Exhibit 99.2
PRESS RELEASE
| Contact: | | Donald Fleming |
For release at 4:30 p.m. | | | Senior Vice President |
on July 17, 2003 | | | Chief Financial Officer |
| | | |
| Contact #: | | (718) 697-2813 |
ANNOUNCEMENT: | STATEN ISLAND BANCORP INC. REPORTS SECOND QUARTER 2003 RESULTS |
Staten Island, New York – Staten Island Bancorp, Inc. (NYSE: SIB), (the “Company”), reported today that net income for the quarter ended June 30, 2003 was $25.5 million or $0.45 per diluted share. This compares to net income of $20.6 million or $0.35 per diluted share for the quarter ended June 30, 2002.
For the six months ended June 30, 2003, the Company reported net income of $50.9 million or $0.90 per diluted share compared to $30.6 million or $0.52 per diluted share for the six months ended June 30, 2002.
Commenting on the second quarter results Chairman and Chief Executive Officer, Harry P. Doherty, stated “We are pleased to deliver another quarter of solid earnings as indicated by the Company’s return on average equity of 16.34% for the quarter. These fine results have again been driven by the strong operating performance of our retail banking and mortgage banking businesses. The Mortgage Company continues to benefit from the strength of a favorable mortgage market and interest rate environment. Mortgage sales at the Mortgage Company reached a record $4.3 billion during the second quarter and we anticipate loan sales of approximately $4.6 billion in the third quarter. Overall deposit growth continues to be strong, as core deposits have reached 68.8% of total deposits at June 30, 2003.”
Financial Highlights:
• | Net interest income increased slightly to $53.4 million in the second quarter 2003 from $52.9 million during the second quarter of 2002. This improvement resulted from a $619.7 million or 10.5% increase in average interest earning assets to $6.5 billion for the quarter ended June 30, 2003 compared to $5.9 billion for the quarter ended June 30, 2002. The current interest rate environment continues to result in a lowering of net interest margins and spreads, which have partially offset the favorable impact on net interest income of the increase in interest earning assets. On a linked quarterly comparison basis, the interest rate spread and net interest margins decreased to 2.95% and 3.28%, respectively, for the second quarter of 2003 compared to 3.03% and 3.37%, respectively, for the first quarter of 2003 and 3.19% and 3.59%, respectively, for the second quarter of 2002. |
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• | During the second quarter of 2003, the volume of loans sold by the Company’s mortgage banking subsidiary, SIB Mortgage Corp., remained strong and amounted to $4.3 billion compared to $3.7 billion in the first quarter of 2003 and $1.5 billion in the second quarter of 2002. The Company’s net gain on loan sales amounted to $111.7 million for the quarter ended June 30, 2003 compared to $87.8 million for the quarter ended March 31, 2003 and $35.1 million for the quarter ended June 30, 2002. The Mortgage Company's net realized gross margins on loans sold increased to 2.60% for the second quarter of 2003 compared to 2.30% for the first quarter of 2003. Because of market conditions and record volume levels, the Mortgage Company was able to widen its margins on all product types. |
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• | Deposit growth remained strong during the first six months of 2003. Deposits increased $243.7 million or 7.0% to $3.7 billion at June 30, 2003 compared to $3.5 billion at December 31, 2002. Core deposits, which consist of savings, NOW, DDA and money market accounts, increased $193.7 million or 8.2% during the six months ended June 30, 2003 and represent 68.8% of total deposits at June 30, 2003. The increase in the core deposit base continues to be driven by our continuing expansion. The expansion of the Bank’s retail deposit base, which has increased the volume of fee-related transactions, also contributed to a $327 thousand or 9.0% increase in service and fee income for the quarter ended June 30, 2003 compared to the quarter ended June 30, 2002. Time deposits increased $50.0 million or 4.5% from December 31, 2002 to June 30, 2003. This increase resulted from an increase in brokered deposits of $93.2 million partially offset by a reduction in retail certificates of deposit of $43.2 million during the same period. |
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• | The overall interest rate environment continues to remain favorable to the Company’s mortgage banking segment. The Mortgage Company continued to experience record loan application volume of $8.8 billion for the quarter ended June 30, 2003 compared to $6.8 billion for the quarter ended March 31, 2003 and $3.0 billion for the quarter ended June 30, 2002. Based upon current application levels, it is anticipated that loan sales will be approximately $4.6 billion in the third quarter of 2003. The Company reported an unrealized gain on derivative transactions of $1.1 million in the second quarter of 2003 due to an increase in the fair market value of locked loan commitments, net of forward sales commitments. For the first |
2
