-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RNLRZB1BXquJZ418LtAt90vtr31iQ8LHb090hp1jH9aHZKOIr68PJJIZljGLLWOy 2iTrkUEyZrKm06UUB9JGKQ== 0000950112-96-002801.txt : 19960814 0000950112-96-002801.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950112-96-002801 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREENPOINT FINANCIAL CORP CENTRAL INDEX KEY: 0000911935 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 061379001 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22516 FILM NUMBER: 96611443 BUSINESS ADDRESS: STREET 1: 41-60 MAIN ST CITY: FLUSHING STATE: NY ZIP: 11355 BUSINESS PHONE: 7186704355 FORMER COMPANY: FORMER CONFORMED NAME: GP FINANCIAL CORP DATE OF NAME CHANGE: 19930913 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-Q [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ---------------- For the Quarter Ended June 30, 1996 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 0-22516 Securities and Exchange Commission File Number GreenPoint Financial Corp. (Exact name of registrant as specified in its charter) Delaware 06-1379001 (State or other jurisdiction of (I.R.S. employer identification number) incorporation or organization) 90 Park Avenue, New York, New York 10016 (Address of principal executive offices) (Zip Code) (212) 834-1711 41-60 Main Street, Flushing, New York (Registrant's telephone number, (Former name, former address and former including area code) fiscal year if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |X| Yes | | No As of August 13, 1996 there were 49,892,000 shares of common stock outstanding. GreenPoint Financial Corp. FORM 10-Q For the Quarter Ended June 30, 1996 INDEX PART I - FINANCIAL INFORMATION Page Item 1 - Financial Statements Consolidated Statements of Financial Condition (unaudited) as of June 30, 1996 and December 31, 1995 3 Consolidated Statements of Income (unaudited) for the quarters and six month periods ended June 30, 1996 and 1995 4 Consolidated Statement of Changes in Stockholders' Equity (unaudited) for the six month periods ended June 30, 1996 and 1995 5 Consolidated Statements of Cash Flows (unaudited) for the six month periods ended June 30, 1996 and 1995 6 Notes to the Unaudited Consolidated Financial Statements 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 10 PART II - OTHER INFORMATION Item 1 - Legal Proceedings 21 Item 4 - Submission of Matters to a Vote of Security Holders 21 Item 6 - Exhibits and Reports on Form 8-K 22
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Unaudited)
June 30, December 31, 1996 1995 ------------ ------------ ASSETS (In thousands, except share amounts) Cash and due from banks $ 108,416 $ 153,679 Money market investments 1,234,400 1,550,700 Loans receivable held for sale 21,710 175,052 Securities available for sale 5,442,891 5,896,505 Securities held to maturity (estimated fair value of $3,699 and $4,361 respectively) 3,697 4,307 Loans receivable held for investment: Mortgage loans 6,433,127 5,992,776 Other loans 25,650 29,669 Deferred loan fees and unearned discount (54,921) (58,297) Allowance for possible loan losses (105,000) (105,500) ------------ ------------ Loans receivable held for investment, net 6,298,856 5,858,648 ------------ ------------ Accrued interest receivable, net 79,325 72,944 Banking premises and equipment, net 119,761 113,673 Deferred income taxes, net 116,597 70,134 Other real estate owned, net 30,583 29,245 Excess of cost over fair value of net assets acquired, net 646,943 670,201 Other assets 47,415 75,375 ------------ ------------ Total assets $ 14,150,594 $ 14,670,463 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: N.O.W. and checking $ 491,060 $ 501,842 Savings and club 1,994,751 2,034,669 Variable rate savings 1,959,895 1,995,292 Money market 591,048 635,696 Term certificates of deposit 7,120,688 7,730,824 ------------ ------------ Total deposits 12,157,442 12,898,323 ------------ ------------ Mortgagors' escrow 67,483 58,935 Securities sold under agreements to repurchase 284,850 --- Accrued interest payable 9,872 2,353 Accrued income taxes payable 20,941 7,618 Other liabilities 143,752 151,917 ------------ ------------ Total liabilities 12,684,340 13,119,146 ------------ ------------ Commitments and Contingencies Stockholders' equity: Preferred stock ($0.01 par value; 50,000,000 shares authorized; none issued) --- --- Common stock ($0.01 par value; 220,000,000 shares authorized; 55,115,582 and 54,965,582 shares issued, respectively) 551 550 Additional paid-in capital 807,719 801,382 Unallocated Employee Stock Ownership Plan (ESOP) shares (120,370) (123,987) Unearned stock plans shares (10,851) (9,838) Retained earnings 987,625 942,137 Net unrealized (loss) gain on securities available for sale, net (52,435) 14,862 Treasury stock, at cost (5,191,517 and 2,748,200 shares, respectively) (145,985) (73,789) ------------ ------------ Total stockholders' equity 1,466,254 1,551,317 ------------ ------------ Total liabilities and stockholders' equity $ 14,150,594 $ 14,670,463 ============ ============
(See the accompanying notes to the unaudited consolidated financial statements) GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Quarter Ended Six Months Ended June 30, June 30, ----------------------- ------------------------ 1996 1995 1996 1995 --------- --------- --------- --------- (In thousands, except per share amounts) Interest income: Mortgages $ 144,566 $ 130,067 $ 285,915 $ 259,481 Money market investments 21,356 8,040 44,746 12,103 Securities 79,872 7,032 165,583 15,983 Other loans 684 416 1,341 797 --------- --------- --------- --------- Total interest income 246,478 145,555 497,585 288,364 --------- --------- --------- --------- Interest expense: Deposits 133,096 63,781 276,175 122,029 Short-term and other borrowing 1,153 --- 1,604 --- --------- --------- --------- --------- Total interest expense 134,249 63,781 277,779 122,029 --------- --------- --------- --------- Net interest income 112,229 81,774 219,806 166,335 Provision for possible loan losses (3,701) (2,692) (7,347) (8,175) --------- --------- --------- --------- Net interest income after provision for possible loan losses 108,528 79,082 212,459 158,160 --------- --------- --------- --------- Non-interest income: Income from fees and commissions: Mortgage loan operations fee income 2,979 2,862 7,542 5,648 Mortgage servicing fees 2,122 2,586 4,382 5,254 Banking services fees and commissions 3,998 778 8,059 1,481 Securities lending fees 805 90 1,117 201 Other income 1,832 1,071 1,849 1,676 Net gain (loss) on securities 81 35 354 (610) Net gain on sales of loans 2,761 12 2,780 52 Gain on sale of branches 8,876 --- 8,876 --- --------- --------- --------- --------- Total non-interest income 23,454 7,434 34,959 13,702 --------- --------- --------- --------- Non-interest expense: General and administrative expenses: Salaries and benefits 20,516 13,681 43,077 28,014 Employee Stock Ownership and stock plans expense 4,699 3,665 8,942 7,289 Net expense of premises and equipment 11,890 3,628 23,588 7,331 Advertising 2,208 1,141 