FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996 Commission file number 2-99779
National Consumer Cooperative Bank
(Exact name of registrant as specified in its charter)
United States of America 52-1157795
(12 U.S.C. Section 3001 et seq.) (I.R.S. Employer
(State or other jurisdiction of Identification No.)
incorporation or organization)
1401 Eye Street, NW, Suite 700, Washington, D.C. 20005
(Address of principal executive offices)
Registrant's telephone number, including area code (202)336-7700
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.
Yes x No________.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at September 30, 1996
Class C 218,192
(Common stock, $100.00 par value)
Class B 786,113
(Common stock, $100.00 par value)
Class D 3
(Common stock, $100.00 par value)
National Consumer Cooperative Bank
(doing business as National Cooperative Bank)
and Subsidiaries
INDEX
PART I FINANCIAL INFORMATION Page No.
Item 1 Consolidated balance sheets - September 30, 1996
and December 31, 1995........................... 3
Consolidated statements of income - for the
three and nine months ended September 30, 1996
and 1995........................................ 4
Consolidated statements of cash flows - for the
nine months ended September 30,1996 and 1995.... 5-6
Condensed notes to the consolidated financial
statements - September 30, 1996................. 7-9
Item 2 Management's discussion and analysis of
financial condition and results of operations - for
the three and nine months ended September 30, 1996
and 1995.......................................... 10-20
PART II OTHER INFORMATION
Item 6 Exhibits:
Exhibit 10.24 - Amendment No. 3 to the Second Amended
and Restated Loan Agreement with Natwest Bank et al.
Exhibit 10.25 - Term Loan Agreement with PNC Bank
Exhibit 27 - Financial Data Schedule
NATIONAL COOPERATIVE BANK
CONSOLIDATED BALANCE SHEETS
September 30, 1996 and December 31, 1995
(Unaudited)
1996 1995
Assets
Cash and cash equivalents $ 24,848,153 $ 21,289,376
Restricted cash 8,348,703 8,348,703
Investment securities
Available-for-sale 29,872,870 29,095,559
Held-to-maturity 3,045,425 3,118,956
Loans and lease financing 544,801,882 558,582,284
Loans held for sale 131,785,495 38,608,195
Less: Allowance for loan losses (15,089,825) (14,554,240)
661,497,552 582,636,239
Excess servicing 31,892,118 25,670,305
Premises and equipment, net 2,195,739 1,896,779
Other assets 8,815,116 12,475,747
Total assets $770,515,676 $684,531,664
Liabilities and Members' Equity
Liabilities
Deposits $ 81,947,147 $ 78,100,173
Patronage dividends payable in cash 5,119,713 5,088,851
Other liabilities 17,004,947 12,687,840
Borrowings
Short-term 157,997,715 132,499,998
Long-term 202,078,691 154,688,045
360,076,406 287,188,043
Subordinated Class A notes 182,869,445 183,013,689
Total borrowings 542,945,851 470,201,732
Total liabilities 647,017,658 566,078,596
Members' equity
Common stock
Class B 78,611,311 72,349,754
Class C 21,819,150 21,731,166
Class D 300 300
Retained earnings
Allocated 4,832,431 6,219,707
Unallocated 18,491,193 17,898,103
Unrealized (loss) gain on investment
securities available-for-sale (256,367) 254,038
Total members' equity 123,498,018 118,453,068
Total liabilities and members'
equity $770,515,676 $684,531,664
NATIONAL COOPERATIVE BANK
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine Months Ended Sept. 30, Three Months Ended Sept. 30,
1996 1995 1996 1995
Interest Income
Loans and lease
financing $40,285,431 $34,873,510 $13,762,641 $12,237,458
Investment securities 2,871,104 2,648,564 987,589 783,408
Total interest
income 43,156,535 37,522,074 14,750,230 13,020,866
Interest expense
Deposits 3,030,438 2,521,462 993,646 892,966
Short-term borrowings 5,034,547 3,782,958 1,662,704 1,543,406
Long-term debt, other
borrowings and subord.
Class A notes 17,227,260 15,512,703 5,988,445 5,279,683
Total interest
expense 25,292,245 21,817,123 8,644,795 7,716,055
Net interest income 17,864,290 15,704,951 6,105,435 5,304,811
Provision for loan
losses 950,000 909,200 300,000 320,000
Net interest income
after provision for
loan losses 16,914,290 14,795,751 5,805,435 4,984,811
Non-interest income
Commercial fees 1,814,305 830,814 962,726 353,523
Real estate fees/gain
on sale 4,703,382 2,601,722 (234,095) 301,616
Servicing fees 1,570,432 1,338,965 543,347 512,391
Excess yield income 1,796,275 1,464,176 542,504 481,852
Other 477,024 364,058 261,004 215,336
10,361,418 6,599,735 2,075,486 1,864,718
Non-interest expenses
Compensation and
employee benefits 8,029,702 7,129,233 2,718,011 2,331,421
Contractual services 2,946,599 3,235,569 936,052 1,053,013
Occupancy and equipment 2,909,220 2,151,240 1,273,109 729,730
Travel and entertainment 888,102 872,213 299,942 338,507
Contribution to NCB
Development Corp. 375,000 375,000 125,000 125,000
Other 1,379,962 972,156 836,945 321,223
Total non-interest
expenses 16,528,585 14,735,411 6,189,059 4,898,894
Income before income
taxes 10,747,123 6,600,075 1,691,862 1,950,635
Provision for income
taxes 608,190 623,938 156,579 246,819
Net income $10,138,933 $ 6,036,137 $ 1,535,283 $ 1,703,816
Distribution of net income
Patronage dividends $10,747,123 $ 5,630,642 $ 1,691,862 $ 2,072,599
Retained earnings (608,190) 405,495 (156,579) (368,783)
$10,138,933 $ 6,036,137 $ 1,535,283 $ 1,703,816
NATIONAL COOPERATIVE BANK
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the nine months ended September 30, 1996 1995
Cash flows from operating activities
Net income $10,138,934 $ 6,036,137
Adjustments to reconcile net income to net
cash used in operating activities
Provision for loan losses 950,000 909,200
Depreciation and amortization 4,052,958 3,490,468
Gain on sale of assets (5,028,011) (4,326,690)
Loans originated for sale (240,309,266) (172,071,002)
Proceeds from sale of loans held
for sale 143,577,309 149,720,026
Increase in other assets (6,745,823) (3,881,186)
Increase in other liabilities 8,396,745 7,189,409
Other (65,264) 83,020
Net cash used in operating activities (85,032,418) (12,850,618)
Cash flows from investing activities
Purchases of investment securities
Available-for-sale (7,293,886) (6,931,027)
Held-to-maturity (1,007,783)
Proceeds from maturities and sales of
investment securities
Available-for-sale 6,075,132 6,960,032
Held-to-maturity 1,090,000 1,775,382
Loans originated, net of loan repayments (8,226,320) (117,125,187)
Proceeds from sale of portfolio loans 26,278,305 43,920,866
Purchases of premises and equipment (714,580) (438,877)