| quarter of 2003, the Company reported an unrealized gain of $4.4 million on derivative transactions. While loan origination volume at the Mortgage Company continues to be positively impacted by the current low interest rate environment, volume in the future, particularly with respect to mortgage loan re-financings (which currently constitute approximately 76% of originations), as well as the unrealized gain/loss on the Company’s derivative instruments, may be adversely affected by increases in interest rates. The Mortgage Company continues to look for market expansion opportunities and to review its current operations and product mix and expects to maintain a profitable level of originations in all interest rate environments. |
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• | The Company’s return on average equity was 16.34% for the quarter ended June 30, 2003 compared to 16.53% for the quarter ended March 31, 2003 and 14.51% for the quarter ended June 30, 2002. The Company’s tangible book value per share increased to $9.61 at June 30, 2003 compared to $9.50 at March 31, 2003 and $9.23 at December 31, 2002. |
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• | The Company continued to manage its capital position through the use of stock repurchases. During the second quarter of 2003, as part of its previously announced ninth share repurchase program, the Company repurchased 1.4 million shares at an average price of $17.75 per share. There are approximately 341 thousand shares remaining to be purchased in the current program. |
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• | Total other expenses for the second quarter of 2003 were $139.6 million compared to $119.3 million for the quarter ended March 31, 2003 and $62.3 million for the quarter ended June 30, 2002. On a linked quarter basis, total other expenses for the community-banking segment were $22.0 million for the second quarter of 2003, compared to $22.7 million for the first quarter of 2003. The decrease of $700 thousand was due primarily to a decrease in professional fees and consulting fees partially offset by increases in personnel and other costs. Also, on a linked quarter basis, total other expenses for the mortgage-banking segment were $117.6 million (net of inter-company eliminations) for the current quarter compared to $96.6 million for the previous quarter. The increase of $21.0 million was primarily due to a $17.1 million increase in commission expense and a $2.4 million increase in personnel expense. The increases in commission and personnel expense reflect the increased loan origination volumes at SIB Mortgage. |
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• | Total assets were $7.1 billion at June 30, 2003 an increase of $184.5 million or 2.7% compared to total assets of $6.9 billion at December 31, 2002. This six month growth resulted primarily from a $209.2 million or 12.1% increase in loans held for sale and a $25.2 million increase in loans, net. Loans held for sale were $1.9 billion and loans, net were $3.4 billion at June 30, 2003. This growth was funded primarily by the $243.7 million or 7.0% increase in deposits during the first six months of 2003. |
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• | Borrowed funds were $2.7 billion at June 30, 2003, a decrease of $55.3 million or 2.0% as compared to $ 2.8 billion at December 31, 2002. |
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• | Stockholders’ equity was $618.8 million an increase of $4.5 million as compared to December 31, 2002. This increase primarily reflects the increase resulting from net income for the six months ended June 30, 2003 partially offset by the impact of stock repurchase transactions and dividends. Tangible equity to assets was 7.82% at June 30, 2003. |
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Asset Quality
• | Overall asset quality continued to be strong at June 30, 2003 as non-accruing assets totaled $26.2 million, representing a reduction of $900 thousand compared to total non-accrual assets of $27.1 million at March 31, 2003. Non-accruing assets at June 30, 2003 consisted of $23.3 million in non-accruing loans and $2.9 million of other real estate owned (“OREO”). This compares to $18.7 million in non-accruing loans and $8.4 million of OREO at March 31, 2003. Non-accruing loans at June 30, 2003 consisted of $16.1 million in single-family residential mortgage loans, $3.6 million of commercial real estate loans, $1.7 million of construction and land loans and $1.9 million of other loans. Net loan charge-offs were $599 thousand in the current quarter. During the second quarter of 2003 the Company sold three OREO properties with a carrying value of $5.3 million, which primarily accounts for the decrease in OREO on a linked quarter basis. Based upon the quarterly review, management deemed it appropriate to make a $2.8 million provision for loan losses in the second quarter of 2003. |
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• | The allowance for loan losses was $25.3 million or 108.3% of total non-accruing loans at June 30, 2003, compared to $22.9 million or 122.3% of non-accruing loans at March 31, 2003 and $22.9 million or 137.7% of non-accruing loans at June 30, 2002. |