4,199 2,282 Federal deposit insurance premiums 1,725 3,084 3,435 6,168 Charitable and educational foundation 1,419 575 2,412 1,150 Other administrative expenses 12,997 7,124 26,070 13,348 --------- --------- --------- --------- Total general and administrative expenses 55,454 32,898 111,723 65,582 --------- --------- --------- --------- Other real estate owned operating expense (income), net 165 (1,193) 50 (1,595) Amortization of excess of cost over fair value of net assets acquired 11,630 46 23,258 93 --------- --------- --------- --------- Total non-interest expense 67,249 31,751 135,031 64,080 --------- --------- --------- --------- Income before income taxes 64,733 54,765 112,387 107,782 Income taxes (27,578) (25,417) (47,880) (49,927) --------- --------- --------- --------- Net income $ 37,155 $ 29,348 $ 64,507 $ 57,855 ========= ========= ========= ========= Earnings per share $ 0.83 $ 0.62 $ 1.43 $ 1.23 ========= ========= ========= ========= Net income (excluding branch sale, net of tax) $ 32,060 $ 59,412 ========= ========= Earnings per share (excluding branch sale, net of tax) $ 0.72 $ 1.32 ========= =========
(See the accompanying notes to the unaudited consolidated financial statements) GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (In thousands)
Six Months Ended June 30, -------------------------- 1996 1995 ----------- ----------- Common Stock Balance at beginning of period $ 550 $ 549 Issuance of common stock to stock plans 1 -- ----------- ----------- Balance at end of period 551 549 ----------- ----------- Additional paid-in capital Balance at beginning of period 801,382 794,615 Issuance of common stock to stock plans 3,693 --- Amortization of ESOP shares committed to be released 2,387 1,352 Amortization of stock plans shares during the period 257 76 Exercise of stock options --- 598 Adjustment to initial public offering issuance costs --- 1,226 ----------- ----------- Balance at end of period 807,719 797,867 ----------- ----------- Unallocated ESOP shares Balance at beginning of period (123,987) (131,039) Amortization of ESOP shares committed to be released 3,617 3,526 ----------- ----------- Balance at end of period (120,370) (127,513) ----------- ----------- Unearned stock plans shares Balance at beginning of period (9,838) (14,307) Issuance of common stock to stock plans (3,694) --- Amortization of stock plans shares during the period 2,681 2,335 ----------- ----------- Balance at end of period (10,851) (11,972) ----------- ----------- Retained earnings Balance at beginning of period 942,137 871,374 Net income for the period 64,507 57,855 Dividends declared (17,619) (18,617) Exercise of stock options from treasury stock (1,400) --- ----------- ----------- Balance at end of period 987,625 910,612 ----------- ----------- Net unrealized gain (loss) on securities available for sale, net Balance at beginning of period 14,862 --- Net unrealized loss on securities available for sale (67,297) --- ----------- ----------- Balance at end of period (52,435) --- ----------- ----------- Treasury stock, at cost Balance at beginning of period (73,789) --- Exercise of stock options from treasury stock 3,264 --- Purchase of treasury stock (75,460) (10,029) ----------- ----------- Balance at end of period (145,985) (10,029) ----------- ----------- Total stockholders' equity $ 1,466,254 $ 1,559,514 =========== ===========
(See accompanying notes to the unaudited consolidated financial statements) GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended June 30, -------------------------- 1996 1995 ----------- ----------- (In thousands) Cash flows from operating activities: Net income $ 64,507 $ 57,855 Adjustments to reconcile net income to net cash provided by operating activities: Provision for possible loan losses 7,347 8,175 Provision for potential declines in value of other real estate 923 126 Depreciation and amortization of premises and equipment 8,570 3,535 Accretion of discount, net of amortization of premium (42,653) (3,999) ESOP and stock plans expense 8,942 7,289 Net change in loans held for sale 153,342 (205) Net (gain) loss on securities (354) 610 Net gain on sales of loans (2,780) (52) Net gain on sales of other real estate owned (3,243) (5,816) Foreclosure expenses on other real estate (879) (1,134) Amortization of excess of cost over fair value of net assets acquired 23,258 93 Decrease in other assets 30,471 9,837 Increase (decrease) in other liabilities 12,667 (55,325) Other, net 4,855 (1,460) ----------- ----------- Net cash provided by operating activities 264,973 19,529 ----------- ----------- Cash flows from investing activities: Mortgage loan originations, net of principal repayments (373,467) (6,898) Proceeds from sales of other real estate owned 7,595 15,929 Repurchases of loans sold with recourse (1,935) (8,923) Other loan originations, net of principal repayments 4,019 (2,872) Purchases of securities available for sale (4,365,166) --- Purchase of securities held to maturity --- (526) Proceeds from maturities of securities available for sale 3,188,263 --- Proceeds from maturities of securities held to maturity --- 386,491 Sales of securities available for sale 1,185,042 --- Principal repayments on securities available for sale 129,397 1,991 Purchases of premises and equipment (14,658) (4,328) Net cash received on branch dispositions 8,876 --- ----------- ----------- Net cash (used in) provided by investing activities (232,034) 380,864 ----------- ----------- Cash flows from financing activities: Net (withdrawals from) deposits to depositors' accounts (596,685) 9,547 Securities sold under agreements to repurchase 284,850 --- Payments for cash dividends (17,619) (18,617) Net increase in mortgagors' escrow 8,548 7,162 Exercise of stock options 1,864 598 Purchase of treasury stock (75,460) (10,029) ----------- ----------- Net cash used in financing activities (394,502) (11,339) ----------- ----------- Net (decrease) increase in cash and cash equivalents (361,563) 389,054 Cash and cash equivalents at beginning of period 1,704,379 293,270 ----------- ----------- Cash and cash equivalents at end of period $ 1,342,816 $ 682,324 =========== =========== Supplemental disclosure of cash flow information Cash paid for income taxes $ 16,255 $ 9,610 =========== =========== Non-cash investing and financing activities: Additions to other real estate owned, net $ 1,338 $ 10,821 =========== =========== Loans to facilitate sales of other real estate $ 8,552 $ 18,044 =========== =========== Interest credited on deposits $ 283,694 $ 124,635 =========== ===========
