UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number: 000-21628
HAVEN BANCORP INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
11-315380
(I.R.S. Employer Identification No.)
93-22 JAMAICA AVENUE, WOODHAVEN, NEW YORK 11421
(Address of principal executive offices) (Zip Code)
(718) 847-7041
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. X Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
There were 4,320,760 shares of the Registrant's common stock
outstanding as of August 9, 1996.
HAVEN BANCORP, INC.
FORM 10-Q
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Financial Condition
as of June 30, 1996 and December 31, 1995 3
Consolidated Statements of Operations for the
Three Months and Six Months ended
June 30, 1996 and 1995 4
Consolidated Statement of Changes in
Stockholders' Equity for the Six Months
ended June 30, 1996 and 1995 5
Consolidated Statements of Cash Flows for the
Six months ended June 30, 1996 and 1995 6
Notes to Consolidated Financial Statements 7-13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13-34
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 34-35
Item 2. Changes in Securities 35
Item 3. Defaults Upon Senior Securities 35
Item 4. Submission of Matters to a Vote of Security
Holders 35
Item 5. Other Information 35
Item 6. Exhibits and Reports on Form 8-K 35
Signature Page
2
HAVEN BANCORP, INC.
Consolidated Statements of Financial Condition
(Dollars in thousands, except for share data)
(Unaudited)
June 30, December 31,
1996 1995
-------- ------------
ASSETS
Cash and due from banks $ 26,775 $ 29,790
Money market investments 8,316 9,064
Securities available for sale (note 2) 496,891 503,058
Loans held for sale 11,135 11,412
Debt securities held to maturity (estimated fair value of $96,488
and $126,811 in 1996 and 1995, respectively) (note 2) 98,290 127,796
Federal Home Loan Bank of NY stock, at cost 8,890 8,138
Mortgage-backed securities held to maturity (estimated fair value of
$199,751 and $189,551 in 1996 and 1995, respectively) (note 2) 205,114 190,714
Loans:
First mortgage loans 622,988 519,804
Cooperative apartment loans 9,557 10,187
Other loans 35,228 38,967
--------- ---------
Total loans 667,773 568,958
Less allowance for loan losses (9,939) (8,573)
--------- ---------
Loans, net 657,834 560,385
Premises and equipment, net 7,831 7,590
Accrued interest receivable 12,140 10,736
Real estate owned, net 2,347 2,033
Other assets 14,712 12,100
--------- ---------
Total assets $1,550,275 $1,472,816
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits 1,121,466 1,083,446
Borrowed funds 309,601 270,583
Mortgagors' escrow balances 3,925 3,227
Due to broker 5,793 5,000
Other liabilities 15,422 12,041
--------- ---------
Total liabilities 1,456,207 1,374,297
--------- ---------
Stockholders' Equity:
Preferred stock, $.01 par value, 2,000,000
shares authorized, none issued - -
Common stock, $.01 par value, 10,500,000 shares authorized,
4,959,375 issued; 4,320,060 and 4,511,457 shares
outstanding in 1996 and 1995, respectively 50 50
Additional paid-in capital 48,088 47,331
Retained earnings, substantially restricted 62,793 57,919
Unrealized (loss) gain on securities available for sale, net
of tax effect (2,573) 2,083
Treasury stock, at cost (639,315 and 447,918 shares in 1996
and 1995, respectively) (11,114) (6,023)
Unallocated common stock held by Bank's ESOP (2,024) (2,197)
Unearned common stock held by Bank's Recognition Plans and Trusts (406) (644)
Unearned Compensation (note 5) (746) -
--------- ---------
Total stockholders' equity 94,068 98,519
--------- ---------
Total liabilities and stockholders' equity $1,550,275 $1,472,816
========= =========
See accompanying notes to consolidated financial statements.
3
HAVEN BANCORP, INC.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1996 1995 1996 1995
---- ---- ---- ----
Interest income:
Mortgage loans $12,566 $10,252 $23,955 $20,065
Other loans 921 1,074 1,897 2,127
Mortgage-backed securities 9,884 8,754 20,042 16,944
Money market investments 44 96 99 189
Debt and equity securities 3,598 3,092 6,925 5,787
------ ------ ------ ------
Total interest income 27,013 23,268 52,918 45,112
------ ------ ------ ------
Interest expense:
Deposits:
Passbook accounts 2,351 2,553 4,685 5,238
NOW accounts 248 228 457 416
Money market accounts 479 316 935 481
Certificate accounts 8,008 7,337 15,713 13,887
Borrowings 3,915 2,764 7,777 5,097
------ ------ ------ ------
Total interest expense 15,001 13,198 29,567 25,119
------ ------ ------ ------
Net interest income before provision for loan losses 12,012 10,070 23,351 19,993
Provision for loan losses 1,125 700 1,775 1,300
------ ------ ------ ------
Net interest income after provision for loan losses 10,887 9,370 21,576 18,693
------ ------ ------ ------
Non-interest income:
Loan fees and servicing income 900 284 1,224 621
Savings/checking fees 801 695 1,573 1,361
Net (loss) gain on sales of interest-earning assets (45) - 99 -
Insurance annuity and mutual fund fees 800 557 1,492 1,084
Other 328 363 549 699
------ ------ ------ ------
Total non-interest income 2,784 1,899 4,937 3,765
------ ------ ------ ------
Non-interest expense:
Compensation and benefits 3,935 3,632 7,674 7,131
Occupancy and equipment 896 823 1,758 1,662
Real estate owned operations, net 234 295 304 834
Federal deposit insurance premiums 619 647 1,236 1,298
Other 2,331 2,354 4,488 4,494
------ ------ ------ ------
Total non-interest expense 8,015 7,751 15,460 15,419
------ ------ ------ ------
Income before income tax expense 5,656 3,518 11,053 7,039
Income tax expense 2,630 1,670 5,169 3,345
------ ------ ------ ------
Net income $3,026 $1,848 $5,884 $3,694
====== ====== ====== ======
Net income per common share: Primary $ 0.69 $ 0.41 $ 1.33 $ 0.82
====== ====== ====== ======
Fully diluted $ 0.69 $ 0.41 $ 1.32 $ 0.82
====== ====== ====== ======
See accompanying notes to consolidated financial statements.
4
HAVEN BANCORP, INC.
Consolidated Statements of Changes in Stockholders' Equity
Six months ended June 30, 1996 and 1995
(Unaudited)
Unrealized
Gain (Loss) Unallocated Unearned
Additional on Securities Common Common
Common Paid-In Retained Available Treasury Stock Held Stock Held Unearned
Stock Capital Earnings for Sale Stock by ESOP by RRP Compensation Total
------ ---------- -------- ------------- -------- ----------- ---------- ------------ -----
(In thousands)
Balance at December 31, 1995 $ 50 47,331 57,919 2,083 (6,023) (2,197) (644) - 98,519
Net income for the six months ended
June 30, 1996 - - 5,884 - - - - - 5,884
Dividends declared (note 4) - - (998) - - - - - (998)
Purchase of treasury stock
(225,537 shares) - - - - (5,516) - - - (5,516)
Stock options exercised, net of
tax effect (4,175 shares) - 82 (12) - 54 - - - 124
Treasury stock issued for deferred
compensation plans
(29,965 shares) (note 5) - 411 - - 371 - - (782) -
Change in unrealized gain (loss) on
securities available for sale, net
of tax effect - - - (4,656) - - - - (4,656)
Allocation of ESOP stock and
amortization of award of RRP
stock, net of tax effect - 284 - - - 173 238 - 695
Amortization of deferred compensation
plan - (20) - - - - - 36 16
---- ------ ------ ------ ------ ------ ----- ----- ------
Balance at June 30, 1996 50 48,088 62,793 (2,573) (11,114) (2,024) (406) (746) 94,068
==== ====== ====== ====== ====== ====== ===== ===== ======
Balance at December 31, 1994 50 46,495 50,331 (1,880) (5,093) (2,725) (943) - 86,235
Net income for the six months ended
June 30, 1995 - - 3,694 - - - - - 3,694
Purchase of treasury stock
(35,000 shares) - - - - (635) - - - (635)
Reissued Treasury Stock contributed to
RRP (9,918 shares) - 49 - - 119 - (168) - -
Stock options exercised (18,316 shares) - - (37) - 220 - - - 183
Change in unrealized gain (loss) on
securities available for sale, net
of tax effect - - - 1,657 - - - - 1,657
Allocation of ESOP stock and
amortization of award of RRP stock - 210 - - - 294 231 - 735
---- ------ ------ ------ ------ ------ ----- ----- ------
Balance at June 30, 1995 50 46,754 53,988 (223) (5,389) (2,431) (880) - 91,869
==== ====== ====== ====== ====== ====== ===== ===== ======
See accompanying notes to consolidated financial statements.
5
HAVEN BANCORP, INC.
