-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RY1TRu37sUaD0+zqvXnLyCCumeUFAcE2snggALqK1G6BpUc4hMKElJF6br6jC/fR Z90HPQ9vnMYzkJdZ3y87/w== 0000900741-99-000007.txt : 19990517 0000900741-99-000007.hdr.sgml : 19990517 ACCESSION NUMBER: 0000900741-99-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAVEN BANCORP INC CENTRAL INDEX KEY: 0000900741 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 113153802 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-21628 FILM NUMBER: 99621070 BUSINESS ADDRESS: STREET 1: 615 MERRICK AVE CITY: WESTBURY STATE: NY ZIP: 11590 BUSINESS PHONE: 5166834100 MAIL ADDRESS: STREET 1: 93 22 JAMAICA AVE CITY: WOODHAVEN STATE: NY ZIP: 11421 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number: 000-21628 HAVEN BANCORP, INC. (Exact name of registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 11-3153802 (I.R.S. Employer Identification No.) 615 MERRICK AVENUE, WESTBURY, NEW YORK 11590 (Address of principal executive offices) (Zip Code) (516) 683-4100 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. There were 8,918,542 shares of the Registrant's common stock outstanding as of May 12, 1999. HAVEN BANCORP, INC. FORM 10-Q INDEX PART I - FINANCIAL INFORMATION PAGE Item 1. Financial Statements (Unaudited) Consolidated Statements of Financial Condition as of March 31, 1999 and December 31, 1998 3 Consolidated Statements of Income for the Three Months ended March 31, 1999 and 1998 4 Consolidated Statement of Changes in Stockholders' Equity for the Three Months ended March 31, 1999 5 Consolidated Statements of Cash Flows for the Three Months ended March 31, 1999 and 1998 6 Notes to Consolidated Financial Statements 7-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10-24 Item 3. Quantitative and Qualitative Disclosure About Market Risk 24 PART II - OTHER INFORMATION Item 1. Legal Proceedings 24 Item 2. Changes in Securities and Use of Proceeds 24 Item 3. Defaults Upon Senior Securities 24 Item 4. Submission of Matters to a Vote of Security Holders 24-25 Item 5. Other Information 25 Item 6. Exhibits and Reports on Form 8-K 25 Signature Page 2 HAVEN BANCORP, INC. Consolidated Statements of Financial Condition (Dollars in thousands, except for share data) (Unaudited)
March 31, December 31, 1999 1998 --------- ------------ ASSETS Cash and due from banks $ 31,759 $ 43,088 Money market investments 1,421 1,720 Securities available for sale (note 2) 941,027 889,251 Loans held for sale 59,440 54,188 Federal Home Loan Bank of NY stock, at cost 22,255 21,990 Loans receivable: First mortgage loans 1,384,483 1,271,784 Cooperative apartment loans 3,432 3,970 Other loans 36,211 34,926 --------- --------- Total loans receivable 1,424,126 1,310,680 Less allowance for loan losses (14,573) (13,978) --------- --------- Loans receivable, net 1,409,553 1,296,702 Premises and equipment, net 37,772 39,209 Accrued interest receivable 13,586 12,108 Other assets 33,346 37,267 --------- --------- Total assets $2,550,159 $2,395,523 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $1,804,795 $1,722,710 Borrowed funds 586,330 440,346 Due to broker 10,000 97,458 Other liabilities 29,904 15,142 --------- --------- Total liabilities 2,431,029 2,275,656 --------- --------- Stockholders' Equity: Preferred stock, $.01 par value, 2,000,000 shares authorized, none issued (note 7) - - Common stock, $.01 par value, 30,000,000 shares authorized, 9,918,750 issued; 8,867,814 and 8,859,692 shares outstanding in 1999 and 1998, respectively (note 7) 100 100 Additional paid-in capital 51,580 51,383 Retained earnings, substantially restricted 81,020 79,085 Accumulated other comprehensive income: Unrealized (loss) gain on securities available for sale, net of tax effect (2,107) 945 Treasury stock, at cost (1,050,936 and 1,059,058 shares in 1999 and 1998, respectively) (9,753) (9,800) Unallocated common stock held by Bank's ESOP (1,149) (1,222) Unearned common stock held by Bank's Recognition Plans and Trusts (262) (263) Unearned compensation (299) (361) --------- --------- Total stockholders' equity 119,130 119,867 --------- --------- Total liabilities and stockholders' equity $2,550,159 $2,395,523 ========= =========
See accompanying notes to consolidated financial statements. 3 HAVEN BANCORP, INC. Consolidated Statements of Income (Dollars in thousands, except per share data) (Unaudited)
Three Months Ended March 31, ------------------ 1999 1998 ---- ---- Interest income: Mortgage loans $24,885 $21,739 Other loans 850 787 Mortgage-backed securities 12,650 8,931 Money market investments 30 104 Debt and equity securities 2,065 3,402 ------ ------ Total interest income 40,480 34,963 ------ ------ Interest expense: Deposits: Savings accounts 4,669 2,416 NOW accounts 324 261 Money market accounts 419 423 Certificate accounts 11,753 11,863 Borrowed funds 7,109 6,506 ------ ------ Total interest expense 24,274 21,469 ------ ------ Net interest income before provision for loan losses 16,206 13,494 Provision for loan losses 675 670 ------ ------ Net interest income after provision for loan losses 15,531 12,824 ------ ------ Non-interest income: Loan fees and servicing income 505 518 Sevicing released premiums and fees on loans sold 4,531 - Savings/checking fees 3,125 1,811 Net gain on sales of interest-earning assets 335 352 Insurance annuity and mutual fund fees 1,975 1,187 Other 590 591 ------ ------ Total non-interest income 11,061 4,459 ------ ------ Non-interest expense: Compensation and benefits 12,055 7,577 Occupancy and equipment 3,344 2,219 Real estate owned operations, net (151) 49 Federal deposit insurance premiums 254 207 Other 6,887 4,015 ------ ------ Total non-interest expense 22,389 14,067 ------ ------ Income before income tax expense 4,203 3,216 Income tax expense 1,603 1,067 ------ ------ Net income $ 2,600 $ 2,149 ====== ====== Net income per common share: Basic $ 0.30 $ 0.25 ====== ====== Diluted $ 0.29 $ 0.24 ====== ======
See accompanying notes to consolidated financial statements. 4 HAVEN BANCORP, INC. Consolidated Statement of Changes in Stockholders' Equity Three Months Ended March 31, 1999 (Unaudited)
