1
EXHIBIT 99.2
FELDMAN FINANCIAL ADVISORS, INC.
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1725 K STREET, NW - SUITE 205
WASHINGTON, DC 20006
(202) 467-6862 - FAX (202) 467-6963
ATLANTIC LIBERTY SAVINGS, F.A.
BROOKLYN, NEW YORK
CONVERSION VALUATION APPRAISAL REPORT
VALUED AS OF DECEMBER 11, 1997
PREPARED BY
FELDMAN FINANCIAL ADVISORS, INC.
WASHINGTON, D.C.
2
FELDMAN FINANCIAL ADVISORS, INC.
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1725 K STREET, NW - SUITE 205
WASHINGTON, DC 20006
December 11, 1997 (202) 467-6862 - FAX (202) 467-6963
Board of Directors
Atlantic Liberty Savings, F.A.
186 Montague Street
Brooklyn, New York 11201
Gentlemen:
At your request, we have completed and hereby provide an independent
appraisal of the aggregate estimated pro forma market value of Atlantic Liberty
Savings, F.A. ("Atlantic Liberty" or the "Association") in connection with its
mutual holding company reorganization (the "Reorganization"). The transaction
structure will include the formation of a federal stock savings association as
the successor to the Association in its mutual form, and concurrent formation of
Brooklyn Heights Bancorp, Inc., a federal stock corporation (the "Stock
Company"), as a majority-owned subsidiary of Atlantic Liberty, MHC (the "Mutual
Company"). The Stock Company will offer shares of its common stock for sale to
eligible depositors and to the Association's and Stock Company's employee stock
benefit plans in a Subscription Offering. Shares not subscribed for in the
Subscription Offering will be offered for sale to certain members of the general
public in a Community Offering.
This appraisal report is being furnished pursuant to the filing of
regulatory applications for the Reorganization by the Association with the
Office of Thrift Supervision and the Federal Deposit Insurance Corporation.
Feldman Financial Advisors, Inc. ("Feldman Financial") is a financial consulting
and economic research firm that specializes in financial valuations and analyses
of business enterprises and securities in the thrift, banking, and mortgage
industries. The background of Feldman Financial is presented in Exhibit I.
In preparing our appraisal, we conducted an analysis of the Association
that included discussions with the Association's management, the Association's
independent auditors, Sol Masch & Company, the Association's offering manager,
Ryan, Beck & Co., and the Association's Reorganization counsel, Luse Lehman
Gorman Pomerenk & Schick, P.C. In addition, where appropriate, we considered
information based on other available published sources that we believe are
reliable; however, we cannot guarantee the accuracy and completeness of such
information.
We also reviewed, among other factors, the economy in the Association's
primary market area and compared the Association's financial condition and
operating performance with that of selected publicly traded financial
institutions. We reviewed conditions in the securities markets in general and in
the market for thrift institution common stocks in particular.
Our appraisal is based on the Association's representation that the
information contained in the regulatory applications and additional evidence
furnished to us by the Association and its independent auditors are truthful,
accurate, and complete. We did not independently verify the financial statements
and other information provided by the Association and its independent auditors,
nor did we independently value the assets or liabilities of the Association. The
valuation considers the Association only as a going concern and should not be
considered as an indication of the liquidation value of the Association.
3
FELDMAN FINANCIAL ADVISORS, INC.
Board of Directors
Atlantic Liberty Savings, F.A.
December 11, 1997
Page Two
It is our opinion that, as of December 11, 1997, the aggregate estimated
pro forma market value of the Association was within the valuation range of
$8,500,000 to $11,500,000 with a midpoint of $10,000,000. The valuation range
was based upon a 15 percent decrease from the midpoint to determine the minimum
and a 15 percent increase to establish the maximum. Assuming an additional 15
percent increase above the maximum value results in an adjusted maximum of
$13,225,000.
The Board of Directors has determined to offer for sale in the
Reorganization a minority ownership interest equal to 46% of all the common
stock to be issued and outstanding. Therefore, the total amount of common stock
to be sold in the Reorganization will be equal to $3,910,000 at the minimum
valuation, $4,600,000 at the midpoint valuation, $5,290,000 at the maximum
valuation, and $6,083,500 at the adjusted maximum.
Our valuation is not intended, and must not be construed, to be a
recommendation of any kind as to the advisability of purchasing shares of common
stock in the Reorganization. Moreover, because the valuation is necessarily
based upon estimates and projections of a number of matters, all of which are
subject to change from time to time, no assurance can be given that persons who
purchase shares of stock in the Reorganization will thereafter be able to sell
such shares at prices related to the foregoing estimate of the Association's pro
forma market value. Feldman Financial is not a seller of securities within the
meaning of any federal or state securities laws and any report prepared by
Feldman Financial shall not be used as an offer or solicitation with respect to
the purchase or sale of any securities.
The valuation reported herein will be updated as appropriate. These
updates will consider, among other factors, any developments or changes in the
Association's operating performance, financial condition, or management
policies, and current conditions in the securities markets for thrift
institution common stocks. Should any such new developments or changes be
material, in our opinion, to the valuation of the Association, appropriate
adjustments to the estimated pro forma market value will be made. The reasons
for any such adjustments will be explained in detail at that time.
Respectfully,
FELDMAN FINANCIAL ADVISORS, INC.
By: /s/ TRENT R. FELDMAN
-----------------------------
Trent R. Feldman
President
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FELDMAN FINANCIAL ADVISORS, INC.
TABLE OF CONTENTS
TAB PAGE
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INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. CHAPTER ONE - BUSINESS OF ATLANTIC LIBERTY
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Income and Expense Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Asset and Liability Management . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Asset Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Market Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
II. CHAPTER TWO - COMPARISONS WITH PUBLICLY HELD COMPANIES
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Selection Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Recent Financial Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
III. CHAPTER THREE - MARKET VALUE ADJUSTMENTS
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Earnings Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Market Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Liquidity of the Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Subscription Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Stock Market Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Recent Acquisition Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
New Issue Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Mutual Holding Company Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Adjustments Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Valuation Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Valuation Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
IV. APPENDIX - EXHIBITS
I Background of Feldman Financial Advisors, Inc. . . . . . . . . . . . . . . I-1
II-1 Statement of Financial Condition . . . . . . . . . . . . . . . . . . . . . II-1
II-2 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . II-2
II-3 Loan Portfolio Composition . . . . . . . . . . . . . . . . . . . . . . . . II-3
II-4 Net Lending Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4
II-5 Investment Portfolio Composition . . . . . . . . . . . . . . . . . . . . . II-5
II-6 Deposit Account Distribution . . . . . . . . . . . . . . . . . . . . . . . II-6
II-7 Office Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-7
III Market Valuation and Financial Data for All Public Thrifts . . . . . . . . III-1
IV-1 Pro Forma Conversion Assumptions . . . . . . . . . . . . . . . . . . . . . IV-1
IV-2 Pro Forma Valuation Range: Full Conversion . . . . . . . . . . . . . . . . IV-2
IV-3 Pro Forma Valuation Range: MHC Offering . . . . . . . . . . . . . . . . . IV-3
IV-4 Comparative Valuation Ratios . . . . . . . . . . . . . . . . . . . . . . . IV-4
IV-5 Pro Forma Full Conversion Analysis at Maximum Value . . . . . . . . . . . . IV-5
5
FELDMAN FINANCIAL ADVISORS, INC.
LIST OF TABLES
TAB PAGE
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I. CHAPTER ONE - BUSINESS OF ATLANTIC LIBERTY
Table 1 - Selected Financial Condition Data and Operating Data . . . . . . . . . . 9
Table 2 - Selected Operations Data and Performance Ratios . . . . . . . . . . . . 10
Table 3 - Income Statement Summary . . . . . . . . . . . . . . . . . . . . . . . . 16
Table 4 - Income Statement Ratios . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 5 - Yield and Cost Summary . . . . . . . . . . . . . . . . . . . . . . . . . 19
Table 6 - NPV Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 7 - Non-performing Asset Summary . . . . . . . . . . . . . . . . . . . . . . 23
Table 8 - Allowance for Loan and Lease Losses . . . . . . . . . . . . . . . . . . . 24
Table 9 - Key Demographic Indicators . . . . . . . . . . . . . . . . . . . . . . . 29
Table 10 - Deposit Trends for Brooklyn and New York City MSA . . . . . . . . . . . . 30
Table 11 - Deposit Market Share for Brooklyn . . . . . . . . . . . . . . . . . . . 31
II. CHAPTER TWO - COMPARISONS WITH PUBLICLY HELD COMPANIES
Table 12 - Comparative Group Operating Summary . . . . . . . . . . . . . . . . . . . 37
Table 13 - Key Financial Comparisons . . . . . . . . . . . . . . . . . . . . . . . . 38
Table 14 - General Financial Performance Ratios . . . . . . . . . . . . . . . . . . 43
Table 15 - Income and Expense Analysis . . . . . . . . . . . . . . . . . . . . . . . 44
Table 16 - Yield-Cost Structure and Growth Rates . . . . . . . . . . . . . . . . . . 45
Table 17 - Balance Sheet Composition . . . . . . . . . . . . . . . . . . . . . . . . 46
Table 18 - Capital Regulatory and Credit Risk Ratios . . . . . . . . . . . . . . . . 47
III. CHAPTER THREE - MARKET VALUE ADJUSTMENTS
Table 19 - Comparative Stock Market Performance . . . . . . . . . . . . . . . . . . 56
Table 20 - Selected Interest Rate Benchmarks . . . . . . . . . . . . . . . . . . . . 57
Table 21 - Recent New York Acquisition Activity . . . . . . . . . . . . . . . . . . 59
Table 22 - Recent Thrift Conversion Activity . . . . . . . . . . . . . . . . . . . . 61
Table 23 - Comparative Valuation Analysis . . . . . . . . . . . . . . . . . . . . . 67
Table 24 - Comparative Discount and Premium Analysis . . . . . . . . . . . . . . . 68
6
FELDMAN FINANCIAL ADVISORS, INC.
INTRODUCTION
As requested, Feldman Financial Advisors, Inc. ("Feldman Financial")
has prepared an independent appraisal of the aggregate estimated pro forma
market value of Atlantic Liberty Savings, F.A. ("Atlantic Liberty" or the
"Association") in connection with its mutual holding company reorganization
(the "Reorganization"). The transaction structure will include the formation
of the federally-chartered stock savings bank, Atlantic Liberty Savings, F.A.,
as the successor to the Association in its mutual form, and concurrent
formation of Brooklyn Heights Bancorp, a federal stock corporation. (the "Stock
Company") as a majority-owned subsidiary of Atlantic Liberty, MHC, a federal
mutual holding company (the "Mutual Company"). Under the Reorganization,
Atlantic Liberty will become a wholly owned subsidiary of the Stock Company and
the Stock Company will become the majority-owned subsidiary of the Mutual
Company. The Stock Company will offer shares of its common stock for sale (the
"Stock Offering") to eligible depositors and to the Association's and Stock
Company's employee stock benefit plans in a Subscription Offering. Shares not
subscribed for in the Subscription Offering will be offered for sale to certain
members of the general public in a Community Offering.
The Mutual Company will own at least 51% of the common shares of the
Stock Company as long as the Mutual Company remains in existence. The
Association will be a wholly owned subsidiary of the Stock Company. The Stock
Company expects to sell in the Stock Offering a minority ownership interest
equal to 46% of its common stock. The remaining issued and outstanding shares
of the Stock Company will be owned by the Mutual Company.
In the course of preparing this appraisal report, we reviewed and
discussed with the Association's management, and with the Association's
independent auditors, Sol Masch & Company, the audited financial statements of
the Association's operations for the years ended
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FELDMAN FINANCIAL ADVISORS, INC.
March 31, 1996 and 1997 and the unaudited financial statements for the six
months ended September 30, 1996 and 1996. We also discussed matters related to
the Reorganization with the Association's legal counsel, Luse Lehman Gorman
Pomerenk & Schick, P.C., and with the Association's offering manager, Ryan Beck
& Co. We also reviewed and discussed with management other financial matters
of the Association.
Where appropriate, we considered information based upon other
available public sources, which we believe to be reliable; however, we cannot
guarantee the accuracy or completeness of such information. We visited the
Association's primary market area and examined the prevailing economic
conditions. We also examined the competitive environment within which the
Association operates and assessed the Association's relative strengths and
weaknesses.
We examined and compared the Association's financial performance with
selected segments of the thrift industry and selected publicly traded thrifts.
We reviewed conditions in the securities markets in general and the market for
thrift institution common stocks in particular. We included in our analysis an
examination of the potential effects of the Reorganization on the Association's
operating characteristics and financial performance as they relate to the
estimated pro forma market value of the Association.
In preparing our valuation, we have relied upon and assumed the
accuracy and completeness of financial and statistical information provided by
the Association and its independent auditors. We did not independently verify
the financial statements and other information provided by the Association and
its independent auditors, nor did we independently value the assets or
liabilities of the Association. The valuation considers the Association only
as a going concern and should not be considered as an indication of the
liquidation value of the Association.
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FELDMAN FINANCIAL ADVISORS, INC.
OUR VALUATION IS NOT INTENDED, AND MUST NOT BE CONSTRUED, TO BE A
RECOMMENDATION OF ANY KIND AS TO THE ADVISABILITY OF PURCHASING SHARES OF
COMMON STOCK IN THE REORGANIZATION. MOREOVER, BECAUSE SUCH VALUATION IS
NECESSARILY BASED ON ESTIMATES AND PROJECTIONS OF A NUMBER OF MATTERS, ALL OF
WHICH ARE SUBJECT TO CHANGE FROM TIME TO TIME, NO ASSURANCE CAN BE GIVEN THAT
PERSONS WHO PURCHASE SHARES OF COMMON STOCK IN THE REORGANIZATION WILL
THEREAFTER BE ABLE TO SELL SUCH SHARES AT PRICES RELATED TO THE FOREGOING
VALUATION OF THE PRO FORMA MARKET VALUE THEREOF. FELDMAN FINANCIAL IS NOT A
SELLER OF SECURITIES WITHIN THE MEANING OF ANY FEDERAL AND STATE SECURITIES
LAWS AND ANY REPORT PREPARED BY FELDMAN FINANCIAL SHALL NOT BE USED AS AN OFFER
OR SOLICITATION WITH RESPECT TO THE PURCHASE OR SALE OF ANY SECURITIES.
The valuation reported herein will be updated as appropriate. These
updates will consider, among other factors, any developments or changes in the
Association's financial performance or management policies, and current
conditions in the securities market for thrift institution common stocks.
Should any such developments or changes be material, in our opinion, to the
Reorganization valuation of the Association, appropriate adjustments to the
estimated pro forma market value will be made. The reasons for any such
adjustments will be explained in detail at that time.
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FELDMAN FINANCIAL ADVISORS, INC.
I. BUSINESS OF ATLANTIC LIBERTY SAVINGS
GENERAL
Atlantic Liberty was organized originally in 1888 as a New York
building and loan association and converted to a Federal savings association in
1983. The Association currently conducts its business from its home office and
one branch, both located in Brooklyn, New York. The Association is subject to
regulation by the Office of Thrift Supervision ("OTS") and the Federal Deposit
Insurance Corporation ("FDIC"), the insurer of its deposit accounts up to
applicable limits through the Bank Insurance Fund. The Association is a member
of the Federal Home Loan Association ("FHLB") of New York. As of September 30,
1997, the Association had total assets of $110 million, total deposits of $101
million, and total equity of $7.2 million or 6.56% of total assets.
Atlantic Liberty emphasizes the origination of residential mortgage
loans. The mortgage loans are secured primarily by one-to-four family
residential real estate. The Association also makes loans secured by
multi-family and commercial real estate, which reflects the large number of
multi-family and commercial properties in the neighborhoods surrounding the
Association's offices. To a lesser extent, the Association also makes consumer
loans. Of the Association's total loan portfolio at September 30, 1997, 61.2%
consisted of loans secured by one-to-four family residential properties, 19.8%
were secured by multi-family real estate, and 18.1% by commercial real estate.
The Association also invests in securities and other short-term investments.
At September 30, 1997, investment securities and short-term investments
amounted to $32.2 million or 29.3% of the Association's assets.
The Association offers traditional deposit accounts consisting of
savings, certificates of deposit, money market accounts, NOW accounts, and
demand accounts. Guardian accounts,
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FELDMAN FINANCIAL ADVISORS, INC.
which are deposits mandated by the court for minor children, have made up a
significant portion of the Association's deposits for more than 15 years. As
of September 30, 1997, guardian accounts were $13.6 million, or 13.6% of the
Association's total deposits.
The Association operates two full-service banking offices in Brooklyn.
The majority of the Association's deposits are gathered from Brooklyn and the
New York metropolitan area. The Association's primary lending area extends
throughout Brooklyn. Because a significant concentration of the Association's
assets are secured by residential real estate located in its primary lending
territory, the Association's asset quality is highly dependent upon the real
estate market conditions in the local economy. As the economic environment of
Brooklyn has improved through the 1990's, the Association's level of
non-performing loans has continued to improve and was 1.6% of total assets as
of September 30, 1997.
Atlantic Liberty historically has generated relatively low
profitability returns. Net income for fiscal 1997 was $123,525, or 0.12% of
average assets. Included in this amount was a one-time charge of $594,000
($356,000 after-taxes) for the special SAIF assessment. Adjusting for this
expense, the Association would have earned approximately $479,400, or 0.45% of
average assets. The adjusted return for fiscal 1997 is a decline from the
0.19% return on average assets in fiscal 1996, largely because of the one-time
SAIF assessment, interest expense as a percent of assets increased while
interest income as a percent of assets decreased even more, and the provision
for loan losses almost tripled. It was the income tax benefit in 1997 that
enabled the Association to show a profit.
For the six months ended September 30, 1997, the Association recorded
net income of $335,392 compared to $647,591 for the same period ending
September 30, 1996. The lower income is due primarily to the income tax
benefit received in the 1996 period, while an income tax
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FELDMAN FINANCIAL ADVISORS, INC.
expense was incurred during the same period in 1997. Income before taxes for
the six months ended September 30 was $585,314 in 1997 compared to $408,007 in
1996.
The Association's capital has substantially exceeded all applicable
regulatory capital requirements and has increased from $6.75 million, or 6.38%
of assets, at March 31, 1996, to $7.21 million, or 6.56% of assets, at
September 30, 1997.
The Association seeks to generate future earnings growth through
continued emphasis on residential real estate lending. Management intends to
monitor economic conditions in the Association's market area and adjust the mix
of its lending activities in response to changing conditions in order to
maintain sound asset quality and profitability. Management believes
opportunities for growth exist in its market area and plans to manage growth to
ensure compliance with regulatory capital requirements and to achieve overall
strategic objectives, without unduly increasing the risk profile of the balance
sheet. Management believes that the Association can continue to meet its
financial and strategic objectives by seeking business primarily within its
market area.
The Board of Directors of Atlantic Liberty has determined that the
Reorganization is in the best interest of the Association and its customers,
and has discerned several business purposes for effecting the proposed
Reorganization. The Reorganization will structure the Association in the stock
form, which is used by commercial Associations, most major business
corporations, and an increasing majority of savings institutions. Formation of
the Stock Company will permit the Association to issue common stock, which is a
source of capital not available to mutual institutions.
At the same time, the Association's mutual form of ownership will be
preserved in the mutual holding company ("MHC") structure, which will permit
the Mutual Company to control at
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FELDMAN FINANCIAL ADVISORS, INC.
least a majority of the common stock issued in the Reorganization. The MHC
structure will enable the Association to raise significantly less capital than
the extraordinary amount of funds that otherwise would result from a full
conversion in today's stock market. The Reorganization will not foreclose the
opportunity for the resulting Mutual Holding Company to convert from mutual to
stock form in the future. Additionally, the middle-tier Stock Company allows
greater flexibility to structure mergers and acquisitions, diversify business
operations, and to repurchase shares of common stock, thereby affording the MHC
structure some of the advantages that were previously available only to thrifts
that opted for fully-converted stock companies.
The Stock Company will offer for sale 46% of its common shares in the
Stock Offering. The sale of common stock will provide the Association with new
equity capital to support future growth and expanded operations. Management
believes that the sale of common stock in selected proportions and at
appropriate intervals facilitates the orderly and manageable expansion of the
Association's capital base. The ability to issue common stock also will enable
the Association to establish stock benefit plans for management and employees,
thereby improving the Association's capacity to attract and retain qualified
personnel. The additional capital, along with the holding company
organizational structure, will help to facilitate expansion through mergers and
acquisitions.
The increased capital resulting from the Stock Offering will enable
the Association to take advantage of additional lending opportunities within
its market area. Based on the Association's expanded capital base, the
Association will be able to increase its lending limits and borrower
concentrations without jeopardizing credit risk management. The Association
will be better able to accommodate the growing financing needs of its larger,
more successful real estate customers. The Association may also explore other
means of expanding loan originations through
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FELDMAN FINANCIAL ADVISORS, INC.
securitizations and loan participations. In addition, adjacent geographic
markets may be considered for new business development opportunities consistent
with the Association's current lines of business. The Association intends to
implement any such growth and expansion plans with a disciplined and deliberate
approach.
The remainder of Chapter I examines in more detail the trends
addressed in this section, including the impact of changes in the Association's
economic and competitive environment, and recent management initiatives. The
discussion is supplemented by the exhibits in the Appendix. Exhibit II-1
summarizes the Association's statements of financial condition as of September
30, 1996 and 1997 and for the fiscal years ending March 31, 1996 and 1997.
Exhibit II-2 presents the Association's statements of income for the six-months
ended September 30, 1996 and 1997 and the fiscal years ended March 31, 1996 and
1997.
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FELDMAN FINANCIAL ADVISORS, INC.
FINANCIAL CONDITION
Table 1 presents selected data concerning Atlantic Liberty's financial
position as of the six-month periods ended September 30, 1996 and 1997 and the
fiscal years ended March 31, 1996 and 1997. Table 2 displays ratios and
operating data for the Association over the same periods.
Table 1
SELECTED FINANCIAL CONDITION AND OPERATING DATA
At or for the Six-month Periods Ending September 30, 1996 and 1997
And the Years Ending March 31, 1996 and 1997
(Dollars in Thousands)
===============================================================================================================
(unaudited)
At or for the 6 months ended At or for the year ended
September 30, March 31,
1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------
SELECTED FINANCIAL CONDITION DATA:
- ---------------------------------------------------
Total assets $ 109,887 $ 105,297 $ 109,794 $ 105,742
Loans receivable, net 65,486 57,321 60,059 54,505
MBS, held for investment 19,017 18,152 19,030 19,226
Investment securities, held for investment 13,150 18,880 17,258 16,155
Deposits 100,539 95,728 100,798 97,396
Retained earnings 7,209 7,397 6,873 6,750
- --------------------------------------------------------------------------------------------------------------
SELECTED OPERATING DATA:
- ---------------------------------------------------
Total interest income $ 4,065 $ 3,615 $ 7,248 $ 7,151
Total interest expense 2,304 2,189 4,363 4,149
----- ----- ----- -----
Net interest income 1,761 1,426 2,885 3,002
Provision for loan losses 105 66 771 275
--- -- --- ---
Net interest income after provision 1,656 1,360 2,113 2,727
----- ----- ----- -----
Gain (loss) on disposal of foreclosed real estate 29 123 148 (135)
Other non-interest income 168 744 1,105 340
--- --- ----- ---
Total non-interest income 197 867 1254 205
--- --- ---- ---
Total non-interest expense 1,267 1,819 3,391 2,595
Income (loss) before tax 585 408 (24) 337
Income tax (expense) benefit (250) 240 147 (141)
----- --- --- -----
Net income $ 335 $ 648 $ 124 $ 196
==============================================================================================================
Source: Atlantic Liberty, preliminary prospectus.
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FELDMAN FINANCIAL ADVISORS, INC.
Table 2
SELECTED OPERATIONS DATA AND PERFORMANCE RATIOS
At or for the Six-month Periods Ending September 30, 1996 and 1997
And the Years Ending March 31, 1996 and 1997
==============================================================================================================
(unaudited)
At or for the
six months ended At or for the year ended
September 30, March 31,
------------- ---------
1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------
PERFORMANCE RATIOS:
- ---------------------------------------------------
Return on average assets 0.62% 1.24% 0.12% 0.19%
Return on average equity 9.14% 18.45% 5.98% 0.76%
Net interest margin 3.40% 2.87% 2.81% 3.10%
Interest rate spread 3.21% 2.75% 2.71% 2.97%
Operating expense to average total assets 2.34% 3.48% 3.22% 2.56%
Average interest earning assets to
average interest bearing liabilities 103.81% 102.85% 103.61% 103.26%
- --------------------------------------------------------------------------------------------------------------
ASSET QUALITY RATIOS:
- ---------------------------------------------------
Non-performing loans to total assets at period end 1.60% N.A. 3.04% 4.55%
Allowance for loan losses to non-performing loans 61.82% N.A. 29.27% 15.51%
Allowance for loan losses to loans receivable, net 1.65% 1.18% 1.63% 1.37%
- --------------------------------------------------------------------------------------------------------------
CAPITAL RATIOS:
- ---------------------------------------------------
Retained earnings to total assets at end of period 6.56% 7.02% 6.26% 6.38%
Average retained earnings to average assets 6.78% 6.72% 6.47% 6.69%
- --------------------------------------------------------------------------------------------------------------
OTHER DATA:
- ---------------------------------------------------
Number of full-service offices 2 2 2 2
==============================================================================================================
Source: Atlantic Liberty, preliminary prospectus, Feldman Financial
calculations
Asset Composition
The Association's asset base grew 4.4% between September 30, 1996 and
September 30, 1997. Total assets increased by $4.6 million over this one-year
period, primarily as a result of the expanding loan portfolio. The
Association's growth was internally generated without augmentation from mergers
or acquisitions of other company operations. The ratio of net loans to assets
increased from 54.4% at September 30, 1996, to 59.6% at September 30, 1997.
During the same time period the ratio of cash and securities to assets
decreased from 42.4% to 37.9%.
- 10 -
16
FELDMAN FINANCIAL ADVISORS, INC.
The Association's loan portfolio is predominantly secured by real
estate properties. As displayed in Exhibit II-3, the Association's net loan
portfolio at September 30, 1997 totaled $65.5 million, of which 61.2% ($40.1
million) were one-to-four family loans, 19.8% ($13.0 million) were multi-family
loans, 18.1% ($11.9 million) were commercial real estate loans, and 2.8% ($1.8
million) were savings account loans.
Between March 31, 1996, and September 30, 1997, the Association's
one-to-four family loans increased by $9.5 million, multi-family loans
increased by $1.8 million, and commercial real estate loans decreased by
$923,000. While the market for these loans was strong in the Association's
lending area, the competition for such business was also active. Exhibit II-4
summarizes the Association's net lending activity during recent periods.
One-to-four family loans generally are originated in amounts up to 75%
of the lesser of the appraised value or purchase price of the property, with
private mortgage insurance required on loans with a long-to-value ratio in
excess of 80%. Fixed-rate loans generally are originated for up to a 15-year
term and are retained in the Association's loan portfolio. Adjustable-rate
mortgages ("ARMs") are offered with a 1, 3 and 5 year adjustment period with
interest rates indexed to the corresponding 1, 3, and 5 year Treasury constant
maturity rates.
Multi-family real estate loans generally are secured by multi-family
rental properties, including walk-up apartments and mixed-use properties.
Substantially all multi-family real estate loans were secured by properties
within the Association's market area. Multi-family loans are offered with both
fixed and adjustable interest rates and have terms of up to 10 years, with an
amortization period of up to 20 years and a fixed-rate of interest for the
initial five-year period and a five-year renewal option. Upon renewal, the
loan's interest rate will adjust to either the prevailing prime rate plus 200
basis points or to the 5 year Treasure Note rate plus 250 basis
- 11 -
17
FELDMAN FINANCIAL ADVISORS, INC.
points, at the borrower's option. Loans secured by apartment buildings and
other multi-family residential properties generally involve larger principal
amounts and a greater degree of risk than one-to-four family residential
mortgage loans. Because payments of loans secured by multi-family properties
are often dependent on successful operation or management of the properties,
repayment of such loans may be subject to a greater extent to adverse
conditions in the real estate market or the economy.
Another major segment of the Association's loan portfolio involves
commercial real estate lending. The Association generally originates loans
that are secured by office buildings, private schools, religious facilities,
and other commercial properties. The Association's underwriting policies and
procedures for originating commercial real estate mortgage loans are similar to
those followed for originating multi-family mortgage loans. To underwrite
commercial real estate loans, the Association reviews net operating income
generated by the real estate to ensure that it is at least 125% of the amount
of the monthly debt service, the age and condition of the collateral, the
financial resources and income level of the borrower, and the borrower's
business experience. Generally, personal guarantees are obtained from
commercial real estate borrowers. The Association considers loans secured by
commercial real estate properties to involve greater risk than multi-family
mortgage loans since they are even more dependent on the ability of the
borrowers to profitably manage a business and are more susceptible to adverse
conditions in the real estate market and economy. As a result, to offset the
greater risk, the Association may require a somewhat higher debt service
coverage ratio and, in certain instances, a higher interest rate on commercial
real estate loans than for multi-family mortgage loans.
Exhibit II-5 displays the composition of the Association's investment
portfolio. Investment securities totaled $32.17 million or 29.3% of total
assets at September 30, 1997,
- 12 -
18
FELDMAN FINANCIAL ADVISORS, INC.
consisting primarily of U.S. Government and Agency obligations ($12.6 million),
FHLB stock ($583,000), Asset Management Fund, Inc. ($4.2 million), and
mortgage-backed securities ($14.8 million. All investments are
held-to-maturity. The fair value of the Association's investment securities as
of September 30, 1997, was $32.2 million, or $23,000 more than the book value.
The Association views its investment portfolio as an alternative
interest-earning asset vehicle into which to deploy excess funds during periods
of weak loan demand or perceived higher risks. The investment portfolio
provides asset diversification and the opportunity to achieve capital
appreciation through long-term investment in equity securities. The
Association's current investment strategy has emphasized the purchase of U.S.
Government and Agency obligations and mortgage-backed securities. Atlantic
Liberty has never utilized hedging instruments and had no outstanding contracts
involving such instruments at September 30, 1997.
Liability Composition
Deposits, repayments and prepayments of loans, proceeds from sales of
loans and securities, proceeds from maturing securities, and cash flows from
operations are the primary sources of the Association's funds for use in
lending, borrowing, and other general purposes. The Association's deposits at
September 30, 1997 totaled $100.5 million, representing 97.9% of total
liabilities. The Association's deposit accounts consist of transaction
accounts (non-interest NOW accounts, interest-bearing NOW accounts, Super Now
accounts, passbook accounts, and money market savings accounts) and certificate
of deposit accounts. Exhibit II-6 presents a summary of the Association's
deposit portfolio as of September 30, 1997.
Transaction accounts amounted to $40.0 million or 39.7% of the
Association's total deposits at September 30, 1997. Certificate of deposit
accounts amounted to $60.6 million or
- 13 -
19
FELDMAN FINANCIAL ADVISORS, INC.
60.3% of deposits at that date. Certificates of deposit have remained
relatively stable as a percent of deposits from March 31, 1996 through
September 30, 1997. Of the Association's $60.6 million of certificate
accounts, $41.1 million or 67.9% were scheduled to mature within one year.
The Association's deposit base increased at a rate of 5.0% between
September 30, 1996 and September 30, 1997. During the past few years, the
strength of the stock market has affected deposit flows as some customers have
opted to place their funds in instruments such as mutual funds rather in
deposit products perceived to have less attractive returns. The Association
obtains deposits predominantly from the areas in which its branch offices are
located. Atlantic Liberty relies mainly on competitive pricing of its deposit
products, customer service, and long-standing relationships with customers to
attract and retain deposits.
