvestment Act Statement" pursuant to which they offer
credit products and take other actions that respond to the credit needs of the
community. The responsible federal banking regulator (in the case of the Bank,
the FDIC) must conduct regular CRA examinations of insured financial
institutions and assign to them a CRA rating of "outstanding," "satisfactory,"
"needs improvement" or "unsatisfactory." The Bank's current federal CRA rating
is "outstanding."
The Bank is also subject to provisions of the New York State Banking
Law which impose continuing and affirmative obligations upon banking
institutions organized in New York State to serve the credit needs of its local
community ("NYCRA"), which are similar to those imposed by the CRA. Pursuant
to the NYCRA, a bank must file an annual NYCRA report and copies of all federal
CRA reports with the Department. The NYCRA requires the Department to make an
annual written assessment of a bank's compliance with
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the NYCRA, utilizing a four-tiered rating system, and make such assessment
available to the public. The NYCRA also requires the Department to consider a
bank's NYCRA rating when reviewing a bank's application to engage in certain
transactions, including mergers, asset purchases and the establishment of
branch offices or automated teller machines, and provides that such assessment
may serve as a basis for the denial of any such application. The Bank's latest
NYCRA rating, received from the Department was "satisfactory."
LIMITATIONS ON DIVIDENDS. The Company is a legal entity separate and
distinct from the Bank. The Company's principal source of revenue consists of
dividends from the Bank. The payment of dividends by the Bank is subject to
various regulatory requirements including a requirement, as a result of the
Company's savings and loan holding company status, that the Bank notify the
Director not less than 30 days in advance of any proposed declaration by its
directors of a dividend.
Under New York State Banking Law, a New York-chartered stock savings
bank may declare and pay dividends out of its net profits, unless there is an
impairment of capital, but approval of the Department is required if the total
of all dividends declared in a calendar year would exceed the total of its net
profits for that year combined with its retained net profits of the preceding
two years, subject to certain adjustments.
MISCELLANEOUS. The Bank is subject to certain restrictions on loans
to the Company or its non-bank subsidiaries, on investments in the stock or
securities thereof, on the taking of such stock or securities as collateral for
loans to any borrower, and on the issuance of a guarantee or letter of credit
on behalf of the Company or its non-bank subsidiaries. The Bank also is
subject to certain restrictions on most types of transactions with the Company
or its non-bank subsidiaries, requiring that the terms of such transactions be
substantially equivalent to terms of similar transactions with non-affiliated
firms.
FEDERAL HOME LOAN BANK SYSTEM. The Bank is a member of the FHLB of
New York, which is one of 12 regional FHLBs that administers the home financing
credit function of savings institutions. Each FHLB serves as a reserve or
central bank for its members within its assigned region. It is funded
primarily from proceeds derived from the sale of consolidated obligations of
the FHLB System. It makes loans to members (i.e., advances) in accordance with
policies and procedures established by the Board of Directors of the FHLB. The
Bank had $14.6 million of FHLB advances at March 31, 1997.
As a FHLB member, the Bank is required to purchase and maintain stock
in the FHLB of New York in an amount equal to at least 1% of its aggregate
unpaid residential mortgage loans, home purchase contracts or similar
obligations at the beginning of each year or 5% of its advances from the FHLB
of New York, whichever is greater. At March 31, 1997, the Bank had
approximately $25.8 million in FHLB stock, which resulted in its compliance
with this requirement.
The FHLBs are required to provide funds for the resolution of troubled
savings institutions and to contribute to affordable housing programs through
direct loans or interest
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subsidies on advances targeted for community investment and low- and
moderate-income housing projects. These contributions have adversely affected
the level of FHLB dividends paid in the past and could continue to do so in the
future. These contributions also could have an adverse effect on the value of
FHLB stock in the future.
FEDERAL RESERVE SYSTEM. The FRB requires all depository institutions
to maintain reserves against their transaction accounts (primarily NOW and
Super NOW checking accounts) and non-personal time deposits. As of March 31,
1997, the Bank was in compliance with applicable requirements. However,
because required reserves must be maintained in the form of vault cash or a
noninterest-bearing account at a Federal Reserve Bank, the effect of this
reserve requirement is to reduce an institution's earning assets.
TAXATION
FEDERAL TAXATION
GENERAL. The Company and the Bank will be subject to federal income
taxation in the same general manner as other corporations with some exceptions
discussed below. The following discussion of federal taxation is intended only
to summarize certain pertinent federal income tax matters and is not a
comprehensive description of the tax rules applicable to the Bank. The Bank's
federal income tax returns have been audited or closed without audit by the
Internal Revenue Service through 1993.
METHOD OF ACCOUNTING. For federal income tax purposes, the Bank
currently reports its income and expenses on the accrual method of accounting
and uses a tax year ending December 31 for filing its consolidated federal
income tax returns. The Small Business Protection Act of 1996 (the "1996 Act")
eliminated the use of the reserve method of accounting for bad debt reserves by
savings institutions, effective tax taxable years beginning after 1995.
BAD DEBT RESERVES. Prior to the 1996 Act, the Bank was permitted to
establish a reserve for bad debts and to make annual additions to the reserve.
These additions could, within specified formula limits, be deducted in arriving
at the Bank's taxable income. As a result of the 1996 Act, the Bank must use
the specific chargeoff method in computing its bad debt deduction beginning
with its 1996 Federal tax return. In addition, the federal legislation
requires the recapture (over a six year period) of the excess of tax bad debt
reserves at December 31, 1995 over those established as of December 31, 1987.
The amount of such reserve subject to recapture as of December 31, 1996 is
approximately $3.6 million.
As discussed more fully below, the Bank and subsidiaries file combined
New York State Franchise and New York City Financial Corporation tax returns.
The basis of the determination of each tax is the greater of a tax on entire
net income (or on alternative entire net income) or a tax computed on taxable
assets. However, for state purposes, New York State enacted legislation in
1996, which among other things, decoupled the Federal
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and New York State tax laws regarding thrift bad debt deductions and permits
the continued use of the bad debt reserve method under section 593. Thus,
provided the Bank continues to satisfy certain definitional tests and other
conditions, for New York State and City income tax purposes, the Bank is
permitted to continue to use the special reserve method bad debt deductions.
The deductible annual addition to the state reserve may be computed using a
specific formula based on the Bank's loss history ("Experience Method") or a
statutory percentage equal to 32% of the Bank's New York State or City taxable
income ("Percentage Method").
TAXABLE DISTRIBUTIONS AND RECAPTURE. Prior to the 1996 Act, bad debt
reserves created prior to January 1, 1988 were subject to recapture into
taxable income should the Bank fail to meet certain thrift asset and
definitional tests. New federal legislation eliminated these thrift related
recapture rules. However, under current law, pre-1988 reserves remain subject
to recapture should the Bank make certain non-dividend distributions or cease
to maintain a bank charter.
At December 31, 1996 the Bank's total federal pre-1988 reserve was
approximately $30.0 million. This reserve reflects the cumulative effects of
federal tax deduction by the Bank for which no Federal income tax provision has
been made.
MINIMUM TAX. The Code imposes an alternative minimum tax ("AMT") at a
rate of 20% on a base of regular taxable income plus certain tax preferences
("alternative minimum taxable income" or "AMTI"). The AMT is payable to the
extent such AMTI is in excess of an exemption amount. Net operating losses can
offset no more than 90% of AMTI. Certain payments of alternative minimum tax
may be used as credits against regular tax liabilities in future years. The
Bank has not been subject to the alternative minimum tax and has no such
amounts available as credits for carryover.
NET OPERATING LOSS CARRYOVERS. A financial institution may carry back
net operating losses to the preceding three taxable years and forward to the
succeeding 15 taxable years. This provision applies to losses incurred in
taxable years beginning after 1986. At December 31, 1996, the Bank had no net
operating loss carryforwards for federal income tax purposes.
CORPORATE DIVIDENDS-RECEIVED DEDUCTION. The Company may exclude from
its income 100% of dividends received from the Bank as a member of the same
affiliated group of corporations. The corporate dividends-received deduction
is 80% in the case of dividends received from corporations with which a
corporate recipient does not file a consolidated tax return, and corporations
which own less than 20% of the stock of a corporation distributing a dividend
may deduct only 70% of dividends received or accrued on their behalf.
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STATE AND LOCAL TAXATION
NEW YORK STATE AND NEW YORK CITY TAXATION. The Company and the Bank
will report income on a combined calendar year basis to both New York State and
New York City. New York State Franchise Tax on corporations is imposed in an
amount equal to the greater of (a) 9% of "entire net income" allocable to New
York State (b) 3% of "alternative entire net income" allocable to New York
State (c) 0.01% of the average value of assets allocable to New York State or
(d) nominal minimum tax. Entire net income is based on federal taxable income,
subject to certain modifications. Alternative entire net income is equal to
entire net income without certain modifications. The New York City Corporation
Tax is imposed using similar alternative taxable income methods and rates.
A temporary Metropolitan Transportation Business Tax Surcharge on
Banking corporations doing business in the Metropolitan District has been
applied since 1982. The Bank transacts a significant portion of its business
within this District and is subject to this surcharge. For the tax year ended
December 31, 1996, the surcharge rate is 17% of the State franchise tax
liability. For 1996, an additional 2.5% tax surcharge on the New York State
Franchise Tax is also imposed on the Company. New York City does not impose
surcharges applicable to the Company.
Delaware State Taxation. As a Delaware holding company not earning
income in Delaware, the Company is exempt from Delaware corporate income tax
but is required to file an annual report with and pay an annual franchise tax
to the State of Delaware. The tax is imposed as a percentage of the capital
base of the Company with an annual maximum of $150,000.
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MANAGEMENT
MANAGEMENT OF THE COMPANY
The Board of Directors of the Company is divided into three classes,
each of which contains approximately one-third of the Board. The directors
shall be elected by the stockholders of the Company for staggered three year
terms, or until their successors are elected and qualified. One class of
directors, consisting of Messrs. Catell, Desai, Gelfman, Hamm and Hand has a
term of office expiring at the first annual meeting of stockholders, a second
class, consisting of Messrs. Archie, Elliott and MacKay and Mrs. Luke has a
term of office expiring at the second annual meeting of stockholders and a
third class, consisting of Messrs. Edelstein, Kolowsky, Morgano and Ratcliff
has a term of office expiring at the third annual meeting of stockholders.
Their names and biographical information are set forth under "- Management of
the Bank."
The following individuals are executive officers of the Company and
hold the offices set forth below opposite their names.
<TABLE>
<CAPTION>
EXECUTIVE POSITION HELD WITH COMPANY
------------------------------ -----------------------------------------------
<S> <C>
Charles J. Hamm Chairman of the Board, President and Chief
Executive Officer
Joseph S. Morgano Executive Vice President
Terence J. Mitchell Executive Vice President
John B. Zurell Executive Vice President - Accounting and
Financial Systems
Thomas J. Brady Senior Vice President and Treasurer
John K. Schnock Senior Vice President, Secretary and Counsel
</TABLE>
The executive officers of the Company are elected annually and hold
office until their respective successors have been elected and qualified or
until death, resignation or removal by the Board of Directors.
Information concerning the principal occupations, employment and
compensation of the directors and officers of the Company during the past five
years is set forth under "- Management of the Bank" and "- Executive Officers
Who Are Not Directors." Directors of the Company initially will not be
compensated by the Company but will serve and be compensated by the Bank. It
is not anticipated that separate compensation will be paid to directors of the
Company until such time as such persons devote significant time to the separate
management of the Company's affairs, which is not expected to occur until the
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Company becomes actively engaged in additional businesses other than holding
the stock of the Bank. The Company may determine that such compensation is
appropriate in the future.
MANAGEMENT OF THE BANK
The following table sets forth certain information regarding the Board
of Directors of the Bank.
<TABLE>
<CAPTION>
Positions Held
With Director
Name Age(1) the Bank Since
----------------------------------- ---------- ---------------------------------- ---------------
<S> <C> <C> <C>
Willard N. Archie 53 Director 1994
Robert B. Catell 60 Director 1984
Rohit M. Desai 58 Director 1992
Chaim Y. Edelstein 54 Director 1991
Donald H. Elliott 64 Director 1973
Robert W. Gelfman 65 Director 1988
Charles J. Hamm 59 Chairman of the Board, President 1975
and Chief Executive Officer
Scott M. Hand 54 Director 1987
Donald E. Kolowsky 64 Director 1989
Janine Luke 58 Director 1976
Malcolm MacKay 56 Director 1977
Joseph S. Morgano 65 Director, Executive Vice President 1996
and Mortgage Officer
Wesley D. Ratcliff 54 Director 1994
</TABLE>
- -------------------------------
(1) As of March 31, 1997.
Set forth below is information with respect to the principal
occupations during at least the last five years for the directors of the Bank.
Willard N. Archie. Mr. Archie is a certified public accountant and
Vice Chairman and Managing Partner of Mitchell & Titus, LLP, an accounting and
management consulting firm in New York City.
Robert B. Catell. Mr. Catell has been Chairman and Chief Executive
Officer of the Brooklyn Union Gas Company in Brooklyn, New York since May 1996.
Previously, Mr.
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<PAGE> 168
Catell was President and Chief Executive Officer of the Brooklyn Union Gas
Company. Mr. Catell also is a director of the Houston Exploration Company.
Rohit M. Desai. Mr. Desai is Chairman and President of Desai Capital
Management an investment management firm in New York City. Mr. Desai also
serves as a director of the Rouse Company, Sunglass Hut International and
Finlay Fine Jewelry.
Chaim Y. Edelstein. Mr. Edelstein has been self-employed as a retail
consultant since May 1995. Previously he served as a consultant to Federated
Department Stores from March 1994 through April 1995 and, from March 1992
through February 1994, as Chairman and Chief Executive Officer of A&S/Jordan
Marsh, a department store in Brooklyn, New York. Mr. Edelstein also is a
director of Hills Stores, Inc. and Carson Pirie Scott.
Donald H. Elliott. Mr. Elliott has been an attorney with, and of
counsel to, the law firm, Hollyer, Brady, Smith, Troxell, Barrett, Rocket,
Hines & Mone LLP, New York City, since September 1995. Previously, Mr. Elliott
was a partner with the law firm, Mudge Rose Guthrie Alexander & Ferdon LLP, New
York City. Mr. Elliott also is a director of the Brooklyn Union Gas Company.
Robert W. Gelfman. Mr. Gelfman is a partner with the law firm, Battle
Fowler LLP, a law firm in New York City.
Charles J. Hamm. Mr. Hamm has served as President of the Bank since
1985 and was elected Chief Executive Officer of the Bank in 1986. Mr. Hamm
also has served as Chairman of the Board of the Bank since 1996.
Scott M. Hand. Mr. Hand is President and a director of Inco Limited,
a mining company headquartered in Toronto, Canada.
Donald E. Kolowsky. Mr. Kolowsky has been retired since December
1991. Previously, Mr. Kolowsky was the President of the Special Chemicals Group
of Pfizer, Inc.
Janine Luke. Mrs. Luke has been a director of Windrove Service
Corporation, an investment advisory firm in New York City since January 1996.
Previously, until December 1995, Mrs. Luke was the President of Breecom Corp.,
an investment advisory firm.
Malcolm MacKay. Mr. MacKay is a Managing Director in Russell Reynolds
Associates, Inc., an executive placement firm in New York City. Mr. MacKay
also serves as a director of Empire Fidelity Life Insurance Company, Inc., a
subsidiary of Fidelity Investment Co.
Joseph S. Morgano. Mr. Morgano has served as Executive Vice President
and Mortgage Officer of the Bank since March 1993. Mr. Morgano has served in
various capacities in the mortgage area since joining the Bank in 1972.
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<PAGE> 169
Wesley D. Ratcliff. Mr. Ratcliff has been President and Chief
Executive Officer of Advanced Technological Solutions, Inc., an electronics
service provider located in Brooklyn, New York, since October 1993.
Previously, Mr. Ratcliff served as a plant manager for IBM Corporation.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Set forth below is information with respect to the principal
occupations during the last five years for the four executive officers of the
Bank who do not serve as directors.
Terence J. Mitchell. Age 44 years. Mr. Mitchell has been Executive
Vice President-Director of Marketing and Retail Banking of the Bank since
February 1995. Previously, Mr. Mitchell served as a Senior Vice President of
the Bank for Marketing and Retail Banking.
John B. Zurell. Age 55 years. Mr. Zurell has been Executive Vice
President-Financial Systems and Director of Commercial and Consumer Lending
since February 1994. Previously, he served as a Senior Vice President of the
Bank.
Thomas J. Brady. Age 62 years. Mr. Brady has been Senior Vice
President of the Bank since March 1993 and Treasurer of the Bank since
September 1991. Previously, Mr. Brady served in various positions since
joining the Bank in 1971.
John K. Schnock. Age 53 years. Mr. Schnock has been Senior Vice
President, Secretary and Counsel of the Bank since February 1996. Previously,
Mr. Schnock served as a Vice President and then First Vice President since
joining the Bank's Secretary and Counsel department in June 1992. Prior
thereto, Mr. Schnock was an attorney with the law firm of Bleakley Platt Remsen
Millham & Curran, New York, New York, from April 1990 to June 1992.
DIRECTORS' COMPENSATION
Members of the Bank's Board of Directors, except for Messrs. Hamm and
Morgano, receive $1,500 per meeting attended of the Board and $850 per
committee meeting attended. Board fees are subject to periodic adjustment by
the Board of Directors. In addition to fees paid to directors for Board and
committee meetings, the Bank's directors are expected to participate in the
Stock Option Plan and the Recognition Plan. See "- Benefits - Stock Option
Plan" and "- Recognition and Retention Plan."
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<PAGE> 170
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Determinations regarding compensation of the Bank's employees are made
by the Organization Committee of the Board of Directors. Mr. Hamm is a member
of the Organization Committee.
SUMMARY COMPENSATION TABLE
The following table sets forth a summary of certain information
concerning the compensation paid by the Bank (including amounts deferred to
future periods by the officers) for services rendered in all capacities during
the fiscal year ended March 31, 1997 to the President and Chief Executive
Officer of the Bank and the four other most highly compensated officers of the
Bank.
<TABLE>
<CAPTION>
====================================================================================================================================
Annual Compensation Long Term Compensation
---------------------------------- ------------------------------------------
Other Awards Payouts
Name and Fiscal Annual ------------------------------------------
Principal Position Year Salary(1) Bonus Compensation Securities LTIP All Other
(2) Restricted Underlying Payouts Compensation
Stock Options
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles J. Hamm
Chairman, President
and Chief
Executive Officer 1997 $488,463 $139,195 -- -- -- $145,070(3) $4,700(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph S. Morgano
Executive Vice
President and
Mortgage Officer 1997 238,500 66,278 -- -- -- 42,946(3) 4,700(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Terence J. Mitchell
Executive Vice
President-Director
of Marketing and
Retail
Banking 1997 152,327 38,214 -- -- -- 23,242(3) 5,117(4)
- ------------------------------------------------------------------------------------------------------------------------------------
John B. Zurell
Executive Vice
President-Financial
Systems and Director
of Commercial and
Consumer Lending 1997 193,646 46,746 -- -- -- 33,656(3) 4,868(4)
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Brady
Senior Vice
President
and Treasurer 1997 111,308 30,010 -- -- -- 19,159(3) 4,841(4)
====================================================================================================================================
</TABLE>
- --------------
(1) Does not include amounts deferred by an officer in prior years and
received by such officer in the current fiscal year.
(2) Does not include amounts attributable to miscellaneous benefits
received by the named executive officer. In the opinion of management
of the Bank, the costs to the Bank of providing such benefits to the
named executive officer during the year ended March 31, 1997 did not
exceed the lesser of $50,000 or 10% of the total of annual salary and
bonus reported for the individual.
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<PAGE> 171
- --------------
(3) Amount reflects one-third of an award received in April 1997 pursuant
to the Bank's Executive Long-Term Incentive Plan ("ELTIP"), which plan
was established in 1994 and provided for awards based upon the
attainment of certain pre-established performance goals and criteria
during the period from November 1, 1994 through December 31, 1996. In
April 1997 the Board of Directors determined to exclude the effect of
the one-time special SAIF assessment for purposes of the ELTIP.
(4) Consists of contributions to the Bank's 401(k) profit sharing plan,
the receipt of $1,000 face amount of 8% junior preferred stock of the
REIT and reimbursement of certain tax payments made by the named
executive officers.
REPORT OF INDEPENDENT COMPENSATION CONSULTANT
Pursuant to regulations of the Department governing the Conversion,
the Bank must obtain the opinion of an independent compensation consultant as
to whether or not the total compensation for the executive officers and
directors of the Bank, viewed as a whole and on an individual basis, is
reasonable and proper in comparison to the compensation provided to executive
officers and directors of similar publicly-traded financial institutions. The
Bank has obtained an opinion from _____________________, which indicates that,
based upon published professional survey data of similarly situated
publicly-traded financial institutions operating in the relevant markets as of
_______________, with respect to the total cash compensation (base salary and
annual incentive) for executive officers and total compensation for directors
of the Bank, such compensation, viewed as a whole and on an individual basis,
is reasonable and proper in comparison to the compensation provided to
similarly situated publicly-traded financial institutions, and that, with
respect to the amount of shares of Common Stock expected to be reserved under
the ESOP, the Recognition Plan and Stock Option Plan as a whole, such amounts
reserved for granting are reasonable in comparison to similar publicly-traded
financial institutions.
CHANGE IN CONTROL AGREEMENTS
The Company and the Bank collectively (the "Employers") will, upon
consummation of the Conversion, enter into Change in Control Agreements with
certain officers including Messrs. Hamm, Morgano, Mitchell, Zurell, Brady and
Schnock (the "Executives"). The Change in Control Agreements have terms of
three years, which term shall be extended each year for a successive additional
one-year period upon approval of the respective Board of Directors unless the
Executive elects, not less than 30 days prior to the annual anniversary date,
not to extend the term.
The Change in Control Agreements provide that if certain adverse
actions are taken with respect to the Executive's employment following a change
in control, as defined, of the Company or the Bank, the Executive will be
entitled to a cash severance amount equal to three times the Executive's annual
compensation. In addition, the Executive will be entitled
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<PAGE> 172
to a continuation of benefits similar to those he is receiving at the time of
such termination for the remaining term of the agreement or until he obtains
full-time employment with another employer.
A change in control is generally defined in the Change in Control
Agreements to include any change in control of the Company or the Bank required
to be reported under the federal securities laws, as well as (i) the
acquisition by any person of 25% or more of the Company's outstanding voting
securities and (ii) a change in a majority of the directors of the Company
during any two-year period without the approval of at least two-thirds of the
persons who were directors of the Company at the beginning of such period.
Each Change in Control Agreement with the Bank provides that if the
payments and benefits to be provided thereunder or otherwise upon termination
of employment are deemed to constitute a "parachute payment" within the meaning
of Section 280G of the Code, then the Executive would be reimbursed for any
excise tax liability pursuant to Sections 280G and 4999 of the Code and for any
additional income taxes imposed as a result of such reimbursement. Because the
amount of the payments and benefits that could constitute a parachute payment
is dependent upon the timing, price and structure of any change in control that
may occur in the future, it is not possible at this time to quantify the
severance benefits payable to an Executive under the employment agreements.
Although the above-described Change in Control Agreements could
increase the cost of any acquisition of control of the Company, management of
the Company does not believe that the terms thereof would have a significant
anti-takeover effect.
BENEFITS
EMPLOYEE STOCK OWNERSHIP PLAN. The Company has established the ESOP
for employees of the Company and the Bank to become effective upon the
Conversion. Full-time employees of the Company and the Bank who have been
credited with at least 1,000 hours of service during a twelve month period are
eligible to participate in the ESOP.
As part of the Conversion, in order to fund the purchase of up to 8%
of the Common Stock to be issued in the Conversion, it is anticipated that the
ESOP will borrow funds from the Company. It is anticipated that such loan will
equal 100% of the aggregate purchase price of the Common Stock acquired by the
ESOP. The loan to the ESOP will be repaid principally from the Company's and
the Bank's contributions to the ESOP over a period of 20 years, and the
collateral for the loan will be the Common Stock purchased by the ESOP. The
interest rate for the ESOP loan is expected to be a fixed rate of ____%. The
Bank also intends to use matching contributions made with respect to ESOP
participants' 401(k) profit sharing plan contributions to satisfy the ESOP loan
obligation. The Company may, in any plan year, make additional discretionary
contributions for the benefit of plan participants in either cash or shares of
Common Stock, which may be acquired through the purchase of outstanding shares
in the market or from individual stockholders, upon the original issuance of
additional shares by the Company or upon the sale of treasury shares by the
Company.
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<PAGE> 173
Such purchases, if made, would be funded through additional borrowings by the
ESOP or additional contributions from the Company. The timing, amount and
manner of future contributions to the ESOP will be affected by various factors,
including prevailing regulatory policies, the requirements of applicable laws
and regulations and market conditions.
Shares purchased by the ESOP with the proceeds of the loan will be
held in a suspense account and released to participants on a pro rata basis as
debt service payments are made. Shares released from the ESOP will be
allocated to the accounts of ESOP participants pursuant to two methods. First,
for each eligible ESOP participant, a portion of the shares released for the
plan year will be allocated to a special "matching" account under the ESOP
equal in value to the amount matching the contribution, if any, that such
participant would be entitled to under the terms of the Bank's 401(k) profit
sharing plan for the plan year. Second, the remaining shares which have been
released for the plan year will be allocated to each eligible participant's
general ESOP account based on the ratio of each such participant's base
compensation to the total base compensation of all eligible ESOP participants.
Forfeitures will be reallocated among remaining participating employees and may
reduce any amount the Company might otherwise have contributed to the ESOP.
The account balances of participants within the ESOP will become 50% vested if
the participant has at least two but less than three years of service and will
become 100% vested upon the completion of three years of service. Credit is
given for years of service with the Bank prior to adoption of the ESOP. In the
case of a "change in control," as defined, however, participants will become
immediately fully vested in their account balances. Benefits may be payable
upon retirement or separation from service. The Company's contributions to the
ESOP are not fixed, so benefits payable under the ESOP cannot be estimated.
Messrs. Catell, Gelfman and Desai will serve as trustees of the ESOP.
Under the ESOP, the trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of the participating employees, and
unallocated shares will be voted in the same ratio on any matter as those
allocated shares for which instructions are given.
See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Impact Accounting Pronouncements" for a discussion of
SOP 93-6, which addresses the measure of compensation expense recorded by
employers for leveraged ESOPs from the cost of ESOP shares to the fair value of
ESOP shares.
GAAP requires that any third party borrowing by the ESOP be reflected
as a liability on the Company's statement of financial condition. Since the
ESOP is borrowing from the Company, such obligation is not treated as a
liability, but will be excluded from stockholders' equity. If the ESOP
purchases newly issued shares from the Company, total stockholders' equity
would neither increase nor decrease, but per share stockholders' equity and per
share net earnings would decrease as the newly issued shares are allocated to
the ESOP participants.
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<PAGE> 174
The ESOP will be subject to the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and the
regulations of the IRS and the Department of Labor thereunder.
STOCK OPTION PLAN. Following consummation of the Conversion, the
Board of Directors of the Company intends to adopt a Stock Option Plan, which
will be designed to attract and retain qualified personnel in key positions,
provide directors, officers and key employees with a proprietary interest in
the Company as an incentive to contribute to the success of the Company and
reward key employees for outstanding performance. The Stock Option Plan will
provide for the grant of incentive stock options intended to comply with the
requirements of Section 422 of the Code ("incentive stock options"),
non-incentive or compensatory stock options, stock appreciation rights and
limited rights which will be exercisable only upon a change in control of the
Company or the Bank (collectively "Awards"). Awards may be granted to
directors and key employees of the Company and any subsidiaries. The Stock
Option Plan will be administered and interpreted by a committee of the Board of
Directors ("Committee"). Unless sooner terminated, the Stock Option Plan shall
continue in effect for a period of 10 years from the date the Stock Option Plan
is adopted by the Board of Directors. Subject to any applicable Department and
FDIC regulations, upon exercise of "Limited Rights" in the event of a change in
control, the employee will be entitled to receive a lump sum cash payment equal
to the difference between the exercise price of the related option and the fair
market value of the shares of common stock subject to the option on the date of
exercise of the right in lieu of purchasing the stock underlying the option.
Under the Stock Option Plan, the Committee will determine which
directors, officers and key employees will be granted Awards, whether options
will be incentive or compensatory options, the number of shares subject to each
Award, the exercise price of each option, whether options may be exercised by
delivering other shares of Common Stock and when such options become
exercisable. The per share exercise price of an incentive stock option must at
least equal the fair market value of a share of Common Stock on the date the
option is granted (110% of fair market value in the case of incentive stock
options granted to employees who are 5% stockholders). The granting or vesting
of stock options may be conditioned upon the achievement of individual or
company-wide performance goals, which could include goals such as the
achievement by the Company or the Bank of specified levels of net income, asset
growth, return on assets, return on equity or other specific performance goals.
At a meeting of stockholders of the Company following the Conversion,
which under applicable Department regulations may be held no earlier than six
months after the completion of the Conversion, the Board of Directors intends
to present the Stock Option Plan to stockholders for approval and to reserve an
amount equal to 10% of the shares of Common Stock issued in the Offerings (or
4,398,148 shares based upon the issuance of 43,981,481 shares), for issuance
under the Stock Option Plan. Department regulations provide that, in the event
such plan is implemented within the one year following the Conversion, no
individual officer or employee of the Bank may receive more than 25% of
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<PAGE> 175
the options granted under the Stock Option Plan and non-employee directors may
not receive more than 5% individually, or 30% in the aggregate of the options
granted under the Stock Option Plan. Department and FDIC regulations also
provide that exercise price of any options granted under any such plan must be
the fair market value of the Common Stock as of the date of grant. Each stock
option or portion thereof will be exercisable at any time on or after it vests
and will be exercisable until 10 years after its date of grant or for periods
of up to one year following the death, disability or other termination of the
optionee's employment or service as a director. However, failure to exercise
incentive stock options within three months after the date on which the
optionee's employment terminates may result in adverse tax consequences to the
optionee.
At the time an Award is granted pursuant to the Stock Option Plan, the
recipient will not be required to make any payment in consideration for such
grant. With respect to incentive or compensatory stock options, the optionee
will be required to pay the applicable exercise price at the time of exercise
in order to receive the underlying shares of Common Stock. The shares reserved
for issuance under the Stock Option Plan may be authorized but previously
unissued shares, treasury shares, or shares purchased by the Company on the
open market or from private sources. In the event of a stock split, reverse
stock split or stock dividend, the number of shares of Common Stock under the
Stock Option Plan, the number of shares to which any Award relates and the
exercise price per share under any option or stock appreciation right shall be
adjusted to reflect such increase or decrease in the total number of shares of
Common Stock outstanding. In the event the Company declares a special cash
dividend or return of capital following the implementation of the Stock Option
Plan in an amount per share which exceeds 10% of the fair market value of a
share of Common Stock as of the date of declaration, the per share exercise
price of all previously granted options which remain unexercised as of the date
of such declaration shall, subject to certain limitations, be proportionately
adjusted to give effect to such special cash dividend or return of capital as
of the date of payment of such special cash dividend or return of capital.
Under current provisions of the Code, the federal income tax treatment
of incentive stock options and compensatory stock options is different. As
regards incentive stock options, an optionee who meets certain holding period
requirements will not recognize income at the time the option is granted or at
the time the option is exercised, and a federal income tax deduction generally
will not be available to the Company at any time as a result of such grant or
exercise. With respect to compensatory stock options, the difference between
the fair market value on the date of exercise and the option exercise price
generally will be treated as compensation income upon exercise, and the Company
will be entitled to a deduction in the amount of income so recognized by the
optionee. Upon the exercise of a stock appreciation right, the holder will
realize income for federal income tax purposes equal to the amount received by
him, whether in cash, shares of stock or both, and the Company will be entitled
to a deduction for federal income tax purposes in the same amount.
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<PAGE> 176
It is currently expected that 30% of the shares available under the
Stock Option Plan will be granted to non-employee directors, with each
non-employee director receiving an option for the same number of shares, in
which event options for a total of approximately 137,941 shares would be
granted to each of the eleven non-employee directors if the amount of Common
Stock sold in the Conversion is equal to the maximum of the Estimated Valuation
Range. In addition, the Stock Option Plan will provide that no individual
officer will be able to receive stock options for more than 25% of the shares
available under the Stock Option Plan, or 1,264,467 shares if the amount of
Common Stock sold in the Conversion is equal to the maximum of the Valuation
Range, vesting over a five-year period (or 252,893 shares per year based upon
the maximum of the Valuation Range).
RECOGNITION PLAN. Following consummation of the Conversion, the Board
of Directors of the Company intends to adopt a Recognition Plan for directors,
officers and employees. The objective of the Recognition Plan will be to
enable the Company to provide directors, officers and employees with a
proprietary interest in the Company as an incentive to contribute to its
success. The Company intends to present the Recognition Plan to stockholders
for their approval at a meeting of stockholders which, pursuant to applicable
Department regulations, may be held no earlier than six months subsequent to
completion of the Conversion.
The Recognition Plan will be administered by a committee of the Board
of Directors, which will have the responsibility to invest all funds
contributed to the trust created for the Recognition Plan (the "Trust"). The
Company will contribute sufficient funds to the Trust so that the Trust can
purchase, following the receipt of stockholder approval, a number of shares
equal to an aggregate of 4% of the Common Stock sold in the Conversion
(2,023,148 shares, based on the sale of 50,578,704 shares at the maximum of the
Valuation Range). Shares of Common Stock granted pursuant to the Recognition
Plan generally will be in the form of restricted stock vesting at the rate of
20% per year over the five years following the date of grant. For accounting
purposes, compensation expense in the amount of the fair market value of the
Common Stock at the date of the grant to the recipient will be recognized pro
rata over the period during which the shares are payable. A recipient will be
entitled to all voting and other stockholder rights, except that the shares,
while restricted, may not be sold, pledged or otherwise disposed of and are
required to be held in the Trust. Under the terms of the Recognition Plan,
recipients of awards will be entitled to instruct the trustee of the
Recognition Plan as to how the underlying shares should be voted, and the
trustee will be entitled to vote all unallocated shares in its discretion. If
a recipient's employment is terminated as a result of death or disability, all
restrictions will expire and all allocated shares will become unrestricted.
The Board of Directors of the Company can terminate the Recognition Plan at any
time, and if it does so, any shares not allocated will revert to the Company.
Recipients of grants under the Recognition Plan will not be required to make
any payment at the time of grant or when the underlying shares of Common Stock
become vested, other than payment of withholding taxes.
It is currently expected that 30% of the shares available under the
Recognition Plan will be granted to non-employee directors, with each
non-employee director receiving an
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<PAGE> 177
award for the same number of shares, in which event awards for a total of
approximately 55,176 shares would be granted to each of the eleven non-employee
directors if the amount of Common Stock sold in the Conversion is equal to the
maximum of the Estimated Valuation Range. In addition, the Recognition Plan
will provide that no individual officer will be able to receive an award for
more than 25% of the shares available under the Recognition Plan, or 505,787
shares if the amount of Common Stock sold in the Conversion is equal to the
maximum of the Valuation Range, vesting over a five-year period (or 101,157
shares per year based upon the maximum of the Valuation Range).
RETIREMENT PLAN. The Bank maintains a non-contributory, tax-qualified
defined benefit pension plan (the "Retirement Plan") for eligible employees.
All salaried employees at least age 21 who have completed at least one year of
service are eligible to participate in the Retirement Plan. The Retirement
Plan provides for a benefit for each participant, including executive officers
named in the Executive Compensation Table above, equal to 2% of the
participant's final average compensation (average W-2 compensation during the
highest 60 months of employment) multiplied by the participant's years (and any
fraction thereof) of eligible employment (up to a maximum of 30 years). A
participant is fully vested in his or her benefit under the Retirement Plan
after five years of service. The Retirement Plan is funded by the Bank on a
actuarial basis and all assets are held in trust by the Retirement Plan
trustee.
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<PAGE> 178
The following table illustrates the annual benefit payable upon normal
retirement at age 65 (in single life annuity amounts with no offset for Social
Security benefits) at various levels of compensation and years of service under
the Retirement Plan and the Supplemental Executive Retirement Plan ("SERP")
maintained by the Bank.
<TABLE>
<CAPTION>
Years of Service
------------------------------------------------------------------------
Remuneration 15 20 25 30 35
------------ ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 $37,500 $50,000 $62,500 $75,000 $75,000
150,000 45,000 60,000 75,000 90,000 90,000
175,000 52,500 70,000 87,500 105,000 105,000
200,000 60,000 80,000 100,000 120,000 120,000
225,000 67,500 90,000 112,500 135,000 135,000
250,000 75,000 100,000 125,000 150,000 150,000
300,000 90,000 120,000 150,000 180,000 180,000
400,000 120,000 160,000 200,000 240,000 240,000
450,000 135,000 180,000 225,000 270,000 270,000
500,000 150,000 200,000 250,000 300,000 300,000
600,000 180,000 240,000 300,000 360,000 360,000
</TABLE>
- -------------------
(1) The annual retirement benefits shown in the table do not reflect a
deduction for Social Security benefits and there are no other offsets
to benefits.
(2) For the fiscal year of the Retirement Plan beginning on January 1,
1996, the average final compensation for computing benefits under the
Retirement Plan cannot exceed $150,000 (as adjusted for subsequent
years pursuant to Code provisions). Benefits in excess of the
limitation are provided through the SERP.
(3) For the fiscal year of the Retirement Plan beginning on January 1,
1996, the maximum annual benefit payable under the Retirement Plan
cannot exceed $120,000 (as adjusted for subsequent years pursuant to
Code provisions).
(4) The maximum years of service credited for benefit purposes is 30
years.
The following table sets forth the years of credited service and the
average annual earnings (as defined above) determined as of December 31, 1996,
the end of the 1996 plan year, for each of the individuals named in the
Executive Compensation Table.
<TABLE>
<CAPTION>
Years of Average Annual
Credited Earnings
Service
------------- -----------------
<S> <C> <C>
Charles J. Hamm............................ 12 years $473,475
Joseph S. Morgano.......................... 24 years 236,354
Terence J. Mitchell........................ 22 years 126,525
John B. Zurell............................. 24 years 179,480
Thomas K. Brady............................ 26 years 103,114
</TABLE>
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<PAGE> 179
401(k) PLAN. The Bank maintains the 401(k) Plan, which is a
tax-qualified defined contribution plan which permits salaried employees with
at least one year of service to make pre-tax salary deferrals under section
401(k) of the Code. Salary deferrals are made by the election and are limited
to 15% of compensation up to $9,500 (for 1996). The Bank generally makes
matching contributions equal to 100% of deferred amounts up to 6% of salary,
with an annual limit of $3,000. Employees are fully vested in their salary
deferrals, and become 50% vested in the Bank's contribution after two years of
employment and 100% vested after three years of employment. The 401(k) Plan
provides that employees select the investment of their accounts among several
options.
The Bank has amended the 401(k) Plan in connection with the Conversion
to provide for option to invest 401(k) Plan assets in Common Stock. In
addition, participating employees may elect to invest all or any part of their
401(k) Plan account balances in Common Stock. Common Stock held by the 401(k)
Plan may be newly issued or treasury shares acquired from the Company or
outstanding shares purchased on the open market or in privately negotiated
transactions. All Common Stock held by the 401(k) Plan will be held by an
independent trustee and allocated to the accounts of individual participants.
Participants will control the exercise of voting and tender rights relating to
the Common Stock held in their accounts.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. The Bank has adopted the SERP
to provide for eligible employees benefits that would be due under its
Retirement Plan, if such benefits were not limited under the
Code. SERP benefits provided with respect to the Retirement Plan are reflected
in the pension table. The Board of Directors of the Bank intends to adopt an
amendment to the SERP to provide eligible employees with benefits that would be
due under the ESOP if such benefits were not limited under the Code.
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THE CONVERSION
THE BOARD OF TRUSTEES OF THE MUTUAL HOLDING COMPANY AND THE BOARDS OF
DIRECTORS OF THE BANK AND THE COMPANY HAVE ADOPTED THE PLAN OF CONVERSION. THE
MUTUAL HOLDING COMPANY, AS THE SOLE SHAREHOLDER OF THE BANK, HAS ALSO APPROVED
THE PLAN. SUBJECT TO APPROVAL BY THE ELIGIBLE ACCOUNT HOLDERS AND THE
SATISFACTION OF CERTAIN OTHER CONDITIONS, THE DEPARTMENT HAS APPROVED THE PLAN.
THE APPROVAL BY THE DEPARTMENT HOWEVER, DOES NOT CONSTITUTE A RECOMMENDATION OR
ENDORSEMENT OF THE PLAN BY THE DEPARTMENT.
GENERAL
The Board of Trustees of the Mutual Holding Company and the Board of
Directors of the Bank unanimously adopted the Plan on April 18, 1997. The Plan
has been approved by the Department and the Bank and Mutual Holding Company
have received a notice of intent not to object to the Plan from the FDIC,
subject to, among other things, approval of the Plan by the Eligible Account
Holders and by the Mutual Holding Company, as the sole stockholder of the Bank.
The Special Meeting has been called for Eligible Account Holders' consideration
of the Plan on ________________, 1997.
The following is a brief summary of pertinent aspects of the Plan and
the Conversion. The summary is qualified in its entirety by reference to the
provisions of the Plan. A copy of the Plan is available from the Bank upon
written request and is available for inspection at the offices of the Bank and
at the offices of the Department. The Plan also is filed as an exhibit to the
Registration Statement of which this Prospectus is a part, copies of which may
be obtained from the SEC. See "Additional Information."
PURPOSES OF THE CONVERSION
The Mutual Holding Company, as a New York-chartered mutual holding
company, does not have stockholders and has no authority to issue capital
stock. As a result of the Conversion, the Company will be structured in the
form used by holding companies of commercial banks, most business entities and
a growing number of savings institutions. While the existing mutual holding
company organization provides greater structural flexibility than a mutual
saving association, the stock holding company form of organization will provide
the organization with the greater ability to diversify its business activities
through acquisitions or otherwise as well as diversification into other
businesses. Although there are no current arrangements, understandings or
agreements regarding any such opportunities, the Company and the Bank will be
in a position after the Conversion, subject to regulatory limitations and the
Company's financial position, to take advantage of any such opportunities that
may arise.
The Conversion also will be important to the future growth and
performance of the holding company organization by providing a larger capital
base to support the operations of the Bank and to sustain its continued growth
and development over the long term while maintaining its status as a
community-based, independent financial institution serving
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Brooklyn, Queens and the greater New York City metropolitan area. The
Conversion will also enhance the organization's future access to capital
markets and its ability to diversify into other financial service-related
activities and to provide services to the public. Although the Bank currently
has the ability to raise additional capital through the sale of shares of Bank
common stock, that ability is limited by the mutual holding company structure
which, among other things, requires that the Mutual Holding Company hold a
majority of the outstanding shares of Bank common stock.
The Conversion also will result in a larger number of outstanding
shares of Common Stock following the Conversion as compared to the number of
outstanding shares of Bank Common Stock that would be outstanding if the Bank
had determined to pursue a public offering of Bank Common Stock within the
mutual holding company structure. The larger number of outstanding shares will
increase the likelihood of the development of an active and liquid trading
market for the Common Stock. See "Market for Common Stock."
In furtherance of the Bank's commitment to the community which it
serves, the Plan provides for the establishment of the Foundation as part of
the Conversion. As is described in greater detail in the following section,
the Foundation is intended to complement the Bank's existing community
reinvestment activity and is a means of establishing a common bond between the
Bank and the communities that it serves and thereby enable such communities to
share in the growth and profitability of the Company over the long term.
Consistent with the Bank's goal, the Company intends to donate to the
Foundation immediately following the Conversion a number of shares of its
authorized, but unissued Common Stock, in an amount equal to 8% of the number
of shares of Common Stock issued in the Conversion.
In light of the foregoing, the Board of Directors of the Bank and the
Board of Trustees of the Mutual Holding Company believe that the Conversion is
in the best interests of such companies as well as in the best interests of the
Bank's depositors, employees, customers and the community historically served
by the Bank.
ESTABLISHMENT OF THE FOUNDATION
GENERAL. In furtherance of the Bank's commitment to the communities
that it serves, the Plan of Conversion provides for the establishment of a
charitable foundation in connection with the Conversion. The Plan provides
that the Bank and the Company will establish the Foundation, which will be
incorporated under Delaware law as a non-stock corporation, and will fund the
Foundation with Common Stock of the Company. The Company and the Bank believe
that the funding of the Foundation with Common Stock of the Company is a means
of establishing a common bond between the Bank and its community and thereby
enables the Bank's community to share in the growth and success of the Company
over the long term. By further enhancing the Bank's visibility and reputation
in the communities that it serves, the Bank believes that the Foundation will
enhance the long-term value of the Bank's community banking franchise. The
Foundation
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will be dedicated to charitable purposes within the communities served by the
Bank, including community development activities.
PURPOSE OF THE FOUNDATION. The purpose of the Foundation is to
provide funding to support charitable causes and community development
activities. In recent years, the Bank has emphasized community lending and
community development activities within the communities that it serves. The
Foundation is being formed as a complement to the Bank's existing community
activities, not as a replacement for such activities. While the Bank intends
to continue to emphasize community lending and community development activities
following the Conversion, such activities are not the Bank's sole corporate
purpose. The Foundation, conversely, will be completely dedicated to community
activities and the promotion of charitable causes, and may be able to support
such activities in ways that are not currently available to the Bank. The Bank
believes that the Foundation will enable the Company and the Bank to assist
their local community in areas beyond community development and lending. The
Bank believes the establishment of the Foundation will enhance its current
activities under the CRA. In this regard, the Board of Directors believes the
establishment of a charitable foundation is consistent with the Bank's
commitment to community service. The Board further believes that the funding
of the Foundation with Common Stock of the Company is a means of enabling the
communities served by the Bank to share in the growth and success of the
Company long after completion of the Conversion. The Foundation will accomplish
that goal by providing for continued ties between the Foundation and Bank,
thereby forming a partnership with the Bank's community. The establishment of
the Foundation will also enable the Company and the Bank to develop a unified
charitable donation strategy and will centralize the responsibility for
administration and allocation of corporate charitable funds. Charitable
foundations have been formed by other financial institutions for this purpose,
among others. The Bank, however, does not expect the contribution to the
Foundation to take the place of the Bank's traditional community lending
activities.
STRUCTURE OF THE FOUNDATION. The Foundation will be incorporated
under Delaware law as a non-stock corporation. Pursuant to the Foundation's
Bylaws, the Foundation's initial Board of Directors will be comprised of
seventeen members, thirteen of whom are existing directors and officers of the
Company, and four other individuals chosen in light of their commitment and
service to charitable and community purposes. A Nominating Committee of the
Foundation's Board, which is to be comprised of a minimum of three members of
the Board, will nominate individuals eligible for election to the Board of
Directors. The members of the Foundation, who are comprised of its Board
members, will elect the directors at the annual meeting of the Foundation from
those nominated by the Nominating Committee. Only persons serving as directors
of the Foundation qualify as members of the Foundation, with voting authority.
Directors will be divided into three classes with each class appointed for
three-year terms. The certificate of incorporation of the Foundation provides
that the corporation is organized exclusively for charitable purposes,
including community development, as set forth in Section 501(c)(3) of the Code.
The Foundation's certificate of incorporation further provides that no part of
the net earnings of the Foundation will inure to the benefit of, or be
distributable to its directors, officers or members.
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The authority for the affairs of the Foundation will be vested in the
Board of Directors of the Foundation. The Directors of the Foundation will be
responsible for establishing the policies of the Foundation will respect to
grants or donations by the Foundation, consistent with the purposes for which
the Foundation was established. Although no formal policy governing Foundation
grants exists at this time, the Foundation's Board of Directors will adopt such
a policy upon establishment of the Foundation. As directors of a nonprofit
corporation, directors of the Foundation will at all times be bound by their
fiduciary duty to advance the Foundation's charitable goals, to protect the
assets of the Foundation and to act in a manner consistent with the charitable
purpose for which the Foundation is established. The Directors of the
Foundation will also be responsible for directing the activities of the
Foundation, including the management of the Common Stock of the Company held by
the Foundation. However, it is expected that as a condition to receiving the
non-objection of the FDIC to the Bank's Conversion, that the Foundation will be
required to commit to the FDIC that all shares of Common Stock held by the
Foundation will be voted in the same ratio as all other shares of the Company's
Common Stock on all proposals considered by stockholders of the Company;
provided, however, that, consistent with the such expected condition, the FDIC
would waive this voting restriction under certain circumstances if compliance
with the voting restriction would: (i) cause a violation of the law of the
State of Delaware; (ii) would cause the Foundation to lose its tax-exempt
status, or cause the Internal Revenue Service to deny the Foundation's request
for a determination that it is an exempt organization or otherwise have a
material and adverse tax consequence on the Foundation; or (iii) would cause
the Foundation to be subject to an excise tax under Section 4941 of the Code.
In order for the FDIC to waive such voting restriction, the Company's or the
Foundation's legal counsel would be required to render an opinion satisfactory
to the FDIC that compliance with the voting requirement would have the effect
described in clauses (i), (ii) or (iii) above. Under those circumstances, the
FDIC would grant a waiver of the voting restriction upon submission of such
legal opinions(s) by the Company or the Foundation that are satisfactory to the
FDIC. In the event that the FDIC were to waive the voting requirement, the
directors would direct the voting of the Common Stock held by the Foundation.
The Foundation's place of business will be located at the Bank's
administrative offices and initially the Foundation is expected to have no
employees but will utilize the members of the staff of the Company or the Bank.
The Board of Directors of the Foundation will appoint such officers as may be
necessary to manage the operations of the Foundation. In this regard, it is
expected that the Bank will be required to provide the FDIC with a commitment
that, to the extent applicable, the Bank will comply with the affiliate
restrictions set forth in Sections 23A and 23B of the Federal Reserve Act with
respect to any transactions between the Bank and the Foundation.
The Company intends to capitalize the Foundation with Common Stock of
the Company in an amount equal to 8.0% of the total amount of the Common Stock
to be sold in connection with the Conversion. At the minimum, midpoint and
maximum of the Estimated Price Range, the contribution to the Foundation would
equal 2,990,740, 3,518,518 and 4,046,296 shares, which would have a market
value of $29.9 million, $35.2 million and
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$40.5 million, respectively, assuming the Purchase Price of $10.00 per share.
The Company and the Bank determined to fund the Foundation with Common Stock
rather than cash because it desired to form a bond with the communities it
serves in a manner that would allow them to share in the growth and success of
the Company and the Bank over the long term. The funding of the Foundation
with stock also provides the Foundation with a potentially larger endowment
than if the Company contributed cash to the Foundation since, as a stockholder,
the Foundation will share in the growth and success of the Company. As such,
the contribution of Common Stock to the Foundation has the potential to provide
a self-sustaining funding mechanism which reduces the amount of cash that the
Company, if it were not making the stock donation, would have to contribute to
the Foundation in future years in order to maintain a level amount of
charitable grants and donations.
The Foundation will receive working capital from any dividends that
may be paid on the Common Stock in the future, and subject to applicable
federal and state laws, loans collateralized by the Common Stock or from the
proceeds of the sale of any of the Common Stock in the open market from time to
time as may be permitted to provide the Foundation with additional liquidity.
As a private foundation under Section 501(c)(3) of the Code, the Foundation
will be required to distribute annually in grants or donations, a minimum of 5%
of the average fair market value of its net investment assets. One of the
conditions imposed on the gift of Common Stock by the Company is that the
amount of Common Stock that may be sold by the Foundation in any one year shall
not exceed 5% of the average market value of the assets held by the Foundation,
except where the Board of Directors of the Foundation determines that the
failure to sell an amount of common stock greater than such amount would result
in a longer-term reduction of the value of the Foundation's assets and as such
would jeopardize the Foundation's capacity to carry out its charitable
purposes. Upon completion of the Conversion and the contribution of shares to
the Foundation immediately following the Conversion, the Company would have
40,374,999, 47,499,999 and 54,625,000 shares issued and outstanding at the
minimum, midpoint and maximum of the Estimated Price Range. Because the
Company will have an increased number of shares outstanding, the voting and
ownership interests of shareholders in the Company's Common Stock would be
diluted by 7.4%, as compared to their interests in the Company if the
Foundation was not established. For additional discussion of the dilutive
effect, see "Pro Forma Data."
TAX CONSIDERATIONS. The Company and the Bank have been advised by
their independent tax advisors that an organization created and operated for
the above charitable purposes would generally qualify as a Section 501(c)(3)
exempt organization under the Code, and further that such an organization would
likely be classified as a private foundation. This opinion presumes that the
Foundation will submit a timely request to the IRS to be recognized as an
exempt organization. As long as the Foundation files its application for
recognition of tax-exempt status within 15 months from the date of its
organization, and provided the IRS approves the application, the effective date
of the Foundation's status as a Section 501(c)(3) organization will be the date
of its organization. The Company's and the Bank's independent tax advisor,
however, has not rendered any advice on the condition to the contribution to be
agreed to by the Foundation which requires that all shares of Common Stock of
the Company held by the Foundation must be voted in the same ratio as all other
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outstanding shares of Common Stock of the Company on all proposals considered
by stockholders of the Company. Consistent with the expected condition, in the
event that the Company or the Foundation receives an opinion of its legal
counsel that compliance with this voting restriction would have the effect of
causing the Foundation to lose its tax-exempt status or otherwise have a
material and adverse tax consequence on the Foundation, or subject the
Foundation to an excise tax under Section 4941 of the Code, it is expected that
the FDIC would waive such voting restriction upon submission of a legal
opinion(s) by the Company or the Foundation satisfactory to the FDIC. See
"--Regulatory Conditions Imposed on the Foundation."
Under Delaware law, the Company is authorized by statute to make
charitable contributions and case law has recognized the benefits of such
contributions to a Delaware corporation. In this regard, Delaware case law
provides that a charitable gift must be within reasonable limits as to amount
and purpose to be valid. Under the Code, the Company is generally allowed a
deduction for charitable contributions made to qualifying donees within the
taxable year of up to 10% of its taxable income (with certain modifications)
for such year. Charitable contributions made by the Company in excess of the
annual deductible amount will be deductible over each of the five succeeding
taxable years, subject to certain limitations. The Company and the Bank
believe that the Conversion presents a unique opportunity to establish and fund
a charitable foundation given the substantial amount of additional capital
being raised in the Conversion. In making such a determination, the Company
and the Bank considered the dilutive impact of the contribution of Common Stock
to the Foundation on the amount of Common Stock available to be offered for
sale in the Conversion. Based on such consideration, the Company and Bank
believe that the contribution to the Foundation in excess of the 10% annual
deduction limitation is justified given the Bank's capital position and its
earnings, the substantial additional capital being raised in the Conversion and
the potential benefits of the Foundation to the communities served by the Bank.
In this regard, assuming the sale of the Common Stock at the midpoint of the
Estimated Price Range, the Company would have pro forma stockholders' equity of
$701.3 million or 17.0% of pro forma consolidated assets and the Bank's pro
forma leverage and total risk-based capital ratios would be 11.08% and 18.06%,
respectively. See "Regulatory Capital Compliance," "Capitalization," and
"Comparison of Valuation and Pro Forma Information with No Foundation." Thus,
the amount of the contribution will not adversely impact the financial
condition of the Company and the Bank and the Company and the Bank therefore
believe that the amount of the charitable contribution is reasonable given the
Company's and the Bank's pro forma capital positions. As such, the Company and
the Bank believe that the contribution does not raise safety and soundness
concerns.
The Company and the Bank have received an opinion of their independent
tax advisors that the Company's contribution of its own stock to the Foundation
would not constitute an act of self-dealing, and that the Company will be
entitled to a deduction in the amount of the fair market value of the stock at
the time of the contribution, subject to the annual deduction limitation
described above. The Company, however, would be able to carry forward any
unused portion of the deduction for five years following the contribution,
subject to certain limitations. The Company's and the Bank's independent tax
advisor, however, has not rendered advice as to fair market value for purposes
of determining the amount of the tax deduction. If the Foundation would have
been established in fiscal 1997, the Company would have received a tax benefit
of approximately $16.5 million (based on the
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Bank's pre-tax income for fiscal 1997, an assumed marginal tax rate of 47% and
a deduction for the contribution of Common Stock equal to $35.2 million). The
Company is permitted under the Code to carry over the excess contribution over
the five-year period following the contribution to the Foundation. Assuming
the close of the Offering at the midpoint of the Estimated Price Range, the
Company estimates that all of the deduction should be deductible over the
six-year period. Neither the Company nor the Bank expect to make any further
contributions to the Foundation within the first five years following the
initial contribution. After that time, the Company and the Bank may consider
future contributions to the Foundation. Any such decisions would be based on
an assessment of, among other factors, the financial condition of the Company
and the Bank at that time, the interests of shareholders and depositors of the
Company and the Bank, and the financial condition and operations of the
Foundation.
Although the Company and the Bank have received an opinion of their
independent tax advisors that the Company is entitled to a deduction for the
charitable contribution, there can be no assurances that the IRS will recognize
the Foundation as a Section 501(c)(3) exempt organization or that a deduction
for the charitable contribution will be allowed. In such event, the Company's
tax benefit related to the contribution to the Foundation would be expensed
without tax benefit, resulting in a reduction in earnings in the year in which
the IRS makes such a determination. See "Risk Factors--Establishment of the
Foundation."
As a private foundation, earnings and gains, if any, from the sale of
Common Stock or other assets are generally exempt from federal and state
corporate income taxation. However, investment income, such as interest,
dividends and capital gains, of a private foundation will generally be subject
to a federal excise tax of 2.0%. The Foundation will be required to make an
annual filing with the IRS within four and one-half months after the close of
the Foundation's fiscal year to maintain its tax-exempt status. The Foundation
will be required to publish a notice that the annual information return will be
available for public inspection for a period of 180 days after the date of such
public notice. The information return for a private foundation must include,
among other things, an itemized list of all grants made or approved, showing
the amount of each grant, the recipient, any relationship between a grant
recipient and the Foundation's managers and a concise statement of the purpose
of each grant. The Foundation will also be required to file an annual report
with the Charities Bureau of the Office of the Attorney General of the State of
New York.
REGULATORY CONDITIONS IMPOSED ON THE FOUNDATION. Establishment of
the Foundation is expected to be subject to the following conditions being
agreed to by the Foundation in writing as a condition to receiving the FDIC's
non-objection of the Conversion: (i) the Foundation will be subject to
examination by the FDIC; (ii) the Foundation must comply with supervisory
directives imposed by the FDIC; (iii) the Foundation will operate in accordance
with written policies adopted by the Board of Directors, including a conflict
of interest policy; and (iv) any shares of Common Stock held by the Foundation
must be voted in the same ratio as all other outstanding shares of Common Stock
all proposals considered by stockholders of the Company; provided, however,
that, consistent with the condition, the FDIC would waive this voting
restriction
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under certain circumstances if compliance with the voting restriction would:
(a) cause a violation of the law of the State of Delaware; (b) would cause the
Foundation to lose its tax-exempt status or otherwise have a material and
adverse tax consequence on the Foundation; or (c) would cause the Foundation to
be subject to an excise tax under Section 4941 of the Code. In order for the
FDIC to waive such voting restriction, the Company's or the Foundation's legal
counsel would be required to render an opinion satisfactory to the FDIC. There
can be no assurances that a legal opinion addressing these issues could be
rendered, or if rendered, that the FDIC would grant an unconditional waiver of
the voting restriction. In no event would the voting restriction survive the
sale of shares of the Common Stock held by the Foundation.
DESCRIPTION OF THE CONVERSION
On April 18, 1997, the Board of Directors of the Bank and the Board of
Trustees of the Mutual Holding Company adopted the Plan and in June 1997 the
Bank incorporated the Company under Delaware law for the purpose of holding all
of the capital stock of the Bank and in order to facilitate the Conversion.
Pursuant to the Plan, (i) the Mutual Holding Company will convert to the stock
form of organization and simultaneously will merge with and into the Bank and
all of the outstanding shares of Bank common stock held by the Mutual Holding
Company will be cancelled. Pursuant to the Plan, the Company is offering
shares of Common Stock in the Offering as part of the Conversion. Upon
consummation of the Offerings, the Company will purchase from the Bank all of
the Bank's common stock issued in the Conversion and the Bank will become a
wholly owned subsidiary of the Company operating under the name "Independence
Savings Bank."
In accordance with Department and FDIC regulations, consummation of
the Conversion (including the offering of Common Stock in the Offerings, as
described below) is conditioned upon the approval of the Plan by the Department
and the non-objection of the FDIC, as well as the approval of at least (1)
seventy-five percent (75%) in amount of deposit liabilities of Eligible Account
Holders represented in person or by proxy at the Special Meeting, and (2) a
majority of the total votes eligible to be cast by Eligible Account Holders at
the Special Meeting. The Mutual Holding Company, in its capacity as the sole
stockholder of the Bank, also has approved the Plan.
EFFECTS OF THE CONVERSION
GENERAL. Prior to the Conversion, each depositor in the Bank has both
a deposit account in the institution and a pro rata ownership interest in the
net worth of the Mutual Holding Company based upon the balance in his or her
account, which interest may only be realized in the event of a liquidation of
the Mutual Holding Company. However, this ownership interest is tied to the
depositor's account and has no tangible market value separate from such deposit
account. A depositor who reduces or closes his or her account receives a
portion or all of the balance in the account but nothing for his or her
ownership interest in the net worth of the Mutual Holding Company, which is
lost to the extent that the balance in the account is reduced.
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Consequently, the depositors of the Bank normally have no way to
realize the value of their ownership interest in the Mutual Holding Company,
which has realizable value only in the unlikely event that the Mutual Holding
Company is liquidated. In such event, the Bank's depositors of record at that
time, as owners, would share pro rata in any residual surplus and reserves of
the Mutual Holding Company after other claims are paid.
Upon consummation of the Conversion, permanent nonwithdrawable capital
stock will be created to represent the ownership of the net worth of the
Company. The Common Stock is separate and apart from deposit accounts and
cannot be and is not insured by the FDIC or any other governmental agency.
Certificates are issued to evidence ownership of the permanent stock. The
stock certificates are transferable, and therefore the stock may be sold or
traded if a purchaser is available with no effect on any account the seller may
hold in the Bank.
CONTINUITY. While the Conversion is being accomplished, the normal
business of the Bank of accepting deposits and making loans will continue
without interruption. The Bank will continue to be subject to regulation by
the Department and the FDIC. After the Conversion, the Bank will continue to
provide services for depositors and borrowers under current policies by its
present management and staff.
The directors and officers of the Bank at the time of the Conversion
will continue to serve as directors and officers of the Bank after the
Conversion. The directors and officers of the Company consist of individuals
currently serving as trustees and officers of the Mutual Holding Company and
directors of the Bank, and they generally will retain their positions in the
Company after the Conversion.
EFFECT ON DEPOSIT ACCOUNTS. Under the Plan, each depositor in the
Bank at the time of the Conversion will automatically continue as a depositor
after the Conversion, and each such deposit account will remain the same with
respect to deposit balance, interest rate and other terms, except to the extent
that funds in the account are withdrawn to purchase Common Stock to be issued
in the Offerings. Each such account will be insured by the FDIC to the same
extent as before the Conversion. Depositors will continue to hold their
existing certificates, passbooks and other evidences of their accounts.
EFFECT ON LOANS. No loan outstanding from the Bank will be affected
by the Conversion, and the amount, interest rate, maturity and security for
each loan will remain as they were contractually fixed prior to the Conversion.
EFFECT ON VOTING RIGHTS OF DEPOSITORS. The voting rights and control
of the Mutual Holding Company are vested exclusively in its Board of Trustees
and the voting rights and control of the Bank are vested exclusively in its
Board of Directors, the members of which are elected by the Mutual Holding
Company, its sole stockholder. Upon completion of the Conversion, all voting
rights in the Bank will be vested in the Company as the sole stockholder of the
Bank. Exclusive voting rights with respect to the Company will be vested in
the holders of Common Stock.
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TAX EFFECTS. Consummation of the Conversion is conditioned on prior
receipt by the Company and the Bank of rulings or opinions with regard to
federal and New York income taxation which indicate that the adoption and
implementation of the Plan of Conversion set forth herein will not be taxable
for federal or New York state and city income tax purposes to the Company or
the Bank or the Eligible Account Holders or Supplemental Eligible Account
Holders, except as discussed below. See "- Tax Aspects" below.
EFFECT ON LIQUIDATION RIGHTS. Were the Mutual Holding Company to
liquidate, all claims of the Mutual Holding Company's creditors would be paid
first. Thereafter, if there were any assets remaining, depositors of the Bank
would receive such remaining assets, pro rata, based upon the deposit balances
in their deposit accounts at the Bank immediately prior to liquidation. In the
unlikely event that the Bank were to liquidate after the Conversion, all claims
of creditors (including those of depositors, to the extent of their deposit
balances) also would be paid first, followed by distribution of the
"liquidation account" to certain depositors (see "- Liquidation Rights" below),
with any assets remaining thereafter distributed to the Company as the holder
of the Bank's capital stock.
THE OFFERINGS
SUBSCRIPTION OFFERING. In accordance with the Plan of Conversion,
rights to subscribe for the purchase of Common Stock have been granted under
the Plan of Conversion to the following persons in the following order of
descending priority: (1) Eligible Account Holders; (2) the ESOP; and (3)
Supplemental Eligible Account Holders. All subscriptions received will be
subject to the availability of Common Stock after satisfaction of all
subscriptions of all persons having prior rights in the Subscription Offering
and to the maximum and minimum purchase limitations set forth in the Plan of
Conversion and as described below under "- Limitations on Common Stock
Purchases." No person holding subscription rights may exceed any otherwise
applicable purchase limitation by submitting multiple orders for Common Stock
in the Offerings.
PRIORITY 1: ELIGIBLE ACCOUNT HOLDERS. Each Eligible Account Holder
will receive, without payment therefor, first priority, nontransferable
subscription rights to subscribe for in the Subscription Offering up to the
amount permitted to be purchased in the Community Offering, currently $500,000
of Common Stock, subject to the overall purchase limitations. See "-
Limitations on Common Stock Purchases."
If there are not sufficient shares available to satisfy all
subscriptions, shares first will be allocated so as to permit each subscribing
Eligible Account Holder to purchase a number of shares sufficient to make his
or her total allocation equal to the lesser of the number of shares subscribed
for or 100 shares. Thereafter, unallocated shares will be allocated to
subscribing Eligible Account Holders whose subscriptions remain unfilled in the
proportion that the amounts of their respective eligible deposits bear to the
total amount of eligible deposits of all subscribing Eligible Account Holders
whose subscriptions remain unfilled, provided that no fractional shares shall
be issued. The subscription rights of Eligible Account Holders who are also
trustees, directors or officers of the Mutual Holding Company
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or the Bank and their associates will be subordinated to the subscription
rights of other Eligible Account Holders to the extent attributable to
increased deposits in the year preceding March 31, 1996.
PRIORITY 2: EMPLOYEE STOCK OWNERSHIP PLAN. The ESOP will receive,
without payment therefor, second priority, nontransferable subscription rights
to subscribe for Common Stock in the Subscription Offering. The ESOP intends
to purchase 8.0% of the shares of Common Stock, or 4,046,296 shares based on
the maximum of the Estimated Price Range. Subscriptions by the ESOP will not
be aggregated with shares of Common Stock purchased directly by or which are
otherwise attributable to any other participants in the Subscription and
Community Offerings, including subscriptions of any of the Bank's directors,
officers, employees or associates thereof. See "Management of the Company
- -Benefits - Employee Stock Ownership Plan." In the event that the ESOP is
unable to purchase at least 8.0% of the Common Stock in the Subscription
Offering, it is anticipated that the ESOP will consider purchasing a like
amount of shares in the open market or from the Company out of authorized but
unissued shares of Common Stock.
PRIORITY 3: SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS. Each Supplemental
Eligible Account Holder will receive, without payment therefor, third priority,
nontransferable subscription rights to subscribe for in the Subscription
Offering up to the amount permitted to be purchased in the Community Offering,
currently $500,000 of Common Stock, subject to the overall purchase
limitations. See "- Limitations on Common Stock Purchases."
If there are not sufficient shares available to satisfy all
subscriptions, shares first will be allocated so as to permit each subscribing
Supplemental Eligible Account Holder to purchase a number of shares sufficient
to make his or her total allocation equal to the lesser of the number of shares
subscribed for or 100 shares. Thereafter, unallocated shares will be allocated
to subscribing Supplemental Eligible Account Holders whose subscriptions remain
unfilled in the proportion that the amounts of their respective eligible
deposits bear to the total amount of eligible deposits of all such subscribing
Supplemental Eligible Account Holders whose subscriptions remain unfilled,
provided that no fractional shares shall be issued.
EXPIRATION DATE FOR THE SUBSCRIPTION OFFERING. The Subscription
Offering will expire at 12:00 p.m., Eastern Time, on _________, 1997, unless
extended for up to 45 days or such additional periods by the Bank and the
Company with the approval of the Department and FDIC, if necessary. Such
extensions may not be extended beyond ________, 1999. Subscription rights which
have not been exercised prior to the Expiration Date will become void.
The Company and the Bank will not execute orders until at least the
minimum number of shares of Common Stock (37,384,259) have been subscribed for
or otherwise sold. If all shares have not been subscribed for or sold within 45
days after the Expiration Date, unless such period is extended with the consent
of the Department and FDIC, if necessary, all funds delivered to the Bank
pursuant to the Subscription Offering will be returned
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promptly to the subscribers with interest and all withdrawal authorizations
will be cancelled. If an extension beyond the 45-day period following the
Expiration Date is granted, the Company and the Bank will notify subscribers of
the extension of time and of any rights of subscribers to modify or rescind
their subscriptions.
The Plan of Conversion provides that the Company complete the sale of
the Common Stock within 45 days after the close of the Subscription Offering.
In the event that the Company is unable to complete the sale of Common Stock
and effect the Conversion within the 45-day time period, one or more extension,
with each such extension up to 60 days, may be granted but such extensions may
not go beyond _______, 1999 unless waived by the Department and FDIC, if
necessary. If an extension is granted, each subscriber will have the right to
affirm, increase, decrease or rescind the subscription at any time prior to 20
days before the end of the extension period or at any time prior to the date of
the commencement of the Community Offering or the Syndicated Community
Offering. No assurance can be given that an extension would be granted if
requested. If an extension is granted, the Company will notify subscribers of
such extension and of any rights of subscribers to modify or rescind their
subscriptions.
COMMUNITY OFFERING. Upon completion of the Subscription Offering, to
the extent that shares remain available for purchase after satisfaction of all
subscriptions of Eligible Account Holders, the ESOP and Supplemental Eligible
Account Holders, the Company and the Bank have determined to offer shares
pursuant to the Plan to certain members of the general public to whom a
Prospectus is delivered, with preference given to natural persons residing in
the counties in New York in which the Bank has a branch office (such natural
persons referred to as "Preferred Subscribers"). Such persons, together with
associates of and persons acting in concert with such persons, may purchase up
to $500,000 of Common Stock subject to the maximum purchase limitations. See
"- Limitations on Common Stock Purchases." WITHIN THE SOLE DISCRETION OF THE
COMPANY AND THE BANK, THIS AMOUNT MAY BE INCREASED UP TO 5% OF THE TOTAL
OFFERING OF SHARES IN THE SUBSCRIPTION OFFERING. THE OPPORTUNITY TO SUBSCRIBE
FOR SHARES OF COMMON STOCK ISSUED IN THE COMMUNITY OFFERING CATEGORY IS SUBJECT
TO THE RIGHT OF THE COMPANY AND THE BANK, IN THEIR SOLE DISCRETION, TO ACCEPT
OR REJECT ANY SUCH ORDERS IN WHOLE OR IN PART EITHER AT THE TIME OF RECEIPT OF
AN ORDER, WHICH MUST BE BY ____, 1997, UNLESS EXTENDED BY THE BANK AND THE
COMPANY WITH THE APPROVAL OF THE DEPARTMENT AND THE FDIC IF NECESSARY, OR AS
SOON AS PRACTICABLE FOLLOWING THE EXPIRATION DATE OF THE COMMUNITY OFFERING
WHICH MUST BE BY ______, 1997, UNLESS EXTENDED BY THE COMPANY AND THE BANK WITH
THE APPROVAL OF THE DEPARTMENT AND THE FDIC, IF NECESSARY.
If there are not sufficient shares available to fill the orders of
Preferred Subscribers after completion of the Subscription and Community
Offerings, such stock will be allocated first to each Preferred Subscriber
whose order is accepted by the Company and the Bank, in an amount equal to the
lesser of 100 shares or the number of shares subscribed for by each such
Preferred Subscriber, if possible. Thereafter, unallocated shares will be
allocated among the Preferred Subscribers whose orders remain unsatisfied on an
equal number of shares basis per order until all orders have been filled,
provided that no fractional shares
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shall be issued. If there are any shares remaining, shares will be allocated
to other members of the general public who subscribe in the Community Offering
applying the same allocation described above for Preferred Subscribers.
SYNDICATED COMMUNITY OFFERING. The Plan provides that, if feasible,
all shares of Common Stock not purchased in the Subscription and Community
Offerings may be offered for sale to the general public in a Syndicated
Community Offering through a syndicate of registered broker-dealers to be
formed by Sandler O'Neill acting as agent for the Company and the Bank. No
person will be permitted to subscribe in the Syndicated Community Offering for
more than $500,000 of Common Stock, subject to the maximum purchase
limitations. This amount may be increased to up to 5% of the Common Stock
issued in the Conversion. If there is not sufficient shares available to fill
the orders of subscribers in the Syndicated Community Offering, such stock will
be allocated first to each subscriber whose order is accepted by the Company
and the Bank, in an amount equal to the lesser of 100 shares or the number of
shares subscribed for by each subscriber, if possible. Thereafter, any
remaining shares will be allocated on an equal number of shares basis per order
until all orders have been filled, provided that no fractional shares shall be
issued. The Company and the Bank have the right to reject orders in whole or
part in their sole discretion in the Syndicated Community Offering. Neither
Sandler O'Neill nor any registered broker-dealer shall have any obligation to
take or purchase any shares of Common Stock in the Syndicated Community
Offering; however, Sandler O'Neill has agreed to use its best efforts in the
sale of shares in the Syndicated Community Offering.
In addition to the foregoing, if a syndicate of broker-dealers
("selected dealers") is formed to assist in the Syndicated Community Offering,
a purchaser may pay for his or her shares with funds held by or deposited with
a selected dealer. If an order form is executed and forwarded to the selected
dealer or if the selected dealer is authorized to execute the order form on
behalf of a purchaser, the selected dealer is required to forward the order
form and funds to the Bank for deposit in a segregated account on or before
noon of the business day following receipt of the order form or execution of
the order form by the selected dealer. Alternatively, selected dealers may
solicit indications of interest from their customers to place orders for
shares. Such selected dealers shall subsequently contact their customers who
indicated an interest and seek their confirmation as to their intent to
purchase. The selected dealer will acknowledge receipt of the order to its
customer in writing on the following business day and will debit such
customer's account on the fifth business day after the customer has confirmed
his or her intent to purchase (the "debit date") and on or before noon of the
next business day following the debit date will send funds to the Bank for
deposit in a segregated account. If such alternative procedure is employed,
purchasers' funds are not required to be in their accounts with selected
dealers until the debit date.
The Syndicated Community Offering will terminate no more than 45 days
following the Expiration Date, unless extended by the Company and the Bank with
the approval of the Department and FDIC. See "- Stock Pricing and Number of
Shares to be Issued" below for a discussion of rights of subscribers, if any,
in the event an extension is granted.
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STOCK PRICING AND NUMBER OF SHARES TO BE ISSUED
The Plan of Conversion requires that the purchase price of the Common
Stock must be based on the appraised pro forma market value of the Common
Stock, as determined on the basis of an independent valuation. The Company and
the Bank have retained RP Financial to make such valuation. For its services
in making such appraisal and for the preparation of a business plan, RP
Financial will receive a maximum fee of $70,000 plus out of pocket expenses not
to exceed $10,000. The Company and the Bank have agreed to indemnify RP
Financial and its employees and affiliates against certain losses (including
any losses in connection with claims under the federal securities laws) arising
out of its services as appraiser, except where RP Financial's liability results
from its negligence or a failure to exercise due diligence or in circumstances
in which it had knowledge of certain material facts.
The appraisal has been prepared by RP Financial in reliance upon the
information contained in this Prospectus, including the Consolidated Financial
Statements. RP Financial also considered the following factors, among others:
the current and projected operating results and financial condition of the
Company and the Bank and the economic and demographic conditions in the Bank's
existing market area; certain historical, financial and other information
relating to the Bank; a comparative evaluation of the operating and financial
statistics of the Bank with those of other similarly situated publicly traded
companies located in New York and other regions of the United States; the
aggregate size of the offering of the Common Stock; the impact of the
Conversion on the Bank's equity and earnings potential; the proposed dividend
policy of the Company and the Bank; the trading market for the securities of
comparable companies and general conditions in the market for such securities.
On the basis of the foregoing, RP Financial has advised the Company
and the Bank in its opinion the estimated pro forma market value of the Common
Stock was $439.8 million as of June 20, 1997. The Boards of Directors of the
Bank and the Company determined that the Common Stock would be sold at $10.00
per share, resulting in a range of 37,384,259 to 50,578,704 shares of Common
Stock being offered. The Boards of Directors of the Bank and Company reviewed
RP Financial's appraisal report, including the methodology and the assumptions
used by RP Financial, and determined that the Valuation Range was reasonable
and adequate. The Valuation Range may be amended with the approval of the
Department and FDIC, if necessary, or if necessitated by subsequent
developments in the financial condition of the Company and the Bank or market
conditions generally. In the event the appraisal is updated to below $373.8
million or above $581.7 million (the maximum of the Valuation Range, as
adjusted by 15%), such appraisal will be filed with the SEC by post-effective
amendment.
Based upon current market and financial conditions and recent
practices and policies of the Department and FDIC, in the event the Company
receives orders for Common Stock in excess of $505.8 million (the maximum of
the Valuation Range) and up to $581.7 million (the maximum of the Valuation
Range, as adjusted by 15%), the Company may be required
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by the Department and FDIC to accept all such orders. No assurances, however,
can be made that the Company will receive orders for Common Stock in excess of
the maximum of the Valuation Range or that, if such orders are received, that
all such orders will be accepted because the Company's final valuation and
number of shares to be issued are subject to the receipt of an updated
appraisal from RP Financial which reflects such an increase in the valuation
and the approval of such increase by the Department and FDIC. There is no
obligation or understanding on the part of management to take and/or pay for
any shares of Common Stock in order to complete the Offerings.
RP FINANCIAL'S VALUATION IS NOT INTENDED, AND MUST NOT BE CONSTRUED,
AS A RECOMMENDATION OF ANY KIND AS TO THE ADVISABILITY OF PURCHASING SUCH
SHARES. RP FINANCIAL DID NOT INDEPENDENTLY VERIFY THE CONSOLIDATED FINANCIAL
STATEMENTS AND OTHER INFORMATION PROVIDED BY THE BANK, NOR DID RP FINANCIAL
VALUE INDEPENDENTLY THE ASSETS OR LIABILITIES OF THE BANK. THE VALUATION
CONSIDERS THE BANK AS A GOING CONCERN AND SHOULD NOT BE CONSIDERED AS AN
INDICATION OF THE LIQUIDATION VALUE OF THE BANK. MOREOVER, BECAUSE SUCH
VALUATION IS NECESSARILY BASED UPON ESTIMATES AND PROJECTIONS OF A NUMBER OF
MATTERS, ALL OF WHICH ARE SUBJECT TO CHANGE FROM TIME TO TIME, NO ASSURANCE CAN
BE GIVEN THAT PERSONS PURCHASING COMMON STOCK IN THE CONVERSION WILL THEREAFTER
BE ABLE TO SELL SUCH SHARES AT PRICES AT OR ABOVE THE PURCHASE PRICE OR IN THE
RANGE OF THE FOREGOING VALUATION OF THE PRO FORMA MARKET VALUE THEREOF.
No sale of shares of Common Stock may be consummated unless prior to
such consummation RP Financial confirms that nothing of a material nature has
occurred which, taking into account all relevant factors, would cause it to
conclude that the Purchase Price is materially incompatible with the estimate
of the pro forma market value of a share of Common Stock upon consummation of
the Conversion. If such is not the case, a new Valuation Range may be set and
a new Subscription Offering, and/or Community Offering or Syndicated Community
Offering may be held or such other action may be taken as the Company and the
Bank shall determine and the Department and FDIC may permit or require.
Prior to the completion of the Conversion, the total number of shares
of Common Stock to be issued in the Offerings may be increased or decreased to
reflect changes in market or financial conditions without a resolicitation of
subscribers, provided that the product of the total number of shares times the
Purchase Price is not below the minimum or more than 15% above the maximum of
the Valuation Range. In the event market or financial conditions change so as
to cause the aggregate Purchase Price of the shares to be below the minimum of
the Valuation Range or more than 15% above the maximum of such range,
purchasers will be resolicited (i.e., permitted to continue their orders, in
which case they will need to affirmatively reconfirm their subscriptions prior
to the expiration of the resolicitation offering or their subscription funds
will be promptly refunded with interest at the Bank's passbook rate of
interest, or be permitted to modify or rescind their subscriptions). Any
change in the Valuation Range must be approved by the Department and FDIC. If
the number of shares of Common Stock issued in the Offerings is increased due
to an increase of up to 15% in the Valuation Range to reflect changes in market
or
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financial conditions, persons who subscribed for the maximum numbers of shares
will be given the opportunity to subscribe for the adjusted maximum number of
shares. See "- Limitations on Common Stock Purchases."
An increase in the number of shares of Common Stock, as a result of an
increase in the appraisal of the estimated pro forma market value (see "- The
Offerings - Subscription Offering"), would decrease both a subscriber's
ownership interest and the Company's pro forma net income and equity on a per
share basis while increasing pro forma net income and equity on an aggregate
basis. A decrease in the number of shares of Common Stock would increase both
a subscriber's ownership interest and the Company's pro forma net income and
equity on a per share basis while decreasing pro forma net income and equity on
an aggregate basis. See "Risk Factors - Possible Dilutive Effect of Issuance
of Additional Shares" and "Pro Forma Data."
The appraisal report of RP Financial has been filed as an exhibit to
the Registration Statement and the Application for Conversion of which this
Prospectus is a part and is available for inspection in the manner set forth
under "Additional Information."
PERSONS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES
The Company and the Bank will make reasonable efforts to comply with
the securities laws of all states in the United States in which persons
entitled to subscribe for stock pursuant to the Plan reside. However, the
Company and the Bank are not required to offer stock in the Subscription
Offering to any person who resides in a foreign country or resides in a state
of the United States with respect to which all of the following apply: (a) the
number of persons otherwise eligible to subscribe for shares under the Plan who
reside in such jurisdiction is small; (b) the granting of subscription rights
or the offer or sale of shares of Common Stock to such persons would require
the Company or the Bank or their officers, directors or employees, under the
laws of such jurisdiction, to register as a broker, dealer, salesman or selling
agent or to register or otherwise qualify its securities for sale in such
jurisdiction or to qualify as a foreign corporation or file a consent to
service of process in such jurisdiction; and (c) such registration,
qualification or filing in the judgment of the Company and the Bank would be
impracticable or unduly burdensome for reasons of costs or otherwise. Where
the number of persons eligible to subscribe for shares in one state is small,
the Company and the Bank will base their decision as to whether or not to offer
the Common Stock in such state on a number of factors, including but not
limited to the size of accounts held by account holders in the state, the cost
of registering or qualifying the shares or the need to register the Company,
its officers, directors or employees as brokers, dealers or salesmen.
LIMITATIONS ON COMMON STOCK PURCHASES
The Plan includes the following limitations on the number of shares of
Common Stock which may be purchased:
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(1) No less than 25 shares of Common Stock may be
purchased, to the extent such shares are available;
(2) Each Eligible Account Holder may subscribe for and
purchase in the Subscription Offering up to the amount permitted to be
purchased in the Community Offering, currently $500,000 of Common
Stock, subject to the overall limitation in clause (6) below;
(3) The ESOP intends to purchase 8.0% of the shares of
Common Stock to be issued in the Offerings, including any additional
shares issued in the event of an increase in the Valuation Price
Range;
(4) Each Supplemental Eligible Account Holder may
subscribe for and purchase in the Subscription Offering up to the
amount permitted to be purchased in the Community Offering, currently
$500,000 of Common Stock, subject to the overall limitation in clause
(6) below;
(5) Persons purchasing shares of Common Stock in the
Community Offering or the Syndicated Community Offering may subscribe
for and purchase in the respective Offering up to $500,000 of Common
Stock, subject to the overall limitation in clause (6) below;
(6) Eligible Account Holders and Supplemental Eligible
Account Holders may purchase stock in the Community Offering and
Syndicated Community Offering subject to the purchase limitations
described above, provided that, except for the ESOP, the maximum
number of shares of Common Stock subscribed for or purchased in all
categories by any person, together with associates of and groups of
persons acting in concert with such persons, shall not exceed the
number of shares of Common Stock that aggregate 1.0% of the Offerings;
and
(7) No more than 25% of the total number of shares issued
in the Conversion may be purchased by trustees, directors and officers
of the Company, Mutual Holding Company and the Bank and their
associates in the aggregate, excluding purchases by the ESOP.
Subject to any required regulatory approval and the requirements of
applicable laws and regulations, but without further approval of the Eligible
Account Holders or the Mutual Holding Company, as the sole stockholder of the
Bank, both the individual amount permitted to be subscribed for and the overall
purchase limitation may be increased up to a maximum of 5% of the total shares
of Common Stock to be issued in the Conversion at the sole discretion of the
Company and the Bank. The overall purchase limitation may not be decreased
below the aggregate 1% of the Offerings. If such amount is increased,
subscribers for the maximum amount will be, and certain other large
subscribers, in the sole discretion of the Company and the Bank, may be given
the opportunity to increase their subscriptions up to the then applicable
limit.
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In the event of an increase in the total number of shares of Common
Stock offered in the Conversion due to an increase in the Valuation Range of up
to 15% (the "Adjusted Maximum"), the additional shares will be allocated in the
following order of priority in accordance with the Plan: (i) to fill
unfulfilled subscriptions of Eligible Account Holders, inclusive of the
Adjusted Maximum; (ii) to fill the subscription of the ESOP; (iii) to fill
unfulfilled subscriptions of Supplemental Eligible Account Holders, inclusive
of the Adjusted Maximum; (iv) to fill unfulfilled subscriptions by Preferred
Subscribers in the Community Offering to the extent possible, inclusive of the
Adjusted Maximum; and (v) to fill unfulfilled subscriptions in the Community
Offering other than from Preferred Subscribers, inclusive of the Adjusted
Maximum.
The term "associate" when used to indicate a relationship with a
person means (i) any corporation or organization (other than the Company or the
Bank or a majority-owned subsidiary of the Bank) of which such person is a
director, officer or partner or is, directly or indirectly, the beneficial
owner of 10% or more of any class of equity securities; (ii) any trust or other
estate in which such person has a substantial beneficial interest or as to
which such person serves as trustee or in a similar fiduciary capacity,
provided, however, that such term shall not include any tax-qualified or
non-tax-qualified employee stock benefit plan of the Company or the Bank in
which such person has a substantial beneficial interest or serves as a trustee
or in a similar fiduciary capacity; and (iii) any relative or spouse of such
person, or any relative of such spouse, who has the same home as such person or
who is a director or officer of the Company or the Bank or any of their
subsidiaries.
MARKETING ARRANGEMENTS
The Bank and the Company have engaged Sandler O'Neill as a
consultant and financial advisor in connection with the offering of the Common
Stock, and Sandler O'Neill has agreed to assist the Bank and the Company in the
solicitation of subscriptions and purchase orders for shares of Common Stock in
the Offerings. Sandler O'Neill will receive a fee equal to 1.625% of the
aggregate Purchase Price of all shares sold in the Offerings, excluding in each
case shares purchased by trustees, directors, officers and employees of the
Bank or the Company and any immediate family member thereof and the Employee
Plans, including the ESOP, for which Sandler O'Neill will not receive a fee.
In the event that a selected dealers' agreement is entered into in connection
with a Syndicated Community Offering, the Company and Bank will pay a fee (to
be negotiated at such time under such agreement) to such selected dealers, any
sponsoring dealers fees, and a management fee to Sandler O'Neill of 1.5% for
shares sold by a NASD member firm pursuant to a selected dealers' agreement;
provided, however, that the aggregate fees payable to Sandler O'Neill for
Common Stock sold by them pursuant to such a selected dealers' agreement shall
not exceed 1.625% of the aggregate Purchase Price and provided, further,
however, that the aggregate fees payable to Sandler O'Neill and the selected
dealers will not exceed 7.0% of the aggregate purchase price of the Common
Stock sold by selected dealers. Fees to Sandler O'Neill and to any other
broker-dealer may be deemed to be underwriting fees, and Sandler O'Neill and
such broker-dealers may be deemed to be underwriters. Sandler O'Neill will
also be reimbursed for its reasonable out-of-pocket expenses, including legal
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fees. Notwithstanding the foregoing, in the event the Offerings are not
consummated or Sandler O'Neill ceases, under certain circumstances after the
subscription solicitation activities are commenced, to provide assistance to
the Company, Sandler O'Neill will be entitled to a fee for its management
advisory services in an amount to be agreed upon by the Bank and Sandler
O'Neill, and based upon the amount of services performed by Sandler O'Neill and
will also be reimbursed for its reasonable out-of-pocket expenses as described
above. The Company and the Bank have agreed to indemnify Sandler O'Neill for
reasonable costs and expenses in connection with certain claims or liabilities,
including certain liabilities under the Securities Act. Sandler O'Neill has
received advances towards its marketing and financial advisory service fees
totaling $_____. Total marketing fees to Sandler O'Neill are expected to be
$5.5 million and $7.5 million at the minimum and the maximum of the Estimated
Price Range, respectively. See "Pro Forma Data" for the assumptions used to
arrive at these estimates.
Sandler O'Neill will also perform proxy solicitation services,
conversion agent services and records management services for the Bank in the
Conversion and will receive a fee for these services of $175,000, plus
reimbursement of reasonable out-of-pocket expenses.
Directors and executive officers of the Company and the Bank may
participate in the solicitation of offers to purchase Common Stock. Other
employees of the Bank may participate in the Offerings in ministerial
capacities or providing clerical work in effecting a sales transaction. Such
other employees have been instructed not to solicit offers to purchase Common
Stock or provide advice regarding the purchase of Common Stock. Questions of
prospective purchasers will be directed to executive officers or registered
representatives. The Company will rely on Rule 3a4-1 under the Exchange Act,
and sales of Common Stock will be conducted within the requirements of Rule
3a4-1, so as to permit officers, directors and employees to participate in the
sale of Common Stock. No officer, director or employee of the Company and the
Bank will be compensated in connection with his or her solicitations or other
participation in the Offerings by the payment of commissions or other
remuneration based either directly or indirectly on transactions in the Common
Stock.
PROCEDURE FOR PURCHASING SHARES IN THE OFFERINGS
To ensure that each purchaser receives a Prospectus at least 48 hours
before the Expiration Date in accordance with Rule 15c2-8 of the Exchange Act,
no Prospectus will be mailed any later than five days prior to such date or
hand delivered any later than two days prior to such date. Execution of the
order form will confirm receipt or delivery of the Prospectus in accordance
with Rule 15c2-8. Order forms will only be distributed with a Prospectus.
To purchase shares in the Offerings, an executed order form with the
required payment for each share subscribed for, or with appropriate
authorization for withdrawal from a deposit account at the Bank (which may be
given by completing the appropriate blanks in the order form), must be received
by the Bank at any of its offices by 12:00 p.m.,
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Eastern Time, on the Expiration Date. In addition, the Company and the Bank
will require a prospective purchaser to execute a certification in connection
with any sale of Common Stock and will not accept order forms unless such a
certification is executed. Any order form which is (i) not timely received,
(ii) improperly completed or executed, (iii) submitted by facsimile or is
photocopied, (iv) not accompanied by the proper payment (or authorization of
withdrawal for payment) or in the case of institutional investors in the
Community Offering, not accompanied by an irrevocable order together with a
legally binding commitment to pay the full amount of the purchase price prior
to 48 hours before the completion of the Offerings, or (v) submitted by a
person whose representations the Company and the Bank believe to be false or
who they otherwise believe, either alone, or acting in concert with others, is
violating, evading or circumventing, or intends to violate, evade or
circumvent, the terms and conditions of the Plan, are not required to be
accepted. The Company and the Bank have the right to waive or permit the
correction of incomplete or improperly executed forms, but do not represent
that they will do so. Once received, an executed order form may not be
modified, amended or rescinded without the consent of the Company and the Bank,
unless the Offerings have not been completed within 45 days after the end of
the Subscription Offering, unless such period has been extended.
In order to ensure that Eligible Account Holders and Supplemental
Eligible Account Holders are properly identified as to their stock purchase
priority, depositors as of the close of business on the Eligibility Record Date
(March 31, 1996) or the Supplemental Eligibility Record Date (_______, 1997)
must list on the order form all accounts in which they have an ownership
interest, giving all names in each account and the account numbers.
Payment for subscriptions may be made (i) in cash if delivered in
person at any office of the Bank, (ii) by check or money order or (iii) by
authorization of withdrawal from deposit accounts maintained with the Bank. No
wire transfers will be accepted. Orders submitted by subscribers in the
Subscription Offering and purchasers in the Community Offering aggregating
$50,000 or more must be paid by official bank or certified check or by
withdrawal authorization from a deposit account at the Bank. Funds will be
deposited in a segregated account at the Bank and interest will be paid on
funds made by cash, check or money order at the Bank's passbook rate of
interest from the date payment is received until completion or termination of
the Conversion. If payment is made by authorization of withdrawal from deposit
accounts, the funds authorized to be withdrawn from a deposit account will
continue to accrue interest at the contractual rates until completion or
termination of the Conversion, but a hold will be placed on such funds, thereby
making them unavailable to the depositor until completion or termination of the
Conversion.
If a subscriber authorizes the Bank to withdraw the aggregate amount
of the purchase price from a deposit account, the Bank will do so as of the
effective date of the Conversion. The Bank will waive any applicable penalties
for early withdrawal from certificate accounts. If the remaining balance in a
certificate account is reduced below the applicable minimum balance requirement
at the time that the funds actually are transferred under the authorization,
the certificate will be cancelled at the time of the withdrawal, without
penalty, and the remaining balance will earn interest at the passbook rate.
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The ESOP will not be required to pay for the shares subscribed for at
the time it subscribes, but rather may pay for such shares of Common Stock
subscribed for by it at the Purchase Price upon consummation of the Offerings,
provided that there is in force from the time of its subscription until such
time, a loan commitment from an unrelated financial institution or the Company
to lend to the ESOP, at such time, the aggregate Purchase Price of the shares
for which it subscribed.
Owners of self-directed Individual Retirement Accounts ("IRAs") may
use the assets of such IRAs to purchase shares of Common Stock in the
Offerings, provided that such IRAs are not maintained at the Bank. In
addition, ERISA provisions and IRS regulations require that officers, directors
and 10% stockholders who use self-directed IRA funds to purchase shares of
Common Stock in the Subscription and Community Offerings make such purchases
for the exclusive benefit of the IRAs. Any interested parties wishing to use
IRA funds for stock purchases are advised to contact the Conversion Center for
additional information.
RESTRICTIONS ON TRANSFER OF SUBSCRIPTION RIGHTS AND SHARES
Pursuant to the rules and regulations of the Department, no person
with subscription rights may transfer or enter into any agreement or
understanding to transfer the legal or beneficial ownership of the subscription
rights issued under the Plan or the shares of Common Stock to be issued upon
their exercise. Such rights may be exercised only by the person to whom they
are granted and only for his or her account. Each person exercising such
subscription rights will be required to certify that he or she is purchasing
shares solely for his or her own account and that he or she has no agreement or
understanding regarding the sale or transfer of such shares. Department
regulations also prohibit any person from offering or making an announcement of
an offer or intent to make an offer to purchase such subscription rights or
shares of Common Stock prior to the completion of the Conversion.
THE COMPANY AND THE BANK WILL PURSUE ANY AND ALL LEGAL AND EQUITABLE
REMEDIES IN THE EVENT THEY BECOME AWARE OF THE TRANSFER OF SUBSCRIPTION RIGHTS
AND WILL NOT HONOR ORDERS KNOWN BY THEM TO INVOLVE THE TRANSFER OF SUCH RIGHTS.
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LIQUIDATION RIGHTS
In the unlikely event of a complete liquidation of the Mutual Holding
Company, each depositor of the Bank would receive his or her pro rata share of
any assets of the Mutual Holding Company remaining after payment of claims of
all creditors. Each depositor's pro rata share of such remaining assets would
be in the same proportion as the value of his or her deposit account was to the
total value of all deposit accounts in the Bank at the time of liquidation.
After the Conversion, each depositor, in the event of a complete liquidation of
the Bank, would have a claim as a creditor of the same general priority as the
claims of all other general creditors of the Bank. However, except as
described below, his or her claim would be solely in the amount of the balance
in his or her deposit account plus accrued interest. He or she would not have
an interest in the value or assets of the Bank or the Company above that
amount.
The Plan provides for the establishment, upon the completion of the
Conversion, of a special "liquidation account" for the benefit of Eligible
Account Holders in an amount equal to the Bank's total equity as reflected in
its latest balance sheet contained in the final Prospectus utilized in the
Offerings. Each Eligible Account Holder, if he or she were to continue to
maintain his or her deposit account at the Bank, would be entitled, upon a
complete liquidation of the Bank after the Conversion, to an interest in the
liquidation account prior to any payment to the Company as the sole stockholder
of the Bank. Each Eligible Account Holder would have an initial interest in
such liquidation account for each deposit account, including passbook accounts,
transaction accounts such as checking accounts, money market deposit accounts
and certificates of deposit, held in the Bank at the close of business on March
31, 1996. Each Eligible Account Holder will have a pro rata interest in the
total liquidation account for each of his or her deposit accounts based on the
proportion that the balance of each such deposit account on the March 31, 1996
Eligibility Record Date bore to the balance of all deposit accounts in the Bank
on such date.
If, however, at the close of business on the last day of any period
for which the Bank or the Company has prepared audited financial statements
subsequent to the effective date of the Conversion ("annual closing date"), the
amount in any deposit account is less than the amount in such deposit account
on March 31, 1996 or any other annual closing date, then the interest in the
liquidation account relating to such deposit account would be reduced by the
proportion of any such reduction, and such interest will cease to exist if such
deposit account is withdrawn or closed. In addition, no interest in the
liquidation account would ever be increased despite any subsequent increase in
the related deposit account. Any assets remaining after the above liquidation
rights of Eligible Account Holders are satisfied would be distributed to the
Company as the sole stockholder of the Bank.
TAX ASPECTS
Consummation of the Conversion is expressly conditioned upon prior
receipt of either a ruling from the IRS or an opinion of counsel with respect
to applicable federal tax laws, and either a ruling from the State of New York
or an opinion of counsel with respect to
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New York tax laws, to the effect that consummation of the transactions
contemplated hereby will not result in a taxable reorganization under the
provisions of the applicable tax codes or otherwise result in any adverse tax
consequences to the Mutual Holding Company, the Bank, the Company or to account
holders receiving subscription rights, except to the extent, if any, that
subscription rights are deemed to have fair market value on the date such
rights are issued. This condition may not be waived by the Company and the
Bank.
Prior to consummation of the Conversion, Elias, Matz, Tiernan &
Herrick L.L.P., Washington, D.C., will issue an opinion to the Company and the
Bank to the effect that, for federal income tax purposes: (1) the conversion
of the Mutual Holding Company to the stock form of organization and its
simultaneous merger with and into the Bank, with the Bank being the surviving
institution, will qualify as a reorganization within the meaning of Section
368(a)(1)(A) of the Code, (2) no gain or loss will be recognized by the Bank
upon the receipt of the assets of the converted Mutual Holding Company in such
merger, (3) the merger of the New York-chartered interim institution with and
into the Bank, with the Bank being the surviving institution, will be
disregarded for federal income tax purposes and, together with the Offerings,
will be treated as (i) the formation of the Company, (ii) the sale for cash by
the Company of common stock pursuant to the Offering, and (iii) the transfer by
the Company of an amount of the net proceeds received by the Company in the
Offerings ("Contributed Offering Proceeds") to the Bank in constructive
exchange for the Bank's common stock, (4) the Bank will recognize no gain or
loss upon the receipt of the Contributed Offering Proceeds from the Company in
constructive exchange for the Bank's common stock, (5) the Company will
recognize no gain or loss upon the receipt of cash in the Offerings for shares
of Common Stock, and (6) the Company will recognize no gain or loss upon the
transfer of the Contributed Offering Proceeds to the Bank in constructive
exchange for the Bank's Common Stock.
Prior to consummation of the Conversion, Ernst & Young, LLP, will
issue an opinion to the Company and the Bank to the effect that the income tax
consequences of the Conversion under New York law will be substantially the
same as the consequences for federal tax purposes.
In the view of RP Financial, which view is not binding on the IRS, the
subscription rights do not have any value, based on the fact that such rights
are acquired by the recipients without cost, are nontransferable and of short
duration, and afford the recipients the right only to purchase the Common Stock
at a price equal to its estimated fair market value, which will be the same
price as the Purchase Price for the unsubscribed shares of Common Stock. If
the subscription rights granted to eligible subscribers are deemed to have an
ascertainable value, receipt of such rights likely would be taxable only to
those eligible subscribers who exercise the subscription rights (either as a
capital gain or ordinary income) in an amount equal to such value, and the
Company and the Bank could recognize gain on such distribution. Eligible
subscribers are encouraged to consult with their own tax advisor as to the tax
consequences in the event that such subscription rights are deemed to have an
ascertainable value.
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Unlike private rulings, an opinion is not binding on the IRS and the
IRS could disagree with conclusions reached therein. In the event of such
disagreement, there can be no assurance that the IRS would not prevail in a
judicial or administrative proceeding.
DELIVERY OF CERTIFICATES
Certificates representing Common Stock issued in connection with the
Offering will be mailed by the Company's transfer agent for the Common Stock to
the persons entitled thereto at the addresses of such persons appearing on the
stock order form for Common Stock as soon as practicable following consummation
of the Conversion. Any certificates returned as undeliverable will be held by
the Company until claimed by persons legally entitled thereto or otherwise
disposed of in accordance with applicable law. Until certificates for Common
Stock are available and delivered to subscribers, subscribers may not be able
to sell the shares of Common Stock for which they have subscribed, even though
trading of Common Stock may be commenced.
REQUIRED APPROVALS
Various approvals of the Department and the non-objection of the FDIC
are required in order to consummate the Conversion. The Department has
approved and the FDIC has issued a notice of intent not to object to the Plan
of Conversion, subject to approval by the Eligible Account Holders of the Bank.
In addition, consummation of the Conversion is subject to OTS and Department
approval of the Company's application to acquire all of the to-be-outstanding
Bank common stock. Applications with respect to the merger of the Mutual
Holding Company (following its conversion to the stock form of organization)
into the Bank have been filed with the FDIC and the Department and are
currently pending. There can be no assurances that the requisite regulatory
approvals will be received in a timely manner, in which event the consummation
of the Conversion may be delayed beyond the expiration of the Offerings.
Pursuant to Department and FDIC regulations, the Plan of Conversion
also must be approved by (1) holders of at least seventy-five percent (75%) in
amount of the deposit liability of Eligible Account Holders represented in
person or by proxy at the Special Meeting, and (2) at least a majority of the
total number of votes eligible to be cast by Eligible Account Holders of the
Bank at the Special Meeting.
CERTAIN RESTRICTIONS ON PURCHASE OR TRANSFER OF SHARES AFTER THE CONVERSION
All shares of Common Stock purchased in connection with the Conversion
by a director or an executive officer of the Company and the Bank will be
subject to a restriction that the shares not be sold for a period of one year
following the Conversion, except in the event of the death of such director or
executive officer. Each certificate for restricted shares will bear a legend
giving notice of this restriction on transfer, and appropriate stop-transfer
instructions will be issued to the Company's transfer agent. Any shares of
Common Stock issued within this one-year period as a stock dividend, stock
split or otherwise with respect
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to such restricted stock will be subject to the same restrictions. The
directors and executive officers of the Company will also be subject to the
insider trading rules promulgated pursuant to the Exchange Act.
Purchases of Common Stock by directors, executive officers and their
associates during the three-year period following completion of the Conversion
(or any person who was an officer, director or trustee at any time after the
date on which the Board of Directors of the Bank and the Board of Trustees of
the Mutual Holding Company adopted the Plan) may be made only through a broker
or dealer registered with the SEC, except with the prior written approval of
the Department. This restriction does not apply, however, to the purchase of
stock pursuant to any tax-qualified employee stock benefit plan, such as the
ESOP, or by any non-tax-qualified employee stock benefit plan following
stockholder approval of such plan.
Pursuant to Department regulations, the Company will generally be
prohibited from repurchasing any shares of Common Stock within one year
following consummation of the Conversion. During the second and third years
following consummation of the Conversion, the Company may not repurchase any
shares of its Common Stock in excess of 5% of its outstanding capital stock
during a 12-month period, without the prior written approval of the Department.
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RESTRICTIONS ON ACQUISITION OF THE COMPANY
AND THE BANK
GENERAL
As described below, certain provisions in the Company's Certificate of
Incorporation and Bylaws and in the Company's and the Bank's benefit plans,
together with provisions of Delaware corporate law, may have anti-takeover
effects. In addition, regulatory restrictions may make it difficult for
persons or companies to acquire control of either the Company or the Bank.
Below is a summary of certain material restrictions on acquisitions of the
Company and the Bank.
RESTRICTIONS IN THE COMPANY'S CERTIFICATE OF INCORPORATION AND BYLAWS
General. A number of provisions of the Company's Certificate of
Incorporation and Bylaws deal with matters of corporate governance and certain
rights of stockholders. The following discussion is a general summary of
certain provisions of the Company's Certificate of Incorporation and Bylaws
which might be deemed to have a potential "anti-takeover" effect. These
provisions may have the effect of discouraging a future takeover attempt which
is not approved by the Board of Directors but which individual Company
stockholders may deem to be in their best interests or in which stockholders
may receive a substantial premium for their shares over then current market
prices. As a result, stockholders who might desire to participate in such a
transaction may not have an opportunity to do so. Such provisions will also
render the removal of the current Board of Directors or management of the
Company more difficult. The following description of certain of the provisions
of the Certificate of Incorporation and Bylaws of the Company is necessarily
general and reference should be made in each case to such Certificate of
Incorporation and Bylaws, which are incorporated herein by reference. See
"Additional Information" as to how to obtain a copy of these documents.
Limitation on Voting Rights. Article 12.B. of the Company's
Certificate of Incorporation provides that no person shall directly or
indirectly offer to acquire or acquire the beneficial ownership of (i) more
than 10% of the issued and outstanding shares of any class of an equity
security of the Company, or (ii) any securities convertible into, or
exercisable for, any equity securities of the Company if, assuming conversion
or exercise by such person of all securities of which such person is the
beneficial owner which are convertible into, or exercisable for, such equity
securities (but of no securities convertible into, or exercisable for, such
equity securities of which such person is not the beneficial owner), such
person would be the beneficial owner of more than 10% of any class of an equity
security of the Company. The terms "person" and "beneficial ownership" are
broadly defined to prevent circumvention of this restriction.
The foregoing restrictions do not apply to (i) any offer with a view
toward public resale made exclusively to the Company by underwriters or a
selling group acting on its
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behalf, (ii) any tax-qualified employee benefit plan or arrangement established
by the Company or the Bank and any trustee of such a plan or arrangement, and
(iii) any other offer or acquisition approved in advance by the affirmative
vote of two-thirds of the Company's entire Board of Directors. In the event
that shares are acquired in violation of Article 12.B., all shares beneficially
owned by any person in excess of 10% shall be considered "Excess Shares" and
shall not be counted as shares entitled to vote and shall not be voted by any
person or counted as voting shares in connection with any matters submitted to
stockholders for a vote, and the Board of Directors may cause such Excess
Shares to be transferred to an independent trustee for sale on the open market
or otherwise, with the expenses of such trustee to be paid out of the proceeds
of sale. In addition, the Company may refuse to recognize any transfer or
attempted transfer of the Company's equity securities which would result in the
transferee becoming the beneficial owner of Excess Shares.
Board of Directors. Article 7.A. of the Certificate of Incorporation
of the Company contains provisions relating to the Board of Directors and
provides, among other things, that the Board of Directors shall be divided into
three classes as nearly equal in number as possible, with the term of office of
one class expiring each year. See "Management - Management of the Company."
The classified Board is intended to provide for continuity of the Board of
Directors and to make it more difficult and time consuming for a stockholder
group to fully use its voting power to gain control of the Board of Directors
without the consent of the incumbent Board of Directors of the Company.
Cumulative voting in the election of directors is not permitted.
Directors may be removed only for cause at a duly constituted meeting
of stockholders called expressly for that purpose upon the vote of the holders
of at least 80% of the total votes eligible to be cast by stockholders. Cause
for removal shall exist only if the director whose removal is proposed has been
either declared incompetent by order of a court, convicted of a felony or of an
offense punishable by imprisonment for a term of more than one year by a court
of competent jurisdiction, or deemed liable by a court of competent
jurisdiction for gross negligence or misconduct in the performance of such
director's duties to the Company. Any vacancy occurring in the Board of
Directors for any reason (including an increase in the number of authorized
directors) may be filled by the affirmative vote of a majority of the remaining
directors, whether or not a quorum of the Board of Directors is present, or the
sole remaining director of the Company, and a director appointed to fill a
vacancy shall serve until the expiration of the term to which he was appointed.
The Company's Bylaws govern nominations for election to the Board, and
requires all nominations for election to the Board of Directors other than
those made by the Board to be made by a stockholder eligible to vote at an
annual meeting of stockholders who has complied with the notice provisions in
that section. Written notice of a stockholder nomination must be delivered to,
or mailed to and received at, the principal executive offices of the Company
not later than 120 days prior to the anniversary date of the
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immediately preceding annual meeting, provided that, with respect to the first
scheduled annual meeting following completion of the Conversion, notice must be
received no later than the close of business on February 26, 1998. Each such
notice shall set forth certain information as specified in Section 4.15 of the
Bylaws, including (a) as to each person whom the stockholder proposes to
nominate as a director, and as to the stockholder giving the notice, (i) the
name, age, business address and residence address of such person; (ii) the
principal occupation or employment of such person; (iii) the class and number
of shares of the Company's stock beneficially owned by such person; and (iv)
such other information regarding such person as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC; and
(b) the name and address of any other stockholders supporting such nominees
and/or those affiliated with, controlling or under common control with such
persons, and the class and number of shares of the Company's stock beneficially
owned by such other stockholders.
The Company's Certificate of Incorporation provides that the personal
liability of the directors and officers of the Company for monetary damages
shall be eliminated to the fullest extent permitted by the General Corporation
Law of the State of Delaware as it exists on the effective date of the
Certificate of Incorporation or as such law may be thereafter in effect.
Section 102(b)(7) of the Delaware General Corporation Law currently provides
that directors (but not officers) of corporations that have adopted such a
provision will not be so liable, except (i) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) for the payment of certain unlawful dividends and the
making of certain stock purchases or redemptions, or (iv) for any transaction
from which the director derived an improper personal benefit. This provision
would absolve directors of personal liability for negligence in the performance
of their duties, including gross negligence. It would not permit a director to
be exculpated, however, for liability for actions involving conflicts of
interest or breaches of the traditional "duty of loyalty" to the Company and
its stockholders, and it would not affect the availability of injunctive or
other equitable relief as a remedy.
The Company's Bylaws provide that the Company shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director, officer or employee of the Company or any
predecessor of the Company, or is or was serving at the request of the Company
or any predecessor of the Company as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines, excise taxes and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding to the fullest extent
authorized by the General Corporation Law of the State of Delaware, provided
that the Company shall not be liable for any amounts which may be due in
connection with a settlement of any action, suit or proceeding effected without
its prior written consent or any action, suit or proceeding initiated by any
person seeking
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indemnification thereunder without its prior written consent. The
indemnification provisions also permit the Company to pay reasonable expenses
in advance of the final disposition of any action, suit or proceeding as
authorized by the Company's Board of Directors, provided that the indemnified
person undertakes to repay the Company if it is ultimately determined that such
person was not entitled to indemnification. The rights of indemnification
provided in the Company's Certificate of Incorporation are not exclusive of any
other rights which may be available under the Company's Bylaws, any insurance
or other agreement, by vote of stockholders or directors (regardless of whether
directors authorizing such indemnification are beneficiaries thereof) or
otherwise. In addition, the Certificate of Incorporation authorizes the
Company to maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Company, whether or not the Company would
have the power to provide indemnification to such person. These provisions are
designed to reduce, in appropriate cases, the risks incident to serving as a
director, officer, employee or agent and to enable the Company to attract and
retain the best personnel available.
The provisions regarding director elections and other provisions in
the Certificate of Incorporation and Bylaws are generally designed to protect
the ability of the Board of Directors to negotiate with the proponent of an
unfriendly or unsolicited proposal to take over or restructure the Company by
making it more difficult and time-consuming to change majority control of the
Board, whether by proxy contest or otherwise. The general effect of these
provisions will be to generally require at least two (and possibly three)
annual stockholders' meetings, instead of one, to effect a change in control of
the Board of Directors of the Company even if holders of a majority of the
Company's capital stock believed that a change in the composition of the Board
of Directors was desirable. Because a majority of the directors at any given
time will have prior experience as directors, these requirements will help to
ensure continuity and stability of the Company's management and policies and
facilitate long-range planning for the Company's business. The provisions
relating to removal of directors and filling of vacancies are consistent with
and supportive of a classified board of directors.
The procedures regarding stockholder nominations will provide the
Board of Directors with sufficient time and information to evaluate a
stockholder nominee to the Board and other relevant information, such as
existing stockholder support for the nominee. The proposed procedures,
however, will provide incumbent directors advance notice of a dissident slate
of nominees for directors, and will make it easier for the Board to solicit
proxies resisting such nominees. This may make it easier for the incumbent
directors to retain their status as directors, even when certain stockholders
view the stockholder nominations as in the best interests of the Company or its
stockholders.
Authorized Shares. Article 4 of the Certificate of Incorporation
authorizes the issuance of 125,000,000 shares of Common Stock and 25,000,000
shares of Preferred Stock. The shares of Common Stock and Preferred Stock were
authorized in an amount greater than that to be issued in the Conversion to
provide the Company's Board of Directors with as much flexibility as possible
to effect, among other transactions, financings, acquisitions,
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stock dividends, stock splits and employee stock options. However, these
additional authorized shares may also be used by the Board of Directors
consistent with its fiduciary duty to deter future attempts to gain control of
the Company. The Board of Directors also has sole authority to determine the
terms of any one or more series of Preferred Stock, including voting rights,
conversion rates, and liquidation preferences. As a result of the ability to
fix voting rights for a series of Preferred Stock, the Board has the power, to
the extent consistent with its fiduciary duty, to issue a series of Preferred
Stock to persons friendly to management in order to attempt to block a
post-tender offer merger or other transaction by which a third party seeks
control, and thereby assist management to retain its position. The Company's
Board currently has no plans for the issuance of additional shares, other than
the issuance of additional shares pursuant to stock benefit plans and to the
Foundation.
Meetings of Stockholders. The Company's Certificate of Incorporation
provides that any action required or permitted by the General Corporation Law
of the State of Delaware or the Certificate of Incorporation to be approved by
or consented to by the stockholders of the Company, must be effected at a duly
called annual or special meeting of stockholders and may not be effected by
written consent by stockholders in lieu of a meeting of stockholders. The
Certificate of Incorporation further provides that, with limited exceptions,
special meetings of stockholders may be called only by a three-fourths vote of
the Board of Directors.
Stockholder Proposals. The Company's Bylaws provide that only such
business as shall have been properly brought before an annual meeting of
stockholders shall be conducted at the annual meeting. In order to be properly
brought before an annual meeting following completion of the Conversion,
business must be (a) brought before the meeting by or at the direction of the
Board of Directors or (b) otherwise properly brought before the meeting by a
stockholder who has given timely and complete notice thereof in writing to the
Company. For stockholder proposals to be included in the Company's proxy
materials, the stockholder must comply with all the timing and informational
requirements of Rule 14a-8 of the Exchange Act. With respect to stockholder
proposals to be considered at the annual meeting of stockholders but not
included in the Company's proxy materials, the stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not less than 120 days prior to the anniversary date of the immediately
preceding annual meeting; provided, however, that with respect to the first
scheduled annual meeting following completion of the Conversion, such written
notice must be received by the Company not later than the close of business on
February 26, 1998. A stockholder's notice shall set forth as to each matter
the stockholder proposes to bring before the annual meeting certain information
as specified in Section 2.14 of the Bylaws, including (a) a brief description
of the proposal desired to be brought before the annual meeting, (b) the name
and address, as they appear on the Company's books, of the stockholder
proposing such business, and, to the extent known, any other stockholders known
by such stockholder to be supporting such proposal, (c) the class and number of
shares of the Company which are beneficially owned by the stockholder; and, to
the extent known, by any other stockholders
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known by such stockholder to be supporting such proposal on the date of such
stockholder notice, (d) the identification of any person retained to make
stockholder solicitations or recommendations with respect to such proposal, and
(e) any material interest of the stockholder in such proposal. Any such
proposal not made in accordance with the Bylaws may be rejected.
The procedures regarding stockholder proposals are designed to provide
the Board with sufficient time and information to evaluate a stockholder
proposal and other relevant information, such as existing stockholder support
for the proposal. The proposed procedures, however, will give incumbent
directors advance notice of a stockholder proposal. This may make it easier for
the incumbent directors to defeat a stockholder proposal, even when certain
stockholders view such proposal as in the best interests of the Company or its
stockholders.
Evaluation of Offers. The Certificate of Incorporation of the Company
further provides that the Board of Directors of the Company, when evaluating
any offer to the Company from another party to (i) make a tender or exchange
offer for any equity security of the Company, (ii) merge or consolidate the
Company with another corporation or entity or (iii) purchase or otherwise
acquire all or substantially all of the properties and assets of the Company,
may, consistent with the exercise of its fiduciary duties and in connection
with the exercise of its judgment in determining what is in the best interest
of the Company and the stockholders of the Company, give due consideration to
the extent permitted by law not only to the price or other consideration being
offered, but also to all other relevant factors, including, without limitation,
the financial and managerial resources and future prospects of the other party,
the possible effects on the business of the Company and its subsidiaries and on
the employees, customers, suppliers and creditors of the Company and its
subsidiaries, and the effects on the communities in which the Company's and its
subsidiaries' facilities are located. By having these standards in the
Certificate of Incorporation of the Company, the Board of Directors may be in a
stronger position to oppose such a transaction if the Board concludes that the
transaction would not be in the best interest of the Company, even if the price
offered is significantly greater than the then market price of any equity
security of the Company.
Stockholder Approval of Mergers and Certain Other Extraordinary
Transactions. Article 11 of the Company's Certificate of Incorporation
provides that any action taken by stockholders under Subchapter IX of the
Delaware General Corporation Law (which relates to merger or consolidation
transactions) and Subchapter X (which relates to sale of assets, dissolution
and winding up transactions) shall, with certain exceptions, generally require
the affirmative vote of at least 80% of the votes eligible to be cast by
stockholders. The supermajority 80% vote requirement of Article 11 of the
Certificate of Incorporation shall not be applicable to any transaction
approved in advance by at least two-thirds of the entire Board of Directors of
the Company, in which case the transaction will require only such stockholder
approval as specified under Delaware law. The Delaware General Corporation Law
requires the approval of the Board of Directors and the holders of a majority
of the
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outstanding stock of the Company entitled to vote thereon for mergers of
consolidations, and for sales, leases or exchanges of all substantially all of
the Company's assets. The Delaware General Corporation Law permits the Company
to merge with another corporation without obtaining the approval of the
Company's stockholders if: (i) the Company is the surviving corporation of the
merger; (ii) the merger agreement does not amend the Company's Certificate of
Incorporation; (iii) each share of the Company's stock outstanding immediately
prior to the effective date of the merger is to be an identical outstanding or
treasury share of the Company after the merger; and (iv) any authorized but
unissued shares or treasury shares of Common Stock to be issued or delivered
under the plan of merger plus those initially issuable upon conversion of any
other securities or obligations to be issued or delivered under such plan do
not exceed 20% of the shares of the Common Stock outstanding immediately prior
to the effective date of the merger.
Amendment of Certificate of Incorporation and Bylaws. Article 13 of
the Company's Certificate of Incorporation generally provides that any
amendment of the Certificate of Incorporation must be approved first by a
majority of the Board of Directors and then by the holders of 80% of the shares
of the Company entitled to vote in an election of directors, except that the
approval of only a majority of the shares of the Company entitled to vote in an
election of directors is required for any amendment previously approved by at
least two-thirds of the entire Board of Directors.
The Bylaws of the Company may be amended by a majority of the Board of
Directors or by the affirmative vote of a majority of the total shares entitled
to vote in an election of directors, except that the affirmative vote of at
least 80% of the total shares entitled to vote in an election of directors
shall be required to amend, adopt, alter, change or repeal any provision
inconsistent with certain specified provisions of the Bylaws.
DELAWARE CORPORATE LAW
In addition to the provisions contained in the Company's Certificate
of Incorporation, the Delaware General Corporation Law ("GCL") includes certain
provisions applicable to Delaware corporations, such as the Company, which may
be deemed to have an anti-takeover effect. Such provisions include
requirements relating to certain business combinations.
Section 203 of the GCL ("Section 203") imposes certain restrictions on
business combinations between the Company and large shareholders.
Specifically, Section 203 prohibits a "business combination" (as defined in
Section 203, generally including mergers, sales and leases of assets, issuances
of securities and similar transactions) between the Company or a subsidiary and
an "interested shareholder" (as defined in Section 203, generally the
beneficial owner of 15% or more of the Company Common Stock) within three years
after the person or entity becomes an interested shareholder, unless (i) prior
to the person or entity becoming an interested shareholder, the business
combination or the transaction pursuant to which such person or entity became
an interested shareholder shall
167
<PAGE> 212
have been approved by the Company's Board of Directors, (ii) upon consummation
of the transaction in which the interested shareholder became such, the
interested shareholder holds at least 85% of the Company Common Stock
(excluding shares held by persons who are both officers and directors and
shares held by certain employee benefit plans), or (iii) the business
combination is approved by the Company's Board of Directors and by the holders
of at least two-thirds of the outstanding Company Common Stock, excluding
shares owned by the interested shareholders.
One of the effects of Section 203 may be to prevent highly leveraged
takeovers, which depend upon getting access to the acquired corporation's
assets to support or repay acquisition indebtedness and certain coercive
acquisition tactics. By requiring approval of the holders of two-thirds of the
shares held by disinterested shareholders for business combinations involving
an interested shareholder, Section 203 may prevent any interested shareholder
from taking advantage of its position as a substantial, if not controlling,
shareholder and engaging in transactions with the Company that may not be fair
to the Company's other shareholders or that may otherwise not be in the best
interests of the Company, its shareholders and other constituencies.
For similar reasons, however, these provisions may make more difficult
or discourage an acquisition of the Company, or the acquisition of control of
the Company by a principal shareholder, and thus the removal of incumbent
management. In addition, to the extent that Section 203 discourages takeovers
that would result in the change of the Company's management, such a change may
be less likely to occur.
ANTI-TAKEOVER EFFECTS OF THE CERTIFICATE OF INCORPORATION AND BYLAWS AND
MANAGEMENT REMUNERATION ADOPTED IN THE CONVERSION
The foregoing provisions of the Certificate of Incorporation and
Bylaws of the Company and Delaware law could have the effect of discouraging an
acquisition of the Company or stock purchases in furtherance of an acquisition,
and could accordingly, under certain circumstances, discourage transactions
which might otherwise have a favorable effect on the price of the Company's
Common Stock. In addition, such provisions may result in the Company being
deemed to be less attractive to a potential acquiror and/or might result in
stockholders receiving a lesser amount of consideration for their shares of
Common Stock than otherwise could have been available.
In addition, the Company and the Bank have also entered into
agreements with certain of their officers which provide such officers with
additional payments upon the officers' termination in connection with a change
in control of the Company or the Bank. See "Management - Management of the
Bank" and "- Employment Agreements." The foregoing provisions and limitations
may make it more difficult for companies or persons to acquire control of the
Bank. Additionally, the provisions could deter offers to the stockholders
which might be viewed by such stockholders to be in their best interests.
168
<PAGE> 213
The Board of Directors believes that the provisions described above
are prudent and will reduce vulnerability to takeover attempts and certain
other transactions that are not negotiated with and approved by the Board of
Directors of the Company. The Board of Directors believes that these
provisions are in the best interests of the Company and its future
stockholders. In the Board of Directors' judgment, the Board of Directors is
in the best position to determine the true value of the Company and to
negotiate more effectively for what may be in the best interests of its
stockholders. Accordingly, the Board of Directors believes that it is in the
best interests of the Company and its future stockholders to encourage
potential acquirors to negotiate directly with the Board of Directors and that
these provisions will encourage such negotiations and discourage hostile
takeover attempts. It is also the Board of Directors' view that these
provisions should not discourage persons from proposing a merger or other
transaction at prices reflective of the true value of the Company and where the
transaction is in the best interests of all stockholders.
Despite the Board of Directors' belief as to the benefits to the
Company's stockholders of the foregoing provisions, these provisions also may
have the effect of discouraging a future takeover attempt in which stockholders
might receive a substantial premium for their shares over then current market
prices and may tend to perpetuate existing management. As a result,
stockholders who might desire to participate in such a transaction may not have
an opportunity to do so. The Board of Directors, however, has concluded that
the potential benefits of these provisions outweigh their possible
disadvantages.
The Board of Directors of the Company and the Bank are not aware of
any effort that might be made to acquire control of the Bank or the Company.
REGULATORY RESTRICTIONS
Change in Bank Control Act. The Change in Bank Control Act provides
that no person, acting directly or indirectly or through or in concert with one
or more other persons, may acquire control of a savings and loan holding
company unless the OTS has been given 60 days' prior written notice. The HOLA
provides that no company may acquire "control" of a savings and loan holding
company without the prior approval of the OTS. Any company that acquires such
control becomes a savings and loan holding company subject to registration,
examination and regulation by the OTS. Pursuant to federal regulations,
control of a savings and loan holding company is conclusively deemed to have
been acquired by, among other things, the acquisition of more than 25% of any
class of voting stock of the institution or the ability to control the election
of a majority of the directors of an institution. Moreover, control is
presumed to have been acquired, subject to rebuttal, upon the acquisition of
more than 10% of any class of voting stock, or of more than 25% of any class of
stock, of a savings and loan holding company where certain enumerated "control
factors" are also present in the acquisition. The OTS may prohibit an
acquisition if (i) it would result in a monopoly or substantially lessen
competition, (ii) the financial condition of the acquiring person might
jeopardize the financial stability of the institution, or (iii) the
169
<PAGE> 214
competence, experience or integrity of the acquiring person indicates that it
would not be in the interest of the depositors or of the public to permit the
acquisition of control by such person. The foregoing restrictions do not apply
to the acquisition of a savings institution's capital stock by one or more
tax-qualified employee stock benefit plans, provided that the plan or plans do
not have beneficial ownership in the aggregate of more than 25% of any class of
equity security.
New York State Banking Board Conversion Regulations. Regulations of
the New York Banking Board prohibit any person, prior to the completion of the
Conversion, from transferring, or from entering into any agreement or
understanding to transfer, to the account of another, legal or beneficial
ownership of the subscription rights issued under the or the Common Stock to be
issued upon their exercise. The New York Banking Board regulations also
prohibit any person, prior to the completion of the Conversion, from offering,
or making an announcement of an offer or intent to make an offer, to purchase
such subscription rights or Common Stock. See "The Conversion--Restrictions on
Transfer of Subscription Rights and Shares."
For one year following the Conversion, the New York Banking Board
regulations prohibit any person from acquiring or making an offer to acquire
more than 10% of the stock of any converted savings institution, except with
the prior approval of the Superintendent.
New York State Bank Holding Company Law. Under the New York Banking
Law, the prior approval of the New York Banking Board is required before: (1)
any action is taken that causes any company to become a bank holding company;
(2) any action is taken that causes any banking institution to become or to be
merged or consolidated with a subsidiary of a bank holding company; (3) any
bank holding company acquires direct or indirect ownership or control of more
than 5% of the voting stock of a banking institution; (4) any bank holding
company or subsidiary thereof acquires all or substantially all of the assets
of a banking institution; or (5) any action is taken that causes any bank
holding company to merge or consolidate with another bank holding company. See
"Regulation-The Company-Restrictions on Acquisition."
New York State Change in Control Law. Prior approval of the New York
Banking Board is also required before any action is taken that causes any
company to acquire direct or indirect control of a banking institution.
Control is presumed to exist if any company directly or indirectly owns,
controls or holds with power to vote 10% or more of the voting stock of a
banking institution or of any company that owns, controls or holds with power
to vote 10% or more of the voting stock of a banking institution. Accordingly,
prior approval of the New York Banking Board would be required before any
company could acquire 10% or more of the Common Stock of the Company.
170
<PAGE> 215
DESCRIPTION OF CAPITAL STOCK OF THE COMPANY
GENERAL
The Company is authorized to issue 125,000,000 shares of Common Stock
having a par value of $0.01 per share and 25,000,000 shares of preferred stock
having a par value of $0.01 per share (the "Preferred Stock"). The Company
currently expects to issue up to a maximum of 50,578,704 shares (58,165,509
shares in the event that the maximum of the Valuation Range is increased by
15%) of Common Stock and no shares of Preferred Stock in the Conversion. Each
share of the Company's Common Stock will have the same relative rights as, and
will be identical in all respects with, each other share of Common Stock. Upon
payment of the Purchase Price for the Common Stock in accordance with the Plan
of Conversion, all such stock will be duly authorized, fully paid and
nonassessable. Presented below is a description of all aspects of the Company's
capital stock which are deemed material to an investment decision with respect
to the Conversion.
THE COMMON STOCK OF THE COMPANY WILL REPRESENT NONWITHDRAWABLE
CAPITAL, WILL NOT BE AN ACCOUNT OF AN INSURABLE TYPE, AND WILL NOT BE INSURED
BY THE FDIC.
COMMON STOCK
Distributions. The Company can pay dividends if, as and when declared
by its Board of Directors, subject to compliance with limitations which are
imposed by law. See "Dividend Policy." The holders of Common Stock of the
Company will be entitled to receive and share equally in such dividends as may
be declared by the Board of Directors of the Company out of funds legally
available therefor. If the Company issues Preferred Stock, the holders thereof
may have a priority over the holders of the Common Stock with respect to
dividends.
Voting Rights. Upon Conversion, the holders of Common Stock of the
Company will possess exclusive voting rights in the Company. They will elect
the Company's Board of Directors and act on such other matters as are required
to be presented to them under Delaware law or the Company's Certificate of
Incorporation or as are otherwise presented
171
<PAGE> 216
to them by the Board of Directors. Each holder of Common Stock will be
entitled to one vote per share and will not have any right to cumulate votes in
the election of directors. Cumulative voting means that holders of stock of a
corporation are entitled, in the election of directors, to cast a number of
votes equal to the number of shares which they own multiplied by the number of
directors to be elected Because a stockholder entitled to cumulative voting
may cast all of his votes for one nominee or disperse his votes among nominees
as he chooses, cumulative voting is generally considered to increase the
ability of minority stockholders to elect nominees to a corporation's board of
directors. Under certain circumstances, shares in excess of 10.0% of the
issued and outstanding shares of Common Stock may be considered "Excess Shares"
and, accordingly, not be entitled to vote. See "Restrictions on Acquisition of
the Company and the Bank." If the Company issues Preferred Stock, holders of
the Preferred Stock may also possess voting rights.
Liquidation. In the event of any liquidation, dissolution or winding
up of the Bank, the Company, as holder of the Bank's capital stock, would be
entitled to receive, after payment or provision for payment of all debts and
liabilities of the Bank (including all deposit accounts and accrued interest
thereon) and after distribution of the balance in the special liquidation
account to Eligible Account Holders and Supplemental Eligible Account Holders
(see "The Conversion - Liquidation Rights"), all assets of the Bank available
for distribution. In the event of liquidation, dissolution or winding up of
the Company, the holders of its Common Stock would be entitled to receive,
after payment or provision for payment of all its debts and liabilities, all of
the assets of the Company available for distribution. If Preferred Stock is
issued, the holders thereof may have a priority over the holders of the Common
Stock in the event of liquidation or dissolution.
Preemptive Rights. Holders of the Common Stock of the Company will
not be entitled to preemptive rights with respect to any shares which may be
issued. The Common Stock is not subject to redemption.
PREFERRED STOCK
None of the shares of the Company's authorized Preferred Stock will be
issued in the Conversion. Such stock may be issued with such preferences and
designations as the Board of Directors may from time to time determine. The
Board of Directors can, without stockholder approval, issue preferred stock
with voting, dividend, liquidation and conversion rights which could dilute the
voting strength of the holders of the Common Stock and may assist management in
impeding an unfriendly takeover or attempted change in control. The Company
has no present plans to issue Preferred Stock.
172
<PAGE> 217
DESCRIPTION OF CAPITAL STOCK OF THE BANK
GENERAL
The Amended and Restated Organization Certificate of the Bank
authorizes the issuance of capital stock consisting of 100 shares of common
stock, par value $1.00 per share. Each share of common stock of the Bank will
have the same relative rights as, and will be identical in all respects with,
each other share of common stock. After the Conversion, the Board of Directors
will be authorized to approve the issuance of common stock up to the amount
authorized by the Amended and Restated Organization Certificate without the
approval of the Company's stockholders. Upon Conversion, all of the issued and
outstanding common stock of the Bank will be held by the Company as the Bank's
sole stockholder. The capital stock of the Bank will represent nonwithdrawable
capital, will not be an account of an insurable type, and will not be insured
by the FDIC. Presented below is a description of all aspects of the Bank's
capital stock which are deemed material to an investment decision with respect
to the Conversion.
DIVIDENDS
The holders of the Bank's common stock will be entitled to receive and
to share equally in such dividends as may be declared by the Board of Directors
of the Bank out of funds legally available therefore. See "Dividend Policy"
for certain restrictions on the payment of dividends.
VOTING RIGHTS
Immediately after the Conversion, the holders of the Bank's common
stock, which will consist solely of the Company, will possess exclusive voting
rights in the Bank. Each holder of shares of common stock will be entitled to
one vote for each share held and there shall be no right to cumulate votes.
LIQUIDATION
In the event of any liquidation, dissolution, or winding up of the
Bank, the holders of common stock will be entitled to receive, after payment of
all debts and liabilities of the Bank (including all deposit accounts and
accrued interest thereon), and distribution of the balance in the special
liquidation account to Eligible Account Holders and Supplemental Eligible
Account Holders, all assets of the Bank available for distribution in cash or
in kind. If additional preferred stock is issued subsequent to the Conversion,
the holders thereof may also have priority over the holders of common stock in
the event of liquidation or dissolution.
173
<PAGE> 218
PREEMPTIVE RIGHTS; REDEMPTION
Holders of the common stock of the Bank will not be entitled to
preemptive rights with respect to any shares of the Bank which may be issued.
The common stock will not be subject to redemption. Upon receipt by the Bank
of the full specified purchase price therefor, the common stock will be fully
paid and nonassessable.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is
_________________.
EXPERTS
The consolidated financial statements of the Bank as of March 31, 1997
and 1996, and for each of the years in the three-year period ended March 31,
1997, included in the Prospectus have been audited by Ernst & Young LLP,
independent certified public accountants, as stated in their report appearing
elsewhere herein, and have been so included in reliance upon the report of such
firm, given upon their authority as experts in accounting and auditing.
RP Financial has consented to the publication herein of the summary of
its report to the Bank and Company setting forth its opinion as to the
estimated pro forma market value of the Common Stock upon Conversion and its
opinion with respect to subscription rights.
LEGAL AND TAX OPINIONS
The legality of the Common Stock and the Federal income tax
consequences of the Conversion will be passed upon for the Bank and the Company
by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C., special counsel to
the Bank and the Company. The New York income tax consequences of the
Conversion will be passed upon for the Bank and the Company by Ernst & Young
LLP. The federal income tax consequences of certain matters relating to
establishment of the Foundation will be passed upon for the Bank and the
Company by Potter Anderson & Corroon. Certain legal matters will be passed
upon for Sandler O'Neill by Muldoon, Murphy & Faucette, Washington, D.C.
ADDITIONAL INFORMATION
The Company has filed with the SEC a Registration Statement under the
Securities Act with respect to the Common Stock offered hereby. As permitted
by the rules and
174
<PAGE> 219
regulations of the SEC, this Prospectus does not contain all the information
set forth in the Registration Statement. Such information, including the
Conversion Valuation Appraisal Report which is an exhibit to the Registration
Statement, can be examined without charge at the public reference facilities of
the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549, and copies
of such material can be obtained from the SEC at prescribed rates. In addition,
the SEC maintains a web site (http://www.sec.gov) that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the SEC, including the Company. The statements
contained in this Prospectus as to the contents of any contract or other
document filed as an exhibit to the Registration Statement are, of necessity,
brief descriptions thereof and are not necessarily complete; each such
statement is qualified by reference to such contract or document.
The Bank has filed an Application for Conversion with the
Superintendent with respect to the Conversion. This Prospectus omits certain
information contained in that application. The Application may be examined at
the office of the Superintendent, Two Rector Street, New York, New York 10006.
The Company has filed with the Office of Thrift Supervision an
Application to Form a Holding Company. This Prospectus omits certain
information contained in such Application. Such Application may be inspected
at the offices of the OTS, 1700 G Street, N.W., Washington, D.C. 20552.
In connection with the Conversion, the Company will register its
Common Stock with the SEC under Section 12(g) of the Exchange Act, and, upon
such registration, the Company and the holders of its stock will become subject
to the proxy solicitation rules, reporting requirements and restrictions on
stock purchases and sales by directors, officers and greater than 10%
stockholders, the annual and periodic reporting and certain other requirements
of the Exchange Act. Under the Plan, the Company has undertaken that it will
not terminate such registration for a period of at least three years following
the Conversion.
A copy of the Plan of Conversion and Certificate of Incorporation and
the Bylaws of the Company and the Amended and Restated Certificate of
Incorporation and Bylaws of the Bank are available without charge from the
Bank. Requests for such information should be directed to:
_______________________, Independence Savings Bank, 195 Montague Street,
Brooklyn, New York 11201.
175
<PAGE> 220
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Auditors'.................................................................... F-2
Consolidated Statements of Financial Condition at
March 31, 1997 and 1996.......................................................................... F-3
Consolidated Statements of Income for the years ended
March 31, 1997, 1996 and 1995.................................................................... 47
Consolidated Statements of Changes in Stockholders' Equity
for the years ended March 31, 1997, 1996 and 1995................................................ F-4
Consolidated Statements of Cash Flows for the years ended
March 31, 1997, 1996 and 1995.................................................................... F-5
Notes to Consolidated Financial Statements......................................................... F-6
</TABLE>
All schedules are omitted as the required information is not applicable or the
information is presented in the Consolidated Financial Statements.
The financial statements of Independence Community Bank Corp. have been omitted
because Independence Community Bank Corp. has not yet issued any stock, has no
assets or liabilities, and has not conducted any business other than of an
organizational nature.
F-1
<PAGE> 221
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
The Board of Directors
Independence Savings Bank
We have audited the accompanying consolidated statements of financial condition
of Independence Savings Bank (the "Bank") as of March 31, 1997 and 1996, and
the related consolidated statements of income, changes in stockholder's equity
and cash flows for each of the three years in the period ended March 31, 1997.
These financial statements are the responsibility of the Bank's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Independence
Savings Bank at March 31, 1997 and 1996, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
March 31, 1997, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
May 29, 1997
F-2
<PAGE> 222
Independence Savings Bank
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
MARCH 31
1997 1996
----------------------------------------
(In thousands)
<S> <C> <C>
ASSETS
Cash and due from banks $ 310,429 $ 44,410
Commercial paper 39,866 -
Federal funds sold 24,341 58,782
----------------------------------------
Total cash and cash equivalents 374,636 103,192
Investment securities, held-to-maturity (estimated
fair value of $39,931) - 39,995
Mortgage-backed and mortgage related securities, held-to-maturity
(estimated fair value of $121,698) - 120,702
Securities available-for-sale:
Debt and equity 357,487 683,828
Mortgage-backed and mortgage related 190,979 395,321
----------------------------------------
Total securities 548,466 1,239,846
Mortgage loans on real estate 2,065,153 1,894,926
Other loans 464,960 448,410
----------------------------------------
Total loans 2,530,113 2,343,336
Less: Allowance for possible loan losses (27,024) (20,528)
----------------------------------------
Total loans, net 2,503,089 2,322,808
Premises, furniture and equipment, net 60,367 51,906
Accrued interest receivable 17,384 21,070
Intangible assets, net 60,499 80,268
Other assets 168,875 50,692
----------------------------------------
Total assets $3,733,316 $3,869,782
========================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 223
<TABLE>
<CAPTION>
MARCH 31
1997 1996
----------------------------------------
(In thousands)
<S> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Deposits:
Savings accounts $1,018,199 $1,109,503
Money market accounts 218,230 215,545
Demand deposit accounts 345,373 274,594
Time deposit accounts 1,743,756 1,797,248
----------------------------------------
Total deposits 3,325,558 3,396,890
Due to banks - 215
Borrowings 17,232 57,295
Escrow and other deposits 41,034 35,597
Accrued expenses and other liabilities 40,378 89,966
----------------------------------------
Total liabilities 3,424,202 3,579,963
Stockholder's equity:
Common stock ($1.00 par value, 100 shares authorized,
issued and outstanding) - -
Contributed capital 52,670 52,670
Surplus 55,812 53,791
Undivided profits 200,264 185,105
Net unrealized gain (loss) on securities available-for-sale,
net of tax 368 (1,747)
----------------------------------------
Total stockholder's equity 309,114 289,819
----------------------------------------
Total liabilities and stockholder's equity $3,733,316 $3,869,782
========================================
</TABLE>
F-3
<PAGE> 224
Independence Savings Bank
Consolidated Statements of Changes in Stockholder's Equity
Years ended March 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
COMMON CONTRIBUTED UNDIVIDED
STOCK (a) CAPITAL SURPLUS PROFITS
---------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Balance--March 31, 1994 $ - $ 52,670 $ 46,704 $ 121,316
Unrealized net gain, net of tax, upon adoption of
SFAS 115 - - - -
Changes in net unrealized gains in securities
available-for-sale, net of tax - - - -
Net income for year ending March 31, 1995 - - 3,490 31,414
---------------------------------------------------------------------
Balance--March 31, 1995 - 52,670 50,194 152,730
Net unrealized loss on securities transferred from
held-to-maturity to available-for-sale, net of tax - - - -
Changes in net unrealized losses in securities
available-for-sale, net of tax - - - -
Net income for the year ended March 31, 1996 - - 3,597 32,375
---------------------------------------------------------------------
Balance--March 31, 1996 - 52,670 53,791 185,105
Net unrealized gain on securities transferred from
held-to-maturity to available-for-sale, net of tax - - - -
Changes in net unrealized gains in securities
available-for-sale, net of tax - - - -
Net income for the year ended March 31, 1997 - - 2,021 15,159
---------------------------------------------------------------------
Balance--March 31, 1997 $ - $ 52,670 $ 55,812 $ 200,264
=====================================================================
</TABLE>
<TABLE>
<CAPTION>
NET UNREALIZED
GAINS (LOSSES) ON
SECURITIES
AVAILABLE-FOR-SALE TOTAL
--------------------------------------
<S> <C> <C>
Balance--March 31, 1994 $ - $ 220,690
Unrealized net gain, net of tax, upon adoption of 2,718 2,718
SFAS 115
Changes in net unrealized gains in securities
available-for-sale, net of tax 885 885
Net income for year ending March 31, 1995 - 34,904
--------------------------------------
Balance--March 31, 1995 3,603 259,197
Net unrealized loss on securities transferred from
held-to-maturity to available-for-sale, net of tax (1,826) (1,826)
Changes in net unrealized losses in securities
available-for-sale, net of tax (3,524) (3,524)
Net income for the year ended March 31, 1996 - 35,972
--------------------------------------
Balance--March 31, 1996 (1,747) 289,819
Net unrealized gain on securities transferred from
held-to-maturity to available-for-sale, net of tax 269 269
Changes in net unrealized gains in securities
available-for-sale, net of tax 1,846 1,846
Net income for the year ended March 31, 1997 - 17,180
--------------------------------------
Balance--March 31, 1997 $ 368 $ 309,114
======================================
</TABLE>
(a) $1.00 par value, 100 shares common stock authorized, issued and outstanding.
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 225
Independence Savings Bank
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
1997 1996 1995
------------------------------------------------
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 17,180 $ 35,972 $ 34,904
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 7,960 3,679 3,592
Net loss (gain) on sale of loans and securities 3,347 (12,222) 3,952
Amortization of deferred income and premiums (11,164) (6,631) (2,888)
Amortization of intangibles 8,278 1,842 905
Depreciation and amortization 5,972 3,545 2,218
Deferred income tax benefit (7,137) (1,416) (1,946)
Change in assets and liabilities net of effects from
purchase of Bay Ridge Bancorp.
Decrease (increase) in accrued interest receivable 3,687 (1,291) 2,318
Increase in accounts receivable-securities transactions (107,624) - -
Decrease in due to banks (215) (729) (5,183)
(Decrease) increase in accrued expenses and other liabilities (49,588) 62,732 (4,357)
Other, net (6,625) (858) 154
------------------------------------------------
Net cash (used in) provided by operating activities (135,929) 84,623 33,669
------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Loan originations (503,153) (232,485) (578,437)
Principal payments on loans 261,161 189,064 116,129
Proceeds from sale of loans 76,002 8,686 133,672
Proceeds from sales, maturities and principal collected
for securities available-for-sale 1,620,254 539,895 229,203
Purchases of securities available-for-sale (927,977) (1,178,896) (57,381)
Proceeds from sales, maturities and principal collected
for investment securities - 4,228 173,113
Purchases of investment securities - - (4,983)
Proceeds from sales of other real estate 1,308 2,512 1,154
Purchases of Federal Home Loan Bank stock (3,579) - (2,460)
Net additions to premises, furniture and equipment (14,433) (6,242) (12,741)
Payment for purchase of Bay Ridge Bancorp, net of cash acquired - (74,731) -
------------------------------------------------
Net cash provided by (used in) investing activities 509,583 (747,969) (2,731)
------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Deposits sold, net of premium (47,661) - -
Deposits purchased, net of premium - 560,948 20,432
Net increase (decrease) in demand and savings deposits 2,276 (14,291) (225,558)
Net (decrease) increase in time deposits (22,199) 120,861 234,108
Net (decrease) increase in other borrowings (40,063) (11,453) 7,159
Net increase in escrow and other deposits 5,437 79 5,648
------------------------------------------------
Net cash (used in) provided by financing activities (102,210) 656,144 41,789
------------------------------------------------
Net increase (decrease) in cash and cash equivalents 271,444 (7,202) 72,727
Cash and cash equivalents at beginning of year 103,192 110,394 37,667
------------------------------------------------
Cash and cash equivalents at end of year $ 374,636 $ 103,192 $ 110,394
================================================
Income taxes paid $ 25,200 $ 30,383 $ 31,394
================================================
Interest paid $ 138,823 $ 110,586 $ 76,483
================================================
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 226
Independence Savings Bank
Notes to Consolidated Financial Statements
March 31, 1997, 1996 and 1995
1. GENERAL
Independence Savings Bank (the "Bank") is a New York State chartered stock form
savings bank which provides financial services primarily to individuals and
small businesses within the New York metropolitan area. The Bank is subject to
regulation by the Federal Deposit Insurance Corp. ("FDIC") and New York State
Banking Department. Independence Savings Bank is the wholly-owned, sole
subsidiary of Independence Community Bank Corp. ("ICBC").
2. ACQUISITIONS
On January 3, 1996, the Bank acquired, via a cash acquisition, the stock of Bay
Ridge Bancorp, Inc. and its thrift subsidiary, Bay Ridge Federal Savings Bank.
The purchase price paid was approximately $127.8 million, and as a result the
Bank acquired approximately $558.6 million in assets and $445.2 million in
liabilities, with the transaction recorded on a purchase accounting basis. The
cost in excess of the net assets acquired is being amortized on a straight-line
basis over approximately 14 years.
On March 15, 1996, the Bank assumed approximately $615.6 million of deposits
and acquired $8.1 million in assets from First Nationwide Bank ("FNB"). The
Bank also received approximately $557.9 million in cash from FNB to fund the
assumption of these deposit liabilities. The Bank subsequently sold, in
September of 1996, approximately $51.4 million of these deposits. The adjusted
cost in excess of the assets received and the deposits assumed is being
amortized on a straight-line basis over 7 years.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a description of the significant accounting policies of the
Bank and its subsidiaries. These policies conform to generally accepted
accounting principles.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of the Bank include all majority-owned
subsidiaries, after elimination of intercompany transactions and accounts.
F-6
<PAGE> 227
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior years' financial
statements to conform with the current year's presentation.
INVESTMENT, MORTGAGE-BACKED AND MORTGAGE RELATED SECURITIES HELD-TO-MATURITY
Investment, mortgage-backed and mortgage related securities held-to-maturity
are stated at cost, adjusted for amortization of premiums and discounts which
are recognized as adjustments to interest income over the life of the security
so as to provide a level yield.
To the extent management determines a decline in value in an investment,
mortgage-backed or mortgage related security held-to-maturity to be other than
temporary the Bank will provide allowances and will reflect such provisions in
the consolidated statement of income.
Gains or losses on disposition of investment, mortgage-backed and mortgage
related securities held-to-maturity are based on the net proceeds, minus the
adjusted carrying amount of the securities sold, using the specific
identification method.
In March 1997, all remaining investment, mortgage-backed and mortgage related
securities classified as held-to-maturity were reclassified to
available-for-sale (see Notes 5 and 6).