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“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in the Company’s Annual Report on Form 10-K and in other documents filed by the Company with the Securities and Exchange Commission from time to time. Forward-looking statements may be identified by terms such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts”, “forecasts,” “potential” or “continue” or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The Company has no obligation to update these forward-looking statements.
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Staten Island Bancorp, Inc. is the holding company for SI Bank & Trust. SI Bank & Trust was chartered in 1864 and currently operates 17 full service branches and three limited service branches on Staten Island, New York, three full service branches in Brooklyn, New York and 15 full service branches in New Jersey. SI Bank & Trust also operates SIB Mortgage Corp., a wholly owned subsidiary of SI Bank & Trust, which conducts business under the name of Ivy Mortgage in 42 states. On June 30, 2003, Staten Island Bancorp had $7.1 billion in total assets and $618.8 million of stockholders’ equity.
For information on our Company please visit our website at www.sibk.com.
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CONSOLIDATED STATEMENTS OF INCOME (unaudited)
| | For the Three Months Ended June 30, | | For the Six Months Ended June 30, | |
| | 2003 | | 2002 | | Increase
(Decrease) | | 2003 | | 2002 | | Increase
(Decrease) | |
| | (000’s omitted, except per share and share data) | |
| | | | | | | | | | | | | |
Interest Income: | | | | | | | | | | | | | |
Loans | | $ | 82,451 | | $ | 75,755 | | $ | 6,696 | | $ | 166,305 | | $ | 145,638 | | $ | 20,667 | |
Securities available for sale | | 12,044 | | 24,016 | | (11,972 | ) | 24,909 | | 47,841 | | (22,932 | ) |
Federal funds sold | | 335 | | 189 | | 146 | | 888 | | 698 | | 190 | |
Total interest income | | 94,830 | | 99,960 | | (5,130 | ) | 192,102 | | 194,177 | | (2,075 | ) |
| | | | | | | | | | | | | |
Interest Expense: | | | | | | | | | | | | | |
Savings and escrow accounts | | 2,971 | | 4,918 | | (1,947 | ) | 6,102 | | 9,401 | | (3,299 | ) |
Certificates of deposits | | 7,562 | | 9,811 | | (2,249 | ) | 15,420 | | 20,157 | | (4,737 | ) |
Money market and NOW accounts | | 3,741 | | 3,985 | | (244 | ) | 7,744 | | 7,342 | | 402 | |
Borrowed funds | | 27,198 | | 28,379 | | (1,181 | ) | 55,671 | | 56,519 | | (848 | ) |
Total interest expense | | 41,472 | | 47,093 | | (5,621 | ) | 84,937 | | 93,419 | | (8,482 | ) |
Net interest income | | 53,358 | | 52,867 | | 491 | | 107,165 | | 100,758 | | 6,407 | |
Provision for Loan Losses | | 2,779 | | 4,990 | | (2,211 | ) | 3,629 | | 6,490 | | (2,861 | ) |
Net interest income after provision for loan losses | | 50,579 | | 47,877 | | 2,702 | | 103,536 | | 94,268 | | 9,268 | |
| | | | | | | | | | | | | |
Other Income (Loss): | | | | | | | | | | | | | |
Service and fee income | | 3,976 | | 3,649 | | 327 | | 7,876 | | 6,871 | | 1,005 | |
Net gains on loan sales | | 111,723 | | 35,054 | | 76,669 | | 199,561 | | 72,184 | | 127,377 | |
Unrealized gain on derivative transactions | | 1,107 | | (160 | ) | 1,267 | | 5,464 | | (1,020 | ) | 6,484 | |
Loan fees | | 13,472 | | 5,063 | | 8,409 | | 24,932 | | 11,843 | | 13,089 | |
Other Income | | 1,936 | | 4,879 | | (2,943 | ) | 3,835 | | 6,709 | | (2,874 | ) |
Securities transactions | | (2 | ) | 432 | | (434 | ) | 313 | | 599 | | (286 | ) |
| | 132,212 | | 48,917 | | 83,295 | | 241,981 | | 97,186 | | 144,795 | |
| | | | | | | | | | | | | |
Other Expenses: | | | | | | | | | | | | | |
Personnel | | 28,971 | | 21,728 | | 7,243 | | 55,038 | | 61,229 | | (6,191 | ) |
Commissions | | 79,151 | | 21,105 | | 58,046 | | 141,154 | | 41,744 | | 99,410 | |
Occupancy and equipment | | 5,861 | | 3,814 | | 2,047 | | 11,041 | | 7,435 | | 3,606 | |
Amortization of intangible assets | | 144 | | 153 | | (9 | ) | 289 | | 298 | | (9 | ) |
Data processing | | 1,853 | | 1,667 | | 186 | | 3,683 | | 3,373 | | 310 | |
Marketing | | 2,551 | | 1,382 | | 1,169 | | 4,291 | | 2,492 | | 1,799 | |
Professional fees | | 4,277 | | 3,059 | | 1,218 | | 9,551 | | 5,719 | | 3,832 | |
Other | | 16,808 | | 9,374 | | 7,434 | | 33,855 | | 17,772 | | 16,083 | |
Total other expenses | | 139,616 | | 62,282 | | 77,334 | | 258,902 | | 140,062 | | 118,840 | |
Income before provision for income taxes | | 43,175 | | 34,512 | | 8,663 | | 86,615 | | 51,392 | | 35,223 | |
| | | | | | | | | | | | | |
Provision for Income Taxes | | 17,671 | | 13,927 | | 3,744 | | 35,668 | | 20,783 | | 14,885 | |
Net Income | | $ | 25,504 | | $ | 20,585 | | $ | 4,919 | | $ | 50,947 | | $ | 30,609 | | $ | 20,338 | |
| | | | | | | | | | | | | |
Earnings Per Share: | | | | | | | | | | | | | |
Basic | | $ | 0.47 | | $ | 0.36 | | | | $ | 0.93 | | $ | 0.54 | | | |
Fully Diluted | | $ | 0.45 | | $ | 0.35 | | | | $ | 0.90 | | $ | 0.52 | | | |
| | | | | | | | | | | | | |
Dividends Declared | | $ | 0.13 | | $ | 0.11 | | | | $ | 0.26 | | $ | 0.21 | | | |
| | | | | | | | | | | | | |
Weighted Average: Fully Diluted | | | | | | | | | | | | | |
Common Shares | | 90,260,624 | | 90,260,624 | | | | 90,260,624 | | 90,260,624 | | | |
Less: Unallocated ESOP/RRP Shares | | 4,855,520 | | 5,296,410 | | | | 4,911,798 | | 5,342,947 | | | |