Equity Capital
The Association's equity capital was $7.2 million, or 6.56% of total
assets, at September 30, 1997. Equity dipped slightly from $7.4 million as of
September 30, 1997, but increased by $459,000 between March 31, 1996 and
September 30, 1997. For regulatory purposes at September 30, 1997, the
Association's Tier 1 leverage capital ratio measured 6.6% and its total
risk-based capital ratio was 15.7%. The Association not only met its minimum
regulatory capital requirements but also surpassed the levels necessary to
qualify for the designation of well capitalized.
- 14 -
20
FELDMAN FINANCIAL ADVISORS, INC.
INCOME AND EXPENSE TRENDS
Table 3 compares the main components of the Association's earnings
performance for the six months periods ending September 30, 1997 and 1996 and
for the fiscal years ended March 31, 1996 and 1997. Table 4 displays the
components of interest income, annualized, as a percent of average assets for
the corresponding periods.
Net income for fiscal 1997 was $123,525, or 0.12% of average assets.
Included in this amount was a one-time charge of $594,000 ($356,000
after-taxes) for the special SAIF assessment. Adjusting for this expense, the
Association would have earned approximately $479,400, or 0.45% of average
assets. The adjusted return for fiscal 1997 is a decrease from the 0.19%
return on average assets in fiscal 1996, due to the higher interest expense
ratio, lower interest income ratio, significantly higher loan loss provision,
and the one-time SAIF assessment.
For the six months ended September 30, 1997, the Association recorded
net income of $335,000 compared to $648,000 for the same period ending
September 30, 1996. The lower income is due primarily to the income tax
benefit received in the 1996 period, while an income tax expense was incurred
during the same period in 1997. Income before taxes for the six months ended
September 30 was $585,000 in 1997 compared to $408,000 in 1996.
The Association's average interest-earning assets remained virtually
unchanged from September 30, 1996 to September 30, 1997. At the same time, the
net interest spread increased from 2.75% to 3.21% due to higher yields on
earning assets, which increased from 7.29% for the six-months ended September
30, 1996 to 7.84% for the same period in 1997. The increased yields benefited
from the receipt of past due interest on non-accrual loans. The Association's
average cost of interest bearing liabilities rose only slightly from 4.54% for
the six-months ended September 30, 1996 to 4.63% for the same period in 1997.
- 15 -
21
FELDMAN FINANCIAL ADVISORS, INC.
Table 3
INCOME STATEMENT SUMMARY
For the Six Month Periods Ended September 30, 1996 and 1997
And the Years Ended March 31, 1996 and 1997
(Dollars in Thousands)
================================================================================================================
(unaudited)
At or for the 6 months ended At or for the year ended
September 30, March 31,
------------- ---------
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------
Loans receivable $ 2,808 $ 2,319 $ 4,677 $ 4,679
Investment securities 647 719 1,434 1,341
Mortgage-backed and related securities 610 577 1,137 1,130
--- --- ----- -----
Total interest income 4,065 3,615 7,248 7,151
Deposits 2,300 2,186 4,357 4,143
Borrowed funds 4 3 7 6
- - - -
Total interest expense 2,304 2,189 4,363 4,149
----- ----- ----- -----
Net interest income 1,761 1,426 2,885 3,002
Provision for loan losses 105 66 771 275
--- -- --- ---
Net interest income after provision 1,656 1,360 2,113 2,727
----- ----- ----- -----
Income from real estate operations 80 57 154 173
Gain (loss) on disposal of foreclosed real estate 29 123 148 (135)
Other 88 687 951 167
--- --- --- ---
Total non-interest income 197 867 1,254 205
--- --- ----- ---
Compensation and benefits 747 700 1,667 1,435
Occupancy and equipment 136 131 276 266
SAIF deposit insurance premium 31 704 763 209
Other 353 285 685 685
--- --- --- ---
Total non-interest expense 1,267 1,819 3,391 2,595
Income (loss) before tax 585 408 (24) 337
Income tax (expense) benefit (250) 240 147 (141)
----- --- --- -----
Net income $ 335 $ 648 $ 124 $ 196
================================================================================================================
Source: Atlantic Liberty, preliminary prospectus.
- 16 -
22
FELDMAN FINANCIAL ADVISORS, INC.
Table 4
INCOME STATEMENT RATIOS
For the Six Month Periods Ended September 30, 1996 and 1997
And the Years Ended March 31, 1996 and 1997
(Percent of Average Assets)
================================================================================================================
(unaudited)
At or for the 6 months ended At or for the year ended
September 30, March 31,
------------- ---------
1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------------
Loans receivable 5.18 4.44 4.44 4.62
Investment securities 1.19 1.38 1.36 1.32
Mortgage-backed and related securities 1.13 1.10 1.08 1.12
---- ---- ---- ----
Total interest income 7.50 6.92 6.87 7.06
Deposits 4.25 4.18 4.13 4.09
Borrowed funds 0.01 0.01 0.01 0.01
---- ---- ---- ----
Total interest expense 4.25 4.19 4.14 4.10
---- ---- ---- ----
Net interest income 3.25 2.73 2.74 2.96
Provision for loan losses 0.19 0.12 0.73 0.27
---- ---- ---- ----
Net interest income after provision 3.06 2.61 2.01 2.69
---- ---- ---- ----
Income from real estate operations 0.15 0.11 0.15 0.17
Gain (loss) on disposal of foreclosed real estate 0.05 0.24 0.14 (0.13)
Other 0.16 1.32 0.90 0.17
----- ---- ---- ----
Total non-interest income 0.36 1.66 1.19 0.20
---- ---- ---- ----
Compensation and benefits 1.38 1.34 1.58 1.42
Occupancy and equipment 0.25 0.25 0.26 0.26
SAIF deposit insurance premium 0.06 1.35 0.72 0.21
Other 0.65 0.55 0.65 0.68
---- ---- ---- ----
Total non-interest expense 2.34 3.48 3.22 2.56
Income (loss) before tax 1.08 0.78 (0.02) 0.33
Income tax (expense) benefit (0.46) 0.46 0.14 (0.14)
------ ---- ---- ------
Net income 0.62 1.24 0.12 0.19
================================================================================================================
Source: Atlantic Liberty, preliminary prospectus, Feldman Financial
calculations.
- 17 -
23
FELDMAN FINANCIAL ADVISORS, INC.
For the six months ended September 30, 1997 and 1996, the Association
added $105,000 and $66,000, respectively, to its allowance for loan losses.
For the years ended March 31, 1997 and 1996, the provision for loan losses was
$771,000 and $275,000, respectively. The increase in the loss provision for
the 1997 fiscal year reflects management's decision to increase the provision
to reflect risks inherent in a participation in six pools of loans, a
commercial real estate loan in foreclosure proceedings, and a loan on a
commercial condominium unit that subsequently has been sold.
Total non-interest income decreased to $197,000 for the six-months
ended September 30, 1997 from $867,000 for the same period in 1996. The
decrease was primarily attributable to nonrecurring income during the six
months ended September 30, 1996, consisting of insurance proceeds of $556,000,
and the settlement of a lawsuit totaling $195,000. Income from real estate
operations of $80,000 during the six months ended September 30, 1997 and
$57,000 during the same period in 1996. The same insurance and lawsuit
proceeds contributed to the $1.3 million in non-interest income during fiscal
year 1996 when compared to $205,000 for fiscal year 1997.
The Association's total non-interest expense decreased from $1.8
million for the six months ended September 30, 1996, to $1.3 million during the
same period in 1997. The primary reason for the decrease was the special
one-time SAIF assessment of $594,000 included in the 1996 expenses. The same
one-time SAIF assessment was the primary contributor to the increase in
operating expenses from $2.6 million in fiscal year 1996 to $3.4 million in
fiscal year 1997. In addition, compensation and benefits increased by $232,000
during the same period due to a restating of the directors deferred
compensation plan. Occupancy and equipment expense increased by only $10,000
from fiscal year 1996 to fiscal year 1997.
- 18 -
24
FELDMAN FINANCIAL ADVISORS, INC.
The Association's earnings before income taxes increased from a
benefit of $141,000 in fiscal 1996 to an expense of $147,000 in 1997. The
provision for federal income taxes was $250,000 for the six months ended
September 30, 1997, compared to a tax benefit of $240,000 for the same period
in 1996. The tax benefit was attributable primarily to the special SAIF
assessment.
Table 5
YIELD AND COST SUMMARY
For the Six Months Ended September 30, 1997
And Fiscal Years Ended March 31, 1996 and 1997
================================================================================================
Six months ended Fiscal year ended
September 30, March 31,
------------- -----------------
1997 1997 1996
- ------------------------------------------------------------------------------------------------
Weighted Average Yields
-----------------------
Loans 9.02% 8.35% 8.69%
Mortgage-backed securities 6.27 6.10 6.31
Investment securities 6.09 5.65 5.35
Other assets 5.46 5.23 5.31
---- ---- ----
Total interest-earning assets 7.84 7.21 7.39
Weighted Average Costs
----------------------
Deposits 4.65 4.53 4.45
Advance payments by borrowers 0.94 0.84 1.02
---- ---- ----
Total interest-bearing liabilities 4.63 4.50 4.42
Net interest rate spread (1) 3.21 2.71 2.97
Net interest margin (2) 3.40 2.81 3.10
================================================================================================
(1) Average yield on interest-earning assets less average cost of
interest-bearing liabilities.
(2) Net interest income (tax equivalent basis) divided by average interest-
earning assets.
Source: Atlantic Liberty, preliminary prospectus.
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25
FELDMAN FINANCIAL ADVISORS, INC.
ASSET AND LIABILITY MANAGEMENT
The Association's principal financial objective is to sustain
long-term profitability while reducing its exposure to fluctuating interest
rates. Atlantic Liberty has sought to reduce exposure of its earnings to
market interest rates by managing the mismatch between asset and liability
rates, maturities and re-pricings. The focus of the Association's
asset/liability management is to evaluate the overall interest rate risk
inherent in the Association's assets and liabilities, determine the level of
risk appropriate given the Association's strategy, operating environment
capital and liquidity requirements and performance objectives, and manage the
risk consistent with the guidelines approved by the Board of Directors.
Through such management, the Association seeks to reduce the vulnerability of
its operations to changes in interest rates.
The Association seeks to manage interest rate risk with the continued
objective of balancing the contrasting strategies of minimizing exposure to
interest rate sensitivity versus maximizing net interest margins. In order to
manage interest rate risk consistent with performance objectives, the
Association has utilized the following strategies to manage interest rate risk:
(1) emphasizing the origination and retention of one-to-four family residential
ARM loans and fixed rate loans with maturities of 15 years or less; (2)
emphasizing the origination and retention of commercial and multi-family
residential real estate loans with shorter maturities and/or adjustable rates;
and (3) investing in shorter term securities which generally bear lower yields
as compared to longer term investments, but which better position the
Association for increases in market rates.
In recent years, the Association has measured interest rate risk
sensitivity by computing the "gap" between the assets and liabilities which
were expected to mature or reprice within certain time periods, based upon
assumptions regarding loan prepayment and deposit decay rates
- 20 -
26
FELDMAN FINANCIAL ADVISORS, INC.
formerly provided by the OTS. The OTS now requires the computation of amounts
by which the net present value of the Association's cash flows from assets,
liabilities and off balance sheet items (the Association's net portfolio value
"NPV") would change in the event of a range of assumed changes in market
interest rates. These computations estimate the effect on the Association's
NPV from instantaneous and permanent 1% to 4% (100 to 400 basis points)
increases and decreases in market interest rates.
Table 6 presents the Association's NPV at September 30, 1997 as
calculated by the OTS. As shown by the table, the Association's current NPV
position is more sensitive to increases in interest rates than to drops in
interest rates due to the shorter maturities of its liability portfolio.
Table 6
NPV CALCULATION
at September 30, 1997
Percentage Change in Net Portfolio Value
Changes in Projected
Market Change (1)
Interest Rates ----------
--------------
(basis points)
+400 (54)%
+300 (39)%
+200 (24)%
+100 (12)%
0 0%
(100) 5%
(200) 6%
(300) 11%
(400) 21%
(1) Calculated as the amount of change in the estimated NPV divided by the
estimated NPV assuming no changes in interest rates.
Source: Atlantic Liberty, preliminary prospectus
- 21 -
27
FELDMAN FINANCIAL ADVISORS, INC.
ASSET QUALITY
The Association improved its asset quality from March 31, 1996 to
September 30, 1997. Management believes the Association's improved asset
quality is primarily attributable to a better economic environment, utilization
of comprehensive loan underwriting policies, application of a risk rating
methodology, systematic loan reviews, active monitoring of loan concentrations,
conservative collateralizaton practices, and consistent and forceful collection
and workout efforts.
In order to effectively monitor problem loans, the Board of
Directors is informed monthly of the status of all mortgage loans delinquent
more than 60 days, all loans in foreclosure, and all foreclosed and repossessed
property owned by the Association.
The Association's ratio of non-performing assets to total assets
decreased from 4.55% at March 31, 1996 to 1.60% at September 30, 1997. Total
non-performing assets were $2.026,000 as of September 30, 1997. The
Association's real estate owned ("REO") was $274,000 as of the same date.
The Association's allowance for loan losses totaled $1.1 million, or
1.7% of net loans and 62% of non-performing loans at September 30, 1997. The
balance of the allowance for loan losses increased by $338,000 since March 31,
1996. Based on its internal asset quality rating system, the Association had
designated as of September 30, 1997 outstanding loans of $2.3 million as
substandard and $665,000 as special mention.
- 22 -
28
FELDMAN FINANCIAL ADVISORS, INC.
Table 7
NON-PERFORMING ASSET SUMMARY
As of September 30, 1997, and March 31, 1996 and 1997
(Dollars in Thousands)
===============================================================================================================
March 31,
-----------------------
September 30, 1997 1997 1996
- ---------------------------------------------------------------------------------------------------------------
Loans accounted for on a non-accrual basis:
One- to four-family residential $ 1,203 $ 1,894 $1,898
Multi-family 0 1,217 1,758
Commercial real estate 549 230 1,147
--- --- -----
Total non-performing loans $ 1,752 $ 3,341 $ 4,803
Accruing loans which are 90 days or more past due 0 0 0
- - -
Total non-performing loans $ 1,752 $ 3,341 $ 4,803
======= ======= =======
Total as a percent of total assets 1.60% 3.04% 4.55%
Troubled debt restructurings 0 0 0
Real estate owned, net 274 385 1,314
--- --- -----
Total non-performing assets $ 2,026 $ 3,726 $ 6,117
======= ======= =======
===============================================================================================================
Source: Atlantic Liberty, preliminary prospectus
- 23 -
29
FELDMAN FINANCIAL ADVISORS, INC.
Table 8
ALLOWANCE FOR LOAN AND LEASE LOSSES
For the Six Month Periods Ended September 30, 1996 and 1997
And the Years Ended March 31, 1996 and 1997
(Dollars in Thousands)
=================================================================================================================
(unaudited)
For the six months ended For the year ended
September 30, March 31,
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------------
Balance at beginning of period $ 978 $ 745 $ 745 $ 619
Charge offs:
One-to-four family -- 90 318 58
Commercial real estate -- 47 220 91
-- -- --- --
Total Charge-offs -- 137 538 149
Provision for loan losses 105 66 771 275
--- -- --- ---
Balance at end of period $ 1,083 $ 674 $ 978 $ 745
- -----------------------------------------------------------------------------------------------------------------
Ratio of net charge-offs during the period to
average loans outstanding during the period 0% 0.25% 0.96% 0.28%
=================================================================================================================
Source: Atlantic Liberty, preliminary prospectus
- 24 -
30
FELDMAN FINANCIAL ADVISORS, INC.
PROPERTIES
The Association conducts its business through two full-service banking
offices located in Brooklyn, New York. Exhibit II-7 provides a general summary
of the Association's offices. The Association owns both of its office
facilities. The net book value of the Association's premises, land and
equipment at September 30, 1997 totaled $1.5 million or 1.4% of total assets.
The Association operates an automated teller machine at each branch
location. The Association expects to continue its ongoing analysis to
determine the efficiency and effectiveness of its branches in delivering
services and products to the local community. The Association's branch network
generally comprises modest but efficient office facilities with favorable
locations and convenience. The Association currently has no plans to add
additional branch facilities, but will monitor feasible expansion
opportunities.
- 25 -
31
FELDMAN FINANCIAL ADVISORS, INC.
SUBSIDIARIES
The Association has no subsidiary corporations.
- 26 -
32
FELDMAN FINANCIAL ADVISORS, INC.
MARKET AREA
The Association's two offices are located in Brooklyn, with the main
office in Brooklyn Heights and the branch office in Flatbush, approximately 10
miles from the main office. The main office is located in what is considered
downtown Brooklyn, within the financial, legal and government complex in that
area. The branch office is located in one of the main business avenues
surrounded by middle income one- and two-family homes and some multi-family
apartment buildings.
The Association draws the majority of its business from the Brooklyn
Heights district surrounding its main branch and the Flatbush community
surrounding its branch office. The market area is characterized by a large
number of two- and three-family residences as well as a significant number of
multi-family dwellings and apartment complexes. To meet the needs of its
immediate lending area, the Association generates a number of multi-family and
commercial real estate loans.
Brooklyn is home to approximately 30% of the residents of New York
City and provides approximately 15% of New York City's jobs. The majority of
Brooklyn residents work in the borough of Manhattan. The largest industries in
Brooklyn include health and medical services, social services, apparel, food
stores, and wholesale trade/non-durable goods. The largest employers in
Brooklyn include Kings County Hospital, Brooklyn State Hospital, Long Island
University, and Brooklyn College.
Table 9 displays selected demographic data for the United States, the
state of New York, the New York City Metropolitan Statistical Area ("New York
City MSA") and Kings County (which is Brooklyn). Both Kings County and New
York show minimal negative projected poulation change in the next five years,
while the New York City MSA and the U.S. both show
- 27 -
33
FELDMAN FINANCIAL ADVISORS, INC.
modest projected population growth. Income levels in Kings County are
projected to increase in line with the increase expected fort he U.S. and for
New York State.
Table 10 shows deposit trends for Brooklyn and the New York City MSA.
Table 11 shows deposit concentrations within Brooklyn. As of June 30, 1996,
Atlantic Liberty had a 0.4% market share of deposits and ranked 8 out of the
numerous financial institutions in Brooklyn. From 1994 to 1996, Atlantic
Liberty's deposits grew 7.4% compared to the overall decline of 0.3% in total
deposits in Brooklyn.
In summary, the Association's market area is characterized as a
metropolitan area with moderate incomes for the area, a stable population, and
moderate per capita growth expected. Competition for originating loans and
attracting deposits is intense and expected to escalate as merging financial
institutions seek to leverage combined resources and to advance their
competitive positions. In addition, non-depository competitors have
significantly penetrated the traditional customer base of thrifts and banks as
a result of the sustained performance of the stock market. However, the region
presents excellent opportunities for increasing a small financial institution's
customer base as more consolidations occur and community banks become
increasingly scarce. In addition, with its many close communities, Brooklyn is
an attractive market that can be served well by a community financial
institution such as Atlantic Liberty.
- 28 -
34
FELDMAN FINANCIAL ADVISORS, INC.
TABLE 9
KEY ECONOMIC INDICATORS
United States, New York, New York City MSA, Kings County
===============================================================================================
UNITED NEW YORK KINGS
KEY ECONOMIC INDICATORS STATES NEW YORK MSA COUNTY
- -----------------------------------------------------------------------------------------------
POPULATION
- ----------
Total Population - 1997 267,240,272 18,177,296 8,647,379 2,268,241
5-year projection percent change 4.5% -0.1% 5.0% -1.7%
1990 - 1997 percent change 7.5% 1.0% 1.2% -1.4%
HOUSEHOLDS
- ----------
Total Households - 1997 98,741,200 66,684 3,274,724 810,706
5-year projection percent change 4.9% 0.0% 0.2% -1.8%
1990 - 1997 percent change 7.4% 0.7% 0.7% -2.1%
PER CAPITA INCOME
- -----------------
Per Capita Income - 1997 $18,885 $21,221 $22,734 $16,139
5-year projection percent change 21.7% 19.7% 21.2% 20.6%
1990 - 1997 percent change 31.2% 28.8% 31.0% 31.0%
AVERAGE HOUSEHOLD INCOME
- ------------------------
Average Household Income - 1997 $51 $57,084 $59,431 $44,844
5-year projection percent change 20.7% 18.3% 18.9% 19.9%
1990 - 1997 percent change 31.3% 29.1% 31.3% 31.7%
MEDIAN HOUSEHOLD INCOME
- -----------------------
Median Household Income - 1997 $37,079 $39,912 $38,147 $31,350
5-year projection percent change 13.1% 9.7% 8.8% 9.9%
1990 - 1997 percent change 23.2% 20.7% 20.2% 21.6%
===============================================================================================
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35
FELDMAN FINANCIAL ADVISORS, INC.
Table 10
DEPOSIT TRENDS FOR BROOKLYN AND NEW YORK CITY MSA
For All Banks, Savings Banks, Thrifts and Credit Unions
Deposit Data as of June 30th Date
(Dollars in Thousands)
==========================================================================================================
'94-'96 1996 1996
1994 1995 1996 PERCENT NO. OF AVG. DEPS
AREA DEPOSITS DEPOSITS DEPOSITS CHANGE OFFICES PER OFFICE
- ----------------------------------------------------------------------------------------------------------
Brooklyn $25,768,569 $25,758,275 $25,753,943 -0.1% 337 $76,421
New York City MSA 230,231,027 223,887,546 237,134,268 3.0% 2,282 103,915
==========================================================================================================
- 30 -
36
FELDMAN FINANCIAL ADVISORS, INC.
TABLE 11
DEPOSIT MARKET SHARE FOR BROOKLYN
For Banks, Savings Banks, and Thrifts (and Excluding Credit Unions)
June 30, 1994 to June 30, 1996
==================================================================================================================================
1996 1995 1994
--------------------- ------------------ ---------------------- 1994-1996
HOLDING CO. OR NUMBER OF DEPOSITS % OF DEPOSITS % OF DEPOSITS % OF GROWTH
INSTITUTION NAME BRANCHES TYPE ($000S) TOTAL ($000S) TOTAL ($000S) TOTAL RATE (%)
- ----------------------------------------------------------------------------------------------------------------------------------
Chase Manhattan Corp 72 B $4,223,905 16.7% $4,275,354 16.9% $4,393,321 17.3% -3.9%
Dime Bancorp 24 SB 4,120,352 16.3% 4,181,634 16.5% 4,386,616 17.3% -6.1%
Republic NY Corp 34 B 3,758,827 14.8% 3,818,719 15.1% 4,076,399 16.1% -7.8%
Greenpoint Financial 16 SB 3,087,232 12.2% 3,416,368 13.5% 3,059,435 12.1% 0.9%
Citicorp 28 B 2,119,778 8.4% 2,040,018 8.0% 1,987,612 7.8% 6.6%
Independence Comm 18 SB 1,920,137 7.6% 1,889,264 7.5% 1,845,719 7.3% 4.0%
Astoria Financial Corp 9 T 1,372,721 5.4% 1,352,976 5.3% 1,396,909 5.5% -1.7%
Popular, Inc. 12 B 568,267 2.2% 523,918 2.1% 522,319 2.1% 8.8%
Dime Community Bancorp 6 SB 520,040 2.1% 158,236 0.6% 157,247 0.6% 230.7%
North Fork Bancorp 10 B 452,139 1.8% 445,766 1.8% 443,636 1.7% 1.9%
Emigrant Bancorp 3 SB 445,822 1.8% 438,195 1.7% 452,433 1.8% -1.5%
TR Financial 2 SB 438,306 1.7% 405,805 1.6% 338,433 1.3% 29.5%
Fleet Financial 15 B 384,252 1.5% 399,742 1.6% 410,270 1.6% -6.3%
First Empire State 4 B 346,949 1.4% 318,318 1.3% 226,874 0.9% 52.9%
HSBC Holdings PLC 5 B 292,346 1.2% 282,311 1.1% 265,934 1.0% 9.9%
ABN Amro No. Amer. 3 B 180,132 0.7% 170,743 0.7% 172,507 0.7% 4.4%
Carver Bancorp, Inc. 3 T 132,501 0.5% 131,358 0.5% 130,450 0.5% 1.6%
National Bank of Greece 2 B 126,537 0.5% 117,096 0.5% 104,922 0.4% 20.6%
Brooklyn Federal SB 2 T 112,906 0.4% 114,009 0.4% 117,118 0.5% -3.6%
Flatbush FS&L 3 T 101,129 0.4% 104,188 0.4% 109,574 0.4% -7.7%
Atlantic Liberty 2 T 96,906 0.4% 92,048 0.4% 90,191 0.4% 7.4%
All Others (37) 24 NA 511,412 2.0% 677,867 2.7% 696,358 2.7% -26.6%
-- ------- ---- ------- ---- ------- ---- ------
Total in Kings County 297 $25,312,596 100.0% $25,353,933 100.0% $25,384,277 100.0% -0.3%
==================================================================================================================================
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37
FELDMAN FINANCIAL ADVISORS, INC.
SUMMARY
Atlantic Liberty has carved out a niche as a traditional,
community-oriented thrift offering primarily residential real estate mortgage
loans, including multi-family and commercial real estate loans. Going forward,
the Association will continue to serve its market area with loans tailored to
meet the unique needs of an urban area by offering mortgage products designed
for one-to-four family, multi-family and commercial real estate loans. The
Association will continue to offer deposit products for the retail customer.
In addition, the Association will closely monitor its credit requirements and
asset quality, maintaining its high credit standards while attracting new
customers. The sound capital position and recently increased reserve levels
serve as an important aspect of such risk management.
The Association's franchise is concentrated in Brooklyn, largely in
the Brooklyn Heights area. The Association's long-standing presence in the
local community provides it with a loyal customer base and a degree of market
penetration locally. It may be the case, however, that customers seeking a
full range of competitive products and services may not be content with the
Association's limited offerings as compared to other financial competitors. As
the Association seeks to manage both sides of the balance sheet, assets and
liabilities, it may face increased pressure to improve and expand its retail
banking franchise. Such action would require additional investment, but could
generate a cost-effective source of funds along with additional lending
business. On the other hand, the Association has a strong knowledge of its
local market area and may be able to continue to strengthen its niche in the
local community through superior customer service, community contacts and
products designed to meet the area's specific needs.
- 32 -
38
FELDMAN FINANCIAL ADVISORS, INC.
II. COMPARISONS WITH PUBLICLY HELD COMPANIES
GENERAL
The comparative market approach provides a sound basis for determining
estimates of going-concern valuations where a regular and active market exists
for the stocks of peer institutions. The comparative market approach was
utilized in determining the estimated aggregate pro forma market value of
Atlantic Liberty because: (i) reliable market and financial data are readily
available for comparable institutions; (ii) the comparative market method is
required by the applicable regulatory guidelines; and (iii) other alternative
valuation methods (such as income capitalization, liquidation analysis, or
discounted cash flow) are unlikely to produce a valuation relevant to the
future trading patterns of the related equity interest. The generally employed
valuation method in initial public offerings, where possible, is the
comparative market approach, which also can be relied upon to determine pro
forma market value in an initial thrift stock offering.
The comparative market approach derives valuation benchmarks from the
trading patterns of selected peer institutions which due to certain factors,
such as financial performance and operating strategies, enable the appraiser to
estimate the potential value of the subject institution in a stock conversion
offering. The pricing and trading history of recent initial public offerings
of thrifts also are examined to provide any evidence of the new issue discount
that must be considered. In Chapter II, our valuation analysis focuses on the
selection and comparison of Atlantic Liberty with a comparable group of
publicly held thrifts (the "Comparative Group"). Chapter III details any
additional discounts or premiums we believe are appropriate to the
Association's pro forma conversion valuation.
-33-
39
FELDMAN FINANCIAL ADVISORS, INC.
SELECTION CRITERIA
Selected market price and financial performance data for thrifts
listed on the New York and American Stock Exchanges and those thrifts traded on
the over-the-counter markets listed on the National Association of Securities
Dealers Automated Quotation System ("Nasdaq") are shown in Exhibit III.
Several criteria were used to select the individual members of the Comparative
Group from the overall universe of publicly held thrifts.
- Operating characteristics - An institution's operating
characteristics are the most important factors because they affect
investors' expected rates of return on a company's stock under
various business/economic scenarios, and they influence the
market's general perception of the quality and attractiveness of a
given company. Operating characteristics, which may vary in
importance during the business cycle, include financial variables
such as profitability, balance sheet growth, capitalization, asset
quality, and other factors such as lines of business and
management strategies.
- Degree of marketability and liquidity - Marketability of a stock
reflects the relative ease and promptness with which a security
may be sold when desired, at a representative current price,
without material concession in price merely because of the
necessity of sale. Marketability also connotes the existence of
buying interest as well as selling interest and is usually
indicated by trading volumes and the spread between the bid and
asked price for a security. Liquidity of the stock issue refers
to the organized market exchange process whereby the security can
be converted into cash. We attempted to limit our selection to
companies that have access to a regular trading market. We
eliminated from the comparative group companies with market prices
that were materially influenced by publicly announced or widely
rumored acquisitions. However, the expectation of continued
industry consolidation is currently embedded in thrift and bank
stock valuations.
- Geographic Location - The region of the country where a company
operates is also of importance in selecting the comparative group.
The operating environment for savings institutions varies from
region to region with respect to business and economic
environments, real estate market conditions, speculative takeover
activity, and investment climates. Economic and investor climates
can also vary greatly within a region, particularly due to
takeover activity.
- 34 -
40
FELDMAN FINANCIAL ADVISORS, INC.
The Association's lending operations conform to the typical lending
profile of a traditional thrift institution. The balance sheet of Atlantic
Liberty is concentrated heavily in residential mortgage loans. The
Association's modest earnings are lower than the average thrift. In determining
the Comparative Group composition, we focused on the Association's level of
earnings, asset size and capital as well as its residential real estate lending
activities. As with any composition of a group of comparable companies, the
identification process was broadened sufficiently to assemble a meaningful
number of candidates. Specifically, we initiated a search for companies by
applying the selection criteria identified below. Companies that met a
majority of the following parameters were considered for inclusion in the
Comparative Group:
- Asset size - total assets ranging between $60 million and $250
million.
- Capital level - regulatory capital ratios that would generally
qualify for well capitalized designation.
- Profitability - return on average assets ("ROAA") less than 90
basis points.
- Balance sheet composition - level of loans to assets greater than
35% and lower than 90%, accompanied by modest concentration of
non-earning assets with reliance upon deposits as the chief
funding source.
- Loan concentration - more than 50% of loans are residential
mortgage loans.
- Asset quality - ratio of non-performing assets to total assets
less than 2.25%.
- Geographic location - additional consideration given to companies
located in New York and surrounding states.
Our search for comparable publicly held thrifts initially targeted
well-capitalized, profitable thrifts with significant residential real estate
lending activities. Many public thrifts exhibited all of these distinct
operating and financial characteristics.
As a result of applying the aforementioned criteria and analyzing the
screening results, the selection process has produced a reliable representation
of publicly traded thrifts with operations
- 35 -
41
FELDMAN FINANCIAL ADVISORS, INC.
comparable to those of Atlantic Liberty. A general overview of the 12 members
selected for the Comparative Group is presented in Table 12. The asset sizes
of the Comparative Group companies range from $69 million at Albion Banc Corp.
to $248 million at Skaneateles Bancorp Inc., with an overall average size of
$148 million. While some differences inevitably exist between the Association
and the individual companies, we believe that the chosen Comparative Group on
the whole provides a meaningful basis of comparison for valuation purposes.
- 36 -
42
FELDMAN FINANCIAL ADVISORS, INC.