Accumulated Other Unallocated Unearned Additional Comprehen- Common Common Common Paid-In Retained sive Treasury Stock Held Stock Held Unearned Total Stock Capital Earnings Income Stock by ESOP by RRP Compensation (Dollars in thousands) ----- ------ ---------- -------- ---------- -------- ----------- ---------- ------------ Balance at December 31, 1998 $119,867 100 51,383 79,085 945 (9,800) (1,222) (263) (361) Comprehensive Income: Net income 2,600 - - 2,600 - - - - - Other comprehensive income, net of tax Net unrealized depreciation on certain securities, net of reclassification adjustment (1) (3,052) - - - (3,052) - - - - ------- Comprehensive Loss (452) - - - - - - - - Dividends declared (note 5) (665) - - (665) - - - - - Treasury stock issued for RRP and deferred compensation plan (3,630 shares) - - 35 - - 21 - (20) (36) Stock options exercised, net of tax effect (4,492 shares) (note 4) 22 - (4) - - 26 - - - Allocation of ESOP stock and amortization of award of RRP stock and related tax benefits 260 - 166 - - - 73 21 - Amortization of deferred compensation plan 98 - - - - - - - 98 ------- --- ------ ------ ------ ------ ------ ----- ----- Balance at March 31, 1999 $119,130 100 51,580 81,020 (2,107) (9,753) (1,149) (262) (299) ======= === ====== ====== ====== ====== ====== ===== ===== (1) Disclosure of Reclassification Adjustment: (in thousands) Three Months Ended March 31, 1999 ------------------ Net unrealized holding loss arising during period (2,844) Less: reclassification adjustment for net gains included in net income 208 ----- Net unrealized loss on securities available for sale (3,052) =====
See accompanying notes to consolidated financial statements. 5 HAVEN BANCORP, INC. Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited)
Three Months Ended March 31, ------------------ 1999 1998 ---- ---- Cash flows from operating activities: Net income $ 2,600 2,149 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Amortization of cost of stock benefit plans 358 490 Amortization of net deferred loan origination fees (23) (10) Amortization of premiums and accretion of discounts on loans, mortgage-backed and debt securities (70) (473) Provision for loan losses 675 670 Provision for losses on real estate owned - 5 Deferred income taxes (404) (389) Net gain on sales of interest-earning assets (335) (352) Loans originated and purchased for sale, net of proceeds from sale (5,252) - Depreciation and amortization 1,178 625 (Increase) decrease in accrued interest receivable (1,478) 524 Decrease in due to broker (87,458) (10,000) Increase in other liabilities 14,762 8,715 Decrease (increase) in other assets 6,187 (930) ------ ------ Net cash (used in) provided by operating activities (69,260) 1,024 ------ ------ Cash flows from investing activities: Net increase in loans (113,517) (45,347) Proceeds from disposition of assets (including REO) 22 1,876 Purchases of securities available for sale (191,880) (186,510) Principal repayments and maturities on securities available for sale 64,373 50,366 Proceeds from sales of securities available for sale 71,214 123,249 Principal repayments, maturities and calls on debt securities held to maturity - 16,020 Principal repayments on mortgage-backed securities held to maturity - 10,580 Purchases of FHLB stock, net (265) - Net decrease (increase) in premises and equipment 259 (2,191) ------- ------ Net cash used in investing activities (169,794) (31,957) ------- ------ Cash flows from financing activities: Net increase in deposits 82,085 109,816 Net increase (decrease) in borrowed funds 145,984 (66,877) Payment of common stock dividends (665) (546) Stock options exercised 22 418 ------- ------- Net cash provided by financing activities 227,426 42,811 ------- ------- Net (decrease) increase in cash and cash equivalents (11,628) 11,878 Cash and cash equivalents at beginning of period 44,808 40,306 ------ ------ Cash and cash equivalents at end of period $33,180 $52,184 ====== ====== Supplemental information: Cash paid during the period for: Interest $24,011 $20,523 Income taxes 1 1 Additions to real estate owned - 310 Securities purchased, not yet received 10,000 - ====== ======
See accompanying notes to consolidated financial statements. 6 HAVEN BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1999 and 1998 (Unaudited) NOTE 1 - BASIS OF PRESENTATION. The accompanying unaudited consolidated financial statements include the accounts of Haven Bancorp, Inc. ("Haven Bancorp" or the "Company") and its wholly- owned subsidiaries, including CFS Bank ("CFS" or the "Bank") as of March 31, 1999 and December 31, 1998 and for the three-month period ended March 31, 1999 and 1998, respectively. Material intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all necessary adjustments, consisting only of normal recurring accruals necessary for a fair presentation have been included. The results of operations for the three-month period ended March 31, 1999 are not necessarily indicative of the results that may be expected for the entire fiscal year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report to Stockholders for the fiscal year ended December 31, 1998. NOTE 2 - DEBT, EQUITY AND MORTGAGE-BACKED SECURITIES ("MBSs"). Debt securities and MBSs which the Company has the ability and the intent to hold until maturity, are carried at cost adjusted for amortization of premiums and accretion of discounts. Debt and equity securities and MBSs to be held for indefinite periods of time and not intended to be held to maturity or on a long-term basis are classified as available for sale securities which are recorded at fair value, with unrealized gains (losses), net of tax, reported as accumulated other comprehensive income, a separate component of stockholders' equity. At March 31, 1999 and December 31, 1998, all of the Company's debt, equity and mortgage-backed securities were classified as available for sale. 7 SECURITIES AVAILABLE FOR SALE The amortized cost and estimated fair values of securities available for sale at March 31, 1999 are summarized as follows:
Gross Gross Estimated Amortized Unrealized Unrealized Fair Cost Gains Losses Value --------- ---------- ---------- --------- (In thousands) Debt and equity securities available for sale: U.S. Government and Agency obligations $ 81,699 6 (909) 80,796 Preferred Stock 10,992 - (277) 10,715 Corporate debt securities 46,025 - - 46,025 ------- ----- ------ ------- 138,716 6 (1,186) 137,536 ------- ----- ------ ------- MBSs available for sale: GNMA Certificates 428 8 - 436 FNMA Certificates 167,589 1,105 (797) 167,897 FHLMC Certificates 45,422 606 (58) 45,970 CMOs and REMICS 592,269 1,166 (4,247) 589,188 ------- ----- ------ ------- 805,708 2,885 (5,102) 803,491 ------- ----- ------ ------- Total $944,424 2,891 (6,288) 941,027 ======= ===== ====== =======