(See accompanying notes to the unaudited consolidated financial statements) GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The unaudited consolidated financial statements of GreenPoint Financial Corp. and Subsidiaries ("GreenPoint" or the "Company") are prepared in accordance with generally accepted accounting principles for interim financial information. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the Company's interim financial condition as of the dates indicated and the results of operations for the periods presented have been included. The results of operations for the interim periods shown are not necessarily indicative of results that may be expected for the entire year. The unaudited consolidated interim financial statements presented herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report to shareholders for the period ended December 31, 1995. 2. Stock Incentive Plan During the six months ended June 30, 1996, GreenPoint granted 375,000 shares of the Company's common stock to certain executive officers pursuant to plans approved by the Company's shareholders in 1994. These shares vest ratably over five years on the anniversary dates of the awards. The market price at the grant date was $24.63. For the six month period ended June 30, 1996, the Company granted options of 130,000 shares of the Company's common stock to certain officers, at an average exercise price of $28.85. These awards vest ratably over five years on the anniversary dates of the awards. 3. Common Stock Repurchase Program During July, the Company completed the previously announced 5% stock repurchase program, repurchasing approximately 2.6 million shares. The Company's Board, after receipt of regulatory approval, has authorized a new repurchase program of up to 5%, or 2.5 million, of its outstanding shares. The repurchase will be at the Company's discretion, based on ongoing assessments of the capital needs of the business and the market valuation of its stock. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 4. Securities Available for Sale and Held to Maturity Securities held at June 30, 1996 are summarized as follows:
Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value ----------- ----------- ----------- ----------- (In thousands) Securities Available for Sale U.S. Government and Federal Agency Obligations: U.S. Treasury notes/bills $2,615,826 $ -- $ (26,812) $2,589,014 Agency discount notes 113,538 30 --- 113,568 Mortgage-backed securities 2,322,888 57 (64,712) 2,258,233 Trust certificates collateralized by GNMA securities 421,766 --- (3,285) 418,481 Other 64,039 --- (444) 63,595 ---------- ---------- ---------- ---------- Total securities available for sale $5,538,057 $ 87 $ (95,253) $5,442,891 ========== ========== ========== ========== Securities Held to Maturity Tax exempt municipals $ 660 $ 2 $ --- $ 662 Other 3,037 --- --- 3,037 ---------- ---------- ---------- ---------- Total securities held to maturity $ 3,697 $ 2 $ --- $ 3,699 ========== ========== ========== ==========
Securities held at December 31, 1995 are summarized as follows:
Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value ---------- ---------- ---------- ---------- (In thousands) Securities Available for Sale U.S. Government and Federal Agency Obligations: U.S. Treasury notes/bills $1,352,276 $ 4,004 $ --- $1,356,280 Agency discount notes 2,417,009 55 (88) 2,416,976 Mortgage-backed securities 1,668,847 24,979 --- 1,693,826 Trust certificates collateralized by GNMA securities 430,340 285 (1,753) 428,872 Other 550 1 --- 551 ---------- ---------- ---------- ---------- Total securities available for sale $5,869,022 $ 29,324 $ (1,841) $5,896,505 ========== ========== ========== ========== Securities Held to Maturity Tax exempt municipals $ 675 $ 54 $ --- $ 729 Other 3,632 --- --- 3,632 ---------- ---------- ---------- ---------- Total securities held to maturity $ 4,307 $ 54 $ --- $ 4,361 ========== ========== ========== ==========
Estimated fair values for securities are based on published market or securities dealers' estimated prices. During the quarter ended June 30, 1996, the Company sold available-for-sale securities aggregating $786.9 million, resulting in gross realized gains of $0.1 million and no realized losses. The average maturities of the securities available for sale and held to maturity at June 30, 1996 are approximately 9.2 years and 13.6 years, respectively. Mortgage-backed securities, almost all of which have contractual maturities of more than 10 years, are subject to scheduled and non-scheduled principal payments which shorten the average life to an estimated 6.5 years. The estimated average life for all securities held for sale is approximately 4.0 years. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) 5. Restructuring Reserve In December 1995, the Company recorded a pre-tax restructuring charge of $8.0 million that reflects actions taken during the fourth quarter of 1995 and taken and to be taken during 1996 to improve operating efficiency. The charge included employee severance benefits, costs associated with planned branch consolidations and fixed asset writedowns. At June 30, 1996 the reserve balance associated with this charge was approximately $5.9 million of which $0.6 million related to severance and $5.3 million related to the disposition of certain facilities, premises and equipment and termination of leases. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations
Quarter Ended ------------------------------------------------------------------- Jun. 30, Mar. 31, Dec. 31, Sept. 30, 1996 1996 1995 1995 -------------- -------------- -------------- ------------- Performance Ratios (Annualized): Return on average assets 0.90%(1) 0.75% 0.52% 1.59% Return on average equity 8.64 (1) 7.04 5.00 7.74 Return on average tangible equity (2) 14.62 (1) 12.42 8.95 8.08 Net interest spread during period 3.20 2.87 2.68 3.59 Net interest margin 3.45 3.16 2.96 4.53 General and administrative expense to average assets 1.56 1.53 1.64 1.77 Efficiency ratio (3) 43.7 (4) 47.3 53.4 36.5 Average interest-earning assets to average interest- bearing liabilities 1.06x 1.07x 1.07x 1.24x Capital Ratios: Company: Period-end stockholders' equity to ending total assets 10.36% 10.58% 10.57% 10.48% Period-end stockholders' equity less intangible assets to tangible assets 6.07 6.31 6.29 6.21 Bank Regulatory Capital Ratios: Leverage capital (5) 6.31 6.33 6.11 12.30 Risk-based capital ratios (5): Tier 1 16.35 16.73 16.05 15.40 Total capital 17.60 17.98 17.30 16.65 Per Share Data: Earnings (excluding branch sale)* $ 0.72 $ 0.60 $ 0.42 $ 0.64 Book value** $33.65 $33.35 $34.25 $33.28 Tangible book value** $18.80 $18.99 $19.44 $18.82 * Average shares used in calculation 44,664,000 45,653,000 46,171,000 47,428,000 ** Period-end shares used in calculation 43,573,000 45,898,000 45,298,000 47,445,000 Total shares issued and outstanding 49,924,000 52,457,000 52,217,000 54,337,000 Asset Quality Ratios: Non-performing loans to total loans 5.77% 6.25% 6.49% 6.50% Non-performing assets to total assets 2.86 2.94 2.94 2.84 Allowance for possible loans losses to: Non-performing loans 28.07 26.49 26.24 26.62 Loans held for investment 1.63 1.73 1.75 1.78