Table 12
COMPARATIVE GROUP OPERATING SUMMARY
As of the Latest Period Ended September 30, 1997
Total Equity/
No. of Conv. Assets Assets
Company City State Offices Date ($000) (%)
------- ---- ----- ------- ------ ------- --------
Atlantic Liberty Savings F.A. Brooklyn NY 2 -- 109,887 6.56
COMPARATIVE GROUP
- -----------------
Albion Banc Corp. (1) Albion NY 2 07/26/93 68,628 8.73
Broadway Financial Corp.(1) Los Angeles CA 3 01/09/96 122,245 10.75
Cecil Bancorp Inc. Elkton MD 2 11/10/94 64,313 11.57
Elmira Savings Bank (The)(1) Elmira NY 6 03/01/85 227,828 6.30
Great American Bancorp Champaign IL 3 06/30/95 139,568 20.43
HFS Bank FSB (1) Hobart IN 4 NA 153,775 7.56
LSB Financial Corp. Lafayette IN 4 02/03/95 200,266 8.63
Prestige Bancorp Inc. Pleasant Hills PA 4 06/27/96 137,834 11.21
SFS Bancorp Inc. Schenectady NY 4 06/30/95 174,093 12.47
Skaneateles Bancorp Inc. Skaneateles NY 9 06/02/86 247,643 7.00
Tappan Zee Financial Inc. Tarrytown NY 1 10/05/95 124,603 17.15
Westwood Financial Corp.(1) Westwood NJ 2 06/07/96 111,394 9.13
(1) Financial data as of June 30, 1997.
- 37 -
43
FELDMAN FINANCIAL ADVISORS, INC.
Table 13
KEY FINANCIAL COMPARISONS
ATLANTIC LIBERTY AND THE COMPARATIVE GROUP
As of the Twelve Months Ended September 30, 1997
Comp.
Atlantic Group
Liberty Average
-------- -------
PROFITABILITY
- -------------
LTM Return on Average Assets (0.17)% 0.55 %
Core Return on Average Assets (2.65) 0.64
LTM Return on Average Equity (0.22) 5.31
Core Return on Average Equity (3.39) 6.28
INCOME AND EXPENSE (% of avg. assets)
- ------------------
Total Interest Income 7.08 7.46
Total Interest Expense 4.13 3.85
Net Interest Income 2.95 3.61
Provision for Loan Losses 0.75 0.13
Other Operating Income 0.56 0.39
Net Gains & Nonrecurring Income 0.05 0.01
General & Administrative Expense 2.62 2.79
Real Estate Expense (Income) 0.00 0.01
Nonrecurring Expense 0.00 0.16
YIELD-COST DATA
- ---------------
Yield on Earning Assets 7.43 7.76
Cost of Funds 4.56 4.47
---- ----
Net Interest Spread 2.87 3.29
ASSET UTILIZATION (% of avg. assets)
- -----------------
Avg. Interest-earning Assets 93.36 96.27
Avg. Interest-bearing Liabilities 90.26 86.06
----- -----
Net Interest-earning Assets 3.09 10.21
- 38 -
44
FELDMAN FINANCIAL ADVISORS, INC.
Table 13 (continued)
KEY FINANCIAL COMPARISONS
ATLANTIC LIBERTY AND THE COMPARATIVE GROUP
As of the Twelve Months Ended June 30, 1997
Comp.
Atlantic Group
Liberty Average
-------- -------
BALANCE SHEET COMPOSITION (% of assets)
- -------------------------
Cash and Securities 37.86 % 23.85 %
Loans Receivable, net 59.59 72.72
Real Estate 0.32 0.21
Intangible Assets 0.00 0.12
Other Assets 0.65 3.10
Total Deposits 91.49 79.55
Borrowed Funds 0.00 8.49
Other Liabilities 1.95 1.05
Total Equity 6.56 10.91
LOAN PORTFOLIO (% of total loans)
- --------------
Residential Mortgage Loans 61.18 68.98
Other Real Estate Mortgage Loans 37.92 11.40
Nonmortgage Loans 0.03 19.62
GROWTH RATES
- ------------
Total Assets (0.34) 11.62
Total Loans 5.85 10.84
Total Deposits (0.46) 10.34
CREDIT RISK RATIOS
- ------------------
Nonperforming Loans / Total Loans 2.96 0.84
Nonperforming Assets / Total Assets 2.04 0.96
Reserves / Nonperforming Loans 54.97 90.23
Reserves / Total Loans 1.65 0.70
- 39 -
45
FELDMAN FINANCIAL ADVISORS, INC.
RECENT FINANCIAL COMPARISONS
Table 13 summarizes certain key financial comparisons between Atlantic
Liberty and the comparative group. Tables 14 through 18 contain detailed
financial comparisons of the Association with the individual Comparative Group
companies based on measures of profitability, income and expense components,
yield-cost structure, capital levels, credit risk, balance sheet composition,
and growth rates. Comparative financial data for both Atlantic Liberty and the
Comparative Group companies were utilized as of or for the last twelve months
("LTM") ended September 30, 1997.
Atlantic Liberty's ROAA was negative 0.17% as compared to the
Comparative Group's average ROAA of 0.55%. The Association's negative 0.22%
core ROAA (excluding gains on sale and other non-recurring items) also trailed
the Comparative Group's average core ROAA of 0.64%. In contrast to the
Comparative Group, the Association's profitability was restrained due to a
higher level of loan loss provisions, lower interest income and higher interest
expense. None of the members of the Comparative Group reported lower levels of
profitability than the Association. Only one other institution, Broadway
Financial Corp, reported negative ROAA and ROAE and Broadway Financial's core
ROAA and ROAE were positive.
The Association's net interest income of 2.95% relative to average
assets was positioned below the Comparative Group's average of 3.61%. The
Association's relatively low level of net interest income is attributable to
its high deposit to loan ratio and relatively low loan to asset ratio and its
comparatively lower capital base.
The Association's net interest rate spread was 2.87% over the observed
period, measuring below the Comparative Group's average of 3.29%. The
Association's cost of funds at 4.56%
- 40 -
46
FELDMAN FINANCIAL ADVISORS, INC.
was only slightly higher than the Comparative Group's average of 4.47%. The
Association's yield on interest-earning assets measured 7.43%, somewhat below
the Comparative Group's average of 7.76%.
The Association's net interest-earning asset balance averaged 3.09% of
total assets and was positioned well below the Comparative Group's average of
10.21%. This disadvantage primarily reflected the Association's lower capital
level compared to the Comparative Group. The Association's 6.56% ratio of
equity to assets fell below the Comparative Group's average equity ratio of
10.91%.
The Association's non-interest operating income totaled 0.56% in
relation to average assets, higher than the Comparative Group's average of
0.39%. Atlantic Liberty enjoyed a benefit from gains on sale of foreclosed
real estate and from income from real estate operations.
The Association increased its level of provision for loan losses, as
explained in Chapter 1, in reaction to specific loans. The Comparative Group
exhibited varying levels of provisions, with an overall average of 0.13%
relative to average assets compared to the Association's 0.75%. The
Association had non-earning assets equal to 2.04% of average assets in
comparison to 0.96% for the Comparative Group on the whole. Atlantic Liberty's
reserves to total loans, at 1.65% of total loans was higher than the
Comparative Group's average of 0.70%. However, the Comparative Groups ratio of
reserves to non-performing loans, at 90.23% was higher than the Association's
ratio of 54.97%, due to the Association's higher level of non-performing loans.
The Association's 2.62% ratio of operating expense to average assets was lower
the Comparative Group average of 2.79%.
Total net loans at the Association amounted to 59.59% of assets at
Atlantic Liberty, slightly below the Comparative Group's average concentration
of 72.72%. The two companies
- 41 -
47
FELDMAN FINANCIAL ADVISORS, INC.
exhibiting loan concentrations lower than the Association were Tappan Zee
Financial Inc. (46.02%) and Westwood Financial Corp. (36.95%). The
Association's holdings of cash and investment securities were 37.9% of total
assets, higher than the Comparative Group's average of 23.8%. Again, only
Tappan Zee Financial Inc. (51.66%) and Westwood Financial Corp. (60.51%) showed
higher concentrations of investment securities than the Association. The
Association's 61.2% proportion of one-to-four family residential mortgages to
total loans was slightly lower than the Comparable Group's average of 69.0%,
while the Association's ratio of other mortgage loans to loans, at 37.9%, is
higher than the Comparable Group's average of 11.4%. The Association had
virtually no non-mortgage loans compared to the Comparable Group's average of
19.6% of loans.
The Association's asset and deposit growth rates, at (0.34)% and
(0.46)% respectively, trailed the Comparative Group's averages of 11.62% and
10.34%, as did its 5.85% loan growth rate trail the Comparative Group's rate of
10.8%. The Association's recent loan growth has been internally generated with
an emphasis on selective origination of assets at attractive yields and with
prudent credit risk considerations.
In summary, the Association's earnings performance trailed that of the
Comparative Group. The Comparative Group's higher capital base provided
substantial source of interest-free funds not available to the Association. In
addition, the Comparative Group's net interest margin is higher than the
Association's and its asset quality is stronger. The Association has a higher
ratio of non-residential mortgages to loans and a lower ratio of total loans to
assets.
- 42 -
48
FELDMAN FINANCIAL ADVISORS, INC.
===============================================================================
Table 14
GENERAL FINANCIAL PERFORMANCE RATIOS
As of or for the Latest Twelve Months Ended September 30, 1997
===============================================================================
Total Tang. Total Net
Total Total Equity/ Equity/ NPAs/ Interest LTM LTM Core Core
Assets Deposits Assets Assets Assets Margin ROAA ROAE ROAA ROAE
($mil.) ($mil.) (%) (%) (%) (%) (%) (%) (%) (%)
------- -------- ------- ------- ------ -------- ---- ---- ------ ------
ATLANTIC LIBERTY SAVINGS F.A 109,887 100,539 6.56 6.56 2.04 3.01 (0.17) (2.65) (0.22) (3.39)
COMPARATIVE GROUP AVERAGE 147,683 118,111 10.91 10.80 0.96 3.75 0.55 5.31 0.64 6.28
Albion Banc Corp. (1) 68,628 52,322 8.73 8.73 0.72 3.62 0.11 1.14 0.37 4.03
Broadway Financial Corp.(1) 122,245 107,550 10.75 10.75 2.06 4.62 (0.11) (0.95) 0.30 2.60
Cecil Bancorp Inc. 64,313 52,677 11.57 11.57 1.42 4.16 0.88 7.56 0.80 6.89
Elmira Savings Bank (The)(1) 227,828 207,386 6.30 6.05 0.66 3.76 0.36 5.70 0.35 5.53
Great American Bancorp 139,568 109,578 20.43 20.43 NA 4.36 0.53 2.38 0.59 2.65
HFS Bank FSB (1) 153,775 112,048 7.56 7.56 0.59 3.37 0.65 8.37 0.93 11.96
LSB Financial Corp. 200,266 135,494 8.63 8.63 1.05 3.51 0.78 8.67 0.69 7.65
Prestige Bancorp Inc. 137,834 90,066 11.21 11.21 0.33 3.24 0.62 5.10 0.62 5.11
SFS Bancorp Inc. 174,093 149,854 12.47 12.47 NA 3.48 0.69 5.45 0.69 5.45
Skaneateles Bancorp Inc. 247,643 208,156 7.00 6.81 1.78 4.04 0.70 10.32 0.68 9.99
Tappan Zee Financial Inc. 124,603 101,343 17.15 17.15 NA 3.84 0.85 4.87 0.84 4.76
Westwood Financial Corp.(1) 111,394 90,852 9.13 8.21 0.00 3.02 0.49 5.12 0.85 8.78
Source: Atlantic Liberty; SNL Securities; Feldman Financial
(1) Data as of June 30, 1997.
- 43 -
49
FELDMAN FINANCIAL ADVISORS, INC.
===============================================================================
Table 15
INCOME AND EXPENSE ANALYSIS
For the Latest Twelve Months Ended September 30, 1997
===============================================================================
As a Percent of Average Assets
-----------------------------------------------------------------------------------------------------
Net Other Gains & Loan Gen. & Real Pretax
Interest Interest Interest Oper. Non-rec. Loss Admin. Estate Non-rec. Core
Income Expense Income Income Income Prov. Expense Expense Expense Earnings
-------- -------- -------- ------ -------- ----- ------- ------- -------- --------
ATLANTIC LIBERTY SAVINGS F.A. 7.08 4.13 2.95 0.56 0.05 0.75 2.62 0.00 0.00 0.14
COMPARATIVE GROUP AVERAGE 7.46 3.85 3.61 0.39 0.01 0.13 2.79 0.01 0.16 1.05
Albion Banc Corp. (1) 7.51 4.06 3.46 0.42 0.02 0.22 3.15 (0.06) 0.43 0.57
Broadway Financial Corp.(1) 7.61 3.12 4.49 0.35 0.01 0.36 3.79 0.24 0.64 0.46
Cecil Bancorp Inc. 7.94 3.85 4.09 0.47 0.12 0.16 2.91 0.00 0.00 1.49
Elmira Savings Bank (The)(1) 7.61 4.02 3.58 0.77 0.02 0.18 3.54 (0.00) 0.00 0.61
Great American Bancorp 7.28 3.19 4.09 0.51 (0.09) 0.17 3.45 (0.01) 0.00 0.99
HFS Bank FSB (1) 7.73 4.47 3.26 0.44 (0.01) 0.05 2.14 (0.01) 0.42 1.52
LSB Financial Corp. 7.80 4.47 3.33 0.32 0.14 0.04 2.46 0.00 0.00 1.16
Prestige Bancorp Inc. 6.94 3.80 3.15 0.27 0.00 0.07 2.35 0.00 0.00 0.99
SFS Bancorp Inc. 7.20 3.82 3.39 0.23 0.00 0.07 2.55 (0.01) 0.00 1.01
Skaneateles Bancorp Inc. 7.68 3.87 3.81 0.66 0.03 0.19 3.26 0.02 0.00 0.97
Tappan Zee Financial Inc. 7.38 3.63 3.75 0.12 0.03 0.05 2.36 0.02 0.00 1.43
Westwood Financial Corp.(1) 6.88 3.95 2.93 0.16 (0.10) 0.02 1.56 0.00 0.45 1.41
Source: Atlantic Liberty; SNL Securities; Feldman Financial
(1) Data as of June 30, 1997.
- 44 -
50
FELDMAN FINANCIAL ADVISORS, INC.
===============================================================================
Table 16
YIELD-COST STRUCTURE AND GROWTH RATES
For the Latest Twelve Months Ended September 30, 1997
===============================================================================
Avg. Avg. Net
Earn. Costing Earn. Yield on Cost Net Asset Loan Deposit
Assets/ Funds/ Assets/ Earn. of Interest Growth Growth Growth
Assets Assets Assets Assets Funds Spread Rate Rate Rate
------- ------- ------- -------- ----- -------- ------ ------ -------
ATLANTIC LIBERTY SAVINGS F.A. 93.36 90.26 3.09 7.43 4.56 2.87 4.36 14.24 5.03
COMPARATIVE GROUP AVERAGE 96.27 86.06 10.21 7.76 4.47 3.29 11.62 10.84 10.34
Albion Banc Corp. (1) 95.37 88.19 7.18 7.88 4.60 3.28 18.77 4.02 10.14
Broadway Financial Corp.(1) 97.09 86.96 10.13 7.84 3.59 4.25 9.28 6.90 11.74
Cecil Bancorp Inc. 98.39 86.41 11.97 8.07 4.45 3.62 6.66 7.15 9.81
Elmira Savings Bank (The)(1) 95.37 86.69 8.68 7.98 4.64 3.34 2.09 6.08 0.47
Great American Bancorp 93.83 76.90 16.93 7.76 4.15 3.61 12.68 20.58 21.15
HFS Bank FSB (1) 96.73 91.07 5.66 7.99 4.90 3.09 12.27 14.60 13.61
LSB Financial Corp. 94.90 90.52 4.38 8.22 4.93 3.29 12.61 12.32 16.50
Prestige Bancorp Inc. 97.10 86.83 10.28 7.15 4.37 2.78 32.05 27.78 9.86
SFS Bancorp Inc. 97.24 86.05 11.19 7.41 4.44 2.97 4.86 NA 5.63
Skaneateles Bancorp Inc. 94.29 85.53 8.76 8.15 4.53 3.62 2.37 4.14 2.28
Tappan Zee Financial Inc. 97.76 80.32 17.44 7.54 4.51 3.03 3.95 4.05 11.34
Westwood Financial Corp.(1) 97.17 87.22 9.95 7.09 4.53 2.56 21.80 11.65 11.54
Source: Atlantic Liberty; SNL Securities; Feldman Financial
(1) Data as of June 30, 1997.
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FELDMAN FINANCIAL ADVISORS, INC.
===============================================================================
Table 17
BALANCE SHEET COMPOSITION
As of the Latest Twelve Months Ended September 30, 1997
===============================================================================
As a Percent of Total Assets
--------------------------------------------------------------------------------------------------
Cash & Net Real Intang. Other Total Borrowed Other Total Total
Securities Loans Estate Assets Assets Deposits Funds Liabs. Liabs. Equity
---------- ----- ------ ------- ------ -------- -------- ------ ------ ------
ATLANTIC LIBERTY SAVINGS F.A. 37.86 59.59 0.32 0.00 0.65 91.49 0.00 1.95 93.44 6.56
COMPARATIVE GROUP AVERAGE 23.85 72.72 0.21 0.12 3.10 79.55 8.49 1.05 89.09 10.91
Albion Banc Corp. (1) 24.72 71.11 0.00 0.00 4.17 76.24 13.50 1.53 91.27 8.73
Broadway Financial Corp.(1) 15.72 80.05 1.31 0.00 2.92 87.98 0.00 1.27 89.25 10.75
Cecil Bancorp Inc. 12.66 85.26 0.27 0.00 1.81 81.91 5.14 1.38 88.43 11.57
Elmira Savings Bank (The)(1) 21.12 74.99 0.28 0.26 3.34 91.03 1.98 0.70 93.70 6.30
Great American Bancorp 14.99 78.62 0.00 0.00 6.40 78.51 0.00 1.06 79.57 20.43
HFS Bank FSB (1) 11.99 85.08 0.25 0.00 2.68 72.86 18.95 0.62 92.44 7.56
LSB Financial Corp. 8.92 87.77 0.00 0.00 3.31 67.66 23.32 0.39 91.37 8.63
Prestige Bancorp Inc. 29.45 67.62 0.01 0.00 2.91 65.34 22.62 0.83 88.79 11.21
SFS Bancorp Inc. 23.53 73.97 0.06 0.00 2.44 86.08 0.00 1.45 87.53 12.47
Skaneateles Bancorp Inc. 10.89 85.14 0.39 0.20 3.38 84.05 7.42 1.52 93.00 7.00
Tappan Zee Financial Inc. 51.66 46.02 0.00 0.00 2.32 81.33 0.00 1.52 82.85 17.15
Westwood Financial Corp.(1) 60.51 36.95 0.00 0.99 1.54 81.56 8.98 0.34 90.87 9.13
Source: Atlantic Liberty; SNL Securities; Feldman Financial
(1) Data as of June 30, 1997.
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FELDMAN FINANCIAL ADVISORS, INC.
===============================================================================
Table 18
REGULATORY CAPITAL AND CREDIT RISK RATIOS
As of or for the Latest Twelve Months Ended September 30, 1997
===============================================================================
Tangible Core Risk- Total Resid. Other Nonmtg.
Capital Capital based NPLs/ NPAs/ Resrvs./ Resrvs./ Mtgs./ Mtgs./ Loans/
Ratio Ratio Capital Loans Assets NPLs Loans Loans Loans Loans
-------- ------- ------- ------ ------- -------- -------- ------- ------ -------
ATLANTIC LIBERTY SAVINGS F.A. 0.00 0.00 0.00 2.96 2.04 54.97 1.65 61.18 37.92 0.03
COMPARATIVE GROUP AVERAGE 8.59 8.37 14.74 0.84 0.96 90.23 0.70 68.98 11.40 19.62
Albion Banc Corp. (1) NA NA NA 1.01 0.72 53.94 0.54 87.69 4.47 7.84
Broadway Financial Corp.(1) 8.69 8.69 14.05 1.05 2.06 96.54 1.01 0.00 0.00 100.00
Cecil Bancorp Inc. 11.72 11.72 18.85 1.35 1.42 22.24 0.30 81.24 10.01 8.74
Elmira Savings Bank (The)(1) 6.04 6.04 9.19 0.49 0.66 172.63 0.85 41.91 13.43 44.66
Great American Bancorp NA NA NA NA NA NA 0.42 56.61 23.57 19.83
HFS Bank FSB (1) 7.56 7.56 12.97 0.40 0.59 161.91 0.66 78.46 16.06 5.48
LSB Financial Corp. 8.07 8.07 10.77 1.18 1.05 69.89 0.83 64.00 31.93 4.07
Prestige Bancorp Inc. 11.24 11.24 23.39 0.47 0.33 84.20 0.40 84.19 1.66 14.14
SFS Bancorp Inc. NA NA NA NA NA NA NA 95.42 4.10 0.48
Skaneateles Bancorp Inc. NA 6.79 10.04 1.62 1.78 60.52 0.98 68.28 15.74 15.99
Tappan Zee Financial Inc. NA NA NA NA NA NA 1.17 77.66 14.71 7.63
Westwood Financial Corp.(1) 6.84 6.84 18.68 - - NM 0.55 92.32 1.05 6.63
Source: Atlantic Liberty; SNL Securities; Feldman Financial
(1) Data as of June 30, 1997.
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FELDMAN FINANCIAL ADVISORS, INC.
III. MARKET VALUE ADJUSTMENTS
This concluding chapter of the appraisal identifies certain
additional adjustments to Atlantic Liberty's estimated pro forma market value
relative to the Comparative Group selected in Chapter II. Adjustments are also
necessary to reflect the equity market's likely reception of a new thrift stock
offering under current conditions. The adjustments discussed in this chapter
are made from the viewpoints of potential investors, which include depositors
holding subscription rights exercisable in the Subscription Offering and
unrelated parties who may purchase stock in the Community Offering. It is
assumed that these potential investors are aware of all relevant and necessary
facts as they would pertain to the value of the Association relative to other
publicly held financial institutions and relative to alternative investments.
In determining the aggregate pro forma market value of the
Association pursuant to its Reorganization, we have assumed that the
Association would be valued, initially, based on a full standard conversion
and, subsequently, with the mutual holding company structure in place based on
a sale of a 46% minority ownership interest. Our appraised value is predicated
on a continuation of the current operating environment for the Association and
thrift institutions in general. Changes in the Association's operating
performance along with changes in the local and national economy, the stock
market, interest rates, the regulatory environment, and other external factors
may occur from time to time, often with great unpredictability, which could
impact materially the value of the Association or thrift stocks in general.
Therefore, the valuation range provided herein is subject to a more current
re-evaluation prior to the actual completion of the Stock Offering.
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FELDMAN FINANCIAL ADVISORS, INC.
In addition to the comparative operating fundamentals discussed
in Chapter II, it is important to address additional market value adjustments
based on certain financial and other criteria, which include, among other
factors:
(1) Earnings Prospects
(2) Market Area
(3) Management
(4) Dividend Policy
(5) Liquidity of the Issue
(6) Subscription Interest
(7) Stock Market Conditions
(8) New Issue Discount
(9) Mutual Holding Company Issues
EARNINGS PROSPECTS
Earnings prospects are dependent upon the sensitivity of asset
yields and liability costs to changes in market interest rates, the credit
quality of assets, the stability of non-interest components of income and
expense, and the ability to leverage the balance sheet. Each of the foregoing
is an important factor to investors in assessing earnings prospects. The
Association's earnings structure is predicated on the ability to manage the
expansion into higher risk, higher yielding loans at profitable spreads over
its cost of funds and operating expenses while maintaining strong credit
quality. Historically, the Association has operated as traditional thrift,
offering primarily one-to-four family residential loans. However, the bulk of
its recent loan origination activity has been concentrated in the commercial
and multi-family real estate lending sector.
The Association's profitability has been adversely affected over
the past two and one-half fiscal years by a below-average net interest margin,
increased loan loss provisions, and the one-time special SAIF assessment. In
contrast to its peers, the Association's net interest margin is restrained by a
comparatively low equity position and its funding dependency on higher costing
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FELDMAN FINANCIAL ADVISORS, INC.
certificate accounts as opposed to core deposits. In addition, the expanded
diversification of its loan portfolio has compelled the Association to guard
against broader credit exposure by fortifying its allowance for loan losses.
The Association's post-Reorganization capital level will be additionally
fortified to help the Association manage these business risks.
Although economic conditions in the Association's market area
are anticipated to remain stable, an unexpected business downturn or dramatic
interest rate increases could suppress the Association's ability to expand its
lending initiatives, disrupt asset quality, and strain earnings. Given the
Association's recent history of low profitability, these are significant risk
factors to Atlantic Liberty's capacity to generate sustainable and predictable
levels of profits. While the Reorganization will provide the Association with
additional capital, that capital must be marginally deployed to produce
earnings improvements above and beyond the additional costs associated with
being a publicly traded stock company. We believe that investors will view the
Association's recent earnings record as unproven in terms of generative
competitive results in the current operating environment. Therefore, we
believe a downward adjustment is necessary to reflect this factor.
MARKET AREA
The members of the Comparative Group are located primarily in
the Mid-Atlantic region of the country. Five are based in New York and one
each from New Jersey, Pennsylvania, and Maryland. The other four companies are
located in urban areas or suburbs of metropolitan areas. All of the
Comparative Group companies have a significant base of real estate mortgage
lending. The Association's primary market area is situated in a major
metropolitan area and characterized by moderate income levels and a stable
population base. We do not believe that, on the whole, the
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FELDMAN FINANCIAL ADVISORS, INC.
market area conditions of the Comparative Group are materially different from
those facing the Association. Accordingly, we believe that no adjustment is
warranted for market area.
MANAGEMENT
Management's principal challenge is to generate profitable
results, monitor credit risks, and control operating costs while the
Association competes in an increasingly competitive financial services
environment. The Association's management team has been in place at the helm
for a relatively short time frame. A portion of this tenure has been directed
at improving the Association's operating systems and managing the higher risk
elements of the loan portfolio. With the Reorganization on the horizon,
management is prepared to demonstrate its effectiveness in implementing the
Association business strategies, maintaining the Association's competitive
profile in its lending markets, and promoting a favorable image within the
local community, which constitutes an important factor in cultivating local
depositor and borrower relationships. Accordingly, we assume that the
Association has sufficient managerial resources in place to implement its
operating goals and objectives. Therefore, we believe that no additional
adjustment is warranted.
DIVIDEND POLICY
The Company has no present plans to a pay a dividend on the
common stock after the Reorganization is completed. Dividends will be subject
to determination and declaration by the Board of Directors in its discretion,
which will take into account the Mutual Company's consolidated financial
condition and operating results, tax considerations, industry standards,
economic conditions, capital levels, regulatory restrictions on dividend
payment by the Association to the Stock Company, general business practices,
and other factors. All twelve of
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FELDMAN FINANCIAL ADVISORS, INC.
the companies in the Comparative Group currently pay regular dividends.
Furthermore, payment of cash dividends has become commonplace among publicly
owned thrifts with relatively high capital levels. Given the lack of initial
intent by the Mutual Company to implement a regular dividend policy following
the Stock Offering, we believe that a downward adjustment is warranted.
LIQUIDITY OF THE ISSUE
Following the completion of the Stock Offering, the Mutual
Company intends to have its stock issue traded on the OTC Electronic Bulletin
Board. Ten of the twelve Comparative Group companies are traded on the Nasdaq
National Market, while one (Cecil Bancorp) is traded on the Bulletin Board and
another (HFS Bank FSB) is provided with price quotations on the "pink sheet"
service. There is no assurance that an active and liquid trading market will
develop for the Company's stock issue on the OTC Bulletin Board. Furthermore,
the relatively small market capitalization of the aggregate public stock to be
floated increases the consideration of a potentially illiquid stock issue.
Therefore, given these overall factors, we believe a downward adjustment should
be applied regarding the possible lack of stock liquidity.
SUBSCRIPTION INTEREST
In recent years, initial public offerings of thrift stocks have
attracted a great deal of investor interest. During 1996, increased pro forma
valuations and more restrained aftermarket performance did little to deter
investors from actively participating in thrift stock conversions. Almost
two-thirds of the conversions in 1996 were oversubscribed by depositors alone
with no shares remaining for community offerings. Contributing to this huge
demand is the growing
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FELDMAN FINANCIAL ADVISORS, INC.
scarcity factor of mutual candidates for thrift stock conversions. The annual
number of conversion offerings and aggregate amount of gross proceeds have both
declined over past years.
The visibility of thrift conversions moved to the forefront once
again in late 1996 and early 1997 with the conversion of Roslyn Savings Bank,
which received orders totaling approximately $1.7 billion for an offering that
was ultimately valued at $424 million. Conversion activity has continued at a
brisk pace in 1997 on the heels of a record-setting stock market. Staten
Island Bancorp received orders of $817 million in November 1997 for its maximum
stock offering of $383 million, which contributed to a resolicitation at a
higher offering range. Notwithstanding the demand for thrift stocks in initial
offerings, a strong subscription does not always indicate that the valuation
range should be increased or the offering should be priced in the upper end of
the valuation range. Many conversion investors do not routinely purchase in
the after-market, particularly at higher stock prices or involving stock issues
with limited liquidity. As such, absent actual results of the Association's
Subscription Offering, we do not believe any adjustment is warranted at this
time.
STOCK MARKET CONDITIONS
Table 19 graphically displays the performance of the SNL Thrift
Index of all publicly traded thrifts and the SNL Thrift MHC Index as compared
to the Standard & Poor's 500-Stock Index ("S&P 500") over the past two years.
Both the SNL Thrift Index and SNL Thrift MHC Index have substantially
outperformed the S&P 500 during this period, advancing by 136.5% and 99.98%
respectively, since year-end 1995 through month-end November 1997 as compared
to the broader market S&P 500 Index up 55.1%.
Table 20 graphically depicts selected interest rate levels over
the past three years. General market interest rates declined throughout 1995
and propelled the stock market to new heights. Interest rates turned upward
during the first half of 1996, responding to concerns about inflationary
pressures. Thrift stocks, which had significantly outperformed the overall
market in
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FELDMAN FINANCIAL ADVISORS, INC.
1995, trailed the broader market through mid-year of 1996. However, as
interest rates declined modestly and stabilized during the second half of 1996,
thrift stocks regained momentum and were sparked additionally by another wave
of mergers and acquisitions. Resolution of the SAIF recapitalization appeared
to break a logjam that resulted in the announcements of a number of
acquisitions of relatively large thrifts.
Speculation about higher rates and the sustainability of thrift
stock valuations stalled the rally in early 1997. The market sell-off was
prompted in part as reaction to suggestions from the Federal Reserve Chairman
that the stock market was overheated and that the central bank might raise
rates to head off inflation. However, a flurry of bank and thrift merger
activity during mid-1997 pumped further speculative fervor into thrift stocks.
Also, general interest levels remained stable over the past several months.
On October 27, 1997, investors sold off stocks in a frenzy as
turmoil in global securities markets spilled over into the U.S. market. The
Dow Jones Industrial Average dropped 554 points or 7.2%, representing the
largest one-day point decline in its history. Market observers generally
attributed the slide to fallout from recent disorder in global markets,
especially in Asia, where investors fear that economic troubles will hurt
profits of American companies with overseas interests. Many analysts also felt
that valuation levels for U.S. stocks had been bid up and were due for
correction. The SNL Thrift Index fell by 5.2% on this day, trailing the
decline of the broader S&P 500 at 6.9%. Spurred by unprecedented trading
volume, domestic stocks rebounded firmly in subsequent days as investors
pointed to the firm underpinning of the U.S. economy.