Net cash provided by (used in) investing
activities 16,200,868 (71,838,811)
Cash flows from financing activities
Net increase in deposits 3,846,974 10,595,211
Net increase in short-term borrowings 25,403,242 19,438,529
Proceeds from issuance increase of
long-term debt 47,500,000 61,846,992
Repayment on long-term debt
Repayment on other borrowings (897,937)
Redemption of common stock (18,000) (34,661)
Patronage dividends paid (4,341,889) (4,056,132)
Net cash provided by financing activities 72,390,327 86,892,002
Increase in cash and cash equivalents 3,558,777 2,202,573
Cash and cash equivalents, beginning of year 21,289,376 12,546,834
Cash and cash equivalents, end of period $24,848,153 $14,749,407
NATIONAL COOPERATIVE BANK
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Supplemental disclosures of cash flows information:
For the nine months ended September 30, 1996 1995
Unrealized (loss) gain on investment
available-for-sale $ (510,406) $ 1,287,339
Interest paid 20,627,561 15,800,340
Income taxes paid 730,924 539,932
Loans charged off 528,145 559,382
NATIONAL COOPERATIVE BANK
CONDENSED NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
The accompanying financial statements have been prepared without audit
and reflect all adjustments (consisting only of normal recurring adjustments)
which were, in the opinion of management, necessary to a fair statement of
the results of the interim period presented. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted. Accordingly, these condensed financial statements should be read
in conjunction with the financial statements and the notes thereto included
in NCB's most current annual report. The results of operations for the
interim periods are not necessarily indicative of the results of the entire
year.
1. Cash, Cash Equivalents and Investment Securities
As of September 30, 1996, NCB's portfolio of investment securities, cash
and cash equivalents had an average adjusted maturity of 1853 days with
interest rates in those portfolios varying from 5.25% to 8.50%.
Cash and Investment Investments
Cash Available- Held-to-
Equivalents for-Sale Maturity
Cash $ 5,692,940 $ $
Federal funds 2,030,000
Money market securities 16,155,690
Mutual funds 969,523 2,137,933
Certificates of deposit 299,000
Mortgage-backed securities 2,746,425
Corporate bonds 10,263,749
U.S. Treasury and
Agency obligations 17,471,188
$24,848,153 $29,872,870 $ 3,045,425
At September 30,1996, the investments in the available-for-sale portfolio
were recorded at aggregate fair value. Restricted cash of $8,348,703 is held
by a trustee for the benefit of certificate holders in the event of loss on
certain loans sold of $37,300,000 and $92,623,000 in 1993 and 1992,
respectively. The restricted cash will become available to NCB I, Inc., as
the principal balance of the respective loans decreases. The loans sold have
original maturities of ten to fifteen years.
2. Loans and Lease Financing
Loans and leases outstanding by category at September 30, 1996 were:
Commercial loans $337,618,144
Lease financing 12,880,496
Real estate loans
Residential 316,822,674
Construction 442,426
Commercial 8,823,637
$676,587,377
At September 30, 1996 and December 31, 1995 real estate loans held for sale
were $131.8 million and $38.6 million, respectively.
3. Impaired Assets
Loans that became impaired after January 1, 1995 totaled $1,979,308 and
$1,645,665 at September 30, 1996 and 1995, respectively. The 1996 impaired
loans are comprised of nonaccrual loans and a restructured loan totaling
$1,282,100 and $697,208, respectively. The 1995 impaired loans are comprised
of nonaccrual loans and a restructured loan totaling $932,197 and $713,468,
respectively. A specific allowance of $244,000 and $250,000 was set aside for
these loans at September 30, 1996 and 1995, respectively, as management's
best estimate of their fair value is less than the recorded investment in
the loans. During 1996 and 1995, the interest collected on the nonaccrual
loans was applied to reduce the outstanding principal. Interest earned on
the restructured loan totalled $40,271 and $40,035 during the nine months
ended September 30, 1996 and 1995, respectively.
At September 30, 1996 there were no commitments to lend additional funds to
borrowers whose loans are non-performing.
At September 30, 1996 and 1995, NCB had real estate acquired through
foreclosure of $518,563 and $1,314,204, respectively, which is classified
as other assets.
4. Allowance for Loan Losses
The following is a summary of the activity in the allowance for loan losses
during the nine months ended September 30, 1996:
Balance at January 1, 1996 $14,554,240
Provision for loan losses 950,000
Charge-offs (528,145)
Recoveries of loans previously charged off 113,730
Balance at September 30, 1996 $15,089,825
The allowance for loan losses as a percentage of average loans and lease
financing at September 30, 1996 was 2.5%.
5. Mortgage Servicing Rights
As of January 1, 1996, NCB adopted Statement of Financial Accounting
Standards No. 122, "Accounting for Mortgage Servicing Rights". The impact
of the implementation on its financial condition and results of operation
was immaterial.
NATIONAL COOPERATIVE BANK
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
SUMMARY
NCB's net income for the nine months ended September 30, 1996 was $10.1
million. This was a 68.3% or $4.1 million increase compared with the nine
months ended September 30, 1995. The variance resulted from increases in
net interest income and in non-interest income of $2.2 million and $3.8
million, respectively. These were, however, partially offset by increases
in non-interest expenses and the provision for loan losses in the total
amount of $1.8 million.
Total assets were $770.5 million at September 30, 1996, representing growth
of more than 12% from $684.5 million at December 31, 1995. This growth
resulted from the large volume of loans originated for sale during the third
quarter.
The return on average total assets was 1.89% for the nine months of 1996
compared with 1.36% for the same period in 1995. The return on average
equity for the nine months of 1996 and 1995 was 11.16% and 6.94%,
respectively.
NET INTEREST INCOME
Net interest income increased 14.0% or $2.2 million for the nine months
ended September 30, 1996 compared with the same period a year ago. As
shown on Table 1, the net yield on interest earning assets dropped 19 basis
points to 3.53% from 3.72 % for the nine months ended September 30, 1995.
