SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 27, 1998
Long Island Bancorp, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-23526 11-3198508
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
201 Old Country Road
Melville, New York 11747-2724
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (516) 547-2000
Not Applicable
(Former Name of Former Address, if Changed Since Last Report)
Item 1. Changes in Control Registrant
Not Applicable
Item 2. Acquisition or Disposition of Assets
Not Applicable
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
Press Release of Long Island Bancorp, Inc.
dated January 27, 1998
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Not Applicable
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LONG ISLAND BANCORP, INC.
By: /s/ Mark Fuster
Name: Mark Fuster
Title: Chief Financial Officer
(principal financial and
accounting officer)
Date: January 27, 1998
LONG ISLAND BANCORP News Release
201 Old Country Road
Melville, New York 11747
Contact:
Roger Teurfs
Corporate Secretary
516-547-3030
LONG ISLAND BANCORP, INC. REPORTS FIRST QUARTER EARNINGS
Melville, New York, January 27, 1998 - Long Island Bancorp, Inc.
(NASDAQ: LISB), the holding company for The Long Island Savings Bank, FSB today
reported record net income of $13.2 million or diluted earnings per share of
$0.57 for the quarter ended December 31, 1997, representing the seventh
consecutive quarter of increased earnings (excluding one-time charges). Net
income for the same period in 1996 was $11.9 million, or $0.51 per share. Basic
earnings per share for the three month period in 1997 and 1996 were $0.59 and
$0.53, respectively.
Commenting on the first quarter earnings, John J. Conefry, Jr.,
Chairman of the Board and Chief Executive Officer stated, "We are pleased to
report a solid financial performance for the first quarter of the 1998 fiscal
year. The Company reported an increase in net income over the prior quarter in a
challenging interest rate environment. Despite the continued flattening of the
yield curve, we managed to minimize the negative impact on the net interest
margin. The Company maintained its focus on the continuing objectives of
controlling costs and delivering attractive loan and savings products while
retaining our focus on growing the core customer base."
Earnings Summary for the Quarter Ended December 31, 1997
- --------------------------------------------------------
Net interest income decreased by $1.3 million, or 3.2%, to $39.0
million during the quarter ended December 31, 1997 from $40.3 million in the
same quarter of 1996. On a consecutive quarter basis net interest income
declined marginally from $39.1 million for the quarter ended September 30, 1997
and is attributable to the continued flattening of the yield curve, coupled with
higher level of average borrowed funds. These factors contributed to a decline
the net interest margin to 2.67% for the quarter ended December 31, 1997 as
compared with 2.77% for the quarter ended September 30, 1997. The Company
continues to explore opportunities to lower its borrowing costs.
The provision for possible loan losses remained constant at $1.5
million for the quarters ended December 31,1997 and 1996 as asset quality
remained stable.
Total non-interest income increased by $1.5 million, or 16.40%, to
$10.3 million for the quarter ended December 31, 1997 compared with the same
period in 1996. This increase is attributable to increases in net gains on asset
sales of $2.1 million and an increase of $0.2 million in income from insurance
and securities commissions. These increases were partially offset by decreases
of $0.8 million in loan servicing fee income and $0.2 million in loan fees and
service charges. The increased gains on asset sales is primarily due to the
Company's mortgage banking activities and greater profits from the sale of
MBS's. The decline in loan service fee income is due to the run off of higher
yielding fees from previously securitized home equity loans and the replacement
with lower yielding fees from one-to-four family loans serviced for others.
Total G&A expense decreased by $1.5 million, or 5.5%, to $25.5 million
for the quarter ended December 31, 1997 compared with the same period in 1996.
Contributing to this decrease were reductions in federal insurance premiums of
$1.1 million and advertising expense of $ 0.6 million. Federal insurance
premiums decreased due to the 1996 enactment of the BIF/SAIF legislation. The
Company continues its efforts to lower its G&A costs which have declined on
average $1.0 million per quarter for the last two quarters.
Income tax expense increased to $8.4 million for the quarter ended
December 31, 1997 from $8.2 million for the 1996 quarter, primarily reflecting
higher pre-tax income partially offset by a 200 basis point decline in the
effective tax rate as a result of tax planning initiatives.
Balance Sheet Summary
- ---------------------
Total assets at December 31, 1997 were $6.1 billion, an increase of
$141.7 million since September 30, 1997. The growth in assets is attributable to
increases of $153.5 million in investment in debt and equity securities, $77.3
million in cash and cash equivalents and $34.0 million in total net loans held
for investment and sale. Loan volume for the quarter ended December 31, 1997 was
$617.9 million (of which $4.8 million represents bulk purchases of loans). A
portion of the growth in loans and cash and cash equivalents was funded by a
reduction of $119.4 million in mortgage-backed securities.