Through December 11, 1997, the S&P 500 has continued to
fluctuate due to the problems related to the Asian economies while the SNL
Thrift Index and SNL Thrift MHC Index have
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FELDMAN FINANCIAL ADVISORS, INC.
continued to climb to record levels. On a year-to-date basis, the SNL Thrift
Index was up 62.8%, as compared to the S&P 500 at 28.9%. The SNL MHC Index has
advanced ahead of other thrift indices, registering a 101.6% increase through
December 11, 1997. Notwithstanding the spillover effect of merger activity,
many stock analysts believe that the financial sector is headed for more
sluggishness as valuation multiples continue to enter ground-breaking
territory, but operating fundamentals remain strong enough to avert a major
correction independent of the overall market.
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FELDMAN FINANCIAL ADVISORS, INC.
Table 19
COMPARATIVE STOCK MARKET PERFORMANCE
Month-end Index Data, Year-end 1995=100
Dec-95 Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96
ALL PUBLIC THRIFTS 100 98.45949535 99.22974768 101.4873838 101.0092961 101.7264276 102.8419655
S&P 500 100 103.2635168 103.9779185 104.805975 106.218542 108.6377659 108.8813119
ALL THRIFT MHCS 100 99.912759 102.8571429 101.308615 100.1090513 93.60959651 93.95856052
Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96
ALL PUBLIC THRIFTS 103.5590969 108.4462151 114.0239044 121.3014608 129.0305445 128.4462151
S&P 500 103.9129729 105.8613411 111.592791 114.5153434 122.9095632 120.2630297
ALL THRIFT MHCS 90.51254089 92.32279171 100.959651 103.9258451 113.5005453 117.3391494
Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97
ALL PUBLIC THRIFTS 138.1407703 149.5618 140.16 142.68 153.49 165.87 181.81
S&P 500 127.6505926 128.3975 122.9 130.1 137.73 143.72 154.94
ALL THRIFT MHCS 127.742639 132.955289 130.9269357 128.1788441 137.1210469 149.1384951 163.7949836
Aug-97 Sep-97 Oct-97 Nov-97
ALL PUBLIC THRIFTS 176.52 195.88 199.84 199.877504
S&P 500 146.05 153.81 148.5 155.124
ALL THRIFT MHCS 185.7579062 213.3478735 232.431843 236.4998625
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FELDMAN FINANCIAL ADVISORS, INC.
Table 20
SELECTED INTEREST RATE BENCHMARKS
Month-end Indicators
Dec-94 Jan-95 Feb-95 Mar-95 Apr-95 May-95 Jun-95 Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95
PRIME RATE 8.5 8.5 9 9 9 9 9 8.75 8.75 8.75 8.75 8.75 8.55
FNMA FIXED MTG. 9.28 8.99 8.55 8.64 8.46 7.8 7.84 7.97 7.82 7.76 7.6 7.37 7.1528
1-YR. TREASURY 6.73 6.39 6.04 6.09 5.93 5.47 5.34 5.34 5.33 5.35 5.26 5.08 4.8935
Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Jul-96 Aug-96 Sep-96 Oct-96 Nov-96 Dec-96
PRIME RATE 8.5 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25 8.25
FNMA FIXED MTG. 7.11 7.64 7.91 8.19 8.34 8.19 8.26 8.37 8.15 7.81 7.62 7.84
1-YR. TREASURY 4.66 4.96 5.12 5.33 5.45 5.38 5.53 5.6 5.4 5.14 5.1 5.22
Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97
PRIME RATE 8.25 8.25 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8.5
FNMA FIXED MTG. 7.85 7.93 8.24 8.06 7.98 7.76 7.38 7.64 7.44 7.3 7.28
1-YR. TREASURY 5.3 5.37 6 5.9 5.77 5.66 5.42 5.56 5.44 5.35 5.35
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FELDMAN FINANCIAL ADVISORS, INC.
RECENT ACQUISITION ACTIVITY
Acquisition speculation is one factor impacting the prices of
newly converted thrifts in the after-market. Table 21 summarizes recent
acquisition activity involving thrifts and banks based in New York. Overall
acquisition premiums for New York financial institutions have been similar to
the ratios reported nationwide. During 1996 and 1997 year-to-date, there were
16 acquisitions involving New York banks and thrifts. Much of the acquisition
activity involved sales of mid-sized to large thrifts in the New York City and
Rochester metropolitan areas. Consistent with nationwide trends, acquisition
values for New York banks and thrifts advanced noticeably higher in 1997 versus
1996.
The state's financial institution deposit marketplace comprises
a large number of middle-tier banks and thrifts. Larger institutions, such as
Chase Manhattan, Citicorp, Bank of New York, and Republic New York, have
continued to grow aggressively statewide. In addition, newcomers such as First
Union, Fleet Financial, and Charter One have staked out selected market
territories. Because of the relatively large number of independent, mid-tier
stockholder-owned institutions, consolidation activity is expected to continue
in New York. We believe that while acquisition premiums are a significant
factor to consider in determining the Association's estimated pro forma market
value, such speculative behavior is reflected to some degree in the general
trading valuation levels of thrift stocks. Furthermore, because of its mutual
holding company organizational structure, the Association will be shielded from
acquisition activity. We do not believe any adjustment is warranted at this
time.
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FELDMAN FINANCIAL ADVISORS, INC.
Table 21
SUMMARY OF RECENT NEW YORK ACQUISITION ACTIVITY
- ------------------------------------------------------------------------------------------------------------
Seller Financial Data
-----------------------------------------
Total TanEq./ YTD YTD
Bank/ Assets Assets ROAA ROAE
Buyer St. Seller St. Thrift ($M) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------
ALL NEW YORK ACQUISITIONS -- 1997 AVERAGE 1,742 9.35 0.79 9.48
ALL NEW YORK ACQUISITIONS -- 1996 AVERAGE 2,015 7.09 0.80 11.33
First Empire State NY ONBANCorp Inc. NY B 5,532 5.88 0.91 14.69
HUBCO, Inc NJ Poughkeepsie Finl NY T 880 8.37 0.54 6.43
North Fork Bancorp NY New York Bancorp NY T 3,284 5.08 1.61 30.99
Commercial Bank-NY NY First Bank -Americas NY B 445 8.15 0.01 0.15
Pathfinder Bancorp NY Oswego County SB NY B 114 10.26 (0.76) (7.74)
Private Investor FO Chinese American Bk NY B 338 23.23 1.02 4.41
Charter One Fin'l OH RCSB Financial NY T 4,032 7.85 0.96 12.26
Reliance Bancorp Inc NY Continental Bank NY B 173 7.10 1.61 20.79
Flushing Financial NY New York FSB NY T 82 9.34 1.32 3.59
Astoria Financial Cp NY Greater New York SB NY T 2,542 8.25 0.72 9.20
Dime Bancorp NY BFS Bankorp, Inc. NY T 643 7.81 1.58 20.12
Safra Holdings NY United Mizrahi B&TC NY B 307 6.87 0.37 5.35
Excel Bank NA NY Union Chelsea NB NY B 195 7.62 0.01 0.08
HSBC Holdings Plc FO First FSLA-Rochester NY T 7,348 5.41 0.75 13.91
North Fork Bancorp NY North Side SB NY T 1,580 7.74 1.29 17.19
- ------------------------------------------------------------------------------------------------------------------------------
Acquisition Ratios
--------------------------------------
Offer Price/ Price/ Price/ Dep.
Date Status Value Book TanBk. EPS Prem.
Buyer St. Seller St. Anncd. (1) ($M) (%) (%) (x) (%)
- ------------------------------------------------------------------------------------------------------------------------------
ALL NEW YORK ACQUISITIONS -- 1997 AVERAGE 389 213.6 221.3 21.7 14.7
ALL NEW YORK ACQUISITIONS -- 1996 AVERAGE 253 160.7 161.6 18.1 7.4
First Empire State NY ONBANCorp Inc. NY 10/28/97 P 880 262.4 275.0 18.4 18.7
HUBCO, Inc NJ Poughkeepsie Finl NY 10/23/97 P 144 181.4 181.4 48.2 13.4
North Fork Bancorp NY New York Bancorp NY 10/07/97 P 832 480.1 480.1 20.0 43.8
Commercial Bank-NY NY First Bank -Americas NY 09/05/97 C 48 132.4 143.0 NA 4.1
Pathfinder Bancorp NY Oswego County SB NY 09/05/97 P NA NA NA NA NA
Private Investor FO Chinese American Bk NY 07/23/97 P 40 133.3 133.3 10.2 4.7
Charter One Fin'l OH RCSB Financial NY 05/21/97 C 648 198.1 203.2 17.1 16.1
Reliance Bancorp Inc NY Continental Bank NY 05/05/97 C 26 198.2 237.2 NA 12.3
Flushing Financial NY New York FSB NY 04/25/97 C 13 169.1 170.5 13.1 10.4
Astoria Financial Cp NY Greater New York SB NY 03/31/97 C 345 167.4 167.4 24.6 8.5
Dime Bancorp NY BFS Bankorp, Inc. NY 12/03/96 C 92 169.4 169.4 9.9 10.3
Safra Holdings NY United Mizrahi B&TC NY 10/24/96 C 30 142.0 142.0 37.9 5.0
Excel Bank NA NY Union Chelsea NB NY 09/10/96 C NA NA NA NA NA
HSBC Holdings Plc FO First FSLA-Rochester NY 08/22/96 C 652 163.0 165.1 12.8 6.1
North Fork Bancorp NY North Side SB NY 07/15/96 C 216 168.5 170.1 11.8 8.0
(1) P = pending; C = completed.
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FELDMAN FINANCIAL ADVISORS, INC.
NEW ISSUE DISCOUNT
A "new issue" discount that reflects investor concerns and
investment risks inherent in all initial stock offerings is a factor to be
considered in valuations of initial thrift stock offerings. The magnitude of
the new issue discount typically expands during periods of declining thrift
stock prices as investors require larger inducements, and narrows during strong
market conditions.
The thrift conversion market continues to respond to the
after-market performance of recent offerings. Table 22 presents a summary of
publicly traded thrifts that have completed standard conversions since January
1, 1997. While the overall stock market performance during the second half of
1997 slowed compared to the first half, the market for thrift conversions has
continued to gain momentum. After-market performance in the second half of
1997 has outpaced the performance of the first half of 1997 even though pro
forma pricing valuations have increased.
Recently, the thrift conversion market has proven to be
resilient with the typical offering selling out in the subscription phase and
being priced at or near the adjusted maximum of the valuation range. With
valuations increasing to reflect the strength of recent offerings, it is
uncertain when the market will reach its tolerance for higher valuations
accompanied by the prospect of companies generating lackluster returns on
equity. The average price/book ratio for the thirty-one publicly traded
conversions completed thus far in 1997 was 71.1% and the average price/earnings
ratio was 22.1x.
In the after-market, full conversions have been trading upward
to and above 90% of book value. To price a new offering at 90% of pro forma
book value, because of the
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FELDMAN FINANCIAL ADVISORS, INC.
Table 22
RECENT THRIFT CONVERSION ACTIVITY
Summary of 1997 Offerings Year-to-Date
=================================================================================================================================
Pro Forma Ratios
Gross Expense/ -------------------
Total Offering Gross Price/ Price/
IPO Assets Proceeds Proceeds Book Earnings
Company St. Exchange Date ($M) ($M) (%) (%) (x)
=================================================================================================================================
AVERAGE -- FULL CONVERSION OFFERINGS 196 40.8 4.2 # 71.1 22.1
AVERAGE -- MHC OFFERINGS 133 8.6 5.3 102.6 24.9
AVERAGE -- 2ND STAGE OFFERINGS 348 30.3 NA NA NA
High Country Bancorp, Inc. CO NASDAQ 12/10/97 76 13.2 4.4 77.7 30.5
First SecurityFed Financial IL NASDAQ 10/31/97 260 64.1 1.5 73.4 21.3
Oregon Trail Financial Corp. OR NASDAQ 10/06/97 204 46.9 2.3 76.6 18.5
Roebling Savings Bank (MHC) NJ OTC-BB 10/02/97 34 2.0 7.7 102.0 26.3
SHS Bancorp Inc. PA NASDAQ 10/01/97 82 8.2 5.6 70.7 13.9
Ohio State Financial Services OH NASDAQ 09/29/97 34 6.3 5.4 63.3 17.0
Citizens Bancorp Inc. IN OTC-BB 09/18/97 45 10.6 4.6 73.5 18.4
WSB Holding Co. PA OTC-BB 08/29/97 33 3.3 8.5 71.4 NA
Bayonne Bancshares Inc. (2nd stage) NJ NASDAQ 08/22/97 602 48.7 NA NA NA
Peoples Home Savings Bk (MHC) PA NASDAQ 07/10/97 202 12.4 4.7 106.2 30.1
FirstSpartan Financial Corp. SC NASDAQ 07/09/97 376 88.6 1.6 73.0 26.0
GSB Financial Corp. NY NASDAQ 07/09/97 96 22.5 4.1 73.4 23.2
FirstBank Corp. ID NASDAQ 07/02/97 133 19.8 3.5 71.9 19.2
Community First Banking Co. GA NASDAQ 07/01/97 353 48.3 2.9 72.7 36.1
Montgomery Financial Corp. (2nd stage) IN NASDAQ 07/01/97 94 11.9 NA NA NA
Security Bancorp, Inc. TN OTC-BB 06/30/97 44 4.4 6.9 72.9 18.1
Sistersville Bancorp Inc. WV OTC-BB 06/26/97 26 6.6 6.8 65.4 26.7
SFB Bancorp Inc. TN OTC-BB 05/30/97 47 7.7 5.2 69.6 17.7
Rocky Ford Financial Inc. CO Pink Sheet 05/22/97 20 4.2 8.3 68.8 17.7
HCB Bancshares Inc. AR NASDAQ 05/07/97 171 26.5 2.8 72.0 29.0
Peoples-Sidney Financial Corp. OH NASDAQ 04/28/97 87 17.9 3.2 71.2 11.5
First Carnegie Deposit (MHC) PA NASDAQ 04/04/97 136 10.4 3.9 98.8 NM
Pulaski Savings Bank (MHC) NJ NASDAQ 04/03/97 159 9.5 5.0 103.2 18.2
Hemlock Federal Financial Corp IL NASDAQ 04/02/97 147 20.8 3.1 71.6 37.5
GS Financial Corp. LA NASDAQ 04/01/97 87 34.4 2.4 63.8 38.7
Market Financial Corp. OH NASDAQ 03/27/97 46 13.4 3.5 71.1 26.2
Vermilion Bancorp Inc. IL OTC-BB 03/26/97 35 4.0 7.2 71.4 NA
Empire Federal Bancorp Inc. MT NASDAQ 01/27/97 87 25.9 2.4 68.1 21.5
FirstFed America Bancorp Inc. MA AMSE 01/15/97 724 87.1 2.4 72.0 13.6
Roslyn Bancorp Inc. NY NASDAQ 01/13/97 1,597 423.7 2.2 72.0 9.3
Advance Financial Bancorp WV NASDAQ 01/02/97 92 10.8 4.5 71.1 16.8
=====================================================================================================================
Current 1st Day 1st Day YTD
IPO Stock Price/ Price Price
Price Price Book Change Change
Company St. ($) ($) (%) (%) (%)
=====================================================================================================================
AVERAGE -- FULL CONVERSION OFFERINGS 10.8 17.8 102.8 44.4 63.2
AVERAGE -- MHC OFFERINGS NA NA 137.6 34.1 84.4
AVERAGE -- 2ND STAGE OFFERINGS NA NA NA 14.4 25.6
High Country Bancorp, Inc. CO 10.00 14.75 112.2 44.4 47.5
First SecurityFed Financial IL 10.00 15.19 110.6 50.6 51.9
Oregon Trail Financial Corp. OR 10.00 16.13 128.4 67.5 61.3
Roebling Savings Bank (MHC) NJ 10.00 17.75 168.3 65.0 77.5
SHS Bancorp Inc. PA 10.00 15.75 104.3 47.5 57.5
Ohio State Financial Services OH 10.00 15.25 98.2 55.0 52.5
Citizens Bancorp Inc. IN 10.00 14.31 102.9 40.0 43.1
WSB Holding Co. PA 10.00 14.37 96.4 35.0 43.7
Bayonne Bancshares Inc. (2nd stage) NJ 10.00 12.63 NA 17.5 26.3
Peoples Home Savings Bk (MHC) PA 10.00 18.38 148.7 40.0 83.8
FirstSpartan Financial Corp. SC 20.00 37.94 133.9 83.4 89.7
GSB Financial Corp. NY 10.00 15.75 107.4 46.3 57.5
FirstBank Corp. ID 10.00 17.00 113.7 58.1 70.0
Community First Banking Co. GA 20.00 37.50 115.9 59.4 87.5
Montgomery Financial Corp. (2nd stage) IN 10.00 12.50 NA 11.3 25.0
Security Bancorp, Inc. TN 10.00 15.81 105.6 45.0 58.1
Sistersville Bancorp Inc. WV 10.00 15.13 89.9 37.5 51.3
SFB Bancorp Inc. TN 10.00 14.50 96.1 38.1 45.0
Rocky Ford Financial Inc. CO 10.00 14.25 128.7 87.1 42.5
HCB Bancshares Inc. AR 10.00 13.50 90.8 26.3 35.0
Peoples-Sidney Financial Corp. OH 10.00 18.00 89.5 25.6 80.0
First Carnegie Deposit (MHC) PA 10.00 18.63 114.8 16.3 86.3
Pulaski Savings Bank (MHC) NJ 10.00 19.00 118.6 15.0 90.0
Hemlock Federal Financial Corp IL 10.00 17.13 92.2 28.8 71.3
GS Financial Corp. LA 10.00 17.56 85.3 33.8 75.6
Market Financial Corp. OH 10.00 15.13 91.9 29.4 51.3
Vermilion Bancorp Inc. IL 10.00 13.50 88.3 23.8 35.0
Empire Federal Bancorp Inc. MT 10.00 17.00 90.2 32.5 70.0
FirstFed America Bancorp Inc. MA 10.00 20.56 98.1 36.3 105.6
Roslyn Bancorp Inc. NY 10.00 22.06 108.0 50.0 120.6
Advance Financial Bancorp WV 10.00 17.75 91.5 28.8 77.5
- 61 -
67
FELDMAN FINANCIAL ADVISORS, INC.
mathematics of the calculation, would require dramatic increases in capital and
produce very marginal returns on equity. This would likely produce price
declines in the after-market. Accordingly, thrift conversions continue to be
priced at discounts to publicly traded companies. This is due to the
relatively high pro forma equity ratios, expected low returns on equity, and
the uncertainty regarding the ability of an institution to leverage the balance
sheet. These are especially relevant issues to the Association given that it
is already well capitalized.
Investors are aware that at pro forma price/book ratios
approaching the current trading range of a majority of public thrifts,
price/earnings ratios of converting thrifts would be excessive, returns on
equity very low, and capital levels dramatically high. Standard thrift
conversions are being discounted by 30% to 40% relative to the overall market
based upon price/book measures and at lesser discounts based upon the
price/earnings ratios.
MUTUAL HOLDING COMPANY ISSUES
Market evidence indicates that minority ownership interests are
discounted to majority ownership interests, which convey the ability to effect
changes, influence business policies, and transfer control. In the thrift MHC
ownership structure, public shareholders hold an aggregate minority ownership
interest that is subordinate to the MHC. However, the governing board of the
MHC is quite often similar to that managing the subsidiary bank. Furthermore,
the public shareholders in a fully converted thrift offering also assume a
minority ownership role since there are limitations on the purchase and
accumulation of stock interests.
The most significant impediment that the MHC poses is the
ability to avert a sale of control by acquisition. Until recent, the trading
activity of other publicly held MHCs indicated that this inability to be
acquired suppressed the comparative market valuation of MHCs versus
- 62 -
68
FELDMAN FINANCIAL ADVISORS, INC.
fully converted thrift stock issues. However, the anticipation of second-stage
conversion announcements, the strong advancements posted by MHCs in general,
and a growing cadre of research analysts advancing the investment attributes of
MHC from prior trading levels have combined to propel MHC stock price
performance in 1997. On a fully converted basis, we have determined that
thrift MHCs are trading at comparable price/earnings ratios to the overall
thrift stock norm, but at discounts on a price/book basis. This discount is
not so much a qualitative abstraction but rather a recognition that the
resulting high pro forma capital ratios have a restraining impact on the
price/book measure. Many MHCs have completed full second-stage conversions
within a relatively short time frame. As previously noted, the imminent
expectation of second-stage offerings has resulted in speculative upward price
movements of current MHCs. Overall, we do not believe that an adjustment is
warranted for these combination of factors.
ADJUSTMENTS CONCLUSION
Individual discounts and premiums are not necessarily additive
and may, to some extent, offset or overlay each other. Currently, conversions
are generally priced at substantial discounts to peer institutions relative to
price/book ratios, but at lesser discounts to the comparable institutions'
price/earnings ratios. It is the role of the appraiser to balance the relative
dynamics of price/book and price/earnings discounts and premiums. We believe
that relative to the Comparative Group, the Association's pro forma valuation
measures should be discounted on the basis of earnings prospects, initial
dividend policy, and the new issue discount encountered by higher capitalized
companies on a price/book basis.
- 63 -
69
FELDMAN FINANCIAL ADVISORS, INC.
VALUATION APPROACH
Table 23 displays the market price and valuation data of the
Comparative Group, all publicly traded thrifts and all MHCs as of December 11,
1997. Table 23 also includes the Association's pro forma valuation ratios on a
full conversion and MHC offering basis. Table 24 provides a summary of the
relative magnitude of valuation ratio discounts and premiums. Exhibit IV
displays the pro forma conversion assumptions and calculations utilized in
analyzing the Association's valuation ratios.
Investors continue to make decisions to purchase thrift
conversion stocks and more seasoned thrift issues based primarily upon
consideration of price/earnings ratio comparisons and secondarily, price/book
valuations. As evidenced by the trading valuation ratios of such Comparative
Group members with average earnings results, the price/earnings ratio functions
as a reliable valuation benchmark for companies with differing capital levels.
The Association's reported earnings results for the last twelve months are
unusually low due to increased loan loss provisions and tax timing differences.
Thus, we have relied on the quarterly earnings results for the three months
ended September 30, 1997 as a more normalized earnings stream. On an
annualized basis, the Association produced net income of $520,000 for the
recent quarter.
Utilizing a discount of approximately 20% to the corresponding
Comparative Group average price/earning ratio, the Association's resulting pro
forma price/earnings ratio at the midpoint is 13.7x, reflecting a full
conversion value of $10.0 million. The resulting maximum price/earnings ratios
of 15.2x and an adjusted maximum of 16.9x produce full conversion values of
$11.5 million and $13.2 million, respectively. At the adjusted maximum
valuation level, where most thrift offerings are being closed in the current
market environment, the Association's price/earnings ratio is positioned at the
Comparative Group's average price/earnings ratio of
- 64 -
70
FELDMAN FINANCIAL ADVISORS, INC.
16.8x for the recent quarter. We believe that this is an appropriate discount
given the level of earnings performance evidenced by the Association and the
Comparative Group on the whole.
The Association's resulting pro forma price/book ratios of 69.6%
at the maximum and 73.8% at the adjusted maximum represent significant
discounts to the Comparative Group's average price/book ratio of 126.5%.
However this disparity is distorted by the differing levels of capital. On a
full conversion basis, the Association's equity to assets ratio would measure
13.86% at the maximum valuation and 14.86% at the adjusted maximum. Among the
Comparative Group companies, only Great American Bancorp and Tappan Zee
Financial exhibited higher equity ratios. The Association's price/assets
ratios of 9.65% at the maximum and 10.97% at the adjusted maximum valuation
trailed the Comparative Group's average price/assets ratio of 13.77%.
VALUATION CONCLUSION
It is our opinion that, as of December 11, 1997, the aggregate
estimated pro forma market value of the Association was within the valuation
range of $8,500,000 to $11,500,000 with a midpoint of $10,000,000. The
valuation range was based upon a 15 percent decrease from the midpoint to
determine the minimum and a 15 percent increase to establish the maximum.
Assuming an additional 15 percent increase above the maximum value results in
an adjusted maximum of $13,225,000. Exhibit IV displays the conversion
calculations and assumptions utilized in determining the Association's
estimated pro forma market value on a full conversion basis and on the MHC
Reorganization basis. The Board of Directors has determined to offer for sale
in the Reorganization a minority ownership interest equal to 46% of all the
common stock to be issued and outstanding. Therefore, the total amount of
common stock to be sold in the
- 65 -
71
FELDMAN FINANCIAL ADVISORS, INC.
Reorganization will be equal to $3,910,000 at the minimum valuation, $4,600,000
at the midpoint valuation, $5,290,000 at the maximum valuation, and $6,083,500
at the adjusted maximum.
- 66 -
72
FELDMAN FINANCIAL ADVISORS, INC.
Table 23
COMPARATIVE VALUATION ANALYSIS
Atlantic Liberty and the Comparative Group
Market Price Data as of December 11, 1997
- -------------------------------------------------------------------------------------------------------------------------------
Current Total Price/ Price/ Price/ Price/ Price/ Total Current
Stock Market LTM Qtr. Book Tang. Total Equity/ Dividend
Price Value EPS(1) EPS(1) Value Book Assets Assets Yield
Company ($) ($M) (x) (x) (%) (%) (%) (%) (%)
- -------------------------------------------------------------------------------------------------------------------------------
ATLANTIC LIBERTY:
MHC OFFERING VALUATION
----------------------
PRO FORMA ADJ. MAXIMUM 10.00 13.2 NM 20.3 110.4 110.4 11.53 10.45 NA
PRO FORMA MAXIMUM 10.00 11.5 NM 18.1 101.8 101.8 10.09 9.91 NA
PRO FORMA MIDPOINT 10.00 10.0 NM 16.1 93.5 93.5 8.82 9.43 NA
PRO FORMA MINIMUM 10.00 8.5 NM 14.3 84.2 84.2 7.54 8.95 NA
FULL CONVERSION VALUATION
-------------------------
PRO FORMA ADJ. MAXIMUM 10.00 13.2 NM 16.9 73.8 73.8 10.97 14.86 NA
PRO FORMA MAXIMUM 10.00 11.5 NM 15.2 69.6 69.6 9.65 13.86 NA
PRO FORMA MIDPOINT 10.00 10.0 NM 13.7 65.3 65.3 8.48 12.97 NA
PRO FORMA MINIMUM 10.00 8.5 NM 12.1 60.3 60.3 7.28 12.07 NA
COMPARATIVE GROUP AVERAGE -- 20.4 18.7 16.8 125.7 126.5 13.77 11.03 1.58
ALL PUBLIC THRIFT AVERAGE -- 215.5 17.5 16.9 154.3 160.1 18.40 13.00 1.43
NEW YORK PUBLIC THRIFT AVG. -- 452.0 19.4 18.7 160.6 178.8 18.34 11.90 1.40
Comparative Group
-----------------
Albion Banc Corp. 28.00 7.0 21.1 18.9 115.5 115.5 9.89 8.56 1.14
Broadway Financial Corp. 13.00 10.8 33.3 29.6 88.0 88.0 8.66 10.57 1.54
Cecil Bancorp Inc. 19.50 9.2 15.9 12.8 123.3 123.3 14.26 11.57 2.05
Elmira Savings Bank (The) 30.00 22.3 23.1 16.3 149.5 153.5 9.75 6.20 2.03
Great American Bancorp 18.50 31.4 47.4 35.6 100.3 100.3 22.49 20.43 2.16
HFS Bank FSB 16.75 15.1 11.5 10.7 127.0 127.0 9.82 7.73 2.63
LSB Financial Corp. 27.75 25.4 16.6 15.1 137.1 137.1 12.70 8.63 1.23
Prestige Bancorp Inc. 19.25 17.6 21.2 20.1 114.0 114.0 12.78 11.21 0.62
SFS Bancorp Inc. 24.50 30.2 24.8 24.5 138.9 138.9 17.32 12.47 1.14
Skaneateles Bancorp Inc. 18.75 26.9 15.9 15.6 155.0 159.6 10.86 6.81 1.42
Tappan Zee Financial Inc. 19.25 28.7 26.7 28.3 134.1 134.1 22.99 17.15 1.46
Westwood Financial Corp.(2) 27.63 17.8 23.0 36.4 173.2 193.6 16.15 8.42 0.72
- -------------------------------------------------------------------------------------------------------------------------------
(1) Price/earnings ratios greater than 25.0 are excluded from averages.
(2) Excluded from comparative group average due to acquisition takeover
announcement.
- 67 -
73
FELDMAN FINANCIAL ADVISORS, INC.
Table 24
COMPARATIVE DISCOUNT AND PREMIUM ANALYSIS
Market Price Data as of December 11, 1997
Relative Premiums (Discounts)
----------------------------------------
Atlantic Comp. All All
Valuation Liberty Group Public New York
Ratio Symbol Savings Average Thrifts(1) Thrifts(2)
--------- ------- -------- -------- ---------- ----------
---------------------------------------
PRICE / LTM EPS (3) P/E 18.7 17.5 19.4
--------- ---------------------------------------
Adj. Maximum (x) NM NA NA NA
Maximum NM NA NA NA
Midpoint NM NA NA NA
Minimum NM NA NA NA
---------
---------------------------------------
PRICE / QTR. EPS (3) P/E 16.8 16.9 18.7
--------- ---------------------------------------
Adj. Maximum (x) 16.9 0% -0% -10%
Maximum 15.2 -9% -10% -19%
Midpoint 13.7 -18% -19% -27%
Minimum 12.1 -28% -29% -35%
---------
---------------------------------------
PRICE / BOOK VALUE P/B 125.7 154.3 160.6
--------- ---------------------------------------
Adj. Maximum (%) 73.8 -41% -52% -54%
Maximum 69.6 -45% -55% -57%
Midpoint 65.3 -48% -58% -59%
Minimum 60.3 -52% -61% -62%
---------
---------------------------------------
PRICE / TANGIBLE BOOK P/B 126.5 160.1 178.8
--------- ---------------------------------------
Adj. Maximum (%) 73.8 -42% -54% -59%
Maximum 69.6 -45% -57% -61%
Midpoint 65.3 -48% -59% -63%
Minimum 60.3 -52% -62% -66%
---------
---------------------------------------
PRICE / TOTAL ASSETS P/A 13.77 18.40 18.34
--------- ---------------------------------------
Adj. Maximum (%) 10.97 -20% -40% -40%
Maximum 9.65 -30% -48% -47%
Midpoint 8.48 -38% -54% -54%
Minimum 7.28 -47% -60% -60%
---------
- --------------------------------------------------------------------------------------------------
(1) Includes 392 publicly traded thrifts nationwide.
(2) Includes 28 publicly traded thrifts based in New York.
(3) Price/earnings ratio averages exclude values greater than 25.
- 68 -
74
FELDMAN FINANCIAL ADVISORS, INC.
EXHIBIT I
BACKGROUND OF FELDMAN FINANCIAL ADVISORS, INC.
OVERVIEW OF FIRM
FELDMAN FINANCIAL ADVISORS provides consulting services to financial
institutions and mortgage companies in the areas of corporate valuations,
mergers and acquisitions, strategic planning, branch sales and purchases,
developing and implementing regulatory business and capital plans, enhancing
franchise value, portfolio analysis and restructuring, advising on retail
branch strategies, evaluating bank management, regulatory analysis, and expert
witness testimony and analysis.
FELDMAN FINANCIAL ADVISORS was incorporated in February 1996 by a group of
consultants who were previously associated with Kaplan Associates. Each of the
principals at Feldman Financial Advisors has more than 10 years experience in
consulting and all were officers of their former employer. Our principals
collectively have worked with more than 1,000 banks, thrifts and mortgage
companies nationwide. The firm's office is located in downtown Washington,
D.C.
BACKGROUND OF SENIOR PROFESSIONAL STAFF
TRENT FELDMAN, President - Trent is a nationally recognized expert in valuing
financial institutions, providing strategic advice to financial institutions,
and advising on mergers and acquisitions for banks and thrifts of all sizes.