F-7
<PAGE> 228
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SECURITIES AVAILABLE-FOR-SALE
Securities available-for-sale are carried at fair value. Unrealized gains or
losses on securities available-for-sale are included as a separate component of
stockholder's equity, net of tax. Gains or losses on such securities are
recognized using the specific identification method.
LOANS
Loans are stated at unpaid principal balances, net of deferred net loan
origination and commitment fees. Interest income on loans is credited as
earned. Accrual of interest income is discontinued and uncollected interest is
reversed for loans on which a default on interest has existed for a period in
excess of 90 days, or for loans which management believes, after giving
consideration to economic and business conditions and collection efforts,
collection of interest is doubtful.
Loan origination and commitment fees and certain direct costs incurred in
connection with loan originations are deferred and amortized to interest
income, using a method which approximates the interest method, over the life of
the related loans as an adjustment to yield.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is determined based upon management's evaluation
of the Bank's loan portfolios considering past loan loss experience, assessment
of current and prospective economic conditions, the size and composition of the
loan portfolios, and other relevant factors.
Assessing the adequacy of the allowance for loan losses is inherently
subjective as it requires making material estimates, including the amount and
timing of future cash flows expected to be received on impaired loans, that may
be susceptible to significant change. In the opinion of management, the
allowance, when taken as a whole, is adequate to absorb reasonable estimated
loan losses inherent in the Bank's loan portfolios.
F-8
<PAGE> 229
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PREMISES, FURNITURE AND EQUIPMENT
Land is carried at cost. Buildings and improvements, leasehold improvements,
furniture, automobiles and equipment are carried at cost less accumulated
depreciation and amortization. Depreciation is computed on a straight-line
basis over the estimated useful lives of the assets. The estimated useful lives
of the assets are as follows:
Buildings 10 to 55 years
Furniture and equipment 3 to 10 years
Automobiles 3 years
Leasehold improvements are amortized on a straight-line basis over the lives of
the respective leases or the estimated useful lives of the improvements,
whichever is shorter.
INCOME TAXES
The Bank uses the liability method to account for income taxes. Under this
method, deferred tax assets and liabilities are determined based on differences
between financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates and laws expected to be in effect when the
differences are expected to reverse.
STOCKHOLDER'S EQUITY - SURPLUS
In accordance with the New York State Banking Law and New York State Banking
Board Regulations, the Bank credits 10% of quarterly net income to surplus and
is required to do so until such time as stockholder's equity is equal to 10% of
amounts due to depositors.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For purposes of the consolidated statements of cash flows, the Bank defines
cash and cash equivalents as highly liquid investments with original maturities
of three months or less.
F-9
<PAGE> 230
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
On April 1, 1995, the Bank adopted Statement of Financial Accounting Standard
("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan" as amended
by SFAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures". Under SFAS No. 114, a loan is impaired when,
based on current information and events, it is probable that a creditor will be
unable to collect all amounts due according to the loan's contractual terms.
Impairment is measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate or the loan's observable
market price or the fair value of the collateral if the loan is collateral
dependent. The adoption of SFAS No. 114 did not have a material impact on the
Bank's financial statements.
In March 1995, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of". SFAS No. 121 is effective for fiscal
years beginning after December 15, 1995 and establishes accounting standards
for impairment of long-lived assets, certain identifiable intangibles, and
goodwill related to those assets to be held and used and for long-lived assets
and certain identifiable intangibles to be disposed of. This statement requires
that long-lived assets and certain identifiable intangibles, to be held and
used by an entity, be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In performing the review for recoverability, the entity should
estimate the future cash flows expected to result from the use of the asset and
its eventual disposition. If the sum of the expected future cash flows is less
than the carrying amount of the asset, an impairment loss should be recognized.
This statement requires that long-lived assets and certain identifiable
intangibles to be disposed of be reported at the lower of carrying amount or
fair value less cost to sell. The Bank adopted SFAS No. 121 on April 1, 1996.
The adoption of SFAS No. 121 did not have an impact on the Bank's financial
statements.
In June 1996, the FASB issued SFAS No. 125 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" which
provides accounting and reporting standards for sales, securitizations, and
servicing of receivables and other financial assets, secured borrowing and
collateral transactions, and the extinguishments of liabilities. The standard
requires an entity to recognize the financial and servicing assets it controls
and the liabilities it has incurred and to derecognize financial assets when
control has been surrendered in accordance with criteria provided in SFAS No.
125. SFAS No. 125 supersedes SFAS
F-10
<PAGE> 231
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
No. 122 "Accounting for Mortgage Servicing Rights" and is to be applied to
transactions occurring after December 31, 1996. The adoption of SFAS No. 125
did not have an impact on the Bank's financial statements.
4. CASH AND DUE FROM BANKS
Cash and due from banks at March 31, 1997 includes $270,173,600 on deposit at
the Federal Home Loan Bank of New York (the "FHLB"). This primarily represents
cash received from the sale of securities that settled on or prior to March 31,
1997. These funds were invested by April 2, 1997 in U.S. Treasury notes.
5. INVESTMENT SECURITIES HELD-TO-MATURITY
In March 1997, investment securities held-to-maturity with an amortized cost of
$31,291,800 and a net unrealized loss of $608,300 were reclassified to
available-for-sale. In reassessing the classification designation for each
security the Bank determined it no longer had the intent to hold these
securities to maturity.
The carrying values and estimated fair values of investment securities
held-to-maturity are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1996
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
---------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
U.S. government and agencies $38,890 $283 $(370) $38,803
Municipals 1,105 23 - 1,128
---------------------------------------------------------------
Total $39,995 $306 $(370) $39,931
===============================================================
</TABLE>
F-11
<PAGE> 232
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
5. INVESTMENT SECURITIES HELD-TO-MATURITY (CONTINUED)
The amortized cost and estimated fair value of investment securities by
contractual maturity are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1996
CARRYING FAIR
VALUE VALUE
----------------------------------
(In thousands)
<S> <C> <C>
One year or less $ 6,034 $ 6,027
One year through five years 32,856 32,776
Five years through ten years 1,105 1,128
----------------------------------
$ 39,995 $ 39,931
==================================
</TABLE>
There were no sales from investment securities held-to-maturity for the periods
April 1, 1996 through March 31, 1997 or April 1, 1995 through March 31, 1996.
Proceeds from sales of investment securities held-to-maturity during the period
April 1, 1994 through March 31, 1995 were $142,742,000. Gross gains and losses
of $8,000 and $100,000, respectively, were realized on those sales.
The amortized cost of investment securities held-to-maturity sold during the
period April 1, 1994 through March 31, 1995, which were sold within three
months of maturity was $120,045,000, with gross gains of $8,000 and gross
losses of $41,000. The amortized cost of investment securities held-to-maturity
sold during the period April 1, 1994 through March 31, 1995, which were sold
within six months of maturity was $22,798,000, with gross losses of $59,000.
Based on an analysis performed by the Bank, interest rate risk had been
eliminated as a pricing factor on the above sales, and these securities were
considered in substance held-to-maturity.
6. MORTGAGE-BACKED AND MORTGAGE RELATED SECURITIES HELD-TO-MATURITY
In March 1997, mortgage-backed and mortgage related securities held-to-maturity
with an amortized cost of $98,045,300 and an unrealized net gain of $1,071,300
were reclassified to available-for-sale. In reassessing the classification
designation for each security the Bank determined it no longer had the intent
to hold these securities to maturity.
F-12
<PAGE> 233
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
6. MORTGAGE-BACKED AND MORTGAGE RELATED SECURITIES HELD-TO-MATURITY (CONTINUED)
The carrying values and estimated fair values of mortgage-backed and mortgage
related securities held-to-maturity are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1996
GROSS GROSS ESTIMATED
CARRYING UNREALIZED UNREALIZED FAIR
VALUE GAINS LOSSES VALUE
--------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Federal National Mortgage Assoc. Pass
Through Certificates $ 5,492 $ 70 $ (76) $ 5,486
Government National Mortgage Assoc.
Pass Through Certificates 98,303 2,967 (1,411) 99,859
Federal Home Loan Mortgage Corp.
Pass Through Certificates 16,907 145 (699) 16,353
--------------------------------------------------------------
Total $ 120,702 $ 3,182 $ (2,186) $ 121,698
==============================================================
</TABLE>
The amortized cost and estimated fair value of mortgage-backed and mortgage
related securities held-to-maturity by contractual maturity are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1996
CARRYING FAIR
VALUE VALUE
----------------------------------
(In thousands)
<S> <C> <C>
One year through five years $ 108 $ 110
Five years through ten years 25,273 25,318
Over ten years 95,321 96,270
----------------------------------
$ 120,702 $ 121,698
==================================
</TABLE>
There were no sales of mortgage-backed and mortgage related securities
held-to-maturity for the three years ended March 31, 1997.
F-13
<PAGE> 234
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
7. SECURITIES AVAILABLE-FOR-SALE
The amortized cost and estimated fair value of securities available-for-sale
are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1997
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Debt securities:
U.S. government and agencies $345,229 $ 346 $ (431) $345,144
Municipals 1,104 - - 1,104
Corporate 363 - (5) 358
--------------------------------------------------------------
Total debt securities 346,696 346 (436) 346,606
--------------------------------------------------------------
Equity securities:
Preferred 281 - (1) 280
Common 10,333 268 - 10,601
--------------------------------------------------------------
Total equity securities 10,614 268 (1) 10,881
--------------------------------------------------------------
Mortgage-backed and mortgage related
securities:
Federal National Mortgage Assoc. Pass
Through Certificates 7,319 18 (162) 7,175
Government National Mortgage Assoc.
Pass Through Certificates 79,684 1,433 (360) 80,757
Federal Home Loan Mortgage Corp. Pass
Through Certificates 18,780 90 (276) 18,594
Collateralized Mortgage Obligation
Bonds 84,761 22 (330) 84,453
--------------------------------------------------------------
Total mortgage-backed and mortgage related
securities 190,544 1,563 (1,128) 190,979
--------------------------------------------------------------
Total securities available-for-sale $547,854 $2,177 $(1,565) $548,466
==============================================================
</TABLE>
F-14
<PAGE> 235
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
7. SECURITIES AVAILABLE-FOR-SALE (CONTINUED)
<TABLE>
<CAPTION>
MARCH 31, 1996
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Debt securities:
U.S. government and agencies $ 670,224 $ 35 $ (978) $ 669,281
Corporate 3,220 474 (9) 3,685
--------------------------------------------------------------
Total debt securities 673,444 509 (987) 672,966
Equity securities:
Preferred 450 2 (7) 445
Common 10,288 282 (153) 10,417
--------------------------------------------------------------
Total equity securities 10,738 284 (160) 10,862
--------------------------------------------------------------
Mortgage-backed and mortgage related
securities:
Federal National Mortgage Assoc. Pass
Through Certificates 3,108 10 (27) 3,091
Federal Home Loan Mortgage Corp. Pass
Through Certificates 60,493 50 (724) 59,819
Collateralized Mortgage Obligation Bonds 334,664 123 (2,376) 332,411
--------------------------------------------------------------
Total mortgage-backed and mortgage related
securities 398,265 183 (3,127) 395,321
--------------------------------------------------------------
Total securities available-for-sale $ 1,082,447 $976 $(4,274) $1,079,149
==============================================================
</TABLE>
Sales of securities available-for-sale are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996 1995
--------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Proceeds from sales $ 523,294 $ 175,691 $ 99,254
Gross gains 1,042 12,681 -
Gross losses 4,905 41 237
</TABLE>
F-15
<PAGE> 236
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
7. SECURITIES AVAILABLE-FOR-SALE (CONTINUED)
The amortized cost and estimated fair value of debt securities by contractual
maturity are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1997
CARRYING VALUE FAIR VALUE
---------------------------------------------
(In thousands)
<S> <C> <C>
One year or less $ 261,535 $ 261,667
One year through five years 83,640 83,417
Five years through ten years 1,521 1,522
---------------------------------------------
$ 346,696 $ 346,606
=============================================
</TABLE>
The amortized cost and estimated fair value of mortgage-backed and mortgage
related securities by contractual maturity are as follows:
<TABLE>
<CAPTION>
MARCH 31, 1997
CARRYING VALUE FAIR VALUE
---------------------------------------------
(In thousands)
<S> <C> <C>
One year or less $ 4,136 $ 4,217
One year through five years 42,014 42,096
Five years through ten years 59,919 59,893
Over ten years 84,475 84,773
---------------------------------------------
$ 190,544 $ 190,979
=============================================
</TABLE>
Corporate debt securities includes an investment with carrying and fair values
of $2,690,000 and $3,164,000, respectively, at March 31, 1996. This carrying
value is net of a $1,950,000 reserve. The investment was sold during 1997.
On November 15, 1995, the Financial Accounting Standards Board issued a Special
Report, "A Guide to Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities". In accordance with provisions in
that Special Report, the Bank chose to reclassify securities from
held-to-maturity to available-for-sale. At the date of transfer (December,
1995) the amortized cost of those securities was $169,092,000 and the net
unrealized losses were $3,511,000.
F-16
<PAGE> 237
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
8. LOANS
Loans are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
-----------------------------------------
(In thousands)
<S> <C> <C>
MORTGAGE LOANS ON REAL ESTATE:
One-to-four family $ 552,745 $ 534,539
Multi-family 1,365,124 1,208,039
Other 158,336 162,799
-----------------------------------------
2,076,205 1,905,377
Less: Net deferred fees 11,052 10,451
-----------------------------------------
Total mortgage loans on real estate 2,065,153 1,894,926
OTHER LOANS:
Cooperative apartment loans 348,029 340,507
Student loans (guaranteed) 45,262 45,947
Home equity and improvement loans 19,545 23,458
Commercial loans 25,249 18,003
Consumer loans 15,241 8,284
Passbook loans 9,710 9,995
Credit card loans 2,054 2,332
-----------------------------------------
465,090 448,526
Less: Unearned discount and deferred fees 130 116
-----------------------------------------
Total other loans 464,960 448,410
Less: Allowance for loan losses (27,024) (20,528)
-----------------------------------------
Total loans, net $ 2,503,089 $ 2,322,808
=========================================
</TABLE>
At March 31, 1997, 1996 and 1995, the Bank was servicing loans on behalf of
others which are not included in the consolidated financial statements of
$314,638,700, $275,306,400 and $287,319,000, respectively.
At March 31, 1997, 1996 and 1995 included in mortgage loans on real estate are
$15,547,200, $18,869,000 and $6,066,000, respectively, of nonaccrual loans. If
interest on the nonaccrual loans had been accrued, such income would have
approximated $1,574,600, $730,300 and $504,000, respectively.
F-17
<PAGE> 238
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
8. LOANS (CONTINUED)
At March 31, 1997, 1996, and 1995, included in other loans are $1,383,400,
$1,365,300 and $1,095,000, respectively, of nonaccrual loans. If interest on
the nonaccrual loans had been accrued, such income would have approximated
$117,800, $78,800 and $36,000, respectively.
A summary of the changes in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
1997 1996 1995
----------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Balance at beginning of period $ 20,528 $ 11,849 $ 8,770
Allowance from acquisition - 6,910 -
Provision charged to operations 7,960 3,679 3,592
Charge-offs, net of recoveries (1,464) (1,910) (513)
----------------------------------------------------
Balance at end of period $ 27,024 $ 20,528 $ 11,849
====================================================
</TABLE>
The Bank's loan portfolios are primarily comprised of secured loans made to
individuals and small businesses located in the New York City Metropolitan
area.
In December, 1994 the Bank securitized and sold $119,971,000 of multi-family
loans. The Bank has pledged $7,800,000 of U.S. government securities as a
credit enhancement for the transaction.
F-18
<PAGE> 239
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
9. PREMISES, FURNITURE AND EQUIPMENT
A summary of premises, furniture and equipment, net of accumulated depreciation
and amortization is as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
--------------------------------------
(In thousands)
<S> <C> <C>
Land $ 3,303 $ 2,238
Buildings and improvements 44,284 38,863
Leasehold improvements 3,591 2,963
Furniture and equipment 9,189 7,842
--------------------------------------
Total premises, furniture and equipment $ 60,367 $ 51,906
======================================
</TABLE>
Depreciation and amortization expense amounted to $5,972,200, $3,545,200 and
$2,218,000 for the years ended March 31, 1997, 1996 and 1995, respectively.
10. OTHER ASSETS
A summary of other assets is as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
-------------------------------------
(In thousands)
<S> <C> <C>
FHLB stock $ 25,752 $ 22,173
Net deferred tax asset 17,830 12,727
Prepaid expenses 1,604 1,783
Other real estate 540 973
Accounts receivable-securities transactions 107,624 -
Other 15,525 13,036
-------------------------------------
$168,875 $ 50,692
=====================================
</TABLE>
F-19
<PAGE> 240
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
11. DEPOSITS
The amounts due to depositors and the weighted average interest rates are as
follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
---------------------------------------------------------------------
(In thousands)
DEPOSIT AVERAGE DEPOSIT AVERAGE
LIABILITY RATE LIABILITY RATE
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Savings $1,018,199 2.80% $1,109,503 3.00%
Money Market 218,230 3.00 215,545 3.11
NOW 268,681 2.49 218,317 2.13
Checking 76,692 - 56,277 -
Time Deposits 1,743,756 5.50 1,797,248 5.63
---------------- ----------------
$3,325,558 $3,396,890
================ ================
</TABLE>
Scheduled maturities of time deposits are as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
--------------------------------------
(In thousands)
<S> <C> <C>
One year $1,333,075 $1,336,895
Two years 212,451 226,562
Three years 110,601 83,329
Four years 52,008 98,464
Thereafter 35,621 51,998
--------------------------------------
$1,743,756 $1,797,248
======================================
</TABLE>
Time deposit accounts in denominations of $100,000 or more totaled
approximately $189,752,900 and $180,092,800 at March 31, 1997 and 1996,
respectively.
F-20
<PAGE> 241
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
12. BORROWINGS
A summary of borrowings is as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
--------------------------------------
(In thousands)
<S> <C> <C>
FHLB borrowings $14,550 $56,045
Other 2,682 1,250
--------------------------------------
$17,232 $57,295
======================================
</TABLE>
Advances from the FHLB are made at fixed rates with maturities between one and
fifteen years, summarized as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
--------------------------------------
(In thousands)
<S> <C> <C>
After one year through five years $ 8,350 $ 5,185
After five years through seven years 4,900 45,195
After seven years through fifteen years 1,300 5,665
--------------------------------------
$ 14,550 $ 56,045
======================================
</TABLE>
Advances from the FHLB are collateralized by all FHLB stock owned by the Bank
in addition to a blanket pledge of eligible assets in an amount required to be
maintained so that the estimated fair value of such eligible assets exceeds, at
all times, 110% of the outstanding advances (See Note 14).
The average cost of borrowing for the 12 month period ended March 31, 1997 and
March 31, 1996 was 7.6% and 6.2%, respectively.
F-21
<PAGE> 242
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
13. BENEFIT PLANS
The Bank has a noncontributory defined benefit pension plan (the "Plan")
covering substantially all of its full-time employees and certain part-time
employees who qualify. The Bank makes annual contributions to the Plan equal to
the amount necessary to satisfy the funding requirements of ERISA.
The Bank also has a Supplemental Executive Retirement Plan (the "Supplemental
Plan"). The Supplemental Plan is a non-qualified, unfunded plan of deferred
compensation covering those senior officers of the Bank whose benefit under the
Plan would be limited by Internal Revenue Code Sections 415 and 401(a)(17).
The following table sets forth the defined benefit plans' funded status and net
periodic pension cost:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
--------------------------------------
(In thousands)
<S> <C> <C>
Accumulated benefit obligation (including vested
benefits of $18,146 and $21,252, respectively) $ (18,938) $ (22,107)
======================================
Projected benefit obligation for services rendered
to date $ (25,577) $ (27,625)
Plan assets, at fair value 24,547 24,649
--------------------------------------
Plan assets less than projected benefit obligation (1,030) (2,976)
Unrecognized prior service cost 581 844
Unrecognized net (gain) or loss (1,230) 1,033
Unrecognized transition asset (1,823) (2,210)
--------------------------------------
Accrued pension cost at December 31, 1996
and 1995 (3,502) (3,309)
Net adjustment (134) 1,650
--------------------------------------
Accrued pension cost $ (3,636) $ (1,659)
======================================
</TABLE>
F-22
<PAGE> 243
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
13. BENEFIT PLANS (CONTINUED)
Net pension expense included the following components:
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
1997 1996 1995
----------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Service cost-benefits earned during the
period $ 924 $ 759 $ 1,311
Interest cost on projected benefit obligation 1,818 1,483 1,499
Actual return on plan assets (2,530) (4,972) 659
Net amortization and deferral 328 3,405 (2,293)
Settlement gain (344) - -
----------------------------------------------------
Net pension expense for the years ended December
31, 1996, 1995, and 1994 196 675 1,176
Net adjustment (63) (117) 73
----------------------------------------------------
Net pension expense $ 133 $ 558 $ 1,249
====================================================
</TABLE>
At December 31, 1996 and 1995, the projected benefit obligation for the plans
was determined using an assumed discount rate of 7.75% and 7.00%, respectively,
and an assumed rate of compensation increase of 6% for the Plan and 7% for the
Supplemental Plan. At December 31, 1996 and 1995, the weighted average assumed
rate of return on plan assets was 9%. Plan assets consist mainly of investments
in U.S. government and agency obligations, mortgage-backed securities and
common stocks.
The Bank also sponsors an incentive savings plan (401(k) plan) whereby eligible
employees may make tax deferred contributions up to certain limits. The Bank
makes matching contributions up to the lesser of 6% of employee compensation,
or $3,000. The Bank may reduce or cease matching contributions if it is
determined that the current or accumulated net earnings or undivided profits of
the Bank are insufficient to pay the full amount of contributions in a plan
year. Contributions to the plan by the Bank aggregated approximately $508,400,
$459,000 and $423,000 for the years ended March 31, 1997, 1996 and 1995,
respectively.
F-23
<PAGE> 244
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
13. BENEFIT PLANS (CONTINUED)
Effective April 1, 1995, the Bank adopted SFAS No. 106, "Employer's Accounting
for Postretirement Benefits Other Than Pensions". In accordance with SFAS No.
106, the Bank elected to recognize the cumulative effect of this change in
accounting principle over future accounting periods.
Status of the plan is as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
---------------------------------------
(In thousands)
Accumulated postretirement benefit obligation:
<S> <C> <C>
Retirees $ (3,266) $ (4,481)
Fully eligible active plan participants (2,972) (3,664)
Other active plan participants (2,605) (4,207)
---------------------------------------
Accumulated benefit obligation (8,843) (12,352)
Unrecognized transition obligation being recognized over
20 years 4,817 7,786
Unrecognized net loss due to past experience difference
from assumptions made 1,409 2,595
Unrecognized prior service cost 30 956
---------------------------------------
Accrued postretirement benefit cost at
December 31, 1996 and 1995 (2,587) (1,015)
Net adjustment (393) (718)
---------------------------------------
Accrued postretirement benefit cost $ (2,980) $ (1,733)
=======================================
</TABLE>
F-24
<PAGE> 245
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
13. BENEFIT PLANS (CONTINUED)
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
1997 1996
---------------------------------------
(In thousands)
<S> <C> <C>
Components of postretirement benefit cost:
Service cost-benefits earned during the period $ 457 $ 295
Interest cost on accumulated postretirement benefit
obligation 850 681
Net amortization 684 409
---------------------------------------
Postretirement benefit expense - years ended December 31,
1996 and 1995 1,991 1,385
Net adjustment 152 348
---------------------------------------
Net postretirement benefit expense $ 2,143 $ 1,733
=======================================
</TABLE>
The assumptions used in arriving at the above include the initial rate of
increase in health care costs of 11% decreasing gradually to 6% by the year
2001. At December 31, 1996 and 1995, discount rates of 7.75% and 7.00%,
respectively, were used.
The health care cost trend rate assumption has a significant effect on the
amounts reported. A 1% increase in each year would increase the accumulated
postretirement benefit obligation as of December 31, 1996 by $1,098,300 and the
aggregate of the service and interest cost components of the net periodic
postretirement benefits expense for the year then ended by $177,100.
14. COMMITMENTS AND CONTINGENCIES
At March 31, 1997, there were outstanding commitments and unused lines of
credit by the Bank to originate or acquire mortgage loans on real estate and
other loans aggregating $96,890,300 and $33,161,400, respectively, consisting
of fixed and adjustable rate residential loans and fixed rate commercial loans
that are expected to close during the next twelve months. The difference
between the estimated fair value and the estimated book value of commitments
and unused lines of credit is not significant.
F-25
<PAGE> 246
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
14. COMMITMENTS AND CONTINGENCIES (CONTINUED)
The Bank has entered into noncancellable lease agreements with respect to Bank
premises. The minimum annual rental commitments under these operating leases,
exclusive of taxes and other charges, are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31: AMOUNT
- ---------------------------------- ----------------------
(In thousands)
<S> <C>
1998 $1,310
1999 1,281
2000 1,248
2001 1,241
2002 and thereafter 8,918
</TABLE>
The rent expense for the 12 month period ended March 31, 1997, 1996 and 1995
was $1,127,600, $980,300 and $984,000, respectively.
The Bank is a member of the FHLB, and owns FHLB stock with a carrying value of
$25,752,100 and $22,173,300 at March 31, 1997 and March 31, 1996, respectively.
As a member, the Bank is able to borrow on a secured basis up to twenty times
the amount of its capital stock investment at either fixed or variable interest
rates for terms ranging from six months to fifteen years (see Note 12). The
borrowings are limited to 30% of total assets except for borrowings to fund
deposit outflows.
In the normal course of business, there are outstanding various legal
proceedings, claims, commitments and contingent liabilities. In the opinion of
management, the financial position of the Bank will not be affected materially
by the outcome of such legal proceedings and claims.
F-26
<PAGE> 247
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
15. INCOME TAXES
The components of deferred tax assets and liabilities are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31
1997 1996
----------------------------------
(In thousands)
<S> <C> <C>
Deferred tax assets:
Securities available-for-sale $ - $ 1,788
Allowance for loan losses 11,271 9,297
Deferred loan fees 5,311 5,614
Amortization of intangible assets 3,088 1,539
Nonaccrual interest 1,330 1,466
Other 4,159 3,147
----------------------------------
Gross deferred tax asset 25,159 22,851
----------------------------------
Less valuation allowance - -
----------------------------------
Deferred tax assets 25,159 22,851
----------------------------------
Deferred tax liabilities:
Securities available-for-sale 245 -
Acquisition premium on mortgage-backed and mortgage related
securities 1,017 1,990
Acquisition premium on mortgages 3,414 3,068
Depreciation 698 1,560
Other 1,955 3,506
----------------------------------
Gross deferred tax liabilities 7,329 10,124
----------------------------------
Net deferred tax asset $ 17,830 $ 12,727
==================================
</TABLE>
The Bank has reported taxable income for Federal, state and local income tax
purposes in each of the past two years and in management's opinion, in view of
the Bank's previous, current and projected future earnings trend, such net
deferred tax asset will be fully realized. Accordingly, no valuation allowance
was deemed necessary for the net deferred tax asset at March 31, 1997 or 1996.
F-27
<PAGE> 248
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
15. INCOME TAXES (CONTINUED)
Significant components of the provision (benefit) for income taxes attributable
to continuing operations are as follows:
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
1997 1996 1995
-----------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Current:
Federal $ 14,832 $ 22,645 $ 19,701
State and local 3,037 9,553 9,572
-----------------------------------------------------
17,869 32,198 29,273
-----------------------------------------------------
Deferred:
Federal (4,873) (518) (1,174)
State and local (2,264) (898) (772)
-----------------------------------------------------
(7,137) (1,416) (1,946)
-----------------------------------------------------
Total $ 10,732 $ 30,782 $ 27,327
=====================================================
</TABLE>
The table below presents a reconciliation between the reported tax provision
and the tax provision computed by applying the statutory Federal income tax
rate to income before provision for income taxes:
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31
1997 1996 1995
-----------------------------------------------
(In thousands)
<S> <C> <C> <C>
Federal income tax provision at statutory rates $ 9,769 $ 23,364 $ 21,781
Increase (reduction) in tax resulting from:
State and local taxes, net of federal income tax effect 502 5,626 5,720
Other 461 1,792 (174)
-----------------------------------------------
$ 10,732 $ 30,782 $ 27,327
===============================================
</TABLE>
The Bank is included in the consolidated Federal income tax return of ICBC,
which is filed on a calendar year basis. For Federal income tax purposes, prior
to 1996, if certain definitional tests and other conditions were met, the Bank
was allowed a special bad debt deduction in determining its taxable income. The
deduction was based on either specified experience formulas or a percentage of
taxable income. Federal tax legislation enacted during 1996 repealed the
special bad debt deduction provisions. As a result, a large thrift institution
such as
F-28
<PAGE> 249
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
15. INCOME TAXES (CONTINUED)
the Bank is required to use the specific charge-off method in computing its
federal bad debt deduction for tax years beginning after December 31, 1995.
However, New York State enacted legislation which, among other things, would
permit a large thrift institution such as the Bank to continue to use the bad
debt reserve method for both New York State and New York City tax purposes.
The 1996 Federal tax legislation also provided that a large thrift institution
such as the Bank is required to recapture the excess of its tax bad debt
reserves at December 31, 1995 over the balance of such reserves as of December
31, 1987 (the "base year"), whether the additions were made under the
percentage of taxable income method or the experience method. The Bank will be
required to recapture its excess bad debt reserves, for which deferred taxes
have been recognized, over a six year period on a straight line basis beginning
in 1998. The base year reserve will remain subject to recapture in the case of
certain excess distributions to and redemptions of shareholders or if the Bank
ceases to be a bank. The New York State legislation provides that the recapture
of excess bad debt reserves is not required for either New York State or New
York City tax purposes.
At March 31, 1997, the base year bad debt reserve for federal income tax
purposes was approximately $30 million, for which deferred taxes are not
required to be recognized. Bad debt reserves maintained for New York State and
New York City tax purposes as of March 31, 1997, for which deferred taxes are
not required to be recognized, amounted to approximately $85 million.
Accordingly, deferred tax liabilities of approximately $21 million have not
been recognized as of March 31, 1997.
Consolidated current and deferred tax expenses are allocated to the Bank as if
the Bank filed consolidated or combined tax returns only with its subsidiaries.
16. REGULATORY REQUIREMENT
As a New York State chartered stock form savings bank, the deposits of which
are insured by the FDIC, the Bank is subject to certain FDIC capital
requirements. Failure to meet minimum capital requirements can initiate certain
mandatory and possibly discretionary actions by regulators that, if undertaken,
could have a direct material effect on the Bank's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative
F-29
<PAGE> 250
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
16. REGULATORY REQUIREMENT (CONTINUED)
measures of the Bank's assets, liabilities and certain off-balance sheet items
as calculated under regulatory accounting practices. The Bank's capital amounts
and classifications are also subject to qualitative judgments by the regulators
about components, risk weightings and other factors.
Based on its regulatory capital ratios at March 31, 1997 and 1996, the Bank is
categorized as "well capitalized" under the regulatory framework for prompt
corrective action. To be categorized as "well capitalized" the Bank must
maintain Tier I leverage, Tier I risk-based and minimum total risk-based ratios
as set forth in the table.
The Bank's actual capital amounts and ratios are presented in the table below
as of March 31, 1997 and 1996:
<TABLE>
<CAPTION>
TO BE WELL
FOR CAPITAL ADEQUACY CAPITALIZED UNDER
ACTUALS PURPOSES FDIC GUIDELINES
AS OF 3/31/97 AT 3/31/97 AT 3/31/97
------------------------ ------------------------ -------------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier 1 Leverage $247,520 6.83% $145,064 4.0% $181,330 5.0%
Tier 1 Risk-Based 247,520 10.05% 98,525 4.0% 147,788 6.0%
Total Risk-Based 274,544 11.15% 197,050 8.0% 246,313 10.0%
<CAPTION>
TO BE WELL
FOR CAPITAL ADEQUACY CAPITALIZED UNDER
ACTUALS PURPOSES FDIC GUIDELINES
AS OF 3/31/96 AT 3/31/96 AT 3/31/96
------------------------ ------------------------ -------------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Tier 1 Leverage $201,693 6.13% $131,548 4.0% $164,436 5.0%
Tier 1 Risk-Based 201,693 9.82% 82,153 4.0% 123,229 6.0%
Total Risk-Based 222,221 10.82% 164,306 8.0% 205,382 10.0%
</TABLE>
F-30
<PAGE> 251
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
17. FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments" requires
disclosure of fair value information about financial instruments, whether or
not recognized in the statements of financial condition, for which it is
practicable to estimate fair value. In cases where quoted market prices are not
available, fair values are based on estimates using present value or other
valuation techniques. Those techniques are significantly affected by
assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot be substantiated
by comparison to independent markets and, in many cases, could not be realized
in immediate settlement of the instrument. SFAS No. 107 requirements exclude
certain financial instruments and all nonfinancial instruments from its
disclosure requirements. Additionally, tax consequences related to the
realization of the unrealized gains and losses can have a potential effect on
fair value estimates and have not been considered in the estimates.
Accordingly, the aggregate fair value amounts presented do not represent the
underlying value of the Bank.
The book values and estimated fair values of the Bank's financial instruments
are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31, 1997
BOOK VALUE FAIR VALUE
----------------------------------
(In thousands)
<S> <C> <C>
FINANCIAL ASSETS
Cash and due from banks $ 310,429 $ 310,429
Commercial paper 39,866 39,866
Federal funds sold 24,341 24,341
Securities available-for-sale 548,466 548,466
Mortgage loans on real estate 2,076,205 2,025,243
Other loans 465,090 466,757
Accrued interest receivable 17,384 17,384
FHLB stock 25,752 25,752
FINANCIAL LIABILITIES
Deposits 1,622,836 1,622,836
Time deposit accounts 1,743,756 1,748,692
Borrowings 17,232 15,487
</TABLE>
F-31
<PAGE> 252
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
17. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
<TABLE>
<CAPTION>
MARCH 31, 1996
BOOK VALUE FAIR VALUE
----------------------------------
(In thousands)
<S> <C> <C>
FINANCIAL ASSETS
Cash and due from banks $ 44,410 $ 44,410
Federal Funds sold 58,782 58,782
Investment securities held-to-maturity 39,995 39,931
Mortgage-backed and mortgage related securities
held-to-maturity 120,702 121,698
Securities available-for-sale 1,079,149 1,079,149
Mortgage loans on real estate 1,905,377 1,926,882
Other loans 448,526 448,956
Accrued interest receivable 21,070 21,070
FHLB stock 22,173 22,173
FINANCIAL LIABILITIES
Deposits 1,635,239 1,635,239
Time deposit accounts 1,797,248 1,811,947
Borrowings 57,295 57,261
</TABLE>
The following methods and assumptions were used by the Bank in estimating the
fair values of financial instruments:
Cash and due from banks: Carrying amounts approximate fair value since these
instruments are payable on demand.
Commercial paper: Carrying amounts approximate fair value since these
instruments have short-term maturities.
Federal funds sold: Carrying amounts approximate fair value since these
instruments have short-term maturities.
Investment securities held-to-maturity: The estimated fair values are based
on independent dealer quotation and quoted market prices.
Mortgage-backed and mortgage related securities held-to-maturity: The
estimated fair values are based on quoted market prices.
F-32
<PAGE> 253
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
17. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
Securities available-for-sale: The estimated fair values are based on quoted
market prices.
Mortgage loans on real estate: At March 31, 1997, the Bank changed its
methodology of calculating fair value on mortgage loans on real estate.
Management believes that this methodology is a more practical and accurate
approach to calculating fair value for mortgage loans.
At March 31, 1997, the Bank's mortgage loans on real estate were segregated
into two categories, residential loans and commercial / multi-family loans.
These were stratified further based upon historical delinquency and loan to
value ratios. The fair value for each loan was then calculated by
discounting the projected mortgage cash flow to a yield target equal to a
spread, which is commensurate with the loan quality and type, over the
Treasury curve at the average life of the cash flow.
At March 31, 1996, the Bank's mortgage loans were segregated into 1-4
family, multifamily and nonresidential mortgage loans. Each loan category
was further segmented into fixed and adjustable rate loans. At March 31,
1996, quoted secondary market prices and discounted cash flows were used to
value the entire mortgage portfolio. Also the fair value of adjustable
mortgage loans, which reprice frequently, were assumed to approximate their
carrying value.
Other loans: At March 31, 1997, the Bank changed its methodology of
calculating fair value on co-op loans. Management believes that this
methodology is a more practical and accurate approach to calculating fair
value for co-op loans.
At March 31, 1997, the co-op loan portfolio was priced using the same
methodology as the mortgage loans on real estate. The fair value of the
remaining other loan category has been estimated to approximate its carrying
value. This is based on the short-term duration of these loans and the fact
that the majority of these loans reprice frequently.
At March 31, 1996, quoted secondary market prices were used to value both
the fixed and variable rate co-op loan portfolios. The fair value of the
remaining other loan category has been estimated to approximate its carrying
value. This is based on the short-term duration of these loans and the fact
that the majority of these loans reprice frequently.
F-33
<PAGE> 254
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
17. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
Accrued interest receivable: Carrying amount approximates fair value since
these instruments have short-term maturities.
FHLB stock: Carrying amount approximates fair value since it is redeemable
at cost, with the issuer only.
Deposits: The estimated fair values of deposits with no stated maturity such
as savings, money market, checking, NOW and escrow accounts approximate the
respective obligations.
Time deposit accounts: The estimated fair value for time deposits is based
on a discounted cash flow calculation that applies interest rates currently
being offered by the Bank to its current deposit portfolio.
Borrowings: The estimated fair value of Federal Home Loan Bank borrowings is
based on the discounted value of their contractual cash flows. The discount
rate used in the present value computation is estimated by comparison to the
current interest rates charged by the Federal Home Loan Bank for advances of
similar remaining maturities.
18. ASSET AND DIVIDEND RESTRICTIONS
The Bank is required to maintain a reserve balance with the Federal Reserve
Bank. The required reserve balance was $1,461,000 and $14,972,000 at March 31,
1997 and March 31, 1996, respectively.
Limitations exist on the availability of the Bank's undistributed earnings for
the payment of dividends to ICBC without prior approval of the Bank's
regulatory authorities.
F-34
<PAGE> 255
Independence Savings Bank
Notes to Consolidated Financial Statements (continued)
19. SUBSEQUENT EVENTS
On April 18, 1997, the Board of Directors of the Bank and the Board of Trustees
of ICBC unanimously adopted a plan to convert ICBC from a New York State
chartered mutual holding company to a New York State chartered stock
institution which shall concurrently merge with the Bank and reorganize the
Bank into the stock holding company form of organization (the "Plan of
Conversion"). Pursuant to the Plan of Conversion, the Bank will issue all of
its capital stock to a new holding company, which will offer and sell shares of
its common stock to depositors of the Bank and others in the manner and subject
to the priorities set forth in the Plan of Conversion.
The Plan of Conversion must be approved by eligible depositors as of March 31,
1996 as well as the New York State Banking Department and approved or consented
to by the FDIC.
F-35
<PAGE> 256
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY INDEPENDENCE COMMUNITY BANK CORP., INDEPENDENCE SAVINGS BANK OR
SANDLER O'NEILL & PARTNERS, L.P. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF INDEPENDENCE COMMUNITY BANK
CORP. OR INDEPENDENCE SAVINGS BANK SINCE ANY OF THE DATES AS OF WHICH
INFORMATION IS FURNISHED HEREIN OR SINCE THE DATE HEREOF.
-----------------
TABLE OF CONTENTS
-----------------
PAGE
----
Summary Overview ......................... 1
Summary .................................. 5
Selected Consolidated Financial
Information ............................. 13
Risk Factors ............................. 16
Independence Community Bank Corp ......... 29
Independence Savings Bank ................ 30
Use of Proceeds .......................... 32
Dividend Policy .......................... 33
Market for the Common Stock .............. 34
Regulatory Capital Requirements .......... 35
Capitalization ........................... 38
Pro Forma Data ........................... 40
Comparison of Valuation and Pro Forma
Information with No Foundation .......... 46
Consolidated Statements of Income ........ 47
Management's Discussion and Analysis
of Financial Condition and Results
of Operations ........................... 48
Business of the Bank ..................... 68
Regulation ............................... 107
Taxation ................................. 119
Management ............................... 122
The Conversion ........................... 136
Restrictions on Acquisition of the
Company and the Bank .................... 161
Description of Capital Stock
of the Company .......................... 171
Description of Capital Stock
of the Bank ............................. 173
Transfer Agent and Registrar ............. 174
Experts .................................. 174
Legal and Tax Opinions ................... 174
Additional Information ................... 174
Index to Consolidated Financial Statements F-1
UNTIL ______ __, 1997, OR 25 DAYS AFTER COMMENCEMENT OF THE SYNDICATED COMMUNITY
OFFERING, IF ANY, WHICHEVER IS LATER, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY
BE REQUIRED TO DELIVER a PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
50,578,704 Shares
INDEPENDENCE COMMUNITY
BANK CORP.
(Proposed Holding Company for
Independence Savings Bank)
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
---------------------
PROSPECTUS
---------------------
-------------------------------------
________ __, 1997
SANDLER O'NEILL
& PARTNERS, L.P.
<PAGE> 257
[TO BE USED IN CONNECTION WITH THE SYNDICATED COMMUNITY OFFERING ONLY]
SYNDICATED PROSPECTUS SUPPLEMENT
INDEPENDENCE COMMUNITY BANK CORP.
(Proposed Holding Company for Independence Savings Bank)
Up to __________ Shares of Common Stock
Independence Community Bank Corp. (the "Company"), a Delaware
corporation, is offering for sale in a syndicated community offering (the
"Syndicated Community Offering") ____________ shares of its common stock, par
value $.01 per share (the "Common Stock"), in connection with the
reorganization of Independence Savings Bank (the "Bank") and the mutual holding
company parent of the Bank (the "Mutual Holding Company") to the stock form of
organization pursuant to the Bank's and the Mutual Holding Company's Plan of
Conversion (the "Plan" or "Plan of Conversion"). The remaining ________ shares
of the Common Stock have been subscribed for in subscription and community
offerings (the "Subscription and Community Offerings") by the Bank's holders of
deposit accounts with the Bank with a balance of $100 or more as of March 31,
1996, by the Company's Employee Stock Ownership Plan, (the "ESOP"), by holders
of deposit accounts with a balance of $100 or more as of _____________, 1997,
and by certain members of the general public. See "The Conversion - General."
Contained herein is the Prospectus in the form used in the Subscription and
Community Offerings. The purchase price for all shares purchased in the
Syndicated Community Offering will be the same as the price paid by subscribers
in the Subscription and Community Offerings (the "Purchase Price"). The
Purchase Price of $10.00 per share is the amount to be paid for each share at
the time a purchase order is submitted. See the cover page of the Prospectus
and the table below for information as to the method by which the range within
which the number of shares offered may vary and the method of subscribing for
shares of the Common Stock. For a discussion of certain factors that should be
considered by each prospective investor, see "Risk Factors" on page 16.
Funds submitted to the Bank with purchase orders will earn interest at
the Bank's passbook rate of interest from the date of receipt until completion
or termination of the Conversion. The Syndicated community Offering will expire
no later than _____, 1997, unless extended by the Bank and the Company with the
approval of the New York State Department of Banking and the Federal Deposit
Insurance Corporation, if necessary. Such extensions may not go beyond
_________ 1999. If an extension of time has been granted, all purchasers will
be notified of such extension, and of their rights to confirm their purchase
orders, or to modify or rescind their purchase orders and have their funds
returned promptly with interest, and of the time period within which the
purchaser must notify the Bank of his intention to confirm, modify or rescind
his subscription. If an affirmative response to any resolicitation is not
received by the Bank and the Company from purchasers, such orders will be
rescinded and all funds will be returned promptly with interest. The minimum
number of shares which may be purchased is 25 shares. Except for the ESOP,
which may
<PAGE> 258
purchase up to 8% of the total number of shares of Common Stock issued in the
Conversion, no person, together with associates of and persons acting in
concert with such person, may purchase in the Community Offering and the
Syndicated Community Offering more than $500,000 of the aggregate value of
Common Stock offered in the Conversion. See "Plan of Conversion -Limitations on
Common Stock Purchases." The Company reserves the right, in its absolute
discretion, to accept or reject, in whole or in part, any or all subscriptions
in the Syndicated Community Offering.
The Company and the Bank have engaged Sandler O'Neill & Partners, L.P.
("Sandler O'Neill") to assist them in the sale of the Common Stock in the
Syndicated Community Offering. It is anticipated that Sandler O'Neill will use
the services of other registered broker-dealers ("Selected Dealers") and that
fees to Sandler O'Neill and such Selected Dealers will be an amount not to
exceed 7.0% of the aggregate Purchase Price of the shares sold in the
Syndicated Community Offering. Neither Sandler O'Neill nor any Selected Dealer
shall have any obligation to take or purchase any shares of Common Stock in the
Syndicated Community Offering.
The Company has received conditional approval from the National
Association of Securities Dealers ("NASD") to have its Common Stock quoted on
the Nasdaq National Market under the symbol "ICBC". Prior to this Offering,
there has not been a public market for the Common Stock, and there can be no
assurance that an active and liquid trading market for the Common Stock will
develop. To the extent an active and liquid market does not develop, the
liquidity and market value of the Common Stock may be adversely affected.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, THE SUPERINTENDENT OF
BANKS OF THE STATE OF NEW YORK, THE NEW YORK STATE BANKING
BOARD, THE NEW YORK STATE BANKING DEPARTMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, OR ANY OTHER FEDERAL OR STATE
AGENCY OR STATE SECURITIES COMMISSION, NOR HAS SUCH
COMMISSION, SUPERINTENDENT, BOARD, DEPARTMENT, CORPORATION OR
ANY STATE SECURITIES COMMISSIONER OR OTHER AGENCY PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
----------------
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS OR DEPOSITS AND ARE NOT INSURED BY THE BANK
INSURANCE FUND OR THE SAVINGS ASSOCIATION
INSURANCE FUND OF THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY ARE NOT
GUARANTEED BY THE COMPANY
OR THE BANK.
<PAGE> 259
<TABLE>
<CAPTION>
====================================================================================================================
Estimated Net
Proceeds of
Estimated Subscription,
Estimated Net Community and
Underwriting Proceeds of Syndicated
Syndicated Fees and Syndicated Community
Community Offering Conversion Common Offerings
Price Expenses(1) Stock (2)(3)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Minimum Per Share $10.00 $ $ $
- --------------------------------------------------------------------------------------------------------------------
Midpoint Per Share $10.00 $ $ $
- --------------------------------------------------------------------------------------------------------------------
Maximum Per Share $10.00 $ $ $
- --------------------------------------------------------------------------------------------------------------------
Maximum Per Share, as adjusted $ $ $ $
- --------------------------------------------------------------------------------------------------------------------
Total Minimum $ $ $ $
- --------------------------------------------------------------------------------------------------------------------
Total Midpoint $ $ $ $
- --------------------------------------------------------------------------------------------------------------------
Total Maximum $ $ $ $
- --------------------------------------------------------------------------------------------------------------------
Total Maximum, as adjusted(4) $ $ $ $
====================================================================================================================
</TABLE>
- ------------
(1) Consists of the pro rata allocation of the estimated costs to the Bank
and the Company to be incurred in connection with the Conversion
(including estimated and marketing fees to be paid to Sandler O'Neill
in connection with the Offerings) and estimated fees of Sandler
O'Neill and Selected Dealers in connection with the sale of the
remaining shares of Common Stock in the Syndicated Community Offering
which fees are estimated to be between $_____ and $_____ based on the
minimum and the maximum of the Estimated Price Range, respectively.
See "The Conversion - Marketing Arrangements." The actual fees and
expenses may vary from the estimates. Such fees paid to Sandler
O'Neill may be deemed to be underwriting fees. See "Pro Forma Data" in
the Prospectus.
(2) Actual net proceeds may vary substantially from estimated amounts
depending on the number of shares sold in the Offerings and other
factors. Gives effect to the purchase of shares of Common Stock by the
Employee Stock Ownership Plan (the "ESOP"), which initially will be
deducted from the Company's stockholders' equity. For the effects of
such purchases, see "Capitalization," "Use of Proceeds" and "Pro Forma
Data."
(3) The net proceeds of the Subscription and Community Offerings (based
upon the sale of the _________ shares subscribed for at a price of
$10.00 per share and after allocation of a pro rata portion of the
estimated expenses relating to the Conversion) are estimated to be
$____________.
(4) As adjusted to reflect the sale of up to an additional 15% of the
Common Stock which may be offered at the Purchase Price, without
resolicitation of subscribers or any right of cancellation, due to
regulatory considerations or changes in market or general financial
and economic conditions. See "Pro Forma Data" and "The
Conversion--Stock Pricing and Number of Shares to be Issued" for a
discussion of the distribution and allocation of the additional
shares, if any, see "The Conversion--The Offerings--Subscription
Offering," "-The Offerings-Community Offering" and " -Limitations on
Common Stock Purchases."
SANDLER O'NEILL & PARTNERS, L.P.
The date of this Prospectus Supplement is __________, 1997.
<PAGE> 260
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
ITEM 13.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (1).
<S> <C>
SEC filing fees............................................................................... $ 190,360
NYBD filing fees.............................................................................. 5,000
OTS filing fees............................................................................... 2,000
NASD filing fees.............................................................................. 30,500
Nasdaq National Market listing fee............................................................ 50,000
Printing, postage and mailing ................................................................ 1,550,000
Legal fees.................................................................................... 1,100,000
Blue Sky and expenses......................................................................... 15,000
Marketing agent's fees and expenses........................................................... 8,600,000
Accounting fees............................................................................... 600,000
Appraiser's fees.............................................................................. 100,000
Proxy solicitation fees and expenses.......................................................... 50,000
Conversion agent fees and expenses............................................................ 200,000
Transfer agent fees and expenses.............................................................. 50,000
Conversion center telephone, temporary support staff and equipment............................ 1,000,000
Miscellaneous................................................................................. 57,140
-----------
TOTAL.........................................................................................$13,600,000
===========
</TABLE>
(1) Actual expense based upon the registration of 62,818,749 shares at
$10.00 per share. All other expenses are estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law sets forth
circumstances under which directors, officers, employees and agents may be
insured or indemnified against liability which they may incur in their capacity
as such. The Certificate of Incorporation and the Bylaws of the Company provide
that the directors, officers, employees and agents of the Company shall be
indemnified to the full extent permitted by law. Such indemnity shall extend to
expenses, including attorney's fees, judgments, fines and amounts paid in the
settlement, prosecution or defense of the foregoing actions.
Article 10 of the Registrant's Certificate of Incorporation provides
as follows:
ARTICLE 10. INDEMNIFICATION. The Corporation shall indemnify its
directors, officers, employees, agents and former directors, officers,
employees and agents, and any other persons serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
association, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees, judgments, fines and amounts paid in
settlement) incurred in connection with any pending or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative, with
respect to which such director, officer,
<PAGE> 261
employee, agent or other person is a party, or is threatened to be made a
party, to the full extent permitted by the General Corporation Law of the State
of Delaware, provided, however, that the Corporation shall not be liable for
any amounts which may be due to any person in connection with a settlement of
any action, suit or proceeding effected without its prior written consent or
any action, suit or proceeding initiated by any person seeking indemnification
hereunder without its prior written consent. The indemnification provided
herein (i) shall not be deemed exclusive of any other right to which any person
seeking indemnification may be entitled under any bylaw, agreement or vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in any other capacity, and (ii) shall
inure to the benefit of the heirs, executors and administrators of any such
person. The Corporation shall have the power, but shall not be obligated, to
purchase and maintain insurance on behalf of any person or persons enumerated
above against any liability asserted against or incurred by them or any of them
arising out of their status as corporate directors, officers, employees, or
agents whether or not the Corporation would have the power to indemnify them
against such liability under the provisions of this Article 10.
Article VI of the Company's Bylaws provides as follows:
6.1 Indemnification. The Corporation shall provide indemnification to
its directors, officers, employees, agents and former directors, officers,
employees and agents and to others in accordance with the Corporation's
Certificate of Incorporation.
6.2 Advancement of Expenses. Reasonable expenses (including attorneys'
fees) incurred by a director, officer or employee of the Corporation in
defending any civil, criminal, administrative or investigative action, suit or
proceeding described in Section 6.1 may be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding as authorized by
the Board of Directors only upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be determined that the
person is not entitled to be indemnified by the Corporation.
6.3 Other Rights and Remedies. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article VI shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under the Corporation's Certificate of
Incorporation, any agreement, vote of stockholders or disinterested directors
or otherwise, both as to actions in their official capacity and as to actions
in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of the heirs, executors and administrators of such person.
6.4 Insurance. Upon resolution passed by the Board of Directors, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer of employee of the Corporation, or is or was serving
at the request of the corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him or incurred by him in any such capacity or
arising out of his status as such, whether or not the Corporation would have
the
<PAGE> 262
power to indemnify him against such liability under the provisions of its
Certificate of Incorporation or this Article VI.
6.5 Modification. The duties of the Corporation to indemnify and to
advance expenses to a director, officer or employee provided in this Article VI
shall be in the nature of a contract between the Corporation and each such
person, and no amendment or repeal of any provision of this Article VI shall
alter, to the detriment of such person, the right of such person to the advance
of expenses or indemnification related to a claim based on an act or failure to
act which took place prior to such amendment or repeal.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Not applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES
The exhibits and financial statement schedules filed as a part of this
Registration Statement are as follows:
(a) LIST OF EXHIBITS (filed herewith unless otherwise noted)
<TABLE>
<S> <C>
1.1 Engagement Letter with Sandler O'Neill & Partners, L.P.
1.2* Form of Agency Agreement with Sandler O'Neill & Partners, L.P.
2.0 Plan of Conversion
3.1 Certificate of Incorporation of Independence Community Bank Corp.
3.2 Bylaws of Independence Community Bank Corp.
4.0 Form of Stock Certificate of Independence Community Bank Corp.
5.0* Opinion of Elias, Matz, Tiernan & Herrick L.L.P. re: legality
8.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. re: Federal tax
matters
8.2* Opinion of Ernst and Young LLP re: New York tax matters
8.3 Letter of RP Financial, LC. re: Subscription Rights
10.1 Form of Change of Control Agreement to be entered into among
Independence Community Bank Corp., Independence Savings Bank and
certain executive offices.
10.2* Form of ESOP Loan Commitment Letter
23.1 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in
Exhibits 5.0 and 8.1, respectively)
23.2 Consent of Ernst & Young LLP.
23.3 Consent of RP Financial, LC.
23.4* Consent of Potter Anderson & Corroon*
24.0 Power of Attorney (included in Signature Page of this Registration
Statement)
99.1 Appraisal Report of RP Financial, LC.
99.2 Subscription Order Form and Instructions
99.3* Additional Solicitation Material
99.4* Form of the Independence Community Bank Foundation Gift Instrument
</TABLE>
- ------------
* To be filed by amendment.
<PAGE> 263
(b) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted as not applicable or not required
under the rules of Regulation S-X.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of the securities offered would not exceed that which was
registered) and any deviation from the low or high and the estimated
maximum offering range may be reflected in the form of Prospectus
filed with the Commission pursuant to Rule 424 (b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the Offering.
The undersigned Registrant hereby undertakes to furnish stock
certificates to or in accordance with the instructions of the respective
purchasers of the Common Stock, so as to make delivery to each purchaser
promptly following the closing under the Plan of Conversion.
<PAGE> 264
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
<PAGE> 265
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Form S-1 Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the State of New
York on July 3, 1997.
INDEPENDENCE COMMUNITY BANK CORP.
By: /s/ Charles J. Hamm
------------------------------------------------
Charles J. Hamm
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Charles J. Hamm his true and
lawful attorney, with full power to sign for each person and in such person's
name and capacity indicated below, and with full power of substitution, any and
all amendments to this Registration Statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.
<TABLE>
<CAPTION>
Name Title Date
- ----------------------------------- ---------------------------------- ---------------------------
<S> <C> <C>
/s/ Charles J. Hamm Chairman, President and July 3, 1997
- ----------------------------------- Chief Executive Officer
Charles J. Hamm (principal executive
officer)
/s/ Joseph S. Morgano Director, Executive Vice July 3, 1997
- ----------------------------------- President and Mortgage
Joseph S. Morgano Officer
/s/ John B. Zurell Executive Vice President- July 3, 1997
- ----------------------------------- Accounting and Financial Systems
John B. Zurell (principal financial and accounting
officer)
/s/ Willard N. Archie Director July 3, 1997
- -----------------------------------
Willard N. Archie
</TABLE>
<PAGE> 266
<TABLE>
<CAPTION>
Name Title Date
- ----------------------------------- ---------------------------------- ---------------------------
<S> <C> <C>
- ----------------------------------- Director July __, 1997
Robert D. Catell
/s/ Rohit M. Desai Director July 3, 1997
- -----------------------------------
Rohit M. Desai
/s/ Chaim Y. Edelstein Director July 3, 1997
- -----------------------------------
Chaim Y. Edelstein
- ----------------------------------- Director July __, 1997
Robert W. Gelfman
/s/ Scott M. Hand Director July 3, 1997
- -----------------------------------
Scott M. Hand
/s/ Donald E. Kolowsky Director July 3, 1997
- -----------------------------------
Donald E. Kolowsky
/s/ Janine Luke Director July 3, 1997
- -----------------------------------
Janine Luke
- ----------------------------------- Director July __, 1997
Wesley D. Ratcliff
/s/ Donald H. Elliott Director July 3, 1997
- -----------------------------------
Donald H. Elliott
/s/ Malcolm MacKay Director July 3, 1997
- -----------------------------------
Malcolm MacKay
</TABLE>
<PAGE> 1
EXHIBIT 1.1
[SANDLER O'NEILL & PARTNERS LETTERHEAD]
Sandler O'Neill
March 4, 1997
Mr. Charles J. Hamm
Chairman, President and Chief Executive Officer
Independence Savings Bank and
Independence Community Bank Corp.
195 Montague Street
Brooklyn, New York 11201
Dear Mr. Hamm:
Sandler O'Neill Corporate Strategies, a division of Sandler O'Neill &
Partners, L.P. ("Sandler O'Neill"), is pleased to act as an independent
financial advisor to Independence Savings Bank (the "Bank") and Independence
Community Bank Corp. (the "Company") in connection with the Company's proposed
conversion from mutual to stock form (the "Conversion"), including the offer
and sale of certain shares of the common stock of the proposed new holding
company for the Bank (the "Holding Company") to the Bank's eligible account
holders in a Subscription Offering, to members of the Bank's community in a
Direct Community Offering and, under certain circumstances, to the general
public in a Syndicated Community Offering (collectively, the "Offerings"). For
purposes of this letter, the term "Actual Purchase Price" shall mean the price
at which the shares of the Holding Company's common stock are sold in the
Conversion. This letter is to confirm the terms and conditions of our
engagement.
ADVISORY SERVICES
Sandler O'Neill will act as a consultant and advisor to the Bank and
the Company and the Holding Company and will work with the Bank's and Company's
management, counsel, accountants and other advisors in connection with the
Conversion and the Offerings. We anticipate that our services will include the
following, each as may be necessary and as the Bank and the Company may
reasonably request:
l. Consulting as to the securities marketing implications of any
aspect of the Plan of Conversion or related corporate
documents;
2. Reviewing with the Board of Directors the independent
appraiser's appraisal of the common stock, particularly with
regard to aspects of the appraisal involving the methodology
employed;
<PAGE> 2
Independence Savings Bank and
Independence Community Bank Corp. Sandler O'Neill
March 4, 1997
Page 2
3. Reviewing all offering documents, including the Prospectus,
stock order forms and related offering materials (it being
understood that preparation and filing of such documents will
be the responsibility of the Bank, the Company and the Holding
Company and their counsel);
4. Assisting in the design and implementation of a marketing
strategy for the Offerings;
5. Assisting in obtaining all requisite regulatory approvals;
6. Assisting Bank and Company management in scheduling and
preparing for meetings with potential investors and
broker-dealers; and
7. Providing such other general advice and assistance as may be
requested to promote the successful completion of the
Conversion.
SYNDICATED COMMUNITY OFFERING
If any shares of the Holding Company's common stock remain available
after the expiration of the Subscription Offering and the Direct Community
Offering, at the request of the Bank and the Company and subject to the
continued satisfaction of the conditions set forth in the second paragraph
under the caption "Definitive Agreement" below, Sandler O'Neill will seek to
form a syndicate of registered dealers to assist in the sale of such common
stock in a Syndicated Community Offering on a best efforts basis, subject to
the terms and conditions set forth in a selected dealers agreement. Sandler
O'Neill will endeavor to limit the aggregate fees to be paid by the Bank and
the Company under any such selected dealers agreement to an amount competitive
with gross underwriting discounts charged at such time for underwritings of
comparable amounts of stock sold at a comparable price per share in a similar
market environment, which shall not exceed 7% of the aggregate Actual Purchase
Price of the shares sold under such agreements. Sandler O'Neill will endeavor
to distribute the common stock among dealers in a fashion which best meets the
distribution objectives of the Bank and the Company and the requirements of the
Plan of Conversion, which may result in limiting the allocation of stock to
certain selected dealers. It is understood that in no event shall Sandler
O'Neill be obligated to act as a selected dealer or to take or purchase any
shares of the Holding Company's common stock.
<PAGE> 3
Independence Savings Bank and
Independence Community Bank Corp. Sandler O'Neill
March 4, 1997
Page 3
FEES
If the Conversion is consummated, the Bank and the Company agree to
pay Sandler O'Neill for its services hereunder the fees set forth below:
1. a fee of one and five eighths percent (1.625%) of the
aggregate Actual Purchase Price of the shares of common stock
sold in the Subscription Offering to eligible account holders,
current depositors and in the Direct Community Offering,
excluding in each case shares purchased by (i) any employee
benefit plan or ESOP of the Holding Company or the Bank
established for the benefit of their respective directors,
officers and employees, (ii) by any foundation or charitable
organization established by the Bank in connection with the
Conversion, and (iii) any director, officer or employee of the
Holding Company or the Bank or members of their immediate
families; and
2. with respect to any shares of the Holding Company's common
stock sold by an NASD member firm (other than Sandler O'Neill)
under any selected dealers agreement in the Syndicated
Community Offering, (a) the sales commission payable to the
selected dealer under such agreement, (b) any sponsoring
dealer's fees, and (c) a management fee to Sandler O'Neill of
one and one-half percent (1.5%). Any fees payable to Sandler
O'Neill for common stock sold by Sandler O'Neill under any
such agreement shall be limited to an aggregate of one and
five eighths percent (1.625%) of the Actual Purchase Price of
such shares.
If (i) Sandler O'Neill's engagement hereunder is terminated for any of
the reasons provided for under the second paragraph of the section of this
letter captioned "Definitive Agreement," or (ii) the Conversion is terminated
by the Bank and the Company, no fees shall be payable by the Bank and the
Company to Sandler O'Neill hereunder; however, the Bank and the Company shall
reimburse Sandler O'Neill for its reasonable out-of-pocket expenses incurred in
connection with its engagement hereunder.
All fees payable to Sandler O'Neill hereunder shall be payable in cash
at the time of the closing of the Conversion. In recognition of the long lead
times involved in the conversion process, the Bank and the Company agree to
make advance payments to Sandler O'Neill in the aggregate amount of $50,000,
$25,000 of which shall be payable upon execution of this letter and the
remaining $25,000 of which shall be payable upon commencement of the
Subscription Offering, which shall be credited against any fees or
reimbursement of expenses payable hereunder.
<PAGE> 4
Independence Savings Bank and
Independence Community Bank Corp. Sandler O'Neill
March 4, 1997
Page 4
COSTS AND EXPENSES
In addition to any fees that may be payable to Sandler O'Neill
hereunder and the expenses to be borne by the Bank and the Company pursuant to
the following paragraph, the Bank and the Company agree to reimburse Sandler
O'Neill, upon request made from time to time, for its reasonable out-of-pocket
expenses incurred in connection with its engagement hereunder, regardless of
whether the Conversion is consummated, including, without limitation, legal
fees, advertising, promotional, syndication, and travel expenses; provided,
however, that Sandler O'Neill shall document such expenses to the reasonable
satisfaction of the Bank and the Company. The provisions of this paragraph are
not intended to apply to or in any way impair the indemnification provisions of
this letter.
As is customary, the Bank and the Company will bear all other expenses
incurred in connection with the Conversion and the Offerings, including,
without limitation, (i) the cost of obtaining all securities and bank
regulatory approvals, including any required NASD filing fees; (ii) the cost of
printing and distributing the offering materials; (iii) the costs of blue sky
qualification (including fees and expenses of blue sky counsel) of the shares
in the various states; (iv) listing fees; and (v) all fees and disbursements of
the Bank's, the Company's and the Holding Company's counsel, accountants,
conversion agent and other advisors. In the event Sandler O'Neill incurs any
such fees and expenses on behalf of the Bank, the Company or the Holding
Company, the Bank and the Company will reimburse Sandler O'Neill for such fees
and expenses whether or not the Conversion is consummated; provided, however,
that Sandler O'Neill shall not incur any substantial expenses on behalf of the
Bank, the Company or the Holding Company pursuant to this paragraph without the
prior approval of the Bank or the Company.
DUE DILIGENCE REVIEW
Sandler O'Neill's obligation to perform the services contemplated by
this letter shall be subject to the satisfactory completion of such
investigation and inquiries relating to the Bank, the Company and the Holding
Company, and their respective directors, officers, agents and employees, as
Sandler O'Neill and its counsel in their sole discretion may deem appropriate
under the circumstances. In this regard, the Bank and the Company agree that,
at its expense, it will make available to Sandler O'Neill all information which
Sandler O'Neill requests, and will allow Sandler O'Neill the opportunity to
discuss with the Bank's, the Company's and the Holding Company's management the
financial condition, business and operations of the Bank, the Company and the
Holding Company. The Bank, the Company and the Holding Company acknowledge
that Sandler O'Neill will rely upon the accuracy and completeness of all
information received from the Bank, the Company and the Holding Company and
their directors, trustees, officers, employees, agents, independent accountants
and counsel.
<PAGE> 5
Independence Savings Bank and
Independence Community Bank Corp. Sandler O'Neill
March 4, 1997
Page 5
BLUE SKY MATTERS
The Bank and the Company agree that if Sandler O'Neill's counsel does
not serve as counsel with respect to blue sky matters in connection with the
Offerings, the Bank and the Company will cause the counsel performing such
services to prepare a Blue Sky Memorandum related to the Offerings including
Sandler O'Neill's participation therein and shall furnish Sandler O'Neill a
copy thereof addressed to Sandler O'Neill or upon which such counsel shall
state Sandler O'Neill may rely.
CONFIDENTIALITY
Other than disclosure to other firms made part of any syndicate of
selected dealers or as required by law or regulation, Sandler O'Neill agrees
that it will not disclose any Confidential Information relating to the Bank or
the Company obtained in connection with its engagement hereunder (whether or
not the Conversion is consummated). As used in this paragraph, the term
"Confidential Information" shall not include information which (i) is or
becomes generally available to the public other than as a result of a
disclosure by Sandler O'Neill, (ii) was available to Sandler O'Neill on a
non-confidential basis prior to its disclosure to Sandler O'Neill by the Bank
or the Company, or (iii) becomes available to Sandler O'Neill on a
non-confidential basis from a person other than the Bank or the Company who is
not otherwise known to Sandler O'Neill to be bound not to disclose such
information pursuant to a contractual, legal or fiduciary obligation.
INDEMNIFICATION
Since Sandler O'Neill will be acting on behalf of the Bank, the
Company and the Holding Company in connection with the Conversion, the Holding
Company, the Company and the Bank agree to indemnify and hold Sandler O'Neill
and its affiliates and their respective partners, directors, officers,
employees, agents and controlling persons within the meaning of Section 15 of
the Securities Act of 1933 or Section 20 of the Securities Exchange Act
(Sandler O'Neill and each such person being an "Indemnified Party") harmless
from and against any and all losses, claims, damages and liabilities, joint or
several, to which such Indemnified Party may become subject under applicable
federal or state law, or otherwise, related to or arising out of the Conversion
or the engagement of Sandler O'Neill pursuant to, or the performance by Sandler
O'Neill of the services contemplated by, this letter, and will reimburse any
Indemnified Party for all reasonable expenses (including reasonable legal fees
and expenses) as they are incurred, including expenses incurred in connection
with the investigation of, preparation for or defense of any pending or
threatened claim or any action or proceeding arising therefrom, whether or not
such Indemnified Party is a party; provided, however, that the Bank, the
Company and the
<PAGE> 6
Independence Savings Bank and
Independence Community Bank Corp. Sandler O'Neill
March 4, 1997
Page 6
Holding Company will not be liable in any such case to the extent that any such
loss, claim, damage, liability or expense (i) arises out of or is based upon
any untrue statement of a material fact or the omission of a material fact
required to be stated therein or necessary to make not misleading any
statements contained in any proxy statement or prospectus (preliminary or
final), or any amendment or supplement thereto, or any of the applications,
notices, filings or documents related thereto made in reliance on and in
conformity with written information furnished to the Bank or the Company by
Sandler O'Neill expressly for use therein, or (ii) is primarily attributable to
the gross negligence, willful misconduct or bad faith of Sandler O'Neill. If
the foregoing indemnification is unavailable for any reason, the Bank, the
Company and the Holding Company agree to contribute to such losses, claims,
damages, liabilities and expenses in the proportion that its financial interest
in the Conversion bears to that of Sandler O'Neill.
DEFINITIVE AGREEMENT
Sandler O'Neill, the Company and the Bank agree that (a) except as set
forth in clause (b), the foregoing represents the general intention of the
Bank, the Company and Sandler O'Neill with respect to the services to be
provided by Sandler O'Neill in connection with the Offerings, which will serve
as a basis for Sandler O'Neill commencing activities, and (b) the only legal
and binding obligations of the Bank, the Company, the Holding Company and
Sandler O'Neill with respect to the subject matter hereof shall be (1) the
Bank's and the Company's obligation to reimburse costs and expenses pursuant to
the section captioned "Costs and Expenses," (2) those set forth under the
captions "Confidentiality" and "Indemnification," and (3) as set forth in a
duly negotiated and executed definitive Agency Agreement to be entered into
prior to the commencement of the Subscription Offering relating to the services
of Sandler O'Neill in connection with the Offerings. Such Agency Agreement
shall be in form and content satisfactory to Sandler O'Neill, the Bank, the
Company and the Holding Company and their respective counsel and shall contain
standard indemnification provisions consistent herewith.
Sandler O'Neill's execution of such Agency Agreement shall also be
subject to (I) Sandler O'Neill's satisfaction with its investigation of the
Bank's and the Company's business, financial condition and results of
operations, (ii) preparation of offering materials that are satisfactory to
Sandler O'Neill and its counsel, (iii) compliance with all relevant legal and
regulatory requirements to the reasonable satisfaction of Sandler O'Neill's
counsel, (iv) agreement that the price established by the independent appraiser
is reasonable and (v) market conditions at the time of the proposed offering.
Sandler O'Neill may terminate this agreement if such Agency Agreement is not
entered into prior to June 30, 1998.
<PAGE> 7
Independence Savings Bank and
Independence Community Bank Corp. Sandler O'Neill
March 4, 1997
Page 7
ELIMINATION OF HOLDING COMPANY
If the Boards of Trustees of the Bank and the Company, for any reason, elects
not to proceed with the formation of the Holding Company but determine to
proceed with the Conversion and substitute the common stock of the Bank for the
common stock of the Holding Company, all of the provisions of this letter
relating to the common stock of the Holding Company will be deemed to pertain
to the common stock of the Bank on the same terms and conditions that such
provisions pertain to the common stock of the Holding Company and all of the
references in this letter to the Holding Company shall be deemed to refer to
the Bank or shall have no effect, as the context of the reference requires.
Please confirm that the foregoing correctly sets forth our agreement
by signing and returning to Sandler O'Neill the duplicate copy of this letter
enclosed herewith.
Very truly yours,
Sandler O'Neill & Partners, L.P.
By: Sandler O'Neill & Partners Corp.,
the sole general partner
By: /s/ MARK B. COHEN
-----------------------------------
Mark B. Cohen
Principal
Accepted and agreed to as of
the date first above written:
Independence Savings Bank and Independence Community Bank Corp.
By: /s/ CHARLES J. HAMM
--------------------------------------------
Charles J. Hamm
Chairman, President and Chief Executive Officer of
Independence Savings Bank and Independence Community Bank Corp.
<PAGE> 1
EXHIBIT 2.0
PLAN OF CONVERSION
OF
INDEPENDENCE COMMUNITY BANK CORP.
AND
INDEPENDENCE SAVINGS BANK
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION
NUMBER PAGE
------ ----
<S> <C> <C>
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. General Procedure for Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Total Number of Shares and Purchase Price of
Conversion Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5. Purchase by the Holding Company of the Stock of the Bank . . . . . . . . . . . . . 9
6. Subscription Rights of Eligible Account Holders . . . . . . . . . . . . . . . . . . . 10
7. Subscription Rights of Tax-Qualified Employee Stock
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8. Subscription Rights of Supplemental Eligible Account Holders . . . . . . . . . . . . 11
9. Community Offering, Syndicated Community Offering, Public
Offering and Other Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Limitations on Subscriptions and Purchases of Conversion Stock . . . . . . . . . . . 13
11. Timing of Subscription Offering, Manner of Exercising
Subscription Rights and Order Forms . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Payment for Conversion Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
13. Account Holders in Nonqualified States or Foreign Countries . . . . . . . . . . . . . 18
14. Voting Rights of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
15. Liquidation Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16. Transfer of Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
17. Requirements Following Conversion for
Registration, Market Making and Stock Exchange Listing . . . . . . . . . . . . . . . 20
18. Directors and Officers of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . 20
19. Requirements for Stock Purchases by Directors
and Officers Following the Conversion . . . . . . . . . . . . . . . . . . . . . . . 21
20. Restrictions on Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 21
21. Restrictions on Acquisition of Stock of the Holding Company . . . . . . . . . . . . . 22
22. Tax Rulings or Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
23. Stock Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
24. Dividend and Repurchase Restrictions on Stock . . . . . . . . . . . . . . . . . . . . 23
25. Payment of Fees to Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
26. Establishment and Funding of Charitable Foundation . . . . . . . . . . . . . . . . . 24
27. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
28. Amendment or Termination of the Plan . . . . . . . . . . . . . . . . . . . . . . . . 25
29. Interpretation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
<PAGE> 3
1. INTRODUCTION.
For purposes of this section, all capitalized terms have the meanings
ascribed to them in Section 2 except as otherwise defined herein.
Independence Savings Bank, headquartered in Brooklyn, New York, is a New
York-chartered stock savings bank (the Bank") which operates as a locally
based, wholly owned subsidiary of Independence Community Bank Corp., a New
York-chartered mutual holding company (the "Mutual Holding Company"). The Bank
organized the Mutual Holding Company in April 1992 in order to facilitate the
acquisition of The Long Island City Financial Corporation.
The Board of Trustees of the Mutual Holding Company and the Board of
Directors of the Bank believe that a conversion of the Mutual Holding Company
to stock form pursuant to this Plan of Conversion is in the best interests of
the Mutual Holding Company and the Bank, as well as in the best interests of
the Bank's depositors, employees, customers and the communities historically
served by the Bank. The Conversion will result in the Bank being wholly owned
by a stock holding company, which is a more common structure and form of
ownership for financial institutions than a mutual holding company. In
addition, the Conversion will result in the raising of additional capital which
will provide the Bank, through the holding company structure, greater
organizational and operational flexibility, including greater flexibility for
effecting mergers and acquisitions of financial institutions.
In connection with the Conversion, for tax and other corporate purposes,
the Mutual Holding Company will be combined with the Bank simultaneously with
the Mutual Holding Company's conversion to stock form and a newly formed
Delaware stock corporation to be known as "Independence Community Bank Corp."
will become the holding company of the Bank (the "Holding Company"). The Bank
and the Holding Company will offer shares of Holding Company Common Stock (the
"Conversion Stock") in a Subscription Offering to Eligible Account Holders,
Tax-Qualified Employee Stock Benefit Plans and Supplemental Eligible Account
Holders. Any shares of Conversion Stock remaining unsold after the
Subscription Offering will be offered for sale to the public through a
Community Offering, a Syndicated Community Offering and/or Public Offering, as
determined by the Boards of Directors of the Holding Company and the Bank in
their sole discretion.
The Conversion is intended to provide a larger capital base to support
the Bank's lending and investment activities and thereby enhance the Bank's
capabilities to serve the borrowing and other financial needs of the
communities it serves. The use of the Holding Company will provide greater
organizational flexibility and possible diversification and will facilitate
growth through acquisitions. In furtherance of the Bank's commitment to the
communities which it serves, this Plan provides for the establishment of a
charitable foundation (the "Foundation") as part of the Conversion. The
Foundation is intended to complement the Bank's existing community reinvestment
activities in a manner that will allow the Bank's local community to share in
the growth and profitability of the Holding Company and the Bank and to support
such charitable purposes as determined by the Board
1
<PAGE> 4
of Directors of the Foundation. Consistent with the Bank's goal, the Holding
Company intends to donate to the Foundation immediately following the
Conversion a number of shares of its authorized but unissued Holding Company
Common Stock in an amount not to exceed 10% of the number of shares of
Conversion Stock issued in the Conversion.
This Plan was adopted by the Board of Trustees of the Mutual Holding
Company and the Board of Directors of the Bank on April 18, 1997.
This Plan is subject to the approval of the New York State Banking
Department (the "Department") and the non-objection of the Federal Deposit
Insurance Corporation (the "FDIC") and must be adopted by Eligible Account
Holders in the manner set forth herein. The Mutual Holding Company, as the
sole stockholder of the Bank, shall vote to approve this Plan.
After the Conversion, the Bank will continue to be regulated by the
Department, as its chartering authority, and by the FDIC, which insures the
Bank's deposits. In addition, the Bank will continue to be a member of the
Federal Home Loan Bank System and all insured savings deposits will continue to
be insured by the FDIC up to the maximum provided by law. The Holding Company
will be registered as a thrift holding company under the Home Owners Loan Act
("HOLA") and will be regulated by the Office of Thrift Supervision (the "OTS")
and the Department.
2. DEFINITIONS.
As used in this Plan, the terms set forth below have the following
meaning:
2.1 Actual Purchase Price means the price per share at which the
Conversion Stock is ultimately sold by the Holding Company in the Offerings in
accordance with the terms hereof.
2.2 Affiliate means a Person who, directly or indirectly, through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified.
2.3 Application for Conversion shall have the meaning set forth in
Section 3(a) hereof.
2.4 Associate when used to indicate a relationship with any Person,
means (i) a corporation or organization (other than the Mutual Holding Company,
the Bank, a majority-owned subsidiary of the Bank or the Holding Company) of
which such Person is a director, officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity
securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity, provided, however, that such term shall not
include any Tax-Qualified Employee Stock Benefit Plan or any Non-Tax-Qualified
Employee Stock Benefit Plan of the Holding Company or the Bank in which such
Person has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity, and (iii) any relative or spouse of such
2
<PAGE> 5
Person, or any relative of such spouse, who has the same home as such Person or
who is a director or officer of the Holding Company or the Bank or any of the
subsidiaries of the foregoing.
2.5 Bank means Independence Savings Bank.
2.6 Bank Benefit Plans includes, but is not limited to, Tax-Qualified
Employee Stock Benefit Plans and Non-Tax-Qualified Stock Benefit Plans.
2.7 Bank Common Stock means the common stock of the Bank, par value
$1.00 per share.
2.8 Banking Law means the Banking Law of the State of New York
including the codes, rules and regulations promulgated thereunder.
2.9 Banking Board means the Banking Board of the State of New York.
2.10 Code means the Internal Revenue Code of 1986, as amended.
2.11 Community Offering means the offering for sale by the Holding
Company of any shares of Conversion Stock not subscribed for in the
Subscription Offering to (i) natural persons residing in the counties in New
York in which the Bank has branch offices, and (ii) such other Persons within
or without the State of New York as may be selected by the Holding Company and
the Bank within their sole discretion.
2.12 Control (including the terms "controlling," "controlled by," and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
2.13 Conversion means (i) the combination, by merger or otherwise, of
the Mutual Holding Company with and into the Bank, pursuant to which the Mutual
Holding Company will cease to exist and, in connection therewith, each share of
Bank Common Stock outstanding immediately prior to the effective time thereof
shall automatically be cancelled, (ii) the issuance of Conversion Stock by the
Holding Company in the Offerings as provided herein and (iii) the issuance to
the Holding Company of Bank Common Stock to be outstanding upon consummation of
the Conversion in exchange for a portion of the net proceeds received by the
Holding Company from the sale of the Conversion Stock and, in connection
therewith, the cancellation of each share of Holding Company Common Stock held
by the Bank.
2.14 Conversion Regulations means Parts 86 and 111 of the General
Regulations of the Banking Board and the regulations of the FDIC set forth at
12 C.F.R. Sections 303.15 and 333.4.
3
<PAGE> 6
2.15 Conversion Stock means the Holding Company Common Stock to be
issued and sold in the Offerings pursuant to the Plan of Conversion and shall
not include shares issued to the charitable foundation pursuant to Section 26
hereof.
2.16 Department means the New York State Banking Department, the head
of which is the Superintendent and of which the Banking Board is a part
thereof.
2.17 Deposit Account means all deposits of the Bank as defined in
Section 9019 of the Banking Law, and includes without limitation, savings and
demand accounts, including passbook accounts, money market deposit accounts and
negotiable order of withdrawal accounts, certificates of deposit and other
authorized accounts of the Bank.
2.18 Director, Trustee, Officer and Employee means the terms as
applied respectively to any person who is a director, trustee, officer or
employee of the Mutual Holding Company, the Bank or any subsidiary thereof.
2.19 Eligible Account Holder means any Person holding a Qualifying
Deposit on the Eligibility Record Date for purposes of determining Subscription
Rights and establishing subaccount balances in the liquidation account to be
established pursuant to Section 15 hereof.
2.20 Eligibility Record Date means the date for determining Qualifying
Deposits of Eligible Account Holders and is the close of business on March 31,
1996.
2.21 Estimated Price Range means the range of the estimated aggregate
pro forma market value of the total number of shares of Conversion Stock to be
issued in the Offerings, as determined by the Independent Appraiser in
accordance with Section 4 hereof.
2.22 FDIC means the Federal Deposit Insurance Corporation or any
successor thereto.
2.23 Holding Company means Independence Community Bank Corp. (or such
other name as may be selected by the incorporator(s)), a corporation to be
organized as a wholly owned direct or indirect subsidiary of the Bank under the
laws of the State of Delaware with the purpose of becoming the holding company
of the Bank upon consummation of the Conversion. Upon completion of the
Conversion, the Holding Company shall hold all of the outstanding capital stock
of the Bank.
2.24 Holding Company Common Stock means the common stock of the
Holding Company.
2.25 Independent Appraiser means the independent investment banking or
financial consulting firm retained by the Holding Company and the Bank to
prepare an appraisal of the estimated pro forma market value of the Conversion
Stock.
4
<PAGE> 7
2.26 Initial Purchase Price means the price per share to be paid
initially by Participants for shares of Conversion Stock subscribed for in the
Subscription Offering and by Persons for shares of Conversion Stock ordered in
the Community Offering and/or the Syndicated Community Offering.
2.27 MHC Combination means the combination of the Mutual Holding
Company with the Bank.
2.28 Mutual Holding Company means Independence Community Bank Corp.
2.29 Offerings means the Subscription Offering, the Community Offering
and the Syndicated Community Offering or Public Offering.
2.30 Officer means the president, executive vice president, senior
vice president, vice president, secretary, treasurer or principal financial
officer, comptroller or principal accounting officer and any other person
performing similar functions with respect to any organization whether
incorporated or unincorporated.
2.31 Order Form means the form or forms provided by the Holding
Company and the Bank, containing all such terms and provisions as set forth in
Section 11 hereof, to a Participant or other Person by which Conversion Stock
may be ordered in the Offerings.
2.32 OTS means the Office of Thrift Supervision.
2.33 Participant means any Eligible Account Holder, Tax-Qualified
Employee Stock Benefit Plan and Supplemental Eligible Account Holder.
2.34 Person means an individual, a corporation, a partnership, an
association, a joint stock company, a trust (including individual retirement
accounts and Keogh accounts), an unincorporated organization or a government or
any political subdivision thereof or any other entity.
2.35 Plan and Plan of Conversion mean this Plan of Conversion as
adopted by the Board of Trustees of the Mutual Holding Company and the Board of
Directors of the Bank and any amendment hereto approved as provided herein.
The Board of Directors of the Holding Company shall adopt this Plan as soon as
practicable following its organization.
2.36 Primary Parties mean the Mutual Holding Company, the Bank and the
Holding Company.
2.37 Prospectus means the one or more documents to be used in offering
the Conversion Stock in the Offerings.
2.38 Public Offering means an underwritten firm commitment offering to
the public through one or more underwriters.
5
<PAGE> 8
2.39 Qualifying Deposits means the aggregate balance of all Deposit
Accounts in the Bank with an aggregate balance of $100 or more of (i) an
Eligible Account Holder at the close of business on the Eligibility Record Date
and (ii) a Supplemental Eligible Account Holder at the close of business on the
Supplemental Eligibility Record Date.
2.40 SEC means the Securities and Exchange Commission.
2.41 Special Meeting means the Special Meeting of Eligible Account
Holders called for the purpose of submitting this Plan to the Eligible Account
Holders for their approval, including any adjournments of such meeting.
2.42 Subscription Offering means the offering of the Conversion Stock
to Participants.
2.43 Subscription Rights means nontransferable rights to subscribe for
Conversion Stock granted to Participants pursuant to the terms of this Plan.
2.44 Superintendent means the Superintendent of Banks of the State of
New York.
2.45 Supplemental Eligible Account Holder means any Person, except
Directors, Trustees and Officers of the Bank and the Mutual Holding Company and
their Associates, holding a Qualifying Deposit at the close of business on the
Supplemental Eligibility Record Date.
2.46 Supplemental Eligibility Record Date, if applicable, means the
date for determining Qualifying Deposits of Supplemental Eligible Account
Holders and shall be required if the Eligibility Record Date is more than 15
months prior to the date of the latest amendment to the Application for
Conversion filed by the Mutual Holding Company and the Bank prior to approval
of such application by the Department. If applicable, the Supplemental
Eligibility Record Date shall be the last day of the calendar quarter preceding
the Department approval of the Application for Conversion submitted by the
Mutual Holding Company and the Bank pursuant to this Plan of Conversion.
2.47 Syndicated Community Offering means the offering for sale by a
syndicate of broker-dealers to the general public of shares of Conversion Stock
not purchased in the Subscription Offering and the Community Offering.
2.48 Tax-Qualified Employee Stock Benefit Plan means any defined
benefit plan or defined contribution plan, including an employee stock
ownership plan ("ESOP"), stock bonus plan, profit-sharing plan or other plan,
which is established for the benefit of the employees of the Holding Company
and the Bank and which, with its related trust, meets the requirements to be
"qualified" under Section 401 of the Code as from time to time in effect. A
"Non-Tax-Qualified Employee Stock Benefit Plan" is any defined benefit plan or
defined contribution stock benefit plan which is not so qualified.
6
<PAGE> 9
3. GENERAL PROCEDURE FOR CONVERSION AND REORGANIZATION.
(a) An application for the Conversion, including the Plan and
all other requisite material (the "Application for Conversion"), shall be
submitted to the Department for approval or waiver and shall be submitted to
the FDIC for non-objection. The Mutual Holding Company and the Bank also will
cause notice of the adoption of the Plan by the Board of Trustees of the Mutual
Holding Company and the Board of Directors of the Bank to be given by (i)
publication in a newspaper having general circulation in each community in
which an office of the Bank is located, (ii) conspicuously posting notice of
such adoption at the Bank's and the Mutual Holding Company's principal offices
and at each of the Bank's branch offices and (iii) issuing a press release
containing the material terms of the Conversion.
(b) Following receipt of all required governmental approvals
and consents, the Plan will be submitted to a vote of the Eligible Account
Holders at the Special Meeting called for that purpose. The Special Meeting
shall be held upon written notice given no less than 20 days nor more than 45
days from the last date on which such Notice is mailed to Eligible Account
Holders. The notice of the Special Meeting, proxy card and proxy statement
(which may be a short-form proxy statement in accordance with applicable laws
and regulations) shall be sent to each Eligible Account Holder who also shall
be given the opportunity to request a copy of the Plan and the Restated
Organization Certificate and proposed Bylaws of the Bank. Readily
distinguishable postage-paid envelopes shall be provided for the return of
proxy cards. At the Special Meeting, each Eligible Account Holder shall be
entitled to cast one vote in person or by proxy for every $100 such Eligible
Account Holder had on deposit with the Bank as of the Eligibility Record Date;
provided, however, that no Eligible Account Holder shall be eligible to cast
more than 1,000 votes. The Superintendent shall be notified of the results of
the Special Meeting within five days after the conclusion of the Special
Meeting by a certificate signed by the Chief Executive Officer and the
Secretary of the Bank. The Plan must be approved by: (i) the affirmative vote
of at least seventy five percent (75%) in amount of deposit liabilities of
Eligible Account Holders represented in person or by proxy at such Special
Meeting; and (ii) the affirmative vote of at least a majority of the total
number of votes entitled to be cast by Eligible Account Holders at such Special
Meeting.
(c) Subscription Rights to purchase shares of Conversion Stock
will be issued without payment therefor to Eligible Account Holders,
Tax-Qualified Employee Plans and Supplemental Eligible Account Holders, if any,
as set forth in Sections 6, 7 and 8 hereof. Such Eligible Account Holders,
Tax-Qualified Employee Stock Benefit Plans and Supplemental Eligible Account
Holders shall be provided with a Prospectus and Order Form to the extent
required by law or regulation.
(d) The Mutual Holding Company, in its capacity as the sole
stockholder of the Bank has adopted this Plan and will adopt such other
documents as may be necessary to effect the Conversion or any part thereof,
including without limitation, the MHC Combination.
7
<PAGE> 10
(e) The Holding Company shall submit or cause to be submitted
(i) an application to the OTS for the Company to acquire the Bank and become a
thrift holding company and (ii) an application to the Department for approval
of the same. Applications also will be filed with the Department and the FDIC
for approval of the MHC Combination. All notices required to be published in
connection with such applications shall be published at the times required.
(f) The Holding Company shall file a Registration Statement
with the SEC to register the Conversion Stock to be issued in the Conversion
under the Securities Act of 1933, as amended, and, subject to the terms of the
Plan, shall register such stock under any applicable state securities laws.
Upon registration and after the receipt of all required regulatory approvals,
the Conversion Stock shall be first offered for sale in a Subscription Offering
to Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans and
Supplemental Eligible Account Holders, if any. Any shares of Conversion Stock
remaining unsold after the Subscription Offering will be sold through a
Community Offering, a Syndicated Community Offering and/or a Public Offering.
The purchase price per share for the Conversion Stock shall be a uniform price
determined in accordance with Section 4 hereof.
(g) The effective date of the Conversion shall be the date set
forth in Section 27 hereof. Upon the effective date, the following
transactions shall occur:
(i) The Mutual Holding Company shall convert into a
stock institution and shall simultaneously combine with and into the Bank in
the MHC Combination, with the Bank being the surviving institution. As a
result of the MHC Combination, (x) the shares of Bank Common Stock currently
held by the Mutual Holding Company shall be extinguished and (y) Eligible
Account Holders of the Bank will be granted interests in the liquidation
account to be established by the Bank pursuant to Section 15 hereof.
(ii) The Holding Company shall sell the Conversion Stock
in the Offerings, as provided herein and use a portion of the net proceeds
thereof to purchase all of the capital stock of the Bank to be outstanding upon
consummation of the Conversion as provided in Section 5 hereof. The Holding
Company Common Stock held by the Bank shall be cancelled.
(h) The Primary Parties may retain and pay for the services of
financial and other advisors and investment bankers to assist in connection
with any or all aspects of the Conversion, including in connection with the
Offerings, the payment of fees to brokers and investment bankers for assisting
Persons in completing and/or submitting Order Forms. All fees, expenses,
retainers and similar items shall be reasonable.
4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF CONVERSION STOCK.
(a) The aggregate price at which shares of Conversion Stock
shall be sold in the Offerings shall be based on a pro forma valuation of the
aggregate market value of the Conversion Stock prepared by the Independent
Appraiser. The valuation shall be based on
8
<PAGE> 11
financial information relating to the Primary Parties, market, financial and
economic conditions, a comparison of the Primary Parties with selected publicly
held financial institutions and holding companies and with comparable financial
institutions and holding companies and such other factors as the Independent
Appraiser may deem to be appropriate. The valuation shall be stated in terms
of an Estimated Price Range, the maximum of which shall generally be no more
than 15% above the average of the minimum and maximum of such price range and
the minimum of which shall generally be no more than 15% below such average.
The valuation shall be updated during the Offerings as market and financial
conditions warrant and as may be required by the Department and the FDIC.
(b) Based upon the independent valuation, the Boards of
Directors of the Holding Company and the Bank shall fix the Initial Purchase
Price and the number (or range) of shares of Conversion Stock to be offered in
the Subscription Offering, Community Offering and/or Syndicated Community
Offering or Public Offering. The Actual Purchase Price and the total number of
shares of Conversion Stock to be issued in the Offerings shall be determined by
the Boards of Trustees and Directors, as the case may be, of the Primary
Parties upon conclusion of the Offerings in consultation with the Independent
Appraiser and any financial advisor or investment banker retained by the
Primary Parties in connection therewith.
(c) Subject to the receipt of any required regulatory approval
or consent, the Estimated Price Range may be increased or decreased to reflect
market, financial and economic conditions prior to completion of the
Conversion, and under such circumstances the Primary Parties may increase or
decrease the total number of shares of Conversion Stock to be issued in the
Conversion to reflect any such change. Notwithstanding anything to the
contrary contained in this Plan, no resolicitation of subscribers shall be
required and subscribers shall not be permitted to modify or cancel their
subscriptions unless the gross proceeds from the sale of the Conversion Stock
issued in the Conversion are less than the minimum or more than 15% above the
maximum of the Estimated Price Range set forth in the Prospectus. In the event
of an increase in the total number of shares offered in the Conversion due to
an increase in the Estimated Price Range, the priority of share allocation
shall be as set forth in this Plan.
5. PURCHASE BY THE HOLDING COMPANY OF THE STOCK OF THE BANK.
Upon the consummation of the sale of all of the Conversion Stock, the
Holding Company will purchase from the Bank all of the capital stock of the
Bank to be issued by the Bank in the Conversion (which shall consist solely of
Bank Common Stock) in exchange for such amount of the net proceeds from the
sale of the Conversion Stock in the Offerings that are not to be retained by
the Holding Company. The Holding Company will retain 50% of the net proceeds
of the Conversion or such lesser percentage as may be deemed acceptable in the
judgment of the Board of Directors.
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6. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS.
(a) Each Eligible Account Holder shall receive, without
payment, Subscription Rights to purchase up to the amount permitted to be
purchased in the Community Offering pursuant to the provisions of Section 9
hereof, but which amount may be increased to 5.0% of the total offering of
shares of Conversion Stock or decreased to .10% of the total offering of shares
of Conversion Stock, subject to (i) any regulatory approval but without the
further approval of Eligible Account Holders or resolicitation of subscribers,
and (ii) the maximum and minimum purchase limitations specified by Section 10
hereof.
(b) In the event of an oversubscription for shares of
Conversion Stock pursuant to Section 6(a), available shares shall be allocated
among subscribing Eligible Account Holders so as to permit each such Eligible
Account Holder, to the extent possible, to purchase a number of shares which
will make his or her total allocation equal to the lesser of the number of
shares subscribed for or 100 shares. Any available shares remaining after each
subscribing Eligible Account Holder has been allocated the lesser of the number
subscribed for or 100 shares shall be allocated among the subscribing Eligible
Account Holders in the proportion which the Qualifying Deposit of each such
subscribing Eligible Account Holder bears to the total Qualifying Deposits of
all such subscribing Eligible Account Holders, provided that no fractional
shares shall be issued. Subscription Rights of Eligible Account Holders who
are also Directors, Trustees or Officers and their Associates shall be
subordinated to those of other Eligible Account Holders to the extent that they
are attributable to increased deposits during the one-year period preceding the
Eligibility Record Date.
7. SUBSCRIPTION RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS.
Notwithstanding the purchase limitations discussed below, Tax-Qualified
Employee Stock Benefit Plans of the Holding Company and the Bank shall receive,
without payment, Subscription Rights to purchase in the aggregate up to 10% of
the total offering of shares of Conversion Stock. Shares of Conversion Stock
purchased by any individual participant ("Plan Participant") in a Tax-Qualified
Employee Stock Benefit Plan using funds therein pursuant to the exercise of
subscription rights granted to such Participant in his individual capacity as
an Eligible Account Holder and/or Supplemental Eligible Account Holder and/or
purchases by such Plan Participant in the Community Offering shall not be
deemed to be purchases by a Tax-Qualified Employee Stock Benefit Plan for
purposes of calculating the maximum amount of Conversion Stock that
Tax-Qualified Stock Benefit Plans may purchase pursuant to the immediately
preceding sentence (if the individual Plan Participant controls or directs the
investment authority with respect to such account or subaccount). The maximum
number of shares of Conversion Stock which may be purchased in the Conversion
by the ESOP to be established by the Company and the Bank shall not exceed 8%
of the total number of shares sold in the Conversion including any shares which
may be issued in the event of an increase with the maximum of the Estimated
Price Range. Consistent with applicable laws and regulations and policies and
practices of the Department and the FDIC, Tax-Qualified Employee Stock Benefit
Plans may use funds contributed by
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<PAGE> 13
the Holding Company or the Bank and/or borrowed from an independent financial
institution to exercise such Subscription Rights, and the Holding Company and
the Bank may make scheduled discretionary contributions thereto, provided that
such contributions do not cause the Holding Company or the Bank to fail to meet
any applicable regulatory capital requirement.
8. SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT
HOLDERS.
(a) In the event that the Eligibility Record Date is more than
15 months prior to the date of the latest amendment to the Application for
Conversion filed prior to Department approval, then, and only in that event, a
Supplemental Eligibility Record Date shall be set and each Supplemental
Eligible Account Holder shall receive, without payment, Subscription Rights to
purchase up to the same amount permitted to be subscribed for in the Community
Offering pursuant to the provisions of Section 9, but which amount may be
increased to 5.0% of the total offering of shares of Conversion Stock or
decreased to .10% of the total offering of shares of Conversion Stock, subject
to (i) any required regulatory approval but without the further approval of
Eligible Account Holders or resolicitation of subscribers, and (ii) (A) the
maximum and minimum purchase limitations specified by Section 10 hereof and (B)
the availability of shares of Conversion Stock for purchase after taking into
account the shares of Conversion Stock purchased by Eligible Account Holders
and Tax-Qualified Employee Stock Benefit Plans through the exercise of
Subscription Rights granted under Sections 6 and 7 hereof.
(b) In the event of an oversubscription for shares of
Conversion Stock pursuant to Section 8(a), available shares shall be allocated
among subscribing Supplemental Eligible Account Holders so as to permit each
such Supplemental Eligible Account Holder, to the extent possible, to purchase
a number of shares which will make his or her total allocation (including the
number of shares, if any, allocated in accordance with Section 6(a)) equal to
the lesser of the number of shares subscribed for or 100 shares. Any available
shares remaining after each subscribing Supplemental Eligible Account Holder
has been allocated the lesser of the number subscribed for or 100 shares shall
be allocated among the subscribing Supplemental Eligible Account Holders in the
proportion which the Qualifying Deposit of each such subscribing Supplemental
Eligible Account Holder bears to the total Qualifying Deposits of all such
subscribing Supplemental Eligible Account Holders, provided that no fractional
shares shall be issued.
9. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING, PUBLIC OFFERING AND
OTHER OFFERINGS.
(a) If less than the total number of shares of Conversion
Stock are sold in the Subscription Offering, it is anticipated that all
remaining shares of Conversion Stock shall, if practicable, be sold in a
Community Offering and/or a Syndicated Community Offering. Subject to the
requirements set forth herein, the manner in which the Conversion Stock is sold
in the Community Offering and/or the Syndicated Community Offering shall have
as an objective the achievement of a broad distribution of such stock.
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<PAGE> 14
(b) In the event of a Community Offering, all shares of
Conversion Stock which are not subscribed for in the Subscription Offering
shall be offered for sale by means of a direct community marketing program,
which may provide for the use of brokers, dealers or investment banking firms
experienced in the sale of financial institution securities. Any available
shares in excess of those not subscribed for in the Subscription Offering will
be available for purchase by members of the general public to whom a Prospectus
is delivered by the Holding Company or on its behalf, with preference given to
natural persons residing in the counties in New York in which the Bank has a
branch office ("Preferred Subscribers").
(c) A Prospectus and Order Form shall be furnished to such
Persons as the Primary Parties may select in connection with the Community
Offering, and each order for Conversion Stock in the Community Offering shall
be subject to the absolute right of the Primary Parties to accept or reject any
such order in whole or in part either at the time of receipt of an order or as
soon as practicable following completion of the Community Offering. Available
shares will be allocated first to each Preferred Subscriber whose order is
accepted in an amount equal to the lesser of 100 shares or the number of shares
subscribed for by each such Preferred Subscriber, if possible. Thereafter,
unallocated shares shall be allocated among the Preferred Subscribers whose
accepted orders remain unsatisfied on an equal number of shares basis per order
until all orders have been filled, provided that no fractional shares shall be
issued. If there are any shares remaining after all accepted orders by
Preferred Subscribers have been satisfied, any remaining shares shall be
allocated to other members of the general public who purchase in the Community
Offering, applying the same allocation described above for Preferred
Subscribers.
(d) The amount of Conversion Stock that any Person may
purchase in the Community Offering shall not exceed $500,000 of the Conversion
Stock offered, provided, however, that this amount may be increased to up to 5%
of the total offering of shares of Conversion Stock or decreased to .10% of the
total offering of shares of Conversion Stock subject to (i) any required
regulatory approval but without the further approval of Eligible Account
Holders or the resolicitation of subscribers and (ii) the maximum and minimum
purchase limitations specified by Section 10 hereof. The Primary Parties may
commence the Community Offering concurrently with, at any time during, or as
soon as practicable after the end of, the Subscription Offering, and the
Community Offering must be completed within 45 days after the completion of the
Subscription Offering, unless extended by the Primary Parties with any required
regulatory approval.
(e) Subject to such terms, conditions and procedures as may be
determined by the Primary Parties, all shares of Conversion Stock not
subscribed for in the Subscription Offering or ordered in the Community
Offering may be sold by a syndicate of broker-dealers to the general public in
a Syndicated Community Offering. Each order for Conversion Stock in the
Syndicated Community Offering shall be subject to the absolute right of the
Primary Parties to accept or reject any such order in whole or in part either
at the time of receipt of an order or as soon as practicable after completion
of the Syndicated Community Offering. The amount of Conversion Stock that any
Person may purchase in the Syndicated Community Offering shall not exceed
$500,000 of the Conversion Stock offered, provided, however, that this amount
may be increased to up to 5% of the total offering of shares of Conversion
Stock or decreased to .10% of the total offering of shares of Conversion Stock,
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<PAGE> 15
subject to (i) any required regulatory approval but without the further
approval of Eligible Account Holders or the resolicitation of subscribers and
(ii) the maximum and minimum purchase limitations specified by Section 10
hereof. Available shares will be allocated first to each purchaser in the
Syndicated Community Offering whose order is accepted in an amount equal to the
lesser of 100 shares or the number of shares ordered by each such purchaser.
Thereafter, shares shall be allocated on an equal number of shares basis per
order until all orders have been filled, provided that no fractional shares
will be issued. The Primary Parties may commence the Syndicated Community
Offering concurrently with, at any time during, or as soon as practicable after
the end of, the Subscription Offering and/or the Community Offering, and the
Syndicated Community Offering must be completed within 45 days after the
completion of the Subscription Offering, unless extended by the Primary Parties
with any required regulatory approval.
(f) The Holding Company and the Bank may sell any shares of
Conversion Stock remaining following the Subscription Offering, Community
Offering and/or the Syndicated Community Offering in a Public Offering. The
provisions of Section 10 hereof shall not be applicable to the sales to
underwriters for purposes of the Public Offering but shall be applicable to
sales by the underwriters to the public. The price to be paid by the
underwriters in such an offering shall be equal to the Actual Purchase Price
less an underwriting discount to be negotiated among such underwriters and the
Bank and the Holding Company, subject to any required regulatory approval or
consent.
(g) If for any reason a Syndicated Community Offering or a
Public Offering of any shares of Conversion Stock not sold in the Subscription
Offering and the Community Offering cannot be effected, or in the event that
any insignificant residue of shares of Conversion Stock not exceeding 1% is not
sold in the Subscription Offering, Community Offering or Syndicated Community
Offering, the Primary Parties shall use their best efforts to obtain other
purchasers for such shares in such manner and upon such conditions as may be
satisfactory to the Department and the FDIC.
10. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF CONVERSION STOCK.
(a) The maximum number of shares of Conversion Stock which may
be purchased in the Conversion by Tax-Qualified Employee Stock Benefit Plans
shall not exceed 10% of the total number of shares of Conversion Stock sold in
the Offerings, including any shares which may be issued in the event of an
increase in the maximum of the Estimated Price Range to reflect changes in
market, financial and economic conditions after commencement of the
Subscription Offering and prior to completion of the Offerings; provided;
however, that purchases of Conversion Stock which are made by Plan Participants
pursuant to the exercise of subscription rights granted to such Participant in
his individual capacity as an Eligible Account Holder or Supplemental Eligible
Account Holder or purchases by a Plan Participant in the Community Offering
using the funds thereof held in Tax-Qualified Employee Stock Benefit Plans
shall not, be deemed to be purchases by a Tax-Qualified Employee Stock Benefit
Plan for purposes of this Section 10(a).
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<PAGE> 16
(b) Except in the case of Tax-Qualified Employee Stock Benefit
Plans in the aggregate, as set forth in Section 10(a) hereof, and in addition
to the other restrictions and limitations set forth herein, the maximum number
of shares of Conversion Stock which any Person together with any Associate or
group of Persons acting in concert may, directly or indirectly, subscribe for
or purchase in the Conversion shall not exceed 1% of the Conversion Stock. The
purchase limitation set forth herein shall not apply to the Holding Company
Common Stock contributed to the charitable foundation in accordance with
Section 26 hereof nor shall such shares be deemed Conversion Stock.
(c) The number of shares of Conversion Stock which Directors,
Trustees and Officers and their Associates may purchase in the aggregate in the
Offerings shall not exceed 25% of the total number of shares of Conversion
Stock sold in the Offerings, including any shares which may be issued in the
event of an increase in the maximum of the Estimated Price Range to reflect
changes in market, financial and economic conditions after commencement of the
Subscription Offering and prior to completion of the Offerings.
(d) No Person may purchase fewer than 25 shares of Conversion
Stock in the Offerings, to the extent such shares are available; provided,
however, that if the Actual Purchase Price is greater than $20.00 per share,
such minimum number of shares shall be adjusted so that the aggregate Actual
Purchase Price for such minimum shares will not exceed $500.00.
(e) For purposes of the foregoing limitations and the
determination of Subscription Rights, (i) Directors, Trustees, Officers and
Employees shall not be deemed to be Associates or a group acting in concert
solely as a result of their capacities as such, (ii) shares purchased by
Tax-Qualified Employee Stock Benefit Plans shall not be attributable to the
individual trustees or beneficiaries of any such plan for purposes of
determining compliance with the limitations set forth in Section 10(b) hereof
and (iii) shares purchased by Tax-Qualified Employee Stock Benefit Plans shall
not be attributable to the individual trustees or beneficiaries of any such
plan for purposes of determining compliance with the limitation set forth in
Section 10(c) hereof.
(f) Subject to any required regulatory approval and the
requirements of applicable laws and regulations, but without further approval
of the Eligible Account Holders or the resolicitation of subscribers, the
Primary Parties may increase or decrease any of the individual or aggregate
purchase limitations set forth herein to a percentage which does not exceed 5%
or fall below .10% of the total offering of shares of Conversion Stock whether
prior to, during or after the Subscription Offering, Community Offering,
Syndicated Community Offering and/or Public Offering. In the event that an
individual purchase limitation is increased after commencement of the
Subscription Offering or any other Offering, the Primary Parties shall permit
any Person who subscribed for the maximum number of shares of Conversion Stock
to purchase an additional number of shares, so that such Person shall be
permitted to subscribe for the then maximum number of shares permitted to be
subscribed for by such Person, subject to the rights and preferences of any
Person who has priority Subscription Rights. In the event that an individual
purchase limitation is decreased after commencement of the Subscription
Offering or any other Offering, the orders of any Person who subscribed for
more than the new
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<PAGE> 17
purchase limitation shall be decreased by the minimum amount necessary so that
such Person shall be in compliance with the then maximum number of shares
permitted to be subscribed for by such Person.
(g) The Primary Parties shall have the right to take all such
action as they may, in their sole discretion, deem necessary, appropriate or
advisable in order to monitor and enforce the terms, conditions, limitations
and restrictions contained in this Section 10 and elsewhere in this Plan and
the terms, conditions and representations contained in the Order Form,
including, but not limited to, the absolute right (subject only to any
necessary regulatory approvals or concurrences) to reject, limit or revoke
acceptance of any subscription or order and to delay, terminate or refuse to
consummate any sale of Conversion Stock which they believe might violate, or is
designed to, or is any part of a plan to, evade or circumvent such terms,
conditions, limitations, restrictions and representations. Any such action
shall be final, conclusive and binding on all persons, and the Primary Parties
and their respective Boards shall be free from any liability to any Person on
account of any such action.
11. TIMING OF SUBSCRIPTION OFFERING, MANNER OF EXERCISING SUBSCRIPTION
RIGHTS AND ORDER FORMS.
(a) The Subscription Offering may be commenced concurrently
with or at any time after the mailing to the Eligible Account Holders of the
Bank of the proxy statement to be used in connection with the Special Meeting,
provided, however that the Subscription Offering may not be closed earlier than
five days after the Special Meeting unless otherwise approved by the Primary
Parties subject to the receipt of any required regulatory approval or consent.
The offer and sale of the Conversion Stock shall be conditioned upon the
approval of the Plan by the Eligible Account Holders of the Bank at the Special
Meeting and the Mutual Holding Company as the sole stockholder of the Bank.
(b) The exact timing of the commencement of the Subscription
Offering shall be determined by the Primary Parties in consultation with the
Independent Appraiser and any financial or advisory or investment banking firm
retained by them in connection with the Conversion. The Primary Parties may
consider a number of factors, including, but not limited to, their current and
projected future earnings, local and national economic conditions, and the
prevailing market for stocks in general and stocks of financial institutions in
particular. The Primary Parties shall have the right to withdraw, terminate,
suspend, delay, revoke or modify any such Subscription Offering, at any time
and from time to time, as they in their sole discretion may determine, without
liability to any Person, subject to compliance with applicable securities laws
and any necessary regulatory approval or concurrence.
(c) The Primary Parties shall, promptly after the SEC has
declared the Registration Statement (which includes the Prospectus) effective
and all required regulatory approvals have been obtained, distribute or make
available the Prospectus, together with Order Forms for the purchase of
Conversion Stock, to all Participants for the purpose of enabling them to
exercise their respective Subscription Rights, subject to Section 13 hereof.
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<PAGE> 18
(d) A single Order Form for all Deposit Accounts maintained
with the Bank by an Eligible Account Holder and any Supplemental Eligible
Account Holder may be furnished, irrespective of the number of Deposit Accounts
maintained with the Bank on the Eligibility Record Date and Supplemental
Eligibility Record Date, respectively. No person holding a subscription right
may exceed any otherwise applicable purchase limitation by submitting multiple
orders for Conversion Stock. Multiple orders are subject to adjustment, in the
manner deemed appropriate by the Holding Company and the Bank, in order to
allocate shares in the event of an oversubscription.
(e) The recipient of an Order Form shall have no less than 20
days and no more than 45 days from the date of mailing of the Order Form (with
the exact termination date to be set forth on the Order Form) to properly
complete and execute the Order Form and deliver it to the Primary Parties,
provided, however, such period shall not end less than five days following the
Special Meeting, unless otherwise approved by the Primary Parties, subject to
the receipt of any required approval or consent. The Primary Parties may
extend such period by such amount of time as they determine is appropriate.
Failure of any Participant to deliver a properly executed Order Form to the
Primary Parties, along with payment (or authorization for payment by
withdrawal) for the shares of Conversion Stock subscribed for, within the time
limits prescribed, shall be deemed a waiver and release by such person of any
rights to subscribe for shares of Conversion Stock. Each Participant shall be
required to confirm to the Primary Parties by executing an Order Form that such
Person has fully complied with all of the terms, conditions, limitations and
restrictions in the Plan.
(f) The Primary Parties shall have the absolute right, in
their sole discretion and without liability to any Participant or other Person,
to reject any Order Form, including, but not limited to, any Order Form that is
(i) improperly completed or executed; (ii) not timely received; (iii) submitted
by facsimile or is photocopied; (iv) not accompanied by the proper payment (or
authorization of withdrawal for payment) or, in the case of institutional
investors in the Community Offering, not accompanied by an irrevocable order
together with a legally binding commitment to pay the full amount of the
purchase price prior to 48 hours before the completion of the Offerings; or (v)
submitted by a Person whose representations the Primary Parties believe to be
false or who they otherwise believe, either alone, or acting in concert with
others, is violating, evading or circumventing, or intends to violate, evade or
circumvent, the terms and conditions of the Plan. Furthermore, in the event
Order Forms (i) are not delivered and are returned to the Primary Parties by
the United States Postal Service or the Primary Parties are unable to locate
the addressee, or (ii) are not mailed pursuant to a "no mail" order placed in
effect by the account holder, the subscription rights of the person to which
such rights have been granted will lapse as though such person failed to return
the contemplated Order Form within the time period specified thereon. The
Primary Parties may, but will not be required to, waive any irregularity on any
Order Form or may require the submission of corrected Order Forms or the
remittance of full payment for shares of Conversion Stock by such date as they
may specify. The interpretation of the Primary Parties of the terms and
conditions of the Plan and the Order Forms shall be final and conclusive,
subject to the authority of the Department and the FDIC.
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<PAGE> 19
12. PAYMENT FOR CONVERSION STOCK.
(a) Payment for shares of Conversion Stock subscribed for by
Participants in the Subscription Offering and payment for shares of Conversion
Stock ordered by Persons in the Community Offering shall be equal to the
Initial Purchase Price multiplied by the number of shares which are being
subscribed for or ordered, respectively. Such payment may be made in cash, if
delivered in person, or by check or money order at the time the Order Form is
delivered to the Primary Parties. The Primary Parties also may elect to accept
payment for shares of Conversion Stock by wire transfer. The Primary Parties
may elect to provide Participants and/or other Persons who have a Deposit
Account with the Bank the opportunity to pay for shares of Conversion Stock by
authorizing the Bank to withdraw from such Deposit Account an amount equal to
the aggregate Initial Purchase Price of such shares. The Primary Parties in
their discretion, may require that payment other than by withdrawal from a
Deposit Account or by cash be by certified or bank check. Payment may also be
made by a Participant using funds held for such Participant's benefit by a Bank
Benefit Plan, to the extent that such plan allows Participants or any related
trust established for the benefit of such Participants to direct that some or
all of their individual accounts or sub-accounts be invested in Conversion
Stock. If the Actual Purchase Price is less than the Initial Purchase Price,
the Primary Parties shall refund the difference to all Participants and other
Persons, unless the Primary Parties choose to provide Participants and other
Persons the opportunity on the Order Form to elect to have such difference
applied to the purchase of additional whole shares of Conversion Stock. If the
Actual Purchase Price is more than the Initial Purchase Price, the Primary
Parties shall reduce the number of shares of Conversion Stock ordered by
Participants and other Persons and refund any remaining amount which is
attributable to a fractional share interest, unless the Primary Parties choose
to provide Participants and other Persons the opportunity to increase the
Actual Purchase Price submitted to them.
(b) Consistent with applicable laws and regulations and
policies and practices of the Department and the FDIC, payment for shares of
Conversion Stock subscribed for by Tax-Qualified Employee Stock Benefit Plans
may be made with funds contributed by the Holding Company and/or the Bank
and/or funds obtained pursuant to a loan from an unrelated financial
institution pursuant to a loan commitment which is in force from the time that
any such plan submits an Order Form until the closing of the transactions
contemplated hereby, which funds shall not be required to be delivered at the
time of subscription but upon the consummation of the Conversion.
(c) If a Participant or other Person authorizes the Bank to
withdraw the amount of the Initial Purchase Price from his or her Deposit
Account, the Bank shall have the right to make such withdrawal or to freeze
funds equal to the aggregate Initial Purchase Price upon receipt of the Order
Form. Notwithstanding any regulatory provisions regarding penalties for early
withdrawals from certificate accounts, the Bank may allow payment by means of
withdrawal from certificate accounts without the assessment of such penalties.
In the case of an early withdrawal of only a portion of such account, the
certificate evidencing
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<PAGE> 20
such account shall be cancelled if any applicable minimum balance requirement
ceases to be met. In such case, the remaining balance will earn interest at
the regular passbook rate. However, where any applicable minimum balance is
maintained in such certificate account, the rate of return on the balance of
the certificate account shall remain the same as prior to such early
withdrawal. This waiver of the early withdrawal penalty applies only to
withdrawals made in connection with the purchase of Conversion Stock and is
entirely within the discretion of the Primary Parties.
(d) The Bank shall pay interest, at not less than the passbook
rate, for all amounts paid in cash, by check or money order to purchase shares
of Conversion Stock in the Subscription Offering and the Community Offering
from the date payment is received until the date the Conversion is completed or
terminated.
(e) The Bank shall not knowingly loan funds or otherwise
extend credit to any Participant or other Person to purchase Conversion Stock.
(f) Each share of Conversion Stock shall be non-assessable
upon payment in full of the Actual Purchase Price.
13. ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES.
The Primary Parties shall make reasonable efforts to comply with the
securities laws of all jurisdictions in the United States in which Participants
reside. However, no Participant will be offered or receive any Conversion
Stock under the Plan if such Participant resides in a foreign country or
resides in a jurisdiction of the United States with respect to which all of the
following apply: (a) there are few Participants otherwise eligible to
subscribe for shares under this Plan who reside in such jurisdiction; (b) the
granting of Subscription Rights or the offer or sale of shares of Conversion
Stock to such Participants would require any of the Primary Parties or their
respective Directors, Trustees and Officers, under the laws of such
jurisdiction, to register as a broker-dealer, salesman or selling agent or to
register or otherwise qualify the Conversion Stock for sale in such
jurisdiction, or any of the Primary Parties would be required to qualify as a
foreign corporation or file a consent to service of process in such
jurisdiction; and (c) such registration, qualification or filing in the
judgment of the Primary Parties would be impracticable or unduly burdensome for
reasons of cost or otherwise.
14. VOTING RIGHTS OF STOCKHOLDERS.
Following consummation of the Conversion, voting rights with respect to
the Bank shall be held and exercised exclusively by the Holding Company as
holder of all of the Bank's outstanding voting capital stock, and voting rights
with respect to the Holding Company shall be held and exercised exclusively by
the holders of the Holding Company's outstanding voting capital stock. No
person shall have any rights as a stockholder of the Holding Company unless and
until the Conversion Stock has been issued to such person.
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15. LIQUIDATION ACCOUNT.
(a) At the time of the MHC Combination, the Bank shall
establish a liquidation account in an amount equal to 100% of the Bank's total
net worth (determined in accordance with generally accepted accounting
principles) as reflected in its latest statement of financial condition
contained in, incorporated into or accompanying the proxy statement distributed
to Eligible Account Holders in connection with the Conversion and
Reorganization. The function of the liquidation account will be to preserve
the rights of Eligible Account Holders who maintain their Deposit Accounts in
the Bank following the Conversion to a priority to distributions in the
unlikely event of a liquidation of the Bank subsequent to the Conversion.
(b) The liquidation account shall be maintained for the
benefit of Eligible Account Holders who maintain their Deposit Accounts in the
Bank after the Conversion. Each such account holder will, with respect to each
Deposit Account held, have a related inchoate interest in a portion of the
liquidation account balance, which interest will be referred to in this Section
15 as the "subaccount balance."
(c) In the event of a complete liquidation of the Bank
subsequent to the Conversion (and only in such event), each Eligible Account
Holder and shall be entitled to receive a liquidation distribution from the
liquidation account in the amount of the then current subaccount balances for
Deposit Accounts then held (adjusted as described below) before any liquidation
distribution may be made with respect to the capital stock of the Bank. No
merger, consolidation, sale of bulk assets or similar combination transaction
with another FDIC-insured institution in which the Bank is not the surviving
entity shall be considered a complete liquidation for this purpose. In any
merger or consolidation transaction, the liquidation account shall be assumed
by the surviving entity.
(d) The initial subaccount balance for a Deposit Account held
by an Eligible Account Holder shall be determined by multiplying the opening
balance in the liquidation account by a fraction, of which the numerator is the
amount of the Qualifying Deposits of such account holder and the denominator is
the total amount of Qualifying Deposits of all Eligible Account Holders.
Initial subaccount balances shall not be increased, and shall be subject to
downward adjustment as provided below.
(e) If, at the close of business on the last day of any period
for which the Bank or the Holding Company, as the case may be, has prepared
audited financial statements subsequent to the effective date of the
Conversion, the deposit balance in the Deposit Account of an Eligible Account
Holder is less than the lesser of (i) the balance in the Deposit Account at the
close of business on the last day of any period for which the Bank or the
Holding Company, as the case may be, has prepared audited financial statements
subsequent to the Eligibility Record Date, or (ii) the amount in such Deposit
Account as of the Eligibility Record Date, the subaccount balance for such
Deposit Account(s) shall be adjusted by reducing such subaccount balance in an
amount proportionate to the reduction
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<PAGE> 22
in such deposit balance. In the event of such a downward adjustment, the
subaccount balance shall not be subsequently increased, notwithstanding any
subsequent increase in the deposit balance of the related Deposit Account(s).
The subaccount balance of an Eligible Account Holder will be reduced to zero if
the Account Holder ceases to maintain a Deposit Account at the Bank.
(f) Subsequent to the Conversion, the Bank may not pay cash
dividends generally on capital stock of the Bank, or repurchase any of the
capital stock of the Bank, if such dividend or repurchase would reduce the
Bank's regulatory capital below the aggregate amount of the then current
subaccount balances for Deposit Accounts then held; otherwise, the existence of
the liquidation account shall not operate to restrict the use or application of
any of the net worth accounts of the Bank.
16. TRANSFER OF DEPOSIT ACCOUNTS.
Each Deposit Account in the Bank at the time of the consummation of the
Conversion shall become, without further action by the holder, a Deposit
Account in the Bank equivalent in withdrawable amount to the withdrawal value
(as adjusted to give effect to any withdrawal made for the purchase of
Conversion Stock), and subject to the same terms and conditions (except as to
liquidation rights) as such Deposit Account in the Bank immediately preceding
consummation of the Conversion. Holders of Deposit Accounts in the Bank shall
not, as such holders, have any voting rights.
17. REQUIREMENTS FOLLOWING CONVERSION AND REORGANIZATION FOR REGISTRATION,
MARKET MAKING AND STOCK EXCHANGE LISTING.
In connection with the Conversion, the Holding Company shall register
the Holding Company Common Stock pursuant to Section 12(g) of the Securities
Exchange Act of 1934, as amended, and shall undertake not to deregister such
stock for a period of three years thereafter. The Holding Company also shall
use its best efforts to (i) encourage and assist a market maker to establish
and maintain a market for the Holding Company Common Stock and (ii) list the
Holding Company Common Stock on a national or regional securities exchange or
to have quotations for such stock disseminated on the Nasdaq Stock Market.
18. DIRECTORS AND OFFICERS OF THE BANK.
Each person serving as a Director or Officer of the Bank at the time of
the Conversion shall continue to serve as a Director or Officer of the Bank for
the balance of the term for which the person was elected prior to the
Conversion, and until a successor is elected and qualified.
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<PAGE> 23
19. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE
CONVERSION AND REORGANIZATION.
For a period of three years following the Conversion, the Directors and
Officers of the Holding Company and the Bank (or any person who was an Officer
or Director or Trustee at any time after the date on which the Board of
Directors of the Bank and the Board of Trustees of the Mutual Holding Company
adopted the Plan) and their Associates may not purchase, without the prior
written approval of the Superintendent, Holding Company Common Stock except
from a broker-dealer registered with the SEC. This prohibition shall not
apply, however, to (i) purchases of stock made by and held by any Tax-Qualified
Employee Stock Benefit Plan (and purchases of stock made by and held by any
Non-Tax-Qualified Employee Stock Benefit Plan following the receipt of
stockholder approval of such plan) which may be attributable to individual
Officers or Directors or (ii) the exercise of any options pursuant to any stock
benefit plan of the Holding Company.
The foregoing restriction on purchases of Holding Company Common Stock
shall be in addition to any restrictions that may be imposed by federal and
state securities laws.
20. RESTRICTIONS ON TRANSFER OF STOCK.
All shares of the Conversion Stock which are purchased by Persons other
than Directors and Officers of the Holding Company and the Bank shall be
transferable without restriction, except in connection with a transaction
proscribed by Section 21 of this Plan. Shares of Conversion Stock purchased by
Directors and Officers of the Holding Company and the Bank on original issue
from the Holding Company (by subscription or otherwise) shall be subject to the
restriction that such shares shall not be sold or otherwise disposed of for
value for a period of one year following the date of purchase, except for any
disposition of such shares following the death or judicial declaration of
incompetence of the original purchaser or pursuant to any merger or similar
transaction approved by the Department. The shares of Conversion Stock issued
by the Holding Company to Directors and Officers shall bear the following
legend giving appropriate notice of such one-year restriction:
The shares of stock evidenced by this Certificate are restricted
as to transfer for a period of one year from the date of this
Certificate. These shares may not be transferred during such
one-year period without a legal opinion of counsel for the
Company that said transfer is permissible under the provisions of
applicable law and regulation. This restrictive legend shall be
deemed null and void after one year from the date of this
Certificate.
In addition, the Holding Company shall give appropriate instructions to
the transfer agent for the Holding Company Common Stock with respect to the
applicable restrictions
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<PAGE> 24
relating to the transfer of restricted stock. Any shares issued at a later
date as a stock dividend, stock split or otherwise with respect to any such
restricted stock shall be subject to the same holding period restrictions as
may then be applicable to such restricted stock.
The foregoing restriction on transfer shall be in addition to any
restrictions on transfer that may be imposed by federal and state securities
laws.
21. RESTRICTIONS ON ACQUISITION OF STOCK OF THE HOLDING COMPANY.
The certificate of incorporation of the Holding Company may prohibit any
Person together with Associates or group of Persons acting in concert from
offering to acquire or acquiring, directly or indirectly, beneficial ownership
of more than 10% of any class of equity securities of the Holding Company, or
of securities convertible into more than 10% of any such class, for such period
of time following completion of the Conversion as may be determined by the
Board of Directors of the Holding Company. The certificate of incorporation of
the Holding Company also may provide that all equity securities beneficially
owned by any Person in excess of 10% of any class of equity securities shall be
considered "excess shares," and that excess shares shall not be counted as
shares entitled to vote and shall not be voted by any Person or counted as
voting shares in connection with any matters submitted to the stockholders for
a vote. The foregoing restrictions shall not apply to (i) any offer with a
view toward public resale made exclusively to the Holding Company by
underwriters or a selling group acting on its behalf, (ii) the purchase of
shares by a Tax-Qualified Employee Stock Benefit Plan established for the
benefit of the employees of the Holding Company and its subsidiaries and (iii)
any offer or acquisition approved in advance by a specified affirmative vote of
the entire Board of Directors of the Holding Company. Directors, Officers or
Employees of the Holding Company or the Bank or any subsidiary thereof shall
not be deemed to be Associates or a group acting in concert with respect to
their individual acquisitions of any class of equity securities of the Holding
Company solely as a result of their capacities as such.
22. TAX RULINGS OR OPINIONS.
Consummation of the Conversion is conditioned upon prior receipt by the
Primary Parties of either a ruling or an opinion of counsel with respect to
federal tax laws, and either a ruling or an opinion of counsel with respect to
New York tax laws, to the effect that consummation of the transactions
contemplated hereby will not result in a taxable reorganization under the
provisions of the applicable codes or otherwise result in any adverse tax
consequences to the Primary Parties or to account holders receiving
Subscription Rights before or after the Conversion, except in each case to the
extent, if any, that Subscription Rights are deemed to have fair market value
on the date such rights are issued.
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<PAGE> 25
23. STOCK COMPENSATION PLANS
(a) The Holding Company and the Bank are authorized to adopt
Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion,
including without limitation an ESOP.
(b) The Holding Company and the Bank also are authorized to
adopt stock option plans, restricted stock grant plans and other
Non-Tax-Qualified Employee Stock Benefit Plans, provided that no stock options
shall be granted, and no shares of Conversion Stock shall be purchased,
pursuant to any of such plans prior to the earlier of (i) the one year
anniversary of the consummation of the Conversion or (ii) the receipt of
stockholder approval of such plans at either an annual or special meeting of
stockholders of the Holding Company to be held not earlier than six months
after the completion of the Conversion. The Holding Company and the Bank also
currently plan to adopt a stock option plan for the benefit of Directors,
Trustees, Officers and Employees and to reserve for issuance pursuant to such
plan from authorized but unissued shares an amount of Holding Company Common
Stock equal to 10% of the number of shares issued in connection with the
Conversion. The Holding Company and the Bank currently anticipate adopting a
restricted stock plan for the benefit of Directors, Trustees, Officers and
Employees to acquire through such plan in open market purchases or from
authorized but unissued shares an amount of Holding Company Common Stock equal
to 4% of the number of shares issued in connection with the Conversion.
(c) Existing as well as any newly created Tax-Qualified
Employee Stock Benefit Plans may purchase shares of Conversion Stock in the
Offerings, to the extent permitted by the terms of such benefit plans and this
Plan.
(d) The Holding Company and the Bank are authorized to enter
into employment or severance agreements with their executive officers.
24. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK.
(a) Following consummation of the Conversion, any repurchases
of shares of capital stock by the Holding Company will be made in accordance
with then applicable laws and regulations.
(b) The Bank may not declare or pay a cash dividend on, or
repurchase any of, its capital stock if the effect thereof would cause the
regulatory capital of the Bank to be reduced below the amount required for the
liquidation account.
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<PAGE> 26
25. PAYMENT OF FEES TO BROKERS.
The Primary Parties may elect to offer to pay fees on a per share basis
to securities brokers who assist purchasers of Conversion Stock in the
Offerings.
26. ESTABLISHMENT AND FUNDING OF CHARITABLE FOUNDATION
As part of the Conversion, the Holding Company and the Bank intend to
establish a Foundation that will qualify as an exempt organization under
Section 501(c)(3) of the Code and to donate to the Foundation from authorized
but unissued shares of Holding Company Common Stock a number of shares of
Holding Company Common Stock in an amount not to exceed 10% of the number of
shares of Conversion Stock issued in the Conversion (provided, however, that
such amount may be reduced by the Holding Company and the Bank), subject to the
receipt of any required regulatory approval or consent. The Foundation is
being formed in connection with the Conversion in order to complement the
Bank's existing community reinvestment activities and to share with the Bank's
local community a part of the Bank's financial success as a locally
headquartered, community minded, financial services institution and to support
such charitable purposes as determined by the Board of Directors of the
Foundation and permissible to a Section 501(c)(3) exempt charitable
organization. The funding of the Foundation with Holding Company Common
Stock accomplishes this goal as it enables the community to share in the growth
and profitability of the Holding Company and the Bank.
The Foundation will be dedicated to the promotion of charitable purposes
including, among other things, community development, grants, or donations to
support housing assistance and affordable housing programs, not-for-profit
community groups and any other type of charitable organization or endeavor
permissible to a Section 501(c)(3) organization. In order to serve the
purposes for which it was formed and maintain its qualification under Section
501(c)(3) of the Code, the Foundation may sell, on an annual basis, a limited
portion of the Holding Company Common Stock contributed to it by the Holding
Company.
The Board of Directors of the Foundation may be comprised of individuals
who are Officers and/or Directors of the Bank or the Holding Company. The
Board of Directors of the Foundation will be responsible for establishing the
polices of the Foundation with respect to grants or donations, consistent with
the stated purposes of the Foundation.
The establishment and funding of the Foundation as part of the
Conversion and Reorganization is subject to the receipt of any required
regulatory approval or consent.
27. EFFECTIVE DATE.
The effective date of the Conversion shall be the date upon which the
closing of the issuance of the shares of Conversion Stock in the Offerings
occurs. The closing of the
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<PAGE> 27
issuance of shares of Conversion Stock in the Offerings shall not occur until
all requisite regulatory, depositor and stockholder approvals have been
obtained, all applicable waiting periods have expired and sufficient
subscriptions and orders for the Conversion Stock have been received and the
MHC Combination has been completed. It is intended that the closing of the MHC
Combination and the sale of shares of Conversion Stock in the Offerings shall
occur consecutively and substantially simultaneously.
28. AMENDMENT OR TERMINATION OF THE PLAN.
If deemed necessary or desirable by the Boards of Directors or Trustees,
as the case may be, of the Primary Parties, this Plan may be substantively
amended, as a result of comments from regulatory authorities or otherwise, at
any time prior to the solicitation of proxies from Eligible Account Holders to
vote on the Plan and at any time thereafter upon receipt of any required
regulatory approval or consent. Any amendment to this Plan made after approval
by the Eligible Account Holders upon receipt of any required regulatory
approval or consent shall not necessitate further approval by the Eligible
Account Holders unless otherwise required by applicable regulatory authority.
This Plan shall terminate if the sale of all shares of Conversion Stock is not
completed within 24 months from the date of the approval of the Plan by the
Department, unless a longer period is permitted by applicable laws and
regulations. Prior to the Special Meeting, this Plan may be terminated by the
Boards of Directors or Trustees, as the case may be, of the Primary Parties
without any regulatory approval or consent; after the Special Meeting, the
Boards of Directors or Trustees, as the case may be, may terminate this Plan
only upon receipt of any required regulatory approval or consent.
29. INTERPRETATION OF THE PLAN.
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of each of the Boards of Directors or
Trustees, as the case may be, of the Primary Parties shall be final, subject to
the authority of the Department and the FDIC.
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<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION OF
INDEPENDENCE COMMUNITY BANK CORP.
ARTICLE 1. NAME. The name of the corporation is Independence
Community Bank Corp. (hereinafter referred to as the "Corporation").
ARTICLE 2. REGISTERED OFFICE AND REGISTERED AGENT. The address of
the registered office of the Corporation in the State of Delaware is 1209
Orange Street, in the city of Wilmington, county of New Castle. The name of
the registered agent at such address is The Corporation Trust Company.
ARTICLE 3. NATURE OF BUSINESS. The purpose of the Corporation is to
engage in any lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware.
ARTICLE 4. CAPITAL STOCK. The total number of shares of capital
stock which the Corporation has authority to issue is 150,000,000, of which
25,000,000 shall be preferred stock, $.01 par value per share (hereinafter the
"Preferred Stock"), and 125,000,000 shall be common stock, par value $.01 per
share (hereinafter the "Common Stock").
The Board of Directors is hereby expressly authorized, by resolution or
resolutions to provide, out of the unissued shares of Preferred Stock, for
series of Preferred Stock. Before any shares of any such series are issued,
the Board of Directors shall fix, and hereby is expressly empowered to fix, by
resolution or resolutions, the following provisions of the shares thereof:
(a) the designation of such series, the number of shares to
constitute such series and the stated value thereof if different from the par
value thereof;
(b) whether the shares of such series shall have voting rights, in
addition to any voting rights provided by law, and, if so, the terms of such
voting rights, which may be general or limited;
(c) the dividends, if any, payable on such series, whether any such
dividends shall be cumulative, and, if so, from what dates, the conditions and
dates upon which such dividends shall be payable, and the preference or
relation which such dividends shall bear to the dividends payable on any shares
of stock of any other class or any other series of this class;
(d) whether the shares of such series shall be subject to redemption
by the Corporation, and, if so, the times, prices and other conditions of such
redemption;
<PAGE> 2
(e) the amount or amounts payable upon shares of such series upon,
and the rights of the holders of such series in, the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, or upon any
distribution of the assets of the Corporation;
(f) whether the shares of such series shall be subject to the
operation of a retirement or sinking fund and, if so, the extent to and manner
in which any such retirement or sinking fund shall be applied to the purchase
or redemption of the shares of such series for retirement or other corporate
purposes and the terms and provisions relative to the operation thereof;
(g) whether the shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or any other series of
this class or any other securities, and, if so, the price or prices or the rate
or rates of conversion or exchange and the method, if any, of adjusting the
same, and any other terms and conditions of conversion or exchange;
(h) the limitations and restrictions, if any, to be effective while
any shares of such series are outstanding upon the payment of dividends or the
making of other distributions on, and upon the purchase, redemption or other
acquisition by the Corporation of, the Common Stock or shares of stock of any
other class or any other series of this class;
(i) the conditions or restrictions, if any, upon the creation of
indebtedness of the Corporation or upon the issue of any additional stock,
including additional shares of such series or of any other series of this class
or of any other class; and
(j) any other powers, preferences and relative, participating,
optional and other special rights, and any qualifications, limitations and
restrictions thereof.
The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding. All shares of any one series of
Preferred Stock shall be identical in all respects with all other shares of
such series, except that shares of any one series issued at different times may
differ as to the dates from which dividends thereon shall accrue and/or be
cumulative.
ARTICLE 5. INCORPORATOR. The name and mailing address of the sole
incorporator is as follows:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Independence Savings Bank 195 Montague Street
Brooklyn, New York
11201
</TABLE>
2
<PAGE> 3
ARTICLE 6. PREEMPTIVE RIGHTS. No holder of the capital stock of the
Corporation shall be entitled as such, as a matter of right, to subscribe for
or purchase any part of any new or additional issue of stock of any class
whatsoever of the Corporation, or of securities convertible into stock of any
class whatsoever, whether now or hereafter authorized, or whether issued for
cash or other consideration or by way of a dividend.
ARTICLE 7. DIRECTORS. The business and affairs of the Corporation
shall be managed by or under the direction of a Board of Directors. Except as
otherwise fixed pursuant to the provisions of Article 4 hereof relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect additional
directors, the number of directors shall be determined as stated in the
Corporation's Bylaws, as may be amended from time to time.
A. CLASSIFICATION AND TERM. The Board of Directors, other
than those who may be elected by the holders of any class or series of
stock having preference over the Common Stock as to dividends or upon
liquidation, shall be divided into three classes as nearly equal in
number as possible, with one class to be elected annually. The term of
office of the initial directors shall be as follows: the term of
directors of the first class shall expire at the first annual meeting of
stockholders after the effective date of this Certificate of
Incorporation; the term of office of the directors of the second class
shall expire at the second annual meeting of stockholders after the
effective date of this Certificate of Incorporation; and the term of
office of the third class shall expire at the third annual meeting of
stockholders after the effective date of this Certificate of
Incorporation; and, as to directors of each class, when their respective
successors are elected and qualified. At each annual meeting of
stockholders, directors elected to succeed those whose terms are
expiring shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders, unless a different term of
office is necessary to comply with the requirements of the first
sentence of this Article 7.A., and until their respective successors are
elected and qualified. Stockholders of the Corporation shall not be
permitted to cumulate their votes for the election of directors.
B. VACANCIES. Except as otherwise fixed pursuant to the
provisions of Article 4 hereof relating to the rights of the holders of
any class or series of stock having a preference over the Common Stock
as to dividends or upon liquidation to elect directors, any vacancy
occurring in the Board of Directors, including any vacancy created by
reason of an increase in the number of directors, may be filled by a
majority vote of the directors then in office, whether or not a quorum
is present, or by a sole remaining director, and any director so chosen
shall hold office for the remainder of the term to which the director
has been selected and until such director's successor shall have been
elected and qualified. When the number of directors is changed, the
Board of Directors shall determine the class or classes to which the
increased or decreased number of directors shall be apportioned,
provided that no decrease in the number of directors shall shorten the
term of any incumbent director.
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<PAGE> 4
C. REMOVAL. Subject to the rights of any class or series of
stock having preference over the Common Stock as to dividends or upon
liquidation to elect directors, any director (including persons elected
by directors to fill vacancies in the Board of Directors) may be removed
from office only with cause by an affirmative vote of not less than 80%
of the Voting Shares ( as defined in Article 12 hereof and after giving
effect to Article 12.D. hereof) at a duly constituted meeting of
stockholders called expressly for such purpose. Cause for removal shall
exist only if the director whose removal is proposed has been either
declared incompetent by an order of a court, convicted of a felony or of
an offense punishable by imprisonment for a term of more than one year
by a court of competent jurisdiction, or deemed liable by a court of
competent jurisdiction for gross negligence or misconduct in the
performance of such director's duties to the Corporation. At least 30
days prior to such meeting of stockholders, written notice shall be sent
to the director whose removal will be considered at the meeting.
D. EVALUATION OF ACQUISITION PROPOSALS. The Board of
Directors of the Corporation, when evaluating any offer to the
Corporation or to the stockholders of the Corporation from another party
to (a) purchase for cash, or exchange any securities or property for,
any outstanding equity securities of the Corporation, (b) merge or
consolidate the Corporation with another corporation or (c) purchase or
otherwise acquire all or substantially all of the properties and assets
of the Corporation, may, consistent with the exercise of its fiduciary
duties and in connection with the exercise of its judgment in
determining what is in the best interest of the Corporation and its
stockholders, give due consideration to the extent permitted by law not
only to the price or other consideration being offered, but also to all
other relevant factors including, without limitation, the financial and
managerial resources and future prospects of the other party, the
possible effects on the business of the Corporation and its subsidiaries
and on the employees, customers, suppliers and creditors of the
Corporation and its subsidiaries, the effects on the ability of the
Corporation to fulfill its corporate objectives as a holding company and
on the ability of its subsidiary savings bank to fulfill its objectives
as a savings bank, and the effects on the communities in which the
Corporation's and its subsidiaries' facilities are located.
ARTICLE 8. MEETINGS OF STOCKHOLDERS. Any action required or
permitted by the General Corporation Law of the State of Delaware or this
Certificate of Incorporation to be approved by or consented to by the
stockholders of the Corporation, must be effected at a duly called annual or
special meeting of stockholders and may not be effected by written consent by
such stockholders in lieu of a meeting of stockholders. Except as otherwise
required by law and subject to the rights of the holders of any class or series
of Preferred Stock, special meetings of the stockholders may be called only by
the Board of Directors pursuant to a resolution approved by the affirmative
vote of at least three-fourths of the directors then in office.
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<PAGE> 5
ARTICLE 9. LIABILITY OF DIRECTORS AND OFFICERS. The personal
liability of the directors and officers of the Corporation for monetary damages
shall be eliminated to the fullest extent permitted by the General Corporation
Law of the State of Delaware as it exists on the effective date of this
Certificate of Incorporation or as such law may be thereafter in effect. No
amendment, modification or repeal of this Article 9 shall adversely affect the
rights provided hereby with respect to any claim, issue or matter in any
proceeding that is based in any respect on any alleged action or failure to act
prior to such amendment, modification or repeal.
ARTICLE 10. INDEMNIFICATION. The Corporation shall indemnify its
directors, officers, employees, agents and former directors, officers,
employees and agents, and any other persons serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
association, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees, judgments, fines and amounts paid in
settlement) incurred in connection with any pending or threatened action, suit
or proceeding, whether civil, criminal, administrative or investigative, with
respect to which such director, officer, employee, agent or other person is a
party, or is threatened to be made a party, to the full extent permitted by the
General Corporation Law of the State of Delaware, provided, however, that the
Corporation shall not be liable for any amounts which may be due to any person
in connection with a settlement of any action, suit or proceeding effected
without its prior written consent or any action, suit or proceeding initiated
by any person seeking indemnification hereunder without its prior written
consent. The indemnification provided herein (i) shall not be deemed exclusive
of any other right to which any person seeking indemnification may be entitled
under any bylaw, agreement or vote of stockholders or disinterested directors
or otherwise, both as to action in his or her official capacity and as to
action in any other capacity, and (ii) shall inure to the benefit of the heirs,
executors and administrators of any such person. The Corporation shall have
the power, but shall not be obligated, to purchase and maintain insurance on
behalf of any person or persons enumerated above against any liability asserted
against or incurred by them or any of them arising out of their status as
corporate directors, officers, employees, or agents whether or not the
Corporation would have the power to indemnify them against such liability under
the provisions of this Article 10.
ARTICLE 11. STOCKHOLDER APPROVAL OF CERTAIN ACTIONS. Except as set
forth in the following sentence, any action required or permitted to be taken
by the stockholders of the Corporation pursuant to Subchapter IX (Merger or
Consolidation) and Subchapter X (Sale of Assets, Dissolution and Winding Up) of
the General Corporation Law of the State of Delaware, or any successors
thereto, shall be taken upon the affirmative vote of at least 80% of the Voting
Shares (as defined in Article 12 hereof and after giving effect to Article
12.D. hereof), as well as such additional vote of the Preferred Stock as may be
required by the provisions of any series thereof. Notwithstanding the
preceding sentence, if any such action is recommended by at least two thirds of
the entire Board of Directors (including any vacancies), the 80% stockholder
vote set forth in the preceding sentence will not be
5
<PAGE> 6
applicable, and, in such event, the action will require only such affirmative
vote as is required by law.
ARTICLE 12. RESTRICTIONS ON OFFERS AND ACQUISITIONS OF THE
CORPORATION'S EQUITY SECURITIES.
A. DEFINITIONS.
(a) Acquire. The term "Acquire" includes every type of
acquisition, whether effected by purchase, exchange, operation of law or
otherwise.
(b) Acting in Concert. The term "Acting in Concert" means (i)
knowing participation in a joint activity or conscious parallel action towards
a common goal whether or not pursuant to an express agreement, or (ii) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise.
(c) Affiliate. An "Affiliate" of, or a Person "affiliated
with," a specified Person, means a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.
(d) Associate. The term "Associate" used to indicate a
relationship with any Person means:
(i) Any corporation or organization (other than the
Corporation or a Subsidiary of the Corporation), or any
subsidiary or parent thereof, of which such Person is a director,
officer or partner or is, directly or indirectly, the Beneficial
Owner of 10% or more of any class of equity securities;
(ii) Any trust or other estate in which such Person has a
10% or greater beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity, provided,
however, such term shall not include any employee stock benefit
plan of the Corporation or a Subsidiary of the Corporation in
which such Person has a 10% or greater beneficial interest or
serves as a trustee or in a similar fiduciary capacity;
(iii) Any relative or spouse of such Person (or any
relative of such spouse) who has the same home as such Person or
who is a director or officer of the Corporation or a Subsidiary
of the Corporation (or any subsidiary or parent thereof); or
(iv) Any investment company registered under the
Investment Company Act of 1940 for which such Person or any
Affiliate or Associate of such Person serves as investment
advisor.
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<PAGE> 7
(e) Beneficial Owner (including Beneficially Owned). A Person
shall be considered the "Beneficial Owner" of any shares of stock (whether or
not owned of record):
(i) With respect to which such Person or any Affiliate or
Associate of such Person directly or indirectly has or shares (A)
voting power, including the power to vote or to direct the voting
of such shares of stock, and/or (B) investment power, including
the power to dispose of or to direct the disposition of such
shares of stock;
(ii) Which such Person or any Affiliate or Associate of
such Person has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, and/or (B) the right to vote pursuant to
any agreement, arrangement or understanding (whether such right
is exercisable immediately or only after the passage of time); or
(iii) Which are Beneficially Owned within the meaning of
(i) or (ii) of this Article 12.A(e) by any other Person with
which such first-mentioned Person or any of its Affiliates or
Associates either (A) has any agreement, arrangement or
understanding, written or oral, with respect to acquiring,
holding, voting or disposing of any shares of stock of the
Corporation or any Subsidiary of the Corporation or acquiring,
holding or disposing of all or substantially all, or any
Substantial Part, of the assets or business of the Corporation or
a Subsidiary of the Corporation, or (B) is Acting in Concert.
For the purpose only of determining whether a Person is the
Beneficial Owner of a percentage specified in this Article 10 of
the outstanding Voting Shares, such shares shall be deemed to
include any Voting Shares which may be issuable pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants, options or
otherwise and which are deemed to be Beneficially Owned by such
Person pursuant to the foregoing provisions of this Article
12.A(e), but shall not include any other Voting Shares which may
be issuable in such manner.
(f) Offer. The term "Offer" shall mean every offer to buy or
acquire, solicitation of an offer to sell, tender offer or request or
invitation for tender of, a security or interest in a security for value;
provided that the term "Offer" shall not include (i) inquiries directed solely
to the management of the Corporation and not intended to be communicated to
stockholders which are designed to elicit an indication of management's
receptivity to the basic structure of a potential acquisition with respect to
the amount of cash and or securities, manner of acquisition and formula for
determining price, or (ii) non-binding expressions of understanding or letters
of intent with the management of the Corporation regarding the basic structure
of a potential acquisition with respect to the amount of cash and or
securities, manner of acquisition and formula for determining price.
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(g) Person. The term "Person" shall mean any individual,
partnership, corporation, limited liability company, association, trust, group
or other entity. When two or more Persons act as a partnership, limited
partnership, syndicate, association or other group for the purpose of
acquiring, holding or disposing of shares of stock, such partnership,
syndicate, associate or group shall be deemed a "Person."
(h) Substantial Part. The term "Substantial Part" as used with
reference to the assets of the Corporation or of any Subsidiary means assets
having a value of more than 10% of the total consolidated assets of the
Corporation and its Subsidiaries as of the end of the Corporation's most recent
fiscal year ending prior to the time the determination is being made.
(i) Subsidiary. "Subsidiary" means any corporation of which a
majority of any class of equity security is owned, directly or indirectly, by
the Person in question.
(j) Voting Shares. "Voting Shares" shall mean shares of the
Corporation entitled to vote generally in an election of directors.