As shown on Table 2 however, there was an increase in net interest income
related to volume of $1.7 million and an increase related to changes in
interest rates of $491 thousand.
For the three months ending September 30,1996, net interest income
increased $799 thousand from the same period in 1995. The net yield for the
period decreased to 3.56% from 3.60%. As shown on Table 2A however, there
were increases in net interest income related to volume and interest rates
of $487 thousand and $312 thousand, respectively.
For the nine months ended September 30,1996, interest income went up $5.6
million to $43.2 million. The average rate on interest earning assets
decreased to 8.52% during the nine months ended September 30, 1996 compared
with 8.90% in the same period in 1995. The increase in interest income was
due to a higher average balance of the assets for the time period. As shown
on Table 2, interest income increased $7.3 million due to increased volume
but decreased $1.7 million due to the drop in interest rates.
Interest income increased $1.8 million to $14.8 million for the three
months ended September 30, 1996 compared with $13 million for the prior year.
The average rate on interest earning assets decreased to 8.59% during the
three months ended September 30, 1996 compared with 8.83% in the same period
in 1995. As shown on Table 2A, interest income increased $2.1 million due to
increased volume but decreased $405 thousand due to the decreasing rate
environment.
Interest expense increased $3.5 million to $25.3 million for the nine
months ended September 30, 1996 compared with $21.8 million for the same
period in 1995. The average rate on interest bearing liabilities decreased
to 5.94% compared with 6.40%. As shown on Table 2, a $5.6 million increase
in interest expense was volume related while a $2.1 million decrease was due
to declining interest rates.
For the three month period ended September 30, 1966, interest expense
increased $929 thousand to $8.6 million. The average rate on interest
bearing liablities dropped to 5.93% compared with 6.39% in the same period
in 1995. As shown on Table 2A, an increase of $1.6 million in interest
expense was volume related which was partially offset by $717 thousand due
to a decrease in rates.
NON-INTEREST INCOME
Non-interest income for the nine months ended September 30, 1996 of $10.4
million increased 57.6% or $3.8 million from $6.6 million for the same period
last year. The increase was primarily due to the fees and gain on sale of
real estate loans which totaled $4.7 million in the nine month period of 1996
compared with $2.6 million in the same period in 1995. Servicing fees and
excess yield income went up due to an increase in the servicing portfolio.
For the three month period ended September 30, non-interest income
increased $200 thousand from $1.9 million at September 30,1995 to $2.1
million for the same period in the current year. The increase was related to
the timing of real estate loan sales during the first nine months of 1996.
NON-INTEREST EXPENSES
Non-interest expenses for the nine months ended September 30, 1996
increased 12.2% to $16.5 million from $14.7 million for the nine months
ended September 30, 1995. Salaries and benefits, the largest component of
non-interest expenses, increased 12.7% or $900 thousand due to a higher
employee base at the start of 1996 and also to higher bonus accruals as
compared with 1995. Non-interest expense, excluding the voluntary
contribution to NCB Development Corporation, decreased slightly to 2.27%
as a percentage of average assets for the nine months ended September 30,
1996 from 2.44% for the nine months ended September 30,1995.
For the three months ended September 30, 1996, non-interest expenses
increased $1.3 million or 26.5% to $6.2 million from $4.9 million for the
same period in 1995. Compensation and employee benefits increased $387
thousand due to the timing of new hires and higher commissions paid to loan
officers based on increased loan originations. Occupancy and equipment
increased $543 thousand due primarily to depreciation and maintenance
related to equipment and software purchases during 1996. Finally, other
expenses increased $516 thousand, $456 thousand of which was related to
the one-time assessment of NCB Savings Bank, FSB to capitalize the Savings
Association Insurance Fund. These increases were offset by decreases of
$156 thousand in contractual services and travel and entertainment.
Table 1
Rate Related Assets and Liabilities
(dollars in thousands)
Nine Months Ended September 30,
ASSETS 1996 1995
Average Income/ Yields/ Average Income/ Yields/
Balance Expense Rates Balance Expense Rates
Interest earning assets
Real estate loans $287,824 $19,733 9.14% $264,823 $17,972 9.05%
Commercial loans
and leases 327,740 20,552 8.36% 247,687 16,901 9.10%
Total loans and leases 615,564 40,285 8.73% 512,510 34,873 9.07%
Trading, investment sec.,
cash equivalents and
other earning assets 59,857 2,871 6.40% 49,813 2,648 7.09%
Total interest earning
assets 675,421 43,156 8.52% 562,323 37,521 8.90%
Allowance for loan
losses (14,863) (13,111)
Non-interest earning assets
Cash 3,541 5,022
Other assets 46,077 32,757
Total non-interest earning
assets 49,618 37,779
Total assets $710,176 $586,991
LIABILITIES AND MEMBERS' EQUITY
Interest bearing liabilities
Subordinated Class A
notes $182,970 7,084 5.16% $182,912 8,416 6.13%
Notes payable 303,25 15,178 6.67% 202,847 10,880 7.15%
Deposits 81,606 3,030 4.95% 68,498 2,521 4.91%
Total interest bearing
liabilities 567,831 25,292 5.94% 454,257 21,817 6.40%
Other liabilities 21,310 16,952
Members' equity 121,035 115,782
Total liabilities and
members' equity $710,176 $586,991
Net interest earning
assets $107,590 $108,066
Net interest revenues
and spread $17,864 2.58% $ 15,704 2.50%
Net yield on
interest earning assets 3.53% 3.72%
Table 1A
Rate Related Assets and Liabilities
(dollars in thousands)
Three Months Ended September 30,
ASSETS 1996 1995
Average Income/ Yields/ Average Income/ Yields/
Balance Expense Rates Balance Expense Rates
Interest earning assets
Real estate loans $302,579 $ 6,968 9.21% $278,202 $ 6,301 9.06%
Commercial loans
and leases 334,263 6,795 8.13% 260,456 5,936 9.12%
Total loans and leases 636,842 13,763 8.64% 538,658 12,237 9.09%
Trading, investment sec.,
cash equivalents and
other earning assets 50,058 988 7.89% 51,255 783 6.11%
Total interest earning
assets 686,900 14,751 8.59% 589,913 13,020 8.83%
Allowance for loan
losses (15,037) (13,365)
Non-interest earning assets
Cash 4,382 4,266
Other assets 51,567 36,008
Total non-interest earning
assets 55,949 40,274
Total assets $727,812 $616,822
LIABILITIES AND MEMBERS' EQUITY
Interest bearing liabilities
Subordinated Class A
notes $182,934 2,394 5.23% $182,915 2,841 6.21%
Notes payable 318,134 5,257 6.61% 228,556 3,981 6.97%
Deposits 81,804 994 4.86% 71,357 893 5.01%
Total interest bearing
liabilities 582,872 8,645 5.93% 482,828 7,715 6.39%
Other liabilities 21,806 16,964
Members' equity 123,134 117,031
Total liabilities and
members' equity $727,812 $616,823
Net interest earning
assets $104,028 $107,085
Net interest revenues
and spread $ 6,106 2.66% $ 5,305 2.44%
Net yield on
interest earning assets 3.56% 3.60%
Table 2
Change in Net Interest Income
(dollars in thousands)
For the nine months ended September 30,
1996 Compared 1995
Increase (decrease) due to changes in:
Average Average
Volume* Yield Net**
Interest Income
Cash equivalents and
investment securities $ 499 $ (276) $ 223
Commercial loans and leases 4,024 (1,444) 2,580
Real estate loans 2,751 79 2,830
Total interest income 7,274 (1,641) 5,633
Interest Expense
Deposits 487 22 509
Notes payable 5,118 (820) 4,298
Subordinated Class A notes 3 (1,334) (1,331)
Total interest expense 5,608 (2,132) 3,476
Net interest income $1,666 $ 491 $2,157
* Average monthly balances
** Changes in interest income and interest expense due to changes in rate
and volume have been allocated to "change in average volume" and
"change in average rate" in proportion to the absolute dollar amounts
in each.