Less: Treasury Shares | | 29,110,878 | | 26,105,952 | | | | 28,679,711 | | 25,897,949 | | | |
| | 56,294,226 | | 58,858,262 | | | | 56,669,115 | | 59,019,728 | | | |
CONSOLIDATED STATEMENTS OF CONDITION (unaudited)
| | June 30, 2003 | | December 31, 2002 | | Increase (Decrease) | |
| | (000’s omitted) | |
ASSETS: | | | | | | | |
Cash and due from banks | | $ | 100,282 | | $ | 137,085 | | $ | (36,803 | ) |
Federal funds sold | | 226,000 | | 237,000 | | (11,000 | ) |
Securities available for sale | | 911,958 | | 911,432 | | 526 | |
Federal Home Loan Bank of NY capital stock | | 97,900 | | 112,150 | | (14,250 | ) |
Loans, net of allowance for loan losses of $25,260 in 2003 and $22,773 in 2002 | | 3,447,711 | | 3,422,492 | | 25,219 | |
Loans held for sale | | 1,939,110 | | 1,729,890 | | 209,220 | |
Accrued interest receivable | | 24,229 | | 23,976 | | 253 | |
Bank premises and equipment, net | | 50,496 | | 47,545 | | 2,951 | |
Intangible assets, net | | 56,445 | | 57,881 | | (1,436 | ) |
Other assets | | 265,500 | | 255,644 | | 9,856 | |
Total assets | | $ | 7,119,631 | | $ | 6,935,095 | | $ | 184,536 | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | |
| | | | | | | |
LIABILITIES: | | | | | | | |
Due Depositors- | | | | | | | |
Savings | | $ | 1,123,232 | | $ | 1,045,767 | | $ | 77,465 | |
Certificates of deposit | | 1,155,358 | | 1,105,370 | | 49,988 | |
Money market | | 714,013 | | 639,037 | | 74,976 | |
NOW accounts | | 140,226 | | 134,450 | | 5,776 | |
Demand deposits | | 575,029 | | 539,510 | | 35,519 | |
Total deposits | | 3,707,858 | | 3,464,134 | | 243,724 | |
Borrowed funds | | 2,701,634 | | 2,756,927 | | (55,293 | ) |
Advances from borrowers for taxes and insurance | | 29,788 | | 23,537 | | 6,251 | |
Accrued interest and other liabilities | | 61,579 | | 76,229 | | (14,650 | ) |
Total liabilities | | 6,500,859 | | 6,320,827 | | 180,032 | |
| | | | | | | |
STOCKHOLDERS’ EQUITY: | | | | | | | |
Common stock, par value $.01 per share, 100,000,000 shares authorized, 90,260,624 issued and 58,512,570 outstanding at June 30, 2003 and 90,260,624 issued and 60,269,397 outstanding at December 31, 2002 | | 903 | | 903 | | — | |
Additional paid-in-capital | | 587,688 | | 586,405 | | 1,283 | |
Retained earnings | | 426,880 | | 391,739 | | 35,141 | |
Unallocated common stock held by ESOP | | (26,782 | ) | (27,468 | ) | 686 | |
Unearned common stock held by RRP | | (8,784 | ) | (8,894 | ) | 110 | |
Treasury stock (31,748,054 shares at June 30, 2003 and 29,991,227 at December 31, 2002), at cost | | (371,694 | ) | (339,982 | ) | (31,712 | ) |
| | 608,211 | | 602,703 | | 5,508 | |
Accumulated other comprehensive income, net of taxes | | 10,561 | | 11,565 | | (1,004 | ) |
Total stockholders’ equity | | 618,772 | | 614,268 | | 4,504 | |
Total liabilities and stockholders’ equity | | $ | 7,119,631 | | $ | 6,935,095 | | $ | 184,536 | |
SELECTED DATA (unaudited)
| | At or For the Three Months
Ended June 30, | | At or For the Six Months
Ended June 30, | |
| | 2003 | | 2002 | | 2003 | | 2002 | |
| | (Dollars in thousands, except per share data) | |
Performance Ratios: | | | | | | | | | |
Return on average assets | | 1.43 | % | 1.30 | % | 1.44 | % | 0.99 | % |
Return on average equity | | 16.34 | % | 14.51 | % | 16.44 | % | 10.88 | % |
| | | | | | | | | |
Earnings per share | | | | | | | | | |
Earnings per share - Fully diluted | | $ | 0.45 | | $ | 0.35 | | $ | 0.90 | | $ | 0.52 | |
| | | | | | | | | |
Average interest-earning assets to average interest-bearing liabilities | | 112.83 | % | 112.60 | % | 112.59 | % | 113.16 | % |
Interest rate spread | | 2.95 | % | 3.19 | % | 2.99 | % | 3.08 | % |
Net interest margin | | 3.28 | % | 3.59 | % | 3.32 | % | 3.51 | % |
Noninterest expenses, exclusive of amortization of intangible assets, to average assets | | 7.80 | % | 3.91 | % | 7.32 | % | 4.51 | % |
Efficiency ratio | | 75.16 | % | 61.30 | % | 74.13 | % | 70.79 | % |
| | | | | | | | | |
Capital and Other Ratios: | | | | | | | | | |
Average equity to average assets | | 8.73 | % | 8.94 | % | 8.77 | % | 9.09 | % |
Tangible equity to assets at end of period | | 7.82 | % | 7.80 | % | 7.82 | % | 7.80 | % |
Total capital to risk-weighted assets | | 14.22 | % | 14.16 | % | 14.22 | % | 14.16 | % |
Tangible book value per share | | $ | 9.61 | | $ | 8.47 | | $ | 9.61 | | $ | 8.47 | |
| | | | | | | | | |
Asset Quality: | | | | | | | | | |
Non-accruing loans and real estate owned to total assets at end of the period | | 0.37 | % | 0.39 | % | 0.37 | % | 0.39 | % |
Allowance for loan losses to non-accruing loans at end of period | | 108.29 | % | 137.74 | % | 108.29 | % | 137.74 | % |
Allowance for loan losses to total loans at end of period | | 0.47 | % | 0.52 | % | 0.47 | % | 0.52 | % |
Non-accruing loans | | $ | 23,326 | | $ | 17,357 | | $ | 23,326 | | $ | 17,357 | |
Non-accruing loans and real estate owned | | $ | 26,235 | | $ | 27,038 | | $ | 26,235 | | $ | 27,038 | |
Allowance for loan losses | | $ | 25,260 | | $ | 22,925 | | $ | 25,260 | | $ | 22,925 | |
Segment Reporting Table
For The Six Months Ended June 30, 2003 and 2002
| | Six Months Ended
June 30, 2003
(000’s omitted)
unaudited | |
| | Mortgage
Banking | | Community
Banking | | Elimination of
Intersegment
Items | | Total | |