(k) Certain Determinations With Respect to Article 12. A
majority of the directors shall have the power to determine for the purposes of
this Article 12, on the basis of information known to them and acting in good
faith: (i) the number of Voting Shares of which any Person is the Beneficial
Owner, (ii) whether a Person is an Affiliate or Associate of another Person,
(iii) whether a Person has an agreement, arrangement or understanding with
another as to the matters referred to in the definition of "Beneficial Owner"
as hereinabove defined, and (iv) such other matters with respect to which a
determination is required under this Article 12. Any such determinations made
by the Board of Directors of the Corporation pursuant to this Article 12 shall
be conclusive and binding upon the Corporation and its stockholders. In order
to carry out its responsibilities under this Article 12, the Board of Directors
shall have the right to demand that any person who is reasonably believed to be
the Beneficial Owner of Excess Shares shall supply the Corporation with
complete information as to (x) the record owners of all shares of equity
securities Beneficially Owned by such Person and (y) any other factual matter
relating to the applicability or effect of this Article 12 as may be reasonably
requested by the Board of Directors.
(l) Directors, Officers or Employees. Directors, officers or
employees of the Corporation or any Subsidiary thereof shall not be deemed to
be a group with respect to their individual acquisitions of any class of equity
securities of the Corporation solely as a result of their capacities as such.
B. RESTRICTIONS. Upon the effective date of the reorganization of
Independence Savings Bank (the "Bank") as a subsidiary of the Corporation, no
Person shall directly or indirectly Offer to Acquire or Acquire the Beneficial
Ownership of (i) more than 10% of the issued and outstanding shares of any
class of an equity security of the Corporation, or
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(ii) any securities convertible into, or exercisable for, any equity securities
of the Corporation if, assuming conversion or exercise by such Person of all
securities of which such Person is the Beneficial Owner which are convertible
into, or exercisable for, such equity securities (but of no securities
convertible into, or exercisable for, such equity securities of which such
Person is not the Beneficial Owner), such Person would be the Beneficial Owner
of more than 10% of any class of an equity security of the Corporation.
C. EXCLUSIONS. The foregoing restrictions shall not apply to (i)
any Offer with a view toward public resale made exclusively to the Corporation
by underwriters or a selling group acting on its behalf, (ii) any tax-qualified
employee benefit plan or arrangement established by the Corporation and any
trustee of such a plan or arrangement, and (iii) any other Offer or acquisition
approved in advance by the affirmative vote of two-thirds of the Corporation's
entire Board of Directors (including any vacancies).
D. REMEDIES. In the event that shares are Acquired in violation of
this Article 12, all shares Beneficially Owned by any Person in excess of 10%
shall be considered "Excess Shares" and (i) shall not be counted as shares
entitled to vote and shall not be voted by any Person or counted as Voting
Shares in connection with any matters submitted to stockholders for a vote,
(ii) the Corporation is authorized to refuse to recognize a transfer or
attempted transfer of any shares of the Corporation's equity securities to any
Person who is the Beneficial Owner, or as the result of such transfer would
become the Beneficial Owner, of Excess Shares and (iii) the Board of Directors
may cause such Excess Shares to be transferred to an independent trustee for
sale on the open market or otherwise, with the expenses of such trustee to be
paid out of the proceeds of the sale.
For purposes of ensuring compliance with Article 12.B, in the event any
partnership, corporation, limited liability company, association or trust is
deemed to Beneficially Own more than 5% of any class of the Corporation's
stock, either by itself or together with one or more other Persons who is an
Affiliate of or Acting in Concert with such entity or who is a member of any
group with such entity with respect to the Corporation's stock, then the
Corporation shall be entitled upon written request to such entity to receive
information regarding the name and address of, and the class and number of
shares of Corporation stock which are Beneficially Owned by, each partner in
such partnership, each director, executive officer and stockholder in such
corporation, each member in such limited liability company or association, and
each trustee and beneficiary of such trust, and in each case each Person
controlling such entity and each partner, director, executive officer,
stockholder, member or trustee of any entity which is ultimately in control of
such partnership, corporation, limited liability company, association or trust.
E. SEVERABILITY. In the event any provision (or portion thereof) of
this Article 12 shall be found to be invalid, prohibited or unenforceable for
any reason, the remaining provisions (or portions thereof) of this Article 12
shall remain in full force and effect, and shall be construed as if such
invalid, prohibited or unenforceable provision had been stricken herefrom or
otherwise rendered inapplicable, it being the intent of this Corporation and
its
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stockholders that each such remaining provision (or portion thereof) of this
Article 12 remain, to the fullest extent permitted by law, applicable and
enforceable as to all stockholders.
ARTICLE 13. AMENDMENT OF CERTIFICATE OF INCORPORATION AND BYLAWS.
A. CERTIFICATE OF INCORPORATION. The Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by law, and all rights
conferred upon stockholders herein are granted subject to this reservation. No
amendment, addition, alteration, change or repeal of this Certificate of
Incorporation shall be made unless it is first approved by the Board of
Directors of the Corporation pursuant to a resolution adopted by the
affirmative vote of a majority of the directors then in office, and is
thereafter approved by the holders of at least 80% of Voting Shares (as defined
in Article 12 hereof and after giving effect to Article 12.D. hereof), voting
together as a single class, as well as such additional vote of the Preferred
Stock as may be required by the provisions of any series thereof.
Notwithstanding the preceding sentence, any amendment to this Certificate of
Incorporation recommended for adoption by at least two thirds of the entire
Board of Directors (including any vacancies) shall, to the extent the General
Corporation Law of the State of Delaware requires stockholder approval of such
amendment, require the affirmative vote of a majority of the Voting Shares (as
defined in Article 12 hereof and after giving effect to Article 12.D. hereof),
voting together as a single class, as well as such additional vote of the
Preferred Stock as may be required by the provisions of any series thereof.
B. BYLAWS. The Board of Directors or stockholders may adopt, alter,
amend or repeal the Bylaws of the Corporation. Such action by the Board of
Directors shall require the affirmative vote of a majority of the directors
then in office at any regular or special meeting of the Board of Directors.
Such action by the stockholders shall require the affirmative vote of at least
a majority of the Voting Shares (as defined in Article 12 hereof and after
giving effect to Article 12.D. hereof), as well as such additional vote of the
Preferred Stock as may be required by the provisions of any series thereof
provided, however, that the affirmative vote of at least 80% of the Voting
Shares (as defined in Article 12 hereof and after giving effect to Article
12.D. hereof), voting together as a single class, as well as such additional
vote of the Preferred Stock as may be required by the provisions of any series
thereof, shall be required to amend, alter, change or repeal any provision of,
or adopt any provision inconsistent with, Sections 2.4, 2.14, 4.1, 4.2, 4.3,
4.4, 4.5 and 4.15 and Article VI of the Bylaws.
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INDEPENDENCE SAVINGS BANK, being the sole Incorporator herein before
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, does make this Certificate, hereby
declaring and certifying that this is the Incorporator's act and deed and that
the facts herein stated are true, and accordingly has caused this Certificate
to be signed on its behalf by the undersigned, thereunto duly authorized, on
the _____ day of __________ 1997.
INDEPENDENCE SAVINGS BANK
By:
---------------------------------------
Name: Charles J. Hamm
Title: President and
Chief Executive Officer
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EXHIBIT 3.2
BYLAWS
OF
INDEPENDENCE COMMUNITY BANK CORP.
ARTICLE I. OFFICES
1.1 Registered Office and Registered Agent. The registered office
of Independence Community Bank Corp. ("Corporation") shall be located in the
State of Delaware at such place as may be fixed from time to time by the Board
of Directors upon filing of such notices as may be required by law, and the
registered agent shall have a business office identical with such registered
office.
1.2 Other Offices. The Corporation may have other offices within
or without the State of Delaware at such place or places as the Board of
Directors may from time to time determine.
ARTICLE II. STOCKHOLDERS' MEETINGS
2.1 Meeting Place. All meetings of the stockholders shall be held
at the principal place of business of the Corporation, or at such other place
within or without the State of Delaware as shall be determined from time to
time by the Board of Directors, and the place at which any such meeting shall
be held shall be stated in the notice of the meeting.
2.2 Annual Meeting. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held each year on such date and time
as determined by the Board of Directors and stated in the notice of such
meeting.
2.3 Organization. Each meeting of the stockholders shall be
presided over by the Chairman of the Board, or in his absence by the President,
or in their absences, any other individual selected by the Board of Directors.
The Secretary, or in his absence a temporary Secretary, shall act as secretary
of each meeting of the stockholders. In the absence of the Secretary and any
temporary Secretary, the chairman of the meeting may appoint any person present
to act as secretary of the meeting. The chairman of any meeting of the
stockholders shall announce the date and time of the opening and the closing of
the polls for each matter upon which the stockholders will vote at a meeting
and, unless prescribed by law or regulation or unless the Board of Directors
has otherwise determined, shall determine the order of the business and the
procedure at the meeting, including such regulation of the manner of voting and
the conduct of discussions as seem to him in order.
<PAGE> 2
2.4 Special Meetings. Except as otherwise required by law and
subject to the rights of the holders of any class or series of Preferred Stock,
special meetings of the stockholders may be called only by the Board of
Directors pursuant to a resolution approved by the affirmative vote of at least
three-fourths of the directors then in office.
2.5 Notice.
(a) Notice of the time and place of the annual meeting of
stockholders shall be given by delivering personally or by mailing a written
notice of the same, not less than ten days and not more than sixty days prior
to the date of the meeting, to each stockholder of record entitled to vote at
such meeting. When any stockholders' meeting, either annual or special, is
adjourned for thirty days or more, or if a new record date is fixed for an
adjourned meeting of stockholders, notice of the adjourned meeting shall be
given as in the case of an original meeting. It shall not be necessary to give
any notice of the time and place of any meeting adjourned for less than thirty
days (unless a new record date is fixed therefor), other than an announcement
at the meeting at which such adjournment is taken. At the adjourned meeting
the Corporation may transact any business which might have been transacted at
the original meeting.
(b) Not less than ten days and not more than sixty days prior to
the meeting, a written notice of each special meeting of stockholders, stating
the place, day and hour of such meeting, and the purpose or purposes for which
the meeting is called, shall be either delivered personally or mailed to each
stockholder of record entitled to vote at such meeting.
2.6 Record List of Stockholders. At least ten days before each
meeting of stockholders, a complete record of the stockholders entitled to vote
at such meeting, or any adjournment thereof, shall be made, arranged in
alphabetical order, with the address of and number of shares registered in the
name of each, which record shall be kept open to the examination of any
stockholder, for a purpose germane to the meeting, in accordance with the
General Corporation Law ("GCL") of the State of Delaware. The record also
shall be kept open at the time and place of such meeting for the inspection of
any stockholder.
2.7 Quorum; Actions of Stockholders. Except as otherwise required
by law or the Corporation's Certificate of Incorporation:
(a) A quorum at any annual or special meeting of stockholders
shall consist of stockholders representing, either in person or by proxy, a
majority of the outstanding capital stock of the Corporation entitled to vote
at such meeting.
(b) In all matters other than the election of directors, the
affirmative vote of the majority of shares present in person or represented by
proxy at the meeting and entitled to vote on the subject matter shall be the
act of the stockholders. Directors shall be elected by a plurality of the
votes of the shares present in person or represented by proxy at the
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meeting and entitled to vote on the election of directors. If, at any meeting
of the stockholders, due to a vacancy or vacancies or otherwise, directors of
more than one class of the Board of Directors are to be elected, each class of
directors to be elected at the meeting shall be elected in a separate election
by a plurality vote.
2.8 Voting of Shares. Except as otherwise provided in these
Bylaws or to the extent that voting rights of the shares of any class or
classes are limited or denied by the Certificate of Incorporation, each
stockholder, on each matter submitted to a vote at a meeting of stockholders,
shall have one vote for each share of stock registered in his name on the books
of the Corporation.
2.9 Closing of Transfer Books and Fixing of the Record Date. For
the purpose of determining stockholders entitled to notice of or to vote at any
meeting of stockholders, or any adjournment thereof, or entitled to receive
payment of any dividend, the Board of Directors may provide that the stock
transfer books shall be closed for a stated period not to exceed 60 days nor
less than ten days preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a record date for any
such determination of stockholders, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the Board
of Directors, and which record date shall not be more than sixty days and, in
case of a meeting of stockholders, not less than ten days prior to the date on
which the particular action requiring such determination of stockholders is to
be taken.
2.10 Proxies. A stockholder may vote either in person or by proxy
executed in writing by the stockholder or his duly authorized attorney-in-fact.
Without limiting the manner in which a stockholder may authorize another person
or persons to act for him as proxy, a stockholder may grant such authority in
the manner specified in Section 212(c) of the GCL (or any successor thereto).
No proxy shall be valid after three years from the date of its execution,
unless otherwise provided in the proxy.
2.11 Waiver of Notice. A waiver of any notice required to be given
any stockholder, signed by the person or persons entitled to such notice,
whether before or after the time stated therein for the meeting, shall be
equivalent to the giving of such notice. The attendance of any stockholder at
a meeting, in person or by proxy, shall constitute a waiver of notice by such
stockholder, except where a stockholder attends a meeting for the express
purpose of objecting at the beginning of the meeting to the transaction of any
business because the meeting is not lawfully called or commenced.
2.12 Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, whether fiduciaries,
members of a partnership, joint tenants, tenants in common, tenants by the
entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary of the
Corporation is given written notice to the contrary and is furnished with a
copy of the instrument or order appointing them or creating the relationship
wherein it is so provided,
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at any meeting of the stockholders of the Corporation any one or more of such
stockholders may cast, in person or by proxy, all votes to which such ownership
is entitled. In the event an attempt is made to cast conflicting votes, in
person or by proxy, by the several persons in whose names shares of stock
stand, the vote or votes to which those persons are entitled shall be cast as
directed by a majority of those holding such stock and present in person or by
proxy at such meeting, but no votes shall be cast for such stock if a majority
cannot agree, except to the extent provided in Section 217(b)(3) of the GCL (or
any successor thereto).
2.13 Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by an officer, agent or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the Board of Directors of such corporation may determine. Shares held by an
administrator, executor, guardian or conservator may be voted by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name. Shares standing in the name of a
receiver may be voted by such receiver, and shares held by or under the control
of a receiver may be voted by such receiver without the transfer thereof into
his name if authority to do so is contained in an appropriate order of the
court or other public authority by which such receiver was appointed. A
stockholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
2.14 Proposals. At an annual meeting of the stockholders, only
such business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors, or (b) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought
before an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely a stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not later than 120 days
prior to the anniversary date of the mailing of proxy materials by the
Corporation in connection with the immediately preceding annual meeting of
stockholders of the Corporation or, in the case of the first annual meeting of
stockholders of the Corporation following its acquisition of all of the
outstanding capital stock of Independence Savings Bank, Brooklyn, New York (the
"Bank"), which is expected to be held in July 1998, notice by the stockholder
must be so delivered and received no later than the close of business on
Thursday, February 26, 1998, notwithstanding a determination by the Corporation
to schedule such first annual meeting later than July 1998. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a description of the business
desired to be brought before the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the stockholder proposing such
business, (c) the class and number
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of shares of Corporation stock which are Beneficially Owned (as defined in
Article 12.A(e) of the Corporation's Certificate of Incorporation) by the
stockholder submitting the notice, by any Person who is Acting in Concert with
or who is an Affiliate or Associate of such stockholder (as such capitalized
terms are defined in Article 12.A of the Corporation's Certificate of
Incorporation), by any Person who is a member of any group with such
stockholder with respect to the Corporation stock or who is known by such
stockholder to be supporting such proposal on the date the notice is given to
the Corporation, and by each Person who is in control of, is controlled by or
is under common control with any of the foregoing Persons (if any of the
foregoing Persons is a partnership, corporation, limited liability company,
association or trust, information shall be provided regarding the name and
address of, and the class and number of shares of Corporation stock which are
Beneficially Owned by, each partner in such partnership, each director,
executive officer and stockholder in such corporation, each member in such
limited liability company or association, and each trustee and beneficiary of
such trust, and in each case each Person controlling such entity and each
partner, director, executive officer, stockholder, member or trustee of any
entity which is ultimately in control of such partnership, corporation, limited
liability company, association or trust), (d) the identification of any person
retained or to be compensated by the stockholder submitting the proposal, or
any person acting on his or her behalf, to make solicitations or
recommendations to stockholders for the purpose of assisting in the passage of
such proposal and a brief description of the terms of such employment, retainer
or arrangement for compensation, and (e) any material interest of the
stockholder in such business. The chairman of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Article II, Section 2.14, and if he should so determine, he shall so declare to
the meeting and any such business not properly brought before the meeting shall
not be transacted. This provision is not a limitation on any other applicable
laws and regulations.
2.15 Inspectors. For each meeting of stockholders, the Board of
Directors shall appoint one or more inspectors of election, who shall make a
written report of such meeting. If for any meeting the inspector(s) appointed
by the Board of Directors shall be unable to act or the Board of Directors
shall fail to appoint any inspector, one or more inspectors shall be appointed
at the meeting by the chairman thereof. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector with strict impartiality and according to the best of
his ability. An inspector or inspectors shall (i) ascertain the number of
shares outstanding and the voting power of each, (ii) determine the shares
represented at a meeting and the validity of proxies and ballots, (iii) count
all votes and ballots, (iv) determine and retain for a reasonable period a
record of the disposition of any challenges made to any determination by the
inspectors and (v) certify their determination of the number of shares
represented at the meeting and their count of all votes and ballots. The date
and time of the opening and the closing of the polls for each matter upon which
the stockholders will vote at a meeting shall be announced at the meeting by
the chairman thereof. An inspector or inspectors shall not accept a ballot,
proxy or vote, nor any revocations thereof or changes
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thereto, after the closing of the polls (unless the Court of Chancery of the
State of Delaware upon application by a stockholder shall determine otherwise)
and may appoint or retain other persons or entities to assist them in the
performance of their duties. Inspectors need not be stockholders and may not
be nominees for election as directors.
ARTICLE III. CAPITAL STOCK
3.1 Certificates. Certificates of stock shall be issued in
numerical order, and each stockholder shall be entitled to a certificate signed
by the Chairman of the Board or the President, and the Secretary or the
Treasurer, and may be sealed with the seal of the Corporation or facsimile
thereof. The signatures of such officers may be facsimiles if the certificate
is manually signed on behalf of a transfer agent, or registered by a registrar,
other than the Corporation itself or an employee of the Corporation. If an
officer who has signed or whose facsimile signature has been placed upon such
certificate ceases to be an officer before the certificate is issued, it may be
issued by the Corporation with the same effect as if the person were an officer
on the date of issue. Each certificate of stock shall state:
(a) that the Corporation is organized under the laws of the State
of Delaware;
(b) the name of the person to whom issued;
(c) the number and class of shares and the designation of the
series, if any, which such certificate represents; and
(d) the par value of each share represented by such certificate,
or a statement that such shares are without par value.
3.2 Transfers.
(a) Transfers of stock shall be made only upon the stock transfer
books of the Corporation, kept at the registered office of the Corporation or
at its principal place of business, or at the office of its transfer agent or
registrar, and before a new certificate is issued the old certificate shall be
surrendered for cancellation. The Board of Directors may, by resolution, open
a share register in any state of the United States, and may employ an agent or
agents to keep such register, and to record transfers of shares therein.
(b) Shares of stock shall be transferred by delivery of the
certificates therefor, accompanied either by an assignment in writing on the
back of the certificate or an assignment separate from the certificate, or by a
written power of attorney to sell, assign and transfer the same, signed by the
holder of said certificate. No shares of stock shall be transferred on the
books of the Corporation until the outstanding certificates therefor have been
surrendered to the Corporation.
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(c) A written restriction on the transfer or registration of
transfer of a certificate evidencing stock of the Corporation, if permitted by
the GCL and noted conspicuously on such certificate, may be enforced against
the holder of the restricted certificate or any successor or transferee of the
holder, including an executor, administrator, trustee, guardian or other
fiduciary entrusted with like responsibility for the person or estate of the
holder.
3.3 Registered Owner. Registered stockholders shall be treated by
the Corporation as the holders in fact of the stock standing in their
respective names and the Corporation shall not be bound to recognize any
equitable or other claim to or interest in any share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of the State of Delaware.
3.4 Lost, Stolen or Destroyed Certificates. The Corporation may
issue a new certificate of stock in place of any certificate previously issued
by it which is alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen or destroyed certificate,
or his legal representative, to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate.
3.5 Fractional Shares or Scrip. The Corporation may (a) issue
fractions of a share which shall entitle the holder to exercise voting rights,
to receive dividends thereon and to participate in any of the assets of the
Corporation in the event of liquidation; (b) arrange for the disposition of
fractional interests by those entitled thereto; (c) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
shares are determined; or (d) issue scrip in registered or bearer form which
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip aggregating a full share.
3.6 Shares of Another Corporation. Shares owned by the
Corporation in another corporation, domestic or foreign, may be voted by such
officer, agent or proxy as the Board of Directors may determine or, in the
absence of such determination, by the President of the Corporation.
ARTICLE IV. BOARD OF DIRECTORS
4.1 Powers. The business and affairs of the Corporation shall be
managed by or under the direction of a Board of Directors, which may exercise
all such authority and powers of the Corporation and do all such lawful acts
and things as are not by law, the Certificate of Incorporation or these Bylaws
directed or required to be exercised or done by the stockholders.
4.2 Classification, Term and Qualifications. The Board of
Directors shall be divided into three classes as provided in Article 7.A. of
the Corporation's Certificate of Incorporation. No director shall serve beyond
the 31st day of December in the year in which he reaches his 75th birthday. No
person shall be eligible for initial election as a director who has attained
seventy years of age or more.
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4.3 Number of Directors. The initial Board of Directors shall
consist of 13 persons. The number of directors may at any time be increased or
decreased by a vote of a majority of the Board of Directors, provided that no
decrease shall have the effect of shortening the term of any incumbent
director. Notwithstanding anything to the contrary contained within these
Bylaws, the number of directors may not be less than five nor more than 20.
4.4 Vacancies. All vacancies in the Board of Directors shall be
filled in the manner provided in the Corporation's Certificate of
Incorporation.
4.5 Removal of Directors. Directors may be removed in the manner
provided in the Corporation's Certificate of Incorporation.
4.6 Regular Meetings. Regular meetings of the Board of Directors
or any committee thereof may be held at the principal place of business of the
Corporation or at such other place or places, either within or without the
State of Delaware, as the Board of Directors or such committee, as the case may
be, may from time to time designate. Notice of such meetings shall be provided
to directors in accordance with the provisions of the GCL. Unless otherwise
determined by the Board of Directors, the annual meeting of the Board of
Directors shall be held immediately after the adjournment of the annual meeting
of stockholders.
4.7 Special Meetings.
(a) Special meetings of the Board of Directors may be called at
any time by the Chairman of the Board, the President or by a majority of the
authorized number of directors, to be held at the principal place of business
of the Corporation or at such other place or places as the Board of Directors
or the person or persons calling such meeting may from time to time designate.
Notice of all special meetings of the Board of Directors shall be given to each
director at least twenty-four (24) hours prior to such meeting if notice is
given in person or by telephone, telegraph, telex, facsimile or other
electronic transmission and at least five (5) days prior to such meeting if
notice is given in writing and delivered by courier or by postage prepaid mail.
Such notice need not specify the business to be transacted at, nor the purpose
of, the meeting. Any director may waive notice of any meeting by submitting a
signed waiver of notice with the Secretary, whether before or after the
meeting. The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened.
(b) Special meetings of any committee of the Board of Directors
may be called at any time by such person or persons and with such notice as
shall be specified for such committee by the Board of Directors, or in the
absence of such specification, in the manner and with the notice required for
special meetings of the Board of Directors.
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<PAGE> 9
4.8 Waiver of Notice. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends
for the express purpose of objecting to the transaction of any business because
the meeting is not lawfully called or convened. A waiver of notice signed by
the director or directors, whether before or after the time stated for the
meeting, shall be equivalent to the giving of notice.
4.9 Quorum; Actions of the Board of Directors. Except as may be
otherwise specifically provided by law, the Certificate of Incorporation or
these Bylaws, at all meetings of the Board of Directors, a majority of the
entire Board of Directors shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
4.10 Action by Directors Without a Meeting. Any action required or
which may be taken at a meeting of the directors, or of a committee thereof,
may be taken without a meeting if a consent in writing, setting forth the
action so taken or to be taken, shall be signed by all of the directors, or all
of the members of the committee, as the case may be, and such consents are
filed with the minutes of proceedings of the Board of Directors or committee,
as the case may be. Such consent shall have the same effect as a unanimous
vote.
4.11 Action by Directors by Communications Equipment. Any action
required or which may be taken at a meeting of directors, or of a committee
thereof, may be taken by means of a conference telephone or similar
communications equipment subject to any applicable provisions of the GCL.
4.12 Registering Dissent. A director who is present at a meeting
of the Board of Directors at which action on a corporate matter is taken shall
be presumed to have assented to such action unless his dissent shall be entered
in the minutes of the meeting, or unless he shall file his written dissent to
such action with the person acting as the secretary of the meeting, before the
adjournment thereof, or shall forward such dissent by registered mail to the
Secretary of the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in favor of such
action.
4.13 Executive and Other Committees. The Board of Directors may,
by resolution passed by a majority of the whole Board, designate one or more
committees which in each case consist of one or more directors of the
Corporation, and may from time to time invest such committees with such powers
as it may see fit, subject to such conditions as may be prescribed by the
Board. An Executive Committee may be appointed by resolution passed by a
majority of the full Board of Directors. It shall have and exercise all of the
authority of the Board of Directors, except in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation
or plan of voluntary liquidation,
9
<PAGE> 10
recommending to the stockholders the sale, lease or exchange or other
disposition of all or substantially all the property and assets of the
Corporation, declaring a dividend on the Corporation's capital stock or
amending these Bylaws. The designation of any such committee, and the
delegation of authority thereto, shall not relieve the Board of Directors, or
any member thereof, of any responsibility imposed by law.
4.14 Remuneration. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors, a stated
salary as director and/or such other compensation as may be fixed by the Board
of Directors. Members of special or standing committees may be allowed like
compensation for serving on committees of the Board of Directors. No such
payments shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
4.15 Nominations of Directors Subject to the rights of holders of
any class or series of stock having a preference over the common stock as to
dividends or upon liquidation, nominations for the election of directors may be
made by the Board of Directors or committee appointed by the Board of Directors
or by any stockholder entitled to vote generally in an election of directors.
However, any stockholder entitled to vote generally in an election of directors
may nominate one or more persons for election as directors at a meeting only if
written notice of such stockholder's intent to make such nomination or
nominations has been given, either by personal delivery or by United States
mail, postage prepaid to the Secretary of the Corporation, which notice is
delivered to or received by the Secretary not later than (i) 120 days prior to
the anniversary date of the mailing of proxy materials by the Corporation in
connection with the immediately preceding annual meeting of stockholders of the
Corporation or, in the case of the first annual meeting of stockholders of the
Corporation following its acquisition of all of the outstanding capital stock
of the Bank, which is expected to be held in July 1998, any such nomination by
a stockholder must be so delivered or received no later than the close of
business on Thursday, February 26, 1998, notwithstanding a determination by the
Corporation to schedule such first Annual Meeting later than July 1998, and
(ii) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on the tenth
day following the date on which notice of such meeting is first given to
stockholders. Each such notice shall set forth: (a) the name, age, business
address and residence address of the stockholder who intends to make the
nomination and of the person or persons to be nominated; (b) the principal
occupation or employment of the stockholder submitting the notice and of each
person being nominated; (c) the class and number of shares of Corporation stock
which are Beneficially Owned (as defined in Article 12.A(e) of the
Corporation's Certificate of Incorporation) by the stockholder submitting the
notice, by any Person who is Acting in Concert with or who is an Affiliate or
Associate of such stockholder (as such capitalized terms are defined in Article
12.A of the Corporation's Certificate of Incorporation), by any Person who is a
member of any group with such stockholder with respect to the Corporation stock
or who is known by such stockholder to be supporting such nominee(s) on the
date the notice is given to the Corporation, by each person being
10
<PAGE> 11
nominated, and by each Person who is in control of, is controlled by or is
under common control with any of the foregoing Persons (if any of the foregoing
Persons is a partnership, corporation, limited liability company, association
or trust, information shall be provided regarding the name and address of, and
the class and number of shares of Corporation stock which are Beneficially
Owned by, each partner in such partnership, each director, executive officer
and stockholder in such corporation, each member in such limited liability
company or association, and each trustee and beneficiary of such trust, and in
each case each Person controlling such entity and each partner, director,
executive officer, stockholder, member or trustee of any entity which is
ultimately in control of such partnership, corporation, limited liability
company, association or trust); (d) a representation that the stockholder is a
holder of record of stock of the Corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (e) a description of all
arrangements or understandings between the stockholder and each nominee and any
arrangements or understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (f) such other
information regarding the stockholder submitting the notice and each nominee
proposed by such stockholder as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the Securities and Exchange
Commission; and (g) the consent of each nominee to serve as a director of the
Corporation if so elected. The presiding officer of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedures.
ARTICLE V. OFFICERS
5.1 Designations. The officers of the Corporation shall be a
Chairman of the Board, a President, a Secretary and a Treasurer appointed by
the Board of Directors, as well as such Executive Vice Presidents, Vice
Presidents, Assistant Vice Presidents, Assistant Secretaries, Assistant
Treasurers and such other officers as the Board of Directors or the Chairman of
the Board and President may designate. Officers of the Corporation shall be
elected for one year by the directors at their first meeting after the annual
meeting of stockholders, and officers of the Corporation shall hold office
until their successors are elected and qualified. Any two or more offices may
be held by the same person, except the offices of President and Secretary.
5.2 Powers and Duties. The officers of the Corporation shall have
such authority and perform such duties as the Board of Directors or, in the
case of officers with a title of Vice President or lower, the Chairman of the
Board and President, may from time to time authorize or determine. In the
absence of action by the Board of Directors or the Chairman of the Board and
President, as applicable, the officers shall have such powers and duties as
generally pertain to their respective offices.
11
<PAGE> 12
5.3 Delegation. In the case of absence or inability to act of any
officer of the Corporation and of any person herein authorized to act in his
place, the Board of Directors may from time to time delegate the powers or
duties of such officer to any other officer or any director or other person
whom it may select.
5.4 Vacancies. Vacancies in any office arising from any cause may
be filled by the Board of Directors at any regular or special meeting of the
Board.
5.5 Term - Removal. The officers of the Corporation shall hold
office until their successors are chosen and qualified. Any officer or agent
elected or appointed by the Board of Directors or by the Chairman and the
President may be removed at any time, with or without cause, by the affirmative
vote of a majority of the whole Board of Directors, but such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
5.6 Bonds. The Board of Directors may, by resolution, require any
and all of the officers to give bonds to the Corporation, with sufficient
surety or sureties, conditions for the faithful performance of the duties of
their respective offices, and to comply with such other conditions as may from
time to time be required by the Board of Directors.
ARTICLE VI. INDEMNIFICATION, ETC. OF DIRECTORS,
OFFICERS AND EMPLOYEES
6.1 Indemnification. The Corporation shall provide
indemnification to its directors, officers, employees, agents and former
directors, officers, employees and agents and to others in accordance with the
Corporation's Certificate of Incorporation.
6.2 Advancement of Expenses. Reasonable expenses (including
attorneys' fees) incurred by a director, officer or employee of the Corporation
in defending any civil, criminal, administrative or investigative action, suit
or proceeding described in Section 6.1 may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the Board of Directors only upon receipt of an undertaking by or
on behalf of such person to repay such amount if it shall ultimately be
determined that the person is not entitled to be indemnified by the
Corporation.
6.3 Other Rights and Remedies. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article VI
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under the
Corporation's Certificate of Incorporation, any agreement, vote of stockholders
or disinterested directors or otherwise, both as to actions in their official
capacity and as to actions in another capacity while holding such office, and
shall continue
12
<PAGE> 13
as to a person who has ceased to be a director, officer or employee and shall
inure to the benefit of the heirs, executors and administrators of such person.
6.4 Insurance. Upon resolution passed by the Board of Directors,
the Corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer of employee of the Corporation, or is or was
serving at the request of the corporation as a director, officer or employee of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him or incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of its Certificate of Incorporation or this Article VI.
6.5 Modification. The duties of the Corporation to indemnify and
to advance expenses to a director, officer or employee provided in this Article
VI shall be in the nature of a contract between the Corporation and each such
person, and no amendment or repeal of any provision of this Article VI shall
alter, to the detriment of such person, the right of such person to the advance
of expenses or indemnification related to a claim based on an act or failure to
act which took place prior to such amendment or repeal.
ARTICLE VII. DIVIDENDS; FINANCE; AND FISCAL YEAR
7.1 Dividends. Subject to the applicable provisions of the
General Corporation Law of the State of Delaware, dividends upon the capital
stock of the Corporation may be declared by the Board of Directors at any
regular or special meeting, and may be paid in cash, in property or in shares
of the capital stock of the Corporation. Before payment of any dividend, there
may be set aside out of any funds of the Corporation available for dividends
such sum or sums as the Board of Directors from time to time, in its absolute
discretion, may deem proper as a reserve or reserves to meet contingencies, or
for dividends, or for repairing or maintaining any property of the Corporation,
or for any other proper purpose, and the Board of Directors may modify or
abolish any such reserve.
7.2 Disbursements. All checks or demand for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
7.3 Depositories. The monies of the Corporation shall be
deposited in the name of the Corporation in such bank or banks or trust company
or trust companies as the Board of Directors shall designate, and shall be
drawn out only by check or other order for payment of money signed by such
persons and in such manner as may be determined by resolution of the Board of
Directors.
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<PAGE> 14
7.4 Fiscal Year. The fiscal year of the Corporation shall end on
the 31st day of [MARCH] of each year.
ARTICLE VIII. NOTICES
Except as may otherwise be required by law, any notice to any
stockholder or director may be delivered personally or by mail. If mailed, the
notice shall be deemed to have been delivered when deposited in the United
States mail, addressed to the addressee at his last known address in the
records of the Corporation, with postage thereon prepaid.
ARTICLE IX. SEAL
The corporate seal of the Corporation shall be in such form and bear
such inscription as may be adopted by resolution of the Board of Directors, or
by usage of the officers on behalf of the Corporation.
ARTICLE X. BOOKS AND RECORDS
The Corporation shall keep correct and complete books and records of
account and shall keep minutes of meetings and proceedings of its stockholders
and Board of Directors (including committees thereof); and it shall keep at its
registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its stockholders, giving the names and
addresses of all stockholders and the number and class of the shares held by
each. Any books, records and minutes may be in written form or any other form
capable of being converted into written form within a reasonable time.
ARTICLE XI. AMENDMENTS
11.1 Amendments. These Bylaws may be altered, amended or repealed
only as set forth in the Corporation's Certificate of Incorporation, which
provisions are incorporated herein with the same effect as if they were set
forth herein.
11.2 Emergency Bylaws. The Board of Directors may adopt emergency
Bylaws, subject to repeal or change by action of the stockholders, which shall
be operative during any national or local emergency.
14
<PAGE> 15
ARTICLE XII. USE OF PRONOUNS
Use of the masculine gender in these Bylaws shall be considered to
represent either masculine or feminine gender whenever appropriate.
15
<PAGE> 1
EXHIBIT 4.0
(FORM OF STOCK CERTIFICATE - FRONT SIDE)
NUMBER SHARES
COMMON STOCK CUSIP
See reverse for
certain definitions
INDEPENDENCE COMMUNITY BANK CORP.
INCORPORATED UNDER THE LAWS OF DELAWARE
This certifies that ___________________________________ is the
registered holder of _________________ fully paid and non-assessable shares of
the Common Stock, par value $.01 per share, of Independence Community Bank
Corp., Brooklyn, New York (the "Corporation"), incorporated under the laws of
the State of Delaware.
The shares evidenced by this Certificate are transferable only on the
books of the Corporation by the holder hereof, in person or by a duly
authorized attorney or legal representative, upon surrender of this Certificate
properly endorsed. This Certificate and the shares represented hereby are
subject to all the provisions of the Certificate of Incorporation and Bylaws of
the Corporation and any and all amendments thereto. THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE NOT DEPOSITS OR ACCOUNTS AND ARE NOT FEDERALLY INSURED OR
GUARANTEED. This Certificate is not valid unless countersigned by the Transfer
Agent and registered by the Registrar.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused its facsimile seal to be affixed hereto.
Dated:
(SEAL)
- ------------------------------ -----------------------------------
John K. Schnock Charles J. Hamm
Corporate Secretary President
E-72
<PAGE> 2
(FORM OF STOCK CERTIFICATE - BACK SIDE)
The Corporation is authorized to issue more than one class of stock,
including a class of preferred stock which may be issued in one or more series.
The Corporation will furnish to any stockholder, upon written request and
without charge, a full statement of the designations, preferences, limitations
and relative rights of the shares of each class authorized to be issued and,
with respect to the issuance of any preferred stock to be issued in series, the
relative rights, preferences and limitations between the shares of each series
so far as the rights, preferences and limitations have been fixed and
determined and the authority of the Board of Directors to fix and determine the
relative rights, preferences and limitations of subsequent series.
The Certificate of Incorporation of the Corporation includes a
provision which generally prohibits any person (including an individual,
company or group acting in concert) from directly or indirectly offering to
acquire or acquiring the beneficial ownership of more than 10% of any class of
equity securities of the Corporation. In the event that stock is acquired in
violation of this 10% limitation, the excess shares will no longer be counted
in determining the total number of outstanding shares for purposes of any
matter involving stockholder action and the Board of Directors of the
Corporation may cause such excess shares to be transferred to an independent
trustee for sale in the open market or otherwise, with the expenses of such
sale to be paid out of the proceeds of the sale.
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - ___________________________ Custodian ________________ under
(Cust) (Minor)
Uniform Gifts to Minors Act___________________________________
(State)
Additional abbreviations may also be used though not in the above list.
E-73
<PAGE> 3
For value received, _____________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------
- --------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
________________________ shares of Common Stock represented by this Certificate,
and do hereby irrevocably constitute and appoint _________________ as Attorney,
to transfer the said shares on the books of the within named Corporation, with
full power of substitution.
Dated____________ _____,_____
-----------------------------------
Signature
-----------------------------------
Signature
NOTICE: The signature(s) to this assignment must correspond with the name(s) as
written upon the face of this Certificate in every particular, without
alteration or enlargement, or any change whatever. The signature(s) should be
guaranteed by an eligible guarantor institution (bank, stockbroker, savings and
loan association or credit union) with membership in an approved signature
medallion program, pursuant to S.E.C. Rule 17Ad-15.
E-74
<PAGE> 1
EXHIBIT 8.1
LAW OFFICES
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
-----
TIMOTHY B. MATZ Telephone: (202) 347-0300 JEFFREY D. HAAS
STEPHEN M. EGE Facsimile: (202) 347-2172 KEVIN M. HOULIHAN
W. MICHAEL HERRICK KENNETH B. TABACH
GERARD L. HAWKINS PATRICIA J. WOHL
NORMAN B. ANTIN JEFFREY R. HOULE
JOHN P. SOUKENIK* DAVID N. PARDYS
GERALD F. HEUPEL, JR.
JEFFREY A. KOEPPEL ----------
DANIEL P. WEITZEL
PHILIP ROSS BEVAN OF COUNSEL
HUGH T. WILKINSON
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
JACQUELINE R. SCOTT
*NOT ADMITTED IN D.C.
VIA EDGAR
_______ __, 1997
[DRAFT]
Boards of Directors
Independence Community Bank Corp. (Delaware-chartered stock corporation)
Independence Savings Bank
Board of Trustees
Independence Community Bank Corp. (mutual holding company)
195 Montague Street
Brooklyn, New York 11201
Lady and Gentlemen:
You have requested the opinion of this firm ("EMTH") regarding certain
federal income tax consequences which will result from the integrated
transactions described below (the "Conversion and Reorganization"). This
Opinion Letter is governed by, and should be interpreted in accordance with,
the Legal Opinion Accord (the "Accord") of the American Bar Association Section
of Business Law (1991). As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord. Our opinions set
forth herein are limited to the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations promulgated thereunder (the "Subject Laws"). We
express no opinion as to other federal laws and regulations, or as to laws and
regulations of other jurisdictions, or as to factual or legal matters other
than as stated herein.
We have made such investigations as we have deemed relevant or
necessary for the purpose of this opinion. In our examination of documents, we
have assumed the authenticity of those documents submitted to us as certified,
conformed or reproduced copies. As to
<PAGE> 2
_______ __, 1997
Page 2
matters of fact which are material to this opinion, we have relied upon the
accuracy of the factual matters set forth in the Plan of Conversion (the
"Plan") and the Registration Statement (the "Registration Statement"), which
contains the Prospectus (the "Prospectus"), filed by Independence Community
Bank Corp. (the "Company") with the Securities and Exchange Commission ("SEC")
under the Securities Act of 1933, as amended.
Facts
Independence Community Bank Corp., a New York-chartered mutual holding
company (the "Mutual Holding Company"), and Independence Savings Bank, a New
York- chartered stock savings bank (the "Bank"), were created in a
reorganization of a New York- chartered mutual savings bank, also named
Independence Savings Bank (the "Mutual Bank"), in April 1992 (the "MHC
Reorganization"). In the MHC Reorganization, the Mutual Bank organized the
Mutual Holding Company and the Mutual Holding Company organized the Bank. In
connection with such organization, the Bank issued 100 shares of common stock,
$1.00 per value per share ("Bank Common Stock"). The Mutual Bank then merged
with and into the Bank under a plan of reorganization in which all of the
Mutual Bank's equity interests were exchanged for liquidation and voting
interests in the Mutual Holding Company. In PLR 9215032, the Internal Revenue
Service (the "IRS") ruled that the MHC Reorganization satisfied significant
subissues to qualify as a reorganization under Section 368(a)(2)(D) of the
Code. No other Bank Common Stock was issued in connection with the MHC
Reorganization. The Mutual Holding Company will own 100 percent of the
outstanding Bank Common Stock immediately prior to the Conversion and
Reorganization.
The Board of Trustees of the Mutual Holding Company and the Board of
Directors of the Bank believe that a conversion of the Mutual Holding Company
to stock form and reorganization of the Bank pursuant to the Plan is in the
best interests of the Mutual Holding Company and the Bank, as well as in the
best interests of the Bank's depositors. To that end, the following
transactions will occur in the Conversion and Reorganization pursuant to the
Plan:
1. The Bank will incorporate the Company, a Delaware corporation, for
the purpose of holding all of the capital stock of the Bank and in order to
facilitate the Conversion and Reorganization.
2. Subscription rights ("Subscription Rights") to purchase shares of
the common stock of the Company ("Company Common Stock") will be issued without
payment therefor to Eligible Account Holders, Tax-Qualified Employee Plans, and
Supplemental Eligible Account Holders (as such persons are defined in the
Plan).
3. Upon the effective date of the Conversion and Reorganization (the
"Effective Date"), the Mutual Holding Company will convert into a stock
institution (the "Interim"), and the Interim will simultaneously merge with and
into the Bank pursuant to a plan of merger, with the Bank being the surviving
institution (the "MHC Merger"). As a result of
<PAGE> 3
_______ __, 1997
Page 3
the MHC Merger, (a) the shares of Bank Common Stock currently held by the
Mutual Holding Company will be extinguished, and (b) the Eligible Account
Holders (as defined in the Plan) will be granted interests in a liquidation
account (the "Liquidation Account") to be established by the Bank pursuant to
the Plan.
4. Upon the Effective Date, the Company will sell shares of Company
Common Stock in a subscription offering (the "Subscription Offering") in
descending order of priority to Eligible Account Holders, Tax-Qualified
Employee Stock Benefit Plans and Supplemental Eligible Account Holders. Any
shares of Company Common Stock remaining unsold after the Subscription Offering
will be sold to the public through a Community Offering (as defined in the
Plan), a Syndicated Community Offering (as defined in the Plan), and/or Public
Offering (as defined in the Plan) as determined by the Boards of Directors of
the Company and the Bank in their sole discretion. Collectively, the
Subscription Offering, the Community Offering, the Syndicated Community
Offering and the Public Offering are referred to herein as the Offerings.
5. The Company will contribute to the Bank 50% of the net proceeds
received by the Company in the Offerings (the "Contributed Offering Proceeds")
in exchange for 100% of the Bank Common Stock.
The Liquidation Account will be established by the Bank for the benefit
of the Eligible Account Holders who maintain Deposit Accounts (as defined in
the Plan) in the Bank after the Conversion and Reorganization. The Liquidation
Account balance will initially be an amount equal to 100 percent of the Bank's
net worth as reflected in its latest statement of financial condition contained
in the final prospectus utilized in the Conversion and Reorganization. Each
Eligible Account Holder will have a related inchoate interest in a portion of
the Liquidation Account balance (referred to as a "subaccount balance"). The
interest of an Eligible Account Holder in the Liquidation Account will never
increase, but will, however, decrease to reflect subsequent withdrawals from
the Deposit Account of such Eligible Account Holders. In the sole event of a
complete liquidation of the Bank after the Conversion and Reorganization, each
Eligible Account Holder will be entitled to receive a liquidation distribution
from the Liquidation Account in the amount of their then current subaccount
balance before any liquidation distribution may be made with respect to the
capital stock of the Bank.
Each Deposit Account in the Bank at the time of consummation of the
Conversion and Reorganization will become a Deposit Account in the Bank
equivalent in withdrawable amount to the withdrawal value ( as adjusted to give
effect to any withdrawal made for the purchase of Company Common Stock
purchased in the Offerings) and subject to the same terms and conditions
(except as to liquidation rights) as such Deposit Account in the Bank
immediately preceding consummation of the Conversion and Reorganization.
<PAGE> 4
_______ __, 1997
Page 4
Representations
You have made the following representations to EMTH with regard to the
Conversion and Reorganization. EMTH has not independently investigated these
representations, but, at your request, EMTH is relying on them as an integral
part of its opinions.
a. The merger of Interim into the Bank in the MHC Merger will be
effected pursuant to applicable state and/or federal banking laws.
b. The aggregate fair market value of the interest in the Liquidation
Account and the Subscription Rights received by each Eligible Account Holder
pursuant to the MHC Merger will be approximately equal to the fair market value
of the equity interest in the Mutual Holding Company surrendered by the
Eligible Account Holder in exchange therefor.
c. To the best of the knowledge of the management of the Mutual Holding
Company and the Bank, there is no plan or intention on the part of the Eligible
Account Holders to withdraw from their Deposit Accounts subsequent to the
Conversion and Reorganization such that the withdrawals would reduce their
aggregate interests in the Liquidation Account to an amount having a value at
the Effective Date of less than fifty percent of the value of the aggregate
interests which the Eligible Account Holders of the Mutual Holding Company will
have in the residual equity of the Mutual Holding Company immediately prior to
the Conversion and Reorganization.
d. The Bank has no plan or intention to reacquire any of the interests
in the Liquidation Account issued in the MHC Merger.
e. The liabilities of the Mutual Holding Company assumed by the Bank in
the MHC Merger and the liabilities to which the transferred assets of the
Mutual Holding Company are subject were incurred by the Mutual Holding Company
in the ordinary course of its business.
f. The Company, the Bank, the Mutual Holding Company, Interim and the
Eligible Account Holders will pay their respective expenses, if any, incurred
in connection with the Conversion and Reorganization, except that the Company,
the Bank, and the Mutual Holding Company may pay fees to brokers and investment
bankers for assisting Eligible Account Holders in completing and/or submitting
Order Forms (as defined in the Plan). These expenses for brokers and investment
bankers to assist Members are solely and directly related to the Conversion and
Reorganization and will be paid by the Company, the Bank, and the Mutual
Holding Company directly to the brokers and investment bankers.
g. There is no intercorporate indebtedness existing (i) between the
Mutual Holding Company and the Bank, or (ii) between the Company and the Bank
that was issued, acquired, or will be settled at a discount in the Conversion
and Reorganization.
<PAGE> 5
_______ __, 1997
Page 5
h. Neither the Company, the Bank, the Mutual Holding Company nor the
Interim are investment companies as defined in Sections 368(a)(2)(F)(iii) and
(iv) of the Code.
i. Neither the Mutual Holding Company nor the Bank are under the
jurisdiction of a court in a Title 11 or similar case within the meaning of
Section 368(a)(3)(A) of the Code.
j. The fair market value of the assets of the Mutual Holding Company
transferred to the Bank in the MHC Merger will equal or exceed the sum of the
liabilities assumed by the Bank plus the amount of liabilities, if any, to
which the transferred assets are subject.
k. The total adjusted basis of the assets of the Mutual Holding Company
transferred to the Bank in the MHC Merger will equal or exceed the sum of the
liabilities assumed by the Bank, plus the amount of liabilities, if any, to
which the transferred assets are subject.
l. The Bank has no plan or intention to issue additional shares of its
stock that would result in the Company owning less than all of the outstanding
stock of the Bank.
m. The Company has no plan or intention to liquidate the Bank; to merge
the Bank with or into another corporation; to sell or otherwise dispose of the
stock of the Bank except for transfers of stock to corporations controlled by
the Company; or to cause the Bank to sell or otherwise dispose of any of its
assets, except for dispositions made in the ordinary course of business or
transfers of assets to a corporation controlled by the Bank.
n. The Company does not own, nor has it owned during any period of its
existence, any shares of stock of the Bank.
o. On the Effective Date, the fair market value of the assets of the
Bank will exceed the sum of its liabilities, plus the amount of liabilities, if
any, to which the assets are subject.
Analysis
Section 368(a)(1)(A) of the Code defines the term "reorganization" to
include a "statutory merger or consolidation" of corporations such as the MHC
Merger. Section 1.368- 2(b)(1) of the Treasury Regulations provides that, in
order to qualify as a reorganization under Section 368(a)(1)(A), a transaction
must be a merger or consolidation effected pursuant to the corporation laws of
the United States or a state. The Agreement provides that the MHC Merger the
will be accomplished in accordance with applicable state and federal law.
Treasury Regulations and case law require that, in addition to the
existence of statutory authority for a merger, certain other conditions must be
satisfied in order to qualify
<PAGE> 6
_______ __, 1997
Page 6
a proposed transaction as a reorganization within the meaning of Section
368(a)(1)(A) of the Code. The "business purpose test," which requires a
proposed merger to have a bona fide business purpose, must be satisfied. See 26
C.F.R. Section 1.368-1(c). We believe that the Merger satisfies the business
purpose test for the reasons set forth in the Prospectus under the caption "The
Conversion and Reorganization - Purposes of the Conversion and Reorganization."
The "continuity of business enterprise test" requires an acquiring corporation
either to continue an acquired corporation's historic business or use a
significant portion of its historic assets in a business. See 26 C.F.R. Section
1.368-1(d). We believe that the continuity of business enterprise test is
satisfied since the Plan provides that the business conducted by the Bank prior
to the Merger will be unaffected by the transactions.
The "continuity of interest doctrine" requires that the continuing
stock interest of the former owners of an acquired corporation, considered in
the aggregate, represent a "substantial part" of the value of their former
interest, and provide them with a "definite and substantial interest" in the
affairs of the acquiring corporation or a corporation in control of the
acquiring corporation. Paulsen v. Comm'r., 469 U.S. 131 (1985); Helvering v.
Minnesota Tea Co., 296 U.S. 378 (1935); John A. Nelson Co. v. Helvering, 296
U.S. 374 (1935); Southwest Natural Gas Co. v. Comm'r., 189 F.2d 332 (5th Cir.
1951), cert. denied, 342 U.S. 860 (1951). We believe that the MHC Merger
satisfies the continuity of interest doctrine based upon the information set
forth in the Company's Registration Statement. Specifically, the IRS has ruled
in substantially identical transactions that the exchange of the members'
equity interests in the MHC for interests in a liquidation account established
at the Bank in the MHC Merger will not violate the continuity of interest
requirement of Section 1.368-1(b) of the Income Tax Regulations.
Section 362 of the Code provides that if property is acquired by a
corporation such as the Bank in connection with a reorganization, then the
basis of such property shall be the same as it would be in the hands of the
transferor immediately prior to the transfer. Section 1223(1) of the Code
states that where a corporation such as the Bank will have a carryover basis in
property received from another corporation which is a party to a
reorganization, the holding period of such assets in the hands of the acquiring
corporation shall include the period for which such assets were held by the
transferor. Section 1032 of the Code states that no gain or loss shall be
recognized to a corporation, such as the Company, on the receipt of property in
exchange for common stock.
Opinions
Based on the foregoing description of the Conversion and
Reorganization, and subject to the qualifications and limitations set forth in
this letter, we are of the opinion that, if the Conversion and Reorganization
were to be consummated as described above as of the date hereof, then:
1. The MHC Merger qualifies as a reorganization within the meaning of
Section 368(a)(1)(A) of the Code.
<PAGE> 7
_______ __, 1997
Page 7
2. No gain or loss will be recognized by the Bank upon the receipt of
the assets of the Mutual Holding Company in the MHC Merger. Section 1032 of the
Code.
3. The Company will recognize no gain or loss upon the receipt of cash
in the Offerings in exchange for shares of common stock of the Company. Section
1032 of the Code.
4. The Company will recognize no gain or loss upon the transfer of the
Contributed Offering Proceeds to the Bank in exchange for common stock of the
Bank. Section 351(a) of the Code.
5. The Bank will recognize no gain or loss upon the receipt of the
Contributed Offering Proceeds from the Company in exchange for common stock of
the Bank. Section 1032 of the Code.
Our opinions set forth herein are based upon the descriptions of the
Conversion and Reorganization as set forth in the Prospectus and upon the
factual matters set forth in the Plan. If the actual facts relating to any
aspect of the Conversion and Reorganization differ from such description in any
material respect, the opinions expressed herein may become inapplicable.
Further, our opinions are based on research of the Code, applicable Treasury
Regulations, current published administrative decisions of the IRS, and
existing judicial decisions as of the date hereof. We express no opinions other
than those stated immediately above as our opinions.
We hereby consent to the references to our firm in the Prospectus
contained in the Form 86-AC and Registration Statement on Form S-1 under the
caption "Legal and Tax Opinions."
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: [DRAFT]
--------------------------------------
Philip Ross Bevan, a Partner
<PAGE> 1
EXHIBIT 8.3
[RP FINANCIAL, LC. LETTERHEAD]
June 20, 1997
Board of Trustees
Independence Community Bank Corp. and
Board of Directors
Independence Savings Bank
195 Montague Street
Brooklyn, New York 11201-6297
Re: Subscription Rights
Members of the Board of Trustees and Board of Directors:
We understand that the Board of Trustees of Independence Community Bank
Corp., a New York-chartered mutual holding company (the "Mutual Holding
Company"), and the Board of Directors of Independence Savings Bank (the
"Bank"), a wholly-owned subsidiary of the Mutual Holding Company, has adopted a
Plan of Conversion, incorporated herein by reference, in which the Mutual
Holding Company will be combined with the Bank simultaneously with the Mutual
Holding Company's conversion to stock form and a newly-formed Delaware stock
corporation, to be known as "Independence Community Bank Corp." (the
"Company"), will become the holding company of the Bank. The Bank and Company
will offer shares of Company Common Stock (the "Conversion Stock") in a
Subscription Offering to Eligible Account Holders, the Company's and Bank's
ESOP and Supplemental Eligible Account Holders. Any shares of Conversion Stock
remaining unsold after the Subscription Offering will be offered for sale to
the public through a Community Offering and a Syndicated Community Offering. In
addition, the Company intends to donate to a charitable foundation, immediately
following the Conversion, authorized but unissued shares of Company Common
Stock in an amount equal to 8 percent of the common stock issued in the
conversion. All capitalized terms not otherwise defined in this letter have
the meanings given such terms in the Plan of Conversion.
We understand that, in accordance with the Plan of Conversion,
Subscription Rights to purchase shares of Common Stock in the Company are to be
issued without payment to: (1) Eligible Account Holders; (2) the Company's and
Bank's ESOP; and (3) Supplemental Eligible Account Holders. Based solely upon
our observation that the Subscription Rights will be available to such parties
without payment, will be legally non-transferable and of short duration, and
will afford such parties the right only to purchase shares of Common Stock in
the Subscription Offering at the same price as will be paid by members of the
general public in the Community Offering and Syndicated
<PAGE> 2
RP Financial, LC.
Board of Trustees
June 20, 1997
Page 2
Community Offering, but without undertaking any independent investigation of
state or federal law or the position of the Internal Revenue Service with
respect to this issue, we are of the belief that, pursuant to our valuation of
the Subscription Rights:
1. the Subscription Rights will have no ascertainable
market value; and
2. the price at which the Subscription Rights are
exercisable will not be more or less than the
estimated pro forma market value of the shares
immediately upon issuance.
Changes in the local and national economy, the legislative and
regulatory environment for financial institutions, the stock market, interest
rates and other external forces (such as natural disasters or significant world
events) may occur from time to time, often with great unpredictability, and may
materially impact the value of thrift stocks as a whole or the Company's value
alone. Accordingly, no assurance can be given that persons who subscribe to
shares of Common Stock in the Conversion will thereafter be able to buy or sell
such shares at the same price paid in the Subscription Offering.
Respectfully submitted,
RP FINANCIAL, LC.
/s/ RP FINANCIAL, LC.
<PAGE> 1
EXHIBIT 10.1
CHANGE IN CONTROL SEVERANCE AGREEMENT AMONG
INDEPENDENCE COMMUNITY BANK CORP.,
INDEPENDENCE SAVINGS BANK AND ______________
THIS CHANGE IN CONTROL SEVERANCE AGREEMENT is dated this ____ day of
_____ 1997, among Independence Community Bank Corp., a Delaware corporation
(the "Corporation"), Independence Savings Bank, a New York chartered savings
bank (the "Bank"), and _______________ (the "Executive"). The Corporation and
the Bank are collectively referred to as the "Employers".
WITNESSETH
WHEREAS, the Executive is presently an officer of each of the
Employers;
WHEREAS, the Employers desire to be ensured of the Executive's
continued active participation in the business of the Employers; and
WHEREAS, in order to induce the Executive to remain in the employ of
the Employers and in consideration of the Executive's agreeing to remain in the
employ of the Employers, the parties desire to specify the severance benefits
which shall be due the Executive in the event that his employment with the
Employers is terminated under specified circumstances;
NOW THEREFORE, in consideration of the mutual agreements herein
contained, and upon the other terms and conditions hereinafter provided, the
parties hereby agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) ANNUAL COMPENSATION. The Executive's "Annual Compensation" for
purposes of this Agreement shall be deemed to mean the highest level of base
salary and bonus paid to the Executive by the Employers or any subsidiary
thereof during the calendar year in which the Date of Termination occurs
(determined on an annualized basis) or either of the two calendar years
immediately preceding the calendar year in which the Date of Termination
occurs.
(b) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and-desist order. For purposes of this paragraph, no act or failure to
act on the Executive's part shall be considered "willful" unless done, or
omitted to be done, by the
<PAGE> 2
2
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interests of the Employers.
(c) CHANGE IN CONTROL OF THE CORPORATION. "Change in Control of the
Corporation" shall mean the occurrence of any of the following: (i) the
acquisition of control of the Corporation as defined in 12 C.F.R. ss.574.4,
unless a presumption of control is successfully rebutted or unless the
transaction is exempted by 12 C.F.R. ss.574.3(c)(vii), or any successor to such
sections; (ii) an event that would be required to be reported in response to
Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant
to the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
successor thereto, whether or not any class of securities of the Corporation is
registered under the Exchange Act; (iii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities; or (iv)
during any period of three consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Corporation cease for
any reason to constitute at least a majority thereof unless the election, or
the nomination for election by stockholders, of each new director was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(d) CODE. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause, the date on which the Notice of
Termination is given, and (ii) if the Executive's employment is terminated for
any other reason, the date specified in the Notice of Termination.
(f) DISABILITY. Termination by the Employers of the Executive's
employment based on "Disability" shall mean termination because of any physical
or mental impairment which qualifies the Executive for disability benefits
under the applicable long-term disability plan maintained by the Employers or
any subsidiary or, if no such plan applies, which would qualify the Executive
for disability benefits under the Federal Social Security System.
(g) GOOD REASON. Termination by the Executive of the Executive's
employment for "Good Reason" shall mean termination by the Executive following
a Change in Control of the Corporation based on:
(i) Without the Executive's express written consent, the
assignment by the Employers to the Executive of any
duties which are materially inconsistent with the
Executive's positions, duties, responsibilities and
status with the Employers immediately prior to a
Change in Control of the Corporation, or a material
change in the Executive's reporting
responsibilities, titles or offices as an employee
and as in effect
<PAGE> 3
3
immediately prior to such a Change in Control, or
any removal of the Executive from or any failure to
re-elect the Executive to any of such
responsibilities, titles or offices, except in
connection with the termination of the Executive's
employment for Cause, Disability or Retirement or as
a result of the Executive's death or by the
Executive other than for Good Reason;
(ii) Without the Executive's express written consent, a
reduction by either of the Employers in the
Executive's base salary as in effect immediately
prior to the date of the Change in Control of the
Corporation or as the same may be increased from
time to time thereafter or a reduction in the
package of fringe benefits provided to the
Executive;
(iii) The principal executive office of either of the
Employers is relocated outside of the Brooklyn, New
York area or, without the Executive's express
written consent, either of the Employers require the
Executive to be based anywhere other than an area in
which the Employers' principal executive office is
located, except for required travel on business of
the Employers to an extent substantially consistent
with the Executive's present business travel
obligations;
(iv) Any purported termination of the Executive's
employment for Cause, Disability or Retirement which
is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (i) below;
or
(v) The failure by the Employers to obtain the assumption
of and agreement to perform this Agreement by any
successor as contemplated in Section 6 hereof.
(h) IRS. IRS shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the
Executive's employment by the Employers for any reason, including without
limitation for Cause, Disability or Retirement, or by the Executive for any
reason, including without limitation for Good Reason, shall be communicated by
written "Notice of Termination" to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a dated notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after such Notice of
Termination is given, except in the case of the Employers' termination of the
Executive's employment for Cause, which shall be effective immediately; and
(iv) is given in the manner specified in Section 7 hereof.
<PAGE> 4
4
(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employers' retirement policies, including
early retirement, generally applicable to their salaried employees.
2. BENEFITS UPON TERMINATION. If the Executive's employment by the
Employers shall be terminated subsequent to a Change in Control of the
Corporation by (i) the Employers for other than Cause, Disability, Retirement
or the Executive's death or (ii) the Executive for Good Reason, then the
Employers shall
(a) pay to the Executive, in either thirty-six (36) equal monthly
installments beginning with the first business day of the month following the
Date of Termination or in a lump sum as of the Date of Termination (at the
Executive's election), a cash severance amount equal to three (3) times the
Executive's Annual Compensation, and
(b) maintain and provide for a period ending at the earlier of (i) the
expiration of the remaining term of this Agreement as of the Date of
Termination or (ii) the date of the Executive's full-time employment by another
employer (provided that the Executive is entitled under the terms of such
employment to benefits substantially similar to those described in this
subparagraph (B)), at no cost to the Executive, the Executive's continued
participation in all group insurance, life insurance, health and accident
insurance, disability insurance and other employee benefit plans, programs and
arrangements offered by the Employers in which the Executive was entitled to
participate immediately prior to the Date of Termination (excluding (y) stock
option and restricted stock plans of the Employers and (z) bonuses included in
Annual Compensation), provided that in the event that the Executive's
participation in any plan, program or arrangement as provided in this
subparagraph (B) is barred, or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Employers shall arrange to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive
under such plans, programs and arrangements immediately prior to the Date of
Termination.
3. PAYMENT OF ADDITIONAL BENEFITS UNDER CERTAIN CIRCUMSTANCES.
(a) If the payments and benefits pursuant to Section 2 hereof, either
alone or together with other payments and benefits which the Executive has the
right to receive from the Employers would constitute a "parachute payment" as
defined in Section 280G(b)(2) of the Code (the "Initial Parachute Payment"),
then the Employers shall pay to the Executive, in either thirty-six (36) equal
monthly installments beginning with the first business day of the month
following the Date of Termination or in a lump sum as of the Date of
Termination (at the Executive's election), a cash amount equal to the sum of
the following:
<PAGE> 5
5
(A) twenty (20) percent (or such other percentage equal to
the tax rate imposed by Section 4999 of the Code) of the amount by
which the Initial Parachute Payment exceeds the Executive's "base
amount" from the Employers, as defined in Section 280G(b)(3) of the
Code, with the difference between the Initial Parachute Payment and
the Executive's base amount being hereinafter referred to as the
"Initial Excess Parachute Payment";
(B) such additional amount (tax allowance) as may be
necessary to compensate the Executive for the payment by the Executive
of state and federal income and excise taxes on the payment provided
under clause (A) above and on any payments under this clause (B). In
computing such tax allowance, the payment to be made under clause (A)
above shall be multiplied by the "gross up percentage" ("GUP"). The
GUP shall be determined as follows:
Tax Rate
GUP = --------------
1- Tax Rate
The Tax Rate for purposes of computing the GUP shall be the highest
marginal federal and state income and employment-related tax rate,
including any applicable excise tax rate, applicable to the Executive
in the year in which the payment under clause (A) above is made.
(b) Notwithstanding the foregoing, if it shall subsequently be
determined in a final judicial determination or a final administrative
settlement to which the Executive is a party that the actual excess parachute
payment as defined in Section 280G(b)(1) of the Code is different from the
Initial Excess Parachute Payment (such different amount being hereafter
referred to as the "Determinative Excess Parachute Payment"), then the
Employers' independent tax counsel or accountants shall determine the amount
(the "Adjustment Amount") which either the Executive must pay to the Employers
or the Employers must pay to the Executive in order to put the Executive (or
the Employers, as the case may be) in the same position the Executive (or the
Employers, as the case may be) would have been if the Initial Excess Parachute
Payment had been equal to the Determinative Excess Parachute Payment. In
determining the Adjustment Amount, the independent tax counsel or accountants
shall take into account any and all taxes (including any penalties and
interest) paid by or for the Executive or refunded to the Executive or for the
Executive's benefit. As soon as practicable after the Adjustment Amount has
been so determined, the Employers shall pay the Adjustment Amount to the
Executive or the Executive shall repay the Adjustment Amount to the Employers,
as the case may be.
(c) In each calendar year that the Executive receives payments of
benefits under this Section 3, the Executive shall report on his state and
federal income tax returns such information as is consistent with the
determination made by the independent tax counsel or accountants of the
Employers as described above. The Employers shall indemnify and hold
<PAGE> 6
6
the Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorneys' fees, interest, fines and penalties)
which the Executive incurs as a result of so reporting such information. The
Executive shall promptly notify the Employers in writing whenever the Executive
receives notice of the institution of a judicial or administrative proceeding,
formal or informal, in which the federal tax treatment under Section 4999 of
the Code of any amount paid or payable under this Section 3 is being reviewed
or is in dispute. The Employers shall assume control at its expense over all
legal and accounting matters pertaining to such federal tax treatment (except
to the extent necessary or appropriate for the Executive to resolve any such
proceeding with respect to any matter unrelated to amounts paid or payable
pursuant to this Section 3) and the Executive shall cooperate fully with the
Employers in any such proceeding. The Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Employers may
have in connection therewith without the prior consent of the Employers.
4. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employers pursuant to employee benefit plans
of the Employers or otherwise.
5. WITHHOLDING. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employers may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
6. ASSIGNABILITY. The Employers may assign this Agreement and their
rights and obligations hereunder in whole, but not in part, to any corporation,
bank or other entity with or into which either of the Employers may hereafter
merge or consolidate or to which either of the Employers may transfer all or
substantially all of its respective assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of the Employers hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this
Agreement or their rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.
7. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
<PAGE> 7
7
To the Corporation: Secretary
Independence Community Bank Corp.
195 Montague Street, 12th Floor
Brooklyn, New York 11201
To the Bank: Secretary
Independence Savings Bank
195 Montague Street, 12th Floor
Brooklyn, New York 11201
To the Executive:
8. AMENDMENT; WAIVER. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or officers as may be
specifically designated by the Boards of Directors of the Employers to sign on
their behalf. No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
9. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the United
States where applicable and otherwise by the substantive laws of the State of
New York.
10. NATURE OF EMPLOYMENT AND OBLIGATIONS.
(a) Nothing contained herein shall be deemed to create other than a
terminable at will employment relationship between the Employers and the
Executive, and the Employers may terminate the Executive's employment at any
time, subject to providing any payments specified herein in accordance with the
terms hereof.
(b) Nothing contained herein shall create or require the Employers to
create a trust of any kind to fund any benefits which may be payable hereunder,
and to the extent that the Executive acquires a right to receive benefits from
the Employers hereunder, such right shall be no greater than the right of any
unsecured general creditor of the Employers.
11. TERM OF AGREEMENT. The term of this Agreement shall be for three
years, commencing on the date of this Agreement and, upon approval of the
Boards of Directors of the Employers, shall extend for an additional year on
each annual anniversary of the date of this Agreement such that at any time the
remaining term of this Agreement shall be from two to three years. Prior to the
first annual anniversary of the date of this Agreement and
<PAGE> 8
8
each annual anniversary thereafter, the Boards of Directors of the Employers
shall consider and review (after taking into account all relevant factors,
including the Executive's performance) an extension of the term of this
Agreement, and the term shall continue to extend each year if the Boards of
Directors approve such extension unless the Executive gives written notice to
the Employers of the Executive's election not to extend the term, with such
written notice to be given not less than thirty (30) days prior to any such
anniversary date. If the Boards of Directors of the Employers elect not to
extend the term, they shall give written notice of such decision to the
Executive not less than thirty (30) days prior to any such anniversary date. If
any party gives timely notice that the term will not be extended as of any
annual anniversary date, then this Agreement shall terminate at the conclusion
of its remaining term. References herein to the term of this Agreement shall
refer both to the initial term and successive terms.
12. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. REGULATORY PROHIBITION. Notwithstanding any other provision of
this Agreement to the contrary, any payments made to the Executive pursuant to
this Agreement, or otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C.
ss.1828(k)) and the regulations promulgated thereunder, including 12 C.F.R.
Part 359.
16. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the Employers and the Executive with respect to the matters agreed to
herein. All prior agreements between the Employers and the Executive with
respect to the matters agreed to herein are hereby superseded and shall have no
force or effect.
<PAGE> 9
9
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: INDEPENDENCE COMMUNITY BANK CORP.
By:
- -------------------------------------- --------------------------------
John K. Schnock, Senior Vice President , Director
and Counsel ----------------------
Attest: INDEPENDENCE SAVINGS BANK
By:
- -------------------------------------- --------------------------------
John K. Schnock, Senior Vice President , Director
and Counsel ----------------------
EXECUTIVE
By:
--------------------------------
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and
"Consolidated Statements of Income" and to the use of our reports dated May 29,
1997 (with respect to the consolidated financial statements of Independence
Savings Bank) and October 8, 1996 (with respect to the financial statements of
Independence Savings Bank 401(k) Savings Plan, referred to in our report as the
Independence Savings Bank Incentive Savings Plan), included in the Registration
Statement, related Prospectus and Prospectus Supplement of Independence
Community Bank Corp., dated July 3, 1997 for the registration of up to
62,818,749 shares of its common stock, and the Application for Conversion on
Form 86-AC, dated July 3, 1997.
/s/ ERNST & YOUNG LLP
New York, New York
June 30, 1997
<PAGE> 1
EXHIBIT 23.3
[RP FINANCIAL, LC. LETTERHEAD]
June 27, 1997
Board of Trustees
Independence Community Bank Corp. and
Board of Directors
Independence Savings Bank
195 Montague Street
Brooklyn, New York 11201-6297
Lady and Gentlemen:
We hereby consent to the use of our firm's name in the Application for
Conversion on Form 86-AC of Independence Community Bank Corp., Brooklyn, New
York and any amendments thereto, in the Form S-1 Registration Statement and any
amendments thereto for Independence Community Bank Corp. to the inclusion of,
summary of and references to our Appraisal Report and our statement concerning
subscription rights in such filings including the Prospectus of Independence
Community Bank Corp.
Sincerely,
RP FINANCIAL, LC.
/s/ RONALD S. RIGGINS
Ronald S. Riggins
President
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 310,429
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 24,341
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 588,332
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 2,530,113
<ALLOWANCE> 27,024
<TOTAL-ASSETS> 3,733,316
<DEPOSITS> 3,325,450
<SHORT-TERM> 0
<LIABILITIES-OTHER> 81,427
<LONG-TERM> 17,232
0
0
<COMMON> 0
<OTHER-SE> 309,207
<TOTAL-LIABILITIES-AND-EQUITY> 3,733,316
<INTEREST-LOAN> 197,827
<INTEREST-INVEST> 51,212
<INTEREST-OTHER> 6,264
<INTEREST-TOTAL> 255,303
<INTEREST-DEPOSIT> 138,840
<INTEREST-EXPENSE> 140,187
<INTEREST-INCOME-NET> 115,116
<LOAN-LOSSES> 7,960
<SECURITIES-GAINS> (3,347)
<EXPENSE-OTHER> 82,153
<INCOME-PRETAX> 27,912
<INCOME-PRE-EXTRAORDINARY> 27,912
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,180
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.39
<LOANS-NON> 16,930
<LOANS-PAST> 1,718
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 20,528
<CHARGE-OFFS> 2,145
<RECOVERIES> 681
<ALLOWANCE-CLOSE> 27,024
<ALLOWANCE-DOMESTIC> 27,024
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE> 1
EXHIBIT 99.1
CONVERSION VALUATION APPRAISAL REPORT
INDEPENDENCE COMMUNITY BANK CORP.
PROPOSED HOLDING COMPANY FOR
INDEPENDENCE SAVINGS BANK
BROOKLYN, NEW YORK
DATED AS OF:
JUNE 20, 1997
PREPARED BY:
RP FINANCIAL, LC.
1700 NORTH MOORE STREET
SUITE 2210
ARLINGTON, VIRGINIA 22209
<PAGE> 2
[RP FINANCIAL, LC. LETTERHEAD]
June 20, 1997
Board of Trustees
Independence Community Bank Corp. and
Board of Directors
Independence Savings Bank
195 Montague Street
Brooklyn, New York 11201-6297
Gentlemen:
At your request, we have completed and hereby provide an independent
appraisal ("Appraisal") of the estimated pro forma market value of the Common
Stock which is to be issued in connection with the mutual-to-stock conversion
transaction described below.
This appraisal is furnished pursuant to the requirements of 563b.7 and
has been prepared in accordance with the "Guidelines for Appraisal Reports for
the Valuation of Savings and Loan Associations Converting from Mutual to Stock
Form of Organization" ("Valuation Guidelines") of the Office of Thrift
Supervision ("OTS"), including the most recent revisions as of October 21,
1994, and applicable regulatory interpretations thereof. Such Valuation
Guidelines are relied upon by the New York State Department of Banking (the
"Department") and the Federal Deposit Insurance Corporation ("FDIC") in
evaluating conversion appraisals in the absence of separate written valuation
guidelines by the respective agencies.
DESCRIPTION OF REORGANIZATION
We understand that the Board of Trustees of Independence Community
Bank Corp., a New York-chartered mutual holding company (the "Mutual Holding
Company"), and the Board of Directors of Independence Savings Bank (the
"Bank"), a wholly-owned subsidiary of the Mutual Holding Company, has adopted a
Plan of Conversion, incorporated herein by reference, in which the Mutual
Holding Company will be combined with the Bank simultaneously with the Mutual
Holding Company's conversion to stock form and a newly-formed Delaware stock
corporation, to be known as "Independence Community Bank Corp.", will become
the holding company of the Bank (the "Company"). The Bank and Company will
offer shares of Company Common Stock (the "Conversion Stock") in a Subscription
Offering to Eligible Account Holders, Tax-Qualified Employee Stock Benefit
Plans and Supplemental Eligible Account Holders. It is our understanding that
any shares of Conversion Stock remaining unsold after the Subscription Offering
will be offered for sale to the public through a Community Offering and a
Syndicated Community Offering, if necessary. In addition, the Company intends
to donate to a charitable
<PAGE> 3
RP Financial, LC.
Board of Directors
June 20, 1997
Page 2
foundation, immediately following the Conversion, authorized but unissued
shares of Company Common Stock in an amount equal to 8 percent of the number of
shares of Conversion Stock issued in the Conversion. All capitalized terms not
otherwise defined in this letter have the meanings given such terms in the Plan
of Conversion.
The aggregate amount of Common Stock to be sold by the Company cannot
exceed the appraised value of the Bank. Upon consummation of the sale of all
of the Conversion Stock, the Company will purchase from the Bank all of the
capital stock of the Bank issued in the Conversion in exchange for net proceeds
from the sale of the Conversion Stock. The Company will retain up to 50
percent of the net proceeds of the Conversion, from which it will extend a loan
to the Employee Stock Ownership Plan ("ESOP") for the purchase of up to 8
percent of the total number of shares sold in the Conversion.
RP FINANCIAL, LC.
RP Financial, LC. ("RP Financial") is a financial consulting firm
serving the financial services industry nationwide that, among other things,
specializes in financial valuations and analyses of business enterprises and
securities, including the pro forma valuation for savings institutions
converting from mutual-to-stock form. The background and experience of RP
Financial is detailed in Exhibit V-1. We believe that, except for the fee we
will receive for our Appraisal and assisting the Bank and the Company in the
preparation of the post-conversion business plan, we are independent of the
Bank and Company and the other parties engaged by the Bank or Company to assist
in the stock conversion process.
VALUATION METHODOLOGY
In preparing the Appraisal, we have reviewed the Bank's and the
Company's Application for Approval of Conversion, including the Proxy
Statement, as filed with the Department and the FDIC, the Company application
as filed with the OTS, and the Company's Form S-1 registration statement as
filed with the Securities Exchange Commission ("SEC"). We have conducted a
financial analysis of the Bank that has included a review of its audited
financial information for fiscal years ended 1993 through 1997 and various
unaudited information and internal financial reports and due diligence related
discussions with the Bank's management; Ernst & Young LLP, the Bank's
independent auditor; Elias, Matz, Tiernan & Herrick, L.L.P., the Bank's
conversion counsel; and Sandler O'Neill & Partners, L.P., the Bank's financial
and marketing advisor in connection with the Company's stock offering. All
conclusions set forth in the Appraisal were reached independently from such
discussions. In addition, where appropriate, we have considered information
based on other available published sources that we believe are reliable. While
we believe the information and data gathered from all these sources are
reliable, we cannot guarantee the accuracy and completeness of such
information.
We have investigated the competitive environment within which the Bank
operates and have assessed the Bank's relative strengths and weaknesses. We
have kept abreast of the changing regulatory and legislative environment for
financial institutions and analyzed the
<PAGE> 4
RP Financial, LC.
Board of Directors
June 20, 1997
Page 3
potential impact on the Bank and the industry as a whole. We have analyzed the
potential effects of conversion on the Bank's operating characteristics and
financial performance as they relate to the pro forma market value. We have
reviewed the overall conditions in the Bank's primary market area as set forth
in demographic, economic and competitive information prepared by CACI, SNL
Securities and other third party private and governmental sources. We have
compared the Bank's financial performance and condition with selected
publicly-traded thrifts and thrift holding companies in accordance with the
Valuation Guidelines, as well as all publicly-traded thrifts and thrift holding
companies. We have reviewed the current conditions in the securities markets
in general and in the market for thrift stocks in particular, including the
market for existing thrift issues and the market for initial public offerings
by thrifts and thrift holding companies. We have excluded from such analyses
publicly-traded mutual holding companies and thrifts subject to announced or
rumored acquisition and/or other unusual characteristics.
Our Appraisal is based on the Bank's representation that the
information contained in the regulatory applications and additional information
furnished to us by the Bank, its independent auditors, legal counsel and other
authorized agents are truthful, accurate and complete. We did not
independently verify the financial statements and other information provided by
the Bank, its independent auditors, legal counsel and other authorized agents
nor did we independently value the assets or liabilities of the Bank. The
valuation considers the Bank only as a going concern and should not be
considered as an indication of the liquidation value.
Our appraised value is predicated on a continuation of the current
operating environment for the Bank and Company and for all thrifts and their
holding companies. Changes in the local, state and national economy, the
legislative and regulatory environment for financial institutions, the stock
market, interest rates, and other external forces (such as natural disasters or
significant world events) may occur from time to time, often with great
unpredictability, and may materially impact the value of thrift stocks as a
whole or the Bank's and Company's values alone. It is our understanding that
there are no current plans for selling control of the Company or the Bank
following Conversion. To the extent that such factors can be foreseen, they
have been factored into our analysis.
The estimated pro forma market value is defined as the price at which
the Company's Common Stock, immediately upon completion of the conversion
offering, would change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell and both having reasonable
knowledge of relevant facts.
VALUATION CONCLUSION
It is our opinion that, as of June 20, 1997, the estimated aggregate
pro forma market value of the shares to be issued immediately following the
conversion was $475 million. Based on this valuation, the Trustees and
Directors of the Company and the Bank have established the Initial Purchase
Price and the number of shares of Conversion Stock to be offered, including the
range of value. Accordingly, the Boards have established a range of value of
15 percent above and below the appraised value of $475 million (or "midpoint"),
indicating a minimum value of $403.75
<PAGE> 5
RP Financial, LC.
Board of Directors
June 20, 1997
Page 4
million and a maximum value of $546.25 million. Based on the $10.00 per share
offering price determined by the Boards, this valuation range equates to an
offering of 40.375 million shares at the minimum to 54.625 million shares at
the maximum, and 47.5 million shares at the midpoint. In the event that the
appraised value is subject to an increase, up to 62,818,750 shares may be sold
at an issue price of $10.00 per share, for an aggregate market value of
$628,187,500, without a resolicitation.
Based on this valuation range, incorporating the 8 percent shares
issued to the Foundation following consummation of the offering, the offering
range is as follows: $373,842,590 at the minimum, $439,814,810 at the
midpoint, $505,787,040 at the maximum and $581,655,090 at the supermaximum.
Based on a $10.00 per share offering price, the number of offering shares is as
follows: 37,384,259 at the minimum, 43,981,481 at the midpoint, 50,578,704 at
the maximum and 58,165,509 at the supermaximum.
LIMITING FACTORS AND CONSIDERATIONS
Our valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing shares of the
Common Stock. Moreover, because such valuation is necessarily based upon
estimates and projections of a number of matters, all of which are subject to
change time to time, no assurance can be given that persons who purchase shares
of common stock in the Conversion will thereafter be able to buy or sell such
shares at prices related to the foregoing valuation of the estimated pro forma
market value thereof.
RP Financial's valuation was determined based on the financial
condition and operations of the Bank as of March 31, 1997, the date of the
financial data included in the Company's Prospectus. The de minimus balance of
Mutual Holding Company assets contributed to the Bank in conjunction with the
Conversion were considered in the estimated pro forma market value.
RP Financial is not a seller of securities within the meaning of any
federal and state securities laws and any report prepared by RP Financial shall
not be used as an offer or solicitation with respect to the purchase or sale of
any securities. RP Financial maintains a policy which prohibits RP Financial,
its principals or employees from purchasing stock of its client financial
institutions.
This valuation will be updated as provided for in the conversion
regulations and guidelines. These updates will consider, among other things,
any developments or changes in the Bank's financial performance and condition,
management policies, and current conditions in the equity markets for thrift
shares. These updates may also consider changes in other external factors
which impact value including, but not limited to: various changes in the
legislative and regulatory environment for financial institutions, the stock
market and the market for thrift stocks,
<PAGE> 6
RP Financial, LC.
Board of Directors
June 20, 1997
Page 5
and interest rates. Should any such new developments or changes be material,
in our opinion, to the valuation of the shares, appropriate adjustments to the
estimated pro forma market value will be made. The reasons for any such
adjustments will be explained in the update at the date of the release of the
update.
Respectfully submitted,
RP FINANCIAL, LC.
/s/ RONALD S. RIGGINS
Ronald S. Riggins
President
<PAGE> 7
RP Financial, LC.
TABLE OF CONTENTS
INDEPENDENCE COMMUNITY BANK CORP.
INDEPENDENCE SAVINGS BANK
<TABLE>
<CAPTION>
PAGE
DESCRIPTION NUMBER
- ----------- ------
<S> <C>
CHAPTER ONE OVERVIEW AND FINANCIAL ANALYSIS
- -----------
Introduction 1.1
Plan of Conversion and Holding Company Reorganization 1.2
Establishment of a Charitable Foundation 1.3
Strategic Overview 1.4
Balance Sheet Trends 1.10
Income and Expense Trends 1.17
Interest Rate Risk Management 1.22
Lending Activities and Strategy 1.22
Asset Quality 1.26
Funding Composition and Strategy 1.27
Subsidiaries 1.28
Legal Proceedings 1.28
CHAPTER TWO MARKET AREA
- -----------
Introduction 2.1
National Economy 2.3
Interest Rate Trends 2.6
Market Area Demographics 2.7
Market Area Economy 2.11
Market Area Deposit Characteristics and Competition 2.13
CHAPTER THREE PEER GROUP ANALYSIS
- -------------
Selection of Peer Group 3.1
Financial Condition 3.7
Income and Expense Trends 3.11
Loan Composition 3.14
Interest Rate Risk 3.16
Credit Risk 3.18
Market Area and Competitive Characteristics 3.18
</TABLE>
<PAGE> 8
RP Financial, LC.
TABLE OF CONTENTS
INDEPENDENCE COMMUNITY BANK CORP.
INDEPENDENCE SAVINGS BANK
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
DESCRIPTION NUMBER
- ----------- ------
<S> <C>
CHAPTER FOUR VALUATION ANALYSIS
- ------------
Introduction 4.1
Appraisal Guidelines 4.1
RP Financial Approach to the Valuation 4.2
Valuation Analysis 4.3
1. Financial Condition 4.3
2. Profitability, Growth and Viability of Earnings 4.4
3. Asset Growth 4.5
4. Primary Market Area 4.6
5. Dividends 4.7
6. Liquidity of the Shares 4.8
7. Marketing of the Issue 4.8
A. The Public Market 4.8
B. The New Issue Market 4.14
C. The Acquisition Market 4.17
8. Management 4.17
9. Effect of Government Regulation and Regulatory Reform 4.18
Summary of Adjustments 4.18
Valuation Approaches 4.19
1. Price-to-Book ("P/B") 4.21
2. Price-to-Earnings ("P/E") 4.21
3. Price-to-Assets ("P/A") 4.22
Comparison to Recent Conversions 4.23
Valuation Conclusion 4.23
</TABLE>
<PAGE> 9
RP Financial, LC.
LIST OF TABLES
INDEPENDENCE COMMUNITY BANK CORP.
INDEPENDENCE SAVINGS BANK
<TABLE>
<CAPTION>
TABLE
NUMBER DESCRIPTION PAGE
------ ----------- ----
<S> <C> <C>
1.1 Historical Balance Sheets 1.11
1.2 Historical Income Statements 1.18
2.1 Location of Branches and Deposits 2.1
2.2 Selected Demographic Data 2.8
2.3 Median Household Income Trends 2.10
2.4 Market Area County Demographic/Economic Data 2.11
2.5 Market Area Unemployment Trends 2.13
2.6 Deposit Summary 2.14
3.1 Peer Group of Publicly-Traded Thrifts 3.4
3.2 Balance Sheet Composition and Growth Rates 3.9
3.3 Income as a Percent of Average Assets and Yields, Costs, Spreads 3.12
3.4 Loan Portfolio Composition and Related Information 3.15
3.5 Interest Rate Risk Measures and Net Interest Income Volatility 3.17
3.6 Credit Risk Measures and Related Information 3.19
4.1 Recent Conversions Pricing 4.15
4.2 Market Pricing Comparatives 4.16
4.3 Public Market Pricing 4.25
</TABLE>
<PAGE> 10
RP Financial, LC.
Page 1.1
I. OVERVIEW AND FINANCIAL ANALYSIS
Introduction
Independence Savings Bank ("Independence" or the "Bank") is a
state-chartered stock savings bank headquartered in Brooklyn, New York (Kings
County). In addition to its main office facility, the Bank conducts banking
operations out of 32 full service branch offices located in the New York
metropolitan area including 18 offices in Brooklyn, 9 offices in Queens, one
office in the Boroughs of Manhattan and the Bronx, 2 offices on Staten Island,
and 2 offices in Nassau County on Long Island. A map of the Bank's office
locations is presented in Exhibit I-1. Independence was organized in 1850 and
has operated in Brooklyn and the surrounding communities since that time. The
Bank is a member of the Federal Home Loan Bank ("FHLB") system, with its
deposits insured up to the regulatory maximums by the Bank Insurance Fund
("BIF") and, as a result of prior acquisitions, the Savings Association
Insurance Fund ("SAIF") of the Federal Deposit Insurance Corporation ("FDIC").
As of March 31, 1997, Independence had $3.733 billion in assets, $3.326 billion
in deposits and stockholders' equity of $0.309 billion, or 8.28 percent of
total assets. Tangible stockholders' equity was $0.249 billion, or 6.66
percent of total assets, after excluding intangible assets of $0.060 billion.
Independence's audited financial statements are included by reference as
Exhibit II-2.
In 1992, the Bank completed a reorganization from a mutual savings
bank to a stock savings bank concurrent with a reorganization as a New
York-chartered mutual holding company. Pursuant to the reorganization,
Independence transferred substantially all of its assets and liabilities to a
newly-formed stock savings bank in exchange for 100 percent of the stock
savings bank's common stock issued to Independence Community Bank Corp. (the
"Mutual Holding Company" or "MHC"). No shares were issued publicly at the time
of the reorganization. Subsequent to the mutual holding company
reorganization, the MHC has engaged in no significant activity other than its
100 percent ownership of the Bank. The $108,000 in assets of the MHC, other
than the stock of the Bank, are held in cash and investments. The analysis set
<PAGE> 11
RP Financial, LC.
Page 1.2
forth herein relates to the Bank's reported financial condition and operations
as the MHC assets are at de minimus levels.
Plan of Conversion and Holding Company Reorganization
On April 18, 1997, the Board of Trustees of the MHC and the Board of
Directors of the Bank, adopted a Plan of Conversion, incorporated herein by
reference, in which the MHC will be combined with the Bank simultaneous with
the MHC's conversion to stock form. A newly-formed Delaware stock corporation,
to be also known as Independence Community Bank Corp. will become the stock
holding company of the Bank ("ICBC" or the "Company"). In the reorganization
process, to become effective concurrent with the targeted completion of the
stock sale during the last quarter of calendar 1997: (1) the MHC, which
currently owns all of the issued and outstanding stock of the Bank, will
convert from mutual to stock form and simultaneously merge with and into the
Bank, with the Bank being the surviving entity and the common stock of the Bank
held by the MHC being cancelled; and (2) an interim institution ("Interim") to
be formed as a wholly-owned subsidiary of the Company will then merge into the
Bank, with the Bank being the surviving entity (hereinafter "Independence" or
the "Bank") and becoming a wholly-owned subsidiary of the Company. Upon
consummation of the conversion and reorganization, the $108,000 assets of the
MHC will become assets of the Bank.
Pursuant to the Plan, the Bank and Company will offer shares of
Company Common Stock (the "Conversion Stock") in a Subscription Offering to
Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans and
Supplemental Eligible Account Holders. It is our understanding that any shares
of Conversion Stock remaining unsold after the Subscription Offering will be
offered for sale to the public through a Community Offering, a Syndicated
Community Offering and/or a Public Offering. In addition, the Company intends
to donate to a charitable foundation, immediately following the Conversion,
authorized but unissued shares of Company Common Stock equal to 8 percent of
the number of shares of common stock sold in the offerings.
At this time, no other activities are contemplated for ICBC other than
the ownership of the Bank, a loan to the newly-formed employee stock ownership
plan ("ESOP") and investment
<PAGE> 12
RP Financial, LC.
Page 1.3
of Company cash in investment securities over the near term. In the future,
ICBC may acquire or organize other operating subsidiaries, diversify into other
banking-related activities or repurchase its stock, although there are no
specific plans to undertake such activities at the present time.
Establishment of a Charitable Foundation
In order to enhance the Bank's existing historically strong service
and reinvestment activities in the local community, the Plan of Conversion
provides for the establishment of the Independence Community Bank Foundation, a
private charitable foundation (the "Foundation") in connection with the
conversion. The Plan provides that the Bank and the Company will create the
Foundation and fund it with shares of common stock contributed by the Company
from authorized but unissued shares in an amount equal to 8.0 percent of the
number of shares of common stock sold in the offering. The Bank believes that
the conversion transaction provides a unique opportunity to put its
well-regarded name on an entity that has significant value -- an opportunity
for corporate activities outside of core banking. The Foundation is intended
to complement the Bank's existing community reinvestment activities and will be
dedicated to the promotion of charitable purposes including, among other
things, health, education and welfare programs, community development
activities, cultural efforts, not-for-profit groups and other charitable
purposes within the communities served by the Bank. Funding the Foundation
with shares of common stock of ICBC will enable the local community served to
share in the growth and the profitability of ICBC over the long term through
dividends and price appreciation. As such, the Bank believes the Foundation
will generate a high level of community goodwill toward ICBC, increase the
Bank's local visibility and further enhance the Bank's strong reputation for
community service, thereby strengthening Independence's community banking
franchise.
The formation and issuance of shares to the Foundation will result in
dilution of pro forma book value and earnings per share as the Company will not
receive proceeds from the shares issued to the Foundation.
<PAGE> 13
RP Financial, LC.
Page 1.4
Strategic Overview
Throughout its corporate history, Independence's strategic focus has
been that of a community oriented financial institution, with a primary focus
on meeting the borrowing and savings needs of the local customer base,
particularly the multi-ethnic population in Kings and Queens Counties (the
Boroughs of Brooklyn and Queens, respectively). The Bank has consistently
strived to positively impact the communities served, fulfilling the mandate of
its mutual charter by implementing a business plan which focused on community
service and development, and which also sought to provide financial services to
the disadvantaged and to those with low-to-moderate income levels.
Independence's current strategic posture has been shaped by the Board
of Trustees and current President and Chief Executive Officer ("CEO"). The
Bank's CEO, who has served on the Board of Trustees since 1975 and as CEO since
1985, possesses broad experience in marketing for Fortune 500 companies and has
successfully applied this experience to the Bank. Under the direction of the
current CEO, Independence's operations were initially focused on: (1) building
capital; (2) investing in systems and technology; and (3) re-establishing its
community commitment -- all with the objective of positioning the Bank for
future growth.
With the foregoing objectives largely accomplished in the early 1990s,
coupled with the impact of disintermediation, Independence implemented a
controlled growth and expansion strategy which focused on actively pursuing
acquisitions in the Bank's existing or contiguous markets. The acquisition
strategy has resulted in significant expansion of the Bank in terms of assets,
deposits and markets. In total, Independence has acquired 23 branches
(includes transactions where Independence acquired deposits only and not the
facility), involving total deposits of approximately $1.6 billion in 7 separate
transactions since 1992, as summarized in the schedule on the following page.
The acquisitions undertaken by Independence involved two whole bank
acquisitions for cash (Long Island City Financial in 1992 and Bay Ridge Bancorp
in 1996, both publicly-traded), two acquisitions of branches of failed
institutions purchased from the Resolution Trust Corporation ("RTC") and 3
branch acquisition transactions from other financial institutions, most
significantly 5 branches of First Nationwide from MacAndrews and Forbes
<PAGE> 14
RP Financial, LC.
Page 1.5
during 1996. The Bank resold one of the First Nationwide branches during
fiscal 1997 at a $1.8 million loss, which at the time of sale had $51.4 million
of deposits.
Independence Savings Bank Acquisitions
1992 to Present
<TABLE>
<CAPTION>
Implied
Branches Deposits Deposit
Institution/Seller Date Acquired(1) Acquired Premium
------------------ ---- ----------- -------- -------
($000) (%)
<S> <C> <C> <C> <C>
Westerleigh Savings/RTC 3/27/92 1 $6,300 0.00%
State Savings/RTC 3/27/92 4 220,500 1.57
Long Island City Fin. Corp. 4/7/92 4 260,811 1.08
North Side SB 6/30/92 1 13,400 N.A.
Banco Central 6/10/94 2 24,000 N.A.
Bay Ridge Bancorp 1/5/96 6 425,392 5.58
MacAndrews & Forbes (First Nationwide) 3/15/96 5 615,975 8.08
- -------
Total 23 $1,566,378
</TABLE>
(1) Includes deposits where the Bank did not actually acquire a physical
facility.
Source: SNL Securities.
The substantial majority of growth achieved by Independence has been
achieved through external acquisitions, as growth derived through existing
branches has been relatively limited. The Bank's earliest acquisitions during
the 1992-94 period, have generally been the most financially rewarding, given
the low premiums paid, and as they were completed during a unique window of
opportunity. In stark contrast, the 1996 acquisitions were consummated at
significantly higher premiums, resulting in more modest post-acquisition
returns, particularly in view of the subsequent deposit runoff (most notably at
the First Nationwide branches). Given the highly competitive state of the
financial services industry today, future acquisitions are expected to continue
to be expensive, rendering future growth less profitable than in the past.
Additionally, as the Bank has grown and as the number of available acquisition
candidates has declined, the potential impact of in-market acquisitions is
believed to be declining. Similarly, while the Bank plans to continue to
pursue growth through existing and de novo branches, such growth is expected to
continue its pattern of slow growth.
<PAGE> 15
RP Financial, LC.
Page 1.6
The Bank's acquisitions have provided growth in existing markets as
well as an entry into contiguous markets in New York City. Importantly, most
of the acquired institutions/branches served communities that were similar to
the communities traditionally serviced by Independence, i.e., low-to-moderate
income blue collar workers and/or ethnic communities. The Bank's borrowers and
savers are typically less financially sophisticated, and increasingly are
recent immigrants with limited credit history and work experience. Independence
has sought to serve this segment by offering low fee, low balance savings
accounts and other core deposit accounts, attempting to accommodate the
sometimes unique characteristics of potential borrowers, and by seeking to
tailor its services to the various in-market ethnic communities. At present,
Independence conducts business in 8 foreign languages, as compared to at least
24 languages that are spoken locally.
While Independence has been successful in serving this market segment
for over 150 years, it is not without risk. For example, the Bank's
orientation to immigrant communities entails the risk of mass customer loss in
the event that such groups become disenchanted with the Bank's pricing,
policies or service, as "word of mouth" is very strong among such groups.
Furthermore, the ethnic make-up of the communities surrounding the offices is
subject to rapid change, while overall population is characterized as slow to
no growth. Independence must remain responsive to the changing ethnic group
composition in order to maintain market share. Given the Bank's strategic
orientation and proximity to Wall Street, the Bank has observed the tendency of
customers to transfer accounts out of the Bank as the accumulation of
customers' deposits over time results in large dollar balances.
Independence's operations have been historically oriented toward the
origination of 1-4 family and multi-family mortgage loans funded with retail
deposits. The Bank's market area is primarily urban in nature, and the
majority of the local housing stock consists of apartment buildings and
cooperative apartments ("co-ops"). The Bank's lending activity reflects this
activity, and multi-family mortgage loans comprise the largest segment of
Independence's interest-earning assets ("IEA"). As of March 31, 1997,
multi-family loans totaled $1.365 billion, or 53.7 percent of the gross loan
portfolio and 36.6 percent of assets. Multi-family mortgage loans typically are
secured by "six-story elevator" buildings in New York City (primarily Brooklyn
and Queens). In
<PAGE> 16
RP Financial, LC.
Page 1.7
comparison, at March 31, 1997, the Bank's 1-4 family residential loans totaled
$552.7 million, or 21.8 percent of loans, and cooperative apartment loans to
individuals (secured by shares in a cooperative housing corporation) totaled
$348.0 million , or 13.7 percent of loans. The Bank has more recently expanded
the commercial business and consumer lending areas, however, such loans remain
a much smaller part of the loan portfolio. In the future, Independence intends
to gradually increase the concentration of commercial business and consumer
loans, facilitated through an increased staff of experienced loan officers,
although the expansion is expected to be gradual. Accordingly, it is
contemplated that the origination of multi-family and 1-4 family permanent
mortgage loans will remain the primary lending activity of the Bank.
Independence has typically maintained a relatively conservative
investment strategy. The current investment portfolio is largely comprised of
U.S. Government Treasury securities, which mature in less than five years (at
present the weighted average maturity approximates one year). Additional
investments are made in mutual funds and equity investments in other local
financial institutions, although these investments remain a small portion of
the investment portfolio. The Bank also maintains a portfolio of
mortgage-backed and mortgage-related securities ("MBS"), which serve as a
supplement to the Bank's portfolio of 1-4 family permanent mortgage loans. The
Bank's MBS portfolio consists of traditional pass-through securities, as well
as agency-backed collateralized mortgage obligations ("CMOs). The MBS
portfolio consists of fixed rate securities, which are generally purchased as a
means to deploy excess liquidity at more favorable yields than other investment
alternatives.
Independence's deposit base reflects the composition of the local
customers and residents (primarily Brooklyn and Queens). The deposit base is
characterized by a large number of small depositors, with a significant balance
of passbook savings and transaction accounts (approximating 47.6 percent at
March 31, 1997). In this regard, Independence's favorable lower deposit
composition has supported profitability; however, the proportion of such
accounts has been declining over the last several years, with the growth in the
balance of certificates of deposit ("CDs") being attributable to recent
acquisitions. Thus, to the extent savings accounts continue to erode in favor
of higher cost CDs, earnings may be subject to downward pressures.
<PAGE> 17
RP Financial, LC.
Page 1.8
The Bank's earnings composition is reflective of a traditional thrift
strategy, with pre-tax earnings being derived primarily from the net interest
margin offset by moderate operating expenses. The Bank's below average net
interest margin is attributable to the relatively low level of interest income,
as the interest expense level has generally been favorable. Interest income in
the most recent periods has been adversely affected by: (1) liquidity build-up
to fund the cash buyout of Bay Ridge; (2) high levels of liquidity from both
1996 acquisitions; and (3) the necessity to maintain strong liquidity as a
result of the deposit runoff and transfers following the 1996 acquisitions.
Sources of non-interest operating income have made small to moderate
contributions to profitability, given the Bank's niche as a low-cost provider
of banking services to the local residents. Profitability has been enhanced by
the Bank's ability to maintain an operating expense ratio below industry
averages, reflecting the Bank's leveraged capital position, large average
branch size, centralized lending functions and relative traditional, less
diversified operations. The Bank's strategy has not focused on significant
revenue diversification to compete with larger, more diversified banking and
other financial services companies. As a result, employee levels are moderate
relative to more diverse banking institutions.
The Bank manages interest rate risk through maintaining a strong
liquidity position, selling long term fixed rate 1-4 family loans in the
secondary market (generally with maturities over 15 years), emphasizing
adjustable rate, balloon and shorter-term amortizing loans for portfolio
promoting core retail deposits and maintaining strong capital. Multi-family
and co-op loans, the Bank's primary lending emphasis at present, are generally
adjustable rate in nature, or have balloon features with maturities of up to
seven years. Independence has sought to limit the credit risk associated with
higher risk lending through restricting lending to familiar market areas,
conforming with established underwriting guidelines and limiting loan size.
The Boards of the MHC and the Bank have elected to convert to the
stock form of ownership to support the continued expansion of the Bank's
strategic focus on serving the local communities and residents. The additional
capital realized from conversion proceeds is expected to increase liquidity to
support loan growth, increase the capital cushion to absorb unanticipated loss,
enhance overall profitability and provide the capital for additional growth.
The additional funds realized from the conversion stock offering will also
serve as an alternative funding source
<PAGE> 18
RP Financial, LC.
Page 1.9
to facilitate the Bank's ability to offer competitive rates. The stock form of
organization will facilitate the ability to fund the Foundation with shares of
stock.
Independence's higher equity-to-assets ratio will also better position
the Bank to take advantage of expansion opportunities as they arise. Such
expansion would most likely occur through acquiring branches or other financial
institutions in current or contiguous markets. At this time, except for the
pending opening of a de novo branch in Red Hook, the Bank has no other specific
plans for physical expansion of office facilities. The projected use of
conversion proceeds are highlighted below.
ICBC. ICBC is expected to retain up to 50 percent of the net
conversion proceeds. At present, the Company funds, net of the loan
to the ESOP, are expected to be invested initially into short- and
intermediate-term investment securities with maturities ranging up to
three years. Over time, the Company funds are anticipated to be
utilized for various corporate purposes, possibly including
acquisitions, infusing additional equity into the Bank, repurchases of
common stock, and the payment of regular and/or special cash
dividends. Additionally, the Company may seek to develop some fee
generating business lines which are synergistic with the Bank's
traditional banking operations.
Independence. At least 50 percent of the net conversion proceeds will
be infused into the Bank in exchange for all of the Bank's newly
issued stock. The increase in capital will be less, as the amount to
be borrowed by the ESOP to fund an 8 percent stock purchase will be
deducted from capital. Cash proceeds (i.e., net proceeds less
deposits withdrawn to fund stock purchases) infused into the Bank are
anticipated to become part of general operating funds, and are
expected to initially be invested in short-term investments, used to
repay short-term borrowings and/or to fund loan commitments or loans
in the pipeline.
ICBC anticipates its post-conversion capital ratio will exceed
industry averages in the near term, leading to a below market return on equity
("ROE") until such time as the new capital can be leveraged or deployed in a
prudent manner. Overall, the primary objective is to serve the local
communities, and expand the Bank's size and services to increase shareholder
returns without compromising the Bank's: (1) focused service to the local
low-to-moderate income community served or (2) risk profile. In other words,
the Bank will not abandon its historical strategic focus simply as a result of
the stock conversion. While ICBC will be cognizant of the importance of
shareholder returns, the Bank will not turn its back on certain customer groups
or account types
<PAGE> 19
RP Financial, LC.
Page 1.10
perceived by other banking institutions to be less profitable or glamorous. At
the same time, ICBC recognizes that, conceivably, certain segments of the
investment community may consider this strategic orientation to limit the
ability to fully maximize shareholder value.
Balance Sheet Trends
Growth Trends
The Bank's asset and deposit growth patterns have been uneven
the last several years and key operating ratios are presented in Exhibit I-3.
While the Bank's assets and deposits have grown at an annual rate of 11.8 and
11.3 percent, respectively, during the March 31, 1993 to 1997 period, the
majority of the growth occurred during fiscal 1996. As previously discussed,
the Bank's growth has been fostered through acquisition, as the competitive
nature of the markets served and the slow- to no-growth local population has
limited branch deposit growth. This trend is demonstrated in Table 1.1, as the
4.6 percent annual growth in total assets between March 31, 1993 and 1995 was
funded to a far greater extent by borrowings and equity growth than deposits;
deposits over the same period grew at a 1.7 percent annual rate. The Bank's
two 1996 acquisitions were the principal factors for the Bank's growth during
that fiscal year. Specifically, the total deposits of these two acquisitions
together accounted for 89.7 percent of the Bank's deposit growth during fiscal
1996. The Bank's shrinkage during fiscal year 1997 was attributable to (a) a
subsequent sale of one of the acquired First Nationwide branches with $51
million in deposits (originally for purposes of maintaining a
"well-capitalized" status), (b) deposit runoff following the two 1996
acquisitions and (c) repayment of the majority of the advances from the Federal
Home Loan Bank of New York ("FHLBNY"). The Bank anticipates deposit growth at
the existing branches will continue at a slow pace. With current and expected
post-conversion liquidity, the Bank expects that future asset growth will be
funded through deposits and equity, with limited need for additional borrowings
except in match-funding transactions.
Unlike deposit growth trends, the Bank's loan receivable
balance has experienced more stable growth each year, indicating an annual
growth rate of 14.4 percent since March 31, 1993. The Bank's loan growth
during fiscal 1994 and 1995 required utilization of FHLBNY advances, as deposit
growth and the reduction of cash and investments provided insufficient
<PAGE> 20
Table 1.1
Independence Savings Bank
Historical Balance Sheets
(Amount and Percent of Assets)
<TABLE>
<CAPTION>
For the Year Ended March 31,
--------------------------------------------------------
1993 1994
-------------------------- --------------------------
Amount Pct Amount Pct
------ --- ------ ---
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Total Amount of:
Assets $2,392,351 100.00% $2,549,180 100.00%
Cash and Cash Equivalents 66,366 2.77% 37,667 1.48%
Investment Securities (HTM) 372,088 15.55% 355,886 13.96%
Mortgage-Backed and Related Securities (HTM) 423,506 17.70% 376,704 14.78%
Mortgage-Backed and Related Securities (AFS) 0 0.00% 0 0.00%
Investment Securities (AFS) 0 0.00% 0 0.00%
Loans Receivable (net) 1,461,931 61.11% 1,693,994 66.45%
Intangible Assets 2,592 0.11% 1,728 0.07%
Deposits 2,163,761 90.44% 2,207,441 86.59%
FHLB Advances 3,375 0.14% 60,489 2.37%
Other Borrowings 1,600 0.07% 1,100 0.04%
Stockholders' Equity 178,445 7.46% 220,690 8.66%
Tangible Stockholders' Equity 175,853 7.35% 218,962 8.59%
AFS Adjustment --- --- --- ---
Loans Serviced for Others N/A $162,122
Interest-Earning Assets/Interest-Bearing Liabilities 107% 108%
Non-Performing Assets/Total Assets 0.85% 0.61%
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended March 31,
---------------------------------------------------------
1995 1996(1)
--------------------------- ----------------------------
Amount Pct Amount Pct
------ --- ------ ---
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Total Amount of:
Assets $2,619,935 100.00% $3,869,782 100.00%
Cash and Cash Equivalents 110,394 4.21% 103,192 2.67%
Investment Securities (HTM) 29,427 1.12% 39,995 1.03%
Mortgage-Backed and Related Securities (HTM) 305,545 11.66% 120,702 3.12%
Mortgage-Backed and Related Securities (AFS) 0 0.00% 395,321 10.22%
Investment Securities (AFS) 61,818 2.36% 683,828 17.67%
Loans Receivable (net) 2,020,262 77.11% 2,322,808 60.02%
Intangible Assets 1,023 0.04% 80,268 2.07%
Deposits 2,236,422 85.36% 3,396,890 87.78%
FHLB Advances 67,462 2.57% 56,045 1.45%
Other Borrowings 1,286 0.05% 1,250 0.03%
Stockholders' Equity 259,197 9.89% 289,819 7.49%
Tangible Stockholders' Equity 258,174 9.85% 209,551 5.42%
AFS Adjustment 3,603 0.14% (1,747) -0.05%
Loans Serviced for Others $287,319 $275,306
Interest-Earning Assets/Interest-Bearing Liabilities 110% 109%
Non-Performing Assets/Total Assets 0.67% 0.78%
</TABLE>
<TABLE>
<CAPTION>
3/31/93-
For the Year Ended March 31, 3/31/97
------------------------------------- Annual
1997 1997 Growth Rate
------------------------------------- -----------
Amount Pct Pct
------ ---
($000) (%) (%)
<S> <C> <C> <C>
Total Amount of:
Assets $3,733,316 100.00% 11.77%
Cash and Cash Equivalents 374,636 (2) 10.03% 54.14%
Investment Securities (HTM) 0 0.00% N.M.
Mortgage-Backed and Related Securities (HTM) 0 0.00% N.M.
Mortgage-Backed and Related Securities (AFS) 190,979 5.12% N.M.
Investment Securities (AFS) 357,487 9.58% N.M.
Loans Receivable (net) 2,503,089 67.05% 14.39%
Intangible Assets 60,499 1.62% 119.80%
Deposits 3,325,558 89.08% 11.34%
FHLB Advances 14,550 0.39% 44.09%
Other Borrowings 2,682 0.07% 13.78%
Stockholders' Equity 309,114 8.28% 14.72%
Tangible Stockholders' Equity 248,615 6.66% 9.04%
AFS Adjustment 368 0.01% N.M.
Loans Serviced for Others $314,639
Interest-Earning Assets/Interest-Bearing Liabilities 106%
Non-Performing Assets/Total Assets 0.51%
</TABLE>
(1) Bay Ridge FSB was acquired January 5, 1996 and the First Nationwide
branches were acquired March 15, 1996.
(2) Excludes $107.6 million of accounts receivable, or 2.88 percent of
assets, as a result of end-of-period investment securities sales.
Includes $270.2 million on deposit at the FHLB of New York, or 7.24
percent of assets, as a result of investment securities sales which
settled on or prior to March 31, 1997; these funds were subsequently
reinvested by April 2, 1997 in U.S. Treasury Securities.
Source: Independence's audited financial reports and offering documents. Key
financial ratios for the past 5 fiscal years are presented in Exhibit I-3.
<PAGE> 21
RP Financial, LC.
Page 1.12
funding. Over the March 31, 1993 and 1995 period the loans/assets ratio
increased from 61.1 to 77.1 percent, respectively. In fact, to generate
liquidity to meet loan funding needs, the Bank sold $131.3 million of loans
during fiscal 1995. The Bank limited its fiscal 1996 origination activity due
to the pending cash acquisition of Bay Ridge, and the loans acquired in the
merger supported loan growth during that year. The assets received in the 1996
acquisitions were predominantly cash and investments (the loans/assets ratio at
Bay Ridge was relatively low). As a result, the Bank's loans/assets ratio
declined sharply by March 31, 1996 to 60.0 percent, despite a 15 percent growth
in the loans receivable balance during the year. Continued loan growth and
concurrent asset shrinkage during fiscal 1997 resulted in an increase in the
loans/assets ratio to 67.1 percent by March 31, 1997.
The Bank has historically maintained a conservative approach
in managing cash and investments, with the primary purpose being liquidity
rather than yield maximization. As loan volume has been relatively strong in
recent years, and with the advent of FAS 115, the Bank has increasingly
positioned its investment portfolio for maximum liquidity, designating all
investment and mortgage-backed securities as "available for sale" ("AFS"), as
opposed to previous designation as "held to maturity" ("HTM"), and improving
the liquidity characteristics of the securities purchased. With the Bay Ridge
acquisition, the Bank owned securities which were inconsistent with its stated
policy and objectives. As a result, the Bank engaged in considerable
investment portfolio restructuring just prior to the March 31, 1997 fiscal year
end, resulting in sales of investment and mortgage-backed securities of $397.3
million, which facilitated the repayment of borrowings, reinvestment of funds
in securities with more desirable features and the dramatic shift of
investments from HTM to AFS. While the restructuring contributed to net losses
on the sale of loans and securities of $3.3 million reported in fiscal 1997,
the reinvestment led to a 70 basis point yield enhancement.
Loan Portfolio
Independence's loan portfolio has grown faster than assets
since fiscal year end 1993, showing an annual increase of 14.4 percent, as the
Bank has sought to invest liquidity into whole loans to support profitability
in the face of intense competition. The primary emphasis of Independence's
lending strategy is residential mortgage lending, particularly multi-family
<PAGE> 22
RP Financial, LC.
Page 1.13
mortgage loans, 1-4 family mortgage loans and co-op loans. As of March 31,
1997, multi-family loans totaled $1.365 billion, or 53.7 percent of the gross
loan portfolio, which represents an increase from a level of $0.651 billion,
equal to 44.1 percent of loans as of March 31, 1993. Residential permanent 1-4
family mortgage loans comprise the next largest segment of the loan portfolio,
equaling 21.8 percent of gross loans outstanding at March 31, 1997, versus a
comparative ratio of 21.3 percent at fiscal year end 1993, while cooperative
apartment loans equaled $348.0 million, or 13.7 percent of loans as of the end
of fiscal 1997. Independence's loan servicing portfolio of $314.6 million at
March 31, 1997 reflected net growth of $152.5 million since fiscal year end
1994, with the majority of such growth occurring from two bulk loan sales: (1)
a sale of $67.7 million of co-op loans to a local commercial bank in 1997; and
(2) a multi-family mortgage loan sale to the Federal National Mortgage
Association in 1995. It is Independence's general practice to retain loans in
the portfolio except for fixed rate 1-4 family residential loans with
terms-to-maturity in excess of 15 years which are sold in the secondary market
to limit interest rate risk exposure. However, total sales of single-family
residential loans have totaled only $21.3 million over the last 3 years.
Commercial mortgage lending has not increased to the same
extent as residential mortgage lending and the loan balance equaled $158.3
million, or 6.2 percent of the gross loan portfolio, as of March 31, 1997. The
increase in commercial mortgage loans in fiscal 1996 was primarily attributable
to loans acquired in the Bay Ridge transaction.
During fiscal 1997, commercial mortgage lending increased with
renewed emphasis, approximating $49.9 million. The emphasis on construction
lending is expected to be fairly limited given the nature of the market served.
Consumer loans, including home equity and student loans, represent a small area
of lending diversification for the Bank ($91.8 million, or 3.6 percent of gross
loans receivable at March 31, 1997), followed by commercial business loans
($25.2 million, or 1.0 percent). The Bank intends to emphasize increased
consumer and commercial business lending, facilitated through increased loan
officers, although portfolio increases are expected to be modest.
<PAGE> 23
RP Financial, LC.
Page 1.14
Investment and Mortgage-Backed Securities
The intent of the Bank's investment policy is to provide
adequate liquidity and to generate a favorable return within the context of
supporting the overall credit and interest rate risk objectives. No material
changes are planned for the Bank's investment strategy over the near term. The
Bank anticipates investing the net proceeds from the stock offering into
investments with short-term maturities (qualifying for regulatory liquidity),
gradually redeploying such funds into loans over time. Independence
anticipates the liquidity portfolio will have a similar composition on a
post-conversion basis. The Bank appears to have adequate liquidity in view of
$96.9 million approved loan commitments outstanding and $33.2 million unused
lines of credit. While there are $1.3 billion of CDs scheduled to mature in
one year or less, management believes a significant proportion of such deposits
will remain with the Bank upon maturity.
As of March 31, 1997, the Bank's cash and investments
portfolio totaled $732.1 million, or 19.6 percent of total assets, and all
investment securities were classified as AFS (see Exhibit I-4). The cash and
investments portfolio consisted of cash, funds due from banks and commercial
paper($350.3 million), federal funds sold ($24.3 million), U.S. Government and
Agency securities ($345.2 million), municipal and corporate investments ($1.5
million) and mutual funds and common stocks ($10.6 million). The large balance
of cash and funds due from banks as of March 31, 1997 reflected liquidity
generated from the sale of approximately $397.3 million of U.S. Treasury
securities from portfolio in late March, which resulted in a loss of
approximately $4.5 million; such funds were reinvested in similar securities in
early April resulting in a yield pick-up of approximately 70 basis points (from
6.0 percent to 6.7 percent). Additionally, at March 31, 1997, the Bank
maintained an accounts receivable balance totaling $107.6 million, or 2.88
percent of assets (included in "other assets"), representing a portion of the
portfolio restructuring which had not settled as of March 31, 1997. Upon
settlement in early April 1997, these funds were invested in Treasury
securities.
As stated above, the Bank also invests in certain mutual funds
and common stocks, totaling $10.6 million as of March 31, 1997, consisting of
five equity mutual funds and several common stock investments. The Bank's
investment in equity mutual funds represents a Board approved policy to invest
$600,000 per month in the five equity mutual funds as a long term
<PAGE> 24
RP Financial, LC.
Page 1.15
investment. The Bank's common stock investments primarily consist of
investments in local financial institutions. Additionally, the Bank's FHLB
stock investment equaled $25.8 million as of March 31, 1997.
The Bank's MBS as of March 31, 1997, equal to $191.0 million,
or 5.1 percent of assets, primarily includes traditional pass-through
securities and CMOs secured by adjustable rate and/or shorter term fixed rate
loans. The balance of MBS steadily declined during fiscal 1994 and 1995, but
increased in fiscal 1996 as a result of the Bay Ridge acquisition. Until
fiscal 1996, all MBS were designated HTM. However, with the FASB "window" in
December 1995 and the nature of the MBS acquired in the Bay Ridge transaction,
the Bank designated the majority of MBS as AFS. During the fiscal 1997
investment and mortgage-backed securities portfolio restructuring, the majority
of MBS were sold.
Funding
Deposits are comprised of a large base of savings and
transaction accounts (or "core" deposits) with the balance of funds comprised
of CDs. Growth of the Bank's deposits have largely been a function of
Independence's merger and acquisition activity, as internal growth of deposits
has typically been modest. In this regard, deposits increased by approximately
$1 billion in fiscal 1996 as a result of the two acquisitions. Deposit
balances actually declined in fiscal 1997 as Independence sold an acquired
branch with $51.4 million of deposits in September 1996, and as runoff in the
acquired deposits was heavy.
Borrowings typically have been utilized to a limited degree by
the Bank, declining from the peak fiscal year end balance of $68.7 million to
$17.2 million at March 31, 1997, following recent restructuring. Borrowings
are generally used for liquidity purposes, with borrowings increasing during
periods of strong loan demand or weak deposit growth. Borrowings held by the
Bank primarily consist of FHLB advances, with short- and intermediate-term
maturities. Future borrowing activity is expected to be limited except with
regard to periodic match-funding transactions.
<PAGE> 25
RP Financial, LC.
Page 1.16
Capital
Earnings since March 31, 1993 have led to annual growth in the
balance of GAAP and tangible stockholders' equity of 14.7 and 9.0 percent,
respectively. The fiscal 1996 acquisitions interrupted the growth in the GAAP
and tangible equity ratios, which peaked at March 31, 1995, at 9.89 and 9.85
percent of assets, respectively. As a result of the two acquisitions the
following year, the GAAP and tangible equity ratios fell to 7.49 and 5.42
percent of assets, respectively, as the GAAP equity level increased by $30.6
million while the tangible equity level decreased by $48.6 million -- the
difference being primarily attributable to the $79.2 million growth in
intangible assets reflecting the acquisition premiums paid. The Bank carried
$60.5 million of intangible assets as of March 31, 1997, resulting in tangible
capital of $248.6 million, or 6.66 percent of total assets. The intangible
assets remaining at March 31, 1997 from the 1992 acquisitions is relatively
small, with the majority of the current intangible assets balance resulting
from the two 1996 acquisitions. The $20 million decline in the intangibles
balance during fiscal 1997 was attributable to nearly $8.3 million in annual
amortization, a $6.2 million net reduction relating to various adjustments
pertaining to the Bay Ridge acquisition, and a $5.3 million reduction following
the subsequent sale of one of the acquired First Nationwide branches. As a
result, tangible stockholders' equity demonstrated strong growth during fiscal
1997, approximating $39 million, or 18.6 percent over the prior year's level.
Future reduction in intangibles is expected to be limited to normal
amortization. The Bank maintained capital surpluses relative to all of its
regulatory capital requirements at March 31, 1997, as summarized in the table
below. The addition of conversion proceeds will serve to substantially
strengthen Independence's financial condition and future growth potential.
<TABLE>
<CAPTION>
Capital
Over
Required Actual Required
Capital Capital Amount
------- ------- ------
($000) ($000) ($000)
<S> <C> <C> <C>
Tier I Leverage Capital Ratio $145,064 $247,520 $102,456
Risk-Based Capital: Tier I 98,525 247,520 148,995
Risk-Based Capital: Total 197,050 274,544 77,494
</TABLE>
Source: Prospectus.
<PAGE> 26
RP Financial, LC.
Page 1.17
Income and Expense Trends
Consistent with the Bank's traditional thrift operating strategy, net
interest income and operating expenses represent the major components of core
earnings, as other operating income has been modest, consistent with the Bank's
objective of providing low-cost financial services to local residents. Despite
the Bank's growth through acquisition and balance sheet repositioning, the
Bank's earnings have experienced erosion, even after adjusting for net
non-recurring items. The Bank has reported positive earnings over the last
five fiscal years (see Table 1.2), ranging from a low of 0.46 percent of
average assets for fiscal 1997 to a high of 1.86 percent in fiscal 1994. The
Bank's earnings have been subject to a variety of significant one-time
non-operating income and expense items and an extraordinary item, explained
more fully below. To gain a clearer picture of the Bank's earnings and core
earnings trend, such non-operating and extraordinary items must be excluded.
After adjusting for such items, the Bank's after-tax "core" earnings trend
shows a steady decline, with a more pronounced decline in the profitability
ratio as the Bank's assets have grown, particularly after the two 1996
acquisitions. As described in greater detail below, the core earnings and
profitability erosion has been attributable to:
(1) limited growth in net interest income due to a yield-cost
spread squeeze, reflecting intense competition and the spread
dilution resulting from the two 1996 acquisitions;
(2) increased operating expenses (before intangibles amortization
and the special SAIF assessment), although the ratio to assets
showed some decline following the two 1996 acquisitions and
related synergies; and
(3) increased amortization of intangibles following the two 1996
acquisitions.
To a lesser extent, lower fiscal 1997 earnings reflect limited other operating
income growth and higher loan loss provisions.
Fiscal 1997 earnings of $17.180 million were sharply lower than fiscal
1996 earnings of $35.972 million. The decline largely reflects $12.2 million
gains on sale in fiscal 1996, including $12.7 million of gains on the sale of
mutual funds, as compared to $13.678 million net non-operating expenses in
fiscal 1997, including: (1) the special SAIF assessment on the Oakar deposits
($8.553 million); (2) net losses on the sale of loans and investment securities
as a result
<PAGE> 27
Table 1.2
Independence Savings Bank
Historical Income Statements
<TABLE>
<CAPTION>
For the Year Ended March 31,
-------------------------------------------------------------------------
1993 1994 1995
-------------------- --------------------- --------------------
Amount Pct(1) Amount Pct(1) Amount Pct(1)
------ ------ ------ ------ ------ ------
($000) (%) ($000) (%) ($000) (%)
<S> <C> <C> <C> <C> <C>
Interest Income $180,698 7.96% $179,697 7.89% $191,539 7.52%
Interest Expense (86,297) -3.80% (75,633) -3.32% (80,562) -3.16%
------- ------ ------- ------ ------- ------
Net Interest Income $94,401 4.16% $104,064 4.57% $110,977 4.36%
Provision for Loan Losses (4,462) -0.20% (5,014) -0.22% (3,841) -0.15%
------ ------ ------ ------ ------ ------
Net Interest Income after Provisions $89,939 3.96% $99,050 4.35% $107,136 4.21%
Other Operating Income $5,103 0.22% $6,873 0.30% $6,416 0.25%
Goodwill Amortization (859) -0.04% (864) -0.04% (905) -0.04%
Operating Expense (37,256) -1.64% (41,176) -1.81% (46,464) -1.82%
------- ------ ------- ------ ------ ------
Net Operating Income $56,927 2.51% $63,883 2.81% $66,183 2.60%
Gain(Loss) on Sale of Loans and Securities $283 0.01% $849 0.04% ($3,952) -0.16%
Loss on Sale of Branch Deposits 0 0.00% 0 0.00% 0 0.00%
SAIF Special Assessment 0 0.00% 0 0.00% 0 0.00%
- ----- - ----- - -----
Net Non-Operating Income/Expense $283 0.01% $849 0.04% ($3,952) -0.16%
Net Income Before Tax $57,210 2.52% $64,732 2.84% $62,231 2.44%
Income Taxes (26,319) -1.16% (25,808) -1.13% (27,327) -1.07%
------- ------ ------- ------ ------- ------
Net Inc(Loss) Before Extraordinary Items $30,891 1.36% $38,924 1.71% $34,904 1.37%
Cumulative Effect of Change in
Accounting For Income Taxes $0 0.00% $3,321 0.15% $0 0.00%
-- ----- ------ ----- -- -----
Net Income (Loss) $30,891 1.36% $42,245 1.86% $34,904 1.37%
Adjusted Earnings
- -----------------
Net Operating Income $56,927 2.51% $63,883 2.81% $66,183 2.60%
Tax Effect (2) (26,189) -1.15% (25,470) -1.12% (29,062) -1.14%
------- ------ ------- ------ ------- ------
Adjusted Earnings $30,738 1.35% $38,413 1.69% $37,121 1.46%
Memo:
Yield/Cost Spread 4.00% 4.13% 4.18%
Efficiency Ratio 37.44% 37.12% 39.79%
Return on Equity 19.23% 21.80% 14.81%
Effective Tax Rate 46.00% 39.87% 43.91%
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended March 31,
---------------------------------------------
1996 1997
--------------------- --------------------
Amount Pct(1) Amount Pct(1)
------ ------ ------ ------
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Interest Income $213,100 7.52% $255,303 6.84%
Interest Expense (110,619) -3.91% (140,187) -3.75%
-------- ------ -------- ------
Net Interest Income $102,481 3.62% $115,116 3.08%
Provision for Loan Losses (3,679) -0.13% (7,960) -0.21%
------ ------ ------ ------
Net Interest Income after Provisions $98,802 3.49% $107,156 2.87%
Other Operating Income $7,860 0.28% $8,034 0.22%
Goodwill Amortization (1,842) -0.07% (8,278) -0.22%
Operating Expense (50,288) -1.78% (65,322) -1.75%
------- ------ ------- ------
Net Operating Income $54,532 1.93% $41,590 1.11%
Gain(Loss) on Sale of Loans and Securities $12,222 0.43% ($3,347) -0.09%
Loss on Sale of Branch Deposits 0 0.00% (1,778) -0.05%
SAIF Special Assessment 0 0.00% (8,553) -0.23%
- ----- ------ ------
Net Non-Operating Income/Expense $12,222 0.43% ($13,678) -0.37%
Net Income Before Tax $66,754 2.36% $27,912 0.75%
Income Taxes (30,782) -1.09% (10,732) -0.29%
------- ------ ------- ------
Net Inc(Loss) Before Extraordinary Items $35,972 1.27% $17,180 0.46%
Cumulative Effect of Change in
Accounting For Income Taxes 0 0.00% 0 0.00%
- ----- - ------
Net Income (Loss) $35,972 1.27% $17,180 0.46%
Adjusted Earnings
- -----------------
Net Operating Income $54,532 1.93% $41,590 1.11%
Tax Effect (2) (25,146) -0.89% (15,991) -0.43%
-------- ------ ------- ------
Adjusted Earnings $29,386 1.04% $25,599 0.69%
Memo:
Yield/Cost Spread 3.39% 3.09%
Efficiency Ratio 45.58% 53.82%
Return on Equity 13.13% 5.69%
Effective Tax Rate 46.11% 38.45%
</TABLE>
(1) Ratios are as a percent of average assets.
(2) Based on effective tax rate for each year.
Source: Independence's audited financial reports and offering documents. Key
financial ratios for the past 5 fiscal years are presented in Exhibit I-3.
<PAGE> 28
RP Financial, LC.
Page 1.19
of portfolio restructuring ($3.347 million); and (3) the $1.778 million loss on
sale of the First Nationwide branch. Additionally, Independence reported a
higher level of loan loss provisions in the most recent fiscal year.
Independence's level of net interest income before provisions for loan
losses peaked at 4.57 percent of average assets in fiscal 1994 and has since
trended lower, approximating 3.08 percent of average assets for fiscal 1997.
The increases in the Bank's net interest income ratio from fiscal 1993 to 1994
was primarily attributable to the Bank's asset/liability mix in the generally
declining interest rate environment. The Bank's net interest margin
subsequently declined due primarily to a higher cost of funds, resulting, in
part, from the two 1996 acquisitions and intensified levels of local
competition. In addition, the most recent acquisitions initially increased
liquidity levels, thus depressing overall asset yields.
The impact of interest rates on Independence's net interest margin is
further revealed through examination of the Bank's historical net interest rate
spreads and yields and costs set forth in Exhibit I-5. Trends in the Bank's net
interest margin generally paralleled the trends in the yield-cost spread. As
highlighted in Exhibit I-5, the 1996 acquisitions adversely affected asset
yields in fiscal 1997. Moreover, the rates paid on deposits acquired in the
1996 branch acquisition were above the average paid on the balance of the
Bank's deposit accounts, leading to a net interest rate spread narrowing from
3.39 percent during fiscal 1996 to 3.09 percent during fiscal 1997. Going
forward, Independence's average yield on interest-earning assets can be
expected to diminish as a result of the large infusion of cash in the
conversion pending the longer term deployment of funds into loans. At the same
time, the net interest margin as a percent of average assets should improve as
the infusion of capital increases the ratio of interest-earning assets to
interest-bearing liabilities.
The Bank's adherence to a traditional thrift operating philosophy,
limited level of diversification in the products and services offered, and
community service commitment as a low cost provider of financial services have
all limited other operating income to modest levels. Throughout the period
shown in Table 1.2, non-interest operating income ranged from 0.30 to 0.22
percent of average assets. For fiscal 1997, non-interest operating income
equaled 0.22
<PAGE> 29
RP Financial, LC.
Page 1.20
percent, below the level in recent years due in part to growth in the
proportion of CDs. Fees and service charges earned from retail banking
activities and originating loans have accounted for most of the Bank's
non-interest operating income. In the future, Independence expects to continue
the current strategy of being a provider of lower cost banking products and
services and, thus, non-interest income is expected to remain a limited
contributor to total revenues. Furthermore, while the Bank is investigating
strategies to improve non-interest income through offering products and
services away from core banking, possibly through the holding company
structure, no significant increase in such revenues is expected in the near
term.
Independence's operating expenses as a percent of average assets have
been maintained at a relatively moderate level over the last five fiscal years,
ranging from 1.64 percent to 1.82 percent of average assets, and equaling 1.75
percent for the fiscal year ended March 31, 1997 (figures exclude intangibles
amortization and the special SAIF assessment). Although operating expenses
have increased by $28.1 million since fiscal 1993 to $65.3 million for fiscal
1997, asset growth facilitated through acquisition and subsequent synergies
have enabled the Bank to limit the increase to the operating expense ratio.
Additionally, the Bank's staffing needs have been limited due to the
traditional operations and large average branch deposit balance. As of March
31, 1997, the Bank maintained approximately 756 full time equivalent employees,
for assets per employee of $4.9 million, which is above the industry average.
The intangible assets created in the 1996 acquisitions has resulted in
a significant earnings drag, approximating $8.278 million in amortization
expense, or 0.22 percent of assets, in fiscal 1997. As discussed earlier,
Independence's earlier acquisitions were consummated at relatively favorable
prices, resulting in only a small balance of intangibles, and thus have been
important contributors to earnings growth and profitability. Conversely, the
dramatically more expensive fiscal 1996 acquisitions have produced much lower
returns, even before taking into account the amortization of intangible assets.
It is management's belief that future acquisitions, if any, will continue to be
relatively expensive given the generally strong financial characteristics of
local institutions, the more limited number of available candidates given
recent local consolidation and the high level of local competition for loans
and deposits.
<PAGE> 30
RP Financial, LC.
Page 1.21
Further upward pressure will be placed on the Bank's operating expense
ratio in the forthcoming year due to planned expansion (the Bank was in the
process of completing an acquisition of a single branch office at fiscal year
end and opening a de novo branch office in fiscal 1998). Also, there are
expected to be increased costs associated with operating as a publicly-traded
company, including expenses related to the stock benefit plans.
Independence's efficiency ratio (operating expenses, before
intangibles amortization and the special SAIF assessment, as a percent of the
sum of net interest income and other operating income) of approximately 54
percent during fiscal 1997 reflects an adverse trend relative to the levels of
the last several fiscal years. The adverse trend in the efficiency ratio is
amplified with the addition of intangibles amortization to operating expenses.
Loan loss provisions have impacted the Bank's earnings to various
degrees over the past five fiscal years, ranging from a low of 0.13 percent of
average assets during fiscal 1996 to a high of 0.22 percent of average assets
during fiscal 1994. After dropping to a low in fiscal 1996, the Bank
established higher loss provisions during the past fiscal year, equal to $7.960
million, or 0.21 percent of average assets. Management attributes the increase
to loan loss provisions in fiscal 1997 to the lower quality assets acquired
from Bay Ridge and the increased proportion of higher risk-weight loans in
portfolio. See Exhibit I-6 for details of the Bank's allowance for loan
losses.
Non-operating income and expenses have significantly influenced
earnings for the last several fiscal years. Independence reported
non-operating income equal to $12.222 million, or 0.43 percent of assets, in
fiscal 1996. The Bank reported net non-operating expenses of $13.678 million
(0.37 percent of average assets) in fiscal 1997 attributable to losses on the
sale of investment securities and MBS, a loss on the sale of a branch, and the
special SAIF assessment. During fiscal 1994, the Bank recognized an $0.849
million gain on sale and an extraordinary item of $3.321 million, reflecting
the cumulative effect of the change in accounting for income taxes. During
fiscal 1995, the Bank recognized a $3.952 million loss which was primarily
attributable to loan sales.
<PAGE> 31
RP Financial, LC.
Page 1.22
The Bank's tax rate has ranged from approximately 38.5 to 46.1 percent
over the last 5 years. During fiscal 1997, the Bank engaged in a tax planning
strategy under current tax laws to reduce state and city income taxes through
the formation of Independence Community Realty Corp. ("ICRC"), a wholly-owned
real estate investment trust ("REIT") subsidiary, to which the Bank transferred
$834 million in Bank mortgage loans. The Bank's income from the REIT qualifies
for a 60 percent dividend exclusion, lowering the overall effective tax rate.
The amount of loans transferred to the REIT was limited by the Qualified Thrift
Lender ("QTL") test, as such loans are excluded in the QTL computation.
Interest Rate Risk Management
Based on financial data as of March 31, 1997, the Bank's one and three
year cumulative gap ratios equaled (45.6) percent and (25.4) percent,
respectively (see Exhibit I-7). The Bank primarily manages interest rate risk
from the asset side of the balance sheet by emphasizing investment in
adjustable rate and relatively short-term (five to ten year) balloon loans and
selling longer term (15 years or more) mortgage loans to the secondary market.
Additionally, the Bank maintains a large investment portfolio wherein it seeks
to maintain relatively short average duration (five years or less), all of
which are classified as AFS and could be sold if interest rate conditions
warrant such action. While the Bank's concentration of core deposits has
provided a relatively lower source of funds, such deposits are considered by
the Bank to be short-term from a repricing standpoint in that the impact of a
rate change in core deposits would be immediately felt, and thus can
significantly impact earnings.
The infusion of stock proceeds will serve to further limit Bank's
interest rate risk exposure, as most of the net proceeds will be redeployed
into interest-earning assets and the increase to capital will lessen the
proportion of interest-sensitive liabilities.
Lending Activities and Strategy
The Bank's lending activities have emphasized the origination of
multi-family/co-op and 1-4 family permanent mortgage loans (see Exhibits I-8,
I-9 and I-10, which reflect loan maturities, loan composition and lending
activity, respectively). The Bank's predominant loan type is a local
<PAGE> 32
RP Financial, LC.
Page 1.23
multi-family mortgage loan secured by a six story elevator building with first
floor retail space. To a lesser extent, Independence also makes loans secured
by 1-4 family residential properties. The focus on multi-family mortgage
lending is largely the result of the Bank's presence in a densely populated
urban market. In addition to residential mortgages, Independence has pursued
loan diversification by originating modest amounts of non-residential real
estate, consumer, and commercial business loans.
Multi-family real estate loans, represent the largest concentration of
loans held by the Bank, with such loans typified by loans secured by six story
"elevator" buildings in the New York metropolitan area. The Bank limits
multi-family mortgage loans to properties within the New York metropolitan
area, but the majority of loans are secured by properties located in New York
City. Multi-family loans equaled $1.365 billion, or 53.7 percent of total
loans outstanding at March 31, 1997. Multi-family loans are underwritten with
a maximum LTV ratio of 75 percent, with the value determined by an in-house
appraiser and a minimum debt service ratio of 1.3 times is generally required.
Other factors considered by the Bank in extending multi-family loans include
the borrower's cash flow, the amount of working capital available to the
borrower, and the financial history of the borrower. Independence competes for
multi-family loans primarily on the basis of price and the rapid loan
application and approval process, which is facilitated by utilization of
in-house appraisers.
The Bank's loan portfolio includes loans secured by cooperative
apartment buildings. Loans secured by cooperative apartments equaled $348.0
million, or 13.7 percent of total loans as of the end of fiscal 1997. In
underwriting these loans, the Bank requires lower loan-to-value ratios relative
to single-family residential mortgage loans. In addition, the Bank generally
will not make a loan on a cooperative apartment building unless at least 65
percent of the total units in the building are owner-occupied.
The Bank's typical multi-family residential mortgage loan is
originated with a term to maturity of 5 or 10 years (with principal due in full
at such time). These loans have a fixed rate of interest and may be extended
by the borrower, upon payment of an additional fee, for 5 additional years at
an interest rate based on the 5-year FHLB of New York advance rate plus a
margin,
<PAGE> 33
RP Financial, LC.
Page 1.24
which may not be below the initial interest rate of the loan. The Bank
recently has been offering loans which have fixed rates for the first five
years then adjust at the fifth year and again at the seventh or eighth year to
pre-set rates established at the time of origination. Under the terms of the
Bank's multi-family residential mortgage loans, the principal balance generally
is amortized at the rate of 1 percent per year. Prepayment penalties are
generally assessed on these loans.
Independence originates both fixed rate and adjustable rate permanent
1-4 family loans, with the majority of originations currently being retained
for portfolio. As of March 31, 1997, mortgage loans secured by 1-4 family
properties equaled $552.7 million, or 21.8 percent of total loans. Fixed rate
loans offered by the Bank currently have terms ranging from 10 to 30 years and
are generally underwritten to conform to agency secondary market standards,
including Federal Home Loan Mortgage Corporation ("FHLMC") and Federal National
Mortgage Association ("FNMA"). Jumbo loans are typically underwritten to
FHLMC/FNMA standards with the exception of the size of the loan. Fixed rate
loans with terms exceeding 15 years are sold in the secondary market with
servicing retained, loans with terms of 15 years are either sold or retained
based on the applicable interest rate, and loans with terms of less than 15
years are generally retained for portfolio.
Historically, Independence has been successful in building a portfolio
of 1-4 family adjustable rate mortgage loans ("ARMs") through offering a
variety of loans with different adjustment periods (ARM loans are originated
with adjustment periods from one to seven years). ARM loans with adjustment
periods of greater than three years are subject to repricing every three years
after the initial adjustment period. Independence also offers a 10/1 ARM that
is fixed for 10 years and adjusts annually thereafter. The 1-4 family ARM
loans originated generally have 30 year terms, an annual cap of 2 percent, a
lifetime cap of 10.75 percent, a loan-to-value ("LTV") ratio of 75 percent and
are indexed to the corresponding U.S. Treasury yield plus 275 basis points.
Private mortgage insurance ("PMI") is required on loans originated with an LTV
ratio of greater than 80 percent.
The Bank's non-residential real estate loan portfolio includes loans
secured by warehouses, funeral homes, religious buildings and other
non-residential property; a substantial portion of the
<PAGE> 34
RP Financial, LC.
Page 1.25
portfolio was acquired through the Bay Ridge acquisition. Newly originated
non-residential loans are subject to the same credit risk analyses and require
the same borrower debt and income ratios as multi-family mortgage loans. As of
March 31, 1997, non-residential mortgage loans totaled $158.3 million, equal to
6.2 percent of total loans.
In recent periods the Bank has built a portfolio of home equity lines
of credit ("HELOC") and home equity loans, which totaled $19.5 million as of
March 31, 1997. Home equity loans are extended up to an LTV ratio of 75
percent of the combined balance of the home equity loan and the first lien.
Home equity lines of credit adjust based on the Wall Street Journal Prime rate
and are typically interest only for the first five years of the loan. Other
loans held by the Bank consist primarily of consumer loans, with guaranteed
student loans, personal auto and credit card loans accounting for the largest
segment of Independence's consumer loan portfolio.
To date, commercial business lending has been a relatively minor area
of lending diversification for the Bank, consisting primarily of real estate
secured loans to small businesses in the local market. Commercial business
loans offered by the Bank are generally extended as floating rate loans indexed
to the Wall Street Journal prime rate plus a margin or short-term fixed rate
loans with terms of less than five years. Management has indicated that it is
its intention to expand the commercial loan portfolio moderately in the future.
Exhibit I-10, which shows the Bank's loan originations, purchases and
sales over the past three fiscal years, indicates that multi-family and 1-4
family mortgage lending are the focus of Independence's lending activities.
The level of loan origination activity has been volatile however, totaling
$764.0 million in fiscal 1995, declining to $259.0 million in fiscal 1996, and
increasing to $541.2 million in fiscal 1997. The lower loan origination
volumes posted in fiscal 1996 was attributable to management's desire to build
liquidity in view of the pending completion of the Bay Ridge Bancorp
acquisition for a cash consideration; the acquisition was completed late in
fiscal 1996.
The Bank has engaged in loan sales in the recent past, and follows a
policy of selling all fixed rate residential loan originations with terms to
maturity of greater than 15 years. The Bank has also completed a number of
larger, portfolio loan sales, including: (1) the sale of $119.7
<PAGE> 35
RP Financial, LC.
Page 1.26
million of multi-family mortgage loans to FNMA in fiscal 1995; and (2) sale of
$67.7 million of cooperative apartment loans to a local commercial bank in
fiscal 1997. Loan purchases have been relatively limited but the Bank has been
originating loans generated through broker relationships, particularly with
respect to cooperative apartment loans in Manhattan.
Asset Quality
Independence's asset quality problems have generally been maintained
at moderate levels but the level of classified assets has recently been subject
to increase which management attributes to problems in the portfolio of loans
acquired from Bay Ridge Bancorp. In this regard, management believes the loan
portfolio acquired with Bay Ridge Bancorp is generally of a lesser quality to
loans originated by Independence. As of March 31, 1997, classified assets
totaled $28.8 million, including $14.0 million of loans acquired from Bay Ridge
Bancorp.
As shown in Exhibit I-11, total non-performing assets increased from
$17.4 million as of March 31, 1995 to $30.1 million as of March 31, 1996,
following the completion of the Bay Ridge acquisition in early 1996. The level
of non-performing assets has subsequently declined to $19.2 million at fiscal
year end 1997, equal to 0.51 percent of assets. The level of non-performing
assets held by the Bank is largely attributable to a small number of loans
secured by multifamily and/or non-residential property. As shown in Exhibit
I-11, the Bank's non-performing assets at March 31, 1997 consisted of $16.9
million of non-accruing loans, $1.7 million of accruing loans greater than 90
days delinquent and $540,000 of real estate owned.
Allowances for loan losses are established by the Bank based on the
credit quality of the loan portfolio, the size and composition of the loan
portfolio and trends in the local economy, among other factors. Partially in
response to the perceived risks involved in the Bank's commercial and
multi-family mortgage lending emphasis and the increased level of classified
and criticized assets (partially resulting from assets acquired with Bay Ridge
Bancorp), allowances for loan losses have been subject to increase during the
last several years. As of March 31, 1997, Independence maintained $27.024
million of valuation allowances, equal to 1.06 percent of gross loans
outstanding and 159.62 percent of non-performing loans.
<PAGE> 36
RP Financial, LC.
Page 1.27
Funding Composition and Strategy
Deposits have consistently been the Bank's primary source of funds and
at March 31, 1997 deposits accounted for in excess of 99 percent of
Independence's interest-bearing liabilities. Exhibit I-12 provides the interest
rate and maturity composition of the CD portfolio at March 31, 1997. The
Bank's deposit composition has consistently reflected a relatively large
concentration in transaction and savings accounts, amounting to $1.582 billion,
or 47.6 percent of total deposits at March 31, 1997. From fiscal year end 1996
to 1997, the Bank's concentration of transaction and savings accounts increased
from 47.1 percent of the portfolio, indicating success in retaining such low
cost deposits, although the absolute balance of these accounts declined
slightly. Independence focuses on customer service to obtain and retain
transaction and savings deposits.
The remainder of the Bank's deposit base consists of CDs, with
Independence's current CD composition reflecting a higher concentration of
short-term CDs (maturities of less than one year). As of March 31, 1997, the
CD portfolio totaled $1.744 million, or 52.4 percent of total deposits, with
76.4 percent of those CDs having maturities of less than one year. Jumbo CDs
(CD accounts with balances of $100,000 or more) amounted to $189.8 million, or
10.88 percent of CDs and 5.71 percent of total deposits. Independence
typically does not pay a premium rate for higher balance CDs.
Borrowings typically have not been a prominent funding source for the
Bank, although borrowings have utilized for liquidity purposes in the recent
past (the Bank's liquidity and funding positions are subject to variations due
to the recent acquisitions). Independence's balance of borrowings decreased
from $57.3 million at fiscal year end 1996 to $17.2 million at March 31, 1997,
as Bay Ridge Bancorp had a substantial portfolio of liquidity investments.
Exhibit I-13 shows the Bank's use of borrowed funds during the three fiscal
years. Borrowings held by the Bank consist primarily of FHLB advances, which
have short- and intermediate-term maturities. The Bank may utilize borrowings
going forward, during periods weak deposit growth and/or heavy loan demand or
in periodic match-funding transactions.
<PAGE> 37
RP Financial, LC.
Page 1.28
Subsidiaries
As of March 31, 1997, Independence maintained two active subsidiaries
including Wiljo Development Corp. ("Wiljo") and the previously described ICRC.
The assets of Wiljo consist primarily of office space in the building in which
the Bank's executive offices are located and its limited partnership interest
in the partnership which owns the remaining portion of the building. At March
31, 1997, Wiljo had total assets of $8.3 million and the Bank's equity
investment in Wiljo equaled $7.5 million.
Legal Proceedings
There are two pending class action suits, one alleging a breach of
fiduciary responsibility by the Bay Ridge directors in conjunction with the
acquisition by the Bank and the other alleging that the MHC aided and abetted
the breaches of fiduciary duty allegedly committed by the directors of Bay
Ridge, neither of which specify or claim a particular amount of damanges. The
Bank believes these two claims are without merit and intends to provide for a
vigorous defense. Otherwise, the Bank is involved in routine legal proceedings
occurring in the ordinary course of business which, in the aggregate, are
believed by management to be immaterial to the financial condition of the Bank.
<PAGE> 38
RP Financial, LC.
Page 2.1
II. MARKET AREA
Introduction
The Bank currently conducts operations through a network of 33 branch
offices, with a primary concentration in Kings and Queens Counties, as
summarized in Table 2.1. Approximately 80 percent of the Bank's deposits are
located in Kings and Queens Counties.
