SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): October 19, 1998
ALBANK Financial Corporation
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(Exact name of registrant as specified in its charter)
DELAWARE 0-19843 14-1746910
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(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
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10 North Pearl Street, Albany, NY 12207-2774
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(Address of principal executive offices)
Registrant's telephone number, including area code: (518) 445-2100
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Not Applicable
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(former name or former address, if changed since last report)
Item 5. Other Events
5.1 Attached hereto as exhibit 99.1 and incorporated by reference herein
is financial information for ALBANK Financial Corporation for the
quarter ended September 30, 1998, as presented in the press release
of October 19, 1998.
Item 7. Financial Statements, Pro Forma Information and Exhibits
(c) Exhibits
99.1 Financial information for ALBANK Financial Corporation
for the quarter ended September 30, 1998.
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 hereunto duly authorized.
Date: October __, 1998
ALBANK Financial Corporation
(Registrant)
By: /s/ Richard J. Heller
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Name: Richard J. Heller
Title: Executive Vice President and
Chief Financial Officer
(Duly Authorized Officer)
ALBANK (Logo)
Albank Financial Corporation
10 North Pearl Street News Release
Albany, New York 12207-2774
518 445-2100
CONTACT: Richard J. Heller
Executive Vice President & CFO
ALBANK Financial Corp.
518/445-2100
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ALBANK FINANCIAL THIRD QUARTER
DILUTED EARNINGS PER SHARE UP 15%
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ALBANY, NY -- October 19, 1998 -- ALBANK Financial Corporation
(Nasdaq: ALBK) reported today that its diluted earnings per share for the
three months ended September 30, 1998, were $0.78, an increase of 15% from
the $0.68 per diluted share earned in the 1997 third quarter.
Net income grew 16% to $10,841,000, up from $9,378,000 last year.
ALBANK's return on average shareholders' equity for the third
quarter was 11.17% versus 11.05% a year ago. Return on average assets was
1.04% compared with 1.03% in 1997 third quarter. Book value per share at
September 30, 1998, was $29.39, up 10% from $26.69 a year ago. The Company's
net interest spread was 3.26% during the third quarter versus 3.53% a year
ago, while the net interest margin was 3.74% compared with 4.03% in the third
quarter of last year.
Discussing the third quarter results, ALBANK's Chairman, President
and CEO, Herbert G. Chorbajian, said, "I am certainly pleased with our third
quarter bottom line results which occurred during a period marked by
generally lower interest rates and a flattened yield curve. This rate
environment continued to put downward pressure on our interest spreads and
margin. The earnings gains came from a higher level of earning assets
following our KeyBank branch purchase last year, improving asset quality,
increases in noninterest income and tighter expense controls."
ALBANK's third quarter profit on a cash basis (that is, core net
income plus amortization of goodwill and costs associated with certain
stock-related employee benefit plans) was $12,736,000, or $0.91 per diluted
share, compared with $10,570,000 and $0.77 per share in the 1997 third
quarter, up 20% and 18%, respectively. Cash return on tangible equity during
the third quarter rose to 16.49% from 14.20% for the same period last year;
cash return on average assets was 1.22% compared with 1.16% last year.
Nonperforming assets at September 30, 1998, were 0.78% of total
assets compared with 0.94% last year. Nonperforming loans were 0.92% of loans
receivable versus 1.17% in 1997. The Bank's allowance for loan losses at
September 30, 1998, was 114% of nonperforming loans, up from 83% a year ago.
ALBANK also released its financial results for the first nine months
of 1998. Diluted earnings per share were $2.23, up 8% from the $2.06 which
the Company reported for the corresponding period last year. Net income rose
10% to a record $30,923,000, up from $28,136,000 in 1997. Return on average
shareholders' equity was 11.08%, and return on average assets was 1.01%;
comparable 1997 figures were 11.46% and 1.06%.
Diluted cash earnings per share for the initial nine months of 1998
were $2.63, up 13% from the $2.32 ALBANK reported for the comparable 1997
period. Cash net income rose to $36,541,000 compared with $31,782,000 in
1997, a 15% increase. The nine-month cash return on tangible equity was
16.65% and the cash return on average assets was 1.19%; comparable 1997
figures were 14.85% and 1.20%.