The net unrealized loss on securities available for sale at March 31, 1999, was reported as a separate component of stockholders' equity, in the amount of $2.1 million which is net of a tax effect of $1.3 million. NOTE 3 - CAPITAL SECURITIES. On April 13, 1999, Haven Bancorp, Inc. filed a registration statement with the Securities and Exchange Commission to issue $35.0 million of capital securities through Haven Capital Trust II. The registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. The Company currently intends to use the net proceeds from the sale of the capital securities to invest in the Bank to increase its capital level. The increased capital will enable the Bank to expand its deposit base and also invest in residential and commercial real estate loans in its market area and in investment-grade mortgage- backed and investment securities. It is also possible that, if the Company's Board of Directors determines that it is in the best interest of its shareholders, a portion of the net proceeds may be used for repurchases of the Company's stock. 8 NOTE 4 - STOCK PLANS. Changes in outstanding options for the benefit of directors, officers and other key employees of the Bank for the three months ended March 31, 1999 are as follows:
Weighted Average Options Exercise Price ------- ---------------- Balance at December 31, 1998 1,305,268 9.44 Granted 176,500 13.77 Forfeited (10,000) 25.70 Exercised (4,492) 5.00 --------- ----- Balance at March 31, 1999 1,467,276 9.86 ========= ===== Shares exercisable at March 31, 1999 1,035,022 7.20 ========= =====
NOTE 5 - DIVIDENDS PAYABLE. On March 24, 1999, the Company's Board of Directors approved a regular quarterly cash dividend of $0.075 per share, payable on April 23, 1999, to shareholders of record as of April 3, 1999. NOTE 6 - RECENT ACCOUNTING/REGULATORY PRONOUNCEMENTS. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133 establishes accounting and reporting standards for derivative instruments and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial condition and measure those instruments at fair value. The accounting for changes in the fair value of a derivative (that is, gains and losses) depends on the intended use of the derivative and the resulting designation. SFAS No. 133 is effective for fiscal years beginning after June 15, 1999 and does not require restatement of prior periods. Management of the Company currently believes the implementation of SFAS No. 133 will not have a material impact on the Company's financial condition or results of operations. NOTE 7 - NET INCOME PER SHARE OF COMMON STOCK. There were 8,634,171 basic shares outstanding and 9,021,614 diluted shares outstanding for the three months ended March 31, 1999. The weighted average number of shares outstanding does not include 229,769 shares which are unallocated by the Employee Stock Ownership Plan ("ESOP") as of March 31, 1999 in accordance with American Institute of CPAs ("AICPA") Statement of Position ("SOP") 93-6, "Employers' Accounting for ESOPs". Basic EPS excludes 9 dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the relevant period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. NOTE 8 - COMPREHENSIVE (LOSS) INCOME. Comprehensive (loss) income was $(452,000) and $878,000 for the three month periods ended March 31, 1999 and 1998, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Haven Bancorp, Inc. ("Haven Bancorp" or the "Company") is the holding company for CFS Insurance Agency, Inc. and CFS Bank ("CFS" or the "Bank"), a federally chartered stock savings bank. CFS converted from a mutual to a stock savings bank on September 23, 1993 in conjunction with the issuance of the Bank's capital stock to Haven Bancorp. Haven Bancorp's business currently consists primarily of the business of the Bank. The Bank's principal business has been and continues to be attracting retail deposits from the general public and investing those deposits, together with funds generated from operations primarily in one- to four-family, owner occupied residential mortgage loans. In addition, the Bank will invest in debt, equity and mortgage-backed securities ("MBSs") to supplement its lending portfolio. The Bank also invests, to a lesser extent, in multi-family residential mortgage loans, commercial real estate loans and other marketable securities. The Bank's results of operations are dependent primarily on its net interest income, which is the difference between the interest income earned on its loan and securities portfolios and its cost of funds, which primarily consists of the interest paid on its deposits and borrowed funds. The Bank's net income also is affected by its non- interest income, including servicing released premiums and fees on loans sold in the secondary market, its provision for loan losses and operating expenses consisting primarily of compensation and benefits, occupancy and equipment, real estate owned operations, net, federal deposit insurance premiums and other general and administrative expenses. The earnings of the Bank are significantly affected by general economic and competitive conditions, particularly changes in market interest rates, and to a lesser extent by government policies and actions of regulatory authorities. 10 ANALYSIS OF FINANCIAL CONDITION CHANGES FROM DECEMBER 31, 1998 TO MARCH 31, 1999 ASSETS Total assets increased by $154.6 million, or 6.5% to $2.55 billion at March 31, 1999 from $2.40 billion at December 31, 1998. Securities available for sale ("AFS") increased by $51.8 million, or 5.8% to $941.0 million at March 31, 1999 from $889.2 million at December 31, 1998 resulting primarily due to purchases during the quarter for the AFS portfolio. During the quarter ended March 31, 1999, the Bank purchased $136.9 million of MBSs and $55.0 million of debt and equity securities for its AFS portfolio. The emphasis on MBS securities was due to the availability of more favorable rates and shorter durations. These increases were partially offset by sales and principal repayments of $71.2 million and $64.4 million, respectively. Net loans increased by $112.9 million, or 8.7% to $1.41 billion at March 31, 1999 from $1.30 billion at December 31, 1998. Loan originations during the quarter totaled $329.9 million (comprised of $292.8 million of residential one- to four-family mortgage