Table 2A
Change in Net Interest Income
(dollars in thousands)
For the three months ended September 30,
1996 Compared 1995
Increase (decrease) due to changes in:
Average Average
Volume* Yield Net**
Interest Income
Cash equivalents and
investment securities $ (19) $ 223 $ 204
Commercial loans and leases 1,183 (690) 493
Real estate loans 969 62 1,031
Total interest income 2,133 (405) 1,728
Interest Expense
Deposits 128 (27) 101
Notes payable 1,518 (242) 1,276
Subordinated Class A notes 0 (448) (448)
Total interest expense 1,646 (717) 929
Net interest income $ 487 $ 312 $ 799
* Average monthly balances
** Changes in interest income and interest expense due to changes in rate
and volume have been allocated to "change in average volume" and
"change in average rate" in proportion to the absolute dollar amounts
in each.
PROVISION FOR INCOME TAXES
The federal income tax provision is determined on the basis of non-member
income generated by NCB Savings Bank, FSB and reserves set aside for the
retirement of Class A notes and dividends on Class C stock. NCB's
subsidiaries are also subject to varying levels of state taxation. The
federal income tax provision for the nine months ended September 30, 1996
was $608 thousand compared with the prior year's provision of $624 thousand.
CASH, CASH EQUIVALENTS AND INVESTMENT SECURITIES
Cash, cash equivalents and investment securities at September 30, 1996
increased $4.2 million or 6.8% from $61.9 million at year-end 1995. As a
percentage of earning assets, cash, cash equivalents and investment
securities decreased to 8.9% at September 30, 1996 from 9.4% at
December 31, 1995.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses at September 30, 1996 increased 3.4% to $15.1
million from $14.6 million at December 31, 1995. The allowance during the
period was impacted by loans charged off, net of recoveries of loans
previously charged off, amounting to $414 thousand and the loan loss
provision of $950 thousand. NCB's provision for loan losses as a percentage
of average loans and leases outstanding decreased to .1% at September 30,
1996 compared with .4% at year-end 1995. The decrease is primarily due to
an increase in loans and leases outstanding during the period. Management
considers the current allowance to be adequate to absorb known and inherent
risks in the loan portfolio.
The loan loss allowance as a percentage of average loans and leases has
remained flat at 2.5%.
As shown in Table 3, total nonperforming assets (renegotiated and
non-accruing loans and real estate owned) decreased from $7.2 million at
December 31, 1995 to $5.9 million at September 30, 1996. This was the
result of the repayment of one loan and the sale of a real estate owned
property. Nonperforming assets as a percentage of loans and leases
outstanding plus real estate owned were .96% at September 30, 1996 compared
with 1.2% at year-end 1995. The allowance for loan losses as a percentage
of nonperforming assets increased to 255.1% at September 30,1996 from 202.7%
at December 31, 1995.
TABLE 3
Nonperforming assets
(dollars in thousands)
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
1996 1996 1996 1995 1995
Real estate owned $ 518 $ 547 $1,621 $1,397 $1,314
Non-accruing $1,282 $1,370 $1,762 $1,741 $ 932
Restructured $4,115 $4,145 $4,124 $4,041 $3,960
INTEREST BEARING LIABILITIES
Interest bearing liabilities
(dollars in thousands)
9/30/96 12/31/95 % Change
Deposits $ 81,947 $ 78,100 4.9%
Lines of credit 157,998 132,500 19.2%
Term debt 202,079 154,688 30.7%
Class A notes 182,689 183,014 0.0%
Total $624,713 $548,302 13.9%
Interest bearing liabilities increased by 13.9% to $624.7 million at
September 30, 1996 from $548.3 million at December 31, 1995.
For the first nine months of 1996, deposits at NCB Saving Bank, FSB grew
4.92% to $81.9 million. The growth was attributable to local and national
deposit accounts and deposits from cooperative customers. Average maturity
of the certificates of deposits is 16.5 months. Funds generated by the
increased deposit activity were used to originate single-family loans and
increase liquidity.
Total short term borrowings and intermediate-term notes increased 25.4%
from year-end 1995 to September 30, 1996. Proceeds were used to fund growth
in real estate loans available for sale. Included in these borrowings are
NCB's short-term borrowings from its cooperative customers which have an
outstanding balance of $12.5 million at September 30, 1996.
SIGNATURE
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.