On June 15, ALBANK announced jointly with Charter One Financial,
Inc. of Clevelend, Ohio (Nasdaq: COFI) that the two companies had entered
into an agreement under the terms of which ALBANK would be merged into a
wholly owned subsidiary of Charter One. When the transaction is completed,
ALBANK shareholders will receive 2.268 shares of Charter One stock for each
share of ALBANK stock. The merger is subject to regulatory approval and
approval by the shareholders of both companies. A closing is expected during
the fourth quarter of this year.
ALBANK Financial Corporation is the holding company for ALBANK, FSB,
a federally chartered savings bank, and ALBANK Commercial, a New York State
chartered commercial bank. Together, the banks and a brokerage and insurance
subsidiary, Alvest Financial Services, Inc., provide a wide range of
financial products and services through a branch network of 109 offices in
upstate New York, western Massachusetts and Vermont. At September 30, 1998,
ALBANK Financial Corporation had consolidated assets of $4.2 billion,
deposits of $3.5 billion and capital of $393 million.
ALBANK Financial Corporation and Subsidiaries
Financial Highlights
(dollars in thousands, except per share amounts) (unaudited)
For the nine
months ended For the three months ended
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09/30/98 09/30/97 09/30/98 06/30/98 03/31/98 12/31/97 09/30/97
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For the period ended:
Net interest income $ 109,554 101,003 36,127 35,967 37,460 35,743 34,517
Provision for loan losses 5,400 5,400 1,800 1,800 1,800 1,800 1,800
Noninterest income 16,011 10,055 5,577 5,589 4,845 4,211 3,289
Noninterest expense (includes
capital securities expense) 72,403 61,134 23,438 24,173 24,792 23,256 21,122
Net income 30,923 28,136 10,841 10,275 9,807 15,288 9,378
Core net income 30,864<F1> 27,978<F2> 10,841 10,275 9,748<F1> 9,162<F1><F2> 9,378
Cash net income<F3> 36,541 31,782 12,736 12,167 11,638 10,732 10,570
Loan originations 480,641 468,725 177,262 180,611 122,768 213,483 212,065
Common share data:
Earnings per share:
Basic 2.37 2.21 0.81 0.79 0.76 1.19 0.73
Diluted 2.23 2.06 0.78 0.74 0.71 1.11 0.68
Earnings per share based on
"core net income":
Basic 2.37 2.20 0.81 0.79 0.76 0.72 0.73
Diluted 2.23 2.05 0.78 0.74 0.71 0.67 0.68
Earnings per share based on
"cash net income":
Basic 2.80 2.50 0.96 0.94 0.91 0.84 0.83
Diluted 2.63 2.32 0.91 0.88 0.85 0.78 0.77
Book value 29.39 26.69 29.39 28.70 28.54 27.86 26.69
Tangible book value 23.60 23.51 23.60 22.72 22.32 21.64 23.51
At period end:
Assets 4,156,852 3,716,954 4,156,852 4,130,868 4,089,428 4,083,097 3,716,954
Securities 775,093 803,094 775,093 813,908 800,099 863,488 803,094
Loans receivable 2,911,756 2,710,441 2,911,756 2,865,779 2,843,764 2,856,049 2,710,441
Allowance for loan losses 30,475 26,458 30,475 29,717 29,751 29,117 26,458
Deposits 3,525,928 2,968,626 3,525,928 3,505,324 3,539,650 3,483,791 2,968,626
Borrowed funds and
repurchase agreements 64,337 238,554 64,337 88,166 32,458 88,808 238,554
Stockholders' equity 393,296 343,512 393,296 379,445 366,828 359,613 343,512
Shares outstanding (in thousands) 13,384 12,872 13,384 13,222 12,853 12,907 12,872
Average balances:
Assets $4,109,088 3,550,685 4,153,880 4,105,286 4,067,145 3,917,263 3,627,836
Stockholders' equity 373,016 328,320 384,884 370,915 363,010 347,907 336,698