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)
Six months ended
June 30,
------------------
1996 1995
---- ----
Net cash flows from operating activities:
Net income $ 5,884 $ 3,694
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Amortization of cost of stock benefit plans 711 735
Amortization of net deferred loan origination fees 66 (40)
Premiums and discounts on loans, mortgage-backed and debt securities 32 337
Provision for loan losses 1,775 1,300
Provision for losses on real estate owned 125 500
Deferred income taxes (5,319) 3,273
Net gain on sales of interest-earning assets (99) -
Depreciation and amortization 489 480
Increase in accrued interest receivable (1,404) (1,518)
Increase (decrease) in due to broker 793 (30,800)
Increase (decrease) in other liabilities 3,381 (1,206)
Increase (decrease) in other assets 2,707 (3,601)
------ ------
Net cash provided by (used in) operating activities 9,141 (26,846)
------ ------
Cash flows from investing activities:
Net increase in loans (98,913) (11,451)
Proceeds from disposition of assets (including REO) 1,800 5,629
Purchases of securities available for sale (218,819) (9,858)
Principal repayments and maturities on securities available for sale 49,219 945
Proceeds from sales of securities available for sale 166,317 -
Purchases of debt securities held to maturity (7,741) (53,130)
Principal repayments, maturities and calls on debt securities
held to maturity 36,511 18,700
Purchases of mortgage-backed securities held to maturity (31,124) (127,642)
Principal repayments on mortgage-backed securities held to maturity 17,852 27,102
Net decrease in premises and equipment 730 125
------ -------
Net cash used in investing activities (84,168) (149,580)
------ -------
Cash flows from financing activities:
Net increase in deposits 38,020 41,844
Net increase in borrowed funds 39,018 134,722
Increase (decrease) in mortgagors' escrow balances 698 (215)
Purchase of treasury stock (5,516) (635)
Payment of common stock dividends (998) -
Stock options exercised 42 183
------ -------
Net cash provided by financing activities 71,264 175,899
------ -------
Net decrease in cash and cash equivalents (3,763) (527)
Cash and cash equivalents at beginning of period 38,854 30,472
------ -------
Cash and cash equivalents at end of period $35,091 $ 29,945
====== =======
Supplemental information:
Cash paid during the period for:
Interest $28,511 $24,201
Additions to real estate owned 2,275 2,655
Securities purchased, not yet received 5,793 -
====== ======
See accompanying notes to consolidated financial statements.
6
HAVEN BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996 and 1995
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION. The accompanying unaudited
consolidated financial statements include the accounts of Haven
Bancorp, Inc. ("Haven Bancorp" or the "Company") and its wholly-
owned subsidiary, Columbia Federal Savings Bank ("Columbia Federal"
or the "Bank") and subsidiaries, as of June 30, 1996 and December
31, 1995 and for the three-month and six-month periods ended June
30, 1996 and 1995, respectively. Material intercompany accounts
and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management all
necessary adjustments, consisting only of normal recurring accruals
necessary for a fair presentation have been included. The results
of operations for the three-month and six-month periods ended June
30, 1996 are not necessarily indicative of the results that may be
expected for the entire fiscal year.
These consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
notes thereto included in the Company's Annual Report to
Stockholders for the fiscal year ended December 31, 1995.
NOTE 2 - DEBT, EQUITY AND MORTGAGE-BACKED SECURITIES ("MBSs").
Under Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities
("SFAS No. 115"), debt securities and MBSs which the Company has
the ability and the intent to hold until maturity, are carried at
cost adjusted for amortization of premiums and accretion of
discounts. Debt and equity securities and MBSs to be held for
indefinite periods of time and not intended to be held to maturity
or on a long-term basis are classified as available for sale
securities which are recorded at fair value, with unrealized gains
(losses) reported as a separate component of stockholders' equity,
net of taxes.
In November, 1995, the Financial Accounting Standards Board
("FASB") issued an implementation guide for SFAS No. 115. The
implementation guide provided guidance in the form of a question
and answer format and allowed an opportunity from mid-November 1995
7
to December 31, 1995 for companies to reclassify securities in the
held to maturity portfolio to securities in the available for sale
portfolio without tainting the remainder of the portfolio. In
connection with the implementation guide for SFAS No. 115, the
Company reclassified $41.9 million of debt securities and $405.3
million of MBSs previously classified as held to maturity to
securities available for sale.
SECURITIES AVAILABLE FOR SALE
The amortized cost and estimated fair values of securities
available for sale at June 30, 1996 are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(In thousands)
Debt and equity securities available for sale:
U.S. Government and Agency obligations $ 90,164 - (4,654) 85,510
FNMA Preferred Stock 19,065 - (170) 18,895
Corporate Bonds 6,000 4 - 6,004
------- ----- ------ -------
115,229 4 (4,824) 110,409
------- ----- ------ -------
MBSs available for sale:
GNMA Certificates 15,765 6 (345) 15,426
FNMA Certificates 54,604 940 (206) 55,338
FHLMC Certificates 88,986 1,354 (452) 89,888
CMOs and REMICS 227,071 548 (1,789) 225,830
------- ----- ------ -------
386,426 2,848 (2,792) 386,482
------- ----- ------ -------
Total $501,655 2,852 (7,616) 496,891
======= ===== ====== =======
The net unrealized loss on securities available for sale at June
30, 1996, was reported as a separate component of stockholders'
equity, in the amount of $2.6 million which is net of a tax effect
of $2.2 million.
DEBT SECURITIES HELD TO MATURITY
The amortized cost, gross unrealized gains and losses and estimated
fair values of debt securities held to maturity at June 30, 1996
are summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(In thousands)
U.S. Government and Agency obligations $ 52,960 27 (1,512) 51,475
Corporate debt securities 45,330 39 (356) 45,013
------- -- ------ -------
Total $ 98,290 66 (1,868) 96,488
======= == ====== =======
8
It is the Company's intent to hold these securities until maturity
and therefore the Company does not expect to realize the current
unrealized losses brought about by the current market environment.
MORTGAGE-BACKED SECURITIES HELD TO MATURITY
The amortized cost, gross unrealized gains and losses and estimated
fair values of MBSs held to maturity at June 30, 1996 are
summarized as follows:
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- ---------
(In thousands)
FHLMC Certificates $ 39,717 188 (961) 38,944
FNMA Certificates 74,017 95 (3,020) 71,092
CMOs and REMICs 91,380 161 (1,826) 89,715
------- ----- ------ -------
Total $205,114 444 (5,807) 199,751
======= ===== ====== =======
It is the Company's intent to hold these securities until maturity
and therefore the Company does not expect to realize the current
unrealized losses brought about by the current market environment.
NOTE 3 - STOCK PLANS. Changes in outstanding options for the
benefit of directors, officers and other key employees of the Bank
for the six months ended June 30, 1996 are as follows:
Weighted Average
Options Exercise Price
------- ----------------
Balance at December 31, 1995 480,463 $10.84
Granted (1) 158,735 25.65
Forfeited - -
Exercised (4,175) $10.00
------- -----
Balance at June 30, 1996 635,023 $14.55
======= =====
Shares exercisable at June 30, 1996 382,085 $10.24
======= =====
(1) During the second quarter, 152,850 options were granted to
9
directors and officers under the Haven Bancorp, Inc. 1996 Stock
Incentive Plan. The remaining 5,885 options were granted from the
1993 Incentive Stock Option Plan. All options vest over a three
year period beginning one year from the date of grant.
NOTE 4 - DIVIDENDS PAYABLE. On June 13, 1996, the Company's Board
of Directors approved a quarterly cash dividend of $0.15 per share,
payable on July 12, 1996, to shareholders of record as of June 27,
1996.
NOTE 5 - UNEARNED COMPENSATION. At the annual meeting of
stockholders on April 24, 1996, the stockholders approved the Haven
Bancorp, Inc. 1996 Stock Incentive Plan which provided 210,000
shares for the grant of options and restricted stock awards. On
April 24, 1996, 1,976 shares were granted to directors which vest
six months from the date of grant and 27,989 shares were granted to
officers and employees on May 23, 1996, which vest over a three
year period beginning one year from the date of grant. Such shares
were recorded as unearned compensation at their fair value on the
date of award, to be amortized to expense over the vesting period.
NOTE 6 - CONTINGENCIES. On February 6, 1995, Nationar, the entity
that provided check collection services for the Bank was seized by
the Superintendent of Banks of the State of New York
("Superintendent"). Checks in process of collection for the Bank
totalling $8.9 million were held by Nationar at the time it was
seized. In April 1995, $3.9 million of these funds were remitted
to the Bank. During the third quarter of 1995, the Bank filed
Proofs of Claim totalling $5.0 million in the aggregate. However,
there was a reasonable likelihood that the Bank would not recover
all of the amounts owed by Nationar. Accordingly, management
established a reserve for potential losses associated with the
Nationar deposits. During the year ended December 31, 1995, the
Bank recorded $430,000 related to the ultimate recovery of amounts
owed by Nationar. On June 27, 1996, the Bank received a partial
payment of it's claim against Nationar totalling $4,987,000, at
which time $389,000 of the reserve previously established against
this claim was taken into income. The Bank could receive further
payment on the outstanding balance of its claims, but the exact
timing and amount of such further payments, if any, are unknown at
this time.