Trent was with Kaplan Associates for 14 years and was one of three founding
principals at that firm. Trent also has worked in the Chairman's Office of the
Federal Home Loan Bank Board, the Federal Savings and Loan Insurance
Corporation, and with the California state legislature. Trent holds Bachelors
and Masters degrees from the University of California at Los Angeles.
PETER WILLIAMS, Principal - Peter specializes in merger and acquisition
analysis, corporate valuations, strategic business plans and retail branch
analysis. Peter was with Kaplan Associates for 13 years. Peter also served as
a Corporate Planning Analyst with the Wilmington Trust Company in Delaware.
Peter holds a BA in Economics from Yale University and an MBA in Finance from
George Washington University.
MICHAEL GREEN, Principal - Mike is an expert in mergers and acquisition
analysis, financial institution valuations, and business plans. During Mike's
10 years at Kaplan Associates, his experience also included mark-to-market
analysis, goodwill valuations and core deposit studies. Mike holds a BS in
Finance and Economics from Rutgers College.
LINDA FARRELL, Principal - Linda is nationally known for her expertise in
branch purchases and sales, and she specializes in small bank mergers and
acquisitions, retail banking analysis, business plans and management reviews.
Linda was with Kaplan Associates for 12 years. Linda also was a Senior Vice
President of Retail Banking at Western Savings in Salt Lake City and a
consultant with both Arthur Young & Company and Richard T. Pratt Associates.
Linda holds a BA in English from Oklahoma State University and an MBA from the
University of Utah.
GREG IZYDORCZYK, Vice President - Greg specializes in merger and acquisition
analysis and corporate valuations and also has experience in mark-to-market
analysis and business plans. Greg was with Kaplan Associates for three years.
Greg also has four years experience as a Senior Auditor in the commercial
banking industry for First Virginia and Integra Financial. Greg worked as a
Financial Analyst with Airbus Industrie of North America for two years
performing analysis on the airline industry and airline capital markets (debt
and leasing) in North America, preparing financial proposals in conjunction
with commercial sales proposals and analyzing the Company's current and
potential financing portfolio. Greg holds a BS in Finance from Pennsylvania
State University and an MBA in Finance from the Katz Graduate School,
University of Pittsburgh.
75
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-1
STATEMENT OF FINANCIAL CONDITION
As of September 30, 1996 and 1997
and March 31, 1996 and 1997
September 30, March 31,
1997 1996 1997 1996
------------ ------------ ------------ -----------
Unaudited
---------
Assets
Cash and cash equivalents $9,440,915 $7,587,021 $10,285,364 $11,225,391
Investment securities, held-to-maturity 32,167,166 37,031,695 36,288,248 35,381,278
Loans receivable, net 65,485,670 57,320,968 60,058,821 54,504,599
Accrued interest receivable 194,795 232,007 222,810 216,026
Foreclosed real estate, net of allowance for losses 274,253 390,596 384,753 1,313,595
Real estate held for investment 78,468 78,468 78,468 78,468
Premises and equipment 1,526,558 1,572,428 1,544,083 1,631,916
Other assets 719,076 1,083,323 931,285 1,390,356
----------- ----------- ----------- -----------
Total assets $109,886,901 $105,296,506 $109,793,832 $105,741,629
----------- ----------- ----------- -----------
Liabilities and Retained Earnings
Deposits $100,539,486 $95,728,403 $100,797,875 $97,395,595
Advances from borrowers for taxes and insurance 763,195 785,687 993,965 802,200
Income taxes payable 28,179 0 0 0
Other liabilities 1,347,529 1,385,230 1,128,872 794,239
----------- ----------- ----------- -----------
Total liabilities 102,678,389 97,899,320 102,920,712 98,992,034
Commitments and contingencies
Retained earnings 7,208,512 7,397,186 6,873,120 6,749,595
------------ ------------ ------------ ------------
Total liabilities and retained earnings $109,886,901 $105,296,506 $109,793,832 $105,741,629
----------- ----------- ----------- -----------
Source: Atlantic Liberty, preliminary prospectus.
II-1
76
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-2
STATEMENT OF OPERATIONS
For the Six Months Ended September 30, 1996 and 1997
and For the Years Ended March 31, 1996 and 1997
Six Months Ended Years Ended
September 30, March 31,
--------------------- --------------------------
1997 1996 1997 1996
--------- ---------- ---------- -----------
Unaudited
---------
Interest income:
Loans receivable
First mortgage loans $2,799,995 $2,319,224 $4,676,981 $4,628,730
Consumer and other loans 7,856 -- -- 50,660
Investment securities 646,827 718,795 1,433,772 1,341,263
Mortgage-backed and related
securities 610,276 576,740 1,137,225 1,130,330
---------- ---------- --------- ----------
Total interest income 4,064,954 3,614,759 7,247,978 7,150,983
---------- ---------- --------- ----------
Interest expense:
Deposits 2,300,345 2,185,940 4,356,710 4,143,186
Borrowed funds 3,585 3,265 6,668 6,257
---------- ---------- --------- ----------
Total interest expense 2,303,930 2,189,205 4,363,378 4,149,443
---------- ---------- --------- ----------
Net interest income 1,761,024 1,425,554 2,884,600 3,001,540
Provision for loan losses 105,473 65,643 771,178 274,980
---------- ---------- --------- ----------
Net interest income after
provision for
loan losses 1,655,551 1,359,911 2,113,422 2,726,560
---------- ---------- --------- ----------
Noninterest income:
Loan servicing fees 72 260 373 590
Income from real estate
operations 80,165 56,129 154,212 173,157
Gain (loss) on disposal of
foreclosed real estate 28,838 123,089 148,394 (135,247)
Other 87,712 686,617 950,607 166,896
---------- ---------- --------- ----------
Total noninterest income 196,787 867,095 1,253,586 205,396
---------- ---------- --------- ----------
Noninterest expense:
General and administrative:
Compensation and benefits 747,473 699,737 1,667,416 1,435,244
Occupancy and equipment 135,627 130,724 276,019 266,342
SAIF deposit insurance
premium 31,318 703,515 762,696 208,903
Other 352,606 285,023 684,677 684,828
---------- ---------- --------- ----------
Total noninterest
expense 1,267,024 1,818,999 3,390,808 2,595,317
---------- ---------- --------- ----------
Income (loss) before
income taxes 585,314 408,007 (23,800) 336,639
Income tax (expense) benefit (249,922) 239,584 147,325 (140,551)
---------- ---------- --------- ----------
Net income $ 335,392 $ 647,591 $ 123,525 $ 196,088
========= ========= ========= =========
Source: Atlantic Liberty, preliminary prospectus.
II-2
77
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-3
LOAN PORTFOLIO COMPOSITION
At September 30, 1997
and At March 31, 1996 and 1997
(Dollars in Thousands)
At September 30, At March 31,
---------------------- -------------------------------------------------
1997 1997 1996
---------------------- -------------------- ---------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
Real estate loans:
-----------------
One-to-four family $ 40,064 61.18% $36,862 61.38% $30,605 56.15%
Multi-family 12,974 19.81 10,555 17.57 11,166 20.49
Commercial 11,861 18.11 11,917 19.84 12,784 23.45
------- ------ ------- ------ ------- ------
Total real estate loans 64,899 99.10 59,334 98.79 54,555 100.09
Other loans:
-----------
Deposit accounts 1,828 2.79 1,830 3.05 816 1.50
Less:
----
Deferred fees and discounts (158) (0.24) (127) (0.21) (121) (0.22)
Allowance for losses (1,083) (1.65) (978) (1.63) (745) (1.37)
------- ------- -------- ------- -------- -------
Total loans receivable, net $ 65,486 100.00% $ 60,059 100.00% $ 54,505 100.00%
======= ======= ======= ====== ======= ======
Composition of loan portfolio by fixed and adjustable rates:
At September 30, At March 31,
-------------------- --------------------------------------------------
1997 1997 1996
-------------------- -------------------- ----------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
Fixed-Rate Loans:
----------------
Real estate:
One-to-four family $ 21,932 33.49% $ 18,270 30.42% $ 12,750 23.39%
Multi-family 6,487 9.91 7,230 12.04 7,792 14.30
Commercial 5,682 8.68 5,697 9.49 7,815 14.34
-------- ------ -------- ------ -------- -----
Total real estate loans 34,101 52.08 31,197 51.95 28,357 52.03
------- ----- ------- ----- ------- -----
Adjustable Rate Loans:
---------------------
Real estate:
One-to-four family 18,132 27.69 18,592 30.95 17,855 32.76
Multi-family 6,487 9.91 3,325 5.53 3,374 6.19
Commercial 6,179 9.43 6,220 10.36 4,969 9.11
------- ------ ------- ----- ------- -----
Total real estate loans 30,798 47.03 28,137 46.84 26,198 48.06
------- ------ ------- ----- ------- -----
Deposit accounts 1,828 2.79 1,830 3.05 816 1.50
------- ------- ------- ------- -------- ------
Total loans 66,727 101.90 61,164 101.84 55,371 101.59
Less:
----
Deferred fees and discounts
Allowance for loan losses (158) (0.25) (127) (0.21) (121) (0.22)
Total loans receivable, net (1,083) (1.65) (978) (1.63) (745) (1.37)
------- ------- -------- ------- -------- -------
$ 65,486 100.00% $ 60,059 100.00% $ 54,505 100.00%
======= ====== ======= ====== ======= ======
Source: Atlantic Liberty, preliminary prospectus.
II-3
78
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-4
NET LENDING ACTIVITY
For the Six Months Ended September 30, 1996 and 1997
and the Years Ended March 31, 1996 and 1997
(Dollars in Thousands)
Six Months Ended Years Ended
September 30, March 31,
------------------------- -----------------------------
1997 1996 1997 1996
----------- ----------- ---------- --------------
Origination by Type:
- -------------------
Adjustable rate:
Real estate:
One-to four-family $ 772 $ 138 $ 703 $ 352
Multi-family 2,279 460 810 450
Commercial 2,244 1,132 3,093 3,051
Non-real estate:
Consumer N/A N/A N/A N/A
------- ------ ------ ------
Total adjustable rate 5,295 1,730 4,606 3,853
------- ------ ------ ------
Fixed rate:
Real estate:
One-to four-family 4,422 3,385 7,368 1,704
Multi-family -- -- 60 --
Commercial -- -- 650 --
Construction -- -- N/A N/A
------- ------- ------ ------
Total fixed-rate 4,422 3,385 8,078 1,704
------- ------- ------ ------
Total loans originated 9,717 5,115 12,684 5,557
Principal Repayments:
- --------------------
Total reductions 4,534 2,299 7,904 5,936
------- ------- ------ ------
Net increase (decrease) $ 5,183 $ 2,816 $ 4,780 $ (379)
======= ======= ======= ======
Source: Atlantic Liberty, preliminary prospectus.
II-4
79
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-5
INVESTMENT PORTFOLIO COMPOSITION
At September 30, 1997
and At March 31, 1996 and 1997
(Dollars in Thousands)
At September 30,
-----------------------------------
1997
-----------------------------------
Amount Percent
------ -------
Investment securities held
for investment:
U.S. Government securities $ -- --
Federal agency obligations 12,567 64.24%
------ ------
Subtotal 12,567 64.24
FHLB stock 583 2.98
------ -------
Total investment securities 13,150 67.22
Other interest-earning deposits
with banks 6,413 32.78
------ -------
Total $19,563 100.00%
====== =======
At March 31,
-----------------------------------------------------------------------------
1997 1996
----------------------------------- -------------------------------------
Amount Percent Amount Percent
------ ------- ------ -------
Investment securities
held for investment:
U.S. Government securities $ 3,604 13.93% $ 3,604 13.46%
Federal agency obligations 13,071 50.51 12,023 44.89
------ ------ ------ ------
Subtotal 16,675 64.44 15,627 58.35
FHLB stock 583 2.25 528 1.97
------ ------- ------ -------
Total investment securities 17,258 66.69 16,155 60.32
Other interest-earning deposits
with banks 8,618 33.31 10,626 39.68
------ ------- ------ -------
Total $25,876 100.00% $26,781 100.00%
====== ======= ====== =======
At September 30,
-----------------------------------
1997
-----------------------------------
Book %
Value of Total
----- --------
Mortgage-backed securities
held for investment:
GNMA $ 559 2.94%
FNMA 6,468 34.02
FHLMC 3,905 20.53
CMOs/REMICS 3,880 20.40
Other 4,205 22.11
-------- -------
Total mortgage-backed
securities $ 19,017 100.00%
====== =======
At March 31,
----------------------------------------------------------------------------
1997 1996
----------------------------------- ------------------------------------
Book % Book %
Value of Total Value of Total
----- -------- ----- --------
Mortgage-backed securities
held for investment:
GNMA $ 611 3.21% $ 728 3.79%
FNMA 6,894 36.23 7,823 40.68
FHLMC 4,291 22.55 5,051 26.27
CMOs/REMICS 4,155 21.83 4,437 23.08
Other 3,079 16.18 1,187 6.18
----- ------- ----- -------
Total mortgage-backed
securities $ 19,030 100.00% $19,226 100.00%
====== ======= ====== =======
Source: Atlantic Liberty, preliminary prospectus.
II-5
80
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-6
DEPOSIT ACCOUNT DISTRIBUTION
At September 30, 1997
and At March 31, 1996 and 1997
(Dollars in Thousands)
At September 30,
-------------------------------------
1997
-------------------------------------
Amount Percent
------ -------
Transaction and savings
- -----------------------
deposit accounts:
- ----------------
Savings accounts $ 21,556 21.4%
NOW accounts 4,285 4.3
Money market accounts 6,749 6.7
Money market statement savings 7,360 7.3
-------- -------
Total non-certificates $ 39,950 39.7
-------- ------
Certificates of deposits:
- -------------------------
4.00 - 5.99% 41,532 41.3
6.00 - 7.99% 18,551 18.5
8.00 - 9.99% 506 .5
-------- --------
Total certificates 60,589 60.3
-------- -------
Total deposits $ 100,539 100.00%
======== ======
At March 31,
--------------------------------------------------------------------------------
1997 1996
------------------------------------- --------------------------------------
Amount Percent Amount Percent
------ ------- ------ -------
Transaction and savings
- -----------------------
deposit accounts:
- ----------------
Savings accounts $ 21,593 21.4% $ 23,585 24.2%
NOW accounts 4,723 4.7 3,974 4.1
Money market accounts 6,999 6.9 8,240 8.5
Money market statement savings 6,785 6.7 3,498 3.6
-------- ------- -------- --------
Total non-certificates $ 40,100 39.7 $ 39,297 40.4
-------- ------- -------- --------
Certificates of deposits:
- -------------------------
4.00 - 5.99% 44,449 44.1 30,974 31.8
6.00 - 7.99% 15,752 15.6 26,721 27.4
8.00 - 9.99% 497 0.5 404 0.4
-------- ------- -------- -------
Total certificates 60,698 60.3 58,099 59.7
-------- ------- -------- -------
Total deposits $ 100,798 100.00% $ 97,396 100.00%
======== ======= ======== =======
Certificates of deposits as of September 30, 1997:
As of September 30,
-------------------------------------
1997
-------------------------------------
Total Percent
Balance of Total
------- --------
Certificate accounts maturing
in quarter ending:
December 31, 1997 $ 12,983 21.43%
March 31, 1998 12,921 21.33
June 30, 1998 7,968 13.15
September 30, 1998 7,274 12.01
December 31, 1998 2,733 4.51
March 31, 1999 2,277 3.76
June 30, 1999 1,724 2.84
September 30, 1999 1,373 2.27
December 31, 1999 1,522 2.51
March 31, 2000 1,569 2.59
June 30, 2000 1,091 1.80
September 30, 2000 710 1.17
Thereafter 6,444 10.63
------- -------
Total $ 60,589 100.00%
======= =======
Source: Atlantic Liberty, preliminary prospectus.
II-6
81
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit II-7
OFFICE FACILITIES
As of September 30, 1997
Net Book Value
Original of Real Property
Year Leased and Equipment at
Location Leased or Owned or Acquired September 30,
1997
- ---------------------------------- ----------------- ----------------------- --------------------------------
MAIN OFFICE
- -----------
186 Montague Street
Brooklyn, NY 11202 Owned 1983 $594,026
BRANCH OFFICE
- -------------
1402 Avenue J
Brooklyn, NY 11230 Owned 1978 $523,364
Note: The total net book value of the Association's premises, land and
equipment was approximately $1,526,588 at September 30, 1997.
Source: Atlantic Liberty, preliminary prospectus.
II-7
82
RFELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
================================================================================================================================
1ST Bancorp FBCV IN 260,935 0.36 4.40 26.000 26.98 14.36 15.12 119.54
1st Bergen Bancorp FBER NJ 284,739 0.77 4.94 19.500 55.86 26.71 27.08 143.70
Abington Bancorp Inc. ABBK MA 501,622 0.76 11.05 37.000 67.52 17.54 16.23 190.43
Acadiana Bancshares Inc. ANA LA 274,018 0.95 5.44 23.625 62.77 22.08 20.37 137.27
Access Anytime Bancorp Inc. AABC NM 105,639 1.34 20.89 10.750 12.83 8.60 2.49 143.14
Advance Financial Bancorp AFBC WV 105,717 0.86 5.92 17.750 19.25 NA 22.19 118.25
Affiliated Community Bancorp AFCB MA 1,128,579 1.08 11.05 33.000 214.44 18.97 19.19 190.97
AFSALA Bancorp Inc. AFED NY 159,181 0.71 5.54 18.750 26.03 NA 20.38 117.78
ALBANK Financial Corp. ALBK NY 3,716,954 1.05 11.35 46.125 593.99 17.34 17.21 172.82
Albion Banc Corp. ALBC NY 70,810 0.49 5.46 28.000 7.00 21.05 18.92 115.46
Algiers Bancorp Inc. ALGC LA 45,325 0.26 1.28 13.875 8.54 42.05 NM 90.45
Alliance Bancorp Inc. ABCL IL 1,371,184 0.84 9.35 26.500 212.56 22.84 16.99 164.60
Alliance Bncorp of New England ANE CT 241,918 0.76 10.93 16.750 27.25 14.57 13.51 152.97
AMB Financial Corp. AMFC IN 103,388 0.73 4.46 16.750 16.14 16.75 13.09 112.04
Ambanc Holding Co. AHCI NY 529,309 (0.61) (4.74) 17.000 73.21 NM 22.37 121.60
Ameriana Bancorp ASBI IN 393,028 0.83 7.60 20.250 65.44 18.08 16.33 148.57
American Bank of Connecticut BKC CT 609,923 1.10 13.05 49.125 113.64 15.40 14.62 211.56
AmTrust Capital Corp. ATSB IN 69,685 0.23 2.27 13.750 7.24 24.55 28.65 95.09
Anchor BanCorp Wisconsin ABCW WI 1,954,749 0.93 14.53 34.875 317.01 17.61 17.10 252.35
Andover Bancorp Inc. ANDB MA 1,280,601 1.03 12.93 37.500 193.22 15.06 14.88 185.64
Argo Bancorp Incorporated ARGO IL 229,026 (0.09) (1.23) 34.125 16.60 14.84 NM 94.27
ASB Financial Corp. ASBP OH 112,449 0.91 5.53 13.500 22.53 19.85 21.09 131.07
Astoria Financial Corp. ASFC NY 7,904,363 0.77 9.80 56.750 ,172.79 19.64 17.52 192.31
Avondale Financial Corp. AVND IL 596,918 (1.94) (20.35) 16.375 57.22 NM NM 124.24
Bancorp Connecticut Inc. BKCT CT 423,800 1.24 12.06 25.000 127.20 24.04 23.15 279.02
Bank Plus Corp. BPLS CA 3,920,257 0.30 6.27 12.500 241.76 18.38 17.36 136.46
Bank United Corp. BNKU TX 11,967,072 0.54 10.48 42.500 ,342.81 17.56 16.87 224.39
Bank West Financial Corp. BWFC MI 164,854 0.57 3.72 16.000 41.96 25.81 17.39 180.38
BankAtlantic Bancorp Inc. BANC FL 2,844,996 0.54 9.57 15.375 339.59 16.18 16.71 218.71
BankPlus FSB BNKP IL 195,076 0.73 11.40 18.000 12.36 9.33 8.82 104.59
BankUnited Financial Corp. BKUNA FL 2,145,406 0.48 7.49 13.625 129.88 25.23 22.71 171.60
Baxley Federal Savings Bank BAXF GA 103,219 1.43 9.18 18.000 9.93 6.62 6.43 72.73
Bay View Capital Corp. BVCC CA 3,162,207 0.61 9.92 34.375 426.98 26.04 37.36 232.11
Bayonne Bancshares Inc. FSNJ NJ 609,053 0.53 5.77 12.250 110.87 NA NA 115.78
Bedford Bancshares Inc. BFSB VA 139,179 1.19 8.34 28.250 32.27 19.22 18.59 156.60
Big Foot Financial Corp. BFFC IL 215,162 NA NA 19.250 48.37 NA 48.13 128.59
Big Sky Bancorp Incorporated FFLN MT 62,758 0.94 7.94 23.813 7.42 13.69 13.53 98.32
BostonFed Bancorp Inc. BFD MA 960,704 0.66 6.87 19.750 111.59 17.48 16.46 128.00
Broadway Financial Corp. BYFC CA 124,740 0.31 2.75 13.000 10.80 33.33 29.55 88.02
Calumet Bancorp Inc. CBCI IL 488,346 1.41 8.96 33.250 105.28 16.46 16.96 132.95
Camco Financial Corp. CAFI OH 502,186 0.99 10.23 24.875 79.96 14.38 11.73 166.05
=========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
=========================================================================
1ST Bancorp FBCV IN 121.84 10.34 1.08
1st Bergen Bancorp FBER NJ 143.70 19.62 1.03
Abington Bancorp Inc. ABBK MA 210.11 13.46 1.08
Acadiana Bancshares Inc. ANA LA 137.27 22.91 1.52
Access Anytime Bancorp Inc. AABC NM 143.14 12.15 -
Advance Financial Bancorp AFBC WV 118.25 18.21 1.80
Affiliated Community Bancorp AFCB MA 191.97 19.00 1.82
AFSALA Bancorp Inc. AFED NY 117.78 16.35 1.28
ALBANK Financial Corp. ALBK NY 196.19 15.98 1.56
Albion Banc Corp. ALBC NY 115.46 9.89 1.14
Algiers Bancorp Inc. ALGC LA 90.45 18.84 1.44
Alliance Bancorp Inc. ABCL IL 166.56 15.50 1.66
Alliance Bncorp of New England ANE CT 156.69 11.26 1.19
AMB Financial Corp. AMFC IN 112.04 15.61 1.67
Ambanc Holding Co. AHCI NY 121.60 13.83 1.18
Ameriana Bancorp ASBI IN 148.68 16.65 3.16
American Bank of Connecticut BKC CT 219.50 18.63 2.93
AmTrust Capital Corp. ATSB IN 96.02 10.39 1.46
Anchor BanCorp Wisconsin ABCW WI 256.81 16.22 0.92
Andover Bancorp Inc. ANDB MA 185.64 15.09 2.03
Argo Bancorp Incorporated ARGO IL 95.29 7.25 2.11
ASB Financial Corp. ASBP OH 131.07 20.04 2.96
Astoria Financial Corp. ASFC NY 227.36 14.84 1.06
Avondale Financial Corp. AVND IL 124.24 9.59 -
Bancorp Connecticut Inc. BKCT CT 279.02 30.01 2.00
Bank Plus Corp. BPLS CA 136.76 6.17 -
Bank United Corp. BNKU TX 229.61 11.22 1.51
Bank West Financial Corp. BWFC MI 180.38 25.45 1.33
BankAtlantic Bancorp Inc. BANC FL 264.18 11.94 0.86
BankPlus FSB BNKP IL 104.59 6.34 -
BankUnited Financial Corp. BKUNA FL 218.00 6.05 -
Baxley Federal Savings Bank BAXF GA 72.73 9.62 4.44
Bay View Capital Corp. BVCC CA 277.89 13.50 0.93
Bayonne Bancshares Inc. FSNJ NJ 115.78 18.20 1.39
Bedford Bancshares Inc. BFSB VA 156.60 23.19 1.98
Big Foot Financial Corp. BFFC IL 128.59 22.48 -
Big Sky Bancorp Incorporated FFLN MT 98.32 11.82 -
BostonFed Bancorp Inc. BFD MA 132.91 11.62 1.42
Broadway Financial Corp. BYFC CA 88.02 8.66 1.54
Calumet Bancorp Inc. CBCI IL 132.95 21.56 -
Camco Financial Corp. CAFI OH 179.47 15.92 2.17
III-1
83
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
=================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
=================================================================================================================================
Cameron Financial Corp CMRN MO 212,504 1.25 5.45 21.000 53.80 21.65 20.19 120.48
Carolina Fincorp Inc. CFNC NC 114,069 1.16 5.32 17.750 32.86 NA 22.19 127.51
Carver Bancorp Inc. CNY NY 415,561 0.18 2.08 16.625 38.47 NM 27.71 110.25
Cascade Financial Corp. CASB WA 426,451 0.61 9.55 13.250 44.88 18.66 19.49 158.49
Catskill Financial Corp. CATB NY 289,619 1.37 5.11 17.375 80.92 21.19 19.74 112.75
CBES Bancorp Inc. CBES MO 106,635 1.13 6.28 21.875 22.42 17.09 17.09 124.29
CCF Holding Company CCFH GA 109,342 (0.15) (1.17) 19.750 16.20 131.67 NM 138.99
Cecil Bancorp Inc. CECB MD 64,313 0.80 6.89 19.500 9.17 15.85 12.83 123.26
CENIT Bancorp Inc. CNIT VA 701,708 0.78 10.96 66.500 110.02 20.15 16.30 214.45
Central Co-operative Bank CEBK MA 358,424 0.83 8.20 26.875 52.81 17.92 17.68 148.89
Century Bancorp Inc. CENB NC 100,937 1.59 6.25 83.000 33.81 NA 19.76 110.59
CFSB Bancorp Inc. CFSB MI 859,962 1.14 14.86 35.875 182.25 19.18 16.92 275.33
Charter One Financial COFI OH 15,196,993 1.24 18.34 62.000 3,953.61 17.17 16.32 286.64
Chester Valley Bancorp Inc. CVAL PA 322,321 0.93 10.83 27.125 59.39 19.94 17.39 210.43
CitFed Bancorp Inc. CTZN OH 3,294,554 0.87 13.46 38.250 496.65 20.03 18.39 240.26
Citizens Bancorp Inc. CIBC IN 51,365 1.46 10.06 15.120 16.00 NA NA 104.71
Citizens First Financial Corp. CBK IL 277,962 0.54 3.70 18.063 46.67 31.14 34.74 110.82
CKF Bancorp Inc. CKFB KY 59,868 1.37 5.63 18.500 16.71 14.80 17.79 109.40
Classic Bancshares Inc. CLAS KY 132,186 0.62 4.25 16.250 21.12 18.68 18.47 107.40
CNS Bancorp Inc. CNSB MO 97,411 0.80 3.23 21.500 35.54 42.16 41.35 149.93
Coastal Bancorp Inc. CBSA TX 2,929,560 0.40 11.94 29.125 145.40 12.39 14.00 144.68
Coastal Financial Corp. CFCP SC 494,003 1.05 16.81 22.250 103.39 18.70 16.86 319.23