Interest income | | $ | 60,404 | | $ | 162,541 | | $ | (30,843 | ) | $ | 192,102 | |
Interest expense | | 36,064 | | 79,716 | | (30,843 | ) | 84,937 | |
Net Interest income | | 24,340 | | 82,825 | | — | | 107,165 | |
Provision for loan losses | | — | | 3,629 | | — | | 3,629 | |
Other income (loss): | | | | | | | | | |
Service and fee income | | — | | 13,862 | | (5,986 | ) | 7,876 | |
Net gains (losses) on loan sales | | 203,566 | | (932 | ) | (3,073 | ) | 199,561 | |
Unrealized gain on derivative transactions | | 3,572 | | 1,892 | | — | | 5,464 | |
Loan fees | | 24,843 | | 89 | | — | | 24,932 | |
Other income | | — | | 3,835 | | — | | 3,835 | |
Securities transactions | | — | | 313 | | — | | 313 | |
Total other income (loss) | | 231,981 | | 19,059 | | (9,059 | ) | 241,981 | |
Other expenses | | 220,176 | | 44,712 | | (5,986 | ) | 258,902 | |
Income before provision for income taxes | | 36,145 | | 53,543 | | (3,073 | ) | 86,615 | |
Provision for income taxes | | 14,880 | | 21,925 | | (1,137 | ) | 35,668 | |
Net income | | $ | 21,265 | | $ | 31,618 | | $ | (1,936 | ) | $ | 50,947 | |
| | Six Months Ended
June 30, 2002
(000’s omitted)
unaudited | |
| | Mortgage
Banking | | Community
Banking | | Elimination of
Intersegment
Items | | Total | |
Interest income | | $ | 45,274 | | $ | 176,761 | | $ | (27,858 | ) | $ | 194,177 | |
Interest expense | | 29,371 | | 91,906 | | (27,858 | ) | 93,419 | |
Net Interest income | | 15,903 | | 84,855 | | — | | 100,758 | |
Provision for loan losses | | 4,590 | | 1,900 | | — | | 6,490 | |
Other income (loss): | | | | | | | | | |
Service and fee income | | — | | 6,871 | | — | | 6,871 | |
Net gains (losses) on loan sales | | 80,294 | | (445 | ) | (7,665 | ) | 72,184 | |
Unrealized gain on derivative transactions | | (1,020 | ) | — | | — | | (1,020 | ) |
Loan fees | | 11,313 | | 530 | | — | | 11,843 | |
Other income | | — | | 6,709 | | — | | 6,709 | |
Securities transactions | | — | | 599 | | — | | 599 | |
Total other income (loss) | | 90,587 | | 14,264 | | (7,665 | ) | 97,186 | |
Other expenses | | 81,023 | | 59,039 | | — | | 140,062 | |
Income before provision for income taxes | | 20,877 | | 38,180 | | (7,665 | ) | 51,392 | |
Provision for income taxes | | 8,664 | | 14,955 | | (2,836 | ) | 20,783 | |
Net income | | $ | 12,213 | | $ | 23,225 | | $ | (4,829 | ) | $ | 30,609 | |
Segment Reporting Table
For The Three Months Ended June 30, 2003 and 2002
| | Quarter Ended
June 30, 2003
(000’s omitted)
unaudited | |
| | Mortgage
Banking | | Community
Banking | | Elimination of
Intersegment
Items | | Total | |
Interest income | | $ | 30,208 | | $ | 80,154 | | $ | (15,532 | ) | $ | 94,830 | |
Interest expense | | 18,179 | | 38,825 | | (15,532 | ) | 41,472 | |
Net Interest income | | 12,029 | | 41,329 | | — | | 53,358 | |
Provision for loan losses | | — | | 2,779 | | — | | 2,779 | |
Other income (loss): | | | | | | | | | |
Service and fee income | | — | | 7,257 | | (3,281 | ) | 3,976 | |
Net gains (losses) on loan sales | | 115,266 | | (959 | ) | (2,584 | ) | 111,723 | |
Unrealized gain on derivative transactions | | 1,040 | | 67 | | — | | 1,107 | |
Loan fees | | 13,410 | | 62 | | — | | 13,472 | |
Other income | | — | | 1,936 | | — | | 1,936 | |
Securities transactions | | — | | (2 | ) | — | | (2 | ) |
Total other income (loss) | | 129,716 | | 8,361 | | (5,865 | ) | 132,212 | |
Other expenses | | 120,915 | | 21,982 | | (3,281 | ) | 139,616 | |
Income before provision for income taxes | | 20,830 | | 24,929 | | (2,584 | ) | 43,175 | |
Provision for income taxes | | 8,602 | | 10,025 | | (956 | ) | 17,671 | |
Net income | | $ | 12,228 | | $ | 14,904 | | $ | (1,628 | ) | $ | 25,504 | |
| | | | | | | | | |
| | Quarter Ended
June 30, 2002
(000’s omitted)
unaudited and restated | |
| | Mortgage
Banking | | Community
Banking | | Elimination of
Intersegment
Items | | Total | |
Interest income | | $ | 22,959 | | $ | 90,398 | | $ | (13,397 | ) | $ | 99,960 | |
Interest expense | | 14,269 | | 46,221 | | (13,397 | ) | 47,093 | |
Net Interest income | | 8,690 | | 44,177 | | — | | 52,867 | |
Provision for loan losses | | 3,890 | | 1,100 | | — | | 4,990 | |
Other income (loss): | | | | | | | | | |
Service and fee income | | — | | 3,649 | | — | | 3,649 | |
Net gains (losses) on loan sales | | 38,414 | | (571 | ) | (2,789 | ) | 35,054 | |
Unrealized gain on derivative transactions | | (160 | ) | — | | | | (160 | ) |
Loan fees | | 5,298 | | (235 | ) | — | | 5,063 | |
Other income | | — | | 4,879 | | | | 4,879 | |
Securities transactions | | — | | 432 | | — | | 432 | |
Total other income (loss) | | 43,552 | | 8,154 | | (2,789 | ) | 48,917 | |
Other expenses | | 42,114 | | 20,168 | | — | | 62,282 | |
Income before provision for income taxes | | 6,238 | | 31,063 | | (2,789 | ) | 34,512 | |
Provision for income taxes | | 2,589 | | 12,370 | | (1,032 | ) | 13,927 | |
Net income | | $ | 3,649 | | $ | 18,693 | | $ | (1,757 | ) | $ | 20,585 | |
The Mortgage Company sells various types of loans in the secondary market.
The following table summarizes loans sold and gross margins realized by the types of loan. The table does not reflect the unrealized gains or losses on derivative transactions (SFAS #133), nor the effect of the recognition of deferred loan costs or fees in accordance with SFAS #91.