NATIONAL CONSUMER COOPERATIVE BANK
Date:
By: /s/ Richard L. Reed
Richard L. Reed,
Managing Director,
Chief Financial Officer
By: /s/ Marietta J. Orcino
Marietta J. Orcino
Vice President,
Tax & Regulatory Compliance
and an authorized signature
<DOUCMENT>
[TYPE] EX-10.24
[TEXT]
Exhibit 10.24
AMENDMENT NO. 3 TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
AGREEMENT, made as of the 30th day of May, 1996, by and
among:
NATIONAL CONSUMER COOPERATIVE BANK, a corporation chartered
by Act of Congress of the United States which conducts business
under the trade name National Cooperative Bank (the "Borrower");
The Banks which have executed this Agreement (individually,
a "Bank" and, collectively, the "Banks"); and
FLEET BANK, N.A. (formerly NatWest Bank N.A.), as Agent for
the Banks (in such capacity, together with its successors in such
capacity, the "Agent");
W I T N E S S E T H:
WHEREAS:
(A) The Borrower, the Agent and the banks signatory
thereto entered into a certain Second Amended and Restated Loan
Agreement dated as of December 15, 1993, which was amended
pursuant to (i) Amendment No. 1 to Second Amended and Restated
Loan Agreement dated as of December 12, 1994, and (ii) Amendment
No. 2 to Second Amended and Restated Loan Agreement dated as of
December 11, 1995 (as so amended, the "Original Loan Agreement";
the Original Loan Agreement, as amended hereby, and as it may
hereafter be further amended, modified or supplemented, is
hereinafter referred as the "Loan Agreement");
(B) The Borrower wishes to amend the Original Loan
Agreement to, among other things, (i) extend the A Commitment
Termination Date to May 28, 1999, and (ii) extend the B
Commitment Termination Date to May 28, 1997, and the Banks and
the Agent are willing to amend and supplement the Original Loan
Agreement on the terms and conditions hereinafter set forth; and
(C) All capitalized terms used herein which are not other-
wise defined herein shall have the respective meanings ascribed
thereto in the Original Loan Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
Article 1. Amendments to Original Loan Agreement;
Third Substituted Notes.
Section 1.1 The Original Loan Agreement is hereby
amended as follows:
(a) The definition of "A Commitment Termination
Date" appearing in Article 1 is amended by deleting the date "May
30, 1998" and substituting therefor the date "May 28, 1999".
(b) The definition of "B Commitment Termination
Date" appearing in Article 1 is amended by deleting the date "May
30, 1996" and substituting therefor the date "May 28, 1997".
(c) Section 2.13 is deleted in its entirety and
there is substituted therefor the following:
"(a) The A Loans made by each Bank shall be
evidenced by a single promissory note of the Borrower (each,
a "Third Substituted A Note" and, collectively, the "Third
Substituted A Notes") in substantially the form of Exhibit
A-1 annexed to Amendment No. 3 to Second Amended and
Restated Loan Agreement dated as of May 30, 1996 by and
among the Borrower, the banks signatory thereto and the
Agent ("Amendment No. 3"). Each Third Substituted A Note
shall be dated the date of Amendment No. 3, shall be payable
to the order of such Bank in a principal amount equal to
such Bank's A Commitment as in effect on the date of
Amendment No. 3 and shall otherwise be duly completed. All
A Loans made by each Bank hereunder and all payments and
prepayments made on account of the principal thereof, and
all conversions of such A Loans shall be recorded by such
Bank on the schedule attached to the relevant A Note
(provided that any failure by such Bank to make any such
endorsement shall not affect the obligations of the Borrower
hereunder or under such A Note in respect of such A Loans).
(b) The B Loans made by each Bank shall be
evidenced by a single promissory note of the Borrower (each,
a "Third Substituted B Note" and, collectively, the "Third
Substituted B Notes") in substantially the form of Exhibit
A-2 annexed to Amendment No. 3. Each Third Substituted B
Note shall be dated the date of Amendment No. 3, shall be
payable to the order of such Bank in a principal amount
equal to such Bank's B Commitment as in effect on the date
of Amendment No. 3 and shall otherwise be duly completed.
All B Loans made by each Bank hereunder and all payments and
prepayments made on account of the principal thereof, and
all conversions of such B Loans shall be recorded by such
Bank on the schedule attached to the relevant B Note
(provided that any failure by such Bank to make any such
endorsement shall not affect the obligations of the Borrower
hereunder or under such B Note in respect of such B Loans).
(c) The Swing Line Loans made by the Swing
Line Lender shall be evidenced by a single promissory note
of the Borrower (the "Third Substituted Swing Line Note")
substantially in the form of Exhibit A-3 annexed to
Amendment No. 3. The Third Substituted Swing Line Note
shall be dated the date of Amendment No. 3, shall be payable
to the order of the Swing Line Lender in a principal amount
equal to the Swing Line Loan Commitment and shall be
otherwise duly completed. All Swing Line Loans made by the
Swing Line Lender hereunder and all payments and prepayments
on account of the principal thereof shall be recorded by the
Swing Line Lender on the schedule attached to the Third
Substituted Swing Line Note (provided, that any failure by
the Swing Line Lender to make such endorsement shall not
affect the obligations of the Borrower hereunder or under
the Swing Line Note)."
Section 1.2 Notwithstanding anything to the contrary
contained in the Loan Agreement, the Agent and the Banks consent
to the execution, delivery and performance by the Borrower of the
Memorandum of Agreement by and between the Borrower and the
Department of Treasury, an executive department of the United
States Government, substantially in the form of Exhibit 1 annexed
hereto, in order to create a repayment schedule for the Class A
Notes which will provide for the full repayment of the Class A
Notes no later than December 31, 2020 in accordance with the
terms of the Bank Act.
Section 1.3 In order to evidence the Loans and the
Swing Line Loan, as amended hereby, the Borrower shall execute
and deliver to each Bank, as the case may be, simultaneously with
the execution and delivery hereof, promissory notes payable to
the order of such Bank in substantially the form of Exhibits A-1,
A-2 and A-3 annexed hereto (hereinafter referred to individually
as a "Third Substituted Note" and collectively as the "Third
Substituted Notes"). Each of the Banks shall, upon the execution
and delivery by the Borrower of its applicable Third Substituted
Note as herein provided, mark the Second Substituted Notes
delivered to it in connection with Amendment No. 2 "Replaced by
Third Substituted Note" and return them to the Borrower.
Section 1.4 (a) All references in the Original Loan
Agreement or any other Loan Document to the "Loan(s)", the "A
Note(s)", the "B Note(s)", the "Swing Line Note", the "Note(s)"
and the "Loan Documents" shall be deemed to refer respectively,
to the Loan(s) as amended hereby, the Third Substituted A
Note(s), the Third Substituted B Note(s), the Third Substituted
Swing Line Note, the Third Substituted Note(s) and the Loan
Documents as defined in the Original Loan Agreement together
with, and as amended by, this Amendment No. 3, the Third
Substituted Notes and all agreements, documents and instruments
delivered pursuant thereto or in connection therewith.
(b) All references in the Original Loan
Agreement and the other Loan Documents to the "Loan Agreement",
and also in the case of the Original Loan Agreement to "this
Agreement", shall be deemed to refer to the Original Loan
Agreement, as amended hereby.