Commercial Federal Corp. CFB NE 7,207,143 0.94 15.97 52.875 1,141.65 17.74 16.95 256.80
Commonwealth Bancorp Inc. CMSB PA 2,278,099 0.58 5.76 21.250 345.20 21.04 21.25 163.21
Community Federal Bancorp CFTP MS 215,953 1.45 4.71 18.500 85.63 26.43 33.04 138.06
Community Financial Corp. CFFC VA 183,278 1.13 8.22 26.500 33.84 17.67 25.48 139.55
Community First Banking Co. CFBC GA 394,570 0.48 4.41 39.500 95.34 NA NA 125.44
Community Investors Bancorp CIBI OH 94,328 0.97 8.37 16.250 14.66 15.48 14.51 134.41
Cooperative Bankshares Inc. COOP NC 359,535 0.63 8.21 18.250 54.45 26.45 28.52 196.87
Crazy Woman Creek Bancorp CRZY WY 59,952 1.30 4.79 15.375 14.68 21.06 18.30 103.33
CSB Financial Group Inc. CSBF IL 48,844 0.51 1.99 13.500 12.71 79.41 56.25 103.93
Cumberland Mountain Bancshares CMBN KY 128,838 0.86 12.51 16.250 11.03 NA 9.45 124.81
D & N Financial Corp. DNFC MI 1,754,069 0.83 14.74 26.500 218.47 16.36 15.41 237.03
Delphos Citizens Bancorp Inc. DCBI OH 107,796 1.61 8.03 17.250 33.80 NA 17.97 117.75
Dime Bancorp Inc. DME NY 19,413,597 0.66 12.47 26.000 2,638.79 20.97 17.11 250.48
Dime Community Bancorp Inc. DIME NY 1,385,356 1.04 6.55 23.500 296.68 21.96 25.54 158.68
Dime Financial Corp. DIBK CT 921,510 1.90 23.53 30.000 154.87 10.17 9.26 206.33
Downey Financial Corp. DSL CA 5,853,968 0.70 9.58 28.375 759.14 19.17 18.19 181.77
Eagle BancGroup Inc. EGLB IL 172,160 0.24 2.00 19.250 22.91 42.78 53.47 113.04
Eagle Bancshares EBSI GA 872,706 0.76 8.90 19.000 108.27 22.09 16.38 150.91
East Side Financial Inc. ESDF IL 74,057 0.85 5.43 23.125 7.33 11.34 12.04 60.58
=========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
=========================================================================
Cameron Financial Corp CMRN MO 120.48 25.32 1.33
Carolina Fincorp Inc. CFNC NC 127.51 28.81 1.35
Carver Bancorp Inc. CNY NY 114.66 9.26 -
Cascade Financial Corp. CASB WA 158.49 10.52 -
Catskill Financial Corp. CATB NY 112.75 27.94 1.84
CBES Bancorp Inc. CBES MO 124.29 21.02 1.83
CCF Holding Company CCFH GA 138.99 14.82 2.79
Cecil Bancorp Inc. CECB MD 123.26 14.26 2.05
CENIT Bancorp Inc. CNIT VA 234.15 15.68 1.50
Central Co-operative Bank CEBK MA 165.38 14.73 1.19
Century Bancorp Inc. CENB NC 110.59 33.50 2.41
CFSB Bancorp Inc. CFSB MI 275.33 21.19 1.90
Charter One Financial COFI OH 312.03 26.02 1.61
Chester Valley Bancorp Inc. CVAL PA 210.43 18.43 1.62
CitFed Bancorp Inc. CTZN OH 264.34 15.07 0.63
Citizens Bancorp Inc. CIBC IN 104.71 31.15 -
Citizens First Financial Corp. CBK IL 110.82 16.79 -
CKF Bancorp Inc. CKFB KY 109.40 27.91 2.70
Classic Bancshares Inc. CLAS KY 126.46 15.98 1.72
CNS Bancorp Inc. CNSB MO 149.93 36.48 1.12
Coastal Bancorp Inc. CBSA TX 172.13 4.96 1.65
Coastal Financial Corp. CFCP SC 319.23 20.93 1.62
Commercial Federal Corp. CFB NE 286.90 15.84 0.62
Commonwealth Bancorp Inc. CMSB PA 209.36 15.15 1.32
Community Federal Bancorp CFTP MS 138.06 39.65 1.62
Community Financial Corp. CFFC VA 139.55 18.46 2.11
Community First Banking Co. CFBC GA 127.13 24.16 1.52
Community Investors Bancorp CIBI OH 134.41 15.54 1.97
Cooperative Bankshares Inc. COOP NC 196.87 15.14 -
Crazy Woman Creek Bancorp CRZY WY 103.33 24.49 2.60
CSB Financial Group Inc. CSBF IL 110.02 26.02 -
Cumberland Mountain Bancshares CMBN KY 124.81 8.56 -
D & N Financial Corp. DNFC MI 239.39 12.46 0.76
Delphos Citizens Bancorp Inc. DCBI OH 117.75 31.36 -
Dime Bancorp Inc. DME NY 263.16 13.59 0.62
Dime Community Bancorp Inc. DIME NY 184.17 21.42 1.02
Dime Financial Corp. DIBK CT 212.46 16.81 1.47
Downey Financial Corp. DSL CA 184.13 12.97 1.13
Eagle BancGroup Inc. EGLB IL 113.04 13.31 -
Eagle Bancshares EBSI GA 150.91 12.41 3.16
East Side Financial Inc. ESDF IL 60.58 9.90 4.67
III-2
84
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
==============================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
==============================================================================================================================
East Texas Financial Services ETFS TX 115,949 0.62 3.44 20.000 20.53 25.64 23.81 98.33
Elmira Savings Bank (The) ESBK NY 228,268 0.34 5.40 30.000 22.25 23.08 16.30 149.48
Emerald Financial Corp. EMLD OH 603,493 0.97 12.70 19.625 99.53 16.49 16.35 211.48
Empire Federal Bancorp Inc. EFBC MT 110,540 NA NA 16.250 42.12 NA 23.90 104.77
Enterprise Federal Bancorp EFBI OH 274,888 0.78 6.14 28.250 56.10 22.97 25.22 178.57
Equitable Federal Savings Bank EQSB MD 308,197 0.73 14.49 48.500 29.21 23.54 14.61 187.98
Essex Bancorp Inc. ESX VA 191,886 0.02 0.30 4.625 4.89 NM NM NM
Falmouth Bancorp Inc. FCB MA 96,391 0.75 3.04 20.500 29.82 37.27 28.47 130.74
FCB Financial Corp. FCBF WI 522,991 1.09 6.92 28.250 109.59 22.60 16.05 150.91
Fed One Bancorp FOBC WV 357,721 0.94 8.26 26.000 61.71 19.40 19.70 149.00
FFBS BanCorp Inc. FFBS MS 134,952 1.41 7.42 22.250 34.98 18.54 18.54 147.64
FFD Financial Corp. FFDF OH 88,220 0.97 3.92 18.625 26.91 14.90 27.39 125.34
FFLC Bancorp Inc. FFLC FL 383,382 0.94 6.42 22.000 84.36 24.44 22.92 160.23
FFVA Financial Corp. FFFC VA 567,266 1.35 9.97 33.750 152.68 20.71 19.18 189.18
FFW Corp. FFWC IN 181,468 1.03 10.34 41.750 29.98 16.97 15.81 169.44
FFY Financial Corp. FFYF OH 610,974 1.26 8.58 32.000 131.66 17.30 16.33 157.64
Fidelity Bancorp Inc. FBCI IL 497,862 0.81 7.81 23.375 65.33 16.94 15.38 125.27
Fidelity Bancorp Inc. FSBI PA 380,951 0.76 11.19 27.500 42.76 16.08 13.75 165.17
Fidelity Federal Bancorp FFED IN 235,336 0.73 13.74 10.000 27.91 14.29 13.16 194.17
Fidelity Financial of Ohio FFOH OH 528,704 0.94 7.07 15.250 85.09 19.55 17.33 123.58
Financial Bancorp Inc. FIBC NY 296,956 0.98 10.16 24.375 41.67 16.25 15.23 155.16
First Allen Parish Bancorp FALN LA 33,228 0.97 7.10 16.500 4.36 12.79 12.13 95.76
First Bancshares Inc. FBSI MO 162,755 1.08 7.68 26.000 28.43 15.29 13.27 125.36
First Bell Bancorp Inc. FBBC PA 681,215 1.09 9.27 18.625 121.26 16.06 15.52 169.01
First Citizens Corp. FSTC GA 337,197 1.75 18.43 26.750 73.39 12.92 15.20 215.03
First Coastal Corp. FCME ME 148,571 3.97 44.97 14.750 20.05 3.28 15.36 138.37
First Colorado Bancorp Inc. FFBA CO 1,512,605 1.20 8.96 24.625 413.47 22.18 19.24 205.21
First Defiance Financial FDEF OH 574,364 1.00 4.67 15.000 134.35 25.00 25.00 118.95
First Essex Bancorp Inc. FESX MA 1,209,698 0.77 10.65 20.625 155.24 14.95 15.17 173.32
First Federal Bancorp Inc. FFBZ OH 203,703 0.97 12.73 20.000 31.50 17.54 17.24 220.75
First Federal Bancorporation BDJI MN 111,492 0.63 5.72 28.000 18.83 23.14 20.59 157.75
First Federal Bancshares of AR FFBH AR 547,119 1.01 6.51 23.625 115.67 19.52 20.37 141.98
First Federal Capital Corp. FTFC WI 1,559,672 0.90 13.94 30.000 274.95 18.07 15.63 261.78
First Federal Financial Corp. FFKY KY 382,585 1.62 11.85 22.250 92.25 15.24 14.64 176.59
First Federal Finl Bncp Inc. FFFB OH 59,315 0.67 3.57 16.125 10.68 48.86 31.01 99.97
First Federal of East Hartford FFES CT 987,416 0.60 9.47 37.125 99.58 19.85 19.75 152.15
First Financial Bancorp Inc. FFBI IL 84,242 0.42 5.18 21.000 8.72 NM 18.10 116.02
First Financial Holdings Inc. FFCH SC 1,712,931 0.85 13.85 48.000 305.68 21.52 21.05 291.79
First Franklin Corp. FFHS OH 231,189 0.65 7.31 26.000 30.99 25.49 19.70 148.66
First Georgia Holding Inc. FGHC GA 156,383 0.78 9.53 8.250 25.18 27.50 17.19 195.96
First Home Bancorp Inc. FSPG NJ 525,092 0.91 13.69 28.875 78.21 16.79 17.19 216.94
========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
========================================================================
East Texas Financial Services ETFS TX 98.33 17.71 1.00
Elmira Savings Bank (The) ESBK NY 153.53 9.75 2.03
Emerald Financial Corp. EMLD OH 214.72 16.49 1.22
Empire Federal Bancorp Inc. EFBC MT 104.77 38.10 1.85
Enterprise Federal Bancorp EFBI OH 178.68 20.41 3.54
Equitable Federal Savings Bank EQSB MD 187.98 9.48 -
Essex Bancorp Inc. ESX VA NM 2.55 -
Falmouth Bancorp Inc. FCB MA 130.74 30.94 0.98
FCB Financial Corp. FCBF WI 150.91 20.95 2.83
Fed One Bancorp FOBC WV 155.88 17.25 2.39
FFBS BanCorp Inc. FFBS MS 147.64 25.92 2.25
FFD Financial Corp. FFDF OH 125.34 30.50 1.61
FFLC Bancorp Inc. FFLC FL 160.23 22.00 1.31
FFVA Financial Corp. FFFC VA 193.08 26.92 1.42
FFW Corp. FFWC IN 186.72 16.52 1.73
FFY Financial Corp. FFYF OH 157.64 21.55 2.50
Fidelity Bancorp Inc. FBCI IL 125.54 13.12 1.37
Fidelity Bancorp Inc. FSBI PA 165.17 11.22 1.31
Fidelity Federal Bancorp FFED IN 194.17 11.86 4.00
Fidelity Financial of Ohio FFOH OH 139.40 16.09 1.84
Financial Bancorp Inc. FIBC NY 155.85 14.03 1.64
First Allen Parish Bancorp FALN LA 95.76 13.12 1.82
First Bancshares Inc. FBSI MO 125.36 17.47 0.77
First Bell Bancorp Inc. FBBC PA 169.01 17.80 2.15
First Citizens Corp. FSTC GA 272.96 21.76 1.10
First Coastal Corp. FCME ME 138.37 13.50 -
First Colorado Bancorp Inc. FFBA CO 207.98 27.33 1.95
First Defiance Financial FDEF OH 118.95 23.39 2.13
First Essex Bancorp Inc. FESX MA 198.13 12.83 2.33
First Federal Bancorp Inc. FFBZ OH 220.99 15.46 1.40
First Federal Bancorporation BDJI MN 157.75 16.89 -
First Federal Bancshares of AR FFBH AR 141.98 21.14 1.02
First Federal Capital Corp. FTFC WI 277.78 17.63 1.60
First Federal Financial Corp. FFKY KY 187.13 24.11 2.52
First Federal Finl Bncp Inc. FFFB OH 99.97 18.01 1.74
First Federal of East Hartford FFES CT 152.15 10.08 1.62
First Financial Bancorp Inc. FFBI IL 116.02 10.35 -
First Financial Holdings Inc. FFCH SC 291.79 17.85 1.75
First Franklin Corp. FFHS OH 149.51 13.40 1.54
First Georgia Holding Inc. FGHC GA 213.73 16.10 0.65
First Home Bancorp Inc. FSPG NJ 220.25 14.89 1.39
III-3
85
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
================================================================================================================================
First Independence Corp. FFSL KS 112,523 0.65 6.09 15.000 14.67 22.06 18.75 127.33
First Indiana Corporation FISB IN 1,547,121 0.95 9.90 29.500 311.56 18.67 17.15 208.92
First Keystone Financial FKFS PA 373,430 0.77 10.53 36.750 45.14 16.19 15.06 182.38
First Lancaster Bancshares FLKY KY 47,184 1.24 3.64 15.750 14.98 28.64 32.81 107.73
First Liberty Financial Corp. FLFC GA 1,288,919 0.94 12.81 30.875 238.68 23.57 17.15 251.02
First Midwest Financial Inc. CASH IA 404,589 0.88 8.04 22.000 59.38 17.32 16.67 136.56
First Mutual Bancorp Inc. FMBD IL 402,389 0.28 1.95 20.000 70.13 58.82 62.50 119.26
First Mutual Savings Bank FMSB WA 451,120 1.00 15.00 17.000 69.14 16.67 15.74 225.76
First Northern Capital Corp. FNGB WI 656,745 0.89 7.88 13.875 122.73 21.68 20.40 168.39
First Palm Beach Bancorp Inc. FFPB FL 1,808,420 0.50 7.31 38.750 195.60 20.95 20.18 173.07
First Savings Bancorp Inc. SOPN NC 295,315 1.76 7.28 23.750 87.80 19.31 18.55 128.87
First SB of Washington Bancorp FWWB WA 1,098,615 1.17 7.97 26.000 266.41 20.00 19.12 164.25
First SecurityFed Financial FSFF IL 267,332 NA NA 15.938 102.13 NA NA NA
First Shenango Bancorp Inc. SHEN PA 401,437 1.17 10.46 33.000 68.28 14.80 14.47 146.34
FirstBank Corp. FBNW ID 177,870 0.51 5.55 18.125 35.96 NA NA 113.35
FirstFed America Bancorp Inc. FAB MA 1,036,062 0.47 4.89 20.250 176.32 NA 23.01 129.56
FirstFed Bancorp Inc. FFDB AL 176,464 1.01 10.32 21.281 24.49 14.48 15.20 144.08
FirstFed Financial Corp. FED CA 4,104,647 0.56 11.68 38.188 404.32 17.76 17.36 190.84
FirstSpartan Financial Corp. FSPT SC 482,314 1.07 7.47 37.250 165.03 NA NA 127.70
FLAG Financial Corp. FLAG GA 238,463 0.72 7.98 18.500 37.68 18.50 18.50 173.55
Flagstar Bancorp Inc. FLGS MI 2,033,260 1.43 22.84 19.625 268.27 43.61 10.90 220.75
Flushing Financial Corp. FFIC NY 960,130 0.96 6.05 23.000 183.62 21.70 19.17 134.66
FMS Financial Corp. FMCO NJ 581,660 1.02 15.74 32.750 78.20 14.36 14.36 207.28
Fort Bend Holding Corp. FBHC TX 319,414 0.51 8.12 20.000 33.28 21.05 20.83 168.35
Fort Thomas Financial Corp. FTSB KY 97,843 1.22 7.18 14.875 22.24 18.83 16.17 140.86
Foundation Bancorp Inc. FOUN OH 36,605 0.80 4.11 15.500 7.17 23.48 22.79 104.17
Frankfort First Bancorp Inc. FKKYD KY 133,255 0.63 2.74 18.000 29.52 NM 18.75 131.58
FSF Financial Corp. FFHH MN 388,135 0.84 6.96 19.750 59.44 18.63 16.46 121.61
Fulton Bancorp Inc. FTNB MO 103,713 1.08 4.69 22.625 38.90 NA 26.93 152.05
GA Financial Inc. GAF PA 802,304 1.07 6.10 18.500 145.62 19.27 15.95 125.68
GFSB Bancorp Inc. GUPB NM 109,964 0.87 5.45 20.250 16.21 21.09 22.01 115.06
Gilmer Financial Svcs, Inc. GLMR TX 41,829 0.30 3.27 18.000 3.44 27.69 14.06 89.02
Glacier Bancorp Inc. GBCI MT 573,968 1.54 16.10 22.000 150.00 18.03 16.18 261.59
Glenway Financial Corp. GFCO OH 293,245 0.77 8.14 18.000 41.07 18.18 16.67 147.90
Golden State Bancorp Inc. GSB CA 16,432,304 0.74 11.69 34.563 1,743.90 25.23 21.60 213.88
Golden West Financial GDW CA 39,228,359 0.86 13.68 90.750 5,154.95 15.41 14.36 200.07
Great American Bancorp GTPS IL 139,568 0.59 2.65 18.500 31.39 47.44 35.58 100.33
Great Southern Bancorp Inc. GSBC MO 727,533 1.74 19.81 24.625 198.85 16.09 13.10 316.11
Green Street Financial Corp. GSFC NC 177,962 1.58 4.47 18.000 77.37 26.87 26.47 122.95
GreenPoint Financial Corp. GPT NY 13,093,985 1.05 10.01 66.750 2,858.64 18.75 17.57 198.37
GS Financial Corp. GSLA LA 131,071 1.32 3.50 17.500 60.17 NA 25.74 106.45
========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
========================================================================
First Independence Corp. FFSL KS 127.33 13.04 1.67
First Indiana Corporation FISB IN 211.47 20.14 1.63
First Keystone Financial FKFS PA 182.38 12.09 0.54
First Lancaster Bancshares FLKY KY 107.73 31.75 3.18
First Liberty Financial Corp. FLFC GA 278.40 18.52 1.43
First Midwest Financial Inc. CASH IA 153.74 14.68 2.18
First Mutual Bancorp Inc. FMBD IL 156.49 17.43 1.60
First Mutual Savings Bank FMSB WA 225.76 15.33 1.18
First Northern Capital Corp. FNGB WI 168.39 18.69 2.31
First Palm Beach Bancorp Inc. FFPB FL 177.18 10.82 1.55
First Savings Bancorp Inc. SOPN NC 128.87 29.73 3.71
First SB of Washington Bancorp FWWB WA 177.84 24.25 1.08
First SecurityFed Financial FSFF IL NA 38.20 -
First Shenango Bancorp Inc. SHEN PA 146.34 17.01 1.82
FirstBank Corp. FBNW ID 113.35 20.22 1.55
FirstFed America Bancorp Inc. FAB MA 129.56 17.02 -
FirstFed Bancorp Inc. FFDB AL 157.40 13.88 2.35
FirstFed Financial Corp. FED CA 192.77 9.85 -
FirstSpartan Financial Corp. FSPT SC 127.70 34.22 1.61
FLAG Financial Corp. FLAG GA 173.55 15.80 1.84
Flagstar Bancorp Inc. FLGS MI 229.80 13.19 -
Flushing Financial Corp. FFIC NY 140.24 19.12 1.04
FMS Financial Corp. FMCO NJ 210.34 13.44 0.86
Fort Bend Holding Corp. FBHC TX 180.34 10.42 2.00
Fort Thomas Financial Corp. FTSB KY 140.86 22.73 1.68
Foundation Bancorp Inc. FOUN OH 104.17 19.59 6.45
Frankfort First Bancorp Inc. FKKYD KY 131.58 22.15 4.44
FSF Financial Corp. FFHH MN 121.61 15.31 2.53
Fulton Bancorp Inc. FTNB MO 152.05 37.51 0.88
GA Financial Inc. GAF PA 126.89 18.15 2.60
GFSB Bancorp Inc. GUPB NM 115.06 14.74 1.98
Gilmer Financial Svcs, Inc. GLMR TX 89.02 8.22 -
Glacier Bancorp Inc. GBCI MT 268.29 26.13 2.18
Glenway Financial Corp. GFCO OH 149.75 14.01 2.22
Golden State Bancorp Inc. GSB CA 239.02 10.61 -
Golden West Financial GDW CA 200.07 13.14 0.55
Great American Bancorp GTPS IL 100.33 22.49 2.16
Great Southern Bancorp Inc. GSBC MO 316.11 27.33 1.79
Green Street Financial Corp. GSFC NC 122.95 43.48 2.44
GreenPoint Financial Corp. GPT NY 370.01 21.83 1.50
GS Financial Corp. GSLA LA 106.45 45.91 1.60
III-4
86
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
======================================================================================= =======================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
======================================================================================= =======================================
GSB Financial Corp. GOSB NY 154,649 NA NA 17.000 38.22 NA NA NA
Guthrie Savings Inc. GTSV OK 48,100 1.03 6.65 17.625 7.36 13.56 13.35 100.60
H.F. Ahmanson & Co. AHM CA 46,799,157 0.73 14.58 62.063 5,859.45 17.94 18.47 307.70
Hallmark Capital Corp. HALL WI 418,467 0.63 8.94 14.875 42.93 16.35 16.90 140.46
Harbor Federal Bancorp Inc. HRBF MD 217,202 0.71 5.50 23.000 38.95 24.47 23.00 137.40
Hardin Bancorp Inc. HFSA MO 117,364 0.75 5.55 17.750 15.25 18.49 20.17 112.70
Harleysville Savings Bank HARL PA 345,239 1.04 16.17 28.500 47.36 14.18 14.25 207.12
Harrington Financial Group HFGI IN 521,043 0.36 7.49 12.313 40.10 18.11 30.78 159.08
Harrodsburg First Fin Bancorp HFFB KY 108,949 1.35 4.99 17.625 35.69 29.87 22.03 112.40
Harvest Home Financial Corp. HHFC OH 87,596 0.57 4.44 14.750 13.49 56.73 19.41 130.42
Haven Bancorp Inc. HAVN NY 1,833,284 0.69 11.45 21.750 190.79 17.13 20.14 173.44
Hawthorne Financial Corp. HTHR CA 891,163 1.04 18.86 21.625 66.78 16.38 11.50 154.35
Haywood Bancshares Inc. HBS NC 152,796 1.37 9.41 21.375 26.73 13.70 8.10 123.34
HCB Bancshares Inc. HCBB AR 199,946 NA NA 13.750 36.37 NA 31.25 95.29
Hemlock Federal Financial Corp HMLK IL 161,905 0.80 5.32 17.375 36.08 NA 19.74 115.37
HF Bancorp Inc. HEMT CA 1,050,377 0.18 2.17 17.125 107.58 NM 53.52 129.15
HF Financial Corp. HFFC SD 574,889 0.94 10.13 25.875 76.01 13.84 11.76 142.01
HFB Financial Corp. HFBC KY 160,876 0.91 8.86 15.500 16.80 9.87 9.23 99.23
HFNC Financial Corp. HFNC NC 866,859 1.05 4.55 14.750 253.59 22.01 14.18 155.59
HFS Bank FSB HFSK IN 153,738 0.91 11.84 16.750 15.10 11.47 10.74 126.99
High Country Bancorp Inc. HCBC CO 76,324 0.38 4.61 14.750 19.51 NA NA NA
Highland Federal Bank FSB HBNK CA 515,990 0.86 11.72 32.875 75.62 13.93 11.26 191.13
Hingham Instit. for Savings HIFS MA 216,240 1.25 12.96 27.875 36.34 14.08 13.40 173.14
HMN Financial Inc. HMNF MN 568,847 0.85 5.81 26.250 109.82 18.62 17.27 130.66
Home Bancorp HBFW IN 334,862 0.89 6.29 26.875 67.85 35.36 21.67 152.53
Home Bancorp of Elgin Inc. HBEI IL 342,518 0.80 2.90 18.250 125.12 39.67 45.63 132.53
Home Building Bancorp HBBI IN 41,746 0.73 5.65 21.250 6.62 18.48 19.68 104.01
Home City Financial Corp. HCFC OH 70,110 1.25 6.49 17.250 15.60 NA 14.87 113.49
Home Federal Bancorp HOMF IN 694,109 1.21 14.44 26.500 135.35 15.77 14.40 225.15
Home Financial Bancorp HWEN IN 41,309 0.74 4.00 17.625 8.19 23.50 23.19 112.91
Home Port Bancorp Inc. HPBC MA 201,014 1.67 15.64 22.875 42.13 13.00 12.71 196.35
Horizon Financial Corp. HRZB WA 531,028 1.55 9.95 17.000 126.47 15.32 15.18 152.19
Horizon Financial Svcs Corp. HZFS IA 87,784 0.66 6.37 11.750 10.00 15.06 10.13 114.41
IBS Financial Corp. IBSF NJ 734,751 0.78 4.44 17.250 188.88 31.94 35.94 147.56
Independence Federal Svgs Bank IFSB DC 251,561 0.23 3.40 14.000 17.94 12.84 21.88 98.38
Industrial Bancorp Inc. INBI OH 354,116 1.44 7.92 17.750 91.82 17.57 17.75 150.94
InterWest Bancorp Inc. IWBK WA 2,046,705 0.98 14.90 39.750 320.00 16.03 15.53 246.44
Ipswich Savings Bank IPSW MA 202,509 0.97 16.37 13.125 31.27 15.63 14.27 274.58
ISB Financial Corp. ISBF LA 956,048 0.72 5.76 27.625 190.63 26.31 34.53 155.63
ITLA Capital Corp. ITLA CA 901,555 1.46 13.06 18.000 141.29 12.08 11.25 146.10
Jacksonville Bancorp Inc. JXVL TX 226,182 1.33 8.42 19.750 48.26 25.65 12.04 145.76
==========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
===========================================================================
GSB Financial Corp. GOSB NY NA 24.71 -
Guthrie Savings Inc. GTSV OK 100.60 15.30 -
H.F. Ahmanson & Co. AHM CA 362.09 12.52 1.42
Hallmark Capital Corp. HALL WI 140.46 10.26 -
Harbor Federal Bancorp Inc. HRBF MD 137.40 17.93 2.09
Hardin Bancorp Inc. HFSA MO 112.70 12.99 2.70
Harleysville Savings Bank HARL PA 207.12 13.72 1.54
Harrington Financial Group HFGI IN 159.08 7.70 0.98
Harrodsburg First Fin Bancorp HFFB KY 112.40 32.76 2.27
Harvest Home Financial Corp. HHFC OH 130.42 15.40 2.98
Haven Bancorp Inc. HAVN NY 174.00 10.41 1.38
Hawthorne Financial Corp. HTHR CA 154.35 7.49 -
Haywood Bancshares Inc. HBS NC 127.69 17.49 2.62
HCB Bancshares Inc. HCBB AR 98.85 18.19 -
Hemlock Federal Financial Corp HMLK IL 115.37 22.28 1.38
HF Bancorp Inc. HEMT CA 154.98 10.24 -
HF Financial Corp. HFFC SD 142.01 13.22 1.62
HFB Financial Corp. HFBC KY 99.23 10.44 2.71
HFNC Financial Corp. HFNC NC 155.59 29.25 1.90
HFS Bank FSB HFSK IN 126.99 9.82 2.63
High Country Bancorp Inc. HCBC CO NA 25.56 -
Highland Federal Bank FSB HBNK CA 191.13 14.66 -
Hingham Instit. for Savings HIFS MA 173.14 16.81 1.72
HMN Financial Inc. HMNF MN 130.66 19.31 -
Home Bancorp HBFW IN 152.53 20.26 0.74
Home Bancorp of Elgin Inc. HBEI IL 132.53 36.53 2.19
Home Building Bancorp HBBI IN 104.01 15.86 1.41
Home City Financial Corp. HCFC OH 113.49 22.25 2.09
Home Federal Bancorp HOMF IN 232.05 19.50 1.32
Home Financial Bancorp HWEN IN 112.91 19.83 1.14
Home Port Bancorp Inc. HPBC MA 196.35 20.96 3.50
Horizon Financial Corp. HRZB WA 152.19 23.82 2.59
Horizon Financial Svcs Corp. HZFS IA 114.41 11.39 1.53
IBS Financial Corp. IBSF NJ 147.56 25.71 2.32
Independence Federal Svgs Bank IFSB DC 110.50 7.13 1.57
Industrial Bancorp Inc. INBI OH 150.94 25.93 3.16
InterWest Bancorp Inc. IWBK WA 250.95 15.63 1.61
Ipswich Savings Bank IPSW MA 274.58 15.44 0.91
ISB Financial Corp. ISBF LA 181.86 19.94 1.81
ITLA Capital Corp. ITLA CA 146.70 15.67 -
Jacksonville Bancorp Inc. JXVL TX 145.76 21.34 2.53
III-5
87
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
==================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
==================================================================================================================================
Jefferson Savings Bancorp JSBA MO 1,257,753 0.76 9.32 41.750 209.02 19.42 21.30 169.92
Joachim Bancorp Inc. JOAC MO 35,073 0.79 2.72 15.000 10.84 39.47 41.67 109.81
JSB Financial Inc. JSB NY 1,531,068 1.72 7.67 49.063 486.63 17.22 14.96 136.63
Kankakee Bancorp Inc. KNK IL 339,937 0.87 8.11 34.250 48.83 16.79 17.47 125.69
Kentucky First Bancorp Inc. KYF KY 88,089 1.14 6.60 14.688 19.06 18.36 16.69 130.10
Kenwood Bancorp Inc. KNWP OH 49,044 (0.06) (0.63) 11.000 3.25 NA 21.15 75.14
Klamath First Bancorp KFBI OR 980,078 1.04 5.75 21.500 215.40 24.43 24.43 137.47
KS Bancorp Inc. KSAV NC 109,937 1.20 8.77 22.500 19.92 17.05 18.15 136.86
KSB Bancorp Inc. KSBK ME 149,657 1.08 14.95 20.563 25.46 15.94 13.53 231.04
Lakeview Financial LVSB NJ 505,882 0.93 9.48 25.000 112.73 20.83 16.45 182.35
Landmark Bancshares Inc. LARK KS 227,736 0.98 6.70 23.250 39.26 17.10 17.10 122.43
Laurel Capital Group Inc. LARL PA 209,980 1.41 13.60 28.125 40.69 14.35 13.79 185.03
Lawrence Savings Bank LSBX MA 352,980 1.74 20.08 15.750 67.48 11.50 11.25 200.89
Lenox Bancorp Inc. LNXC OH 48,707 0.69 4.55 16.750 6.86 22.95 24.63 99.17
Lexington B&L Financial Corp. LXMO MO 59,236 1.32 4.46 17.125 19.50 30.04 19.46 116.26
Life Financial Corp. LFCO CA 294,102 5.42 46.82 13.000 85.04 6.02 5.42 171.96
Little Falls Bancorp Inc. LFBI NJ 324,425 0.51 3.93 20.250 52.81 30.22 28.13 139.37
Logansport Financial Corp. LOGN IN 85,801 1.47 7.54 16.000 20.17 17.78 17.39 124.42
London Financial Corporation LONF OH 38,210 0.96 4.63 15.250 7.86 18.83 14.12 103.32
Long Island Bancorp Inc. LISB NY 5,930,784 0.73 7.93 45.375 1,090.04 21.81 20.63 199.54
LSB Financial Corp. LSBI IN 200,266 0.69 7.65 27.750 25.43 16.62 15.08 137.10
MAF Bancorp Inc. MAFB IL 3,370,587 1.15 14.72 34.250 517.23 14.64 14.76 198.90
Marion Capital Holdings MARN IN 179,822 1.68 7.40 27.000 48.00 16.98 18.75 121.51
Market Financial Corp. MRKF OH 56,121 0.99 3.66 15.438 20.62 NA 25.73 103.68
Maryland Federal Bancorp MFSL MD 1,175,006 0.91 11.00 27.000 174.62 23.48 18.75 175.10
MASSBANK Corp. MASB MA 932,757 1.03 9.90 47.000 167.86 17.41 16.79 166.37
Mayflower Co-operative Bank MFLR MA 129,033 0.94 9.79 23.750 21.15 16.27 16.05 170.01
MBLA Financial Corp. MBLF MO 224,013 0.85 6.63 27.000 34.22 20.15 17.76 120.81
MCM Savings Bank FSB MCMS MO 63,865 0.25 4.03 21.000 3.82 NM 12.80 95.67
Mechanics Savings Bank MECH CT 830,741 1.79 17.83 26.750 141.59 9.98 18.58 163.81