| | Quarter Ended June 30, 2003 | |
| | (unaudited) | |
Type | | Volume | | Net Realized
Gross Gain | | Net Realized
Gross Margin | |
| | | | | | | |
Agency Eligible | | $ | 2,758,112,177 | | $ | 65,594,853 | | 2.38 | % |
Government | | 459,743,721 | | 18,502,526 | | 4.03 | % |
Jumbo | | 290,894,116 | | 4,931,043 | | 1.70 | % |
Alt-A | | 716,398,793 | | 19,957,986 | | 2.79 | % |
Sub Prime | | 103,175,957 | | 3,455,556 | | 3.35 | % |
Total | | $ | 4,328,324,764 | | $ | 112,441,964 | | 2.60 | % |
| | | | | | | |
| | Quarter Ended March 31, 2003 | |
| | (unaudited) | |
Type | | Volume | | Net Realized
Gross Gain | | Net Realized
Gross Margin | |
| | | | | | | |
Agency Eligible | | $ | 2,360,063,396 | | $ | 50,311,820 | | 2.13 | % |
Government | | 347,567,863 | | 11,835,158 | | 3.41 | % |
Jumbo | | 151,911,337 | | 2,150,712 | | 1.42 | % |
Alt-A | | 731,064,605 | | 17,339,661 | | 2.37 | % |
Sub Prime | | 137,505,222 | | 4,202,226 | | 3.06 | % |
Total | | $ | 3,728,112,423 | | $ | 85,839,577 | | 2.30 | % |
AVERAGE BALANCES, NET INTEREST INCOME, YIELDS EARNED AND RATES PAID (unaudited)
| | Three Months Ended June 30, | |
| | 2003 | | 2002 | |
| | Average
Balance | | Interest | | Average
Yield/
Cost | | Average
Balance | | Interest | | Average
Yield/
Cost | |
| | (000’s omitted) | |
Interest-earning assets: | | | | | | | | | | | | | |
Loans receivable (1): | | | | | | | | | | | | | |
Real estate loans | | $ | 5,185,972 | | $ | 80,569 | | 6.23 | % | $ | 4,100,486 | | $ | 73,529 | | 7.19 | % |
Other loans | | 95,247 | | 1,882 | | 7.93 | % | 105,857 | | 2,226 | | 8.43 | % |
Total loans | | 5,281,219 | | 82,451 | | 6.26 | % | 4,206,343 | | 75,755 | | 7.22 | % |
Securities (2) | | 1,124,457 | | 12,044 | | 4.30 | % | 1,647,438 | | 24,016 | | 5.85 | % |
Other interest-earning assets (3) | | 120,136 | | 335 | | 1.12 | % | 52,307 | | 189 | | 1.45 | % |
Total interest-earning assets | | 6,525,812 | | 94,830 | | 5.83 | % | 5,906,088 | | 99,960 | | 6.79 | % |
Noninterest-earning assets | | 644,548 | | | | | | 460,434 | | | | | |
Total assets | | $ | 7,170,360 | | | | | | $ | 6,366,522 | | | | | |
| | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | |
NOW and money market deposits | | $ | 842,371 | | 3,741 | | 1.78 | % | $ | 621,252 | | 3,985 | | 2.57 | % |
Savings and escrow accounts | | 1,138,800 | | 2,971 | | 1.05 | % | 996,026 | | 4,918 | | 1.98 | % |
Certificates of deposit | | 1,125,113 | | 7,562 | | 2.70 | % | 1,101,234 | | 9,811 | | 3.57 | % |
Total deposits | | 3,106,284 | | 14,274 | | 1.84 | % | 2,718,512 | | 18,714 | | 2.76 | % |
Total Other Borrowings | | 2,677,240 | | 27,198 | | 4.07 | % | 2,526,681 | | 28,379 | | 4.51 | % |
Total interest-bearing liabilities | | 5,783,524 | | 41,472 | | 2.88 | % | 5,245,193 | | 47,093 | | 3.60 | % |
Noninterest-bearing liabilities (4) | | 760,827 | | | | | | 552,338 | | | | | |
Total liabilities | | 6,544,351 | | | | | | 5,797,531 | | | | | |
Stockholders’ equity | | 626,009 | | | | | | 568,991 | | | | | |
Total liabilities and stockholders’ equity | | $ | 7,170,360 | | | | | | $ | 6,366,522 | | | | | |
Net interest-earning assets | | $ | 742,288 | | | | | | $ | 660,895 | | | | | |
Net interest income/interest rate spread | | | | $ | 53,358 | | 2.95 | % | | | $ | 52,867 | | 3.19 | % |
| | | | | | | | | | | | | |
Net interest margin | | | | | | 3.28 | % | | | | | 3.59 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities | | | | | | 112.83 | % | | | | | 112.60 | % |
| | | | | | | | | | | | | |
| | Six Months Ended June 30, | |
| | 2003 | | 2002 | |
| | Average
Balance | | Interest | | Average
Yield/
Cost | | Average
Balance | | Interest | | Average
Yield/
Cost | |
| | (000’s omitted) | |
Interest-earning assets: | | | | | | | | | | | | | |
Loans receivable (1): | | | | | | | | | | | | | |
Real estate loans | | $ | 5,171,118 | | $ | 162,434 | | 6.33 | % | $ | 3,979,497 | | $ | 141,182 | | 7.15 | % |
Other loans | | 100,817 | | 3,871 | | 7.74 | % | 105,996 | | 4,456 | | 8.48 | % |
Total loans | | 5,271,935 | | 166,305 | | 6.36 | % | 4,085,493 | | 145,638 | | 7.19 | % |
Securities (2) | | 1,068,515 | | 24,909 | | 4.70 | % | 1,616,029 | | 47,841 | | 5.97 | % |
Other interest-earning assets (3) | | 159,263 | | 888 | | 1.12 | % | 91,644 | | 698 | | 1.54 | % |
Total interest-earning assets | | 6,499,713 | | 192,102 | | 5.96 | % | 5,793,166 | | 194,177 | | 6.76 | % |
Noninterest-earning assets | | 623,808 | | | | | | 450,068 | | | | | |
Total assets | | $ | 7,123,521 | | | | | | $ | 6,243,234 | | | | | |
| | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | |
NOW and money market deposits | | $ | 824,295 | | 7,744 | | 1.89 | % | $ | 571,125 | | 7,342 | | 2.59 | % |
Savings and escrow accounts | | 1,113,565 | | 6,102 | | 1.11 | % | 956,216 | | 9,401 | | 1.98 | % |
Certificates of deposit | | 1,107,099 | | 15,420 | | 2.81 | % | 1,090,578 | | 20,157 | | 3.73 | % |
Total deposits | | 3,044,959 | | 29,266 | | 1.94 | % | 2,617,919 | | 36,900 | | 2.84 | % |
Total Other Borrowings | | 2,727,798 | | 55,671 | | 4.12 | % | 2,501,454 | | 56,519 | | 4.56 | % |
Total interest-bearing liabilities | | 5,772,757 | | 84,937 | | 2.97 | % | 5,119,373 | | 93,419 | | 3.68 | % |
Noninterest-bearing liabilities (4) | | 725,675 | | | | | | 556,346 | | | | | |
Total liabilities | | 6,498,432 | | | | | | 5,675,719 | | | | | |
Stockholders’ equity | | 625,089 | | | | | | 567,515 | | | | | |
Total liabilities and stockholders’ equity | | $ | 7,123,521 | | | | | | $ | 6,243,234 | | | | | |
Net interest-earning assets | | $ | 726,956 | | | | | | $ | 673,793 | | | | | |
Net interest income/interest rate spread | | | | $ | 107,165 | | 2.99 | % | | | $ | 100,758 | | 3.08 | % |
| | | | | | | | | | | | | |
Net interest margin | | | | | | 3.32 | % | | | | | 3.51 | % |
Ratio of average interest-earning assets to average interest-bearing liabilities | | | | | | 112.59 | % | | | | | 113.16 | % |
(1) The average balance of loans receivable includes nonaccruing loans, interest on which is recognized on a cash basis.