Quarter Ended Six Months Ended --------------- -------------- -------------- Jun. 30, Jun. 30, Jun. 30, 1995 1996 1995 -------------- -------------- -------------- Performance Ratios (Annualized): Return on average assets 1.69% 0.82%(1) 1.67% Return on average equity 7.61 7.82 (1) 7.55 Return on average tangible equity (2) 7.62 13.52 (1) 7.55 Net interest spread during period 3.80 3.07 3.94 Net interest margin 4.84 3.33 4.94 General and administrative expense to average assets 1.89 1.55 1.89 Efficiency ratio (3) 36.9 45.4 (4) 36.4 Average interest-earning assets to average interest- bearing liabilities 1.27x 1.06x 1.27x Capital Ratios: Company: Period-end stockholders' equity to ending total assets 22.42% Period-end stockholders' equity less intangible assets to tangible assets 22.42 Bank Regulatory Capital Ratios: Leverage capital (5) 16.89 Risk-based capital ratios (5): Tier 1 29.59 Total capital 30.84 Per Share Data: Earnings (excluding branch sale)* $ 0.62 Book value** $33.09 Tangible book value** $33.08 * Average shares used in calculation 47,087,000 ** Period-end shares used in calculation 47,135,000 Total shares issued and outstanding 54,514,000 Asset Quality Ratios: Non-performing loans to total loans 6.87% Non-performing assets to total assets 6.21 Allowance for possible loans losses to: Non-performing loans 26.50 Loans held for investment 1.82
(1) Excludes $5.1 million after tax gain on branch sale. (2) Average tangible equity has been calculated in accordance with regulatory guidelines. (3) The efficiency ratio is calculated by dividing the Company's total general and administrative expenses by the sum of net interest income and non-interest income. (4) Excludes $8.9 million pre-tax gain on branch sale. (5) These ratios are calculated using regulatory guidelines which exclude the impact on stockholders' equity resulting from the adoption of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("SFAS 115"). GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) 1. General The Bank has historically operated as a traditional consumer-oriented institution serving the markets in which its branches are located. Management's objective has been to become a major niche loan originator in the national residential mortgage market and to become a major consumer banking force within the attractive, rapidly consolidating New York metropolitan consumer banking market. GreenPoint regularly explores opportunities for acquisitions of and holds discussions with financial institutions and related businesses, and also regularly explores opportunities for acquisitions of liabilities and assets of financial institutions, and other financial service providers. The Company routinely analyzes its lines of business and from time to time may increase, decrease or terminate one or more of its activities. 2. Operating Results Second quarter's results include the following: o GreenPoint Mortgage Corp. (GPMC) opened regional mortgage production offices in Philadelphia and Chicago. o Based on a careful evaluation of the attractive value of GPMC's No Doc loan production, the Company has decided to retain such loans instead of selling them to third parties. This will accelerate the Company's loan portfolio growth in future periods. o The decision to portfolio GPMC's No Doc loans resulted in an increase in the deferrals of loan origination fees and expenses relating to GPMC's loan originations during the second quarter, as required under Financial Accounting Standard No. 91 (FAS 91). o Asset quality improved as non-performing loans and non-performing assets declined. The ratio of non-performing loans to total loans fell to the lowest level in more than seven years. o Principally as a result of the 1995 acquisition of 60 branch offices, the Company was able to lower its average funding costs in the second quarter by 47 basis points. Net income for the quarter ended June 30, 1996 was $37.2 million, or $0.83 per share, a 26.6% increase over the $29.3 million, or $0.62 per share, for the comparable 1995 period. The quarter's results include an after-tax gain of $5.1 million on the sale of the Company's two banking offices in Rockland County, New York. Excluding the branch sale gain, the quarter's results were $32.1 million, or $0.72 per share, a 9.2% increase over the comparable 1995 period. Net income in the first six months of 1996 was $64.5 million, or $1.43 per share, compared to $57.9 million for the 1995 period. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Interest Rate Sensitivity The Bank's cumulative one-year rate sensitivity gap was negative 1.8% of total assets at June 30, 1996, compared to positive 6.4% at December 31, 1995. The change reflects continued progress in investing the deposits associated with the HSA acquisition. Net Interest Income Net interest income increased by $30.5 million, or 37.2%, in the second quarter of 1996, and $53.5 million, or 32.1%, in the first six months of 1996, versus the comparable periods in 1995. The increases reflect higher interest income of $100.9 million in the second quarter of 1996, and $209.2 million in the first six months of 1996, which was partially offset by increases of $70.5 million and $155.8 million, respectively, in interest expense. The rise in net interest income reflects increases in average interest earning assets of $6.40 billion in the second quarter of 1996 versus the second quarter of 1995, and $6.68 billion in the first six months of 1996, versus the comparable period in 1995, primarily from the investment of the funds received in the HSA branch acquisition. The rise in interest income was partially offset by a $7.08 billion related increase in average interest bearing liabilities for the second quarter of 1996, and by $7.30 billion in the first six months of 1996, compared to the same periods in 1995. Interest income increased by $100.9 million, or 69.3%, to $246.5 million in the second quarter of 1996, and $209.2 million, or 72.6%, to $497.6 million in the first six months of 1996, from $145.6 million and $288.4 million, respectively for the 1995 periods. The primary reason for the increases was the deployment of funds received in the HSA branch acquisition into money market investments and securities. Interest income on securities rose by $72.9 million to $79.9 million for the quarter ended June 30, 1996, and $149.6 million to $165.6 million in the first six months of 1996, from $7.0 million and $16.0 million, respectively, for the comparable periods of 1995. The increases are primarily the result of two factors: the investment of the majority of the funds received in the HSA branch acquisition into various types of securities which increased the average balance by $4.79 billion in the second quarter of 1996, and $4.91 billion in the first six months of 1996, versus the same periods in 1995. A greater investment in higher yielding securities resulted in a 38 basis point increase in the average yield for the current quarter, and a 50 basis point increase in the first six months of 1996, compared to 1995. Interest income on money market investments increased by $13.3 million to $21.3 million in the second quarter of 1996, and $32.6 million to $44.7 million in the first six months of 1996, from $8.0 million and $12.1 million, respectively, for the comparable 1995 periods. The increase is primarily due to the investment of funds received in the HSA branch acquisition that resulted in higher average balances of $1.07 billion in the second quarter of 1996, and $1.26 billion in the first six months of 1996, versus the comparable periods in 1995. The increase was partially offset by lower short-term interest rates, that resulted in a 73 basis point decrease in the average yield for the current quarter, and a 63 basis point decrease in the first six months of 1996, versus the comparable periods in 1995. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Interest income on mortgages increased by $14.5 million to $144.6 million in the second quarter of 1996, and $26.4 million to $285.9 million in the first six months of 1996, from $130.1 million and $259.5 million, respectively, for the comparable 1995 periods. The increase reflects higher average balances of $531.4 million, or 9.3%, in the second quarter of 1996, and $492.9 million, or 8.6%, in the first six months of 1996, principally as a result of retained no-doc loan origination volume generated by GPMC. The higher volume in loan originations during the first six months of 1996 outpaced scheduled amortizations and prepayments. The improvement in interest income also reflects a 16 basis point increase in the average yield in the second quarter of 1996, and a 13 basis point increase in the first six months of 1996, due to a lower percentage of non-performing loans and a higher yield on the Company's adjustable rate mortgages in the second quarter of 1996 versus the second quarter of 1995. Interest expense increased by $70.4 million to $134.2 million, in the second quarter of 1996, and $155.8 million to $277.8 million in the first six months of 1996, from $63.8 million and $122.0 million, respectively, for the comparable 1995 periods. The higher interest expense is primarily the result of the inclusion of the deposits assumed in the HSA branch acquisition in the quarterly and six month ended average balances. Interest expense on time deposits increased by $47.5 million to $96.0 million in the second quarter of 1996, and $111.1 million to $201.1 million in the first six months of 1996, from $48.5 million and $90.0 million, respectively, for the comparable 1995 periods. The rise in interest expense reflects an increase in the average balances of $4.01 billion in the second quarter of 1996, and $4.30 billion in the first six months of 1996, resulting from the HSA branch acquisitions. Interest expense on savings accounts increased by $9.6 million to $13.9 million in the second quarter of 1996, and $19.1 million to $27.9 million in the first six months of 1996, from $4.3 million and $8.8 million, respectively, for the comparable 1995 periods. The rise in interest expense reflects an increase in the average balances of $1.45 billion in the second quarter of 1996, and $1.44 billion in the first six months of 1996, which was partially offset by a 33 basis point decrease in the average cost during the quarter and a 35 basis point decrease in the first six months of 1996, as a result of the inclusion of deposits acquired in the HSA branch acquisition. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Average Balance Sheets and Interest Yield/Cost The following table sets forth certain information relating to the Company's average statements of financial condition (unaudited) and statements of income (unaudited) for the quarters ended June 30, 1996 and 1995, and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such annualized yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. Average balances and yields include non-accrual loans. The yields and costs include fees which are considered adjustments to yields.
Quarter Ended ------------------------------------------------------------------------ June 30, 1996 June 30, 1995 ---------------------------------- ---------------------------------- Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Cost Cost ----------- ---------- ----- ---------- -------- ----- (Dollars in thousands) Assets: Interest-earning assets: Mortgage loans (1) $ 6,240,179 $144,566 9.27% $5,708,747 $130,067 9.11% Other loans (1) 32,192 684 8.50 22,078 416 7.54 Money market investments (2) 1,604,158 21,356 5.35 530,022 8,040 6.08 Securities 5,269,745 81,399 6.21 483,894 7,032 5.83 ----------- ---------- ---------- -------- Total interest-earning assets 13,146,274 248,005 7.56 6,744,741 145,555 8.63 ---------- -------- Non-interest earning assets (3) 1,049,272 207,062 ----------- ---------- Total assets $14,195,546 $6,951,803 =========== ========== Liabilities & Stockholders' Equity: Interest-bearing liabilities: Savings $2,001,434 13,866 2.79% $553,228 4,302 3.12% NOW 334,452 1,522 1.83 108,685 572 2.11 Money market and variable rate savings 2,576,936 21,464 3.35 1,267,384 10,110 3.20 Term certificates of deposit 7,288,174 96,003 5.30 3,280,768 48,468 5.93 Mortgagors' escrow 81,111 241 1.20 82,552 329 1.60 Repurchase agreements 89,244 1,153 5.20 --- --- --- ----------- ---------- ---------- -------- Total interest-bearing liabilities 12,371,351 134,249 4.36 5,292,617 63,781 4.83 ---------- -------- Other liabilities (4) 339,959 117,355 ----------- ---------- Total liabilities 12,711,310 5,409,972 Stockholders' equity 1,484,236 1,541,831 ----------- ---------- Total liabilities & stockholders' equity $14,195,546 $6,951,803 =========== ========== Net interest income/interest rate spread (5) $113,756 3.20% $ 81,774 3.80% ========== ==== ======== Net interest-earning assets/net interest margin (6) $ 774,923 3.45% $1,452,124 4.84% =========== ==== ========== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.06x 1.27x ==== ====
- ---------- (1) In computing the average balances and average yield on loans, non-accruing loans and loans held for sale have been included. (2) Includes overnight federal funds sold and securities purchased under resale agreements. (3) Includes banking premises and equipment - net, net deferred tax assets, accrued interest receivable, and other miscellaneous non-interest earning assets. (4) Includes accrued interest payable, accounts payable, official checks drawn against the bank, accrued expenses, and other miscellaneous non-interest-bearing obligations of the Company. (5) Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (6) Net interest margin represents net interest income on a tax equivalent basis before the provision for possible loan losses divided by average interest-earning assets. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Average Balance Sheets and Interest Yield/Cost The following table sets forth certain information relating to the Company's average statements of financial condition (unaudited) and statements of income (unaudited) for the six months ended June 30, 1996 and 1995, and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such annualized yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from average daily balances. Average balances and yields include non-accrual loans. The yields and costs include fees which are considered adjustments to yields.