NOTE 7 - RECENT ACCOUNTING/REGULATORY PRONOUNCEMENTS. In March,
1995, the FASB issued SFAS No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
SFAS No. 121 requires that long-lived assets such as plant and
equipment and certain identifiable intangibles to be held and used
by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may
not be recoverable. The statement requires that long-lived assets
and certain identifiable intangibles to be disposed of be reported
10
at the lower of carrying amount or fair value less cost to sell.
SFAS No. 121 was adopted by the Company on January 1, 1996 and did
not have a material effect on the Company's financial statements.
In May, 1995, the FASB issued SFAS No. 122, "Accounting for
Mortgage Servicing Rights". This Statement amends SFAS No. 65,
"Accounting for Certain Mortgage Banking Activities," to require
that a mortgage banking enterprise recognize as separate assets
rights to service mortgage loans for others, however acquired. A
mortgage banking enterprise that acquires mortgage servicing rights
through either the purchase or origination of mortgage loans and
sells or securitizes those loans with servicing rights retained
should allocate the total cost of the mortgage loans to the
mortgage servicing rights and the loans (without the mortgage
servicing rights) based on their relative fair values. This
statement requires that a mortgage banking enterprise assess its
capitalized mortgage servicing rights for impairment based on the
fair value of those rights. Impairment should be recognized
through a valuation allowance. SFAS No. 122 was adopted by the
Company on January 1, 1996 and did not have a material effect on
the Company's financial statements.
In October, 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation". SFAS No. 123 applies to all
transactions in which an entity acquires goods or services by
issuing equity instruments or by incurring liabilities where the
payment amounts are based on the entity's common stock price,
except for employee stock ownership plans. SFAS No. 123 covers
transactions with employees and non-employees.
SFAS No. 123 established a new method of accounting for stock-based
compensation arrangements with employees. The new method is a fair
value based method rather than the intrinsic value based method
that is contained in APB Opinion 25 ("Opinion 25"). However, SFAS
No. 123 does not require an entity to adopt the new fair value
based method for purposes of preparing its basic financial
statements. Entities are allowed (1) to continue to use the
Opinion 25 method or (2) to adopt the SFAS No. 123 fair value based
method. SFAS No. 123 fair value based method is considered by the
FASB to be preferable to the Opinion 25 method, and thus, once the
fair value based method is adopted, an entity cannot change back to
the Opinion 25 method. Also, the selected method applies to all of
an entity's compensation plans and transactions. For entities not
adopting SFAS No. 123 fair value based method, SFAS No. 123
requires the entity to display in the footnotes to the financial
statements pro forma net income and earnings per share information
as if the fair value based method had been adopted. Under the fair
value based method, compensation cost is measured at the grant date
based on the value of the award and is recognized over the service
period, which is usually the vesting period.
11
The accounting requirements of SFAS No. 123 are effective for
transactions entered into in fiscal years that begin after December
15, 1995, though they may be adopted on issuance. The disclosure
requirements are effective for financial statements for fiscal
years beginning after December 15, 1995, or for an earlier fiscal
year for which SFAS No. 123 is initially adopted for recognizing
compensation cost. Pro forma disclosures required for entities
that elect to continue to measure compensation cost using the
Opinion 25 method must include the effects of all awards granted in
fiscal years that begin after December 15, 1994. Pro forma disclo-
sures for awards granted in the first fiscal year beginning after
December 15, 1994, need not be included in the financial statements
for that fiscal year, but should be presented subsequently whenever
financial statements for that fiscal year are presented for
comparative purposes with financial statements for a later fiscal
year. The Company will continue to apply the Opinion No. 25 method
in preparing its consolidated financial statements and will provide
the pro forma disclosures required by SFAS No. 123.
In June, 1996, the FASB issued SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" which establishes accounting and reporting standards
for transfers and servicing of financial assets and extinguishments
of liabilities based on the consistent application of the
financial-components approach. This approach requires the
recognition of financial assets and servicing assets that are
controlled by the reporting entity, the derecognition of financial
assets when control is surrendered, and the derecognition of
liabilities when they are extinguished. Specific criteria are
established for determining when control has been surrendered in
the transfer of financial assets.
Liabilities and derivatives incurred or obtained by transferors in
conjunction with the transfer of financial assets are required to
be measured at fair value, if practicable. Servicing assets and
other retained interests in transferred assets are required to be
measured by allocating the previous carrying amount between the
assets sold, if any, and the interest that is retained, if any,
based on the relative fair values of the assets at the date of the
transfer. Servicing assets retained are subsequently subject to
amortization and assessment for impairment.
SFAS No. 125 provides implementation guidance for: assessing
isolation of transferred assets; accounting for transfers of
partial interests; servicing of financial assets; securitizations;
transfers of sales-type and direct financing lease receivables;
securities lending transactions; repurchase agreements (including
"dollar rolls" and "wash sales"); loan syndications and
participations; risk participations in banker's acceptances;
factoring arrangements; transfers of receivables with recourse;
extinguishment of liabilities.
12
SFAS No. 125 is effective for transfers and servicing of financial
assets and extinguishments of liabilities occurring after December
31, 1996. It is to be applied prospectively; earlier or
retroactive application is not permitted. SFAS No. 125 when
adopted is not expected to have a material effect on the Company's
financial statements.
NOTE 8 - NET INCOME PER SHARE OF COMMON STOCK. Primary and fully
diluted net income per share were determined by dividing net income
by the weighted average number of shares outstanding. There were
4,381,284 primary shares outstanding and 4,408,603 fully diluted
shares outstanding for the three months ended June 30, 1996. There
were 4,418,538 primary shares outstanding and 4,466,143 fully
diluted shares outstanding for the six months ended June 30, 1996.
The weighted average number of shares outstanding does not include
202,411 shares which are unallocated by the Employee Stock
Ownership Plan ("ESOP") as of June 30, 1996 in accordance with
American Institute of CPAs ("AICPA") Statement of Position ("SOP")
93-6, "Employers' Accounting for ESOPs". Stock options are
regarded as common stock equivalents and are considered in both
primary earnings per share and fully diluted earnings per share
using the treasury stock method.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Haven Bancorp, Inc. ("Haven Bancorp" or the "Company") is the
holding company for Columbia Federal Savings Bank ("Columbia" or
the "Bank"), a federally chartered stock savings bank. Columbia
converted from a mutual to a stock savings bank on September 23,
1993 in conjunction with the issuance of the Bank's capital stock
to Haven Bancorp.
Haven Bancorp's business currently consists of the business of the
Bank. The Bank's principal business has been and continues to be
attracting retail deposits from the general public and investing
those deposits, together with funds generated from operations
primarily in one-to four-family, owner occupied residential
mortgage loans. In addition, in times of low loan demand, the Bank
will invest in debt, equity and MBSs to supplement its lending
portfolio. The Bank also invests, to a lesser extent, in multi-
family residential mortgage loans, commercial real estate loans,
equity lines of credit and other marketable securities. The Bank's
results of operations are dependent primarily on its net interest
income, which is the difference between the interest income earned
on its loan and securities portfolios and its cost of funds, which
primarily consist of the interest paid on its deposits and borrowed
funds. The Bank's net income also is affected by its provision for
13
loan losses as well as non-interest income and operating expenses
consisting primarily of compensation and benefits, occupancy and
equipment, real estate owned operations, net, federal deposit
insurance premiums and other general and administrative expenses.
The earnings of the Bank are significantly affected by general
economic and competitive conditions, particularly changes in market
interest rates, and to a lesser extent by government policies and
actions of regulatory authorities.
ANALYSIS OF FINANCIAL CONDITION CHANGES FROM DECEMBER 31, 1995 TO
JUNE 30, 1996
ASSETS
Total assets increased by $77.5 million, or 5.3% to $1.6 billion at
June 30, 1996. Securities available for sale decreased by $6.2
million, or 1.2% to $496.9 million at June 30, 1996 from $503.1
million at December 31, 1995. During the six month period ended
June 30, 1996, the Bank purchased $108.6 million of MBSs, $85.1
million of government agency securities, $19.1 million in FNMA
Preferred Stock and $6.0 million of corporate bond securities.
These purchases for the available for sale portfolio were offset by
sales and principal repayments of $166.3 million and $49.2 million,
respectively. The purchases and sales during the first six months
of 1996 in the available for sale portfolio were done to improve
the net interest margin by swapping lower yielding securities for
higher yielding securities while minimizing interest rate risk.
During the second quarter of 1996, $36.9 million of MBSs were sold
in the available for sale portfolio with an average yield of 6.27%
and replaced with $45.6 million of MBSs yielding approximately
7.36%. Debt securities held to maturity declined by $29.5 million,
or 23.1% to $98.3 million at June 30, 1996 from $127.8 million at
December 31, 1995 mainly due to principal repayments and calls
totalling $36.5 million which were partially offset by purchases
totalling $7.0 million. MBSs held to maturity increased by $14.4
million, or 7.6% to $205.1 million at June 30, 1996 from $190.7
million at December 31, 1995. During the second quarter of 1996,
the Bank purchased $21.1 million of MBSs for the held to maturity
portfolio which were offset by principal repayments totaling $11.4
million.