Medford Bancorp Inc. MDBK MA 1,106,345 1.00 11.19 38.250 173.70 16.00 16.78 174.18
Meritrust Federal SB MERI LA 233,311 1.15 14.61 69.000 53.42 21.23 21.56 277.22
Metropolitan Financial Corp. METF OH 865,572 0.60 15.21 15.250 107.53 20.61 18.15 308.08
MetroWest Bank MWBX MA 585,760 1.37 18.02 8.750 122.12 16.51 15.63 279.55
MFB Corp. MFBC IN 255,921 0.83 5.62 23.500 38.79 20.61 20.26 115.71
Mid-Central Financial Corp. MCFC MN 57,123 0.93 9.77 21.750 4.86 9.98 8.63 90.78
Mid-Coast Bancorp Inc. MCBN ME 61,473 0.72 8.25 28.750 6.70 14.82 13.31 126.93
Mid-Iowa Financial Corp. MIFC IA 128,017 1.15 12.41 11.250 18.88 12.50 14.06 156.47
Midland Federal S&LA MIDF IL 109,599 0.62 8.90 21.000 7.28 9.37 10.50 89.21
Midwest Bancshares Inc. MWBI IA 149,850 0.77 11.05 17.750 18.07 15.99 11.68 174.36
Midwest Savings Bank MDWB IL 43,342 0.44 6.21 15.437 2.96 12.76 12.45 98.01
==========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
==========================================================================
Jefferson Savings Bancorp JSBA MO 216.66 16.62 1.34
Joachim Bancorp Inc. JOAC MO 109.81 30.91 3.33
JSB Financial Inc. JSB NY 136.63 31.78 2.85
Kankakee Bancorp Inc. KNK IL 133.32 14.36 1.40
Kentucky First Bancorp Inc. KYF KY 130.10 21.64 3.40
Kenwood Bancorp Inc. KNWP OH 75.14 6.63 2.55
Klamath First Bancorp KFBI OR 151.20 21.98 1.49
KS Bancorp Inc. KSAV NC 136.94 18.12 2.67
KSB Bancorp Inc. KSBK ME 243.06 17.01 0.39
Lakeview Financial LVSB NJ 212.77 22.28 0.50
Landmark Bancshares Inc. LARK KS 122.43 17.24 1.72
Laurel Capital Group Inc. LARL PA 185.03 19.38 1.85
Lawrence Savings Bank LSBX MA 200.89 19.12 -
Lenox Bancorp Inc. LNXC OH 99.17 14.08 1.19
Lexington B&L Financial Corp. LXMO MO 116.26 32.92 1.75
Life Financial Corp. LFCO CA 171.96 28.92 -
Little Falls Bancorp Inc. LFBI NJ 151.12 16.28 0.99
Logansport Financial Corp. LOGN IN 124.42 23.51 2.50
London Financial Corporation LONF OH 103.32 20.57 1.57
Long Island Bancorp Inc. LISB NY 201.40 18.38 1.32
LSB Financial Corp. LSBI IN 137.10 12.70 1.23
MAF Bancorp Inc. MAFB IL 226.37 15.35 0.82
Marion Capital Holdings MARN IN 121.51 26.69 3.26
Market Financial Corp. MRKF OH 103.68 36.74 1.81
Maryland Federal Bancorp MFSL MD 177.17 14.86 1.56
MASSBANK Corp. MASB MA 168.88 18.00 2.04
Mayflower Co-operative Bank MFLR MA 172.73 16.39 2.86
MBLA Financial Corp. MBLF MO 120.81 15.28 1.48
MCM Savings Bank FSB MCMS MO 95.67 5.98 0.95
Mechanics Savings Bank MECH CT 163.81 17.04 -
Medford Bancorp Inc. MDBK MA 185.86 15.70 1.88
Meritrust Federal SB MERI LA 277.22 22.90 1.01
Metropolitan Financial Corp. METF OH 337.39 12.42 -
MetroWest Bank MWBX MA 279.55 20.85 1.37
MFB Corp. MFBC IN 115.71 15.16 1.36
Mid-Central Financial Corp. MCFC MN 90.78 8.51 1.38
Mid-Coast Bancorp Inc. MCBN ME 126.93 10.90 1.81
Mid-Iowa Financial Corp. MIFC IA 156.69 14.75 0.71
Midland Federal S&LA MIDF IL 89.21 6.64 1.43
Midwest Bancshares Inc. MWBI IA 174.36 12.06 1.35
Midwest Savings Bank MDWB IL 98.01 6.83 -
III-6
88
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
=================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
=================================================================================================================================
Milton Federal Financial Corp. MFFC OH 209,958 0.65 4.52 15.000 34.57 23.81 23.44 121.85
Mississippi View Holding Co. MIVI MN 68,546 1.05 5.95 17.500 12.95 18.23 18.23 107.36
Mitchell Bancorp Inc. MBSP NC 34,591 1.62 3.79 17.250 16.06 27.82 28.75 112.30
Monterey Bay Bancorp Inc. MBBC CA 409,663 0.42 3.79 19.250 62.17 32.63 30.08 123.40
Montgomery Financial Corp. MONT IN 101,986 0.69 5.12 12.250 20.25 NA NA 103.73
MSB Bancorp Inc. MBB NY 773,991 0.54 6.06 30.500 86.75 27.23 23.11 136.16
MSB Financial Inc. MSBF MI 77,014 1.44 8.08 19.500 24.06 21.91 20.31 188.77
Mutual Community Savings Bank MTUC NC 59,620 0.21 1.67 11.375 4.12 NM 9.81 53.81
Mutual Savings Bank FSB MSBK MI 654,127 0.02 0.35 12.750 54.56 85.00 79.69 131.04
New Hampshire Thrift Bncshrs NHTB NH 319,338 0.60 8.11 21.250 44.09 21.46 16.10 176.50
NewMil Bancorp Inc. NMSB CT 317,407 0.82 7.93 13.125 50.34 20.51 19.30 155.88
North American Savings Bank NASB MO 736,585 1.20 16.21 54.000 120.76 13.33 10.89 212.85
North Bancshares Inc. NBSI IL 122,081 0.56 3.86 25.875 24.73 34.50 53.91 151.85
North Central Bancshares Inc. FFFD IA 215,133 1.84 7.57 18.750 61.25 16.30 15.12 123.93
Northeast Bancorp NBN ME 265,442 0.61 7.89 27.500 40.75 23.11 20.22 192.71
Northeast Indiana Bancorp NEIB IN 190,319 1.20 7.78 20.000 35.25 16.53 15.15 128.95
Northwest Equity Corp. NWEQ WI 96,954 0.99 8.42 19.250 16.15 15.52 14.58 132.48
NorthWest Indiana Bancorp NWIN IN 307,522 1.11 11.81 42.500 58.71 17.28 17.42 202.28
NS&L Bancorp Inc. NSLB MO 59,711 0.77 3.72 18.500 13.09 42.05 24.34 112.05
NSS Bancorp Inc. NSSY CT 670,749 0.33 4.07 38.000 93.34 15.45 13.77 168.96
Nutmeg Federal S&LA NTMG CT 105,151 0.50 7.18 10.750 10.61 26.22 29.86 182.82
Ocean Financial Corp. OCFC NJ 1,489,220 1.00 5.71 37.125 297.55 22.64 20.63 134.36
Ocwen Financial Corp. OCN FL 2,956,300 1.74 19.54 24.750 1,497.50 16.61 17.68 358.18
Ohio State Financial Services OSFS OH 38,559 0.98 6.13 14.870 9.43 NA NA 90.29
OHSL Financial Corp. OHSL OH 234,600 0.88 7.86 26.500 32.72 16.16 16.16 123.72
Oregon Trail Financial Corp. OTFC OR 341,988 NA NA 16.000 75.12 NA NA NA
Ottawa Financial Corp. OFCP MI 866,966 0.79 8.88 28.625 152.60 23.27 23.85 202.30
Pamrapo Bancorp Inc. PBCI NJ 371,958 1.33 9.61 25.125 71.43 15.32 14.28 148.76
Park Bancorp Inc. PFED IL 174,515 1.06 4.65 17.875 43.46 21.80 22.34 107.62
Parkvale Financial Corporation PVSA PA 1,005,440 1.08 14.93 28.000 142.97 14.00 13.73 184.21
Peekskill Financial Corp. PEEK NY 181,242 1.15 4.33 17.500 55.88 26.12 25.74 118.16
Pekin Savings SB PEKS IL 84,910 0.78 9.49 62.500 10.51 25.61 14.60 147.65
PenFed Bancorp Incorporated PFBXX KY 30,485 0.88 5.09 13.000 3.86 NM NM 80.95
PennFed Financial Services Inc PFSB NJ 1,363,950 0.82 10.96 33.500 161.56 15.44 14.96 149.35
PennFirst Bancorp Inc. PWBC PA 822,350 0.66 8.61 18.625 98.91 17.91 17.25 143.71
Pennwood Bancorp Inc. PWBK PA 47,645 1.08 5.66 18.500 10.54 21.51 19.27 120.60
Peoples-Sidney Financial Corp. PSFC OH 102,835 1.04 6.37 17.250 30.80 NA 21.56 109.73
Peoples Bancorp PFDC IN 290,601 1.48 9.69 24.000 81.41 19.67 18.18 183.77
People's Bancshares Inc. PBKB MA 717,451 0.47 8.45 21.750 71.41 16.11 15.10 242.75
Peoples Financial Corp. PFFC OH 86,486 0.90 3.54 14.500 21.25 NA 25.89 91.89
Peoples Heritage Finl Group PHBK ME 6,056,083 1.30 16.37 43.500 1,196.29 17.06 15.99 264.92
=========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
=========================================================================
Milton Federal Financial Corp. MFFC OH 121.85 16.47 4.00
Mississippi View Holding Co. MIVI MN 107.36 18.89 0.91
Mitchell Bancorp Inc. MBSP NC 112.30 46.43 2.32
Monterey Bay Bancorp Inc. MBBC CA 133.13 15.18 0.62
Montgomery Financial Corp. MONT IN 103.73 19.86 1.80
MSB Bancorp Inc. MBB NY 255.44 11.21 1.97
MSB Financial Inc. MSBF MI 188.77 31.24 1.44
Mutual Community Savings Bank MTUC NC 59.28 6.91 3.17
Mutual Savings Bank FSB MSBK MI 131.04 8.34 -
New Hampshire Thrift Bncshrs NHTB NH 205.51 13.81 2.35
NewMil Bancorp Inc. NMSB CT 155.88 15.86 2.44
North American Savings Bank NASB MO 220.23 16.39 1.48
North Bancshares Inc. NBSI IL 151.85 20.26 1.86
North Central Bancshares Inc. FFFD IA 123.93 28.47 1.33
Northeast Bancorp NBN ME 218.08 15.35 1.16
Northeast Indiana Bancorp NEIB IN 128.95 18.52 1.70
Northwest Equity Corp. NWEQ WI 132.48 16.66 2.91
NorthWest Indiana Bancorp NWIN IN 202.28 19.09 3.01
NS&L Bancorp Inc. NSLB MO 112.05 21.92 2.70
NSS Bancorp Inc. NSSY CT 174.07 13.92 1.05
Nutmeg Federal S&LA NTMG CT 182.82 10.09 1.40
Ocean Financial Corp. OCFC NJ 134.36 19.98 2.16
Ocwen Financial Corp. OCN FL 367.76 50.65 -
Ohio State Financial Services OSFS OH 90.29 24.46 -
OHSL Financial Corp. OHSL OH 123.72 13.95 3.32
Oregon Trail Financial Corp. OTFC OR NA 21.97 -
Ottawa Financial Corp. OFCP MI 250.44 17.60 1.40
Pamrapo Bancorp Inc. PBCI NJ 149.82 19.20 3.98
Park Bancorp Inc. PFED IL 107.62 24.90 -
Parkvale Financial Corporation PVSA PA 185.43 14.22 1.86
Peekskill Financial Corp. PEEK NY 118.16 30.83 2.06
Pekin Savings SB PEKS IL 147.65 12.38 1.60
PenFed Bancorp Incorporated PFBXX KY 80.95 12.66 -
PennFed Financial Services Inc PFSB NJ 176.41 11.85 0.84
PennFirst Bancorp Inc. PWBC PA 161.68 12.03 1.93
Pennwood Bancorp Inc. PWBK PA 120.60 22.12 1.73
Peoples-Sidney Financial Corp. PSFC OH 109.73 29.95 1.62
Peoples Bancorp PFDC IN 183.77 28.01 1.78
People's Bancshares Inc. PBKB MA 253.20 9.95 2.02
Peoples Financial Corp. PFFC OH 91.89 24.57 3.45
Peoples Heritage Finl Group PHBK ME 310.27 19.75 1.93
III-7
89
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
==============================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
==============================================================================================================================
Peoples Savings Bank of Troy PESV OH 128,229 1.34 12.97 14.250 25.85 16.38 16.19 191.28
Peoples Savings Financial Corp PSVF PA 43,991 1.00 4.92 24.500 10.84 24.26 23.56 117.34
Permanent Bancorp Inc. PERM IN 433,568 0.62 6.61 26.063 54.81 21.54 21.72 128.71
Perpetual Federal Savings Bank PFOH OH 214,649 1.71 10.57 17.250 38.36 13.58 10.78 109.87
Perpetual Midwest Financial PMFI IA 401,665 0.32 3.78 27.625 51.74 33.69 23.81 151.45
Perry County Financial Corp. PCBC MO 81,105 1.07 5.72 23.250 19.25 24.22 19.38 123.60
PFF Bancorp Inc. PFFB CA 2,615,466 0.46 4.33 19.125 342.40 28.98 25.16 130.19
Piedmont Bancorp Inc. PDB NC 126,544 0.57 3.19 10.625 29.23 NM 17.71 140.54
Pioneer Financial Corporation PONE KY 76,830 1.33 11.45 42.500 NA 11.55 8.57 103.33
Pittsburgh Home Financial Corp PHFC PA 273,304 0.76 6.02 17.875 35.20 17.19 14.90 122.18
Potters Financial Corp. PTRS OH 122,716 0.96 10.72 18.500 17.85 15.81 16.52 165.03
Prestige Bancorp Inc. PRBC PA 137,834 0.62 5.11 19.250 17.61 21.15 20.05 114.04
Princeton Federal Bank FSB PRNXX KY 31,738 0.88 6.28 17.500 4.57 24.65 14.11 104.35
Progress Financial Corp. PFNC PA 436,746 0.71 13.62 15.375 61.18 17.88 19.22 262.82
Progressive Bank Inc. PSBK NY 884,617 0.94 11.17 36.250 138.79 16.48 15.90 179.63
Provident Financial Holdings PROV CA 640,634 0.36 2.55 21.750 105.19 22.66 16.99 123.16
PS Financial Inc. PSFI IL 85,698 2.10 5.43 18.250 37.85 NA 24.01 123.64
Pulse Bancorp PULS NJ 526,016 1.10 14.06 26.750 82.40 14.86 14.86 190.66
PVF Capital Corp. PVFC OH 383,278 1.31 18.82 20.750 53.75 11.53 11.28 195.20
QCF Bancorp Inc. QCFB MN 158,192 1.65 9.33 28.500 39.44 14.54 13.70 151.35
Quaker City Bancorp Inc. QCBC CA 847,024 0.69 7.79 22.000 102.81 18.33 16.67 143.51
Queens County Bancorp Inc. QCSB NY 1,541,049 1.55 11.55 36.500 551.45 25.70 24.01 275.26
Raritan Bancorp Inc. RARB NJ 407,262 1.02 13.07 27.500 65.24 17.86 18.09 217.56
RedFed Bancorp Inc. REDF CA 967,309 1.02 12.25 19.625 140.88 15.58 12.91 175.07
Redwood Financial Inc. REDW MN 64,651 0.84 3.81 12.000 10.97 27.27 21.43 91.46
Reliancd Bancshares Inc. RELI WI 46,987 1.29 2.52 8.875 21.94 34.13 16.16 96.68
Reliance Bancorp Inc. RELY NY 2,034,753 0.84 10.22 34.250 298.40 17.93 31.70 177.55
River Valley Bancorp RIVR IN 138,461 0.57 4.75 18.125 21.57 NA 15.63 122.47
Riverview Bancorp Inc. RVSB WA 282,247 1.23 11.07 15.125 92.69 NM NM 158.21
Rocky Ford Financial Inc. RFFC CO 23,708 1.08 7.03 14.125 5.98 NA NA 93.85
Roslyn Bancorp Inc. RSLN NY 3,474,150 1.17 6.80 22.000 960.13 NA 19.64 156.70
S. Carolina Community Bancshrs SCCB SC 45,619 1.15 4.37 22.500 15.72 28.85 31.25 129.68
Sandwich Bancorp Inc. SWCB MA 511,765 0.95 11.95 41.000 78.68 17.37 16.53 193.76
Scotland Bancorp Inc. SSB NC 64,399 1.88 6.36 10.250 19.61 13.85 10.68 134.69
Security Bancorp Inc. SCYT TN 49,130 NA NA 15.500 6.76 NA 11.74 103.68
Security Federal Bancorp Inc. SIYF AL 77,704 1.00 8.08 20.750 13.93 15.15 16.21 152.46
Security First Corp. SFSL OH 680,827 1.37 14.73 20.500 155.31 19.71 18.98 246.69
SFB Bancorp Inc. SFBK TN 52,757 1.16 7.65 15.500 11.89 NA 14.35 98.98
SFS Bancorp Inc. SFED NY 174,093 0.69 5.48 24.500 30.16 24.75 24.50 138.89
SGV Bancorp Inc. SGVB CA 408,975 0.31 3.95 17.250 40.41 25.37 28.75 132.90
Shelby County Bancorp SCBXX IN 88,776 0.78 9.99 25.000 4.40 10.08 8.33 62.59
==========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
==========================================================================
Peoples Savings Bank of Troy PESV OH 191.28 20.16 0.49
Peoples Savings Financial Corp PSVF PA 117.34 24.64 4.08
Permanent Bancorp Inc. PERM IN 130.45 12.64 1.54
Perpetual Federal Savings Bank PFOH OH 109.87 17.87 3.01
Perpetual Midwest Financial PMFI IA 151.45 12.88 1.09
Perry County Financial Corp. PCBC MO 123.60 23.73 1.72
PFF Bancorp Inc. PFFB CA 131.53 13.09 -
Piedmont Bancorp Inc. PDB NC 140.54 23.10 3.77
Pioneer Financial Corporation PONE KY 103.33 NA 3.77
Pittsburgh Home Financial Corp PHFC PA 123.45 12.88 1.34
Potters Financial Corp. PTRS OH 165.03 14.55 1.08
Prestige Bancorp Inc. PRBC PA 114.04 12.78 0.62
Princeton Federal Bank FSB PRNXX KY 104.35 14.40 5.71
Progress Financial Corp. PFNC PA 294.54 14.01 0.78
Progressive Bank Inc. PSBK NY 199.39 15.69 1.88
Provident Financial Holdings PROV CA 123.16 16.42 -
PS Financial Inc. PSFI IL 123.64 44.17 2.63
Pulse Bancorp PULS NJ 190.66 15.66 2.62
PVF Capital Corp. PVFC OH 195.20 14.02 -
QCF Bancorp Inc. QCFB MN 151.35 24.93 -
Quaker City Bancorp Inc. QCBC CA 143.51 12.14 -
Queens County Bancorp Inc. QCSB NY 275.26 35.78 2.19
Raritan Bancorp Inc. RARB NJ 220.88 16.02 1.75
RedFed Bancorp Inc. REDF CA 175.69 14.56 -
Redwood Financial Inc. REDW MN 91.46 16.97 -
Reliancd Bancshares Inc. RELI WI 96.68 46.69 -
Reliance Bancorp Inc. RELY NY 241.71 14.67 1.87
River Valley Bancorp RIVR IN 124.23 15.58 0.88
Riverview Bancorp Inc. RVSB WA 164.22 32.84 -
Rocky Ford Financial Inc. RFFC CO 93.85 25.22 -
Roslyn Bancorp Inc. RSLN NY 157.48 27.64 1.27
S. Carolina Community Bancshrs SCCB SC 129.68 34.46 2.67
Sandwich Bancorp Inc. SWCB MA 201.57 15.37 3.42
Scotland Bancorp Inc. SSB NC 134.69 30.45 2.93
Security Bancorp Inc. SCYT TN 103.68 13.76 -
Security Federal Bancorp Inc. SIYF AL 152.46 17.93 -
Security First Corp. SFSL OH 250.61 22.81 1.56
SFB Bancorp Inc. SFBK TN 98.98 22.54 -
SFS Bancorp Inc. SFED NY 138.89 17.32 1.14
SGV Bancorp Inc. SGVB CA 134.98 9.88 -
Shelby County Bancorp SCBXX IN 62.59 4.96 1.60
III-8
90
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
=================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
=================================================================================================================================
SHS Bancorp Inc. SHSB PA 88,460 0.34 4.43 16.250 13.32 NA NA NA
SIS Bancorp Inc. SISB MA 1,453,017 0.82 11.33 37.500 209.28 18.29 16.45 197.99
Sistersville Bancorp Inc. SVBC WV 32,568 NA NA 15.500 10.25 NA 22.79 94.98
Skaneateles Bancorp Inc. SKAN NY 247,643 0.68 9.99 18.750 26.90 15.89 15.63 154.96
Sobieski Bancorp Inc. SOBI IN 84,279 0.57 3.56 19.500 15.20 29.55 27.08 112.98
South Street Financial Corp. SSFC NC 240,524 1.19 6.62 18.938 85.15 NA 27.85 127.61
Southern Banc Co. SRN AL 106,164 0.47 2.77 17.750 21.84 42.26 34.13 120.42
Southern Community Bancshares SCBS AL 70,370 0.90 5.16 19.000 21.61 NA 22.62 144.05
Southern Missouri Bancorp Inc. SMBC MO 163,297 0.90 5.61 20.125 32.44 21.41 22.87 123.01
SouthFirst Bancshares Inc. SZB AL 97,283 0.17 1.24 20.625 17.48 NM 34.38 128.42
Southwest Bancshares SWBI IL 375,004 1.02 9.55 25.250 67.13 17.53 16.61 157.71
Sovereign Bancorp Inc. SVRN PA 14,601,008 0.65 12.46 21.500 1,919.42 31.62 NM 293.32
St. Francis Capital Corp. STFR WI 1,660,649 0.76 9.08 40.500 212.14 18.41 17.16 165.04
St. Landry Financial Corp. SLAN LA 58,660 0.33 2.77 16.000 6.63 NM 16.00 97.50
St. Paul Bancorp Inc. SPBC IL 4,548,436 1.07 12.11 24.750 845.65 18.33 17.68 206.59
StateFed Financial Corp. SFFC IA 87,542 1.28 7.20 13.500 21.03 18.75 22.50 136.92
Statewide Financial Corp. SFIN NJ 703,112 0.81 8.46 22.500 101.46 17.72 17.05 156.90
Sterling Financial Corp. STSA WA 1,870,513 0.54 9.50 21.375 161.75 17.52 16.19 164.68
Stone Street Bancorp Inc. SSM NC 104,773 1.56 4.57 22.250 42.23 25.00 27.81 136.34
Sturgis B&TC, FSB STUR MI 192,271 0.82 9.82 27.500 33.05 19.37 15.63 205.84
SuburbFed Financial Corp. SFSB IL 432,559 0.54 8.28 36.000 45.46 17.65 16.67 158.38
SWVA Bancshares Inc. SWVB VA 72,187 0.89 7.42 19.750 10.09 12.99 20.57 123.36
Tappan Zee Financial Inc. TPNZ NY 124,603 0.84 4.77 19.250 28.65 26.74 28.31 134.05
Teche Holding Co. TSH LA 404,097 0.94 7.01 21.000 72.19 17.65 18.75 132.83
Telebanc Financial Corp. TBFC VA 838,533 0.24 5.20 17.500 38.92 12.07 16.83 129.15
Texarkana First Financial Corp FTF AR 178,710 1.69 10.66 25.750 46.02 15.70 14.63 168.08
TF Financial Corp. THRD PA 625,338 0.67 6.02 29.250 93.23 23.98 22.16 152.26
Three Rivers Financial Corp. THR MI 94,216 0.86 6.19 20.250 16.68 19.10 17.46 128.57
Towne Financial Corp. TOFI OH 108,300 0.61 8.21 27.000 5.63 8.91 7.94 72.19
TR Financial Corp. ROSE NY 3,691,564 0.87 14.14 33.250 584.94 17.78 16.30 238.52
Trenton SB (MHC) TSBS NJ 638,942 0.90 5.26 37.750 341.48 43.39 52.43 315.37
Tri-County Bancorp Inc. TRIC WY 88,173 1.07 7.26 13.688 15.98 18.01 19.01 118.31
TSB Financial Inc. TSBF IL 29,859 0.90 7.06 14.500 3.31 12.50 10.36 84.94
Twin City Bancorp TWIN TN 106,931 0.72 5.59 14.250 18.13 19.79 15.49 131.09
Union Financial Bcshs, Inc. UFBS SC 171,245 0.99 11.31 24.250 19.88 20.04 14.10 151.75
United Federal Savings Bank UFRM NC 285,744 0.57 7.55 10.500 32.28 16.67 16.41 153.96
United Financial Corp. UBMT MT 103,082 1.40 6.01 25.250 30.89 20.53 19.13 124.75
USABancshares, Inc. USAB PA 64,269 0.47 4.08 9.750 7.14 33.62 15.23 144.87
Vermilion Bancorp Inc. VBAS IL 37,391 0.41 4.12 14.500 5.31 NA 19.08 90.97
Virginia Beach Fed. Financial VABF VA 605,486 0.49 7.24 16.500 82.16 22.00 18.75 189.66
Warren Bancorp Inc. WRNB MA 364,130 1.76 17.57 20.250 77.02 10.38 12.05 198.53
==========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
==========================================================================
SHS Bancorp Inc. SHSB PA NA 15.06 -
SIS Bancorp Inc. SISB MA 197.99 14.40 1.49
Sistersville Bancorp Inc. SVBC WV 94.98 31.47 -
Skaneateles Bancorp Inc. SKAN NY 159.57 10.86 1.42
Sobieski Bancorp Inc. SOBI IN 112.98 18.04 1.64
South Street Financial Corp. SSFC NC 127.61 35.40 2.11
Southern Banc Co. SRN AL 121.49 20.57 1.97
Southern Community Bancshares SCBS AL 144.05 30.71 1.58
Southern Missouri Bancorp Inc. SMBC MO 123.01 19.87 2.48
SouthFirst Bancshares Inc. SZB AL 128.42 17.97 2.42
Southwest Bancshares SWBI IL 157.71 17.90 3.17
Sovereign Bancorp Inc. SVRN PA 358.93 13.15 0.37
St. Francis Capital Corp. STFR WI 186.55 12.77 1.38
St. Landry Financial Corp. SLAN LA 97.50 11.30 -
St. Paul Bancorp Inc. SPBC IL 207.11 18.59 1.62
StateFed Financial Corp. SFFC IA 136.92 24.02 1.48
Statewide Financial Corp. SFIN NJ 157.12 14.43 1.96
Sterling Financial Corp. STSA WA 179.92 8.65 -
Stone Street Bancorp Inc. SSM NC 136.34 40.31 2.02
Sturgis B&TC, FSB STUR MI 221.95 17.19 1.16
SuburbFed Financial Corp. SFSB IL 158.94 10.51 0.89
SWVA Bancshares Inc. SWVB VA 123.36 13.98 1.52
Tappan Zee Financial Inc. TPNZ NY 134.05 22.99 1.46
Teche Holding Co. TSH LA 132.83 17.86 2.38
Telebanc Financial Corp. TBFC VA 130.60 4.64 -
Texarkana First Financial Corp FTF AR 168.08 25.75 2.18
TF Financial Corp. THRD PA 172.46 14.91 1.37
Three Rivers Financial Corp. THR MI 129.06 17.70 1.98
Towne Financial Corp. TOFI OH 75.67 5.20 -
TR Financial Corp. ROSE NY 238.52 15.85 1.93
Trenton SB (MHC) TSBS NJ 350.51 53.44 0.93
Tri-County Bancorp Inc. TRIC WY 118.31 18.12 2.92
TSB Financial Inc. TSBF IL 84.94 11.09 1.72
Twin City Bancorp TWIN TN 131.09 16.95 2.81
Union Financial Bcshs, Inc. UFBS SC 185.11 11.61 2.23
United Federal Savings Bank UFRM NC 153.96 11.30 2.29
United Financial Corp. UBMT MT 124.75 29.97 3.96
USABancshares, Inc. USAB PA 147.06 11.11 -
Vermilion Bancorp Inc. VBAS IL 90.97 14.20 -
Virginia Beach Fed. Financial VABF VA 189.66 13.57 1.21
Warren Bancorp Inc. WRNB MA 198.53 21.15 2.57
III-9
91
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
===================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
===================================================================================================================================
Washington Bancorp WBIO IA 66,146 1.16 7.08 18.250 11.88 15.08 18.25 109.81
Washington Fed Bank for Svgs WFBS IL 25,694 0.65 6.06 19.687 2.70 17.27 12.30 106.53
Washington Federal Inc. WFSL WA 5,719,589 1.85 15.62 32.000 1,520.28 14.48 14.04 211.78
Washington Mutual Inc. WAMU WA 95,607,369 0.68 11.92 68.875 17,713.00 129.95 NM 339.62
Washington Savings Bank, FSB WSB MD 267,870 0.62 7.14 7.125 30.98 29.69 14.84 138.08
Wayne Bancorp Inc. WYNE NJ 267,285 0.86 6.01 21.750 43.80 20.14 21.75 131.90
Webster Financial Corp. WBST CT 6,811,014 0.73 13.84 62.875 852.22 29.52 22.78 234.35
Wells Financial Corp. WEFC MN 204,761 1.04 7.37 18.500 36.25 16.82 15.95 124.50
West Town Bancorp Inc. WESXX IL 28,199 0.58 3.98 11.000 2.47 14.86 19.64 62.22
Westco Bancorp WCBI IL 309,070 1.41 9.19 26.500 65.56 15.59 14.10 136.46
Westcorp WES CA 3,757,362 (0.01) (0.11) 17.188 451.29 13.02 12.64 132.22
WesterFed Financial Corp. WSTR MT 999,203 0.76 6.60 24.063 134.20 19.10 18.80 126.45
Western Ohio Financial Corp. WOFC OH 397,425 0.43 3.16 26.500 62.43 39.55 220.83 113.25
Westwood Homestead Fin. Corp. WEHO OH 142,878 1.09 3.50 15.500 43.13 31.00 48.44 109.15
WHG Bancshares Corp. WHGB MD 100,235 0.85 3.72 15.875 23.21 45.36 23.35 112.11
Wilshire Financial Services WFSG OR 1,369,761 1.62 25.01 26.750 202.50 NA 8.57 280.10
Winton Financial Corp. WFI OH 324,532 0.86 12.06 19.750 39.23 12.19 11.22 168.52
Wood Bancorp Inc. FFWD OH 166,520 1.29 10.20 18.500 39.22 18.32 16.52 189.36
WSB Holding Co. WSBH PA 35,637 NA NA 13.750 4.55 NA NA 92.72
WSFS Financial Corp. WSFS DE 1,495,609 1.13 20.39 20.250 251.96 15.94 14.89 304.05
WVS Financial Corp. WVFC PA 282,235 1.28 10.65 32.000 55.94 15.46 15.09 165.12
Yonkers Financial Corporation YFCB NY 312,956 1.07 6.79 18.250 55.13 17.89 16.90 125.60
York Financial Corp. YFED PA 1,155,725 0.80 9.70 25.250 222.36 20.70 24.28 217.30
Average 1,311,512 0.92 8.41 23.69 215.54 17.52 16.85 154.26
Median 273,661 0.89 7.65 20.38 44.88 17.54 16.81 140.70
===========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
===========================================================================
Washington Bancorp WBIO IA 109.81 17.96 2.19
Washington Fed Bank for Svgs WFBS IL 106.53 10.51 2.54
Washington Federal Inc. WFSL WA 230.71 26.58 2.88
Washington Mutual Inc. WAMU WA 366.55 18.53 1.63
Washington Savings Bank, FSB WSB MD 138.08 11.57 1.40
Wayne Bancorp Inc. WYNE NJ 131.90 16.39 0.92
Webster Financial Corp. WBST CT 272.19 12.51 1.27
Wells Financial Corp. WEFC MN 124.50 17.70 2.60
West Town Bancorp Inc. WESXX IL 62.22 8.76 -
Westco Bancorp WCBI IL 136.46 21.21 2.57
Westcorp WES CA 132.52 12.01 2.33
WesterFed Financial Corp. WSTR MT 156.76 13.43 1.91
Western Ohio Financial Corp. WOFC OH 121.34 15.71 3.77
Westwood Homestead Fin. Corp. WEHO OH 109.15 30.19 1.81
WHG Bancshares Corp. WHGB MD 112.11 23.16 2.02
Wilshire Financial Services WFSG OR 280.10 14.78 -
Winton Financial Corp. WFI OH 171.89 12.09 2.33
Wood Bancorp Inc. FFWD OH 189.36 23.55 2.16
WSB Holding Co. WSBH PA 92.72 12.77 -
WSFS Financial Corp. WSFS DE 306.35 16.85 -
WVS Financial Corp. WVFC PA 165.12 19.82 3.75
Yonkers Financial Corporation YFCB NY 125.60 17.62 1.32
York Financial Corp. YFED PA 217.30 19.24 1.90
Average 160.14 18.40 1.53
Median 144.91 16.79 1.54
Note: average and median price/earnings ratios exclude values greater than 25.