(2) Securities include the Bank’s investment in FHLB New York stock.
(3) Includes money market accounts, Federal Funds sold, and interest-earning bank deposits.
(4) Consists primarily of demand deposit accounts.
LOAN PORTFOLIO COMPOSITION - - The following table sets forth the composition of the Company’s loans held for investment portfolio at the dates indicated.
| | June 30, 2003 | | December 31, 2002 | | Increase (Decrease) | |
| | | | (000’s omitted) | | | |
| | | | (unaudited) | | | |
Mortgage loans: (1) | | | | | | | |
Single-family residential | | $ | 2,640,624 | | $ | 2,671,041 | | $ | (30,417 | ) |
Multi-family residential | | 62,333 | | 56,545 | | 5,788 | |
Commercial real estate | | 455,286 | | 418,708 | | 36,578 | |
Construction and land | | 170,484 | | 153,144 | | 17,340 | |
Home equity | | 21,309 | | 19,032 | | 2,277 | |
Total mortgage loans | | 3,350,036 | | 3,318,470 | | 31,566 | |
| | | | | | | |
Other loans: | | | | | | | |
Student loans | | 141 | | 228 | | (87 | ) |
Passbook loans | | 8,653 | | 8,692 | | (39 | ) |
Commercial business loans | | 61,540 | | 62,777 | | (1,237 | ) |
Other consumer loans | | 31,995 | | 37,362 | | (5,367 | ) |
Total other loans | | 102,329 | | 109,059 | | (6,730 | ) |
| | | | | | | |
Total loans receivable | | 3,452,365 | | 3,427,529 | | 24,836 | |
Less: | | | | | | | |
Premium on loans purchased | | 3,609 | | 3,941 | | (332 | ) |
Allowance for loan losses | | (25,260 | ) | (22,773 | ) | (2,487 | ) |
Deferred loan costs | | 16,997 | | 13,795 | | 3,202 | |
Loans receivable, net | | $ | 3,447,711 | | $ | 3,422,492 | | $ | 25,219 | |
(1) Mortgage loans held for sale at June 30, 2003 and December 31, 2002, of $1.9 billion and $1.7 billion, respectively, are not included in this table.
LOANS PAST DUE 90 DAYS OR MORE STILL ACCRUING AND NON-ACCRUING ASSETS. The following tables set forth information with respect to non-accruing loans, other real estate owned, repossessed assets and loans past due 90 days or more and still accruing.
| | June 30, 2003 | | December 31, 2002 | |
| | (000’s omitted) | |
| | (unaudited) | |
Non-Accruing Loan Assets | | | | | |
Mortgage loans: | | | | | |
Single-family residential | | $ | 16,070 | | $ | 11,942 | |
Multi-family residential | | — | | — | |
Commercial real estate | | 3,645 | | 2,687 | |
Construction and land | | 1,686 | | 1,094 | |
Home equity | | — | | — | |
Other loans: | | | | | |
Commercial business loans | | 937 | | 797 | |
Other consumer loans | | 988 | | 837 | |
| | | | | |
Total non-accrual loans | | 23,326 | | 17,357 | |
Other real estate owned and repossessed assets, net | | 2,909 | | 9,681 | |
Total non-accruing loan assets | | 26,235 | | 27,038 | |
| | | | | |
Loans past due 90 days or more and still accruing | | 2,625 | | 5,684 | |
Non-accruing loan assets and loans past due 90 days or more and still accruing | | $ | 28,860 | | $ | 32,722 | |
| | | | | |
Non-accruing loan assets to total *HFI & **HFS loans | | 0.49 | % | 0.53 | % |
Non-accruing loan assets to total assets | | 0.37 | % | 0.39 | % |
Non-accruing loans to total *HFI & **HFS loans | | 0.44 | % | 0.34 | % |
Non-accruing loans to total assets | | 0.33 | % | 0.25 | % |
* Held for Investment
** Held for Sale
DELINQUENT LOANS: The following table sets forth information concerning accruing but delinquent loans at the dates indicated. The amounts presented represent the total outstanding principal balances of the related loans held in portfolio and held for sale loans, rather than the actual payment amounts which are past due.
| | June 30, 2003 | | December 31, 2002 | |
| | (000’s omitted) | |
| | (unaudited) | |
90 Days or More | | | | | |
Mortgage loans: | | | | | |
Single-family residential | | $ | 2,129 | | $ | 4,451 | |
Multi-family residential | | — | | — | |
Commercial real estate | | — | | — | |
Construction and land | | 141 | | 940 | |
Home equity | | — | | — | |
Total mortgage loans | | 2,270 | | 5,391 | |
| | | | | |
Other loans: | | | | | |
Commercial business loans | | 249 | | 41 | |
Other loans | | 106 | | 252 | |
Total other loans | | 355 | | 293 | |
| | | | | |
Total | | 2,625 | | 5,684 | |
| | | | | |
| | June 30, 2003 | | December 31, 2002 | |
60-89 Days | | | | | |
Mortgage loans: | | | | | |
Single-family residential | | $ | 4,465 | | $ | 6,699 | |
Multi-family residential | | — | | — | |
Commercial real estate | | 388 | | 493 | |
Construction and land | | 674 | | 465 | |
Home equity | | — | | 8 | |
Total mortgage loans | | 5,527 | | 7,665 | |
| | | | | |
Other loans: | | | | | |
Commercial business loans | | 288 | | 124 | |
Other loans | | 407 | | 418 | |
Total other loans | | 695 | | 542 | |
| | | | | |
Total | | 6,222 | | 8,207 | |
| | | | | |
| | June 30, 2003 | | December 31, 2002 | |