From a network of 11 branch office locations in the early 1990s, the
Bank has expanded the branch office network significantly through whole-bank
acquisitions and branch acquisitions. The 1992 acquisition of Long Island City
Financial Corporation and the 1996 acquisition of Bay Ridge Bancorp added a
total of 10 branches, primarily in Brooklyn (Kings County) and Queens County,
to the Bank's office network. Between 1992 and 1996, Independence also
acquired a total of nine branch offices through three separate purchase
transactions, including four branches purchased from the Resolution Trust
Corporation. These purchases expanded the market area coverage in Brooklyn and
Queens and enabled the Bank to enter a new market area, Staten Island (Richmond
County). The Bank has recently announced the forthcoming opening of a branch
office in the Red Hook area of Brooklyn, with the objective of further
expanding its market coverage. Additional detail regarding the Bank's office
locations is included in Exhibit II-1.
Table 2.1
Location of Branches and Deposits
As of March 31, 1997
<TABLE>
<CAPTION>
# of % of Total
County Branches Deposits Deposits
------ -------- -------- --------
($Mil) (%)
<S> <C> <C> <C>
Kings County (Brooklyn) 18 $1,828 55.0%
Queens County (Queens) 9 777 23.4%
Nassau County 2 279 8.4%
Richmond County (Staten Island) 2 263 7.9%
Bronx County 1 116 3.5%
New York City (Manhattan) 1 63 1.9%
- -- ----
Total 33 $3,326 100.0%
</TABLE>
Source: Independence's Prospectus.
<PAGE> 39
RP Financial, LC.
Page 2.2
While the Bank's branch offices serve New York City's five boroughs,
incorporated in the New York Metropolitan Statistical Area ("MSA"), and western
Nassau County, comprising the Nassau/Suffolk MSA (Long Island), the Bank's
activity is dominated by Kings and Queens Counties. A community-oriented
thrift, the Bank considers its primary deposit market to consist of the areas
within one-half mile of each branch office, while the lending market consists
of Kings County (Brooklyn), Queens County (Queens), Richmond County (Staten
Island), New York County (Manhattan, extending south of 110th Street), the
southeastern portion of Bronx County, and the portion of Nassau County to the
west of the Meadowbrook Parkway. Independence serves a wide cross-section of
the population of the New York MSA, and has branch offices located in several
neighborhoods with significant minority populations, representing an estimated
24 language groups. The prevalence of the immigrant populations in the local
market area has led to the Bank's strategy to employ bilingual personnel and
actively market to the various ethnic communities surrounding its branches.
The 1990 U.S. Census found Queens to be the most ethnicly diverse county in the
U.S.
Recent population trends have affected the demographic characteristics
and economic health of New York City, particularly the Bank's primary market
area of Brooklyn and Queens. During the 1990s, New York City has experienced
an influx of an estimated 113,000 new foreign-born immigrants each year. In
comparison to earlier waves of immigrants, recent studies have shown that new
immigrants in general are less likely to use social services and more likely to
have jobs, albeit in lower-paying positions. Recent immigration has curtailed
population out-migration to suburbs and limited housing vacancies (apartments
are in short supply in certain areas). Local school systems are filled to
capacity or are overcrowded due to the larger size of immigrant families.
For example, two neighborhoods in Queens, Jackson Heights and Corona
have undergone significant changes in the population base since the 1970s, when
these areas were primarily Italian and Jewish. Specifically, these areas have
seen a succession of African-Americans, Dominicans, Columbians, and, more
recently, Central Americans, South Americans, Chinese, Indians, Pakistanis,
Koreans and Mexicans. The ethnic makeup of the population base is much more
varied at present, requiring business services to cater to a more varied
population base and in
<PAGE> 40
RP Financial, LC.
Page 2.3
more languages. These changing local demographic characteristics pose
significant challenges to the Bank for attracting and maintaining customers.
The greater New York area represents one of the world's largest money
centers. Independence is one of several hundred financial institutions
operating in New York City and Long Island, a number of which are larger than
the Bank in terms of deposits, scope of operations, and number of branches, and
have greater resources at their disposal than the Bank. In addition, a large
number of smaller institutions operate in the local New York City neighborhoods
and provide significant competition as these institutions serve specific market
niches, such as specific ethnic, immigrant or language groups. Competition for
both loans and deposits has increased over the last several years as the local
economy has gradually recovered and the financial and capital position of local
financial institutions has strengthened. Given the intensity of competition,
community institutions such as the Bank have pursued niche strategies to remain
viable and grow. The New York MSA has also undergone a certain amount of
consolidation in the banking industry in recent years, which has assisted
financial institutions with a community orientation (such as Independence).
The following sections analyze the market area's historical and
forecasted demographic growth trends, economy and competitive environment to
help determine the growth potential and opportunities that exist for the Bank,
and the related impact on value.
National Economy
Economic Trends
Over the past year, the nation's economy has continued to grow,
although concerns remained about the threat of inflation and potentially higher
interest rates. In early-April 1996 inflation concerns became more prominent
as a result of a stronger than expected March 1996 employment report; however,
other economic indicators suggested that the pace of economic growth was
moderate and inflation was under control. Inflation concerns were further
heightened in late-April 1996, as a result of higher oil and commodity prices;
although, wages, which account for most of the inflation measures, did not
signal that inflation was heating up. Unemployment
<PAGE> 41
RP Financial, LC.
Page 2.4
data for both May and June 1996 suggested a strong pace of economic growth,
with the stronger than expected job growth pushing interest rates higher.
However, other economic measures, such as consumer and producer prices,
reflected a more modest pace of economic growth.
The third quarter of 1996 started with a continuation of second
quarter trends, although mid-July Congressional testimony by the Federal
Reserve Chairman hinted of expectations that the economy would taper off
slightly in the second half of 1996. However, much of the economic data
released during July and August 1996 continued to indicate a fairly robust pace
of economic growth. Such economic data included a stronger than expected
increase in July 1996 durable goods orders, the consumer confidence index
hitting a six year high and a decline in the August 1996 unemployment rate.
Comparatively, for the balance of the third quarter 1996, economic data, such
as a decline in August 1996 durable goods orders and smaller than expected
increases in August retail sales and consumer prices, suggested that the
economy was cooling off. A slight increase in the September 1996 unemployment
rate further signaled a slowing economy.
Economic data released at the beginning of the fourth quarter 1996
generally confirmed that the national economy was slowing. October 1996
unemployment remained at 5.2 percent, although the number of new jobs being
added to the economy was lower compared to job growth recorded during
late-spring and summer 1996. Third quarter 1996 GDP growth fell to a 2.2
percent annual rate, versus a comparative 4.7 percent rate in the prior
quarter. Wage data also indicated that inflation was under control, as wages
remained flat for production and nonsupervisory workers in October 1996,
despite a $0.50 increase in the minimum wage rate that became effective on
October 1, 1996. While the November 1996 unemployment rate climbed to 5.4
percent from 5.2 percent in October 1996, inflation concerns were heightened
somewhat by an unexpectedly sharp jump in average hourly earnings. However,
most of the economic data released at the close of 1996, which included jobless
claims rising to a five month high in November 1996 and a decline in November
1996 durable goods orders, suggested that the economy was sluggish and
non-inflationary.
<PAGE> 42
RP Financial, LC.
Page 2.5
While fourth quarter 1996 GDP growth came in at a stronger than
expected 4.7 percent annual growth rate (subsequently revised to 3.9 percent),
most of the economic data released during the beginning of the first quarter of
1997 indicated a continuation of moderate economic growth. Such measures as a
1.9 percent decline in December 1996 durable goods orders and a modest uptick
in the January 1997 unemployment rate to 5.4 percent, versus 5.3 percent in
December 1996, eased concerns that the economy was overheating. However, the
increase in the unemployment rate was attributable to more people who entered
the job force, and some markets were experiencing labor shortages. In
congressional testimony at the end of February 1997, the Federal Reserve
Chairman indicated that he anticipated recent signs of lower job insecurity
among workers would lead to upward pressure in wages, which could possibly
trigger the Federal Reserve to boost interest rates. Signs of inflation became
more notable during March and April 1997, with most economic indicators posting
month-to-month increases from January to February 1997. Most notably, during
February 1997 industrial production increased 0.5 percent, housing starts rose
12.2 percent and the sale of existing homes jumped 9.0 percent. Accelerating
economic growth was further indicated by a decline in the March 1997
unemployment rate to 5.2 percent, versus 5.3 percent for February 1997, and a
higher than expected rise in the March 1997 "core" producer price index, which
posted its largest increase in 18 months. The revised first quarter 1997 GDP
growth rate, released in late May 1997, was an annual rate of 5.8 percent, far
exceeding analysts' projections, and gave more evidence of the strong economy.
The unemployment rate for April 1997 declined to 4.9 percent, also an indicator
of a strong economy.
More recent economic data released in late-May and early June 1997
indicates a potential slowing of the economy, as retail sales have slowed to an
estimated 2 percent annual growth rate in the second quarter, and business
inventories have also increased, which added to the first quarter 1997 GDP
growth figures. New home sales also dropped by 7.7 percent in April 1997, the
sharpest decline in six months. Automobile sales for April and May 1997 have
declined from year-earlier levels, and discounting and other sales efforts are
becoming more common by automakers. Overall, GDP growth for the second quarter
of 1997 is estimated at 2.0 to 2.5 percent, a significant drop from the first
quarter 1997 results.
<PAGE> 43
RP Financial, LC.
Page 2.6
Interest Rate Trends
Consistent with recent economic activity, interest rate trends have
been varied as well over the past year. Generally improving economic
conditions and indications that the Federal Reserve would not cut interest
rates further started an upward trend in interest during the first quarter of
1996. Interest rates continued to edge higher during the second quarter of
1996, as the 30-year U.S. Government bond yield climbed above 7.0 percent
following the stronger than expected May 1996 job growth reported in early-June
1996. In early-July 1996, the release of a strong June 1996 employment report
had a more severe effect on bond prices, as the large drop in unemployment
provided for one of the largest one day declines in bond prices with the yield
on the 30-year benchmark bond increasing from 6.93 percent to 7.18 percent.
After trending lower for a brief period during early- and mid-August 1996,
interest rates moved higher in late-August and early-September 1996 as
inflation concerns were raised by the stronger than expected economic growth.
The Federal Reserve's decision not to raise interest rates at its
September and October 1996 meetings, along with economic data providing
indications of a cooling economy, translated into a declining interest rate
environment during late-September and through most of October 1996. Interest
rates continued to edge lower through November 1996, as the October 1996
economic data suggested that inflationary pressures were non-threatening. Bond
prices declined slightly in early-December 1996, as investors focused on
weakness in the dollar and rising oil prices. Concern over Japanese investors
slowing their buying of U.S. Treasury notes caused bond prices to slide in
mid-December 1996, despite economic data which continued to indicate mild
inflation. Interest rates were somewhat trendless at the close of 1996, as the
Federal Reserve elected not to change interest rates at its December 1996
meeting.
With few inflationary signs, interest rates held steady at the
beginning of 1997, which was followed by a mild easing in interest rates during
the first half of February 1997. Indications of slowing economic growth and
the Federal Reserve's decision to leave rates unchanged at its early-February
1997 meeting spurred the downward trend in interest rates. However, interest
rates edged higher in late-February 1997, following renewed concerns by the
Federal Reserve
<PAGE> 44
RP Financial, LC.
Page 2.7
Chairman over the sharp rise in the stock market during the past two years.
After stabilizing briefly, the strengthening economy and growing expectations
of a rate increase by the Federal Reserve propelled interest rates higher in
late-March 1997.
The Federal Reserve increased short-term interest rates by 0.25
percent in late-March 1997, which was followed by a sharp sell-off in the bond
market. For the first time in six months, the rate on the 30-year benchmark
bond moved above 7.0 percent in late-March 1997. Inflation concerns pushed
interest rates higher during the first half of April 1997, which was followed
by a slight decline in interest rates on rumors of a national budget accord.
Throughout the end of April and the month of May 1997, interest rates continued
to fluctuate in a moderately narrow range as various economic indicators showed
various signs of growth and/or stability in the economy. The most recent
revision to the inflation rate in late-May 1997 showed a 1.6 percent annual
rate. Overconfidence in the nation's economy was relatively strong in early
and mid-June, reflecting little signs of inflation, continued strong stock
market performance and an overall positive business outlook. Interest rates
declined in mid-June, reflecting this positive outlook, and as of June 20,
1997, one- and thirty-year U.S. Government bonds were yielding 5.63 percent and
6.66 percent, respectively. Exhibit II-2 provides historical interest rate
trends from 1991 through June 20, 1997.
Market Area Demographics
Demographic trends in the Bank's market are an important indicator of
future growth potential. The following sections evaluate several key
demographic factors impacting the Bank, including trends in population,
households, income, age distribution and housing permit data for the primary
market areas (see Exhibit II-3). Examined are figures for the U.S. overall,
the State of New York, the New York and Nassau-Suffolk MSAs, the Bank's primary
markets of the five New York City boroughs and Nassau County, and the
individual zip codes in which the Bank operates. In general, the Bank serves
an inner city market consisting of low income/disadvantaged residents, many of
whom are recent immigrants to the United States. The Bank does not target, for
example, the wealthier segments of its market, selecting instead to serve
<PAGE> 45
RP Financial, LC.
Page 2.8
the low income, small transaction, modest saver resident historically served by
the Bank. This customer base exemplifies the Bank's mission to serve all
residents in the local community.
Similar to demographic trends experienced in many of the large urban
areas in the Northeast, growth of total population and households in the Bank's
markets have been relatively sluggish since 1980, and future trends are
expected to be similar (see Exhibit II-3 and the summary in Table 2.2 below).
Specifically, the data shows that between 1990 and 1997 the Kings County
population declined by 0.2 percent annually while the population of Queens
increased by 0.3 percent annually. Population data for the remaining market
area counties ranged from growth of 0.8 percent in Richmond County (Staten
Island), to a decrease of 0.1 percent for Bronx County. In comparison, the
U.S. as a whole increased by an annual rate of 1.1 percent, while the State of
New York experienced a lower population increase of 0.2 percent annually.
Thus, the population trends for Kings and Queens Counties, the location of the
majority of the Bank's business operations, are generally unfavorable in
comparison to other areas.
Table 2.2
Selected Demographic Data
Projected 1997-2002
<TABLE>
<CAPTION>
Annual Annual
Population Growth Household Growth
County 1997-2002 1997-2002
------ --------- ---------
(%) (%)
<S> <C> <C>
United States 1.0% 1.0%
State of New York 0.2% 0.1%
Kings County (Brooklyn) -0.2% -0.3%
Queens County(Queens) 0.2% 0.2%
Nassau County 0.2% 0.2%
Richmond County (Staten Island) 0.7% 0.7%
Bronx County -0.1% -0.2%
New York City (Manhattan) 0.5% 0.5%
</TABLE>
Source: CACI Marketing Systems
<PAGE> 46
RP Financial, LC.
Page 2.9
These population trends are projected to continue over the next five
years through 2001. The population and household trends in the primary market
area represent a continuation of a longer-term course prompted by many forces,
including the already dense population and high cost of living in the New York
metropolitan area. Although the population and number of households
experienced relatively little growth between 1990 and 1997 and are forecasted
to continue to record limited growth through 2002, it is believed such factors
are mitigated in part by the huge overall size of the market (the market area
counties have in excess of 8.6 million residents) which provides ample lending
opportunities and a huge pool of available deposit funds. At the same time,
competition for such funds is very intense.
Median household and per capita income levels in the primary market
area reflect the distinct socioeconomic markets served by the Bank. The Bank's
business operations are concentrated in Kings County, an area that has the
second lowest median income level of all counties in the New York MSA, and
Queens County, which recorded an income level that approximated the MSA
averages. Independence serves a broad market spectrum of the population
ranging from relatively affluent white collar professionals in suburban Nassau
County (which is among the highest-ranked areas in the U.S. in terms of
effective buying income levels) to a generally more blue collar and/or ethnic
customer base in the more urban and more densely populated markets of Kings and
Queens Counties in New York City. Within Kings County (Brooklyn) and Queens
County, a number of the Bank's branch offices are located in neighborhoods with
significant proportions of ethnic residents, including African-Americans and
Asians (such as Koreans, Chinese, etc.). In line with projected national
trends, all market area counties examined are expected to record increasing
levels of household income over the next five years.
<PAGE> 47
RP Financial, LC.
Page 2.10
Table 2.3
Median Household Income Trends
Projected 1997-2002
<TABLE>
<CAPTION>
Median 1997-2002
Household Income % of MSA Percent
County 1997 2002 Avg. 1997 Inc/(Dec)
------ ---- ---- --------- ---------
($) ($) (%) (%)
<S> <C> <C> <C> <C>
United States $36,961 $42,042 101.27% 13.75%
State of New York 36,341 38,815 100.12% 6.81%
New York MSA 36,298 39,559 100.00% 8.98%
Kings County (Brooklyn) $29,778 $34,472 82.03% 15.76%
Queens County (Queens) 38,332 42,693 105.60% 11.38%
Nassau County 59,020 61,974 162.60% 5.01%
Richmond County (Staten Island) 46,775 51,385 128.86% 9.86%
Bronx County 25,969 29,385 71.54% 13.15%
New York City (Manhattan) 37,272 38,207 102.68% 2.51%
</TABLE>
Source: CACI Marketing Systems
Table 2.4 presents various demographic data regarding the counties in
which Independence operates. All of the market area counties, except Nassau and
Richmond, maintain significant African-American populations, ranging from 22.0
percent for Queens County to 38.4 percent for Kings County. Asian/Pacific
Islanders are most prevalent in Queens County and New York County. Residents
with a Hispanic background are also represented in Kings, Queens, Bronx and New
York Counties.
<PAGE> 48
RP Financial, LC.
Page 2.11
Table 2.4
Market Area County Demographic/Economic Data
<TABLE>
<CAPTION>
Racial Mix
------------------------------------------------
Asian/
White Black Pacific Hispanic
----- ----- ------- --------
<S> <C> <C> <C> <C>
Kings 43.0% 38.4% 6.0% 24.9%
Queens 53.0 22.0 15.4 23.7
Nassau 83.7 9.8 4.5 8.2
Richmond 81.4 9.1 6.4 10.8
Bronx 33.3 35.7 3.2 49.9
New York 52.6 23.6 9.2 32.2
</TABLE>
Source: CACI Marketing Systems, 1990 U.S. Census.
Market Area Economy
According to the Federal Reserve Bank of New York, the economies of
New York City and Long Island have improved since the recession of the early
1990s, although job growth has been more moderate than the national averages.
Overall, commercial and residential real estate values in these areas have
generally stabilized. The past causes of the economic downturn in the primary
market area can be attributed to various economic trends that developed in the
market area during the 1980s. Specifically, during this timeframe, the New
York metropolitan area led the nation in job growth in the financial and real
estate ("FIRE") sector, and of the 400,000 new jobs created in the local area
between 1977 and 1987, roughly a third were in the FIRE sector. The rapid
growth in the FIRE sector fueled employment growth in other areas of the
economy, particularly business services catering to the financial sector and
retail trade. At the same time, manufacturing employment declined, and there
was a high level of corporate relocations owing in part to the high cost of
labor and office space in New York City. A side effect of the rapid employment
gains in the relatively high-paying FIRE sector was explosive growth in real
estate, both in terms of construction and values. Home prices, rental rates,
and construction costs rose at rates far exceeding the national average for the
corresponding time period. When the stock market crashed in October 1987, FIRE
employment fell sharply, eventually triggering declines in services, retail
trade, and construction employment. While the New York recession was
originally
<PAGE> 49
RP Financial, LC.
Page 2.12
a regional phenomenon, the national recession that began in early 1990
exacerbated the region's economic problems.
In this regard, co-operative residential buildings ("co-ops") are a
particularly large element of the housing stock of New York City. The value of
co-ops, particularly in Manhattan, have been subject to fluctuation based on
prevailing trends in the local economy and real estate market. Accordingly,
the co-op market in New York City boomed in the 1980s but became depressed in
the latter part of the 1980s following the 1987 stock market crash and
continued to decline in the recession of the early 1990s. With the bull market
in the 1990s, which has provided substantive support for the New York economy,
the co-op market has again been booming as evidenced by rising transaction
values. The risks to co-op lenders such as Independence are two-fold. First,
the Bank has credit risk exposure to the borrower (i.e., the resident of the
co-op unit). Second, many co-ops have underlying loans to the corporation
which are serviced through monthly assessments to the tenants. Thus, if a
portion of the co-op tenants experience financial difficulties, the underlying
loan can go into default thereby placing Independence's collateral at risk.
In recent periods, the New York metropolitan area is again
experiencing job growth in sectors such as services and government, and Wall
Street is experiencing relative prosperity. Manufacturing employment in the
region has continued to decline, although this is more a reflection of national
developments than an indication of weakness unique to New York. In the
Nassau/Suffolk metropolitan area, defense cutbacks had the most significant
negative impact on the economy, as Long Island was one of the nation's leading
centers for defense technology. Manufacturing employment, along with
construction, were the most severely impacted sectors in Nassau County.
Exhibit II-3 presents income and employment trends for the Bank's primary
market area counties and for the state of New York for the most recent
available six year period. The data shows that while total personal income
levels have continued to rise in all areas examined, employment levels in the
specific market area counties such as Kings and Queens Counties have remained
essentially stagnant or have declined. Queens County, in particular, recorded
a decline of approximately 28,000 jobs between 1989 and 1994, or approximately
5.0 percent. Nassau County and New York County also recorded declines in
employment, while the other market area counties recorded employment gains.
Within employment sectors, the services
<PAGE> 50
RP Financial, LC.
Page 2.13
industry showed increases in all market area counties except New York County,
and other significant employment sectors such as manufacturing and government
recorded declines in employment. Additional data is provided in Exhibit II-3
that reveals trends in per capita income levels and other employment and
earnings data. The data shows that per capita income has risen in all market
area counties, along with overall personal income.
Table 2.5 displays unemployment trends for the markets served by the
Bank. The unemployment rate in the Bank's markets in New York City are
traditionally higher than the surrounding suburbs and reflect an increase
relative to the rate reported as of the previous year. The Bank's primary
market area of Kings and Queens Counties recorded unemployment rates higher
than all other counties except for Bronx County. The unemployment rate in
Nassau County is relatively favorable to state and national averages.
Table 2.5
Independence Savings Bank
Market Area Unemployment Trends
<TABLE>
<CAPTION>
March 1996 March 1997
Region Unemployment Unemployment
------ ------------ ------------
<S> <C> <C>
United States 5.8% 5.5%
New York State 6.8% 6.7%
Kings County 10.5% 11.4%
Queens County 8.9% 9.4%
Nassau County 3.9% 3.2%
Richmond County 7.8% 8.6%
Bronx County 10.7% 12.6%
New York County 7.5% 8.1%
</TABLE>
Source: U.S. Bureau of Labor Statistics.
Market Area Deposit Characteristics and Competition
Table 2.6 displays deposit market trends in the six-county area in
which the Bank operates branches from June 30, 1994 to June 30, 1996, using the
latest data available. The New York MSA is a domestic and international hub
for financial services, and has more financial institution
<PAGE> 51
RP Financial, LC.
Page 2.14
TABLE 2.6
INDEPENDENCE SAVINGS BANK
DEPOSIT SUMMARY
<TABLE>
<CAPTION>
As of June 30,
--------------------------------------------------------------------------------------
1994 1996
---------------------------------------- ----------------------------------------
Market # of Market # of
Deposits Share Branches Deposits Share Branches
-------- ----- -------- -------- ----- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
State of New York $ 353,700,121 100.0% 4,847 $ 360,630,139 100.0% 4,725
Commercial Banks 252,899,437 71.5% 3,646 271,012,870 75.1% 3,640
Savings Banks 68,380,593 19.3% 684 64,058,570 17.8% 675
Savings Institutions 32,420,091 9.2% 517 25,558,699 7.1% 410
Kings County (Brooklyn) $ 24,936,466 100.0% 275 $ 25,018,877 100.0% 254
Commercial Banks 8,947,927 35.9% 144 11,508,999 46.0% 145
Savings Banks 12,685,670 50.9% 84 12,177,798 48.7% 83
Savings Institutions 3,302,869 13.2% 47 1,332,180 5.3% 26
Independence SB 1,089,779 4.4% 8 1,920,137 7.7% 18
Queens County (Queens) $ 27,114,934 100.0% 356 $ 27,731,115 100.0% 338
Commercial Banks 10,400,415 38.4% 201 12,042,342 43.4% 197
Savings Banks 9,777,874 36.1% 85 9,259,768 33.4% 81
Savings Institutions 6,936,645 25.6% 70 6,429,005 23.2% 60
Independence SB 704,374 2.6% 9 752,699 2.7% 9
Nassau County (Western Long Island) $ 32,038,693 100.0% 477 $ 31,924,515 100.0% 465
Commercial Banks 15,707,643 49.0% 316 16,839,907 52.7% 323
Savings Banks 11,908,908 37.2% 97 11,106,140 34.8% 88
Savings Institutions 4,422,142 13.8% 64 3,978,468 12.5% 54
Independence SB 260,789 0.8% 2 273,691 0.9% 2
Richmond County (Staten Island) $ 5,000,243 100.0% 78 $ 5,171,062 100.0% 70
Commercial Banks 1,715,014 34.3% 30 1,646,863 31.8% 21
Savings Banks 2,657,695 53.2% 42 3,444,465 66.6% 47
Savings Institutions 627,534 12.6% 6 79,734 1.5% 2
Independence SB 0 0.0% 0 270,406 5.2% 2
Bronx County $ 8,784,823 100.0% 119 $ 9,012,262 100.0% 115
Commercial Banks 5,414,493 61.6% 86 5,692,640 63.2% 81
Savings Banks 2,377,306 27.1% 17 2,395,694 26.6% 19
Savings Institutions 993,024 11.3% 16 923,928 10.3% 15
Independence SB 120,664 1.4% 1 117,141 1.3% 1
New York County (Manhattan) $ 137,817,124 100.0% 607 $ 142,434,725 100.0% 553
Commercial Banks 125,140,753 90.8% 505 133,166,248 93.5% 479
Savings Banks 10,758,500 7.8% 70 8,214,755 5.8% 54
Savings Institutions 1,917,871 1.4% 32 1,053,722 0.7% 20
Independence SB 59,502 0.0% 1 59,557 0.0% 1
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL OF SIX-COUNTY AREA $ 235,692,283 1,912 $ 241,292,556 1,795
INDEPENDENCE SB (TOTAL) $ 2,235,108 21 $ 3,393,631 33
EXISTING BRANCHES AT 6/30/94 $ 2,235,108 21 $ 2,321,640 21
ACQUIRED BRANCHES BY 6/30/96 -- -- $ 1,071,991 12
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Annualized
Deposit
Growth Rate
1994-1996
---------
(%)
<S> <C>
State of New York 1.0%
Commercial Banks 3.5%
Savings Banks -3.2%
Savings Institutions -11.2%
Kings County (Brooklyn) 0.2%
Commercial Banks 13.4%
Savings Banks -2.0%
Savings Institutions -36.5%
Independence SB 32.7%
Queens County (Queens) 1.1%
Commercial Banks 7.6%
Savings Banks -2.7%
Savings Institutions -3.7%
Independence SB 3.4%
Nassau County (Western Long Island) -0.2%
Commercial Banks 3.5%
Savings Banks -3.4%
Savings Institutions -5.1%
Independence SB 2.4%
Richmond County (Staten Island) 1.7%
Commercial Banks -2.0%
Savings Banks 13.8%
Savings Institutions -64.4%
Independence SB N/M
Bronx County 1.3%
Commercial Banks 2.5%
Savings Banks 0.4%
Savings Institutions -3.5%
Independence SB -1.5%
New York County (Manhattan) 1.7%
Commercial Banks 3.2%
Savings Banks -12.6%
Savings Institutions -25.9%
Independence SB 0.0%
- -----------------------------------------------------
TOTAL OF SIX-COUNTY AREA 1.2%
INDEPENDENCE SB (TOTAL) 23.2%
EXISTING BRANCHES AT 6/30/94 1.9%
ACQUIRED BRANCHES BY 6/30/96 --
- -----------------------------------------------------
</TABLE>
Source: FDIC, OTS.
<PAGE> 52
RP Financial, LC.
Page 2.15
headquarters and branches than any other region in the United States. In the
market area of Kings and Queens Counties where a majority of the Bank's
branches are located, Independence competes with a large number of commercial
banks, savings banks and savings institutions, which operate out of
approximately 600 branch offices.
Annual deposit growth in the six-county market area was approximately
1.2 percent between 1994 and 1996. The slow growth in deposits is a trend
experienced nationwide, as the low interest rate environment during this period
enhanced the attractiveness of the stock and bond markets and was a factor
leading to the growth of mutual funds. The deposit market in the counties
served by Independence is dominated by commercial banks and savings banks.
Commercial banks experienced increases in deposits in all market area counties
with the exception of Richmond County between 1994 and 1996. Savings banks
lost deposits in all counties except for Richmond County and Bronx County,
while savings institutions lost deposits in all market area counties,
reflecting a nationwide trend. Independence's deposit base increased most
notably in Kings and Richmond Counties over the period from June 30, 1994 to
1996 as the Bank completed an acquisition of Bay Ridge Bancorp and three
separate branch acquisition transactions that added a total of 12 branches to
the Bank.
Competition among financial institutions in the counties in which the
Bank operates is fierce. As larger institutions compete for market share (in a
slow growth deposit market) to achieve economies of scale, the market
environment for the Bank's products and services is expected to become
increasingly competitive in the future. Smaller institutions will be forced to
either compete with larger institutions on pricing, or to identify and
successfully operate in a "niche" that will allow for operating margins to be
maintained at profitable levels. Although Independence has successful pursued
a strategy of expanding the branch network in order to provide better service
in recent years, other institutions have also expanded in their market areas
and have become more competitive. Independence's low deposit growth recently
in existing branches is partially a reflection of the slow growth market
surrounding the Bank's branch offices. As shown at the bottom of Table 2.6,
while Independence's total deposits increased at an annual rate of 23.2 percent
from June 30, 1994 to June 30, 1996, the Bank's total deposits at branches
existing at June 30, 1994 increased by only a 1.9 percent annual growth rate.
This data illustrates
<PAGE> 53
RP Financial, LC.
Page 2.16
that almost all of the Bank's deposits have been achieved through acquisitions,
and not net deposit growth. The Bank expects the pressures of the marketplace
to intensify in the future as overall market growth remains limited and the
remaining institutions compete for market share to support earnings growth.
* * * * * * * * * *
The Bank's market area contains a diverse economy, a large number of
employers, and a large number of potential customers. The demographics of the
Bank's immediate markets is mixed, however, with slow growth (or declines) and
unemployment levels higher than state and national averages evident in the
markets where the Bank maintains its greater concentration of deposits.
Although the Bank appears to have adopted lending strategies well suited to the
primary market (i.e., residential and multi-family lending), other competitors
with have begun to compete for such loans. Compounding these concerns, the
Bank's deposit market is extremely competitive, which over time can be expected
to erode spreads and market share as larger competitors with greater resources
seek to expand their operations.
<PAGE> 54
RP Financial, LC.
Page 3.1
III. PEER GROUP ANALYSIS
This chapter presents an analysis of Independence's operations versus
a group of comparable savings institutions (the "Peer Group") selected from the
universe of all publicly-traded savings institutions in a manner consistent
with the regulatory valuation guidelines. The basis of the pro forma market
valuation of Independence is derived from the pricing ratios of the Peer Group
institutions, incorporating valuation adjustments for key differences in
relation to the Peer Group. Since no Peer Group can be exactly comparable to
Independence, key areas examined for differences are: financial condition;
profitability, growth and viability of earnings; assets growth; primary market
area; dividends; liquidity of the shares; marketing of the issue; management;
and effect of government regulations and regulatory reform.
Selection of Peer Group
The Peer Group selection process is governed by the general parameters
set forth in the regulatory valuation guidelines. Accordingly, the Peer Group
is comprised of only those publicly-traded savings institutions whose common
stock is either listed on a national exchange (NYSE or AMEX), or is NASDAQ
listed, since the stock trading activity is regularly reported and generally
more frequent than non-publicly traded and closely-held institutions.
Non-listed institutions are inappropriate since the trading activity for
thinly-traded or closely-held stocks is typically highly irregular in terms of
frequency and price and thus may not be a reliable indicator of market value.
We have also excluded from the Peer Group those companies under acquisition or
subject to rumored acquisition, mutual holding companies and recent
conversions, since their pricing ratios are subject to unusual distortion
and/or have limited trading history. A recent listing of the universe of all
publicly-traded savings institutions is included as Exhibit III-1.
Ideally, the Peer Group, which must have at least 10 members to comply
with the regulatory valuation guidelines, should be comprised of locally or
regionally-based institutions with comparable resources, strategies and
financial characteristics. Since there are only just over 400 publicly-traded
institutions nationally, it is typically the case that the Peer Group will be
comprised of institutions with relatively comparable characteristics. To the
extent that differences
<PAGE> 55
RP Financial, LC.
Page 3.2
exist between the converting institution and the Peer Group, valuation
adjustments will be applied to account for the differences.
There are a number of relatively large regional publicly-traded
thrifts in the greater New York metropolitan area, a number of which operate in
the same or similar market areas as Independence. Accordingly, a
regionally-based Peer Group with relatively comparable characteristics was
assembled, although there are several distinct differences as noted herein.
The Peer Group selection process is described more fully below.
First, only New York institutions were considered for the Peer Group
(Exhibit III-2 presents financial and other information regarding the universe
of all New York institutions). While there are 31 publicly-traded thrifts in
New York, a number were not comparable and were excluded from consideration. A
total of 12 institutions were excluded in the first cut as follows: one was in
mutual holding company form, two were subject to acquisition (Greater New York
Savings Bank and RCSB Financial, Inc.), and nine were relatively small (under
$300 million in assets). The institutions under $300 million in assets were
excluded due to their low market capitalization and lower stock liquidity, more
limited resources and market coverage (certain of these institutions only had
one or two offices) and more limited capacity for growth and diversification.
The 19 remaining New York thrifts are large publicly-traded thrifts
generally operating in or near the New York metropolitan area, but it became
necessary to exclude nine of these for reasons described below (Exhibit III-3
presents financial and other information regarding the selected Peer Group
candidates). Long Island Bancorp was excluded as we believe, based on a review
of several stock analyst reports, that the stock price reflects speculation of
up to a $500 million potential windfall from pending litigation against the
U.S. Government relating to supervisory goodwill (which may approximate as much
as $12.25 per share after-tax, representing 57 percent of current book value
per share). Astoria Financial Corporation, despite certain market and
operating similarities, was excluded due to (a) its pending $250 million plus
supervisory goodwill claim (which may approximate as much as $7.70 per share
after-tax, representing 34 percent of current tangible book value per share);
and (b) the recently announced
<PAGE> 56
RP Financial, LC.
Page 3.3
acquisition of Greater New York Savings Bank, a transaction representing 35
percent of Astoria's assets -- thus, while the stock price reflects the large
cash and stock acquisition, the balance sheet, income statement and per share
impact remains unknown publicly until the release of the quarterly results
following the close of the merger. We excluded the two largest of the
remaining institutions, GreenPoint Financial and Dime Bancorp, Incorporated,
$13.3 and 18.5 billion in assets, respectively, because of their very large
scale and uniqueness of operations (GreenPoint specializes in limited
documentation residential lending and nationwide retail mortgage banking and
Dime is highly diversified with a heavy mortgage banking and consumer lending
emphasis and also has a large supervisory goodwill claim based on an original
supervisory goodwill balance exceeding $650 million, representing nearly 40
percent of current tangible book value per share on an after-tax basis). Roslyn
Bancorp was excluded since it only recently completed its conversion (in early
1997) and thus lacks seasoning and reporting history as a public company and
has not invested its conversion proceeds for a full year. New York Bancorp was
excluded due to its highly leveraged position and resulting high return on
equity ("ROE"), which was twice the highest ROE of the Peer Group members, a
factor distinctly reflected in its pricing ratios. Ambanc Holding Company,
with less than $500 million in assets, was excluded due to its low
profitability historically and operating loss for the trailing 12 month period.
Carver Bancorp, Inc., with less than $400 million in assets, was excluded due
to its low historical and current profitability, very limited loan origination
activity and stockholder securities litigation regarding the closing value in
the initial public offering. Finally, MSB Bancorp was excluded due to its
historically low to moderate profitability, low market capitalization and
highly leveraged tangible equity position following branch purchases which
doubled its size during the past year.
As a result of this selection process, we derived a Peer Group of 10
regional New York institutions. Exhibit III-2 identifies these selected Peer
Group companies. Table 3.1 shows the general characteristics of each of the 10
Peer Group companies and Exhibit III-4 provides summary demographic and deposit
market share data for the primary market areas served by each of the Peer Group
companies. All but two of the Peer Group companies have completed their stock
conversions since 1990. Six of the Peer Group members are more leveraged than
Independence immediately following conversion, while the other four Peer Group
members have
<PAGE> 57
RP FINANCIAL, LC.
- --------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.1
Peer Group of Publicly-Traded Thrifts
June 26, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ -------
($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBK ALBANK Fin. Corp. of Albany NY OTC Upstate NY, MA Thrift 3,496 70 06-30 04/92 39.81 510
ROSE T R Financial Corp. of NY (3) OTC New York City NY Thrift 3,404 15 12-31 06/93 23.50 414
RELY Reliance Bancorp, Inc. of NY OTC New York City NY Thrift 1,927 28 06-30 03/94 26.87 237
HAVN Haven Bancorp of Woodhaven NY OTC New York City NY Thrift 1,728 20 12-31 09/93 37.00 160
JSBF JSB Financial, Inc. of NY OTC New York City NY Thrift 1,531 13 12-31 06/90 43.87 431
QCSB Queens County Bancorp of NY (3) OTC New York City NY Thrift 1,373 13 12-31 11/93 46.12 514
DIME Dime Community Bancorp of NY OTC New York City NY Thrift 1,237 15 06-30 06/96 19.12 251
PSBK Progressive Bank, Inc. of NY (3) OTC Southeast NY Thrift 878 17 12-31 08/84 29.62 113
PKPS Poughkeepsie Fin. Corp. of NY OTC Southeast NY Thrift 861 13 12-31 11/85 6.94 87
FFIC Flushing Fin. Corp. of NY (3) OTC New York City NY Thrift 811 7 12-31 11/95 19.87 161
</TABLE>
NOTES: (1) Or most recent date available (M=March, S=September, D=December,
J=June, E=Estimated, and P=Pro Forma)
(2) Operating strategies are: Thrift=Traditional Thrift,
M.B.=Mortgage Banker, R.E.=Real Estate Developer,
Div.=Diversified, and Ret.=Retail Banking.
(3) FDIC savings bank institution.
Source: Corporate offering circulars, data derived from information
published in SNL Securities Quarterly Thrift Report, and financial
reports of publicly-traded thrifts.
Date of Last Update: 06/26/97
<PAGE> 58
RP Financial, LC.
Page 3.5
relatively high capital levels. As a result, Independence's pro forma return
on equity will be at a distinct disadvantage relative to the Peer Group average
but more similar to the four highly capitalized Peer Group members.
While there are expectedly some differences between the Peer Group
companies and Independence, we believe that the Peer Group companies, on
average, provide a good basis for valuation subject to valuation adjustments.
The following sections present a comparison of Independence's financial
condition, income and expense trends, loan composition, interest rate and
credit risk versus the Peer Group as of the most recent publicly available
date. A brief introduction to each Peer Group member appears below, ordered by
descending asset size.
ALBANK Financial Corporation of Albany, NY. ALBANK, with $3.5 billion in
assets and 70 branch offices in upstate New York and, to a lesser extent,
New England, was selected due to its comparable asset size and regional
market area. ALBANK has grown through a series of acquisitions, resulting
in relatively large balance of intangible assets. ALBANK is primarily a
residential lender, and has built a portfolio of residential loans serviced
for others, but is emphasizing loan diversification. Approximately 47
percent of ALBANK's deposits are in core deposits.
TR Financial Corp. of Garden City, NY. TR Financial, with $3.4 billion of
assets and 15 branch offices, was selected due to comparable size and
general location. TR Financial maintains a focus on 1-4 family residential
lending, given its relative suburban location. Approximately 31 percent of
TR Financial's deposits are in core deposits. TR Financial has utilized
borrowings to a large extent to fund investment activity.
Reliance Bancorp of Garden City, NY. Reliance Bancorp, with $1.9 billion in
assets and 28 offices, was selected due to size and general location.
Reliance has grown through cash acquisitions, creating relatively large
balance of intangible assets. Reliance is primarily a 1-4 family
residential lender, given its relative suburban location, and has built a
relatively large portfolio of loans serviced for others. Approximately 48
percent of Reliance's deposits are in core deposits. Reliance has utilized
borrowings to a large extent to fund investment activity. Reliance is
currently in the process of acquiring Continental Bank ($173 million in
assets) for cash and stock.
Haven Bancorp of Woodhaven, NY. Haven Bancorp, with $1.7 billion in assets
and 20 offices, was selected due to size and similar market area. Haven is
primarily a residential lender with an emphasis on multi-family lending,
given the nature of its immediate market area. Haven has also been active
in selling loans and has built a relatively large portfolio of
<PAGE> 59
RP Financial, LC.
Page 3.6
loans serviced for others. Approximately 47 percent of Haven's deposits are
in core deposits. Haven has utilized borrowings to a large extent to fund
investment activity.
JSB Financial, Inc. of Lynbrook, NY. JSB Financial, with $1.5 billion in
assets and 13 offices, was selected due to size and similar market area.
JSB is primarily a multi-family lender for portfolio, given the nature of
its immediate market area. Approximately 66 percent of JSB's deposits are
in core deposits.
Queens County Bancorp of Flushing, NY. Queens County, with $1.4 billion in
assets and 13 offices, was selected due to size and similar market area.
Queens County is primarily a multi-family lender for portfolio, given the
nature of its immediate market area. Approximately 36 percent of Queens
County's deposits are in core deposits.
Dime Community Bancorp, Inc. of Brooklyn, NY. Dime Community, with $1.2
billion in assets and 15 offices, was selected due to size and similar
market area. Dime Community has grown through cash acquisitions, creating
relatively large intangible assets. Dime Community is primarily a
residential lender for portfolio, with particular emphasis in multi-family
lending given the nature of its immediate market area. Approximately 48
percent of Dime Community's deposits are in core deposits.
Progressive Bank, Inc. of Fishkill, NY. Progressive, with $0.9 billion in
assets and 17 branches, was selected due to size and general location.
Progressive has grown through acquisitions accounted for as a purchase.
Progressive is primarily a residential lender, with an emphasis in 1-4
family construction and custom homes lending as well as multi-family
lending. Approximately 53 percent of Progressive's deposits are in core
deposits.
Poughkeepsie Savings Bank, FSB of Poughkeepsie, NY. (Currently reorganizing
under a holding company known as Poughkeepsie Financial Corp.)
Poughkeepsie, with $0.9 billion in assets and 13 branches, was selected due
to size and general location. Poughkeepsie is primarily a residential
lender, with an emphasis in multi-family and construction lending.
Approximately 45 percent of Poughkeepsie's deposits are in core deposits.
Poughkeepsie has utilized borrowings to a large extent to fund lending and
investment activity.
Flushing Financial Corp. of Flushing, NY. Flushing, with $0.8 billion in
assets and 7 branches, was selected due to size and similar market area.
Flushing is primarily a residential lender, with an emphasis in multi-family
lending given the nature of its immediate market area. Approximately 46
percent of Flushing's deposits are in core deposits. Flushing is currently
in the process of acquiring New York Federal Savings Bank ($80 million in
assets) for cash.
<PAGE> 60
RP Financial, LC.
Page 3.7
In the aggregate, the Peer Group companies are more highly leveraged
than the industry average, and more profitable on a core basis, contributing to
the Peer Group's higher core return on equity measure. Overall, the Peer
Group's pricing ratios demonstrate a higher average book value ratio, lower
average earnings multiple and a higher average assets ratio, a similar
comparison relative to New York publicly-traded thrifts, as summarized in the
following table.
<TABLE>
<CAPTION>
As of June 20, 1997
-------------------
Publicly- All
Traded Publicly-
Peer New York Traded
Group Thrifts(1) Thrifts(2)
----- ---------- ----------
<S> <C> <C> <C>
Key Financial Ratios
--------------------
Equity/Assets 11.45% 12.14% 12.40%
Tangible Equity/Assets 10.80% 11.60% 12.10%
Core Return on Assets ("ROA")(3) 1.06% 0.86% 0.87%
Core Return on Equity ("ROE")(3) 9.95% 8.07% 7.84%
Key Pricing Ratios
------------------
Price/Book Ratio ("P/B") 157.64% 136.77% 133.98%
Price/Tangible Book Ratio ("P/TB") 170.82% 145.15% 137.26%
Price/Core Earnings Multiple ("P/E")(3) 17.10x 18.16x 17.77x
Price/Assets Ratio ("P/A") 17.71% 16.49% 16.10%
</TABLE>
(1) Excludes institutions in MHC form and subject to acquisition.
(2) Excludes institutions subject to acquisition.
(3) Adjusted to omit non-operating items (including the special SAIF
assessment) on an after-tax basis and extraordinary items.
The following comparative analyses are based on the latest
publicly-available financial information for both Independence and the Peer
Group, which is as of or for the 12 months ending March 31, 1997.
Financial Condition
The Bank is larger than the average Peer Group member, but during the
past year the Bank has experienced shrinkage while the Peer Group on average
has grown more than 9 percent. The Bank's shrinkage reflects the sale of one
acquired First Nationwide branch, deposit runoff
<PAGE> 61
RP Financial, LC.
Page 3.8
following the acquisitions and repayment of the majority of borrowed funds
following investment portfolio restructuring. Such shrinkage, coupled with
moderate loan growth, contributed to the Bank's decline in cash and investments
(Independence's balance of MBS also declined during the latest year). In
contrast, all but one of the Peer Group members experienced asset growth,
funded through deposit growth and increased utilization of borrowed funds. The
Peer Group's loan and MBS growth was in line with industry averages. (Note:
Data fields designated "NM" or "not meaningful" in the growth section of Table
3.2, representing growth in excess of 100 percent, are excluded from averages.)
The Peer Group is better capitalized than Independence on a
pre-conversion basis, on both a reported and tangible capital basis, and all
Peer Group members meet the FDICIA "well-capitalized" standards. Specifically,
the Bank's current reported and tangible capital levels of 8.3 and 6.7 percent
of assets, respectively, fall below the Peer Group's reported and tangible
capital levels of 11.5 and 10.8 percent, respectively. On a post-conversion
basis, the Bank's pro forma capital is anticipated to exceed the Peer Group's
average, and at least 9 of the 10 Peer Group members', tangible capital ratios.
ICBC's higher pro forma capital position will provide greater leverage
potential than the Peer Group, although in the intermediate term the higher
capital will lead to a pronounced disadvantage in terms of ROE. As a result of
recent acquisitions, the Bank's intangible assets ratio is more than double the
Peer Group average, 1.6 and 0.7 percent of assets, respectively. The Bank's
tangible equity grew more quickly than the average Peer Group member given (a)
the Bank's greater amortization of intangible assets and (b) the various
capital management strategies employed by the Peer Group, particularly
dividends and stock repurchases.
The Bank's interest-earning assets ("IEA") position (including cash
and equivalents) of 91.8 percent of assets appears to compare very unfavorably
to the Peer Group average of 96.5 percent, but the Bank's ratio was understated
by approximately 2.9 percent given the fiscal year end investment portfolio
restructuring pending settlement and subsequent reinvestment into Treasury
Securities in April 1997. Adjusting for this factor, the Bank's ratio of 94.7
percent still compares unfavorably, in part due to the Bank's higher intangible
and fixed assets ratios. The Bank's proportion of cash and investments (even
before the April 1997 reinvestment of funds)
<PAGE> 62
RP FINANCIAL, LC.
- -------------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.2
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of March 31, 1997
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets
-----------------------------------------------------------------------------------------
Cash and Borrowed Subd. Net Goodwill Tng Net MEMO:
Investments Loans MBS Deposits Funds Debt Worth & Intang Worth Pref.Stock
----------- ------ ------ -------- -------- ------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY
- ------------------------------
March 31, 1997 19.6 67.1 5.1 89.1 0.5 0.0 8.3 1.6 6.7 0.0
All Public Companies 18.9 65.8 11.5 72.2 13.9 0.1 12.4 0.3 12.1 0.0
Comparable Group Average 18.4 61.2 16.9 75.5 10.9 0.0 11.5 0.7 10.8 0.0
Mid-Atlantic Companies 18.4 61.2 16.9 75.5 10.9 0.0 11.5 0.7 10.8 0.0
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
ALBK ALBANK Fin. Corp. of Albany NY 16.0 72.6 7.0 85.5 2.9 0.0 9.2 1.2 8.0 0.0
DIME Dime Community Bancorp of NY 21.9 54.4 18.9 77.8 4.3 0.0 15.4 2.2 13.2 0.0
FFIC Flushing Fin. Corp. of NY 26.0 52.2 19.1 73.7 9.4 0.0 16.0 0.0 16.0 0.0
HAVN Haven Bancorp of Woodhaven NY 32.9 53.2 11.6 67.3 23.7 0.0 5.8 0.0 5.8 0.0
JSBF JSB Financial, Inc. of NY 40.1 57.0 0.0 74.5 0.0 0.0 22.2 0.0 22.2 0.0
PKPS Poughkeepsie Fin. Corp. of NY 4.8 74.6 16.0 67.7 22.7 0.0 8.4 0.0 8.4 0.0
PSBK Progressive Bank, Inc. of NY 15.2 66.7 14.3 90.6 0.0 0.0 8.4 1.0 7.4 0.0
QCSB Queens County Bancorp of NY 7.2 85.4 4.9 74.5 7.7 0.0 15.0 0.0 15.0 0.0
RELY Reliance Bancorp, Inc. of NY 5.8 44.7 45.0 72.9 17.7 0.0 8.0 2.4 5.6 0.0
ROSE T R Financial Corp. of NY 14.4 51.5 32.5 70.6 21.1 0.0 6.2 0.0 6.2 0.0
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Annual Growth Rates Regulatory Capital
------------------------------------------------------------- -------------------------
Cash and Loans Borrows. Net Tng Net
Assets Investments & MBS Deposits &Subdebt Worth Worth Tangible Core Reg.Cap.
------ ----------- ------ -------- -------- -------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY
- ------------------------------
March 31, 1997 -3.53 -11.47 -5.10 -2.10 -69.92 6.66 18.64 6.83 10.05 11.15
All Public Companies 13.40 4.85 13.17 8.06 21.40 0.07 -0.77 10.91 10.91 22.71
Comparable Group Average 9.02 4.50 13.75 6.93 17.26 1.91 0.84 8.97 8.66 17.36
Mid-Atlantic Companies 9.02 4.50 13.75 6.93 17.26 1.91 0.84 8.97 8.66 17.36
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
ALBK ALBANK Fin. Corp. of Albany NY 4.90 -26.02 14.47 3.46 NM 0.27 -1.45 7.23 7.23 12.47
DIME Dime Community Bancorp of NY 13.14 12.93 16.40 0.43 NM NM NM 10.45 10.45 21.55
FFIC Flushing Fin. Corp. of NY 9.71 -14.38 24.29 5.48 NM -6.14 -6.14 12.22 12.22 27.06
HAVN Haven Bancorp of Woodhaven NY 16.34 3.10 24.66 6.12 70.03 7.07 7.28 6.81 6.81 14.82
JSBF JSB Financial, Inc. of NY -1.13 -11.18 9.48 -2.33 NM 0.42 0.42 13.76 13.76 20.17
PKPS Poughkeepsie Fin. Corp. of NY 2.62 18.13 2.57 8.74 -9.25 1.69 1.69 6.86 6.86 11.61
PSBK Progressive Bank, Inc. of NY 11.73 29.56 8.71 19.97 -100.00 5.35 -6.67 NM 7.39 14.43
QCSB Queens County Bancorp of NY 9.04 -3.20 10.63 8.08 78.04 -3.79 -3.79 NM 10.09 18.16
RELY Reliance Bancorp, Inc. of NY 10.46 30.15 10.82 4.42 53.63 0.22 4.14 5.43 5.43 14.95
ROSE T R Financial Corp. of NY 13.40 5.87 15.42 14.95 11.14 12.12 12.12 NM 6.39 18.35
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The
information provided in this table has been obtained from sources we
believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 63
RP Financial, LC.
Page 3.10
exceeds the Peer Group average. Largely due to the Bank's $310.3 million sale
of MBS during the last 12 months, the Bank's current MBS ratio of 5.1 percent
of assets falls well below the Peer Group average of 16.9 percent. The Bank
maintains a higher proportion of loans/assets than the Peer Group, 67.1 and
61.2 percent, respectively. In contrast, the Peer Group maintains a higher
loans/deposits ratio than the Bank, 81.1 and 75.3 percent, respectively, owing
the Peer Group's greater utilization of borrowed funds at the end of the
period.
Following recent investment portfolio restructuring, the Bank now
classifies all investment securities and MBS as AFS. In contrast, the split of
AFS and HTM investment and MBS for the Peer Group, on average, as of the most
recent date was 56.2 and 43.8 percent, respectively. Accordingly, the Bank may
be subject to greater stockholders' equity adjustments than the Peer Group in
the future. As of March 31, 1997, the Bank's AFS adjustment represents a
positive 0.12 percent of total stockholders' equity compared to a negative 0.50
percent for the Peer Group, on average.
The Bank's ratio of fixed assets/assets was higher than the Peer Group
average, 1.6 and 0.9 percent, respectively, despite the Bank's higher average
branch deposit size of $100.8 million, as compared to $86.0 million for the
Peer Group. The higher investment may reflect the Bank's program of upgrading
office facilities the last several years.
The Bank's higher interest-bearing liabilities ("IBL") ratio of 89.6
percent of assets, relative to the Peer Group's ratio of 86.4 percent, reflects
the Bank's lower capitalization. On a post-conversion basis, this relationship
can be expected to be reversed with the infusion of new capital and the extent
to which deposits are withdrawn to fund stock purchases. Following the recent
repayment of borrowed funds, the Bank's funding liabilities are primarily
composed of deposits, as the Bank's orrowings/assets ratio approximated 0.5
percent compared to 10.9 percent for the Peer Group. In terms of deposit mix,
approximately 48 percent of the Bank's deposits are in core deposits, in
comparison to the Peer Group's average of approximately 47 percent.
The Peer Group presently appears to maintain greater balance sheet
strength and earnings power than the Bank, owing to the higher IEA/IBL ratio of
111.7 and 105.7 (adjusted for the
<PAGE> 64
RP Financial, LC.
Page 3.11
April 1997 funds reinvestment) percent, respectively. The strengthened capital
position from conversion, the partial withdrawal of funds to purchase
conversion stock and the reinvestment of proceeds in interest-earning assets
should diminish the Bank's comparative disadvantage and improve earnings power.
Income and Expense Trends
Reported profitability for the past 12 months approximated 0.46 and
0.96 percent of average assets for the Bank and the Peer Group, respectively
(see Table 3.3), demonstrating the greater earnings power of the Peer Group.
As described in greater detail below, the Peer Group's earnings advantage was
largely attributable to higher interest and non-interest income and lower loan
loss provisions and net non-operating losses, despite slightly higher operating
expenses. On a core earnings basis, excluding net non-operating items
(including the special SAIF assessment) on an after-tax basis, the Peer Group
maintains its competitive advantage relative to the Bank, 1.06 and 0.69 percent
of average assets, respectively.
Net Interest Income
The Bank's 49 basis point lower net interest income ratio was
primarily attributable to a lower interest income ratio as the interest expense
ratio was comparable to the Peer Group average. The Bank's 43 basis point
lower interest income ratio reflected a lower level of interest-earning assets
as well as overall lower yields (7.37 percent for the Bank compared to 7.55
percent for the Peer Group on average), despite a higher loans/asset ratio and
higher proportion of 100 percent risk weight loans (as discussed in greater
detail later). Following reinvestment of conversion proceeds, the Bank's
interest income ratio can be expected to increase although yields may be
diluted as such funds are initially invested into short- to intermediate-term
securities.
The Bank's comparable interest expense ratio reflected a
similar core deposit mix, with the comparatively lower borrowings utilization
offsetting the Peer Group's advantage provided by higher capitalization. The
Bank's 4.28 percent cost of funds ratio compared closely to the Peer Group's
cost of funds ratio of 4.27 percent. Following infusion of the conversion
<PAGE> 65
RP FINANCIAL, LC.
- --------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.3
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1997
<TABLE>
<CAPTION>
Net Interest Income Other Income
---------------------------- -------------------
Loss NII Total
Net Provis. After Loan R.E. Other Other
Income Income Expense NII on IEA Provis. Fees Oper. Income Income
------ ------ ------- ------ ------- ------- ---- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY
- ------------------------------
March 31, 1997 0.46 6.84 3.75 3.09 0.22 2.87 0.00 0.00 0.22 0.22
All Public Companies 0.69 7.37 4.05 3.32 0.15 3.17 0.12 0.00 0.29 0.41
Comparable Group Average 0.96 7.27 3.69 3.58 0.12 3.47 0.06 -0.02 0.22 0.26
Mid-Atlantic Companies 0.96 7.27 3.69 3.58 0.12 3.47 0.06 -0.02 0.22 0.26
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
ALBK ALBANK Fin. Corp. of Albany NY 0.81 7.32 3.60 3.72 0.18 3.54 0.05 -0.04 0.30 0.30
DIME Dime Community Bancorp of NY 0.92 6.42 2.94 3.48 0.35 3.13 0.04 -0.04 0.17 0.17
FFIC Flushing Fin. Corp. of NY 0.90 7.35 3.52 3.84 0.04 3.80 0.08 -0.04 0.13 0.16
HAVN Haven Bancorp of Woodhaven NY 0.62 7.09 3.99 3.09 0.20 2.89 0.11 -0.02 0.51 0.60
JSBF JSB Financial, Inc. of NY 1.77 7.02 2.60 4.42 0.04 4.38 0.18 0.16 0.03 0.36
PKPS Poughkeepsie Fin. Corp. of NY 0.21 7.51 4.45 3.06 0.12 2.94 -0.03 -0.11 0.30 0.16
PSBK Progressive Bank, Inc. of NY 1.10 7.88 4.05 3.83 0.30 3.53 0.02 -0.08 0.38 0.31
QCSB Queens County Bancorp of NY 1.72 7.92 3.47 4.45 -0.15 4.60 0.03 0.00 0.11 0.14
RELY Reliance Bancorp, Inc. of NY 0.56 7.09 3.77 3.32 0.04 3.28 0.05 -0.03 0.13 0.15
ROSE T R Financial Corp. of NY 0.98 7.11 4.47 2.63 0.04 2.60 0.09 -0.02 0.18 0.24
</TABLE>
<TABLE>
<CAPTION>
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
---------------- -------------- --------------------------
MEMO: MEMO:
G&A Goodwill Net Extrao. Yield Cost Yld-Cost Assets/ Effective
Expense Amort. Gains Items On Assets Of Funds Spread FTE Emp. Tax Rate
------- ------- ------- ------- --------- -------- ------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY
- ------------------------------
March 31, 1997 1.75 0.22 -0.37 0.00 7.37 4.28 3.09 4,942 38.45
All Public Companies 2.22 0.03 -0.29 0.00 7.36 4.55 2.81 4,528 35.55
Comparable Group Average 1.96 0.06 -0.15 0.00 7.55 4.27 3.28 5,102 39.50
Mid-Atlantic Companies 1.96 0.06 -0.15 0.00 7.55 4.27 3.28 5,102 39.50
Comparable Group
- ----------------
Mid-Atlantic Companies
- ----------------------
ALBK ALBANK Fin. Corp. of Albany NY 2.18 0.09 -0.30 0.00 7.65 4.09 3.56 2,978 36.17
DIME Dime Community Bancorp of NY 1.62 0.15 -0.17 0.00 6.77 3.68 3.09 5,113 35.82
FFIC Flushing Fin. Corp. of NY 2.36 0.00 -0.05 0.00 7.60 4.33 3.27 4,056 49.58
HAVN Haven Bancorp of Woodhaven NY 2.10 0.01 -0.43 0.00 7.27 4.36 2.91 3,972 37.02
JSBF JSB Financial, Inc. of NY 1.83 0.00 0.14 0.00 7.25 3.44 3.81 4,312 42.15
PKPS Poughkeepsie Fin. Corp. of NY 2.35 0.00 -0.40 0.00 7.89 4.95 2.94 3,237 40.44
PSBK Progressive Bank, Inc. of NY 2.30 0.16 -0.01 0.00 8.21 4.50 3.71 3,239 19.90
QCSB Queens County Bancorp of NY 1.84 0.00 -0.03 0.00 8.13 4.27 3.86 11,444 42.17
RELY Reliance Bancorp, Inc. of NY 1.70 0.19 -0.44 0.00 7.46 4.18 3.28 4,953 50.44
ROSE T R Financial Corp. of NY 1.35 0.00 0.18 0.00 7.24 4.89 2.35 7,720 41.35
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The
information provided in this table has been obtained from sources we
believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 66
RP Financial, LC.
Page 3.13
proceeds, coupled with partial conversion proceeds funding by deposit
withdrawals, the Bank's interest expense ratio can be expected to decline.
Accordingly, the Bank's net interest income ratio can be
expected to increase on a post-conversion basis, perhaps by as much as 20 basis
points initially.
Provisions for Loan Losses
During the last 12 months, the Bank's provision for loan
losses was higher than the Peer Group average, 0.22 and 0.12 percent of average
assets, respectively. As described in greater detail in a later section, while
the Bank maintains more favorable non-performing assets ratios relative to the
Peer Group, the Bank's greater loan portfolio risk profile and higher net loan
chargeoffs provide support to the Bank's higher loan loss provisions.
Operating Expenses
Before incorporating the intangibles amortization and the
special SAIF assessment, the Bank maintained lower operating expenses than the
Peer Group, approximating 1.75 and 1.96 percent of average assets,
respectively. The Bank's lower operating expense ratio is consistent with the
Bank's lower level of fee income (i.e., less activities to contribute to
overhead) and larger average branch size. The Peer Group's average operating
expense ratio is impacted by the expense of stock plans and the costs of
operating a public company, costs which the Bank has not incurred to date.
Following the conversion transaction, the Bank's operating expenses can be
expected to increase by as much as 7 basis points simply for the cost of the
stock plans alone.
Intangibles Amortization
As would be expected, given the Bank's higher intangibles
level, the Bank's intangibles amortization expense is much higher than the Peer
Group average, 0.22 and 0.06 basis points, respectively.
<PAGE> 67
RP Financial, LC.
Page 3.14
Net Non-Operating Items
The Bank's net non-operating loss was greater than the Peer
Group, on average, given the greater impact of the Bank's investment portfolio
restructuring, loss on the sale of a branch office and the special assessment
on the Bank's Oakar deposits. Several members of the Peer Group also realized
net gains/losses on the sale of assets while five Peer Group members were also
subject to the special SAIF assessment.
Efficiency Ratio
The Bank operates with a similar efficiency ratio (operating
expenses, excluding goodwill amortization and the special SAIF assessment, as a
percent of the sum of net interest income and other operating income) as the
Peer Group, 54 and 51 percent, respectively. The Bank's pre-tax operating
profitability is limited by its higher loan loss provisions and intangibles
amortization.
Income Taxes
The Bank's effective tax rate of 38.5 percent approximates the
Peer Group's average effective tax rate of 39.5 percent. Several of the Peer
Group members have recently engaged similar tax planning strategies as the Bank
to reduce state and city taxes.
Loan Composition
Perhaps one of the greatest differences between Independence and the
Peer Group is loan composition, with the Bank having a substantially greater
risk profile (Table 3.4). The Bank's portfolio is dominated by
multi-family/commercial lending, underscoring its niche strategy, whereas the
Peer Group on average has emphasized 1-4 family lending to a greater extent,
supplemented by MBS investment. Specifically, the Bank's portfolio of
multi-family/commercial loans represents more than 55 percent of loans and MBS
compared to the Peer Group average of 31 percent. In contrast, the Peer
Group's 1-4 family emphasis is underscored by 42 and 22 percent proportions of
1-4 family loans and MBS, respectively, as compared to the Bank's ratios of
approximately 33 and 7 percent, respectively. The Bank's loan portfolio
composition is even
<PAGE> 68
RP FINANCIAL, LC.
- ---------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.4
Loan Portfolio Composition and Related Information
Comparable Institution Analysis
As of March 31, 1997
<TABLE>
<CAPTION>
Portfolio Composition as a Percent of MBS and Loans
---------------------------------------------------------
1-4 Constr. 5+Unit Commerc.
Institution MBS Family & Land Comm RE Business Consumer
----------- ------ ------ ------ ------ -------- --------
(%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY 7.00 32.96 0.00 55.75 0.92 3.36
All Public Companies 14.93 60.76 4.99 13.09 6.16 1.96
Comparable Group Average 22.02 41.50 1.13 31.27 3.29 1.40
Comparable Group
----------------
ALBK ALBANK Fin. Corp. of Albany NY 8.63 68.05 0.83 5.86 8.53 8.42
DIME Dime Community Bancorp of NY 25.75 28.33 0.03 45.62 0.66 0.00
FFIC Flushing Fin. Corp. of NY 28.62 43.85 0.00 27.49 0.32 0.00
HAVN Haven Bancorp of Woodhaven NY 26.69 48.42 0.89 20.75 3.29 0.04
JSBF JSB Financial, Inc. of NY 0.72 9.39 0.28 86.54 3.39 0.16
PKPS Poughkeepsie Fin. Corp. of NY 19.00 48.81 6.72 25.01 3.80 0.88
PSBK Progressive Bank, Inc. of NY 16.47 56.25 1.36 15.08 9.16 1.68
QCSB Queens County Bancorp of NY 6.65 22.95 0.11 70.32 0.06 0.00
RELY Reliance Bancorp, Inc. of NY 50.02 38.85 0.67 7.23 3.29 0.08
ROSE T R Financial Corp. of NY 37.61 50.06 0.39 8.81 0.39 2.73
</TABLE>
<TABLE>
<CAPTION>
RWA/ Serviced Servicing
Institution Assets For Others Assets
----------- ------ ---------- ------
(%) ($000) ($000)
<S> <C> <C> <C>
Independence SB of Brooklyn NY 65.98 314,639 0
All Public Companies 51.24 425,714 3,114
Comparable Group Average 52.01 126,390 409
Comparable Group
----------------
ALBK ALBANK Fin. Corp. of Albany NY 62.80 280,933 594
DIME Dime Community Bancorp of NY 49.18 76,184 27
FFIC Flushing Fin. Corp. of NY 45.29 46,272 0
HAVN Haven Bancorp of Woodhaven NY 48.81 192,546 0
JSBF JSB Financial, Inc. of NY 60.88 15,229 0
PKPS Poughkeepsie Fin. Corp. of NY 65.14 32,013 0
PSBK Progressive Bank, Inc. of NY 56.09 53,920 36
QCSB Queens County Bancorp of NY 58.21 0 0
RELY Reliance Bancorp, Inc. of NY 37.23 424,129 3,302
ROSE T R Financial Corp. of NY 36.44 142,678 127
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The
information provided in this table has been obtained from sources we
believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 69
RP Financial, LC.
Page 3.16
more represented by non-traditional lending due to a substantial portfolio of
loans secured by cooperative residential properties. As of March 31, 1997,
loans on cooperative properties totaled $348.0 million, or 12.7 percent of
gross loans and MBS. These loans are included in the "1-4 family" category in
Table 3.4; thus, the Bank's traditional 1-4 family residential portfolio
totaled only $552.7 million, or 20.2 percent of gross loans receivable and MBS.
By comparison, the Peer Group on average maintained cooperative property loans
of 5.0 percent of gross loans receivable and MBS, as of the latest data
available. The Bank maintained a slightly higher relative portfolio of loans
serviced for others, representing 8.4 of assets, compared to 6.8 percent on
average for the Peer Group.
Both the Bank and the Peer Group are primarily lenders on permanent
real estate, with very limited construction lending, representing 0.0 and 1.1
percent, respectively. Additionally, neither the Bank nor the Peer Group has
restructured their loan portfolios to be commercial bank-like, as the
commercial business and consumer loan portfolios were relatively small,
collectively representing approximately 4.3 and 4.7 percent, respectively.
Consistent with the Bank's comparatively higher risk weight lending
emphasis, the Bank maintains a higher risk weighted assets/assets ratio than
the Peer Group, approximating 66.0 and 52.0 percent, respectively. In fact,
the Bank maintains the highest risk-weighted assets ratio of any Peer Group
member.
Interest Rate Risk
Public companies are not required to report interest rate risk in a
standard fashion and many do not specifically quantify their interest rate risk
on a regular basis. Furthermore, the computation of interest rate risk is
predicated on numerous assumptions, many of which are unique among
institutions. As a result, we have sought to measure interest rate risk
through evaluating balance sheet composition and recent quarterly changes in
net interest income.
Currently, the Bank's asset composition suggests greater interest rate
risk given its lower capitalization and higher non-earning assets, resulting in
a lower IEA/IBL ratio. As a result, the Bank has greater dependence of the
yield-cost spread to sustain the net interest margin. Post-
<PAGE> 70
RP FINANCIAL, LC.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.5
Interest Rate Risk Measures and Net Interest Income Volatility
Comparable Institution Analysis
As of March 31, 1997 or Most Recent Date Available
<TABLE>
<CAPTION>
Balance Sheet Measures
----------------------------
Non-Earn.
Equity/ IEA/ Assets/
Institution Assets IBL Assets
----------- ------ ------ ------
(%) (%) (%)
<S> <C> <C> <C>
Independence SB of Brooklyn NY 6.7 102.5 8.2
All Public Companies 12.2 112.3 4.1
Comparable Group Average 10.8 112.2 3.4
Comparable Group
----------------
ALBK ALBANK Fin. Corp. of Albany NY 8.0 108.3 4.3
DIME Dime Community Bancorp of NY 13.2 115.8 4.9
FFIC Flushing Fin. Corp. of NY 16.0 117.0 2.8
HAVN Haven Bancorp of Woodhaven NY 5.8 107.3 2.3
JSBF JSB Financial, Inc. of NY 22.2 130.3 2.9
PKPS Poughkeepsie Fin. Corp. of NY 8.4 105.7 4.5
PSBK Progressive Bank, Inc. of NY 7.4 106.2 3.9
QCSB Queens County Bancorp of NY 15.0 118.5 2.6
RELY Reliance Bancorp, Inc. of NY 5.6 105.4 4.5
ROSE T R Financial Corp. of NY 6.2 107.3 1.6
</TABLE>
<TABLE>
<CAPTION>
Quarterly Change in Net Interest Income
----------------------------------------------------------
Institution 03/31/97 12/31/96 09/30/96 06/30/96 03/31/96 12/31/95
----------- -------- -------- -------- -------- -------- --------
(change in net interest income is annualized in basis points)
<S> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY -61 13 -7 12 49 0
All Public Companies 1 0 -1 8 2 7
Comparable Group Average 0 10 4 -3 14 6
Comparable Group
----------------
ALBK ALBANK Fin. Corp. of Albany NY 11 -1 -8 -17 31 -5
DIME Dime Community Bancorp of NY 3 46 96 NA NA NA
FFIC Flushing Fin. Corp. of NY -1 0 9 4 25 18
HAVN Haven Bancorp of Woodhaven NY -19 11 -9 10 10 11
JSBF JSB Financial, Inc. of NY 1 0 4 7 0 -1
PKPS Poughkeepsie Fin. Corp. of NY -2 20 9 -24 17 4
PSBK Progressive Bank, Inc. of NY 7 16 -33 12 -1 -3
QCSB Queens County Bancorp of NY 2 4 -13 9 8 2
RELY Reliance Bancorp, Inc. of NY -2 1 -5 -33 27 20
ROSE T R Financial Corp. of NY 4 -1 -10 6 9 7
</TABLE>
NA=Change is greater than 100 basis points during the quarter.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The
information provided in this table has been obtained from sources we
believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 71
RP Financial, LC.
Page 3.18
conversion capitalization should diminish the Bank's current comparative
disadvantage in this regard and thereby lessen interest rate risk. The Bank
maintains a similar composition of core deposits as the Peer Group.
The Bank's greater fluctuation in net interest income during the last
5 quarters, as compared to the Peer Group on average, suggests greater interest
rate risk exposure, although the Bank's data was subject to portfolio
restructuring and the impact of acquisition. It is expected that the infusion
of stock proceeds will serve to enhance the stability of the Bank's net income
and diminish the comparative disadvantage relative to the Peer Group.
Credit Risk
Overall, the Bank's credit risk exposure appears to be somewhat less
than the Peer Group's, on average, as indicated by higher reserve coverage
ratios and lower non-performing loans and assets ratios. As shown in Table
3.6, the Bank's ratio of non-performing loans/loans and non-performing
assets/assets ratios of 0.67 and 0.51 percent, respectively, were more
favorable than the Peer Group's respective ratios of 1.25 and 1.08 percent.
The Bank's loss reserves/loans ratio was comparable to the Peer Group average,
each at 1.08 percent. The Bank's reserve coverage ratio (loss reserves as a
percent of non-performing loans) of 159.6 percent exceeded the Peer Group
average of 117.8 percent. The Bank's ratios are somewhat distorted due to
$14.3 million of balloon loans which are past maturity but are still paying
principal and interest. The Bank's net loan chargeoffs relative to loans of 6
basis points, while comparable to industry averages, exceeded the Peer Group
average of one basis point.
Market Area and Competitive Characteristics
As indicated previously, all ten Peer Group companies are regionally
based, and thus share similar market area and competitive characteristics with
Independence. Seven of the ten Peer Group companies operate in the greater New
York metropolitan area (including eastern Long Island), while the remaining
three operate north of New York City. Thus, both Independence and the Peer
Group are subject to similar market area demographic and economic forces and
trends.
<PAGE> 72
RP FINANCIAL, LC.
- --------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.6
Credit Risk Measures and Related Information
Comparable Institution Analysis
As of March 31, 1997 or Most Recent Date Available
<TABLE>
<CAPTION>
NPAs & Rsrves/
REO/ 90+Del/ NPLs/ Rsrves/ Rsrves/ NPAs &
Institution Assets Assets Loans Loans NPLs 90+Del
----------- ------ ------ ------ ------ ------ --------
(%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY 0.01 0.51 0.67 1.08 159.62 140.84
All Public Companies 0.28 0.83 0.93 0.94 174.02 127.29
Comparable Group Average 0.22 1.08 1.25 1.08 117.83 93.31
Comparable Group
----------------
ALBK ALBANK Fin. Corp. of Albany NY 0.11 0.92 0.85 0.98 115.39 78.02
DIME Dime Community Bancorp of NY 0.15 0.82 1.20 1.45 120.17 97.78
FFIC Flushing Fin. Corp. of NY 0.04 0.27 0.44 1.28 288.53 251.62
HAVN Haven Bancorp of Woodhaven NY 0.06 0.78 1.34 1.23 92.04 84.95
JSBF JSB Financial, Inc. of NY 0.74 1.08 1.66 0.62 37.50 33.09
PKPS Poughkeepsie Fin. Corp. of NY 0.78 4.21 3.38 1.45 42.89 26.20
PSBK Progressive Bank, Inc. of NY 0.15 0.84 0.98 1.58 160.96 127.85
QCSB Queens County Bancorp of NY 0.00 0.75 0.58 0.80 138.21 91.25
RELY Reliance Bancorp, Inc. of NY 0.06 0.75 1.50 0.56 37.60 33.69
ROSE T R Financial Corp. of NY 0.09 0.40 0.57 0.83 145.05 108.61
</TABLE>
<TABLE>
<CAPTION>
Net Loan NLCs/
Institution Chargoffs Loans
----------- --------- ----------
($000) (%)
<S> <C> <C>
Independence SB of Brooklyn NY 1,464 0.06
All Public Companies 270 0.11
Comparable Group Average 203 0.01
Comparable Group
----------------
ALBK ALBANK Fin. Corp. of Albany NY 704 0.11
DIME Dime Community Bancorp of NY 56 0.03
FFIC Flushing Fin. Corp. of NY 232 -0.05
HAVN Haven Bancorp of Woodhaven NY 260 -0.02
JSBF JSB Financial, Inc. of NY 7 0.00
PKPS Poughkeepsie Fin. Corp. of NY 150 -0.33
PSBK Progressive Bank, Inc. of NY 410 0.28
QCSB Queens County Bancorp of NY 1 -0.02
RELY Reliance Bancorp, Inc. of NY 187 0.09
ROSE T R Financial Corp. of NY 19 0.00
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The
information provided in this table has been obtained from sources we
believe are reliable, but we cannot guarantee the accuracy or
completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 73
RP Financial, LC.
Page 3.20
The Peer Group's average asset size approximates $1.7 billion, less
than Independence's pro forma asset base of approximately $4.1 billion. Both,
however, operate substantial branch office networks and compete with other
financial institutions (both larger and smaller) in the greater New York
metropolitan area. In general, the Bank and Peer Group also engage in varied
lending activities, including residential lending, commercial real estate
lending (including multi-family lending) and commercial business and consumer
lending.
<PAGE> 74
RP Financial, LC.
Page 4.1
IV. VALUATION ANALYSIS
Introduction
This chapter presents the valuation analysis, prepared pursuant to the
regulatory valuation guidelines, and valuation adjustments and assumptions used
to determine the estimated pro forma market value of the common stock to be
issued in conjunction with the Bank's conversion transaction.
Appraisal Guidelines
The OTS appraisal guidelines, most recently amended in written form in
October 1994, specify the methodology for estimating the pro forma market value
of an institution pursuant to a mutual-to-stock conversion. Such valuation
guidelines are relied upon by the New York Department of Banking (the
"Department") and the FDIC in evaluating conversion appraisals and neither
agency has issued separate written valuation guidelines. The valuation
methodology provides for: (1) the selection of a peer group of comparable
publicly-traded institutions, excluding those converted for less than a year,
subject to acquisition or in MHC form; (2) a financial and operational
comparison of the subject company to the selected peer group, identifying key
differences and similarities; and (3) a valuation analysis in which the pro
forma market value of the subject company is determined based on the market
pricing of the peer group as of the date of valuation, incorporating valuation
adjustments for key differences. In addition, the pricing characteristics of
recent conversions, both at conversion and in the aftermarket, must be
considered. In MHC conversions, the FDIC's policy is slightly different than
the OTS's policy regarding the treatment of assets held by the mutual holding
company, as evidenced by recent stock conversions of mutual holding companies
involving state-chartered savings bank. However, given the de minimus level of
assets at the MHC level, such policy differences will not have a significant
effect on the valuation.
<PAGE> 75
RP Financial, LC.
Page 4.2
RP Financial Approach to the Valuation
RP Financial's valuation analysis complies with the above-referenced
appraisal guidelines. Accordingly, the valuation incorporates a detailed
analysis based on the Peer Group discussed in Chapter III, incorporating
"fundamental analysis" techniques. Additionally, the valuation incorporates a
"technical analysis" of recently completed stock conversions, including closing
pricing and aftermarket trading of such conversions. It should be noted that
such analyses cannot possibly fully account for all the market forces which
impact trading activity and pricing characteristics of a particular stock on a
given day.
The pro forma market value determined herein is a preliminary value
for the to-be-issued stock. Throughout the conversion process, RP Financial
will: (1) review changes in the Bank's operations and financial condition; (2)
monitor the Bank's operations and financial condition relative to the Peer
Group to identify any fundamental changes; (3) monitor the external factors
affecting value including, but not limited to, local and national economic
conditions, interest rates, and the stock market environment, including the
market for thrift stocks; and (4) monitor pending conversion offerings
(including those in the offering phase) both regionally and nationally. If
material changes should occur during the conversion process, RP Financial will
prepare updated valuation reports reflecting such changes and their related
impact on value, if any, over the course of the conversion process. RP
Financial will also prepare a final valuation update at the closing of the
conversion offering to determine if the preliminary range of value continues to
be appropriate.
The appraised value determined herein is based on the current market
and operating environment for the Bank and for all thrifts. Subsequent changes
in the local and national economy, the legislative and regulatory environment,
the stock market, interest rates, and other external forces (such as natural
disasters or major world events), which may occur from time to time (often with
great unpredictability) may materially impact the market value of all thrift
stocks, including the Bank, or the Bank's value alone. To the extent a change
in factors impacting the Bank's value can be reasonably anticipated and/or
quantified, RP Financial has incorporated the estimated impact into our
analysis.
<PAGE> 76
RP Financial, LC.
Page 4.3
Valuation Analysis
A fundamental analysis discussing similarities and differences
relative to the Peer Group was presented in Chapter III. The following sections
summarize the key differences between the Bank and the Peer Group and how those
differences affect the pro forma valuation. Emphasis is placed on the specific
strengths and weaknesses of the Bank relative to the Peer Group in such key
areas as financial condition, profitability, growth and viability of earnings,
asset growth, primary market area, dividends, liquidity of the issue, marketing
of the issue, management, and the effect of government regulations and/or
regulatory reform. We have also considered the market for thrift stocks, and in
particular new issues, to assess the impact on value of the Bank coming to
market at this time.
1. Financial Condition
The financial condition of an institution is an important determinant
in pro forma market value, because investors typically look to such factors as
liquidity, capital, asset composition and quality, and funding sources in
assessing investment attractiveness. The similarities and differences in the
financial condition of the Bank and the Peer Group are noted as follows:
- Overall A/L Composition. At the present time, the Bank's balance
sheet structure is characterized by a comparatively lower capital
position and higher level of non-earning assets, both of which
weaken the earnings power of the Bank relative to the Peer Group.
The Bank has partially compensated for such disadvantages through
a comparable core deposits/deposits ratio and a higher
risk-weighted assets ratio to realize higher asset yields. The
Peer Group is currently supplementing deposits with higher
borrowings utilization, a factor which has leveraged not only
their equity but also fixed assets and operating expenses. On a
post-conversion basis, the Bank's current A/L disadvantage should
largely diminish with the increased capitalization.
- Credit Quality. The Peer Group maintains a lower risk-weighted
assets ratio, while Independence reported more favorable asset
quality figures.
- Balance Sheet Liquidity. The Bank maintains a higher level of
cash and investment securities (even before factoring in the post
fiscal year end reinvestment of accounts receivable) but a lower
balance of MBS (following recent portfolio restructuring). The
infusion of the stock proceeds will initially increase the Bank's
level of liquid assets pending a longer term use of proceeds. The
Bank appears to have greater current borrowings capacity than the
Peer Group, as the Bank has a
<PAGE> 77
RP Financial, LC.
Page 4.4
much smaller balance of borrowed funds as of the most recent
period. At the same time, the Bank does not appear to have
interest in funding through borrowings given its higher liquidity
position.
- Capital. The Bank operates with a lower pre-conversion capital
ratio than the Peer Group, but this will be reversed on a
post-conversion basis. The increase in capital will depress the
Bank's pro forma return on equity until the proceeds can be
effectively reinvested and leveraged over time. The establishment
of the Foundation will act to reduce the pro forma capital
position.
On balance, we believe the Bank, on a pro forma basis, has less
favorable financial condition characteristics than the Peer Group. Therefore,
we concluded that a slight downward valuation adjustment was warranted for the
Bank's financial strength.
2. Profitability, Growth and Viability of Earnings
Earnings are a key factor in determining pro forma market value, as
the level and risk characteristics of an institution's earnings stream and the
prospects and ability to generate future earnings heavily influence the
multiple the investment community will pay for earnings. The major factors
considered in the valuation are described below.
- Reported Earnings. The Bank reported lower profitability than the
Peer Group, reflecting a comparative disadvantage relative to the
Peer Group in every major component of the earnings statement
except operating expenses (before intangibles amortization and
the special SAIF assessment).
- Core Earnings. The Bank also maintains a less favorable core
earnings posture relative to the Peer Group, net of the special
SAIF assessment and net non-operating items. The Bank's lower net
interest and other income, higher loan loss provisions and
greater intangibles amortization were key factors leading to
lower core earnings, despite lower operating expenses. While
redeployment of conversion proceeds into interest-earning assets
should enhance the Bank's net interest income, operating expenses
for the Bank are expected to increase as well. On a pro forma
basis, the Bank's core profitability is expected to remain below
that of the Peer Group.
- Interest Rate Risk. The Bank's greater perceived interest rate
risk posture should be moderated by the anticipated redeployment
of stock proceeds into interest-earning assets.
- Credit Risk. Loss provisions had a greater impact on the Bank's
earnings in comparison to the Peer Group. In terms of future
exposure to credit quality related losses, while the Bank
maintains a lower ratio of non-performing assets
<PAGE> 78
RP Financial, LC.
Page 4.5
relative to the Peer Group (before the impact of performing past
maturity loans), the Bank's higher risk-weighted assets ratio
suggests greater potential exposure to earnings in the event of
an increase in delinquencies.
- Earnings Growth Potential. The Bank's earnings growth
historically appears to have been a function of asset growth
facilitated through acquisition as well as the local multi-family
lending emphasis. The Bank's most recent acquisitions have been
far less profitable than the earlier acquisitions given the
higher premium required to be paid in the face of intense
competitive bidding. The success of the Bank's lending niche has
led to many institutions, a number with far greater resources, to
pursue the same niche market for loans and deposits, forcing the
Bank to be more interest rate competitive than in the past. As a
result, the Bank's net interest margin has been subject to a
squeeze, leading the Bank to begin revenue diversification
through intensified cross-selling efforts. It is anticipated
that, over time, the net cash proceeds from conversion will be
gradually deployed into loans; however, it is anticipated that
the yield-cost spread immediately following conversion will be
diminished through the initial reinvestment into short-term
securities. The proceeds reinvestment benefit will also be
impacted by the annual expense of the stock plans, operations as
a public company and plans to increase executive/senior
management staffing to address succession. In addition,
Independence plans to spend approximately $2.6 million over the
next two years for a conversion of the data processing system.
Over the longer term, the Bank will have greater capacity to
leverage than the Peer Group, given the Bank's higher pro forma
capital position, positioning the Bank for greater earnings
growth potential.
- Return on Equity. The higher pro forma capital position and lower
pro forma profitability will place the Bank at a distinct
disadvantage relative to the Peer Group in terms of return on
equity.
- Effective Tax Rate. The Bank has recently implemented a tax
planning strategy which several of the Peer Group companies are
pursuing which should lead to a relatively comparable effective
tax rate.
Overall, a moderate downward valuation adjustment was
warranted for profitability, growth and viability of the Bank's earnings.
3. Asset Growth
The Bank's ability to grow will be enhanced on a post-conversion basis
as the infusion of stock proceeds improves the equity-to-assets ratio. The Bank
expects that growth in branch deposits will continue its historical pattern of
slow growth. At the same time, the local
<PAGE> 79
RP Financial, LC.
Page 4.6
community served has experienced deposit erosion over the last several years
and the Bank appears to be strictly committed to the current communities served
rather than pursuing new markets. The number of independent local institutions
which may be potential acquisition targets has become increasingly limited due
to past merger activity, a factor which may inflate the cost of such
acquisitions. At the same time, competition has become increasingly intense in
the Bank's markets, particularly through consolidation of the community
financial institutions by larger New York banks. Also, there has been a
proliferation of ethnic banks or banks with an ethnic emphasis seeking to serve
the rapidly growing local ethnic communities. Thus, while the Bank may be
better capitalized to pursue growth through acquisition, the Peer Group is
subject to the same competitive and market factors limiting deposit growth
potential. Overall, we have applied no adjustment for this factor.
4. Primary Market Area
The general condition of an institution's market area has an impact on
value, as future success is in part dependent upon opportunities for profitable
activities in the local market served. As stated previously, all ten Peer Group
companies are based in southeastern New York State, and thus share similar
market area and competitive characteristics with Independence. Seven of the ten
Peer Group companies operate in the greater New York metropolitan area
(including eastern Long Island), while the remaining three operate north of New
York City. Thus, both Independence and the Peer Group are subject to similar
market area demographic and economic forces and trends.
Summary demographic and deposit market share data for the Bank and
Peer Group is provided in Exhibit III-4. The Peer Group's average asset size
approximates $1.7 billion, less than Independence's pro forma asset base of
approximately $4.1 billion. Both, however, operate substantial branch office
networks and compete with other financial institutions (both larger and
smaller) in the greater New York metropolitan area. In general, the Bank and
Peer Group also engage in varied lending activities, including residential
lending, commercial real estate lending (including multi-family lending) and
commerical business and consumer lending.
On balance, we concluded that no adjustment was appropriate for the
Bank's market area.
<PAGE> 80
RP Financial, LC.
Page 4.7
5. Dividends
While ICBC has not indicated its intention to commence a cash dividend
at this time, the pro forma capitalization and profitability clearly position
ICBC to have the capacity to pay cash dividends comparable to the Peer Group.
Historically, thrifts typically have not established dividend policies at the
time of their conversion to stock ownership. Newly converted institutions, in
general, have preferred to gain market seasoning, establish an earnings track
record and fully invest the conversion proceeds before establishing a dividend
policy. However, during the late 1980s and early 1990s, with negative publicity
surrounding the thrift industry, there was a tendency for more thrifts to
initiate moderate dividend policies concurrent with their conversion as a means
of increasing the attractiveness of the stock offering. Today, fewer
institutions are compelled to initially establish dividend policies at the time
of their conversion offering as (1) industry profitability has improved, (2)
the number of problem thrift institutions has declined, and (3) the stock
market cycle for thrift stocks is generally more favorable than in the
early-1990s. At the same time, with ROE ratios under pressure, due to high
equity levels, well-capitalized institutions are subject to increased
competitive pressures to offer dividends.
As publicly-traded thrifts' capital levels and profitability have
improved and as weakened institutions have been resolved, the proportion of
institutions with cash dividend policies has increased. All 10 institutions in
the Peer Group presently pay regular cash dividends, with implied dividend
yields ranging from 0.94 percent to 3.19 percent. The average dividend yield on
the stocks of the Peer Group institutions was 1.85 percent as of June 20, 1997,
representing an average earnings payout ratio of 30.64 percent. As of June 20,
1997, approximately 83 percent of all publicly-traded thrifts had adopted cash
dividend policies (see Exhibit IV-1), exhibiting an average yield of 2.12
percent and an average payout ratio of 41.42 percent. The dividend paying
thrifts generally maintain higher than average profitability ratios,
facilitating their ability to pay cash dividends, which supports a market
pricing premium on average relative to non-dividend paying thrifts.
<PAGE> 81
RP Financial, LC.
Page 4.8
Given ICBC's capacity to pay a dividend comparable to the Peer Group
based on pro forma capitalization and profitability, and since no regulatory
hurdle exists, we have applied no adjustment for this factor.
6. Liquidity of the Shares
The Peer Group is by definition composed of companies that are traded
in the public markets, all of which trade on the NASDAQ system. Typically, the
number of shares outstanding and market capitalization provides an indication
of how much liquidity there will be in a particular stock. The market
capitalization of the Peer Group companies ranged from $87 million to $514
million as of June 20, 1997, with an average market value of $288 million. The
shares outstanding of the Peer Group members ranged from 3.8 million to 17.6
million, with an average of approximately 10.2 million. The Bank's pro forma
market value and shares outstanding is expected to fall above the upper end of
the comparative Peer Group averages. Since large relatively liquid companies
comprise the Peer Group, no adjustment was considered necessary for this
factor.
7. Marketing of the Issue
Three separate markets exist for thrift stocks: (1) the after-market
for public companies, in which trading activity is regular and investment
decisions are made based upon financial condition, earnings, capital, ROE and
dividends; (2) the new issue market in which converting thrifts are evaluated
on the basis of the same factors but on a pro forma basis without the benefit
of a stock trading history and reporting quarterly operating results as a
publicly-held company; and (3) the thrift acquisition market. All three of
these markets were considered in the valuation of the Bank's to-be-issued
stock.
A. The Public Market
The value of publicly-traded thrift stocks is easily
measurable, and is tracked by most investment houses and related organizations.
Exhibit IV-1 provides pricing and financial data on all publicly-traded
thrifts. In general, thrift stock values react to market stimuli such as
interest rates, inflation, perceived industry health, projected rates of
economic growth, regulatory
<PAGE> 82
RP Financial, LC.
Page 4.9
issues and stock market conditions in general. Exhibit IV-2 displays historical
stock market trends for various indices and includes historical stock price
index values for thrifts and commercial banks. Exhibit IV-3 displays historical
stock price indices for thrifts only.
In terms of assessing general stock market conditions, the stock
market has generally trended higher over the past year. Earnings reports
dominated the stock market in mid-April 1996, with day-to-day fluctuations in
the market reflecting changing investor sentiment regarding the strength of
first quarter earnings and future earnings expectations. Favorable fourth
quarter earnings among technology issues pushed the NASDAQ Composite Index to
new highs in late-April and early-May, while blue chip stocks lagged the
overall market. Stronger than expected first quarter GDP growth reported in
early-May stirred major sell-offs in stocks and bonds, resulting in the 30-year
bond edging above 7.0 percent and a one day drop in the DJIA of almost 77
points. Inflation concerns receded somewhat following a mid-May report by the
Federal Reserve, which indicated that inflation remained in check and near term
interest rate increases were not likely. The positive reading on inflation by
the Federal Reserve, along with the Federal Reserve's decision to leave
interest rates unchanged at its late-May meeting, served to strengthen bond and
stock prices, with the DJIA posting new highs in late-May and the 30-year bond
dropping below 7.0 percent. However, signs of an accelerating economy and
revised upward estimates of second quarter GDP growth provided for a pullback
in the stock market at the end of May. Stronger than expected job growth in May
further depressed bond prices in early-June, which served to stall the stock
market as well.
Expectations that the Federal Reserve would not tighten interest
rates at its July 1996 meeting provided for a rally in the bond market in
late-June, as the 30-year bond yield moved back below 7.0 percent. The positive
interest rate outlook also served to boost the stock market in early-July, but
the rally was cut short by a larger than expected drop in June unemployment.
Bond and stock prices tumbled following the June unemployment report, as
highlighted by a 115 point one-day decline in the DJIA and an increase in the
30-year bond yield to 7.18 percent. The release of second quarter earnings
reports provided for a volatile stock market in mid-July, especially among the
technology stocks. Overall, the stock market declined due to earnings
disappointments, with a more severe decline occurring in the technology driven
<PAGE> 83
RP Financial, LC.
Page 4.10
NASDAQ Composite Index. At the same time bond prices recovered, as the 30-year
bond yield dropped below 7.0 percent following statements by the Federal
Reserve Chairman which indicated he expected the economy to slow down in the
second half of 1996. Stocks and bonds rallied in late-July and early-August, as
economic data indicated a healthy but moderating economy. However, higher
interest rates pushed stocks lower in late-August, reflecting increasing
expectations that the Federal Reserve would tighten interest rates in
September. The decline in the stock market was reversed in early-September, as
investors reacted positively to the inflation data contained in the August
employment report. Oil stocks sustained the upward trend in the stock market in
early-September, as renewed tension between the U.S. and Iraq pushed crude oil
prices to their highest level in five years. Both bond and stock prices surged
higher in mid-September, as most of the economic data for August indicated that
the economy was slowing down and investors became more optimistic that the
Federal Reserve would not raise interest rates in September.
The Federal Reserve's decision not to raise interest rates at its
September 1996 meeting, and generally healthy third quarter earnings results
sustained the upward momentum in the stock market during the beginning of the
fourth quarter. Favorable inflation data and lower interest rates further
spurred the upward trend in the stock market prior to the election. Investors
were cheered by the "status quo" election results, as stocks rallied strongly
immediately following the election with the DJIA posting ten consecutive
advances through mid-November. Economic stability and a rising bond market
sustained the stock market rally through the end of November. For the entire
month of November, the DJIA increased 492.3 points, or 8.2 percent. Following
the rapid rise in the stock market during November, stocks retreated during the
first half of December. Profit taking, concern about speculative excesses in
the stock market and higher interest rates all contributed to the decline in
the stock market.
The stock market resumed an upward trend during the end of 1996 and
the first three weeks of 1997, with the DJIA establishing several new highs in
the process. Factors contributing to the rally in the stock market included the
Federal Reserve's decision to leave rates unchanged at its December meeting,
economic data which reflected moderate growth and low inflation, and favorable
fourth quarter earnings particularly in the technology sector. However, a
<PAGE> 84
RP Financial, LC.
Page 4.11
disappointing fourth quarter earnings report by IBM ignited a sell-off in the
stock market in late-January. Higher interest rates extended the downturn, as
the 30-year bond approached 7.0 percent at the end of January. A high degree of
market volatility was evident throughout most of February 1997, reflecting
concern over speculative excesses in the stock market; particularly, as the
DJIA closed above the 7000 mark in mid-February. Profit taking, growing
expectations of a correction and comments by the Federal Reserve Chairman
pulled the market lower in late-February.
Following a downturn in late-February 1997, the market recovered in
early-March. Despite increasing expectations of an interest rate hike by the
Federal Reserve, the Dow Jones Industrial Average ("DJIA") closed to a new
record high of 7085.16 on March 11, 1997. However, an upward revision to the
January retail sales figure triggered a one day sell-off in stocks and bonds on
March 13, 1997, as the stronger than expected growth heightened expectations of
an interest rate increase by the Federal Reserve. Unease over higher interest
rates, profitability concerns in the technology sector and litigation concerns
for tobacco stocks pulled the stock market lower in mid-March 1997. As
expected, the Federal Reserve increased the rate on short-term funds by 0.25
percent at its late-March 1997 meeting. Following the rate increase, the
sell-off in the stock market became more severe amid further signs of an
accelerating economy. Stocks bottomed-out on news of a stronger than expected
rise in core producer prices for March, with the DJIA closing at 6391.69 on
April 11, 1997, or 9.8 percent below its all-time high recorded a month ago.
Some favorable first quarter earnings reports and news of a possible
settlement by tobacco companies to resolve the threat of liability lawsuits
provided for a modest recovery in the stock market in mid-April 1997. In
late-April 1997, the release of economic data which indicated mild inflationary
pressures furthered the rally in bond and stock prices. News of a budget
agreement and a favorable ruling for tobacco companies sent the stock market
soaring to record highs in early-May 1997. Mixed economic data and the Federal
Reserve's decision to leave its target for the federal-funds rate unchanged at
its May meeting sustained a positive trend in the stock market through the end
of May 1997. Profit worries caused a sell-off in high-technology stocks in
early-June, while declining interest rates served to stabilize the broader
market. On June
<PAGE> 85
RP Financial, LC.
Page 4.12
20, 1997, the DJIA closed at a record high of 7796.5, translating into an
increase of 36.7` percent from a year ago. A sharp drop in bond yields
supported the new high established in the DJIA, as investors largely ignored
news that the May 1997 unemployment rate fell to its lowest level in 24 years.
Similar to the overall stock market, the market for thrift stocks has
generally been favorable during the past twelve months. A bullish outlook on
the financial institution sector in general served to bolster prices in
early-April 1996, as a number of analysts forecasted healthy first quarter
earnings for thrift and bank stocks and that the financial institution sector
would outperform the market in general during the balance of 1996. However,
thrift prices declined following the release of the March 1996 employment
report, as interest-rate sensitive stocks were pulled lower by the unfavorable
interest rate outlook. The downturn was abbreviated by the generally strong
first quarter earnings posted by bank and thrift issues, which provided for a
mild upward trend in thrift stocks in mid-April. Paralleling the stock market
in general, thrift prices dropped sharply in early-May following the rise in
interest rates caused by the strong first quarter GDP growth. Thrift prices
rebounded in mid-May, as interest rates declined slightly on the strength of
tame inflation news. At the end of May and through mid-June, uncertainty over
future interest rate trends provided for a relatively flat thrift stock market.
The Supreme Court's ruling in favor of thrifts seeking damages for
goodwill served to boost thrift prices in the beginning of July 1996, but the
upturn was abbreviated by a sharp increase in interest rates. The sharp rise in
interest rates, which was prompted by the stronger than expected June
unemployment report, pushed interest-rate sensitive issues in general lower.
Generally favorable second quarter earnings and lower interest rates supported
a modest recovery in thrift prices in mid-July, although concerns about future
interest rate trends moderated the impact of the healthy second quarter
earnings. Lower interest rates and the announced acquisitions of two large
California thrifts, American Savings with $20 billion in assets and CalFed
Bancorp with $14 billion in assets, pushed the SNL Index higher in late-July
and through mid-August 1996. Thrift stocks settled into a narrow trading range
in late-August and early-September 1996, as higher interest rates dampened
interest in the thrift sector. For the balance of September, trading activity
in thrift stocks was somewhat mixed. Higher thrift prices were
<PAGE> 86
RP Financial, LC.
Page 4.13
recorded in mid-September 1996, as the yield on the 30-year U.S. Treasury bond
briefly dropped below 7.0 percent. However, the rally in financial services
stocks faltered in late-September 1996, reflecting renewed fears about higher
interest rates and rising bad debt on credit cards.
Thrift prices generally moved higher during October and November 1996.
The upward trend in thrift prices was supported by lower interest rates, with
the slow down in economic growth pushing the 30-year U.S. bond rate below 6.5
percent during the second half of November 1996. Investors also reacted
positively to the SAIF rescue legislation, in light of the reduction in deposit
insurance premiums to be paid by SAIF-insured thrifts following the one time
special assessment. Similar to the overall stock market, thrift prices traded
lower in early-December 1996. Profit taking and expectations of higher interest
rates were factors contributing to the pull back in thrift issues.
Bullish sentiment for thrift stocks heightened at the beginning of
1997, as investors reacted positively to the favorable inflation data and
generally strong fourth quarter earnings. The rally in thrift issues was driven
by the large California institutions, reflecting expectations that there would
be further consolidation among the large California thrifts. The acquisition
speculation for the large California thrifts became a reality in mid-February,
as H.F. Ahamanson's unsolicited offer to acquire Great Western Financial sent
the SNL Index soaring in mid-February. Stable interest rates and acquisition
activity supported higher thrift prices in early-March, with the SNL Index
posting a new high of 579.1 on March 11, 1997. Like the stock market in
general, the peak in thrift prices was followed by a sharp sell-off in
mid-March 1997. In fact, interest-rate sensitive issues were among the sectors
hardest hit by the revised January 1997 retail sales report, as the 30-year
bond approached 7.0 percent. Interest-rate sensitive issues continued to
experience selling pressure in late-March and early-April 1997, as signs of a
strengthening economy pushed interest rates higher. The sell-off in thrift
stocks culminated on April 11, 1997, as interest rates increased sharply on
news of the higher than expected rise in core producer prices for March. Thrift
prices edged modestly higher in mid-April 1997, reflecting generally favorable
first quarter earnings and a slight decline in interest rates following the
release of economic data which showed that inflation was low. Favorable
inflation data and the budget agreement provided for a more substantial rally
in thrift stocks in late-April and early-May 1997, as interest-rate
<PAGE> 87
RP Financial, LC.
Page 4.14
sensitive issues were bolstered by a decline in interest rates. Thrift stocks
continued to trend higher through early-June, based on the improved
interest-rate outlook and an overall positive outlook for the economy. The SNL
Index for all publicly-traded thrifts closed at 625.9 on June 20, 1997, an
increase of 62.9 percent from one year ago, while the industry price/tangible
book has increased by nearly 25 percent.
B. The New Issue Market
In addition to thrift stock market conditions in general, the new
issue market for converting thrifts is also an important consideration in
determining the Association's pro forma market value. Interest in converting
thrift issues receded somewhat in the second quarter of 1996, as indicated by
fewer oversubscriptions and generally weak aftermarket trading performance.
However, interest returned to converting issues during the second half of 1996,
as most offerings experienced healthy oversubscriptions. Fewer offerings, more
attractive pricing, lower interest rates, and the general positive trend in
thrift prices were among the most prominent factors contributing to the renewed
investor interest shown for converting thrift issues. The favorable market
environment for converting thrift issues has generally been sustained during
the first two quarters of 1997; however, in comparison to other periods of
market strength for thrift stocks, the number of conversion offerings completed
during the past three months has been relatively low. As shown in Table 4.1,
the median one week change in price for offerings completed during the latest
three months equaled positive 31 percent.
In examining the current pricing characteristics of institutions
completing their conversions during the last three months (see Table 4.2), we
note there exists a considerable difference in pricing ratios compared to the
universe of all publicly-traded thrifts. Specifically, the current average P/B
ratio of the conversions completed in the most recent three month period of
94.16 percent reflects a discount of 29.72 percent from the average P/B ratio
of all publicly-traded thrifts (equal to 133.98 percent), and the average core
P/E ratio of 22.33 times reflects a premium of 25.66 percent from the all
public average core P/E ratio of 17.77 times. The pricing ratios of the better
capitalized but lower earning recently converted thrifts (with resulting lower
return on equity measures) suggest that the investment community has determined
to discount
<PAGE> 88
RP Financial, LC.
TABLE 4.1
RECENT CONVERSIONS PRICING:
LAST 3 MONTHS NATIONALLY AND LAST 3 YEARS IN NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Institutional Information Pre-Conversion Data Offering Information
---------------------------------
Financial Info. Asset Quality
- -----------------------------------------------------------------------------------------------------------------------------
Conversion Equity/ NPAs/ Res. Gross % of Exp./
Institution State Date Ticker Assets Assets Assets Cov. Proc. Mid. Proc.
- ----------- ----- ---- ------ ------ ------ ------ ---- ----- ---- -----
($Mil) (%) (%)(2) (%) ($Mil.) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------------
LAST 3 MONTHS NATIONALLY
- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SFB Bancorp TN 05/30/97 SFBK $ 47 10.04% 0.80% 82% $ 7.7 132% 3.2%
Rocky Ford Financial CO 05/22/97 P. Sheet 21 13.92% 0.00% NA 4.2 132% 8.3%
HCB Bancshares AR 05/07/97 HCBB 176 7.81% 0.21% 110% 26.5 132% 2.8%
Peoples Sidney Fin. Corp. OH 04/28/97 PSFC 92 10.08% 1.11% 33% 17.9 132% 3.2%
NewSouth Bancorp(1) NC 04/08/97 NSBC 199 9.52% 0.41% 299% 43.6 132% 2.9%
Hemlock Fed. Fin. Corp. IL 04/02/97 HMLK 146 7.86% 0.44% 117% 20.8 132% 3.1%
Cumberland Mtn. Bncshrs.(8) KY 04/01/97 P. Sheet 92 5.14% 1.31% 19% 4.4 132% 8.0%
GS Financial Corp. LA 04/01/97 GSLA 88 28.30% 0.29% 107% 34.4 132% 2.4%
Market Fin. Corp. OH 03/27/97 MRKF 46 16.73% 0.99% 11% 13.4 132% 3.5%
Vermilion Bancorp(1) IL 03/26/97 P. Sheet 36 6.63% 0.97% 39% 4.0 132% 7.2%
AVERAGES: $ 94 11.60% 0.65% 91% $ 17.7 132% 4.5%
AVERAGES, EXCLUDING 2ND STEPS: $ 95 12.32% 0.58% 100% $ 19.1 132% 4.1%
LAST 3 YEARS IN NEW YORK
- ------------------------
Roslyn Bancorp(1) NY 01/13/97 RSLN $1,973 11.55% 0.82% 137% $436.4 132% 2.1%
AFSALA Bancorp NY 10/01/96 AFED 137 6.08% 0.56% 105% 14.5 132% 4.9%
Dime Community Bancorp NY 06/26/96 DIME 1,094 7.46% 0.75% 77% 145.5 132% 2.5%
Catskill Financial Corp. NY 04/18/96 CATB 231 12.75% 0.70% 112% 56.7 132% 3.3%
Yonkers Financial Corp. NY 04/18/96 YFCB 210 7.72% 1.73% 23% 35.7 132% 2.7%
Peekskill Financial Corp. NY 12/29/95 PEEK 155 13.90% 1.30% 24% 41.0 132% 2.4%
Ambanc Holding Co. NY 12/27/95 AHCI 342 8.17% 3.52% 24% 54.2 132% 3.4%
Flushing Financial Corp. NY 11/21/95 FFIC 604 7.69% 1.08% 80% 99.2 132% 2.3%
Tappan Zee Financial NY 10/05/95 TPNZ 95 8.72% 2.40% 30% 16.2 132% 5.1%
SFS Bancorp NY 06/30/95 SFED 154 6.66% 1.41% 44% 15.0 115% 4.7%
Carver FSB NY 12/25/94 CARV 309 4.50% 0.93% 45% 23.1 132% 5.2%
Financial Bancorp NY 08/17/94 FIBC 158 6.51% 3.39% 18% 21.9 175% 7.2%
AVERAGES: $ 455 8.48% 1.55% 60% $ 80.0 134% 3.8%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Insider Purchases Pro Forma Data
----------------------------------------------------
Pricing Ratios(4) Financial Charac.
- ------------------------------------------------------------------------------------------------------------
Benefit Plans
-------------
Recog. Mgmt.& Core
Institution ESOP Plans Dirs. P/TB P/E(5) P/A ROA TE/A ROE
- ----------- ---- ----- ----- ---- ------ --- --- ---- ---
(%) (%) (%)(3) (%) (x) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------
LAST 3 MONTHS NATIONALLY
- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFB Bancorp 8.0% 4.0% 5.3% 70.1% 13.9x 14.5% 1.0% 20.7% 5.0%
Rocky Ford Financial 8.0% 4.0% 23.6% 67.9% 14.6 17.7% 1.2% 26.1% 4.7%
HCB Bancshares 8.0% 4.0% 4.3% 72.9% 34.4 13.3% 0.4% 18.2% 2.1%
Peoples Sidney Fin. Corp. 8.0% 4.0% 9.8% 71.0% 13.7 16.5% 1.2% 23.3% 5.2%
NewSouth Bancorp(1) 8.0% 4.0% 0.8% 77.8% 20.7 18.5% 0.9% 23.7% 3.8%
Hemlock Fed. Fin. Corp. 8.0% 4.0% 6.0% 72.8% 20.3 12.7% 0.6% 17.4% 3.6%
Cumberland Mtn. Bncshrs.(8) 6.2% 4.0% 4.5% 81.2% 13.8 7.1% 0.5% 8.8% 5.9%
GS Financial Corp. 8.0% 4.0% 5.3% 63.4% 25.9 29.4% 1.1% 46.3% 2.4%
Market Fin. Corp. 8.0% 4.0% 7.8% 70.6% 20.0 23.4% 1.2% 33.2% 3.5%
Vermilion Bancorp(1) 8.0% 4.0% 16.4% 71.0% 18.7 10.1% 0.5% 14.2% 3.8%
7.8% 4.0% 8.4% 71.9% 19.6X 16.3% 0.9% 23.2% 4.0%
8.0% 4.0% 8.8% 70.8% 20.2X 17.3% 0.9% 24.8% 3.8%
LAST 3 YEARS IN NEW YORK
- ------------------------
Roslyn Bancorp(1) 8.0% 4.0% 1.3% 73.8% 15.3x 18.6% 1.2% 25.2% 4.8%
AFSALA Bancorp 8.0% 4.0% 4.7% 71.2% 16.3 9.7% 0.6% 13.7% 4.4%
Dime Community Bancorp 8.0% 4.0% 2.7% 80.3% 17.3 11.9% 0.7% 16.9% 4.7%
Catskill Financial Corp. 8.0% 4.0% 2.6% 73.2% 18.4 20.4% 1.1% 27.8% 4.0%
Yonkers Financial Corp. 8.0% 4.0% 3.7% 76.5% 15.1 14.8% 1.0% 19.4% 5.1%
Peekskill Financial Corp. 8.0% 4.0% 2.0% 72.4% 15.3 21.5% 1.4% 29.8% 4.7%
Ambanc Holding Co. 8.0% 4.0% 0.4% 73.5% 14.8 14.0% 0.9% 19.0% 5.0%
Flushing Financial Corp. 8.0% 4.0% 1.4% 75.4% 17.2 14.2% 0.8% 18.9% 4.4%
Tappan Zee Financial 8.0% 4.0% 2.2% 74.7% 14.6 15.0% 1.0% 20.1% 5.1%
SFS Bancorp 8.0% 4.0% 10.7% 65.8% 14.1 9.0% 0.6% 13.6% 4.7%
Carver FSB 8.0% 3.0% 0.7% 73.9% 42.1 7.0% 0.2% 9.5% 1.8%
Financial Bancorp 7.0% 3.0% 5.6% 76.9% 13.8 12.2% 0.9% 15.9% 5.6%
7.9% 3.8% 3.2% 74.0% 17.8X 14.0% 0.9% 19.2% 4.5%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Post-IPO Pricing Trends
-----------------------------------------------------------
Closing Price:
-----------------------------------------------------------
First After After
IPO Trading % First % First %
Institution Price Day Change Week(6) Change Month(7) Change
- ----------- ----- --- ------ ------- ------ ------- ------
($) ($) (%) ($) (%) ($) (%)
- ----------------------------------------------------------------------------------------------------
LAST 3 MONTHS NATIONALLY
- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SFB Bancorp $10.00 $13.81 38.1% $13.38 33.8% NA NA
Rocky Ford Financial 10.00 13.00 30.0% 13.13 32.5% $13.00 30.0%
HCB Bancshares 10.00 12.63 26.3% 12.69 26.9% 12.88 28.8%
Peoples Sidney Fin. Corp. 10.00 12.56 25.6% 13.25 32.5% 12.88 28.8%
NewSouth Bancorp(1) 15.00 20.25 35.0% 22.00 46.7% 23.50 56.7%
Hemlock Fed. Fin. Corp. 10.00 12.88 28.8% 12.88 28.8% 13.00 30.0%
Cumberland Mtn. Bncshrs.(8) 10.00 11.88 18.8% 12.25 22.5% 12.63 26.3%
GS Financial Corp. 10.00 13.38 33.8% 13.63 36.2% 14.00 40.0%
Market Fin. Corp. 10.00 12.94 29.4% 12.50 25.0% 12.63 26.3%
Vermilion Bancorp(1) 10.00 12.38 23.7% 12.25 22.5% 11.75 17.5%
$10.50 $13.57 29.0% $13.80 30.7% $14.03 31.6%
$10.56 $13.76 30.1% $13.90 30.8% $11.11 26.3%
LAST 3 YEARS IN NEW YORK
- ------------------------
Roslyn Bancorp(1) $10.00 $15.00 50.0% $15.88 58.8% $16.00 60.0%
AFSALA Bancorp 10.00 11.38 13.8% 11.31 13.1% 12.13 21.2%
Dime Community Bancorp 10.00 12.00 20.0% 12.00 20.0% 11.87 18.7%
Catskill Financial Corp. 10.00 10.38 3.8% 10.50 5.0% 10.38 3.8%
Yonkers Financial Corp. 10.00 9.75 -2.5% 10.00 0.0% 9.94 -0.6%
Peekskill Financial Corp. 10.00 12.125 21.2% 11.75 17.5% 11.25 12.5%
Ambanc Holding Co. 10.00 10.00 0.0% 10.31 3.1% 9.87 -1.3%
Flushing Financial Corp. 11.50 13.88 20.7% 14.31 24.4% 14.38 25.0%
Tappan Zee Financial 10.00 11.625 16.3% 11.50 15.0% 12.00 20.0%
SFS Bancorp 10.00 11.50 15.0% 11.38 13.8% 11.25 12.5%
Carver FSB 10.00 7.78 -22.2% 7.88 -21.2% 6.38 -36.2%
Financial Bancorp 10.00 10.88 8.7% 10.94 9.4% 10.38 3.8%
$10.13 $11.36 12.1% $11.48 13.2% $11.32 11.6%
- ------------------------------------------------------------------------------------------------------
</TABLE>
Note: "NT" - Not Traded; "NA" - Not Applicable, Not Available.
(1) Non-OTS regulated thrifts.
(2) As reported in summary pages of prospectus.
(3) As reported in prospectus.
(4) Does not take into account the adoption of SOP 93-6.
(5) Excludes impact of special SAIF assessment on earnings.
(6) Latest price if offering less than one week old.
(7) Latest price if offering more than one week but less than one month old.
(8) Second-step conversions.
June 13,1997
- -------------------------------------------------------------------------------
<PAGE> 89
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.2
Market Pricing Comparatives
Prices As of June 20, 1997
<TABLE>
<CAPTION>
Market Per Share Data
Capitalization --------------- Pricing Ratios(3)
--------------- Core Book ----------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- --------------------- -------- ----- ------ ----- --- --- --- ---- ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 20.91 169.19 1.18 15.55 19.40 133.98 16.10 137.26 17.77
Special Selection Grouping(8) 13.61 31.17 0.44 14.45 24.32 94.16 26.34 94.98 22.33
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
GSLA GS Financial Corp. of LA 15.25 52.44 0.29 15.77 NM 96.70 44.81 96.70 NM
HCBB HCB Bancshares of AR 12.94 34.23 0.29 13.73 NM 94.25 17.20 98.33 NM
HMLK Hemlock Fed. Fin. Corp. of IL 13.25 27.51 0.37 14.49 NM 91.44 16.72 91.44 NM
MRKF Market Fin. Corp. of OH 13.00 17.37 0.50 14.17 NM 91.74 30.46 91.74 26.00
PSFC Peoples Sidney Fin. Corp of OH 13.62 24.31 0.73 14.09 24.32 96.66 22.49 96.66 18.66
</TABLE>
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- ------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ -------------- --------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
- --------------------- ----- --------------------- ------ ------ --- --- --- ---
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 0.39 1.85 28.86 1,281 12.70 0.83 0.67 6.05 0.87 7.84
Special Selection Grouping(8) 0.00 0.00 0.00 129 27.87 0.67 0.43 1.01 0.82 3.26
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
GSLA GS Financial Corp. of LA 0.00 0.00 0.00 117 46.34 0.13 0.85 1.84 0.85 1.84
HCBB HCB Bancshares of AR 0.00 0.00 0.00 199 18.25 NA -0.11 -0.58 0.39 2.11
HMLK Hemlock Fed. Fin. Corp. of IL 0.00 0.00 0.00 165 18.29 NA -0.39 -2.85 0.49 3.64
MRKF Market Fin. Corp. of OH 0.00 0.00 0.00 57 33.20 0.89 0.89 2.68 1.17 3.53
PSFC Peoples Sidney Fin. Corp of OH 0.00 0.00 0.00 108 23.26 1.00 0.92 3.97 1.21 5.18
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month data,
adjusted to omit non-operating items (including the SAIF assessment) on a
tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets;
P/TB = Price to tangible book value; and P/CORE = Price to estimated core
earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend
declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month earnings and average equity and assets
balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
(8) Includes Converted Last 3 Mths (no MHC);
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 90
RP Financial, LC.
Page 4.17
their stocks on a book basis until the earnings improve through redeployment
and leveraging of the proceeds over the longer term.
C. The Acquisition Market
Also considered in the valuation was the potential impact on
the Bank's stock price of recently completed and pending acquisitions of other
thrifts operating in the Bank's market area. As shown in Exhibit IV-4, there
were 12 publicly-traded New York thrifts acquired since 1995, and 3
acquisitions are currently pending of publicly-traded New York thrifts. The
Bank's larger size relatively high pro forma capital position may tend to
lessen acquisition speculation in the Bank's stock, based on expectations that
an acquiror would be reluctant to pay an acquisition premium for the Bank's
"excess" capital. However, at the same time, the fairly active acquisition
market for New York thrifts may imply a certain degree of acquisition
speculation for the Bank's stock. To the extent that acquisition speculation
may impact the Bank's offering, we have largely taken this into account in
selecting companies which operate in the same market.
Taking these factors and trends into account, primarily recent
trends in the new issue market, market conditions overall and recent trends in
the acquisition market, RP Financial concluded that no adjustment was
appropriate in the valuation analysis for purposes of marketing of the issue.
8. Management
The Bank's management team appears to have experience and expertise in
all of the key areas of the Bank's operations, although we note that it is
unusual that there is no separate Chief Financial Officer. Exhibit IV-5
provides summary resumes of the Bank's Board of Directors and executive
management. The financial characteristics and growth of the Bank suggest that
the Bank is being effectively managed and there appears to be a well-defined
organizational structure. While the Bank has no apparent executive/senior
management vacancies, other than noted above, the executive/senior management
team is generally staffed with individuals approaching retirement age. In order
to ensure smooth succession, the Bank has commenced a search program to employ
and train executive/senior management as successors in the event of planned or
unexpected vacancy, a factor expected to put upward pressure on operating
expenses. The location in a large
<PAGE> 91
RP Financial, LC.
Page 4.18
metropolitan area and the compensation and benefits available through the stock
structure should facilitate the Bank's ability to attract qualified candidates.
The returns, capital positions, and other operating measures of the
Peer Group companies are indicative of well-managed financial institutions,
which also have generally seasoned Boards and management teams.
On balance, we concluded that a slight downward valuation adjustment
relative to the Peer Group was appropriate for this factor.
9. Effect of Government Regulation and Regulatory Reform
A portion of the Bank's deposits and several of the Peer Group
companies were impacted by the recently enacted SAIF rescue legislation,
leading to a special assessment during 1996 and a reduced deposit insurance
premium structure beginning in 1997. It appears there are no significant
differences between the Bank and the Peer Group from a regulatory perspective,
and several of the Peer Group members operate under the same regulatory scheme
as the Bank. On balance, no adjustment to the Bank's value was warranted for
this factor.
Summary of Adjustments
Overall, we believe the Bank's pro forma market value should be
discounted relative to the Peer Group as follows.
<TABLE>
<CAPTION>
Key Valuation Parameters Valuation Adjustment
------------------------ --------------------
<S> <C>
Financial Condition Slight Downward
Profitability, Growth and Viability of Earnings Moderate Downward
Asset Growth No Adjustment
Primary Market Area No Adjustment
Dividends No Adjustment
Liquidity of the Shares No Adjustment
Marketing of the Issue No Adjustment
Management Slight Downward
Effect of Government Regulations and Regulatory Reform No Adjustment
</TABLE>
<PAGE> 92
RP Financial, LC.
Page 4.19
Valuation Approaches
In applying the accepted valuation methodology promulgated by the
regulatory agencies, i.e., the pro forma market value approach, we considered
the three key pricing ratios in valuing the Bank's to-be-issued stock --
price/earnings ("P/E"), price/book ("P/B"), and price/assets ("P/A") -- all
performed on a pro forma basis including the effects of the conversion
proceeds. In computing the pro forma impact of the conversion and the related
pricing ratios, we have incorporated the valuation parameters disclosed in the
Bank's prospectus for offering expenses, reinvestment rate, the effective tax
rate, stock benefit plans and contribution to the charitable foundation
(summarized in Exhibits IV-6 and IV-7). Each of these assumptions are described
more fully below.
- Conversion Expenses. The Bank has estimated its fixed and
variable conversion expenses over the range of value
incorporating the appraised value determined herein, based on the
financial arrangements with the various third parties engaged by
the Bank to assist in completing the conversion transaction.
- Effective Tax Rate. The Bank, in consultation with its outside
auditors, has determined the marginal effective tax rate on the
net reinvestment benefit of the conversion proceeds to be 47
percent based on the statutory Federal, state and city income tax
rates.
- Reinvestment Rate. The pro forma section in the draft prospectus
incorporates a 6.00 percent reinvestment rate, equivalent to
yield on the one-year Treasury bill as of March 31, 1997, the
rate utilized herein. The reinvestment rate calculation specified
in the OTS's conversion regulations, equivalent to the arithmetic
average of the yield on interest-earning assets and cost of
deposits for the most recent fiscal year, indicates a
reinvestment rate of 5.82 percent. This calculated rate is
reasonably similar to: (1) the current market rate on short- to
intermediate-term securities (i.e., 1 to 5 year Treasury yields
as of the valuation date ranged from 5.70 to 6.26 percent,
respectively); and (2) the 5.89 percent blended reinvestment rate
in the first 12 months of the business plan post-conversion,
reflecting the current anticipated use of conversion proceeds,
incorporating a flat rate interest rate scenario and the
estimated impact of deposit withdrawals to fund purchases equal
to 20 percent of the stock issued in the conversion.
- Stock Benefit Plans. The assumptions for the stock benefit plans,
i.e., the Employee Stock Ownership Plan ("ESOP") and Recognition
Plan ("Recognition Plan"), are consistent with the structure as
approved by the Bank's Board and the disclosure in the pro forma
section of the prospectus. Specifically, the ESOP is assumed to
purchase 8 percent of the stock in conversion at the initial
public
<PAGE> 93
RP Financial, LC.
Page 4.20
offering price, with the Holding Company funded ESOP loan
amortized on a straight-line basis over 20 years. The Recognition
Plan is assumed to purchase 4 percent of the stock in the
aftermarket at a price equivalent to the initial public offering
price (we also considered the impact of the issuance of
Recognition Plan shares from authorized but unissued shares at a
price equivalent to the initial public offering price), with the
Recognition Plan cost expensed on a straight line basis in
conjunction with the 5 year vesting schedule.
- Contribution to Charitable Foundation. Immediately upon
completion of the stock conversion, consistent with the Plan of
Conversion, ICBC will contribute authorized but unissued shares,
equal to 8 percent of the shares issued in conversion, to a
charitable foundation.
- Consolidation of MHC Assets with Bank Assets. Concurrent with the
conversion transaction $0.108 million assets and $0.093 million
of equity held by the MHC will be consolidated with the Bank. The
method of accounting for the MHC assets in the valuation is
consistent with the methodology and formula promulgated by the
FDIC. Since the MHC assets in the instant case are nominal, the
valuation impact is likewise nominal.
RP Financial's valuation considered each of the valuation approaches
promulgated in the regulatory valuation guidelines, as described more fully
below.
- P/E Approach. The P/E approach is generally regarded as the best
indicator of long-term value for a stock. Given the traditional
thrift operating strategies employed by the Bank and the Peer
Group, which provided a certain degree of financial comparability
between the Bank and the Peer Group, the P/E approach was
carefully considered in this valuation. At the same time, since
reported earnings for both the Bank and the Peer Group included
certain unusual items, we also made adjustments to earnings to
arrive at a core earnings estimate and the resulting price/core
earnings ratio.
- P/B Approach. P/B ratios have generally served as a useful
benchmark in the valuation of thrift stocks, with the greater
determinant of long term value being earnings. RP Financial
considered the P/B approach to be a reliable indicator of value
given current market conditions, particularly the market for new
conversions which often exhibit P/E multiples that are well above
industry averages and since the P/E multiples do not reflect the
actual impact of reinvestment, leveraging and capital management
strategies. We have also modified the P/B approach to exclude the
impact of intangible assets (i.e., price/tangible book value or
"P/TB"), in that the investment community frequently makes this
adjustment in its evaluation of the stock price level.
<PAGE> 94
RP Financial, LC.
Page 4.21
- P/A Approach. P/A ratios are generally a less reliable indicator
of market value. Investors do not place significant weight on
simply the size of total assets as a determinant of market
value without making risk adjustments. Investors generally
place significantly greater weight on book value and earnings,
which are more meaningful indicators of value than total assets.
Furthermore, this approach as set forth in the regulatory
valuation guidelines does not take into account the amount of
stock purchases funded by deposit withdrawals, thus understating
the pro forma P/A ratio. At the same time, the P/A ratio is an
indicator of franchise value, and, in the case of highly
capitalized institutions, the high P/A ratios may limit the
investment community's willingness to pay market multiples for
earnings or book value when ROE is expected to be low.
Based on the application of the three valuation approaches, taking
into consideration the valuation adjustments discussed above, and placing the
greatest weight on the earnings and book approaches, RP Financial concluded
that the pro forma market value of the Bank's conversion stock is $475 million
at the midpoint at this time.
1. Price-to-Book ("P/B"). The application of the P/B valuation
method requires calculating the Bank's pro forma market value by applying a
valuation P/B ratio, derived from the Peer Group's P/B ratio, to the Bank's pro
forma book value. In applying the P/B approach, we considered both reported
book value and tangible book value. Based on the $475 million midpoint
valuation, the Bank's pro forma P/B and P/TB ratios were 67.73 and 74.13
percent, respectively. In comparison to the median P/B and P/TB ratios for the
Peer Group of 153.77 percent and 167.52 percent, respectively, the Bank's
ratios were discounted by 55.95 and 55.75 percent. RP Financial considered such
discounts to be reasonable in light of the previously referenced valuation
adjustments, lower pro forma core ROE and resulting pricing ratios under the
earnings and assets approaches.
2. Price-to-Earnings ("P/E"). The application of the P/E valuation
method requires calculating the Bank's pro forma market value by applying a
valuation P/E multiple, derived from the Peer Group's P/E multiple, times the
pro forma earnings base. In applying this technique, we considered both
reported earnings and a recurring earnings base, that is, earnings adjusted to
exclude any one-time non-operating and extraordinary items, plus the estimated
after-tax earnings benefit from reinvestment of net conversion proceeds. The
Bank's reported earnings were $17.180 million for the fiscal year ended March
31, 1997. In deriving the Bank's core earnings, the following adjustments were
made to reported pre-tax earnings for fiscal 1997 to account for the one-time
expense: the special SAIF assessment ($8.553 million), the net loss on sale of
<PAGE> 95
RP Financial, LC.
Page 4.22
securities ($3.347 million) and the loss on the sale of a branch ($1.778
million, reflected in other income). On a tax effected basis, based on the
Bank's fiscal 1997 effective tax rate of 38.45 percent, adjusted earnings
approximated $25.599 million. Similar types of adjustments were applied to the
Peer Group in the calculation of their core earnings (Note: see Exhibit IV-8).
Based on the Bank's reported and estimated core earnings, and
incorporating the impact of the pro forma assumptions discussed previously, the
Bank's pro forma reported and core P/E multiples at the $475 million midpoint
value were 18.04 and 13.67 times, respectively, which provided for discounts of
1.69 and 14.62 percent relative to the Peer Group's median reported and core
earnings multiples of 18.35 and 16.01 times, respectively. The Bank's pro forma
core P/E exceeds the Peer Group median at the supermaximum of the range. Such
adjustments reflect the valuation adjustments outlined previously and the
pricing ratios under the book and assets approaches. We also considered the
intangibles amortization in examining the pricing ratios, as well as the Bank's
recent portfolio restructuring and cost of ongoing data processing conversion.
RP Financial also considered the impact of SOP 93-6 in examining the P/E
ratios.
3. Price-to-Assets ("P/A"). The P/A valuation methodology determines
market value by applying a valuation P/A ratio to the Bank's pro forma asset
base, conservatively assuming no deposit withdrawals are made to fund stock
purchases. In all likelihood there will be deposit withdrawals, which results
in understating the pro forma P/A ratio which is computed herein. At the
midpoint of the valuation range, the Bank's value equaled 11.51 percent of pro
forma assets, compared to the Peer Group median P/A ratio of 13.75 percent,
which implies a 16.29 percent discount being applied to the Bank's pro forma
P/A ratio. The Bank's pro forma P/A ratio exceeded the Peer Group median at the
supermaximum of the range. While generally emphasized less than the P/E and P/B
approaches, the P/A ratio is an indicator of franchise value and, thus, was
considered in the valuation conclusion.
<PAGE> 96
RP Financial, LC.
Page 4.23
Comparison to Recent Conversions
As indicated at the beginning of this chapter, RP Financial's analysis
of recent conversion pricing characteristics at conversion (excluding second
step conversions) and in the aftermarket has been limited to a "technical"
analysis and, thus, the pricing characteristics of recent conversions is not
the primary determinate of value herein. Particular focus was placed on the P/B
approach in this analysis since the P/E multiples do not reflect the actual
impact of reinvestment and the source of the conversion funds (i.e., external
funds vs. deposit withdrawals). The recent conversions on average closed their
offerings at their supermaximum levels given the oversubscribed nature of their
offerings and prevailing market conditions at closing, indicating an average
price/tangible book ratio of 70.8 percent. On average, the prices of recent
conversions appreciated by 26 percent. In comparison, the Bank's P/TB ratio at
the appraised midpoint reflects a premium relative to the closing ratios, but a
discount to the aftermarket ratios. The closing and aftermarket P/TB ratios are
not directly comparable in that the closing ratio reflects the pro forma impact
of conversion on equity whereas the aftermarket ratio reflects only price (with
no further impact on equity capital).
Valuation Conclusion
It is our opinion that, as of June 20, 1997, the estimated aggregate
pro forma market value of the shares to be issued immediately following the
conversion was $475 million. Based on this valuation, the Trustees and
Directors of the Company and the Bank have established the Initial Purchase
Price and the number of shares of Conversion Stock to be offered, including the
range of value. Accordingly, the Boards have established a range of value of 15
percent above and below the appraised value of $475 million (or "midpoint"),
indicating a minimum value of $403.75 million and a maximum value of $546.25
million. Based on the $10.00 per share offering price determined by the Boards,
this valuation range equates to an offering of 40.375 million shares at the
minimum to 54.625 million shares at the maximum, and 47.5 million shares at the
midpoint. In the event that the appraised value is subject to an increase, up
to 62,818,750 shares may be sold at an issue price of $10.00 per share, for an
aggregate market value of $628,187,500, without a resolicitation.
<PAGE> 97
RP Financial, LC.
Page 4.24
Based on this valuation range, incorporating the 8 percent shares
issued to Foundation following consummation of the offering, the offering range
is as follows: $373,842,590 at the minimum, $439,814,810 at the midpoint,
$505,787,040 at the maximum and $581,655,090 at the supermaximum. Based on a
$10.00 per share offering price, the number of offering shares is as follows:
37,384,259 at the minimum, 43,981,481 at the midpoint, 50,578,704 at the
maximum and 58,165,509 at the supermaximum.
The comparative pro forma valuation ratios relative to the Peer Group
are shown in Table 4.3, and the key valuation assumptions are detailed in
Exhibit IV-6. The pro forma calculations for the range are detailed in Exhibit
IV-7, and pro forma regulatory capital levels are presented in Exhibit IV-9.
<PAGE> 98
RP FINANCIAL, LC.
- --------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Table 4.3
Public Market Pricing
Independence SB of Brooklyn NY and the Cornparables
As or June 20, 1997
<TABLE>
<CAPTION>
Market Per Share Data
Capitalization --------------
-------------- Core Book Pricing Ratios(3)
Price/ Market 12-Mth Value/ --------------------------------------------
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
-------- ------ ------ ------ --- --- --- ---- ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY
- ------------------------------
Superrange 10.00 628.19 0.47 13.20 21.42 75.75 14.77 81.71 16.64
Range Maximum 10.00 546.25 0.51 13.93 19.71 71.79 13.05 78.00 15.12
Range Midpoint 10.00 475.00 0.55 14.76 18.04 67.73 11.51 74.13 13.67
Range Minimum 10.00 403.75 0.62 15.89 16.20 62.91 9.93 69.46 12.11
All Public Companies 20.91 169.19 1.18 15.55 19.40 133.98 16.10 137.26 17.77
All Non-MHC State of NY(7)
- ---------------------------
Averages 25.51 418.66 1.38 17.71 20.47 136.77 16.48 145.15 18.16
Medians --- --- --- --- 21.80 125.40 14.35 134.92 17.82
Comparable Group Averages
- --------------------------
Averages 29.27 287.92 1.87 18.62 18.50 157.64 17.71 170.82 17.10
Medians --- --- --- --- 18.35 153.77 13.75 167.52 16.01
State of NY
- ------------
AFED AFSALA Bancorp, Inc. of NY 14.75 21.46 0.55 14.49 NM 101.79 14.10 101.79 26.82
ALBK ALBANK Fin. Corp. of Albany NY 39.81 510.32 2.71 25.10 18.35 158.61 14.60 182.87 14.69
ALBC Albion Banc Corp. of Albion NY 22.00 5.50 0.93 23.62 NM 93.14 8.29 93.14 23.66
AHCI Ambanc Holding Co., Inc. of NY 16.00 70.27 -0.65 13.85 NM 115.52 14.70 115.52 NM
ASFC Astoria FInancial Corp. of NY 45.62 969.11 2.62 27.51 25.77 165.83 12.60 199.30 17.41
CNY Carver Bancorp, Inc. of NY 12.25 28.35 -0.05 14.76 NM 82.99 6.69 86.69 NM
CATB Catskill Fin. Corp. of NY 15.50 77.92 0.85 14.70 18.45 105.44 28.45 105.44 18.24
DME Dime Bancorp, Inc. of NY 19.00 1999.92 1.34 10.01 18.10 189.81 10.83 191.53 14.18
DIME Dime Community Bancorp of NY 19.12 250.97 0.97 14.53 21.gB 131.59 20.28 153.33 19.71
FIBC Financial Bancorp, Inc. of NY 17.27 30.15 1.42 14.98 22.40 115.15 11.20 115.69 12.15
FFIC Flushing Fin. Corp. of NY 19.82 160.71 0.89 16.06 23.10 123.72 19.81 123.72 22.33
GPT GreenPoint Fin. Corp. of NY 66.37 3111.96 2.82 30.56 21.48 217.18 23.47 NM 23.54
HAVN Haven Bancorp of Woodhaven NY 37.00 160.21 3.32 23.13 16.23 159.97 9.27 160.59 11.14
JSBF JSB Financial, Inc. of NY 43.87 431.24 2.62 34.52 15.89 127.09 28.17 127.09 16.74
LISB Long Island Bancorp, Inc of NY 36.12 875.12 1.64 21.62 26.17 167.07 15.05 168.71 22.02
MBB MSB Bancorp of Middletown NY 19.25 54.61 0.62 20.57 NM 93.58 6.65 214.13 NM
NYB New York Bancorp, Inc. of NY 34.75 569.24 2.82 9.81 14.54 NM 17.93 NM 12.32
PEEK Peekskill Fin. Corp. of NY 15.00 48.05 0.81 14.58 23.81 102.88 26.31 102.88 18.52
PKPS Poughkeepsie Fin. Corp. of NY 6.94 87.41 0.32 5.75 NM 120.70 10.15 120.70 21.69
PSBK Progressive Bank, Inc. of NY 29.62 113.30 2.50 19.17 11.94 154.51 12.91 174.44 11.85
QCSB Queens County Bancorp of NY 46.12 513.64 2.07 18.47 22.50 249.70 37.40 249.70 22.28
RCSB RCSB FInancial, Inc. of NY(7) 45.25 670.42 2.60 21.36 17.27 211.84 16.63 217.34 17.40
RELY Reliance Bancorp, Inc. of NY 26.87 237.02 1.76 17.56 23.16 153.02 12.30 218.28 15.27
RSLN Roslyn Bancorp, Inc. of NY 20.00 872.84 0.93 14.08 NM 142.05 30.63 142.76 21.51
<CAPTION>
Dividends(4) Financial Characteristics(6)
-------------------------- -------------------------------------------------------------
Reported Core
Amount Payout Total Equity/ NPAs/ ------------- --------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------ ----- -------- ------ ------ ------ ----- ----- ----- -----
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Independence SB of Brooklyn NY
- ------------------------------
Superrange 0.00 0.00 0.00 4,254 19.50 0.45 0.69 3.54 0.89 4.55
Range Maximum 0.00 0.00 0.00 4,185 18.18 0.46 0.66 3.64 0.86 4.75
Range Midpoint 0.00 0.00 0.00 4,126 17.00 0.47 0.64 3.75 0.84 4.95
Range Minimum 0.00 0.00 0.00 4,066 15.78 0.47 0.61 3.88 0.82 5.20
All Public Companies 0.39 1.85 28.86 1,281 12.70 0.83 0.67 6.05 0.87 7.84
All Non-MHC State of NY(7)
- ---------------------------
Averages 0.44 1.68 29.16 2,570 12.14 1.17 0.67 6.31 0.86 8.07
Medians --- --- --- --- --- --- --- --- --- ---
Comparable Group Averages
- --------------------------
Averages 0.58 1.85 30.64 1,725 11.45 1.08 0.96 8.73 1.06 9.95
Medians --- --- --- --- --- --- --- --- --- ---
State of NY
- ------------
AFED AFSALA Bancorp, Inc. of NY 0.16 1.08 29.09 152 13.85 NA 0.24 2.52 0.57 6.04
ALBK ALBANK Fin. Corp. of Albany NY 0.60 1.51 22.14 3,496 9.20 0.92 0.81 8.74 1.01 10.91
ALBC Albion Banc Corp. of Albion NY 0.31 1.41 33.33 66 8.90 NA 0.09 0.93 0.38 3.93
AHCI Ambanc Holding Co., Inc. of NY 0.00 0.00 NM 478 12.72 1.06 -0.62 -4.16 -0.62 -4.16
ASFC Astoria FInancial Corp. of NY 0.60 1.32 22.90 7,689 7.60 0.52 0.52 6.54 0.77 9.68
CNY Carver Bancorp, Inc. of NY 0.20 1.63 NM 424 8.06 1.53 -0.47 -5.07 -0.03 -0.33
CATB Catskill Fin. Corp. of NY 0.28 1.81 32.94 274 26.98 0.50 1.42 6.14 1.44 6.22
DME Dime Bancorp, Inc. of NY 0.00 0.00 0.00 18,465 5.71 2.36 0.58 10.88 0.73 13.89
DIME Dime Community Bancorp of NY 0.18 0.94 18.56 1,237 15.41 0.82 0.93 6.19 1.03 6.90
FIBC Financial Bancorp, Inc. of NY 0.40 2.32 28.17 269 9.73 2.77 0.51 5.14 0.95 9.49
FFIC Flushing Fin. Corp. of NY 0.24 1.21 26.97 811 16.01 0.27 0.90 5.16 0.93 5.34
GPT GreenPoint Fin. Corp. of NY 1.00 1.51 35.46 13,261 10.81 2.84 1.06 9.91 0.96 9.05
HAVN Haven Bancorp of Woodhaven NY 0.60 1.62 18.07 1,728 5.80 0.78 0.62 10.26 0.91 14.94
JSBF JSB Financial, Inc. of NY 1.40 3.19 53.44 1,531 22.17 1.08 1.78 8.11 1.69 7.69
LISB Long Island Bancorp, Inc of NY 0.60 1.66 36.59 5,814 9.01 1.04 0.62 6.41 0.74 7.62
MBB MSB Bancorp of Middletown NY 0.60 3.12 NM 821 7.11 0.70 0.22 2.99 0.23 3.09
NYB New York Bancorp, Inc. of NY 0.60 1.73 21.28 3,175 5.06 1.29 1.31 24.82 1.55 29.28
PEEK Peekskill Fin. Corp. of NY 0.36 2.40 44.44 183 25.57 1.23 1.07 3.74 1.38 4.81
PKPS Poughkeepsie Fin. Corp. of NY 0.10 1.44 31.25 861 8.41 4.21 0.21 2.47 0.47 5.65
PSBK Progressive Bank, Inc. of NY 0.68 2.30 27.20 878 8.35 0.84 1.10 13.18 1.11 13.28
QCSB Queens County Bancorp of NY 0.80 1.73 38.65 1,373 14.98 0.75 1.72 10.84 1.74 1O.94
RCSB RCSB FInancial, Inc. of NY(7) 0.60 1.33 23.08 4,032 7.85 0.79 O.96 12.27 0.96 12.17
RELY Reliance Bancorp, Inc. of NY 0.64 2.38 36.36 1,927 8.04 0.75 0.56 6.66 0.85 10.11
RSLN Roslyn Bancorp, Inc. of NY 0.20 1.00 21.51 2,849 21.57 0.31 0.35 1.63 1.42 6.61
</TABLE>
<PAGE> 99
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.3
Public Market Pricing
Independence SB of Brooklyn NY and the Comparables
As of June 20, 1997
<TABLE>
<CAPTION>
Market Per Share Data
Capitalization --------------
-------------- Core Book Pricing Ratios(3)
Price/ Market 12-Mth Value/ ------------------------------------------
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
-------- ------ ------ ------ --- --- --- ---- ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFED SFS Bancorp of Schenectady NY 16.50 20.97 1.08 17.26 27.50 95.60 12.42 95.60 15.28
ROSE T R Financial Corp. of NY 23.50 4l4.35 1.54 11.90 13.35 197.48 12.17 197.48 15.26
TPNZ Tappan Zee Fin., Inc. of NY 16.50 25.31 0.50 13.86 NM 119.05 21.68 119.05 NM
ESBK The Elmira SB FSB of Elmira NY 19.25 13.59 O.85 19.87 21.63 96.88 6.10 101.21 22.65
GRTR The Greater New York SB of NY(7) 21.25 290.66 0.74 11.78 24.71 180.39 11.31 180.39 28.72
YFCB Yonkers Fin. Corp. of NY 15.37 48.88 0.92 13.68 22.94 112.35 17.19 112.35 16.71
Comparable Group
- ----------------
ALBK ALBANK Fin. Corp. of Albany NY 39.81 510.32 2.71 25.10 18.35 158.61 14.60 182.87 14.69
DIME Dime Community Bancorp of NY 19.12 250.97 0.97 14.53 21.98 131.59 20.28 153.33 19.71
FFIC Flushing Fin. Corp. of NY 19.87 160.71 0.89 16.06 23.10 123.72 19.81 123.72 22.33
HAVN Haven Bancorp of Woodhaven NY 37.00 160.21 3.32 23.13 16.23 159.97 9.27 160.59 11.14
JSBF JSB Financial, Inc. of NY 43.87 431.24 2.62 34.52 15.89 127.09 28.17 127.09 16.74
PKPS Poughkeepsie Fin. Corp. of NY 6.94 87.41 0.32 5.75 NM 120.70 10.15 120.70 21.69
PSBK Progressive Bank, Inc. of NY 29.62 113.30 2.50 19.17 11.94 154.51 12.91 174.44 11.85
QCSB Queens County Bancorp of NY 46.12 513.64 2.07 18.47 22.50 249.70 37.40 249.70 22.28
RELY Reliance Bancorp, Inc. of NY 26.87 237.07 1.76 17.56 23.16 153.02 12.30 218.28 15.27
ROSE T R Financial Corp. of NY 23.50 414.35 1.54 11.90 13.35 197.48 12.17 197.48 15.26
<CAPTION>
Dividends(4) Financial Characteristics(6)
-------------------------- ------------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ ------------- --------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------ ----- -------- ------ ------ ------ ----- ----- ----- -----
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFED SFS Bancorp of Schenectady NY O.28 1.70 25.93 169 12.99 0.69 0.46 3.46 0.83 6.22
ROSE T R Financial Corp. of NY 0.52 2.21 33.77 3,404 6.16 0.40 0.98 15.66 0.85 13.70
TPNZ Tappan Zee Fin., Inc. of NY 0.20 1.21 40.00 117 18.22 NA 0.71 3.80 0.66 3.52
ESBK The Elmira SB FSB of Elmira NY 0.64 3.32 NM 223 6.30 0.83 0.28 4.48 0.27 4.28
GRTR The Greater New York SB of NY(7) 0.20 0.94 27.03 2,571 6.27 7.49 0.46 7.67 0.40 6.60
YFCB Yonkers Fin. Corp. of NY 0.20 1.30 21.74 284 15.30 0.73 0.84 5.28 1.16 7.25
Comparable Group
- ----------------
ALBK ALBANK Fin. Corp. of Albany NY 0.60 1.51 22.14 3,496 9.20 0.92 0.81 8.74 1.01 10.91
DIME Dime Community Bancorp of NY 0.18 0.94 18.56 1,237 15.41 0.82 0.93 6.19 1.03 6.90
FFIC Flushing Fin. Corp. of NY 0.24 1.21 26.97 811 16.01 0.27 0.90 5.16 0.93 5.34
HAVN Haven Bancorp of Woodhaven NY 0.60 1.62 18.07 1,728 5.80 0.78 0.62 10.26 0.91 14.94
JSBF JSB Financial, Inc. of NY 1.40 3.19 53.44 1,531 22.17 1.08 1.78 8.11 1.69 7.69
PKPS Poughkeepsie Fin. Corp. of NY 0.10 1.44 31.25 861 8.41 4.21 0.21 2.47 0.47 5.65
PSBK Progressive Bank, Inc. of NY 0.68 2.30 27.20 878 8.35 0.84 1.10 13.18 1.11 13.28
QCSB Queens County Bancorp of NY 0.80 1.73 38.65 1,373 14.98 0.75 1.72 10.84 1.74 10.94
RELY Reliance Bancorp, Inc. of NY 0.64 2.38 36.36 1,927 8.04 0.75 0.56 6.66 0.85 10.11
ROSE T R Financial Corp. of NY 0.52 2.21 33.77 3,404 6.16 0.40 0.98 15.66 0.85 13.70
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) EPS (core basis) is based on actual trailing twelve month data, adjusted
to omit the impact of non-operating items (including the SAIF assessment)
on a tax effected basis, and is shown on a pro forma basis where
appropriate.
(3) P/E = Price to Earnings; P/B = Price to Book; P/A = Price to Assets;
P/TB = Price to Tangible Book; and P/CORE = Price to Core Earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend
declared.
(5) Indicated twelve month dividend as a percent of trailing twelve month
estimated core earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and total asset balances.
(7) Excludes from averages and medians those companies the subject of actual
or rumored acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been
obtained from sources we believe are reliable, but we cannot guarantee
the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 100
EXHIBITS
<PAGE> 101
RP Financial, LC.
LIST OF EXHIBITS
Exhibit
Number Description
I-1 Map of Office Locations
I-2 Independence Savings Bank's Audited Financial Statements
I-3 Key Operating Ratios
I-4 Investment Portfolio Composition
I-5 Yields and Costs
I-6 Allowance for Loan Losses Activity
I-7 Gap Analysis
I-8 Loan Maturity Schedule
I-9 Loan Portfolio Composition
I-10 Loan Originations, Purchases, and Sales
I-11 Non-Performing Assets
I-12 Time Deposit Rate/Maturity
I-13 Borrowings
II-1 List of Branch Offices
II-2 Historical Interest Rates
II-3 A. Demographic Reports for Nation, State, MSA, County and Zip
Codes
B. Personal Income by Major Source and Earnings by Industry
C. Full-Time and Part-Time Employees by Major Industry
D. Regional Economic Profile
<PAGE> 102
RP Financial, LC.