Section 1.5 The Original Loan Agreement and the other
Loan Documents shall each be deemed amended and supplemented
hereby to the extent necessary, if any, to give effect to the
provisions of this Agreement.
Article 2. Representations and Warranties.
The Borrower hereby confirms, reaffirms and restates to
each of the Banks and the Agent all of the representations and
warranties set forth in Article 3 of the Original Loan Agreement
as if such representations and warranties were made as of the
date hereof, except for changes in the ordinary course of
business which, either singly or in the aggregate, are not
materially adverse to the business or financial condition of the
Borrower.
Article 3. Conditions to Effectiveness of this Agreement.
This Amendment No. 3 to Second Amended and Restated
Loan Agreement shall become effective on the date of the
fulfillment (to the satisfaction of the Agent) of the following
conditions precedent:
(a) This Amendment No. 3 shall have been executed
and delivered to the Agent by a duly authorized representative of
the Borrower, the Agent and each Bank.
(b) The Borrower shall have executed and
delivered to each Bank its Third Substituted A Note and Third
Substituted B Note and with respect to the Swing Line Lender, the
Third Substituted Swing Line Note.
(c) The Agent shall have received a Compliance
Certificate from the Borrower dated the date hereof and the
matters certified therein, including, without limitation, that
after giving effect to the terms and conditions of this Amendment
No. 3, no Default or Event of Default shall exist, shall be true.
(d) Shea & Gardner, counsel to the Borrower,
shall have delivered its legal opinion to the Agent, in form and
substance satisfactory to the Agent and its counsel.
(e) The Agent shall have received copies of the
following:
(i) All corporate action taken by the
Borrower to authorize the execution, delivery and performance of
this Amendment No. 3, the Third Substituted Notes and the trans-
actions contemplated hereby, certified by its secretary;
(ii) A certificate from the secretary of the
Borrower to the effect that the By-laws of the Borrower delivered
to the Agent pursuant to the Original Loan Agreement have not
been amended since the date of such delivery and that such
document is in full force and effect and is true and correct as
of the date hereof; and
(iii) An incumbency certificate (with
specimen signatures) with respect to the Borrower.
(f) All legal matters incident hereto shall be
satisfactory to the Agent and its counsel.
Article 4. Miscellaneous.
Section 4.1 Article 10 of the Original Loan Agreement.
The miscellaneous provisions under Article 10 of the Original
Loan Agreement, together with the definition of all terms used
therein, and all other sections of the Original Loan Agreement to
which Article 10 refers are hereby incorporated by reference as
if the provisions thereof were set forth in full herein, except
that (i) the terms "Loan Agreement", "Note(s)" and "Loan", shall
be deemed to refer, respectively, to the Original Loan Agreement,
as amended hereby, the Third Substituted Note(s) and the Loans,
as amended hereby; (ii) the term "this Agreement" shall be deemed
to refer to this Agreement; and (iii) the terms "hereunder" and
"hereto" shall be deemed to refer to this Agreement.
Section 4.2 Continued Effectiveness. Except as
amended hereby, the Original Loan Agreement and the other Loan
Documents are hereby ratified and confirmed in all respects and
shall remain in full force and effect in accordance with their
respective terms.
Section 4.3 Counterparts. This Agreement may be
executed by the parties hereto in one or more counterparts, each
of which shall be an original and all of which shall constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first above written.
NATIONAL CONSUMER COOPERATIVE BANK,
D/B/A NATIONAL COOPERATIVE BANK
By:_________________________________
Title
A Commitment FLEET BANK, N.A. (formerly
NatWest Bank N.A.), as Agent
and as a Bank, and as a
$24,000,000 Swing Line Lender
By:____________________________
Title
B Commitment Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans, Fed
$16,000,000 Funds Loans and Address for
notices:
175 Water Street
New York, New York 10038
Attn: Thomas J. Levy
Vice President
Telephone No.: 212-703-1785
Telecopier No.: 212-703-1724
A Commitment CREDIT SUISSE
$18,000,000
By:________________________________
Title
B Commitment By: _______________________________
Title
$12,000,000
Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans, Fed
Funds Loans and address for
notices:
Credit Suisse
12 East 49th Street
New York, New York 10017
Attn: Yvette McQueen
Administrative Assistant
Telephone No.: 212-238-5362
Telecopier No.: 212-238-5389
Telex No.: 420-149
A Commitment COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. ("Rabobank
$18,000,000 Nederland"), New York Branch
By: _______________________________
Title
By: _______________________________
Title
B Commitment Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans, Fed
$12,000,000 Funds Loans and address for
notices:
245 Park Avenue
New York, New York 10167-0062
Attn: Corporate Services
Telephone No.: 212-916-7979
Telecopier No.: 212-916-7837
Telex No.: 42 4337
A Commitment COMERICA BANK
$19,500,000
By:________________________________
Title
B Commitment Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans, and
$13,000,000 Fed Funds Loans:
Comerica Bank
500 Woodward Avenue
Mail Code 3280
Detroit, Michigan 48226
Attn.: Tammy Gurne
Account Officer
Telephone No.: 313-222-7806
Telecopier No.: 313-222-3330
A Commitment PNC BANK, NATIONAL ASSOCIATION
$15,000,000
By:________________________________
Title
B Commitment Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans, Fed
$10,000,000 Funds Loans and address for
notices:
PNC Bank, National Association
100 South Broad Street
Philadelphia, Pennsylvania 19110
Attn.: Mark W. Biedermann
Vice President
Telephone No.: 215-585-5559
Telecopier No.: 215-585-5972
Telex No.: 845 270
A Commitment SIGNET BANK
$15,000,000
By:________________________________
Title
B Commitment Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans and
$10,000,000 Fed Funds Loans:
Signet Bank
7799 Leesburg Pike
Falls Church, Virginia 22043
Address for Notices:
Signet Bank
1350 Connecticut Avenue NW
Suite 1000
Washington, D.C. 20036-1701
Attn.: Linwood White
Senior Vice President
Telephone No.: 202-331-5453
Telecopier No.: 202-872-9250
Telex No.: 82-724-0507
A Commitment FIRST NATIONAL BANK OF MARYLAND
$10,500,000
By:_______________________________
Title
B Commitment Lending Office for Prime Rate
Loans, LIBOR Loans, CD Loans and
$7,000,000 Fed Funds Loans:
First National Bank of Maryland
Internal I.D. BANC 101-716
18th Floor
25 South Charles Street
Baltimore, Maryland 21201
or
P.O. Box 101-710
Baltimore, Maryland 21203
Attn: Steven A. Schramm
Assistant Vice President
Telephone No.: 410-244-4045
Telecopier No.: 410-244-4234
Telex No.: 684-9150 FNBUW
EXHIBITS
A-1 Form of Third Substituted A Note
A-2 Form of Third Substituted B Note
A-3 Form of Third Substituted Swing Line Note
1. Form of Memorandum of Agreement
EXHIBIT A-1
TO AMENDMENT NO. 3
TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
BY AND AMONG
NATIONAL CONSUMER COOPERATIVE BANK
AND
CERTAIN BANKS NAMED THEREIN
AND
FLEET BANK, N.A., AS AGENT FOR THE BANKS
FORM OF THIRD SUBSTITUTED A NOTE
[A Commitment Amount] Due May 28, 1999
FOR VALUE RECEIVED, NATIONAL CONSUMER COOPERATIVE BANK D/B/A
NATIONAL COOPERATIVE BANK, (the "Borrower"), hereby promises to
pay to the order of [ ] (the "Bank") by payment to the
Agent for the account of the Bank the principal sum of [amount of
A Commitment] ($__________) Dollars (or such lesser amount as
shall equal the aggregate unpaid principal amount of the A Loans
made by the Bank under the Loan Agreement hereinafter defined,
shown on the schedule annexed hereto and any continuation
thereof), in lawful money of the United States of America and in
immediately available funds on the date or dates determined as
provided in the Loan Agreement but in no event later than May 28,
1999.