loans, $3.0 million of equity loans and lines of credit, $26.8 million of multi-family loans and $7.3 million of commercial real estate loans). Originations of residential one- to four-family mortgage loans included purchases of $112.6 million of residential loans in the secondary market. Residential loans originated or purchased for sale in the secondary market for the three months ended March 31, 1999 totaled $160.6 million. During the first quarter of 1999, the Bank sold $155.4 million of residential loans on a servicing released basis to third party investors. During the first quarter of 1999, principal repayments totaled $53.6 million. LIABILITIES Deposits increased by $82.1 million, or 4.8% to $1.80 billion at March 31, 1999 from $1.72 billion at December 31, 1998 primarily due to deposit inflows in the Bank's supermarket branches. Deposits in the supermarket branches totaled $578.1 million at March 31, 1999 compared to $504.0 million at December 31, 1998. The Bank had fifty-nine supermarket bank branches as of March 31, 1999 compared to fifty-seven supermarket branches at December 31, 1998. The Bank expects to open one additional in-store branch during May of 1999. Core deposits (comprised of checking, savings and money market accounts) were equal to 58.3% of total in-store branch deposits at March 31, 1999 compared to 45.3% in the Bank's eight traditional branches. Core deposits for the supermarket branches included $209.3 million of "Liquid Asset" account balances at March 31, 1999. Overall, core deposits represented 53.6% of total deposits at March 31, 1999 compared to 47.7% at December 31, 11 1998. Borrowed funds increased by $146.0 million, or 33.2% to $586.3 million at March 31, 1999 from $440.3 million at December 31, 1998 primarily due to the funding requirements for loan origination volume and wholesale purchases of CFS Intercounty, the Bank's residential lending division. STOCKHOLDERS' EQUITY Haven Bancorp's stockholders' equity decreased to $119.1 million at March 31, 1999 from $119.9 million at December 31, 1998. The decrease in stockholders' equity was due to a reduction of $3.1 million in the unrealized gain on securities available for sale and dividends declared totaling $665,000. These decreases were partially offset by net income of $2.6 million for the quarter and $380,000 related to the amortization of awards of shares of stock by the Bank's RRPs, and amortization of the deferred compensation plan, and stock options exercised. 12 NON-PERFORMING ASSETS The following table sets forth information regarding all non- accrual loans (which consist of loans 90 days or more past due and restructured loans that have not yet performed in accordance with their modified terms for the required six-month seasoning period), restructured loans and real estate owned ("REO").
March 31, December 31, 1999 1998 --------- ------------ (Dollars in thousands) Non-accrual loans One- to four-family $ 5,374 3,779 Cooperative 387 367 Multi-family 620 308 Non-residential and other 2,215 2,074 ------ ------ Total non-accrual loans 8,596 6,528 ------ ------ Restructured loans One- to four-family 193 544 Cooperative 182 183 Multi-family 1,123 1,130 ------ ------ Total restructured loans 1,498 1,857 ------ ------ Total non-performing loans 10,094 8,385 ------ ------ REO, net One- to four-family 44 66 Cooperative 38 38 Non-residential and other 121 121 ------ ------ Total REO 203 225 Less allowance for REO (12) (25) ------ ------ REO, net 191 200 ------ ------ Total non-performing assets $10,285 8,585 ====== ====== Non-performing loans to total loans 0.71% 0.64% Non-performing assets to total assets 0.40 0.36 Non-performing loans to total assets 0.40 0.35
The increase in non-performing assets was primarily due to an increase of $1.7 million in non-performing loans from December 31, 1998 to March 31, 1999. The ratios of non-performing loans to 13 total loans, non-performing assets to total assets and non- performing loans to total assets all increased primarily due to the increase of $1.7 million in non-performing loans during the quarter. The Bank maintains an allowance for loan losses and an allowance for REO, which it believes are adequate for potential losses at each period end. Management's judgment as to potential losses is based on its review of the loan and REO portfolios and its judgment regarding prevailing and anticipated economic conditions and a variety of other factors which have an impact on those portfolios. Although management believes that the allowances are adequate as of the period end, additional provisions may be required in the future. ALLOWANCE FOR LOAN LOSSES The following table sets forth the changes in the allowance for loan losses for the three months ended March 31, 1999 and 1998:
1999 1998 ------- ------- (Dollars in thousands) Balance at beginning of period $13,978 12,528 Charge-offs: Residential (324) (84) Cooperative - (56) Multi-family - (708) Non-residential and other - (291) ------ ------ Total charge-offs (324) (1,139) ------ ------ Recoveries 244 857 ------ ------ Net charge-offs (80) (282) Provision for loan losses 675 670 ------ ------ Balance at end of period $14,573 12,916 ====== ====== Ratio of net charge-offs during the period to average loans outstanding during the period 0.02% 0.10% Ratio of allowance for loan losses to total loans at the end of the period 1.02 1.08 Ratio of allowance for loan losses to non- performing loans at the end of the period 144.37 119.05