Total liabilities at December 31, 1997 were $5.5 million, an increase
of $130.9 million since September 30, 1997. The increase in total liabilities
primarily reflects an increase in borrowed funds of $112.5 million to $1.6
billion and an increase in deposit liabilities of $11.9 million to $3.7 billion
at December 31, 1997.
Stockholders' equity increased by $10.9 million to $557.3 million since
September 30, 1997. The increase consists of earnings of $13.2 million, $1.4
million related to the Company's stock benefit plans and $0.1 million related to
the exercise of stock options and the related tax benefits. These increases were
offset by a decline of $0.5 million in unrealized gains on securities classified
as available-for-sale, net of tax, and the declaration of $3.3 million in
dividends. At December 31, 1997 book value per share amounted to $23.19.
Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.
Long Island Bancorp,Inc. is the holding company for The Long Island
Savings Bank, FSB. The Long Island Savings Bank, FSB is a federally
chartered FDIC-insured institution which serves its customers through 35 full
service branch offices throughout Queens, Nassau and Suffolk counties.The Bank
also operates mortgage loan offices across Long Island and in New Jersey,
Pennsylvania, Maryland, Virginia, North Carolina, South Carolina and Georgia
and has an Internet home page at the address: http://www.lisb.com.
(Financial tables attached)
This document may contain forward looking statements based on current
management expectations. The Company's actual results could differ materially
from those management expectations. Factors that could cause future results to
vary from current management expectations include, but are not limited to,
general economic conditions, changes in interest rates, deposit flows, the cost
of funds, cost of federal deposit insurance premiums, cost of stock-based
benefit plans, demand for loan products, demand for financial services,
competition, changes in the quality or composition of the Company's loan and
investment portfolios, changes in accounting principles, policies or guidelines,
and other economic, competitive, governmental, regulatory and technological
factors affecting the Company's operations, products, services and prices.
Additional factors are described in the Company's public reports filed with the
Securities and Exchange Commission.
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
December 31, September 30,
1997 1997
----------------- -------------------
ASSETS
- ------
Cash and cash equivalents (including interest-earning assets of $53,105 and
$9,735, respectively) $ 121,028 $ 43,705
Investment in debt and equity securities, net:
Available-for-sale 292,064 138,578
Mortgage-backed securities, net:
Held-to-maturity (estimated fair value of
$19,959 and $20,188, respectively) 21,957 22,223
Available-for-sale 1,689,292 1,808,471
Stock in Federal Home Loan Bank of New York, at cost 48,724 48,724
Loans held for sale 188,744 157,617
Loans receivable held for investment, net:
Real estate loans, net 3,330,109 3,333,185
Commercial loans, net 9,393 6,465
Other loans, net 181,246 178,325
----------------- -------------------
Loans, net 3,520,748 3,517,975
Less allowance for possible loan losses (33,734) (33,881)
----------------- -------------------
Total loans receivable held for investment, net 3,487,014 3,484,094
Mortgage servicing rights, net 44,176 41,789
Office properties and equipment, net 87,007 88,466
Accrued interest receivable, net 33,299 35,334
Investment in real estate, net 10,366 9,103
Deferred taxes 16,529 16,547
Excess of cost over fair value of net assets acquired 4,961 5,069
Prepaid expenses and other assets 27,363 31,064
----------------- -------------------
Total assets $ 6,072,524 $ 5,930,784
================= ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits $ 3,742,432 $ 3,730,503
Official checks outstanding 53,533 26,840
Borrowed funds,net 1,613,934 1,501,456
Mortgagors' escrow payments 48,169 69,353
Accrued expenses and other liabilities 57,203 56,257
----------------- -------------------
Total liabilities 5,515,271 5,384,409
Stockholders' equity:
Preferred stock ($0.01 par value, 5,000,000 shares authorized;
none issued) --- ---
Common stock ($0.01 par value, 45,000,000 shares authorized; 26,816,464
shares issued, 24,028,550 and 24,022,924 outstanding, respectively) 268 268
Additional paid-in capital 310,238 309,372
Unallocated Employee Stock Ownership Plan (17,887) (18,079)
Unearned Management Recognition & Retention Plan (3,409) (3,816)
Unrealized gain on securities available-for-sale, net of tax 12,444 12,947
Retained income-partially restricted 329,522 319,756
Treasury stock, at cost (2,787,914 and 2,793,540 shares, respectively) (73,923) (74,073)
----------------- -------------------
Total stockholders' equity 557,253 546,375
----------------- -------------------
Total liabilities and stockholders' equity $ 6,072,524 $ 5,930,784
================= ===================
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
FOR THE THREE MONTHS ENDED
DECEMBER 31,
----------------------------
1997 1996
------------- -------------
Interest income:
Real estate loans $ 65,339 $ 59,159