Interest-earning assets 3,827,382 3,369,384 3,866,428 3,817,586 3,797,373 3,695,215 3,447,305
Interest-bearing liabilities 3,406,556 3,017,313 3,431,576 3,406,569 3,380,968 3,285,839 3,047,579
Diluted shares (in thousands) 13,871 13,679 13,954 13,825 13,718 13,774 13,699
Ratios:
Return on average
stockholders' equity ("ROE") 11.08% 11.46% 11.17% 11.11% 10.96% 17.43% 11.05%
ROE based on "core net income" 11.06 11.39 11.17 11.11 10.89 10.45 11.05
Return on tangible equity
based on "cash net income" 16.65 14.85 16.49 16.76 16.71 14.92 14.20
Return on average assets ("ROA") 1.01 1.06 1.04 1.00 0.98 1.55 1.03
ROA based on "core net income" 1.00 1.05 1.04 1.00 0.97 0.93 1.03
ROA based on "cash net income" 1.19 1.20 1.22 1.19 1.16 1.09 1.16
Net interest spread 3.33 3.54 3.26 3.29 3.42 3.41 3.53
Net interest margin 3.80 3.99 3.74 3.75 3.89 3.89 4.03
Equity to assets (period end) 9.46 9.24 9.46 9.19 8.97 8.81 9.24
Efficiency ratio<F4> 50.13 50.56 48.54 50.61 51.25 51.40 49.12
Asset quality (period end):
Nonperforming loans ("NPLs") $ 26,764 31,713 26,764 30,067 33,170 31,814 31,713
Nonperforming assets ("NPAs") 32,423 34,864 32,423 35,317 37,669 35,800 34,864
NPLs as a % of loans receivable 0.92% 1.17% 0.92% 1.05% 1.17% 1.11% 1.17%
NPAs as a % of total assets 0.78 0.94 0.78 0.85 0.92 0.88 0.94
<FN>
<F1> Core net income excludes the after tax effect of the following partial
recoveries related to a 1995 write-off of an investment in Nationar:
March 1998 ($0.1 million), October 1997 ($0.1 million)
and April 1997 ($0.2 million).
<F2> Core net income excludes the December 1997 tax benefit ($6.0 million)
that resulted from a corporate realignment.
<F3> Cash net income is core net income plus amortization of goodwill and
costs associated with certain stock-related employee benefit plans.
<F4> The efficiency ratio is calculated by dividing core noninterest
expense by net interest income plus core noninterest income. In
addition to noncore items, noninterest expense excludes capital
securities expense, goodwill amortization and foreclosure related
costs, while noninterest income excludes securities gains/losses and
foreclosure related income.
</FN>
ALBANK Financial Corporation and Subsidiaries
Consolidated Statements of Earnings
(in thousands, except per share amounts) (unaudited)
For the nine
months ended For the three months ended
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09/30/98 09/30/97 09/30/98 06/30/98 03/31/98 12/31/97 09/30/97
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Interest income:
Mortgage loans $135,804 127,987 45,083 45,033 45,688 45,309 43,874
Other loans 36,678 33,214 12,409 12,064 12,205 11,837 11,134
Securities available for sale 33,854 30,130 11,359 10,885 11,610 11,813 10,617
Investment securities 4,621 5,234 1,491 1,530 1,600 1,533 1,541
Federal funds sold 783 37 168 285 330 100 23
Securities purchased under agreement to resell 4,870 6 1,865 1,803 1,202 650 --
Stock in Federal Home Loan Bank 1,411 962 482 463 466 364 333
Total interest income 218,021 197,570 72,857 72,063 73,101 71,606 67,522
Interest expense:
Deposits and escrow accounts 106,562 91,907 35,800 35,628 35,134 33,619 30,880
Short-term borrowed funds and repurchase agreements 1,265 3,803 597 329 339 1,968 1,844
Long-term debt 640 857 333 139 168 276 281
Total interest expense 108,467 96,567 36,730 36,096 35,641 35,863 33,005