Net loans increased by $97.4 million, or 17.4% to $657.8 million at
June 30, 1996 from $560.4 million at December 31, 1995. Loan
originations during the six month period ended June 30, 1996
totaled $147.4 million (comprised of $109.7 million of residential
one-to four-family mortgage loans, $3.6 million of equity loans and
lines of credit, $1.5 million of construction advances, and $32.6
million of commercial real estate and multi-family loans.
Originations for residential one-to four-family mortgage loans
14
included purchases of $55.4 million of residential loans in the
secondary market. The purchase of loans in the secondary market
was done to enhance the Bank's internal loan origination volume.
Multi-family, commercial real estate and construction and land
lending are generally believed to involve a higher degree of credit
risk than one-to four-family lending because such loans typically
involve higher principal amounts and the repayment of such loans
generally is dependent on income produced by the property
sufficient to cover operating expenses and debt service. Economic
events that are outside the control of the borrower or lender could
adversely impact the value of the security for the loan or the
future cash flows from the borrower's property. In recognition of
these risks, the Bank has instituted more stringent underwriting
criteria for all of its loans and originates multi-family,
commercial real estate and construction and land loans only on a
selective basis. During the second quarter of 1996, principal
repayments totalled $28.7 million, $1.2 million was transferred to
REO and $93,000 of loans were sold in the secondary market. During
the first quarter of 1996, loan originations totalled $36.0
million, principal repayments totalled $16.9 million, $1.0 million
was transferred to REO and $679,000 of loans were sold in the
secondary market.
REO, net increased by $314,000, or 15.4% to $2.3 million (net of a
$120,000 reserve) at June 30, 1996 from $2.0 million (net of a
$178,000 reserve) at December 31, 1995. During the second quarter,
the Bank acquired $1.2 million of REO properties, sold $371,000 of
REO, and recorded write-downs to fair value of $265,000 on various
properties. During the first quarter, the Bank acquired $1.0
million of REO, sold $657,000 of REO and recorded write-downs to
fair value of $726,000 on various properties. (See discussion of
non-performing assets on pages 17-18).
Included in other assets at June 30, 1996 was $9.5 million of net
deferred tax assets compared to $4.1 million at December 31, 1995.
The increase was primarily due to $4.1 million which represents the
tax effect of the increase of $8.8 million in the unrealized loss
on securities available for sale from December 31, 1995 to June 30,
1996. The remainder of the increase was primarily due to a net
increase of $1.4 million in the allowance for loan losses.
Management believes that the Company will generate future taxable
income sufficient to utilize the deferred tax asset over time.
15
LIABILITIES
Deposits increased by $38.0 million between December 31, 1995 and
June 30, 1996 primarily due to an increase in certificates of
deposit outstanding of $47.0 million for the six-month period. The
Bank's strategy has been to attract deposits from short to medium
term certificates of deposit (up to 24 months) as a lower cost
alternative to borrowed funds to fund loan originations. In May,
1996, the Bank opened its first supermarket branch in an Edwards
Super Store located in Medford, Long Island. This branch had $1.6
million in deposits at June 30, 1996. The Bank is pursuing
opportunities to open additional supermarket branches in the
future. Borrowed funds increased by $39.0 million, or 14.4% to
$309.6 million from $270.6 million at December 31, 1995 primarily
for the funding of residential mortgage loans purchased on the
secondary market. During the quarter ended June 30, 1996, the Bank
purchased $51.4 million of residential mortgages in the secondary
market. Due to brokers totalling $5.8 million includes amounts due
at quarter end on securities purchased, not yet delivered.
STOCKHOLDERS' EQUITY
Haven Bancorp's stockholders' equity decreased to $94.1 million at
June 30, 1996 from $98.5 million at December 31, 1995. Net income
of $5.9 million for the six-month period was offset by the purchase
of 225,537 shares of treasury stock for $5.5 million. In
addition, there was a decline of $4.7 million in the unrealized
gain on securities available for sale, net of tax effect, and the
Company declared dividends of $998,000 for the first half of 1996.
The allocation of ESOP stock due to the reduction of the Bank's
ESOP debt and the amortization of awards of shares of stock by the
Bank's RRPs, together with related tax benefits, increased
stockholders' equity by $695,000. Finally, during the second
quarter, the Company awarded 29,965 shares of restricted stock from
the Haven Bancorp 1996 Stock Incentive Plan. See Note 5 to Notes
to Consolidated Financial Statements.
16
NON-PERFORMING ASSETS
The following table sets forth information regarding all non-
accrual loans (which consist of loans 90 days or more past due and
restructured loans that have not yet performed in accordance with
their modified terms for the required six-month seasoning period),
restructured loans and real estate owned.
June 30, December 31,
1996 1995
-------- ------------
Non-accrual loans
One-to four-family $ 3,715 3,800
Cooperative 408 871
Multi-family 1,151 967
Non-residential and other 4,438 4,167
------ ------
Total non-accrual loans 9,712 9,805
------ ------
Restructured loans
One-to four-family 972 853
Cooperative 490 494
Multi-family 2,344 3,602
Non-residential and other - 2,123
------ ------
Total restructured loans 3,806 7,072
------ ------
Total non-performing loans 13,518 16,877
------ ------
REO, net
One-to four-family 1,142 1,148
Cooperative 644 723
Multi-family 524 156
Non-residential and other 157 184
------ ------
Total REO 2,467 2,211
Less allowance for REO (120) (178)
------ ------
REO, net 2,347 2,033
------ ------
Total non-performing assets $15,865 18,910
====== ======
Non-performing loans to total loans 2.02% 2.97%
Non-performing assets to total assets 1.02 1.28
Non-performing loans to total assets 0.87 1.15
17
The $3.0 decrease in non-performing assets is due to a decrease of
$3.3 million in restructured loans partially offset by a $314,000
increase in REO, net. The decrease in restructured loans was due
to the satisfaction of one loan for $1.6 million and the transfer
of several other loans to performing status. The ratio of non-
performing loans to total loans decreased primarily due to the
decrease of $3.4 million in non-performing loans during the six
months which was attributable to the satisfaction of a loan for
$1.6 million and the reclassification of several other loans to
performing status. In addition, total loans increased $98.8
million during the six-month period. The decreases in the ratios
of non-performing assets to total assets and non-performing loans
to total assets were due to the aforementioned reduction in
restructured loans and an increase of $77.5 million in total assets
during the six-month period.
The Bank maintains an allowance for loan losses and an allowance
for REO, which it believes are adequate for potential losses at
each period end. Management's judgment as to potential losses is
based on its review of the loan and REO portfolios and its judgment
regarding prevailing and anticipated economic conditions and a
variety of other factors which have an impact on those portfolios.
Although management believes that the allowances are adequate as of
the period end, additional provisions may be required in the
future.
18
ALLOWANCE FOR LOAN LOSSES
The following table sets forth the changes in the allowance for
loan losses for the six months ended June 30, 1996 and 1995:
1996 1995
------- -------
Balance at beginning of period $ 8,573 10,847
Charge-offs:
Residential (497) (225)
Cooperative (315) (1,465)
Multi-family (30) (491)
Non-residential and other (288) (784)
------ ------
Total charge-offs (1,130) (2,965)
------ ------
Recoveries 721 249
------ ------
Net charge-offs (409) (2,716)
Provision for loan losses 1,775 1,300
------ ------
Balance at end of period $ 9,939 9,431
====== ======
Ratio of net charge-offs during the period to
average loans outstanding during the period 0.13% 1.05%
Ratio of allowance for loan losses to
total loans at the end of the period 1.49 1.80
Ratio of allowance for loan losses to non-
performing loans at the end of the period 73.52 40.56
The ratio of net charge-offs during the first six months of 1996 to
average loans outstanding decreased compared to the same period in
1995 due to the decrease in charge-offs as a result of the decrease
in non-performing loans between the periods and an increase of
$95.5 million in average loans outstanding. The ratio of allowance
for loan losses to total loans also decreased due to the increase
in average loans outstanding as previously mentioned. The ratio of
allowance for loan losses to non-performing loans increased between
the periods due to the decrease in non-performing loans. The
Bank's allowance for loan losses was $9.9 million and $9.4 million
at June 30, 1996 and 1995, respectively, while non-performing loans
totalled $13.5 million and $23.3 million, respectively, at those
dates.
19
ALLOWANCE FOR REAL ESTATE OWNED
Activity in the allowance for REO for the six months ended June 30,
1996 and 1995 are as follows:
1996 1995
------- -------
Balance at beginning of period $ 178 717
Provision charged to operations 125 500
Charge-offs (183) (931)
------ ------
Balance at end of period $ 120 286
====== ======
ASSET/LIABILITY MANAGEMENT
The Company closely monitors its interest rate risk as such risk
relates to its operational strategies. The Asset/Liability
Committee is responsible for reviewing the Company's
asset/liability policies and interest rate risk position, and
generally meets weekly and reports to the Board of Directors on
interest rate risk and trends on a quarterly basis.