Six Months Ended ------------------------------------------------------------------------ June 30, 1996 June 30, 1995 ---------------------------------- ---------------------------------- Average Average Average Average Balance Interest Yield/ Balance Interest Yield/ Cost Cost ----------- ----------- ----- ----------- ----------- ----- (Dollars in thousands) Assets: Interest-earning assets: Mortgage loans (1) $ 6,199,401 $ 285,915 9.22% $ 5,706,501 $ 259,481 9.09% Other loans (1) 33,942 1,341 7.90 21,665 797 7.36 Money market investments (2) 1,664,304 44,746 5.41 404,080 12,103 6.04 Securities 5,482,540 168,041 6.16 568,772 15,983 5.66 ----------- ----------- ----------- ----------- Total interest-earning assets 13,380,187 500,043 7.49 6,701,018 288,364 8.61 ----------- ----------- Non-interest earning assets (3) 1,051,508 222,463 ----------- ----------- Total assets $14,431,695 $ 6,923,481 =========== =========== Liabilities & Stockholders' Equity: Interest-bearing liabilities: Savings $ 2,008,635 27,852 2.79% $ 563,961 8,769 3.14% NOW 336,177 3,070 1.84 107,950 1,129 2.11 Money market and variable rate savings 2,601,140 43,691 3.38 1,356,778 21,482 3.19 Term certificates of deposit 7,462,874 201,058 5.42 3,166,512 90,006 5.73 Mortgagors' escrow 78,984 504 1.28 78,909 643 1.64 Repurchase agreements 87,270 1,604 3.70 -- -- -- ----------- ----------- ----------- ----------- Total interest-bearing liabilities 12,575,080 277,779 4.42 5,274,110 122,029 4.67 ----------- ----------- Other liabilities (4) 337,395 116,580 ----------- ----------- Total liabilities 12,912,475 5,390,690 Stockholders' Equity 1,519,220 1,532,791 ----------- ----------- Total liabilities & stockholders' equity $14,431,695 $ 6,923,481 =========== =========== Net interest income/interest rate spread (5) $ 222,264 3.07% $ 166,335 3.94% =========== ==== =========== ==== Net interest-earning assets/net interest margin (6) $ 805,107 3.33% $ 1,426,908 4.94% =========== ==== =========== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.06x 1.27x ==== ====
- ---------- (1) In computing the average balances and average yield on loans, non-accruing loans and loans held for sale have been included. (2) Includes overnight federal funds sold and securities purchased under resale agreements. (3) Includes banking premises and equipment - net, net deferred tax assets, accrued interest receivable, and other miscellaneous non-interest earning assets. (4) Includes accrued interest payable, accounts payable, official checks drawn against the bank, accrued expenses, and other miscellaneous non-interest-bearing obligations of the Company. (5) Net interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (6) Net interest margin represents net interest income on a tax equivalent basis before the provision for possible loan losses divided by average interest-earning assets. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Rate/Volume Analysis The following table presents the effects of changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities on the Company's interest income and interest expense during the periods indicated. Information is provided in each category on changes (i) attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to volume and rate.
Quarter Ended June 30, 1996 Six Months Ended June 30, 1996 Compared to Compared to Quarter Ended June 30, 1995 Six Months Ended June 30, 1995 Increase/(Decrease) Increase/(Decrease) ---------------------------------- ---------------------------------- Due to Due to --------------------- ---------------------- Average Average Net Average Average Net Volume Rate Change Volume Rate Change -------- -------- -------- -------- -------- -------- (In thousands) (In thousands) Interest-earning assets: Mortgage loans (1) $12,281 $ 2,218 $ 14,499 $ 22,687 $ 3,747 $ 26,434 Other loans (1) 210 58 268 481 63 544 Money market investments (2) 14,414 (1,098) 13,316 34,005 (1,362) 32,643 Securities 74,544 (177) 74,367 151,925 133 152,058 -------- -------- -------- -------- -------- -------- Total interest-earning assets 101,449 1,001 102,450 209,098 2,581 211,679 -------- -------- -------- -------- -------- -------- Interest-bearing liabilities: Savings 10,082 (518) 9,564 20,131 (1,048) 19,083 NOW 1,037 (87) 950 2,101 (160) 1,941 Money market and variable rate savings 10,889 465 11,354 20,826 1,383 22,209 Term certificates of deposit 53,310 (5,775) 47,535 115,985 (4,933) 111,052 Mortgagors' escrow (6) (82) (88) 1 (140) (139) Repurchase agreements 1,153 -- 1,153 1,604 -- 1,604 -------- -------- -------- -------- -------- -------- Total interest-bearing liabilities 76,465 (5,997) 70,468 160,648 (4,898) 155,750 -------- -------- -------- -------- -------- -------- Net change in net interest income $ 24,984 $ 6,998 $ 31,982 $ 48,450 $ 7,479 $ 55,929 ======== ======== ======== ======== ======== ========
(1) In computing the volume and rate components of net interest income for loans, non-accrual loans and loans held for sale have been included. (2) Includes overnight federal funds and securities purchased under resale agreements. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Provision for Possible Loan Losses The provision for possible loan losses increased by $1.0 million, or 37.5%, to $3.7 million in the second quarter of 1996, from $2.7 million, in the same period in 1995. For the first six months of 1996, the provision for possible loan losses decreased by $0.8 million, or 10.1%, to $7.3 million as compared to $8.1 million during the same period in 1995. The provision is the result of management's assessment of the loan portfolio in view of the state of the regional and national economies, trends in the real estate market of the Company's primary lending areas and trends in the level of the Company's non-performing loans and assets. Non-Interest Income Non-interest income increased by $16.0 million in the second quarter of 1996 and $21.3 million in the first six months of 1996, as compared to the same periods in 1995. Banking services fees and commissions increased by $3.2 million in the second quarter of 1996, and $6.6 million in the first six months of 1996, versus comparable periods in 1995. This increase is primarily due to additional fee income generated from the operations of GPMC and the 60 former HSA branches. Net gain on the sale of loans rose by $2.8 million in the second quarter of 1996, as compared to the same period in 1995, primarily as the result of loan sales generated from GPMC operations. Mortgage loan operations fee income increased by $0.1 million in the second quarter of 1996, and $1.9 million in the first six months of 1996, as compared to the same periods in 1995. The increase in mortgage loan operations fee income