III-10
92
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
=================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
=================================================================================================================================
THRIFTS UNDER ACQUISITION
- -------------------------
Advantage Bancorp Inc. AADV WI 1,037,462 0.94 10.49 66.500 215.18 21.52 19.56 217.32
America First Financial Fund AFFFZ CA 2,250,517 2.00 24.78 49.000 294.52 8.05 15.91 166.61
Anchor Savings Bank FSB ANCXX FL 164,685 0.88 11.84 1.000 4.44 2.63 2.78 33.90
Branford Savings Bank BSBC CT 182,868 1.11 11.92 6.063 39.77 20.91 25.26 225.39
Capital Savings Bancorp Inc. CAPS MO 242,259 0.94 10.77 23.250 43.98 19.54 18.75 198.72
CENFED Financial Corp. CENF CA 2,304,678 0.57 11.14 41.750 250.17 17.25 14.50 194.10
CFX Corp. CFX NH 2,821,182 0.95 11.09 28.500 684.04 26.39 NM 278.05
Charter Financial Inc. CBSB IL 393,268 1.16 7.78 23.750 98.57 22.84 13.19 173.23
Coast Savings Financial CSA CA 9,040,413 0.66 13.39 62.563 1,165.63 22.26 15.19 248.17
Eagle Financial Corp. EGFC CT 2,097,179 0.51 6.85 52.000 328.43 48.15 20.00 226.98
Emerald Isle Bancorp Inc. EIRE MA 443,503 0.92 13.23 32.000 71.99 20.38 20.00 232.22
First FS&LA of San Bernardino FSSB CA 103,538 0.05 1.22 9.850 3.23 57.94 9.85 70.06
Gateway Bancorp Inc. GWBC KY 62,609 0.94 3.59 18.750 20.28 31.78 58.59 116.10
GF Bancorp Inc. GNPI OH 49,451 0.95 7.11 32.000 9.87 23.36 44.44 144.08
GF Bancshares Incorporated GFBH GA 98,919 1.35 10.44 13.000 12.86 9.22 8.55 99.16
GFS Bancorp Inc. GFSB IA 94,496 1.27 11.03 17.063 16.86 15.23 14.71 154.98
Great Financial Corp. GTFN KY 2,893,505 0.77 8.01 49.125 679.08 22.53 20.82 233.04
Home Savings Bk of Siler City HSSC NC 56,380 0.75 4.17 14.750 13.61 32.78 92.19 142.79
HomeCorp Inc. HMCI IL 326,877 0.41 6.43 27.375 46.74 29.76 26.32 209.45
Indiana Community Bank SB INCB IN 96,089 0.53 4.30 20.500 18.90 39.42 34.17 165.59
Life Bancorp Inc. LIFB VA 1,486,357 0.86 8.10 36.000 354.51 26.09 25.71 222.63
Mid Continent Bancshares Inc. MCBS KS 405,262 1.20 11.87 46.000 90.25 21.40 23.00 227.72
Midwest Federal Financial MWFD WI 211,689 1.11 12.82 27.000 43.95 15.98 15.00 230.77
ML Bancorp Inc. MLBC PA 2,315,784 0.51 7.09 30.000 355.97 23.81 21.43 208.19
New York Bancorp Inc. NYB NY 3,244,200 1.49 28.61 38.000 810.11 16.89 15.32 479.19
North Cincinnati Savings Bank NSGB OH 60,585 0.31 3.43 16.750 6.65 33.50 23.26 114.73
Norwich Financial Corp. NSSB CT 700,860 1.07 9.54 30.250 164.33 21.15 20.44 201.00
Palfed Inc. PALM SC 668,504 0.67 8.22 28.250 149.70 58.85 39.24 263.04
Poughkeepsie Financial Corp. PKPS NY 883,981 0.54 6.44 10.500 132.25 30.00 32.81 177.66
Sho-Me Financial Corp. SMFC MO 344,849 1.24 12.97 49.750 74.58 18.56 16.58 219.84
Somerset Savings Bank SOSA MA 520,339 0.99 16.47 5.063 84.31 16.33 12.66 245.78
Westwood Financial Corp. WWFC NJ 110,425 0.78 2.50 27.625 17.83 23.02 36.35 173.20
AVERAGE 1,116,022 0.89 9.93 29.187 196.96 18.23 16.26 196.68
MEDIAN 399,265 0.93 9.99 27.938 79.45 20.38 15.91 204.60
=========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
=========================================================================
THRIFTS UNDER ACQUISITION
- -------------------------
Advantage Bancorp Inc. AADV WI 233.58 20.74 0.60
America First Financial Fund AFFFZ CA 168.38 13.09 3.27
Anchor Savings Bank FSB ANCXX FL 34.13 2.70 -
Branford Savings Bank BSBC CT 225.39 21.75 1.32
Capital Savings Bancorp Inc. CAPS MO 198.72 18.15 1.03
CENFED Financial Corp. CENF CA 194.37 10.85 0.86
CFX Corp. CFX NH 288.46 24.25 3.09
Charter Financial Inc. CBSB IL 195.80 25.06 1.35
Coast Savings Financial CSA CA 251.06 12.89 -
Eagle Financial Corp. EGFC CT 285.24 15.66 1.92
Emerald Isle Bancorp Inc. EIRE MA 232.22 16.23 0.88
First FS&LA of San Bernardino FSSB CA 71.85 3.12 -
Gateway Bancorp Inc. GWBC KY 116.10 32.39 2.13
GF Bancorp Inc. GNPI OH 144.08 19.96 1.50
GF Bancshares Incorporated GFBH GA 99.16 13.00 16.92
GFS Bancorp Inc. GFSB IA 154.98 17.84 1.52
Great Financial Corp. GTFN KY 242.83 23.47 1.22
Home Savings Bk of Siler City HSSC NC 142.79 24.14 2.71
HomeCorp Inc. HMCI IL 209.45 14.30 -
Indiana Community Bank SB INCB IN 165.59 19.67 1.76
Life Bancorp Inc. LIFB VA 229.01 23.85 1.33
Mid Continent Bancshares Inc. MCBS KS 227.72 22.27 0.87
Midwest Federal Financial MWFD WI 238.73 20.76 1.26
ML Bancorp Inc. MLBC PA 223.21 15.37 1.33
New York Bancorp Inc. NYB NY 479.19 24.97 1.58
North Cincinnati Savings Bank NSGB OH 114.73 10.98 -
Norwich Financial Corp. NSSB CT 221.45 23.45 1.85
Palfed Inc. PALM SC 263.04 22.39 0.43
Poughkeepsie Financial Corp. PKPS NY 177.66 14.96 1.91
Sho-Me Financial Corp. SMFC MO 219.84 21.63 -
Somerset Savings Bank SOSA MA 245.78 16.20 -
Westwood Financial Corp. WWFC NJ 193.59 16.15 0.72
AVERAGE 202.75 18.20 1.67
MEDIAN 214.65 18.91 1.29
Note: average and median price/earnings ratios exclude values greater than 25.
III-11
93
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
==================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
==================================================================================================================================
MUTUAL HOLDING COMPANIES
- ------------------------
Ashe Federal Bank (MHC) ASFE NC 87,709 0.73 5.62 18.500 18.50 NA 27.21 168.33
Community Savings Bnkshrs(MHC) CMSV FL 709,220 0.74 6.46 34.875 177.69 32.29 28.13 215.01
Fidelity Bankshares Inc. (MHC) FFFL FL 1,045,692 0.57 6.48 30.000 203.55 31.91 25.00 237.15
First Carnegie Deposit (MHC) SKBO PA 147,102 0.54 4.45 18.875 43.41 NA 33.71 177.90
First Fed SB of Siouxland(MHC) FFSX IA 456,850 0.71 8.61 32.375 91.72 27.21 26.98 229.94
First Federal of SC, FSB (MHC) FCFS SC 73,625 0.73 8.63 12.500 12.53 48.08 13.02 196.54
First FS&LA of Alpena (MHC) FFAL MI 208,167 0.66 7.46 17.875 29.26 26.29 24.83 186.78
First Savings Bank (MHC) FSLA NJ 1,044,513 0.93 9.99 41.625 333.74 37.17 47.30 335.96
Greater Delaware Valley (MHC) GDVS PA 248,792 0.93 7.95 30.000 98.18 44.12 44.12 338.98
Guaranty Federal SB (MHC) GFED MO 210,139 0.97 6.78 26.125 81.64 42.14 38.42 298.23
Harbor Florida Bancorp (MHC) HARB FL 1,131,024 1.20 14.58 67.000 333.22 25.19 23.93 344.30
Harris Financial Inc. (MHC) HARS PA 2,110,299 0.77 9.21 19.000 641.81 36.54 31.67 371.09
Jacksonville Savings Bk (MHC) JXSB IL 164,235 0.54 5.05 28.500 36.26 36.08 29.69 209.25
Jefferson FS&LA (MHC) JFSB TN 176,047 1.41 11.57 29.000 53.98 22.31 22.66 246.60
Leeds Federal Savings Bk (MHC) LFED MD 285,425 1.19 7.30 23.000 119.19 35.38 33.82 250.27
Liberty Savings Bank (MHC) LBTM MO 160,850 0.70 6.31 22.000 29.22 52.38 27.50 175.16
Northwest Savings Bank (MHC) NWSB PA 2,100,744 0.96 9.84 14.750 689.61 34.30 33.52 340.65
Oswego City Savings Bk (MHC) PBHC NY 193,005 0.95 8.27 25.000 47.92 23.36 24.04 207.99
Pennsylvania Svgs Bk (MHC) PSBI PA 126,364 0.35 2.90 26.750 31.96 76.43 44.58 216.25
People's Bank (MHC) PBCT CT 7,731,200 0.74 8.90 35.500 2,169.97 24.83 23.36 311.13
Peoples Home Savings Bk (MHC) PHSB PA 206,426 0.80 8.55 18.750 51.75 NA NA 183.46
Perpetual Bank (MHC) PERT SC 256,211 1.11 9.03 56.250 84.63 47.67 31.96 279.29
Pocahontas FS&LA (MHC) PFSL AR 383,417 0.62 9.98 35.500 57.95 24.32 26.89 239.06
Ponchatoula Homestead (MHC) PHSXX LA 58,537 0.43 4.67 13.000 7.88 20.97 23.21 138.15
Pulaski Bank, Svgs Bank (MHC) PULB MO 180,232 0.92 7.16 30.000 62.82 51.72 28.85 267.14
Pulaski Savings Bank (MHC) PLSK NJ 178,987 0.62 6.82 19.000 39.33 NA 29.69 183.40
Roebling Savings Bank (MHC) ROEB NJ 32,306 1.17 14.90 18.750 7.98 NA NA NA
SB of the Finger Lakes (MHC) SBFL NY 227,970 0.24 2.51 30.000 53.55 68.18 68.18 251.68
Wake Forest FS&LA (MHC) WAKE NC 62,527 1.38 7.14 20.500 24.42 35.34 24.40 201.18
Wayne Savings Bancshares (MHC) WAYN OH 250,241 0.69 7.40 31.000 69.91 38.27 35.23 293.01
Webster City Federal SB (MHC) WCFB IA 94,481 1.42 6.09 21.250 44.63 32.69 33.20 202.00
AVERAGE 656,204 0.83 7.76 27.331 185.43 23.16 22.72 243.20
MEDIAN 208,167 0.74 7.40 26.125 53.98 23.36 23.93 233.55
==========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
==========================================================================
MUTUAL HOLDING COMPANIES
- ------------------------
Ashe Federal Bank (MHC) ASFE NC 173.22 21.09 1.08
Community Savings Bnkshrs(MHC) CMSV FL 215.01 25.05 2.58
Fidelity Bankshares Inc. (MHC) FFFL FL 238.66 19.47 3.00
First Carnegie Deposit (MHC) SKBO PA 177.90 29.51 1.59
First Fed SB of Siouxland(MHC) FFSX IA 231.75 20.08 1.48
First Federal of SC, FSB (MHC) FCFS SC 196.54 17.02 -
First FS&LA of Alpena (MHC) FFAL MI 226.55 14.06 3.92
First Savings Bank (MHC) FSLA NJ 369.67 31.95 1.15
Greater Delaware Valley (MHC) GDVS PA 338.98 39.46 1.20
Guaranty Federal SB (MHC) GFED MO 298.23 38.85 1.68
Harbor Florida Bancorp (MHC) HARB FL 355.44 29.46 2.09
Harris Financial Inc. (MHC) HARS PA 419.43 30.41 1.16
Jacksonville Savings Bk (MHC) JXSB IL 209.25 22.08 1.58
Jefferson FS&LA (MHC) JFSB TN 246.60 30.66 1.72
Leeds Federal Savings Bk (MHC) LFED MD 250.27 41.76 2.20
Liberty Savings Bank (MHC) LBTM MO 175.16 18.17 3.64
Northwest Savings Bank (MHC) NWSB PA 360.64 32.83 1.09
Oswego City Savings Bk (MHC) PBHC NY 247.52 24.83 1.12
Pennsylvania Svgs Bk (MHC) PSBI PA 216.42 25.29 -
People's Bank (MHC) PBCT CT 311.40 28.07 2.14
Peoples Home Savings Bk (MHC) PHSB PA 183.46 25.07 -
Perpetual Bank (MHC) PERT SC 279.29 33.03 2.49
Pocahontas FS&LA (MHC) PFSL AR 239.06 15.11 2.54
Ponchatoula Homestead (MHC) PHSXX LA 138.15 13.46 5.85
Pulaski Bank, Svgs Bank (MHC) PULB MO 267.14 34.86 3.67
Pulaski Savings Bank (MHC) PLSK NJ 183.40 21.97 1.58
Roebling Savings Bank (MHC) ROEB NJ NA 24.70 -
SB of the Finger Lakes (MHC) SBFL NY 251.68 23.49 1.33
Wake Forest FS&LA (MHC) WAKE NC 201.18 39.06 1.95
Wayne Savings Bancshares (MHC) WAYN OH 293.01 27.94 2.00
Webster City Federal SB (MHC) WCFB IA 202.00 47.24 3.77
AVERAGE 249.90 27.29 1.92
MEDIAN 238.86 25.29 1.68
Note: average and median price/earnings ratios exclude values greater than 25.
III-12
94
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit III
MARKET VALUATION AND FINANCIAL DATA FOR ALL PUBLIC THRIFTS
====================================================================================================================================
LTM LTM Stock Total Price/ Price/ Price/
Total Core Core Price Market LTM QTR Book
Assets ROAA ROAE 12/11/97 Value EPS EPS Value
Company Ticker St. ($000) (%) (%) ($) ($M) (x) (x) (%)
====================================================================================================================================
NEW YORK THRIFTS
- ----------------
AFSALA Bancorp Inc. AFED NY 159,181 0.71 5.54 18.750 26.03 NA 20.38 117.78
ALBANK Financial Corp. ALBK NY 3,716,954 1.05 11.35 46.125 593.99 17.34 17.21 172.82
Albion Banc Corp. ALBC NY 70,810 0.49 5.46 28.000 7.00 21.05 18.92 115.46
Ambanc Holding Co. AHCI NY 529,309 (0.61) (4.74) 17.000 73.21 NM 22.37 121.60
Astoria Financial Corp. ASFC NY 7,904,363 0.77 9.80 56.750 1,172.79 19.64 17.52 192.31
Carver Bancorp Inc. CNY NY 415,561 0.18 2.08 16.625 38.47 NM 27.71 110.25
Catskill Financial Corp. CATB NY 289,619 1.37 5.11 17.375 80.92 21.19 19.74 112.75
Dime Bancorp Inc. DME NY 19,413,597 0.66 12.47 26.000 2,638.79 20.97 17.11 250.48
Dime Community Bancorp Inc. DIME NY 1,385,356 1.04 6.55 23.500 296.68 21.96 25.54 158.68
Elmira Savings Bank (The) ESBK NY 228,268 0.34 5.40 30.000 22.25 23.08 16.30 149.48
Financial Bancorp Inc. FIBC NY 296,956 0.98 10.16 24.375 41.67 16.25 15.23 155.16
Flushing Financial Corp. FFIC NY 960,130 0.96 6.05 23.000 183.62 21.70 19.17 134.66
GreenPoint Financial Corp. GPT NY 13,093,985 1.05 10.01 66.750 2,858.64 18.75 17.57 198.37
GSB Financial Corp. GOSB NY 154,649 NA NA 17.000 38.22 NA NA NA
Haven Bancorp Inc. HAVN NY 1,833,284 0.69 11.45 21.750 190.79 17.13 20.14 173.44
JSB Financial Inc. JSB NY 1,531,068 1.72 7.67 49.063 486.63 17.22 14.96 136.63
Long Island Bancorp Inc. LISB NY 5,930,784 0.73 7.93 45.375 1,090.04 21.81 20.63 199.54
MSB Bancorp Inc. MBB NY 773,991 0.54 6.06 30.500 86.75 27.23 23.11 136.16
Peekskill Financial Corp. PEEK NY 181,242 1.15 4.33 17.500 55.88 26.12 25.74 118.16
Progressive Bank Inc. PSBK NY 884,617 0.94 11.17 36.250 138.79 16.48 15.90 179.63
Queens County Bancorp Inc. QCSB NY 1,541,049 1.55 11.55 36.500 551.45 25.70 24.01 275.26
Reliance Bancorp Inc. RELY NY 2,034,753 0.84 10.22 34.250 298.40 17.93 16.16 177.55
Roslyn Bancorp Inc. RSLN NY 3,474,150 1.17 6.80 22.000 960.13 NA 19.64 156.70
SFS Bancorp Inc. SFED NY 174,093 0.69 5.48 24.500 30.16 24.75 24.50 138.89
Skaneateles Bancorp Inc. SKAN NY 247,643 0.68 9.99 18.750 26.90 15.89 15.63 154.96
Tappan Zee Financial Inc. TPNZ NY 124,603 0.84 4.77 19.250 28.65 26.74 28.31 134.05
TR Financial Corp. ROSE NY 3,691,564 0.87 14.14 33.250 584.94 17.78 16.30 238.52
Yonkers Financial Corporation YFCB NY 312,956 1.07 6.79 18.250 55.13 17.89 16.90 125.60
AVERAGE 2,548,376 0.83 7.54 29.230 452.03 19.41 18.67 160.55
MEDIAN 829,304 0.84 6.80 24.438 112.77 18.75 17.57 154.96
==========================================================================
Price/ Price/
Tang. Total Div.
Book Assets Yield
Company Ticker St. (%) (%) (%)
==========================================================================
NEW YORK THRIFTS
- ----------------
AFSALA Bancorp Inc. AFED NY 117.78 16.35 1.28
ALBANK Financial Corp. ALBK NY 196.19 15.98 1.56
Albion Banc Corp. ALBC NY 115.46 9.89 1.14
Ambanc Holding Co. AHCI NY 121.60 13.83 1.18
Astoria Financial Corp. ASFC NY 227.36 14.84 1.06
Carver Bancorp Inc. CNY NY 114.66 9.26 -
Catskill Financial Corp. CATB NY 112.75 27.94 1.84
Dime Bancorp Inc. DME NY 263.16 13.59 0.62
Dime Community Bancorp Inc. DIME NY 184.17 21.42 1.02
Elmira Savings Bank (The) ESBK NY 153.53 9.75 2.03
Financial Bancorp Inc. FIBC NY 155.85 14.03 1.64
Flushing Financial Corp. FFIC NY 140.24 19.12 1.04
GreenPoint Financial Corp. GPT NY 370.01 21.83 1.50
GSB Financial Corp. GOSB NY NA 24.71 -
Haven Bancorp Inc. HAVN NY 174.00 10.41 1.38
JSB Financial Inc. JSB NY 136.63 31.78 2.85
Long Island Bancorp Inc. LISB NY 201.40 18.38 1.32
MSB Bancorp Inc. MBB NY 255.44 11.21 1.97
Peekskill Financial Corp. PEEK NY 118.16 30.83 2.06
Progressive Bank Inc. PSBK NY 199.39 15.69 1.88
Queens County Bancorp Inc. QCSB NY 275.26 35.78 2.19
Reliance Bancorp Inc. RELY NY 241.71 14.67 1.87
Roslyn Bancorp Inc. RSLN NY 157.48 27.64 1.27
SFS Bancorp Inc. SFED NY 138.89 17.32 1.14
Skaneateles Bancorp Inc. SKAN NY 159.57 10.86 1.42
Tappan Zee Financial Inc. TPNZ NY 134.05 22.99 1.46
TR Financial Corp. ROSE NY 238.52 15.85 1.93
Yonkers Financial Corporation YFCB NY 125.60 17.62 1.32
AVERAGE 178.85 18.34 1.43
MEDIAN 157.48 16.17 1.40
Note: average and median price/earnings ratios exclude values greater than 25.
III-13
95
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit IV-1
PRO FORMA CONVERSION ASSUMPTIONS
1. The total amount of the net conversion proceeds was fully invested at the
beginning of the applicable period
2. The net conversion proceeds are invested to yield a return of 5.36%, which
represents the one-year U.S. Treasury bill yield as of September 30, 1997.
The effective income tax rate was assumed to be 43.0%, resulting in an
after-tax yield of 3.06%.
3. It is assumed that 8.0% of the shares offered in a full conversion would be
purchased by the Association's Employee Stock Ownership Plan ("ESOP"). For
the MHC conversion valuation, it is assumed that the ESOP purchases 8.0% of
the amount sold in the initial offering. Pro forma adjustments have been
made to earnings and equity to reflect the impact of the ESOP. The annual
ESOP expense is estimated based on a 10-year debt amortization period. No
reinvestment is assumed on proceeds used to fund the ESOP.
4. It is assumed that 4.0% of the shares offered in a full conversion would be
purchased in the open market by the Association's Stock Award Plan ("SAP").
For the MHC conversion valuation, it is assumed that the SAP acquires,
through open market purchases, 4.0% of the amount sold in the initial
offering. Pro forma adjustments have been made to earnings and equity to
reflect the impact of the SAP. The annual SAP expense is estimated based on
a 5-year vesting period. No reinvestment is assumed on proceeds used to fund
the SAP.
5. Conversion expenses are estimated at 7.0% of the total aggregate offering
for the full conversion valuation. For the MHC conversion valuation,
expenses are estimated at lower levels ranging from $500,000 at the minimum
to $534,000 at the adjusted maximum.
6. The number of shares outstanding for purposes of calculating earnings per
share is adjusted to reflect the shares assumed to held by the ESOP not
committed to be released within the first year following the conversion.
7. In conjunction with the Reorganization, the Association will capitalize
Atlantic Liberty, MHC with a capital transfer of $50,000. For the MHC
conversion valuation, such amount has been deducted from equity and total
assets.
8. No effect has been given to withdrawals from deposit accounts for the
purpose of purchasing common stock in the conversion.
IV-1
96
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit IV-2
PRO FORMA VALUATION RANGE: FULL CONVERSION
As of September 30, 1997
(In $000s, except share data)
PRO FORMA MARKET CAPITALIZATION $8,500 $10,000 $11,500 $13,225
AMOUNT SOLD TO PUBLIC 100.0% 100.0% 100.0% 100.0%
----------------------------------------------------------------
MINIMUM MIDPOINT MAXIMUM ADJ. MAX
- -------------------------------------------------------------------------------------------------------------------
Shares issued 850,000 1,000,000 1,150,000 1,322,500
Shares sold 850,000 1,000,000 1,150,000 1,322,500
Offering price $10.00 $10.00 $10.00 $10.00
- -------------------------------------------------------------------------------------------------------------------
Gross proceeds 8,500 10,000 11,500 13,225
Less: estimated expenses (595) (700) (805) (926)
----- ----- ----- -----
Net offering proceeds 7,905 9,300 10,695 12,299
Less: ESOP purchase (680) (800) (920) (1,058)
Less: SAP purchase (340) (400) (460) (529)
----- ----- ----- -----
Net investable proceeds 6,885 8,100 9,315 10,712
- -------------------------------------------------------------------------------------------------------------------
NET INCOME:
LTM ended September 30, 1997 (190) (190) (190) (190)
Pro forma income on net proceeds 211 248 285 328
Pro forma ESOP adjustment (39) (46) (52) (60)
Pro forma SAP adjustment (39) (46) (52) (60)
---- ---- ---- ----
Pro forma net income (57) (34) (9) 18
---- ---- --- --
Pro forma net income per share ($0.07) ($0.04) ($0.01) $0.01
- -------------------------------------------------------------------------------------------------------------------
NET INCOME (ANNUALIZED):
Quarter ended September 30, 1997 520 520 520 520
Pro forma income on net proceeds 211 248 285 328
Pro forma ESOP adjustment (39) (46) (52) (60)
Pro forma SAP adjustment (39) (46) (52) (60)
---- ---- ---- ----
Pro forma core net income 653 676 701 728
--- --- --- ---
Pro forma core income per share $0.83 $0.73 $0.66 $0.59
- -------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Total equity at September 30, 1997 7,208 7,208 7,208 7,208
Net proceeds 7,905 9,300 10,695 12,299
Less: ESOP purchase (680) (800) (920) (1,058)
Less: SAP purchase (340) (400) (460) (529)
----- ----- ----- -----
Pro forma stockholders' equity 14,093 15,308 16,523 17,920
------ ------ ------ ------
Pro forma book value per share $16.58 $15.31 $14.37 $13.55
- -------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS:
Total assets at September 30, 1997 109,887 109,887 109,887 109,887
Net proceeds 7,905 9,300 10,695 12,299
Less: ESOP purchase (680) (800) (920) (1,058)
Less: SAP purchase (340) (400) (460) (529)
----- ----- ----- -----
Pro forma total assets 116,772 117,987 119,202 120,599
- -------------------------------------------------------------------------------------------------------------------
IV-2
97
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit IV-3
PRO FORMA VALUATION RANGE: MHC OFFERING
As of September 30, 1997
(In $000s, except share data)
PRO FORMA MARKET CAPITALIZATION $8,500 $10,000 $11,500 $13,225
AMOUNT SOLD TO PUBLIC 46.0% 46.0% 46.0% 46.0%
------------------------------------------------------------------------
MINIMUM MIDPOINT MAXIMUM ADJ. MAX
- --------------------------------------------------------------------------------------------------------------------
Shares issued 850,000 1,000,000 1,150,000 1,322,500
Shares sold 391,000 460,000 529,000 608,350
Offering price $10.00 $10.00 $10.00 $10.00
- --------------------------------------------------------------------------------------------------------------------
Gross proceeds 3,910 4,600 5,290 6,084
Less: estimated expenses (500) (510) (521) (534)
----- ----- ----- -----
Net offering proceeds 3,410 4,090 4,769 5,550
Less: ESOP purchase (313) (368) (423) (487)
Less: SAP purchase (156) (184) (212) (243)
----- ----- ----- -----
Net investable proceeds 2,941 3,538 4,134 4,820
- --------------------------------------------------------------------------------------------------------------------
NET INCOME:
LTM ended September 30, 1997 (190) (190) (190) (190)
Pro forma income on net proceeds 90 108 127 147
Pro forma ESOP adjustment (18) (14) (16) (19)
Pro forma SAP adjustment (18) (14) (16) (18)
---- ---- ---- ----
Pro forma net income (136) (110) (95) (80)
----- ----- ---- ----
Pro forma net income ($0.17) ($0.11) ($0.09) ($0.06)
- --------------------------------------------------------------------------------------------------------------------
NET INCOME (ANNUALIZED)
Quarter ended September 30, 1997 520 520 520 520
Pro forma income on net proceeds 90 108 127 147
Pro forma ESOP adjustment (18) (14) (16) (19)
Pro forma SAP adjustment (18) (14) (16) (18)
---- ---- ---- ----
Pro forma core net income 574 600 615 630
--- --- --- ---
Pro forma core income per share $0.70 $0.62 $0.55 $0.49
- --------------------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Equity at September 30, 1997 7,158 7,158 7,158 7,158
Net proceeds 3,410 4,090 4,769 5,550
Less: ESOP purchase (313) (368) (423) (487)
Less: SAP purchase (156) (184) (212) (243)
----- ----- ----- -----
Pro forma stockholders' equity 10,099 10,696 11,292 11,978
------ ------ ------ ------
Pro forma book value per share $11.88 $10.70 $9.82 $9.06
- --------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS:
Total assets at September 30, 1997 109,837 109,837 109,837 109,837
Net proceeds 3,410 4,090 4,769 5,550
Less: ESOP purchase (313) (368) (423) (487)
Less: SAP purchase (156) (184) (212) (243)
----- ----- ----- -----
Pro forma total assets 112,778 113,375 113,971 114,657
- --------------------------------------------------------------------------------------------------------------------
IV-3
98
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit IV-4
COMPARATIVE VALUATION RATIOS -- FULL CONVERSION VALUATION
Market Price Data as of December 11, 1997
Nationwide New York
Comparative Public Thrift Public Thrift
Atlantic Group Aggregate(1) Aggregate(2)
Valuation Liberty ------------------ ------------------ -------------------
Ratio Symbol Savings Mean Median Mean Median Mean Median
------ ------ ------- ---- ------ ---- ------ ---- ------
PRICE/LTM EPS (3) P/E
Adj. Maximum (x) NM 18.7 18.8 17.5 17.5 19.4 18.8
Maximum NM
Midpoint NM
Minimum NM
PRICE/QTR. EPS (3) P/E
Adj. Maximum (x) 16.9 16.8 16.0 16.9 16.8 18.7 17.6
Maximum 15.2
Midpoint 13.7
Minimum 12.1
PRICE/BOOK VALUE P/B
Adj. Maximum (%) 73.8 125.7 127.0 154.3 140.7 160.6 155.0
Maximum 69.6
Midpoint 65.3
Minimum 60.3
PRICE/TANGIBLE BOOK P/B
Adj. Maximum (%) 73.8 126.5 127.0 160.1 144.9 178.8 157.5
Maximum 69.6
Midpoint 65.3
Minimum 60.3
PRICE/TOTAL ASSETS P/A
Adj. Maximum (%) 10.97 13.77 12.70 18.40 16.79 18.34 16.17
Maximum 9.65
Midpoint 8.48
Minimum 7.28
- ------------------------------------------------------------------------------------------------------------------------
(1) Includes 392 publicly-traded, non-MHC, non-acquired thrifts nationwide.
(2) Includes 28 publicly-traded, non-MHC, non-acquired thrifts based in New
York.
(3) Price/earnings ratios exclude values greater than 25.
IV-4
99
FELDMAN FINANCIAL ADVISORS, INC.
Exhibit IV-5
PRO FORMA FULL CONVERSION ANALYSIS AT MAXIMUM VALUE
ATLANTIC LIBERTY SAVINGS, F.A.
Financial Data as of September 30, 1997
VALUATION PARAMETERS SYMBOL DATA
- -------------------- ------ -----------
Net income -- LTM Y $ -190,000
Net income -- Qtr. annlzd. Y 520,000
Net worth B 7,208,000
Tangible net worth B 7,208,000
Total assets A 109,887,000
Expenses in conversion X 805,000
Other proceeds not reinvested O 1,380,000
ESOP purchase E 8.0% 920,000
ESOP expense (pre-tax) F 10.0% 92,000
SAP purchase M 4.0% 460,000
SAP expense (pre-tax) N 20.0% 92,000
Reinvestment rate (after-tax) R 3.06%
Tax rate T 43.00%
Shares for EPS S 92.80%
PRO FORMA VALUATION RATIOS AT MAXIMUM VALUE
- -------------------------------------------
Price / LTM earnings P/E 889.33 x
Price / Qtr. earnings P/E 14.78 x
Price / book value P/B 69.60%
Price / tangible book P/B 69.60%
Price / assets P/A 9.65%
PRO FORMA CALCULATION AT MAXIMUM VALUE Based on
- -------------------------------------- --------
V = (P/E / S)*((Y-R*(O+X)-(F+N)*(1-T))) = $12,238,959 [LTM earnings]
-----------------------------------
1 - (P/E / S) * R
V = (P/E / S)*((Y-R*(O+X)-(F+N)*(1-T))) = $10,819,680 [Qtr. earnings]
-----------------------------------
1 - (P/E / S) * R
V = P/B * (B - X - E - M) = $11,500,026 [Book value]
---------------------
1 - P/B
V = P/B * (B - X - E - M) = $11,500,026 [Tangible book]
---------------------
1 - P/B
V = P/A * (B - X - E - M) = $11,503,313 [Total assets]
---------------------
1 - P/A
PRO FORMA VALUATION RANGE
- -------------------------
MINIMUM = $10,000,000 X 0.85 = $ 8,500,000
MIDPOINT = $10,000,000 X 1.00 = $10,000,000
MAXIMUM = $10,000,000 X 1.15 = $11,500,000
ADJ. MAX. = $11,500,000 X 1.15 = $13,225,000
IV-5