30-59 Days | | | | | |
Mortgage loans: | | | | | |
Single-family residential | | $ | 11,799 | | $ | 16,496 | |
Multi-family residential | | — | | — | |
Commercial real estate | | 3,120 | | 3,646 | |
Construction and land | | 344 | | 2,787 | |
Home equity | | 219 | | 51 | |
Total mortgage loans | | 15,482 | | 22,980 | |
| | | | | |
Other loans: | | | | | |
Commercial business loans | | 1,732 | | 3,014 | |
Other loans | | 1,324 | | 1,523 | |
Total other loans | | 3,056 | | 4,537 | |
| | | | | |
Total | | 18,538 | | 27,517 | |
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
| | QUARTER ENDED | |
| | June 30,
2003 | | March 31,
2003 | | December 31,
2002 | | September 30,
2002 | | June 30,
2002 | |
| | (000’s omitted, except per share and share data) | |
| | | | | | | | | | | |
Interest Income: | | | | | | | | | | | |
Loans | | $ | 82,451 | | $ | 83,854 | | $ | 86,445 | | $ | 79,552 | | $ | 75,755 | |
Securities available for sale | | 12,044 | | 12,865 | | 15,457 | | 20,761 | | 24,016 | |
Federal funds sold | | 335 | | 553 | | 418 | | 322 | | 189 | |
Total interest income | | 94,830 | | 97,272 | | 102,320 | | 100,635 | | 99,960 | |
| | | | | | | | | | | |
Interest Expense: | | | | | | | | | | | |
Savings and escrow | | 2,971 | | 3,131 | | 3,751 | | 4,285 | | 4,918 | |
Certificates of deposits | | 7,562 | | 7,858 | | 9,014 | | 9,837 | | 9,811 | |
Money market and NOW | | 3,741 | | 4,003 | | 4,515 | | 4,423 | | 3,985 | |
Borrowed funds | | 27,198 | | 28,473 | | 29,549 | | 29,821 | | 28,379 | |
Total interest expense | | 41,472 | | 43,465 | | 46,829 | | 48,366 | | 47,093 | |
Net interest income | | 53,358 | | 53,807 | | 55,491 | | 52,269 | | 52,867 | |
Provision for Loan Losses | | 2,779 | | 850 | | (985 | ) | 3,349 | | 4,990 | |
| | | | | | | | | | | |
Net interest income after provision for loan losses | | 50,579 | | 52,957 | | 56,476 | | 48,920 | | 47,877 | |
| | | | | | | | | | | |
Other Income (Loss): | | | | | | | | | | | |
Service and fee income | | 3,976 | | 3,900 | | 3,955 | | 3,948 | | 3,649 | |
Net gains on loan sales | | 111,723 | | 87,838 | | 78,923 | | 55,293 | | 35,054 | |
Unrealized gain on derivative transactions | | 1,107 | | 4,357 | | (426 | ) | 14,033 | | (160 | ) |
Loan fees | | 13,472 | | 11,460 | | 10,092 | | 7,252 | | 5,063 | |
Other Income | | 1,936 | | 1,899 | | 1,928 | | 1,917 | | 4,879 | |
Securities transactions | | (2 | ) | 315 | | (2,506 | ) | 1,512 | | 432 | |
| | 132,212 | | 109,769 | | 91,966 | | 83,955 | | 48,917 | |
| | | | | | | | | | | |
Other Expenses: | | | | | | | | | | | |
Personnel | | 28,971 | | 26,067 | | 25,126 | | 9,905 | | 21,728 | |
Commissions | | 79,151 | | 62,003 | | 53,848 | | 33,735 | | 21,105 | |
Occupancy and equipment | | 5,861 | | 5,180 | | 4,942 | | 4,085 | | 3,814 | |
Amortization of intangible assets | | 144 | | 145 | | 145 | | 138 | | 153 | |
FDIC Insurance | | 139 | | 145 | | 136 | | 131 | | 125 | |
Data processing | | 1,853 | | 1,830 | | 1,674 | | 1,643 | | 1,667 | |
Marketing | | 2,551 | | 1,740 | | 1,683 | | 1,322 | | 1,382 | |
Professional fees | | 4,277 | | 5,274 | | 3,823 | | 2,978 | | 3,059 | |
Other | | 16,669 | | 16,902 | | 14,740 | | 10,232 | | 9,249 | |
Total other expenses | | 139,616 | | 119,286 | | 106,117 | | 64,169 | | 62,282 | |
Income before provision for income taxes | | 43,175 | | 43,440 | | 42,325 | | 68,706 | | 34,512 | |
| | | | | | | | | | | |
Provision for Income Taxes | | 17,671 | | 17,997 | | 17,763 | | 28,230 | | 13,927 | |
Income before cumulative effect of accounting change | | 25,504 | | 25,443 | | 24,562 | | 40,476 | | 20,585 | |
Cumulative effect of change in accounting principle, net of tax | | — | | — | | — | | 4,731 | | — | |
Net Income | | $ | 25,504 | | $ | 25,443 | | $ | 24,562 | | $ | 45,207 | | $ | 20,585 | |
| | | | | | | | | | | |
Earnings Per Share After Cumulative Effect of Accounting Change: | | | | | | | | | | | |
Basic | | $ | 0.47 | | $ | 0.46 | | $ | 0.45 | | $ | 0.81 | | $ | 0.36 | |
Fully Diluted | | $ | 0.45 | | $ | 0.45 | | $ | 0.43 | | $ | 0.78 | | $ | 0.35 | |
| | | | | | | | | | | |
Dividends Declared Per Share | | $ | 0.13 | | $ | 0.13 | | $ | 0.13 | | $ | 0.12 | | $ | 0.11 | |
| | | | | | | | | | | |
Stock Closing Price | | 19.480 | | 14.920 | | 20.140 | | 17.400 | | 19.200 | |
| | | | | | | | | | | |
Weighted Average - Fully Diluted Shares | | | | | | | | | | | |
Common Shares | | 90,260,624 | | 90,260,624 | | 90,260,624 | | 90,260,624 | | 90,260,624 | |
Less: Unallocated ESOP/RRP Shares | | 4,855,520 | | 4,968,700 | | 5,073,993 | | 5,181,972 | | 5,296,410 | |
Less: Treasury Shares | | 29,110,878 | | 28,243,146 | | 27,721,717 | | 27,504,031 | | 26,105,952 | |
| | 56,294,226 | | 57,048,778 | | 57,464,914 | | 57,574,621 | | 58,858,262 | |
