SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
For the period ended: June 30, 2004
NORTH FORK BANCORPORATION, INC.
| DELAWARE | 36-3154608 | |
| (State or other Jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 275 BROADHOLLOW ROAD, MELVILLE, NEW YORK | 11747 | |
| (Address of principal executive offices) | (Zip Code) |
(631) 844-1004
Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: (X) Yes ( ) No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). (X)Yes ( ) No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| CLASS OF COMMON STOCK | NUMBER OF SHARES OUTSTANDING — 8/5/04 | |
| $.01 Par Value | 172,633,608 |
1
THIS PAGE INTENTIONALLY LEFT BLANK FOR THE EDGAR
DOCUMENT FILED WITH THE SECURITIES & EXCHANGE COMMISSION
2
North Fork Bancorporation, Inc.
Form 10-Q
INDEX
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PART I. FINANCIAL INFORMATION (unaudited) |
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| STATEMENT RE: COMPUTATION OF NET INCOME | ||||||||
| CERTIFICATION | ||||||||
| CERTIFICATION | ||||||||
| CERTIFICATION | ||||||||
| CERTIFICATION | ||||||||
| SUPPLEMENTAL PERFORMANCE MEASUREMENTS | ||||||||
3
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)
| June 30, | December 31, | June 30, | ||||||||||
| (in thousands, except per share amounts) |
2004 |
2003 |
2003 |
|||||||||
Assets: |
||||||||||||
Cash & Due from Banks |
$ | 528,772 | $ | 510,354 | $ | 406,694 | ||||||
Money Market Investments |
16,140 | 21,037 | 63,799 | |||||||||
Due from Brokers |
— | — | 464,351 | |||||||||
Securities Held-for-Sale |
— | — | 613,628 | |||||||||
Securities: |
||||||||||||
Available-for-Sale ($2,290,348 ,$1,911,586 and $2,882,841 pledged at
June 30, 2004, December 31, 2003 and June 30, 2003, respectively) |
8,762,663 | 7,136,275 | 8,108,198 | |||||||||
Held-to-Maturity ($33,710, $52,808 and $82,445 pledged at
June 30, 2004, December 31, 2003 and June 30, 2003, respectively) |
152,201 | 190,285 | 221,378 | |||||||||
Total Securities |
8,914,864 | 7,326,560 | 8,329,576 | |||||||||
Loans: |
||||||||||||
Held-for-Sale |
2,902 | 4,074 | 21,862 | |||||||||
Held-for-Investment, Net of Unearned Income & Deferred Costs |
15,385,568 | 12,341,199 | 11,875,571 | |||||||||
Total Loans |
15,388,470 | 12,345,273 | 11,897,433 | |||||||||
Less: Allowance for Loan Losses |
138,008 | 122,733 | 117,753 | |||||||||
Net Loans |
15,250,462 | 12,222,540 | 11,779,680 | |||||||||
Goodwill |
1,003,668 | 410,494 | 410,495 | |||||||||
Identifiable Intangibles |
49,447 | 12,765 | 14,548 | |||||||||
Premises & Equipment |
220,379 | 150,875 | 143,374 | |||||||||
Accrued Income Receivable |
107,495 | 88,722 | 101,972 | |||||||||
Other Assets |
380,632 | 226,027 | 211,017 | |||||||||
Total Assets |
$ | 26,471,859 | $ | 20,969,374 | $ | 22,539,134 | ||||||
Liabilities and Stockholders’ Equity: |
||||||||||||
Deposits: |
||||||||||||
Demand |
$ | 5,259,052 | $ | 4,080,134 | $ | 3,746,741 | ||||||
Savings |
4,494,251 | 3,770,683 | 3,665,580 | |||||||||
NOW & Money Market |