In order to reduce its sensitivity to interest rate risk, the
Company's current strategy includes emphasizing the origination or
purchase for portfolio of adjustable-rate loans, debt securities
and MBSs and maintaining a securities available for sale portfolio.
The Company invests in MBSs and debt and equity securities and
utilizes such investments to complement its mortgage lending
activities and supplement such activities at times of low mortgage
loan demand. While MBSs carry a reduced credit risk as compared to
whole loans, such securities remain subject to the risk that a
fluctuating interest rate environment, along with other factors
such as geographic distribution of the underlying mortgage loans,
may alter the prepayment rate of such mortgage loans and so affect
both the prepayment speed, and value of such securities.
The Company has attempted to reduce its exposure to interest rate
risk through the origination of ARM loans and the purchase of
adjustable-rate securities which are expected to help protect net
interest margins during periods of rising interest rates. During
the first half of 1996, the Bank sold a large portion of its
available for sale portfolio, most of which were fixed rate
securities, to improve yield with purchases of fixed rate
securities bearing higher yields and shorter duration. The Bank
purchased fixed rate debt securities and MBSs during the period to
take advantage of higher yields versus rates offered on adjustable
20
rate securities. At June 30, 1996, $248.9 million, or 42.1% of the
Company's MBSs portfolio were adjustable-rate MBSs. In addition,
$56.3 million or 27.0% of the Company's debt securities portfolio
were floating rate securities. The adjustable portion of the MBS
portfolio is allocated as follows: $238.3 million is in the
available for sale portfolio, whereas, $10.6 million is in the held
to maturity portfolio. The Company's adjustable debt securities
are allocated as follows: $50.3 million is in the held to maturity
portfolio, whereas, $6.0 million is in the available for sale
portfolio.
Historically, the Company has been able to maintain a substantial
level of core deposits (comprised of passbook, money market, NOW
and demand accounts) which the Company believes helps to limit
interest rate risk by providing a relatively stable, low cost,
long-term funding base. At June 30, 1996 core deposits represented
48.7% of deposits compared to 50.8% of deposits at December 31,
1995. During the first six months of 1996, passbook accounts
decreased by $704,000, net of interest, whereas, certificates of
deposit increased by $47.0 million, net of interest. The Bank's
strategy during 1995 and 1996 has been to emphasize 12 and 18 month
certificates of deposit in order to retain a portion of customer
withdrawals from passbook accounts as customers sought higher
yielding investment opportunities when rates started to rise again
during February and as a less expensive alternative to borrowed
funds. During the first six months of 1996 the cost of certificate
accounts was 5.65% compared to 5.87% for borrowed funds. The
amount of certificate accounts outstanding at June 30, 1996 was
$580.0 million compared to $533.0 million at December 31, 1995.
LIQUIDITY AND CAPITAL
The Bank is required to maintain minimum levels of liquid assets as
defined by the OTS regulations. This requirement, which may be
varied by the OTS depending upon economic conditions and deposit
flows, is based upon a percentage of withdrawable deposits and
short-term borrowings. The required ratio is currently 5%. The
Bank's ratio was 12.62% at June 30, 1996 compared to 10.31% at
December 31, 1995. The increase in the liquidity ratio during the
six-month period is due to the purchase of government agency
securities, which are considered liquid assets according to the OTS
guidelines, and an increase in federal funds sold.
The Company's primary sources of funds are deposits, principal and
interest payments on loans and MBSs, retained earnings and advances
from FHLB-NY. Proceeds from the sale of securities available for
sale and loans held for sale are also a source of funding, as are,
to a lesser extent, the sales of annuities and securities brokerage
activities conducted by the Bank's subsidiary, Columbia Investment
Services, Inc. While maturities and scheduled amortization of
21
loans and MBSs are somewhat predictable sources of funds, deposit
flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions, competition and regulatory
changes.
The Company's most liquid assets are cash and short term
investments. The levels of these assets are dependent on the
Company's operating, financing, lending and investing activities
during any given period. At June 30, 1996 and December 31, 1995,
cash and short and intermediate-term investments totaled $35.1
million and $38.9 million, respectively.
The Company and the Bank have other sources of liquidity which
include debt securities maturing within one year, mortgage loans
and MBSs available for sale. Other sources of funds include FHLB
advances, which at June 30, 1996, totaled $169.7 million. If
needed, the Bank may borrow an additional $200,000 from the FHLB.
As of June 30, 1996, the Bank exceeded all regulatory capital
requirements as detailed in the following table:
Tangible Capital Core Capital Risk-Based Capital
-------------------- -------------------- -----------------------
Amount Percentage(1) Amount Percentage(1) Amount Percentage(1)(3)
------ ---------- ------ ---------- ------ ----------
(Dollars in thousands)
Capital for regulatory purposes $91,950 5.95% $91,950 5.95% $100,487 13.83%
Minimum regulatory requirement 23,163 1.50 46,326 3.00(2) 58,135 8.00
------ ---- ------ ---- ------- ----
Excess $68,787 4.45% $45,624 2.95% $ 42,352 5.83%
====== ==== ====== ==== ======= ====
Legislation currently before the United States Congress reportedly
provides for a one-time, special assessment on all deposits insured
by the Savings Association Insurance Fund ("SAIF") which has been
estimated to be approximately $.80 per $100 of deposits. This one-
time assessment, which is intended to recapitalize the SAIF to the
required level of 1.25% of insured deposits, may be a future
expense of the Bank, depending on the enactment, timing and final
wording of such legislation. If the assessment is made at the
proposed rate, the effect on the Bank would be a pre-tax charge of
approximately $8.3 million, based on insured deposits as of March
31, 1995. It is anticipated that if the SAIF reserves are
increased to the required ratio, the Bank may see a decrease in the
annual deposit premium in future periods.
(1) Tangible and core capital are shown as a percentage of total
adjusted assets. Risk-based capital levels are shown as a
percentage of risk-weighted assets.
22
(2) Although the minimum capital ratio is 3.0%, the OTS
regulations provide that generally an institution with less than
4.0% core capital is undercapitalized. Failure to meet the capital
requirements or to be deemed undercapitalized exposes an
institution to regulatory sanctions, including limitations on asset
growth. The OTS noted in the preamble to the final rulemaking for
interest rate risk that its intention was to issue a proposal to
lower this ratio requirement from 4.0% to 3.0%.
(3) The OTS has incorporated an interest rate risk component into
its regulatory capital rule. Under the rule, saving associations
with "above normal" interest rate risk exposure would be subject to
a deduction from total capital for purposes of calculating their
risk-based capital requirements. The OTS has postponed the date
that the component will first be deducted from an institution's
total capital until an appeals process is developed for the
measurement of an institution's interest rate risk. The Bank does
not anticipate that the new rule, when implemented, will have a
material effect on the Bank's risk-based capital.
ANALYSIS OF CORE EARNINGS
The Company's profitability is primarily dependent upon net
interest income, which represents the difference between interest
and fees earned on loans, MBSs and debt and equity securities, and
the cost of deposits and borrowings. Net interest income is
dependent on the difference between the average balances and rates
earned on interest-earning assets and the average balances and
rates paid on interest-bearing liabilities. Net income is further
affected by non-interest income, non-interest expense and income
taxes.
The following table sets forth certain information relating to the
Company's average consolidated statements of financial condition
and reflect the average yield on assets and average cost of
liabilities for the periods indicated. Such yields and costs are
derived by dividing income or expense annualized by the average
balance of assets or liabilities, respectively, for the periods
shown. Average balances were derived from average daily balances.
The average balance of loans includes loans on which the Company
has discontinued accruing interest. The yields and costs include
fees which are considered adjustments to yields.