The ratio of net charge-offs to average loans outstanding during 14 the first quarter of 1999 decreased compared to the same period in 1998 primarily due to the decrease in net charge-offs for the first quarter of 1999 compared to the first quarter of 1998, as well as the increase in average loans outstanding. The ratio of allowance for loan losses to total loans decreased for the quarter due to the increase in loans outstanding at March 31, 1999. The ratio of allowance for loan losses to non-performing loans increased between the periods due to an increase of $1.7 million in the allowance for loan losses. The Bank's allowance for loan losses was $14.6 million and $12.9 million at March 31, 1999 and March 31, 1998, respectively, whereas non-performing loans totaled $10.1 million and $10.8 million, respectively, at those dates. ASSET/LIABILITY MANAGEMENT The Company has attempted to reduce its exposure to interest rate risk through the origination and purchase of ARM loans, debt securities and MBSs and maintaining an AFS securities portfolio. During the first quarter of 1999, the Bank originated or purchased for its portfolio $77.7 million of residential adjustable-rate mortgages and $34.1 million of adjustable-rate multi-family, commercial real estate and construction loans which are expected to help protect net interest margins during periods of rising interest rates. During the same period, the Bank purchased $176.6 million of fixed rate debt securities and MBSs to take advantage of higher yields compared to rates offered on adjustable-rate securities. At March 31, 1999, $240.5 million, or 25.6% of the Company's AFS portfolio were adjustable-rate securities and $700.5 million, or 74.4% of the portfolio were fixed rate securities. Historically, the Company has been able to maintain a substantial level of core deposits (comprised of checking, savings and money market accounts) which the Company believes helps to limit interest rate risk by providing a relatively stable, low cost, long-term funding base. At March 31, 1999, core deposits represented 53.6% of deposits compared to 47.7% of deposits at December 31, 1998. Core deposits included $209.3 million of "Liquid Asset" account balances at March 31, 1999. This account was introduced at the supermarket branches in the second quarter of 1998 and currently pays an initial rate of 4.25% for balances over $2,500. During the first quarter of 1999, savings accounts increased by $62.6 million, net of interest, whereas, certificates of deposit decreased by $10.8 million, net of interest. The number of checking accounts increased by 14,997, or 9.9% to 166,436 at March 31, 1999 from 151,439 at December 31, 1998. Most of the increase, 13,678 accounts, is attributable to the Bank's supermarket bank branches. The Company expects to attract a higher percentage of core deposits from its supermarket branch locations as the supermarket branching program continues to grow and mature. 15 LIQUIDITY AND CAPITAL The Bank is required to maintain minimum levels of liquid assets as defined by the Office of Thrift Supervision ("OTS") regulations. This requirement, which may be varied by the OTS depending upon economic conditions and deposit flows, is based upon a percentage of withdrawable deposits and short-term borrowings. The required ratio is currently 4%. The Bank's ratio was 5.43 at March 31, 1999 compared to 4.24% at December 31, 1998. The Company's primary sources of funds are deposits, advances from Federal Home Loan Bank of New York ("FHLB-NY"), principal and interest payments on loans and MBSs and retained earnings. Proceeds from the sale of AFS securities and loans held for sale are also a source of funding, as are, to a lesser extent, the sales of insurance, annuities and securities brokerage activities conducted by the Company's subsidiary, CFS Insurance Agency, Inc. and the Bank's subsidiary, CFS Investments, Inc. ("CFSI"). While maturities and scheduled amortization of loans and MBSs are somewhat predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions, competition and regulatory changes. The Company's most liquid assets are cash and short term investments. The levels of these assets are dependent on the Company's operating, financing, lending and investing activities during any given period. At March 31, 1999 and December 31, 1998, cash and short and intermediate-term investments totaled $33.2 million and $44.8 million, respectively. The Company and the Bank have other sources of liquidity which include debt securities maturing within one year, loans held for sale and AFS securities. Other sources of funds include FHLB advances, which at March 31, 1999, totaled $397.9 million. At March 31, 1999, the Bank had unused lines of credit totaling $39.4 million with the FHLB-NY. As of March 31, 1999, the Bank exceeded all regulatory capital requirements as detailed in the following table:
Tangible Capital Core Capital(1) Risk-Based Capital(2) ------------------ ------------------ ------------------- Amount Ratio (3) Amount Ratio (3) Amount Ratio (3) ------ --------- ------ --------- ------ ---------- (Dollars in thousands) Capital for regulatory purposes $133,259 5.20% $133,259 5.20% $146,565 11.24% Minimum regulatory requirement 51,212 2.00 102,423 4.00(3) 104,359 8.00 ------- ---- ------- ---- ------- ---- Excess $ 82,047 3.20% $ 30,836 1.20% $ 42,206 3.24% ======= ==== ======= ==== ======= ====
(1) Under the OTS's prompt corrective action regulations, the core 16 capital requirement was effectively increased to 4.00% since OTS regulations stipulate that as of that date an institution with less than 4.00% core capital will be deemed to be classified as "undercapitalized". (2) The OTS regulations require that certain institutions with more than a "normal level" of interest rate risk to maintain capital in addition to the 8.0% risk-based capital requirement. The Bank currently is not, and does not anticipate that its risk- based capital requirement will be materially affected as a result of this OTS requirement. (3) For tangible and core capital, the ratio is to adjusted total assets. For risk-based capital, the ratio is to total risk- weighted assets. ANALYSIS OF CORE EARNINGS The Company's profitability is primarily dependent upon net interest income, which represents the difference between income on interest-earning assets and expenses on interest-bearing liabilities. Net interest income is dependent on the average balances and rates received on interest-earning assets and the average balances and rates paid on interest-bearing liabilities. Net income is further affected by non-interest income, non-interest expense and income taxes. 17 The following table sets forth certain information relating to the Company's average consolidated statements of financial condition and consolidated statements of income for the three months ended March 31, 1999 and 1998, respectively, and reflects the average yield on assets and average cost of liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense annualized by the average balance of assets or liabilities, respectively, for the periods shown. Average balances were derived from average daily balances. The average balance of loans includes loans on which the Company has discontinued accruing interest. The yields and costs include fees which are considered adjustments to yields.