6,321,943 | 4,519,476 | 3,960,731 | |||||||||
Time |
2,300,540 | 1,784,408 | 1,922,407 | |||||||||
Certificates of Deposit, $100,000 & Over |
1,460,671 | 961,414 | 1,176,835 | |||||||||
Total Deposits |
19,836,457 | 15,116,115 | 14,472,294 | |||||||||
Federal Funds Purchased & Securities Sold Under
Agreements to Repurchase |
2,288,935 | 2,171,154 | 3,291,500 | |||||||||
Federal Home Loan Bank Advances |
850,000 | 1,050,000 | 1,850,000 | |||||||||
Subordinated Debt |
462,808 | 476,499 | 493,790 | |||||||||
Junior Subordinated Debt |
261,358 | 266,977 | 281,021 | |||||||||
Accrued Expenses & Other Liabilities |
460,714 | 410,140 | 578,428 | |||||||||
Total Liabilities |
24,160,272 | 19,490,885 | 20,967,033 | |||||||||
Stockholders’ Equity: |
||||||||||||
Preferred Stock, par value $1.00; authorized 10,000,000 shares, unissued |
$ | — | $ | — | $ | — | ||||||
Common stock, par value $0.01; authorized 500,000,000 shares;
issued 193,108,367 shares at June 30, 2004 |
1,931 | 1,746 | 1,746 | |||||||||
Additional Paid in Capital |
1,121,040 | 378,793 | 373,851 | |||||||||
Retained Earnings |
1,930,379 | 1,816,458 | 1,705,789 | |||||||||
Accumulated Other Comprehensive (Loss)/Income |
(61,784 | ) | (2,044 | ) | 42,019 | |||||||
Deferred Compensation |
(84,294 | ) | (91,789 | ) | (65,795 | ) | ||||||
Treasury Stock at cost; 21,037,978 shares at June 30, 2004 |
(595,685 | ) | (624,675 | ) | (485,509 | ) | ||||||
Total Stockholders’ Equity |
2,311,587 | 1,478,489 | 1,572,101 | |||||||||
Total Liabilities and Stockholders’ Equity |
$ | 26,471,859 | $ | 20,969,374 | $ | 22,539,134 | ||||||
See accompanying notes to the consolidated financial statements
4
Consolidated Statements of Income (unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, |
June 30, |
|||||||||||||||
| (in thousands, except per share amounts) |
2004 |
2003 |
2004 |
2003 |
||||||||||||
Interest Income: |
||||||||||||||||
Loans |
$ | 213,002 | $ | 195,826 | $ | 407,202 | $ | 392,747 | ||||||||
Mortgage-Backed Securities |
72,031 | 70,355 | 131,168 | 152,583 | ||||||||||||
Other Securities |
11,296 | 12,232 | 20,895 | 25,836 | ||||||||||||
State & Municipal Obligations |
6,578 | 3,990 | 11,102 | 7,779 | ||||||||||||
Money Market Investments |
467 | 95 | 670 | 269 | ||||||||||||
Total Interest Income |
303,374 | 282,498 | 571,037 | 579,214 | ||||||||||||
Interest Expense: |
||||||||||||||||
Savings, NOW & Money Market Deposits |
19,108 | 14,476 | 34,119 | 29,236 | ||||||||||||
Time Deposits |
7,412 | 9,419 | 14,055 | 19,472 | ||||||||||||
Certificates of Deposit, $100,000 & Over |
4,899 | 4,801 | 8,992 | 9,904 | ||||||||||||
Federal Funds Purchased & Securities Sold Under Agreements to Repurchase |
19,035 | 27,640 | 35,316 | 56,298 | ||||||||||||
Federal Home Loan Bank Advances |
12,273 | 16,719 | 24,595 | 35,676 | ||||||||||||
Subordinated Debt |
4,599 | 7,120 | 9,144 | 14,345 | ||||||||||||
Junior Subordinated Debt |
1,953 | 2,451 | 3,892 | 4,961 | ||||||||||||
Total Interest Expense |
69,279 | 82,626 | 130,113 | 169,892 | ||||||||||||
Net Interest Income |