23
Three months ended June 30,
1996 1995
------------------------ ------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ------- ------- -------- -------
(Dollars in thousands)
Assets:
Interest-earning assets:
Mortgage loans $ 606,591 $12,566 8.29% $478,377 $10,252 8.57%
Other loans 36,185 921 10.18 40,551 1,074 10.59
Mortgage-backed securities 574,572 9,884 6.88 546,662 8,754 6.41
Money market investments 3,481 44 5.06 4,879 96 7.87
Debt and equity securities 225,284 3,598 6.39 181,234 3,092 6.82
--------- ------ --------- ------
Total interest-earning assets 1,446,113 27,013 7.47 1,251,703 23,268 7.44
Non-interest earning assets 63,705 ------ 67,158 ------
--------- ---------
Total assets 1,509,818 1,318,861
========= =========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Passbook accounts 379,023 2,351 2.48 410,978 2,553 2.48
Certificate accounts 571,749 8,008 5.60 500,633 7,337 5.86
NOW accounts 111,835 248 0.89 94,648 228 0.96
Money market accounts 58,880 479 3.25 40,437 316 3.13
Borrowed funds 271,517 3,915 5.77 164,264 2,764 6.73
--------- ------ --------- ------
Total interest-bearing liabilities 1,393,004 15,001 4.31 1,210,960 13,198 4.36
Other liabilities 22,235 ------ 16,821 ------
--------- ---------
Total liabilities 1,415,239 1,227,781
Stockholders' equity 94,579 91,080
--------- ---------
Total liabilities and stockholders' equity 1,509,818 1,318,861
========= =========
Net interest income/net interest rate spread $12,012 3.16% $10,070 3.08%
====== ==== ====== ====
Net interest earning assets/net interest margin $53,109 3.32% $40,743 3.22%
====== ==== ====== ====
Ratio of interest-earning assets to
interest-bearing liabilities 103.81% 103.36%
====== ======
24
Six months ended June 30,
1996 1995
------------------------ ------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------- -------- ------- ------- -------- -------
(Dollars in thousands)
Assets:
Interest-earning assets:
Mortgage loans $ 573,947 $23,955 8.35% $474,954 $20,065 8.45%
Other loans 37,243 1,897 10.19 40,741 2,127 10.44
Mortgage-backed securities 585,936 20,042 6.84 529,612 16,944 6.40
Money market investments 3,699 99 5.35 4,447 189 8.50
Debt and equity securities 218,854 6,925 6.33 171,328 5,787 6.76
--------- ------ --------- ------
Total interest-earning assets 1,419,679 52,918 7.45 1,221,082 45,112 7.39
Non-interest earning assets 62,428 ------ 74,906 ------
--------- ---------
Total assets 1,482,107 1,295,988
========= =========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Passbook accounts 377,779 4,685 2.48 423,720 5,238 2.47
Certificate accounts 556,304 15,713 5.65 484,413 13,887 5.73
NOW accounts 108,416 457 0.84 92,634 416 0.90
Money market accounts 60,284 935 3.10 33,908 481 2.84
Borrowed funds 264,853 7,777 5.87 153,644 5,097 6.63
--------- ------ --------- ------
Total interest-bearing liabilities 1,367,636 29,567 4.32 1,188,319 25,119 4.23
Other liabilities 19,854 ------ 17,100 ------
--------- ---------
Total liabilities 1,387,490 1,205,419
Stockholders' equity 94,617 90,569
--------- ---------
Total liabilities and stockholders' equity 1,482,107 1,295,988
========= =========
Net interest income/net interest rate spread $23,351 3.13% $19,993 3.16%
====== ==== ====== ====
Net interest earning assets/net interest margin $52,043 3.29% $32,763 3.27%
====== ==== ====== ====
Ratio of interest-earning assets to
interest-bearing liabilities 103.81% 102.76%
====== ======
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS
ENDED JUNE 30, 1996 AND 1995
GENERAL. The Company reported net income of $3.0 million for the
three months ended June 30, 1996 compared to net income of $1.8
million for the three months ended June 30, 1995. The $1.2 million
increase was primarily attributable to an increase of $3.7 million
in interest income and an increase of $885,000 in non-interest
income. These were partially offset by interest expense which
increased $1.8 million, the provision for loan losses which
increased $425,000, an increase of $264,000 in non-interest expense
and the provision for income tax expense which increased $960,000.
INTEREST INCOME. Interest income increased by $3.7 million, or
16.1% to $27.0 million for the three months ended June 30, 1996
from $23.3 million for the three months ended June 30, 1995. The
25
increase was primarily the result of a $2.3 million increase in
interest income on mortgage loans, an increase of $1.1 million in
interest income on MBSs, and an increase of $506,000 in interest
income on debt and equity securities. These were partially offset
by a decrease in interest income on other loans and money market
investments of $153,000 and $52,000, respectively.
Interest income on mortgage loans increased by $2.3 million, or
22.6% to $12.6 million for the three months ended June 30, 1996,
from $10.3 million for the comparable three-month period in 1995
primarily as a result of an increase in average balances of
mortgage loans of $128.2 million partially offset by a decrease in
the average yield on mortgage loans of 28 basis points. The
average yield on mortgage loans decreased to 8.29% for the three
months ended June 30, 1996 from 8.57% for the comparable three-
month period in 1995. The increase in average balances of mortgage
loans between the periods was primarily due to mortgage
originations for the second quarter of 1996 which totalled $109.4
million. The originations included the purchase of $55.4 million
of residential mortgages in the secondary market. During the first
quarter of 1996 and the second half of 1995, the Bank originated
$34.3 million and $92.7 million, respectively, in mortgage loans
partially offset by principal payments of $13.5 and $42.3 million,
respectively. The mortgage loans purchased during the second
quarter of 1996 were done to enhance in-house originations and
provide additional production volume. Interest income on other
loans decreased by $153,000, or 14.2% primarily due to a decrease
of $4.4 million in average balances outstanding and a decrease of
41 basis points in average yield. During the fourth quarter of
1995, the Bank discontinued its non-real estate related consumer
lending function.
Interest income on MBSs increased by $1.1 million, or 12.9% to $9.9
million for the three months ended June 30, 1996 from $8.8 million
for the comparable three-month period in 1995 primarily due to an
increase in average balances of MBSs of $27.9 million and an
increase in the average yield of 47 basis points. The increase in
average balances of MBSs between the periods was primarily due to
the purchase of $139.7 million of MBSs during 1996 (of which $116.4
million were fixed rate securities), which were partially offset by
sales totalling $114.3 million from the available for sale
portfolio. During the second quarter of 1996, the Company
purchased $66.1 million of fixed rate MBSs, of which $45.6 million
were for the available for sale portfolio. The emphasis on fixed
rate securities was due to more favorable yield opportunities in
fixed rate securities during the first half of 1996 compared to
adjustable-rate securities. The Company has been actively managing
its available for sale portfolio to increase yield while
maintaining or reducing its interest-rate risk exposure.
Interest income on debt and equity securities increased by
26
$506,000, or 16.4% to $3.6 million for the three months ended June
30, 1996 from $3.1 million for the comparable three-month period in
1995 primarily as a result of an increase in average balances of
$44.1 million partially offset by a decrease in average yield of 43
basis points. The increase in average balance was primarily due to
the purchase of $122.2 million of debt securities during 1996
partially offset by sales totalling $46.9 million from the
available for sale portfolio. The decrease in average yield was
attributable to a decrease in the two year treasury index which is
used to determine the change in rate on $51.3 million of corporate
bonds which adjust quarterly. During the second quarter of 1996,
the Bank purchased $16.1 million of debt securities of which $15.1
million were designated as available for sale.
INTEREST EXPENSE. Interest expense increased by $1.8 million, or
13.6% to $15.0 million for the three months ended June 30, 1996
from $13.2 million for the three months ended June 30, 1995. The
increase was primarily the result of a $652,000 increase in
interest expense on deposits and an increase of $1.2 million in
interest expense on borrowings.
Interest on deposits increased by $652,000, or 6.2% to $11.1
million for the three months ended June 30, 1996 from $10.4 million
for the comparable three-month period in 1995. The increase in
interest on deposits was primarily due to the average balance which
increased $74.8 million, or 7.1% to $1.12 billion for the three
months ended June 30, 1996 from $1.05 billion for the comparable
three-month period in 1995. The cost of deposit decreased slightly
between the periods from 3.99% in the 1995 period to 3.95% in the
1996 period. The increase in average balance was primarily due to
certificate account balances which increased $71.1 million, or
14.2% to $571.7 million for the three months ended June 30, 1996
from $500.6 million for the comparable three-month period in 1995.
The Bank's strategy during 1995 and the first half of 1996 has been
to emphasize 12 and 18 month certificates of deposit in order to
retain a portion of customer withdrawals from passbook accounts as
customers sought higher yielding investment opportunities in the
rising interest rate environment and as a less expensive
alternative to borrowed funds when appropriate. The average cost
of certificate accounts was 5.60% for the second quarter of 1996
compared to 5.86% for the comparable 1995 period due to the
decrease in market interest rates particularly for 12 to 18 month
certificate accounts. Interest expense on certificate accounts
increased by $671,000 or 9.1% to $8.0 million for the three months
ended June 30, 1996 from $7.3 million in the same period in 1995.
The average balance of passbook accounts decreased by $32.0
million, or 7.8% to $379.0 million for the three months ended June
30, 1996 from $411.0 million for the second quarter of 1995. The
average cost of passbook accounts remained the same at 2.48% for
both periods. Interest expense on passbook accounts decreased by
$202,000, or 7.9% to $2.4 million for the three months ended June
27
30, 1996 from $2.6 million in the same period in 1995 primarily due
to a decrease in average balances due to customers seeking higher
yielding investment opportunities including the Bank's certificate
of deposit accounts.
Interest on borrowed funds increased by $1.2 million, or 41.6% to
$3.9 million for the three months ended June 30, 1996 from $2.8
million for the comparable three-month period in 1995. Borrowed
funds on an average basis increased by $107.3 million between the
periods due to the addition of short-term FHLB advances and
securities sold under agreements to repurchase during 1996 to
provide funding for the purchase of $55.4 million of residential
mortgages in the secondary market and the purchase of debt and MBS
securities. The average rate paid on borrowings decreased to 5.77%
for the three months ended June 30, 1996 from 6.73% for the
comparable prior-year period due to a decrease in market interest
rates between the periods.