reflects a rise in loan originations which was partially offset by the increase of $1.6 million in the second quarter of 1996, for loan origination fee and expense deferrals required under FAS 91. The quarter's results included a pre-tax gain of $8.9 million on the sale of the Company's two banking offices in Rockland County, New York. Non-Interest Expense Non-interest expense increased by $35.5 million to $67.2 million in the second quarter of 1996, and $71.0 million to $135.0 million, in the first six months of 1996, as compared to the same periods in 1995. The 1995 BAM and HSA acquisitions resulted in increases to operating expenses for the first six months of 1996. Amortization of goodwill increased by $11.6 million in the second quarter of 1996, and $23.2 million in the first six months of 1996, as compared to the same periods in 1995. Salaries and benefits increased by $6.9 million in the second quarter of 1996, and $15.1 million, in the first six months of 1996, as compared to the same periods in 1995, which was partially offset by a $1.7 million reduction due to deferrals required by FAS 91. For the 1996 periods net expense of premises and equipment increased by $8.3 million and $16.3 million, respectively. Other administrative expenses increased by $5.9 million, or 82.4%, in the second quarter of 1996, and $12.7 million, or 95.3%, in the first six months of 1996 as compared to the same periods in 1995. Income Tax Expense Income tax expense increased by $2.2 million, or 8.5%, to $27.6 million in the second quarter of 1996, from $25.4 million for the same period of 1995. The increase in the quarter is primarily due to a $10.0 million, or 18.2%, increase in income before income taxes, which was partially offset by the decrease in the effective rate from 46.4% to 42.6%. For the six months ended June 30, 1996, income tax expense decreased by $2.0 million, or 4.1% to $47.9 million from $49.9 million for the comparable 1995 period. The decline in GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) income tax expense reflects a reduction in the effective rate to 42.6% for the 1996 period from 46.3% in the 1995 period. 3. Financial Condition Total assets decreased by $519.9 million to $14.15 billion at June 30, 1996 from $14.67 billion at December 31, 1995. Total loans held for investment, net, rose $440.2 million to $6.30 billion at June 30, 1996 from $5.86 billion at December 31, 1995. The Company's loans held for sale portfolio decreased $153.3 million during the current quarter as a result of the Company retaining its GPMC loans in portfolio rather than holding them for sale to third parties. Securities available for sale decreased $453.6 million to $5.44 billion at June 30, 1996 from $5.90 billion at December 31, 1995 primarily as a result of the usage of proceeds from the maturities and sales of securities to fund deposit outflows. Tangible Capital Growth from Operations GreenPoint's operating results include significant amortization of goodwill and employee stock compensation plans expense. These non-cash expenditures, unlike all other expenses reported by the Company, result in net increases in GreenPoint's tangible capital (total stockholders' equity less intangible assets). Quarter Ended ----------------------------- June 30, March 31, June 30, 1996 1996 1995 ------- ------- ------- (In thousands, except per share amounts) Net income $32,060* $27,352 $29,348 Add back: Goodwill expense 11,630 11,628 46 Employee stock plans expense 4,699 4,243 3,665 ------- ------- ------- Tangible Capital growth from operations (**) $48,389 $43,223 33,059 ======= ======= ======= Amounts expressed per share (***) $ 1.11 $ 0.94 $ 0.70 ======= ======= ======= * Excludes $5.1 million after-tax gain on branch sale. ** Tangible Capital consists of total stockholders' equity less the excess of cost over fair value of net assets acquired (Goodwill). *** Based on the share amounts used to calculate book and tangible book values per share, as of each respective period-end date. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Non-Performing Assets The Company improved its asset quality during the six months ended June 30, 1996 as non-performing loans decreased by $28.1 million, or 7.0%, while non-performing assets decreased by $26.8 million, or 6.2%. The ratio of non-performing loans to total loans fell to 5.77% at June 30, 1996 from 6.49% at December 31, 1995. The ratio of non-performing assets to total assets fell to 2.86% at June 30, 1996 from 2.94% at December 31, 1995. Non-performing assets, net of related specific reserves, were as follows: June 30, December 31, 1996 1995 -------- ------------ (In thousands) Mortgage loans secured by: Residential one-to-four family mortgages $275,810 $291,589 Residential multi-family mortgages 55,960 61,594 Commercial property mortgages 42,226 48,911 Other loans 4 4 -------- -------- Total non-performing loans (1) 374,000 402,098 -------- -------- Total other real estate owned, net 30,583 29,245 -------- -------- Total non-performing assets $404,583 $431,343 ======== ======== (1) Includes $37.4 million and $42.3 million of non-accrual mortgage loans under 90 days past due at June 30, 1996 and December 31, 1995 respectively. Allowance for Possible Loan Losses The following is a summary of the provision and allowance for possible loan losses:
Quarter Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------- 1996 1995 1996 1995 --------- --------- --------- --------- (In thousands) Balance beginning of period $ 105,000 $ 105,500 $ 105,500 $ 103,000 Provision charged to income 3,701 2,692 7,347 8,175 Charge-offs (4,043) (3,279) (8,632) (7,338) Recoveries 342 587 785 1,663 --------- --------- --------- --------- Balance end of period $ 105,000 $ 105,500 $ 105,000 $ 105,500 ========= ========= ========= =========
GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) Loans Sold with Recourse GreenPoint is subject to an agreement with the Federal National Mortgage Association ("FNMA") whereby the Company will repurchase, through 1996, mortgages sold to FNMA during the period January 1, 1990 through March 31, 1991, which become 90 days delinquent during 1995 and 1996. In addition, the Company will be obligated to repurchase, until the later of December 1997 or five years from the date of delivery, certain mortgages sold to FNMA which become 90 days delinquent during that period. Serviced loans repurchased from FNMA by GreenPoint are included within the Company's loan portfolio. At June 30, 1996, the aggregate amount of loans sold to FNMA which were still subject to the repurchase agreement was $129.8 million. During the quarter ended June 30, 1996 a total of $0.2 million of loans was repurchased by the Bank from FNMA pursuant to the repurchase agreement. At June 30, 1996, $0.5 million of the FNMA servicing portfolio of loans sold with recourse were delinquent 90 days or more. Capital Ratios The Company's ratio of period-end stockholders' equity to ending total assets at June 30, 1996 was 10.36% compared to 10.57% at December 31, 1995. In accordance with the requirements of the Federal Deposit Insurance Corporation ("FDIC") and the New York State Banking Department ("Banking Department"), the Bank must meet certain measures of capital adequacy with respect to leverage and risk-based capital. As of both June 30, 1996 and December 31, 1995, the Bank exceeded those requirements. The Bank's leverage capital ratios were 6.31% and 6.11% at June 30, 1996 and December 31, 1995, respectively. The Bank's Tier-1 risk- based capital ratios were 16.35% and 16.05% at June 30, 1996 and December 31, 1995, respectively. The Bank's total risk-based capital ratios were 17.60% and 17.30% at June 30, 1996 and December 31, 1995, respectively. GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) PART II - OTHER INFORMATION Item 1 - Legal Proceedings With the exception of the matters set forth below, the Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business which, in the aggregate, involve amounts which are believed by management to be immaterial to the consolidated financial statements of the Company. The Bank or one of its subsidiaries has been named as a defendant in eleven unrelated legal complaints which assert that infant plaintiffs sustained personal injuries from the ingestion of lead based paint, chips or dust. Additionally there are twelve other instances of threatened litigation. The injuries are alleged to have occurred in residential properties for which the Bank was a first mortgagee and for which the Bank may be or may have been an owner, through foreclosure proceedings. The complaints are in various early stages of discovery. The defense of two of the claims has been assumed by an insurer. Defense of four claims was (or is anticipated to be) rejected by an insurer on the basis of pollution coverage exclusions. The remaining claims are awaiting a determination by the insurance carriers. The Bank referred the rejected claims to a special environmental counsel. Counsel has advised the Bank that because discovery on these claims has only recently begun, counsel is not yet in a position to express an opinion as to the Bank's liability or to quantify the Bank's potential exposure, if any, in dollar terms at the time. Because of the absence of both a determination of liability and a reasonable estimate of an associated liability exposure in dollar terms, if any, the Bank has not established a contingency reserve for these complaints. Accordingly, in the event that one or more of these actions are subsequently determined to represent an accruable liability for the Bank, such accruals will be funded through charges to be made against the Bank's operating income for the period or periods in which such determinations may occur. The Company currently believes that such liability exposure, if any, would not be material to the Bank's financial condition. Item 4 - Submission of Matters to a Vote of Security Holders At the Company's annual meeting of shareholders held on May 10, 1996, the following matters were voted upon with the results of the voting on such matters indicated: 1. Election of the following five directors of the Company to three-year terms: For Withheld Bernard S. Berman 43,035,959 2,207,873 Dan F. Huebner 43,058,137 2,185,695 Thomas S. Johnson 41,877,785 3,366,047 Susan J. Kropf 43,072,988 2,170,844 Jules Zimmerman 43,054,743 2,189,089 GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) The following sets forth the names of Directors continuing in office after the annual meeting: Edward C. Bessey Innis O'Rourke, Jr. William M. Jackson Edward C. Schmults Charles B. McQuade Wilfred O. Uhl Alvin N. Puryear Robert F. Vizza Robert P. Quinn Robert M. McLane 2. Ratification of the appointment of Price Waterhouse LLP as the Company's independent auditors for the year ending December 31, 1996. For: 44,731,156 Against: 321,517 Abstain: 191,159 3. Approval of a Stockholder Proposal, set forth as Item 3 in the proxy statement distributed in connection with the annual meeting. For: 7,929,529 Against: 28,415,221 Abstain: 849,245 Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits Exhibit Number 11.1 Statement Regarding Computation of Per Share Earnings. 27.1 Financial Data Schedule GREENPOINT FINANCIAL CORP. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition and Results of Operations - (Continued) (b) Reports on Form 8-K No current reports on Form 8-K were filed by the Company with the Securities and Exchange Commission during the quarter ended June 30, 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GreenPoint Financial Corp. By: /s/ Thomas S. Johnson _____________________________ Thomas S. Johnson Chairman of the Board, President and Chief Executive Officer By: /s/ Charles P. Richardson _____________________________ Charles P. Richardson Executive Vice President and Chief Financial Officer Dated August 13, 1996 EX-11.1 2 Exhibit 11.1 Exhibit 11.1 Statement Regarding Computation of Per Share Earnings (In thousands, except per share amounts)
Quarter Ended Six Months Ended June 30, June 30, --------------------------- ------------------------ 1996 1995 1996 1995 ---------- ---------- ---------- ------- Net Income $ 37,155 $ 29,348 $ 64,507 $57,855 Net Income (excluding branch sale) 32,060 N/A 59,412 N/A Weighted average number of common stock and common stock equivalents outstanding during each period - primary 44,664 47,087 45,161 47,157 Weighted average number of common stock and common stock equivalents outstanding during each period - fully diluted 44,675 47,135 45,302 47,240 Net earnings per share - primary $ 0.83 $ 0.62 $ 1.43 $ 1.23 ========== ========== ========== ======= Net earnings per share (excluding branch sale) - primary $ 0.72 N/A $ 1.32 N/A ========== ========== ========== ======= Net earnings per share - fully diluted $ 0.83 $ 0.62 $ 1.42 $ 1.23 ========== ========== ========== ======= Net earnings per share (excluding branch sale) - fully diluted $ 0.72 N/A $ 1.31 N/A ========== ========== ========== =======
EX-27.1 3
9 1,000 6-Mos DEC-31-1996 JUN-30-1996 107,281 1,135 1,234,400 0 5,442,891 3,697 3,699 6,425,566 (105,000) 14,150,594 12,157,442 284,850 242,048 0 0 0 551 1,465,703 14,150,594 287,256 210,329 0 497,585 276,175 277,779 219,806 (7,347) 354 135,031 112,387 64,507 0 0 64,507 1.43 1.42 3.33 374,000 0 0 0 (105,500) (8,632) 785 (105,000) (105,000) 0 0
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