234,095 | 199,872 | 440,924 | 409,322 | ||||||||||||
Provision for Loan Losses |
6,500 | 6,500 | 13,000 | 12,750 | ||||||||||||
Net Interest Income after Provision for Loan Losses |
227,595 | 193,372 | 427,924 | 396,572 | ||||||||||||
Non-Interest Income: |
||||||||||||||||
Customer Related Fees & Service Charges |
23,417 | 20,460 | 45,188 | 40,626 | ||||||||||||
Investment Management, Commissions & Trust Fees |
4,099 | 3,892 | 8,023 | 7,016 | ||||||||||||
Mortgage Banking Income |
1,318 | 3,199 | 2,478 | 6,017 | ||||||||||||
Check Cashing Fees |
1,159 | 1,265 | 2,348 | 2,261 | ||||||||||||
Other Income |
5,658 | 3,964 | 11,455 | 8,510 | ||||||||||||
Securities (Losses)/Gains, net |
(475 | ) | 3,699 | 7,413 | 6,296 | |||||||||||
Gain on Sale of Facilities, net |
— | 10,980 | — | 10,980 | ||||||||||||
Total Non-Interest Income |
35,176 | 47,459 | 76,905 | 81,706 | ||||||||||||
Non-Interest Expense: |
||||||||||||||||
Employee Compensation & Benefits |
55,224 | 49,075 | 106,301 | 96,415 | ||||||||||||
Occupancy & Equipment, net |
20,074 | 16,389 | 37,699 | 31,910 | ||||||||||||
Other Expenses |
21,181 | 16,894 | 39,127 | 33,711 | ||||||||||||
Amortization of Identifiable Intangibles |
1,889 | 892 | 2,670 | 1,784 | ||||||||||||
Debt Restructuring Costs |
— | 11,955 | — | 11,955 | ||||||||||||
Total Non-Interest Expense |
98,368 | 95,205 | 185,797 | 175,775 | ||||||||||||
Income Before Income Taxes |
164,403 | 145,626 | 319,032 | 302,503 | ||||||||||||
Provision for Income Taxes |
55,404 | 49,513 | 107,514 | 102,851 | ||||||||||||
Net Income |
$ | 108,999 | $ | 96,113 | $ | 211,518 | $ | 199,652 | ||||||||
Earnings Per Share — Basic |
$ | 0.69 | $ | 0.63 | $ | 1.38 | $ | 1.30 | ||||||||
Earnings Per Share — Diluted |
0.68 | 0.62 | 1.36 | 1.29 | ||||||||||||
See accompanying notes to the consolidated financial statements
5
Consolidated Statements of Cash Flows (unaudited)
For the Six Months Ended June 30,
| (in thousands) |
2004 |
2003 |
||||||
Cash Flows from Operating Activities: |
||||||||
Net Income |
$ | 211,518 | $ | 199,652 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |
||||||||
Provision for Loan Losses |
13,000 | 12,750 | ||||||
Depreciation |
8,792 | 7,350 | ||||||
Amortization of Deferred Compensation |
6,962 | 4,966 | ||||||
Amortization of Identifiable Intangible |
2,670 | 1,784 | ||||||
Amortization of Premiums |
18,851 | 52,544 | ||||||
Accretion of Discounts and Net Deferred Loan Fees |
(15,576 | ) | (15,640 | ) | ||||
Securities Gains, net |
(7,413 | ) | (6,296 | ) | ||||
Gains on Sales of Loans Held-for-Sale |
(592 | ) | (3,188 | ) | ||||
Originations of Loans Held-for-Sale |
(58,166 | ) | (209,532 | ) | ||||
Proceeds from Sales of Loans Held-for-Sale |
57,586 | 203,909 | ||||||
Purchases of Trading Assets |
(13,911 | ) | (24,895 | ) | ||||
Sales of Trading Assets |
14,015 | 25,362 | ||||||
Gain on the Sale of Facilities |
— | (10,980 | ) | |||||
Debt Restructuring Costs |
— | 11,955 | ||||||
Other, Net |
(15,480 | ) | 51,248 | |||||
Net Cash Provided by Operating Activities |