Three Months Ended March 31, 1999 1998 ------------------------ ------------------------ Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ------- -------- ------- ------- -------- ------- (Dollars in thousands) Assets: Interest-earning assets: Mortgage loans $1,377,235 $24,885 7.23% $1,136,919 $21,739 7.65% Other loans 37,178 850 9.15 32,833 787 9.59 Mortgage-backed securities 762,234 12,650 6.64 537,116 8,931 6.65 Money market investments 1,516 30 7.92 8,175 104 5.09 Debt and equity securities 133,067 2,065 6.21 200,415 3,402 6.79 --------- ------ --------- ------ Total interest-earning assets 2,311,230 40,480 7.01 1,915,458 34,963 7.30 Non-interest-earning assets 147,604 ------ 93,488 ------ --------- --------- Total assets 2,458,834 2,008,946 ========= ========= Liabilities and stockholders' equity: Interest-bearing liabilities: Savings accounts 576,044 4,669 3.24 384,701 2,416 2.51 Certificate accounts 892,050 11,753 5.27 824,774 11,863 5.75 NOW accounts 222,499 324 0.58 159,088 261 0.66 Money market accounts 57,986 419 2.89 55,260 423 3.06 Borrowed funds 530,099 7,109 5.36 432,750 6,506 6.01 --------- ------ --------- ------ Total interest-bearing liabilities 2,278,678 24,274 4.26 1,856,573 21,469 4.63 Other liabilities 60,133 ------ 38,074 ------ --------- --------- Total liabilities 2,338,811 1,894,647 Stockholders' equity 120,023 114,299 --------- --------- Total liabilities and stockholders' equity $2,458,834 2,008,946 ========= ========= Net interest income/net interest rate spread $16,206 2.75% $13,494 2.67% ====== ==== ====== ==== Net interest earning assets/net interest margin $32,552 2.80% $58,885 2.82% ====== ==== ====== ==== Ratio of interest-earning assets to interest-bearing liabilities 101.43% 103.17% ====== ======
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 GENERAL. The Company reported net income of $2.6 million for the 18 three months ended March 31, 1999 compared to net income of $2.1 million for the three months ended March 31, 1998. The increase was primarily attributable to an increase of $2.7 million in net interest income and an increase of $6.6 million in non-interest income. These increases were partially offset by an increase of $8.3 million in non-interest expense from the prior year period. Income tax expense increased $536,000 from the same period last year due to an increase of $1.0 million in pre-tax income. INTEREST INCOME. Interest income increased by $5.5 million, or 15.8% to $40.5 million for the three months ended March 31, 1999 from $35.0 million for the three months ended March 31, 1998. The increase was primarily the result of a $3.1 million increase in interest income on mortgage loans and an increase of $3.7 million in interest income on MBS securities. These increases were partially offset by decreases in interest income on debt and equity securities and money market investments of $1.3 million and $74,000, respectively. Interest income on mortgage loans increased by $3.1 million, or 14.5% to $24.9 million for the three months ended March 31, 1999, from $21.7 million for the comparable three-month period in 1998. The increase was primarily the result of an increase in the average balance of mortgage loans of $240.3 million, partially offset by a decline in the average yield on mortgage loans of 42 basis points from the first quarter of 1998. The increase in the average balance of mortgage loans between the periods was primarily due to mortgage originations, including purchases, for the entire year of 1998 and the first quarter of 1999 which totaled $1.22 billion and $326.8 million, respectively. The increased originations reflect the addition of the loan production franchise of CFS Intercounty. The originations for both periods were partially offset by prin- cipal payments of $279.7 million and $51.8 million, respectively. The decline in the average yield from the prior year was primarily due to the general decline in market interest rates in 1998. Interest income on MBSs increased by $3.7 million, or 41.6% to $12.6 million for the three months ended March 31, 1999 from $8.9 million for the comparable three-month period in 1998 primarily due to an increase of $225.1 million in the average balance of MBSs at March 31, 1999 compared to March 31, 1998. During the first quarter of 1999, the Bank purchased $136.9 million of MBSs for its AFS portfolio which were partially offset by sales of MBSs totaling $54.3 million. Interest income on debt and equity securities decreased by $1.3 million, or 39.3% to $2.1 million for the three months ended March 31, 1999 from $3.4 million for the comparable three-month period in 1998 primarily as a result of a decrease in average balances of $67.3 million coupled with a 58 basis point decrease in the average yield. During the first quarter of 1999, the Bank purchased $55.0 19 million of debt and equity securities for the AFS portfolio, partially offset by sales totaling $16.9 million. The emphasis on MBS securities over debt and equity securities was due to the availability of competitive rates along with shorter durations. INTEREST EXPENSE. Interest expense increased by $2.8 million, or 13.1% to $24.3 million for the three months ended March 31, 1999 from $21.5 million for the three months ended March 31, 1998. The increase was primarily the result of a $2.2 million increase in interest expense on deposits and an increase of $0.6 million in interest expense on borrowed funds. Interest on deposits increased by $2.2 million, or 14.7% to $17.2 million for the three months ended March 31, 1999 from $15.0 million for the comparable three-month period in 1998. The increase in interest on deposits was primarily due to the increased average balance of $324.8 million. The deposit growth is primarily attributable to the Bank's supermarket banking program. At March 31, 1999, the Bank had fifty-nine supermarket bank branches with deposits totaling $578.1 million, compared to thirty-nine supermarket branches with deposits of $238.2 million at March 31, 1998. The increase in average balance was primarily due to savings account balances which increased by $191.3 million, or 49.7% to $576.0 million for the three months ended March 31, 1999 from $384.7 million for the comparable three-month period in 1998. Interest expense on savings accounts increased by $2.3 million, or 93.3% to $4.7 million for the three months ended March 31, 1999 from $2.4 million in the same period in 1998. The average cost of savings accounts was 3.24% for the first quarter of 1999 compared to 2.51% for the first quarter of 1998. The increase in the average cost of savings accounts was due to the "Liquid Asset" account which was introduced at the supermarket bank branches during the second quarter of 1998. This account currently pays an initial rate of 4.25% for balances over $2,500. The Bank's supermarket branches had $267.1 million in savings balances as of March 31, 1999 compared to $45.6 million as of March 31, 1998. Interest expense on certificate accounts decreased by $110,000, or 0.9% to $11.8 million for the three months ended March 31, 1999 from $11.9 million in the same period in 1998. This was primarily due to the decline in the average cost of these deposits to 5.27% for the period ended March 31, 1999 from 5.75% for the same period last year. The average cost of all deposits was 3.92% for the three months ended March 31, 1999 compared to 4.20% for the first quarter of 1998 reflecting the general decline in market interest rates. Interest on borrowed funds increased by $603,000, or 9.3% to $7.1 million for the three months ended March 31, 1999 from $6.5 million for the comparable three-month period in 1998. Borrowed funds on an average basis increased by $97.3 million between the periods primarily due to the addition of short-term FHLB advances and 20 securities