LIST OF EXHIBITS
(CONTINUED)
Exhibit
Number Description
III-1 General Characteristics of Publicly-Traded Institutions
III-2 Financial Analysis of New York Institutions
III-3 Financial Analysis of Peer Group Candidates
III-4 Peer Group Market Area Comparative Analysis
IV-1 Stock Prices: June 20, 1997
IV-2 Historical Stock Price Indices
IV-3 Historical Thrift Stock Indices
IV-4 Market Area Acquisition Activity
IV-5 Directors and Senior Management Summary Resumes
IV-6 Pro Forma Analysis Sheet
IV-7 Pro Forma Effect of Conversion Proceeds
IV-8 Peer Group Core Earnings Analysis
IV-9 Pro Forma Regulatory Capital Ratios
V-1 Firm Qualifications Statement
<PAGE> 103
EXHIBIT I-1
Independence Savings Bank
Map of Office Locations
<PAGE> 104
[INDEPENDENCE SAVINGS BANK MARKET AREA MAP]
<PAGE> 105
EXHIBIT I-2
Independence Savings Bank
Audited Financial Statements
[Incorporated by Reference]
<PAGE> 106
EXHIBIT I-3
Independence Savings Bank
Key Operating Ratios
<PAGE> 107
Exhibit I-3
Independence Savings Bank
Key Operating Ratios
<TABLE>
<CAPTION>
At or For the Year Ended March 31,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERFORMANCE RATIOS:(4)
Return on assets(2) 0.46% 1.27% 1.37% 1.71% 1.36%
Return on equity(2) 5.69 13.13 14.81 21.80 19.23
Interest-earning assets to interest-
bearing liabilities 1.06 1.09 1.10 1.08 1.07
Interest rate spread(5) 3.09 3.39 4.18 4.13 4.00
Net interest margin(5) 3.32 3.77 4.52 4.38 4.27
Noninterest expenses, exclusive of
amortization of intangible assets, to
total assets(2) 1.99 1.77 1.83 1.67 1.64
Efficiency ratio(6) 53.82 45.58 39.79 37.12 37.44
ASSET QUALITY RATIOS:
Non-performing loans as a percent of
total loans .73 1.24 .77 .79 1.06
Non-performing assets to total assets
at end of period(7) 0.51 0.78 0.67 0.61 0.85
Allowance for loan losses to
nonperforming loans at end of period 144.92 70.55 75.01 64.92 40.83
Allowance for loan losses to total loans
at end of period 1.06 0.87 0.58 0.51 0.43
CAPITAL AND OTHER RATIOS(4):
Equity to assets at end of period 8.28 7.49 9.89 8.66 7.46
Leverage capital 6.83 6.13 9.54 8.52 7.31
Tangible equity to risk-weighted assets
at end of period 10.05 9.82 13.76 13.85 12.57
Total capital to risk-weighted assets at
end of period 11.15 10.82 14.43 14.41 13.05
NUMBER OF FULL SERVICE OFFICES(8) 32 33 21 20 20
</TABLE>
- ------------------------
(1) Represents the excess of cost over fair value of net assets acquired
which consists of goodwill and other intangibles which amounted to
$23.7 million and $36.8 million at March 31, 1997, respectively. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operation -- Recent Acquisitions."
(2) At and for the year ended March 31, 1997, reflects the effects of a
special one-time assessment imposed on institutions which had deposits
insured by the Savings Association Insurance Fund ("SAIF"). The Bank,
as a result of the various acquisitions it has completed, is deemed to
have SAIF deposits. As a consequence, during fiscal 1997, it paid
$8.6 million in satisfaction of the special assessment. Had this amount
not been paid, for the year ended March 31, 1997, the Bank's returns
on assets and equity would have been .61% and 7.44%, respectively, and
the Bank's ratio of noninterest expenses, exclusive of amortization of
intangible assets, to total assets would have been 1.76%.
(3) Reflects adoption of Statements of Financial Accounting Standards
("SFAS") No. 109.
(4) With the exception of end of period ratios and the efficiency ratio,
all ratios are based on average daily balances during the respective
periods.
(5) Interest rate spread represents the difference between the weighted
average yield on interest-earning assets and the weighted average cost
of interest-bearing liabilities; net interest margin represents net
interest income as a percentage of average interest-earning assets.
(6) Reflects adjusted operating expenses (net of amortization of
intangibles and the special Savings Association Insurance Fund ("SAIF")
assessment) as a percent of the aggregate of net interest income and
adjusted non-interest income (net of gains and losses on the sales of
loans and securities).
(7) Non-performing assets consist of non-accrual loans, loans past due 90
days or more as to interest and accruing and other real estate acquired
through foreclosure or by deed-in-lieu thereof.
(8) In April 1997, the Bank acquired a branch office in Astoria, New York.
<PAGE> 108
EXHIBIT I-4
Independence Savings Bank
Investment Portfolio Composition
<PAGE> 109
Exhibit I-4
Independence Savings Bank
Investment Portfolio Composition
<TABLE>
<CAPTION>
At March 31,
---------------------------------------------------------------------------------
1997 1996 1995
---------------------- ----------------------- ---------------------
Amortized Market Amortized Market Amortized Market
Cost Value Cost Value Cost Value
--------- --------- ---------- ---------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Held to maturity:
Investment securities:
U.S. Government and federal
agency obligations $ -- $ -- $ 38,890 $ 38,803 $ 22,580 $ 21,718
Corporate securities -- -- 3,339 3,177
Municipal securities -- -- 1,105 1,128 1,106 1,127
Other -- -- -- -- 2,402 2,441
Mortgage-backed and mortgage-
related securities:
FNMA -- -- 5,492 5,486 6,463 6,322
GNMA -- -- 98,303 99,859 108,352 108,042
FHLMC -- -- 16,907 16,353 78,521 74,835
CMOs -- -- -- -- 112,209 108,187
--------- --------- ---------- ---------- -------- --------
Total $ -- $ -- $ 160,697 $ 161,629 $334,972 $325,849
========= ========= ========== ========== ======== ========
Available for sale:
Investment securities:
U.S. Government and federal
agency obligations $345,229 $345,144 $ 670,224 $ 669,281 $ 7,433 $ 7,468
Corporate securities 363 358 3,220 3,685 5,000 5,000
Municipal securities 1,104 1,104 -- -- -- --
Stocks:
Preferred 281 280 450 455 19,500 19,500
Common 10,333 10,601 10,288 10,417 22,991 29,850
Mortgage-related securities:
FNMA 7,319 7,175 3,108 3,091 -- --
GNMA 79,684 80,757 -- -- -- --
FHLMC 18,780 18,594 60,493 59,819 -- --
CMOs 84,761 84,453 334,664 332,411 -- --
-------- -------- ---------- ---------- -------- --------
Total $547,854 $548,466 $1,082,447 $1,079,149 $ 54,924 $ 61,818
======== ======== ========== ========== ======== ========
</TABLE>
<PAGE> 110
EXHIBIT I-5
Independence Savings Bank
Yields and Costs
<PAGE> 111
Exhibit I-5
Independence Savings Bank
Yields and Costs
<TABLE>
<CAPTION>
At March 31, Year Ended March 31,
1997 ---------------------------------------------------------------------------
------------ 1997 1996
---------------------------------- -------------------------------------
Average Average
Yield/ Average Yield/ Average Yield/
Cost Balance Interest Cost Balance Interest Cost
---- ------- -------- ---- ------- -------- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable(1):
Mortgage loans 8.08% $2,007,670 $161,638 8.05% $1,648,009 $140,435 8.52%
Other loans:
Cooperative apartment loans 7.24 361,011 26,687 7.39 352,440 26,389 7.49
Other(2) 8.40 108,608 9,502 8.75 108,661 9,773 8.99
---------- -------- ---------- --------
Total loans 7.98 2,477,289 197,827 7.99 2,109,110 176,597 8.37
Mortgage-backed and mortgage-related
securities 6.34 475,967 28,856 6.06% 286,317 17,779 6.21
Investment securities 5.61 395,677 22,356 5.65 204,862 11,635 5.68
Other interest-earning assets(3) 5.46 114,490 6,264 5.47 120,791 7,089 5.87
---------- -------- ---------- --------
Total interest-earning assets 7.39 3,463,423 255,303 7.37 2,721,080 213,100 7.93
---- -------- ---- -------- ----
Non-interest-earning assets 244,567 118,944
---------- ----------
Total assets $3,707,990 $2,840,024
========== ==========
Interest-bearing liabilities:
Deposits:
Demand deposits(4) 2.77 $ 469,833 $ 12,459 2.65 $ 350,395 $ 9,362 2.67
Savings deposits 2.88 1,055,807 30,728 2.91 834,374 25,097 3.01
Certificates of deposit 5.50 1,729,185 95,653 5.53 1,235,755 71,920 5.82
---------- -------- ---------- --------
Total deposits 4.27 3,254,825 138,840 4.27 2,420,524 106,379 4.39
---------- -------- ---------- --------
Total borrowings 7.36 18,581 1,347 7.25 69,402 4,240 6.11
---------- -------- ---------- --------
Total interest-bearing liabilities 4.29 3,273,406 140,187 4.28 2,489,926 110,619 4.44
---- -------- ---- -------- ----
Non-interest-bearing liabilities(5) 132,807 76,075
---------- ----------
Total liabilities 3,406,213 2,566,001
Total equity 301,777 274,023
---------- ----------
Total liabilities and equity $3,707,990 $2,840,024
========== ==========
Net interest-earning assets $ 190,017 $ 231,154
========== ==========
Net interest income/interest
rate spread 3.10% $115,116 3.09% $102,481 3.39%
==== ======== ==== ======== ====
Net interest margin 3.32% 3.77%
==== ====
Ratio of average interest-earning
assets to average interest-bearing
liabilities 1.05x 1.06x 1.09x
==== ==== ====
<CAPTION>
Year Ended March 31,
----------------------------------
1995
----------------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Interest-earning assets:
Loans receivable(1):
Mortgage loans $1,447,776 $128,008 8.84%
Other loans:
Cooperative apartment loans 314,665 23,185 7.37
Other(2) 113,748 8,541 7.51
---------- --------
Total loans 1,876,189 159,734 8.51
Mortgage-backed and mortgage-related
securities 335,128 20,204 6.03
Investment securities 196,928 8,644 4.39
Other interest-earning assets(3) 49,094 2,957 6.02
---------- --------
Total interest-earning assets 2,457,339 191,539 7.79
-------- ----
Non-interest-earning assets 88,518
----------
Total assets $2,545,857
==========
Interest-bearing liabilities:
Deposits:
Demand deposits(4) $ 329,451 $ 7,776 2.36%
Savings deposits 957,017 27,985 2.92
Certificates of deposit 877,252 40,682 4.64
---------- --------
Total deposits 2,163,720 76,443 3.53
---------- --------
Total borrowings 70,176 4,119 5.87
---------- --------
Total interest-bearing liabilities 2,233,896 80,562 3.61
-------- ----
Non-interest-bearing liabilities(5) 76,230
----------
Total liabilities 2,310,126
Total equity 235,731
----------
Total liabilities and equity $2,545,857
==========
Net interest-earning assets $ 223,443
==========
Net interest income/interest
rate spread $110,977 4.18%
======== ====
Net interest margin 4.52%
====
Ratio of average interest-earning
assets to average interest-bearing
liabilities 1.10x
====
</TABLE>
- ---------------
(1) The average balance of loans receivable includes non-performing loans,
interest on which is recognized on a cash basis.
(2) Includes home equity lines of credit and improvement loans, student loans,
automobile loans, passbook loans, credit card loans, personal loans and
commercial business loans.
(3) Includes federal funds sold, interest-earning bank deposits, FHLB stock and
overnight commercial paper.
(4) Includes NOW and money market accounts.
(5) Includes escrow accounts for the payment of taxes.
<PAGE> 112
EXHIBIT I-6
Independence Savings Bank
Allowance for Loan Losses Activity
<PAGE> 113
Exhibit I-6
Independence Savings Bank
Allowance for Loan Losses Activity
<TABLE>
<CAPTION>
Year Ended March 31,
----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Allowance at beginning of
period $20,528 $11,849 $ 8,770 $6,415 $6,374
------- ------- ------- ------ ------
Allowance from
acquisition(1) -- 6,910 -- -- --
Provision:
Mortgage loans(2) 8,425 3,300 3,300 3,075 1,925
Other loans(3) (465)(4) 379 292 750 1,862
------- ------- ------- ------ ------
Total provision 7,960 3,679 3,592 3,825 3,787
Charge-offs:
Mortgage loans(2) 1,636 1,634 842 1,049 2,371
Other loans(3) 509 751 220 1,259 2,066
------- ------- ------- ------ ------
Total charge-offs 2,145 2,385 1,062 2,308 4,437
------- ------- ------- ------ ------
Recoveries:
Mortgage loans(2) 545 176 294 28 41
Other loans 136 299 255 810 650
------- ------- ------- ------ ------
Total recoveries 681 475 549 838 691
------- ------- ------- ------ ------
Allowance at end of
period $27,024 $20,528 $11,849 $8,770 $6,415
======= ======= ======= ====== ======
</TABLE>
- -------------------------
(1) Reflects allowance for loan losses acquired in the Bay Ridge acquisition in
January 1996.
(2) Includes individual cooperative apartment loans.
(3) Includes student loans, home equity loans and lines of credit, automobile
loans, secured and unsecured personal loans, and commercial business loans.
(4) Reflects adjustment to allowance related to commercial business loans.
<PAGE> 114
EXHIBIT I-7
Independence Savings Bank
Gap Analysis
<PAGE> 115
EXHIBIT I-7
Independence Savings Bank
Gap Analysis
The following table summarizes the anticipated maturities or repricing
of the Bank's interest-earning assets and interest-bearing liabilities as of
March 31, 1997, based on the information and assumptions set forth in the notes
below.
<TABLE>
<CAPTION>
More Than
Three to More Than Three Years
Within Three Twelve One Year to to Five Over Five
Months Months Three Years Years Years Total
---------------- ------------ ------------ ------------ ------------- -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets (1):
Loans receivable:
Single-family residential loans 22,782 76,586 227,790 70,177 113,848 511,183
Multi-family residential 29,105 112,432 404,739 782,571 56,277 1,365,124
Commercial real estate and
mortgage loans 15,844 21,828 99,051 9,432 12,181 158,336
Other loans:
Cooperative apartment loans 17,752 67,629 178,163 54,418 30,067 348,029
Other loans(2) 77,224 19,653 9,492 8,151 2,541 117,061
Mortgage-backed and mortgage-
related securities 10,363 31,087 77,297 43,201 29,031 190,979
Investment securities 91,635 170,032 83,417 -- 1,522 346,606
Equity securities 10,861 10,881
Other interest-earning assets 361,665 361,665
----------- --------- ---------- --------- --------- ----------
Total $ 637,251 $ 499,247 $1,079,949 $ 947,950 $ 245,467 $3,409,864
=========== ========= ========== ========= ========= ==========
Interest-bearing liabilities:
Deposits (3):
NOW accounts $ 268,478 $ -- $ -- $ -- $ -- $ 268,478
Savings accounts 1,116,130 -- -- -- -- 1,116,130
Money market deposit accounts 218,230 -- -- -- -- 218,230
Certificates of deposit 545,103 779,379 334,013 84,904 431 1,743,830
Other borrowings -- -- 1,882 8,050 7,300 17,232
----------- --------- -------- --------- ---------- ----------
Total $ 2,147,941 $ 779,379 $335,895 $ 92,954 $ 7,731 $3,363,900
=========== ========= ======== ========= ========== ==========
Excess (deficiency) of interest-earning
assets over interest-bearing
liabilities $(1,417,259) $(284,428) $(755,015) $ 852,796 $237,642 $ 143,766
=========== ========= ======== ========= ======== =========
Cumulative excess (deficiency) of
interest-earning assets over interest-
bearing liabilities $(1,417,259) $(1,701,687) $(946,672) $ (93,876) $ 143,766
=========== =========== ======== ========= =========
Cumulative excess (deficiency) of
interest-earning assets over interest-
bearing liabilities as a percent of
total assets (38.1)% (45.6)% (25.4)% (2.5)% 3.9%
===== ===== ==== ==== ====
</TABLE>
- ------------
(1) Adjustable-rate loans are included in the period in which interest
rates are next scheduled to adjust rather than in the period in which
they are due, and fixed-rate loans are included in the periods in
which they are scheduled to be repaid, based on scheduled
amortization, in each case as adjusted to take into account estimated
prepayments based on certain assumptions.
(2) Includes student loans, home equity lines of credit and improvement
loans, automobile loans, passbook loans, personal loans, credit card
loans and commercial business loans.
(3) Does not include non-interest-bearing deposit accounts.
<PAGE> 116
EXHIBIT I-8
Independence Savings Bank
Loan Maturity Schedule
<PAGE> 117
EXHIBIT I-8
INDEPENDENCE SAVINGS BANK
LOAN MATURITY SCHEDULE
<TABLE>
<CAPTION>
Principal Repayments Contractually Due
in Year(s) Ended March 31,
Total at --------------------------------------------------------------------------------
March 31, 2002- 2008- There-
1997 1998 1999 2000 2001 2007 2013 after
--------- ------- -------- -------- -------- ------- -------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage loans:
Single-family residential $ 511,183 $5,018 $ 1,000 $ 1,032 $ 1,355 $ 95,785 $128,190 $278,803
Multi-family residential 1,365,124 101,711 118,262 155,903 250,914 713,996 24,216 122
Commercial and other
real estate 158,336 23,619 22,443 15,976 24,582 61,627 3,688 6,401
Other loans:
Cooperative apartment loans 348,029 54 182 98 462 40,349 38,508 268,376
Other(1) 117,061 84,559 4,641 6,911 4,388 12,459 4,103 --
--------- ------- ------- ------- ------- ------- ------- -------
Totals(2) $2,499,733 $214,961 $146,528 $179,920 $281,701 $924,216 $198,705 $553,702
========= ======= ======= ======= ======= ======= ======= =======
</TABLE>
- --------------------------
(1) Includes student loans, home equity loans and lines of credit,
automobile loans, passbook loans, personal loans, credit card loans and
commercial business loans.
(2) Does not include $41.6 million of single-family residential loans
serviced by others. Of the $2.29 billion of loan principal repayments
contractually due after March 31, 1998, $1.54 billion have fixed rates
of interest and $749.0 million have adjustable rates of interest.
<PAGE> 118
EXHIBIT I-9
Independence Savings Bank
Loan Portfolio Composition
<PAGE> 119
Exhibit I-9
Independence Savings Bank
Loan Portfolio Composition
<TABLE>
<CAPTION>
At March 31,
- ------------------------------------------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
----------------- ----------------- ----------------- ------------------ -----------------
Percent Percent Percent Percent Percent
Amount of Total Amount of Total Amount of Total Amount of Total Amount of Total
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mortgage loans:
Single-family residential $ 552,745 21.8% $ 534,539 22.7% $ 376,047 18.4% $ 308,960 18.0% $ 315,219 21.3%
Multi-family residential(1) 1,365,124 53.7 1,208,039 51.3 1,076,969 52.7 896,605 52.3 651,488 44.1
Commercial and other real
estate 158,336 6.2 162,799 6.9 119,890 5.9 95,172 5.6 82,033 5.6
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
Total mortgage loans 2,076,205 81.7 1,905,377 80.9 1,572,906 77.0 1,300,737 75.9 1,048,740 71.0
Other loans:
Cooperative apartment loans 348,029 13.7 340,507 14.4 360,434 17.6 288,381 16.8 296,600 20.1
Student loans 45,262 1.8 45,947 2.0 47,823 2.3 47,609 2.8 47,853 3.2
Home equity loans and lines 19,545 0.8 23,458 1.0 27,232 1.3 31,875 1.9 36,276 2.5
Consumer and other loans 27,005 1.1 20,611 0.9 18,151 0.9 28,100 1.6 30,953 2.1
Commercial business loans 25,249 1.0 18,003 0.8 16,866 0.8 17,694 1.0 16,900 1.1
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
Total other loans 465,090 18.3 448,526 19.1 470,506 23.0 413,659 24.1 428,582 29.0
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
Total loans receivable 2,541,295 100.0% 2,353,903 100.0% 2,043,412 100.0% 1,714,396 100.0% 1,477,322 100.0%
--------- ----- --------- ----- --------- ----- --------- ----- --------- -----
Less:
Discount on loans purchased
and deferred fees 11,182 10,567 11,301 11,632 8,976
Allowance for loan losses 27,024 20,528 11,849 8,770 6,415
--------- --------- --------- --------- ---------
Loans receivable, net $2,503,089 $2,322,808 $2,020,262 $1,693,994 $1,461,931
========== ========== ========== ========== ==========
</TABLE>
----------------
(1) Includes at March 31, 1997, $294.9 million of loans secured by
mixed use (combined residential and commercial use) properties.
<PAGE> 120
EXHIBIT I-10
Independence Savings Bank
Loan Originations, Purchases, and Sales
<PAGE> 121
Exhibit I-10
Independence Savings Bank
Loan Originations, Purchases and Sales
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------------------------
1997 1996 1995
---------- ---------- ----------
(In Thousands)
<S> <C> <C> <C>
Total loans held at beginning of period $2,353,903 $2,043,412 $1,714,396
Originations of loans:
Single-family residential 106,688 31,296 201,877
Multi-family residential 225,906 144,560 359,343
Commercial and other real estate 49,924 18,055 33,426
Other:
Cooperative apartment loans 115,685 23,862 116,588
Other(1) 43,009 41,195 52,791
---------- ---------- ----------
Total originations 541,212 258,968 764,025
Purchases of loans:
Single-family residential 19,097 171,108 --
Multi-family residential -- 31,126 --
Commercial and other real estate -- 67,084 --
Other loans:
Cooperative apartment loans 11,724 2,317 --
Other(1) -- 2,525 --
---------- ---------- ----------
Total purchases 30,821 274,160(2) --
---------- ---------- ----------
Total originations and purchases 572,033 533,128 764,025
Loans sold:
Single-family residential 4,066 5,693 11,565
Multi-family residential -- -- 119,692
Commercial and other real estate 1,494(3) -- --
Other loans:
Cooperative apartment loans 67,658 1,123 82
Other(1) -- -- --
---------- ---------- ----------
Total sold 73,218 6,816 131,339
Repayments(4) 311,423 215,821 303,670
---------- ---------- ----------
Net loan activity 187,392 310,491 329,016
---------- ---------- ----------
Total loans held at end of period $2,541,295 $2,353,903 $2,043,412
========== ========== ==========
</TABLE>
- ---------------
(1) Includes student loans, home equity loans and lines of credit, automobile
loans, passbook loans, personal loans, credit card loans and commercial
loans.
(2) Includes $273.6 million of loans acquired in connection with the acquisition
of Bay Ridge in January 1996 and $531,000 of loans acquired in the 1996
Branch Acquisition.
(3) Reflects sale of certain non-performing loans acquired in the Bay Ridge
acquisition.
(4) Also includes loans charged off or transferred to other real estate owned.
<PAGE> 122
EXHIBIT I-11
Independence Savings Bank
Non-Performing Assets
<PAGE> 123
Exhibit I-11
Independence Savings Bank
Non-Performing Assets
<TABLE>
<CAPTION>
At March 31,
-------------------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Non-accrual loans (1):
Mortgage loans:
Single-family residential ................ $ 2,474 $ 2,890 $ 2,074 $ 2,438 $ 2,905
Multi-family residential ................. 1,918 3,379 2,018 2,095 1,953
Commercial and Other ..................... 11,155 12,600 1,975 2,033 3,183
Other loans:
Cooperative apartment loans .............. 427 355 451 606 1,068
Other (2) ................................ 956 1,135 1,590 1,621 1,597
------- ------- ------- ------- -------
Total non-accruing loans ............... 16,930 20,359(3) 8,108 8,793 10,706
Loans past due 90 days or more as to
interest and accruing ...................... 1,718 8,737 7,564 4,715 5,004
------- ------- ------- ------- -------
Total non-performing loans ................... 18,648 29,096 15,672 13,508 15,710
------- ------- ------- ------- -------
Other real estate owned, net (4) ............. 540 973 1,691 2,024 4,534
------- ------- ------- ------- -------
Total non-performing assets (5) .............. $19,188 $30,069 $17,363 $15,532 $20,244
======= ======= ======= ======= =======
Allowance for loan losses as a
percent of total loans ..................... 1.06% 0.87% 0.58% 0.51% 0.43%
Allowance for loan losses as a percent of
non-performing loans ....................... 144.92 70.55 75.01 64.92 40.83
Non-performing loans as a percent of
total loans ................................ 0.73 1.24 0.77 0.79 1.06
Non-performing assets as a percent of
total assets ............................... 0.51 0.78 0.67 0.61 0.85
</TABLE>
(1) Does not include $14.4 million of loans more than 90 days or more past
maturity which continue to make payments on a basis consistent with the
original repayment schedule.
(2) Consists primarily of commercial business loans and home equity lines of
credit.
(3) Includes $9.5 million of loans acquired in the Bay Ridge acquisition.
(4) Net of related loss allowances.
(5) Non-performing assets consist of non-performing loans and other real estate
owned. Non-performing loans consist of non-accrual loans and loans 90 days
or more past due as to interest and other loans which have been identified
by the Bank as presenting uncertainty with respect to the collectibility
of interest or principle.
<PAGE> 124
EXHIBIT I-12
Independence Savings Bank
Time Deposit Rate/Maturity
<PAGE> 125
EXHIBIT I-12
INDEPENDENCE SAVINGS BANK
TIME DEPOSIT RATE/MATURITY
<TABLE>
<CAPTION>
At March 31,
------------------------------------------
1997 1996 1995
---------- ---------- ----------
(Dollars in Thousands)
<S> <C> <C> <C>
2.00% to 3.99% $ 2,666 $ 6,775 $ 121,160
4.00% to 4.99% 215,992 413,348 216,568
5.00% to 5.99% 1,260,417 798,536 258,688
6.00% to 6.99% 174,972 457,039 403,209
7.00% to 8.99% 89,701 121,542 78,638
9.00% to 10.99% 8 8 94
---------- ---------- ----------
$1,743,756 $1,797,248 $1,078,357
========== ========== ==========
</TABLE>
The following table sets forth the amount and remaining maturities of
the Bank's certificates of deposit at March 31, 1997.
<TABLE>
<CAPTION>
Over Six Over One Over Two
Months Year Years
Six Months Through One Through Through Over Three
and Less Year Two Years Three Years Years Total
---------- -------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
2.00% to 3.99% $ 679 $ 1,979 $ -- $ 8 $ -- $ 2,666
4.00% to 4.99% 192,937 17,898 4,898 125 134 215,992
5.00% to 5.99% 738,319 266,826 193,487 32,067 29,718 1,260,417
6.00% to 6.99% 70,246 32,906 8,171 21,832 41,817 174,972
7.00% to 8.99% 4,827 6,450 5,895 56,569 15,960 89,701
9.00% to 10.99% 8 -- -- -- -- 8
---------- -------- -------- -------- ------- ----------
Total $1,007,016 $326,059 $212,451 $110,601 $87,629 $1,743,756
========== ======== ======== ======== ======= ==========
</TABLE>
<PAGE> 126
EXHIBIT I-13
Independence Savings Bank
Borrowings
<PAGE> 127
Exhibit I-13
Independence Savings Bank
Borrowings
BORROWINGS. The Bank may obtain advances from the FHLB of New York
upon the security of the common stock it owns in that bank and certain of its
residential mortgage loans, provided certain standards related to
creditworthiness have been met. Such advances are made pursuant to several
credit programs, each of which has its own interest rate and range of
maturities. Such advances are generally available to meet seasonal and other
withdrawals of deposit accounts and to permit increased lending. At March 31,
1997, the Bank had $14.6 million of advances from the FHLB of New York with
maturities ranging between one year and 15 years with the substantial majority
having a maturity of less than seven years. The other borrowers outstanding at
March 31, 1997 consisted of two mortgages extended to the Bank in connection
with its purchase of two of its branch offices and totalled $2.7 million at
such date.
<PAGE> 128
EXHIBIT II-1
Independence Savings Bank
List of Branch Offices
<PAGE> 129
<TABLE>
<CAPTION>
New Book
Value of
Property and
Leasehold
Lease Improvements Deposits at
Owned or Expiration at March 31, March 31,
Location Leased Date 1997 1997
- ------------------------------ -------- -------------- ------------ -----------
(In Thousands)
<S> <C> <C> <C> <C>
EXECUTIVE AND ADMINISTRATIVE
OFFICES
195 Montague Street Owned $17,256 $ 87,324
Brooklyn, New York 11201(1)
BRANCH OFFICES
130 Court Street Owned 5,818 190,457
Brooklyn, New York 11201(2)
6424-18th Avenue Owned 966 353,874
Brooklyn, New York 11204
23 Newkirk Plaza Owned 2,372 122,970
Brooklyn, New York 11226
443 Hillside Avenue Owned 2,208 205,011
Williston Park, New York 11596
23-56 Bell Boulevard Leased 9/30/1998(3) 399 212,113
Bayside, New York 11360
250 Lexington Avenue Leased 12/31/2001(4) 65 62,617
New York, New York 10016
1416 East Avenue Leased (5) 481 116,142
Bronx, New York 10462
1108 Northern Boulevard Leased month to month 22 74,423
Manhasset, New York 11030 (6)
1769-86th Street Owned 1,616 168,499
Brooklyn, New York 11214
Pratt Institute Campus Leased (7) -- 3,315
200 Willoughby Avenue
Brooklyn, New York 11205
</TABLE>
<PAGE> 130
<TABLE>
<CAPTION>
Net Book
Value of
Property and
Leasehold
Lease Improvements Deposits at
Owned or Expiration at March 31, March 31,
Location Leased Date 1997 1997
- ------------------------------- ------- ---------- ------------ -----------
(In Thousands)
<S> <C> <C> <C> <C>
2357-59 86th Street Owned 2,018 81,974
Brooklyn, New York 11214
4514 16th Avenue Owned 2,032 123,559
Brooklyn, New York 11204
37-10 Broadway Owned 1,146 105,865
Long Island City, New York 11103
22-59 31st Street Owned 682 90,791
Long Island City, New York 11105
24-28 34th Avenue Leased 6/30/1997 326 67,146
Long Island City, New York 11106
51-12 31st Avenue Leased 10/31/1997 318 41,957
Woodside, New York 11377
83-20 Roosevelt Avenue Leased 1/31/2005 1,085 58,855
Jackson Heights, New York 11372
75-15 31st Avenue Leased 4/30/2004 380 78,235
Jackson Heights, New York 11370
89-01 Northern Boulevard Leased 7/31/2004 328 74,753
Jackson Heights, New York 11372
150-28 Union Turnpike Leased 5/31/2012 176 47,262
Flushing, New York 11367
234 Prospect Park West Owned 1,864 31,353
Brooklyn, New York 11215
7500 Fifth Avenue Owned 596 67,724
Brooklyn, New York 11209
440 Avenue P Owned 706 83,304
Brooklyn, New York 11223
4703 13th Avenue Owned 1,158 85,913
Brooklyn, New York 11219
</TABLE>
<PAGE> 131
<TABLE>
<CAPTION>
Net Book
Value of
Property and
Leasehold
Lease Improvements Deposits at
Owned or Expiration at March 31, March 31,
Location Leased Date 1997 1997
- -------- -------- ---------- ------------- ------------
(In Thousands)
<S> <C> <C> <C> <C>
301 Avenue U Owned 555 69,897
Brooklyn, New York 11223
8808 Fifth Avenue Owned 2,169 60,986
Brooklyn, New York 11209
1310 Kings Highway Owned 415 68,645
Brooklyn, New York 11229
4823 13th Avenue Owned 1,468 114,376
Brooklyn, New York 11219
1302 Avenue J Owned 795 113,483
Brooklyn, New York 11230
1550 Richmond Road Owned 1,101 139,762
Staten Island, New York 10304
1460 Forest Avenue Leased 8/27/11 12 122,973
Staten Island, New York 10302
OTHER PROPERTY:
- ---------------
6820 Bay Parkway Owned 644 --
Brooklyn, New York 11204(8)
------- ----------
Totals $51,177 $3,325,558
======= ==========
</TABLE>
(1) The Bank operates a full-service branch on the ground floor of the building.
(2) Designated as the Bank's main office.
(3) The Bank has an option to extend this lease for an additional 10 year term.
(4) The Bank has an option to extend this lease for two additional 10 year
terms.
(5) Consists of two leases. The original lease executed March 1972 expires in
March 2002. In February 1987, the Bank entered into a lease for additional
space in the adjacent lot which expires in November 2002.
(6) The Bank has entered a lease for space in a building under construction.
Upon completion, the Bank will relocate the branch office into the new
building.
(7) The Bank executed a "Memorandum of Understanding" with the Pratt Institute
to occupy the space; no expiration date was stated in the Memorandum.
(8) Consists of a former branch office the deposits of which were transferred to
another institution in September 1996. The building was sold subsequent to
March 31, 1997.
<PAGE> 132
EXHIBIT II-2
Historical Interest Rates
<PAGE> 133
HISTORICAL INTEREST RATES(1)
<TABLE>
<CAPTION>
Prime 90 Day One Year 30 Year
Year/Qtr. Ended Rate T-Bill T-Bill T-Bond
- --------------- ---- ------ ------ ------
<S> <C> <C> <C> <C>
1991: Quarter 1 8.75% 5.92% 6.24% 8.26%
Quarter 2 8.50% 5.72% 6.35% 8.43%
Quarter 3 8.00% 5.22% 5.38% 7.80%
Quarter 4 6.50% 3.95% 4.10% 7.47%
1992: Quarter 1 6.50% 4.15% 4.53% 7.97%
Quarter 2 6.50% 3.65% 4.06% 7.79%
Quarter 3 6.00% 2.75% 3.06% 7.38%
Quarter 4 6.00% 3.15% 3.59% 7.40%
1993: Quarter 1 6.00% 2.95% 3.18% 6.93%
Quarter 2 6.00% 3.09% 3.45% 6.67%
Quarter 3 6.00% 2.97% 3.36% 6.03%
Quarter 4 6.00% 3.06% 3.59% 6.34%
1994: Quarter 1 6.25% 3.56% 4.44% 7.09%
Quarter 2 7.25% 4.22% 5.49% 7.61%
Quarter 3 7.75% 4.79% 5.94% 7.82%
Quarter 4 8.50% 5.71% 7.21% 7.88%
1995: Quarter 1 9.00% 5.86% 6.47% 7.43%
Quarter 2 9.00% 5.57% 5.63% 6.63%
Quarter 3 8.75% 5.42% 5.68% 6.51%
Quarter 4 8.50% 5.09% 5.14% 5.96%
1996: Quarter 1 8.25% 5.14% 5.38% 6.67%
Quarter 2 8.25% 5.16% 5.68% 6.87%
Quarter 3 8.25% 5.03% 5.69% 6.92%
Quarter 4 8.25% 5.18% 5.49% 6.64%
1997: Quarter 1 8.50% 5.32% 6.00% 7.10%
June 20, 1997 8.50% 5.06% 5.63% 6.66%
</TABLE>
(1) End of period data.
Source: SNL Securities.
<PAGE> 134
EXHIBIT II-3
Independence Savings Bank
A. Demographic Reports for Nation, State, MSA, County and Zip Codes
B. Personal Income by Major Source and Earnings by Industry
C. Full-Time and Part-Time Employees by Major Industry
D. Regional Economic Profile
<PAGE> 135
A. Demographic Reports for Nation, State, MSA, County and Zip Codes
<PAGE> 136
STATE DEMOGRAPHIC REPORT
State 00
State Name UNITED STATES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 226,542,204 0-4 7.2 Total $35,584
1990 248,709,873 5-9 7.4 Householder <35 $30,999
1997 267,805,150 10-14 7.1 Householder 35-44 $40,281
2002 281,208,787 15-19 7.1 Householder 45-54 $45,940
20-24 6.5 Householder 55-64 $39,611
Population Growth Rate 1 25-44 31.4 Householder 65+ $22,603
45-64 20.5
Households 65-84 11.3
1990 91,947,410 85+ 1.4 Spending Potential index*
1997 99,019,931 18+ 74.3 Auto Loan 100
2002 104,000,643 Home Loan 100
Median Age Investments 100
Household Growth Rate 1 1990 32.9 Retirement Plans 100
Average Household Size 2.64 1997 34.8 Home Repair 100
Lawn & Garden 100
Families Male/Female Ratio 95.9 Remodeling 100
1990 64,517,947 Appliances 100
1997 68,999,546 Per Capita Income $18,100 Electronics 100
Furniture 100
Family Growth Rate 0.9 1997 Household Income* Restaurants 100
Base 99,019,225 Sporting Goods 100
Race 1990 1997 %<$15K 17.7 Theater/Concerts 100
% White 80.3 78.4 %$15K-25K 14.4 Toys & Hobbies 100
% Black 12.1 12.4 %$25K-50K 33.5 Travel 100
% Asian %$50K-100K 26.5 Video Rental 100
/Pacific Isl. 2.9 3.7 %$100K-150K 5.4 Apparel 100
%>$150K 2.6 Auto Aftermarket 100
Health Insurance 100
% Hispanic* 9 10.8 Median Household Income Pets & Supplies 100
1997 $36,961
2002 $42,042
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 137
STATE DEMOGRAPHIC REPORT
State 36
State Name NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 17,558,165 0-4 6.9 Total $33,910
1990 17,990,455 5-9 7 Householder <35 $30,429
1997 18,191,341 10-14 6.7 Householder 35-44 $36,263
2002 18,332,121 15-19 6.6 Householder 45-54 $43,029
20-24 6.4 Householder 55-64 $39,393
25-44 32.3 Householder 65+ $21,618
Population Growth Rate 0.2 45-64 20.9
Households 65-84 11.7
1990 6,639,322 85+ 1.5 Spending Potential Index*
1997 6,699,651 18+ 75.7 Auto Loan 101
2002 6,743,853 Home Loan 108
Median Age Investments 110
Household Growth Rate 0.1 1990 33.9 Retirement Plans 106
Average Household Size 2.63 1997 35.3 Home Repair 103
Lawn & Garden 103
Families Male/Female Ratio 93.8 Remodeling 96
1990 4,489,312 Appliances 101
1997 4,530,808 Per Capita Income $18,504 Electronics 101
Furniture 108
Family Growth Rate 0.1 1997 Household Income* Restaurants 104
Base 6,699,533 Sporting Goods 103
%<$15K 20.2 Theater/Concerts 105
Race 1990 1997 %$15K-25K 13.9 Toys & Hobbies 101
% White 74.4 71.6 %$25K-50K 31.3 Travel 111
% Black 15.9 16.5 %$50K-100K 25.9 Video Rental 100
% Asian %$100K-150K 5.5 Apparel 105
/Pacific Isl. 3.9 5 %>$150K 3.2 Auto Aftermarket 103
Health Insurance 100
% Hispanic* 12.3 15.2 Median Household Income Pets & Supplies 101
1997 $36,341
2002 $38,815
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase,
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 138
MSA DEMOGRAPHIC REPORT
MSA 5600
MSA Name NEW YORK, NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 8,274,961 0-4 7 Total $35,230
1990 8,546,846 5-9 6.7 Householder <35 $32,666
1997 8,659,129 10-14 6.3 Householder 35-44 $36,735
2002 8,736,913 15-19 6.2 Householder 45-54 $42,485
20-24 6.5 Householder 55-64 $40,248
25-44 33.7 Householder 65+ $23,160
Population Growth Rate 0.2 45-64 21
65-84 11.1
Households 85+ 1.5 Spending Potential Index*
1990 3,252,399 18+ 76.4 Auto Loan 100
1997 3,285,298 Home Loan 114
2002 3,308,952 Median Age Investments 111
1990 34 Retirement Plans 106
Household Growth Rate 0.1 1997 35.2 Home Repair 106
Average Household Size 2.57 Lawn & Garden 103
Remodeling 93
Families Male/Female Ratio 91.5 Appliances 100
1990 2,051,867 Electronics 100
1997 2,067,092 Per Capita Income $20,150 Furniture 114
Restaurants 105
Family Growth Rate 0.1 1997 Household Income* Sporting Goods 104
Base 3,285,238 Theater/Concerts 106
Race 1990 1997 %<$15K 21.8 Toys & Hobbies 97
% White 56.5 52.6 %$15K-25K 13.1 Travel 117
% Black 26.3 26.6 %$25K-50K 29.5 Video Rental 102
% Asian %$50K-100K 25.3 Apparel 106
/Pacific Isl. 6.5 8.2 %$100K-150K 6.2 Auto Aftermarket 105
%>$150K 4.1 Health Insurance 97
Pets & Supplies 100
% Hispanic* 22.1 26.8 Median Household Income
1997 $36,298
2002 $39,559
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 139
County and Zip Code Demographic Reports:
Kings County (Brooklyn)
<PAGE> 140
COUNTY DEMOGRAPHIC REPORT
STATE/COUNTY 36047
COUNTY NAME KINGS NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 2,231,028 0-4 8.1 Total $28,741
1990 2,300,664 5-9 7.2 Householder <35 $27,737
1997 2,268,273 10-14 6.9 Householder 35-44 $30,440
2002 2,246,217 15-19 7.2 Householder 45-54 $34,910
20-24 7.7 Householder 55-64 $33,445
Population Growth Rate -0.2 25-44 32.4 Householder 65+ $18,807
45-64 19
Households 65-84 10.2
1990 828,199 85+ 1.3
1997 810,574 18+ 73.6 Spending Potential Index*
2002 799,216 Auto Loan 97
Median Age Home Loan 105
Household Growth Rate -0.3 1990 32.3 Investments 100
Average Household Size 2.76 1997 32.5 Retirement Plans 93
Home Repair 105
Families Male/Female Ratio 90.1 Lawn & Garden 97
1990 555,284 Remodeling 89
1997 543,708 Per Capita Income $14,742 Appliances 97
Electronics 93
Family Growth Rate -0.3 1997 Household Income* Furniture 110
Base 810,564 Restaurants 96
Race 1990 1997 %<$15K 27.1 Sporting Goods 98
% White 46.9 43 %$15K-25K 15.1 Theater/Concerts 100
% Black 37.9 38.4 %$25K-50K 30.2 Toys & Hobbies 91
% Asian %$50K-100K 21.7 Travel 114
/Pacific Isl. 4.8 6 %$100K-150K 4.2 Video Rental 101
% >$150K 1.7 Apparel 99
% Hispanic* 20.1 24.9 Median Household Income Auto Aftermarket 99
1997 $29,778 Health Insurance 94
2002 $34,472 Pets & Supplies 96
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 141
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11204
POST OFFICE NAME BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 67,783 0-4 7.4 Total $29,030
1990 64,780 5-9 6.9 Householder <35 $29,379
1997 62,964 10-14 6.6 Householder 35-44 $32,181
2002 62,195 15-19 7 Householder 45-54 $35,819
20-24 7.4 Householder 55-64 $35,660
Population Growth Rate -0.4 25-44 29.8 Householder 65+ $18,465
45-64 19.7
Households 65-84 13.5
1990 23,332 85+ 1.6 Spending Potential Index*
1997 22,530 18+ 74.9 Auto Loan 97
2002 22,164 Home Loan 108
Median Age Investments 90
Household Growth Rate -0.5 1990 34.3 Retirement Plans 89
Average Household Size 2.79 1997 34.4 Home Repair 109
Lawn & Garden 97
Families Male/Female Ratio 95.4 Remodeling 85
1990 16,674 Per Capita Income $14,993 Appliances 95
1997 16,097 Electronics 93
Furniture 113
Family Growth Rate -0.5 1997 Household Income * Restaurants 98
Base 22,529 Sporting Goods 98
Race 1990 1997 %<$15K 26.3 Theater/Concerts 101
% White 87.3 82 %$15K-25K 13.9 Toys & Hobbies 89
% Black 0.5 0.6 %$25K-50K 31.6 Travel 118
% Asian %$50K-1OOK 22.6 Video Rental 103
/Pacific Isl. 9.6 13.2 %$100K-150K 4 Apparel 99
% >$150K 1.6 Auto Aftermarket 100
Health Insurance 94
% Hispanic* 8.3 12.8 Median Household Income Pets & Supplies 96
1997 $31,020
2002 $35,903
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 142
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11201
POST OFFICE NAME BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 48,991 0-4 5.9 Total $45,099
1990 46,980 5-9 4.6 Householder <35 $41,324
1997 45,913 10-14 4.2 Householder 35-44 $49,766
2002 45,490 15-19 4.9 Householder 45-54 $50,896
20-24 8.5 Householder 55-64 $43,149
25-44 42.2 Householder 65+ $25,874
Population Growth Rate -0.3 45-64 19.5
65-84 8.7
Households 85+ 1.5 Spending Potential Index*
1990 20,543 18+ 82.7 Auto Loan 100
1997 19,873 Home Loan 123
2002 19,582 Median Age Investments 113
1990 34 Retirement Plans 109
Household Growth Rate -0.5 1997 34.4 Home Repair 103
Average Household Size 2.07 Lawn & Garden 102
Remodeling 93
Families Male/Female Ratio 100.4 Appliances 100
1990 9,242 Per Capita Income $30,889 Electronics 103
1997 8,973 Furniture 112
Restaurants 108
Sporting Goods 104
Family Growth Rate -0.4 1997 Household Income* Theater/Concerts 106
Base 19,873 Toys & Hobbies 99
Race 1990 1997 %<$15K 17.4 Travel 116
% White 59.8 55.7 %$15K-25K 9.9 Video Rental 101
% Black 28.8 29.6 %$25K-50K 27.8 Apparel 108
% Asian %$50K-1OOK 27.2 Auto Aftermarket 106
/Pacific Isl. 4.5 5.5 %$100K-150K 9.2 Health Insurance 97
%>$150K 8.6 Pets & Supplies 103
% Hispanic* 16.2 22.1 Median Household Income
1997 $44,621
2002 $50,437
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX:(703) 243-6272 6/13/97
<PAGE> 143
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11214
POST OFFICE NAME BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 75,867 0-4 6 Total $28,520
1990 73,076 5-9 5 Householder <35 $31,368
1997 70,631 10-14 4.9 Householder 35-44 $30,770
2002 69,721 15-19 5.9 Householder 45-54 $36,581
20-24 7.2 Householder 55-64 $34,770
25-44 31.7 Householder 65+ $17,409
Population Growth Rate -0.5 45-64 21.4
65-84 15.9
Households 85+ 2.2 Spending Potential Index*
1990 29,256 18+ 80.8 Auto Loan 97
1997 28,097 Home Loan 107
2002 27,617 Investments 97
Median Age Retirement Plans 91
Household Growth Rate -0.6 1990 37.7 Home Repair 109
Average Household Size 2.48 1997 37.8 Lawn & Garden 98
Remodeling 86
Families Male/Female Ratio 92 Appliances 96
1990 19,588 Per Capita Income $15,787 Electronics 93
1997 18,809 Furniture 112
Restaurants 98
Family Growth Rate -0.6 1997 Household Income* Sporting Goods 98
Base 28,096 Theater/Concerts 101
Race 1990 1997 %<$15K 24.7 Toys & Hobbies 90
% White 86.1 80.1 %$15K-25K 14.5 Travel 116
% Black 0.9 1.1 %$25K-50K 33.3 Video Rental 102
% Asian %$50K-100K 22.6 Apparel 99
/Pacific Isl. 10.9 15.3 %$100K-150K 3.9 Auto Aftermarket 99
%>$150K 1.1 Health Insurance 96
Pets & Supplies 96
% Hispanic* 7.9 12.3 Median Household Income
1997 $31,844
2002 $36,476
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 144
CODE DEMOGRAPHIC REPORT
ZIP CODE 11226
POST OFFICE NAME BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 97,257 Total $27,647
1990 111,396 0-4 9.1 Householder <35 $25,199
1997 110,396 5-9 8.5 Householder 35-44 $26,763
2002 109,378 10-14 7.8 Householder 45-54 $31,915
15-19 7.9 Householder 55-64 $33,471
Population Growth Rate -0.1 20-24 7.7 Householder 65+ $18,872
Households 25-44 36.8
1990 36,249 45-64 17.1
1997 35,713 65-84 4.5 Spending Potential Index*
2002 35,242 85+ 0.5 Auto Loan 97
18+ 69.8 Home Loan 107
Household Growth Rate -0.2 Investments 91
Average Household Size 3.07 Median Age Retirement Plans 90
1990 29.6 Home Repair 110
Families 1997 30 Lawn & Garden 98
1990 26,609 Remodeling 86
1997 26,212 Male/Female Ratio 85 Appliances 95
Per Capita Income $12,645 Electronics 93
Family Growth Rate -0.2 Furniture 114
Restaurants 98
Race 1990 1997 1997 Household Income* Sporting Goods 98
% White 8.7 7.8 Base 35,714 Theater/Concerts 101
% Black 82.5 82 %<$15K 20 Toys & Hobbies 89
% Asian %$15K-25K 18.2 Travel 119
/Pacific Isl. 4.1 4.5 %$25K-50K 37.5 Video Rental 102
%$50K-100K 21.2 Apparel 100
% Hispanic* 14.3 17.9 %$100K-150K 2.4 Auto Aftermarket 100
%>$150K 0.8 Health Insurance 94
Pets & Supplies 96
Median Household Income
1997 $30,913
2002 $35,514
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 145
ZIP CODE DEMOGRAPHIC REPORT
ZIP Code 11219
Post Office Name BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average_Disposable Income
1980 72,256 0-4 9.7 Total $25,850
1990 73,527 5-9 8.3 Householder <35 $24,635
1997 72,253 10-14 7.7 Householder 35-44 $28,513
2002 71,501 15-19 7.2 Householder 45-54 $35,408
20-24 6.7 Householder 55-64 $32,363
Population Growth Rate -0.2 25-44 27.9 Householder 65+ $18,254
Households 45-64 15.6
1990 24,816 65-84 14.7
1997 24,231 85+ 2.3 Spending Potential Index*
2002 23,875 18+ 70.1 Auto Loan 97
Median Age Home Loan 106
Household Growth Rate -0.3 1990 32.6 Investments 90
Average Household Size 2.93 1997 32.5 Retirement Plans 88
Home Repair 109
Families Male/Female Ratio 96.6 Lawn & Garden 97
1990 17,379 Per Capita Income $12,703 Remodeling 86
1997 16,974 Appliances 95
Electronics 92
Family Growth Rate -0.3 1997 Household Income* Furniture 113
Base 24,232 Restaurants 97
Race 1990 1997 %<$15K 30.4 Sporting Goods 97
% White 84.1 78.6 %$15K-25K 17.3 Theater/Concerts 100
% Black 1.5 1.8 %$25K-50K 29.6 Toys & Hobbies 88
% Asian %$60K-100K 18.3 Travel 118
/Pacific Isl. 9.1 12 %$100K-150K 3.4 Video Rental 102
%>$150K 1.1 Apparel 99
% Hispanic* 12.3 17.7 Median Household Income Auto Aftermarket 99
1997 $26,280 Health Insurance 94
2002 $29,953 Pets & Supplies 95
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 146
ZIP CODE DEMOGRAPHIC REPORT
ZIP Code 11230
Post Office Name BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 70,439 0-4 8 Total $32,421
1990 72,733 5-9 6.9 Householder <35 $31,799
1997 70,637 10-14 6 Householder 35-44 $34,976
2002 69,778 15-19 6.1 Householder 45-54 $43,211
20-24 6.4 Householder 55-64 $40,849
Population Growth Rate -0.4 25-44 30.9 Householder 65+ $22,055
Households 45-64 18.3
1990 28,154 65-84 15.3
1997 27,221 85+ 2.2 Spending Potential Index*
2002 26,786 18+ 75.5 Auto Loan 98
Median Age Home Loan 108
Household Growth Rate -0.5 1990 35.6 Investments 104
Average Household Size 2.58 1997 35.8 Retirement Plans 96
Home Repair 109
Families Male/Female Ratio 95.5 Lawn & Garden 101
1990 18,160 Per Capita Income $18,333 Remodeling 89
1997 17,538 Appliances 97
Electronics 94
Family Growth Rate -0.5 1997 Household Income* Furniture 112
Base 27,222 Restaurants 100
Race 1990 1997 %<$15K 24.5 Sporting Goods 99
% White 80.2 74.4 %$15K-25K 14 Theater/Concerts 103
% Black 8.7 10 %$25K-50K 28.7 Toys & Hobbies 93
% Asian %$50K-100K 23.8 Travel 117
/Pacific Isl. 8.5 11.6 %$100K-150K 6.1 Video Rental 101
%>$150K 3 Apparel 100
% Hispanic* 8.3 12.5 Median Household Income Auto Aftermarket 100
1997 $33,379 Health Insurance 97
2002 $37,891 Pets & Supplies 98
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 147
ZIP CODE DEMOGRAPHIC REPORT
ZIP Code 11223
Post Office Name BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 73,116 0-4 6.7 Total $29,807
1990 70,865 5-9 6.1 Householder <35 $30,070
1997 68,044 10-14 5.6 Householder 35-44 $31,844
2002 67,100 15-19 6.3 Householder 45-54 $38,207
20-24 7 Householder 55-64 $37,854
Population Growth Rate -0.6 25-44 30.2 Householder 65+ $18,725
Households 45-64 20.8
1990 27,863 65-84 15.7
1997 26,599 85+ 1.7 Spending Potential lndex*
2002 26,125 18+ 77.9 Auto Loan 97
Median Age Home Loan 105
Household Growth Rate -0.6 1990 36.7 Investments 102
Average Household Size 2.55 1997 36.8 Retirement Plans 92
Home Repair 108
Families Male/Female Ratio 93.3 Lawn & Garden 99
1990 18,866 Remodeling 88
1997 17,998 Per Capita Income $17,287 Appliances 96
Electronics 92
Family Growth Rate -0.6 1997 Household Income* Furniture 111
Base 26,599 Restaurants 98
Race 1990 1997 %<$15K 25.4 Sporting Goods 98
% White 83.6 79.2 %$15K-25K 14.2 Theater/Concerts 101
% Black 6 6.2 %$25K-50K 30.9 Toys & Hobbies 92
0% Asian %$50K-100K 23.6 Travel 115
/Pacific Isl. 6.9 9.7 %$100K-150K 4.2 Video Rental 101
%>$150K 1.6 Apparel 98
% Hispanic* 9.9 14.1 Median Household Income Auto Aftermarket 99
1997 $31,789 Health Insurance 97
2002 $36,456 Pets & Supplies 96
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 148
ZIP CODE DEMOGRAPHIC REPORT
ZIP Code 11209
Post Office Name BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 66,035 0-4 5.1 Total $35,376
1990 62,346 5-9 4.1 Householder <35 $37,133
1997 60,437 10-14 4 Householder 35-44 $40,072
2002 59,700 15-19 4.5 Householder 45-54 $45,201
20-24 6.5 Householder 55-64 $42,142
Population Growth Rate -0.4 25-44 34.7 Householder 65+ $22,114
Households 45-64 21.7
1990 29,714 65-84 16.8
1997 28,727 85+ 2.6 Spending Potential Index*
2002 28,276 18+ 84.1 Auto Loan 98
Median Age Home Loan 108
Household Growth Rate -0.5 1990 39.1 Investments 111
Average Household Size 2.1 1997 39.2 Retirement Plans 99
Home Repair 109
Families Male/Female Ratio 90.1 Lawn & Garden 102
1990 15,699 Per Capita Income $24,247 Remodeling 90
1997 15,119 Appliances 98
Electronics 95
Family Growth Rate -0.5 1997 Household Income* Furniture 110
Base 28,727 Restaurants 101
Race 1990 1997 %<$15K 18.9 Sporting Goods 99
% White 91 86.7 %$15K-25K 12.7 Theater/Concerts 103
% Black 0.7 0.9 %$25K-50K 31.5 Toys & Hobbies 95
% Asian %$50K-100K 26.6 Travel 116
/Pacific Isl. 6.4 9.2 %$100K-l50K 6.6 Video Rental 100
%>$150K 3.6 Apparel 100
% Hispanic* 6.6 10.6 Median Household Income Auto Aftermarket 100
1997 $38,064 Health Insurance 99
2002 $42,994 Pets & Supplies 98
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 149
ZIP CODE DEMOGRAPHIC REPORT
ZIP Code 11229
Post Office Name BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 75,058 0-4 5.9 Total $32,420
1990 72,699 5-9 5.6 Householder <35 $35,287
1997 71,309 10-14 5.4 Householder 35-44 $36,460
2002 70,543 15-19 5.8 Householder 45-54 $41,864
20-24 6.1 Householder 55-64 $39,944
Population Growth Rate -0.3 25-44 29.8 Householder 65+ $20,228
Households 45-64 21.5
1990 29,547 65-84 17.8
1997 28,760 85+ 2.1 Spending Potential Index*
2002 28,328 18+ 79.6 Auto Loan 98
Median Age Home Loan 106
Household Growth Rate -0.4 1990 39.6 Investments 106
Average Household Size 2.47 1997 39.5 Retirement Plans 96
Home Repair 108
Families Male/Female Ratio 91.9 Lawn & Garden 101
1990 19,348 Per Capita Income 18,917 Remodeling 89
1997 18,859 Appliances 98
Electronics 95
Family Growth Rate -0.4 1997 Household Income* Furniture 110
Base 28,759 Restaurants 100
Race 1990 1997 % <$15K 22.3 Sporting Goods 99
% White 86.1 80.9 % $15K-25K 13.3 Theater/Concerts 103
% Black 3.2 3.9 % $25K-50K 29.5 Toys & Hobbies 95
% Asian % $50K- 100K 26.6 Travel 114
/Pacific Isl. 8.9 12.4 % $100K-150K 6.2 Video Rental 101
% >$150K 2.1 Apparel 100
% Hispanic* 5.8 9.1 Median Household Income Auto Aftermarket 100
1997 $36,525 Health Insurance 98
2002 $41,071 Pets & Supplies 98
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, Including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 150
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11215
POST OFFICE NAME BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 66,833 0-4 6.7 Total $39,111
1990 63,338 5-9 5.3 Householder <35 $37,617
1997 61,441 10-14 4.9 Householder 35-44 $43,176
2002 60,703 15-19 5.1 Householder 45-54 $46,550
20-24 8 Householder 55-64 $38,035
Population Growth Rate -0.4 25-44 43 Householder 65+ $20,749
Households 45-64 17.4
1990 26,476 65-84 8.5
1997 25,502 85+ 1.2 Spending Potential Index*
2002 25,087 18+ 80.2 Auto Loan 100
Home Loan 119
Household Growth Rate -0.5 Median Age Investments 109
Average Household Size 2.38 1990 33.2 Retirement Plans 104
1997 33.5 Home Repair 105
Families Lawn & Garden 102
1990 14,470 Male/Female Ratio 94.8 Remodeling 92
1997 13,953 Per Capita Income $24,059 Appliances 100
Electronics 100
Family Growth Rate -0.5 Furniture 114
1997 Household Income* Restaurants 107
Race 1990 1997 Base 25,502 Sporting Goods 103
% White 70.3 62.9 %<$15K 16.2 Theater/Concerts 105
% Black 12.1 14 %$15K-25K 11.6 Toys & Hobbies 97
% Asian %$25K-50K 31.7 Travel 117
/Pacific Isl. 4.6 5.7 %$50K-100K 27.7 Video Rental 101
%$100K-150K 7.8 Apparel 106
% Hispanic* 26.6 35.4 %>$150K 5.1 Auto Aftermarket 105
Health Insurance 97
Median Household Income Pets & Supplies 102
1997 $41,413
2002 $46,437
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 151
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11205
POST OFFICE NAME BROOKLYN NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 33,971 0-4 7.8 Total $25,762
1990 36,852 5-9 6.9 Householder <35 $25,007
1997 35,763 10-14 6.7 Householder 35-44 $27,272
2002 35,344 15-19 8.1 Householder 45-54 $30,804
20-24 10.9 Householder 55-64 $29,007
Population Growth Rate -0.4 25-44 33.2 Householder 65+ $14,928
Households 45-64 18.2
1990 12,856 65-84 7-3
1997 12,405 85+ 0.9 Spending Potential Index*
2002 12,202 18+ 74.7 Auto Loan 96
Home Loan 105
Household Growth Rate -0.5 Median Age Investments 104
Average Household Size 2.67 1990 29.7 Retirement Plans 95
1997 29.9 Home Repair 102
Families Lawn & Garden 96
1990 7,400 Male/Female Ratio 91.9 Remodeling 91
1997 7,132 Per Capita Income $12,919 Appliances 97
Electronics 93
Family Growth Rate -0.5 Furniture 107
1997 Household Income* Restaurants 94
Race 1990 1997 Base 12,406 Sporting Goods 98
% White 18.7 16.3 %<$15K 29.3 Theater/Concerts 98
% Black 64.4 63.9 %$15K-25K 17.4 Toys & Hobbies 92
% Asian %$25K-50K 30.5 Travel 111
/Pacific Isl. 1.7 1.9 %$50K-100K 18.2 Video Rental 99
%$100K-150K 3.9 Apparel 98
% Hispanic* 27.2 32.3 %>$150K 0.6 Auto Aftermarket 99
Health Insurance 93
Median Household Income Pets & Supplies 95
1997 $26,953
2002 $31,253
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX (703) 243-6272 6/13/97
<PAGE> 152
County and Zip Code Demographic Reports:
Queens County (Queens)
<PAGE> 153
COUNTY DEMOGRAPHIC REPORT
STATE/COUNTY 36081
COUNTY NAME QUEENS NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 1,891,325 0-4 6.3 Total $33,139
1990 1,951,598 5-9 6.1 Householder <35 $33,323
1997 1,986,671 10-14 5.8 Householder 35-44 $34,125
2002 2,010,857 15-19 5.8 Householder 45-54 $40,444
20-24 6.2 Householder 55-64 $39,778
Population Growth Rate 0.2 25-44 34.2 Householder 65+ $22,244
45-64 21.2
Households 65-84 12.7
1990 720,149 85+ 1.6 Spending Potential Index*
1997 730,960 18+ 78.4 Auto Loan 98
2002 737,903 Home Loan 1ll
Median Age Investments 105
Household Growth Rate 0.2 1990 35.2 Retirement Plans 100
Average Household Size 2.68 1997 36.5 Home Repair 105
Lawn & Garden 100
Families Male/Female Ratio 93.3 Remodeling 87
1990 490,915 Appliances 99
1997 496,497 Per Capita income $17,607 Electronics 98
Furniture 1ll
Restaurants 102
Family Growth Rate 0.2 Sporting Goods 101
1997 Household Income* Theater/Concerts 104
Race 1990 1997 Base 730,944 Toys & Hobbies 94
% White 57.9 53 % <$15K 17.2 Travel 115
% Black 21.7 22 % $15K-25K 13 Video Rental 103
% Asian % $25K-50K 33.4 Apparel 103
/Pacific Isl. 12.2 15.4 % $50K-100K 29.1 Auto Aftermarket 104
% $100K-l50K 5.5 Health Insurance 96
% Hispanic* 19.5 23.7 % >$150K 1.7 Pets & Supplies 99
Median Household Income
1997 $38,332
2002 $42,693
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 154
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11360
POST OFFICE NAME FLUSHING NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 18,297 0-4 5.2 Total $47,855
1990 20,337 5-9 4.3 Householder <35 $51,151
1997 21,621 10-14 4 Householder 35-44 $47,427
2002 22,177 15-19 4.2 Householder 45-54 $57,022
20-24 4.7 Householder 55-64 $55,430
Population Growth Rate 0.8 25-44 33.3 Householder 65+ $31,746
45-64 26.5
Households 65-84 16.5
1990 8,837 85+ 1.2
1997 9,342 18+ 83.8 Spending Potential Index*
2002 9,547 Auto Loan 105
Median Age Home Loan 134
1990 41.2 Investments 129
Household Growth Rate 0.8 1997 41.5 Retirement Plans 125
Average Household Size 2.31 Home Repair 111
Male/Female Ratio 91.1 Lawn & Gordon 116
Families Remodeling 97
1990 5,924 Per Capita Income $31,491 Appliances 106
1997 6,270 Electronics 114
Furniture 121
Restaurants 125
Family Growth Rate 0.8 1997 Household Income* Sporting Goods 111
Base 9,343 Theater/Concerts 122
Race 1990 1997 % <$l5K 8.5 Toys & Hobbies 110
% White 88.7 83.7 % $15K-25K 7.2 Travel 128
% Black 1.1 1.4 % $25K-50K 25.7 Video Rental 103
% Asian % $50K-100K 39.8 Apparel 124
/Pacific Isl. 9.2 13.6 % $100K-l50K 12.7 Auto Aftermarket 119
% >$150K 6 Health Insurance 106
% Hispanic* 4.9 7 Pets & Supplies 109
Median Household Income
1997 $57,576
2002 $62,814
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase-
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800)292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 155
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11103
POST OFFICE NAME LONG ISLAND CITY NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 38,625 0-4 5.4 Total $27,876
1990 38,597 5-9 4.8 Householder <35 $30,017
1997 40,952 10-14 4.5 Householder 35-44 $29,209
2002 42,118 15-19 4.9 Householder 45-54 $30,987
20-24 7.5 Householder 55-64 $33,023
Population Growth Rate 0.8 25-44 39.5 Householder 65+ $18,196
45-64 20.2
Households 65-84 11.7
1990 16,397 85+ 1.5
1997 17,327 18+ 82.7 Spending Potential Index*
2002 17,761 Auto Loan 97
Median Age Home Loan 107
1990 34 Investments 89
Household Growth Rate 0.8 1997 35.3 Retirement Plans 88
Average Household Size 2.36 Home Repair 110
Male/Female Ratio 101.5 Lawn & Garden 97
Families Remodeling 85
1990 9,502 Per Capita Income $16,140 Appliances 95
1997 10,026 Electronics 92
1997 Household Income* Furniture 114
Family Growth Rate 0.7 Base 17,327 Restaurants 97
% <$15K 20.1 Sporting Goods 97
Race 1990 1997 % $15K-25K 15.9 Theater/Concerts 100
% White 79.1 73 % $25K-50K 38 Toys & Hobbies 88
% Black 1 1.1 % $50K-100K 23 Travel 118
% Asian % $100K-150K 2.6 Video Rental 102
/Pacific Isl. 12 15.9 % >$150K 0.5 Apparel 99
Auto Aftermarket 99
% Hispanic* 19.9 25.9 Median Household Income Health Insurance 94
1997 $32,536 Pets & Supplies 95
2002 $36,625
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase,
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for
a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 156
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11105
POST OFFICE NAME LONG ISLAND CITY NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 39,014 0-4 5 Total $30,108
1990 37,297 5-9 5.1 Householder <35 $31,820
1997 38,888 10-14 5.2 Householder 35-44 $31,513
2002 39,693 15-19 5.4 Householder 45-54 $35,258
20-24 6.8 Householder 55-64 $36,569
Population Growth Rate 0.6 25-44 35.2 Householder 65+ $19,306
Households 45-64 22.2
1990 15,243 65-84 13.2
1997 15,798 85+ 1.7 Spending Potential Index*
2002 16,062 18+ 81.6
Auto Loan 97
Median Age Home Loan 107
Household Growth Rate 0.5 1990 35.7 Investments 91
Average Household Size 2.46 1997 37 Retirement Plans 89
Home Repair 109
Families Male/Female Ratio 97.4 Lawn & Garden 97
1990 9,723 Per Capita Income $17,030 Remodeling 86
1997 10,071 Appliances 95
Electronics 92
Family Growth Rate 0.5 1997 Household Income* Furniture 113
Race 1990 1997 Base 15,798 Restaurants 97
% White 86 81.2 % <$15K 18.7 Sporting Goods 98
% Black 2.2 2.6 % $15K-25K 14.6 Theater/Concerts 100
% Asian % $25K-50K 35 Toys & Hobbies 89
/Pacific Isl. 5.6 8 % $50K-100K 27.4 Travel 117
% $100K-150K 3.6 Video Rental 102
% Hispanic' 18.8 25.8 % >$150K 0.8 Apparel 99
Median Household Income Auto Aftermarket 100
1997 $35,317 Health Insurance 94
2002 $39,250 Pets & Supplies 95
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 157
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11370
POST OFFICE NAME FLUSHING NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 23,507 0-4 6.2 Total $35,832
1990 24,066 5-9 5.3 Householder <35 $33,792
1997 23,506 10-14 5.2 Householder 35-44 $33,368
2002 23,425 15-19 5.7 Householder 45-54 $42,914
20-24 7.1 Householder 55-64 $45,880
Population Growth Rate -0.3 25-44 36 Householder 65+ $24,966
Households 45-64 22.7
1990 8,710 65-84 10.5
1997 8,465 85+ 1.2
2002 8,407 18+ 80.1 Spending Potential Index*
Auto Loan 97
Median Age Home Loan 110
Household Growth Rate -0.4 1990 34.4 Investments 97
Average Household Size 2.77 1997 35.9 Retirement Plans 93
Home Repair 107
Families Male/Female Ratio 97.9 Lawn & Garden 98
1990 6,398 Per Capita Income $18,659 Remodeling 85
1997 6,214 Appliances 96
Electronics 95
Family Growth Rate -0.4 1997 Household Income* Furniture 111
Base 8,465 Restaurants 100
Race 1990 1997 % <$15K 12.2 Sporting Goods 99
% White 71.5 65.7 % $15K-25K 11.7 Theater/Concerts 102
% Black 1.6 1.8 % $25K-50K 34.3 Toys & Hobbies 91
% Asian % $50K-100K 34.1 Travel 115
/Pacific Isl. 15 18.3 % $100K-150K 6 Video Rental 102
% >$150K 1.7 Apparel 99
% Hispanic* 29 35.4 Median Household Income Auto Aftermarket 101
1997 $42,118 Health Insurance 96
2002 $46,795 Pets & Supplies 98
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX (703) 243-6272 6/13/97
<PAGE> 158
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11372
POST OFFICE NAME FLUSHING NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 55,522 0-4 5.8 Total $30,358
1990 57,726 5-9 5.1 Householder <35 $32,659
1997 60,619 10-14 4.7 Householder 35-44 $31,002
2002 61,923 15-19 4.9 Householder 45-54 $35,083
20-24 5.6 Householder 55-64 $36,001
Population Growth Rate 0.7 25-44 36.3 Householder 65+ $21,126
Households 45-64 22.7
1990 23,764 65-84 13.1
1997 24,916 85+ 1.8 Spending Potential Index*
2002 25,391 18+ 81.7 Auto Loan 97
Median Age Home Loan 104
Household Growth Rate 0.7 1990 37.1 Investments 91
Average Household Size 2.43 1997 38.2 Retirement Plans 87
Home Repair 108
Families Male/Female Ratio 95.5 Lawn & Garden 97
1990 13,907 Per Capita Income $17,553 Remodeling 88
1997 14,542 Appliances 95
Electronics 91
Family Growth Rate 0.6 1997 Household Income* Furniture 113
Base 24,914 Restaurants 96
Race 1990 1997 % <$15K 17.1 Sporting Goods 97
% White 63.5 58.5 % $15K-25K 15.1 Theater/Concerts 99
% Black 4 4.1 % $25K-50K 37.9 Toys & Hobbies 88
% Asian % $50K-100K 25 Travel 117
/Pacific Isl. 16.7 19.6 % $100K-150K 3.8 Video Rental 102
% >$150K 1.2 Apparel 98
% Hispanic* 43.6 49.8 Median Household Income Auto Aftermarket 98
1997 $35,192 Health Insurance 94
2002 $38,961 Pets & Supplies 94
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 159
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11106
POST OFFICE NAME LONG ISLAND CITY NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 37,373 0-4 5.4 Total $25,648
1990 36,515 5-9 4.9 Householder <35 $28,766
1997 40,769 10-14 4.6 Householder 35-44 $27,006
2002 42,609 15-19 4.8 Householder 45-54 $33,233
20-24 6.2 Householder 55-64 $28,196
Population Growth Rate 1.5 25-44 37.1 Householder 65+ $15,976
Households 45-64 20.5
1990 16,290 65-84 14.5
1997 18,010 85+ 1.8
18+ 82.3 Spending Potential Index*
2002 18,725 Auto Loan 97
Median Age Home Loan 106
Household Growth Rate 1.4 1990 36.3 Investments 92
Average Household Size 2.25 1997 37.3 Retirement Plans 88
Home Repair 109
Families Male/Female Ratio 96.1 Lawn & Garden 97
1990 9,015 Per Capita Income $15,659 Remodeling 87
1997 10,003 Appliances 95
Electronics 92
Family Growth Rate 1.4 1997 Household Income* Furniture 113
Base 18,008 Restaurants 97
Race 1990 1997 % <$15K 26.1 Sporting Goods 97
% White 69.7 63.3 % $15K-25K 17.4 Theater/Concerts 100
% Black 8.5 9.3 % $25K-50K 34.6 Toys & Hobbies 89
% Asian % $50K-100K 18.6 Travel 117
/Pacific Isl. 11.3 14.4 % $100K-150K 2.7 Video Rental 102
% >$150K 0.6 Apparel 98
% Hispanic* 26.6 34 Median Household Income Auto Aftermarket 99
1997 $28,105 Health Insurance 95
2002 $31,761 Pets & Supplies 95
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 160
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11367
POST OFFICE NAME FLUSHING NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 37,438 0-4 6.9 Total $33,560
1990 36,877 5-9 6.7 Householder <35 $36,536
1997 39,703 10-14 6 Householder 35-44 $35,003
2002 40,901 15-19 5.5 Householder 45-54 $42,166
20-24 5.3 Householder 55-64 $40,031
Population Growth Rate 1 25-44 33.6 Householder 65+ $21,508
Households 45-64 19.4
1990 14,608 65-84 15.2
1997 15,623 85+ 1.2 Spending Potential Index*
2002 16,030 18+ 77.1 Auto Loan 99
Median Age Home Loan 115
Household Growth Rate 0.9 1990 35.9 Investments 109
Average Household Size 2.54 1997 36.8 Retirement Plans 103
Home Repair 106
Families Male/Female Ratio 92.6 Lawn & Garden 102
1990 10,135 Per Capita Income $18,675 Remodeling 88
1997 10,859 Appliances 99
Electronics 100
Family Growth Rate 1 1997 Household Income* Furniture 109
Base 15,621 Restaurants 104
Race 1990 1997 % <$15K 17.6 Sporting Goods 101
% White 75.4 69.2 % $15K-25K 11.3 Theater/Concerts 105
% Black 8.9 9.8 % $25K-50K 33.1 Toys & Hobbies 96
% Asian % $50K-100K 31.3 Travel 115
/Pacific Isl. 10.8 14.7 % $100K-150K 4.6 Video Rental 102
% >$150K 2 Apparel 101
% Hispanic* 13.5 17.9 Median Household Income Auto Aftermarket 104
1997 $39,235 Health Insurance 98
2002 $44,023 Pets & Supplies 101
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 161
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11377
POST OFFICE NAME FLUSHING NY
<TABLE>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 71,098 0-4 5.9 Total $29,253
1990 75,704 5-9 5.3 Householder <35 $29,844
1997 76,070 10-14 5.1 Householder 35-44 $29,104
2002 76,561 15-19 5.2 Householder 45-54 $35,469
20-24 6.7 Householder 55-64 $36,036
Population Growth Rate 0.1 25-44 37 Householder 65+ $18,938
Households 45-64 21.5
1990 29,252 65-84 12
1997 29,289 85+ 1.3
2002 29,388 18+ 80.8 Spending Potential Index*
Auto Loan 97
Median Age Home Loan 109
Household Growth Rate 0 1990 35.1 Investments 94
Average Household Size 2.59 1997 36.5 Retirement Plans 91
Home Repair 106
Families Male/Female Ratio 95.7 Lawn & Garden 97
1990 18,553 Per Capita Income $16,075 Remodeling 87
1997 18,537 Appliances 95
Electronics 94
Family Growth Rate 0 1997 Household Income* Furniture 112
Base 29,290 Restaurants 99
Race 1990 1997 % <$15K 20.2 Sporting Goods 98
% White 59.5 52.9 % $15K-25K 14.9 Theater/Concerts 100
% Black 4.2 4.5 % $25K-50K 35.9 Toys & Hobbies 89
% Asian % $50K-100K 24.3 Travel 116
/Pacific W. 23.4 27.8 % $100K-150K 3.8 Video Rental 103
% >$150K 0.8 Apparel 99
% Hispanic* 30.8 36.1 Auto Aftermarket 100
Median Household Income Health Insurance 95
1997 $32,985 Pets & Supplies 96
2002 $37,014
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 162
MSA DEMOGRAPHIC REPORT
MSA 5380
MSA Name NASSAU-SUFFOLK, NY
<TABLE>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 2,605,813 0-4 6.4 Total $46,538
1990 2,609,212 5-9 7.2 Householder <35 $42,303
1997 2,666,335 10-14 7 Householder 35-44 $47,105
2002 2,705,736 15-19 6.1 Householder 45-54 $58,178
20-24 5.1 Householder 55-64 $54,774
Population Growth Rate 0.3 25-44 32.1 Householder 65+ $30,093
Households 45-64 22.3
1990 856,234 65-84 12.4
1997 876,006 85+ 1.3
2002 888,970 18+ 75.8 Spending Potential Index*
Auto Loan 107
Median Age Home Loan 126
Household Growth Rate 0.3 1990 34.9 Investments 125
Average Household Size 2.99 1997 36.6 Retirement Plans 125
Home Repair 109
Families Male/Female Ratio 95.3 Lawn & Garden 116
1990 685,095 Per Capita Income $23,247 Remodeling 100
1997 701,263 Appliances 107
Electronics 114
Family Growth Rate 0.3 1997 Household Income* Furniture 120
Base 875,982 Restaurants 123
Race 1990 1997 % <$15K 9.1 Sporting Goods 112
% White 88.4 85.8 % $15K-25K 7.9 Theater/Concerts 122
% Black 7.4 8.5 % $25K-50K 26 Toys & Hobbies 112
% Asian % $50K-1OOK 39.7 Travel 124
/Pacific Isl. 2.4 3.5 % $100K-150K 11.4 Video Rental 103
% >$150K 6 Apparel 125
% Hispanic* 6.3 8.7 Auto Aftermarket 118
Median Household Income Health Insurance 106
1997 $55,788 Pets & Supplies 108
2002 $60,295
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 163
County and Zip Code Demographic Reports:
Nassau County (Western Long Island)
<PAGE> 164
COUNTY DEMOGRAPHIC REP0RT
STATE/COUNTY 36059
COUNTY NAME NASSAU NY
<TABLE>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 1,321,582 0-4 5.9 Total $50,013
1990 1,287,348 5-9 7 Householder <35 $45,643
1997 1,304,452 10-14 6.8 Householder 35-44 $50,548
2002 1,316,183 15-19 5.9 Householder 45-54 $61,804
20-24 4.8 Householder 55-64 $59,125
Population Growth Rate 0.2 25-44 31.3 Householder 65+ $33,949
45-64 22.4
Households 65-84 14.4
1990 431,515 85+ 1.5
1997 436,682 18+ 76.8 Spending Potential Index*
2002 440,342 Auto Loan 109
Median Age Home Loan 133
Household Growth Rate 0.2 1990 36.6 Investments 133
Average Household Size 2.94 1997 37.8 Retirement Plans 133
Home Repair 114
Families Male/Female Ratio 94.3 Lawn & Garden 123
1990 344,502 Per Capita Income $25,933 Remodeling 102
1997 349,108 Appliances 109
Electronics 117
Family Growth Rate 0.2 1997 Household Income Furniture 124
Base 436,680 Restaurants 129
Race 1990 1997 % <$15K 8.5 Sporting Goods 115
% White 86.6 83.7 % $15K-25K 7.6 Theater/Concerts 129
% Black 8.6 9.8 % $25K-50K 24.2 Toys & Hobbies 114
% Asian % $50K-100K 39.1 Travel 132
/Pacific Isl. 3.1 4.5 % $100K-150K 12.6 Video Rental 104
% >$150K 8.1 Apparel 131
% Hispanic* 6 8.2 Auto Aftermarket 122
Median Household Income Health Insurance 108
1997 $59,020 Pets & Supplies 110
2002 $61,974
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 165
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11501
POST OFFICE NAME MINEOLA NY
<TABLE>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 20,851 0-4 5.3 Total $39,838
1990 19,087 5-9 6.2 Householder <35 $42,771
1997 20,227 10-14 5.6 Householder 35-44 $39,885
2002 20,699 15-19 4.8 Householder 45-54 $54,912
20-24 4.6 Householder 55-64 $50,080
Population Growth Rate 0.8 25-44 35 Householder 65+ $25,908
45-64 19.9
Households 65-84 17.2
1990 7,317 85+ 1.4
1997 7,753 18+ 80.1
2002 7,931 Spending Potential Index*
Auto Loan 119
Median Age Home Loan 119
Household Growth Rate 0.8 1990 36.3 Investments 120
Average Household Size 2.6 1997 37.7 Retirement Plans 113
Home Repair 107
Families Male/Female Ratio 93.4 Lawn & Garden 109
1990 5,088 Per Capita Income $22,288 Remodeling 94
1997 5,390 Appliances 103
Electronics 107
Family Growth Rate 0.8 1997 Household income* Furniture 114
Base 7,754 Restaurants 115
Race 1990 1997 % <$15K 9.3 Sporting Goods 107
% White 95.1 92.7 % $15K-25K 10.7 Theater/Concerts 113
% Black 1 1.5 % $25K-50K 30.9 Toys & Hobbies 106
% Asian % $50K-100K 37.9 Travel 117
/Pacific Isl. 2.5 3.8 % $100K-150K 8.5 Video Rental 102
% >$150K 2.6 Apparel 113
% Hispanic* 8.1 12
Median Household Income Auto Aftermarket 111
1997 $49,134 Health Insurance 105
2002 $52,012 Pets & Supplies 106
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 166
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 11030
POST OFFICE NAME MANHASSET NY
<TABLE>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 15,895 0-4 5.2 Total $85,239
1990 15,266 5-9 7.3 Householder <35 $66,431
1997 14,541 10-14 7.4 Householder 35-44 $84,820
2002 14,341 15-19 6.2 Householder 45-54 $90,103
20-24 3.8 Householder 55-64 $93,375
Population Growth Rate -0.7 25-44 25.2 Householder 65+ $62,010
Households 45-64 27.1
1990 5,109 65-84 15.7
1997 4,857 85+ 2.1
2002 4,786 18+ 76.1 Spending Potential Index*
Auto Loan 121
Median Age Home Loan 164
Household Growth Rate -0.7 1990 41.2 Investments 149
Average Household Size 2.96 1997 42 Retirement Plans 175
Home Repair 126
Families Male/Female Ratio 91.3 Lawn & Garden 152
1990 4,253 Per Capita Income $48,756 Remodeling 123
1997 4,042 Appliances 120
Electronics 134
Family Growth Rate -0.7 1997 Household Income* Furniture 143
Base 4,857 Restaurants 161
Race 1990 1997 % <$15K 5.5 Sporting Goods 135
% White 89.3 84.7 % $15K-25K 4.2 Theater/Concerts 159
% Black 5.1 7 % $25K-50K 12 Toys & Hobbies 131
% Asian % $50K-100K 27.2 Travel 162
/Pacific Isl. 5.3 7.9 % $100K-150K 19.8 Video Rental 106
% >$150K 31.4 Apparel 173
% Hispanic* 3.2 4.8
Median Household Income Auto Aftermarket 141
1997 $102,039 Health Insurance 119
2002 $106,437 Pets & Supplies 116
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 167
County and Zip Code Demographic Reports.
Richmond County (Staten Island)
<PAGE> 168
COUNTY DEMOGRAPHIC REPORT
STATE/COUNTY 36085
COUNTY NAME RICHMOND NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 352,029 0-4 7.3 Total $38,086
1990 378,977 5-9 7.7 Householder <35 $36,100
1997 400,193 10-14 7 Householder 35-44 $39,732
2002 414,816 15-19 6.1 Householder 45-54 $48,085
20-24 5.5 Householder 55-64 $44,005
Population Growth Rate 0.8 25-44 33.7 Householder 65+ $21,615
Households 45-64 21.2
1990 130,519 65-84 10.3
1997 137,672 85+ 1.2 Spending Potential Index*
2002 149,659 18+ 74.4 Auto Loan 103
Median Age Home Loan 113
Household Growth Rate 0.7 1990 33.3 Investments 108
Average Household Size 2.85 1997 34.7 Retirement Plans 109
Home Repair 102
Families Male/Female Ratio 94.5 Lawn & Garden 104
1990 99,059 Per Capita Income $19,101 Remodeling 96
1997 104,683 Appliances 103
Electronics 106
Family Growth Rate 0.8 1997 Household Income* Furniture 112
Base 137,667 Restaurants 112
Race 1990 1997 % <$15K 14.8 Sporting Goods 107
% White 85 81.4 % $15K-25K 9.5 Theater/Concerts 109
% Black 8.1 9.1 % $25K-50K 29 Toys & Hobbies 106
% Asian % $50K-100K 36.3 Travel 110
/Pacific Isl. 4.5 6.4 % $100K-150K 7.8 Video Rental 102
% >$150K 2.6 Apparel 112
% Hispanic* 8 10.8 Median Household Income Auto Aftermarket 108
1997 $46,775 Health Insurance 101
2002 $51,385 Pets & Supplies 105
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 169
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 10302
POST OFFICE NAME STATEN ISLAND NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 13,845 0-4 7.7 Total $33,172
1990 13,369 5-9 7.5 Householder <35 $33,674
1997 13,900 10-14 6.6 Householder 35-44 $34,834
2002 14,314 15-19 5.9 Householder 45-54 $40,434
20-24 6.1 Householder 55-64 $39,048
Population Growth Rate 0.5 25-44 32.1 Householder 65+ $20,075
Households 45-64 21.2
1990 4,645 65-84 1 2
1997 4,817 85+ 0.9 Spending Potential Index*
2002 4,957 18+ 74.7 Auto Loan 98
Median Age Home Loan 100
Household Growth Rate 0.5 1990 33.2 Investments 106
Average Household Size 2.86 1997 34.7 Retirement Plans 97
Home Repair 101
Families Male/Female Ratio 97.9 Lawn & Garden 99
1990 3,456 Per Capita Income $16,180 Remodeling 90
1997 3,585 Appliances 100
Electronics 97
Family Growth Rate 0.5 1997 Household Income* Furniture 105
Base 4,816 Restaurants 99
Race 1990 1997 % <$15K 15.8 Sporting Goods 99
% White 77.4 72.8 % $15K-25K 12.3 Theater/Concerts 101
% Black 15.2 17.7 % $25K-50K 33.1 Toys & Hobbies 100
% Asian % $50K-100K 32.6 Travel 104
/Pacific Isl. 2 2.8 % $100K-150K 5.3 Video Rental 100
% >$150K 0.9 Apparel 102
% Hispanic* 12 16.1 Median Household Income Auto Aftermarket 101
1997 $40,918 Health Insurance 97
2002 $45,413 Pets & Supplies 100
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 170
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 10304
POST OFFICE NAME STATEN ISLAND NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 33,028 0-4 8.3 Total $33,383
1990 33,028 5-9 9 Householder <35 $26,418
1997 35,861 10-14 7.6 Householder 35-44 $32,705
2002 37,518 15-19 6 Householder 45-54 $45,923
20-24 5.4 Householder 55-64 $40,798
Population Growth Rate 1.1 25-44 32.3 Householder 65+ $22,894
Households 45-64 19.6
1990 11,627 65-84 10.3
1997 12,607 85+ 1.6 Spending Potential Index*
2002 13,187 18+ 71.6 Auto Loan 100
Median Ace Home Loan 114
Household Growth Rate 1. 1 1990 32.1 Investments 119
Average Household Size 2.77 1997 33.2 Retirement Plans 115
Home Repair 106
Families Male/Female Ratio 88.1 Lawn & Garden 107
1990 8,346 Per Capita Income $17,031 Remodeling 96
1997 9,059 Appliances 100
Electronics 102
Family Growth Rate 1.1 1997 Household Income* Furniture 108
Base 12,607 Restaurants 102
Race 1990 1997 % <$15K 27.3 Sporting Goods 105
% White 62.5 56.3 % $15K-25K 11.6 Theater/Concerts 108
% Black 26.8 30.3 % $25K-50K 25.8 Toys & Hobbies 101
% Asian % $50K-100K 26.2 Travel 117
/Pacific Isl. 4.6 6.2 % $100K-150K 5.4 Video Rental 100
% >$150K 3.6 Apparel 107
% Hispanic* 13.4 16.9 Median Household Income Auto Aftermarket 105
1997 $34,232 Health Insurance 97
2002 $37,497 Pets & Supplies 101
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living
increase.
* The Spending Potential Index (SPI) is calculated by CACI from the
Consumer Expenditure Survey, Bureau of Labor Statistics. The index
represents the ratio of the average amount spent locally to the average
U.S. spending for a product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 171
County and Zip Code Demographic Reports:
Bronx County (The Bronx)
<PAGE> 172
COUNTY DEMOGRAPHIC REPORT
STATE/COUNTY 36005
COUNTY NAME BRONX NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 1,168,972 0-4 8.8 Total $25,275
1990 1,203,789 5-9 7.9 Householder less than 35 $23,414
1997 1,192,107 10-14 7.5 Householder 35-44 $26,300
2002 1,184,121 15-19 7.3 Householder 45-54 $30,957
20-24 7.1 Householder 55-64 $29,821
Population Growth Rate -0.1 25-44 32.7 Householder 65+ $17,809
45-64 17.9
Households 65-84 9.4
1990 424,112 85+ 1.4
1997 415,805 18+ 71.7 Spending Potential Index*
2002 410,948 Auto Loan 96
Median Age Home Loan 98
Household Growth Rate -0.3 1990 30.9 Investments 97
Average Household Size 2.77 1997 31.6 Retirement Plans 88
Home Repair 102
Families Male/Female Ratio 89.4 Lawn & Garden 96
1990 288,609 Remodeling 94
1997 283,408 Per Capita Income $ 12,528 Appliances 97
Electronics 89
Family Growth Rate -0.3 1997 Household Income* Furniture 112
Base 415,784 Restaurants 94
Race 1990 1997 % less than $15K 32 Sporting Goods 98
% White 35.7 33.3 % $15K-25K 16.2 Theater/Concerts 97
% Black 37.3 35.7 % $25K-50K 29.3 Toys & Hobbies 90
% Asian % $50K-100K 18.7 Travel 112
/Pacific Isl. 3 3.2% % $100K-150K 2.9 Video Rental 99
% greater than $150K 0.9 Apparel 96
Auto Aftermarket 97
% Hispanic* 43.5 49.9 Median Household Income Health Insurance 94
1997 $25,969 Pets & Supplies 92
2002 $29,385
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/12/97
<PAGE> 173
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 10462
POST OFFICE NAME BRONX NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 63,630 0-4 6.5 Total $28,499
1990 61,478 5-9 5.8 Householder less than 35 $31,308
1997 57,985 10-14 5.6 Householder 35-44 $31,478
2002 57,144 15-19 5.2 Householder 45-54 $36,099
20-24 5.7 Householder 55-64 $32,087
Population Growth Rate -0.8 25-44 34.1 Householder 65+ $17,810
45-64 19.7
Households 65-84 15.1
1990 26,576 85+ 2.3
1997 24,932 18+ 79.1 Spending Potential Index*
2002 24,468 Auto Loan 97
Median Age Home Loan 105
Household Growth Rate -0.9 1990 36.9 Investments 96
Average Household Size 2.31 1997 37.2 Retirement Plans 89
Home Repair 109
Families Male/Female Ratio 89.5 Lawn & Garden 98
1990 15,965 Remodeling 87
1997 14,960 Per Capita Income $ 17,129 Appliances 96
Electronics 91
Family Growth Rate -0.9 1997 Household Income* Furniture 112
Base 24,933 Restaurants 97
Race 1990 1997 % less than $15K 22 Sporting Goods 97
% White 58.3 53.5 % $15K-25K 14.8 Theater/Concerts 100
% Black 21.5 21.6 % $25K-50K 35.5 Toys & Hobbies 90
% Asian % $50K-100K 23.7 Travel 116
/Pacific Isl. 5.8 6.8 % $100K-150K 3.5 Video Rental 101
% greater than $150K 0.6 Apparel 98
Auto Aftermarket 98
% Hispanic* 30.7 38.2 Median Household Income Health Insurance 96
1997 $33,103 Pets & Supplies 95
2002 $37,409
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 174
County and Zip Code Demographic Reports:
New York County (Manhattan)
<PAGE> 175
COUNTY DEMOGRAPHIC REPORT
STATE/COUNTY 36061
COUNTY NAME NEW YORK NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 1,428,285 0-4 5.2 Total $42,182
1990 1,487,536 5-9 5 Householder less than 35 $38,910
1997 1,544,407 10-14 4.6 Householder 35-44 $44,067
2002 1,583,631 15-19 4.6 Householder 45-54 $46,779
20-24 5.7 Householder 55-64 $43,005
Population Growth Rate 0.5 25-44 37.6 Householder 65+ $28,074
45-64 24.3
Households 65-84 11.4
1990 716,422 85+ 1.6
1997 742,789 18+ 82.8 Spending Potential Index*
2002 760,782 Auto Loan 100
Median Age Home Loan 122
Household Growth Rate 0.5 1990 35.9 Investments 114
Average Household Size 2 1997 38.2 Retirement Plans 110
Home Repair 104
Families Male/Female Ratio 90.6 Lawn & Garden 104
1990 301,041 Remodeling 95
1997 310,321 Per Capita Income $32,787 Appliances 101
Electronics 102
Family Growth Rate 0.4 1997 Household Income* Furniture 114
Base 742,781 Restaurants 108
Race 1990 1997 % less than $15K 22 Sporting Goods 105
% White 58.3 52.6 % $15K-25K 12.5 Theater/Concerts 107
% Black 22 23.6 % $25K-50K 27.2 Toys & Hobbies 98
% Asian % $50K-100K 21.9 Travel 119
/Pacific Isl. 7.4 9.2 % $10OK-150K 7.6 Video Rental 101
% greater than $150K 8.9 Apparel 108
Auto Aftermarket 106
% Hispanic* 26 32.2 Median Household Income Health Insurance 98
1997 $37,272 Pets & Supplies 102
2002 $38,207
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjustment for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6972 6/12/97
<PAGE> 176
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 10016
POST OFFICE NAME NEW YORK NY
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1997 Age Distribution 1997 Average Disposable Income
1980 46,076 0-4 2.3 Total $47,808
1990 51,561 5-9 1.6 Householder less than 35 $40,616
1997 53,273 10-14 1.4 Householder 35-44 $51,564
2002 54,423 15-19 3.2 Householder 45-54 $53,480
20-24 6.3 Householder 55-64 $50,488
Population Growth Rate 0.5 25-44 44 Householder 65+ $33,869
45-64 28.9
Households 65-84 11
1990 31,895 85+ 1.3
1997 32,879 18+ 93.7 Spending Potential Index*
2002 33,550 Auto Loan 101
Median Age Home Loan 129
Household Growth Rate 0.4 1990 38 Investments 116
Average Household Size 1.51 1997 40.7 Retirement Plans 113
Home Repair 104
Families Male/Female Ratio 87.9 Lawn & Garden 105
1990 8,077 Remodeling 94
1997 8,277 Per Capita Income $46,559 Appliances 101
Electronics 105
Family Growth Rate 0.3 1997 Household Income* Furniture 114
Bass 32,879 Restaurants 113
Race 1990 1997 % less than $15K 13.7 Sporting Goods 105
% White 84.1 76 % $15K-25K 9.1 Theater/Concerts 108
% Black 6.2 9.1 % $25K-50K 29.4 Toys & Hobbies 102
% Asian % $50K-1OOK 28.1 Travel 118
/Pacific Isl. 7.4 11.1 % $1OOK-150K 10.3 Video Rental 101
% greater than $150K 9.4 Apparel 112
Auto Aftermarket 109
% Hispanic* 8.2 13.8 Median Household Income Health Insurance 99
1997 $47,698 Pets & Supplies 106
2002 $49,074
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income represents the annual income for the preceding year in current
dollars, including an adjust for inflation or cost-of-living increase.
* The Spending Potential Index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
Copyright 1997 CACI (800) 292-CACI FAX: (703) 243-6272 6/13/97
<PAGE> 177
ZIP CODE DEMOGRAPHIC REPORT
ZIP CODE 10016
POST OFFICE NAME NEW YORK
<TABLE>
<CAPTION>
<S> <C> <C>
Population 1996 Age Distribution 1996 Average Disposable Income
1980 46,076 0-4 2.2 Total $45,428
1990 51,561 5-9 2.4 Householder less than 35 $38,689
1996 53,385 10-14 1.5 Householder 35-44 $51,243
2001 54,720 15-19 3.1 Householder 45-54 $50,497
20-24 5.0 Householder 55-64 $45,427
Population Growth Rate 0.6 25-44 43.8 Householder 65+ $33,633
45-64 28.6
Households 65-84 12.0
1990 31,895 85+ 1.3
1996 33,201 18+ 93.0 Spending Potential Index*
2001 34,167 Auto Loan 103
Median Age Home Loan 129
Household Growth Rate 0.6 1990 38.0 Investments 113
Average Household Size 1.50 1996 40.9 Retirement Plans 119
Home Repair 105
Families Male/Female Ratio 83.1 Lawn & Garden 106
1990 8,077 Remodeling 110
1996 8,306 Per Capita Income $44,323 Appliances 105
Electronics 108
Family Growth Rate 0.4 1996 Household Income Furniture 112
Base 33,201 Restaurants 113
Race 1990 1996 % less than $15K 14.7 Sporting Goods 113
% White 84.1 80.3 % $15K-25K 9.8 Theater/Concerts 112
% Black 6.2 7.7 % $25K-50K 30.3 Toys & Hobbies 105
% Asian % $50K-1OOK 27.2 Travel 114
/Pacific Isl. 7.4 9.3 % $1OOK-150K 9.7 Video Rental 103
% greater than $150K 8.3 Apparel 112
Auto Aftermarket 108
% Hispanic* 8.2 10.0 Median Household Income Health Insurance 100
1996 $45,273 Pets & Supplies 101
2001 $39,238
</TABLE>
* Persons of Hispanic Origin may be of any race.
* Income amounts are expressed in current dollars for 1996.
* The Spending Potential index (SPI) is calculated by CACI from the Consumer
Expenditure Survey, Bureau of Labor Statistics. The index represents the
ratio of the average amount spent locally to the average U.S. spending for a
product or service, multiplied by 100.
Copyright 1996 CACI (800) 292-CACI FAX: (703) 243-6272 5/2/97
<PAGE> 178
B. Personal Income by Major Source and Earnings by Industry
<PAGE> 179
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-000) NEW YORK
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 377,342,418 401,833,272 413,644,570
011 Nonfarm personal income 376,568,113 401,053,887 412,935,227
012 Farm income 2/ 774,305 779,385 709,343
020 Population (thousands) 3/ 17,983.2 18,002.3 18,040.8
030 Per capita personal income (dollars) 20,983 22,321 22,928
Derivation of total personal income
040 Earnings by place of work 278,157,851 295,488,397 299,460,485
041 Less: Personal cont. for social insur. 4/ 20,365,962 21,578,469 22,937,717
042 Plus: Adjustment for residence 5/ -12,766,709 -13,309,190 -13,086,078
045 Equals: Net earn. by place of residence 245,025,180 260,600,738 263,436,690
046 Plus: Dividends, interest, and rent 6/ 73,504,765 76,631,812 77,101,374
047 Plus: Transfer payments 58,812,473 64,600,722 73,106,506
Earnings by place of work
Components of Earnings:
050 Wages and salaries 233,175,026 245,454,911 245,008,157
060 Other labor income 19,852,710 21,491,868 23,277,468
070 Proprietors' income 7/ 25,130,115 28,541,618 31,174,860
071 Farm proprietors' income 492,164 450,102 383,939
072 Nonfarm proprietors' income 24,637,951 28,091,516 30,790,921
Earnings by Industry:
081 Farm earninqs 774,305 779,385 709,343
082 Nonfarm earnings 277,383,546 294,709,012 298,751,142
090 Private earnings 233,703,860 247,436,485 250,609,905
100 Ag. serv., for., fish., and other 8/ 878,730 980,704 1,042,756
130 Mining 310,096 300,001 256,801
180 Construction 13,822,104 13,613,913 12,291,100
190 Manufacturing 42,792,569 43,157,744 43,110,238
200 Nondurable goods 18,259,096 18,656,102 18,734,150
310 Durable goods 24,533,473 24,501,642 24,376,088
440 Transportation and public utilities 16,554,476 18,058,010 18,396,298
510 Wholesale trade 18,644,922 19,298,155 18,820,810
520 Retail trade 21,858,214 22,215,561 22,052,246
530 Finance, insurance, and real estate 36,439,517 40,274,845 43,555,056
560 Services 82,403,232 89,537,552 91,084,600
630 Government and government enterprises 43,679,686 47,272,527 48,141,237
640 Federal, civilian 5,255,842 5,753,492 5,996,404
650 Military 1,043,816 1,072,948 1,153,604
660 State and local 37,380,028 40,446,087 40,991,229
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 436,839,110 451,124,875 467,397,414
011 Nonfarm personal income 436,058,443 450,248,615 466,745,146
012 Farm income 2/ 780,667 876,260 652,268
020 Population (thousands) 3/ 18,095.2 18,154.5 18,172.6
030 Per capita personal income (dollars) 24,141 24,849 25,720
Derivation of total personal income
040 Earnings by place of work 319,353,218 328,692,513 339,514,666
041 Less: Personal cont. for social insur. 4/ 23,805,819 24,603,525 25,962,007
042 Plus: Adjustment for residence 5/ -15,143,534 -15,130,933 -15,313,626
045 Equals: Net earn. by place of residence 280,403,865 288,958,055 298,239,033
046 Plus: Dividends, interest, and rent 6/ 73,951,592 74,139,211 77,306,029
047 Plus: Transfer payments 82,483,653 88,027,609 91,852,352
Earnings by place of work
Components of Earnings:
050 Wages and salaries 259,282,702 264,104,942 271,101,923
060 Other labor income 25,388,315 27,104,761 28,528,284
070 Proprietors' income 7/ 34,682,201 37,482,810 39,884,459
071 Farm proprietors' income 458,367 523,137 309,661
072 Nonfarm proprietors' income 34,223,834 36,959,673 39,574,798
Earnings by Industry:
081 Farm earninqs 780,667 876,260 652,268
082 Nonfarm earnings 318,572,551 327,816,253 338,862,398
090 Private earnings 268,969,414 276,493,798 285,874,115
100 Ag. serv., for., fish., and other 8/ 1,034,820 1,098,643 1,167,363
130 Mining 261,602 277,537 296,798
180 Construction 11,334,364 11,527,942 12,265,826
190 Manufacturing 43,910,279 43,384,433 43,713,022
200 Nondurable goods 19,576,677 19,556,729 20,052,307
310 Durable goods 24,333,602 23,827,704 23,660,715
440 Transportation and public utilities 18,880,993 19,142,011 19,959,812
510 Wholesale trade 19,695,526 19,752,728 20,362,940
520 Retail trade 22,638,161 22,876,255 24,032,441
530 Finance, insurance, and real estate 54,080,574 56,736,039 56,396,478
560 Services 97,133,095 101,698,210 107,679,435
630 Government and government enterprises 49,603,137 51,322,455 52,988,283
640 Federal, civilian 6,344,285 6,443,579 6,555,784
650 Military 1,189,469 1,169,106 1,096,230
660 State and local 42,069,383 43,709,770 45,336,269
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 180
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-047) KINGS NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 37,105,853 39,735,054 40,815,759
011 Nonfarm personal income 37,105,853 39,735,054 40,815,759
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 2,299.5 2,298.3 2,287.8
030 Per capita personal income (dollars) 16,137 17,289 17,841
Derivation of total personal income
040 Earnings by place of work 11,419,037 12,328,359 12,528,763
041 Less: Personal cont. for social insur. 4/ 962,537 1,008,871 1,078,412
042 Plus: Adjustment for residence 5/ 12,102,044 12,823,549 12,437,397
045 Equals: Net earn. by place of residence 22,588,544 24,143,037 23,887,748
046 Plus: Dividends, interest, and rent 6/ 5,826,853 5,957,070 5,957,238
047 Plus: Transfer payments 8,690,456 9,634,947 10,970,773
Earnings by place of work
Components of Earnings:
050 Wages and salaries 9,717,682 10,332,841 10,429,532
060 Other labor income 807,941 881,770 967,938
070 Proprietors' income 7/ 923,414 1,113,748 1,131,293
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' incomes 923,414 1,113,748 1,131,293
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 11,449,037 12,328,359 12,528,763
090 Private earnings 10,142,503 10,878,618 11,032,980
100 Ag. serv., for., fish., and other 8/ 31,988 35,650 38,235
130 Mining 1,795 2,580 1,053
180 Construction 780,682 758,358 698,352
190 Manufacturing 1,655,476 1,616,577 1,566,559
200 Nondurable goods 1,032,559 1,012,042 1,011,955
210 Durable goods 622,917 604,535 554,604
340 Transportation and public utilities 852,160 942,694 968,022
510 Wholesale trade 815,314 896,266 908,129
520 Retail trade 1,220,748 1,232,248 1,196,460
530 Finance, insurance, and real estate 563,642 705,865 731,192
Services 4,220,698 4,688,380 4,924,978
630 Government and government enterprises 1,306,534 1,449,741 1,495,783
640 Federal, civilian 381,261 419,954 447,063
650 Military 78,687 82,684 83,234
660 State and local 846,586 947,103 965,486
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 43,366,542 44,309,232 45,710,625
011 Nonfarm personal income 43,366,542 44,309,232 45,710,625
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 2,281.4 2,279.5 2,272.0
030 Per capita personal income (dollars) 19,008 19,438 20,119
Derivation of total personal income
040 Earnings by place of work 13,346,366 13,965,875 14,701,016
041 Less: Personal cont. for social insur. 4/ 1,113,803 1,178,295 1,270,070
042 Plus: Adjustment for residence 5/ 13,673,314 13,586,846 13,528,835
045 Equals: Net earn. by place of residence 25,905,877 26,374,426 26,959,781
046 Plus: Dividends, interest, and rent 6/ 5,208,030 4,798,574 5,014,844
047 Plus: Transfer payments 12,252,635 13,136,232 13,736,000
Earnings by place of work
Components of Earnings:
050 Wages and salaries 10,994,618 11,410,462 11,966,184
060 Other labor income 1,060,409 1,159,329 1,237,982
070 Proprietors' income 7/ 1,291,339 1,396,084 1,496,850
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' incomes 1,291,339 1,396,084 1,496,850
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 13,346,366 13,965,875 14,701,016
090 Private earnings 11,781,719 12,374,539 13,021,205
100 Ag. serv., for., fish., and other 8/ 39,788 43,915 46,926
130 Mining 363 125 123
180 Construction 679,113 674,764 723,399
190 Manufacturing 1,526,351 1,500,080 1,506,825
200 Nondurable goods 990,689 989,651 1,009,124
210 Durable goods 535,662 510,429 497,701
340 Transportation and public utilities 1,022,855 1,060,448 1,137,502
510 Wholesale trade 974,179 998,628 1,054,234
520 Retail trade 1,203,967 1,187,745 1,217,920
530 Finance, insurance, and real estate 1,039,284 1,271,603 1,308,498
Services 5,295,819 5,637,231 6,026,778
630 Government and government enterprises 1,564,647 1,591,336 1,678,811
640 Federal, civilian 474,874 474,083 489,061
650 Military 94,482 91,329 74,427
660 State and local 995,291 1,025,924 1,115,323
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 181
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-081) QUEENS NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 39,628,734 41,862,186 42,528,134
011 Nonfarm personal income 39,628,734 41,862,186 42,528,134
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 1,951.5 1,952.1 1,951.4
030 Per capita personal income (dollars) 20,307 21,444 21,794
Derivation of total personal income
040 Earnings by place of work 14,963,896 15,879,647 16,034,905
041 Less: Personal cont. for social insur. 4/ 1,229,117 1,285,050 1,362,909
042 Plus: Adjustment for residence 5/ 10,645,328 11,081.091 10,708,918
045 Equals: Net earn, by place of residence 24,380,107 25,675,688 25,380,914
046 Plus: Dividends, interest, and rent 6/ 7,749,390 7,861,948 7,642,263
047 Plus: Transfer payments 7,499,237 8,324,550 9,504,957
Earnings by place of work
Components of Earnings:
050 Wages and salaries 12,649,698 13,233,368 13,215,737
060 Other labor income 1,169,874 1,263,250 1,366,241
070 Proprietors' income 7/ 1,144,324 1,383,029 1,452,927
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 1,144,324 1,383,029 1,452,927
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 14,963,896 15,879,647 16,034,905
090 Private earnings 13,631,889 14,443,092 14,563,284
100 Ag. serv., for., fish., and other 8/ 37,027 40,162 45,119
130 Mining 1,010 1,226 2,041
180 Construction 1,625,406 1,634,013 1,547,027
190 Manufacturing 1,831,359 1,807,727 1,710,629
200 Nondurable goods 911,872 904,524 880,744
310 Durable goods 919,487 903,203 829,885
440 Transportation and public utilities 2,850,770 3,064,324 3,099,406
510 Wholesale trade 1,147,688 1,188,953 1,152,128
520 Retail trade 1,451,583 1,458,286 1,412,018
530 Finance, insurance, and real estate 663,601 828,611 964,399
560 Services 4,023,445 4,419,790 4,630,517
630 Government and government enterprises 1,332,007 1,436,555 1,471,621
640 Federal, civilian 440,635 481,214 507,309
650 Military 41,956 42,217 41,014
660 State and local 849,416 913,124 923,298
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 45,251,322 46,334,628 47,729,731
011 Nonfarm personal income 45,251,322 46,334,628 47,729,731
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 1,953.1 1,960.2 1,964.7
030 Per capita personal income (dollars) 23,169 23,638 24,293
Derivation of total personal income
040 Earnings by place of work 16,464,841 16,768,809 17,467,519
041 Less: Personal cont. for social insur. 4/ 1,355,764 1,390,389 1,483,601
042 Plus: Adjustment for residence 5/ 11,780,011 12,013,733 12,017,303
045 Equals: Net earn, by place of residence 26,889,088 27,392,153 28,001,221
046 Plus: Dividends, interest, and rent 6/ 7,603,341 7,419,368 7,730,115
047 Plus: Transfer payments 10,758,893 11,523,107 11,998,395
Earnings by place of work
Components of Earnings:
050 Wages and salaries 13,435,772 13,519,176 14,014,740
060 Other labor income 1,439,569 1,515,032 1,596,579
070 Proprietors' income 7/ 1,589,500 1,734,601 1,856,200
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 1,589,500 1,734,601 1,856,200
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 16,464,841 16,768,809 17,467,519
090 Private earnings 14,935,373 15,184,658 15,827,452
100 Ag. serv., for., fish., and other 8/ 43,457 47,797 50,333
130 Mining 2,410 2,345 2,530
180 Construction 1,435,675 1,422,068 1,480,245
190 Manufacturing 1,692,564 1,659,091 1,672,291
200 Nondurable goods 880,131 876,432 888,844
310 Durable goods 812,433 782,659 783,447
440 Transportation and public utilities 3,018,165 2,984,402 3,043,405
510 Wholesale trade 1,206,350 1,183,126 1,206,633
520 Retail trade 1,428,996 1,408,853 1,473,950
530 Finance, insurance, and real estate 1,242,871 1,341,215 1,413,930
560 Services 4,864,885 5,135,761 5,484,135
630 Government and government enterprises 1,529,468 1,584,151 1,640,067
640 Federal, civilian 527,711 543,827 564,413
650 Military 42,398 42,063 40,958
660 State and local 959,359 998,261 1,034,696
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 182
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-059) NASSAU NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 38,126,585 40,166,644 40,355,001
011 Nonfarm personal income 38,123,931 40,163,752 40,351,563
012 Farm income 21 2,654 2,892 3,438
020 Population (thousands) 3/ 1,292.8 1,286.1 1,291.2
030 Per capita personal income (dollars) 29,491 31,232 31,255
Derivation of total personal income 20,532,312 21,753,508 22,106,708
040 Earnings by place of work 1,526,124 1,602,419 1,698,574
041 Less: Personal cont. for social insur. 4/ 5,089,444 5,285,912 5,135,966
042 Plus: Adjustment for residence 5/ 24,095,632 25,437,001 25,544,100
045 Equals: Net earn. by place of residence 10,160,570 10,558,392 10,144,039
046 Plus: Dividends, interest, and rent 6/ 3,870,383 4,171,251 4,666,862
047 Plus: Transfer payments
Earnings by place of work
Components of Earnings:
050 Wages and salaries 16,786,109 17,379,086 17,391,067
060 Other labor income 1,399,206 1,486,336 1,603,546
070 Proprietors' income 7/ 2,346,997 2,888,086 3,112,095
071 Farm proprietors' income 2,000 2,129 2,685
072 Nonfarm proprietors' income 2,344,997 2,885,957 3,109,410
Earnings by Industry:
081 Farm earnings 2,654 2,892 3,438
082 Nonfarm earnings 20,529,658 21,750,616 22,103,270
090 Private earnings 17,813,568 18,804,446 18,988,125
100 Ag. serv., for., fish., and other 8/ 84,933 87,346 89,484
130 Mining 5,171 4,573 4,152
180 Construction 1,138,865 1,088,527 964,874
190 Manufacturing 2,647,329 2,546,057 2,418,680
200 Nondurable goods 676,208 701,826 685,398
310 Durable goods 1,971,121 1,844,231 1,733,282
440 Transportation and public utilities 991,631 1,109,967 1,142,153
510 Wholesale trade 1,990,920 1,958,354 1,889,270
520 Retail trade 2,203,039 2,224,794 2,228,692
530 Finance, insurance, and real estate 1,910,728 2,200,165 2,410,012
560 Services 6,840,952 7,584,663 7,840,808
630 Government and government enterprises 2,716,090 2,946,170 3,115,145
640 Federal, civilian 349,633 376,410 385,258
650 Military 31,448 31,259 31,002
660 State and local 2,335,009 2,538,501 2,698,885
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 41,732,927 43,479,037 45,102,077
011 Nonfarm personal income 41,729,655 43,475,260 45,098,971
012 Farm income 21 3,272 3,777 3,106
020 Population (thousands) 3/ 1,296.5 1,300.2 1,302.4
030 Per capita personal income (dollars) 32,188 33,439 34,629
Derivation of total personal income
040 Earnings by place of work 22,862,299 23,601,572 24,375,693
041 Less: Personal cont. for social insur. 4/ 1,705,211 1,766,386 1,864,275
042 Plus: Adjustment for residence 5/ 5,823,724 5,959,250 6,260,742
045 Equals: Net earn. by place of residence 26,980,812 27,794,436 28,772,160
046 Plus: Dividends, interest, and rent 6/ 9,414,713 10,025,259 10,434,742
047 Plus: Transfer payments 5,337,402 5,659,342 5,895,175
Earnings by place of work
Components of Earnings:
050 Wages and salaries 17,788,547 18,157,136 18,595,116
060 Other labor income 1,699,807 1,813,609 1,899,331
070 Proprietors' income 7/ 3,373,945 3,630,827 3,881,246
071 Farm proprietors' income 2,524 2,959 2,310
072 Nonfarm proprietors' income 3,371,421 3,627,868 3,878,936
Earnings by Industry:
081 Farm earnings 3,272 3,777 3,106
082 Nonfarm earnings 22,859,027 23,597,795 24,372,587
090 Private earnings 19,722,889 20,345,802 21,080,628
100 Ag. serv., for., fish., and other 8/ 85,075 89,311 95,361
130 Mining 3,501 4,128 4,007
180 Construction 854,511 883,684 947,445
190 Manufacturing 2,366,987 2,282,675 2,204,998
200 Nondurable goods 681,265 701,638 718,867
310 Durable goods 1,685,722 1,581,037 1,486,131
440 Transportation and public utilities 1,138,438 1,168,556 1,245,208
510 Wholesale trade 1,976,034 1,920,312 2,022,079
520 Retail trade 2,287,612 2,333,581 2,470,827
530 Finance, insurance, and real estate 2,735,466 2,933,562 3,029,588
560 Services 8,275,265 8,729,993 9,061,115
630 Government and government enterprises 3,136,138 3,251,993 3,291,959
640 Federal, civilian 405,050 364,225 327,851
650 Military 31,762 31,863 30,847
660 State and local 2,699,326 2,855,905 2,933,261
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 183
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-085) RICHMOND NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 7,776,692 8,348,538 8,731,126
01l Nonfarm personal income 7,776,692 8,348,538 8,731,126
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 377.8 380.0 385.4
030 Per capita personal income (dollars) 20,584 21,970 22,657
Derivation of total personal income
040 Earnings by place of work 2,007,183 2,208,681 2,311,522
041 Less: Personal cont. for social insur. 4/ 163,941 175,946 192,743
042 Plus: Adjustment for residence 5/ 3,534,359 3,681,753 3,748,892
045 Equals: Net earn, by place of residence 5,377,601 5,714,488 5,867,671
046 Plus: Dividends, interest, and rent 6/ 1,098,974 1,145,496 1,097,424
047 Plus: Transfer payments 1,300,117 1,488,554 1,766,031
Earnings by place of work
Components of Earnings:
050 Wages and salaries 1,623,090 1,750,132 1,789,660
060 Other labor income 129,816 143,693 159,761
070 Proprietors' income 7/ 254,277 314,856 362,101
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 254,277 314,856 362,101
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 2,007,183 2,208,681 2,311,522
090 Private earnings 1,796,827 1,966,251 2,066,053
100 Ag. serv., for., fish., and other 8/ 8,701 9,472 10,328
130 Mining (L) (L) (L)
180 Construction 200,322 204,644 198,024
190 Manufacturing 114,497 112,815 93,571
200 Nondurable goods 83,970 81,404 61,929
310 Durable goods 30,527 31,411 31,642
440 Transportation and public utilities 171,444 193,562 202,189
510 Wholesale trade 53,946 56,788 62,496
520 Retail trade 260,431 264,351 270,611
530 Finance, insurance, and real estate 115,195 168,644 211,010
560 Services 872,285 955,970 1,017,816
630 Government and government enterprises 210,356 242,430 245,469
640 Federal, civilian 34,323 36,652 38,471
650 Military 8,368 12,225 20,803
660 State and local 167,665 193,553 186,195
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 9,213,517 9,585,241 9,949,211
01l Nonfarm personal income 9,213,517 9,585,241 9,949,211
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 390.9 395.7 397.7
030 Per capita personal income (dollars) 23,571 24,226 25,015
Derivation of total personal income
040 Earnings by place of work 2,442,802 2,606,881 2,782,556
041 Less: Personal cont. for social insur. 4/ 197,867 213,607 233,411
042 Plus: Adjustment for residence 5/ 3,895,917 3,943,513 3,981,975
045 Equals: Net earn, by place of residence 6,140,852 6,336,787 6,531,120
046 Plus: Dividends, interest, and rent 6/ 967,658 985,838 1,031,807
047 Plus: Transfer payments 2,105,007 2,262,616 2,386,284
Earnings by place of work
Components of Earnings:
050 Wages and salaries 1,878,574 1,981,233 2,108,749
060 Other labor income 175,126 194,386 213,393
070 Proprietors' income 7/ 389,102 431,262 460,414
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 389,102 431,262 460,414
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 2,442,802 2,606,881 2,782,556
090 Private earnings 2,178,171 2,340,479 2,514,955
100 Ag. serv., for., fish., and other 8/ 10,556 12,620 13,424
130 Mining (L) (L) (L)
180 Construction 194,505 209,960 222,772
190 Manufacturing 92,180 88,008 94,722
200 Nondurable goods 59,842 58,469 63,548
310 Durable goods 32,338 29,539 31,174
440 Transportation and public utilities 209,712 226,547 252,825
510 Wholesale trade 64,426 65,807 67,216
520 Retail trade 272,341 279,635 296,968
530 Finance, insurance, and real estate 231,940 261,878 272,274
560 Services 1,102,505 1,196,018 1,294,745
630 Government and government enterprises 264,631 266,402 267,601
640 Federal, civilian 42,041 40,913 43,831
650 Military 34,677 46,063 24,183
660 State and local 187,913 179,426 199,587
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 184
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-005) BRONX NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 16,718,300 17,713,898 18,298,728
011 Nonfarm personal income 16,718,300 17,713,898 18,298,728
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 1,200.9 1,203.6 1,199.5
030 Per capita personal income (dollars) 13,921 14,718 15,256
Derivation of total personal income
040 Earnings by place of work 5,932,178 6,330,975 6,529,499
041 Less: Personal cont. for social insur. 4/ 493,134 514,947 557,261
042 Plus: Adjustment for residence 5/ 4,282,660 4,405,163 4,139,461
045 Equals: Net earn, by place of residence 9,721,704 10,221,191 10,111,699
046 Plus: Dividends, interest, and rent 6/ 2,287,888 2,278,740 2,284,077
047 Plus: Transfer payments 4,708,708 5,213,967 5,902,952
Earnings by place of work
Components of Earnings:
050 Wages and salaries 5,135,979 5,438,519 5,567,423
060 Other labor income 412,587 451,230 503,407
070 Proprietors' income 7/ 383,612 441,226 458,669
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 383,612 441,226 458,669
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 5,932,178 6,330,975 6,529,499
090 Private earnings 5,108,830 5,449,825 5,597,045
100 Ag. serv., for., fish., and other 8/ (0) (0) 17,442
130 Mining (0) (0) 380
180 Construction 578,166 574,308 491,926
190 Manufacturing 485,830 466,016 470,884
200 Nondurable goods 231,292 220,828 220,585
310 Durable goods 254,538 245,188 250,299
440 Transportation and public utilities 334,215 366,743 385,978
510 Wholesale trade 410,012 433,080 429,819
520 Retail trade 556,272 549,222 536,575
530 Finance, insurance, and real estate 271,610 296,503 304,860
560 Services 2,457,637 2,746,716 2,959,181
530 Government and government enterprises 823,348 881,150 932,454
540 Federal, civilian 312,928 326,335 368,241
550 Military 25,089 25,660 24,973
560 State and local 485,331 529,155 539,240
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 19,388,514 19,846,020 20,490,819
011 Nonfarm personal income 19,388,514 19,846,020 20,490,819
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 1,194.3 1,195.7 1,191.8
030 Per capita personal income (dollars) 16,235 16,598 17,193
Derivation of total personal income
040 Earnings by place of work 6,927,254 7,221,785 7,570,020
041 Less: Personal cont. for social insur. 4/ 572,569 603,174 648,381
042 Plus: Adjustment for residence 5/ 4,246,682 4,158,524 4,123,439
045 Equals: Net earn, by place of residence 10,601,367 10,777,135 11,045,078
046 Plus: Dividends, interest, and rent 6/ 2,174,290 1,987,352 2,068,389
047 Plus: Transfer payments 6,612,857 7,081,533 7,377,352
Earnings by place of work
Components of Earnings:
050 Wages and salaries 5,872,359 6,091,921 6,365,160
060 Other labor income 548,493 597,794 632,182
070 Proprietors' income 7/ 506,402 532,070 572,678
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 506,402 532,070 572,678
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 6,927,254 7,221,785 7,570,020
090 Private earnings 5,908,830 6,156,122 6,451,034
100 Ag. serv., for., fish., and other 8/ 17,702 19,435 20,945
130 Mining 516 636 624
180 Construction 414,037 410,885 441,547
190 Manufacturing 452,958 457,435 457,922
200 Nondurable goods 213,508 217,919 213,905
310 Durable goods 239,450 239,516 244,017
440 Transportation and public utilities 392,820 409,852 432,870
510 Wholesale trade 436,375 443,339 453,666
520 Retail trade 554,121 541,607 553,374
530 Finance, insurance, and real estate 355,469 370,830 387,133
560 Services 3,284,832 3,502,103 3,702,953
530 Government and government enterprises 1,018,424 1,065,663 1,118,986
540 Federal, civilian 412,933 424,071 442,166
550 Military 25,858 25,489 24,223
560 State and local 579,633 616,103 652,597
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 185
April 28, 1997
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(36-061) NEW YORK NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 60,427,028 66,077,342 68,401,501
011 Nonfarm personal income 60,427,028 66,077,342 68,401,501
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 1,484.0 1,487.0 1,483.6
030 Per capita personal income (dollars) 40,718 44,436 46,105
Derivation of total personal income
040 Earnings by place of work 110,141,819 116,717,404 116,810,717
041 Less: Personal cont. for social insur. 4/ 7,816,370 8,352,846 8,756,310
042 Plus: Adjustment for residence 5/ -62,321,171 -64,938,857 -63,478,680
045 Equals: Net earn. by place of residence 40,004,278 43,425,70] 44,575,727
046 Plus: Dividends, interest, and rent 6/ 13,891,834 15,452,194 15,745,103
047 Plus: Transfer payments 6,530,916 7,199,447 8,080,671
Earnings by place of work
Components of Earnings:
050 Wages and salaries 92,381,644 97,333,791 95,121,129
060 Other labor income 7,237,909 7,847,166 8,304,653
070 Proprietors' income 7/ 10,522,266 11,536,447 13,384,935
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 10,522,266 11,536,447 13,384,935
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 110,141,819 116,717,404 116,810,717
090 Private earnings 94,199,662 99,600,158 99,989,263
100 Ag. serv., for., fish., and other 8/ 177,253 200,413 213,493
130 Mining 74,911 50,123 36,994
180 Construction 2,294,516 2,152,861 1,910,308
190 Manufacturing 8,728,897 8,916,159 8,808,550
200 Nondurable goods 7,396,365 7,508,363 7,481,286
310 Durable goods 1,332,532 1,407,796 1,327,264
440 Transportation and public utilities 5,239,738 5,759,486 5,694,827
510 Wholesale trade 7,982,880 8,107,232 7,746,684
520 Retail trade 4,857,990 4,875,800 4,681,203
530 Finance, insurance, and real estate 27,054,887 29,320,843 31,446,791
560 Services 37,788,590 40,217,241 39,450,413
630 Government and government enterprises 15,942,157 17,117,246 16,821,454
640 Federal, civilian 1,466,694 1,622,190 1,650,134
650 Military 71,489 70,949 78,755
660 State and local 14,403,974 15,424,107 15,092,565
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income by place of residence
010 Total personal income ($000) 74,756,]67 77,161,311 80,154,258
011 Nonfarm personal income 74,756,167 77,161,311 80,154,258
012 Farm income 2/ 0 0 0
020 Population (thousands) 3/ 1,486.6 1,495.6 1,507.0
030 Per capita personal income (dollars) 50,286 51,594 53,189
Derivation of total personal income
040 Earnings by place of work 128,722,774 132,082,836 135,607,821
041 Less: Personal cont. for social insur. 4/ 9,426,490 9,671,767 10,095,266
042 Plus: Adjustment for residence 5/ -70,043,995 -70,820,053 -71,929,537
045 Equals: Net earn. by place of residence 49,252,289 51,541,016 53,583,018
046 Plus: Dividends, interest, and rent 6/ 16,424,375 15,740,427 16,364,965
047 Plus: Transfer payments 9,079,503 9,879,868 10,206,275
Earnings by place of work
Components of Earnings:
050 Wages and salaries 104,286,113 105,633,836 107,508,847
060 Other labor income 9,218,051 9,871,281 10,403,054
070 Proprietors' income 7/ 15,218,610 16,577,719 17,695,920
071 Farm proprietors' income 0 0 0
072 Nonfarm proprietors' income 15,218,610 16,577,719 17,695,920
Earnings by Industry:
081 Farm earnings 0 0 0
082 Nonfarm earnings 128,722,774 132,082,836 135,607,821
090 Private earnings 111,670,084 114,573,718 117,731,863
100 Ag. serv., for., fish., and other 8/ 215,246 240,526 261,492
130 Mining 47,365 43,948 45,862
180 Construction 1,721,273 1,777,324 1,959,757
190 Manufacturing 9,266,858 9,267,989 9,543,742
200 Nondurable goods 7,859,949 7,739,521 7,965,578
310 Durable goods 1,406,909 1,528,468 1,578,164
440 Transportation and public utilities 5,772,421 5,729,410 5,903,532
510 Wholesale trade 8,103,597 7,931,107 8,179,150
520 Retail trade 4,779,278 4,780,433 5,128,916
530 Finance, insurance, and real estate 39,933,496 41,553,829 40,916,070
560 Services 41,830,550 43,249,129 45,793,342
630 Government and government enterprises 17,052,690 17,509,118 17,875,958
640 Federal, civilian 1,736,004 1,756,300 1,745,207
650 Military 77,178 82,705 86,969
660 State and local 15,239,508 15,670,113 16,043,782
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 186
Footnotes for Table CA05
1/ 1969-74 based on 1967 SIC. 1975-87 based on 1972 SIC. 1988-94 based on
1987 SIC.
2/ Farm income consists of proprietors' net farm income, the wages of hired
farm labor, the pay-in-kind of hired farm labor, and the salaries of
officers of corporate farms.
3/ Census Bureau midyear population estimates. Estimates for 1990-94
reflect county population estimates available as of October 1995.
4/ Personal contributions for social insurance are included in earnings by
type and industry but excluded from personal income.
5/ U.S. adjustment for residence consists of adjustments for border workers:
income of U.S. residents commuting outside U.S. borders to work less
income of foreign residents commuting inside U.S. borders to work plus
certain Caribbean seasonal workers.
6/ Includes the capital consumption adjustment for rental income of persons.
7/ Includes the inventory valuation and capital consumption adjustments.
8/ "Other" consists of wages and salaries of U.S. residents employed by
international organizations and foreign embassies and consulates in the
U.S.
13/ Estimates for 1979 forward reflect Alaska Census Areas as defined in the
1980 Decennial Census: those for prior years reflect Alaska Census
Divisions as defined in the 1970 Decennial Census. Estimates from 1988
forward separate Aleutian Islands Census Area into Aleutians East Borough
and Aleutians West Census Area. Denali and Lake + Peninsula Boroughs
begin in 1991. Estimates from 1993 forward separate
Skagway-Yakutat-Angoon Census Area into Skagway-Hoonah-Angoon Census Area
and Yakutat Borough.
14/ Cibola, NM was separated from Valencia in June 1981, but in these
estimates, Valencia includes Cibola through the end of 1981.
15/ La Paz county, AZ was separated from Yuma county on January 1, 1983.
E The estimate shown here constitutes the major portion of the true
estimate.
(D) Not shown to avoid disclosure of confidential information.
(L) Less than $50,000. Estimates are included in totals.
(N) Data not available for this year.
REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 187
C. Full-Time and Part-Time Employees by Major Industry
<PAGE> 188
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-000) NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 9,834,410 9,854,973 9,528,942
By Type:
020 Wage and salary employment 8,703,331 8,667,960 8,327,048
040 Proprietors' employment 1,131,079 1,187,013 1,201,894
050 Farm proprietors' employment 40,689 39,973 39,371
060 Nonfarm proprietors' employment 2/ 1,090,390 1,147,040 1,162,523
By industry:
070 Farm employment 66,200 66,235 64,546
080 Nonfarm employment 9,768,210 9,788,738 9,464,396
090 Private employment 8,261,415 8,258,048 7,965,857
100 Ag.serv.,for.,fish., and other 3/ 49,965 52,555 53,294
130 Mining 12,127 11,398 10,751
180 Construction 439,638 422,750 375,663
190 Manufacturing 1,222,710 1,164,628 1,091,064
440 Transportation and public utilities 455,191 478,837 471,916
510 Wholesale trade 506,525 496,612 468,985
520 Retail trade 1,411,945 1,396,126 1,343,903
530 Finance, insurance, and real estate 1,093,587 1,076,458 1,041,623
560 Services 3,069,727 3,158,684 3,108,658
630 Government and government enterprises 1,506,795 1,530,690 1,498,539
640 Federal, civilian 163,430 169,626 158,145
650 Military 91,215 88,151 86,402
660 State and local 1,252,150 1,272,913 1,253,992
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 9,350,729 9,370,929 9,459,572
By Type:
020 Wage and salary employment 8,174,741 8,185,813 8,256,554
040 Proprietors' employment 1,175,988 1,185,116 1,203,018
050 Farm proprietors' employment 39,440 39,165 38,141
060 Nonfarm proprietors' employment 2/ 1,136,548 1,145,951 1,164,877
By industry:
070 Farm employment 64,844 66,099 65,650
080 Nonfarm employment 9,285,885 9,304,830 9,393,922
090 Private employment 7,810,352 7,836,333 7,938,486
100 Ag.serv.,for.,fish., and other 3/ 51,258 55,182 57,712
130 Mining 9,392 9,735 9,500
180 Construction 346,614 343,834 352,476
190 Manufacturing 1,044,861 1,012,421 990,132
440 Transportation and public utilities 448,257 453,270 456,677
510 Wholesale trade 462,045 451,871 455,684
520 Retail trade 1,320,299 1,319,942 1,343,400
530 Finance, insurance, and real estate 1,008,082 1,007,851 1,009,314
560 Services 3,119,544 3,182,227 3,263,591
630 Government and government enterprises 1,475,533 1,468,497 1,455,436
640 Federal, civilian 155,914 150,985 149,819
650 Military 85,215 80,067 73,239
660 State and local 1,234,404 1,237,445 1,232,378
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 189
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-047) KINGS NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 543,278 546,211 533,853
By Type:
020 Wage and salary employment 465,554 464,992 450,113
040 Proprietors' employment 77,724 81,219 83,740
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 77,724 81,219 83,740
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 543,278 546,211 533,853
090 Private employment 495,702 498,027 486,458
100 Ag.serv.,for.,fish., and other 3/ 1,258 1,361 1,380
130 Mining 115 113 106
180 Construction 28,146 26,922 23,568
190 Manufacturing 74,274 68,623 61,780
440 Transportation and public utilities 28,464 30,296 30,546
510 Wholesale trade 28,847 30,140 29,066
520 Retail trade 79,281 76,745 72,846
530 Finance, insurance, and real estate 42,897 42,203 41,676
560 Services 212,420 221,624 225,490
630 Government and government enterprises 47,576 48,184 47,395
640 Federal, civilian 11,723 11,401 11,159
650 Military 8,817 8,576 8,264
660 State and local 27,036 28,207 27,972
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 532,084 541,736 546,038
By Type:
020 Wage and salary employment 450,444 459,355 462,306
040 Proprietors' employment 81,640 82,381 83,732
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 81,640 82,381 83,732
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 532,084 541,736 546,038
090 Private employment 485,469 495,772 501,085
100 Ag.serv.,for.,fish., and other 3/ 1,439 1,555 1,647
130 Mining 80 83 78
180 Construction 22,714 22,244 23,072
190 Manufacturing 59,395 58,824 57,343
440 Transportation and public utilities 29,579 30,943 31,646
510 Wholesale trade 29,266 29,190 30,374
520 Retail trade 70,447 70,005 70,577
530 Finance, insurance, and real estate 42,888 46,122 45,639
560 Services 229,661 236,806 240,709
630 Government and government enterprises 46,615 45,964 44,953
640 Federal, civilian 10,905 10,596 10,479
650 Military 8,478 7,812 6,637
660 State and local 27,232 27,556 27,837
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 190
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-081) (QUEENS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 605,691 604,921 583,907
By Type:
020 Wage and salary employment 518,663 513,319 490,923
040 Proprietors' employment 87,028 91,602 92,984
050 Farm proprietors' employment 0 0 0
060 Nonfarm Proprietors' employment 2/ 87,028 91,602 92,984
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 605,691 604,921 583,907
090 Private employment 559,405 558,711 538,933
100 Ag.serv.,for.,fish., and other 3/ 1,530 1,620 1,681
130 Mining 144 175 142
180 Construction 45,646 44,323 40,675
190 Manufacturing 69,602 64,446 57,832
440 Transportation and public utilities 81,751 86,121 83,199
510 Wholesale trade 34,597 34,237 32,645
520 Retail trade 88,954 87,238 82,596
530 Finance, insurance, and real estate 43,910 42,914 42,137
560 Services 193,271 197,637 198,026
630 Government and government enterprises 46,286 46,210 44,974
640 Federal, civilian 13,519 13,383 12,940
650 Military 6,465 6,190 5,960
660 State and local 26,302 26,637 26,074
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 570,568 569,169 577,922
By Type:
020 Wage and salary employment 480,100 477,628 484,664
040 Proprietors' employment 90,468 91,541 93,258
050 Farm proprietors' employment 0 0 0
060 Nonfarm Proprietors' employment 2/ 90,468 91,541 93,258
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 570,568 569,169 577,922
090 Private employment 526,203 525,230 534,214
100 Ag.serv.,for.,fish., and other 3/ 1,568 1,684 1,743
130 Mining 143 143 137
180 Construction 36,749 35,693 36,486
190 Manufacturing 55,435 54,022 52,619
440 Transportation and public utilities 77,221 77,817 77,484
510 Wholesale trade 31,720 30,782 30,827
520 Retail trade 80,851 79,189 80,855
530 Finance, insurance, and real estate 43,119 43,091 43,403
560 Services 199,397 202,809 210,660
630 Government and government enterprises 44,365 43,939 43,708
640 Federal, civilian 12,509 12,169 12,337
650 Military 5,883 5,439 4,955
660 State and local 25,973 26,331 26,416
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 191
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-059) NASSAU NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 754,192 746,211 713,915
By Type:
020 Wage and salary employment 650,274 638,540 609,245
040 Proprietors' employment 103,918 107,671 104,670
050 Farm proprietors' employment 54 53 52
060 Nonfarm proprietors' employment 2/ 103,864 107,618 104,618
By Industry:
070 Farm employment 123 124 120
080 Nonfarm employment 754,069 746,087 713,795
090 Private employment 668,567 660,176 629,384
100 Ag. serv., for., fish., and other 3/ 4,723 4,637 4,681
130 Mining 780 541 432
180 Construction 33,694 31,559 27,265
190 Manufacturing 73,080 67,036 60,892
440 Transportation and public utilities 29,330 31,778 30,855
510 Wholesale trade 55,188 51,301 48,108
520 Retail trade 129,491 124,705 120,085
530 Finance, insurance, and real estate 94,793 93,156 86,772
560 Services 247,488 255,463 250,294
630 Government and government enterprises 85,502 85,911 84,411
640 Federal, civilian 10,460 10,308 9,545
650 Military 4,425 4,199 4,080
660 State and local 70,617 71,404 70,786
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 687,494 689,524 698,391
By Type:
020 Wage and salary employment 588,143 589,540 597,040
040 Proprietors' employment 99,351 99,984 101,351
050 Farm proprietors' employment 53 53 51
060 Nonfarm proprietors' employment 2/ 99,298 99,931 101,300
By Industry:
070 Farm employment 122 126 126
080 Nonfarm employment 687,372 689,398 698,265
090 Private employment 607,728 610,755 619,463
100 Ag. serv., for., fish., and other 3/ 4,391 4,757 4,985
130 Mining 358 385 368
180 Construction 24,048 24,337 25,162
190 Manufacturing 54,869 51,526 49,395
440 Transportation and public utilities 28,265 28,769 29,956
510 Wholesale trade 46,799 44,486 44,871
520 Retail trade 117,669 118,959 121,958
530 Finance, insurance, and real estate 82,272 82,622 83,471
560 Services 249,057 254,914 259,297
630 Government and government enterprises 79,644 78,643 78,802
640 Federal, civilian 9,245 7,960 7,000
650 Military 4,025 3,729 3,398
660 State and local 66,374 66,954 68,404
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 192
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-085) RICHMOND NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 95,070 97,466 96,743
By Type:
020 Wage and salary employment 77,996 79 640 78,177
040 Proprietors' employment 17,074 17,826 18,566
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 17,074 17,826 18,566
By industry:
070 Farm employment 0 0 0
080 Nonfarm employment 95,070 97,466 96,743
090 Private employment 87,483 89,441 88,716
100 Ag.serv.,for.,fish., and other 3/ 460 504 509
130 Mining 26 25 26
180 Construction 7,128 6,852 6,351
190 Manufacturing 3,181 3,014 2,688
440 Transportation and public utilities 5,079 5,671 5,689
510 Wholesale trade 2,038 2,101 2,268
520 Retail trade 20,096 19,784 19,062
530 Finance, insurance, and real estate 8,707 8,948 8,782
560 Services 40,768 42,542 43,341
630 Government and government enterprises 7,587 8,025 8,027
640 Federal, civilian 1,049 1,040 1,008
650 Military 1,250 1,354 1,656
660 State and local 5,288 5,631 5,363
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 95,836 98,823 101,640
By Type:
020 Wage and salary employment 77,762 80,610 83,147
040 Proprietors' employment 18,074 18,213 18,493
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 18,074 18,213 18,493
By industry:
070 Farm employment 0 0 0
080 Nonfarm employment 95,836 98,823 101,640
090 Private employment 87,500 90,240 93,843
100 Ag.serv.,for.,fish., and other 3/ 545 622 687
130 Mining 25 27 26
180 Construction 5,989 5,942 6,258
190 Manufacturing 2,414 2,520 2,575
440 Transportation and public utilities 5,386 5,813 6,382
510 Wholesale trade 2,270 2,212 2,264
520 Retail trade 18,884 19,116 20,014
530 Finance, insurance, and real estate 8,276 8,389 8,437
560 Services 43,711 45,599 47,200
630 Government and government enterprises 8,336 8,583 7,797
640 Federal, civilian 997 960 986
650 Military 2,118 2,511 1,581
660 State and local 5,221 5,112 5,230
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 193
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-005) BRONX NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 258,127 259,003 254,237
By Type:
020 Wage and salary employment 231,460 231,379 224,578
040 Proprietors' employment 26,667 27,624 29,659
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 26,667 27,624 29,659
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 258,127 259,003 254,237
090 Private employment 227,787 228,765 224,508
100 Ag.serv.,for.,fish., and other 3/ (D) (D) 623
130 Mining (D) (D) 78
180 Construction 15,320 14,926 13,118
190 Manufacturing 19,798 18,568 16,891
440 Transportation and public utilities 10,956 11,498 12,059
510 Wholesale trade 13,493 13,438 12,675
520 Retail trade 36,434 35,157 33,211
530 Finance. insurance, and real estate 18,519 18,573 19,098
560 Services 112,678 115,912 116,755
630 Government and government enterprises 30,340 30,238 29,729
640 Federal. civilian 9,774 9,393 9,425
650 Military 3,950 3,808 3,660
660 State and local 16,616 17,037 16,644
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 252,867 257,320 261,078
By Type:
020 Wage and salary employment 222,786 226,892 230,214
040 Proprietors' employment 30,081 30,428 30,864
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 30,081 30,428 30,864
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 252,867 257,320 261,078
090 Private employment 222,941 227,284 231,134
100 Ag.serv.,for.,fish., and other 3/ 614 647 694
130 Mining 70 73 71
180 Construction 10,783 10,556 10,777
190 Manufacturing 16,081 15,942 15,522
440 Transportation and public utilities 11,087 11,539 11,779
510 Wholesale trade 12,410 12,384 12,564
520 Retail trade 33,077 32,774 32,827
530 Finance. insurance, and real estate 20,110 20,481 20,539
560 Services 118,709 122,888 126,361
630 Government and government enterprises 29,926 30,036 29,944
640 Federal. civilian 9,427 9,106 9,237
650 Military 3,600 3,315 2,992
660 State and local 16,899 17,615 17,715
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 194
April 28, 1997
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(36-061) NEW YORK NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 2,710,057 2,684,306 2,536,450
By Type:
020 Wage and salary employment: 2,545,778 2,511,217 2,363,244
040 Proprietors' employment 164,279 173,089 173,206
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 164,279 173,089 173,206
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 2,710,057 2,684,306 2,536,450
090 Private employment 2,213,994 2,182,362 2,049,503
100 Ag.serv.,for.,fish., and other 3/ 5,527 6,149 6,043
130 Mining 2,371 2,195 2,060
180 Construction 44,177 40,078 34,171
190 Manufacturing 203,407 193,662 180,728
440 Transportation and public utilities 111,943 117,524 114,419
510 Wholesale trade 160,924 151,654 138,432
520 Retail trade 219,872 212.744 197.706
530 Finance, insurance, and real estate 539,075 529,435 506,235
560 Services 926,698 928,921 869,709
630 Government and government enterprises 496,063 501,944 486,947
640 Federal, civilian 42,769 46,115 40,350
650 Military 6,359 6,047 6,016
660 State and local 446,935 449,782 440,581
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Employment by Place of Work
010 Total full- & part-time employment 2,450,093 2,431,607 2,447,946
By Type:
020 Wage and salary employment: 2,285,803 2,266,368 2,280,943
040 Proprietors' employment 164,290 165,239 167,003
050 Farm proprietors' employment 0 0 0
060 Nonfarm proprietors' employment 2/ 164,290 165,239 167,003
By Industry:
070 Farm employment 0 0 0
080 Nonfarm employment 2,450,093 2,431,607 2,447,946
090 Private employment 1,973,555 1,960,908 1,992,291
100 Ag.serv.,for.,fish., and other 3/ 6,175 6,609 7,003
130 Mining 1,549 1,545 1,476
180 Construction 29,503 29,654 31,565
190 Manufacturing 169,527 168,088 164,479
440 Transportation and public utilities 105,994 103,476 102,034
510 Wholesale trade 134,734 127,288 125.896
520 Retail trade 190,818 190.086 194,769
530 Finance. insurance. and real estate 481,735 474,409 479,985
560 Services 853,520 859,753 885,084
630 Government and government enterprises 476,538 470,699 455,655
640 Federal, civilian 39,014 37,372 36,132
650 Military 5,881 5,687 5,424
660 State and local 431,643 427,640 414,099
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 195
Footnotes for Table CA25
1/ 1969-74 based on 1967 SIC. 1975-87 based on 1972 SIC. 1988-94 based on
1987 SIC.
2/ Excludes limited partners.
3/ "Other" consists of the number of jobs held by U.S. residents employed by
international organizations and foreign embassies and consulates in the
United States.
4/ Cibola. NM was separated from Valencia in June 1981, but in these
estimates Valencia includes Cibola through the end of 1981.
5/ La Paz county, AZ was separated from Yuma county on January 1. 1983.
6/ Estimates for 1979 forward reflect Alaska Census Areas as defined in the
1980 Decennial Census: those for prior years reflect Alaska Census
Divisions as defined in the 1970 Decennial Census. Estimates from 1988
forward separate Aleutian Islands Census Area into Aleutians East Bor.
and Aleutians West Census Area. Denali and Lake + Peninsula Boroughs
begin in 1991. Estimates from 1993 forward separate
Skagway-Yakutat-Angoon Census Area into Skagway-Hoonah-Angoon Census Area
and Yakutat Borough.
E Estimate shown constitutes the major portion of the true estimate.
(D) Not shown to avoid disclosure of confidential information.
(L) Less than 10 jobs. Estimates are included in totals.
(N) Data not available for this year.