222,256 | 300,989 | ||||||
Cash Flows from Investing Activities: |
||||||||
Purchases of Securities Held-to-Maturity |
— | (29,348 | ) | |||||
Maturities, Redemptions, Calls and Principal Repayments on Securities Held-to-Maturity |
37,736 | 115,035 | ||||||
Purchases of Securities Available-for-Sale |
(2,882,982 | ) | (4,415,437 | ) | ||||
Proceeds from Sales of Securities Available-for-Sale |
917,045 | 1,231,757 | ||||||
Maturities, Redemptions, Calls and Principal Repayments on Securities Available-for-Sale |
1,742,003 | 3,624,486 | ||||||
Net Change in Loans Held-for-Investment |
(929,825 | ) | (520,338 | ) | ||||
Transfers to Other Real Estate, Net of Sales |
502 | — | ||||||
Purchases of Premises and Equipment, net |
(29,164 | ) | (20,042 | ) | ||||
Purchase Acquisition, net of cash acquired |
246,209 | — | ||||||
Net Cash Used in Investing Activities |
(898,476 | ) | (13,887 | ) | ||||
Cash Flows from Financing Activities: |
||||||||
Net Increase in Customer Deposit Liabilities |
1,549,940 | 1,279,764 | ||||||
Net Decrease in Borrowings |
(771,282 | ) | (271,455 | ) | ||||
Purchases of Treasury Stock |
— | (91,952 | ) | |||||
Exercise of Options and Common Stock Sold for Cash |
2,815 | 5,786 | ||||||
Cash Dividends Paid |
(91,732 | ) | (85,111 | ) | ||||
Net Cash Provided by Financing Activities |
689,741 | 837,032 | ||||||
Net Increase in Cash and Cash Equivalents |
13,521 | 1,124,134 | ||||||
Cash and Cash Equivalents at Beginning of the Period |
531,391 | 424,338 | ||||||
Cash and Cash Equivalents at End of the Period |
$ | 544,912 | $ | 1,548,472 | ||||
6
Consolidated Statements of Cash Flows (continued)
For the Six Months Ended June 30,
| (in thousands) |
2004 |
2003 |
||||||
Supplemental Disclosures of Cash Flow Information: |
||||||||
Cash Paid
During the Period for: |
||||||||
Interest Expense |
$ | 127,007 | $ | 174,266 | ||||
Income Taxes |
$ | 73,400 | $ | 112,160 | ||||
During the Period the Company Purchased Various Securities which
Settled in the Subsequent Period |
$ | 86,769 | $ | 188,063 | ||||
During the Period the Company Sold Various Securities which
Settled in the Subsequent Period |
$ | 29,913 | $ | 464,351 | ||||
Non-cash activity related to the TCNJ acquisition not reflected above
for the period ended June 30, 2004 follows (1): |
||||||||
Fair Value of Assets Acquired |
$ | 4,028,089 | ||||||
Goodwill & Identifiable Intangible Assets |
632,525 | |||||||
Common Stock Issued and Fair Value of Options, net of taxes |
744,125 | |||||||
Liabilities Assumed |
$ | 3,916,489 | ||||||
| (1) | See “Condensed Notes to the Consolidated Financial Statements — Note 2 — Business Combinations” for further details. |
See accompanying notes to the consolidated financial statements
7
Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
| Additional | Accumulated | |||||||||||||||||||||||||||
| Common | Paid in | Retained | Other Comprehensive | Deferred | Treasury | |||||||||||||||||||||||
| (dollars in thousands, except per share amounts) |
Stock |
Capital |
Earnings |