sold under agreements to repurchase during 1999 in order to complement deposit growth as a funding mechanism for mortgage loan originations. The average rate paid on borrowings decreased to 5.36% for the three months ended March 31, 1999 from 6.01% for the comparable prior-year period primarily due to a decline in market rates in 1998. NET INTEREST INCOME. Net interest income increased by $2.7 million, or 20.1% to $16.2 million for the three months ended March 31, 1999 from $13.5 million for the three months ended March 31, 1998. The increase is primarily due to the total average balance of interest-earning assets which increased by $395.8 million, or 20.7% to $2.31 billion for the three months ended March 31, 1999 from $1.92 billion for the same period last year. This growth is mainly due to growth in the Bank's residential mortgage loan and mortgage-backed securities portfolios. This increase was partially offset by the average yield on interest-earning assets which decreased to 7.01% for the three month period ended March 31, 1999 from 7.30% for the three-month period in 1998. However, the average cost of interest-bearing liabilities decreased to 4.26% from 4.63% for the three months ended March 31, 1999 and 1998, respectively, reflecting the general decline in market interest rates in 1998. Therefore, the net interest spread was 2.75% for the three months ended March 31, 1999 compared to 2.67% for the comparable period in 1998. PROVISION FOR LOAN LOSSES. The Bank provided $675,000 for loan losses for the three months ended March 31, 1999 compared to $670,000 for the comparable three-month period in 1998. The provision for loan losses is established based on management's periodic review and evaluation of the loan portfolio. NON-INTEREST INCOME. Non-interest income increased by $6.6 million, or 148.1% for the three months ended March 31, 1999 to $11.1 million from $4.5 million for the comparable three-month period in 1998. Non-interest income for the first quarter of 1999 included $4.5 million in servicing released premiums and fees related to loans sold in the secondary market in the quarter. The Bank generally recognizes fee income, including servicing released premiums, from its mortgage banking activities as loan sales are settled. Savings and checking fees increased by $1.3 million, or 72.6% to $3.1 million for the first quarter of 1999 compared to $1.8 million for the same period last year. The significant increase in savings and checking fees is primarily due to the number of checking accounts which increased by 54,902, or 49.2% to 166,436 accounts at March 31, 1999 from 111,534 accounts at March 31, 1998. A significant portion of this growth is attributable to the Bank's supermarket banking program. The supermarket branches generated savings and checking fees of $2.2 million for the first quarter of 1999 compared to $1.0 million for the first quarter of last year. Insurance, annuity and mutual fund fees for the first 21 quarter of 1999 increased by $788,000, or 66.4% to $2.0 million from $1.2 million for the same period last year which included $946,000 in revenue from sales originating from supermarket branches compared to $330,000 for the three months ended March 31, 1998. NON-INTEREST EXPENSE. Non-interest expense increased by $8.3 million, or 59.2% for the three months ended March 31, 1999 to $22.4 million from $14.1 million for the comparable three-month period in 1998. The increase was due primarily to the addition of the expenses of the loan production franchise of CFS Intercounty and the Bank's expansion of its supermarket banking program from thirty-nine branches at March 31, 1998 to fifty-nine branches at March 31, 1999. As a result of the increased headcount, compensation and benefits costs increased by $4.5 million, or 59.1% to $12.1 million for the three months ended March 31, 1999 from $7.6 million for the same period last year. Occupancy and equipment costs increased by $1.1 million, or 50.7% to $3.3 million for the first quarter of 1999 from $2.2 million for the same period last year primarily due to the addition of twenty supermakret branches as well as the expansion of the Bank's residential lending function through CFS Intercounty. Occupancy and equipment expense also increased as a result of the purchase of the Company's new headquarters, which was completed in the third quarter 1998. Other operating costs increased by $2.9 million, or 71.5% to $6.9 million for the three months ended March 31, 1999 from $4.0 million for the same period last year primarily due to the addition of CFS Intercounty and the additional supermarket branches. INCOME TAX EXPENSE. Income tax expense was $1.6 million for an effective tax rate of 38.1% for the three months ended March 31, 1999 compared to income tax expense of $1.1 million for an effective tax rate of 33.2% for the comparable period in 1998. The 1998 quarter included a reversal of previously provided income taxes. COMPUTER ISSUES FOR THE YEAR 2000. Many of the Company's existing computer systems use two digits to identify the year in the date fields. As a result, these systems may not be able to distinguish the year 2000 from the year 1900. Software, hardware and equipment both within and outside the Company's direct control and with which the Company electronically or operationally interfaces (e.g. third party vendors providing data processing, information system management, maintenance of computer systems, and credit bureau information) are likely to be affected. Further, if computer systems are not adequately changed to identify the year 2000, many computer applications could fail or create erroneous results. As a result, many calculations which rely on the date field information, such as interest, payment or due dates and other operating functions, could generate results which could be significantly misstated, and the Company could experience a temporary inability 22 to process transactions, send invoices or engage in similar normal business activities. If not corrected, these computer systems could fail by or at the year 2000. The Company primarily uses a third party vendor to process its electronic data. This vendor has made modifications or replacements of its computer applications and systems necessary to correct the year 2000 date issue. Management has substantially completed the testing of the modifications to these systems and applications. The Company also utilizes a combination of purchased and contract-based software as well as other third party vendors for a variety of data processing needs. The Company's assessment of potential computer issues for the year 2000 have been substantially completed. Where potential computer issues have been identified, the vendors have committed to definitive dates to resolve such issues. Under regulatory guidelines issued by the federal banking regulators, the Bank and the Company must substantially complete testing of both internally and externally supplied systems and all renovations, by June 30, 1999. In the event that the Company's significant vendors do not achieve year 2000 compliance, the Company's operations could be adversely affected. The Company has established contingency plans for these systems for which year 2000 issues will not be corrected. The OTS, the Company's primary federal bank regulatory agency, along with the other federal bank regulatory agencies has published guidance on the year 2000 compliance and has identified the year 2000 issue as a substantive area of examination for both regularly scheduled and special bank examinations. These publications, in addition to providing guidance as to examination criteria, have outlined requirements for creation and implementation of a compliance plan and target dates for testing and implementation of corrective action, as discussed above. As a