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 196
D. Regional Economic Profile
<PAGE> 197
April 28, 1997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-000) NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 377,342,418 401,833,272 413,644,570
020 Nonfarm personal income 376,568,113 401,053,887 412,935,227
030 Farm income 774,305 779,385 709,343
Derivation of Total Personal Income
040 Net earnings 1/ 245,025,180 260,600,738 263,436,690
050 Transfer payments 58,812,473 64,600,722 73,106,506
060 Income maintenance 2/ 6,041,427 6,679,183 7,422,997
070 Unemployment insurance 1,328,530 1,888,795 2,644,900
080 Retirement and other 51,442,516 56,032,744 63,038,609
090 Dividends, interest, and rent 73,504,765 76,631,812 77,101,374
100 Population (thousands) 3/ 17,983.2 18,002.3 18,040.8
Per Capita Incomes ($) 4/
110 Per capita personal income 20,983 22,321 22,928
120 Per capita net earnings 13,625 14,476 14,602
130 Per capita transfer payments 3,270 3,588 4,052
140 Per capita income maintenance 336 371 411
150 Per capita unemployment insurance 74 105 147
160 Per capita retirement & other 2,861 3,113 3,494
170 Per capita dividends, interest, & rent 4,087 4,257 4,274
Place of Work Profile
180 Total earnings (place of work, $000) 278,157,851 295,488,397 299,460,485
190 Wages and salaries 233,175,026 245,454,911 245,008,157
200 Other labor income 19,852,710 21,491,868 23,277,468
210 Proprietors' income 25,130,115 28,541,618 31,174,860
220 Nonfarm proprietors' income 24,637,951 28,091,516 30,790,921
230 Farm proprietors' income 492,164 450,102 383,939
240 Total employment (full & part-time) 9,834,410 9,854,973 9,528,942
250 Wage and salary jobs 8,703,331 8,667,960 8,327,048
260 Number of proprietors 1,131,079 1,187,013 1,201,894
270 Number of nonfarm proprietors /5 1,090,390 1,147,040 1,162,523
280 Number of farm proprietors 40,689 39,973 39,371
290 Average earnings per job ($) 28,284 29,984 31,426
300 Wage & salary earnings per job ($) 26,791 28,317 29,423
310 Average earnings per nonfarm proprietor ($) 22,596 24,490 26,486
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 436,839,110 451,124,875 467,397,414
020 Nonfarm personal income 436,058,443 450,248,615 466,745,146
030 Farm income 780,667 876,260 652,268
Derivation of Total Personal Income
040 Net earnings 1/ 280,403,865 288,958,055 298,239,033
050 Transfer payments 82,483,653 88,027,609 91,852,352
060 Income maintenance 2/ 8,645,104 9,534,457 10,212,242
070 Unemployment insurance 4,719,218 3,411,049 2,214,822
080 Retirement and other 69,119,331 75,082,103 79,425,288
090 Dividends, interest, and rent 73,951,592 74,139,211 77,306,029
100 Population (thousands) 3/ 18,095.2 18,154.5 18,172.6
Per Capita Incomes ($) 4/
110 Per capita personal income 24,141 24,849 25,720
120 Per capita net earnings 15,496 15,917 16,411
130 Per capita transfer payments 4,558 4,849 5,054
140 Per capita income maintenance 478 525 562
150 Per capita unemployment insurance 261 188 122
160 Per capita retirement & other 3,820 4,136 4,371
170 Per capita dividends, interest, & rent 4,087 4,084 4,254
Place of Work Profile
180 Total earnings (place of work, $000) 319,353,218 328,692,513 339,514,666
190 Wages and salaries 259,282,702 264,104,942 271,101,923
200 Other labor income 25,388,315 27,104,761 28,528,284
210 Proprietors' income 34,682,201 37,482,810 39,884,459
220 Nonfarm proprietors' income 34,223,834 36,959,673 39,574,798
230 Farm proprietors' income 458,367 523,137 309,661
240 Total employment (full & part-time) 9,350,729 9,370,929 9,459,572
250 Wage and salary jobs 8,174,741 8,185,813 8,256,554
260 Number of proprietors 1,175,988 1,185,116 1,203,018
270 Number of nonfarm proprietors /5 1,136,548 1,145,951 1,164,877
280 Number of farm proprietors 39,440 39,165 38,141
290 Average earnings per job ($) 34,153 35,076 35,891
300 Wage & salary earnings per job ($) 31,718 32,264 32,835
310 Average earnings per nonfarm proprietor ($) 30,112 32,252 33,973
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 198
April 28, 2997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-047) KINGS NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 37,105,853 39,735,054 40,815,759
020 Nonfarm personal income 37,105,853 39,735,054 40,815,759
030 Farm income 0 0 0
Derivation of Total Personal income
040 Net earnings 1/ 22,588,544 24,143,037 23,887,748
050 Transfer payments 8,690,456 9,634,947 10,970,773
060 Income maintenance 2/ 1,258,120 1,391,561 1,540,527
070 Unemployment insurance 186,473 309,360 379,695
080 Retirement and other 7,245,863 7,934,026 9,050,551
090 Dividends, interest, and rent 5,826,853 5,957,070 5,957,238
100 Population (thousands) 3/ 2,299.5 2,298.3 2,287.8
Per Capita Incomes ($) 4/
110 Per capita personal income 16,137 17,289 17,841
120 Per capita net earnings 9,823 10,505 10,441
130 Per capita transfer payments 3,779 4,192 4,795
140 Per capita income maintenance 547 605 673
150 Per capita unemployment insurance 81 135 166
160 Per capita retirement & other 3,151 3,452 3,956
170 Per capita dividends, interest, & rent 2,534 2,592 2,604
Place of Work Profile
180 Total earnings (place of work, $000) 11,449,037 12,328,359 12,528,763
190 Wages and salaries 9,717,682 10,332,841 10,429,532
200 Other labor income 807,941 881,770 967,938
210 Proprietors' income 923,414 1,113,748 1,131,293
220 Nonfarm proprietors' income 923,414 1,113,748 1,131,293
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 543,278 546,211 533,853
250 Wage and salary jobs 465,554 464,992 450,113
260 Number of proprietors 77,724 81,219 83,740
270 Number of nonfarm proprietors /5 77,724 81,219 83,740
280 Number of farm proprietors 0 0 0
290 Average earnings per job (S) 21,074 22,571 23,469
300 Wage & salary earnings per job ($) 20,873 22,222 23,171
310 Average earnings per nonfarm proprietor ($) 11,881 13,713 13,510
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 43,366,542 44,309,232 45,710,625
020 Nonfarm personal income 43,366,542 44,309,232 45,710,625
030 Farm income 0 0 0
Derivation of Total Personal income
040 Net earnings 1/ 25,905,877 26,374,426 26,959,781
050 Transfer payments 12,252,635 13,136,232 13,736,000
060 Income maintenance 2/ 1,798,126 2,015,988 2,204,245
070 Unemployment insurance 729,167 545,179 337,662
080 Retirement and other 9,725,342 10,575,065 11,194,093
090 Dividends, interest, and rent 5,208,030 4,798,574 5,014,844
100 Population (thousands) 3/ 2,281.4 2,279.5 2,272.0
Per Capita Incomes ($) 4/
110 Per capita personal income 19,008 19,438 20,119
120 Per capita net earnings 11,355 11,570 11,866
130 Per capita transfer payments 5,371 5,763 6,046
140 Per capita income maintenance 788 884 970
150 Per capita unemployment insurance 320 239 149
160 Per capita retirement & other 4,263 4,639 4,927
170 Per capita dividends, interest, & rent 2,283 2,105 2,207
Place of Work Profile
180 Total earnings (place of work, $000) 13,346,366 13,965,875 14,701,016
190 Wages and salaries 10,994,618 11,410,462 11,966,184
200 Other labor income 1,060,409 1,159,329 1,237,982
210 Proprietors' income 1,291,339 1,396,084 1,496,850
220 Nonfarm proprietors' income 1,291,339 1,396,084 1,496,850
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 532,084 541,736 546,038
250 Wage and salary jobs 450,444 459,355 462,306
260 Number of proprietors 81,640 82,381 83,732
270 Number of nonfarm proprietors /5 81,640 82,381 83,732
280 Number of farm proprietors 0 0 0
290 Average earnings per job (S) 25,083 25,780 26,923
300 Wage & salary earnings per job ($) 24,408 24,840 25,884
310 Average earnings per nonfarm proprietor ($) 15,817 16,947 17,877
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 199
April 28, 1997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-081) QUEENS NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 39,628,734 41,862,186 42,528,134
020 Nonfarm personal income 39,628,734 41,862,186 42,528,134
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings 1/ 24,380,107 25,675,688 25,380,914
050 Transfer payments 7,499,237 8,324,550 9,504,957
060 Income maintenance 2/ 901,237 992,340 1,093,681
070 Unemployment insurance 139,378 236,153 319,445
080 Retirement and other 6,458,622 7,096,057 8,091,831
090 Dividends, interest, and rent 7,749,390 7,861,948 7,642,263
100 Population (thousands) 3/ 1,951.5 1,952.1 1,951.4
Per Capita Incomes ($) 4/
110 Per capita personal income 20,307 21,444 21,794
120 Per capita net earnings 12,493 13,153 13,007
130 Per capita transfer payments 3,843 4,264 4,871
140 Per capita income maintenance 462 508 560
150 Per capita unemployment insurance 71 121 164
160 Per capita retirement & other 3,310 3,635 4,147
170 Per capita dividends, interest, & rent 3,971 4,027 3,916
Place of Work Profile
180 Total earnings (place of work, $000) 14,963,896 15,879,647 16,034,905
190 Wages and salaries 12,649,698 13,233,368 13,215,737
200 Other labor income 1,169,874 1,263,250 1,366,241
210 Proprietors' income 1,144,324 1,383,029 1,452,927
220 Nonfarm proprietors' income 1,144,324 1,383,029 1,452,927
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 605,691 604,921 583,907
250 Wage and salary jobs 518,663 513,319 490,923
260 Number of proprietors 87,028 91,602 92,984
270 Number of nonfarm proprietors /5 87,028 91,602 92,984
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 24,705 26,251 27,461
300 Wage & salary earnings per; job ($) 24,389 25,780 26,920
310 Average earnings per nonfarm proprietor ($) 13,149 15,098 15,626
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 45,251,322 46,334,628 47,729,731
020 Nonfarm personal income 45,251,322 46,334,628 47,729,731
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings 1/ 26,889,088 27,392,153 28,001,221
050 Transfer payments 10,758,893 11,523,107 11,998,395
060 Income maintenance 2/ 1,310,993 1,470,827 1,603,496
070 Unemployment insurance 637,400 459,408 287,550
080 Retirement and other 8,810,500 9,592,872 10,107,349
090 Dividends, interest, and rent 7,603,341 7,419,368 7,730,115
100 Population (thousands) 3/ 1,953.1 1,960.2 1,964.7
Per Capita Incomes ($) 4/
110 Per capita personal income 23,169 23,638 24,293
120 Per capita net earnings 13,767 13,974 14,252
130 Per capita transfer payments 5,509 5,879 6,107
140 Per capita income maintenance 671 750 816
150 Per capita unemployment insurance 326 234 146
160 Per capita retirement & other 4,511 4,894 5,144
170 Per capita dividends, interest, & rent 3,893 3,785 3,934
Place of Work Profile
180 Total earnings (place of work, $000) 16,464,841 16,768,809 17,467,519
190 Wages and salaries 13,435,772 13,519,176 14,014,740
200 Other labor income 1,439,569 1,515,032 1,596,579
210 Proprietors' income 1,589,500 1,734,601 1,856,200
220 Nonfarm proprietors' income 1,589,500 1,734,601 1,856,200
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 570,568 569,169 577,922
250 Wage and salary jobs 480,100 477,628 484,664
260 Number of proprietors 90,468 91,541 93,258
270 Number of nonfarm proprietors /5 90,468 91,541 93,258
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 28,857 29,462 30,225
300 Wage & salary earnings per; job ($) 27,985 28,305 28,916
310 Average earnings per nonfarm proprietor ($) 17,570 18,949 19,904
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 200
April 28, 1997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-059) NASSAU NEW YORK
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personael income ($000) 38,126,585 40,166,644 40,355,001
020 Nonfarm personal income 38,123,931 40,163,752 40,351,563
030 Farm income 2,654 2,892 3,438
Derivation of Total Personal Income
040 Net earnings 1/ 24,095,632 25,437,001 25,544,100
050 Transfer payments 3,870,383 4,171,251 4,666,862
060 Income maintenance 2/ 116,732 126,693 147,200
070 Unemployment insurance 80,746 102,127 157,609
080 Retirement and other 3,672,905 3,942,431 4,362,053
090 Dividends, interest, and rent 10,160,570 10,558,392 10,144,039
100 Population (thousands) 3/ 1,292.8 1,286.1 1,291.2
Per Capita Incomes ($) 4/
110 Per capita personal income 29,491 31,232 31,255
120 Per capita net earnings 18,638 19,779 19,784
130 Per capita transfer payments 2,994 3,243 3,614
140 Per capita income maintenance 90 99 114
150 Per capita unemployment insurance 62 79 122
160 Per capita retirement & other 2,841 3,065 3,378
170 Per capita dividends, interest, & rent 7,859 8,210 7,857
Place of Work Profile
180 Total earnings (place of work, $000) 20,532,312 21,753,508 22,106,708
190 Wages and salaries 16,786,109 17,379,086 17,391,067
200 Other labor income 1,399,206 1,486,336 1,603,546
210 Proprietors' income 2,346,997 2,888,086 3,112,095
220 Nonfarm proprietors' income 2,344,997 2,885,957 3,109,410
230 Farm proprietors' income 2,000 2,129 2,685
240 Total employment (full & part-time) 754,192 746,211 713,915
250 Wage and salary jobs 650,274 638,540 609,245
260 Number of proprietors 103,918 107,671 104,670
270 Number of nonfarm proprietors /5 103,864 107,618 104,618
280 Number of farm proprietors 54 53 52
290 Average earnings per job ($) 27,224 29,152 30,965
300 Wage & salary earnings per job ($) 25,814 27,217 28,545
310 Average earnings per nonfarm proprietor ($) 22,578 26,817 29,722
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personael income ($000) 41,732,927 43,479,037 45,102,077
020 Nonfarm personal income 41,729,655 43,475,260 45,098,971
030 Farm income 3,272 3,777 3.06
Derivation of Total Personal Income
040 Net earnings 1/ 26,980,812 27,794,436 28,772,160
050 Transfer payments 5,337,402 5,659,342 5,895,175
060 Income maintenance 2/ 171,786 194,340 211,901
070 Unemployment insurance 284,963 187,589 121,161
080 Retirement and other 4,880,653 5,277,413 5,562,113
090 Dividends, interest, and rent 9,414,713 10,025,259 10,434,742
100 Population (thousands) 3/ 1,296.5 1,300.2 1,302.4
Per Capita Incomes ($) 4/
110 Per capita personal income 32,188 33,439 34,629
120 Per capita net earnings 20,810 21,376 22,091
130 Per capita transfer payments 4,117 4,333 4,526
140 Per capita income maintenance 132 149 163
150 Per capita unemployment insurance 220 144 93
160 Per capita retirement & other 3,764 4,059 4,271
170 Per capita dividends, interest, & rent 7,261 7,710 8,012
Place of Work Profile
180 Total earnings (place of work, $000) 22,862,299 23,601,572 24,375,693
190 Wages and salaries 17,788,547 18,157,136 18,595,116
200 Other labor income 1,699,807 1,813,609 1,899,331
210 Proprietors' income 3,373,945 3,630,827 3,881,246
220 Nonfarm proprietors' income 3,371,421 3,627,868 3,878,936
230 Farm proprietors' income 2,524 2,959 2,310
240 Total employment (full & part-time) 687,494 689,524 698,391
250 Wage and salary jobs 588,143 589,540 597,040
260 Number of proprietors 99,351 99,984 101,351
270 Number of nonfarm proprietors /5 99,298 99,931 101,300
280 Number of farm proprietors 53 53 51
290 Average earnings per job ($) 33,255 34,229 34,903
300 Wage & salary earnings per job ($) 30,245 30,799 31,146
310 Average earnings per nonfarm proprietor ($) 33,953 36,304 38,292
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 201
April 28, 1997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-085) RICHMOND NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 7,776,692 8,348,538 8,731,126
020 Nonfarm personal income 7,776,692 8,348,538 8,731,126
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings 1/ 5,377,601 5,714,488 5,867,671
050 Transfer payments 1,300,117 1,488,554 1,766,031
060 Income maintenance 2/ 128,138 141,340 158,411
070 Unemployment insurance 24,070 45,366 59,982
080 Retirement and other 1,147,909 1,301,848 1,547,638
090 Dividends, interest, and rent 1,098,974 1,145,496 1,097,424
100 Population (thousands) 3/ 377.8 380.0 385.4
Per Capita Incomes (S) 4/
110 Per capita personal income 20,584 21,970 22,657
120 Per capita net earnings 14,234 15,038 15,227
130 Per capita transfer payments 3,441 3,917 4,583
140 Per capita income maintenance 339 372 411
150 Per capita unemployment insurance 64 119 156
160 Per capita retirement & other 3,038 3,426 4,016
170 Per capita dividends, interest, & rent 2,909 3,014 2,848
Place of Work Profile
180 Total earnings (place of work, $000) 2,007,183 2,208,681 2,311,522
190 Wages and salaries 1,623,090 1,750,132 1,789,660
200 Other labor income 129,816 143,693 159,761
210 Proprietors' income 254,277 314,856 362,101
220 Nonfarm proprietors' income 254,277 314,856 362,101
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 95,070 97,466 96,743
250 Wage and salary jobs 77,996 79,640 78,177
260 Number of proprietors 17,074 17,826 18,566
270 Number of nonfarm proprietors /5 17,074 17,826 18,566
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 21,113 22,661 23,893
300 Wage & salary earnings per job ($) 20,810 21,976 22,892
310 Average earnings per nonfarm proprietor ($) 14,893 17,663 19,503
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 9,213,517 9,585,241 9,949,211
020 Nonfarm personal income 9,213,517 9,585,241 9,949,211
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings 1/ 6,140,852 6,336,787 6,531,120
050 Transfer payments 2,105,007 2,262,616 2,386,284
060 Income maintenance 2/ 244,584 273,887 297,131
070 Unemployment insurance 114,935 86,596 52,835
080 Retirement and other 1,745,488 1,902,133 2,036,318
090 Dividends, interest, and rent 967,658 985,838 1,031,807
100 Population (thousands) 3/ 390.9 395.7 397.7
Per Capita Incomes (S) 4/
110 Per capita personal income 23,571 24,226 25,015
120 Per capita net earnings 15,710 16,016 16,421
130 Per capita transfer payments 5,385 5,719 6,000
140 Per capita income maintenance 626 692 747
150 Per capita unemployment insurance 294 219 133
160 Per capita retirement & other 4,465 4,808 5,120
170 Per capita dividends, interest, & rent 2,476 2,492 2,594
Place of Work Profile
180 Total earnings (place of work, $000) 2,442,802 2,606,881 2,782,556
190 Wages and salaries 1,878,574 1,981,233 2,108,749
200 Other labor income 175,126 194,386 213,393
210 Proprietors' income 389,102 431,262 460,414
220 Nonfarm proprietors' income 389,102 431,262 460,414
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 95,836 98,823 101,640
250 Wage and salary jobs 77,762 80,610 83,147
260 Number of proprietors 18,074 18,213 18,493
270 Number of nonfarm proprietors /5 18,074 18,213 18,493
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 25,489 26,379 27,377
300 Wage & salary earnings per job ($) 24,158 24,578 25,362
310 Average earnings per nonfarm proprietor ($) 21,528 23,679 24,897
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 202
April 28, 1997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-005) BRONX NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 16,718,300 17,713,898 18,298,728
020 Nonfarm personal income 16,718,300 17,713,898 18,298,728
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings 1/ 9,721,704 10,221,191 10,111,699
050 Transfer payments 4,708,708 5,213,967 5,902,952
060 Income maintenance 2/ 718,815 792,208 876,916
070 Unemployment insurance 96,137 160,056 198,276
080 Retirement and other 3,893,756 4,261,703 4,827,760
090 Dividends, interest, and rent 2,287,888 2,278,740 2,284,077
100 Population (thousands) 3/ 1,200.9 1,203.6 1,199.5
Per Capita Incomes ($) 4/
110 Per capita personal income 13,921 14,718 15,256
120 Per capita net earnings 8,095 8,492 8,430
130 Per capita transfer payments 3,921 4,332 4,921
140 Per capita income maintenance 599 658 731
150 Per capita unemployment insurance 80 133 165
160 Per capita retirement & other 3,242 3,541 4,025
170 Per capita dividends, interest, & rent 1,905 1,893 1,904
Place of Work Profile
180 Total earnings (place of work, $000) 5,932,178 6,330,975 6,529,499
190 Wages and salaries 5,135,979 5,438,519 5,567,423
200 Other labor income 412,587 451,230 503,407
210 Proprietors' income 383,612 441,226 458,669
220 Nonfarm proprietors' income 383,612 441,226 458,669
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 258,127 259,003 254,237
250 Wage and salary jobs 231,460 231,379 224,578
260 Number of proprietors 26,667 27,624 29,659
270 Number of nonfarm proprietors /5 26,667 27,624 29,659
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 22,982 24,444 25,683
300 Wage & salary earnings per job ($) 22,189 23,505 24,791
310 Average earnings per nonfarm proprietor ($) 14,385 15,973 15,465
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 19,388,514 19,846,020 20,490,819
020 Nonfarm personal income 19,388,514 19,846,020 20,490,819
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings 1/ 10,601,367 10,777,135 11,045,078
050 Transfer payments 6,612,857 7,081,533 7,377,352
060 Income maintenance 2/ 1,011,541 1,127,634 1,221,861
070 Unemployment insurance 379,077 275,670 166,170
080 Retirement and other 5,222,239 5,678,229 5,989,321
090 Dividends, interest, and rent 2,174,290 1,987,352 2,068,389
100 Population (thousands) 3/ 1,194.3 1,195.7 1,191.8
Per Capita Incomes ($) 4/
110 Per capita personal income 16,235 16,598 17,193
120 Per capita net earnings 8,877 9,013 9,267
130 Per capita transfer payments 5,537 5,922 6,190
140 Per capita income maintenance 847 943 1,025
150 Per capita unemployment insurance 317 231 139
160 Per capita retirement & other 4,373 4,749 5,025
170 Per capita dividends, interest, & rent 1,821 1,662 1,735
Place of Work Profile
180 Total earnings (place of work, $000) 6,927,254 7,221,785 7,570,020
190 Wages and salaries 5,872,359 6,091,921 6,365,160
200 Other labor income 548,493 597,794 632,182
210 Proprietors' income 506,402 532,070 572,678
220 Nonfarm proprietors' income 506,402 532,070 572,678
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 252,867 257,320 261,078
250 Wage and salary jobs 222,786 226,892 230,214
260 Number of proprietors 30,081 30,428 30,864
270 Number of nonfarm proprietors /5 30,081 30,428 30,864
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 27,395 28,065 28,995
300 Wage & salary earnings per job ($) 26,359 26,849 27,649
310 Average earnings per nonfarm proprietor ($) 16,835 17,486 18,555
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 203
April 28, 1997
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(36-005) NEW YORK NEW YORK
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1989 1990 1991
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
010 Total personal income ($000) 60,427,028 66,077,342 68,401,501
020 Nonfarm personal income 60,427,028 66,077,342 68,401,501
030 Farm income 0 0 0
Derivation of Total Personal Income
040 Net earnings /1 40,004,278 43,425,701 44,575,727
050 Transfer payments 6,530,916 7,199,447 8,080,671
060 Income maintenance 2/ 826,160 911,467 1,005,914
070 Unemployment insurance 121,694 198,548 254,620
080 Retirement and other 5,583,062 6,089,432 6,820,137
090 Dividends, interest, and rent 13,891,834 15,452,194 15,745,103
100 Population (thousands) 3/ 1,484.0 1,487.0 1,483.6
Per Capita Incomes ($) 4/
110 Per capita personal income 40,718 44,436 46,105
120 Per capita net earnings 26,956 29,203 30,046
130 Per capita transfer payments 4,401 4,842 5,447
140 Per capita income maintenance 557 613 678
150 Per capita unemployment insurance 82 134 172
160 Per capita retirement 3,726 4,095 4,597
170 Per capita dividends, interest, & rent 9,351 10,391 10,613
Place of Work Profile
180 Total earnings (place of work, $000) 110,141,819 116,717,404 116,810,717
190 Wages and salaries 92,381,644 97,333,791 95,121,129
200 Other labor income 7,237,909 7,847,166 8,304,653
210 Proprietors' income 10,522,266 11,536,447 13,384,935
220 Nonfarm proprietors' income 10,522,266 11,536,447 13,384,935
230 Farm proprietors' income 0 0 0
240 Total employment (full & part-time) 2,710,057 2,684,306 2,536,450
250 Wage and salary jobs 2,545,778 2,511,217 2,363,244
260 Number of proprietors 164,279 173,086 173,206
270 Number of nonfarm Proprietors /5 164,279 173,089 173,206
280 Number of farm proprietors 0 0 0
290 Average earnings per job ($) 40,642 43,481 46,053
300 Wage & salary earnings per job ($) 36,288 38,760 40,250
310 Average earnings per nonfarm proprietor ($) 64,051 66,650 77,278
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Line Item 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Place of Residence Profile
74,756,167 77,161,311 80,154,258
010 Total personal income ($000) 74,756,167 77,161,311 80,154,258
020 Nonfarm personal income 0 0 0
030 Farm income
Derivation of Total Personal Income 49,252,289 51,541,016 53,583,018
040 Net earnings /1 9,079,503 9,879,868 10,206,275
050 Transfer payments 1,140,606 1,268,876 2,367,811
060 Income maintenance 2/ 467,725 356,600 222,036
070 Unemployment insurance 7,471,172 8,254,392 8,616,428
080 Retirement and other 16,424,375 15,740,427 16,364,965
090 Dividends, interest, and rent
1,486.6 1,495.6 1,507.0
100 Population (thousands) 3/
Per Capita Incomes ($) 4/ 50,286 51,594 53,189
110 Per capita personal income 33,131 34,463 35,557
120 Per capita net earnings 6,108 6,606 6,773
130 Per capita transfer payments 767 848 908
140 Per capita income maintenance 315 238 147
150 Per capita unemployment insurance 5,025 5,519 5,718
160 Per capita retirement 11,048 10,525 10,860
170 Per capita dividends, interest, & rent
Place of Work Profile
128,722,774 132,082,836 135,607,821
180 Total earnings (place of work, $000) 104,286,113 105,633,836 107,508,847
190 Wages and salaries 9,218,051 9,871,281 10,403,054
200 Other labor income 15,218,610 16,577,719 17,695,920
210 Proprietors' income 15,218,610 16,577,719 17,695,920
220 Nonfarm proprietors' income 0 0 0
230 Farm proprietors' income
2,450,093 2,431,607 2,447,946
240 Total employment (full & part-time) 2,285,803 2,266,368 2,280,943
250 Wage and salary jobs 164,290 165,239 167,003
260 Number of proprietors 164,290 165,239 167,003
270 Number of nonfarm Proprietors /5 0 0 0
280 Number of farm proprietors
52,538 54,319 55,397
290 Average earnings per job ($) 45,623 46,609 47,134
300 Wage & salary earnings per job ($) 92,633 100,326 105,962
310 Average earnings per nonfarm proprietor ($)
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 204
Footnotes for Table CA30
1/ Total earnings less personal contributions for social insurance adjusted
to place of residence.
2/ Includes supplemental security income payments, payments to families with
dependent children (AFDC), general assistance payments, food stamp
payments, and other assistance payments, including emergency assistance.
3/ Census Bureau midyear population estimates. Estimates for 1990-1994
reflect county population estimates available as of October 1995.
4/ Type of income divided by population yields a per capita for that type of
income.
5/ Excludes limited partners.
6/ Cibola, NM was separated from Valencia in June 1981, but in these
estimates Valencia includes Cibola through the end of 1981.
7/ La Paz county, AZ was separated from Yuma county on January 1, 1983.
8/ Estimates for 1979 forward reflect Alaska Census Areas as defined in
the 1980 Decennial Census: those for prior years reflect Alaska Census
Divisions as defined in the 1970 Decennial Census. Estimates from 1988
forward separate Aleutian Islands Census Area Into Aleutians East Bor.
and Aleutians West Census Area. Denali and Lake + Peninsula Boroughs
begin in 1991. Estimates from 1993 forward separate
Skagway-Yakutat-Angoon Census Area into Skagway-Hoonah-Angoon Census Area
and Yakutat Borough.
(L) Less than $50,000 or less than 10 jobs, as appropriate. Estimates are
included in totals.
(N) Data not available for this year.
REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE> 205
EXHIBIT III-1
General Characteristics of Publicly-Traded Institutions
<PAGE> 206
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ----- ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
California Companies
--------------------
AHM Ahmanson and Co. H.F. of CA NYSE Nationwide M.B. 48,698 345 12-31 10/72 47.12 4,740
GWF Great Western Fin. Corp. of CA NYSE CA,FL Div. 42,878 416 12-31 / 56.00 7,722
GDW Golden West Fin. Corp. of CA NYSE Nationwide M.B. 38,530 232 12-31 05/59 73.25 4,191
GLN Glendale Fed. Bk, FSB of CA NYSE CA Div. 15,394 150 06-30 10/83 25.37 1,276
CSA Coast Savings Financial of CA NYSE California R.E. 8,797 89 12-31 12/85 46.00 855
DSL Downey Financial Corp. of CA NYSE Southern CA Thrift 5,484 52 12-31 01/71 23.25 622
FED FirstFed Fin. Corp. of CA NYSE Los Angeles CA R.E. 4,130 25 12-31 12/83 30.62 323
WES Westcorp Inc. of Orange CA NYSE California Div. 3,406 25 12-31 05/86 18.75 488
BPLS Bank Plus Corp. of CA OTC Los Angeles CA R.E. 3,295 33 12-31 / 10.00 182
BVCC Bay View Capital Corp. of CA OTC San Francisco CA M.B. 3,045 27 12-31 05/86 26.62 345
PFFB PFF Bancorp of Pomona CA OTC Southern CA Thrift 2,536 22 03-31 03/96 17.25 325
CENF CENFED Financial Corp. of CA OTC Los Angeles CA Thrift 2,263 18 12-31 10/91 32.75 189
FRC First Republic Bancorp of CA (3) NYSE CA,NV M.B. 2,183 11 12-31 / 21.50 215
AFFFZ America First Fin. Fund of CA OTC San Francisco CA Div. 2,183 36 12-31 / 39.56 238
CFHC California Fin. Hld. Co. of CA OTC Central CA Thrift 1,315 22 12-31 04/83 29.62 141
REDF RedFed Bancorp of Redlands CA OTC Southern CA Thrift 909 14 12-31 04/94 15.63 112
HTHR Hawthorne Fin. Corp. of CA OTC Southern CA Thrift 828 S 9 12-31 / 11.37 30
HEMT HF Bancorp of Hemet CA OTC Southern CA Thrift 827 J 12 06-30 06/95 14.06 88
ITLA Imperial Thrift & Loan of CA (3) OTC Los Angeles CA R.E. 810 11 12-31 / 16.00 125
QCBC Quaker City Bancorp of CA OTC Los Angeles CA R.E. 781 8 06-30 12/93 17.00 81
PROV Provident Fin. Holdings of CA OTC M.B. 609 0 06-30 06/96 16.75 85
HBNK Highland Federal Bank of CA OTC Los Angeles CA R.E. 480 11 12-31 / 23.87 54
MBBC Monterey Bay Bancorp of CA OTC West Central CA Thrift 422 6 12-31 02/95 16.75 54
SGVB SGV Bancorp of W. Covina CA OTC Los Angeles CA Thrift 400 6 06-30 06/95 14.00 33
PCCI Pacific Crest Capital of CA (3) OTC Southern CA R.E. 343 4 12-31 / 13.37 39
BYFC Broadway Fin. Corp. of CA OTC Los Angeles CA Thrift 117 D 3 12-31 01/96 10.75 10
FSSB First FS&LA of San Bern. CA OTC San Bernard. CA Thrift 104 4 06-30 12/92 9.50 3
</TABLE>
Florida Companies
-----------------
<PAGE> 207
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ----- ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Florida Companies (continued)
-----------------------------
BANC BankAtlantic Bancorp of FL OTC Southeastern FL M.B. 2,773 43 12-31 11/83 14.12 262
OCWN Ocwen Financial Corp. of FL OTC Southeast FL Div. 2,649 1 12-31 / 29.75 797
FFPB First Palm Beach Bancorp of FL OTC Southeast FL Thrift 1,558 31 09-30 09/93 30.25 152
BKUNA BankUnited SA of FL OTC Miami FL Thrift 1,453 7 09-30 12/85 9.62 85
HARB Harbor FSB, MHC of FL (46.0) OTC Eastern FL Thrift 1,105 22 09-30 01/94 40.75 202
FFFL Fidelity FSB, MHC of FL (47.4) OTC Southeast FL Thrift 927 20 12-31 01/94 19.37 131
CMSV Commty. Svgs, MHC of FL (48.5) OTC Southeast FL Thrift 682 17 09-30 10/94 21.75 107
FFLC FFLC Bancorp of Leesburg FL OTC Central FL Thrift 359 8 12-31 01/94 28.50 67
FFFG F.F.O. Financial Group of FL OTC Central FL R.E. 317 D 11 12-31 10/88 4.87 41
Mid-Atlantic Companies
----------------------
DME Dime Bancorp, Inc. of NY (3) NYSE NY,NJ,FL M.B. 18,465 87 12-31 08/86 19.00 2,000
GPT GreenPoint Fin. Corp. of NY (3) NYSE New York City NY Thrift 13,261 82 06-30 01/94 66.37 3,112
SVRN Sovereign Bancorp of PA OTC PA,NJ,DE M.B. 10,287 120 12-31 08/86 14.12 986
ASFC Astoria Financial Corp. of NY OTC New York City NY Thrift 7,689 46 12-31 11/93 45.62 969
LISB Long Island Bancorp, Inc of NY OTC Long Island NY M.B. 5,814 36 09-30 04/94 36.12 875
COFD Collective Bancorp Inc. of NJ OTC Southern NJ Thrift 5,518 79 06-30 02/84 46.12 943
RCSB RCSB Financial, Inc. of NY (3) OTC NY M.B. 4,032 34 11-30 04/86 45.25 670
ALBK ALBANK Fin. Corp. of Albany NY OTC Upstate NY, MA Thrift 3,496 70 06-30 04/92 39.81 510
ROSE T R Financial Corp. of NY (3) OTC New York City NY Thrift 3,404 15 12-31 06/93 23.50 414
NYB New York Bancorp, Inc. of NY AMEX Southeastern NY Thrift 3,175 29 09-30 01/88 34.75 569
RSLN Roslyn Bancorp, Inc. of NY (3) OTC Long Island NY M.B. 2,849 6 12-31 01/97 20.00 873
GRTR The Greater New York SB of NY (3) OTC New York NY Div. 2,571 14 12-31 06/87 21.25 291
BKCO Bankers Corp. of NJ (3) OTC Central NJ Thrift 2,542 15 12-31 03/90 25.87 320
CMSB Cmnwealth Bancorp of PA OTC Philadelphia PA M.B. 2,236 39 06-30 06/96 16.62 284
NWSB Northwest SB, MHC of PA (29.9) OTC Pennsylvania Thrift 1,997 53 06-30 11/94 15.25 356
HARS Harris SB, MHC of PA (24.2) OTC Southeast PA Thrift 1,943 31 12-31 01/94 21.25 238
RELY Reliance Bancorp, Inc. of NY OTC New York City NY Thrift 1,927 28 06-30 03/94 26.87 237
MLBC ML Bancorp of Villanova PA OTC Philadelphia PA M.B. 1,875 D 18 03-31 08/94 19.06 199
HAVN Haven Bancorp of Woodhaven NY OTC New York City NY Thrift 1,728 20 12-31 09/93 37.00 160
JSBF JSB Financial, Inc. of NY OTC New York City NY Thrift 1,531 13 12-31 06/90 43.87 431
</TABLE>
<PAGE> 208
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ----- ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
WSFS WSFS Financial Corp. of DE (3) OTC DE Div. 1,478 14 12-31 11/86 13.62 171
OCFC Ocean Fin. Corp. of NJ OTC Eastern NJ Thrift 1,388 9 12-31 07/96 33.12 300
QCSB Queens County Bancorp of NY (3) OTC New York City NY Thrift 1,373 13 12-31 11/93 46.12 514
PFSB PennFed Fin. Services of NJ OTC Northern NJ Thrift 1,252 17 06-30 07/94 27.37 132
DIME Dime Community Bancorp of NY OTC New York City NY Thrift 1,237 15 06-30 06/96 19.12 251
YFED York Financial Corp. of PA OTC PA,MD Thrift 1,157 22 06-30 02/84 19.50 136
MFSL Maryland Fed. Bancorp of MD OTC MD Thrift 1,128 25 02-28 06/87 44.25 142
FSLA First SB SLA MHC of NJ (47.5) OTC Eastern NJ Thrift 1,025 17 12-31 06/92 24.00 174
PVSA Parkvale Financial Corp of PA OTC Southwestern PA Thrift 973 28 06-30 07/87 28.37 115
PSBK Progressive Bank, Inc. of NY (3) OTC Southeast NY Thrift 878 17 12-31 08/84 29.62 113
PKPS Poughkeepsie Fin. Corp. of NY OTC Southeast NY Thrift 861 13 12-31 11/85 6.94 87
MBB MSB Bancorp of Middletown NY (3) OTC Southeastern NY Thrift 821 D 17 09-30 08/92 19.25 55
FFIC Flushing Fin. Corp. of NY (3) OTC New York City NY Thrift 811 7 12-31 11/95 19.87 161
IBSF IBS Financial Corp. of NJ OTC Southwest NJ Thrift 740 8 09-30 10/94 15.50 171
FBBC First Bell Bancorp of PA OTC Pittsburgh PA Thrift 709 7 12-31 06/95 16.00 109
PWBC PennFirst Bancorp of PA OTC Western PA Thrift 706 9 12-31 06/90 15.00 59
FCIT First Cit. Fin. Corp of MD OTC DC Metro Area Thrift 694 14 12-31 12/86 30.37 89
GAF GA Financial Corp. of PA AMEX Pittsburgh PA Thrift 670 10 12-31 03/96 18.94 159
THRD TF Financial Corp. of PA OTC Philadelphia PA Thrift 644 11 06-30 07/94 18.37 75
SFIN Statewide Fin. Corp. of NJ OTC Northern NJ Thrift 636 D 16 03-31 10/95 17.12 82
TSBS Trenton SB, FSB MHC of NJ(35.0) OTC Central NJ Thrift 626 10 12-31 08/95 19.50 176
PBIX Patriot Bank Corp. of PA OTC Southeast PA Thrift 594 7 12-31 12/95 16.31 70
FSNJ First SB of NJ, MHC (45.9) OTC Northern NJ Thrift 579 D 4 05-31 01/95 26.00 80
FMCO FMS Financial Corp. of NJ OTC Southern NJ Thrift 554 16 12-31 12/88 23.50 56
PULS Pulse Bancorp of S. River NJ OTC Central NJ Thrift 516 4 09-30 09/86 19.62 60
FSPG First Home Bancorp of NJ OTC NJ,DE Thrift 508 10 12-31 04/87 19.37 52
ANBK American Nat'l Bancorp of MD OTC Baltimore MD R.E. 487 S 9 07-31 11/95 16.12 58
AHCI Ambanc Holding Co., Inc. of NY (3) OTC East-Central NY Thrift 478 9 12-31 12/95 16.00 70
LVSB Lakeview SB of Paterson NJ OTC Northern NJ Thrift 472 D 8 07-31 12/93 32.25 74
CNY Carver Bancorp, Inc. of NY OTC New York, NY Thrift 424 8 03-31 10/94 12.25 28
SHEN First Shenango Bancorp of PA OTC Western PA Thrift 401 4 12-31 04/93 26.00 54
PFNC Progress Financial Corp. of PA OTC Southeastern PA M.B. 400 9 12-31 07/83 9.50 36
RARB Raritan Bancorp. of Raritan NJ (3) OTC Central NJ Thrift 375 5 12-31 03/87 30.00 46
</TABLE>
<PAGE> 209
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ----- ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
----------------------------------
PBCI Pamrapo Bancorp, Inc. of NJ OTC Northern NJ Thrift 367 8 12-31 10/89 19.75 57
FOBC Fed One Bancorp of Wheeling WV OTC Northern WV,OH Thrift 346 9 12-31 01/95 21.00 51
HARL Harleysville SA of PA OTC Southeastern PA Thrift 333 4 09-30 08/87 22.00 36
FSBI Fidelity Bancorp, Inc. of PA OTC Southwestern PA Thrift 328 8 09-30 06/88 20.00 31
FKFS First Keystone Fin. Corp of PA OTC Philadelphia PA Thrift 315 5 09-30 01/95 23.00 28
CVAL Chester Valley Bancorp of PA OTC Southeastern PA Thrift 305 6 06-30 03/87 21.00 43
LFBI Little Falls Bancorp of NJ OTC New Jersey Thrift 303 7 12-31 01/96 14.12 39
EQSB Equitable FSB of Wheaton MD OTC Central MD Thrift 296 4 09-30 09/93 36.25 22
YFCB Yonkers Fin. Corp. of NY OTC Yonkers NY Thrift 284 4 09-30 04/96 15.37 49
LFED Leeds FSB, MHC of MD (36.2) OTC Baltimore MD Thrift 282 1 06-30 03/94 19.00 66
WVFC WVS Financial Corp. of PA (3) OTC Pittsburgh PA Thrift 280 5 06-30 11/93 25.75 45
CATB Catskill Fin. Corp. of NY (3) OTC Albany NY Thrift 274 3 09-30 04/96 15.50 78
FIBC Financial Bancorp, Inc. of NY OTC New York, NY Thrift 269 5 09-30 08/94 17.25 30
IFSB Independence FSB of DC OTC Washington DC Ret. 263 2 12-31 06/85 9.00 12
WSB Washington SB, FSB of MD AMEX Southeastern MD Thrift 257 D 3 07-31 / 5.25 22
FBER First Bergen Bancorp of NJ OTC Northern NJ Thrift 252 2 09-30 04/96 15.12 46
WYNE Wayne Bancorp of NJ OTC Thrift 245 0 12-31 06/96 19.50 42
GDVS Greater DV SB,MHC of PA (19.9) (3) OTC Southeast PA Thrift 239 7 12-31 03/95 13.00 43
PHFC Pittsburgh Home Fin. of PA OTC Pittsburgh PA Thrift 237 6 09-30 04/96 15.00 30
ESBK The Elmira SB FSB of Elmira NY (3) OTC NY,PA Ret. 223 6 12-31 03/85 19.25 14
HRBF Harbor Federal Bancorp of MD OTC Baltimore MD Thrift 219 6 03-31 08/94 18.00 32
SBFL SB Fngr Lakes MHC of NY (33.1) OTC Western NY Thrift 213 4 04-30 11/94 16.50 29
LARL Laurel Capital Group of PA OTC Southwestern PA Thrift 209 6 06-30 02/87 21.50 32
PEEK Peekskill Fin. Corp. of NY OTC Southeast NY Thrift 183 3 06-30 12/95 15.00 48
PLSK Pulaski SB, MHC of NJ (46.0) OTC New Jersey Thrift 169 P 5 12-31 04/97 13.00 27
SFED SFS Bancorp of Schenectady NY OTC Eastern NY Thrift 169 3 12-31 06/95 16.50 21
SKBO First Carnegie,MHC of PA(45.0) OTC Western PA Thrift 150 P 3 03-31 04/97 13.87 32
PRBC Prestige Bancorp of PA OTC Thrift 127 0 12-31 06/96 15.75 14
TPNZ Tappan Zee Fin., Inc. of NY OTC Southeast NY Thrift 117 D 1 03-31 10/95 16.50 25
WWFC Westwood Fin. Corp. of NJ OTC Northern NJ Thrift 108 2 03-31 06/96 18.25 12
AFBC Advance Fin. Bancorp of WV OTC Northern Neck WV Thrift 104 2 06-30 01/97 14.25 15
WHGB WHG Bancshares of MD OTC Baltimore MD Thrift 98 5 09-30 04/96 14.25 22
ALBC Albion Banc Corp. of Albion NY OTC Western NY Thrift 66 2 09-30 07/93 22.00 6
</TABLE>
<PAGE> 210
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
----------------------------------
PWBK Pennwood SB of PA (3) OTC Pittsburgh PA Thrift 48 3 12-31 07/96 15.00 9
Mid-West Companies
------------------
COFI Charter One Financial of OH OTC OH,MI Div. 14,040 155 12-31 01/88 51.00 2,363
RFED Roosevelt Fin. Grp. Inc. of MO OTC MO,IL,KS Div. 7,796 D 79 12-31 01/87 24.12 1,028
CFB Commercial Federal Corp. of NE NYSE NE,CO,KS,OK M.B. 6,902 98 06-30 12/84 37.50 807
FFHC First Financial Corp. of WI OTC WI,IL Div. 5,809 129 12-31 12/80 28.62 1,042
SPBC St. Paul Bancorp, Inc. of IL OTC Chicago IL Div. 4,485 52 12-31 05/87 33.87 774
SECP Security Capital Corp. of WI OTC Wisconsin Div. 3,647 42 06-30 01/94 94.50 870
MAFB MAF Bancorp of IL OTC Chicago IL Thrift 3,236 13 06-30 01/90 41.37 431
GTFN Great Financial Corp. of KY OTC Kentucky M.B. 3,002 41 12-31 03/94 34.75 489
CTZN CitFed Bancorp of Dayton OH OTC Dayton OH M.B. 2,937 33 03-31 01/92 37.56 324
STND Standard Fin. of Chicago IL OTC Chicago IL Thrift 2,489 13 12-31 08/94 24.94 404
ABCW Anchor Bancorp Wisconsin of WI OTC Wisconsin M.B. 1,885 33 03-31 07/92 50.00 229
STFR St. Francis Cap. Corp. of WI OTC Milwaukee WI Thrift 1,579 13 09-30 06/93 33.25 179
FTFC First Fed. Capital Corp. of WI OTC Southern WI M.B. 1,530 44 12-31 11/89 22.00 201
DNFC D&N Financial Corp. of MI OTC MI,WI Ret. 1,528 35 12-31 02/85 19.06 159
FISB First Indiana Corp. of IN OTC Central IN M.B. 1,481 28 12-31 08/83 20.87 219
ABCL Allied Bancorp of IL OTC Chicago IL M.B. 1,313 10 09-30 07/92 29.87 159
JSBA Jefferson Svgs Bancorp of MO OTC St. Louis MO,TX Thrift 1,148 D 21 12-31 04/93 29.87 148
FFSW First Fed Fin. Serv. of OH OTC Northeastern OH Thrift 1,088 18 12-31 04/87 38.25 175
AADV Advantage Bancorp of WI OTC WI,IL Thrift 1,021 15 09-30 03/92 39.00 126
OFCP Ottawa Financial Corp. of MI OTC Western MI Thrift 859 26 12-31 08/94 22.50 113
CFSB CFSB Bancorp of Lansing MI OTC Central MI Thrift 834 18 12-31 06/90 23.25 120
IFSL Indiana Federal Corp. of IN OTC Northwestern IN Thrift 819 15 12-31 02/87 28.50 136
NASB North American SB of MO OTC KS,MO M.B. 689 8 09-30 09/85 44.00 99
GSBC Great Southern Bancorp of MO OTC Southwest MO Div. 679 25 06-30 12/89 17.00 141
HOMF Home Fed Bancorp of Seymour IN OTC Southern IN Thrift 664 15 06-30 01/88 27.75 94
MSBK Mutual SB, FSB of Bay City MI OTC Michigan M.B. 663 22 12-31 07/92 9.62 41
AVND Avondale Fin. Corp. of IL OTC Chicago IL Ret. 635 6 03-31 04/95 14.00 49
SFSL Security First Corp. of OH OTC Northeastern OH R.E. 635 13 03-31 01/88 21.37 107
</TABLE>
<PAGE> 211
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
FNGB First Northern Cap. Corp of WI OTC Northeast WI Thrift 618 20 12-31 12/83 21.25 94
FFYF FFY Financial Corp. of OH OTC Youngstown OH Thrift 599 10 06-30 06/93 25.87 112
EMLD Emerald Financial Corp of OH OTC Cleveland OH Thrift 589 13 12-31 / 14.06 71
HFFC HF Financial Corp. of SD OTC South Dakota Thrift 561 19 06-30 04/92 19.75 59
HMNF HMN Financial, Inc. of MN OTC Southeast MN Thrift 553 7 12-31 06/94 23.00 97
COVB CoVest Bancshares of IL OTC Chicago IL Thrift 553 3 12-31 07/92 18.25 55
FDEF First Defiance Fin.Corp. of OH OTC Northwest OH Thrift 546 9 06-30 10/95 14.50 137
FFBH First Fed. Bancshares of AR OTC Northern AR Thrift 520 8 12-31 05/96 19.31 95
FFOH Fidelity Financial of OH OTC Cincinnati OH Thrift 513 4 12-31 03/96 15.00 84
CBCI Calumet Bancorp of Chicago IL OTC Chicago IL Thrift 495 5 06-30 02/92 39.50 88
FBCI Fidelity Bancorp of Chicago IL OTC Chicago IL Thrift 486 5 09-30 12/93 19.00 53
CAFI Camco Fin. Corp. of OH OTC Eastern OH M.B. 472 7 12-31 / 18.00 55
FFSX First FS&LA. MHC of IA (46.0) OTC Western IA Thrift 463 12 06-30 06/92 23.75 67
FMBD First Mutual Bancorp of IL OTC Central IL Thrift 425 7 12-31 07/95 15.00 56
PERM Permanent Bancorp of IN OTC Southwest IN Thrift 413 D 11 03-31 04/94 25.00 52
HALL Hallmark Capital Corp. of WI OTC Milwaukee WI Thrift 409 3 06-30 01/94 21.62 31
SFSB SuburbFed Fin. Corp. of IL OTC IL,IN Thrift 408 12 12-31 02/92 24.50 31
ASBI Ameriana Bancorp of IN OTC Eastern IN,OH Thrift 402 8 12-31 02/87 15.63 51
WOFC Western Ohio Fin. Corp. of OH OTC Western OH Thrift 400 6 12-31 07/94 22.00 51
PMFI Perpetual Midwest Fin. of IA OTC EastCentral IA Thrift 398 4 12-31 03/94 19.00 36
CBSB Charter Financial Inc. of IL OTC Southern IL Thrift 395 6 09-30 12/95 17.06 72
PFSL Pocahnts Fed, MHC of AR (46.4) OTC Northeast AR Thrift 373 5 09-30 04/94 20.75 34
FFKY First Fed. Fin. Corp. of KY OTC Central KY Thrift 372 7 06-30 07/87 18.50 77
SWBI Southwest Bancshares of IL OTC Chicago IL Thrift 372 5 12-31 06/92 20.50 54
MCBS Mid Continent Bancshares of KS OTC Central KS M.B. 371 7 09-30 06/94 27.50 54
CASH First Midwest Fin. Corp. of IA OTC IA,SD R.E. 370 9 09-30 09/93 15.12 43
FFHH FSF Financial Corp. of MN OTC Southern MN Thrift 367 11 09-30 10/94 17.44 54
HBEI Home Bancorp of Elgin IL OTC Northern IL Thrift 359 5 12-31 09/96 16.00 112
PVFC PVF Capital Corp. of OH OTC Cleveland OH R.E. 356 9 06-30 12/92 19.12 44
KNK Kankakee Bancorp of IL AMEX Illinois Thrift 342 10 03-31 12/92 29.00 41
HVFD Haverfield Corp. of OH OTC Cleveland OH Thrift 342 10 12-31 03/85 25.87 49
HMCI Homecorp, Inc. of Rockford IL OTC Northern IL Thrift 336 9 12-31 06/90 14.25 24
INBI Industrial Bancorp of OH OTC Northern OH Thrift 334 10 12-31 08/95 13.44 73
</TABLE>
<PAGE> 212
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
HBFW Home Bancorp of Fort Wayne IN OTC Northeast IN Thrift 328 8 09-30 03/95 20.62 54
WCBI WestCo Bancorp of IL OTC Chicago IL Thrift 310 1 12-31 06/92 24.25 62
SMFC Sho-Me Fin. Corp. of MO OTC Southwest MO Thrift 304 7 12-31 06/94 40.25 61
WFCO Winton Financial Corp. of OH OTC Cincinnati OH R.E. 292 S 4 09-30 08/88 13.12 26
PFDC Peoples Bancorp of Auburn IN OTC Northeastern IN Thrift 283 6 09-30 07/87 22.25 51
GFCO Glenway Financial Corp. of OH OTC Cincinnati OH Thrift 281 6 06-30 11/90 25.75 29
FBCV 1st Bancorp of Vincennes IN OTC Southwestern IN M.B. 273 1 06-30 04/87 31.50 22
CBK Citizens First Fin.Corp. of IL AMEX Central IL Thrift 272 6 12-31 05/96 16.00 45
FCBF FCB Fin. Corp. of Neenah WI OTC Eastern WI Thrift 269 D 6 03-31 09/93 24.75 61
FFED Fidelity Fed. Bancorp of IN OTC Southwestern IN Thrift 250 4 06-30 08/87 9.25 23
WAYN Wayne S&L Co. MHC of OH (47.8) OTC Central OH Thrift 250 D 6 03-31 06/93 17.00 38
EFBI Enterprise Fed. Bancorp of OH OTC Cincinnati OH Thrift 246 D 5 09-30 10/94 18.25 37
CAPS Capital Savings Bancorp of MO OTC Central MO Thrift 238 7 06-30 12/93 16.62 31
MFBC MFB Corp. of Mishawaka IN OTC Northern IN Thrift 234 4 09-30 03/94 19.75 34
OHSL OHSL Financial Corp. of OH OTC Cincinnati, OH Thrift 230 4 12-31 02/93 25.25 31
DFIN Damen Fin. Corp. of Chicago IL OTC Chicago IL Thrift 227 3 11-30 10/95 14.37 47
CBCO CB Bancorp of Michigan City IN OTC Northwest IN Thrift 227 D 3 03-31 12/92 34.19 40
FFHS First Franklin Corp. of OH OTC Cincinnati OH Thrift 226 7 12-31 01/88 20.00 24
LARK Landmark Bancshares of KS OTC Central KS Thrift 224 5 09-30 03/94 20.12 36
SBCN Suburban Bancorp. of OH OTC Cincinnati OH Thrift 222 8 06-30 09/93 19.50 29
BFFC Big Foot Fin. Corp. of IL OTC Chicago IL Thrift 212 3 07-31 12/96 16.00 40
MBLF MBLA Financial Corp. of MO OTC Northeast MO Thrift 210 2 06-30 06/93 24.00 32
FFFD North Central Bancshares of IA OTC Central IA Thrift 204 4 12-31 03/96 15.25 52
WEFC Wells Fin. Corp. of Wells MN OTC Southcentral MN Thrift 202 7 12-31 04/95 14.25 29
MWFD Midwest Fed. Fin. Corp of WI OTC Central WI Thrift 201 9 12-31 07/92 19.75 32
HCBB HCB Bancshares of AR OTC Southern AR Thrift 199 P 5 06-30 05/97 12.94 34
CMRN Cameron Fin. Corp. of MO OTC Northwest MO Thrift 198 3 09-30 04/95 16.75 45
GFED Guarnty FS&LA,MHC of MO (31.0) OTC Southwest MO Thrift 196 4 06-30 04/95 20.50 64
FFBZ First Federal Bancorp of OH OTC Eastern OH Thrift 192 6 09-30 06/92 18.25 29
LSBI LSB Fin. Corp. of Lafayette IN OTC Central IN Thrift 188 3 12-31 02/95 20.87 20
PULB Pulaski SB, MHC of MO (29.0) OTC St. Louis MO Thrift 179 S 5 09-30 05/94 18.25 38
MFFC Milton Fed. Fin. Corp. of OH OTC Southwest OH Thrift 179 2 09-30 10/94 14.00 33
PFED Park Bancorp of Chicago IL OTC Chicago IL Thrift 178 3 12-31 08/96 14.75 36
</TABLE>
<PAGE> 213
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
MARN Marion Capital Holdings of IN OTC Central IN Thrift 174 2 06-30 03/93 22.62 41
NEIB Northeast Indiana Bncrp of IN OTC Northeast IN Thrift 173 3 12-31 06/95 15.00 26
EGLB Eagle BancGroup of IL OTC Central IL Thrift 171 1 12-31 07/96 15.63 20
SMBC Southern Missouri Bncrp of MO OTC Southeast MO Thrift 166 8 06-30 04/94 17.62 29
HMLK Hemlock Fed. Fin. Corp. of IL OTC Chicago IL Thrift 165 3 12-31 04/97 13.25 28
JXSB Jcksnville SB,MHC of IL (44.6) OTC Central IL Thrift 164 4 12-31 04/95 17.62 22
FFWD Wood Bancorp of OH OTC Northern OH Thrift 163 6 06-30 08/93 16.87 25
FBSI First Bancshares of MO OTC Southcentral MO Thrift 160 5 06-30 12/93 20.00 23
FFWC FFW Corporation of Wabash IN OTC Central IN Thrift 158 3 06-30 03/93 26.00 18
SJSB SJS Bancorp of St. Joseph MI OTC Southwest MI Thrift 152 S 4 06-30 02/95 26.50 24
QCFB QCF Bancorp of Virginia MN OTC Northeast MN Thrift 148 S 2 06-30 04/95 20.50 29
BWFC Bank West Fin. Corp. of MI OTC Southeast MI Thrift 147 2 06-30 03/95 14.00 25
CNBA Chester Bancorp of IL OTC Southern IL Ret. 142 6 Dec 10/96 14.81 32
MWBI Midwest Bancshares, Inc. of IA OTC Southeast IA Thrift 139 4 12-31 11/92 31.50 11
RIVR River Valley Bancorp of IN OTC Southeast IN Thrift 138 7 12-31 12/96 14.75 18
GTPS Great American Bancorp of IL OTC East Central IL Thrift 138 3 09-30 06/95 16.50 29
WEHO Westwood Hmstd Fin Corp of OH OTC Cincinnati OH Thrift 130 2 12-31 09/96 13.75 39
CLAS Classic Bancshares of KY OTC Eastern KY Thrift 128 D 1 03-31 12/95 14.25 19
FKKY Frankfort First Bancorp of KY OTC Frankfort KY Thrift 128 3 06-30 07/95 12.12 41
MFCX Marshalltown Fin. Corp. of IA OTC Central IA Thrift 127 3 09-30 03/94 15.12 21
MIFC Mid Iowa Financial Corp. of IA OTC Central IA Thrift 124 6 09-30 10/92 8.75 15
NBSI North Bancshares of Chicago IL OTC Chicago IL Thrift 120 2 06-30 12/93 19.25 20
PTRS Potters Financial Corp of OH OTC Northeast OH Thrift 117 4 12-31 12/93 21.55 10
ASBP ASB Financial Corp. of OH OTC Southern OH Thrift 109 1 06-30 04/95 12.00 21
FFSL First Independence Corp. of KS OTC Southeast KS Thrift 109 1 09-30 10/93 11.19 11
HFFB Harrodsburg 1st Fin Bcrp of KY OTC Central KY Thrift 108 2 09-30 10/95 15.00 30
PSFC Peoples Sidney Fin. Corp of OH OTC WestCentral OH Thrift 108 P 2 06-30 04/97 13.62 24
BDJI First Fed. Bancorp. of MN OTC Northern MN Thrift 108 5 09-30 04/95 18.75 13
DCBI Delphos Citizens Bancorp of OH OTC Northwest OH Thrift 107 1 09-30 11/96 14.62 30
HFSA Hardin Bancorp of Hardin MO OTC Western MO Thrift 103 3 03-31 09/95 14.62 13
FTNB Fulton Bancorp of MO OTC Central MO Thrift 99 2 04-30 10/96 20.00 34
CNSB CNS Bancorp of MO OTC Central MO Thrift 98 5 12-31 06/96 16.50 27
CIBI Community Inv. Bancorp of OH OTC NorthCentral OH Thrift 97 3 06-30 02/95 13.50 13
</TABLE>
<PAGE> 214
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
CBES CBES Bancorp of MO OTC Western MO Thrift 95 2 06-30 09/96 16.87 17
NWEQ Northwest Equity Corp. of WI OTC Northwest WI Thrift 95 3 03-31 10/94 14.75 12
FTSB Fort Thomas Fin. Corp. of KY OTC Northern KY Thrift 95 2 09-30 06/95 10.50 16
AMFC AMB Financial Corp. of IN OTC Northwest IN Thrift 94 4 12-31 04/96 14.00 15
WCFB Wbstr Cty FSB MHC of IA (45.2) OTC Central IA Thrift 93 1 12-31 08/94 14.75 31
FFBI First Financial Bancorp of IL OTC Northern IL M.B. 93 2 12-31 10/93 18.75 8
INCB Indiana Comm. Bank, SB of IN OTC Central IN Ret. 91 3 06-30 12/94 15.00 14
PFFC Peoples Fin. Corp. of OH OTC Northeast OH Thrift 90 2 09-30 09/96 15.25 23
KYF Kentucky First Bancorp of KY AMEX Central KY Thrift 89 2 06-30 08/95 11.00 15
GFSB GFS Bancorp of Grinnell IA OTC Central IA Thrift 88 1 06-30 01/94 13.25 13
THR Three Rivers Fin. Corp. of MI AMEX Southwest MI Thrift 87 S 4 06-30 08/95 15.75 13
FFDF FFD Financial Corp. of OH OTC Northeast OH Thrift 85 1 06-30 04/96 13.50 20
SFFC StateFed Financial Corp. of IA OTC Des Moines IA Thrift 85 2 06-30 01/94 19.12 15
HHFC Harvest Home Fin. Corp. of OH OTC Southwest OH Thrift 84 D 3 09-30 10/94 10.50 10
PCBC Perry Co. Fin. Corp. of MO OTC EastCentral MO Thrift 80 D 1 09-30 02/95 19.75 16
LOGN Logansport Fin. Corp. of IN OTC Northern IN Thrift 79 1 12-31 06/95 14.00 18
SOBI Sobieski Bancorp of S. Bend IN OTC Northern IN Thrift 79 3 06-30 03/95 14.75 11
HZFS Horizon Fin'l. Services of IA OTC Central IA Thrift 78 3 06-30 06/94 19.25 8
MSBF MSB Financial Corp. of MI OTC Southcentral MI Thrift 76 2 06-30 02/95 22.00 14
PSFI PS Financial of Chicago IL OTC Chicago IL Thrift 75 1 12-31 11/96 14.75 32
ATSB AmTrust Capital Corp. of IN OTC Northcentral IN Thrift 71 3 06-30 03/95 12.62 7
MIVI Miss. View Hold. Co. of MN OTC Central MN Thrift 70 1 09-30 03/95 14.62 12
HCFC Home City Fin. Corp. of OH OTC Southwest OH Thrift 68 1 06-30 12/96 14.00 13
GWBC Gateway Bancorp of KY OTC Eastern KY Thrift 66 2 06-30 01/95 17.50 19
LXMO Lexington B&L Fin. Corp. of MO OTC West Central MO Thrift 62 S 1 09-30 06/96 15.19 17
CKFB CKF Bancorp of Danville KY OTC Central KY Thrift 60 1 12-31 01/95 19.25 18
NSLB NS&L Bancorp of Neosho MO OTC Southwest MO Thrift 58 2 09-30 06/95 16.50 12
MRKF Market Fin. Corp. of OH OTC Cincinnati OH Thrift 57 P 2 09-30 03/97 13.00 17
CSBF CSB Financial Group Inc of IL (3) OTC Centralia IL Thrift 50 S 1 09-30 10/95 12.50 12
RELI Reliance Bancshares Inc of WI (3) OTC Milwaukee WI Thrift 48 S 1 June 04/96 8.25 21
HBBI Home Building Bancorp of IN OTC Southwest IN Thrift 47 2 09-30 02/95 21.00 7
HWEN Home Financial Bancorp of IN OTC Central IN Thrift 39 0 06-30 07/96 15.75 8
LONF London Financial Corp. of OH OTC Central OH Thrift 38 1 09-30 04/96 14.87 8
</TABLE>
<PAGE> 215
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
------------------------------
FLKY First Lancaster Bncshrs of KY OTC Thrift 37 D 0 06-30 07/96 15.50 15
JOAC Joachim Bancorp of MO OTC Eastern MO Thrift 36 1 03-31 12/95 14.50 11
New England Companies
---------------------
PBCT Peoples Bank, MHC of CT (37.4) (3) OTC Southwestern CT Div. 7,538 84 12-31 07/88 26.50 1,617
WBST Webster Financial Corp. of CT OTC Central CT Thrift 5,584 64 12-31 12/86 43.87 524
PHBK Peoples Heritage Fin Grp of ME (3) OTC ME,NH Div. 5,458 82 12-31 12/86 35.75 1,016
CFX CFX Corp of NH (3) AMEX S.W. NH,MA M.B. 1,744 23 12-31 02/87 18.12 236
EGFC Eagle Financial Corp. of CT OTC Western CT Thrift 1,512 19 09-30 02/87 30.75 140
SISB SIS Bank of Springfield MA (3) OTC Central MA Div. 1,349 D 21 12-31 02/95 29.62 168
ANDB Andover Bancorp, Inc. of MA (3) OTC Northeastern MA M.B. 1,210 11 12-31 05/86 29.37 151
FESX First Essex Bancorp of MA (3) OTC MA,NH Div. 1,147 10 12-31 08/87 16.50 123
AFCB Affiliated Comm BC, Inc of MA OTC MA Thrift 1,055 10 12-31 / 24.37 157
MDBK Medford Savings Bank of MA (3) OTC Eastern MA Thrift 1,054 16 12-31 03/86 30.50 138
FAB FirstFed America Bancorp of MA AMEX Southeast MA M.B. 980 14 12-31 01/97 17.00 148
FFES First FS&LA of E. Hartford CT OTC Central CT Thrift 975 12 12-31 06/87 29.75 79
BFD BostonFed Bancorp of MA AMEX Boston MA M.B. 941 8 12-31 10/95 17.69 105
MASB MassBank Corp. of Reading MA (3) OTC Eastern MA Thrift 901 14 12-31 05/86 46.75 126
EBCP Eastern Bancorp of NH OTC VT, NH M.B. 866 25 09-30 11/83 26.62 98
DIBK Dime Financial Corp. of CT (3) OTC Central CT Thrift 814 10 12-31 07/86 23.00 118
MECH Mechanics SB of Hartford CT (3) OTC Hartford CT Thrift 789 0 12-31 06/96 18.75 99
NSSB Norwich Financial Corp. of CT (3) OTC Southeastern CT Thrift 701 18 12-31 11/86 22.62 122
NSSY Norwalk Savings Society of CT (3) OTC Southwest CT Thrift 617 8 12-31 06/94 28.37 68
BKC American Bank of Waterbury CT (3) AMEX Western CT Thrift 589 15 12-31 12/81 35.50 82
CBNH Community Bankshares Inc of NH (3) OTC Southcentral NH M.B. 581 9 06-30 05/86 37.75 93
MWBX Metro West of MA (3) OTC Eastern MA Thrift 555 9 12-31 10/86 5.56 78
PBKB People's SB of Brockton MA (3) OTC Southeastern MA Thrift 549 14 12-31 10/86 15.12 54
SOSA Somerset Savings Bank of MA (3) OTC Eastern MA R.E. 522 5 12-31 07/86 2.66 44
ABBK Abington Savings Bank of MA (3) OTC Southeastern MA M.B. 492 7 12-31 06/86 25.00 47
PBNB Peoples Sav. Fin. Corp. of CT (3) OTC Central CT Thrift 479 8 12-31 08/86 36.25 69
SWCB Sandwich Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 475 11 04-30 07/86 31.00 59
</TABLE>
<PAGE> 216
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
New England Companies (continued)
---------------------------------
PETE Primary Bank of NH (3) OTC Southern NH Ret. 436 8 12-31 10/93 24.87 52
BKCT Bancorp Connecticut of CT (3) OTC Central CT Thrift 414 3 12-31 07/86 25.50 65
EIRE Emerald Island Bancorp, MA (3) OTC Eastern MA R.E. 412 7 12-31 09/86 18.50 41
WRNB Warren Bancorp of Peabody MA (3) OTC Eastern MA R.E. 361 6 12-31 07/86 18.00 66
LSBX Lawrence Savings Bank of MA (3) OTC Northeastern MA Thrift 342 6 12-31 05/86 10.75 46
CEBK Central Co-Op. Bank of MA (3) OTC Eastern MA Thrift 324 D 11 04-30 10/86 18.12 36
NMSB Newmil Bancorp. of CT (3) OTC Eastern CT Thrift 317 12 06-30 02/86 10.25 40
NHTB NH Thrift Bancshares of NH OTC Central NH Thrift 313 10 12-31 05/86 15.25 31
POBS Portsmouth Bank Shrs Inc of NH (3) OTC Southeastern NH Thrift 263 3 12-31 02/88 16.00 94
NBN Northeast Bancorp of ME (3) OTC Eastern ME Thrift 248 8 06-30 08/87 14.37 18
TBK Tolland Bank of CT (3) AMEX Northern CT Thrift 237 7 12-31 12/86 19.12 22
HIFS Hingham Inst. for Sav. of MA (3) OTC Eastern MA Thrift 206 4 12-31 12/88 19.87 26
HPBC Home Port Bancorp, Inc. of MA (3) OTC Southeastern MA Thrift 189 2 12-31 08/88 20.25 37
BSBC Branford SB of CT (3) OTC New Haven CT R.E. 177 5 12-31 11/86 4.69 31
IPSW Ipswich SB of Ipswich MA (3) OTC Northwest MA Thrift 166 4 12-31 05/93 16.25 19
AFED AFSALA Bancorp, Inc. of NY OTC Central NY Thrift 152 D 4 09-30 10/96 14.75 21
KSBK KSB Bancorp of Kingfield ME (3) OTC Western ME M.B. 133 J 8 12-31 06/93 35.00 14
MFLR Mayflower Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 125 4 04-30 12/87 18.00 16
NTMG Nutmeg FS&LA of CT OTC CT M.B. 94 3 12-31 / 8.25 6
FCB Falmouth Co-Op Bank of MA (3) AMEX Southeast MA Thrift 90 1 09-30 03/96 16.25 24
MCBN Mid-Coast Bancorp of ME OTC Eastern ME Thrift 58 D 2 03-31 11/89 19.50 4
GLBK Glendale Co-op. Bank of MA (3) OTC Boston MA Thrift 37 D 1 04-30 01/94 27.00 7
North-West Companies
--------------------
WAMU Washington Mutual Inc. of WA (3) OTC WA,OR,ID,UT,MT Div. 46,051 290 12-31 03/83 62.69 7,413
WFSL Washington FS&LA of Seattle WA OTC Western US Thrift 5,789 89 09-30 11/82 27.69 1,314
IWBK Interwest SB of Oak Harbor WA OTC Western WA Div. 1,771 31 12-31 / 36.00 289
STSA Sterling Financial Corp. of WA OTC WA,OR M.B. 1,557 41 06-30 / 19.00 105
FWWB First Savings Bancorp of WA (3) OTC Central WA Thrift 977 D 16 03-31 11/95 21.50 226
KFBI Klamath First Bancorp of OR OTC Southern OR Thrift 684 7 09-30 10/95 18.75 187
HRZB Horizon Financial Corp. of WA (3) OTC Northwest WA Thrift 515 12 03-31 08/86 16.12 119
</TABLE>
<PAGE> 217
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
North-West Companies (continued)
--------------------------------
FMSB First Mutual SB of Bellevue WA (3) OTC Western WA M.B. 417 D 6 12-31 12/85 17.25 47
CASB Cascade SB of Everett WA OTC Seattle WA Thrift 352 6 06-30 08/92 18.50 38
RVSB Rvrview SB,FSB MHC of WA(41.7) OTC Southwest WA M.B. 224 9 03-31 10/93 22.00 53
EFBC Empire Federal Bancorp of MT OTC Southern MT Thrift 110 P 3 06-30 01/97 13.50 35
South-East Companies
--------------------
FFCH First Fin. Holdings Inc. of SC OTC CHARLESTON SC Div. 1,602 32 09-30 11/83 29.50 187
LIFB Life Bancorp of Norfolk VA OTC Southeast VA Thrift 1,408 20 12-31 10/94 23.62 233
MGNL Magna Bancorp of MS OTC MS,AL M.B. 1,383 62 06-30 03/91 26.37 363
AMFB American Federal Bank of SC OTC Northwest SC Thrift 1,307 41 12/31 01/89 31.75 350
FLFC First Liberty Fin. Corp. of GA OTC Georgia M.B. 1,248 29 9-30 12/83 21.75 168
ISBF ISB Financial Corp. of LA OTC SouthCentral LA Thrift 929 D 16 12-31 04/95 23.25 163
HFNC HFNC Financial Corp. of NC OTC Charlotte NC Thrift 843 8 06-30 12/95 16.75 288
VFFC Virginia First Savings of VA OTC Petersburg VA M.B. 817 23 06-30 01/78 22.62 131
CNIT Cenit Bancorp of Norfolk VA OTC Southeastern VA Thrift 707 D 15 12-31 08/92 44.50 73
EBSI Eagle Bancshares of Tucker GA OTC Atlanta GA Thrift 666 D 10 03-31 04/86 17.87 81
PALM Palfed, Inc. of Aiken SC OTC Southwest SC Thrift 656 19 12-31 12/85 16.69 88
VABF Va. Beach Fed. Fin. Corp of VA OTC Southeast VA M.B. 607 12 12-31 11/80 12.84 64
FFFC FFVA Financial Corp. of VA OTC Southern VA Thrift 550 11 12-31 10/94 26.75 121
CFCP Coastal Fin. Corp. of SC OTC SC Thrift 485 9 09-30 09/90 23.00 107
TSH Teche Holding Company of LA AMEX Southern LA Thrift 394 8 09-30 04/95 18.69 64
COOP Cooperative Bk.for Svgs. of NC OTC Eastern NC Thrift 349 17 03-31 08/91 21.25 32
FSFC First So.east Fin. Corp. of SC OTC Northwest SC Thrift 335 11 06-30 10/93 10.12 44
SOPN First SB, SSB, Moore Co. of NC OTC Central NC Thrift 271 5 06-30 01/94 24.00 89
UFRM United FS&LA of Rocky Mount NC OTC Eastern NC M.B. 270 9 12-31 07/80 12.00 37
ANA Acadiana Bancshares of LA (3) AMEX Southern LA Thrift 264 D 4 12-31 07/96 19.37 53
FSTC First Citizens Corp of GA OTC Western GA M.B. 257 D 8 03-31 03/86 24.75 39
SSFC South Street Fin. Corp. of NC (3) OTC South Central NC Thrift 239 2 09-30 10/96 16.50 74
MERI Meritrust FSB of Thibodaux LA OTC Southeast LA Thrift 229 8 12-31 / 38.00 29
PERT Perpetual of SC, MHC (46.8) OTC Northwest SC Thrift 223 D 5 09-30 10/96 29.50 44
FLAG Flag Financial Corp of GA OTC Western GA M.B. 222 4 12-31 12/86 14.25 29
</TABLE>
<PAGE> 218
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
South-East Companies (continued)
--------------------------------
CFTP Community Fed. Bancorp of MS OTC Northeast MS Thrift 206 1 09-30 03/96 17.62 75
PLE Pinnacle Bank of AL AMEX Central AL Thrift 200 5 06-30 12/86 21.37 19
ESX Essex Bancorp of VA AMEX VA,NC M.B. 180 12 12-31 / 1.12 1
GSFC Green Street Fin. Corp. of NC OTC Southern NC Thrift 174 3 09-30 04/96 17.75 76
FTF Texarkana Fst. Fin. Corp of AR AMEX Southwest AR Thrift 168 5 09-30 07/95 18.00 33
CFFC Community Fin. Corp. of VA OTC Central VA Thrift 167 D 3 03-31 03/88 22.50 29
FGHC First Georgia Hold. Corp of GA OTC Southeastern GA Thrift 147 7 09-30 02/87 7.25 22
BFSB Bedford Bancshares of VA OTC Southern VA Thrift 132 3 09-30 08/94 20.75 24
FFBS FFBS Bancorp of Columbus MS OTC Columbus MS Thrift 129 3 06-30 06/93 23.00 36
PDB Piedmont Bancorp of NC AMEX Central NC Thrift 119 2 06-30 12/95 10.37 29
GSLA GS Financial Corp. of LA OTC New Orleans LA Thrift 117 P 3 12-31 04/97 15.25 52
GSLC Guaranty Svgs & Loan FA of VA OTC Charltsvl VA M.B. 116 D 3 06-30 / 10.63 16
CFNC Carolina Fincorp of NC (3) OTC Southcentral NC Thrift 109 4 06-30 11/96 14.37 27
SSM Stone Street Bancorp of NC AMEX Central NC Thrift 105 2 12-31 04/96 27.25 50
SRN Southern Banc Company of AL AMEX Northeast AL Thrift 105 D 4 06-30 10/95 14.87 18
TWIN Twin City Bancorp of TN OTC Northeast TN Thrift 104 3 12-31 01/95 19.00 16
KSAV KS Bancorp of Kenly NC OTC Central NC Thrift 101 3 12-31 12/93 25.50 17
CENB Century Bancshares of NC (3) OTC Charlotte NC Thrift 100 1 06-30 12/96 69.25 28
SZB SouthFirst Bancshares of AL AMEX Central AL Thrift 93 2 09-30 02/95 15.12 12
CCFH CCF Holding Company of GA OTC Atlanta GA Thrift 87 3 09-30 07/95 16.00 14
CZF Citisave Fin. Corp. of LA AMEX Baton Rouge LA Thrift 75 5 12-31 07/95 20.25 19
SCBS Southern Commun. Bncshrs of AL OTC NorthCentral AL Thrift 73 P 3 09-30 12/96 14.25 16
SSB Scotland Bancorp of NC AMEX S. Central NC Thrift 69 2 09-30 04/96 16.25 30
SCCB S. Carolina Comm. Bnshrs of SC OTC Central SC Thrift 46 1 06-30 07/94 18.25 13
MBSP Mitchell Bancorp of NC (3) OTC Western NC Thrift 34 1 12-31 07/96 16.37 16
South-West Companies
--------------------
CBSA Coastal Bancorp of Houston TX OTC Houston TX M.B. 2,853 40 12-31 / 28.75 143
FBHC Fort Bend Holding Corp. of TX OTC Eastcentral TX M.B. 279 D 5 03-31 06/93 28.75 24
JXVL Jacksonville Bancorp of TX OTC East Central TX Thrift 218 6 09-30 04/96 14.94 38
ETFS East Texas Fin. Serv. of TX OTC Northeast TX Thrift 112 2 09-30 01/95 18.37 20
</TABLE>
<PAGE> 219
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Characteristics of Publicly-Traded Thrifts
June 18, 1997(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
---------------------------- ----- ------ --------- ------ ------- ---- ---- ----- -----
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
South-West Companies (continued)
--------------------------------
AABC Access Anytime Bancorp of NM OTC Eastern NM Thrift 106 3 12-31 08/86 5.75 7
GUPB GFSB Bancorp of Gallup NM OTC Northwest NM Thrift 87 1 06-30 06/95 19.00 16
Western Companies (Excl CA)
---------------------------
FFBA First Colorado Bancorp of Co OTC Denver CO Thrift 1,514 D 26 12-31 01/96 18.87 312
WSTR WesterFed Fin. Corp. of MT OTC MT Thrift 932 20 06-30 01/94 20.62 114
GBCI Glacier Bancorp of MT OTC Western MT Div. 552 13 06-30 03/84 17.75 121
UBMT United Fin. Corp. of MT OTC Central MT Thrift 108 4 12-31 09/86 19.50 24
TRIC Tri-County Bancorp of WY OTC Southeastern WY Thrift 86 2 12-31 09/93 21.25 13
CRZY Crazy Woman Creek Bncorp of WY OTC Northeast WY Thrift 52 1 09-30 03/96 13.50 14
</TABLE>
Other Areas
- -----------
NOTES: (1) Or most recent date available (M=March, S=September, D=December,
J=June, E=Estimated, and P=Pro Forma)
(2) Operating strategies are: Thrift=Traditional Thrift, M.B.=Mortgage
Banker, R.E.=Real Estate Developer, Div.=Diversified, and
Ret.=Retail Banking.
(3) FDIC savings bank.
Source: Corporate offering circulars, SNL Securities Quarterly Thrift Report,
and financial reports of publicly Traded Thrifts.
Date of Last Update: 06/26/97
<PAGE> 220
EXHIBIT III-2
Financial Analysis of New York Thrifts
<PAGE> 221
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-2A
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of March 31, 1997
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets
----------------------------------------------------------------------------------------
Cash and Borrowed Subd. Net Goodwill Tng Net
Investments Loans MBS Deposits Funds Debt Worth & Intang Worth
----------- ----- --- -------- -------- ----- ----- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 18.9 65.8 11.5 72.2 13.9 0.1 12.4 0.3 12.1
State of NY 24.1 53.8 18.5 74.0 12.3 0.0 12.1 0.6 11.5
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY(1) 40.1 47.6 10.2 84.3 1.1 0.0 13.8 0.0 13.8
ALBK ALBANK Fin. Corp. of Albany NY 16.0 72.6 7.0 85.5 2.9 0.0 9.2 1.2 8.0
ALBC Albion Banc Corp. of Albion NY 17.5 71.0 5.7 75.9 14.0 0.0 8.9 0.0 8.9
AHCI Ambanc Holding Co., Inc. of NY 14.5 51.9 31.2 65.1 21.4 0.0 12.7 0.0 12.7
ASFC Astoria Financial Corp. of NY 46.0 35.9 14.5 58.4 33.0 0.0 7.6 1.3 6.3
CNY Carver Bancorp, Inc. of NY 17.0 46.7 31.6 62.9 28.6 0.0 8.1 0.3 7.7
CATB Catskill Fin. Corp. of NY 23.9 44.9 29.3 72.0 0.0 0.0 27.0 0.0 27.0
DME Dime Bancorp, Inc. of NY 12.0 58.4 25.1 69.6 23.8 0.0 5.7 0.1 5.7
DIME Dime Community Bancorp of NY 21.9 54.4 18.9 77.8 4.3 0.0 15.4 2.2 13.2
FIBC Financial Bancorp, Inc. of NY 21.1 54.7 20.4 76.6 12.3 0.0 9.7 0.0 9.7
FFIC Flushing Fin. Corp. of NY 26.0 52.2 19.1 73.7 9.4 0.0 16.0 0.0 16.0
GPT GreenPoint Fin. Corp. of NY 21.9 58.0 12.5 84.7 2.2 0.0 10.8 4.6 6.2
HAVN Haven Bancorp of Woodhaven NY 32.9 53.2 11.6 67.3 23.7 0.0 5.8 0.0 5.8
JSBF JSB Financial, Inc. of NY 40.1 57.0 0.0 74.5 0.0 0.0 22.2 0.0 22.2
LISB Long Island Bancorp, Inc of NY 7.2 59.5 27.8 63.1 24.9 0.0 9.0 0.1 8.9
MBB MSB Bancorp of Middletown NY(1) 48.9 41.2 2.7 89.7 0.1 0.0 8.6 4.0 4.6
NYB New York Bancorp, Inc. of NY 32.6 61.0 4.4 53.8 38.7 0.2 5.1 0.0 5.1
PEEK Peekskill Fin. Corp. of NY 20.1 24.1 54.8 72.7 0.0 0.0 25.6 0.0 25.6
PKPS Poughkeepsie Fin. Corp. of NY 4.8 74.6 16.0 67.7 22.7 0.0 8.4 0.0 8.4
PSBK Progressive Bank, Inc. of NY 15.2 66.7 14.3 90.6 0.0 0.0 8.4 1.0 7.4
QCSB Queens County Bancorp of NY 7.2 85.4 4.9 74.5 7.7 0.0 15.0 0.0 15.0
RCSB RCSB Financial, Inc. of NY(2) 40.5 47.4 3.0 58.7 28.6 0.0 7.8 0.2 7.6
RELY Reliance Bancorp, Inc. of NY 5.8 44.7 45.0 72.9 17.7 0.0 8.0 2.4 5.6
RSLN Roslyn Bancorp, Inc. of NY(3) 55.0 21.8 19.6 60.5 15.6 0.0 21.6 0.1 21.5
SBFL SB Fngr Lakes MHC of NY (33.1) 30.8 43.2 22.5 74.5 15.1 0.0 9.5 0.0 9.5
SFED SFS Bancorp of Schenectady NY 15.6 70.2 11.6 85.5 0.0 0.0 13.0 0.0 13.0
ROSE T R Financial Corp. of NY 14.4 51.5 32.5 70.6 21.1 0.0 6.2 0.0 6.2
TPNZ Tappan Zee Fin., Inc. of NY(1) 31.6 48.0 17.6 80.2 0.0 0.0 18.2 0.0 18.2
ESBK The Elmira SB FSB of Elmira NY 18.6 78.1 0.0 91.8 1.2 0.0 6.3 0.3 6.0
GRTR The Greater New York SB of NY(2) 39.6 36.8 17.8 64.9 26.1 0.0 8.3 0.0 8.3
YFCB Yonkers Fin. Corp. of NY 41.3 32.0 24.5 69.6 14.8 0.0 15.3 0.0 15.3
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets Balance Sheet Annual Growth Rates
------------------------------------ -----------------------------------
MEMO: Cash and Loans
Pref.Stock Assets Investments & MBS
---------- ------ ----------- -----
<S> <C> <C> <C> <C>
All Public Companies 0.0 13.40 4.85 13.17
State of NY 0.0 13.96 -1.11 13.06
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY(1) 0.0 16.76 34.25 10.62
ALBK ALBANK Fin. Corp. of Albany NY 0.0 4.90 -26.02 14.47
ALBC Albion Banc Corp. of Albion NY 0.0 16.98 NM 3.53
AHCI Ambanc Holding Co., Inc. of NY 0.0 21.86 39.60 20.31
ASFC Astoria Financial Corp. of NY 0.0 14.63 18.23 12.95
CNY Carver Bancorp, Inc. of NY 0.0 15.19 -33.22 36.96
CATB Catskill Fin. Corp. of NY 0.0 -25.66 -71.54 53.07
DME Dime Bancorp, Inc. of NY 0.0 -4.88 NM -14.00
DIME Dime Community Bancorp of NY 0.0 13.14 12.93 16.40
FIBC Financial Bancorp, Inc. of NY 0.0 6.88 -4.94 10.92
FFIC Flushing Fin. Corp. of NY 0.0 9.71 -14.38 24.29
GPT GreenPoint Fin. Corp. of NY 0.0 -8.35 -36.95 9.59
HAVN Haven Bancorp of Woodhaven NY 0.0 16.34 3.10 24.66
JSBF JSB Financial, Inc. of NY 0.0 -1.13 -11.18 9.48
LISB Long Island Bancorp, Inc of NY 0.0 20.27 -27.95 25.28
MBB MSB Bancorp of Middletown NY(1) 0.0 80.77 NM 9.11
NYB New York Bancorp, Inc. of NY 0.0 15.27 19.87 13.50
PEEK Peekskill Fin. Corp. of NY 0.0 -5.72 -18.09 -2.31
PKPS Poughkeepsie Fin. Corp. of NY 0.0 2.62 18.13 2.57
PSBK Progressive Bank, Inc. of NY 0.0 11.73 29.56 8.71
QCSB Queens County Bancorp of NY 0.0 9.04 -3.20 10.63
RCSB RCSB Financial, Inc. of NY(2) 0.0 -1.92 -4.40 -7.19
RELY Reliance Bancorp, Inc. of NY 0.0 10.46 30.15 10.82
RSLN Roslyn Bancorp, Inc. of NY(3) 0.0 88.83 NM -31.01
SBFL SB Fngr Lakes MHC of NY (33.1) 0.0 20.53 22.31 21.16
SFED SFS Bancorp of Schenectady NY 0.0 1.98 -24.35 8.21
ROSE T R Financial Corp. of NY 0.0 13.40 5.87 15.42
TPNZ Tappan Zee Fin., Inc. of NY(1) 0.0 5.59 -16.85 22.14
ESBK The Elmira SB FSB of Elmira NY 0.0 -0.18 -25.54 9.23
GRTR The Greater New York SB of NY(2) 2.0 -0.20 3.51 -1.97
YFCB Yonkers Fin. Corp. of NY 0.0 33.99 52.40 21.94
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Annual Growth Rates Regulatory Capital
------------------------------------------ ------------------------------
Borrows. Net Tng Net
Deposits &Subdebt Worth Worth Tangible Core Reg.Cap.
-------- -------- ----- ----- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 8.06 21.40 0.07 -0.77 10.91 10.91 22.71
State of NY 7.66 14.98 -1.65 -2.38 9.90 9.53 23.74
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY(1) 7.59 -26.07 NM NM 13.91 13.91 33.88
ALBK ALBANK Fin. Corp. of Albany NY 3.46 NM 0.27 -1.45 7.23 7.23 12.47
ALBC Albion Banc Corp. of Albion NY 8.24 NM -2.75 -2.75 NM NM NM
AHCI Ambanc Holding Co., Inc. of NY 0.69 NM -19.15 -19.15 10.00 10.00 24.94
ASFC Astoria Financial Corp. of NY 4.34 43.41 1.94 4.25 5.43 5.43 15.78
CNY Carver Bancorp, Inc. of NY 3.70 63.77 -1.77 -1.21 6.95 6.96 16.00
CATB Catskill Fin. Corp. of NY -4.60 NM NM NM 20.94 20.94 61.28
DME Dime Bancorp, Inc. of NY 1.47 -21.86 6.85 6.95 6.32 6.32 13.30
DIME Dime Community Bancorp of NY 0.43 NM NM NM 10.45 10.45 21.55
FIBC Financial Bancorp, Inc. of NY 6.28 16.43 -2.40 -2.34 7.43 7.43 18.94
FFIC Flushing Fin. Corp. of NY 5.48 NM -6.14 -6.14 12.22 12.22 27.06
GPT GreenPoint Fin. Corp. of NY -11.56 NM -6.38 -5.85 NM 6.20 15.01
HAVN Haven Bancorp of Woodhaven NY 6.12 70.03 7.07 7.28 6.81 6.81 14.82
JSBF JSB Financial, Inc. of NY -2.33 NM 0.42 0.42 13.76 13.76 20.17
LISB Long Island Bancorp, Inc of NY 1.30 NM 1.35 0.37 7.39 7.39 14.94
MBB MSB Bancorp of Middletown NY(1) 89.27 -41.78 NM -12.21 5.60 5.60 NM
NYB New York Bancorp, Inc. of NY -2.23 57.20 0.91 0.91 4.91 4.91 11.76
PEEK Peekskill Fin. Corp. of NY 2.83 NM -21.38 -21.38 24.50 24.50 97.73
PKPS Poughkeepsie Fin. Corp. of NY 8.74 -9.25 1.69 1.69 6.86 6.86 11.61
PSBK Progressive Bank, Inc. of NY 19.97 -100.00 5.35 -6.67 NM 7.39 14.43
QCSB Queens County Bancorp of NY 8.08 78.04 -3.79 -3.79 NM 10.09 18.16
RCSB RCSB Financial, Inc. of NY(2) 5.04 -6.63 -14.77 -14.64 NM NM NM
RELY Reliance Bancorp, Inc. of NY 4.42 53.63 0.22 4.14 5.43 5.43 14.95
RSLN Roslyn Bancorp, Inc. of NY(3) 23.46 NM NM NM NM NM NM
SBFL SB Fngr Lakes MHC of NY (33.1) 9.26 NM -1.13 -1.13 9.69 9.69 26.10
SFED SFS Bancorp of Schenectady NY 3.29 NM -5.76 -5.76 12.98 12.98 25.17
ROSE T R Financial Corp. of NY 14.95 11.14 12.12 12.12 NM 6.39 18.35
TPNZ Tappan Zee Fin., Inc. of NY(1) 8.94 NM -5.50 -5.50 NM NM NM
ESBK The Elmira SB FSB of Elmira NY -1.12 NM -0.11 0.15 6.11 6.11 9.97
GRTR The Greater New York SB of NY(2) -3.59 6.37 7.43 7.43 NM 7.31 15.35
YFCB Yonkers Fin. Corp. of NY 1.66 NM NM NM 12.89 12.89 35.16
</TABLE>
(1) Financial information is for the quarter ending December 31, 1996.
(2) Excluded from averages due to announced or pending acquisition.
(3) Growth rates have been annualized from available financial information.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 222
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-2B
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1997
<TABLE>
<CAPTION>
Net Interest Income Other Income
------------------------------------ -----------------------
Loss NII
Net Provis. After Loan R.E. Other
Income Income Expense NII on IEA Provis. Fees Oper. Income
------ ------ ------- --- ------- ------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 0.69 7.37 4.05 3.32 0.15 3.17 0.12 0.00 0.29
State of NY 0.65 7.13 3.71 3.42 0.20 3.23 0.07 -0.04 0.25
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY(1) 0.23 5.77 3.78 3.00 0.20 2.80 0.00 0.00 0.79
ALBK ALBANK Fin. Corp. of Albany NY 0.81 7.32 3.60 3.72 0.18 3.54 0.05 -0.04 0.30
ALBC Albion Banc Corp. of Albion NY 0.09 7.51 4.01 3.49 0.23 3.26 0.04 0.05 0.39
AHCI Ambanc Holding Co., Inc. of NY -0.62 7.41 3.88 3.53 1.78 1.75 0.00 -0.56 0.22
ASFC Astoria Financial Corp. of NY 0.52 7.00 4.35 2.66 0.05 2.60 0.02 0.00 0.15
CNY Carver Bancorp, Inc. of NY -0.47 6.04 3.30 2.74 0.45 2.29 0.05 -0.01 0.21
CATB Catskill Fin. Corp. of NY 1.42 6.69 2.98 3.70 0.09 3.61 0.00 -0.05 0.13
DME Dime Bancorp, Inc. of NY 0.57 6.94 4.52 2.42 0.21 2.21 0.10 -0.06 0.33
DIME Dime Community Bancorp of NY 0.52 6.42 2.94 3.48 0.35 3.13 0.04 -0.04 0.17
FIBC Financial Bancorp, Inc. of NY 0.51 7.23 3.53 3.70 0.23 3.47 0.03 -0.12 0.18
FFIC Flushing Fin. Corp. of NY 0.90 7.35 3.52 3.84 0.04 3.80 0.08 -0.04 0.13
GPT GreenPoint Fin. Corp. of NY 1.05 7.00 3.66 3.35 0.12 3.22 0.16 0.01 0.16
HAVN Haven Bancorp of Woodhaven NY 0.62 7.09 3.99 3.09 0.20 2.89 0.11 -0.02 0.51
JSBF JSB Financial, Inc. of NY 1.77 7.02 2.60 4.42 0.04 4.38 0.18 0.16 0.03
LISB Long Island Bancorp, Inc of NY 0.62 6.94 4.01 2.93 0.11 2.82 0.33 -0.02 0.22
MBB MSB Bancorp of Middletown NY(1) 0.22 7.10 4.02 3.08 0.18 2.89 0.00 -0.06 0.52
NYB New York Bancorp, Inc. of NY 1.31 7.42 3.70 3.72 0.07 3.65 0.10 -0.04 0.27
PEEK Peekskill Fin. Corp. of NY 1.06 6.59 2.83 3.75 0.07 3.68 0.08 0.01 0.04
PKPS Poughkeepsie Fin. Corp. of NY 0.21 7.51 4.45 3.06 0.12 2.94 -0.03 -0.11 0.30
PSBK Progressive Bank, Inc. of NY 1.10 7.88 4.05 3.83 0.30 3.53 0.02 -0.08 0.38
QCSB Queens County Bancorp of NY 1.72 7.92 3.47 4.45 -0.15 4.60 0.03 0.00 0.11
RCSB RCSB Financial, Inc. of NY(2)(3) 0.96 7.37 4.17 3.20 0.40 2.80 1.59 0.04 0.18
RELY Reliance Bancorp, Inc. of NY 0.56 7.09 3.77 3.32 0.04 3.28 0.05 -0.03 0.13
RSLN Roslyn Bancorp, Inc. of NY(3) 0.35 7.03 3.57 3.46 0.02 3.44 0.24 0.01 0.01
SBFL SB Fngr Lakes MHC of NY (33.1) 0.07 7.17 3.97 3.20 0.24 2.96 0.00 -0.03 0.27
SFED SFS Bancorp of Schenectady NY 0.46 7.13 3.72 3.42 0.07 3.34 0.09 0.01 0.12
ROSE T R Financial Corp. of NY 0.98 7.11 4.47 2.63 0.04 2.60 0.09 -0.02 0.18
TPNZ Tappan Zee Fin., Inc. of NY(1) 0.72 7.24 3.48 3.76 0.05 3.71 0.00 -0.05 0.11
ESBK The Elmira SB FSB of Elmira NY 0.28 7.52 3.97 3.55 0.17 3.38 0.09 -0.02 0.64
GRTR The Greater New York SB of NY(2) 0.74 6.89 4.03 2.86 0.04 2.82 0.09 -0.18 0.24
YFCB Yonkers Fin. Corp. of NY 0.85 7.36 3.40 3.96 0.18 3.78 0.01 0.02 0.30
<CAPTION>
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
-------------------- ----------------- --------------------------
Total
Other G&A Goodwill Net Extrao. Yield Cost
Income Expense Amort. Gains Items On Assets Of Funds
------ ------- -------- ----- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 0.41 2.22 0.03 -0.29 0.00 7.36 4.55
State of NY 0.28 2.16 0.05 -0.29 0.00 7.16 4.16
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY(1) 0.79 2.75 0.00 -0.50 0.00 7.10 4.23
ALBK ALBANK Fin. Corp. of Albany NY 0.30 2.18 0.09 -0.30 0.00 7.65 4.09
ALBC Albion Banc Corp. of Albion NY 0.47 3.22 0.00 -0.44 0.00 7.91 4.52
AHCI Ambanc Holding Co., Inc. of NY -0.34 2.34 0.00 0.00 0.00 7.62 4.61
ASFC Astoria Financial Corp. of NY 0.17 1.33 0.12 -0.38 0.00 7.29 4.77
CNY Carver Bancorp, Inc. of NY 0.25 2.62 0.06 -0.67 0.00 6.34 3.66
CATB Catskill Fin. Corp. of NY 0.09 1.57 0.00 -0.03 0.00 6.80 4.46
DME Dime Bancorp, Inc. of NY 0.37 1.48 0.01 -0.25 0.00 7.24 4.82
DIME Dime Community Bancorp of NY 0.17 1.62 0.15 -0.17 0.00 6.77 3.68
FIBC Financial Bancorp, Inc. of NY 0.09 2.10 0.01 -0.66 0.00 7.52 3.97
FFIC Flushing Fin. Corp. of NY 0.16 2.36 0.00 -0.05 0.00 7.60 4.33
GPT GreenPoint Fin. Corp. of NY 0.33 1.60 0.34 0.14 0.00 7.62 4.19
HAVN Haven Bancorp of Woodhaven NY 0.60 2.10 0.01 -0.43 0.00 7.27 4.36
JSBF JSB Financial, Inc. of NY 0.36 1.83 0.00 0.14 0.00 7.25 3.44
LISB Long Island Bancorp, Inc of NY 0.53 2.12 0.00 -0.17 0.00 7.29 4.61
MBB MSB Bancorp of Middletown NY(1) 0.46 2.55 0.43 -0.01 0.00 7.65 4.50
NYB New York Bancorp, Inc. of NY 0.33 1.67 0.00 -0.36 0.00 7.58 4.03
PEEK Peekskill Fin. Corp. of NY 0.14 1.72 0.00 -0.47 0.00 6.65 4.10
PKPS Poughkeepsie Fin. Corp. of NY 0.16 2.35 0.00 -0.40 0.00 7.89 4.95
PSBK Progressive Bank, Inc. of NY 0.31 2.30 0.16 -0.01 0.00 8.21 4.50
QCSB Queens County Bancorp of NY 0.14 1.84 0.00 -0.03 0.00 8.13 4.27
RCSB RCSB Financial, Inc. of NY(2)(3) 1.80 2.99 0.04 0.01 0.00 0.00 0.00
RELY Reliance Bancorp, Inc. of NY 0.15 1.70 0.19 -0.44 0.00 7.46 4.18
RSLN Roslyn Bancorp, Inc. of NY(3) 0.26 1.62 0.02 -1.64 0.00 0.00 0.00
SBFL SB Fngr Lakes MHC of NY (33.1) 0.24 3.00 0.00 -0.63 0.00 7.44 4.48
SFED SFS Bancorp of Schenectady NY 0.23 2.62 0.00 -0.55 0.00 7.30 4.37
ROSE T R Financial Corp. of NY 0.24 1.35 0.00 0.18 0.00 7.24 4.89
TPNZ Tappan Zee Fin., Inc. of NY(1) 0.06 2.85 0.00 0.09 0.00 7.48 4.39
ESBK The Elmira SB FSB of Elmira NY 0.70 3.59 0.02 0.02 0.00 7.79 4.27
GRTR The Greater New York SB of NY(2) 0.15 1.88 0.00 0.10 0.00 7.32 4.42
YFCB Yonkers Fin. Corp. of NY 0.33 2.27 0.00 -0.48 0.00 7.50 4.06
<CAPTION>
Yields, Costs, and Spreads
--------------------------
MEMO: MEMO:
Yld-Cost Assets/ Effective
Spread FTE Emp. Tax Rate
-------- -------- ---------
<S> <C> <C> <C>
All Public Companies 2.81 4,528 35.55
State of NY 2.99 4,911 38.74
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY(1) 2.87 2 31.47
ALBK ALBANK Fin. Corp. of Albany NY 3.56 2,978 36.17
ALBC Albion Banc Corp. of Albion NY 3.40 NM NM
AHCI Ambanc Holding Co., Inc. of NY 3.01 NM 31.94
ASFC Astoria Financial Corp. of NY 2.52 8,313 44.41
CNY Carver Bancorp, Inc. of NY 2.67 4,412 41.31
CATB Catskill Fin. Corp. of NY 2.34 4,348 44.47
DME Dime Bancorp, Inc. of NY 2.42 6,330 32.32
DIME Dime Community Bancorp of NY 3.09 5,113 35.82
FIBC Financial Bancorp, Inc. of NY 3.54 4,807 35.40
FFIC Flushing Fin. Corp. of NY 3.27 4,056 49.58
GPT GreenPoint Fin. Corp. of NY 3.43 6,787 41.02
HAVN Haven Bancorp of Woodhaven NY 2.91 3,972 37.02
JSBF JSB Financial, Inc. of NY 3.81 4,312 42.15
LISB Long Island Bancorp, Inc of NY 2.68 3,955 41.06
MBB MSB Bancorp of Middletown NY(1) 3.16 3,435 39.22
NYB New York Bancorp, Inc. of NY 3.55 6,414 48.31
PEEK Peekskill Fin. Corp. of NY 2.54 7,608 34.77
PKPS Poughkeepsie Fin. Corp. of NY 2.94 3,237 40.44
PSBK Progressive Bank, Inc. of NY 3.71 3,239 19.90
QCSB Queens County Bancorp of NY 3.86 11,444 42.17
RCSB RCSB Financial, Inc. of NY(2)(3) 0.00 2,407 NM
RELY Reliance Bancorp, Inc. of NY 3.28 4,953 50.44
RSLN Roslyn Bancorp, Inc. of NY(3) 0.00 7,440 NM
SBFL SB Fngr Lakes MHC of NY (33.1) 2.96 3,378 NM
SFED SFS Bancorp of Schenectady NY 2.93 2,768 NM
ROSE T R Financial Corp. of NY 2.35 7,720 41.35
TPNZ Tappan Zee Fin., Inc. of NY(1) 3.09 NM 28.13
ESBK The Elmira SB FSB of Elmira NY 3.52 1,687 42.57
GRTR The Greater New York SB of NY(2) 2.90 4,691 37.54
YFCB Yonkers Fin. Corp. of NY 3.44 4,989 37.08
</TABLE>
(1) Financial information is for the quarter ending December 31, 1996.
(2) Excluded from averages due to announced or pending acquisition.
(3) Income and expense information has been annualized from available financial
information.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 223
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-2C
Market Pricing Comparatives
Prices As of June 20, 1997
<TABLE>
<CAPTION>
Market
Capitalization Per Share Data Pricing Ratios(3)
------------------ ----------------- ------------------------------------------
Core Book
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB
- --------------------- -------- ------ ------ ------ ------ ------ ------ ------
($) ($Mil) ($) ($) (X) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 20.91 169.19 1.18 15.55 19.40 133.98 16.10 137.26
State of NY 25.20 404.56 1.35 17.49 20.47 137.11 16.39 145.20
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY 14.75 21.46 0.55 14.49 NM 101.79 14.10 101.79
ALBK ALBANK Fin. Corp. of Albany NY 39.81 510.32 2.71 25.10 18.35 158.61 14.60 182.87
ALBC Albion Banc Corp. of Albion NY 22.00 5.50 0.93 23.62 NM 93.14 8.29 93.14
AHCI Ambanc Holding Co., Inc. of NY 16.00 70.27 -0.65 13.85 NM 115.52 14.70 115.52
ASFC Astoria Financial Corp. of NY 45.62 969.11 2.62 27.51 25.77 165.83 12.60 199.30
CNY Carver Bancorp, Inc. of NY 12.25 28.35 -0.05 14.76 NM 82.99 6.69 86.69
CATB Catskill Fin. Corp. of NY 15.50 77.92 0.85 14.70 18.45 105.44 28.45 105.44
DME Dime Bancorp, Inc. of NY 19.00 1999.92 1.34 10.01 18.10 189.81 10.83 191.53
DIME Dime Community Bancorp of NY 19.12 250.97 0.97 14.53 21.98 131.59 20.28 153.33
FIBC Financial Bancorp, Inc. of NY 17.25 30.15 1.42 14.98 22.40 115.15 11.20 115.69
FFIC Flushing Fin. Corp. of NY 19.87 160.71 0.89 16.06 23.10 123.72 19.81 123.72
GPT GreenPoint Fin. Corp. of NY 66.37 3111.96 2.82 30.56 21.48 217.18 23.47 NM
HAVN Haven Bancorp of Woodhaven NY 37.00 160.21 3.32 23.13 16.23 159.97 9.27 160.59
JSBF JSB Financial, Inc. of NY 43.87 431.24 2.62 34.52 15.89 127.09 28.17 127.09
LISB Long Island Bancorp, Inc of NY 36.12 875.12 1.64 21.62 26.17 167.07 15.05 168.71
MBB MSB Bancorp of Middletown NY 19.25 54.61 0.62 20.57 NM 93.58 6.65 214.13
NYB New York Bancorp, Inc. of NY 34.75 569.24 2.82 9.81 14.54 NM 17.93 NM
PEEK Peekskill Fin. Corp. of NY 15.00 48.05 0.81 14.58 23.81 102.88 26.31 102.88
PKPS Poughkeepsie Fin. Corp. of NY 6.94 87.41 0.32 5.75 NM 120.70 10.15 120.70
PSBK Progressive Bank, Inc. of NY 29.62 113.30 2.50 19.17 11.94 154.51 12.91 174.44
QCSB Queens County Bancorp of NY 46.12 513.64 2.07 18.47 22.50 249.70 37.40 249.70
RCSB RCSB Financial, Inc. of NY(7) 45.25 670.42 2.60 21.36 17.27 211.84 16.63 217.34
RELY Reliance Bancorp, Inc. of NY 26.87 237.07 1.76 17.56 23.16 153.02 12.30 218.28
RSLN Roslyn Bancorp, Inc. of NY 20.00 872.84 0.93 14.08 NM 142.05 30.63 142.76
SBFL SB Fngr Lakes MHC of NY (33.1) 16.50 9.73 0.54 11.27 NM 146.41 13.84 146.41
SFED SFS Bancorp of Schenectady NY 16.50 20.97 1.08 17.26 27.50 95.60 12.42 95.60
ROSE T R Financial Corp. of NY 23.50 414.35 1.54 11.90 13.35 197.48 12.17 197.48
TPNZ Tappan Zee Fin., Inc. of NY 16.50 25.31 0.50 13.86 NM 119.05 21.68 119.05
ESBK The Elmira SB FSB of Elmira NY 19.25 13.59 0.85 19.87 21.63 96.88 6.10 101.21
GRTR The Greater New York SB of NY(7) 21.25 290.66 0.74 11.78 24.71 180.39 11.31 180.39
YFCB Yonkers Fin. Corp. of NY 15.37 48.88 0.92 13.68 22.94 112.35 17.19 112.35
<CAPTION>
Pricing Ratios(3) Dividends(4) Financial Characteristics(6)
----------------- -------------------------- -----------------------------
Amount/ Payout Total Equity/ NPAs/
Financial Institution P/CORE Share Yield Ratio(5) Assets Assets Assets
- --------------------- ------ ------- ----- ------- ------ ------- ------
(x) ($) (%) (%) ($Mil) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 17.77 0.39 1.85 28.86 1,281 12.70 0.83
State of NY 18.16 0.44 1.71 28.97 2,489 12.05 1.15
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY 26.82 0.16 1.08 29.09 152 13.85 NA
ALBK ALBANK Fin. Corp. of Albany NY 14.69 0.60 1.51 22.14 3,496 9.20 0.92
ALBC Albion Banc Corp. of Albion NY 23.66 0.31 1.41 33.33 66 8.90 NA
AHCI Ambanc Holding Co., Inc. of NY NM 0.00 0.00 NM 478 12.72 1.06
ASFC Astoria Financial Corp. of NY 17.41 0.60 1.32 22.90 7,689 7.60 0.52
CNY Carver Bancorp, Inc. of NY NM 0.20 1.63 NM 424 8.06 1.53
CATB Catskill Fin. Corp. of NY 18.24 0.28 1.81 32.94 274 26.98 0.50
DME Dime Bancorp, Inc. of NY 14.18 0.00 0.00 0.00 18,465 5.71 2.36
DIME Dime Community Bancorp of NY 19.71 0.18 0.94 18.56 1,237 15.41 0.82
FIBC Financial Bancorp, Inc. of NY 12.15 0.40 2.32 28.17 269 9.73 2.77
FFIC Flushing Fin. Corp. of NY 22.33 0.24 1.21 26.97 811 16.01 0.27
GPT GreenPoint Fin. Corp. of NY 23.54 1.00 1.51 35.46 13,261 10.81 2.84
HAVN Haven Bancorp of Woodhaven NY 11.14 0.60 1.62 18.07 1,728 5.80 0.78
JSBF JSB Financial, Inc. of NY 16.74 1.40 3.19 53.44 1,531 22.17 1.08
LISB Long Island Bancorp, Inc of NY 22.02 0.60 1.66 36.59 5,814 9.01 1.04
MBB MSB Bancorp of Middletown NY NM 0.60 3.12 NM 821 7.11 0.70
NYB New York Bancorp, Inc. of NY 12.32 0.60 1.73 21.28 3,175 5.06 1.29
PEEK Peekskill Fin. Corp. of NY 18.52 0.36 2.40 44.44 183 25.57 1.23
PKPS Poughkeepsie Fin. Corp. of NY 21.69 0.10 1.44 31.25 861 8.41 4.21
PSBK Progressive Bank, Inc. of NY 11.85 0.68 2.30 27.20 878 8.35 0.84
QCSB Queens County Bancorp of NY 22.28 0.80 1.73 38.65 1,373 14.98 0.75
RCSB RCSB Financial, Inc. of NY(7) 17.40 0.60 1.33 23.08 4,032 7.85 0.79
RELY Reliance Bancorp, Inc. of NY 15.27 0.64 2.38 36.36 1,927 8.04 0.75
RSLN Roslyn Bancorp, Inc. of NY 21.51 0.20 1.00 21.51 2,849 21.57 0.31
SBFL SB Fngr Lakes MHC of NY (33.1) NM 0.40 2.42 24.48 213 9.45 0.78
SFED SFS Bancorp of Schenectady NY 15.28 0.28 1.70 25.93 169 12.99 0.69
ROSE T R Financial Corp. of NY 15.26 0.52 2.21 33.77 3,404 6.16 0.40
TPNZ Tappan Zee Fin., Inc. of NY NM 0.20 1.21 40.00 117 18.22 NA
ESBK The Elmira SB FSB of Elmira NY 22.65 0.64 3.32 NM 223 6.30 0.83
GRTR The Greater New York SB of NY(7) 28.72 0.20 0.94 27.03 2,571 6.27 7.49
YFCB Yonkers Fin. Corp. of NY 16.71 0.20 1.30 21.74 284 15.30 0.73
</TABLE>
<TABLE>
<CAPTION>
Financial Characteristics(6)
------------------------------------
Reported Core
-------------- --------------
Financial Institution ROA ROE ROA ROE
- --------------------- --- --- --- ---
(%) (%) (%) (%)
<S> <C> <C> <C> <C>
All Public Companies 0.67 6.05 0.87 7.84
State of NY 0.65 6.12 0.84 7.96
Comparable Group
State of NY
AFED AFSALA Bancorp, Inc. of NY 0.24 2.52 0.57 6.04
ALBK ALBANK Fin. Corp. of Albany NY 0.81 8.74 1.01 10.91
ALBC Albion Banc Corp. of Albion NY 0.09 0.93 0.38 3.93
AHCI Ambanc Holding Co., Inc. of NY 0.62 -4.16 -0.62 -4.16
ASFC Astoria Financial Corp. of NY 0.52 6.54 0.77 9.68
CNY Carver Bancorp, Inc. of NY 0.47 -5.07 -0.03 -0.33
CATB Catskill Fin. Corp. of NY 1.42 6.14 1.44 6.22
DME Dime Bancorp, Inc. of NY 0.58 10.88 0.73 13.89
DIME Dime Community Bancorp of NY 0.93 6.19 1.03 6.90
FIBC Financial Bancorp, Inc. of NY 0.51 5.14 0.95 9.49
FFIC Flushing Fin. Corp. of NY 0.90 5.16 0.93 5.34
GPT GreenPoint Fin. Corp. of NY 1.06 9.91 0.96 9.05
HAVN Haven Bancorp of Woodhaven NY 0.62 10.26 0.91 14.94
JSBF JSB Financial, Inc. of NY 1.78 8.11 1.69 7.69
LISB Long Island Bancorp, Inc of NY 0.62 6.41 0.74 7.62
MBB MSB Bancorp of Middletown NY 0.22 2.99 0.23 3.09
NYB New York Bancorp, Inc. of NY 1.31 24.82 1.55 29.28
PEEK Peekskill Fin. Corp. of NY 1.07 3.74 1.38 4.81
PKPS Poughkeepsie Fin. Corp. of NY 0.21 2.47 0.47 5.65
PSBK Progressive Bank, Inc. of NY 1.10 13.18 1.11 13.28
QCSB Queens County Bancorp of NY 1.72 10.84 1.74 10.94
RCSB RCSB Financial, Inc. of NY(7) 0.96 12.27 0.96 12.17
RELY Reliance Bancorp, Inc. of NY 0.56 6.66 0.85 10.11
RSLN Roslyn Bancorp, Inc. of NY 0.35 1.63 1.42 6.61
SBFL SB Fngr Lakes MHC of NY (33.1) 0.07 0.71 0.49 4.77
SFED SFS Bancorp of Schenectady NY 0.46 3.46 0.83 6.22
ROSE T R Financial Corp. of NY 0.98 15.66 0.85 13.70
TPNZ Tappan Zee Fin., Inc. of NY 0.71 3.80 0.66 3.52
ESBK The Elmira SB FSB of Elmira NY 0.28 4.48 0.27 4.28
GRTR The Greater New York SB of NY(7) 0.46 7.67 0.40 6.60
YFCB Yonkers Fin. Corp. of NY 0.84 5.28 1.16 7.25
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month data,
adjusted to omit non-operating items (including the SAIF assessment) on a
tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets;
P/TB = Price to tangible book value; and P/CORE = Price to estimated core
earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month earnings and average equity and assets balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 224
EXHIBIT III-3
Financial Analysis of Peer Group Candidates
<PAGE> 225
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-3A
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of March 31, 1997
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets
--------------------------------------------------------------------------------------
Cash and Borrowed Subd. Net
Investments Loans MBS Deposits Funds Debt Worth
----------- ----- --- -------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 18.9 65.8 11.5 72.2 13.9 0.1 12.4
Comparable Group Average 23.1 55.1 17.8 71.7 15.7 0.0 10.7
Mid-Atlantic Companies 23.1 55.1 17.8 71.7 15.7 0.0 10.7
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 16.0 72.6 7.0 85.5 2.9 0.0 9.2
- ---------------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY 14.5 51.9 31.2 65.1 21.4 0.0 12.7
ASFC Astoria Financial Corp. of NY 46.0 35.9 14.5 58.4 33.0 0.0 7.6
CNY Carver Bancorp, Inc. of NY 17.0 46.7 31.6 62.9 28.6 0.0 8.1
DME Dime Bancorp, Inc. of NY 12.0 58.4 25.1 69.6 23.8 0.0 5.7
DIME Dime Community Bancorp of NY 21.9 54.4 18.9 77.8 4.3 0.0 15.4
- ---------------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 26.0 52.2 19.1 73.7 9.4 0.0 16.0
- ---------------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 21.9 58.0 12.5 84.7 2.2 0.0 10.8
HAVN Haven Bancorp of Woodhaven NY 32.9 53.2 11.6 67.3 23.7 0.0 5.8
- ---------------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 40.1 57.0 0.0 74.5 0.0 0.0 22.2
- ---------------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 7.2 59.5 27.8 63.1 24.9 0.0 9.0
MBB MSB Bancorp of Middletown NY(1) 48.9 41.2 2.7 89.7 0.1 0.0 8.6
NYB New York Bancorp, Inc. of NY 32.6 61.0 4.4 53.8 38.7 0.2 5.1
PKPS Poughkeepsie Fin. Corp. of NY 4.8 74.6 16.0 67.7 22.7 0.0 8.4
- ---------------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 15.2 66.7 14.3 90.6 0.0 0.0 8.4
- ---------------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 7.2 85.4 4.9 74.5 7.7 0.0 15.0
- ---------------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 5.8 44.7 45.0 72.9 17.7 0.0 8.0
- ---------------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY(3) 55.0 21.8 19.6 60.5 15.6 0.0 21.6
ROSE T R Financial Corp. of NY 14.4 51.5 32.5 70.6 21.1 0.0 6.2
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets Balance Sheet Annual Growth Rates
------------------------------------ ---------------------------------
Goodwill Tng Net MEMO: Cash and Loans
& Intang Worth Pref.Stock Assets Investments & MBS
-------- ------- ---------- ------ ----------- -----
<S> <C> <C> <C> <C> <C> <C>
All Public Companies 0.3 12.1 0.0 13.40 4.85 13.17
Comparable Group Average 0.9 9.8 0.0 17.57 1.53 11.59
Mid-Atlantic Companies 0.9 9.8 0.0 17.57 1.53 11.59
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 1.2 8.0 0.0 4.90 -26.02 14.47
- ----------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY 0.0 12.7 0.0 21.86 39.60 20.31
ASFC Astoria Financial Corp. of NY 1.3 6.3 0.0 14.63 18.23 12.95
CNY Carver Bancorp, Inc. of NY 0.3 7.7 0.0 15.19 -33.22 36.96
DME Dime Bancorp, Inc. of NY 0.1 5.7 0.0 -4.88 NM -14.00
DIME Dime Community Bancorp of NY 2.2 13.2 0.0 13.14 12.93 16.40
- ----------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 0.0 16.0 0.0 9.71 -14.38 24.29
- ----------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 4.6 6.2 0.0 -8.35 -36.95 9.59
HAVN Haven Bancorp of Woodhaven NY 0.0 5.8 0.0 16.34 3.10 24.66
- ----------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 0.0 22.2 0.0 -1.13 -11.18 9.48
- ----------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 0.1 8.9 0.0 20.27 -27.95 25.28
MBB MSB Bancorp of Middletown NY(1) 4.0 4.6 0.0 80.77 NM 9.11
NYB New York Bancorp, Inc. of NY 0.0 5.1 0.0 15.27 19.87 13.50
PKPS Poughkeepsie Fin. Corp. of NY 0.0 8.4 0.0 2.62 18.13 2.57
- ----------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 1.0 7.4 0.0 11.73 29.56 8.71
- ----------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 0.0 15.0 0.0 9.04 -3.20 10.63
- ----------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 2.4 5.6 0.0 10.46 30.15 10.82
- ----------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY(3) 0.1 21.5 0.0 88.83 NM -31.01
ROSE T R Financial Corp. of NY 0.0 6.2 0.0 13.40 5.87 15.42
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Annual Growth Rates Regulatory Capital
-------------------------------------------- --------------------------------
Borrows. Net Tng Net
Deposits &Subdebt Worth Worth Tangible Core Reg.Cap.
-------- -------- ----- ------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 8.06 21.40 0.07 -0.77 10.91 10.91 22.71
Comparable Group Average 9.46 18.57 0.06 -1.08 7.81 7.75 16.78
Mid-Atlantic Companies 9.46 18.57 0.06 -1.08 7.81 7.75 16.78
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 3.46 NM 0.27 -1.45 7.23 7.23 12.47
- ---------------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY 0.69 NM -19.15 -19.15 10.00 10.00 24.94
- ---------------------------------------------------------------------------------------------------------------------------
ASFC Astoria Financial Corp. of NY 4.34 43.41 1.94 4.25 5.43 5.43 15.78
CNY Carver Bancorp, Inc. of NY 3.70 63.77 -1.77 -1.21 6.95 6.96 16.00
DME Dime Bancorp, Inc. of NY 1.47 -21.86 6.85 6.95 6.32 6.32 13.30
DIME Dime Community Bancorp of NY 0.43 NM NM NM 10.45 10.45 21.55
- ---------------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 5.48 NM -6.14 -6.14 12.22 12.22 27.06
- ---------------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY -11.56 NM -6.38 -5.85 NM 6.20 15.01
HAVN Haven Bancorp of Woodhaven NY 6.12 70.03 7.07 7.28 6.81 6.81 14.82
- ---------------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY -2.33 NM 0.42 0.42 13.76 13.76 20.17
- ---------------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 1.30 NM 1.35 0.37 7.39 7.39 14.94
MBB MSB Bancorp of Middletown NY(1) 89.27 -41.78 NM -12.21 5.60 5.60 NM
NYB New York Bancorp, Inc. of NY -2.23 57.20 0.91 0.91 4.91 4.91 11.76
PKPS Poughkeepsie Fin. Corp. of NY 8.74 -9.25 1.69 1.69 6.86 6.86 11.61
- ---------------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 19.97 -100.00 5.35 -6.67 NM 7.39 14.43
- ---------------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 8.08 78.04 -3.79 -3.79 NM 10.09 18.16
- ---------------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 4.42 53.63 0.22 4.14 5.43 5.43 14.95
- ---------------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY(3) 23.46 NM NM NM NM NM NM
ROSE T R Financial Corp. of NY 14.95 11.14 12.12 12.12 NM 6.39 18.35
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Financial information is for the quarter ending December 31, 1996.
(3) Growth rates have been annualized from available financial information.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 226
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-3B
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1997
<TABLE>
<CAPTION>
Net Interest Income Other Income
------------------------------------- ------------------------
Loss NII
Net Provis. After Loan R.E. Other
Income Income Expense NII on IEA Provis. Fees Oper. Income
------ ------ ------- --- ------- ------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 0.69 7.37 4.05 3.32 0.15 3.17 0.12 0.00 0.29
Comparable Group Average 0.69 7.14 3.78 3.35 0.22 3.14 0.09 -0.05 0.23
Mid-Atlantic Companies 0.69 7.14 3.78 3.35 0.22 3.14 0.09 -0.05 0.23
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 0.81 7.32 3.60 3.72 0.18 3.54 0.05 -0.04 0.30
- ----------------------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY -0.62 7.41 3.88 3.53 1.78 1.75 0.00 -0.56 0.22
ASFC Astoria Financial Corp. of NY 0.52 7.00 4.35 2.66 0.05 2.60 0.02 0.00 0.15
CNY Carver Bancorp, Inc. of NY -0.47 6.04 3.30 2.74 0.45 2.29 0.05 -0.01 0.21
DME Dime Bancorp, Inc. of NY 0.57 6.94 4.52 2.42 0.21 2.21 0.10 -0.06 0.33
DIME Dime Community Bancorp of NY 0.92 6.42 2.94 3.48 0.35 3.13 0.04 -0.04 0.17
- ----------------------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 0.90 7.35 3.52 3.84 0.04 3.80 0.08 -0.04 0.13
- ----------------------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 1.05 7.00 3.66 3.35 0.12 3.22 0.16 0.01 0.16
HAVN Haven Bancorp of Woodhaven NY 0.62 7.09 3.99 3.09 0.20 2.89 0.11 -0.02 0.51
- ----------------------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 1.77 7.02 2.60 4.42 0.04 4.38 0.18 0.16 0.03
- ----------------------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 0.62 6.94 4.01 2.93 0.11 2.82 0.33 -0.02 0.22
MBB MSB Bancorp of Middletown NY(1) 0.22 7.10 4.02 3.08 0.18 2.89 0.00 -0.06 0.52
NYB New York Bancorp, Inc. of NY 1.31 7.42 3.70 3.72 0.07 3.65 0.10 -0.04 0.27
PKPS Poughkeepsie Fin. Corp. of NY 0.21 7.51 4.45 3.06 0.12 2.94 -0.03 -0.11 0.30
- ----------------------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 1.10 7.88 4.05 3.83 0.30 3.53 0.02 -0.08 0.38
- ----------------------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 1.72 7.92 3.47 4.45 -0.15 4.60 0.03 0.00 0.11
- ----------------------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 0.56 7.09 3.77 3.32 0.04 3.28 0.05 -0.03 0.13
- ----------------------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY(3) 0.35 7.03 3.57 3.46 0.02 3.44 0.24 0.01 0.01
ROSE T R Financial Corp. of NY 0.98 7.11 4.47 2.63 0.04 2.60 0.09 -0.02 0.18
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
------------------- ----------------- --------------------------
Total
Other G&A Goodwill Net Extrao. Yield Cost
Income Expense Amort. Gains Items On Assets Of Funds
------ ------- -------- ----- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 0.41 2.22 0.03 -0.29 0.00 7.36 4.55
Comparable Group Average 0.26 1.95 0.08 -0.25 0.00 7.06 4.10
Mid-Atlantic Companies 0.26 1.95 0.08 -0.25 0.00 7.06 4.10
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 0.30 2.18 0.09 -0.30 0.00 7.65 4.09
- ------------------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY -0.34 2.34 0.00 0.00 0.00 7.62 4.61
ASFC Astoria Financial Corp. of NY 0.17 1.33 0.12 -0.38 0.00 7.29 4.77
CNY Carver Bancorp, Inc. of NY 0.25 2.62 0.06 -0.67 0.00 6.34 3.66
DME Dime Bancorp, Inc. of NY 0.37 1.48 0.01 -0.25 0.00 7.24 4.82
DIME Dime Community Bancorp of NY 0.17 1.62 0.15 -0.17 0.00 6.77 3.68
- ------------------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 0.16 2.36 0.00 -0.05 0.00 7.60 4.33
- ------------------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 0.33 1.60 0.34 0.14 0.00 7.62 4.19
HAVN Haven Bancorp of Woodhaven NY 0.60 2.10 0.01 -0.43 0.00 7.27 4.36
- ------------------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 0.36 1.83 0.00 0.14 0.00 7.25 3.44
- ------------------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 0.53 2.12 0.00 -0.17 0.00 7.29 4.61
MBB MSB Bancorp of Middletown NY(1) 0.46 2.55 0.43 -0.01 0.00 7.65 4.50
NYB New York Bancorp, Inc. of NY 0.33 1.67 0.00 -0.36 0.00 7.58 4.03
PKPS Poughkeepsie Fin. Corp. of NY 0.16 2.35 0.00 -0.40 0.00 7.89 4.95
- ------------------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 0.31 2.30 0.16 -0.01 0.00 8.21 4.50
- ------------------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 0.14 1.84 0.00 -0.03 0.00 8.13 4.27
- ------------------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 0.15 1.70 0.19 -0.44 0.00 7.46 4.18
- ------------------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY(3) 0.26 1.62 0.02 -1.64 0.00 0.00 0.00
ROSE T R Financial Corp. of NY 0.24 1.35 0.00 0.18 0.00 7.24 4.89
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Yields, Costs, and Spreads
--------------------------
MEMO: MEMO:
Yld-Cost Assets/ Effective
Spread FTE Emp. Tax Rate
-------- -------- ---------
<S> <C> <C> <C>
All Public Companies 2.81 4,528 35.55
Comparable Group Average 2.96 5,451 39.70
Mid-Atlantic Companies 2.96 5,451 39.70
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 3.56 2,978 36.17
- --------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY 3.01 NM 31.94
ASFC Astoria Financial Corp. of NY 2.52 8,313 44.41
CNY Carver Bancorp, Inc. of NY 2.67 4,412 41.31
DME Dime Bancorp, Inc. of NY 2.42 6,330 32.32
DIME Dime Community Bancorp of NY 3.09 5,113 35.82
- --------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 3.27 4,056 49.58
- --------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 3.43 6,787 41.02
HAVN Haven Bancorp of Woodhaven NY 2.91 3,972 37.02
- --------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 3.81 4,312 42.15
- --------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 2.68 3,955 41.06
MBB MSB Bancorp of Middletown NY(1) 3.16 3,435 39.22
NYB New York Bancorp, Inc. of NY 3.55 6,414 48.31
PKPS Poughkeepsie Fin. Corp. of NY 2.94 3,237 40.44
- --------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 3.71 3,239 19.90
- --------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 3.86 11,444 42.17
- --------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 3.28 4,953 50.44
- --------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY(3) 0.00 7,440 NM
ROSE T R Financial Corp. of NY 2.35 7,720 41.35
- --------------------------------------------------------------------------------------------------------
</TABLE>
(1) Financial information is for the quarter ending December 31, 1996.
(3) Income and expense information has been annualized from available financial
information.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 227
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-3C
Market Pricing Comparatives
Prices As of June 20, 1997
<TABLE>
<CAPTION>
Market
Capitalization Per Share Data Pricing Ratios(3)
------------------- ------------------ ------------------------------------------
Core Book
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- --------------------- ------- ------- ------ ------ ----- ------- ----- ------ ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 20.91 169.19 1.18 15.55 19.40 133.98 16.10 137.26 17.77
Comparable Group Average 29.58 601.61 1.62 18.37 19.47 152.80 16.61 166.28 17.62
Mid-Atlantic Companies 29.58 601.61 1.62 18.37 19.47 152.80 16.61 166.28 17.62
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 39.81 510.32 2.71 25.10 18.35 158.61 14.60 182.87 14.69
- -----------------------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY 16.00 70.27 -0.65 13.85 NM 115.52 14.70 115.52 NM
ASFC Astoria Financial Corp. of NY 45.62 969.11 2.62 27.51 25.77 165.83 12.60 199.30 17.41
CNY Carver Bancorp, Inc. of NY 12.25 28.35 -0.05 14.76 NM 82.99 6.69 86.69 NM
DME Dime Bancorp, Inc. of NY 19.00 1999.92 1.34 10.01 18.10 189.81 10.83 191.53 14.18
DIME Dime Community Bancorp of NY 19.12 250.97 0.97 14.53 21.98 131.59 20.28 153.33 19.71
- -----------------------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 19.87 160.71 0.89 16.06 23.10 123.72 19.81 123.72 22.33
- -----------------------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 66.37 3111.96 2.82 30.56 21.48 217.18 23.47 NM 23.54
HAVN Haven Bancorp of Woodhaven NY 37.00 160.21 3.32 23.13 16.23 159.97 9.27 160.59 11.14
- -----------------------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 43.87 431.24 2.62 34.52 15.89 127.09 28.17 127.09 16.74
- -----------------------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 36.12 875.12 1.64 21.62 26.17 167.07 15.05 168.71 22.02
MBB MSB Bancorp of Middletown NY 19.25 54.61 0.62 20.57 NM 93.58 6.65 214.13 NM
NYB New York Bancorp, Inc. of NY 34.75 569.24 2.82 9.81 14.54 NM 17.93 NM 12.32
PKPS Poughkeepsie Fin. Corp. of NY 6.94 87.41 0.32 5.75 NM 120.70 10.15 120.70 21.69
- -----------------------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 29.62 113.30 2.50 19.17 11.94 154.51 12.91 174.44 11.85
- -----------------------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 46.12 513.64 2.07 18.47 22.50 249.70 37.40 249.70 22.28
- -----------------------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 26.87 237.07 1.76 17.56 23.16 153.02 12.30 218.28 15.27
- -----------------------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY 20.00 872.84 0.93 14.08 NM 142.05 30.63 142.76 21.51
ROSE T R Financial Corp. of NY 23.50 414.35 1.54 11.90 13.35 197.48 12.17 197.48 15.26
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
---------------------------- ---------------------------------------------
Reported
Amount/ Payout Total Equity/ NPAs/ ------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE
------- ------ ------- ------ ------- ------ --- ---
($) (%) (%) ($Mil) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
All Public Companies 0.39 1.85 28.86 1,281 12.70 0.83 0.67 6.05
Comparable Group Average 0.50 1.60 27.76 3,696 10.64 1.18 0.69 7.43
Mid-Atlantic Companies 0.50 1.60 27.76 3,696 10.64 1.18 0.69 7.43
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 0.60 1.51 22.14 3,496 9.20 0.92 0.81 8.74
- ------------------------------------------------------------------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY 0.00 0.00 NM 478 12.72 1.06 0.62 -4.16
ASFC Astoria Financial Corp. of NY 0.60 1.32 22.90 7,689 7.60 0.52 0.52 6.54
CNY Carver Bancorp, Inc. of NY 0.20 1.63 NM 424 8.06 1.53 0.47 -5.07
DME Dime Bancorp, Inc. of NY 0.00 0.00 0.00 18,465 5.71 2.36 0.58 10.88
DIME Dime Community Bancorp of NY 0.18 0.94 18.56 1,237 15.41 0.82 0.93 6.19
- ------------------------------------------------------------------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 0.24 1.21 26.97 811 16.01 0.27 0.90 5.16
- ------------------------------------------------------------------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 1.00 1.51 35.46 13,261 10.81 2.84 1.06 9.91
HAVN Haven Bancorp of Woodhaven NY 0.60 1.62 18.07 1,728 5.80 0.78 0.62 10.26
- ------------------------------------------------------------------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 1.40 3.19 53.44 1,531 22.17 1.08 1.78 8.11
- ------------------------------------------------------------------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 0.60 1.66 36.59 5,814 9.01 1.04 0.62 6.41
MBB MSB Bancorp of Middletown NY 0.60 3.12 NM 821 7.11 0.70 0.22 2.99
NYB New York Bancorp, Inc. of NY 0.60 1.73 21.28 3,175 5.06 1.29 1.31 24.82
PKPS Poughkeepsie Fin. Corp. of NY 0.10 1.44 31.25 861 8.41 4.21 0.21 2.47
- ------------------------------------------------------------------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 0.68 2.30 27.20 878 8.35 0.84 1.10 13.18
- ------------------------------------------------------------------------------------------------------------------------------
QCSB Queens County Bancorp of NY 0.80 1.73 38.65 1,373 14.98 0.75 1.72 10.84
- ------------------------------------------------------------------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 0.64 2.38 36.36 1,927 8.04 0.75 0.56 6.66
- ------------------------------------------------------------------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY 0.20 1.00 21.51 2,849 21.57 0.31 0.35 1.63
ROSE T R Financial Corp. of NY 0.52 2.21 33.77 3,404 6.16 0.40 0.98 15.66
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Financial Characteristics(6)
----------------------------
Core
------------
Financial Institution ROA ROE
--- ---
(%) (%)
<S> <C> <C>
All Public Companies 0.87 7.84
Comparable Group Average 0.86 9.17
Mid-Atlantic Companies 0.86 9.17
Comparable Group
Mid-Atlantic Companies
ALBK ALBANK Fin. Corp. of Albany NY 1.01 10.91
- -----------------------------------------------------------------------
AHCI Ambanc Holding Co., Inc. of NY -0.62 -4.16
ASFC Astoria Financial Corp. of NY 0.77 9.68
CNY Carver Bancorp, Inc. of NY -0.03 -0.33
DME Dime Bancorp, Inc. of NY 0.73 13.89
DIME Dime Community Bancorp of NY 1.03 6.90
- -----------------------------------------------------------------------
FFIC Flushing Fin. Corp. of NY 0.93 5.34
- -----------------------------------------------------------------------
GPT GreenPoint Fin. Corp. of NY 0.96 9.05
HAVN Haven Bancorp of Woodhaven NY 0.91 14.94
- -----------------------------------------------------------------------
JSBF JSB Financial, Inc. of NY 1.69 7.69
- -----------------------------------------------------------------------
LISB Long Island Bancorp, Inc of NY 0.74 7.62
MBB MSB Bancorp of Middletown NY 0.23 3.09
NYB New York Bancorp, Inc. of NY 1.55 29.28
PKPS Poughkeepsie Fin. Corp. of NY 0.47 5.65
- -----------------------------------------------------------------------
PSBK Progressive Bank, Inc. of NY 1.11 13.28
- -----------------------------------------------------------------------
QCSB Queens County Bancorp of NY 1.74 10.94
- -----------------------------------------------------------------------
RELY Reliance Bancorp, Inc. of NY 0.85 10.11
- -----------------------------------------------------------------------
RSLN Roslyn Bancorp, Inc. of NY 1.42 6.61
ROSE T R Financial Corp. of NY 0.85 13.70
- -----------------------------------------------------------------------
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (estimate core basis) is based on actual trailing twelve month data,
adjusted to omit non-operating items (including the SAIF assessment) on a
tax effected basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets;
P/TB = Price to tangible book value; and P/CORE = Price to estimated core
earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month estimated core
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month earnings and average equity and assets balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, LC.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 228
EXHIBIT III-4
Peer Group Market Area Comparative Analysis
<PAGE> 229
Exhibit III-4
Peer Group Market Area Comparative Analysis
<TABLE>
<CAPTION>
Population Proj.
--------------- Pop. 1990-97 1997-2002
Institution County 1990 1997 2002 % Change % Change Median Age
- ----------- ------ ---- ---- ---- -------- -------- ----------
(000) (000)
<S> <C> <C> <C> <C> <C> <C> <C>
ALBANK Fin. Corp. of NY Albany 293 297 299 1.4% 0.9% 35.5
Dime Community Bancorp of NY Kings 2,301 2,268 2,246 -1.4% -1.0% 32.5
Flushing Fin. Corp. of NY Queens 1,952 1,987 2,011 1.8% 1.2% 36.5
Haven Bancorp of NY Queens 1,952 1,987 2,011 1.8% 1.2% 36.5
JSB Financial, Inc. of NY Nassau 1,287 1,304 1,316 1.3% 0.9% 37.8
Poughkeepsie Fin. Corp. of NY Dutchess 259 263 265 1.3% 0.9% 35.3
Progressive Bank, Inc. of NY Dutchess 259 263 265 1.3% 0.9% 35.3
Queens County Bancorp of NY Queens 1,952 1,987 2,011 1.8% 1.2% 36.5
Reliance Bancorp of NY Nassau 1,287 1,304 1,316 1.3% 0.9% 37.8
TR Financial of NY Nassau 1,287 1,304 1,316 1.3% 0.9% 37.8
AVERAGES: 1,283 1,296 1,306 1.2% 0.8% 36.2
MEDIANS: 1,287 1,304 1,316 1.3% 0.9% 36.5
INDEPENDENCE SAVINGS BANK KINGS 2,301 2,268 2,246 -1.4% -1.0% 32.5
</TABLE>
<TABLE>
<CAPTION>
Per Capita Income
--------------------------
Deposit
% State Market
Institution Amount Average Share(1)(2)
- ----------- ------ ------- -----------
<S> <C> <C> <C>
ALBANK Fin. Corp. of NY 18,262 98.7% 12.5%
Dime Community Bancorp of NY 14,742 79.7% 2.1%
Flushing Fin. Corp. of NY 17,607 95.2% 1.3%
Haven Bancorp of NY 17,607 95.2% 3.5%
JSB Financial, Inc. of NY 25,933 140.1% 1.0%
Poughkeepsie Fin. Corp. of NY 18,909 102.2% 16.8%
Progressive Bank, Inc. of NY 18,909 102.2% 12.1%
Queens County Bancorp of NY 17,607 95.2% 3.4%
Reliance Bancorp of NY 25,933 140.1% 1.9%
TR Financial of NY 25,933 140.1% 2.7%
------ ----
20,144 108.9% 5.7%
18,586 100.4% 3.0%
INDEPENDENCE SAVINGS BANK 14,742 79.7% 7.7%
</TABLE>
(1) Total institution deposits in headquarters county as percent of total county
deposits.
(1) Excludes Credit Unions.
Sources: CACI, Inc; FDIC; OTS.