Net interest income 109,554 101,003 36,127 35,967 37,460 35,743 34,517
Provision for loan losses 5,400 5,400 1,800 1,800 1,800 1,800 1,800
Net interest income after provision
for loan losses 104,154 95,603 34,327 34,167 35,660 33,943 32,717
Noninterest income:
Service charges on deposit accounts 8,517 4,778 2,990 3,023 2,504 2,352 1,661
Net security transactions 93 274 -- -- 93 202 19
Brokerage and insurance commissions 1,811 1,622 547 638 626 486 557
Other 5,590 3,381 2,040 1,928 1,622 1,171 1,052
Total noninterest income 16,011 10,055 5,577 5,589 4,845 4,211 3,289
Noninterest expense:
Compensation and employee benefits 33,567 30,003 10,503 11,411 11,653 11,365 10,145
Occupancy, net 8,119 7,467 2,707 2,679 2,733 2,588 2,476
Furniture, fixtures and equipment 5,595 4,838 1,907 1,877 1,811 1,813 1,664
Federal deposit insurance premiums 1,058 1,056 346 352 360 356 345
Professional, legal and other fees 2,493 2,391 844 843 806 585 672
Telephone, postage and printing 4,081 3,310 1,256 1,234 1,591 1,384 1,085
Goodwill amortization 4,731 2,619 1,582 1,578 1,571 1,253 872
Capital securities expense 3,514 1,495 1,171 1,171 1,172 1,171 1,170
Other 9,245 7,955 3,122 3,028 3,095 2,741 2,693
Total noninterest expense 72,403 61,134 23,438 24,173 24,792 23,256 21,122
Income before income taxes 47,762 44,524 16,466 15,583 15,713 14,898 14,884
Income tax expense 16,839 16,388 5,625 5,308 5,906 (390) 5,506
Net income $ 30,923 28,136 10,841 10,275 9,807 15,288 9,378
Basic earnings per share $ 2.37 2.21 0.81 0.79 0.76 1.19 0.73
Diluted earnings per share 2.23 2.06 0.78 0.74 0.71 1.11 0.68
ALBANK Financial Corporation and Subsidiaries
Consolidated Statements of Financial Condition
(dollars in thousands)
As of
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09/30/98 12/31/97
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(unaudited)
Assets
Cash and due from banks $ 76,501 97,389
Federal funds sold 28,000 --
Securities purchased under agreement to resell 125,000 75,000
Securities available for sale 698,992 768,517
Investment securities 76,101 94,971
Loans receivable 2,911,756 2,856,049
Less: allowance for loan losses 30,475 29,117
Loans receivable, net 2,881,281 2,826,932
Accrued interest receivable 26,489 27,837
Office premises and equipment, net 54,790 57,435
Stock in Federal Home Loan Bank, at cost 25,864 21,408
Real estate owned 5,643 3,966
Goodwill 77,445 80,281
Other assets 80,746 29,361
$4,156,852 4,083,097
Liabilities
Deposits $3,525,928 3,483,791
Escrow accounts 8,558 21,172
Accrued income taxes payable 9,626 8,289
Short-term borrowed funds and repurchase agreements 29,276 68,747
Long-term debt 35,061 20,061
Obligation under capital lease 4,459 4,542
Other liabilities 100,648 66,882
Total liabilities 3,713,556 3,673,484
Corporation-obligated mandatorily redeemable
capital securities of subsidiary trust 50,000 50,000
Stockholders' Equity
Common stock (15,697,500 shares issued; 13,384,214 and 12,906,845
shares outstanding, respectively) 157 157
Additional paid-in capital 185,621 182,704
Retained earnings, substantially restricted 264,001 248,402
Treasury stock, at cost (2,313,286 and 2,790,655 shares, respectively) (62,473) (73,200)
Accumulated other comprehensive income 10,652 6,578
Common stock acquired by employee stock ownership plan
and bank recognition plan (4,662) (5,028)
Total stockholders' equity 393,296 359,613
$4,156,852 4,083,097