Commercial loans 151 178
Other loans 4,296 3,904
Mortgage-backed securities 28,579 28,999
Debt and equity securities 6,152 3,730
------------- -------------
Total interest income 104,517 95,970
------------- -------------
Interest expense:
Deposits 41,442 39,438
Borrowed funds 24,108 16,276
------------- -------------
Total interest expense 65,550 55,714
------------- -------------
Net interest income 38,967 40,256
Provision for possible loan losses 1,500 1,500
------------- -------------
Net interest income after provision for possible 37,467 38,756
loan losses
------------- -------------
Non-interest income:
Fees and other income:
Loan fees and service charges 838 1,006
Loan servicing fees 2,584 3,382
Income from insurance and securities commissions 690 507
Deposit service fees 1,453 1,528
------------- -------------
Total fee income 5,565 6,423
Other income 993 861
------------- -------------
Total fees and other income 6,558 7,284
------------- -------------
Net gains on sale activity:
Net gains on loans and mortgage-backed securities 3,959 1,975
Net gain (loss) on investment in debt and equity
securities 219 99
------------- -------------
Total net gains on sale activity 4,178 2,074
Net gain (loss) on investment in real estate and premises (443) (515)
------------- -------------
Total non-interest income 10,293 8,843
Non-interest expense:
General and administrative expense:
Compensation, payroll taxes and fringe benefits 14,310 14,128
Advertising 607 1,255
Office occupancy and equipment 5,489 5,397
Federal insurance premiums 796 1,903
Other general and administrative expense 4,276 4,265
------------- -------------
Total general and administrative expense 25,478 26,948
Litigation expense - goodwill lawsuit 593 359
Amortization of excess of cost over fair value of assets
assets acquired 108 110
------------- -------------
Total non-interest expense 26,179 27,417
------------- -------------
Income before income taxes 21,581 20,182
Provision for income taxes 8,399 8,248
------------- -------------
Net income $ 13,182 $ 11,934
============= =============
Basic earnings per common share $ 0.59 $ 0.53
============= =============
Diluted earnings per common share $ 0.57 $ 0.51
============= =============
(a) The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earning per Share" as of December 31, 1997. SFAS No.128 replaces
primary earnings per share ("EPS") with basic EPS and fully diluted EPS
with diluted EPS. Basic EPS is computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution
of options, warrants and convertible securities. Net income per common
share amounts for periods prior to December 31, 1997, have been restated
to reflect the adoption of SFAS No. 128.
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
AVERAGE BALANCE SHEET
FOR THE THREE MONTHS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------
1997 1996
-------------------------------------------- ----------------------------------------------
AVERAGE AVERAGE
AVERAGE YIELD\ AVERAGE YIELD\
BALANCE INTEREST COST BALANCE INTEREST COST
-------------- ------------ -------------- -------------- ------------- ---------------
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS
Interest-earning cash
equivalents $ 67,104 $ 920 5.44 % $ 58,388 $ 766 5.20 %
Debt and equity securities
and FHLB-NY stock, net (1) 328,775 5,232 6.37 213,001 2,964 5.57
Mortgage-backed securities, 1,762,043 28,579 6.49 1,693,945 28,999 6.85
net (1)
Real estate loans, net (2) 3,503,208 65,339 7.46 3,105,539 59,159 7.62
Commercial and other loans, 172,621 4,447 10.30 140,214 4,082 11.65
net (2)
-------------- ------------ ------------ -------------- ------------- ------------
Total interest-earning assets 5,833,751 104,517 7.17 5,211,087 95,970 7.37
Other non-interest-earning 236,483 300,439
assets
-------------- ------------ -------------- -------------
Total assets $ 6,070,234 $ 104,517 $ 5,511,526 $ 95,970
============== ============ ============== =============
INTEREST BEARING LIABILITIES
Deposits, net $ 3,795,388 $ 41,442 4.33 % $ 3,708,611 $ 39,438 4.22 %
Borrowed funds 1,637,739 24,108 5.84 1,133,506 16,276 5.70
-------------- ------------ ------------ -------------- ------------- ------------
Total interest-bearing 5,433,127 65,550 4.79 4,842,117 55,714 4.56
liabilities
Non-interest-bearing 87,198 144,903
liabilities
-------------- --------------
Total liabilities 5,520,325 4,987,020
Total stockholders' equity 549,909 524,506
-------------- ------------ ------------ -------------- ------------- ------------
Total liabilities and
stockholders'
equity $ 6,070,234 $ 65,550 $ 5,511,526 $ 55,714
============== ------------ ============== -------------
Net interest income/spread (3) $ 38,967 2.38 % $ 40,256 2.80 %
============ ============ ============= ============
Net interest margin as %
of interest-earning assets 2.67 % 3.09 %
(4)
============ ============
Ratio of interest-earning
assets to
interest-bearing 107.37 % 107.62 %
liabilities
============ ============
(1)Debt and equity and mortgage-backed securities are shown including the
average market value appreciation of $22.0 million and $15.8 million for the
three months ended December 31, 1997 and 1996, respectively.