NET INTEREST INCOME. Net interest income increased by $1.9 million
to $12.0 million for the three months ended June 30, 1996 from
$10.1 million for the three months ended June 30, 1995. The
increase reflects an increase in the average yield on interest-
earning assets to 7.47% from 7.44% for the three months ended June
30, 1996 and 1995, respectively. This increase was enhanced by the
average cost on interest-bearing liabilities which decreased to
4.31% from 4.36% for the three months ended June 30, 1996 and 1995,
respectively. The net interest spread was 3.16% for the three
months ended June 30, 1996 compared to 3.08% for the comparable
period in 1995.
PROVISION FOR LOAN LOSSES. The Bank provided $1.1 million for loan
losses for the three months ended June 30, 1996 compared to
$700,000 for the comparable three-month period in 1995. The
increase was due to the growth in the Bank's residential and
commercial mortgage loan portfolio.
NON-INTEREST INCOME. Non-interest income increased by $885,000 or
46.6% for the three months ended June 30, 1996 to $2.8 million from
$1.9 million for the comparable three-month period in 1995. Loan
fees and servicing income increased by $616,000 mainly due to the
recovery of interest totalling $597,000 on the satisfaction of a
land loan that was previously classified as a restructured loan.
Insurance, annuity and mutual fund fees increased by $243,000 due
to an increase in sales volume. During the quarter ended June 30,
1996, the Bank incurred a net loss of $45,000 on the sale of $36.9
million in securities which had been available for sale. Savings
and checking fees increased by $106,000 due to the number of
checking accounts which increased by 8,758 or 17.5% to 58,747 at
June 30, 1996 from 49,989 at June 30, 1995 due to the Bank's
strategy to continue to attract lower cost deposit balances. The
growth in deposit accounts includes 1,119 new accounts opened at
28
the Bank's first supermarket branch located in Medford, Long
Island. These were slightly offset by other income which declined
$35,000 mainly due to a decrease of $34,000 in fees from
corresponding Banks.
NON-INTEREST EXPENSE. Non-interest expense increased by $264,000,
or 3.4% for the three months ended June 30, 1996 to $8.0 million
from $7.8 million for the comparable three-month period in 1995.
The increase was primarily due to increases of $303,000 and
$73,000, respectively, in compensation and benefits and occupancy
and equipment costs. The increase in compensation and benefits
expense was due to additional sales volume generated by CIS, Inc.
which increased commissions paid by $112,000. The remainder of the
increase in compensation and benefits was due to normal merit
increases. The increase in occupancy and equipment expense was
attributable to higher contract costs for the second quarter
compared to the same period last year. These increases were
partially offset by decreases of $61,000 and $28,000, respectively,
in REO operations, net and federal deposit insurance premiums.
Miscellaneous operating expenses in total were essentially
unchanged from the same period last year. In connection with the
June 27, 1996 receipt of a partial payment with respect to the
Bank's claim against Nationar, approximately $389,000 of the
reserve previously established against this claim was taken into
income and is reflected as a credit to other non-interest expense.
(See Note 6 of Notes to Consolidated Financial Statements.) This
reduction in non-interest expense was offset by the settlement of
two legal actions for $150,000 (see legal proceedings); NYCE fees
which increased $115,000 due to additional processing fees paid to
EDS. The EDS EFIT Division now functions as the switch for the
Bank's ATM transactions, whereas in the past EDS Newtrend Division
provided the software to switch these transactions. Finally, Haven
incurred $95,000 in legal expenses for corporate governance and
other matters.
INCOME TAX EXPENSE. Income tax expense was $2.6 million for an
effective tax rate of 46.5% for the three months ended June 30,
1996 compared to income tax expense of $1.7 million for an
effective tax rate of 47.5% for the comparable period in 1995.
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS
ENDED JUNE 30, 1996 AND 1995
GENERAL. The Company reported net income of $5.9 million for the
six months ended June 30, 1996 compared to net income of $3.7
million for the six months ended June 30, 1995. The $2.2 million
increase was primarily attributable to an increase of $7.8 million
in interest income and an increase of $1.2 million in non-interest
income. These were partially offset by interest expense which
increased $4.4 million, the provision for loan losses which
increased $475,000 and non-interest expense which increased
29
$41,000. Finally, the provision for income tax expense increased
$1.8 million due to the increase in pre-tax income.
INTEREST INCOME. Interest income increased by $7.8 million, or
17.3% to $52.9 million for the six months ended June 30, 1996 from
$45.1 million for the six months ended June 30, 1995. The increase
was primarily the result of a $3.9 million increase in interest
income on mortgage loans, an increase of $3.1 million in interest
income on MBSs, and an increase of $1.1 million in interest income
on debt and equity securities. These were slightly offset by a
decrease in interest income on other loans and money market
investments of $230,000 and $90,000, respectively.
Interest income on mortgage loans increased by $3.9 million, or
19.4% to $24.0 million for the six months ended June 30, 1996 from
$20.1 million for the comparable six-month period in 1995 primarily
as a result of an increase in average balances of mortgage loans of
$99.0 million slightly offset by a decrease in the average yield on
mortgage loans of 10 basis points. The average yield on mortgage
loans decreased to 8.35% for the six months ended June 30, 1996
from 8.45% for the comparable six-month period in 1995. The drop
in the overall yield on the portfolio was mainly attributable to
the two rate indexes used for residential and commercial loans.
The average rate for the 30 year treasury bond and the 5-year
treasury note declined 48 and 86 basis points, respectively, when
compared to the first six months of 1995. Rates declined during
the second half of 1995 and did not show any upward movement until
February of 1996. The increase in average balances between the
periods was due to mortgage originations of $143.8 million during
1996 which included the purchase of $55.4 million of residential
mortgage loans in the secondary market. This was partially offset
by principal repayments which totalled $38.3 million.
Interest income on other loans decreased by $230,000, or 10.8%
primarily due to a decrease of $3.5 million in average balances
outstanding and a decrease of 25 basis points in average yield.
During the fourth quarter of 1995, the Bank discontinued its non-
real estate related consumer lending function.
Interest income on MBSs increased by $3.1 million, or 18.3% to
$20.0 million for the six months ended June 30, 1996 from $16.9
million for the comparable six-month period in 1995 primarily due
to an increase in average balances of MBSs of $56.3 million and an
increase in the average yield of 44 basis points. During 1996, the
Bank purchased $139.7 million of MBSs, of which $108.6 million were
for the available for sale portfolio. The Bank has been actively
managing its available for sale portfolio as part of its interest
rate risk strategy. The purchases for the held to maturity
portfolio which totalled $31.1 million were fixed rate securities
and 78.5% or $85.3 million of the amount purchased for the
available for sale portfolio were fixed rate. The emphasis on
30
fixed rate securities during the six-month period was due to more
favorable yields available compared to adjustable-rate securities
during the same period.
Interest income on debt and equity securities increased by $1.1
million, or 19.7% to $6.9 million for the six months ended June 30,
1996 from $5.8 million for the comparable six-month period in 1995
primarily as a result of an increase in average balances of $47.5
million partially offset by a decrease in average yield of 43 basis
points. The decline in average yield was due to a decrease in
rates during the second half of 1995. The debt and equity security
portfolio includes $51.3 million of corporate bonds which adjust
quarterly with rates tied to the two year treasury index which has
declined 94 basis points from the same period last year. The
average rate for the index for the first six months of 1996 was
5.68% compared to 6.62% for the same period last year. During the
second quarter of 1996, the Bank purchased $16.1 million of debt
and equity securities of which $15.1 million were designated as
available for sale. During the first quarter of 1996, the Bank
purchased $121.2 million of debt and equity securities of which
$115.2 million were designated as available for sale. The Bank has
been actively managing its available for sale portfolio as part of
its interest rate risk strategy.
INTEREST EXPENSE. Interest expense increased by $4.4 million, or
17.7% to $29.6 million for the six months ended June 30, 1996 from
$25.1 million for the six months ended June 30, 1995. The increase
was the result of a $1.8 million increase in interest expense on
deposits and an increase of $2.7 million in interest expense on
borrowings.