The Borrower further promises to pay to the order of the
Bank by payment to the Agent for the account of the Bank interest
on the unpaid principal amount of each Loan from the date such
Loan is made until paid in full, payable at such rates and at
such times as provided for in the Loan Agreement.
The Bank has been authorized by the Borrower to record on
the schedules annexed to this A Note (or on any continuation
thereof) the amount, type, due date and interest rate of each A
Loan made by the Bank under the Loan Agreement and the amount of
each payment or prepayment of principal and the amount of each
payment of interest of each such A Loan received by the Bank, it
being understood, however, that failure to make any such notation
shall not affect the rights of the Bank or the obligations of the
Borrower hereunder or under the Loan Agreement in respect of such
Loans. Such notations shall be deemed correct, absent manifest
error.
This A Note is one of the Notes referred to in the Second
Amended and Restated Loan Agreement dated as of December 15,
1993, as amended by (i) Amendment No. 1 to Second Amended and
Restated Loan Agreement dated as of December 12, 1994, (ii)
Amendment No. 2 to Second Amended and Restated Loan Agreement
dated as of December 11, 1995, and (iii) Amendment No. 3 to
Second Amended and Restated Loan Agreement dated as of May 30,
1996 (as so amended, the "Loan Agreement") among the Borrower,
the Banks and Fleet Bank, N.A., as Agent for the Banks and
evidences the A Loans made by the Bank thereunder. This A Note
supersedes and is given in substitution for the Second
Substituted A Note dated December 11, 1995 made by the Borrower
to the order of the Bank in the original principal amount of
$ but does not constitute a novation, extinguishment or
termination of the obligations evidenced thereby. Capitalized
terms used in this Note have the respective meanings assigned to
them in the Loan Agreement.
Upon the occurrence of an Event of Default under the Loan
Agreement, the principal hereof and accrued interest hereon shall
become, or may be declared to be, forthwith due and payable in
the manner, upon the conditions and with the effect provided in
the Loan Agreement.
The Borrower may at its option prepay all or any part of the
principal of this A Note before maturity upon and subject to the
terms provided in the Loan Agreement.
The Borrower agrees to pay costs of collection and reason-
able attorneys' fees in case default occurs in the payment of
this A Note.
Presentment for payment, notice of dishonor, protest and
notice of protest are hereby waived.
This A Note has been executed and delivered this 30th day of
May, 1996 in New York, New York, and shall be construed in
accordance with and governed by the internal laws of the State of
New York.
NATIONAL CONSUMER COOPERATIVE BANK
D/B/A NATIONAL COOPERATIVE BANK
By:________________________________
Title
SCHEDULE TO THIRD SUBSTITUTED A NOTE
MADE BY NATIONAL CONSUMER COOPERATIVE BANK
IN FAVOR OF _____________________
This Note evidences the Loans made under the within
described Agreement, in the principal amounts, of the types
(Prime Rate Loans, Fed Funds Loans, CD Loans or LIBOR Loans) and
on the dates set forth below, subject to the payments or prepay-
ments set forth below:
Prin. Interest Amt. of
Date Made Amt of Type of Due Date Rate on Payment or Balance Notation
/Converted Loan Loan of Loan Loan Prepayment Outs. made by
EXHIBIT A-2
TO AMENDMENT NO. 3
TO SECOND AMENDED AND RESTATED LOAN AGREEMENT
BY AND AMONG
NATIONAL CONSUMER COOPERATIVE BANK
AND
CERTAIN BANKS NAMED THEREIN
AND
FLEET BANK, N.A., AS AGENT FOR THE BANKS
FORM OF THIRD SUBSTITUTED B NOTE
[B Commitment Amount] Due May 28, 1997
FOR VALUE RECEIVED, NATIONAL CONSUMER COOPERATIVE BANK D/B/A
NATIONAL COOPERATIVE BANK (the "Borrower"), hereby promises to
pay to the order of [ ] (the "Bank") by payment to the
Agent for the account of the Bank the principal sum of [amount of
B Commitment] ($__________) Dollars (or such lesser amount as
shall equal the aggregate unpaid principal amount of the B Loans
made by the Bank under the Loan Agreement hereinafter defined,
shown on the schedule annexed hereto and any continuation
thereof), in lawful money of the United States of America and in
immediately available funds on the date or dates determined as
provided in the Loan Agreement but in no event later than May 28,
1997.
The Borrower further promises to pay to the order of the
Bank by payment to the Agent for the account of the Bank interest
on the unpaid principal amount of each Loan from the date such
Loan is made until paid in full, payable at such rates and at
such times as provided for in the Loan Agreement.
The Bank has been authorized by the Borrower to record on
the schedules annexed to this B Note (or on any continuation
thereof) the amount, type, due date and interest rate of each B
Loan made by the Bank under the Loan Agreement and the amount of
each payment or prepayment of principal and the amount of each
payment of interest of each such B Loan received by the Bank, it
being understood, however, that failure to make any such notation
shall not affect the rights of the Bank or the obligations of the
Borrower hereunder or under the Loan Agreement in respect of such
Loans. Such notations shall be deemed correct, absent manifest
error.