Income/(Loss) |
Compensation |
Stock |
Total |
|||||||||||||||||||||
Balance, December 31, 2002 |
$ | 1,746 | $ | 377,311 | $ | 1,590,594 | $ | 17,991 | ($ | 70,562 | ) | ($ | 403,027 | ) | $ | 1,514,053 | ||||||||||||
Net Income |
— | — | 199,652 | — | — | — | 199,652 | |||||||||||||||||||||
Cash Dividends ($.54 per share) |
— | — | (84,457 | ) | — | — | — | (84,457 | ) | |||||||||||||||||||
Issuance of Stock (84,813 shares) |
— | 545 | — | — | — | 2,285 | 2,830 | |||||||||||||||||||||
Restricted Stock Activity, net |
— | 162 | — | — | 4,767 | 62 | 4,991 | |||||||||||||||||||||
Employee Stock Option Activity, net |
— | (4,167 | ) | — | — | — | 7,123 | 2,956 | ||||||||||||||||||||
Purchases of Treasury Stock (2,796,000 shares) |
— | — | — | — | — | (91,952 | ) | (91,952 | ) | |||||||||||||||||||
Accumulated Other Comprehensive Income, net of tax |
— | — | — | 24,028 | — | — | 24,028 | |||||||||||||||||||||
Balance, June 30, 2003 |
$ | 1,746 | $ | 373,851 | $ | 1,705,789 | $ | 42,019 | ($ | 65,795 | ) | ($ | 485,509 | ) | $ | 1,572,101 | ||||||||||||
Balance, December 31, 2003 |
$ | 1,746 | $ | 378,793 | $ | 1,816,458 | ($ | 2,044 | ) | ($ | 91,789 | ) | ($ | 624,675 | ) | $ | 1,478,489 | |||||||||||
Net Income |
— | — | 211,518 | — | — | — | 211,518 | |||||||||||||||||||||
Cash Dividends ($.60 per share) |
— | — | (97,597 | ) | — | — | — | (97,597 | ) | |||||||||||||||||||
Issuance of
Stock - TCNJ (18,527,589 shares) |
185 | 714,609 | — | — | — | — | 714,794 | |||||||||||||||||||||
Fair Value
of Options - TCNJ |
— | 33,364 | — | — | — | — | 33,364 | |||||||||||||||||||||
Issuance of Stock (70,386 shares) |
— | 822 | — | — | — | 1,993 | 2,815 | |||||||||||||||||||||
Restricted Stock Activity, net |
— | 148 | — | — | 7,495 | (908 | ) | 6,735 | ||||||||||||||||||||
Employee Stock Option Activity, net |
— | (6,696 | ) | — | — | — | 27,905 | 21,209 | ||||||||||||||||||||
Accumulated Other Comprehensive (Loss), net of tax |
— | — | — | (59,740 | ) | — | — | (59,740 | ) | |||||||||||||||||||
Balance, June 30, 2004 |
$ | 1,931 | $ | 1,121,040 | $ | 1,930,379 | ($ | 61,784 | ) | ($ | 84,294 | ) | ($ | 595,685 | ) | $ | 2,311,587 | |||||||||||
See accompanying notes to the consolidated financial statements
8
Consolidated Statements of Comprehensive Income (Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, |
June 30, |
|||||||||||||||
| (in thousands) |
2004 |
2003 |
2004 |
2003 |
||||||||||||
Net Income |
$ | 108,999 | $ | 96,113 | $ | 211,518 | $ | 199,652 | ||||||||
Other Comprehensive (Loss)/Income |
||||||||||||||||
Unrealized (Losses)/Gains On Securities: |
||||||||||||||||
Change in Unrealized (Losses)/Gains During the Period |
(170,600 | ) | 12,658 | (103,501 | ) | 30,550 | ||||||||||
Less: Reclassification Adjustment for Losses/(Gains) Included in Net Income |
475 | (3,699 | ) | (7,413 | ) | (6,296 | ) | |||||||||
Change in Unrealized (Losses)/Gains During the Period |
(170,125 | ) | 8,959 | (110,914 | ) | 24,254 | ||||||||||
Related Tax Effect on Unrealized (Loss | ||||||||||||||||