<PAGE> 230
EXHIBIT IV-1
Stock Prices:
As of June 20, 1997
<PAGE> 231
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization
-------------------------------------------
Shares Market
Price/ Outst- Capital-
Financial Institution Share(1) anding ization(9)
- --------------------- ------- ------- ----------
($) (000) ($Mil)
<S> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHC)
SAIF-Insured Thrifts(314) 20.55 5,335 144.6
NYSE Traded Companies(9) 37.73 38,943 1,662.8
AMEX Traded Companies(18) 18.08 3,927 83.7
NASDAQ Listed OTC Companies(287) 20.18 4,409 102.7
California Companies(24) 23.84 18,136 670.8
Florida Companies(6) 22.45 12,310 272.5
Mid-Atlantic Companies(59) 21.30 6,329 145.5
Mid-West Companies(153) 19.85 3,208 82.8
New England Companies(11) 22.12 4,473 121.7
North-West Companies(6) 22.24 12,602 327.9
South-East Companies(43) 19.80 3,376 65.8
South-West Companies(6) 19.26 1,904 41.2
Western Companies (Excl CA)(6) 18.58 5,290 99.6
Thrift Strategy(245) 19.68 3,486 77.4
Mortgage Banker Strategy(39) 24.88 12,967 445.6
Real Estate Strategy(11) 21.23 7,021 177.5
Diversified Strategy(14) 28.78 22,414 715.0
Retail Banking Strategy(5) 14.37 3,245 53.1
Companies Issuing Dividends(262) 20.97 5,289 149.1
Companies Without Dividends(52) 18.40 5,573 121.7
Equity/Assets (less than) 6%(26) 23.67 16,800 500.1
Equity/Assets 6-12%(156) 22.69 5,740 169.8
Equity/Assets (greater than) 12%(132) 17.63 2,813 52.6
Converted Last 3 Mths (no MHC)(5) 13.61 2,256 31.2
Actively Traded Companies(45) 28.71 16,741 598.9
Market Value Below $20 Million(68) 16.00 885 13.4
Holding Company Structure(276) 20.74 5,213 146.2
Assets Over $1 Billion(66) 30.61 16,902 560.2
Assets $500 Million-$1 Billion(51) 19.59 5,525 99.8
Assets $250-$500 Million(65) 20.15 2,564 47.9
Assets less than $250 Million(132) 16.58 1,448 23.1
Goodwill Companies(129) 23.75 8,676 245.1
Non-Goodwill Companies(185) 18.42 3,108 77.7
Acquirors of FSLIC Cases(11) 31.18 33,955 1,395.5
</TABLE>
<TABLE>
<CAPTION>
Price Change Data
-------------------------------------------------------------------------
52 Week (1) % Change From
-------------------- ---------------------------------
Last Last Dec 31, Dec 31,
Financial Institution High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------ ------ ------ ------- -------
($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHC)
SAIF-Insured Thrifts(314) 21.45 14.46 20.23 1.56 168.18 17.47
NYSE Traded Companies(9) 39.36 23.56 37.00 2.03 245.10 20.28
AMEX Traded Companies(18) 19.16 12.35 17.65 2.37 279.18 17.14
NASDAQ Listed OTC Companies(287) 21.05 14.32 19.88 1.49 156.91 17.40
California Companies(24) 24.92 14.96 23.26 2.40 104.27 19.55
Florida Companies(6) 23.85 14.71 21.95 2.05 124.35 20.00
Mid-Atlantic Companies(59) 21.98 14.12 20.92 2.14 152.85 22.21
Mid-West Companies(153) 20.78 14.53 19.59 1.16 192.03 15.18
New England Companies(11) 22.35 15.30 21.86 2.30 289.09 18.71
North-West Companies(6) 22.90 15.61 21.62 2.41 125.83 18.99
South-East Companies(43) 21.13 14.33 19.63 0.86 150.54 18.59
South-West Companies(6) 19.54 12.69 18.75 2.38 -14.81 12.86
Western Companies (Excl CA)(6) 18.94 14.32 18.00 3.37 275.01 10.76
Thrift Strategy(245) 20.55 14.06 19.40 1.39 145.94 17.03
Mortgage Banker Strategy(39) 25.56 16.59 24.35 2.69 222.94 23.27
Real Estate Strategy(11) 22.39 14.01 21.00 0.71 176.88 18.91
Diversified Strategy(14) 30.39 18.65 28.06 2.69 206.83 13.16
Retail Banking Strategy(5) 16.35 11.50 14.29 1.11 233.91 2.65
Companies Issuing Dividends(262) 21.88 14.80 20.68 1.34 182.14 17.33
Companies Without Dividends(52) 19.23 12.74 17.92 2.69 89.68 18.30
Equity/Assets (less than) 6%(26) 24.49 14.74 23.06 2.83 177.66 20.62
Equity/Assets 6-12%(156) 23.57 15.45 22.34 1.55 168.56 20.44
Equity/Assets (greater than) 12%(132) 18.56 13.33 17.40 1.33 152.32 13.37
Converted Last 3 Mths (no MHC)(5) 13.77 12.66 13.37 1.73 0.00 0.00
Actively Traded Companies(45) 29.53 18.75 28.34 1.26 199.41 23.01
Market Value Below $20 Million(68) 16.87 12.36 15.89 0.97 143.44 12.92
Holding Company Structure(276) 21.62 14.66 20.41 1.53 158.62 16.98
Assets Over $1 Billion(66) 31.45 19.58 29.88 2.54 209.61 21.89
Assets $500 Million-$1 Billion(51) 20.42 13.57 19.43 1.22 185.98 20.38
Assets $250-$500 Million(65) 21.07 14.07 19.72 2.12 137.98 18.92
Assets less than $250 Million(132) 17.51 12.69 16.44 0.96 105.11 13.42
Goodwill Companies(129) 24.63 15.88 23.31 1.86 192.18 19.22
Non-Goodwill Companies(185) 19.33 13.52 18.18 1.35 131.61 16.25
Acquirors of FSLIC Cases(11) 32.15 20.11 30.57 1.68 221.41 19.47
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHC)
SAIF-Insured Thrifts(314) 0.82 1.15 15.75 15.24 155.82
NYSE Traded Companies(9) 1.80 2.67 20.84 19.96 373.05
AMEX Traded Companies(18) 0.65 0.97 14.21 14.02 112.01
NASDAQ Listed OTC Companies(287) 0.81 1.11 15.68 15.17 151.93
California Companies(24) 0.70 1.08 16.32 15.33 258.18
Florida Companies(6) 0.98 0.95 13.43 12.73 175.35
Mid-Atlantic Companies(59) 0.96 1.36 15.91 15.22 169.87
Mid-West Companies(153) 0.81 1.10 16.07 15.73 138.70
New England Companies(11) 0.84 1.36 16.86 15.68 223.95
North-West Companies(6) 0.90 1.26 13.25 12.68 151.06
South-East Companies(43) 0.74 1.04 14.28 13.97 120.66
South-West Companies(6) 0.57 1.09 16.27 15.49 216.35
Western Companies (Excl CA)(6) 0.86 1.03 15.88 15.17 103.62
Thrift Strategy(245) 0.76 1.08 15.94 15.48 141.26
Mortgage Banker Strategy(39) 1.20 1.52 15.85 14.94 229.70
Real Estate Strategy(11) 0.69 1.27 14.17 13.89 211.17
Diversified Strategy(14) 1.53 1.81 13.47 13.10 185.83
Retail Banking Strategy(5) 0.20 0.20 13.14 12.79 146.74
Companies Issuing Dividends(262) 0.91 1.24 15.94 15.41 153.07
Companies Without Dividends(52) 0.39 0.70 14.75 14.34 170.06
Equity/Assets (less than) 6%(26) 0.85 1.42 13.87 12.94 288.83
Equity/Assets 6-12%(156) 1.01 1.38 16.00 15.23 192.54
Equity/Assets (greater than) 12%(132) 0.61 0.85 15.81 15.66 91.26
Converted Last 3 Mths (no MHC)(5) 0.17 0.44 14.45 14.34 58.35
Actively Traded Companies(45) 1.46 1.99 17.55 16.93 236.53
Market Value Below $20 Million(68) 0.46 0.76 15.42 15.30 122.85
Holding Company Structure(276) 0.82 1.15 16.06 15.56 152.86
Assets Over $1 Billion(66) 1.41 1.92 18.13 16.80 256.72
Assets $500 Million-$1 Billion(51) 0.86 1.08 14.15 13.43 153.77
Assets $250-$500 Million(65) 0.82 1.19 15.87 15.38 164.93
Assets less than $250 Million(132) 0.55 0.81 15.21 15.15 106.41
Goodwill Companies(129) 1.01 1.39 16.38 15.23 204.99
Non-Goodwill Companies(185) 0.70 0.99 15.32 15.24 123.05
Acquirors of FSLIC Cases(11) 1.51 2.31 18.26 17.27 298.15
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public
(non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 232
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization
-----------------------------------------
Shares Market
Price/ Outst- Capital-
Financial Institution Share(1) anding ization(9)
- --------------------- -------- ------ ----------
($) (000) ($Mil)
<S> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
BIF-Insured Thrifts(69) 23.02 10,142 336.7
NYSE Traded Companies(3) 35.62 54,046 1,775.6
AMEX Traded Companies(5) 21.67 4,142 83.4
NASDAQ Listed OTC Companies(61) 22.38 8,066 274.5
California Companies(3) 16.96 6,919 126.5
Mid-Atlantic Companies(18) 25.26 17,723 511.6
Mid-West Companies(2) 12.50 942 11.8
New England Companies(37) 21.26 4,870 107.8
North-West Companies(4) 29.39 34,716 1,951.2
South-East Companies(5) 27.17 2,091 39.5
Thrift Strategy(45) 23.47 5,050 161.6
Mortgage Banker Strategy(10) 20.87 29,965 587.0
Real Estate Strategy(6) 14.11 4,650 60.6
Diversified Strategy(6) 31.64 34,470 1,778.2
Retail Banking Strategy(2) 19.25 706 13.6
Companies Issuing Dividends(55) 24.56 9,015 349.0
Companies Without Dividends(14) 15.79 15,440 279.3
Equity/Assets (less than) 6%(5) 27.61 59,907 2,409.5
Equity/Assets 6-12%(45) 22.73 6,299 195.4
Equity/Assets (greater than) 12%(19) 22.53 6,588 145.5
Actively Traded Companies(24) 24.79 17,201 630.2
Market Value Below $20 Million(9) 15.96 940 14.9
Holding Company Structure(45) 23.49 9,968 354.0
Assets Over $1 Billion(17) 30.90 30,688 1,181.8
Assets $500 Million-$1 Billion(16) 22.72 5,804 110.4
Assets $250-$500 Million(18) 19.24 2,968 52.2
Assets less than $250 Million(18) 19.47 1,711 24.9
Goodwill Companies(31) 25.23 16,684 625.3
Non-Goodwill Companies(37) 21.17 4,656 94.7
</TABLE>
<TABLE>
<CAPTION>
Price Change Data
--------------------------------------------------------------------------
52 Week (1) % Change From
--------------------- ----------------------------------
Last Last Dec 31, Dec 31,
Financial Institution High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- ------- ------- --------
($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
BIF-Insured Thrifts(69) 23.61 14.90 22.60 1.76 170.12 20.85
NYSE Traded Companies(3) 36.66 17.12 34.42 4.02 233.32 32.30
AMEX Traded Companies(5) 22.02 13.62 21.72 -0.22 101.78 31.43
NASDAQ Listed OTC Companies(61) 22.97 14.89 21.97 1.83 172.84 19.03
California Companies(3) 18.54 11.08 16.46 2.94 377.78 17.10
Mid-Atlantic Companies(18) 25.70 15.38 24.71 2.14 105.40 22.84
Mid-West Companies(2) 12.50 9.00 12.50 0.00 0.00 23.52
New England Companies(37) 21.81 13.87 20.96 1.64 182.19 20.29
North-West Companies(4) 29.98 16.23 28.28 2.44 133.84 26.88
South-East Companies(5) 27.97 21.80 27.00 0.46 0.00 15.40
Thrift Strategy(45) 23.95 15.61 23.05 1.79 171.58 20.59
Mortgage Banker Strategy(10) 22.04 13.60 20.66 1.70 162.94 19.43
Real Estate Strategy(6) 15.05 9.31 13.95 1.78 232.71 15.95
Diversified Strategy(6) 31.86 16.40 30.46 3.15 158.53 32.27
Retail Banking Strategy(2) 21.25 14.75 20.50 -6.10 33.96 5.48
Companies Issuing Dividends(55) 25.16 16.01 24.13 1.65 167.24 20.04
Companies Without Dividends(14) 16.35 9.66 15.41 2.30 191.75 24.57
Equity/Assets (less than) 6%(5) 27.61 14.06 25.97 5.68 142.26 37.40
Equity/Assets 6-12%(45) 23.45 14.50 22.44 1.39 178.41 19.37
Equity/Assets (greater than) 12%(19) 22.98 16.03 22.14 1.64 41.16 20.07
Actively Traded Companies(24) 25.44 15.23 24.18 2.34 214.15 24.04
Market Value Below $20 Million(9) 16.62 11.19 15.95 0.33 105.42 13.84
Holding Company Structure(45) 24.04 15.52 23.06 1.66 175.13 21.47
Assets Over $1 Billion(17) 31.37 16.89 29.99 2.82 184.66 29.74
Assets $500 Million-$1 Billion(16) 23.12 15.57 22.26 1.82 128.37 20.24
Assets $250-$500 Million(18) 20.19 12.85 19.17 1.02 208.53 16.83
Assets less than $250 Million(18) 20.02 14.32 19.24 1.42 155.73 17.46
Goodwill Companies(31) 25.92 15.64 24.73 1.94 165.78 22.88
Non-Goodwill Companies(37) 21.68 14.27 20.82 1.62 177.15 19.21
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
-----------------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- -------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
BIF-Insured Thrifts(69) 1.40 1.43 15.69 14.89 156.78
NYSE Traded Companies(3) 1.84 1.80 18.92 14.54 225.59
AMEX Traded Companies(5) 1.22 1.21 15.34 14.93 150.13
NASDAQ Listed OTC Companies(61) 1.39 1.43 15.53 14.91 153.24
California Companies(3) 1.27 1.17 12.13 12.11 146.25
Mid-Atlantic Companies(18) 1.26 1.35 16.66 14.78 169.35
Mid-West Companies(2) 0.25 0.38 13.57 12.80 53.10
New England Companies(37) 1.62 1.58 14.03 13.50 162.36
North-West Companies(4) 1.01 1.33 13.59 13.31 176.61
South-East Companies(5) 1.21 1.27 26.67 26.67 97.84
Thrift Strategy(45) 1.42 1.41 16.97 16.01 150.45
Mortgage Banker Strategy(10) 1.26 1.45 13.28 13.13 163.73
Real Estate Strategy(6) 1.23 1.15 9.10 9.09 105.91
Diversified Strategy(6) 1.72 1.98 14.11 13.07 218.17
Retail Banking Strategy(2) 0.89 0.85 19.87 19.02 315.32
Companies Issuing Dividends(55) 1.53 1.56 16.55 15.60 165.48
Companies Without Dividends(14) 0.80 0.82 11.66 11.56 115.85
Equity/Assets (less than) 6%(5) 1.08 1.39 11.04 10.64 208.90
Equity/Assets 6-12%(45) 1.66 1.63 14.88 13.71 179.51
Equity/Assets (greater than) 12%(19) 0.88 0.99 18.73 18.68 91.18
Actively Traded Companies(24) 1.69 1.72 14.88 14.14 181.55
Market Value Below $20 Million(9) 0.80 0.81 14.17 13.65 136.51
Holding Company Structure(45) 1.35 1.41 16.10 15.40 146.84
Assets Over $1 Billion(17) 1.71 1.85 15.81 14.34 196.44
Assets $500 Million-$1 Billion(16) 1.58 1.53 15.68 14.41 168.80
Assets $250-$500 Million(18) 1.24 1.25 13.99 13.76 139.82
Assets less than $250 Million(18) 1.10 1.12 17.18 16.91 124.35
Goodwill Companies(31) 1.51 1.59 15.85 14.09 196.19
Non-Goodwill Companies(37) 1.31 1.30 15.57 15.57 123.72
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have been
adjusted for stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded
companies, and RP Financial, Inc. calculations. The information
provided in this report has been obtained from sources we believe
are reliable, but we cannot guarantee the accuracy or completeness
of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 233
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization
-----------------------------------
Shares Market
Price/ Outst- Capital-
Financial Institution Share(1) anding ization(9)
- --------------------- ------- ------- ----------
($) (000) ($Mil)
<S> <C> <C> <C>
Market Averages. MHC Institutions
SAIF-Insured Thrifts(21) 20.33 5,045 37.6
BIF-Insured Thrifts(2) 19.75 32,145 205.0
NASDAQ Listed OTC Companies(23) 20.27 7,755 54.3
Florida Companies(3) 27.29 5,550 68.6
Mid-Atlantic Companies(10) 17.26 7,085 41.7
Mid-West Companies(7) 18.69 2,028 13.9
New England Companies(1) 26.50 61,017 401.6
South-East Companies(1) 29.50 1,505 20.8
Thrift Strategy(21) 19.94 4,952 36.1
Diversified Strategy(1) 26.50 61,017 401.6
Companies Issuing Dividends(22) 20.60 8,042 56.4
Companies Without Dividends(1) 13.87 2,300 14.4
Equity/Assets 6-12%(15) 21.35 10,196 71.5
Equity/Assets >12%(8) 18.27 3,223 22.4
Actively Traded Companies(1) 24.00 7,247 81.7
Holding Company Structure(1) 24.00 7,247 81.7
Assets Over $1 Billion(5) 25.55 21,565 148.0
Assets $500 Million-$1 Billion(4) 20.21 6,908 58.0
Assets $250-$500 Million(4) 20.13 2,540 18.0
Assets less than $250 Million(10) 17.06 2,050 12.6
Goodwill Companies(9) 23.80 15,807 110.4
Non-Goodwill Companies(14) 17.92 2,388 17.0
MHC Institutions(23) 20.27 7,755 54.3
MHC Converted Last 3 Months(2) 13.44 2,185 13.4
</TABLE>
<TABLE>
<CAPTION>
Price Change Data
--------------------------------------------------------------
52 Week (1) % Change From
----------------- -----------------------------
Last Last Dec 31, Dec 31,
Financial Institution High Low Week Week 1994(2) 1995(2)
- --------------------- ------ ------ ------ ------- ------- -------
($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
SAIF-Insured Thrifts(21) 21.56 14.24 19.76 2.21 198.04 17.64
BIF-Insured Thrifts(2) 20.25 11.42 18.44 6.37 236.72 31.51
NASDAQ Listed OTC Companies(23) 21.43 13.95 19.63 2.63 210.93 19.18
Florida Companies(3) 27.71 17.00 26.17 2.93 0.00 9.74
Mid-Atlantic Companies(10) 18.03 12.23 17.11 0.78 140.00 20.89
Mid-West Companies(7) 21.17 14.03 18.12 3.13 256.07 18.43
New England Companies(1) 26.50 13.58 24.37 8.74 236.72 37.66
South-East Companies(1) 29.75 20.25 27.00 9.26 0.00 21.65
Thrift Strategy(21) 21.16 13.97 19.38 2.31 198.04 18.10
Diversified Strategy(1) 26.50 13.58 24.37 8.74 236.72 37.66
Companies Issuing Dividends(22) 21.78 14.08 19.91 2.91 210.93 19.18
Companies Without Dividends(1) 14.75 11.62 14.25 -2.67 0.00 0.00
Equity/Assets 6-12%(15) 22.81 14.28 20.69 2.58 210.93 19.22
Equity/Assets >12%(8) 18.87 13.36 17.66 2.73 0.00 19.08
Actively Traded Companies(1) 25.25 14.09 23.75 1.05 140.00 29.73
Holding Company Structure(1) 25.25 14.09 23.75 1.05 140.00 29.73
Assets Over $1 Billion(5) 26.17 15.38 24.25 4.49 188.36 22.38
Assets $500 Million-$1 Billion(4) 20.91 13.21 20.33 -0.62 0.00 12.37
Assets $250-$500 Million(4) 23.31 15.23 19.41 3.68 256.07 15.80
Assets less than $250 Million(10) 17.72 12.70 16.59 2.16 0.00 22.19
Goodwill Companies(9) 25.78 15.29 22.92 3.06 210.93 20.58
Non-Goodwill Companies(14) 18.53 13.07 17.44 2.35 0.00 18.06
MHC Institutions(23) 21.43 13.95 19.63 2.63 210.93 19.18
MHC Converted Last 3 Months(2) 14.13 11.56 13.88 -3.19 0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- ------ ------ ----- -------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
SAIF-Insured Thrifts(21) 0.63 0.99 12.74 12.42 123.69
BIF-Insured Thrifts(2) 0.67 0.65 9.38 9.38 98.25
NASDAQ Listed OTC Companies(23) 0.64 0.95 12.40 12.11 121.14
Florida Companies(3) 1.08 1.53 15.32 15.05 166.11
Mid-Atlantic Companies(10) 0.40 0.69 11.05 10.51 98.91
Mid-West Companies(7) 0.59 0.97 12.09 12.07 127.11
New England Companies(1) 1.33 1.06 10.39 10.38 123.54
South-East Companies(1) 1.00 1.41 19.69 19.69 148.17
Thrift Strategy(21) 0.60 0.95 12.51 12.20 121.02
Diversified Strategy(1) 1.33 1.06 10.39 10.38 123.54
Companies Issuing Dividends(22) 0.66 0.98 12.52 12.21 124.09
Companies Without Dividends(1) 0.24 0.35 10.21 10.21 65.23
Equity/Assets 6-12%(15) 0.69 1.07 12.49 12.12 142.08
Equity/Assets >12%(8) 0.55 0.74 12.24 12.10 82.27
Actively Traded Companies(1) 0.69 1.22 13.00 11.52 141.40
Holding Company Structure(1) 0.69 1.22 13.00 11.52 141.40
Assets Over $1 Billion(5) 0.97 1.30 12.74 11.83 149.25
Assets $500 Million-$1 Billion(4) 0.72 0.93 13.06 12.70 114.98
Assets $250-$500 Million(4) 0.74 1.16 12.82 12.79 146.42
Assets less than $250 Million(10) 0.35 0.64 11.73 11.73 93.25
Goodwill Companies(9) 0.86 1.15 12.58 11.86 139.54
Non-Goodwill Companies(14) 0.49 0.82 12.28 12.28 108.88
MHC Institutions(23) 0.64 0.95 12.40 12.11 121.14
MHC Converted Last 3 Months(2) 0.24 0.44 10.02 10.02 73.53
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common equity
and assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by
public (non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have been
adjusted for stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded
companies, and RP Financial, Inc. calculations. The information
provided in this report has been obtained from sources we believe
are reliable, but we cannot guarantee the accuracy or completeness
of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 234
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization
--------------------------------
Shares Market
Price/ Outst- Capital-
Financial Institution Share(1) anding ization(9)
- --------------------- -------- ------- ----------
($) (000) ($Mil)
<S> <C> <C> <C>
NYSE Traded Companies
AHM Ahmanson and Co. H.F. of CA 47.12 100,596 4,740.1
CSA Coast Savings Financial of CA 46.00 18,593 855.3
CFB Commercial Federal Corp. of NE 37.50 21,523 807.1
DME Dime Bancorp, Inc. of NY* 19.00 105,259 1,999.9
DSL Downey Financial Corp. of CA 23.25 26,734 621.6
FRC First Republic Bancorp of CA* 21.50 9,992 214.8
FED FirstFed Fin. Corp. of CA 30.62 10,560 323.3
GLN Glendale Fed. Bk, FSB of CA 25.37 50,306 1,276.3
GDW Golden West Fin. Corp. of CA 73.25 57,218 4,191.2
GWF Great Western Fin. Corp. of CA(8) 56.00 137,885 7,721.6
GPT GreenPoint Fin. Corp. of NY* 66.37 46,888 3,112.0
WES Westcorp Inc. of Orange CA 18.75 26,014 487.8
AMEX Traded Companies
ANA Acadiana Bancshares of LA* 19.37 2,731 52.9
BKC American Bank of Waterbury CT* 35.50 2,302 81.7
BFD BostonFed Bancorp of MA 17.69 5,963 105.5
CFX CFX Corp of NH* 18.12 13,050 236.5
CZF Citisave Fin. Corp. of LA(8) 20.25 962 19.5
CBK Citizens First Fin.Corp. of IL 16.00 2,799 44.8
ESX Essex Bancorp of VA(8) 1.12 1,055 1.2
FCB Falmouth Co-Op Bank of MA* 16.25 1,455 23.6
FAB FirstFed America Bancorp of MA 17.00 8,707 148.0
GAF GA Financial Corp. of PA 18.94 8,408 159.2
KNK Kankakee Bancorp of IL 29.00 1,420 41.2
KYF Kentucky First Bancorp of KY 11.00 1,319 14.5
NYB New York Bancorp, Inc. of NY 34.75 16,381 569.2
PDB Piedmont Bancorp of NC 10.37 2,751 28.5
PLE Pinnacle Bank of AL 21.37 890 19.0
SSB Scotland Bancorp of NC 16.25 1,840 29.9
SZB SouthFirst Bancshares of AL 15.12 821 12.4
SRN Southern Banc Company of AL 14.87 1,230 18.3
SSM Stone Street Bancorp of NC 27.25 1,825 49.7
TSH Teche Holding Company of LA 18.69 3,438 64.3
FTF Texarkana Fst. Fin. Corp of AR 18.00 1,833 33.0
THR Three Rivers Fin. Corp. of MI 15.75 824 13.0
TBK Tolland Bank of CT* 19.12 1,172 22.4
WSB Washington SB, FSB of MD 5.25 4,220 22.2
NASDAQ Listed OTC Companies
FBCV 1st Bancorp of Vincennes IN 31.50 698 22.0
AFED AFSALA Bancorp, Inc. of NY 14.75 1,455 21.5
ALBK ALBANK Fin. Corp. of Albany NY 39.81 12,819 510.3
AMFC AMB Financial Corp. of IN 14.00 1,068 15.0
ASBP ASB Financial Corp. of OH 12.00 1,721 20.7
ABBK Abington Savings Bank of MA(8)* 25.00 1,894 47.4
AABC Access Anytime Bancorp of NM 5.75 1,143 6.6
AFBC Advance Fin. Bancorp of WV 14.25 1,084 15.4
AADV Advantage Bancorp of WI 39.00 3,232 126.0
AFCB Affiliated Comm BC, Inc of MA 24.37 6,456 157.3
ALBC Albion Banc Corp. of Albion NY 22.00 250 5.5
</TABLE>
<TABLE>
<CAPTION>
Price Change Data
-------------------------------------------------------------------
52 Week (1) % Change From
------------------ ------------------------------
Last Last Dec 31, Dec 31,
Financial Institution High Low Week Week 1994(2) 1995(2)
- --------------------- ------ ------ ------ ------ ------- ------
($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
AHM Ahmanson and Co. H.F. of CA 47.12 24.00 45.62 3.29 151.31 44.98
CSA Coast Savings Financial of CA 48.75 29.25 45.00 2.22 297.92 25.61
CFB Commercial Federal Corp. of NE 39.00 24.00 37.25 0.67 916.26 17.19
DME Dime Bancorp, Inc. of NY* 19.00 11.75 18.00 5.56 88.87 28.81
DSL Downey Financial Corp. of CA 23.25 12.86 22.00 5.68 114.09 24.40
FRC First Republic Bancorp of CA* 24.62 12.62 20.75 3.61 377.78 28.36
FED FirstFed Fin. Corp. of CA 30.62 16.75 30.37 0.82 89.60 39.18
GLN Glendale Fed. Bk, FSB of CA 28.00 16.50 26.12 -2.87 56.12 9.12
GDW Golden West Fin. Corp. of CA 74.25 51.87 71.62 2.28 179.69 16.05
GWF Great Western Fin. Corp. of CA(8) 56.00 21.12 52.25 7.18 222.39 93.10
GPT GreenPoint Fin. Corp. of NY* 66.37 27.00 64.50 2.90 N.A. 39.73
WES Westcorp Inc. of Orange CA 23.87 13.25 18.00 4.17 155.80 -14.31
AMEX Traded Companies
ANA Acadiana Bancshares of LA* 19.87 11.69 19.62 -1.27 N.A. 30.26
BKC American Bank of Waterbury CT* 36.00 24.50 35.50 0.00 89.33 26.79
BFD BostonFed Bancorp of MA 17.75 11.62 17.37 1.84 N.A. 19.93
CFX CFX Corp of NH* 18.50 11.90 18.00 0.67 52.27 16.90
CZF Citisave Fin. Corp. of LA(8) 20.25 13.00 20.00 1.25 N.A. 44.64
CBK Citizens First Fin.Corp. of IL 16.75 9.50 16.00 0.00 N.A. 11.34
ESX Essex Bancorp of VA(8) 2.81 1.00 1.12 0.00 -93.31 -48.86
FCB Falmouth Co-Op Bank of MA* 16.25 10.25 16.12 0.81 N.A. 23.86
FAB FirstFed America Bancorp of MA 17.00 13.62 15.37 10.61 N.A. N.A.
GAF GA Financial Corp. of PA 18.94 10.25 17.50 8.23 N.A. 25.26
KNK Kankakee Bancorp of IL 29.00 18.50 28.50 1.75 190.00 17.17
KYF Kentucky First Bancorp of KY 15.25 10.62 11.00 0.00 N.A. 1.20
NYB New York Bancorp, Inc. of NY 34.75 16.92 33.62 3.36 390.13 34.53
PDB Piedmont Bancorp of NC 19.12 9.25 10.31 0.58 N.A. -1.24
PLE Pinnacle Bank of AL 22.62 16.12 21.88 -2.33 216.59 23.03
SSB Scotland Bancorp of NC 16.75 11.87 16.25 0.00 N.A. 15.08
SZB SouthFirst Bancshares of AL 15.25 12.00 15.00 0.80 N.A. 14.11
SRN Southern Banc Company of AL 15.37 12.25 14.75 0.81 N.A. 13.34
SSM Stone Street Bancorp of NC 27.25 16.25 26.25 3.81 N.A. 32.93
TSH Teche Holding Company of LA 19.25 12.00 18.37 1.74 N.A. 30.06
FTF Texarkana Fst. Fin. Corp of AR 18.12 13.62 17.62 2.16 N.A. 15.16
THR Three Rivers Fin. Corp. of MI 15.87 12.50 15.12 4.17 N.A. 12.50
TBK Tolland Bank of CT* 19.50 9.75 19.37 -1.29 163.72 59.33
WSB Washington SB, FSB of MD 5.69 4.38 5.12 2.54 320.00 7.80
NASDAQ Listed OTC Companies
FBCV 1st Bancorp of Vincennes IN 33.25 24.76 30.75 2.44 N.A. 10.53
AFED AFSALA Bancorp, Inc. of NY 14.75 11.31 14.62 0.89 N.A. 22.92
ALBK ALBANK Fin. Corp. of Albany NY 39.81 25.12 39.00 2.08 71.23 26.90
AMFC AMB Financial Corp. of IN 15.00 10.25 14.37 -2.57 N.A. 5.66
ASBP ASB Financial Corp. of OH 18.25 11.50 11.87 1.10 N.A. -7.69
ABBK Abington Savings Bank of MA(8)* 25.50 15.25 25.25 -0.99 277.64 28.21
AABC Access Anytime Bancorp of NM 6.25 5.25 5.75 0.00 -14.81 4.55
AFBC Advance Fin. Bancorp of WV 14.50 12.75 13.62 4.63 N.A. N.A.
AADV Advantage Bancorp of WI 41.25 31.25 39.00 0.00 323.91 20.93
AFCB Affiliated Comm BC, Inc of MA 25.00 13.40 25.00 -2.52 N.A. 42.51
ALBC Albion Banc Corp. of Albion NY 23.00 16.50 23.00 -4.35 69.23 31.34
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- ------ ------ ------ -------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NYSE Traded Companies
AHM Ahmanson and Co. H.F. of CA 1.41 2.80 19.05 16.08 484.09
CSA Coast Savings Financial of CA 0.73 2.31 23.45 23.12 473.14
CFB Commercial Federal Corp. of NE 1.99 2.84 18.99 16.90 320.67
DME Dime Bancorp, Inc. of NY* 1.05 1.34 10.01 9.92 175.42
DSL Downey Financial Corp. of CA 0.84 1.42 14.98 14.76 205.15
FRC First Republic Bancorp of CA* 1.38 1.23 16.20 16.19 218.52
FED FirstFed Fin. Corp. of CA 0.95 1.89 18.48 18.24 391.07
GLN Glendale Fed. Bk, FSB of CA 0.65 1.63 17.31 16.10 306.00
GDW Golden West Fin. Corp. of CA 6.49 7.96 42.19 42.19 673.39
GWF Great Western Fin. Corp. of CA(8) 0.67 2.09 17.55 15.54 310.97
GPT GreenPoint Fin. Corp. of NY* 3.09 2.82 30.56 17.51 282.83
WES Westcorp Inc. of Orange CA 1.30 0.51 12.29 12.26 130.92
AMEX Traded Companies
ANA Acadiana Bancshares of LA* 0.29 0.30 17.24 17.24 96.80
BKC American Bank of Waterbury CT* 3.02 2.62 20.39 19.49 255.68
BFD BostonFed Bancorp of MA 0.64 0.88 14.05 13.56 157.81
CFX CFX Corp of NH* 0.94 1.17 10.25 9.56 133.67
CZF Citisave Fin. Corp. of LA(8) 0.40 0.61 12.95 12.95 77.90
CBK Citizens First Fin.Corp. of IL 0.25 0.53 14.21 14.21 97.04
ESX Essex Bancorp of VA(8) -7.54 -3.77 0.12 -0.08 170.55
FCB Falmouth Co-Op Bank of MA* 0.52 0.50 15.17 15.17 62.04
FAB FirstFed America Bancorp of MA -0.28 0.44 14.03 14.03 112.52
GAF GA Financial Corp. of PA 0.77 0.97 13.76 13.62 79.73
KNK Kankakee Bancorp of IL 1.51 1.94 25.74 24.10 241.11
KYF Kentucky First Bancorp of KY 0.53 0.70 10.86 10.86 67.42
NYB New York Bancorp, Inc. of NY 2.39 2.82 9.81 9.81 193.82
PDB Piedmont Bancorp of NC -0.14 0.36 7.31 7.31 43.08
PLE Pinnacle Bank of AL 1.26 1.89 17.34 16.78 224.27
SSB Scotland Bancorp of NC 0.55 0.67 13.74 13.74 37.46
SZB SouthFirst Bancshares of AL 0.05 0.30 15.82 15.82 113.17
SRN Southern Banc Company of AL 0.19 0.50 14.40 14.24 85.57
SSM Stone Street Bancorp of NC 0.99 1.15 20.72 20.72 57.80
TSH Teche Holding Company of LA 0.80 1.10 15.23 15.23 114.47
FTF Texarkana Fst. Fin. Corp of AR 1.25 1.55 14.70 14.70 91.70
THR Three Rivers Fin. Corp. of MI 0.54 0.81 15.35 15.29 106.03
TBK Tolland Bank of CT* 1.35 1.45 13.63 13.21 202.48
WSB Washington SB, FSB of MD 0.31 0.45 5.06 5.06 60.81
NASDAQ Listed OTC Companies
FBCV 1st Bancorp of Vincennes IN 0.91 0.13 31.17 30.48 391.25
AFED AFSALA Bancorp, Inc. of NY 0.23 0.55 14.49 14.49 104.64
ALBK ALBANK Fin. Corp. of Albany NY 2.17 2.71 25.10 21.77 272.75
AMFC AMB Financial Corp. of IN 0.55 0.69 14.29 14.29 87.68
ASBP ASB Financial Corp. of OH 0.39 0.57 10.00 10.00 63.58
ABBK Abington Savings Bank of MA(8)* 1.98 1.72 17.86 16.00 259.80
AABC Access Anytime Bancorp of NM -0.57 -0.22 6.34 6.34 93.17
AFBC Advance Fin. Bancorp of WV 0.35 0.71 14.76 14.76 95.55
AADV Advantage Bancorp of WI 1.08 2.68 27.92 25.87 316.04
AFCB Affiliated Comm BC, Inc of MA 1.45 1.66 15.96 15.86 163.41
ALBC Albion Banc Corp. of Albion NY 0.22 0.93 23.62 23.62 265.26
</TABLE>
<PAGE> 235
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization
------------------------------------
Shares Market
Price/ Outst- Capital-
Financial Institution Share(1) anding ization(9)
- --------------------- ------- ------- ----------
($) (000) ($Mil)
<S> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
ABCL Allied Bancorp of IL 29.87 5,334 159.3
ATSB AmTrust Capital Corp. of IN 12.62 526 6.6
AHCI Ambanc Holding Co., Inc. of NY* 16.00 4,392 70.3
ASBI Ameriana Bancorp of IN 15.63 3,260 51.0
AFFFZ America First Fin. Fund of CA(8) 39.56 6,011 237.8
AMFB American Federal Bank of SC(8) 31.75 11,035 350.4
ANBK American Nat'l Bancorp of MD 16.12 3,613 58.2
ABCW Anchor Bancorp Wisconsin of WI 50.00 4,581 229.1
ANDB Andover Bancorp, Inc. of MA* 29.37 5,146 151.1
ASFC Astoria Financial Corp. of NY 45.62 21,243 969.1
AVND Avondale Fin. Corp. of IL 14.00 3,525 49.4
BKCT Bancorp Connecticut of CT* 25.50 2,560 65.3
BPLS Bank Plus Corp. of CA 10.00 18,245 182.5
BWFC Bank West Fin. Corp. of MI 14.00 1,783 25.0
BANC BankAtlantic Bancorp of FL 14.12 18,553 262.0
BKUNA BankUnited SA of FL 9.62 8,847 85.1
BKCO Bankers Corp. of NJ(8)* 25.87 12,378 320.2
BVCC Bay View Capital Corp. of CA 26.62 12,970 345.3
BFSB Bedford Bancshares of VA 20.75 1,142 23.7
BFFC Big Foot Fin. Corp. of IL 16.00 2,513 40.2
BSBC Branford SB of CT* 4.69 6,559 30.8
BYFC Broadway Fin. Corp. of CA 10.75 893 9.6
CBCO CB Bancorp of Michigan City IN(8) 34.19 1,162 39.7
CBES CBES Bancorp of MO 16.87 1,025 17.3
CCFH CCF Holding Company of GA 16.00 865 13.8
CENF CENFED Financial Corp. of CA 32.75 5,760 188.6
CFSB CFSB Bancorp of Lansing MI 23.25 5,167 120.1
CKFB CKF Bancorp of Danville KY 19.25 927 17.8
CNSB CNS Bancorp of MO 16.50 1,653 27.3
CSBF CSB Financial Group Inc of IL* 12.50 942 11.8
CFHC California Fin. Hld. Co. of CA(8) 29.62 4,766 141.2
CBCI Calumet Bancorp of Chicago IL 39.50 2,238 88.4
CAFI Camco Fin. Corp. of OH 18.00 3,062 55.1
CMRN Cameron Fin. Corp. of MO 16.75 2,682 44.9
CAPS Capital Savings Bancorp of MO 16.62 1,892 31.4
CFNC Carolina Fincorp of NC* 14.37 1,851 26.6
CNY Carver Bancorp, Inc. of NY 12.25 2,314 28.3
CASB Cascade SB of Everett WA 18.50 2,054 38.0
CATB Catskill Fin. Corp. of NY* 15.50 5,027 77.9
CNIT Cenit Bancorp of Norfolk VA 44.50 1,640 73.0
CEBK Central Co-Op. Bank of MA* 18.12 1,965 35.6
CENB Century Bancshares of NC* 69.25 407 28.2
CBSB Charter Financial Inc. of IL 17.06 4,220 72.0
COFI Charter One Financial of OH 51.00 46,339 2,363.3
CNBA Chester Bancorp of IL 14.81 2,182 32.3
CVAL Chester Valley Bancorp of PA 21.00 2,054 43.1
CTZN CitFed Bancorp of Dayton OH 37.56 8,613 323.5
CLAS Classic Bancshares of KY 14.25 1,322 18.8
CMSB Cmnwealth Bancorp of PA 16.62 17,111 284.4
COVB CoVest Bancshares of IL 18.25 3,018 55.1
CBSA Coastal Bancorp of Houston TX 28.75 4,969 142.9
CFCP Coastal Fin. Corp. of SC 23.00 4,637 106.7
COFD Collective Bancorp Inc. of NJ(8) 46.12 20,447 943.0
CMSV Commty. Svgs, MHC of FL (48.5) 21.75 4,921 51.5
CBNH Community Bankshares Inc of NH(8)* 37.75 2,465 93.1
</TABLE>
<TABLE>
<CAPTION>
Price Change Data
---------------------------------------------------------------
52 Week (1) % Change From
----------------- -----------------------------
Last Last Dec 31, Dec 31,
Financial Institution High Low Week Week 1994(2) 1995(2)
- --------------------- ------ ------ ------ ----- ------- -------
($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
ABCL Allied Bancorp of IL 31.25 22.00 29.62 0.84 198.70 19.48
ATSB AmTrust Capital Corp. of IN 12.75 8.50 12.75 -1.02 N.A. 26.20
AHCI Ambanc Holding Co., Inc. of NY* 16.00 9.50 15.12 5.82 N.A. 42.22
ASBI Ameriana Bancorp of IN 16.37 13.25 16.00 -2.31 69.34 -2.31
AFFFZ America First Fin. Fund of CA(8) 39.56 25.87 38.37 3.10 110.99 30.78
AMFB American Federal Bank of SC(8) 32.25 15.50 31.25 1.60 568.42 68.26
ANBK American Nat'l Bancorp of MD 16.12 9.75 15.00 7.47 N.A. 33.00
ABCW Anchor Bancorp Wisconsin of WI 50.00 33.00 47.00 6.38 70.24 39.86
ANDB Andover Bancorp, Inc. of MA* 31.12 19.17 31.00 -5.26 173.21 14.64
ASFC Astoria Financial Corp. of NY 46.25 24.62 43.62 4.59 73.79 23.73
AVND Avondale Fin. Corp. of IL 18.50 12.50 13.44 4.17 N.A. -18.22
BKCT Bancorp Connecticut of CT* 26.25 20.00 25.62 -0.47 191.43 13.33
BPLS Bank Plus Corp. of CA 13.75 8.75 10.25 -2.44 N.A. -13.04
BWFC Bank West Fin. Corp. of MI 14.25 10.25 13.56 3.24 N.A. 31.83
BANC BankAtlantic Bancorp of FL 14.25 8.24 14.00 0.86 171.54 31.96
BKUNA BankUnited SA of FL 11.25 7.12 9.50 1.26 77.16 -3.80
BKCO Bankers Corp. of NJ(8)* 26.00 17.25 25.75 0.47 313.92 28.58
BVCC Bay View Capital Corp. of CA 28.62 16.19 25.75 3.38 34.78 25.63
BFSB Bedford Bancshares of VA 20.75 16.50 20.25 2.47 97.62 17.76
BFFC Big Foot Fin. Corp. of IL 16.12 12.31 16.06 -0.37 N.A. 23.08
BSBC Branford SB of CT* 4.75 2.87 4.50 4.22 121.23 21.19
BYFC Broadway Fin. Corp. of CA 11.25 9.00 10.75 0.00 N.A. 16.22
CBCO CB Bancorp of Michigan City IN(8) 34.75 17.00 33.75 1.30 210.82 43.96
CBES CBES Bancorp of MO 17.50 12.62 16.87 0.00 N.A. 18.39
CCFH CCF Holding Company of GA 16.75 11.50 16.75 -4.48 N.A. 8.47
CENF CENFED Financial Corp. of CA 32.75 19.09 31.12 5.24 108.86 23.17
CFSB CFSB Bancorp of Lansing MI 24.75 16.11 24.75 -6.06 158.33 31.13
CKFB CKF Bancorp of Danville KY 20.75 17.50 19.25 0.00 N.A. -4.94
CNSB CNS Bancorp of MO 17.50 11.00 15.75 4.76 N.A. 9.13
CSBF CSB Financial Group Inc of IL* 12.50 9.00 12.50 0.00 N.A. 23.52
CFHC California Fin. Hld. Co. of CA(8) 30.00 21.50 29.62 0.00 182.10 2.60
CBCI Calumet Bancorp of Chicago IL 39.50 27.75 38.00 3.95 95.06 18.80
CAFI Camco Fin. Corp. of OH 19.29 14.75 18.50 -2.70 N.A. 13.42
CMRN Cameron Fin. Corp. of MO 17.00 13.50 16.50 1.52 N.A. 4.69
CAPS Capital Savings Bancorp of MO 18.25 9.00 17.50 -5.03 25.43 27.85
CFNC Carolina Fincorp of NC* 15.25 13.00 14.37 0.00 N.A. 7.48
CNY Carver Bancorp, Inc. of NY 12.25 7.37 10.62 15.35 96.00 48.48
CASB Cascade SB of Everett WA 21.00 13.00 19.00 -2.63 44.53 14.76
CATB Catskill Fin. Corp. of NY* 16.50 9.87 15.37 0.85 N.A. 10.71
CNIT Cenit Bancorp of Norfolk VA 46.50 31.75 45.50 -2.20 180.23 7.23
CEBK Central Co-Op. Bank of MA* 18.50 14.75 17.12 5.84 245.14 3.54
CENB Century Bancshares of NC* 71.00 62.00 68.50 1.09 N.A. 6.54
CBSB Charter Financial Inc. of IL 18.00 10.87 17.25 -1.10 N.A. 36.48
COFI Charter One Financial of OH 51.00 32.02 49.25 3.55 191.43 21.43
CNBA Chester Bancorp of IL 15.37 12.62 15.00 -1.27 N.A. 12.88
CVAL Chester Valley Bancorp of PA 21.00 13.90 20.25 3.70 85.35 41.89
CTZN CitFed Bancorp of Dayton OH 38.00 24.17 37.25 0.83 317.33 13.82
CLAS Classic Bancshares of KY 14.75 10.37 14.50 -1.72 N.A. 22.63
CMSB Cmnwealth Bancorp of PA 16.62 9.75 15.75 5.52 N.A. 10.80
COVB CoVest Bancshares of IL 19.00 16.25 19.00 -3.95 174.02 5.80
CBSA Coastal Bancorp of Houston TX 28.75 16.50 27.75 3.60 N.A. 25.71
CFCP Coastal Fin. Corp. of SC 23.00 12.90 22.00 4.55 130.00 46.03
COFD Collective Bancorp Inc. of NJ(8) 46.50 23.00 45.62 1.10 505.25 31.32
CMSV Commty. Svgs, MHC of FL (48.5) 22.37 15.25 21.88 -0.59 N.A. 6.10
CBNH Community Bankshares Inc of NH(8)* 38.00 17.50 37.75 0.00 906.67 84.15
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------ -------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
ABCL Allied Bancorp of IL 0.63 1.06 22.93 22.63 246.18
ATSB AmTrust Capital Corp. of IN 0.40 0.26 13.73 13.58 135.04
AHCI Ambanc Holding Co., Inc. of NY* -0.65 -0.65 13.85 13.85 108.86
ASBI Ameriana Bancorp of IN 0.73 1.05 13.38 13.37 123.36
AFFFZ America First Fin. Fund of CA(8) 5.32 6.51 30.07 29.64 363.18
AMFB American Federal Bank of SC(8) 1.35 1.67 10.65 9.93 118.43
ANBK American Nat'l Bancorp of MD 0.19 0.68 12.33 12.33 134.69
ABCW Anchor Bancorp Wisconsin of WI 3.04 3.97 25.73 25.23 411.48
ANDB Andover Bancorp, Inc. of MA* 2.52 2.60 18.96 18.96 235.06
ASFC Astoria Financial Corp. of NY 1.77 2.62 27.51 22.89 361.97
AVND Avondale Fin. Corp. of IL -1.22 -2.30 14.88 14.88 180.27
BKCT Bancorp Connecticut of CT* 2.01 1.92 16.81 16.81 161.61
BPLS Bank Plus Corp. of CA -0.63 -0.07 8.88 8.86 180.58
BWFC Bank West Fin. Corp. of MI 0.59 0.42 12.62 12.62 82.46
BANC BankAtlantic Bancorp of FL 1.11 0.86 8.23 6.69 149.47
BKUNA BankUnited SA of FL 0.21 0.41 7.33 5.89 164.25
BKCO Bankers Corp. of NJ(8)* 2.04 2.18 15.98 15.72 205.34
BVCC Bay View Capital Corp. of CA 0.94 1.59 14.81 14.08 234.74
BFSB Bedford Bancshares of VA 1.16 1.48 16.49 16.49 115.15
BFFC Big Foot Fin. Corp. of IL 0.04 0.35 14.34 14.34 84.46
BSBC Branford SB of CT* 0.31 0.30 2.58 2.58 27.05
BYFC Broadway Fin. Corp. of CA -0.31 0.16 14.26 14.26 131.13
CBCO CB Bancorp of Michigan City IN(8) 1.76 2.06 17.22 17.22 194.97
CBES CBES Bancorp of MO 0.69 0.86 17.08 17.08 92.90
CCFH CCF Holding Company of GA 0.25 0.41 14.39 14.39 100.51
CENF CENFED Financial Corp. of CA 1.84 2.70 20.06 20.02 392.95
CFSB CFSB Bancorp of Lansing MI 1.17 1.57 12.32 12.32 161.46
CKFB CKF Bancorp of Danville KY 0.84 0.83 15.38 15.38 64.94
CNSB CNS Bancorp of MO 0.31 0.47 14.73 14.73 59.35
CSBF CSB Financial Group Inc of IL* 0.25 0.38 13.57 12.80 53.10
CFHC California Fin. Hld. Co. of CA(8) 1.48 2.27 19.21 19.13 275.92
CBCI Calumet Bancorp of Chicago IL 2.49 3.22 35.23 35.23 220.98
CAFI Camco Fin. Corp. of OH 0.99 1.16 14.95 13.76 154.29
CMRN Cameron Fin. Corp. of MO 0.77 0.96 16.92 16.92 73.71
CAPS Capital Savings Bancorp of MO 0.77 1.10 10.89 10.89 125.75
CFNC Carolina Fincorp of NC* 0.65 0.61 13.92 13.92 58.71
CNY Carver Bancorp, Inc. of NY -0.76 -0.05 14.76 14.13 183.02
CASB Cascade SB of Everett WA 0.76 0.96 10.59 10.59 171.53
CATB Catskill Fin. Corp. of NY* 0.84 0.85 14.70 14.70 54.49
CNIT Cenit Bancorp of Norfolk VA 3.17 2.95 30.25 27.58 431.16
CEBK Central Co-Op. Bank of MA* 0.96 1.08 16.94 15.03 165.04
CENB Century Bancshares of NC* 4.31 4.36 73.51 73.51 245.57
CBSB Charter Financial Inc. of IL 0.84 1.06 13.22 11.60 93.56
COFI Charter One Financial of OH 2.88 3.66 20.53 19.10 302.99
CNBA Chester Bancorp of IL 0.71 0.71 14.50 14.50 65.30
CVAL Chester Valley Bancorp of PA 0.87 1.28 12.72 12.72 148.58
CTZN CitFed Bancorp of Dayton OH 1.76 2.55 21.59 19.23 341.03
CLAS Classic Bancshares of KY 0.30 0.50 14.49 12.17 97.10
CMSB Cmnwealth Bancorp of PA 0.66 0.85 12.50 9.60 130.68
COVB CoVest Bancshares of IL 0.31 0.85 16.36 15.59 183.09
CBSA Coastal Bancorp of Houston TX 1.49 2.49 19.64 16.59 574.11
CFCP Coastal Fin. Corp. of SC 0.89 0.98 6.37 6.37 104.51
COFD Collective Bancorp Inc. of NJ(8) 2.45 2.98 18.89 17.08 269.85
CMSV Commty. Svgs, MHC of FL (48.5) 0.83 1.26 15.57 15.57 138.65
CBNH Community Bankshares Inc of NH(8)* 2.08 1.68 16.80 16.80 235.56
</TABLE>
<PAGE> 236
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization
---------------------------------
Shares Market
Price/ Outst- Capital-
Financial Institution Share(1) anding ization(9)
- --------------------- -------- ------- ----------
($) (000) ($Mil)
<S> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
CFTP Community Fed. Bancorp of MS 17.62 4,282 75.4
CFFC Community Fin. Corp. of VA 22.50 1,272 28.6
CIBI Community Inv. Bancorp of OH 13.50 949 12.8
COOP Cooperative Bk. for Svgs. of NC 21.25 1,492 31.7
CRZY Crazy Woman Creek Bncorp of WY 13.50 1,005 13.6
DNFC D&N Financial Corp. of MI 19.06 8,316 158.5
DFIN Damen Fin. Corp. of Chicago IL 14.37 3,247 46.7
DCBI Delphos Citizens Bancorp of OH 14.62 2,039 29.8
DIME Dime Community Bancorp of NY 19.12 13,126 251.0
DIBK Dime Financial Corp. of CT* 23.00 5,136 118.1
EGLB Eagle BancGroup of IL 15.63 1,268 19.8
EBSI Eagle Bancshares of Tucker GA 17.87 4,552 81.3
EGFC Eagle Financial Corp. of CT 30.75 4,554 140.0
ETFS East Texas Fin. Serv. of TX 18.37 1,079 19.8
EBCP Eastern Bancorp of NH(8) 26.62 3,680 98.0
EMLD Emerald Financial Corp of OH 14.06 5,062 71.2
EIRE Emerald Island Bancorp, MA* 18.50 2,235 41.3
EFBC Empire Federal Bancorp of MT 13.50 2,592 35.0
EFBI Enterprise Fed. Bancorp of OH 18.25 2,011 36.7
EQSB Equitable FSB of Wheaton MD 36.25 602 21.8
FFFG F.F.O. Financial Group of FL(8) 4.87 8,430 41.1
FCBF FCB Fin. Corp. of Neenah WI 24.75 2,460 60.9
FFBS FFBS Bancorp of Columbus MS 23.00 1,557 35.8
FFDF FFD Financial Corp. of OH 13.50 1,455 19.6
FFLC FFLC Bancorp of Leesburg FL 28.50 2,342 66.7
FFFC FFVA Financial Corp. of VA 26.75 4,521 120.9
FFWC FFW Corporation of Wabash IN 26.00 697 18.1
FFYF FFY Financial Corp. of OH 25.87 4,328 112.0
FMCO FMS Financial Corp. of NJ 23.50 2,386 56.1
FFHH FSF Financial Corp. of MN 17.44 3,095 54.0
FOBC Fed One Bancorp of Wheeling WV 21.00 2,443 51.3
FBCI Fidelity Bancorp of Chicago IL 19.00 2,792 53.0
FSBI Fidelity Bancorp, Inc. of PA 20.00 1,541 30.8
FFFL Fidelity FSB, MHC of FL (47.4) 19.37 6,766 61.7
FFED Fidelity Fed. Bancorp of IN 9.25 2,490 23.0
FFOH Fidelity Financial of OH 15.00 5,594 83.9
FIBC Financial Bancorp, Inc. of NY 17.25 1,748 30.2
FBSI First Bancshares of MO 20.00 1,160 23.2
FBBC First Bell Bancorp of PA 16.00 6,803 108.8
FBER First Bergen Bancorp of NJ 15.12 3,015 45.6
SKBO First Carnegie,MHC of PA(45.0) 13.87 2,300 14.4
FCIT First Cit. Fin. Corp of MD(8) 30.37 2,944 89.4
FSTC First Citizens Corp of GA 24.75 1,588 39.3
FFBA First Colorado Bancorp of Co 18.87 16,555 312.4
FDEF First Defiance Fin.Corp. of OH 14.50 9,423 136.6
FESX First Essex Bancorp of MA* 16.50 7,484 123.5
FFES First FS&LA of E. Hartford CT 29.75 2,649 78.8
FSSB First FS&LA of San Bern. CA 9.50 328 3.1
FFSX First FS&LA. MHC of IA (46.0) 23.75 2,827 20.6
FFSW First Fed Fin. Serv. of OH 38.25 4,588 175.5
BDJI First Fed. Bancorp. of MN 18.75 701 13.1
FFBH First Fed. Bancshares of AR 19.31 4,896 94.5
FTFC First Fed. Capital Corp. of WI 22.00 9,134 200.9
FFKY First Fed. Fin. Corp. of KY 18.50 4,165 77.1
FFBZ First Federal Bancorp of OH 18.25 1,572 28.7
</TABLE>
<TABLE>
<CAPTION>
Price Change Data
------------------------------------------------------------------------
52 Week (1) % Change From
------------------ ------------------------------------
Last Last Dec 31, Dec 31,
Financial Institution High Low Week Week 1994(2) 1995(2)
- --------------------- ------ ------ ------ ------ ------- -------
($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
CFTP Community Fed. Bancorp of MS 20.00 12.25 17.50 0.69 N.A. 3.65
CFFC Community Fin. Corp. of VA 23.50 19.50 22.50 0.00 221.43 8.43
CIBI Community Inv. Bancorp of OH 13.50 10.00 12.54 7.66 N.A. 19.15
COOP Cooperative Bk. for Svgs. of NC 22.00 16.50 21.00 1.19 112.50 4.94
CRZY Crazy Woman Creek Bncorp of WY 14.25 10.06 13.12 2.90 N.A. 12.50
DNFC D&N Financial Corp. of MI 19.12 12.37 18.25 4.44 117.83 13.79
DFIN Damen Fin. Corp. of Chicago IL 15.00 11.00 14.12 1.77 N.A. 11.66
DCBI Delphos Citizens Bancorp of OH 14.75 11.75 14.75 -0.88 N.A. 21.83
DIME Dime Community Bancorp of NY 19.62 11.69 17.87 6.99 N.A. 29.63
DIBK Dime Financial Corp. of CT* 24.12 14.50 24.12 -4.64 119.05 33.33
EGLB Eagle BancGroup of IL 16.25 10.50 15.00 4.20 N.A. 5.11
EBSI Eagle Bancshares of Tucker GA 17.92 13.62 16.75 6.69 146.48 15.29
EGFC Eagle Financial Corp. of CT 30.75 23.75 30.62 0.42 251.43 0.82
ETFS East Texas Fin. Serv. of TX 18.75 14.25 17.50 4.97 N.A. 12.22
EBCP Eastern Bancorp of NH(8) 27.12 16.00 26.12 1.91 112.11 13.28
EMLD Emerald Financial Corp of OH 15.00 10.25 14.37 -2.16 N.A. 24.98
EIRE Emerald Island Bancorp, MA* 20.50 11.20 18.00 2.78 142.78 15.63
EFBC Empire Federal Bancorp of MT 14.44 12.50 13.37 0.97 N.A. N.A.
EFBI Enterprise Fed. Bancorp of OH 19.12 12.75 18.75 -2.67 N.A. 25.86
EQSB Equitable FSB of Wheaton MD 38.00 22.50 36.25 0.00 N.A. 28.32
FFFG F.F.O. Financial Group of FL(8) 4.87 2.50 4.38 11.19 -41.40 44.51
FCBF FCB Fin. Corp. of Neenah WI 25.12 17.00 24.50 1.02 N.A. 33.78
FFBS FFBS Bancorp of Columbus MS 24.25 19.75 23.00 0.00 N.A. 0.00
FFDF FFD Financial Corp. of OH 14.00 10.12 13.50 0.00 N.A. 1.89
FFLC FFLC Bancorp of Leesburg FL 28.50 18.00 27.00 5.56 N.A. 32.56
FFFC FFVA Financial Corp. of VA 27.25 15.75 26.75 0.00 N.A. 30.49
FFWC FFW Corporation of Wabash IN 26.75 19.25 26.75 -2.80 N.A. 18.83
FFYF FFY Financial Corp. of OH 26.37 23.25 26.37 -1.90 N.A. 2.21
FMCO FMS Financial Corp. of NJ 25.50 15.50 24.00 -2.08 161.11 28.77
FFHH FSF Financial Corp. of MN 18.25 11.37 16.75 4.12 N.A. 15.34
FOBC Fed One Bancorp of Wheeling WV 21.00 13.25 20.87 0.62 110.00 33.33
FBCI Fidelity Bancorp of Chicago IL 20.87 15.50 18.50 2.70 N.A. 11.76
FSBI Fidelity Bancorp, Inc. of PA 21.70 14.54 20.25 -1.23 158.73 10.01
FFFL Fidelity FSB, MHC of FL (47.4) 20.00 12.00 19.37 0.00 N.A. 9.13
FFED Fidelity Fed. Bancorp of IN 12.00 7.50 9.25 0.00 31.21 -5.13
FFOH Fidelity Financial of OH 15.00 9.62 14.50 3.45 N.A. 30.43
FIBC Financial Bancorp, Inc. of NY 18.50 12.37 17.00 1.47 N.A. 15.00
FBSI First Bancshares of MO 20.75 15.00 20.12 -0.60 56.86 20.34
FBBC First Bell Bancorp of PA 17.37 13.12 15.12 5.82 N.A. 20.75
FBER First Bergen Bancorp of NJ 15.12 9.00 13.62 11.01 N.A. 31.48
SKBO First Carnegie,MHC of PA(45.0) 14.75 11.62 14.25 -2.67 N.A. N.A.
FCIT First Cit. Fin. Corp of MD(8) 30.37 16.00 30.00 1.23 249.48 66.41
FSTC First Citizens Corp of GA 26.75 18.87 25.75 -3.88 98.00 -1.98
FFBA First Colorado Bancorp of Co 18.87 12.50 18.75 0.64 471.82 11.00
FDEF First Defiance Fin.Corp. of OH 14.50 9.87 14.37 0.90 N.A. 17.22
FESX First Essex Bancorp of MA* 17.12 10.00 16.37 0.79 175.00 25.76
FFES First FS&LA of E. Hartford CT 30.37 16.50 30.25 -1.65 357.69 29.35
FSSB First FS&LA of San Bern. CA 10.75 8.25 9.12 4.17 -5.00 5.56
FFSX First FS&LA. MHC of IA (46.0) 35.00 21.00 23.00 3.26 256.07 21.79
FFSW First Fed Fin. Serv. of OH 39.00 22.20 36.50 4.79 181.25 22.99
BDJI First Fed. Bancorp. of MN 19.25 12.25 18.75 0.00 N.A. 1.35
FFBH First Fed. Bancshares of AR 20.37 12.75 19.37 -0.31 N.A. 21.68
FTFC First Fed. Capital Corp. of WI 22.00 13.00 20.37 8.00 193.33 40.40
FFKY First Fed. Fin. Corp. of KY 21.50 17.75 19.00 -2.63 17.46 -8.64
FFBZ First Federal Bancorp of OH 19.00 11.75 17.50 4.29 82.50 14.06
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
---------------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------ ------ --------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
CFTP Community Fed. Bancorp of MS 0.68 0.81 16.13 16.13 48.12
CFFC Community Fin. Corp. of VA 1.31 1.65 18.05 18.05 131.03
CIBI Community Inv. Bancorp of OH 0.66 0.98 11.82 11.82 102.68
COOP Cooperative Bk. for Svgs. of NC -1.96 0.29 17.49 17.49 233.58
CRZY Crazy Woman Creek Bncorp of WY 0.51 0.64 14.42 14.42 51.78
DNFC D&N Financial Corp. of MI 1.06 1.43 10.67 10.56 183.80
DFIN Damen Fin. Corp. of Chicago IL 0.51 0.64 14.12 14.12 70.03
DCBI Delphos Citizens Bancorp of OH 0.62 0.62 14.88 14.88 52.51
DIME Dime Community Bancorp of NY 0.87 0.97 14.53 12.47 94.26
DIBK Dime Financial Corp. of CT* 2.61 2.69 12.41 11.96 158.57
EGLB Eagle BancGroup of IL -0.26 0.15 16.27 16.27 134.49
EBSI Eagle Bancshares of Tucker GA 0.80 1.09 12.74 12.74 146.35
EGFC Eagle Financial Corp. of CT 1.85 2.47 22.91 17.24 332.02
ETFS East Texas Fin. Serv. of TX 0.34 0.68 19.69 19.69 103.51
EBCP Eastern Bancorp of NH(8) 0.87 1.36 17.86 16.95 235.28
EMLD Emerald Financial Corp of OH 0.75 0.96 8.73 8.58 116.28
EIRE Emerald Island Bancorp, MA* 1.41 1.49 12.84 12.84 184.40
EFBC Empire Federal Bancorp of MT 0.35 0.46 14.76 14.76 42.30
EFBI Enterprise Fed. Bancorp of OH 0.75 0.82 15.52 15.50 122.52
EQSB Equitable FSB of Wheaton MD 2.20 3.52 24.92 24.92 491.70
FFFG F.F.O. Financial Group of FL(8) 0.19 0.31 2.41 2.41 37.60
FCBF FCB Fin. Corp. of Neenah WI 0.97 1.17 19.11 19.11 109.16
FFBS FFBS Bancorp of Columbus MS 0.96 1.21 16.05 16.05 82.64
FFDF FFD Financial Corp. of OH 0.44 0.61 14.50 14.50 58.62
FFLC FFLC Bancorp of Leesburg FL 1.00 1.47 22.16 22.16 153.09
FFFC FFVA Financial Corp. of VA 1.27 1.57 15.78 15.43 121.60
FFWC FFW Corporation of Wabash IN 1.98 2.46 22.75 22.75 227.32
FFYF FFY Financial Corp. of OH 1.20 1.72 19.50 19.50 138.32
FMCO FMS Financial Corp. of NJ 1.41 2.15 14.59 14.29 232.02
FFHH FSF Financial Corp. of MN 0.72 0.93 13.97 13.97 118.68
FOBC Fed One Bancorp of Wheeling WV 0.96 1.37 16.45 15.68 141.72
FBCI Fidelity Bancorp of Chicago IL 0.88 1.26 17.74 17.69 174.07
FSBI Fidelity Bancorp, Inc. of PA 1.07 1.70 14.81 14.81 212.78
FFFL Fidelity FSB, MHC of FL (47.4) 0.49 0.78 12.08 11.98 136.99
FFED Fidelity Fed. Bancorp of IN 0.17 0.30 5.17 5.17 100.52
FFOH Fidelity Financial of OH 0.40 0.64 12.03 10.57 91.72
FIBC Financial Bancorp, Inc. of NY 0.77 1.42 14.98 14.91 154.00
FBSI First Bancshares of MO 1.18 1.45 19.80 19.77 137.97
FBBC First Bell Bancorp of PA 1.07 1.26 10.63 10.63 104.22
FBER First Bergen Bancorp of NJ 0.35 0.63 13.76 13.76 83.68
SKBO First Carnegie,MHC of PA(45.0) 0.24 0.35 10.21 10.21 65.23
FCIT First Cit. Fin. Corp of MD(8) 1.19 1.79 14.39 14.39 235.67
FSTC First Citizens Corp of GA 2.91 2.43 15.18 11.94 162.02
FFBA First Colorado Bancorp of Co 1.03 1.02 13.08 12.92 91.46
FDEF First Defiance Fin.Corp. of OH 0.44 0.60 12.41 12.41 57.95
FESX First Essex Bancorp of MA* 1.27 1.11 11.20 9.65 153.24
FFES First FS&LA of E. Hartford CT 1.56 2.49 23.00 23.00 367.95
FSSB First FS&LA of San Bern. CA -3.66 -3.67 13.70 13.20 316.08
FFSX First FS&LA. MHC of IA (46.0) 0.68 1.17 13.32 13.20 163.72
FFSW First Fed Fin. Serv. of OH 2.01 1.59 14.35 12.12 237.17
BDJI First Fed. Bancorp. of MN 0.48 1.00 17.17 17.17 153.66
FFBH First Fed. Bancshares of AR 0.81 1.16 16.79 16.79 106.16
FTFC First Fed. Capital Corp. of WI 1.18 1.37 10.65 9.98 167.53
FFKY First Fed. Fin. Corp. of KY 1.08 1.29 12.16 11.42 89.39
FFBZ First Federal Bancorp of OH 0.86 1.18 9.34 9.33 121.94
</TABLE>
<PAGE> 237
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
------------------------------ -----------------------------------------------
52 Week (1) % Change From
Shares Market ----------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- -------- ------ ---------- ---- --- ---- ---- ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFCH First Fin. Holdings Inc. of SC 29.50 6,326 186.6 30.00 17.50 29.00 1.72 140.82 31.11
FFBI First Financial Bancorp of IL 18.75 415 7.8 18.75 15.50 17.25 8.70 N.A. 18.15
FFHC First Financial Corp. of WI(8) 28.62 36,411 1,042.1 28.75 17.20 28.75 -0.45 81.71 16.82
FFHS First Franklin Corp. of OH 20.00 1,178 23.6 20.75 14.25 20.75 -3.61 52.44 21.21
FGHC First Georgia Hold. Corp of GA 7.25 3,052 22.1 8.25 4.00 7.50 -3.33 89.30 27.87
FSPG First Home Bancorp of NJ 19.37 2,708 52.5 19.37 13.31 19.37 0.00 222.83 39.65
FFSL First Independence Corp. of KS 11.19 1,005 11.2 12.25 8.87 11.19 0.00 N.A. 7.91
FISB First Indiana Corp. of IN 20.87 10,505 219.2 24.30 16.80 21.88 -4.62 54.59 -2.48
FKFS First Keystone Fin. Corp of PA 23.00 1,228 28.2 23.00 16.75 22.62 1.68 N.A. 19.48
FLKY First Lancaster Bncshrs of KY 15.50 959 14.9 16.25 13.12 15.00 3.33 N.A. 6.02
FLFC First Liberty Fin. Corp. of GA 21.75 7,725 168.0 22.50 13.67 22.00 -1.14 328.15 18.40
CASH First Midwest Fin. Corp. of IA 15.12 2,827 42.7 17.50 14.50 16.00 -5.50 N.A. -1.37
FMBD First Mutual Bancorp of IL 15.00 3,742 56.1 16.00 11.62 14.87 0.87 N.A. 0.00
FMSB First Mutual SB of Bellevue WA* 17.25 2,699 46.6 19.00 11.14 17.25 0.00 122.58 8.42
FNGB First Northern Cap. Corp of WI 21.25 4,419 93.9 21.25 15.25 20.00 6.25 45.95 30.77
FFPB First Palm Beach Bancorp of FL 30.25 5,009 151.5 30.50 19.94 29.62 2.13 N.A. 28.07
FSLA First SB SLA MHC of NJ (47.5) 24.00 7,247 81.7 25.25 14.09 23.75 1.05 140.00 29.73
FSNJ First SB of NJ, MHC (45.9)(8) 26.00 3,064 36.5 27.00 14.00 26.00 0.00 N.A. 13.04
SOPN First SB, SSB, Moore Co. of NC 24.00 3,697 88.7 24.00 16.75 23.12 3.81 N.A. 28.00
FWWB First Savings Bancorp of WA* 21.50 10,519 226.2 22.12 14.37 22.00 -2.27 N.A. 17.04
SHEN First Shenango Bancorp of PA 26.00 2,063 53.6 26.00 20.00 25.50 1.96 N.A. 15.56
FSFC First So.east Fin. Corp. of SC 10.12 4,388 44.4 18.62 9.12 10.62 -4.71 N.A. 7.89
FLAG Flag Financial Corp of GA 14.25 2,037 29.0 14.25 9.75 13.12 8.61 45.41 32.56
FFIC Flushing Fin. Corp. of NY* 19.87 8,088 160.7 19.94 16.37 19.37 2.58 N.A. 9.66
FBHC Fort Bend Holding Corp. of TX 28.75 822 23.6 28.75 16.87 28.00 2.68 N.A. 12.75
FTSB Fort Thomas Fin. Corp. of KY 10.50 1,495 15.7 17.75 9.25 10.12 3.75 N.A. -28.18
FKKY Frankfort First Bancorp of KY 12.12 3,385 41.0 12.25 9.75 12.12 0.00 N.A. 6.60
FTNB Fulton Bancorp of MO 20.00 1,719 34.4 20.12 12.50 20.00 0.00 N.A. 30.12
GFSB GFS Bancorp of Grinnell IA 13.25 988 13.1 14.25 10.12 14.25 -7.02 N.A. 24.76
GUPB GFSB Bancorp of Gallup NM 19.00 839 15.9 19.00 13.25 19.00 0.00 N.A. 19.72
GSLA GS Financial Corp. of LA 15.25 3,439 52.4 15.25 13.37 14.62 4.31 N.A. N.A.
GWBC Gateway Bancorp of KY(8) 17.50 1,076 18.8 17.75 13.00 16.87 3.73 N.A. 22.81
GBCI Glacier Bancorp of MT 17.75 6,799 120.7 17.75 13.50 16.25 9.23 267.49 8.70
GLBK Glendale Co-op. Bank of MA(8)* 27.00 247 6.7 27.00 16.50 27.00 0.00 N.A. 35.00
GFCO Glenway Financial Corp. of OH 25.75 1,144 29.5 26.50 18.09 23.00 11.96 N.A. 25.61
GTPS Great American Bancorp of IL 16.50 1,760 29.0 16.50 13.19 16.00 3.13 N.A. 11.41
GTFN Great Financial Corp. of KY 34.75 14,073 489.0 35.00 25.37 34.31 1.28 N.A. 19.33
GSBC Great Southern Bancorp of MO 17.00 8,288 140.9 18.00 13.12 16.87 0.77 482.19 -4.55
GDVS Greater DV SB,MHC of PA (19.9)* 13.00 3,272 8.4 14.00 9.25 12.50 4.00 N.A. 25.36
GSFC Green Street Fin. Corp. of NC 17.75 4,298 76.3 18.87 12.50 17.56 1.08 N.A. 14.52
GSLC Guaranty Svgs & Loan FA of VA 10.63 1,499 15.9 11.00 7.25 10.25 3.71 N.A. 21.49
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 20.50 3,125 19.9 20.50 9.75 17.00 20.59 N.A. 69.98
HCBB HCB Bancshares of AR 12.94 2,645 34.2 13.25 12.62 13.00 -0.46 N.A. N.A.
HEMT HF Bancorp of Hemet CA 14.06 6,282 88.3 14.50 9.25 13.62 3.23 N.A. 26.44
HFFC HF Financial Corp. of SD 19.75 2,998 59.2 20.50 14.75 19.69 0.30 295.00 14.10
HFNC HFNC Financial Corp. of NC 16.75 17,192 288.0 22.06 15.87 17.25 -2.90 N.A. -6.27
HMNF HMN Financial, Inc. of MN 23.00 4,210 96.8 23.75 15.12 21.50 6.98 N.A. 26.93
HALL Hallmark Capital Corp. of WI 21.62 1,443 31.2 21.62 14.50 19.75 9.47 N.A. 21.80
HARB Harbor FSB, MHC of FL (46.0) 40.75 4,962 92.5 40.75 23.75 37.25 9.40 N.A. 13.99
HRBF Harbor Federal Bancorp of MD 18.00 1,754 31.6 18.75 12.37 18.00 0.00 80.00 14.29
HFSA Hardin Bancorp of Hardin MO 14.62 859 12.6 15.50 11.00 14.62 0.00 N.A. 16.96
HARL Harleysville SA of PA 22.00 1,651 36.3 23.00 14.00 22.00 0.00 23.94 39.24
HARS Harris SB, MHC of PA (24.2) 21.25 11,221 57.7 22.62 14.75 20.75 2.41 N.A. 16.44
HFFB Harrodsburg 1st Fin Bcrp of KY 15.00 2,025 30.4 19.00 14.87 15.50 -3.23 N.A. -20.51
HHFC Harvest Home Fin. Corp. of OH 10.50 935 9.8 13.75 9.25 10.50 0.00 N.A. 7.69
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFCH First Fin. Holdings Inc. of SC 1.35 2.05 15.57 15.57 253.24
FFBI First Financial Bancorp of IL -0.05 1.05 17.52 17.52 224.47
FFHC First Financial Corp. of WI(8) 1.43 1.95 11.14 10.82 159.53
FFHS First Franklin Corp. of OH 0.27 1.15 16.93 16.81 192.05
FGHC First Georgia Hold. Corp of GA 0.47 0.28 4.09 3.73 48.20
FSPG First Home Bancorp of NJ 1.63 2.14 12.36 12.14 187.68
FFSL First Independence Corp. of KS 0.53 0.81 11.42 11.42 108.69
FISB First Indiana Corp. of IN 1.26 1.45 13.51 13.34 141.00
FKFS First Keystone Fin. Corp of PA 1.24 1.84 18.12 18.12 256.22
FLKY First Lancaster Bncshrs of KY 0.38 0.49 14.27 14.27 38.43
FLFC First Liberty Fin. Corp. of GA 1.76 1.42 11.87 10.62 161.56
CASH First Midwest Fin. Corp. of IA 0.96 1.24 15.18 13.43 130.94
FMBD First Mutual Bancorp of IL 0.13 0.34 15.22 11.71 113.47
FMSB First Mutual SB of Bellevue WA* 1.45 1.40 10.15 10.15 154.44
FNGB First Northern Cap. Corp of WI 0.81 1.20 16.09 16.09 139.83
FFPB First Palm Beach Bancorp of FL -0.02 0.15 21.04 20.50 311.09
FSLA First SB SLA MHC of NJ (47.5) 0.69 1.22 13.00 11.52 141.40
FSNJ First SB of NJ, MHC (45.9)(8) -0.70 0.47 16.18 16.18 188.83
SOPN First SB, SSB, Moore Co. of NC 0.99 1.19 18.04 18.04 73.34
FWWB First Savings Bancorp of WA* 0.81 0.77 14.06 14.06 92.89
SHEN First Shenango Bancorp of PA 1.55 2.08 20.79 20.79 194.34
FSFC First So.east Fin. Corp. of SC 0.01 0.70 7.80 7.80 76.29
FLAG Flag Financial Corp of GA -0.07 0.15 10.25 10.25 109.02
FFIC Flushing Fin. Corp. of NY* 0.86 0.89 16.06 16.06 100.30
FBHC Fort Bend Holding Corp. of TX 0.74 1.72 21.78 20.15 338.85
FTSB Fort Thomas Fin. Corp. of KY 0.30 0.46 10.19 10.19 63.33
FKKY Frankfort First Bancorp of KY 0.24 0.36 9.93 9.93 37.91
FTNB Fulton Bancorp of MO 0.41 0.58 14.47 14.47 57.86
GFSB GFS Bancorp of Grinnell IA 0.85 1.09 10.32 10.32 89.22
GUPB GFSB Bancorp of Gallup NM 0.69 0.87 16.88 16.88 103.59
GSLA GS Financial Corp. of LA 0.29 0.29 15.77 15.77 34.03
GWBC Gateway Bancorp of KY(8) 0.53 0.74 15.95 15.95 61.16
GBCI Glacier Bancorp of MT 1.00 1.13 7.77 7.55 81.24
GLBK Glendale Co-op. Bank of MA(8)* 1.11 1.07 24.48 24.48 149.50
GFCO Glenway Financial Corp. of OH 0.92 1.67 23.46 23.10 245.47
GTPS Great American Bancorp of IL 0.33 0.42 16.58 16.58 78.35
GTFN Great Financial Corp. of KY 1.46 1.40 19.83 18.97 213.33
GSBC Great Southern Bancorp of MO 1.09 1.23 7.35 7.35 81.94
GDVS Greater DV SB,MHC of PA (19.9)* 0.01 0.24 8.37 8.37 72.95
GSFC Green Street Fin. Corp. of NC 0.57 0.70 14.64 14.64 40.57
GSLC Guaranty Svgs & Loan FA of VA 0.33 0.31 4.43 4.43 77.50
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 0.30 0.49 8.68 8.68 62.73
HCBB HCB Bancshares of AR -0.08 0.29 13.73 13.16 75.24
HEMT HF Bancorp of Hemet CA -0.36 -2.62 12.91 0.00 131.63
HFFC HF Financial Corp. of SD 1.10 1.51 17.21 17.17 187.22
HFNC HFNC Financial Corp. of NC 0.51 0.67 9.23 9.23 49.03
HMNF HMN Financial, Inc. of MN 0.99 1.20 18.71 18.71 131.36
HALL Hallmark Capital Corp. of WI 1.20 1.58 19.82 19.82 283.64
HARB Harbor FSB, MHC of FL (46.0) 1.93 2.54 18.30 17.61 222.68
HRBF Harbor Federal Bancorp of MD 0.51 0.82 16.09 16.09 125.12
HFSA Hardin Bancorp of Hardin MO 0.54 0.88 15.38 15.38 120.32
HARL Harleysville SA of PA 1.30 1.86 12.82 12.82 201.43
HARS Harris SB, MHC of PA (24.2) 0.36 0.88 13.71 11.83 173.19
HFFB Harrodsburg 1st Fin Bcrp of KY 0.55 0.73 14.08 14.08 53.43
HHFC Harvest Home Fin. Corp. of OH 0.17 0.44 11.12 11.12 89.47
</TABLE>
<PAGE> 238
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
-------------------------- ----------------------------------------------------
52 Week (1) % Change From
Shares Market ------------ --------------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------ ------- ------ ----- ----- ----- ----- ------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HAVN Haven Bancorp of Woodhaven NY 37.00 4,330 160.2 37.00 25.56 34.38 7.62 N.A. 29.28
HVFD Haverfield Corp. of OH(8) 25.87 1,906 49.3 26.00 17.00 25.62 0.98 66.90 35.30
HTHR Hawthorne Fin. Corp. of CA 11.37 2,629 29.9 11.75 6.62 11.37 0.00 -58.65 39.85
HMLK Hemlock Fed. Fin. Corp. of IL 13.25 2,076 27.5 13.25 12.50 12.87 2.95 N.A. N.A.
HBNK Highland Federal Bank of CA 23.87 2,282 54.5 24.00 14.25 22.75 4.92 N.A. 40.41
HIFS Hingham Inst. for Sav. of MA* 19.87 1,301 25.9 19.87 14.00 18.50 7.41 335.75 5.97
HBEI Home Bancorp of Elgin IL 16.00 7,009 112.1 16.25 11.81 16.00 0.00 N.A. 18.52
HBFW Home Bancorp of Fort Wayne IN 20.62 2,623 54.1 20.87 14.75 20.50 0.59 N.A. 8.53
HBBI Home Building Bancorp of IN 21.00 312 6.6 22.00 17.00 21.00 0.00 N.A. 6.33
HCFC Home City Fin. Corp. of OH 14.00 952 13.3 14.25 12.00 13.87 0.94 N.A. 5.66
HOMF Home Fed Bancorp of Seymour IN 27.75 3,390 94.1 28.25 17.33 27.00 2.78 176.12 7.77
HWEN Home Financial Bancorp of IN 15.75 486 7.7 15.75 9.87 15.75 0.00 N.A. 23.53
HPBC Home Port Bancorp, Inc. of MA* 20.25 1,842 37.3 20.37 12.50 19.87 1.91 153.13 22.73
HMCI Homecorp, Inc. of Rockford IL 14.25 1,693 24.1 15.17 11.33 14.25 0.00 42.50 11.76
HZFS Horizon Fin'l. Services of IA 19.25 426 8.2 19.25 14.00 19.25 0.00 N.A. 27.31
HRZB Horizon Financial Corp. of WA* 16.12 7,399 119.3 16.12 10.65 15.37 4.88 41.16 37.31
IBSF IBS Financial Corp. of NJ 15.50 11,012 170.7 16.25 10.87 15.75 -1.59 N.A. 14.05
ISBF ISB Financial Corp. of LA 23.25 7,001 162.8 26.12 13.62 23.00 1.09 N.A. 29.17
ITLA Imperial Thrift & Loan of CA* 16.00 7,829 125.3 17.25 12.62 15.63 2.37 N.A. 6.67
IFSB Independence FSB of DC 9.00 1,280 11.5 9.75 6.75 8.50 5.88 350.00 12.50
INCB Indiana Comm. Bank, SB of IN 15.00 922 13.8 19.00 13.25 16.25 -7.69 N.A. -7.69
IFSL Indiana Federal Corp. of IN(8) 28.50 4,786 136.4 28.50 18.25 27.50 3.64 277.98 27.40
INBI Industrial Bancorp of OH 13.44 5,410 72.7 13.50 9.87 12.87 4.43 N.A. 5.41
IWBK Interwest SB of Oak Harbor WA 36.00 8,018 288.6 36.25 23.87 34.25 5.11 260.00 11.63
IPSW Ipswich SB of Ipswich MA* 16.25 1,188 19.3 16.37 9.75 16.12 0.81 N.A. 35.42
JSBF JSB Financial, Inc. of NY 43.87 9,830 431.2 46.00 32.75 45.75 -4.11 281.48 15.45
JXVL Jacksonville Bancorp of TX 14.94 2,572 38.4 15.75 10.00 14.50 3.03 N.A. 2.19
JXSB Jcksnville SB,MHC of IL (44.6) 17.62 1,272 10.0 18.00 11.50 17.50 0.69 N.A. 32.98
JSBA Jefferson Svgs Bancorp of MO 29.87 4,971 148.5 30.50 22.25 28.50 4.81 N.A. 14.88
JOAC Joachim Bancorp of MO 14.50 760 11.0 15.25 12.25 14.50 0.00 N.A. 0.00
KSAV KS Bancorp of Kenly NC 25.50 663 16.9 25.50 18.00 22.00 15.91 N.A. 28.33
KSBK KSB Bancorp of Kingfield ME(8)* 35.00 413 14.5 35.00 20.00 33.00 6.06 N.A. 52.17
KFBI Klamath First Bancorp of OR 18.75 9,962 186.8 19.00 13.37 19.00 -1.32 N.A. 19.05
LSBI LSB Fin. Corp. of Lafayette IN 20.87 945 19.7 20.87 14.29 20.25 3.06 N.A. 12.39
LVSB Lakeview SB of Paterson NJ 32.25 2,302 74.2 33.50 17.73 30.75 4.88 N.A. 29.67
LARK Landmark Bancshares of KS 20.12 1,808 36.4 20.12 15.25 19.75 1.87 N.A. 11.78
LARL Laurel Capital Group of PA 21.50 1,498 32.2 22.50 14.50 21.50 0.00 67.97 30.30
LSBX Lawrence Savings Bank of MA* 10.75 4,256 45.8 11.00 5.12 10.87 -1.10 212.50 32.23
LFED Leeds FSB, MHC of MD (36.2) 19.00 3,455 23.7 19.00 13.00 17.75 7.04 N.A. 18.75
LXMO Lexington B&L Fin. Corp. of MO 15.19 1,088 16.5 15.75 9.62 14.75 2.98 N.A. 12.52
LIFB Life Bancorp of Norfolk VA 23.62 9,847 232.6 23.62 14.12 23.25 1.59 N.A. 31.22
LFBI Little Falls Bancorp of NJ 14.12 2,745 38.8 14.12 9.87 14.00 0.86 N.A. 10.75
LOGN Logansport Fin. Corp. of IN 14.00 1,256 17.6 15.00 11.12 13.25 5.66 N.A. 24.44
LONF London Financial Corp. of OH 14.87 515 7.7 17.50 10.00 14.62 1.71 N.A. 5.31
LISB Long Island Bancorp, Inc of NY 36.12 24,228 875.1 39.25 27.69 35.50 1.75 N.A. 3.20
MAFB MAF Bancorp of IL 41.37 10,429 431.4 42.62 22.25 42.62 -2.93 386.71 19.05
MBLF MBLA Financial Corp. of MO(8) 24.00 1,316 31.6 24.00 19.00 23.50 2.13 N.A. 26.32
MFBC MFB Corp. of Mishawaka IN 19.75 1,735 34.3 19.75 13.75 19.00 3.95 N.A. 18.83
MLBC ML Bancorp of Villanova PA 19.06 10,415 198.5 20.25 11.87 19.37 -1.60 N.A. 34.99
MBB MSB Bancorp of Middletown NY* 19.25 2,837 54.6 20.50 15.50 19.00 1.32 92.50 -1.89
MSBF MSB Financial Corp. of MI 22.00 630 13.9 22.00 16.50 22.00 0.00 N.A. 15.79
MGNL Magna Bancorp of MS(8) 26.37 13,754 362.7 26.37 16.75 25.50 3.41 427.40 50.69
MARN Marion Capital Holdings of IN 22.62 1,828 41.3 23.25 19.25 22.62 0.00 N.A. 17.51
MRKF Market Fin. Corp. of OH 13.00 1,336 17.4 13.37 12.25 13.00 0.00 N.A. N.A.
MFCX Marshalltown Fin. Corp. of IA(8) 15.12 1,411 21.3 16.62 14.25 15.00 0.80 N.A. 1.68
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HAVN Haven Bancorp of Woodhaven NY 2.28 3.32 23.13 23.04 399.03
HVFD Haverfield Corp. of OH(8) 0.88 1.86 15.04 15.04 179.26
HTHR Hawthorne Fin. Corp. of CA 2.39 1.65 12.11 12.11 314.87
HMLK Hemlock Fed. Fin. Corp. of IL -0.29 0.37 14.49 14.49 79.24
HBNK Highland Federal Bank of CA 0.59 1.03 15.70 15.70 210.43
HIFS Hingham Inst. for Sav. of MA* 1.73 1.73 15.10 15.10 158.08
HBEI Home Bancorp of Elgin IL 0.15 0.39 14.39 14.39 51.18
HBFW Home Bancorp of Fort Wayne IN 0.68 1.10 17.43 17.43 124.97
HBBI Home Building Bancorp of IN 0.27 0.74 18.11 18.11 150.01
HCFC Home City Fin. Corp. of OH 0.51 0.77 14.77 14.77 71.68
HOMF Home Fed Bancorp of Seymour IN 1.93 2.29 16.54 16.00 195.77
HWEN Home Financial Bancorp of IN 0.45 0.64 15.12 15.12 81.16
HPBC Home Port Bancorp, Inc. of MA* 1.69 1.68 11.11 11.11 102.72
HMCI Homecorp, Inc. of Rockford IL 0.23 0.77 12.52 12.52 198.73
HZFS Horizon Fin'l. Services of IA 0.75 1.05 19.31 19.31 183.96
HRZB Horizon Financial Corp. of WA* 1.05 1.03 10.61 10.61 69.65
IBSF IBS Financial Corp. of NJ 0.35 0.60 11.45 11.45 67.20
ISBF ISB Financial Corp. of LA 0.75 1.01 16.28 13.74 132.73
ITLA Imperial Thrift & Loan of CA* 1.37 1.37 11.77 11.72 103.52
IFSB Independence FSB of DC 0.29 0.66 13.39 11.74 205.28
INCB Indiana Comm. Bank, SB of IN 0.16 0.50 12.27 12.27 99.06
IFSL Indiana Federal Corp. of IN(8) 1.10 1.56 15.03 14.12 171.11
INBI Industrial Bancorp of OH 0.44 0.86 11.41 11.41 61.71
IWBK Interwest SB of Oak Harbor WA 1.67 2.34 14.82 14.47 220.94
IPSW Ipswich SB of Ipswich MA* 1.53 1.20 8.59 8.59 139.32
JSBF JSB Financial, Inc. of NY 2.76 2.62 34.52 34.52 155.74
JXVL Jacksonville Bancorp of TX 0.74 1.02 13.27 13.27 84.89
JXSB Jcksnville SB,MHC of IL (44.6) 0.33 0.77 13.26 13.26 128.80
JSBA Jefferson Svgs Bancorp of MO 0.57 1.43 18.09 14.12 230.96
JOAC Joachim Bancorp of MO 0.24 0.37 13.60 13.60 46.92
KSAV KS Bancorp of Kenly NC 1.34 1.76 21.01 21.00 151.97
KSBK KSB Bancorp of Kingfield ME(8)* 2.75 2.74 21.90 20.27 320.90
KFBI Klamath First Bancorp of OR 0.59 0.87 14.03 14.03 68.64
LSBI LSB Fin. Corp. of Lafayette IN 0.94 0.79 18.06 18.06 198.97
LVSB Lakeview SB of Paterson NJ 2.85 1.78 20.78 16.64 204.95
LARK Landmark Bancshares of KS 0.98 1.22 18.11 18.11 123.78
LARL Laurel Capital Group of PA 1.50 1.92 14.51 14.51 139.24
LSBX Lawrence Savings Bank of MA* 1.30 1.30 7.06 7.06 80.37
LFED Leeds FSB, MHC of MD (36.2) 0.63 0.90 13.20 13.20 81.59
LXMO Lexington B&L Fin. Corp. of MO 0.42 0.58 17.24 17.24 56.68
LIFB Life Bancorp of Norfolk VA 0.96 1.18 15.42 14.94 142.97
LFBI Little Falls Bancorp of NJ 0.27 0.53 14.30 13.16 110.52
LOGN Logansport Fin. Corp. of IN 0.73 0.95 12.41 12.41 63.14
LONF London Financial Corp. of OH 0.54 0.79 14.63 14.63 73.66
LISB Long Island Bancorp, Inc of NY 1.38 1.64 21.62 21.41 239.98
MAFB MAF Bancorp of IL 2.23 3.11 24.46 21.24 310.33
MBLF MBLA Financial Corp. of MO(8) 1.05 1.36 21.51 21.51 159.41
MFBC MFB Corp. of Mishawaka IN 0.71 1.07 19.59 19.59 135.04
MLBC ML Bancorp of Villanova PA 1.26 1.15 13.55 13.22 180.04
MBB MSB Bancorp of Middletown NY* 0.60 0.62 20.57 8.99 289.36
MSBF MSB Financial Corp. of MI 1.22 1.52 19.94 19.94 120.05
MGNL Magna Bancorp of MS(8) 1.33 1.57 9.62 9.30 100.56
MARN Marion Capital Holdings of IN 1.27 1.53 21.99 21.99 95.41
MRKF Market Fin. Corp. of OH 0.38 0.50 14.17 14.17 42.68
MFCX Marshalltown Fin. Corp. of IA(8) 0.30 0.63 14.06 14.06 90.08
</TABLE>
<PAGE> 239
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -------------------------------------------------
-------------------------- 52 Week (1) % Change From
Shares Market --------------------- ----------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------ ------- ----- ----- ----- ---- ------ ------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MFSL Maryland Fed. Bancorp of MD 44.25 3,210 142.0 45.00 26.91 43.50 1.72 321.43 27.34
MASB MassBank Corp. of Reading MA* 46.75 2,686 125.6 46.75 32.50 43.50 7.47 279.16 22.64
MFLR Mayflower Co-Op. Bank of MA* 18.00 890 16.0 19.75 13.12 16.25 10.77 260.00 5.88
MECH Mechanics SB of Hartford CT* 18.75 5,290 99.2 19.00 11.00 18.50 1.35 N.A. 19.05
MDBK Medford Savings Bank of MA* 30.50 4,540 138.5 30.50 20.75 29.50 3.39 335.71 18.45
MERI Meritrust FSB of Thibodaux LA 38.00 774 29.4 41.50 30.75 38.00 0.00 N.A. 20.18
MWBX Metro West of MA* 5.56 13,943 77.5 5.56 3.50 5.56 0.00 34.95 3.54
MCBS Mid Continent Bancshares of KS 27.50 1,958 53.8 27.50 17.50 27.50 0.00 N.A. 17.67
MIFC Mid Iowa Financial Corp. of IA 8.75 1,676 14.7 9.00 6.00 9.00 -2.78 75.00 37.36
MCBN Mid-Coast Bancorp of ME 19.50 230 4.5 20.25 18.00 19.50 0.00 241.51 2.63
MWBI Midwest Bancshares, Inc. of IA 31.50 348 11.0 31.50 24.50 31.50 0.00 215.00 18.87
MWFD Midwest Fed. Fin. Corp of WI 19.75 1,625 32.1 24.50 15.12 19.75 0.00 295.00 6.76
MFFC Milton Fed. Fin. Corp. of OH 14.00 2,327 32.6 16.00 11.50 14.12 -0.85 N.A. -3.45
MIVI Miss. View Hold. Co. of MN 14.62 819 12.0 15.63 10.75 14.62 0.00 N.A. 21.83
MBSP Mitchell Bancorp of NC* 16.37 968 15.8 16.75 10.19 16.75 -2.27 N.A. 14.88
MBBC Monterey Bay Bancorp of CA 16.75 3,245 54.4 18.25 11.37 16.25 3.08 N.A. 13.56
MSBK Mutual SB, FSB of Bay City MI 9.62 4,274 41.1 9.62 5.12 8.87 8.46 9.94 74.91
NHTB NH Thrift Bancshares of NH 15.25 2,041 31.1 15.50 9.75 15.25 0.00 230.09 20.84
NSLB NS&L Bancorp of Neosho MO 16.50 708 11.7 17.25 12.00 16.50 0.00 N.A. 21.15
NMSB Newmil Bancorp. of CT* 10.25 3,888 39.9 10.25 6.75 9.62 6.55 60.91 5.13
NASB North American SB of MO 44.00 2,257 99.3 46.25 29.25 44.75 -1.68 935.29 28.47
NBSI North Bancshares of Chicago IL 19.25 1,035 19.9 20.12 15.25 19.25 0.00 N.A. 16.67
NFFD North Central Bancshares of IA 15.25 3,429 52.3 16.62 10.37 15.12 0.86 N.A. 12.46
NBN Northeast Bancorp of ME* 14.37 1,275 18.3 14.75 12.50 14.50 -0.90 22.30 2.64
NEIB Northeast Indiana Bncrp of IN 15.00 1,763 26.4 16.00 11.75 15.00 0.00 N.A. 10.13
NWEQ Northwest Equity Corp. of WI 14.75 839 12.4 15.00 10.25 14.25 3.51 N.A. 21.70
NWSB Northwest SB, MHC of PA (29.9) 15.25 23,376 106.6 15.75 10.75 15.12 0.86 N.A. 14.06
NSSY Norwalk Savings Society of CT* 28.37 2,404 68.2 28.37 20.87 27.87 1.79 N.A. 21.39
NSSB Norwich Financial Corp. of CT* 22.62 5,400 122.1 23.25 14.12 22.00 2.82 223.14 15.29
NTMG Nutmeg FS&LA of CT 8.25 725 6.0 8.25 7.00 7.37 11.94 N.A. 10.00
OHSL OHSL Financial Corp. of OH 25.25 1,208 30.5 25.25 19.25 24.00 5.21 N.A. 18.16
OCFC Ocean Fin. Corp. of NJ 33.12 9,059 300.0 33.12 19.62 31.25 5.98 N.A. 29.88
OCWN Ocean Financial Corp. of FL 29.75 26,800 797.3 34.75 20.25 29.62 0.44 N.A. 11.21
OFCP Ottawa Financial Corp. of MI 22.50 5,040 113.4 22.75 16.00 21.75 3.45 N.A. 33.85
PFFB PFF Bancorp of Pomona CA 17.25 18,846 325.1 17.25 10.37 15.37 12.23 N.A. 16.01
PSFI PS Financial of Chicago IL 14.75 2,182 32.2 14.75 11.62 14.37 2.64 N.A. 25.53
PVFC PVF Capital Corp. of OH 19.12 2,323 44.4 19.12 12.00 19.12 0.00 334.55 21.40
PCCI Pacific Crest Capital of CA* 13.37 2,937 39.3 13.75 8.00 13.00 2.85 N.A. 16.26
PALM Palfed, Inc. of Aiken SC 16.69 5,278 88.1 17.50 11.62 17.50 -4.63 8.59 19.21
PBCI Pamrapo Bancorp, Inc. of NJ 19.75 2,863 56.5 23.75 18.25 20.00 -1.25 250.80 -1.25
PFED Park Bancorp of Chicago IL 14.75 2,431 35.9 16.12 10.19 14.50 1.72 N.A. 13.46
PVSA Parkvale Financial Corp of PA 28.37 4,060 115.2 29.50 19.60 28.75 -1.32 242.63 9.12
PBIX Patriot Bank Corp. of PA 16.31 4,266 69.6 16.75 10.62 16.00 1.94 N.A. 20.81
PEEK Peekskill Fin. Corp. of NY 15.00 3,203 48.0 15.25 11.25 14.62 2.60 N.A. 5.26
PFSB PennFed Fin. Services of NJ 27.37 4,821 132.0 27.37 14.87 26.50 3.28 N.A. 35.16
PWBC PennFirst Bancorp of PA 15.00 3,911 58.7 15.50 13.00 14.25 5.26 87.97 10.13
PWBK Pennwood SB of PA* 15.00 610 9.2 15.00 9.00 15.00 0.00 N.A. 9.09
PBKB People's SB of Brockton MA* 15.12 3,592 54.3 15.12 9.00 14.37 5.22 154.55 42.37
PFDC Peoples Bancorp of Auburn IN 22.25 2,279 50.7 23.00 19.25 21.75 2.30 27.14 9.88
PBCT Peoples Bank, MHC of CT (37.4)* 26.50 61,017 401.6 26.50 13.58 24.37 8.74 236.72 37.66
PFFC Peoples Fin. Corp. of OH 15.25 1,491 22.7 16.00 10.87 15.25 0.00 N.A. 12.96
PHBK Peoples Heritage Fin Grp of ME* 35.75 28,425 1,016.2 36.25 19.00 35.44 0.87 133.51 27.68
PBNB Peoples Sav. Fin. Corp. of CT(8)* 36.25 1,907 69.1 36.25 21.50 35.87 1.06 267.27 30.63
PSFC Peoples Sidney Fin. Corp of OH 13.62 1,785 24.3 13.75 12.56 13.37 1.87 N.A. N.A.
PERM Permanent Bancorp of IN 25.00 2,083 52.1 25.50 15.75 24.12 3.65 N.A. 23.46
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
---------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- ------ ------ ------ ------ -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MFSL Maryland Fed. Bancorp of MD 2.03 2.96 29.68 29.28 351.55
MASB MassBank Corp. of Reading MA* 3.60 3.34 33.49 33.49 335.49
MFLR Mayflower Co-Op. Bank of MA* 1.33 1.30 13.21 12.98 140.10
MECH Mechanics SB of Hartford CT* 0.35 0.37 14.50 14.50 149.06
MDBK Medford Savings Bank of MA* 2.33 2.26 20.43 18.91 232.18
MERI Meritrust FSB of Thibodaux LA 1.77 2.88 23.34 23.34 295.34
MWBX Metro West of MA* 0.50 0.50 2.92 2.92 39.80
MCBS Mid Continent Bancshares of KS 1.75 2.00 19.04 19.04 189.57
MIFC Mid Iowa Financial Corp. of IA 0.64 0.84 6.71 6.70 73.73
MCBN Mid-Coast Bancorp of ME 0.97 1.55 21.63 21.63 251.47
MWBI Midwest Bancshares, Inc. of IA 1.84 3.04 27.71 27.71 399.44
MWFD Midwest Fed. Fin. Corp of WI 1.16 1.13 10.66 10.24 123.74
MFFC Milton Fed. Fin. Corp. of OH 0.40 0.55 11.32 11.32 76.82
MIVI Miss. View Hold. Co. of MN 0.58 0.86 15.55 15.55 85.17
MBSP Mitchell Bancorp of NC* 0.47 0.59 15.17 15.17 35.01
MBBC Monterey Bay Bancorp of CA 0.31 0.57 13.98 12.82 130.16
MSBK Mutual SB, FSB of Bay City MI 0.15 0.06 9.31 9.31 155.02
NHTB NH Thrift Bancshares of NH 0.44 0.65 11.47 9.72 153.37
NSLB NS&L Bancorp of Neosho MO 0.41 0.62 16.35 16.35 82.05
NMSB Newmil Bancorp. of CT* 0.65 0.63 8.13 8.13 81.54
NASB North American SB of MO 3.85 3.74 24.35 23.56 305.38
NBSI North Bancshares of Chicago IL 0.52 0.74 16.94 16.94 115.95
FFFD North Central Bancshares of IA 0.98 1.14 14.59 14.59 59.35
NBN Northeast Bancorp of ME* 0.64 0.61 13.49 11.66 194.14
NEIB Northeast Indiana Bncrp of IN 0.94 1.11 14.87 14.87 98.06
NWEQ Northwest Equity Corp. of WI 0.85 1.08 12.94 12.94 113.35
NWSB Northwest SB, MHC of PA (29.9) 0.56 0.81 8.30 7.80 85.45
NSSY Norwalk Savings Society of CT* 2.42 2.77 20.69 19.95 256.81
NSSB Norwich Financial Corp. of CT* 1.34 1.27 14.27 12.80 129.86
NTMG Nutmeg FS&LA of CT 0.34 0.44 7.35 7.35 129.17
OHSL OHSL Financial Corp. of OH 1.08 1.54 21.00 21.00 190.24
OCFC Ocean Fin. Corp. of NJ -0.06 1.30 27.30 27.30 153.20
OCWN Ocean Financial Corp. of FL 2.59 1.88 8.40 8.40 98.86
OFCP Ottawa Financial Corp. of MI 0.70 1.20 15.07 12.06 170.42
PFFB PFF Bancorp of Pomona CA 0.14 0.56 14.09 13.93 134.55
PSFI PS Financial of Chicago IL 0.66 0.68 14.88 14.88 34.43
PVFC PVF Capital Corp. of OH 1.54 2.03 10.77 10.77 153.36
PCCI Pacific Crest Capital of CA* 1.06 0.90 8.43 8.43 116.70
PALM Palfed, Inc. of Aiken SC 0.07 0.70 10.07 10.07 124.23
PBCI Pamrapo Bancorp, Inc. of NJ 1.07 1.51 16.43 16.29 128.31
PFED Park Bancorp of Chicago IL 0.53 0.74 15.88 15.88 73.21
PVSA Parkvale Financial Corp of PA 1.64 2.46 17.91 17.76 239.56
PBIX Patriot Bank Corp. of PA 0.52 0.71 11.26 11.26 139.25
PEEK Peekskill Fin. Corp. of NY 0.63 0.81 14.58 14.58 57.01
PFSB PennFed Fin. Services of NJ 1.35 2.01 19.55 16.12 259.78
PWBC PennFirst Bancorp of PA 0.76 1.14 12.77 11.65 180.58
PWBK Pennwood SB of PA* 0.46 0.73 15.30 15.30 78.57
PBKB People's SB of Brockton MA* 1.16 0.69 8.57 8.21 152.78
PFDC Peoples Bancorp of Auburn IN 1.35 1.79 18.87 18.87 124.28
PBCT Peoples Bank, MHC of CT (37.4)* 1.33 1.06 10.39 10.38 123.54
PFFC Peoples Fin. Corp. of OH 0.05 0.24 16.18 16.18 60.15
PHBK Peoples Heritage Fin Grp of ME* 2.00 2.14 15.76 13.30 192.02
PBNB Peoples Sav. Fin. Corp. of CT(8)* 2.20 2.19 24.13 22.61 251.23
PSFC Peoples Sidney Fin. Corp of OH 0.56 0.73 14.09 14.09 60.57
PERM Permanent Bancorp of IN 0.46 1.01 19.23 19.04 198.26
</TABLE>
<PAGE> 240
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------------
----------------------------- 52 Week (1) % Change From
Shares Market ------------------------ --------------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ---------- ------- ------- ------ ------ ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PMFI Perpetual Midwest Fin. of IA 19.00 1,907 36.2 22.00 17.00 19.75 -3.80 N.A. -1.30
PERT Perpetual of SC, MHC (46.8) 29.50 1,505 20.8 29.75 20.25 27.00 9.26 N.A. 21.65
PCBC Perry Co. Fin. Corp. of MO 19.75 808 16.0 20.25 15.50 19.75 0.00 N.A. 16.18
PHFC Pittsburgh Home Fin. of PA 15.00 1,983 29.7 15.50 9.50 14.37 4.38 N.A. 12.19
PFSL Pocahnts Fed, MHC of AR (46.4) 20.75 1,629 15.6 20.75 14.25 19.87 4.43 N.A. 18.57
POBS Portsmouth Bank Shrs Inc of NH(8)* 16.00 5,872 94.0 16.50 12.38 16.50 -3.03 53.70 16.62
PTRS Potters Financial Corp of OH 21.55 487 10.5 21.75 15.50 21.75 -0.92 N.A. 7.75
PKPS Poughkeepsie Fin. Corp. of NY 6.94 12,595 87.4 7.31 4.75 7.12 -2.53 -10.45 32.19
PRBC Prestige Bancorp of PA 15.75 920 14.5 16.12 9.75 15.50 1.61 N.A. 16.67
PETE Primary Bank of NH(8)* 24.87 2,087 51.9 24.87 11.19 24.25 2.56 N.A. 63.19
PFNC Progress Financial Corp. of PA 9.50 3,814 36.2 9.50 5.75 9.02 5.32 -13.71 13.50
PSBK Progressive Bank, Inc. of NY* 29.62 3,825 113.3 29.62 18.50 28.87 2.60 121.54 30.20
PROV Provident Fin. Holdings of CA 16.75 5,075 85.0 17.19 10.12 17.00 -1.47 N.A. 19.64
PULB Pulaski SB, MHC of MO (29.0) 18.25 2,094 11.0 20.00 12.25 17.37 5.07 N.A. 25.86
PLSK Pulaski SB, MHC of NJ (46.0) 13.00 2,070 12.4 13.50 11.50 13.50 -3.70 N.A. N.A.
PULS Pulse Bancorp of S. River NJ 19.62 3,061 60.1 19.62 15.50 19.00 3.26 58.61 24.57
QCFB QCF Bancorp of Virginia MN 20.50 1,426 29.2 21.00 14.75 20.50 0.00 N.A. 12.33
QCBC Quaker City Bancorp of CA 17.00 4,778 81.2 17.50 10.30 17.37 -2.13 126.67 11.84
QCSB Queens County Bancorp of NY* 46.12 11,137 513.6 46.12 23.25 43.87 5.13 N.A. 46.04
RCSB RCSB Financial, Inc. of NY(8)* 45.25 14,816 670.4 45.25 24.00 43.12 4.94 267.59 56.03
RARB Raritan Bancorp. of Raritan NJ* 30.00 1,532 46.0 30.75 20.25 30.50 -1.64 207.69 29.03
REDF RedFed Bancorp of Redlands CA 15.63 7,164 112.0 15.75 8.37 15.50 0.84 N.A. 15.78
RELY Reliance Bancorp, Inc. of NY 26.87 8,823 237.1 26.87 15.63 26.12 2.87 N.A. 37.79
RELI Reliance Bancshares Inc of WI(8)* 8.25 2,528 20.9 10.12 6.50 7.62 8.27 N.A. 22.22
RIVR River Valley Bancorp of IN 14.75 1,190 17.6 15.50 13.25 14.50 1.72 N.A. 7.27
RFED Roosevelt Fin. Grp. Inc. of MO(8) 24.12 42,615 1,027.9 24.25 15.63 24.00 0.50 518.46 14.86
RSLN Roslyn Bancorp, Inc. of NY* 20.00 43,642 872.8 20.00 15.00 18.94 5.60 N.A. N.A.
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 22.00 2,416 20.2 24.00 13.07 20.50 7.32 N.A. 38.28
SCCB S. Carolina Comm. Bnshrs of SC 18.25 704 12.8 20.50 15.00 18.87 -3.29 N.A. 21.67
SBFL SB Fngr Lakes MHC of NY (33.1) 16.50 1,785 9.7 17.00 12.75 16.62 -0.72 N.A. 20.00
SFED SFS Bancorp of Schenectady NY 16.50 1,271 21.0 18.00 12.00 16.50 0.00 N.A. 11.86
SGVB SGV Bancorp of W. Covina CA 14.00 2,342 32.8 14.25 7.75 13.50 3.70 N.A. 24.44
SISB SIS Bank of Springfield MA* 29.62 5,662 167.7 29.62 17.50 29.00 2.14 N.A. 29.51
SJSB SJS Bancorp of St. Joseph MI(8) 26.50 918 24.3 26.62 19.50 26.50 0.00 N.A. 4.95
SWCB Sandwich Co-Op. Bank of MA* 31.00 1,906 59.1 34.00 19.50 32.00 -3.13 259.63 4.20
SECP Security Capital Corp. of WI(8) 94.50 9,203 869.7 96.75 59.00 96.75 -2.33 N.A. 28.14
SFSL Security First Corp. of OH 21.37 5,003 106.9 22.00 13.25 21.00 1.76 35.68 17.94
SMFC Sho-Me Fin. Corp. of MO 40.25 1,519 61.1 40.25 15.50 36.12 11.43 N.A. 85.06
SOBI Sobieski Bancorp of S. Bend IN 14.75 760 11.2 16.00 11.75 14.75 0.00 N.A. 1.72
SOSA Somerset Savings Bank of MA(8)* 2.66 16,652 44.3 2.88 1.44 2.66 0.00 -48.05 35.03
SSFC South Street Fin. Corp. of NC* 16.50 4,496 74.2 17.00 12.12 15.75 4.76 N.A. 17.86
SCBS Southern Commun. Bncshrs of AL 14.25 1,137 16.2 14.25 13.00 14.25 0.00 N.A. 7.55
SMBC Southern Missouri Bncrp of MO 17.62 1,638 28.9 17.62 13.50 17.00 3.65 N.A. 17.47
SWBI Southwest Bancshares of IL 20.50 2,639 54.1 21.00 17.83 20.25 1.23 105.00 12.33
SVRN Sovereign Bancorp of PA 14.12 69,832 986.0 14.12 8.02 13.75 2.69 215.88 29.07
STFR St. Francis Cap. Corp. of WI 33.25 5,386 179.1 33.25 24.00 30.25 9.92 N.A. 27.88
SPBC St. Paul Bancorp, Inc. of IL 33.87 22,840 773.6 33.87 17.80 33.19 2.05 100.77 44.13
STND Standard Fin. of Chicago IL(8) 24.94 16,204 404.1 25.00 15.25 24.75 0.77 N.A. 27.12
SFFC StateFed Financial Corp. of IA 19.12 790 15.1 19.12 15.00 18.75 1.97 N.A. 15.88
SFIN Statewide Fin. Corp. of NJ 17.12 4,771 81.7 17.50 11.25 17.37 -1.44 N.A. 19.14
STSA Sterling Financial Corp. of WA 19.00 5,543 105.3 19.00 13.00 17.62 7.83 109.02 34.56
SFSB SuburbFed Fin. Corp. of IL 24.50 1,261 30.9 25.25 16.25 24.00 2.08 267.32 28.95
SBCN Suburban Bancorp. of OH(8) 19.50 1,475 28.8 19.50 14.25 19.12 1.99 N.A. 27.87
ROSE T R Financial Corp. of NY* 23.50 17,632 414.4 23.62 13.00 23.00 2.17 N.A. 32.39
THRD TF Financial Corp. of PA 18.37 4,087 75.1 19.25 13.75 18.00 2.06 N.A. 13.05
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
--------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
<S> <C> <C> <C> <C> <C>
PMFI Perpetual Midwest Fin. of IA 0.18 0.53 17.72 17.72 208.59
PERT Perpetual of SC, MHC (46.8) 1.00 1.41 19.69 19.69 148.17
PCBC Perry Co. Fin. Corp. of MO 0.70 0.95 18.76 18.76 99.51
PHFC Pittsburgh Home Fin. of PA 0.59 0.84 13.71 13.55 119.51
PFSL Pocahnts Fed, MHC of AR (46.4) 1.34 1.87 14.61 14.61 229.14
POBS Portsmouth Bank Shrs Inc of NH(8)* 1.02 0.89 11.25 11.25 44.78
PTRS Potters Financial Corp of OH 0.75 1.62 21.38 21.38 240.08
PKPS Poughkeepsie Fin. Corp. of NY 0.14 0.32 5.75 5.75 68.37
PRBC Prestige Bancorp of PA 0.32 0.68 16.11 16.11 137.86
PETE Primary Bank of NH(8)* 1.68 1.66 13.82 13.79 208.78
PFNC Progress Financial Corp. of PA 0.44 0.54 5.47 4.79 104.97
PSBK Progressive Bank, Inc. of NY* 2.48 2.50 19.17 16.98 229.46
PROV Provident Fin. Holdings of CA 0.26 0.13 17.06 17.06 119.94
PULB Pulaski SB, MHC of MO (29.0) 0.42 0.67 10.75 10.75 85.39
PLSK Pulaski SB, MHC of NJ (46.0) 0.23 0.52 9.83 9.83 81.83
PULS Pulse Bancorp of S. River NJ 1.17 1.75 13.14 13.14 168.55
QCFB QCF Bancorp of Virginia MN 1.32 1.32 18.35 18.35 104.01
QCBC Quaker City Bancorp of CA 0.49 0.89 14.56 14.54 163.42
QCSB Queens County Bancorp of NY* 2.05 2.07 18.47 18.47 123.31
RCSB RCSB Financial, Inc. of NY(8)* 2.62 2.60 21.36 20.82 272.16
RARB Raritan Bancorp. of Raritan NJ* 2.18 2.36 18.80 18.46 244.87
REDF RedFed Bancorp of Redlands CA 0.15 0.57 10.37 10.36 126.84
RELY Reliance Bancorp, Inc. of NY 1.16 1.76 17.56 12.31 218.38
RELI Reliance Bancshares Inc of WI(8)* 0.25 0.25 11.59 11.59 18.98
RIVR River Valley Bancorp of IN -0.21 -0.21 14.37 14.15 116.24
RFED Roosevelt Fin. Grp. Inc. of MO(8) 0.23 1.77 10.16 9.55 182.95
RSLN Roslyn Bancorp, Inc. of NY* 0.23 0.93 14.08 14.01 65.29
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 0.83 1.06 10.36 9.39 92.87
SCCB S. Carolina Comm. Bnshrs of SC 0.52 0.70 17.11 17.11 65.93
SBFL SB Fngr Lakes MHC of NY (33.1) 0.08 0.54 11.27 11.27 119.23
SFED SFS Bancorp of Schenectady NY 0.60 1.08 17.26 17.26 132.84
SGVB SGV Bancorp of W. Covina CA 0.22 0.57 12.41 12.18 170.70
SISB SIS Bank of Springfield MA* 3.21 3.11 18.00 18.00 238.19
SJSB SJS Bancorp of St. Joseph MI(8) 0.28 0.79 17.23 17.23 165.45
SWCB Sandwich Co-Op. Bank of MA* 2.24 2.27 20.55 19.59 249.34
SECP Security Capital Corp. of WI(8) 4.40 5.27 62.82 62.82 396.28
SFSL Security First Corp. of OH 1.28 1.62 11.88 11.67 126.88
SMFC Sho-Me Fin. Corp. of MO 1.73 2.06 19.13 19.13 200.46
SOBI Sobieski Bancorp of S. Bend IN 0.30 0.60 16.03 16.03 104.05
SOSA Somerset Savings Bank of MA(8)* 0.18 0.18 1.85 1.85 31.36
SSFC South Street Fin. Corp. of NC* 0.35 0.47 13.51 13.51 53.11
SCBS Southern Commun. Bncshrs of AL 0.40 0.71 13.30 13.30 64.05
SMBC Southern Missouri Bncrp of MO 1.02 1.00 15.85 15.85 101.15
SWBI Southwest Bancshares of IL 1.04 1.46 15.19 15.19 140.80
SVRN Sovereign Bancorp of PA 0.55 0.91 5.96 4.37 147.31
STFR St. Francis Cap. Corp. of WI 1.53 1.81 23.74 20.89 293.16
SPBC St. Paul Bancorp, Inc. of IL 1.28 1.89 17.16 17.11 196.36
STND Standard Fin. of Chicago IL(8) 0.68 1.02 16.74 16.72 153.60
SFFC StateFed Financial Corp. of IA 1.05 1.29 19.00 19.00 107.95
SFIN Statewide Fin. Corp. of NJ 0.66 1.18 14.03 14.00 133.31
STSA Sterling Financial Corp. of WA 0.18 0.86 11.22 9.52 280.93
SFSB SuburbFed Fin. Corp. of IL 1.02 1.67 21.23 21.14 323.39
SBCN Suburban Bancorp. of OH(8) 0.72 1.07 17.56 17.56 150.46
ROSE T R Financial Corp. of NY* 1.76 1.54 11.90 11.90 193.08
THRD TF Financial Corp. of PA 0.79 1.11 17.09 14.90 157.66
</TABLE>
<PAGE> 241
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------------
------------------------------ 52 Week (1) % Change From
Shares Market ----------------------- ---------------------------
Price/ Out- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) standing ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ---------- ------- ------- ------ ------- ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
TPNZ Tappan Zee Fin., Inc. of NY 16.50 1,534 25.3 17.37 11.62 16.50 0.00 N.A. 21.15
ESBK The Elmira SB FSB of Elmira NY* 19.25 706 13.6 21.25 14.75 20.50 -6.10 33.96 5.48
GRTR The Greater New York SB of NY(8)* 21.25 13,678 290.7 21.37 10.12 20.62 3.06 128.25 56.02
TSBS Trenton SB, FSB MHC of NJ(35.0 19.50 9,037 60.8 20.37 12.37 19.75 -1.27 N.A. 21.88
TRIC Tri-County Bancorp of WY 21.25 609 12.9 21.25 18.00 20.25 4.94 N.A. 18.06
TWIN Twin City Bancorp of TN 19.00 853 16.2 19.50 16.00 18.50 2.70 N.A. 10.14
UFRM United FS&LA of Rocky Mount NC 12.00 3,066 36.8 12.00 7.00 12.00 0.00 269.23 41.18
UBMT United Fin. Corp. of MT 19.50 1,223 23.8 19.75 18.00 19.25 1.30 85.71 1.30
VABF Va. Beach Fed. Fin. Corp of VA 12.84 4,972 63.8 13.25 6.88 13.12 -2.13 173.77 36.02
VFFC Virginia First Savings of VA(8) 22.62 5,805 131.3 23.00 11.00 22.75 -0.57 ***.** 77.41
WHGB WHG Bancshares of MD 14.25 1,539 21.9 14.75 11.00 13.75 3.64 N.A. 8.61
WSFS WSFS Financial Corp. of DE* 13.62 12,530 170.7 13.62 6.75 13.00 4.77 87.86 33.66
WVFC WVS Financial Corp. of PA* 25.75 1,737 44.7 27.25 20.25 25.62 0.51 N.A. 4.59
WRNB Warren Bancorp of Peabody MA* 18.00 3,691 66.4 19.00 11.87 18.62 -3.33 434.12 20.00
WFSL Washington FS&LA of Seattle WA 27.69 47,444 1,313.7 27.69 17.90 26.50 4.49 89.79 14.94
WAMU Washington Mutual Inc. of WA* 62.69 118,248 7,413.0 62.69 28.75 58.50 7.16 237.77 44.75
WYNE Wayne Bancorp of NJ 19.50 2,156 42.0 19.50 10.75 19.25 1.30 N.A. 27.87
WAYN Wayne S&L Co. MHC of OH (47.8) 17.00 2,248 12.2 18.50 12.67 17.00 0.00 N.A. 4.10
WCFB Wbstr Cty FSB MHC of IA (45.2) 14.75 2,100 14.0 14.75 12.50 14.00 5.36 N.A. 7.27
WBST Webster Financial Corp. of CT 43.87 11,954 524.4 43.87 28.00 43.25 1.43 364.72 19.37
WEFC Wells Fin. Corp. of Wells MN 14.25 2,024 28.8 16.00 11.37 14.75 -3.39 N.A. 8.61
WCBI WestCo Bancorp of IL 24.25 2,554 61.9 25.12 20.00 24.37 -0.49 142.50 12.79
WSTR WesterFed Fin. Corp. of MT 20.62 5,551 114.5 21.75 13.87 20.37 1.23 N.A. 12.99
WOFC Western Ohio Fin. Corp. of OH 22.00 2,312 50.9 23.00 19.50 21.25 3.53 N.A. 1.15
WWFC Westwood Fin. Corp. of NJ 18.25 645 11.8 21.25 10.25 21.25 -14.12 N.A. 10.61
WEHO Westwood Hmstd Fin Corp of OH 13.75 2,843 39.1 14.50 10.37 13.25 3.77 N.A. 13.45
WFCO Winton Financial Corp. of OH 13.12 1,986 26.1 14.50 11.25 13.12 0.00 N.A. 14.09
FFWD Wood Bancorp of OH 16.87 1,493 25.2 17.25 12.33 17.00 -0.76 N.A. -0.76
YFCB Yonkers Fin. Corp. of NY 15.37 3,180 48.9 15.75 9.50 14.75 4.20 N.A. 19.43
YFED York Financial Corp. of PA 19.50 6,971 135.9 20.00 14.54 20.00 -2.50 106.35 20.00
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
------------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- ------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
TPNZ Tappan Zee Fin., Inc. of NY 0.54 0.50 13.86 13.86 76.09
ESBK The Elmira SB FSB of Elmira NY* 0.89 0.85 19.87 19.02 315.32
GRTR The Greater New York SB of NY(8)* 0.86 0.74 11.78 11.78 187.93
TSBS Trenton SB, FSB MHC of NJ(35.0 0.84 0.74 11.54 10.55 69.31
TRIC Tri-County Bancorp of WY 1.00 1.30 21.62 21.62 141.17
TWIN Twin City Bancorp of TN 0.70 0.97 15.83 15.83 122.49
UFRM United FS&LA of Rocky Mount NC 0.19 0.40 6.70 6.70 88.12
UBMT United Fin. Corp. of MT 0.94 1.16 19.95 19.95 88.08
VABF Va. Beach Fed. Fin. Corp of VA 0.18 0.50 8.29 8.29 122.16
VFFC Virginia First Savings of VA(8) 1.81 1.66 11.35 10.96 140.79
WHGB WHG Bancshares of MD 0.47 0.47 14.00 14.00 63.98
WSFS WSFS Financial Corp. of DE* 1.39 1.40 6.05 5.99 117.97
WVFC WVS Financial Corp. of PA* 1.64 2.04 20.50 20.50 161.14
WRNB Warren Bancorp of Peabody MA* 2.02 1.67 9.88 9.88 97.88
WFSL Washington FS&LA of Seattle WA 1.86 2.06 14.10 12.70 122.02
WAMU Washington Mutual Inc. of WA* 0.72 2.12 19.53 18.43 389.44
WYNE Wayne Bancorp of NJ 0.39 0.39 16.57 16.57 113.84
WAYN Wayne S&L Co. MHC of OH (47.8) 0.30 0.71 10.15 10.15 111.24
WCFB Wbstr Cty FSB MHC of IA (45.2) 0.46 0.61 10.45 10.45 44.36
WBST Webster Financial Corp. of CT 1.20 2.43 23.72 19.96 467.09
WEFC Wells Fin. Corp. of Wells MN 0.62 1.00 14.20 14.20 99.75
WCBI WestCo Bancorp of IL 1.33 1.71 18.89 18.89 121.35
WSTR WesterFed Fin. Corp. of MT 0.65 0.90 18.44 14.57 167.98
WOFC Western Ohio Fin. Corp. of OH 0.48 0.69 23.21 21.87 173.04
WWFC Westwood Fin. Corp. of NJ 0.67 1.24 15.43 13.67 167.41
WEHO Westwood Hmstd Fin Corp of OH 0.22 0.37 14.15 14.15 45.71
WFCO Winton Financial Corp. of OH 0.84 1.07 10.49 10.23 147.15
FFWD Wood Bancorp of OH 1.02 1.26 13.91 13.91 109.51
YFCB Yonkers Fin. Corp. of NY 0.67 0.92 13.68 13.68 89.43
YFED York Financial Corp. of PA 0.97 1.25 13.99 13.99 166.02
</TABLE>
<PAGE> 242
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
--------------------------------------------------------------- ------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ------------------------ ---------------- NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROB(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-
Insured Thrifts(no MHCs)
- ------------------------
SAIF-Insured Thrifts(314) 12.93 12.65 0.62 5.26 3.73 0.84 7.32 0.80 126.24 0.83
NYSE Traded Companies(9) 6.02 5.78 0.50 7.79 4.37 0.67 11.62 1.42 69.96 1.38
AMEX Traded Companies(18) 15.58 15.47 0.61 4.61 3.21 0.95 7.23 0.71 120.82 0.74
NASDAQ Listed OTC Companies(287) 12.98 12.69 0.62 5.23 3.74 0.84 7.20 0.79 128.43 0.82
California Companies(24) 7.37 6.76 0.21 3.20 3.01 0.29 5.02 1.75 63.17 1.35
Florida Companies(6) 7.94 7.52 0.90 10.89 4.44 0.82 9.72 1.40 66.01 0.81
Mid-Atlantic Companies(59) 10.66 10.28 0.61 6.14 4.22 0.86 8.79 0.91 97.56 0.95
Mid-West Companies(153) 14.34 14.15 0.65 5.10 3.80 0.89 6.93 0.62 143.41 0.70
New England Companies(11) 8.50 8.10 0.37 4.83 3.55 0.64 8.43 0.74 96.48 1.04
North-West Companies(6) 13.96 13.64 0.79 6.99 3.69 1.05 9.84 0.54 112.30 0.67
South-East Companies(43) 15.49 15.30 0.70 5.13 3.30 0.97 7.09 0.86 133.79 0.89
South-West Companies(6) 11.27 11.10 0.31 1.80 1.38 0.59 5.41 0.88 53.10 0.72
Western Companies (Excl CA)(6) 16.78 16.32 0.99 6.61 4.59 1.18 7.75 0.23 299.54 0.73
Thrift Strategy(245) 14.23 13.97 0.63 4.72 3.67 0.88 6.74 0.70 131.92 0.75
Mortgage Banker Strategy(39) 7.46 7.05 0.52 7.22 4.19 0.65 9.38 1.12 96.28 1.00
Real Estate Strategy(11) 7.52 7.34 0.44 5.30 3.17 0.72 9.30 1.66 100.42 1.35
Diversified Strategy(14) 7.83 7.68 1.08 13.23 5.43 1.14 14.51 1.36 106.28 1.32
Retail Banking Strategy(5) 11.03 10.86 0.26 2.39 1.19 0.29 2.94 0.76 164.76 1.62
Companies Issuing Dividends(262) 13.09 12.81 0.67 5.77 4.06 0.91 7.82 0.74 126.42 0.79
Companies Without Dividends(52) 12.11 11.82 0.32 2.64 1.99 0.49 4.76 1.17 125.29 1.04
Equity/Assets less than 6%(26) 4.93 4.60 0.34 6.66 4.41 0.52 10.25 1.20 92.43 1.15
Equity/Assets 6-12%(156) 8.64 8.25 0.56 6.45 4.02 0.75 8.71 0.94 120.21 0.94
Equity/Assets greater than 12%(132) 19.11 18.97 0.73 3.70 3.29 1.00 5.26 0.57 139.65 0.65
Converted Last 3 Mths (no MHC)(5) 27.87 27.72 0.43 1.01 1.23 0.82 3.26 0.67 89.00 0.87
Actively Traded Companies(45) 8.68 8.45 0.71 8.60 5.04 0.94 11.71 1.03 107.39 0.99
Market Value Below $20 Million(68) 15.01 14.93 0.50 2.89 3.03 0.75 4.79 0.82 117.89 0.70
Holding Company Structure(276) 13.52 13.26 0.62 5.16 3.67 0.86 7.21 0.78 125.08 0.81
Assets Over $1 Billion(66) 7.84 7.29 0.65 8.40 4.38 0.83 11.13 1.03 89.59 1.02
Assets $500 Million-$1 Billion(51) 10.36 9.88 0.60 5.94 4.03 0.78 7.69 0.80 160.90 1.03
Assets $250-$500 Million(65) 10.69 10.37 0.56 5.27 3.76 0.81 7.75 0.79 134.75 0.79
Assets less than $250 Million(132) 17.34 17.28 0.64 3.58 3.30 0.89 5.25 0.69 126.37 0.69
Goodwill Companies(129) 8.92 8.32 0.58 6.43 4.21 0.77 8.76 0.88 112.15 0.90
Non-Goodwill Companies(185) 15.60 15.54 0.64 4.48 3.41 0.89 6.37 0.75 136.37 0.79
Acquirors of FSLIC Cases(11) 7.14 6.76 0.54 7.08 4.15 0.80 11.25 1.57 52.89 0.91
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
------------------------------------------- ----------------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------ ------ ------- -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-
Insured Thrifts(no MHCs)
- -----------------------
SAIF-Insured Thrifts(314) 20.46 129.51 15.85 132.85 17.89 0.35 1.75 36.16
NYSE Traded Companies(9) 18.06 179.33 10.48 175.77 15.33 0.29 0.84 19.02
AMEX Traded Companies(18) 22.75 116.94 19.22 118.23 19.12 0.38 2.20 43.41
NASDAQ Listed OTC Companies(287) 20.36 128.71 15.81 132.54 17.90 0.35 1.75 36.44
California Companies(24) 17.38 138.72 9.75 136.98 18.11 0.14 0.51 13.08
Florida Companies(6) 17.57 143.80 14.75 162.64 18.77 0.24 0.90 14.70
Mid-Atlantic Companies(59) 20.16 131.50 13.65 136.28 16.50 0.38 1.79 38.69
Mid-West Companies(153) 20.67 123.10 16.64 125.05 17.71 0.35 1.83 36.01
New England Companies(11) 20.75 128.54 10.62 139.39 17.65 0.43 1.74 44.36
North-West Companies(6) 20.26 168.07 19.29 177.70 20.18 0.35 1.44 26.82
South-East Companies(43) 20.96 140.46 20.53 144.18 20.06 0.43 2.14 44.58
South-West Companies(6) 22.34 114.59 12.23 120.85 18.35 0.31 1.53 50.88
Western Companies (Excl CA)(6) 20.91 129.03 19.67 135.39 18.56 0.54 2.92 52.58
Thrift Strategy(245) 20.96 121.95 16.76 125.77 18.10 0.37 1.88 39.14
Mortgage Banker Strategy(39) 19.05 159.35 11.41 164.97 17.37 0.33 1.28 26.10
Real Estate Strategy(11) 15.12 145.61 10.66 148.09 16.57 0.14 0.89 21.44
Diversified Strategy(14) 18.35 204.63 17.48 201.87 15.32 0.45 1.60 30.22
Retail Banking Strategy(5) 19.42 112.86 12.07 115.13 19.46 0.16 1.29 16.90
Companies Issuing Dividends(262) 20.59 131.18 16.21 134.70 17.87 0.42 2.09 42.92
Companies Without Dividends(52) 19.15 120.79 13.97 123.11 18.03 0.00 0.00 0.00
Equity/Assets less than 6%(26) 17.51 164.62 8.57 168.58 15.33 0.21 0.78 15.93
Equity/Assets 6-12%(156) 19.48 140.31 12.24 146.11 16.49 0.38 1.68 35.39
Equity/Assets greater than 12%(132) 22.42 111.78 21.14 113.13 20.11 0.36 2.01 41.97
Converted Last 3 Mths (no MHC)(5) 24.32 94.16 26.34 94.98 22.33 0.00 0.00 0.00
Actively Traded Companies(45) 18.55 163.14 13.55 161.50 15.61 0.49 1.82 32.42
Market Value Below $20 Million(68) 22.46 105.32 15.59 106.16 19.57 0.32 1.94 42.85
Holding Company Structure(276) 20.85 127.66 16.37 130.43 18.09 0.36 1.80 37.55
Assets Over $1 Billion(66) 19.46 165.15 13.09 174.42 16.64 0.45 1.44 29.82
Assets $500 Million-$1 Billion(51) 18.79 140.61 14.45 145.65 17.41 0.34 1.65 39.23
Assets $250-$500 Million(65) 19.81 127.91 13.62 132.56 16.88 0.34 1.80 33.71
Assets less than $250 Million(132) 22.06 110.86 18.75 111.48 19.31 0.33 1.92 40.10
Goodwill Companies(129) 19.66 144.57 12.51 153.16 17.05 0.39 1.68 33.93
Non-Goodwill Companies(185) 21.09 119.38 18.07 119.47 18.51 0.33 1.81 37.95
Acquirors of FSLIC Cases(11) 18.82 161.75 11.16 160.21 15.47 0.37 1.55 30.01
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data
and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common
equity and assets balances; ROI (return on investment) is current EPS
divided by current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities
or unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of
institutions included in the respective averages. All figures have been
adjusted for stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 243
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
------------------------------------------------------------ ------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ --------------------- ------------- NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------ ----- ------ ----- ----- ----- ------ ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts
(no MHCs)
- ------------------------------------
BIF-Insured Thrifts(69) 11.91 11.55 0.99 10.37 6.19 1.02 10.48 0.99 122.83 1.47
NYSE Traded Companies(3) 7.97 6.42 0.76 10.56 5.53 0.76 10.88 2.16 39.24 1.08
AMEX Traded Companies(5) 12.93 12.71 0.81 8.54 5.09 0.82 8.81 1.08 109.25 1.43
NASDAQ Listed OTC Companies(61) 12.05 11.74 1.02 10.55 6.34 1.06 10.62 0.91 129.32 1.50
California Companies(3) 8.67 8.65 1.05 12.34 7.64 0.98 11.29 1.43 74.61 1.40
Mid-Atlantic Companies(18) 12.11 11.43 0.79 8.26 4.80 0.91 8.99 1.00 117.28 1.44
Mid-West Companies(2) 25.56 24.11 0.54 2.08 2.00 0.82 3.16 0.74 41.29 0.53
New England Companies(37) 9.08 8.79 1.09 12.84 7.55 1.06 12.41 1.06 134.22 1.71
North-West Companies(4) 10.49 10.42 0.96 8.81 4.96 1.05 10.73 0.42 148.23 1.06
South-East Companies(5) 28.04 28.04 1.06 4.11 3.45 1.17 4.54 0.70 110.74 0.77
Thrift Strategy(45) 13.43 13.01 0.99 9.36 5.89 1.01 9.24 0.92 126.81 1.37
Mortgage Banker Strategy(10) 9.50 9.39 0.77 10.56 5.88 1.00 12.11 1.14 118.19 1.58
Real Estate Strategy(6) 9.04 9.03 1.31 14.63 8.39 1.21 13.51 1.39 91.31 1.82
Diversified Strategy(6) 6.64 6.12 1.06 15.16 7.10 1.13 16.67 1.03 138.02 1.94
Retail Banking Strategy(2) 6.30 6.03 0.28 4.48 4.62 0.27 4.28 0.83 76.33 0.80
Companies Issuing Dividends(55) 11.53 11.13 1.03 10.56 6.37 1.05 10.64 0.89 132.10 1.48
Companies Without Dividends(14) 13.70 13.54 0.82 9.51 5.34 0.88 9.71 1.48 82.04 1.46
Equity/Assets <6%(5) 5.36 5.21 0.73 13.16 6.14 0.80 14.66 1.59 69.24 1.64
Equity/Assets 6-12%(45) 8.44 7.95 1.05 12.58 7.43 1.02 12.25 1.12 123.56 1.59
Equity/Assets >12%(19) 21.57 21.47 0.92 4.57 3.34 1.08 5.34 0.56 136.24 1.16
Actively Traded Companies(24) 8.68 8.29 1.10 12.92 7.44 1.09 12.92 0.96 127.51 1.60
Market Value Below $20 Million(9) 16.74 16.34 0.75 6.88 4.83 0.85 6.78 1.30 59.48 1.07
Holding Company Structure(45) 13.26 12.91 1.03 9.86 5.83 1.08 10.16 0.78 145.29 1.52
Assets Over $1 Billion(17) 8.88 8.27 0.98 12.28 6.18 1.09 13.31 1.09 118.24 1.58
Assets $500 Million-$1 Billion(16) 10.05 9.53 1.07 11.16 6.80 1.03 10.70 0.96 132.06 1.56
Assets $250-$500 Million(18) 11.17 11.05 0.95 10.38 6.46 0.94 10.20 0.91 132.00 1.58
Assets less than $250 Million(18) 17.16 16.96 0.97 7.85 5.37 1.02 7.90 1.01 110.32 1.19
Goodwill Companies(31) 9.08 8.29 0.86 10.65 6.25 0.93 11.18 1.23 104.40 1.58
Non-Goodwill Companies(37) 14.29 14.29 1.10 10.14 6.14 1.10 9.89 0.79 139.94 1.39
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- ---------------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ----- ------ ----- ------- ------ ------ -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts
(no MHCs)
- -------------------------------------
BIF-Insured Thrifts(69) 14.85 148.71 16.58 151.51 15.95 0.46 1.87 28.10
NYSE Traded Companies(3) 18.38 179.90 14.71 162.17 18.40 0.33 0.50 10.79
AMEX Traded Companies(5) 15.06 142.13 16.62 147.18 14.07 0.62 2.61 33.65
NASDAQ Listed OTC Companies(61) 14.56 147.45 16.70 151.52 15.91 0.45 1.88 28.91
California Companies(3) 13.29 142.42 12.25 142.64 14.67 0.00 0.00 0.00
Mid-Atlantic Companies(18) 17.26 152.95 17.47 159.25 17.49 0.45 1.72 34.41
Mid-West Companies(2) 0.00 92.11 23.54 97.66 0.00 0.00 0.00 0.00
New England Companies(37) 13.38 155.16 13.76 157.57 13.83 0.51 2.27 29.77
North-West Companies(4) 17.93 158.27 18.39 158.27 21.37 0.47 1.57 27.23
South-East Companies(5) 19.09 107.97 30.10 107.97 22.40 0.59 1.71 25.72
Thrift Strategy(45) 15.27 142.46 17.71 146.99 16.26 0.50 1.99 31.45
Mortgage Banker Strategy(10) 15.30 161.03 14.75 163.58 15.38 0.33 1.56 10.19
Real Estate Strategy(6) 12.29 160.52 14.53 160.63 13.07 0.18 1.22 14.28
Diversified Strategy(6) 12.47 190.96 13.89 187.64 16.08 0.54 1.64 22.19
Retail Banking Strategy(2) 21.63 96.88 6.10 101.21 22.65 0.64 3.32 71.91
Companies Issuing Dividends(55) 15.17 149.75 16.49 153.00 16.13 0.56 2.27 34.27
Companies Without Dividends(14) 12.67 143.93 17.01 144.95 14.85 0.00 0.00 0.00
Equity/Assets <6%(5) 13.64 197.12 12.09 201.03 18.85 0.37 1.14 12.64
Equity/Assets 6-12%(45) 13.78 154.93 13.09 159.09 14.11 0.50 2.10 27.57
Equity/Assets >12%(19) 19.98 125.25 25.79 125.64 20.75 0.40 1.52 33.51
Actively Traded Companies(24) 13.60 159.60 14.14 162.19 14.95 0.51 1.97 26.61
Market Value Below $20 Million(9) 17.06 118.13 18.20 122.27 20.31 0.30 1.79 36.04
Holding Company Structure(45) 15.37 148.38 18.36 153.07 16.60 0.48 1.90 27.75
Assets Over $1 Billion(17) 15.41 182.60 16.64 180.27 16.78 0.54 1.73 22.51
Assets $500 Million-$1 Billion(16) 14.58 150.24 14.88 163.61 15.55 0.47 1.94 25.88
Assets $250-$500 Million(18) 13.66 140.08 14.83 141.79 13.52 0.41 1.87 28.51
Assets less than $250 Million(18) 15.92 125.97 19.76 128.20 17.81 0.43 1.94 34.21
Goodwill Companies(31) 15.10 152.48 13.66 159.38 16.19 0.52 2.01 28.43
Non-Goodwill Companies(37) 14.61 145.67 19.03 145.67 15.73 0.41 1.75 27.85
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data
and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common
equity and assets balances; ROI (return on investment) is current EPS
divided by current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities
or unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 244
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Equity/ Equity/ _Reported Earnings Core Earnings NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------ ------ ----- ------ ----- ----- ------ ------ ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(21) 11.58 11.32 0.56 4.91 2.93 0.85 7.72 0.52 165.73 0.76
BIF-Insured Thrifts(2) 9.94 9.94 0.56 6.87 2.55 0.61 6.84 1.85 84.60 1.87
NASDAQ Listed OTC Companies(23) 11.41 11.18 0.56 5.11 2.89 0.83 7.63 0.66 156.19 0.88
Florida Companies(3) 9.42 9.29 0.65 6.87 3.69 0.93 9.78 0.45 120.09 0.78
Mid-Atlantic Companies(10) 12.03 11.57 0.48 3.65 2.21 0.76 6.22 0.88 177.29 0.99
Mid-West Companies(7) 11.68 11.67 0.51 4.76 3.06 0.83 7.88 0.36 150.22 0.63
New England Companies(1) 8.41 8.40 1.10 13.63 5.02 0.88 10.86 0.91 125.48 1.68
South-East Companies(1) 13.29 13.29 0.75 6.48 3.39 1.06 9.13 0.00 0.00 1.01
Thrift Strategy(21) 11.57 11.33 0.53 4.66 2.78 0.82 7.46 0.65 158.11 0.83
Diversified Strategy(1) 8.41 8.40 1.10 13.63 5.02 0.88 10.86 0.91 125.48 1.68
Companies Issuing Dividends(22) 11.19 10.95 0.57 5.25 2.95 0.84 7.85 0.66 163.85 0.89
Companies Without Dividends(1) 15.65 15.65 0.37 2.35 1.73 0.54 3.43 0.74 33.56 0.66
Equity/Assets 6-12%(15) 9.10 8.86 0.47 5.41 2.91 0.76 8.39 0.73 110.98 1.00
Equity/Assets >12%(8) 15.70 15.50 0.72 4.55 2.85 0.96 6.22 0.50 303.10 0.62
Actively Traded Companies(1) 9.19 8.15 0.51 5.44 2.88 0.90 9.61 0.58 93.31 1.05
Holding Company Structure(1) 9.19 8.15 0.51 5.44 2.88 0.90 9.61 0.58 93.31 1.05
Assets Over $1 Billion(5) 8.69 8.08 0.70 7.95 3.60 0.92 10.32 0.70 115.46 1.20
Assets $500 Million-$1 Billion(4) 12.23 11.73 0.79 5.66 3.55 0.92 7.10 0.55 67.73 0.57
Assets $250-$500 Million(4) 9.95 9.94 0.52 5.65 3.60 0.83 9.07 0.29 365.36 0.61
Assets less than $250 Million(10) 13.54 13.54 0.41 2.86 1.84 0.73 5.42 0.94 82.65 0.94
Goodwill Companies(9) 9.63 9.06 0.71 7.06 3.46 0.89 9.20 0.59 122.21 0.95
Non-Goodwill Companies(14) 12.60 12.60 0.46 3.81 2.51 0.78 6.58 0.72 186.39 0.83
MHC Institutions(23) 11.41 11.18 0.56 5.11 2.89 0.83 7.63 0.66 156.19 0.88
MHC Converted Last 3 Months(2) 13.83 13.83 0.32 2.35 1.75 0.59 4.36 0.71 33.56 0.66
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
---------------------------------------------- ---------------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------ ------ ------ -------- ------- ----- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(21) 23.79 158.61 18.04 163.48 21.49 0.66 3.16 54.10
BIF-Insured Thrifts(2) 19.92 155.32 19.64 155.32 25.00 0.52 2.65 50.38
NASDAQ Listed OTC Companies(23) 23.24 158.43 18.20 163.05 21.69 0.65 3.11 53.63
Florida Companies(3) 23.66 174.24 16.04 177.59 19.38 1.03 3.90 72.54
Mid-Atlantic Companies(10) 25.22 156.23 18.59 164.67 22.52 0.39 2.24 42.09
Mid-West Companies(7) 15.49 155.27 17.86 155.54 21.61 0.70 3.85 68.88
New England Companies(1) 19.92 0.00 21.45 0.00 25.00 0.67 2.53 50.38
South-East Companies(1) 29.50 149.82 19.91 149.82 20.92 1.40 4.75 0.00
Thrift Strategy(21) 23.79 158.43 18.03 163.05 21.49 0.64 3.14 54.10
Diversified Strategy(1) 19.92 0.00 21.45 0.00 25.00 0.67 2.53 50.38
Companies Issuing Dividends(22) 23.24 159.69 18.04 164.56 21.69 0.68 3.27 61.29
Companies Without Dividends(1) 0.00 135.85 21.26 135.85 0.00 0.00 0.00 0.00
Equity/Assets 6-12%(15) 21.99 164.04 15.45 170.02 20.36 0.64 2.96 64.56
Equity/Assets >12%(8) 26.36 148.82 23.30 151.09 24.13 0.66 3.39 20.83
Actively Traded Companies(1) 0.00 184.62 16.97 208.33 19.67 0.48 2.00 69.57
Holding Company Structure(1) 0.00 184.62 16.97 208.33 19.67 0.48 2.00 69.57
Assets Over $1 Billion(5) 22.76 186.51 17.37 203.72 20.74 0.69 2.56 62.41
Assets $500 Million-$1 Billion(4) 24.71 156.34 19.32 162.07 22.82 0.68 3.35 41.67
Assets $250-$500 Million(4) 15.49 157.94 15.53 158.34 19.11 0.69 3.49 68.88
Assets less than $250 Million(10) 29.50 145.43 19.63 145.43 24.04 0.58 3.18 0.00
Goodwill Companies(9) 22.87 179.09 17.95 191.62 21.90 0.63 2.59 60.31
Non-Goodwill Companies(14) 23.73 146.38 18.36 146.38 21.52 0.65 3.46 33.58
MHC Institutions(23) 23.24 158.43 18.20 163.05 21.69 0.65 3.11 53.63
MHC Converted Last 3 Months(2) 0.00 134.05 18.57 134.05 25.00 0.15 1.15 0.00
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data
and is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios
based on trailing twelve month common earnings and average common
equity and assets balances; ROI (return on investment) is current EPS
divided by current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities
or unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 245
RP FINANCIAL, LC.