This B Note is one of the Notes referred to in the Second
Amended and Restated Loan Agreement dated as of December 15,
1993, as amended by (i) Amendment No. 1 to Second Amended and
Restated Loan Agreement dated as of December 12, 1994, (ii)
Amendment No. 2 to Second Amended and Restated Loan Agreement
dated as of December 11, 1995, and (iii) Amendment No. 3 to
Second Amended and Restated Loan Agreement dated as of May 30,
1996 (as so amended, the "Loan Agreement") among the Borrower,
the Banks, and Fleet Bank, N.A., as Agent for the Banks and
evidences the B Loans made by the Bank thereunder. This B Note
supersedes and is given in substitution for the Second
Substituted B Note dated December 11, 1995 made by the Borrower
to the order of the Bank in the original principal amount of
$ but does not constitute a novation, extinguishment or
termination of the obligations evidenced thereby. Capitalized
terms used in this Note have the respective meanings assigned to
them in the Loan Agreement.
Upon the occurrence of an Event of Default under the Loan
Agreement, the principal hereof and accrued interest hereon shall
become, or may be declared to be, forthwith due and payable in
the manner, upon the conditions and with the effect provided in
the Loan Agreement.
The Borrower may at its option prepay all or any part of the
principal of this B Note before maturity upon and subject to the
terms provided in the Loan Agreement.
The Borrower agrees to pay costs of collection and reason-
able attorneys' fees in case default occurs in the payment of
this B Note.
Presentment for payment, notice of dishonor, protest and
notice of protest are hereby waived.
This B Note has been executed and delivered this 30th day of
May, 1996 in New York, New York, and shall be construed in
accordance with and governed by the internal laws of the State of
New York.
NATIONAL CONSUMER COOPERATIVE BANK
D/B/A NATIONAL COOPERATIVE BANK
By:________________________________
Title
SCHEDULE TO THIRD SUBSTITUTED B NOTE
MADE BY NATIONAL CONSUMER COOPERATIVE BANK
IN FAVOR OF _____________________
This Note evidences the Loans made under the within
described Agreement, in the principal amounts, of the types
(Prime Rate Loans, Fed Funds Loans, CD Loans or LIBOR Loans) and
on the dates set forth below, subject to the payments or prepay-
ments set forth below:
Prin. Interest Amt of
Date Made Amt. of Type of Due Date Rate on Payment or Balance Notation
/Converted Loan Loan of Loan Loan Prepayment Outs. made by
EXHIBIT A-3
TO AMENDMENT NO. 3
TO THIRD AMENDED AND RESTATED LOAN AGREEMENT
BY AND AMONG
NATIONAL CONSUMER COOPERATIVE BANK
CERTAIN BANKS NAMED THEREIN
AND
FLEET BANK, N.A., AS AGENT FOR THE BANKS
FORM OF THIRD SUBSTITUTED SWING LINE NOTE
$10,000,000 Due May 28, 1997
FOR VALUE RECEIVED, NATIONAL CONSUMER COOPERATIVE BANK D/B/A
NATIONAL COOPERATIVE BANK (the "Borrower"), hereby promises to
pay to the order of FLEET BANK, N.A. (the "Bank") by payment to
the Bank of the principal sum of TEN MILLION DOLLARS
($10,000,000) (or such lesser amount as shall equal the aggregate
unpaid principal amount of the Swing Line Loans made by the Bank
under the Loan Agreement hereinafter defined, shown on the
schedule annexed hereto and any continuation thereof), in lawful
money of the United States of America and in immediately avail-
able funds on the date or dates determined as provided in the
Loan Agreement but in no event later than May 28, 1997.
The Borrower further promises to pay to the order of the
Bank by payment to the Bank interest on the unpaid principal
amount of each Swing Line Loan from the date such Swing Line Loan
is made until paid in full, payable at such rates and at such
times as provided for in the Loan Agreement.
The Bank has been authorized by the Borrower to record on
the schedules annexed to this Swing Line Note (or on any
continuation thereof) the amount, due date and interest rate of
each Swing Line Loan made by the Bank under the Loan Agreement
and the amount of each payment of principal and the amount of
each payment of interest of each such Swing Line Loan received by
the Bank, it being understood, however, that failure to make any
such notation shall not affect the rights of the Bank or the
obligations of the Borrower hereunder or under the Loan Agreement
in respect of such Swing Line Loans. Such notations shall be
deemed correct, absent manifest error.
This Swing Line Note is the Swing Line Note referred to in
the Second Amended and Restated Loan Agreement dated as of
December 15, 1993, as amended by (i) Amendment No. 1 to Second
Amended and Restated Loan Agreement dated as of December 12,
1994, (ii) Amendment No. 2 to Second Amended and Restated Loan
Agreement dated as of December 11, 1995, and (iii) Amendment No.
3 to Second Amended and Restated Loan Agreement dated as of May
30, 1996 (as so amended, the "Loan Agreement") among the
Borrower, the Banks and Fleet Bank, N.A., as Agent for the Banks
and evidences the Swing Line Loans made by the Bank thereunder.
Capitalized terms used in this Swing Line Note have the
respective meanings assigned to them in the Loan Agreement.
Upon the occurrence of an Event of Default, under the Loan
Agreement, the principal hereof and accrued interest hereon shall
become, or may be declared to be, forthwith due and payable in
the manner, upon the conditions and with the effect provided in
the Loan Agreement.
The Borrower agrees to pay costs of collection and reason-
able attorneys' fees in case default occurs in the payment of
this Swing Line Note.
Presentment for payment, notice of dishonor, protest and
notice of protest are hereby waived.
This Swing Line Note has been executed and delivered this
30th day of May, 1996 in New York, New York, and shall be
construed in accordance with and governed by the laws of the
State of New York.
NATIONAL CONSUMER COOPERATIVE BANK
D/B/A NATIONAL COOPERATIVE BANK
By:________________________________
Title
SCHEDULE TO THIRD SUBSTITUTED SWING LINE NOTE
MADE BY NATIONAL CONSUMER COOPERATIVE BANK
IN FAVOR OF FLEET BANK, N.A.
This Swing Line Note evidences the Swing Line Loans made
under the within described Agreement, in the principal amounts,
and on the dates set forth below, subject to the payments set
forth below:
Prin Interest
Amt of Due Date Rate on Amt of Balance Notation
Date Made Loan of Loan Loan Payment Outstanding made by