Interest on deposits increased by $1.8 million, or 8.8% to $21.8
million for the six months ended June 30, 1996 from $20.0 million
for the comparable six-month period in 1995. The increase in
interest on deposits was primarily due to the average balance which
increased $68.1 million or 6.6% to $1.10 billion for the six months
ended June 30, 1996 from $1.03 billion for the comparable six-month
period in 1995 and an increase of 8 basis points in the average
cost of deposits between the periods. The increase in average
balance was primarily due to certificate account balances which
increased $71.9 million, or 14.8% to $556.3 million for the six
months ended June 30, 1996 from $484.4 million for the comparable
six-month period in 1995. The Bank's strategy during 1995 and the
first half of 1996 has been to emphasize 12 and 18 month
certificates of deposit in order to retain a portion of customer
withdrawals from passbook accounts as customers sought higher
yielding investment opportunities and as an alternative to borrowed
funds. The average cost of certificate accounts was 5.65% for the
first half of 1996 compared to 5.73% for the comparable 1995 period
due to a falling interest rate environment during the second half
of 1995 and the beginning of 1996. Interest expense on certificate
31
accounts increased by $1.8 million or 13.1% to $15.7 million for
the six months ended June 30, 1996 from $13.9 million in the same
period in 1995 due to the growth in average balances. The average
balance of passbook accounts decreased by $45.9 million, or 10.8%
to $377.8 million for the six months ended June 30, 1996 from
$423.7 million for the first half of 1995. The average cost of
passbook accounts was stable at approximately 2.48% for both
periods. Interest expense on passbook accounts decreased by
$553,000, or 10.6% to $4.7 million for the six months ended June
30, 1996 from $5.2 million in the same period in 1995 primarily due
to a decrease in average balances due to customers seeking higher
yielding investment opportunities including the Bank's certificate
of deposit accounts. The average cost of all deposits was 3.95%
for the period ended June 30, 1996 compared to 3.87% for the period
ended June 30, 1995 primarily due to the shift from passbook
accounts to higher costing certificates of deposit accounts.
Interest on borrowed funds increased by $2.7 million, or 52.6% to
$7.8 million for the six months ended June 30, 1996 from $5.1
million for the comparable six-month period in 1995. Borrowed
funds on an average basis increased by $111.2 million between the
periods due to the addition of short-term FHLB advances and
securities sold under agreements to repurchase during 1996 to
provide funding for loan originations and the purchase of $55.4
million of residential mortgages in the secondary market during the
first half of 1996. The growth in average borrowings was also due
to a $75 million leverage program that was completed during June of
1995 for the purpose of improving the Bank's net interest margin.
The average rate paid on borrowings decreased to 5.87% for the six
months ended June 30, 1996 from 6.63% for the comparable prior-year
period due to the decrease in market interest rates between the
periods. For example, the weighted average rates outstanding on
FHLB advances and repurchase agreements at June 30, 1996 were 5.63%
and 5.56%, respectively, compared to 6.23% and 5.99% at June 30,
1995.
NET INTEREST INCOME. Net interest income increased by $3.4 million
to $23.4 million for the six months ended June 30, 1996 from $20.0
million for the six months ended June 30, 1995. The increase
reflects an increase in the average yield on interest-earning
assets to 7.45% from 7.39% for the six months ended June 30, 1996
and 1995, respectively. This increase was partially offset by the
average cost on interest-bearing liabilities which increased to
4.32% from 4.23% for the six months ended June 30, 1996 and 1995,
respectively. The net interest spread was 3.13% for the six months
ended June 30, 1996 compared to 3.16% for the comparable period in
1995. It is unclear how the recent increases in market interest
rates will impact net interest income for the remainder of 1996.
PROVISION FOR LOAN LOSSES. The Bank provided $1.8 million for loan
losses for the six months ended June 30, 1996 compared to $1.3
32
million for the comparable six-month period in 1995. The Bank
established an additional provision of $400,000 during June 1996
related to the growth in the Bank's residential and commercial
mortgage loan portfolios.
NON-INTEREST INCOME. Non-interest income increased by $1.2 million
or 31.1% for the six months ended June 30, 1996 to $4.9 million
from $3.8 million for the comparable six-month period in 1995.
Loan fees and servicing income increased by $603,000 due to the
recovery of interest totalling $597,000 during the second quarter
of 1996 on the satisfaction of a land loan that was previously
classified as a restructured loan. Insurance, annuity and mutual
fund fees increased by $408,000 due to an increase in sales volume
of 46% for the first half of 1996 from the same period in 1995.
The net gain on the sale of interest earning assets was $99,000 due
to the sale of $166.3 million in securities which had been
available for sale. The Bank has been actively managing its
available for sale portfolio to improve yield and to reduce
interest rate risk on the overall portfolio. Savings and checking
fees increased by $212,000 due to the number of checking accounts
which increased by 8,758 or 17.5% to 58,747 at June 30, 1996 from
49,989 at June 30, 1995 due to the Bank's strategy to attract lower
cost deposit balances. These were partially offset by other non-
interest income which declined $150,000 due to decreases of $90,000
and $57,000, respectively, in miscellaneous income and fees from
corresponding Banks.
NON-INTEREST EXPENSE. Non-interest expense increased by $41,000,
or 0.3% for the six months ended June 30, 1996 to $15.5 million
from $15.4 million for the comparable six-month period in 1995.
The increase was primarily due to increases of $543,000 and
$96,000, respectively, in compensation and benefits and occupancy
and equipment costs. The increase in compensation costs was due to
a 46% increase in sales volume generated by CIS, Inc. which
increased commissions paid for the period by $190,000. The
remainder of the increase in compensation was due to normal merit
increases. The increase in occupancy and equipment costs was due
to higher contract costs for the first half of 1996 when compared
to the same period last year. These increases were offset by
decreases of $530,000 and $62,000, respectively, in REO operations,
net and FDIC deposit insurance premiums. The decrease in real
estate owned operations, net was primarily due to the sale of $1.0
million of REO properties during 1996. Miscellaneous operating
expenses in total were essentially unchanged from the same period
last year. During June 1996, the Bank took into income $389,000 of
the reserve previously established against its claim against
Nationar (see Note 6 to Notes to Consolidated Financial
Statements). This reduction in miscellaneous costs was offset by
the following: Other miscellaneous expenses were up $150,000 due to
agency fees of $55,000 paid for additions to staff and the
33
settlement of two legal actions for $150,000 (see legal
proceedings). NYCE fees increased $118,000 during the period.
The EDS EFIT Division now functions as the switch for the Bank's
ATM transactions, whereas in the past EDS Newtrend Division
provided the software to switch these transactions.
INCOME TAX EXPENSE. Income tax expense was $5.2 million for an
effective tax rate of 46.8% for the six months ended June 30, 1996
compared to income tax expense of $3.3 million for an effective tax
rate of 47.5% for the comparable period in 1995.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On February 6, 1995, Nationar, the entity that provided check
collection services for the Bank was seized by the Superintendent
of Banks of the State of New York ("Superintendent"). Checks in
process of collection for the Bank totalling $8.9 million were held
by Nationar at the time it was seized. In April 1995, $3.9 million
of these funds were remitted to the Bank.
During the third quarter of 1995, the Bank filed Proofs of Claim
totalling $5.0 million in the aggregate. However, there was a
reasonable likelihood that the Bank would not recover all of the
amounts owed by Nationar. Accordingly, management established a
reserve for potential losses associated with Nationar deposits, in
connection with its normal procedure for monitoring asset quality.
During the year ended December 31, 1995, the Bank recorded $430,000
related to the ultimate recovery of amounts owed by Nationar. On
June 27, 1996, the Bank received a partial payment of it's claims
against Nationar totalling $4,987,000, at which time $389,000 of
the reserve previously established was taken into income. The Bank
could receive further payment on the outstanding balance of its
claims, but the exact timing of such further payments, if any, are
unknown at this time.
In February, 1983, a burglary of the contents of safe deposit boxes
occurred at a branch office of the Bank. At June 30, 1996, the
Bank has a class action lawsuit related thereto pending, whereby
the plaintiffs are seeking recovery of approximately $13,300,000 in
actual damages and an additional $13,000,000 of unspecified
damages. The Banks ultimate liability, if any , which might arise
from the disposition of these claims cannot presently be
determined. Management believes it has meritorious defenses
against these actions and has and will continue to defend its
position. Accordingly, no provision for any liability that may
result upon adjudication has been recognized in the accompanying
consolidated financial statements.
In addition, the Bank and certain of its officers are defendants in
a lawsuit alleging discriminatory employment practices by the
34
defendants. The suit was filed on June 1, 1994 in the United
States District Court, Eastern District of New York and alleges
violations under Title VII of the Civil Rights Act of 1964 and the
New York Human Rights Law. The lawsuit seeks monetary damages.
The Bank does not believe it engaged in any discriminatory
employment practices and intends to vigorously defend this lawsuit.
In May 1996, the Bank settled a lawsuit filed on July 28, 1994 in
the United States District Court, Eastern District of New York
which alleged violations under Title VII of the Civil Rights Act of
1964 and the New York Human Rights Law. The suit was settled for
$99,999.
The Company is involved in various other legal actions arising in
the ordinary course of business, which in the aggregate, are
believed by management to be immaterial to the financial position
of the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 27.1 Financial Data Schedule.
(b) None.
35
SIGNATURES
Pursuant to the requirements of The Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
HAVEN BANCORP INC.
(Registrant)
Date: August 13, 1996 By: /s/ Philip S. Messina
---------------------------
Philip S. Messina
President and Chief Executive
Officer
Date: August 13, 1996 By: /s/ Catherine Califano
---------------------------
Catherine Califano
Senior Vice President
and Chief Financial Officer
36