(2) Net of unearned discounts, premiums, deferred loan fees, purchase accounting
discounts and premiums and allowance for possible loan losses, and including
non- performing loans and loans held for sale. (3) Interest rate spread
represents the difference between the average rate on interest-earning assets
and the average cost of interest-bearing liabilities. (4) Net interest margin
represents net interest income divided by average interest-earning assets.
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
FINANCIAL HIGHLIGHTS
At or for the Three Months
Ended December 31,
----------------------------------
1997 1996
-------------- ---------------
Selected Financial Ratios: (a)
Return on average assets ...................... 0.87% 0.87%
Return on average stockholders' equity ....... 9.59 9.10
Average stockholders' equity to average assets 9.06 9.52
Stockholders' equity to total assets ......... 9.18 9.13
Interest rate spread during period............. 2.38 2.80
Net interest margin............................ 2.67 3.09
Operating expenses to average assets........... 1.68 1.96
Efficiency ratio............................... 55.96 56.68
Average interest-earning assets to average
interest- bearing 107.37 107.62
liabilities....................................
Net interest income to operating expenses ..... 1.53x 1.49x
Selected Data:
Basic earnings per share....................... $0.59 $0.53
Weighted average number of shares outstanding
for basic earnings per share computation (b) 22,295,110 22,695,520
Diluted earning per share.................... $0.57 $0.51
Weighted average number of shares outstanding
for diluted earnings per share computation (b) 23,179,000 23,476,384
Book value per share........................... $23.19 $21.49
Number of shares outstanding for book value per
share computation........................... 24,028,550 24,458,346
Cash dividends declared per share.............. $0.15 $0.15
Dividend payout ratio.......................... 26.32% 29.41%
At December 31,
----------------------------
1997 1996
------------ -----------
Asset Quality Ratios:
Non-performing loans to total gross loans.................... 1.24% 1.53%
Non-performing assets to total assets........................ 0.89 1.08
Allowance for possible loan losses to non-performing loans... 73.47 63.64
Regulatory Capital at December 31, 1997 for The Long Island Savings Bank, FSB:
Regulatory Regulatory Excess
Capital Capital Capital
Requirement Level Level
Amount Percent Amount Percent Amount Percent
(Dollars in thousands)
Tangible capital........................... $ 90,811 1.50% $442,895 7.32% $352,084 5.82%
Core capital............................... 181,622 3.00 442,895 7.32 261,273 4.32
Risk-based capital......................... 241,101 8.00 476,629 15.82 235,528 7.82
(a) Ratios for the three months ended December 31, 1997 and 1996 were calculated
on an annualized basis. (b) The weighted average common shares outstanding for
periods prior to December 31,1997,have been restated to reflect the adoption of
SFAS No. 128.
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
SUPPLEMENTAL INFORMATION
SELECTED FINANCIAL DATA - CASH EARNINGS
Three Months Ended
December 31,
------------------------------
1997 1996
-------------- ---------------
(In thousands, except per share data)
Net income ................................................... $ 13,182 $ 11,934
Add back selected non-cash items:
Amortization of excess of cost over fair value
of assets acquired................................... 108 110
Management Recognition & Retention Plan and
Employee Stock Ownership Plan expense................ 1,248 2,140
-------------- --------------------
Cash earnings................................................. $ 14,538 $ 14,184
============== ====================
Cash EPS (a)................................................. $ 0.65 $ 0.62
============== ====================
At or for the Three Months
Ended December 31,
---------------------------------
1997 1996
-------------- --------------
Selected Financial Ratios Based Upon Cash Earnings (b):
Cash return on average assets................................. 0.96% 1.03%
Cash return on average stockholders' equity................... 10.57 10.82
Cash return on average tangible stockholders' equity.......... 10.67 10.92
Cash operating expenses to average assets..................... 1.59 1.80
Cash efficiency ratio......................................... 52.99 51.95
Net interest income to cash operating expenses................ 1.62 1.63
(a) Cash EPS was calculated based on the weighted average number of shares
outstanding for basic EPS computation. (b) Ratios for the three months ended
December 31, 1997 and 1996 were calculated on an annualized basis.