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
NYSE Traded Companies
- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AHM Ahmanson and Co. H.F. of CA 3.94 3.32 0.29 6.90 2.99 0.57 13.71 2.06 38.66 1.24
CSA Coast Savings Financial of CA 4.96 4.89 0.16 3.19 1.59 0.50 10.09 1.34 71.08 1.37
CFB Commercial Federal Corp. of NE 5.92 5.27 0.64 10.83 5.31 0.91 15.46 1.01 70.83 0.95
DME Dime Bancorp, Inc. of NY* 5.71 5.65 0.58 10.88 5.53 0.73 13.89 2.36 23.73 0.94
DSL Downey Financial Corp. of CA 7.30 7.19 0.45 5.74 3.61 0.76 9.71 1.11 50.35 0.62
FRC First Republic Bancorp of CA* 7.41 7.41 0.66 10.90 6.42 0.59 9.72 1.28 65.82 0.95
FED FirstFed Fin. Corp. of CA 4.73 4.66 0.24 5.24 3.10 0.48 10.42 1.74 110.91 2.53
GLN Glendale Fed. Bk, FSB of CA 5.66 5.26 0.22 3.99 2.56 0.55 10.01 1.66 64.79 1.45
GDW Golden West Fin. Corp. of CA 6.27 6.27 1.01 15.83 8.86 1.24 19.41 1.44 37.62 0.68
GWF Great Western Fin. Corp. of CA(8) 5.64 5.00 0.21 3.73 1.20 0.66 11.65 1.28 58.56 1.02
GPT GreenPoint Fin. Corp. of NY* 10.81 6.19 1.06 9.91 4.66 0.96 9.05 2.84 28.16 1.36
WES Westcorp Inc. of Orange CA 9.39 9.36 0.99 10.58 6.93 0.39 4.15 1.02 115.45 2.20
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares of LA* 17.81 17.81 0.31 2.70 1.50 0.33 2.79 0.51 192.62 1.37
BKC American Bank of Waterbury CT* 7.97 7.62 1.27 15.17 8.51 1.10 13.16 1.97 44.68 1.43
BFD BostonFed Bancorp of MA 8.90 8.59 0.48 4.34 3.62 0.65 5.97 0.63 91.43 0.71
CFX CFX Corp of NH* 7.67 7.15 0.90 10.59 5.19 1.12 13.18 0.61 147.62 1.34
CZF Citisave Fin. Corp. of LA(8) 16.62 16.62 0.50 3.00 1.98 0.77 4.58 0.20 46.05 0.15
CBK Citizens First Fin.Corp. of IL 14.64 14.64 0.27 1.98 1.56 0.58 4.19 0.54 35.90 0.24
ESX Essex Bancorp of VA(8) 0.07 -0.05 -3.47 NM NM -1.73 NM 3.23 40.63 1.50
FCB Falmouth Co-Op Bank of MA* 24.45 24.45 0.85 3.46 3.20 0.82 3.32 0.02 NA 1.06
FAB FirstFed America Bancorp of MA 12.47 12.47 -0.27 -3.69 -1.65 0.42 5.80 NA NA 1.06
GAF GA Financial Corp. of PA 17.26 17.08 1.07 5.21 4.07 1.35 6.57 0.12 136.73 0.48
KNK Kankakee Bancorp of IL 10.68 10.00 0.61 5.97 5.21 0.78 7.67 1.06 64.54 1.01
KYF Kentucky First Bancorp of KY 16.11 16.11 0.80 3.99 4.82 1.06 5.27 0.14 295.31 0.77
NYB New York Bancorp, Inc. of NY 5.06 5.06 1.31 24.82 6.88 1.55 29.28 1.29 48.39 1.01
PDB Piedmont Bancorp of NC 16.97 16.97 -0.31 -1.27 -1.35 0.79 3.28 0.91 71.22 0.80
PLE Pinnacle Bank of AL 7.73 7.48 0.58 7.39 5.90 0.88 11.08 1.53 39.16 0.87
SSB Scotland Bancorp of NC 36.68 36.68 1.46 4.01 3.38 1.78 4.88 NA NA 0.50
SZB SouthFirst Bancshares of AL 13.98 13.98 0.05 0.31 0.33 0.27 1.89 0.64 44.97 0.40
SRN Southern Banc Company of AL 16.83 16.64 0.22 1.14 1.28 0.57 3.00 NA NA NA
SSM Stone Street Bancorp of NC 35.85 35.85 1.67 4.76 3.63 1.94 5.52 0.18 274.87 0.62
TSH Teche Holding Company of LA 13.30 13.30 0.73 5.04 4.28 1.01 6.94 0.27 303.33 0.97
FTF Texarkana Fst. Fin. Corp of AR 16.03 16.03 1.39 7.83 6.94 1.72 9.71 0.47 144.57 0.82
THR Three Rivers Fin. Corp. of MI 14.48 14.42 0.54 3.58 3.43 0.81 5.36 1.21 44.02 0.80
TBK Tolland Bank of CT* 6.73 6.52 0.69 10.81 7.06 0.75 11.61 2.31 52.07 1.95
WSB Washington SB, FSB of MD 8.32 8.32 0.51 6.16 5.90 0.74 8.95 NA NA 0.90
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 7.97 7.79 0.24 2.95 2.89 0.03 0.42 0.71 51.00 0.55
AFED AFSALA Bancorp, Inc. of NY 13.85 13.85 0.24 2.52 1.56 0.57 6.04 NA NA NA
ALBK ALBANK Fin. Corp. of Albany NY 9.20 7.98 0.81 8.74 5.45 1.01 10.91 0.92 78.02 0.98
AMFC AMB Financial Corp. of IN 16.30 16.30 0.69 3.72 3.93 0.87 4.67 0.58 64.22 0.50
ASBP ASB Financial Corp. of OH 15.73 15.73 0.60 3.01 3.25 0.88 4.40 1.58 50.98 1.23
ABBK Abington Savings Bank of MA(8)* 6.87 6.16 0.77 11.55 7.92 0.67 10.04 0.30 133.04 0.64
AABC Access Anytime Bancorp of NM 6.80 6.80 -0.59 -11.49 -9.91 -0.23 -4.44 1.59 26.80 0.94
AFBC Advance Fin. Bancorp of WV 15.45 15.45 0.39 3.45 2.46 0.79 7.00 0.37 89.84 0.40
AADV Advantage Bancorp of WI 8.83 8.19 0.35 3.80 2.77 0.86 9.43 0.56 102.27 1.01
AFCB Affiliated Comm BC, Inc of MA 9.77 9.71 0.93 9.45 5.95 1.07 10.81 0.46 163.49 1.19
ALBC Albion Banc Corp. of Albion NY 8.90 8.90 0.09 0.93 1.00 0.38 3.93 NA NA 0.65
ABCL Allied Bancorp of IL 9.31 9.19 0.42 4.88 2.11 0.71 8.21 0.18 236.73 0.50
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
AHM Ahmanson and Co. H.F. of CA NM 247.35 9.73 NM 16.83 0.88 1.87 62.41
CSA Coast Savings Financial of CA NM 196.16 9.72 198.96 19.91 0.00 0.00 0.00
CFB Commercial Federal Corp. of NE 18.84 197.47 11.69 221.89 13.20 0.28 0.75 14.07
DME Dime Bancorp, Inc. of NY* 18.10 189.81 10.83 191.53 14.18 0.00 0.00 0.00
DSL Downey Financial Corp. of CA 27.68 155.21 11.33 157.52 16.37 0.32 1.38 38.10
FRC First Republic Bancorp of CA* 15.58 132.72 9.84 132.80 17.48 0.00 0.00 0.00
FED FirstFed Fin. Corp. of CA NM 165.69 7.83 167.87 16.20 0.00 0.00 0.00
GLN Glendale Fed. Bk, FSB of CA NM 146.56 8.29 157.58 15.56 0.00 0.00 0.00
GDW Golden West Fin. Corp. of CA 11.29 173.62 10.88 173.62 9.20 0.44 0.60 6.78
GWF Great Western Fin. Corp. of CA(8) NM NM 18.01 NM 26.79 1.00 1.79 NM
GPT GreenPoint Fin. Corp. of NY* 21.48 217.18 23.47 NM 23.54 1.00 1.51 32.36
WES Westcorp Inc. of Orange CA 14.42 152.56 14.32 152.94 NM 0.40 2.13 30.77
AMEX Traded Companies
- ---------------------
ANA Acadiana Bancshares of LA* NM 112.35 20.01 112.35 NM 0.36 1.86 NM
BKC American Bank of Waterbury CT* 11.75 174.10 13.88 182.14 13.55 1.44 4.06 47.68
BFD BostonFed Bancorp of MA 27.64 125.91 11.21 130.46 20.10 0.28 1.58 43.75
CFX CFX Corp of NH* 19.28 176.78 13.56 189.54 15.49 0.88 4.86 NM
CZF Citisave Fin. Corp. of LA(8) NM 156.37 25.99 156.37 NM 0.40 1.98 NM
CBK Citizens First Fin.Corp. of IL NM 112.60 16.49 112.60 NM 0.00 0.00 0.00
ESX Essex Bancorp of VA(8) NM NM 0.66 NM NM 0.00 0.00 NM
FCB Falmouth Co-Op Bank of MA* NM 107.12 26.19 107.12 NM 0.20 1.23 38.46
FAB FirstFed America Bancorp of MA NM 121.17 15.11 121.17 NM 0.00 0.00 NM
GAF GA Financial Corp. of PA 24.60 137.65 23.76 139.06 19.53 0.40 2.11 51.95
KNK Kankakee Bancorp of IL 19.21 112.67 12.03 120.33 14.95 0.48 1.66 31.79
KYF Kentucky First Bancorp of KY 20.75 101.29 16.32 101.29 15.71 0.50 4.55 NM
NYB New York Bancorp, Inc. of NY 14.54 NM 17.93 NM 12.32 0.60 1.73 25.10
PDB Piedmont Bancorp of NC NM 141.86 24.07 141.86 28.81 0.40 3.86 NM
PLE Pinnacle Bank of AL 16.96 123.24 9.53 127.35 11.31 0.80 3.74 63.49
SSB Scotland Bancorp of NC 29.55 118.27 43.38 118.27 24.25 0.30 1.85 54.55
SZB SouthFirst Bancshares of AL NM 95.58 13.36 95.58 NM 0.50 3.31 NM
SRN Southern Banc Company of AL NM 103.26 17.38 104.42 29.74 0.35 2.35 NM
SSM Stone Street Bancorp of NC 27.53 131.52 47.15 131.52 23.70 0.45 1.65 45.45
TSH Teche Holding Company of LA 23.36 122.72 16.33 122.72 16.99 0.50 2.68 62.50
FTF Texarkana Fst. Fin. Corp of AR 14.40 122.45 19.63 122.45 11.61 0.45 2.50 36.00
THR Three Rivers Fin. Corp. of MI 29.17 102.61 14.85 103.01 19.44 0.36 2.29 66.67
TBK Tolland Bank of CT* 14.16 140.28 9.44 144.74 13.19 0.20 1.05 14.81
WSB Washington SB, FSB of MD 16.94 103.75 8.63 103.75 11.67 0.10 1.90 32.26
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN NM 101.06 8.05 103.35 NM 0.40 1.27 43.96
AFED AFSALA Bancorp, Inc. of NY NM 101.79 14.10 101.79 26.82 0.16 1.08 69.57
ALBK ALBANK Fin. Corp. of Albany NY 18.35 158.61 14.60 182.87 14.69 0.60 1.51 27.65
AMFC AMB Financial Corp. of IN 25.45 97.97 15.97 97.97 20.29 0.24 1.71 43.64
ASBP ASB Financial Corp. of OH NM 120.00 18.87 120.00 21.05 0.40 3.33 NM
ABBK Abington Savings Bank of MA(8)* 12.63 139.98 9.62 156.25 14.53 0.40 1.60 20.20
AABC Access Anytime Bancorp of NM NM 90.69 6.17 90.69 NM 0.00 0.00 NM
AFBC Advance Fin. Bancorp of WV NM 96.54 14.91 96.54 20.07 0.32 2.25 NM
AADV Advantage Bancorp of WI NM 139.68 12.34 150.75 14.55 0.40 1.03 37.04
AFCB Affiliated Comm BC, Inc of MA 16.81 152.69 14.91 153.66 14.68 0.48 1.97 33.10
ALBC Albion Banc Corp. of Albion NY NM 93.14 8.29 93.14 23.66 0.31 1.41 NM
ABCL Allied Bancorp of IL NM 130.27 12.13 131.99 28.18 0.65 2.18 NM
</TABLE>
<PAGE> 246
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ATSB AmTrust Capital Corp. of IN 10.17 10.06 0.29 2.88 3.17 0.19 1.87 2.84 23.48 0.93
AHCI Ambanc Holding Co., Inc. of NY* 12.72 12.72 -0.62 -4.16 -4.06 -0.62 -4.16 1.06 72.94 1.47
ASBI Ameriana Bancorp of IN 10.85 10.84 0.60 5.40 4.67 0.86 7.77 0.43 63.58 0.38
AFFFZ America First Fin. Fund of CA(8) 8.28 8.16 1.42 19.23 13.45 1.74 23.53 0.41 80.65 0.50
AMFB American Federal Bank of SC(8) 8.99 8.38 1.10 13.34 4.25 1.37 16.50 0.44 193.22 1.30
ANBK American Nat'l Bancorp of MD 9.15 9.15 0.15 1.44 1.18 0.54 5.14 NA NA 1.17
ABCW Anchor Bancorp Wisconsin of WI 6.25 6.13 0.76 12.01 6.08 0.99 15.68 0.75 161.56 1.53
ANDB Andover Bancorp, Inc. of MA* 8.07 8.07 1.09 14.05 8.58 1.13 14.50 1.14 89.41 1.41
ASFC Astoria Financial Corp. of NY 7.60 6.32 0.52 6.54 3.88 0.77 9.68 0.52 35.00 0.50
AVND Avondale Fin. Corp. of IL 8.25 8.25 -0.71 -7.35 -8.71 -1.34 -13.86 1.66 194.88 5.35
BKCT Bancorp Connecticut of CT* 10.40 10.40 1.26 11.92 7.88 1.20 11.39 1.11 108.02 1.98
BPLS Bank Plus Corp. of CA 4.92 4.91 -0.35 -6.90 -6.30 -0.04 -0.77 3.22 49.87 1.96
BWFC Bank West Fin. Corp. of MI 15.30 15.30 0.74 4.25 4.21 0.53 3.03 0.03 458.70 0.20
BANC BankAtlantic Bancorp of FL 5.51 4.48 0.92 14.32 7.86 0.71 11.10 0.78 120.47 1.40
BKUNA BankUnited SA of FL 4.46 3.59 0.18 3.57 2.18 0.35 6.97 0.74 26.73 0.24
BKCO Bankers Corp. of NJ(8)* 7.78 7.66 1.10 13.28 7.89 1.18 14.19 1.20 23.83 0.46
BVCC Bay View Capital Corp. of CA 6.31 6.00 0.38 6.12 3.53 0.64 10.36 0.79 115.33 1.20
BFSB Bedford Bancshares of VA 14.32 14.32 1.05 7.12 5.59 1.35 9.09 0.63 77.52 0.57
BFFC Big Foot Fin. Corp. of IL 16.98 16.98 0.05 0.28 0.25 0.42 2.45 0.09 151.52 0.34
BSBC Branford SB of CT* 9.54 9.54 1.14 12.65 6.61 1.11 12.24 1.94 112.22 3.09
BYFC Broadway Fin. Corp. of CA 10.87 10.87 -0.24 -2.42 -2.88 0.12 1.25 2.42 41.50 1.19
CBCO CB Bancorp of Michigan City IN(8) 8.83 8.83 1.00 10.68 5.15 1.17 12.50 2.90 27.47 1.98
CBES CBES Bancorp of MO 18.39 18.39 0.77 5.22 4.09 0.96 6.51 0.77 54.05 0.46
CCFH CCF Holding Company of GA 14.32 14.32 0.26 1.47 1.56 0.43 2.41 0.34 189.90 0.79
CENF CENFED Financial Corp. of CA 5.10 5.09 0.49 9.61 5.62 0.72 14.11 1.40 51.06 1.03
CFSB CFSB Bancorp of Lansing MI 7.63 7.63 0.75 9.50 5.03 1.00 12.75 0.10 565.80 0.62
CKFB CKF Bancorp of Danville KY 23.68 23.68 1.31 5.12 4.36 1.29 5.05 1.48 12.02 0.20
CNSB CNS Bancorp of MO 24.82 24.82 0.53 2.41 1.88 0.81 3.66 0.45 80.36 0.57
CSBF CSB Financial Group Inc of IL* 25.56 24.11 0.54 2.08 2.00 0.82 3.16 0.74 41.29 0.53
CFHC California Fin. Hld. Co. of CA(8) 6.96 6.93 0.53 8.00 5.00 0.82 12.26 1.04 54.70 0.77
CBCI Calumet Bancorp of Chicago IL 15.94 15.94 1.11 6.86 6.30 1.44 8.87 1.40 84.90 1.54
CAFI Camco Fin. Corp. of OH 9.69 8.92 0.75 8.54 5.50 0.88 10.01 0.68 38.86 0.32
CMRN Cameron Fin. Corp. of MO 22.95 22.95 1.12 4.46 4.60 1.39 5.56 0.60 135.41 0.95
CAPS Capital Savings Bancorp of MO 8.66 8.66 0.65 7.16 4.63 0.92 10.23 0.26 116.53 0.38
CFNC Carolina Fincorp of NC* 23.71 23.71 1.11 4.65 4.52 1.05 4.36 0.28 133.67 0.54
CNY Carver Bancorp, Inc. of NY 8.06 7.72 -0.47 -5.07 -6.20 -0.03 -0.33 1.53 34.62 1.12
CASB Cascade SB of Everett WA 6.17 6.17 0.46 7.46 4.11 0.58 9.42 0.59 142.60 1.02
CATB Catskill Fin. Corp. of NY* 26.98 26.98 1.42 6.14 5.42 1.44 6.22 0.50 133.79 1.47
CNIT Cenit Bancorp of Norfolk VA 7.02 6.40 0.74 10.48 7.12 0.68 9.75 0.65 85.28 0.87
CEBK Central Co-Op. Bank of MA* 10.26 9.11 0.59 5.92 5.30 0.66 6.66 1.67 53.48 1.24
CENB Century Bancshares of NC* 29.93 29.93 1.76 5.86 6.22 1.78 5.93 0.39 139.39 0.91
CBSB Charter Financial Inc. of IL 14.13 12.40 0.97 5.94 4.92 1.22 7.50 0.51 114.56 0.80
COFI Charter One Financial of OH 6.78 6.30 0.97 14.40 5.65 1.23 18.30 0.32 147.01 0.77
CNBA Chester Bancorp of IL 22.21 22.21 1.09 4.90 4.79 1.09 4.90 0.25 107.12 0.70
CVAL Chester Valley Bancorp of PA 8.56 8.56 0.63 7.00 4.14 0.92 10.30 0.47 187.15 1.10
CTZN CitFed Bancorp of Dayton OH 6.33 5.64 0.55 8.47 4.69 0.79 12.27 0.45 128.08 0.99
CLAS Classic Bancshares of KY 14.92 12.53 0.42 2.06 2.11 0.71 3.43 0.91 68.31 0.99
CMSB Cmnwealth Bancorp of PA 9.57 7.35 0.56 5.44 3.97 0.72 7.00 0.42 106.34 0.86
COVB CoVest Bancshares of IL 8.94 8.51 0.16 1.78 1.70 0.43 4.89 0.23 118.11 0.43
CBSA Coastal Bancorp of Houston TX 3.42 2.89 0.26 7.87 5.18 0.44 13.15 0.65 37.23 0.56
CFCP Coastal Fin. Corp. of SC 6.10 6.10 0.90 14.66 3.87 0.99 16.14 0.26 350.59 1.14
COFD Collective Bancorp Inc. of NJ(8) 7.00 6.33 0.94 13.56 5.31 1.15 16.49 0.40 60.69 0.47
CMSV Commty. Svgs, MHC of FL (48.5) 11.23 11.23 0.63 5.41 3.82 0.95 8.21 0.57 66.20 0.64
CBNH Community Bankshares Inc of NH(8)* 7.13 7.13 0.93 13.02 5.51 0.75 10.52 0.61 115.48 1.01
CFTP Community Fed. Bancorp of MS 33.52 33.52 1.43 4.31 3.86 1.70 5.13 0.35 79.45 0.47
CFFC Community Fin. Corp. of VA 13.78 13.78 1.04 7.50 5.82 1.31 9.44 0.35 180.62 0.70
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ATSB AmTrust Capital Corp. of IN NM 91.92 9.35 92.93 NM 0.20 1.58 50.00
AHCI Ambanc Holding Co., Inc. of NY* NM 115.52 14.70 115.52 NM 0.00 0.00 NM
ASBI Ameriana Bancorp of IN 21.41 116.82 12.67 116.90 14.89 0.60 3.84 NM
AFFFZ America First Fin. Fund of CA(8) 7.44 131.56 10.89 133.47 6.08 1.60 4.04 30.08
AMFB American Federal Bank of SC(8) 23.52 NM 26.81 NM 19.01 0.48 1.51 35.56
ANBK American Nat'l Bancorp of MD NM 130.74 11.97 130.74 23.71 0.12 0.74 63.16
ABCW Anchor Bancorp Wisconsin of WI 16.45 194.33 12.15 198.18 12.59 0.56 1.12 18.42
ANDB Andover Bancorp, Inc. of MA* 11.65 154.91 12.49 154.91 11.30 0.68 2.32 26.98
ASFC Astoria Financial Corp. of NY 25.77 165.83 12.60 199.30 17.41 0.60 1.32 33.90
AVND Avondale Fin. Corp. of IL NM 94.09 7.77 94.09 NM 0.00 0.00 NM
BKCT Bancorp Connecticut of CT* 12.69 151.70 15.78 151.70 13.28 0.88 3.45 43.78
BPLS Bank Plus Corp. of CA NM 112.61 5.54 112.87 NM 0.00 0.00 NM
BWFC Bank West Fin. Corp. of MI 23.73 110.94 16.98 110.94 NM 0.28 2.00 47.46
BANC BankAtlantic Bancorp of FL 12.72 171.57 9.45 211.06 16.42 0.12 0.85 10.81
BKUNA BankUnited SA of FL NM 131.24 5.86 163.33 23.46 0.00 0.00 0.00
BKCO Bankers Corp. of NJ(8)* 12.68 161.89 12.60 164.57 11.87 0.64 2.47 31.37
BVCC Bay View Capital Corp. of CA 28.32 179.74 11.34 189.06 16.74 0.32 1.20 34.04
BFSB Bedford Bancshares of VA 17.89 125.83 18.02 125.83 14.02 0.56 2.70 48.28
BFFC Big Foot Fin. Corp. of IL NM 111.58 18.94 111.58 NM 0.00 0.00 0.00
BSBC Branford SB of CT* 15.13 181.78 17.34 181.78 15.63 0.08 1.71 25.81
BYFC Broadway Fin. Corp. of CA NM 75.39 8.20 75.39 NM 0.20 1.86 NM
CBCO CB Bancorp of Michigan City IN(8) 19.43 198.55 17.54 198.55 16.60 0.00 0.00 0.00
CBES CBES Bancorp of MO 24.45 98.77 18.16 98.77 19.62 0.40 2.37 57.97
CCFH CCF Holding Company of GA NM 111.19 15.92 111.19 NM 0.50 3.13 NM
CENF CENFED Financial Corp. of CA 17.80 163.26 8.33 163.59 12.13 0.33 1.01 17.93
CFSB CFSB Bancorp of Lansing MI 19.87 188.72 14.40 188.72 14.81 0.60 2.58 51.28
CKFB CKF Bancorp of Danville KY 22.92 125.16 29.64 125.16 23.19 0.44 2.29 52.38
CNSB CNS Bancorp of MO NM 112.02 27.80 112.02 NM 0.20 1.21 64.52
CSBF CSB Financial Group Inc of IL* NM 92.11 23.54 97.66 NM 0.00 0.00 0.00
CFHC California Fin. Hld. Co. of CA(8) 20.01 154.19 10.73 154.84 13.05 0.44 1.49 29.73
CBCI Calumet Bancorp of Chicago IL 15.86 112.12 17.87 112.12 12.27 0.00 0.00 0.00
CAFI Camco Fin. Corp. of OH 18.18 120.40 11.67 130.81 15.52 0.52 2.89 52.53
CMRN Cameron Fin. Corp. of MO 21.75 99.00 22.72 99.00 17.45 0.28 1.67 36.36
CAPS Capital Savings Bancorp of MO 21.58 152.62 13.22 152.62 15.11 0.24 1.44 31.17
CFNC Carolina Fincorp of NC* 22.11 103.23 24.48 103.23 23.56 0.20 1.39 30.77
CNY Carver Bancorp, Inc. of NY NM 82.99 6.69 86.69 NM 0.20 1.63 NM
CASB Cascade SB of Everett WA 24.34 174.69 10.79 174.69 19.27 0.00 0.00 0.00
CATB Catskill Fin. Corp. of NY* 18.45 105.44 28.45 105.44 18.24 0.28 1.81 33.33
CNIT Cenit Bancorp of Norfolk VA 14.04 147.11 10.32 161.35 15.08 1.00 2.25 31.55
CEBK Central Co-Op. Bank of MA* 18.88 106.97 10.98 120.56 16.78 0.32 1.77 33.33
CENB Century Bancshares of NC* 16.07 94.20 28.20 94.20 15.88 2.00 2.89 46.40
CBSB Charter Financial Inc. of IL 20.31 129.05 18.23 147.07 16.09 0.32 1.88 38.10
COFI Charter One Financial of OH 17.71 248.42 16.83 NM 13.93 1.00 1.96 34.72
CNBA Chester Bancorp of IL 20.86 102.14 22.68 102.14 20.86 0.24 1.62 33.80
CVAL Chester Valley Bancorp of PA 24.14 165.09 14.13 165.09 16.41 0.44 2.10 50.57
CTZN CitFed Bancorp of Dayton OH 21.34 173.97 11.01 195.32 14.73 0.32 0.85 18.18
CLAS Classic Bancshares of KY NM 98.34 14.68 117.09 28.50 0.28 1.96 NM
CMSB Cmnwealth Bancorp of PA 25.18 132.96 12.72 173.13 19.55 0.28 1.68 42.42
COVB CoVest Bancshares of IL NM 111.55 9.97 117.06 21.47 0.40 2.19 NM
CBSA Coastal Bancorp of Houston TX 19.30 146.38 5.01 173.30 11.55 0.48 1.67 32.21
CFCP Coastal Fin. Corp. of SC 25.84 NM 22.01 NM 23.47 0.33 1.43 37.08
COFD Collective Bancorp Inc. of NJ(8) 18.82 244.15 17.09 NM 15.48 1.00 2.17 40.82
CMSV Commty. Svgs, MHC of FL (48.5) 26.20 139.69 15.69 139.69 17.26 0.90 4.14 NM
CBNH Community Bankshares Inc of NH(8)* 18.15 224.70 16.03 224.70 22.47 0.64 1.70 30.77
CFTP Community Fed. Bancorp of MS 25.91 109.24 36.62 109.24 21.75 0.30 1.70 44.12
CFFC Community Fin. Corp. of VA 17.18 124.65 17.17 124.65 13.64 0.56 2.49 42.75
</TABLE>
<PAGE> 247
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CIBI Community Inv. Bancorp of OH 11.51 11.51 0.67 5.51 4.89 1.00 8.19 0.72 65.53 0.62
COOP Cooperative Bk.for Svgs. of NC 7.49 7.49 -0.89 -10.79 -9.22 0.13 1.60 0.45 53.51 0.30
CRZY Crazy Woman Creek Bncorp of WY 27.85 27.85 1.01 3.35 3.78 1.27 4.20 0.23 240.34 1.03
DNFC D&N Financial Corp. of MI 5.81 5.75 0.63 10.98 5.56 0.85 14.82 0.37 192.28 1.01
DFIN Damen Fin. Corp. of Chicago IL 20.16 20.16 0.71 3.13 3.55 0.89 3.93 0.20 76.94 0.38
DCBI Delphos Citizens Bancorp of OH 28.34 28.34 1.27 6.07 4.24 1.27 6.07 0.10 93.46 0.13
DIME Dime Community Bancorp of NY 15.41 13.23 0.93 6.19 4.55 1.03 6.90 0.82 97.78 1.45
DIBK Dime Financial Corp. of CT* 7.83 7.54 1.85 22.66 11.35 1.91 23.35 0.46 337.58 3.23
EGLB Eagle BancGroup of IL 12.10 12.10 -0.20 -1.89 -1.66 0.12 1.09 1.67 31.93 0.80
EBSI Eagle Bancshares of Tucker GA 8.71 8.71 0.59 6.82 4.48 0.80 9.29 0.88 65.80 0.84
EGFC Eagle Financial Corp. of CT 6.90 5.19 0.58 8.18 6.02 0.78 10.92 1.21 47.66 1.01
ETFS East Texas Fin. Serv. of TX 19.02 19.02 0.32 1.70 1.85 0.64 3.41 0.25 100.00 0.53
EBCP Eastern Bancorp of NH(8) 7.59 7.20 0.38 4.96 3.27 0.59 7.76 1.27 25.79 0.57
EMLD Emerald Financial Corp of OH 7.51 7.38 0.69 8.89 5.33 0.89 11.37 0.34 75.41 0.34
EIRE Emerald Island Bancorp, MA* 6.96 6.96 0.81 12.00 7.62 0.86 12.68 0.62 105.23 0.97
EFBC Empire Federal Bancorp of MT 34.89 34.89 0.83 2.37 2.59 1.09 3.12 NA NA 0.47
EFBI Enterprise Fed. Bancorp of OH 12.67 12.65 0.68 4.72 4.11 0.75 5.16 0.01 NA 0.28
EQSB Equitable FSB of Wheaton MD 5.07 5.07 0.48 9.33 6.07 0.76 14.93 1.07 19.82 0.31
FFFG F.F.O. Financial Group of FL(8) 6.41 6.41 0.52 8.41 3.90 0.85 13.72 3.17 55.02 2.47
FCBF FCB Fin. Corp. of Neenah WI 17.51 17.51 0.91 5.04 3.92 1.10 6.08 0.11 426.35 0.56
FFBS FFBS Bancorp of Columbus MS 19.42 19.42 1.19 6.07 4.17 1.49 7.65 0.42 109.44 0.66
FFDF FFD Financial Corp. of OH 24.74 24.74 0.78 3.42 3.26 1.08 4.74 NA NA 0.27
FFLC FFLC Bancorp of Leesburg FL 14.48 14.48 0.69 4.30 3.51 1.01 6.32 0.27 116.25 0.46
FFFC FFVA Financial Corp. of VA 12.98 12.69 1.08 7.35 4.75 1.34 9.09 0.10 585.64 1.01
FFWC FFW Corporation of Wabash IN 10.01 10.01 0.90 8.74 7.62 1.11 10.86 0.22 150.42 0.48
FFYF FFY Financial Corp. of OH 14.10 14.10 0.89 5.44 4.64 1.27 7.80 0.72 73.17 0.69
FMCO FMS Financial Corp. of NJ 6.29 6.16 0.64 9.89 6.00 0.97 15.08 1.07 47.56 0.90
FFHH FSF Financial Corp. of MN 11.77 11.77 0.64 4.73 4.13 0.83 6.11 0.10 216.04 0.34
FOBC Fed One Bancorp of Wheeling WV 11.61 11.06 0.68 5.79 4.57 0.98 8.27 0.45 93.85 1.00
FBCI Fidelity Bancorp of Chicago IL 10.19 10.16 0.53 4.92 4.63 0.75 7.05 0.70 24.69 0.23
FSBI Fidelity Bancorp, Inc. of PA 6.96 6.96 0.52 7.41 5.35 0.83 11.77 0.51 100.48 1.06
FFFL Fidelity FSB, MHC of FL (47.4) 8.82 8.75 0.39 4.09 2.53 0.62 6.51 0.30 77.48 0.31
FFED Fidelity Fed. Bancorp of IN 5.14 5.14 0.16 3.18 1.84 0.28 5.62 0.16 455.75 0.85
FFOH Fidelity Financial of OH 13.12 11.52 0.63 3.90 2.67 1.01 6.24 0.18 174.34 0.38
FIBC Financial Bancorp, Inc. of NY 9.73 9.68 0.51 5.14 4.46 0.95 9.49 2.77 16.97 0.85
FBSI First Bancshares of MO 14.35 14.33 0.91 5.88 5.90 1.11 7.22 0.32 88.44 0.35
FBBC First Bell Bancorp of PA 10.20 10.20 1.19 7.34 6.69 1.40 8.65 0.09 107.87 0.12
FBER First Bergen Bancorp of NJ 16.44 16.44 0.42 2.50 2.31 0.75 4.50 0.74 161.82 2.41
SKBO First Carnegie,MHC of PA(45.0) 15.65 15.65 0.37 2.35 1.73 0.54 3.43 0.74 33.56 0.66
FCIT First Cit. Fin. Corp of MD(8) 6.11 6.11 0.53 8.65 3.92 0.79 13.02 1.92 52.05 1.33
FSTC First Citizens Corp of GA 9.37 7.37 1.80 19.17 11.76 1.50 16.01 1.26 87.96 1.40
FFBA First Colorado Bancorp of Co 14.30 14.13 1.13 7.87 5.46 1.12 7.80 0.19 136.49 0.37
FDEF First Defiance Fin.Corp. of OH 21.42 21.42 0.78 3.37 3.03 1.06 4.60 0.45 93.68 0.55
FESX First Essex Bancorp of MA* 7.31 6.30 1.01 13.37 7.70 0.88 11.68 0.62 143.10 1.42
FFES First FS&LA of E. Hartford CT 6.25 6.25 0.43 7.04 5.24 0.69 11.23 0.51 55.25 1.57
FSSB First FS&LA of San Bern. CA 4.33 4.18 -1.18 -24.68 NM -1.18 -24.75 2.31 45.41 1.47
FFSX First FS&LA. MHC of IA (46.0) 8.14 8.06 0.43 5.19 2.86 0.73 8.93 0.14 263.34 0.52
FFSW First Fed Fin. Serv. of OH 6.05 5.11 0.87 15.36 5.25 0.69 12.15 0.38 73.66 0.40
BDJI First Fed. Bancorp. of MN 11.17 11.17 0.32 2.58 2.56 0.66 5.38 0.31 127.79 0.82
FFBH First Fed. Bancshares of AR 15.82 15.82 0.79 5.42 4.19 1.13 7.76 0.19 127.62 0.31
FTFC First Fed. Capital Corp. of WI 6.36 5.96 0.74 11.32 5.36 0.86 13.15 0.17 308.37 0.68
FFKY First Fed. Fin. Corp. of KY 13.60 12.78 1.25 9.03 5.84 1.49 10.79 0.40 115.33 0.53
FFBZ First Federal Bancorp of OH 7.66 7.65 0.74 9.58 4.71 1.01 13.14 0.58 153.04 1.02
FFCH First Fin. Holdings Inc. of SC 6.15 6.15 0.55 8.85 4.58 0.84 13.43 1.82 39.24 0.84
FFBI First Financial Bancorp of IL 7.81 7.81 -0.02 -0.27 -0.27 0.47 5.76 0.27 200.40 0.69
FFHC First Financial Corp. of WI(8) 6.98 6.78 0.93 12.87 5.00 1.26 17.55 0.29 137.23 0.65
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CIBI Community Inv. Bancorp of OH 20.45 114.21 13.15 114.21 13.78 0.27 2.00 40.91
COOP Cooperative Bk.for Svgs. of NC NM 121.50 9.10 121.50 NM 0.00 0.00 NM
CRZY Crazy Woman Creek Bncorp of WY 26.47 93.62 26.07 93.62 21.09 0.40 2.96 NM
DNFC D&N Financial Corp. of MI 17.98 178.63 10.37 180.49 13.33 0.00 0.00 0.00
DFIN Damen Fin. Corp. of Chicago IL 28.18 101.77 20.52 101.77 22.45 0.24 1.67 47.06
DCBI Delphos Citizens Bancorp of OH 23.58 98.25 27.84 98.25 23.58 0.00 0.00 0.00
DIME Dime Community Bancorp of NY 21.98 131.59 20.28 153.33 19.71 0.18 0.94 20.69
DIBK Dime Financial Corp. of CT* 8.81 185.33 14.50 192.31 8.55 0.40 1.74 15.33
EGLB Eagle BancGroup of IL NM 96.07 11.62 96.07 NM 0.00 0.00 NM
EBSI Eagle Bancshares of Tucker GA 22.34 140.27 12.21 140.27 16.39 0.60 3.36 75.00
EGFC Eagle Financial Corp. of CT 16.62 134.22 9.26 178.36 12.45 0.92 2.99 49.73
ETFS East Texas Fin. Serv. of TX NM 93.30 17.75 93.30 27.01 0.20 1.09 58.82
EBCP Eastern Bancorp of NH(8) NM 149.05 11.31 157.05 19.57 0.64 2.40 73.56
EMLD Emerald Financial Corp of OH 18.75 161.05 12.09 163.87 14.65 0.24 1.71 32.00
EIRE Emerald Island Bancorp, MA* 13.12 144.08 10.03 144.08 12.42 0.28 1.51 19.86
EFBC Empire Federal Bancorp of MT NM 91.46 31.91 91.46 29.35 0.30 2.22 NM
EFBI Enterprise Fed. Bancorp of OH 24.33 117.59 14.90 117.74 22.26 1.00 5.48 NM
EQSB Equitable FSB of Wheaton MD 16.48 145.47 7.37 145.47 10.30 0.00 0.00 0.00
FFFG F.F.O. Financial Group of FL(8) 25.63 202.07 12.95 202.07 15.71 0.00 0.00 0.00
FCBF FCB Fin. Corp. of Neenah WI 25.52 129.51 22.67 129.51 21.15 0.72 2.91 74.23
FFBS FFBS Bancorp of Columbus MS 23.96 143.30 27.83 143.30 19.01 0.50 2.17 52.08
FFDF FFD Financial Corp. of OH NM 93.10 23.03 93.10 22.13 0.30 2.22 68.18
FFLC FFLC Bancorp of Leesburg FL 28.50 128.61 18.62 128.61 19.39 0.48 1.68 48.00
FFFC FFVA Financial Corp. of VA 21.06 169.52 22.00 173.36 17.04 0.48 1.79 37.80
FFWC FFW Corporation of Wabash IN 13.13 114.29 11.44 114.29 10.57 0.72 2.77 36.36
FFYF FFY Financial Corp. of OH 21.56 132.67 18.70 132.67 15.04 0.70 2.71 58.33
FMCO FMS Financial Corp. of NJ 16.67 161.07 10.13 164.45 10.93 0.20 0.85 14.18
FFHH FSF Financial Corp. of MN 24.22 124.84 14.69 124.84 18.75 0.50 2.87 69.44
FOBC Fed One Bancorp of Wheeling WV 21.88 127.66 14.82 133.93 15.33 0.58 2.76 60.42
FBCI Fidelity Bancorp of Chicago IL 21.59 107.10 10.92 107.41 15.08 0.32 1.68 36.36
FSBI Fidelity Bancorp, Inc. of PA 18.69 135.04 9.40 135.04 11.76 0.36 1.80 33.64
FFFL Fidelity FSB, MHC of FL (47.4) NM 160.35 14.14 161.69 24.83 0.80 4.13 NM
FFED Fidelity Fed. Bancorp of IN NM 178.92 9.20 178.92 NM 0.40 4.32 NM
FFOH Fidelity Financial of OH NM 124.69 16.35 141.91 23.44 0.28 1.87 70.00
FIBC Financial Bancorp, Inc. of NY 22.40 115.15 11.20 115.69 12.15 0.40 2.32 51.95
FBSI First Bancshares of MO 16.95 101.01 14.50 101.16 13.79 0.20 1.00 16.95
FBBC First Bell Bancorp of PA 14.95 150.52 15.35 150.52 12.70 0.40 2.50 37.38
FBER First Bergen Bancorp of NJ NM 109.88 18.07 109.88 24.00 0.12 0.79 34.29
SKBO First Carnegie,MHC of PA(45.0) NM 135.85 21.26 135.85 NM 0.00 0.00 0.00
FCIT First Cit. Fin. Corp of MD(8) 25.52 211.05 12.89 211.05 16.97 0.00 0.00 0.00
FSTC First Citizens Corp of GA 8.51 163.04 15.28 207.29 10.19 0.44 1.78 15.12
FFBA First Colorado Bancorp of Co 18.32 144.27 20.63 146.05 18.50 0.44 2.33 42.72
FDEF First Defiance Fin.Corp. of OH NM 116.84 25.02 116.84 24.17 0.32 2.21 72.73
FESX First Essex Bancorp of MA* 12.99 147.32 10.77 170.98 14.86 0.48 2.91 37.80
FFES First FS&LA of E. Hartford CT 19.07 129.35 8.09 129.35 11.95 0.60 2.02 38.46
FSSB First FS&LA of San Bern. CA NM 69.34 3.01 71.97 NM 0.00 0.00 NM
FFSX First FS&LA. MHC of IA (46.0) NM 178.30 14.51 179.92 20.30 0.48 2.02 70.59
FFSW First Fed Fin. Serv. of OH 19.03 NM 16.13 NM 24.06 0.44 1.15 21.89
BDJI First Fed. Bancorp. of MN NM 109.20 12.20 109.20 18.75 0.00 0.00 0.00
FFBH First Fed. Bancshares of AR 23.84 115.01 18.19 115.01 16.65 0.20 1.04 24.69
FTFC First Fed. Capital Corp. of WI 18.64 206.57 13.13 220.44 16.06 0.48 2.18 40.68
FFKY First Fed. Fin. Corp. of KY 17.13 152.14 20.70 162.00 14.34 0.52 2.81 48.15
FFBZ First Federal Bancorp of OH 21.22 195.40 14.97 195.61 15.47 0.24 1.32 27.91
FFCH First Fin. Holdings Inc. of SC 21.85 189.47 11.65 189.47 14.39 0.72 2.44 53.33
FFBI First Financial Bancorp of IL NM 107.02 8.35 107.02 17.86 0.00 0.00 NM
FFHC First Financial Corp. of WI(8) 20.01 NM 17.94 NM 14.68 0.60 2.10 41.96
</TABLE>
<PAGE> 248
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ ______________________ _______________ NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFHS First Franklin Corp. of OH 8.82 8.75 0.14 1.59 1.35 0.62 6.76 0.62 68.29 0.62
FGHC First Georgia Hold. Corp of GA 8.49 7.74 0.96 11.69 6.48 0.57 6.97 1.35 50.33 0.79
FSPG First Home Bancorp of NJ 6.59 6.47 0.90 13.90 8.42 1.19 18.24 0.79 93.39 1.41
FFSL First Independence Corp. of KS 10.51 10.51 0.50 4.27 4.74 0.76 6.53 0.90 69.84 0.97
FISB First Indiana Corp. of IN 9.58 9.46 0.89 9.68 6.04 1.03 11.14 1.55 85.76 1.59
FKFS First Keystone Fin. Corp of PA 7.07 7.07 0.51 6.65 5.39 0.76 9.86 2.46 34.36 1.46
FLKY First Lancaster Bncshrs of KY 37.13 37.13 0.98 1.94 2.45 1.26 2.50 0.75 32.89 0.29
FLFC First Liberty Fin. Corp. of GA 7.35 6.57 1.09 14.83 8.09 0.88 11.96 0.75 114.80 1.23
CASH First Midwest Fin. Corp. of IA 11.59 10.26 0.76 6.54 6.35 0.98 8.44 0.79 81.68 0.97
FMBD First Mutual Bancorp of IL 13.41 10.32 0.15 0.75 0.87 0.38 1.97 0.16 207.98 0.46
FMSB First Mutual SB of Bellevue WA* 6.57 6.57 1.01 15.31 8.41 0.98 14.78 NA NA 1.24
FNGB First Northern Cap. Corp of WI 11.51 11.51 0.60 5.05 3.81 0.89 7.48 0.13 368.77 0.54
FFPB First Palm Beach Bancorp of FL 6.76 6.59 -0.01 -0.09 -0.07 0.05 0.69 1.09 46.69 0.74
FSLA First SB SLA MHC of NJ (47.5) 9.19 8.15 0.51 5.44 2.88 0.90 9.61 0.58 93.31 1.05
FSNJ First SB of NJ, MHC (45.9)(8) 8.57 8.57 -0.34 -4.31 -2.69 0.23 2.89 0.87 58.25 1.21
SOPN First SB, SSB, Moore Co. of NC 24.60 24.60 1.39 5.48 4.13 1.67 6.58 0.12 192.97 0.32
FWWB First Savings Bancorp of WA* 15.14 15.14 1.06 5.65 3.77 1.01 5.37 0.32 210.94 1.03
SHEN First Shenango Bancorp of PA 10.70 10.70 0.83 7.07 5.96 1.12 9.49 0.50 144.74 1.14
FSFC First So.east Fin. Corp. of SC 10.22 10.22 0.01 0.11 0.10 0.92 7.48 0.11 362.15 0.50
FLAG Flag Financial Corp of GA 9.40 9.40 -0.06 -0.68 -0.49 0.14 1.45 4.52 44.14 2.91
FFIC Flushing Fin. Corp. of NY* 16.01 16.01 0.90 5.16 4.33 0.93 5.34 0.27 251.62 1.28
FBHC Fort Bend Holding Corp. of TX 6.43 5.95 0.23 3.44 2.57 0.54 7.99 NA NA 0.95
FTSB Fort Thomas Fin. Corp. of KY 16.09 16.09 0.50 2.50 2.86 0.76 3.83 2.02 25.00 0.57
FKKY Frankfort First Bancorp of KY 26.19 26.19 0.62 2.19 1.98 0.93 3.29 0.06 138.89 0.08
FTNB Fulton Bancorp of MO 25.01 25.01 0.74 3.81 2.05 1.05 5.39 NA NA 1.01
GFSB GFS Bancorp of Grinnell IA 11.57 11.57 0.99 8.43 6.42 1.27 10.81 1.54 45.77 0.81
GUPB GFSB Bancorp of Gallup NM 16.30 16.30 0.74 3.86 3.63 0.93 4.86 NA NA 0.69
GSLA GS Financial Corp. of LA 46.34 46.34 0.85 1.84 1.90 0.85 1.84 0.13 214.61 0.85
GWBC Gateway Bancorp of KY(8) 26.08 26.08 0.82 3.25 3.03 1.15 4.54 0.78 15.82 0.40
GBCI Glacier Bancorp of MT 9.56 9.29 1.39 14.68 5.63 1.57 16.59 0.28 212.30 0.85
GLBK Glendale Co-op. Bank of MA(8)* 16.37 16.37 0.75 4.64 4.11 0.72 4.47 NA NA 0.72
GFCO Glenway Financial Corp. of OH 9.56 9.41 0.38 3.95 3.57 0.68 7.17 0.32 84.04 0.32
GTPS Great American Bancorp of IL 21.16 21.16 0.43 1.95 2.00 0.55 2.48 0.16 188.02 0.42
GTFN Great Financial Corp. of KY 9.30 8.89 0.73 7.40 4.20 0.70 7.09 3.42 13.77 0.72
GSBC Great Southern Bancorp of MO 8.97 8.97 1.36 14.03 6.41 1.53 15.83 1.83 124.20 2.60
GDVS Greater DV SB,MHC of PA (19.9)* 11.47 11.47 0.01 0.12 0.08 0.33 2.81 2.78 43.72 2.05
GSFC Green Street Fin. Corp. of NC 36.09 36.09 1.33 4.48 3.21 1.64 5.50 0.14 97.92 0.19
GSLC Guaranty Svgs & Loan FA of VA 5.72 5.72 0.46 7.73 3.10 0.43 7.26 NA NA 1.00
GFED Guarnty FS&LA,MHC of MO (31.0)(8) 13.84 13.84 0.50 3.50 1.46 0.81 5.71 0.54 206.36 1.42
HCBB HCB Bancshares of AR 18.25 17.49 -0.11 -0.58 -0.62 0.39 2.11 NA NA 1.47
HEMT HF Bancorp of Hemet CA 9.81 0.00 -0.31 -2.63 -2.56 -2.27 -19.11 NA NA 1.10
HFFC HF Financial Corp. of SD 9.19 9.17 0.59 6.44 5.57 0.81 8.85 0.40 200.58 1.04
HFNC HFNC Financial Corp. of NC 18.83 18.83 1.07 3.82 3.04 1.41 5.01 0.99 94.51 1.26
HMNF HMN Financial, Inc. of MN 14.24 14.24 0.75 4.93 4.30 0.91 5.98 0.08 555.50 0.70
HALL Hallmark Capital Corp. of WI 6.99 6.99 0.45 6.30 5.55 0.60 8.30 0.02 NA 0.60
HARB Harbor FSB, MHC of FL (46.0) 8.22 7.91 0.93 11.11 4.74 1.22 14.62 0.47 216.59 1.38
HRBF Harbor Federal Bancorp of MD 12.86 12.86 0.43 3.20 2.83 0.68 5.15 0.13 131.49 0.26
HFSA Hardin Bancorp of Hardin MO 12.78 12.78 0.51 3.17 3.69 0.82 5.16 0.37 41.58 0.29
HARL Harleysville SA of PA 6.36 6.36 0.69 10.70 5.91 0.99 15.31 0.12 475.58 0.77
HARS Harris SB, MHC of PA (24.2) 7.92 6.83 0.25 2.68 1.69 0.60 6.55 0.70 61.77 0.98
HFFB Harrodsburg 1st Fin Bcrp of KY 26.35 26.35 1.03 3.73 3.67 1.36 4.95 0.47 58.12 0.37
HHFC Harvest Home Fin. Corp. of OH 12.43 12.43 0.21 1.35 1.62 0.54 3.49 0.15 90.48 0.26
HAVN Haven Bancorp of Woodhaven NY 5.80 5.77 0.62 10.26 6.16 0.91 14.94 0.78 84.95 1.23
HVFD Haverfield Corp. of OH(8) 8.39 8.39 0.49 5.94 3.40 1.03 12.55 1.00 87.44 1.00
HTHR Hawthorne Fin. Corp. of CA 3.85 3.85 0.81 21.02 21.02 0.56 14.51 NA NA 1.92
HMLK Hemlock Fed. Fin. Corp. of IL 18.29 18.29 -0.39 -2.85 -2.19 0.49 3.64 NA NA 1.37
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFHS First Franklin Corp. of OH NM 118.13 10.41 118.98 17.39 0.32 1.60 NM
FGHC First Georgia Hold. Corp of GA 15.43 177.26 15.04 194.37 25.89 0.05 0.69 10.64
FSPG First Home Bancorp of NJ 11.88 156.72 10.32 159.56 9.05 0.40 2.07 24.54
FFSL First Independence Corp. of KS 21.11 97.99 10.30 97.99 13.81 0.25 2.23 47.17
FISB First Indiana Corp. of IN 16.56 154.48 14.80 156.45 14.39 0.48 2.30 38.10
FKFS First Keystone Fin. Corp of PA 18.55 126.93 8.98 126.93 12.50 0.20 0.87 16.13
FLKY First Lancaster Bncshrs of KY NM 108.62 40.33 108.62 NM 0.00 0.00 0.00
FLFC First Liberty Fin. Corp. of GA 12.36 183.24 13.46 204.80 15.32 0.40 1.84 22.73
CASH First Midwest Fin. Corp. of IA 15.75 99.60 11.55 112.58 12.19 0.36 2.38 37.50
FMBD First Mutual Bancorp of IL NM 98.55 13.22 128.10 NM 0.32 2.13 NM
FMSB First Mutual SB of Bellevue WA* 11.90 169.95 11.17 169.95 12.32 0.20 1.16 13.79
FNGB First Northern Cap. Corp of WI 26.23 132.07 15.20 132.07 17.71 0.64 3.01 NM
FFPB First Palm Beach Bancorp of FL NM 143.77 9.72 147.56 NM 0.60 1.98 NM
FSLA First SB SLA MHC of NJ (47.5) NM 184.62 16.97 208.33 19.67 0.48 2.00 69.57
FSNJ First SB of NJ, MHC (45.9)(8) NM 160.69 13.77 160.69 NM 0.50 1.92 NM
SOPN First SB, SSB, Moore Co. of NC 24.24 133.04 32.72 133.04 20.17 0.80 3.33 NM
FWWB First Savings Bancorp of WA* 26.54 152.92 23.15 152.92 27.92 0.28 1.30 34.57
SHEN First Shenango Bancorp of PA 16.77 125.06 13.38 125.06 12.50 0.60 2.31 38.71
FSFC First So.east Fin. Corp. of SC NM 129.74 13.27 129.74 14.46 0.24 2.37 NM
FLAG Flag Financial Corp of GA NM 139.02 13.07 139.02 NM 0.34 2.39 NM
FFIC Flushing Fin. Corp. of NY* 23.10 123.72 19.81 123.72 22.33 0.24 1.21 27.91
FBHC Fort Bend Holding Corp. of TX NM 132.00 8.48 142.68 16.72 0.28 0.97 37.84
FTSB Fort Thomas Fin. Corp. of KY NM 103.04 16.58 103.04 22.83 0.25 2.38 NM
FKKY Frankfort First Bancorp of KY NM 122.05 31.97 122.05 NM 0.36 2.97 NM
FTNB Fulton Bancorp of MO NM 138.22 34.57 138.22 NM 0.20 1.00 48.78
GFSB GFS Bancorp of Grinnell IA 15.59 128.39 14.85 128.39 12.16 0.20 1.51 23.53
GUPB GFSB Bancorp of Gallup NM 27.54 112.56 18.34 112.56 21.84 0.40 2.11 57.97
GSLA GS Financial Corp. of LA NM 96.70 44.81 96.70 NM 0.00 0.00 0.00
GWBC Gateway Bancorp of KY(8) NM 109.72 28.61 109.72 23.65 0.40 2.29 NM
GBCI Glacier Bancorp of MT 17.75 228.44 21.85 235.10 15.71 0.43 2.42 43.00
GLBK Glendale Co-op. Bank of MA(8)* 24.32 110.29 18.06 110.29 25.23 0.00 0.00 0.00
GFCO Glenway Financial Corp. of OH 27.99 109.76 10.49 111.47 15.42 0.68 2.64 73.91
GTPS Great American Bancorp of IL NM 99.52 21.06 99.52 NM 0.40 2.42 NM
GTFN Great Financial Corp. of KY 23.80 175.24 16.29 183.18 24.82 0.60 1.73 41.10
GSBC Great Southern Bancorp of MO 15.60 231.29 20.75 231.29 13.82 0.40 2.35 36.70
GDVS Greater DV SB,MHC of PA (19.9)* NM 155.32 17.82 155.32 NM 0.36 2.77 NM
GSFC Green Street Fin. Corp. of NC NM 121.24 43.75 121.24 25.36 0.40 2.25 70.18
GSLC Guaranty Svgs & Loan FA of VA NM 239.95 13.72 239.95 NM 0.10 0.94 30.30
GFED Guarnty FS&LA,MHC of MO (31.0)(8) NM 236.18 32.68 236.18 NM 0.40 1.95 NM
HCBB HCB Bancshares of AR NM 94.25 17.20 98.33 NM 0.00 0.00 NM
HEMT HF Bancorp of Hemet CA NM 108.91 10.68 NM NM 0.00 0.00 NM
HFFC HF Financial Corp. of SD 17.95 114.76 10.55 115.03 13.08 0.36 1.82 32.73
HFNC HFNC Financial Corp. of NC NM 181.47 34.16 181.47 25.00 0.28 1.67 54.90
HMNF HMN Financial, Inc. of MN 23.23 122.93 17.51 122.93 19.17 0.00 0.00 0.00
HALL Hallmark Capital Corp. of WI 18.02 109.08 7.62 109.08 13.68 0.00 0.00 0.00
HARB Harbor FSB, MHC of FL (46.0) 21.11 222.68 18.30 231.40 16.04 1.40 3.44 72.54
HRBF Harbor Federal Bancorp of MD NM 111.87 14.39 111.87 21.95 0.40 2.22 NM
HFSA Hardin Bancorp of Hardin MO 27.07 95.06 12.15 95.06 16.61 0.48 3.28 NM
HARL Harleysville SA of PA 16.92 171.61 10.92 171.61 11.83 0.40 1.82 30.77
HARS Harris SB, MHC of PA (24.2) NM 155.00 12.27 179.63 24.15 0.58 2.73 NM
HFFB Harrodsburg 1st Fin Bcrp of KY 27.27 106.53 28.07 106.53 20.55 0.40 2.67 72.73
HHFC Harvest Home Fin. Corp. of OH NM 94.42 11.74 94.42 23.86 0.40 3.81 NM
HAVN Haven Bancorp of Woodhaven NY 16.23 159.97 9.27 160.59 11.14 0.60 1.62 26.32
HVFD Haverfield Corp. of OH(8) 29.40 172.01 14.43 172.01 13.91 0.56 2.16 63.64
HTHR Hawthorne Fin. Corp. of CA 4.76 93.89 3.61 93.89 6.89 0.00 0.00 0.00
HMLK Hemlock Fed. Fin. Corp. of IL NM 91.44 16.72 91.44 NM 0.00 0.00 NM
</TABLE>
<PAGE> 249
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HBNK Highland Federal Bank of CA 7.46 7.46 0.29 3.88 2.47 0.51 6.77 3.23 57.68 2.28
HIFS Hingham Inst. for Sav. of MA* 9.55 9.55 1.16 12.00 8.71 1.16 12.00 0.55 125.61 0.91
HBEI Home Bancorp of Elgin IL 28.12 28.12 0.31 1.41 0.94 0.81 3.66 0.35 77.63 0.37
HBFW Home Bancorp of Fort Wayne IN 13.95 13.95 0.56 3.74 3.30 0.90 6.05 0.09 468.58 0.53
HBBI Home Building Bancorp of IN 12.07 12.07 0.19 1.47 1.29 0.53 4.02 0.52 32.51 0.28
HCFC Home City Fin. Corp. of OH 20.61 20.61 0.78 5.01 3.64 1.17 7.57 0.62 110.38 0.87
HOMF Home Fed Bancorp of Seymour IN 8.45 8.17 1.03 12.42 6.95 1.22 14.74 0.43 121.80 0.61
HWEN Home Financial Bancorp of IN 18.63 18.63 0.57 3.68 2.86 0.82 5.23 NA NA 0.63
HPBC Home Port Bancorp, Inc. of MA* 10.82 10.82 1.70 15.85 8.35 1.69 15.76 0.25 501.45 1.53
HMCI Homecorp, Inc. of Rockford IL 6.30 6.30 0.11 1.87 1.61 0.38 6.24 3.68 13.13 0.62
HZFS Horizon Fin'l. Services of IA 10.50 10.50 0.43 3.87 3.90 0.60 5.42 1.02 36.63 0.56
HRZB Horizon Financial Corp. of WA* 15.23 15.23 1.55 9.82 6.51 1.52 9.64 0.01 NA 0.85
IBSF IBS Financial Corp. of NJ 17.04 17.04 0.52 2.73 2.26 0.88 4.68 0.15 94.57 0.52
ISBF ISB Financial Corp. of LA 12.27 10.35 0.74 4.49 3.23 1.00 6.05 NA NA 0.79
ITLA Imperial Thrift & Loan of CA* 11.37 11.32 1.46 13.06 8.56 1.46 13.06 1.78 75.09 1.63
IFSB Independence FSB of DC 6.52 5.72 0.14 2.19 3.22 0.33 4.98 NA NA 0.34
INCB Indiana Comm. Bank, SB of IN 12.39 12.39 0.16 1.24 1.07 0.51 3.88 NA NA 0.71
IFSL Indiana Federal Corp. of IN(8) 8.78 8.25 0.67 7.44 3.86 0.95 10.55 0.82 102.87 1.11
INBI Industrial Bancorp of OH 18.49 18.49 0.73 3.87 3.27 1.43 7.56 0.42 115.71 0.55
IWBK Interwest SB of Oak Harbor WA 6.71 6.55 0.84 12.48 4.64 1.18 17.49 0.69 69.69 0.81
IPSW Ipswich SB of Ipswich MA* 6.17 6.17 1.18 19.52 9.42 0.93 15.31 1.94 49.55 1.26
JSBF JSB Financial, Inc. of NY 22.17 22.17 1.78 8.11 6.29 1.69 7.69 1.08 33.09 0.62
JXVL Jacksonville Bancorp of TX 15.63 15.63 0.88 5.43 4.95 1.21 7.48 1.04 48.35 0.67
JXSB Jcksnville SB,MHC of IL (44.6) 10.30 10.30 0.29 2.50 1.87 0.67 5.84 0.39 125.08 0.63
JSBA Jefferson Svgs Bancorp of MO 7.83 6.11 0.25 3.41 1.91 0.63 8.56 0.52 117.45 0.82
JOAC Joachim Bancorp of MO 28.99 28.99 0.51 1.71 1.66 0.78 2.64 0.68 30.45 0.31
KSAV KS Bancorp of Kenly NC 13.83 13.82 0.92 6.45 5.25 1.21 8.47 0.42 70.56 0.35
KSBK KSB Bancorp of Kingfield ME(8)* 6.82 6.32 0.88 13.36 7.86 0.88 13.31 NA NA 1.00
KFBI Klamath First Bancorp of OR 20.44 20.44 0.90 3.79 3.15 1.33 5.59 0.10 176.70 0.24
LSBI LSB Fin. Corp. of Lafayette IN 9.08 9.08 0.50 5.26 4.50 0.42 4.42 1.34 68.99 1.07
LVSB Lakeview SB of Paterson NJ 10.14 8.12 1.43 13.88 8.84 0.89 8.67 NA NA NA
LARK Landmark Bancshares of KS 14.63 14.63 0.84 5.40 4.87 1.05 6.72 0.60 62.24 0.57
LARL Laurel Capital Group of PA 10.42 10.42 1.12 10.59 6.98 1.43 13.55 0.51 181.26 1.31
LSBX Lawrence Savings Bank of MA* 8.78 8.78 1.66 20.38 12.09 1.66 20.38 0.36 290.57 2.27
LFED Leeds FSB, MHC of MD (36.2) 16.18 16.18 0.79 4.89 3.32 1.13 6.98 0.02 977.36 0.30
LXMO Lexington B&L Fin. Corp. of MO 30.42 30.42 0.97 4.48 2.76 1.34 6.18 0.63 58.31 0.49
LIFB Life Bancorp of Norfolk VA 10.79 10.45 0.71 6.30 4.06 0.87 7.74 0.49 144.60 1.54
LFBI Little Falls Bancorp of NJ 12.94 11.91 0.25 1.78 1.91 0.50 3.48 0.90 36.77 0.82
LOGN Logansport Fin. Corp. of IN 19.65 19.65 1.17 5.26 5.21 1.53 6.84 0.45 67.13 0.42
LONF London Financial Corp. of OH 19.86 19.86 0.74 3.55 3.63 1.09 5.19 0.79 62.54 0.64
LISB Long Island Bancorp, Inc of NY 9.01 8.92 0.62 6.41 3.82 0.74 7.62 1.04 56.14 0.95
MAFB MAF Bancorp of IL 7.88 6.84 0.79 10.58 5.39 1.10 14.75 0.49 113.73 0.72
MBLF MBLA Financial Corp. of MO(8) 13.49 13.49 0.66 4.90 4.38 0.86 6.34 0.25 111.87 0.49
MFBC MFB Corp. of Mishawaka IN 14.51 14.51 0.56 3.37 3.59 0.85 5.09 0.03 529.85 0.20
MLBC ML Bancorp of Villanova PA 7.53 7.34 0.72 9.30 6.61 0.65 8.49 NA NA 1.73
MBB MSB Bancorp of Middletown NY* 7.11 3.11 0.22 2.99 3.12 0.23 3.09 0.70 36.62 0.60
MSBF MSB Financial Corp. of MI 16.61 16.61 1.20 6.08 5.55 1.49 7.58 1.02 48.65 0.57
MGNL Magna Bancorp of MS(8) 9.57 9.25 1.38 14.29 5.04 1.63 16.86 3.25 22.63 1.12
MARN Marion Capital Holdings of IN 23.05 23.05 1.32 5.68 5.61 1.59 6.85 0.76 153.22 1.35
MRKF Market Fin. Corp. of OH 33.20 33.20 0.89 2.68 2.92 1.17 3.53 0.89 10.40 0.20
MFCX Marshalltown Fin. Corp. of IA(8) 15.61 15.61 0.34 2.17 1.98 0.71 4.55 NA NA 0.19
MFSL Maryland Fed. Bancorp of MD 8.44 8.33 0.58 6.97 4.59 0.84 10.17 NA NA NA
MASB MassBank Corp. of Reading MA* 9.98 9.98 1.10 10.91 7.70 1.02 10.12 0.19 128.64 0.88
MFLR Mayflower Co-Op. Bank of MA* 9.43 9.26 1.00 10.42 7.39 0.98 10.18 1.03 90.08 1.56
MECH Mechanics SB of Hartford CT* 9.73 9.73 0.25 2.93 1.87 0.27 3.10 1.71 67.13 1.72
MDBK Medford Savings Bank of MA* 8.80 8.14 1.04 11.72 7.64 1.01 11.37 0.45 146.30 1.22
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HBNK Highland Federal Bank of CA NM 152.04 11.34 152.04 23.17 0.00 0.00 0.00
HIFS Hingham Inst. for Sav. of MA* 11.49 131.59 12.57 131.59 11.49 0.40 2.01 23.12
HBEI Home Bancorp of Elgin IL NM 111.19 31.26 111.19 NM 0.40 2.50 NM
HBFW Home Bancorp of Fort Wayne IN NM 118.30 16.50 118.30 18.75 0.20 0.97 29.41
HBBI Home Building Bancorp of IN NM 115.96 14.00 115.96 28.38 0.30 1.43 NM
HCFC Home City Fin. Corp. of OH 27.45 94.79 19.53 94.79 18.18 0.32 2.29 62.75
HOMF Home Fed Bancorp of Seymour IN 14.38 167.78 14.17 173.44 12.12 0.50 1.80 25.91
HWEN Home Financial Bancorp of IN NM 104.17 19.41 104.17 24.61 0.20 1.27 44.44
HPBC Home Port Bancorp, Inc. of MA* 11.98 182.27 19.71 182.27 12.05 0.80 3.95 47.34
HMCI Homecorp, Inc. of Rockford IL NM 113.82 7.17 113.82 18.51 0.00 0.00 0.00
HZFS Horizon Fin'l. Services of IA 25.67 99.69 10.46 99.69 18.33 0.32 1.66 42.67
HRZB Horizon Financial Corp. of WA* 15.35 151.93 23.14 151.93 15.65 0.35 2.17 33.33
IBSF IBS Financial Corp. of NJ NM 135.37 23.07 135.37 25.83 0.32 2.06 NM
ISBF ISB Financial Corp. of LA NM 142.81 17.52 169.21 23.02 0.40 1.72 53.33
ITLA Imperial Thrift & Loan of CA* 11.68 135.94 15.46 136.52 11.68 0.00 0.00 0.00
IFSB Independence FSB of DC NM 67.21 4.38 76.66 13.64 0.22 2.44 NM
INCB Indiana Comm. Bank, SB of IN NM 122.25 15.14 122.25 30.00 0.36 2.40 NM
IFSL Indiana Federal Corp. of IN(8) 25.91 189.62 16.66 201.84 18.27 0.72 2.53 65.45
INBI Industrial Bancorp of OH NM 117.79 21.78 117.79 15.63 0.48 3.57 NM
IWBK Interwest SB of Oak Harbor WA 21.56 242.91 16.29 248.79 15.38 0.60 1.67 35.93
IPSW Ipswich SB of Ipswich MA* 10.62 189.17 11.66 189.17 13.54 0.24 1.48 15.69
JSBF JSB Financial, Inc. of NY 15.89 127.09 28.17 127.09 16.74 1.40 3.19 50.72
JXVL Jacksonville Bancorp of TX 20.19 112.58 17.60 112.58 14.65 0.50 3.35 67.57
JXSB Jcksnville SB,MHC of IL (44.6) NM 132.88 13.68 132.88 22.88 0.40 2.27 NM
JSBA Jefferson Svgs Bancorp of MO NM 165.12 12.93 211.54 20.89 0.40 1.34 70.18
JOAC Joachim Bancorp of MO NM 106.62 30.90 106.62 NM 0.50 3.45 NM
KSAV KS Bancorp of Kenly NC 19.03 121.37 16.78 121.43 14.49 0.60 2.35 44.78
KSBK KSB Bancorp of Kingfield ME(8)* 12.73 159.82 10.91 172.67 12.77 0.24 0.69 8.73
KFBI Klamath First Bancorp of OR NM 133.64 27.32 133.64 21.55 0.30 1.60 50.85
LSBI LSB Fin. Corp. of Lafayette IN 22.20 115.56 10.49 115.56 26.42 0.32 1.53 34.04
LVSB Lakeview SB of Paterson NJ 11.32 155.20 15.74 193.81 18.12 0.25 0.78 8.77
LARK Landmark Bancshares of KS 20.53 111.10 16.25 111.10 16.49 0.40 1.99 40.82
LARL Laurel Capital Group of PA 14.33 148.17 15.44 148.17 11.20 0.44 2.05 29.33
LSBX Lawrence Savings Bank of MA* 8.27 152.27 13.38 152.27 8.27 0.00 0.00 0.00
LFED Leeds FSB, MHC of MD (36.2) NM 143.94 23.29 143.94 21.11 0.76 4.00 NM
LXMO Lexington B&L Fin. Corp. of MO NM 88.11 26.80 88.11 26.19 0.30 1.97 71.43
LIFB Life Bancorp of Norfolk VA 24.60 153.18 16.52 158.10 20.02 0.48 2.03 50.00
LFBI Little Falls Bancorp of NJ NM 98.74 12.78 107.29 26.64 0.12 0.85 44.44
LOGN Logansport Fin. Corp. of IN 19.18 112.81 22.17 112.81 14.74 0.40 2.86 54.79
LONF London Financial Corp. of OH 27.54 101.64 20.19 101.64 18.82 0.24 1.61 44.44
LISB Long Island Bancorp, Inc of NY 26.17 167.07 15.05 168.71 22.02 0.60 1.66 43.48
MAFB MAF Bancorp of IL 18.55 169.13 13.33 194.77 13.30 0.42 1.02 18.83
MBLF MBLA Financial Corp. of MO(8) 22.86 111.58 15.06 111.58 17.65 0.40 1.67 38.10
MFBC MFB Corp. of Mishawaka IN 27.82 100.82 14.63 100.82 18.46 0.32 1.62 45.07
MLBC ML Bancorp of Villanova PA 15.13 140.66 10.59 144.18 16.57 0.40 2.10 31.75
MBB MSB Bancorp of Middletown NY* NM 93.58 6.65 214.13 NM 0.60 3.12 NM
MSBF MSB Financial Corp. of MI 18.03 110.33 18.33 110.33 14.47 0.56 2.55 45.90
MGNL Magna Bancorp of MS(8) 19.83 NM 26.22 NM 16.80 0.60 2.28 45.11
MARN Marion Capital Holdings of IN 17.81 102.86 23.71 102.86 14.78 0.88 3.89 69.29
MRKF Market Fin. Corp. of OH NM 91.74 30.46 91.74 26.00 0.00 0.00 0.00
MFCX Marshalltown Fin. Corp. of IA(8) NM 107.54 16.79 107.54 24.00 0.00 0.00 0.00
MFSL Maryland Fed. Bancorp of MD 21.80 149.09 12.59 151.13 14.95 0.80 1.81 39.41
MASB MassBank Corp. of Reading MA* 12.99 139.59 13.93 139.59 14.00 1.08 2.31 30.00
MFLR Mayflower Co-Op. Bank of MA* 13.53 136.26 12.85 138.67 13.85 0.60 3.33 45.11
MECH Mechanics SB of Hartford CT* NM 129.31 12.58 129.31 NM 0.00 0.00 0.00
MDBK Medford Savings Bank of MA* 13.09 149.29 13.14 161.29 13.50 0.72 2.36 30.90
</TABLE>
<PAGE> 250
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MERI Meritrust FSB of Thibodaux LA 7.90 7.90 0.60 7.91 4.66 0.98 12.87 0.38 80.65 0.58
MWBX Metro West of MA* 7.34 7.34 1.37 18.25 8.99 1.37 18.25 1.19 88.62 1.37
MCBS Mid Continent Bancshares of KS 10.04 10.04 1.02 9.26 6.36 1.17 10.58 0.19 53.92 0.19
MIFC Mid Iowa Financial Corp. of IA 9.10 9.09 0.91 9.88 7.31 1.19 12.96 0.13 186.45 0.44
MCBN Mid-Coast Bancorp of ME 8.60 8.60 0.40 4.53 4.97 0.64 7.23 0.40 128.70 0.61
MWBI Midwest Bancshares, Inc. of IA 6.94 6.94 0.46 6.80 5.84 0.77 11.24 0.82 61.28 0.84
MWFD Midwest Fed. Fin. Corp of WI 8.61 8.28 0.94 10.88 5.87 0.91 10.60 0.14 543.01 1.01
MFFC Milton Fed. Fin. Corp. of OH 14.74 14.74 0.53 3.00 2.86 0.72 4.13 0.32 91.83 0.46
MIVI Miss. View Hold. Co. of MN 18.26 18.26 0.68 3.67 3.97 1.01 5.44 0.25 488.70 1.93
MBSP Mitchell Bancorp of NC* 43.33 43.33 1.34 3.08 2.87 1.68 3.86 2.06 24.32 0.62
MBBC Monterey Bay Bancorp of CA 10.74 9.85 0.28 2.17 1.85 0.51 3.99 0.36 94.16 0.61
MSBK Mutual SB, FSB of Bay City MI 6.01 6.01 0.09 1.62 1.56 0.04 0.65 0.17 168.15 0.71
NHTB NH Thrift Bancshares of NH 7.48 6.34 0.33 4.46 2.89 0.49 6.59 1.03 91.05 1.14
NSLB NS&L Bancorp of Neosho MO 19.93 19.93 0.49 2.30 2.48 0.74 3.47 0.06 127.27 0.13
NMSB Newmil Bancorp. of CT* 9.97 9.97 0.82 7.86 6.34 0.80 7.62 1.30 123.07 3.01
NASB North American SB of MO 7.97 7.71 1.23 16.83 8.75 1.19 16.35 3.34 26.40 1.00
NBSI North Bancshares of Chicago IL 14.61 14.61 0.46 2.95 2.70 0.65 4.19 NA NA 0.28
FFFD North Central Bancshares of IA 24.58 24.58 1.70 6.31 6.43 1.98 7.35 0.22 457.01 1.18
NBN Northeast Bancorp of ME* 6.95 6.01 0.33 4.74 4.45 0.31 4.52 1.37 77.15 1.32
NEIB Northeast Indiana Bncrp of IN 15.16 15.16 1.04 5.98 6.27 1.23 7.07 0.49 126.20 0.71
NWEQ Northwest Equity Corp. of WI 11.42 11.42 0.77 6.16 5.76 0.97 7.83 NA NA 0.59
NWSB Northwest SB, MHC of PA (29.9) 9.71 9.13 0.69 6.88 3.67 1.00 9.95 0.84 80.17 0.89
NSSY Norwalk Savings Society of CT* 8.06 7.77 0.97 12.51 8.53 1.11 14.32 2.09 56.84 1.70
NSSB Norwich Financial Corp. of CT* 10.99 9.86 1.03 9.60 5.92 0.97 9.10 1.00 200.13 2.87
NTMG Nutmeg FS&LA of CT 5.69 5.69 0.27 4.76 4.12 0.35 6.16 NA NA 0.60
OHSL OHSL Financial Corp. of OH 11.04 11.04 0.61 5.15 4.28 0.86 7.34 0.33 68.18 0.31
OCFC Ocean Fin. Corp. of NJ 17.82 17.82 -0.04 -0.29 -0.18 0.95 6.33 0.64 69.12 0.88
OCWN Ocwen Financial Corp. of FL 8.50 8.50 2.70 32.38 8.71 1.96 23.50 4.10 19.90 1.19
OFCP Ottawa Financial Corp. of MI 8.84 7.08 0.43 4.52 3.11 0.74 7.76 0.31 112.26 0.42
PFFB PFF Bancorp of Pomona CA 10.47 10.35 0.11 0.93 0.81 0.45 3.74 1.87 58.44 1.50
PSFI PS Financial of Chicago IL 43.22 43.22 1.92 4.46 4.47 1.98 4.59 0.43 57.23 0.52
PVFC PVF Capital Corp. of OH 7.02 7.02 1.05 15.54 8.05 1.39 20.48 1.20 61.53 0.79
PCCI Pacific Crest Capital of CA* 7.22 7.22 1.05 13.05 7.93 0.89 11.08 1.23 82.93 1.62
PALM Palfed, Inc. of Aiken SC 8.11 8.11 0.06 0.70 0.42 0.57 6.99 2.52 42.12 1.29
PBCI Pamrapo Bancorp, Inc. of NJ 12.80 12.70 0.84 5.70 5.42 1.18 8.04 3.60 20.89 1.33
PFED Park Bancorp of Chicago IL 21.69 21.69 0.77 4.08 3.59 1.07 5.70 0.20 139.28 0.76
PVSA Parkvale Financial Corp of PA 7.48 7.41 0.71 9.51 5.78 1.07 14.27 0.24 604.11 2.08
PBIX Patriot Bank Corp. of PA 8.09 8.09 0.47 4.26 3.19 0.65 5.81 0.13 242.39 0.65
PEEK Peekskill Fin. Corp. of NY 25.57 25.57 1.07 3.74 4.20 1.38 4.81 1.23 26.98 1.36
PFSB PennFed Fin. Services of NJ 7.53 6.21 0.57 7.10 4.93 0.85 10.57 0.69 31.83 0.31
PWBC PennFirst Bancorp of PA 7.07 6.45 0.43 5.89 5.07 0.64 8.84 0.58 86.14 1.57
PWBK Pennwood SB of PA* 19.47 19.47 0.61 3.89 3.07 0.97 6.17 1.13 57.64 1.40
PBKB People's SB of Brockton MA* 5.61 5.37 0.80 14.39 7.67 0.47 8.56 0.88 91.08 1.65
PFDC Peoples Bancorp of Auburn IN 15.18 15.18 1.10 7.16 6.07 1.45 9.50 0.42 73.36 0.39
PBCT Peoples Bank, MHC of CT (37.4)* 8.41 8.40 1.10 13.63 5.02 0.88 10.86 0.91 125.48 1.68
PFFC Peoples Fin. Corp. of OH 26.90 26.90 0.08 0.31 0.33 0.40 1.48 0.01 NA 0.41
PHBK Peoples Heritage Fin Grp of ME* 8.21 6.93 1.24 14.93 5.59 1.32 15.97 0.94 130.42 1.77
PBNB Peoples Sav. Fin. Corp. of CT(8)* 9.60 9.00 0.93 9.31 6.07 0.92 9.26 0.54 70.66 0.69
PSFC Peoples Sidney Fin. Corp of OH 23.26 23.26 0.92 3.97 4.11 1.21 5.18 1.00 42.00 0.45
PERM Permanent Bancorp of IN 9.70 9.60 0.24 2.35 1.84 0.52 5.16 1.08 46.35 0.98
PMFI Perpetual Midwest Fin. of IA 8.50 8.50 0.09 0.99 0.95 0.26 2.92 0.41 172.00 0.94
PERT Perpetual of SC, MHC (46.8) 13.29 13.29 0.75 6.48 3.39 1.06 9.13 NA NA 1.01
PCBC Perry Co. Fin. Corp. of MO 18.85 18.85 0.71 3.66 3.54 0.96 4.97 0.05 64.10 0.20
PHFC Pittsburgh Home Fin. of PA 11.47 11.34 0.57 4.58 3.93 0.81 6.53 1.74 30.40 0.78
PFSL Pocahnts Fed, MHC of AR (46.4) 6.38 6.38 0.58 9.56 6.46 0.81 13.35 0.28 170.57 1.20
POBS Portsmouth Bank Shrs Inc of NH(8)* 25.12 25.12 2.24 8.99 6.38 1.95 7.85 0.38 69.08 0.70
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MERI Meritrust FSB of Thibodaux LA 21.47 162.81 12.87 162.81 13.19 0.70 1.84 39.55
MWBX Metro West of MA* 11.12 190.41 13.97 190.41 11.12 0.12 2.16 24.00
MCBS Mid Continent Bancshares of KS 15.71 144.43 14.51 144.43 13.75 0.40 1.45 22.86
MIFC Mid Iowa Financial Corp. of IA 13.67 130.40 11.87 130.60 10.42 0.08 0.91 12.50
MCBN Mid-Coast Bancorp of ME 20.10 90.15 7.75 90.15 12.58 0.52 2.67 53.61
MWBI Midwest Bancshares, Inc. of IA 17.12 113.68 7.89 113.68 10.36 0.60 1.90 32.61
MWFD Midwest Fed. Fin. Corp of WI 17.03 185.27 15.96 192.87 17.48 0.34 1.72 29.31
MFFC Milton Fed. Fin. Corp. of OH NM 123.67 18.22 123.67 25.45 0.60 4.29 NM
MIVI Miss. View Hold. Co. of MN 25.21 94.02 17.17 94.02 17.00 0.16 1.09 27.59
MBSP Mitchell Bancorp of NC* NM 107.91 46.76 107.91 27.75 0.00 0.00 0.00
MBBC Monterey Bay Bancorp of CA NM 119.81 12.87 130.66 29.39 0.10 0.60 32.26
MSBK Mutual SB, FSB of Bay City MI NM 103.33 6.21 103.33 NM 0.00 0.00 0.00
NHTB NH Thrift Bancshares of NH NM 132.96 9.94 156.89 23.46 0.50 3.28 NM
NSLB NS&L Bancorp of Neosho MO NM 100.92 20.11 100.92 26.61 0.50 3.03 NM
NMSB Newmil Bancorp. of CT* 15.77 126.08 12.57 126.08 16.27 0.24 2.34 36.92
NASB North American SB of MO 11.43 180.70 14.41 186.76 11.76 0.80 1.82 20.78
NBSI North Bancshares of Chicago IL NM 113.64 16.60 113.64 26.01 0.48 2.49 NM
FFFD North Central Bancshares of IA 15.56 104.52 25.70 104.52 13.38 0.25 1.64 25.51
NBN Northeast Bancorp of ME* 22.45 106.52 7.40 123.24 23.56 0.32 2.23 50.00
NEIB Northeast Indiana Bncrp of IN 15.96 100.87 15.30 100.87 13.51 0.32 2.13 34.04
NWEQ Northwest Equity Corp. of WI 17.35 113.99 13.01 113.99 13.66 0.48 3.25 56.47
NWSB Northwest SB, MHC of PA (29.9) 27.23 183.73 17.85 195.51 18.83 0.32 2.10 57.14
NSSY Norwalk Savings Society of CT* 11.72 137.12 11.05 142.21 10.24 0.40 1.41 16.53
NSSB Norwich Financial Corp. of CT* 16.88 158.51 17.42 176.72 17.81 0.56 2.48 41.79
NTMG Nutmeg FS&LA of CT 24.26 112.24 6.39 112.24 18.75 0.00 0.00 0.00
OHSL OHSL Financial Corp. of OH 23.38 120.24 13.27 120.24 16.40 0.88 3.49 NM
OCFC Ocean Fin. Corp. of NJ NM 121.32 21.62 121.32 25.48 0.80 2.42 NM
OCWN Ocwen Financial Corp. of FL 11.49 NM 30.09 NM 15.82 0.00 0.00 0.00
OFCP Ottawa Financial Corp. of MI NM 149.30 13.20 186.57 18.75 0.40 1.78 57.14
PFFB PFF Bancorp of Pomona CA NM 122.43 12.82 123.83 NM 0.00 0.00 0.00
PSFI PS Financial of Chicago IL 22.35 99.13 42.84 99.13 21.69 0.32 2.17 48.48
PVFC PVF Capital Corp. of OH 12.42 177.53 12.47 177.53 9.42 0.00 0.00 0.00
PCCI Pacific Crest Capital of CA* 12.61 158.60 11.46 158.60 14.86 0.00 0.00 0.00
PALM Palfed, Inc. of Aiken SC NM 165.74 13.43 165.74 23.84 0.12 0.72 NM
PBCI Pamrapo Bancorp, Inc. of NJ 18.46 120.21 15.39 121.24 13.08 1.00 5.06 NM
PFED Park Bancorp of Chicago IL 27.83 92.88 20.15 92.88 19.93 0.00 0.00 0.00
PVSA Parkvale Financial Corp of PA 17.30 158.40 11.84 159.74 11.53 0.52 1.83 31.71
PBIX Patriot Bank Corp. of PA NM 144.85 11.71 144.85 22.97 0.35 2.15 67.31
PEEK Peekskill Fin. Corp. of NY 23.81 102.88 26.31 102.88 18.52 0.36 2.40 57.14
PFSB PennFed Fin. Services of NJ 20.27 140.00 10.54 169.79 13.62 0.28 1.02 20.74
PWBC PennFirst Bancorp of PA 19.74 117.46 8.31 128.76 13.16 0.36 2.40 47.37
PWBK Pennwood SB of PA* NM 98.04 19.09 98.04 20.55 0.32 2.13 69.57
PBKB People's SB of Brockton MA* 13.03 176.43 9.90 184.17 21.91 0.44 2.91 37.93
PFDC Peoples Bancorp of Auburn IN 16.48 117.91 17.90 117.91 12.43 0.60 2.70 44.44
PBCT Peoples Bank, MHC of CT (37.4)* 19.92 NM 21.45 NM 25.00 0.67 2.53 50.38
PFFC Peoples Fin. Corp. of OH NM 94.25 25.35 94.25 NM 0.50 3.28 NM
PHBK Peoples Heritage Fin Grp of ME* 17.88 226.84 18.62 NM 16.71 0.72 2.01 36.00
PBNB Peoples Sav. Fin. Corp. of CT(8)* 16.48 150.23 14.43 160.33 16.55 0.92 2.54 41.82
PSFC Peoples Sidney Fin. Corp of OH 24.32 96.66 22.49 96.66 18.66 0.00 0.00 0.00
PERM Permanent Bancorp of IN NM 130.01 12.61 131.30 24.75 0.30 1.20 65.22
PMFI Perpetual Midwest Fin. of IA NM 107.22 9.11 107.22 NM 0.30 1.58 NM
PERT Perpetual of SC, MHC (46.8) 29.50 149.82 19.91 149.82 20.92 1.40 4.75 NM
PCBC Perry Co. Fin. Corp. of MO 28.21 105.28 19.85 105.28 20.79 0.40 2.03 57.14
PHFC Pittsburgh Home Fin. of PA 25.42 109.41 12.55 110.70 17.86 0.24 1.60 40.68
PFSL Pocahnts Fed, MHC of AR (46.4) 15.49 142.03 9.06 142.03 11.10 0.90 4.34 67.16
POBS Portsmouth Bank Shrs Inc of NH(8)* 15.69 142.22 35.73 142.22 17.98 0.60 3.75 58.82
</TABLE>
<PAGE> 251
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PTRS Potters Financial Corp of OH 8.91 8.91 0.31 3.45 3.48 0.67 7.45 0.83 231.18 3.23
PKPS Poughkeepsie Fin. Corp. of NY 8.41 8.41 0.21 2.47 2.02 0.47 5.65 4.21 26.20 1.45
PRBC Prestige Bancorp of PA 11.69 11.69 0.27 2.17 2.03 0.58 4.61 0.32 78.54 0.39
PETE Primary Bank of NH(8)* 6.62 6.61 0.84 13.14 6.76 0.83 12.98 1.05 54.10 1.02
PFNC Progress Financial Corp. of PA 5.21 4.56 0.45 8.54 4.63 0.56 10.49 1.36 61.30 1.22
PSBK Progressive Bank, Inc. of NY* 8.35 7.40 1.10 13.18 8.37 1.11 13.28 0.84 127.85 1.58
PROV Provident Fin. Holdings of CA 14.22 14.22 0.23 1.72 1.55 0.11 0.86 1.97 44.11 1.03
PULB Pulaski SB, MHC of MO (29.0) 12.59 12.59 0.49 3.91 2.30 0.78 6.24 NA NA 0.33
PLSK Pulaski SB, MHC of NJ (46.0) 12.01 12.01 0.28 2.34 1.77 0.64 5.29 0.68 NA NA
PULS Pulse Bancorp of S. River NJ 7.80 7.80 0.72 8.47 5.96 1.08 12.67 0.75 60.59 1.83
QCFB QCF Bancorp of Virginia MN 17.64 17.64 1.24 6.25 6.44 1.24 6.25 NA NA NA
QCBC Quaker City Bancorp of CA 8.91 8.90 0.32 3.44 2.88 0.57 6.25 1.49 69.17 1.25
QCSB Queens County Bancorp of NY* 14.98 14.98 1.72 10.84 4.44 1.74 10.94 0.75 91.25 0.80
RCSB RCSB Financial, Inc. of NY(8)* 7.85 7.65 0.96 12.27 5.79 0.96 12.17 0.79 88.29 1.38
RARB Raritan Bancorp. of Raritan NJ* 7.68 7.54 0.93 12.34 7.27 1.01 13.36 0.46 179.82 1.27
REDF RedFed Bancorp of Redlands CA 8.18 8.17 0.12 1.71 0.96 0.47 6.50 3.26 34.86 1.33
RELY Reliance Bancorp, Inc. of NY 8.04 5.64 0.56 6.66 4.32 0.85 10.11 0.75 33.69 0.56
RELI Reliance Bancshares Inc of WI(8)* 61.06 61.06 1.32 2.16 3.03 1.32 2.16 NA NA 0.52
RIVR River Valley Bancorp of IN 12.36 12.17 -0.18 -1.46 -1.42 -0.18 -1.46 0.12 700.00 1.06
RFED Roosevelt Fin. Grp. Inc. of MO(8) 5.55 5.22 0.11 2.23 0.95 0.85 17.13 0.98 29.36 0.50
RSLN Roslyn Bancorp, Inc. of NY* 21.57 21.46 0.35 1.63 1.15 1.42 6.61 0.31 264.38 3.59
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 11.16 10.11 0.92 8.38 3.77 1.17 10.71 0.10 372.65 0.54
SCCB S. Carolina Comm. Bnshrs of SC 25.95 25.95 0.82 2.99 2.85 1.10 4.03 1.78 35.52 0.81
SBFL SB Fngr Lakes MHC of NY (33.1) 9.45 9.45 0.07 0.71 0.48 0.49 4.77 0.78 68.91 1.22
SFED SFS Bancorp of Schenectady NY 12.99 12.99 0.46 3.46 3.64 0.83 6.22 0.69 58.23 0.57
SGVB SGV Bancorp of W. Covina CA 7.27 7.14 0.14 1.66 1.57 0.37 4.29 0.61 49.82 0.42
SISB SIS Bank of Springfield MA* 7.56 7.56 1.50 20.13 10.84 1.46 19.50 0.46 254.44 2.57
SJSB SJS Bancorp of St. Joseph MI(8) 10.41 10.41 0.17 1.51 1.06 0.49 4.26 0.36 131.93 0.65
SWCB Sandwich Co-Op. Bank of MA* 8.24 7.86 0.94 11.30 7.23 0.95 11.45 1.28 62.63 1.13
SECP Security Capital Corp. of WI(8) 15.85 15.85 1.15 7.17 4.66 1.38 8.58 0.11 989.84 1.46
SFSL Security First Corp. of OH 9.36 9.20 1.10 11.88 5.99 1.39 15.04 0.26 301.46 0.87
SMFC Sho-Me Fin. Corp. of MO 9.54 9.54 0.91 8.68 4.30 1.09 10.34 0.09 664.29 0.70
SOBI Sobieski Bancorp of S. Bend IN 15.41 15.41 0.29 1.67 2.03 0.58 3.35 0.25 102.04 0.35
SOSA Somerset Savings Bank of MA(8)* 5.90 5.90 0.58 10.29 6.77 0.58 10.29 6.50 19.62 1.69
SSFC South Street Fin. Corp. of NC* 25.44 25.44 0.77 4.27 2.12 1.03 5.74 0.28 63.69 0.39
SCBS Southern Commun. Bncshrs of AL 20.77 20.77 0.62 3.01 2.81 1.11 5.34 2.28 50.34 2.02
SMBC Southern Missouri Bncrp of MO 15.67 15.67 1.03 6.46 5.79 1.01 6.33 1.10 37.60 0.64
SWBI Southwest Bancshares of IL 10.79 10.79 0.75 6.83 5.07 1.05 9.59 0.18 112.82 0.28
SVRN Sovereign Bancorp of PA 4.05 2.97 0.41 10.30 3.90 0.68 17.04 0.60 81.74 0.77
STFR St. Francis Cap. Corp. of WI 8.10 7.13 0.59 6.39 4.60 0.69 7.56 0.27 143.07 0.88
SPBC St. Paul Bancorp, Inc. of IL 8.74 8.71 0.68 7.65 3.78 1.00 11.30 0.48 163.91 1.18
STND Standard Fin. of Chicago IL(8) 10.90 10.89 0.47 4.12 2.73 0.71 6.18 0.22 137.54 0.49
SFFC StateFed Financial Corp. of IA 17.60 17.60 1.04 5.59 5.49 1.27 6.87 1.89 15.67 0.37
SFIN Statewide Fin. Corp. of NJ 10.52 10.50 0.50 4.60 3.86 0.89 8.23 0.49 80.61 0.81
STSA Sterling Financial Corp. of WA 3.99 3.39 0.07 1.61 0.95 0.31 7.68 0.43 119.58 0.81
SFSB SuburbFed Fin. Corp. of IL 6.56 6.54 0.33 4.93 4.16 0.54 8.08 0.27 75.49 0.33
SBCN Suburban Bancorp. of OH(8) 11.67 11.67 0.51 4.13 3.69 0.75 6.14 0.19 725.46 1.73
ROSE T R Financial Corp. of NY* 6.16 6.16 0.98 15.66 7.49 0.85 13.70 0.40 108.61 0.83
THRD TF Financial Corp. of PA 10.84 9.45 0.54 4.44 4.30 0.76 6.24 0.33 88.83 0.60
TPNZ Tappan Zee Fin., Inc. of NY 18.22 18.22 0.71 3.80 3.27 0.66 3.52 NA NA 1.18
ESBK The Elmira SB FSB of Elmira NY* 6.30 6.03 0.28 4.48 4.62 0.27 4.28 0.83 76.33 0.80
GRTR The Greater New York SB of NY(8)* 6.27 6.27 0.46 7.67 4.05 0.40 6.60 7.49 8.61 1.72
TSBS Trenton SB, FSB MHC of NJ(35.0 16.65 15.22 1.36 7.47 4.31 1.20 6.58 0.77 59.50 0.75
TRIC Tri-County Bancorp of WY 15.31 15.31 0.76 4.72 4.71 0.99 6.14 0.05 965.12 1.16
TWIN Twin City Bancorp of TN 12.92 12.92 0.57 4.36 3.68 0.79 6.04 0.19 127.41 0.33
UFRM United FS&LA of Rocky Mount NC 7.60 7.60 0.22 2.86 1.58 0.47 6.02 0.85 124.07 1.42
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PTRS Potters Financial Corp of OH 28.73 100.80 8.98 100.80 13.30 0.36 1.67 48.00
PKPS Poughkeepsie Fin. Corp. of NY NM 120.70 10.15 120.70 21.69 0.10 1.44 71.43
PRBC Prestige Bancorp of PA NM 97.77 11.42 97.77 23.16 0.12 0.76 37.50
PETE Primary Bank of NH(8)* 14.80 179.96 11.91 180.35 14.98 0.00 0.00 0.00
PFNC Progress Financial Corp. of PA 21.59 173.67 9.05 198.33 17.59 0.08 0.84 18.18
PSBK Progressive Bank, Inc. of NY* 11.94 154.51 12.91 174.44 11.85 0.68 2.30 27.42
PROV Provident Fin. Holdings of CA NM 98.18 13.97 98.18 NM 0.00 0.00 0.00
PULB Pulaski SB, MHC of MO (29.0) NM 169.77 21.37 169.77 27.24 1.00 5.48 NM
PLSK Pulaski SB, MHC of NJ (46.0) NM 132.25 15.89 132.25 25.00 0.30 2.31 NM
PULS Pulse Bancorp of S. River NJ 16.77 149.32 11.64 149.32 11.21 0.70 3.57 59.83
QCFB QCF Bancorp of Virginia MN 15.53 111.72 19.71 111.72 15.53 0.00 0.00 0.00
QCBC Quaker City Bancorp of CA NM 116.76 10.40 116.92 19.10 0.00 0.00 0.00
QCSB Queens County Bancorp of NY* 22.50 249.70 37.40 249.70 22.28 0.80 1.73 39.02
RCSB RCSB Financial, Inc. of NY(8)* 17.27 211.84 16.63 217.34 17.40 0.60 1.33 22.90
RARB Raritan Bancorp. of Raritan NJ* 13.76 159.57 12.25 162.51 12.71 0.72 2.40 33.03
REDF RedFed Bancorp of Redlands CA NM 150.72 12.32 150.87 27.42 0.00 0.00 0.00
RELY Reliance Bancorp, Inc. of NY 23.16 153.02 12.30 218.28 15.27 0.64 2.38 55.17
RELI Reliance Bancshares Inc of WI(8)* NM 71.18 43.47 71.18 NM 0.00 0.00 0.00
RIVR River Valley Bancorp of IN NM 102.64 12.69 104.24 NM 0.00 0.00 NM
RFED Roosevelt Fin. Grp. Inc. of MO(8) NM 237.40 13.18 NM 13.63 0.68 2.82 NM
RSLN Roslyn Bancorp, Inc. of NY* NM 142.05 30.63 142.76 21.51 0.20 1.00 NM
RVSB Rvrview SB,FSB MHC of WA(41.7)(8) 26.51 212.36 23.69 234.29 20.75 0.22 1.00 26.51
SCCB S. Carolina Comm. Bnshrs of SC NM 106.66 27.68 106.66 26.07 0.60 3.29 NM
SBFL SB Fngr Lakes MHC of NY (33.1) NM 146.41 13.84 146.41 NM 0.40 2.42 NM
SFED SFS Bancorp of Schenectady NY 27.50 95.60 12.42 95.60 15.28 0.28 1.70 46.67
SGVB SGV Bancorp of W. Covina CA NM 112.81 8.20 114.94 24.56 0.00 0.00 0.00
SISB SIS Bank of Springfield MA* 9.23 164.56 12.44 164.56 9.52 0.48 1.62 14.95
SJSB SJS Bancorp of St. Joseph MI(8) NM 153.80 16.02 153.80 NM 0.44 1.66 NM
SWCB Sandwich Co-Op. Bank of MA* 13.84 150.85 12.43 158.24 13.66 1.20 3.87 53.57
SECP Security Capital Corp. of WI(8) 21.48 150.43 23.85 150.43 17.93 1.20 1.27 27.27
SFSL Security First Corp. of OH 16.70 179.88 16.84 183.12 13.19 0.48 2.25 37.50
SMFC Sho-Me Fin. Corp. of MO 23.27 210.40 20.08 210.40 19.54 0.00 0.00 0.00
SOBI Sobieski Bancorp of S. Bend IN NM 92.01 14.18 92.01 24.58 0.28 1.90 NM
SOSA Somerset Savings Bank of MA(8)* 14.78 143.78 8.48 143.78 14.78 0.00 0.00 0.00
SSFC South Street Fin. Corp. of NC* NM 122.13 31.07 122.13 NM 0.40 2.42 NM
SCBS Southern Commun. Bncshrs of AL NM 107.14 22.25 107.14 20.07 0.30 2.11 75.00
SMBC Southern Missouri Bncrp of MO 17.27 111.17 17.42 111.17 17.62 0.50 2.84 49.02
SWBI Southwest Bancshares of IL 19.71 134.96 14.56 134.96 14.04 0.76 3.71 73.08
SVRN Sovereign Bancorp of PA 25.67 236.91 9.59 NM 15.52 0.08 0.57 14.55
STFR St. Francis Cap. Corp. of WI 21.73 140.06 11.34 159.17 18.37 0.48 1.44 31.37
SPBC St. Paul Bancorp, Inc. of IL 26.46 197.38 17.25 197.95 17.92 0.48 1.42 37.50
STND Standard Fin. of Chicago IL(8) NM 148.98 16.24 149.16 24.45 0.40 1.60 58.82
SFFC StateFed Financial Corp. of IA 18.21 100.63 17.71 100.63 14.82 0.40 2.09 38.10
SFIN Statewide Fin. Corp. of NJ 25.94 122.02 12.84 122.29 14.51 0.40 2.34 60.61
STSA Sterling Financial Corp. of WA NM 169.34 6.76 199.58 22.09 0.00 0.00 0.00
SFSB SuburbFed Fin. Corp. of IL 24.02 115.40 7.58 115.89 14.67 0.32 1.31 31.37
SBCN Suburban Bancorp. of OH(8) 27.08 111.05 12.96 111.05 18.22 0.60 3.08 NM
ROSE T R Financial Corp. of NY* 13.35 197.48 12.17 197.48 15.26 0.52 2.21 29.55
THRD TF Financial Corp. of PA 23.25 107.49 11.65 123.29 16.55 0.40 2.18 50.63
TPNZ Tappan Zee Fin., Inc. of NY NM 119.05 21.68 119.05 NM 0.20 1.21 37.04
ESBK The Elmira SB FSB of Elmira NY* 21.63 96.88 6.10 101.21 22.65 0.64 3.32 71.91
GRTR The Greater New York SB of NY(8)* 24.71 180.39 11.31 180.39 28.72 0.20 0.94 23.26
TSBS Trenton SB, FSB MHC of NJ(35.0 23.21 168.98 28.13 184.83 26.35 0.35 1.79 41.67
TRIC Tri-County Bancorp of WY 21.25 98.29 15.05 98.29 16.35 0.60 2.82 60.00
TWIN Twin City Bancorp of TN 27.14 120.03 15.51 120.03 19.59 0.64 3.37 NM
UFRM United FS&LA of Rocky Mount NC NM 179.10 13.62 179.10 30.00 0.24 2.00 NM
</TABLE>
<PAGE> 252
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 20, 1997
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
UBMT United Fin. Corp. of MT 22.65 22.65 1.09 4.70 4.82 1.34 5.80 0.42 16.41 0.21
VABF Va. Beach Fed. Fin. Corp of VA 6.79 6.79 0.15 2.19 1.40 0.41 6.09 1.15 63.74 0.96
VFFC Virginia First Savings of VA(8) 8.06 7.78 1.36 17.14 8.00 1.25 15.72 2.29 47.29 1.19
WHGB WHG Bancshares of MD 21.88 21.88 0.74 3.28 3.30 0.74 3.28 0.39 57.59 0.28
WSFS WSFS Financial Corp. of DE* 5.13 5.08 1.30 22.90 10.21 1.31 23.06 2.19 76.62 2.83
WVFC WVS Financial Corp. of PA* 12.72 12.72 1.08 8.12 6.37 1.34 10.10 0.31 229.86 1.31
WRNB Warren Bancorp of Peabody MA* 10.09 10.09 2.10 22.37 11.22 1.73 18.49 1.39 81.06 1.81
WFSL Washington FS&LA of Seattle WA 11.56 10.41 1.65 14.21 6.72 1.83 15.74 0.90 52.91 0.66
WAMU Washington Mutual Inc. of WA* 5.01 4.73 0.24 4.46 1.15 0.70 13.14 0.93 85.52 1.13
WYNE Wayne Bancorp of NJ 14.56 14.56 0.37 2.58 2.00 0.37 2.58 0.85 91.84 1.24
WAYN Wayne S&L Co. MHC of OH (47.8) 9.12 9.12 0.27 2.96 1.76 0.64 7.01 0.71 50.17 0.42
WCFB Wbstr Cty FSB MHC of IA (45.2) 23.56 23.56 1.01 4.44 3.12 1.35 5.89 0.27 141.96 0.67
WBST Webster Financial Corp. of CT 5.08 4.27 0.34 6.67 2.74 0.69 13.50 0.94 97.81 1.44
WEFC Wells Fin. Corp. of Wells MN 14.24 14.24 0.63 4.43 4.35 1.02 7.14 0.30 106.53 0.36
WCBI WestCo Bancorp of IL 15.57 15.57 1.10 7.06 5.48 1.41 9.08 0.84 33.74 0.39
WSTR WesterFed Fin. Corp. of MT 10.98 8.67 0.56 4.33 3.15 0.78 5.99 0.22 226.57 0.76
WOFC Western Ohio Fin. Corp. of OH 13.41 12.64 0.31 2.02 2.18 0.44 2.90 0.96 45.88 0.59
WWFC Westwood Fin. Corp. of NJ 9.22 8.17 0.43 4.44 3.67 0.80 8.22 0.14 146.31 0.54
WEHO Westwood Hmstd Fin Corp of OH 30.96 30.96 0.55 2.11 1.60 0.93 3.54 NA NA 0.19
WFCO Winton Financial Corp. of OH 7.13 6.95 0.66 8.78 6.40 0.84 11.18 NA NA 0.33
FFWD Wood Bancorp of OH 12.70 12.70 1.00 7.48 6.05 1.24 9.24 0.10 346.50 0.41
YFCB Yonkers Fin. Corp. of NY 15.30 15.30 0.84 5.28 4.36 1.16 7.25 0.73 51.78 1.17
YFED York Financial Corp. of PA 8.43 8.43 0.60 7.20 4.97 0.77 9.28 2.49 22.69 0.65
</TABLE>
<TABLE>
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
UBMT United Fin. Corp. of MT 20.74 97.74 22.14 97.74 16.81 0.96 4.92 NM
VABF Va. Beach Fed. Fin. Corp of VA NM 154.89 10.51 154.89 25.68 0.20 1.56 NM
VFFC Virginia First Savings of VA(8) 12.50 199.30 16.07 206.39 13.63 0.10 0.44 5.52
WHGB WHG Bancshares of MD NM 101.79 22.27 101.79 NM 0.20 1.40 42.55
WSFS WSFS Financial Corp. of DE* 9.80 225.12 11.55 227.38 9.73 0.00 0.00 0.00
WVFC WVS Financial Corp. of PA* 15.70 125.61 15.98 125.61 12.62 0.80 3.11 48.78
WRNB Warren Bancorp of Peabody MA* 8.91 182.19 18.39 182.19 10.78 0.52 2.89 25.74
WFSL Washington FS&LA of Seattle WA 14.89 196.38 22.69 218.03 13.44 0.88 3.18 47.31
WAMU Washington Mutual Inc. of WA* NM NM 16.10 NM 29.57 1.04 1.66 NM
WYNE Wayne Bancorp of NJ NM 117.68 17.13 117.68 NM 0.20 1.03 51.28
WAYN Wayne S&L Co. MHC of OH (47.8) NM 167.49 15.28 167.49 23.94 0.61 3.59 NM
WCFB Wbstr Cty FSB MHC of IA (45.2) NM 141.15 33.25 141.15 24.18 0.80 5.42 NM
WBST Webster Financial Corp. of CT NM 184.95 9.39 219.79 18.05 0.80 1.82 66.67
WEFC Wells Fin. Corp. of Wells MN 22.98 100.35 14.29 100.35 14.25 0.00 0.00 0.00
WCBI WestCo Bancorp of IL 18.23 128.37 19.98 128.37 14.18 0.60 2.47 45.11
WSTR WesterFed Fin. Corp. of MT NM 111.82 12.28 141.52 22.91 0.42 2.04 64.62
WOFC Western Ohio Fin. Corp. of OH NM 94.79 12.71 100.59 NM 1.00 4.55 NM
WWFC Westwood Fin. Corp. of NJ 27.24 118.28 10.90 133.50 14.72 0.20 1.10 29.85
WEHO Westwood Hmstd Fin Corp of OH NM 97.17 30.08 97.17 NM 0.28 2.04 NM
WFCO Winton Financial Corp. of OH 15.62 125.07 8.92 128.25 12.26 0.46 3.51 54.76
FFWD Wood Bancorp of OH 16.54 121.28 15.40 121.28 13.39 0.40 2.37 39.22
YFCB Yonkers Fin. Corp. of NY 22.94 112.35 17.19 112.35 16.71 0.20 1.30 29.85
YFED York Financial Corp. of PA 20.10 139.39 11.75 139.39 15.60 0.60 3.08 61.86
</TABLE>
<PAGE> 253
EXHIBIT IV-2
Historical Stock Price Indices
<PAGE> 254
EXHIBIT IV-2
INDEPENDENCE SAVINGS BANK
HISTORICAL STOCK PRICE INDICES(1)
<TABLE>
<CAPTION>
SNL SNL
NASDAQ Thrift Bank
Year/Qtr. Ended DJIA S&P 500 Composite Index Index
- --------------- ---- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
1991: Quarter 1 2881.1 375.2 482.3 125.5 66.0
Quarter 2 2957.7 371.2 475.9 130.5 82.0
Quarter 3 3018.2 387.9 526.9 141.8 90.7
Quarter 4 3168.0 417.1 586.3 144.7 103.1
1992: Quarter 1 3235.5 403.7 603.8 157.0 113.3
Quarter 2 3318.5 408.1 563.6 173.3 119.7
Quarter 3 3271.7 417.8 583.3 167.0 117.1
Quarter 4 3301.1 435.7 677.0 201.1 136.7
1993: Quarter 1 3435.1 451.7 690.1 228.2 151.4
Quarter 2 3516.1 450.5 704.0 219.8 147.0
Quarter 3 3555.1 458.9 762.8 258.4 154.3
Quarter 4 3754.1 466.5 776.8 252.5 146.2
1994: Quarter 1 3625.1 445.8 743.5 241.6 143.1
Quarter 2 3625.0 444.3 706.0 269.6 152.6
Quarter 3 3843.2 462.6 764.3 279.7 149.2
Quarter 4 3834.4 459.3 752.0 244.7 137.6
1995: Quarter 1 4157.7 500.7 817.2 278.4 152.1
Quarter 2 4556.1 544.8 933.5 313.5 171.7
Quarter 3 4789.1 584.4 1,043.5 362.3 195.3
Quarter 4 5117.1 615.9 1,052.1 376.5 207.6
1996: Quarter 1 5587.1 645.5 1,101.4 382.1 225.1
Quarter 2 5654.6 670.6 1,185.0 387.2 224.7
Quarter 3 5882.2 687.3 1,226.9 429.3 249.2
Quarter 4 6442.5 737.0 1,280.7 483.6 280.1
1997: Quarter 1 6583.5 757.1 1,221.7 527.7 292.5
June 20, 1997 7796.5 898.7 1,447.1 625.9 344.8
</TABLE>
(1) End of period data.
Sources: SNL Securities; Wall Street Journal.
<PAGE> 255
EXHIBIT IV-3
Historical Thrift Stock Indices
<PAGE> 256
MONTHLY MARKET REPORT
INDEX VALUES
<TABLE>
<CAPTION>
INDEX VALUES PERCENT CHANGE
------------------------------------------------------ --------------------------------------
05/30/97 1 MONTH YTD 52 WEEK 1 MONTH YTD 52 WEEK
<S> <C> <C> <C> <C> <C> <C> <C>
All Pub. Traded Thrifts 577.9 537.2 483.6 383.4 7.58 19.50 50.75
MHC Index 628.7 587.7 538.0 424.8 6.98 16.84 47.98
INSURANCE INDICES
- ------------------------------------------------------------------------------------------------------------------------------------
SAIF Thrifts 516.8 484.2 439.2 359.6 6.75 17.67 43.74
BIF Thrifts 757.3 689.7 616.8 454.9 9.80 22.78 66.49
STOCK EXCHANGE INDICES
- ------------------------------------------------------------------------------------------------------------------------------------
AMEX Thrifts 172.6 166.7 156.2 134.9 3.52 10.49 27.95
NYSE Thrifts 342.3 314.7 277.3 257.9 8.75 23.45 32.71
OTC Thrifts 667.0 622.5 569.7 459.1 7.16 17.08 45.28
GEOGRAPHICAL INDICES
- ------------------------------------------------------------------------------------------------------------------------------------
Mid-Atlantic Thrifts 1,148.2 1,077.4 970.7 745.1 6.58 18.29 54.09
Midwestern Thrifts 1,293.8 1,234.5 1,159.3 970.8 4.80 11.60 33.27
New England Thrifts 498.8 458.4 428.9 318.4 8.82 16.31 56.68
Southeastern Thrifts 521.3 499.4 447.2 383.9 4.40 16.58 35.80
Southwestern Thrifts 383.5 347.5 315.9 264.2 10.35 21.41 45.14
Western Thrifts 592.5 539.7 474.7 377.6 9.78 24.81 56.90
ASSET SIZE INDICES
- ------------------------------------------------------------------------------------------------------------------------------------
Less than $250M 648.7 639.4 586.6 545.1 1.45 10.59 19.01
$250M to $500M 898.1 865.2 789.8 688.3 3.80 13.72 30.49
$500M to $1B 590.0 558.9 521.8 434.1 5.56 13.07 35.90
$1B to $5B 639.9 593.8 546.0 430.8 7.77 17.19 48.53
Over $5B 374.7 344.1 305.8 238.0 8.89 22.51 57.41
COMPARATIVE INDICES
- ------------------------------------------------------------------------------------------------------------------------------------
Dow Jones Industrials 7,331.0 7,009.0 6,448.3 5,693.4 4.59 13.69 28.76
S&P 500 848.3 801.3 740.7 671.7 5.86 14.52 26.29
</TABLE>
All SNL indices are market-value weighted; i.e., an institution's effect on an
index is proportionate to that institution's market capitalization. All SNL
thrift indices, except for the SNL MHC Index, began at 100 on March 30, 1984.
The SNL MHC Index began at 201.082 on Dec. 31, 1992, the level of the SNL Thrift
Index on that date. On March 30, 1984, the S&P 500 closed at 159.2 and the Dow
Jones Industrials stood at 1164.9.
Mid-Atlantic: DE, DC, PA, MD, NJ, NY, PR; Midwest: IA, IL, IN, KS, KY, MI,
MN, MO, ND, NE, OH, SD, WI; New England: CT, ME, MA, NH, RI, VT; Southeast:
AL, AR, FL, GA, MS, NC, SC, TN, VA, WV; Southwest: CO, LA, NM, OK, TX, UT;
West: AZ, AK, CA, HI, ID, MT, NV, OR, WA, WY
JUNE 1997
<PAGE> 257
EXHIBIT IV-4
Market Area Acquisition Activity
<PAGE> 258
<TABLE>
<CAPTION>
EXHIBIT IV-4
INDEPENDENCE SAVINGS BANK
COMPLETED NEW YORK THRIFT ACQUISITIONS 1995-JUNE 13, 1997
Seller:
1:Total
Announce Completed/ Assets
Date Date Buyer ST Seller ST ($000)
<S> <C> <C> <C> <C> <C> <C>
12/03/96 04/30/97 Dime Bancorp NY BFS Bankorp, Inc. NY 643,180
08/22/96 03/01/97 HSBC Holdings Plc FO First FSLA-Rochester NY 7,348,042
07/15/96 01/02/97 North Fork Bancorp NY North Side SB NY 1,580,435
11/03/95 06/26/96 Dime SB Williamsbrgh NY Conestoga Bancorp NY 485,132
09/24/95 02/29/96 Republic New York NY Brooklyn Bancorp NY 4,139,215
07/31/95 01/11/96 Reliance Bancorp Inc NY Sunrise Bancorp Inc NY 611,933
05/16/95 01/05/96 Independence Cmty NY Bay Ridge Bancorp NY 587,904
04/12/95 10/05/95 HSBC Holdings Plc FO United Northern Bncp NY 88,848
04/03/95 08/11/95 Reliance Bancorp Inc NY Bank of Westbury NY 185,431
07/13/94 01/31/95 Astoria Financial Cp NY Fidelity New York NY 2,071,973
07/06/94 01/13/95 Dime Bancorp NY Anchor Bancorp, Inc. NY 8,367,095
07/01/94 01/27/95 New York Bancorp NY Hamilton Bancorp NY 741,404
Maximum 8,367,095
Minimum 88,848
Average 2,237,549
Median 692,292
</TABLE>
<TABLE>
<CAPTION>
Seller:
Seller: Seller: Seller: Seller: 1:Loan Loss Final
1:Tang 1:YTD 1:YTD 1:NPAs Reserves/ Deal
Announce Completed/ Eqty/ ROAA ROAE Assets Nonperform Value
Date Date Buyer ST Assets(%) (%) (%) (%) Loans(%) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/03/96 04/30/97 Dime Bancorp NY 7.81 1.58 20.12 1.04 94.15 91.8
08/22/96 03/01/97 HSBC Holdings Plc FO 5.35 0.75 13.91 0.72 105.64 652.0
07/15/96 01/02/97 North Fork Bancorp NY 7.67 1.29 17.19 0.51 121.82 282.4
11/03/95 06/26/96 Dime SB Williamsbrgh NY 15.93 0.64 3.84 0.19 19.25 105.4
09/24/95 02/29/96 Republic New York NY 8.79 1.00 11.83 13.63 18.75 529.6
07/31/95 01/11/96 Reliance Bancorp Inc NY 10.90 1.11 10.07 0.50 65.45 112.8
05/16/95 01/05/96 Independence Cmty NY 17.42 1.60 9.42 3.87 64.35 127.8
04/12/95 10/05/95 HSBC Holdings Plc FO 7.56 1.02 13.37 3.24 NA 9.3
04/03/95 08/11/95 Reliance Bancorp Inc NY 5.79 0.56 9.29 0.88 NA 16.7
07/13/94 01/31/95 Astoria Financial Cp NY 4.93 0.54 9.88 1.96 NA 157.0
07/06/94 01/13/95 Dime Bancorp NY 3.81 0.57 11.73 0.52 NA 442.2
07/01/94 01/27/95 New York Bancorp NY 10.51 1.35 12.64 1.41 NA 125.4
Maximum 17.42 1.60 20.12 13.63 121.82 652.0
Minimum 3.81 0.54 3.84 0.19 18.75 9.3
Average 8.87 1.00 11.94 2.37 69.92 221.0
Median 7.74 NM 11.78 0.96 65.45 126.6
</TABLE>
<TABLE>
<CAPTION>
Final Final Final Final Final
Deal Deal Deal Pr/ Deal Pr/ Deal Pr/
Announce Completed/ Price Per Consider Pr/Bk Tg Bk Assets 4-Qtr
Date Date Buyer ST Share($) Type (%) (%) (%) EPS(x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/03/96 04/30/97 Dime Bancorp NY 52.000 Cash 165.13 165.13 14.11 10.24
08/22/96 03/01/97 HSBC Holdings Plc FO NA Cash 163.00 166.03 9.09 8.15
07/15/96 01/02/97 North Fork Bancorp NY 55.433 Com Stock 211.01 212.79 17.23 14.40
11/03/95 06/26/96 Dime SB Williamsbrgh NY 21.310 Cash 121.22 121.22 21.32 30.01
09/24/95 02/29/96 Republic New York NY 41.500 Cash 132.76 132.76 12.84 25.94
07/31/95 01/11/96 Reliance Bancorp Inc NY 32.000 Cash 155.64 155.64 18.22 15.24
05/16/95 01/05/96 Independence Cmty NY 22.060 Cash 125.20 125.20 22.20 13.70
04/12/95 10/05/95 HSBC Holdings Plc FO NA Cash 132.46 136.70 10.87 12.53
04/03/95 08/11/95 Reliance Bancorp Inc NY 37.720 Cash 148.76 149.53 9.93 21.27
07/13/94 01/31/95 Astoria Financial Cp NY 29.000 Cash 132.06 144.93 7.88 21.01
07/06/94 01/13/95 Dime Bancorp NY 15.045 Com Stock NA NA NA NA
07/01/94 01/27/95 New York Bancorp NY 32.182 Com Stock 142.40 143.41 15.69 11.70
Maximum 55.433 211.01 212.79 22.20 30.01
Minimum 15.045 121.22 121.22 7.88 8.15
Average 33.825 148.15 150.30 14.49 16.74
Median 32.091 142.40 144.93 14.11 14.40
Source: SNL Securities, LLP.
</TABLE>
<PAGE> 259
<TABLE>
<CAPTION>
EXHIBIT IV-4
INDEPENDENCE SAVINGS BANK
PENDING NEW YORK THRIFT ACQUISITIONS
Pooling, Seller: Seller: Seller: Seller:
Purch, NA, 1:Total 1:Tang 1:YTD 1:YTD
Announce Not Disc, Assets Eqty/ ROAA ROAE
Date Buyer ST Seller ST Minority Stk ($000) Assets(%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
05/21/97 Charter One Fin'l OH RCSB Financial NY P 4,032,365 7.66 0.96 12.26
04/25/97 Flushing Financial NY New York FSB NY U 82,249 9.28 1.32 3.59
03/31/97 Astoria Financial Cp NY Greater New York SB NY U 2,541,888 8.25 0.72 9.20
Maximum 4,032,365 9.28 1.32 12.26
Minimum 82,249 7.66 0.72 3.59
Average 2,218,834 8.40 NM 8.35
Median 2,541,888 8.25 0.96 9.20
</TABLE>
<TABLE>
<CAPTION>
Seller:
Pooling, Seller: 1:Loan Loss Ann'd Ann'd
Purch, NA, 1:NPAs/ Reserves/ Deal Deal
Announce Not Disc, Assets Nonperform Value Price Per Consider
Date Buyer ST Seller ST Minority Stk (%) Loans(%) ($M) Share($) Type
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/21/97 Charter One Fin'l OH RCSB Financial NY P 0.66 132.02 647.5 42.315 Com Stock
04/25/97 Flushing Financial NY New York FSB NY U 1.14 117.28 13.0 272.500 Cash
03/31/97 Astoria Financial Cp NY Greater New York SB NY U 7.84 9.20 344.6 18.938 Mixture
Maximum 7.84 132.02 647.5 272.500
Minimum 0.66 9.20 13.0 18.938
Average 3.21 86.17 335.0 111.251
Median 1.14 117.28 344.6 42.315
</TABLE>
<TABLE>
<CAPTION>
Pooling, Ann'd Ann'd Ann'd
Purch, NA, Deal Deal Pr/ Deal Pr/ Deal Pr/
Announce Not Disc, Pr/Bk Tg Bk Assets 4-Qtr
Date Buyer ST Seller ST Minority Stk (%) (%) (%) EPS(x)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
05/21/97 Charter One Fin'l OH RCSB Financial NY P 198.10 203.24 16.06 17.06
04/25/97 Flushing Financial NY New York FSB NY U 169.14 170.51 15.81 13.13
03/31/97 Astoria Financial Cp NY Greater New York SB NY U 167.44 167.44 13.56 24.59
Maximum 198.10 203.24 16.06 24.59
Minimum 167.44 167.44 13.56 13.13
Average 178.23 180.40 15.14 18.26
Median 169.14 170.51 15.81 17.06
</TABLE>
Source: SNL Securities, LLP.
<PAGE> 260
EXHIBIT IV-5
Directors and Senior Management Summary Resumes
<PAGE> 261
SUMMARY DESCRIPTIONS OF DIRECTORS
WILLARD N. ARCHIE is a certified public accountant and Vice Chairman
and Managing Partner of Mitchell & Titus, LLP, an accounting and management
consulting firm in New York City.
ROBERT B. CATELL has been Chairman and Chief Executive Officer of the
Brooklyn Union Gas Company in Brooklyn, New York since May 1996. Previously, Mr.
Catell was President and Chief Executive Officer of the Brooklyn Union Gas
Company. Mr. Catell also is a director of the Houston Independent Oil & Gas
Company.
ROHIT M. DESAI is Chairman and President of Desai Capital Management,
an investment management firm in New York City. Mr. Desai also serves as a
director of the Rouse Company, Sunglass Hut International and Finlay Fine
Jewelry.
CHAIM Y. EDELSTEIN has been self-employed as a retail consultant since
May 1995. Previously he served as a consultant to Federated Department Stores
from March 1994 through April 1995 and, from March 1992 through February 1994,
as Chairman and Chief Executive Officer of A&S/Jordan Marsh, a department store
in Brooklyn, New York. Mr. Edelstein also is a director of Hills Stores, Inc.
and Carson Pirie Scott.
DONALD H. ELLIOTT has been an attorney with, and of counsel to, the law
firm, Hollyer, Brady, Smith, Troxell, Barrett, Rocket, Hines & Mone LLP, New
York City, since September 1995. Previously, Mr. Elliott was a partner with the
law firm, Mudge Rose Guthrie Alexander & Ferdon LLP, New York City. Mr. Elliott
also is a director of the Brooklyn Union Gas Company.
ROBERT W. GELFMAN is a partner with the law firm, Battle Fowler LLP, a
law firm in New York City.
CHARLES J. HAMM has served as President of the Bank since 1985 and was
elected Chief Executive Officer of the Bank in 1986. Mr. Hamm also has served as
Chairman of the Board of the Bank since 1996.
SCOTT M. HAND is President and a director of Inco Limited, a mining
company headquartered in Toronto, Canada.
DONALD E. KOLOWSKY has been retired since December 1991. Previously,
Mr. Kolowsky was the President of the Special Chemicals Group of Pfizer, Inc.
<PAGE> 262
SUMMARY DESCRIPTIONS OF DIRECTORS
(CONTINUED)
JANINE LUKE has been a director of Windrove Service Corporation, an
investment advisory firm in New York City since January 1996. Previously, until
December 1995, Mrs. Luke was the President of Breecom Corp., an investment
advisory firm.
MALCOLM MACKAY is a Managing Director in Russell Reynolds Associates,
Inc., an executive placement firm in New York City. Mr. MacKay also serves as a
director of Empire Fidelity Life Insurance Company, Inc., a subsidiary of
Fidelity Investment Co.
JOSEPH S. MORGANO has served as Executive Vice President and Mortgage
Officer of the Bank since March 1993. Mr. Morgano has served in various
capacities in the mortgage area since joining the Bank in 1972.
WESLEY D. RATCLIFF has been President and Chief Executive Officer of
Advanced Technological Solutions, Inc., an electronics service provider located
in Brooklyn, New York, since October 1993. Previously, Mr. Ratcliff served as a
plant manager for IBM Corporation.
<PAGE> 263
SUMMARY DESCRIPTIONS OF SENIOR MANAGEMENT
CHARLES J. HAMM has served as President of the Bank since 1985 and was
elected Chief Executive Officer of the Bank in 1986. Mr. Hamm also has served as
Chairman of the Board of the Bank since 1996.
JOSEPH S. MORGANO has served as Executive Vice President and Mortgage
Officer of the Bank since March 1993. Mr. Morgano has served in various
capacities in the mortgage area since joining the Bank in 1972.
TERENCE J. MITCHELL has been Executive Vice President - Director of
Marketing and Retail Banking of the Bank since February 1995. Previously, Mr.
Mitchell served as a Senior Vice President of the Bank for Marketing and Retail
Banking.
JOHN B. ZURELL has been Executive Vice President - Financial Systems
and Director of Commercial and Consumer Lending since February 1994. Previously,
he served as a Senior Vice President of the Bank.
THOMAS J. BRADY has been Senior Vice President of the Bank since March
1993 and Treasurer of the Bank since September 1991. Previously, Mr. Brady
served in various positions since joining the Bank in 1971.
JOHN K. SCHNOCK has been Senior Vice President, Secretary and Counsel
of the Bank since February 1996. Previously, Mr. Schnock served as a Vice
President and then First Vice President since joining the Bank's Secretary and
Counsel department in June 1992. Prior thereto, Mr. Schnock was an attorney with
the law firm of Bleakley Platt Remsen Millham & Curran, New York, New York, from
April 1990 to June 1992. Prior to 1992, Mr. Schnock was employed by the Bank in
a variety of capacities (from 1972 to 1992).
<PAGE> 264
EXHIBIT IV-6
Pro Forma Analysis Sheet
<PAGE> 265
EXHIBIT IV-6
PRO FORMA ANALYSIS SHEET
Independence Savings Bank
Prices as of June 20, 1997
<TABLE>
<CAPTION>
All Savings
Peer Group New York Companies Institutions
------------------------ ------------------- ------------
Price Multiple Symbol Subject (1) Mean Median Mean Median Mean
- -------------- ------ ----------- ---- ------ ---- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
Price-earnings ratio P/E 18.04 x 18.50x 18.35x 20.47x 21.80x 19.40x
Price-book ratio = P/B 67.73% 157.64% 153.77% 136.77% 125.40% 133.98%
Price-assets ratio = P/A 11.51% 17.71% 13.75% 16.48% 14.35% 16.10%
Valuation Parameters
Pre-Conversion Earnings (Y) $17,180,000 ESOP Stock Purchases (E) 8.00% (5)
Pre-Conversion Book Value (B) $309,207,000 Cost of ESOP Borrowings (S) 0.00% (4)
Pre-Conv. Tang. Book Value (B) $248,708,000 ESOP Amortization (T) 20.00 years
Pre-Conversion Assets (A) $3,733,409,000 RRP Amount (M) 4.00%
Reinvestment Rate (2)(R) 3.18% RRP Vesting (N) 5.00 years (5)
Est. Conversion Expenses (3)(X) 2.61% Foundation (F) 8.00%
Tax rate (TAX) 47.00% Tax Benefit (Z) 16,537,037
Percentage Sold (PCT) 100.00%
</TABLE>
Calculation of Pro Forma Value After Conversion
<TABLE>
<CAPTION>
<S> <C> <C>
1. V= P/E * (Y) V=$475,000,000
-------------------------------------------------------------
1 - P/E * PCT * ((1-X-E-M-F)*R - (1-TAX)*E/T - (1-TAX)*M/N)
2. V= P/B * (B+Z) V=$475,000,000
-------------------------------
1 - P/B * PCT * (1-X-E-M-F)
3. V= P/A * (A+Z) V=$475,000,000
-------------------------------
1 - P/A * PCT * (1-X-E-M-F)
</TABLE>
<TABLE>
<CAPTION>
Shares Aggregate
Shares Sold to Price Per Gross Offering Issued To Total Shares Market Value
Conclusion Public Share Proceeds Foundation Issued of Stock Issued
- ----------- ------ ----- -------- ---------- ------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Minimum 37,384,259 10.00 $373,842,593 2,990,741 40,375,000 403,750,000
Midpoint 43,981,481 10.00 439,814,815 3,518,519 47,500,000 475,000,000
Maximum 50,578,704 10.00 505,787,037 4,046,296 54,625,000 546,250,000
Supermaximum 58,165,509 10.00 581,655,093 4,653,241 62,818,750 628,187,500
</TABLE>
- -------------------------------------------------------
(1) Pricing ratios shown reflect the midpoint value.
(2) Net return reflects a reinvestment rate of 6.00 percent, and a tax rate of
47.00 percent.
(3) Offering expenses shown at estimated midpoint value.
(4) No cost is applicable since holding company will fund the ESOP loan.
(5) ESOP and MRP amortize over 20 years and 5 years, respectively;
amortization expenses tax effected at 47.00 percent.
<PAGE> 266
EXHIBIT IV-7
Pro Forma Effect of Conversion Proceeds
<PAGE> 267
Exhibit IV-7
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Independence Savings Bank
At the Minimum
<TABLE>
<S> <C>
1. Offering Proceeds $ 373,842,593
Less: Estimated Offering Expenses 10,507,697
--------------
Net Conversion Proceeds $ 363,334,896
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $ 363,334,896
Less: Proceeds Invested in Non-Earning Fixed Assets 0
Less: Non-Cash Stock Purchases (1) 44,861,111
--------------
Net Proceeds Reinvested $ 318,473,784
Estimated net incremental rate of return 3.18%
--------------
Earnings Increase $ 10,127,466
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 792,546
Less: Recognition Plan Vesting (4) 1,585,093
--------------
Net Earnings Increase $ 7,749,827
<CAPTION>
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
<S> <C> <C> <C>
12 Months ended March 31, 1997 (reported) $ 17,180,000 $ 7,749,827 $ 24,929,827
12 Months ended March 31, 1997 (core) $ 25,599,000 $ 7,749,827 $ 33,348,827
<CAPTION>
Before Net Cash Tax Benefit (5) After
4. Pro Forma Net Worth Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $ 309,207,000 $318,473,784 $14,056,481 $ 641,737,266
March 31, 1997 (Tangible) $ 248,708,000 $318,473,784 $14,056,481 $ 581,238,266
<CAPTION>
Before Net Cash Tax Benefit (5) After
5. Pro Forma Assets Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $3,733,409,000 $318,473,784 $14,056,481 $4,065,939,266
</TABLE>
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the
offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is
tax-effected at a 47.00 percent rate.
(4) MRP is amortized over 5 years, and amortization expense is tax effected at
47.00 percent.
(5) Reflects tax benefit of stock contribution to the Foundation.
<PAGE> 268
Exhibit IV-7
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Independence Savings Bank
At the Midpoint
<TABLE>
<S> <C>
1. Offering Proceeds $ 439,814,815
Less: Estimated Offering Expenses 11,493,981
--------------
Net Conversion Proceeds $ 428,320,834
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $ 428,320,834
Less: Proceeds Invested in Non-Earning Fixed Assets 0
Less: Non-Cash Stock Purchases (1) 52,777,778
--------------
Net Proceeds Reinvested $ 375,543,056
Estimated net incremental rate of return 3.18%
--------------
Earnings Increase $ 11,942,269
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 932,407
Less: Recognition Plan Vesting (4) 1,864,815
--------------
Net Earnings Increase $ 9,145,047
<CAPTION>
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
<S> <C> <C> <C>
12 Months ended March 31, 1997 (reported) $ 17,180,000 $ 9,145,047 $ 26,325,047
12 Months ended March 31, 1997 (core) $ 25,599,000 $ 9,145,047 $ 34,744,047
<CAPTION>
Before Net Cash Tax Benefit (5) After
4. Pro Forma Net Worth Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $ 309,207,000 $375,543,056 $16,537,037 $ 701,287,093
March 31, 1997 (Tangible) $ 248,708,000 $375,543,056 $16,537,037 $ 640,788,093
<CAPTION>
Before Net Cash Tax Benefit (5) After
5. Pro Forma Assets Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $3,733,409,000 $375,543,056 $16,537,037 $4,125,489,093
</TABLE>
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the
offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is
tax-effected at a 47.00 percent rate.
(4) MRP is amortized over 5 years, and amortization expense is tax effected at
47.00 percent.
(5) Reflects tax benefit of stock contribution to the Foundation.
<PAGE> 269
Exhibit IV-7
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Independence Savings Bank
At the Maximum
<TABLE>
<S> <C>
1. Offering Proceeds $ 505,787,037
Less: Estimated Offering Expenses 12,480,266
--------------
Net Conversion Proceeds $ 493,306,771
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $ 493,306,771
Less: Proceeds Invested in Non-Earning Fixed Assets 0
Less: Non-Cash Stock Purchases (1) 60,694,444
--------------
Net Proceeds Reinvested $ 432,612,327
Estimated net incremental rate of return 3.18%
--------------
Earnings Increase $ 13,757,072
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 1,072,269
Less: Recognition Plan Vesting (4) 2,144,537
--------------
Net Earnings Increase $ 10,540,266
<CAPTION>
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
<S> <C> <C> <C>
12 Months ended March 31, 1997 (reported) $ 17,180,000 $10,540,266 $ 27,720,266
12 Months ended March 31, 1997 (core) $ 25,599,000 $10,540,266 $ 36,139,266
<CAPTION>
Before Net Cash Tax Benefit (5) After
4. Pro Forma Net Worth Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $ 309,207,000 $432,612,327 $19,017,593 $ 760,836,919
March 31, 1997 (Tangible) $ 248,708,000 $432,612,327 $19,017,593 $ 700,337,919
<CAPTION>
Before Net Cash Tax Benefit (5) After
5. Pro Forma Assets Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $3,733,409,000 $432,612,327 $19,017,593 $4,185,038,919
</TABLE>
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the
offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is
tax-effected at a 47.00 percent rate.
(4) MRP is amortized over 5 years, and amortization expense is tax effected at
47.00 percent.
(5) Reflects tax benefit of stock contribution to the Foundation.
<PAGE> 270
Exhibit IV-7
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Independence Savings Bank
At the Supermaximum Value
<TABLE>
<S> <C>
1. Offering Proceeds $ 581,655,093
Less: Estimated Offering Expenses 13,614,494
--------------
Net Conversion Proceeds $ 568,040,599
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds $ 568,040,599
Less: Proceeds Invested in Non-Earning Fixed Assets 0
Less: Non-Cash Stock Purchases (1) 69,798,611
--------------
Net Proceeds Reinvested $ 498,241,987
Estimated net incremental rate of return 3.18%
--------------
Earnings Increase $ 15,844,095
Less: Estimated cost of ESOP borrowings (2) 0
Less: Amortization of ESOP borrowings (3) 1,233,109
Less: Recognition Plan Vesting (4) 2,466,218
--------------
Net Earnings Increase $ 12,144,769
<CAPTION>
Net
Before Earnings After
3. Pro Forma Earnings Conversion Increase Conversion
---------- -------- ----------
<S> <C> <C> <C>
12 Months ended March 31, 1997 (reported) $ 17,180,000 $12,144,769 $ 29,324,769
12 Months ended March 31, 1997 (core) $ 25,599,000 $12,144,769 $ 37,743,769
<CAPTION>
Before Net Cash Tax Benefit (5) After
4. Pro Forma Net Worth Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $ 309,207,000 $498,241,987 $21,870,231 $ 829,319,219
March 31, 1997 (Tangible) $ 248,708,000 $498,241,987 $21,870,231 $ 768,820,219
<CAPTION>
Before Net Cash Tax Benefit (5) After
5. Pro Forma Assets Conversion Proceeds Of Contribution Conversion
---------- -------- --------------- ----------
<S> <C> <C> <C> <C>
March 31, 1997 $3,733,409,000 $498,241,987 $21,870,231 $4,253,521,219
</TABLE>
(1) Includes ESOP and MRP stock purchases equal to 8.0 and 4.0 percent of the
offering, respectively.
(2) ESOP stock purchases are internally financed by a loan from the holding
company.
(3) ESOP borrowings are amortized over 20 years, amortization expense is
tax-effected at a 47.00 percent rate.
(4) MRP is amortized over 5 years, and amortization expense is tax effected at
47.00 percent.
(5) Reflects tax benefit of stock contribution to the Foundation.
<PAGE> 271
EXHIBIT IV-8
Peer Group Core Earnings Analysis
<PAGE> 272
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Core Earnings Analysis
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1997
<TABLE>
<CAPTION>
Estimated
Net Income Less: Net Tax Effect Less: Extd Core Income Estimated
to Common Gains(Loss) @ 34% Items to Common Shares Core EPS
---------- ----------- ---------- ---------- ---------- ---------- -------
($000) ($000) $000) ($000) ($000) ($000) ($)
Comparable Group
- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALBK ALBANK Fin. Corp. of Albany NY 27,813 10,439 -3,549 0 34,703 12,819 2.71
DIME Dime Community Bancorp of NY 11,380 2,095 -712 0 12,763 13,126 0.97
FFIC Flushing Fin. Corp. of NY 6,942 355 -121 0 7,176 8,088 0.89
HAVN Haven Bancorp of Woodhaven NY 9,872 6,828 -2,322 0 14,378 4,330 3.32
JSBF JSB Financial, Inc. of NY 27,095 -2,069 703 0 25,729 9,830 2.62
PKPS Poughkeepsie Fin. Corp. of NY 1,776 3,442 -1,170 0 4,048 12,595 0.32
PSBK Progressive Bank, Inc. of NY 9,502 63 -21 0 9,544 3,825 2.50
QCSB Queens County Bancorp of NY 22,812 418 -142 0 23,088 11,137 2.07
RELY Reliance Bancorp, Inc. of NY 10,197 8,078 -2,747 0 15,528 8,823 1.76
ROSE T R Financial Corp. of NY 31,095 -5,854 1,990 0 27,231 17,632 1.54
</TABLE>
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, LC. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1997 by RP Financial, LC.
<PAGE> 273
EXHIBIT IV-9
Pro Forma Regulatory Capital Ratios
<PAGE> 274
<TABLE>
<CAPTION>
Pro Forma at March 31, 1997 Based on
--------------------------------------------------------------------
37,384,259 43,981,481 50,578,704
Shares Shares Shares
Historical at (Minimum (Mid-point (Maximum
March 31, 1997 of Range) of Range) of Range)(1)
----------------------- ----------------------- ------------------------ -----------------------
Percent Percent Percent Percent
Amount of Assets(2) Amount of Assets(2) Amount of Assets(2) Amount of Assets(2)
-------- ------------ ------ ------------ ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP capital (3) $309,114 8.28% $460,085 11.75% $487,142 12.34% $514,199 12.92%
======== ===== ======== ===== ======== ===== ======== =====
Tier I risk-based
level:(4)(5) $247,520 10.05% $398,491 15.94% $425,548 16.98% $452,605 18.02%
Requirement 98,525 4.00 99,972 4.00 100,231 4.00 100,490 4.00
-------- ----- -------- ----- -------- ----- -------- -----
Excess $148,995 6.05% $298,518 11.94% $325,317 12.98% $352,115 14.02%
======== ===== ======== ===== ======== ===== ======== =====
Total risk-based
level:(1)(4)(5) $274,544 11.15% $425,515 17.03% $425,572 18.06% $479,629 19.09%
Requirement 197,050 8.00 199,944 8.00 200,462 8.00 200,979 8.00
-------- ----- -------- ----- -------- ----- -------- -----
Excess $ 77,494 3.15% $225,570 9.03% $252,110 10.06% $278,650 11.09%
======== ===== ======== ===== ======== ===== ======== =====
Tier I leverage
level:(4)(5)(6) $247,520 6.83% $398,491 10.47% $425,548 11.08% $452,605 11.69%
Requirement 145,064 3.00 152,299 4.00 153,593 4.00 154,886 4.00
-------- ----- -------- ----- -------- ----- -------- -----
Excess $102,456 3.83% $246,192 6.47% $271,955 7.08% $297,719 7.69%
======== ===== ======== ===== ======== ===== ======== =====
</TABLE>
- -----------------
(1) In the event of an oversubscription for shares of Common Stock, the Company
and the Bank may increase the total number of shares offered in the
Conversion by up to 15%. Assuming a full increase in the number of shares,
the Bank's Tier I risk-based, total risk-based and Tier I leverage capital
ratios would be 19.2%, 20.3% and 12.4%, respectively, at the maximum of the
Estimated Price Range, as adjusted. See generally, "Capitalization" and "Pro
Forma Data."
(2) Adjusted or risk-weighted assets, as appropriate.
(3) The difference between capital under generally accepted accounting
principles ("GAAP") and regulatory capital is an adjustment to decrease
regulatory capital by the amount of the net unrealized gain, if any, on
available-for-sale securities recognized for GAAP purposes, as well as
adjustments related to core deposit intangibles of the Bank and the
goodwill resulting from the Bay Ridge acquisition. Regulatory risk-based
capital reflects these adjustments plus the inclusion of the allowance for
loan losses.
(4) Pro forma capital levels assume receipt by the Bank of 50% of the net
proceeds from the shares of Common Stock sold at the minimum, midpoint and
maximum of the Estimated Price Range. These levels also assume funding by
the Bank of the Recognition Plan equal to 4% of the Common Stock issued and
repayment of the Company's loan to the ESOP. See "Management - Benefits" for
a discussion of the Recognition Plan and ESOP.
(5) The pro forma Tier I risk-based, total risk-based and Tier I leverage
capital amounts reflect the $108,000 of assets to be acquired by the Bank
upon the merger of the Mutual Holding Company with and into the Bank.
(6) The current leverage capital requirement for savings banks is 3% of total
adjusted assets for savings banks that receive the highest supervisory
rating for safety and soundness and that are not experiencing or
anticipating significant growth. The current leverage capital ratio
applicable to all other savings banks is 4% to 5%. The Company will not be
subject to regulatory capital requirements.
<PAGE> 275
EXHIBIT V-1
RP Financial, LC.
Firm Qualifications Statement
<PAGE> 276
RP FINANCIAL, LC.
- ---------------------------------------
FINANCIAL SERVICES INDUSTRY CONSULTANTS FIRM QUALIFICATION STATEMENT
RP Financial provides financial and management consulting and valuation services
to the financial services industry nationwide, particularly federally-insured
financial institutions. RP Financial establishes long-term client relationships
through its wide array of services, emphasis on quality and timeliness, hands-on
involvement by our principals and senior consulting staff, and careful
structuring of strategic plans and transactions. RP Financial's staff draws from
backgrounds in consulting, regulatory agencies and investment banking, thereby
providing our clients with considerable resources.
STRATEGIC AND CAPITAL PLANNING
RP Financial's strategic and capital planning services are designed to provide
effective workable plans with quantifiable results. Through a program known as
SAFE (Strategic Alternatives Financial Evaluations), RP Financial analyzes
strategic options to enhance shareholder value or other established objectives.
Our planning services involve conducting situation analyses; establishing
mission statements, strategic goals and objectives; and identifying strategies
for enhancement of franchise value, capital management and planning, earnings
improvement and operational issues. Strategy development typically includes the
following areas: capital formation and management, asset/liability targets,
profitability, return on equity and market value of stock. Our proprietary
financial simulation model provides the basis for evaluating the financial
impact of alternative strategies and assessing the feasibility/compatibility of
such strategies with regulations and/or other guidelines.
MERGER AND ACQUISITION SERVICES
RP Financial's merger and acquisition (M&A) services include targeting
candidates and potential acquirors, assessing acquisition merit, conducting
detailed due diligence, negotiating and structuring transactions, preparing
merger business plans and financial simulations, rendering fairness opinions and
assisting in implementing post-acquisition strategies. Through our financial
simulations, comprehensive in-house data bases, valuation expertise and
regulatory knowledge, RP Financial's M&A consulting focuses on structuring
transactions to enhance shareholder returns.
VALUATION SERVICES
RP Financial's extensive valuation practice includes valuations for a variety of
purposes including mergers and acquisitions, mutual-to-stock conversions, ESOPs,
subsidiary companies, mark-to-market transactions, loan and servicing
portfolios, non-traded securities, core deposits, FAS 107 (fair market value
disclosure), FAS 122 (loan servicing rights) and FAS 123 (stock options). Our
principals and staff are highly experienced in performing valuation appraisals
which conform with regulatory guidelines and appraisal industry standards. RP
Financial is the nation's leading valuation firm for mutual-to-stock conversions
of thrift institutions.
OTHER CONSULTING SERVICES AND DATA BASES
RP Financial offers a variety of other services including branching strategies,
feasibility studies and special research studies, which are complemented by our
quantitative and computer skills. RP Financial's consulting services are aided
by its in-house data base resources for commercial banks and savings
institutions and proprietary valuation and financial simulation models.
YEAR 2000 SERVICES
RP Financial, through a relationship with a computer research and development
company with a proprietary methodology, offers Year 2000 advisory and conversion
services to financial institutions which are more cost effective and less
disruptive than most other providers of such service.
RP Financial's Key Personnel (Years of Relevant Experience)
Ronald S. Riggins, Managing Director (17)
William E. Pommerening, Managing Director (13)
Gregory E. Dunn, Senior Vice President (15)
James P. Hennessey, Senior Vice President (12)
James J. Oren, Vice President (10)
Timothy M. Biddle, Vice President (8)
Alan P. Carruthers, Director-Community Banking (15)
- --------------------------------------------------------------------------------
WASHINGTON HEADQUARTERS
Rosslyn Center
1700 North Moore Street, Suite 2210 Telephone: (703) 528-1700
Arlington, VA 22209 Fax No.: (703) 528-1788
<PAGE> 1
EXHIBIT 99.2
LOGO: INDEPENDENCE COMMUNITY BANK CORP.
Subscription & Community Offering Stock Order Form
INDEPENDENCE SAVINGS BANK EXPIRATION DATE
CONVERSION CENTER for Stock Order Forms:
XX Street Day, Month XX, 1997
City, State Zip Code 12:00 Noon, Eastern Time
(XXX) XXX-XXXX
IMPORTANT-PLEASE NOTE: A properly completed original stock order form must
be used to subscribe for Common Stock. Copies of this
form are not required to be accepted. Please read the
Stock Ownership Guide and Stock Order Form Instructions
as you complete this Form.
(1) NUMBER OF SHARES (2) TOTAL PAYMENT DUE
- --------------------- SUBSCRIPTION PRICE ----------------------
x $ 10.00 =
- --------------------- ----------------------
The minimum purchase is 25 shares. The maximum purchase limitations are: (i) in
the Subscription Offering-for any eligible subscriber is $XXX,XXX (XX,XXX
shares); and (ii) in the Community Offering-for any person, together with
associates or persons acting in concert is $XXX,XXX (XX,XXX shares). In
addition, no person, together with Associates and persons acting in concert
with such person, may purchase in the aggregate more than 1.0% of the shares
offered (XXX,XXX shares, based on the offering of XX,XXX,XXX shares).
(3) EMPLOYEE/OFFICER/DIRECTOR INFORMATION
[ ] Check here if you are an employee, officer or director of Independence
Savings Bank or a member of such person's immediate family.
(4) METHOD OF PAYMENT/CHECK
Enclosed is a check, bank draft or money order made payable to Independence
Savings Bank in the amount of:
- -----------------------
Check Amount
- -----------------------
ORDERS ON A CONSOLIDATED BASIS EQUAL TO OR EXCEEDING $50,000 MUST BE
ACCOMPANIED BY CERTIFIED FUNDS.
(5) METHOD OF PAYMENT/WITHDRAWAL
The undersigned authorizes withdrawal from the following account(s) at
Independence Savings Bank. Individual Retirement Accounts maintained at
Independence Savings Bank cannot be used. There is no penalty for early
withdrawal used for this payment.
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Account Number(s) Withdrawal Amount(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Withdrawal Amount
-----------------------------------
</TABLE>
(6) PURCHASER INFORMATION
a. [ ] Check here if you are an Eligible Account Holder with a deposit
account(s) totalling $100.00 or more on March 31, 1996. List
account(s) below.
b. [ ] Check here if you are a Supplemental Eligible Account Holder with a
deposit account(s) totalling $100.00 or more on ____XX. 1997. List
account(s) below.
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
Account Title (Names on Accounts) Account Number(s) Bank Use
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
PLEASE NOTE: FAILURE TO LIST ALL YOUR ACCOUNTS MAY RESULT IN THE LOSS OF TOTAL
PART OR ALL OF YOUR SUBSCRIPTION RIGHTS. IF ADDITIONAL SPACE IS NEEDED, PLEASE
UTILIZE THE BACK OF THIS STOCK ORDER FORM.
(7) STOCK REGISTRATION/FORM OF STOCK OWNERSHIP
<TABLE>
<C> <C> <C> <C>
[ ] Individual [ ] Joint Tenants [ ] Tenants in Common [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
[ ] Fiduciary [ ] Company/Corp/Partnership [ ] Uniform Gifts to Minors Act [ ] IRA or other Qualified Plan
(i.e. trust, estate, etc.) - Beneficial Owners SS#
</TABLE>
(8) NAME(S) IN WHICH STOCK IS TO BE REGISTERED (PLEASE PRINT CLEARLY)
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Name(s) Social Security # or Tax ID
- ----------------------------------------------------------------------------------------------------------------------------
Name(s) continued Social Security # or Tax ID
- ----------------------------------------------------------------------------------------------------------------------------
Street Address County of Residence
- ----------------------------------------------------------------------------------------------------------------------------
City State Zip Code
- ----------------------------------------------------------------------------------
(9) TELEPHONE - Daytime ( ) Evening ( )
------------------------------------------------------------------
</TABLE>
[ ] (10) NASD AFFILIATION - Check here if you are a member of the National
Association of Securities Dealers, Inc. ("NASD"), a person associated with an
NASD member, a member of the immediate family of any such person to whose
support such person contributes, directly or indirectly, or the holder of an
account in which an NASD member or person associated with an NASD member has a
beneficial interest. To comply with conditions under which an exemption from
the NASD's Interpretation With Respect to Free-Riding and Withholding is
available, you agree, if you have checked the NASD Affiliation box, (i) not to
sell, transfer or hypothecate the stock for a period of 90 days following
issuance, and (ii) to report this subscription in writing to the applicable
NASD member within one day of payment therefor.
[ ] (11) ASSOCIATES - ACTING IN CONCERT
Check here, and complete the reverse side of this Form, if you or any
associates (as defined on the reverse side of this Form) or persons acting in
concert with you have submitted other orders for shares in the Subscription
and/or Community Offerings.
(12) ACKNOWLEDGMENT - To be effective, this Stock Order Form and
accompanying Certification Form must be properly completed and actually
received by Independence Savings Bank no later than 12:00 Noon, Eastern time,
on Day, Month Date, 1997, unless extended; otherwise this Stock Order Form and
all subscription rights will be void. The undersigned agrees that after
receipt by Independence Savings Bank, this Stock Order Form may not be
modified, withdrawn or canceled without the Bank's consent and if authorization
to withdraw from deposit accounts at the Bank has been given as payment for
shares; the amount authorized for withdrawal shall not otherwise be available
for withdrawal by the undersigned. Under penalty of perjury, I hereby certify
that the Social Security or Tax ID Number and the information provided on this
Stock Order Form is true, correct and complete, that I am not subject to
back-up withholding, and that I am purchasing solely for my own account and
that there is no agreement or understanding regarding the sale or transfer of
such shares, or my right to subscribe for shares herewith. It is understood
that this Stock Order Form will be accepted in accordance with, and subject to,
the terms and conditions of the Plan of Conversion of the Bank described in the
accompanying Prospectus. The undersigned hereby acknowledges receipt of the
Prospectus at least 48 hours prior to delivery of this Stock Order Form to the
Bank.
APPLICABLE REGULATIONS PROHIBIT ANY PERSON FROM TRANSFERRING, OR ENTERING INTO
ANY AGREEMENT, DIRECTLY OR INDIRECTLY, TO TRANSFER THE LEGAL OR BENEFICIAL
OWNERSHIP OF SUBSCRIPTION RIGHTS OR THE UNDERLYING SECURITIES TO THE ACCOUNT OF
ANOTHER. INDEPENDENCE SAVINGS BANK AND INDEPENDENCE COMMUNITY BANK CORP. WILL
PURSUE ANY AND ALL LEGAL AND EQUITABLE REMEDIES IN THE EVENT THEY BECOME AWARE
OF THE TRANSFER OF SUBSCRIPTION RIGHTS AND WILL NOT HONOR ORDERS KNOWN BY THEM
TO INVOLVE SUCH TRANSFER.
- ------------------------------------- ------------------------------------
SIGNATURE DATE SIGNATURE DATE
- ------------------------------------- ------------------------------------
A SIGNED CERTIFICATION FORM MUST ACCOMPANY ALL STOCK ORDER FORMS
(SEE REVERSE SIDE)
BANK USE ONLY
======================
======================
- ----------------------
BANK USE ONLY
======================
<PAGE> 2
ITEM (6) a, b - (CONTINUED)
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
Account Title (Names on Accounts) Account Number(s)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
Account Title (Names on Accounts) Account Number(s)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
ITEM (11) - (CONTINUED)
List below all other orders submitted by you or Associates (as defined) or by
persons acting in concert with you.
<TABLE>
<S> <C>
- ----------------------------------------------------------------------
Number of Shares
Name(s) listed on other Stock Order Forms Ordered
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
</TABLE>
"Associate" is defined as: (i) any corporation or organization (other than the
Company or the Bank or a majority-owned subsidiary of the Bank) of which such
person is a director, officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity securities; (ii) any
trust or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar fiduciary
capacity; provided, however, that such term shall not include Independence
Community Bank Corp.'s or Independence Savings Bank's employee benefit plans in
which such person has a substantial beneficial interest or serves as a trustee
or in a similar fiduciary capacity; and (iii) ANY RELATIVE OR SPOUSE OF SUCH
PERSON, OR ANY RELATIVE OF SUCH SPOUSE, WHO EITHER HAS THE SAME HOME AS SUCH
PERSON or who is a director or officer of the Company or the Bank or any
subsidiaries thereof. Directors of the Company or the Bank are not treated as
Associates solely because of their Board memberships.
YOU MUST SIGN THE FOLLOWING CERTIFICATION IN ORDER TO PURCHASE STOCK
CERTIFICATION FORM
I ACKNOWLEDGE THAT THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT
FEDERALLY INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
AND IS NOT INSURED OR GUARANTEED BY INDEPENDENCE SAVINGS BANK, THE FEDERAL
GOVERNMENT OR BY ANY GOVERNMENT AGENCY. THE ENTIRE AMOUNT OF AN INVESTOR'S
PRINCIPLE IS SUBJECT TO LOSS.
I further certify that, before purchasing the Common Stock of Independence
Community Bank Corp. (the "Company"), the proposed holding company for
Independence Savings Bank, I received a Prospectus of the Company dated
____________, 1997 relating to such offer of Common Stock.
The Prospectus that I received contains disclosure concerning the nature of the
Common Stock being offered by the Company and describes in the "Risk Factors"
section of the Prospectus the risks involved in the investment in this Common
Stock, including but not limited to the:
<TABLE>
<S> <C>
1 (page )
2. (page )
3. (page )
4. (page )
5. (page )
6. (page )
7. (page )
8. (page )
9. (page )
10. (page )
</TABLE>
- ---------------------------------- -----------------------------------
SIGNATURE DATE SIGNATURE DATE
- ---------------------------------- -----------------------------------
- ---------------------------------- -----------------------------------
NAME (PLEASE PRINT) NAME (PLEASE PRINT)
- ---------------------------------- -----------------------------------
<PAGE> 3
[LOGO] INDEPENDENCE COMMUNITY BANK CORP.
STOCK OWNERSHIP GUIDE
INDIVIDUAL
Include the first name, middle initial and last name of the shareholder. Avoid
the use of two initials. Please omit words that do not affect ownership
rights, such as "Mrs.", "Mr.", "Dr.", "special account", "single person", etc.
JOINT TENANTS
Joint tenants with right of survivorship may be specified to identify two or
more owners. When stock is held by joint tenants with right of survivorship,
ownership is intended to pass automatically to the surviving joint tenant(s)
upon the death of any joint tenant. All parties must agree to the transfer or
sale of shares held by joint tenants.
TENANTS IN COMMON
Tenants in common may also be specified to identify two or more owners. When
stock is held by tenants in common, upon the death of one co-tenant, ownership
of the stock will be held by the surviving co-tenant(s) and by the heirs of the
deceased co-tenant. All parties must agree to the transfer or sale of shares
held by tenants in common.
UNIFORM GIFTS TO MINORS ACT ("UGMA")
Stock may be held in the name of a custodian for a minor under the Uniform
Gifts to Minors Act of each state. There may be only one custodian and one
minor designated on a stock certificate. The standard abbreviation for
Custodian is "CUST", while the Uniform Gifts to Minors Act is "UGMA". Standard
U.S. Postal Service state abbreviations should be used to describe the
appropriate state. For example, stock held by John Doe as custodian for Susan
Doe under the New York Uniform Gifts to Minors Act will be abbreviated John
Doe, CUST Susan Doe UGMA NY (use minor's social security number).
FIDUCIARIES
Information provided with respect to stock to be held in a fiduciary capacity
must contain the following:
- - The name(s) of the fiduciary. If an individual, list the first name,
middle initial and last name. If a corporation, list the full corporate
title (name). If an individual and a corporation, list the corporation's
title before the individual.
- - The fiduciary capacity, such as administrator, executor, personal
representative, conservator, trustee, committee, etc.
- - A description of the document governing the fiduciary relationship,
such as a trust agreement or court order. Documentation establishing a
fiduciary relationship may be required to register your stock in a fiduciary
capacity.
- - The date of the document governing the relationship, except that the
date of a trust created by a will need not be included in the description.
- - The name of the maker, donor or testator and the name of the beneficiary.
An example of fiduciary ownership of stock in the case of a trust is: John Doe,
Trustee Under Agreement Dated 10-1-87 for Susan Doe.
STOCK ORDER FORM INSTRUCTIONS
ITEMS 1 AND 2-
Fill in the number of shares that you wish to purchase and the total payment
due. The amount due is determined by multiplying the number of shares by the
subscription price of $10.00 per share. The minimum purchase in the
Subscription and Community Offerings is 25 shares. In the Subscription
Offering, the maximum purchase by each Eligible Account Holder, Supplemental
Eligible Account Holder is $XXX,XXX (XX,XXX shares), and the maximum purchase in
the Community Offering by any person, together with associates or persons acting
in concert, is $XXX,XXX (XX,XXX shares). However, no person, together with
associates and persons acting in concert with such person, may purchase in the
aggregate more than 1.0% of the shares offered. Based on the offering of
XX,XXX,XXX shares 1.0% amounts to XXX,XXX shares. Eligible Account Holders
desiring to purchase shares in the Community Offering must do so by obtaining
from the Conversion Center an additional Stock Order Form and submitting a
completed additional Stock Order Form which indicates the number of shares to be
purchased in the Community Offering. Independence Savings Bank and Independence
Community Bank Corp. have reserved the right to reject the subscription of any
order received in the Community Offering, in whole or in part.
ITEM 3-
Please check this box to indicate whether you are an employee, officer
or director of Independence Savings Bank or a member of such person's immediate
family.
ITEM 4-
Payment for shares may be made in cash (only if delivered by you in person to a
branch office of Independence) or by check, bank draft or money order payable
to Independence Savings Bank. Your funds will earn interest at the Bank's
passbook rate of interest until the Conversion is completed. DO NOT MAIL CASH
TO PURCHASE STOCK! Please insert the total check(s) amount in this box if your
method of payment is by check, bank draft or money order. ORDERS ON A
CONSOLIDATED BASIS EQUAL TO OR EXCEEDING $50,000 MUST BE ACCOMPANIED BY
CERTIFIED FUNDS.
ITEM 5-
If you pay for your stock by a withdrawal from a deposit account at
Independence Savings Bank, insert the account number(s) and the amount of your
withdrawal authorization for each account. The total amount withdrawn should
equal the amount of your stock purchase. There will be no penalty assessed for
early withdrawals from certificate accounts used for stock purchases. THIS
FORM OF PAYMENT MAY NOT BE USED IF YOUR ACCOUNT IS AN INDIVIDUAL RETIREMENT
ACCOUNT OR QUALIFIED PLAN.
ITEM 6-
a. Please check this box if you are an Eligible Account Holder with a
deposit account(s) totalling $100.00 or more on March 31, 1996.
b. Please check this box if you are a Supplemental Eligible Account Holder
with a deposit account(s) totalling $100.00 or more on ________ XX, 1997.
Please list all names on the account(s) and all account number(s) of accounts
you had at these dates in order to insure proper identification of your
purchase rights. PLEASE NOTE: FAILURE TO LIST ALL YOUR ACCOUNTS MAY RESULT IN
THE LOSS OF PART OR ALL OF YOUR SUBSCRIPTION RIGHTS.
ITEMS 7,8 AND 9-
The stock transfer industry has developed a uniform system of shareholder
registrations that will be used in the issuance of your Independence Community
Bank Corp. Common Stock. Please complete items 7, 8 and 9 as fully and
accurately as possible, and be certain to supply your social security or Tax
I.D. number(s) and your daytime and evening telephone number(s). We will need
to call you if we cannot execute your order as given. If you have any questions
regarding the registration of your stock, please consult your legal advisor.
Stock ownership must be registered in one of the ways described above under
"Stock Ownership Guide".
ITEM 10-
Please check this box if you are a member of the NASD or if this item otherwise
applies to you.
ITEM 11-
Please check this box if you or any associate (as defined on the reverse
side of the Stock Order Form) or person acting in concert with you has submitted
another order for shares and complete the reverse side of the Stock Order Form.
ITEM 12-
Please sign and date the Stock Order Form and Certification Form where
indicated. Before you sign, review the Stock Order Form, including the
acknowledgement, and the Certification Form. Normally, one signature is
required. An additional signature is required only when payment is to be made by
withdrawal from a deposit account that requires multiple signatures to withdraw
funds.
You may mail your completed Stock Order Form and Certification Form in the
envelope that has been provided, or you may deliver your Stock Order Form and
Certification Form to any branch of Independence Savings Bank. Your Stock
Order Form and Certification Form, properly completed, and payment in full (or
withdrawal authorization) at the subscription price must be received by
Independence Savings Bank no later than 12:00 noon, Eastern time, on
___________, __________ 1997 or it will become void. If you have any remaining
questions, or if you would like assistance in completing your Stock Order Form
and Certification Form, you may call our Conversion Center Monday through
Friday from 10:00 a.m. to 4:00 p.m.