result of the oversight by and authority vested in the federal bank regulatory agencies, a financial institution that does not become year 2000 compliant could become subject to administrative remedies similar to those imposed on financial institutions otherwise found not to be operating in a safe and sound manner, including remedies available under prompt corrective action regulations. There has been limited litigation filed against corporations regarding the year 2000 problem and such corporations' compliance efforts. To date, no such litigation has resulted in a decided case imposing liability on the corporate entity. Nonetheless, the law in this area will likely continue to develop well into the new millennium. Should the Company experience a year 2000 failure, exposure of the Company could be significant and material, unless there is legislative action to limit such liability. Legislation has been introduced in several jurisdictions regarding the year 2000 problem. However, no assurance can be given that legislation 23 will be enacted in jurisdictions where the Company does business that will have the effect of limiting any potential liability. Through March 31, 1999, the Company did not incur any costs associated with achieving year 2000 compliance. However, the Company expects to incur approximately $451,000 in costs to achieve year 2000 compliance during the remainder of 1999. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK In management's opinion, there has not been a material change in market risk from December 31, 1998 as reported in item 7A of the Company's Form 10-K. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In February, 1983, a burglary of the contents of safe deposit boxes occurred at a branch office of the Bank. At March 31, 1999, the Bank has a class action lawsuit related thereto pending, whereby the plaintiffs are seeking recovery of approximately $12.9 million in actual damages and an additional $12.9 million of unspecified damages. The Banks ultimate liability, if any, which might arise from the disposition of these claims cannot presently be determined. Management believes it has meritorious defenses against these actions and has and will continue to defend its position. Accordingly, no provision for any liability that may result upon adjudication has been recognized in the accompanying consolidated financial statements. The Company is involved in various other legal actions arising in the ordinary course of business, which in the aggregate, are believed by management to be immaterial to the financial position of the Company. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Company's Annual Meeting of Stockholders was held on April 21, 1999. (b) Not applicable. 24 (c) At such meeting, the shareholders approved the following matters: 1. The election of the following individuals as Directors for a term of 3 years each:
Votes Broker Votes For Withheld Abstentions Non-Votes George S. Worgul 7,103,456 914,489 -0- -0- Michael J. Levine 7,113,320 904,625 -0- -0-
2. The ratification of KPMG LLP as independent auditors of the Company for the fiscal year ending December 31, 1999, as reflected by 7,863,457 votes for, 134,216 votes against, 20,272 abstentions and no broker non-votes. (d) Not applicable. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 3.1 Bylaws of Haven Bancorp, Inc., as amended on April 21, 1999. a) 27.1 Financial Data Schedule. b) The Company filed a Form 8-K on April 29, 1999 regarding the press release announcing its 1999 first quarter earnings. 25 SIGNATURES Pursuant to the requirements of The Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HAVEN BANCORP INC. (Registrant) Date: May 13, 1999 By: /s/ Philip S. Messina --------------------------- Philip S. Messina Chairman, President and Chief Executive Officer Date: May 13, 1999 By: /s/ Catherine Califano --------------------------- Catherine Califano Senior Vice President and Chief Financial Officer 26 EX-3.1 2 EXHIBIT 3.1 HAVEN BANCORP, INC. BYLAWS ARTICLE I - STOCKHOLDERS Section 1. Annual Meeting. An annual meeting of the stockholders, for the election of Directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, on such date, and at such time as the Board of Directors shall each year fix, which date shall be within thirteen (13) months subsequent to the later of the date of incorporation or the last annual meeting of stockholders. Section 2. Special Meetings. Subject to the rights of the holders of any class or series of preferred stock of the Corporation, special meetings of stockholders of the Corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of Directors which the Corporation would have if there were no vacancies on the Board of Directors (hereinafter the "Whole Board"). Section 3. Notice of Meetings. Written notice of the place, date, and time of all meetings of the stockholders shall be given, not less than ten (10) nor more than sixty (60) days before the date on which the meeting is to be held, to each stockholder entitled to vote at such meeting, except as otherwise provided herein or required by law (meaning, here and hereinafter, as required from time to time by the Delaware General Corporation Law or the Certificate of Incorporation of the Corporation). When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than thirty (30) days after the date for which the meeting was originally noticed, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting. Section 4. Quorum. At any meeting of the stockholders, the holders of a majority of all of the shares of the stock entitled to vote at the meeting, present in person or by proxy (after giving effect to the provisions of Article FOURTH of the Corporation's Certificate of Incorporation), shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Where a separate vote by a class or classes is required, a majority of the shares of such class or classes present in person or represented by proxy (after giving effect to the provisions of Article FOURTH of the Corporation's Certificate of Incorporation) shall constitute a quorum entitled to take action with respect to that vote on that matter. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time. If a notice of any adjourned special meeting of stockholders is sent to all stockholders entitled to vote thereat, stating that it will be held with those present in person or by proxy constituting a quorum, then except as otherwise required by law, those present in person or by proxy at such adjourned meeting shall constitute a quorum, and all matters shall be determined by a majority of the votes cast at such meeting. Section 5. Organization. Such person as the Board of Directors may have designated or, in the absence of such a person, the Chairman of the Board of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman appoints. Section 6. Conduct of Business. (a) The chairman of any meeting of stockholders shall determine the order of business and the procedures at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. (b) At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who is entitled to vote with respect thereto and who complies with the notice procedures set forth in this Section 6(b). For business to be properly brought before an annual meeting by a stockholder, the business must relate to a proper subject matter for stockholder action and the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered or mailed to and received at the principal executive offices of the Corporation not less than ninety (90) days prior to the date of the annual meeting; provided, however, that in the event that less than one hundred (100) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter such stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation's capital stock that are beneficially owned by such stockholder and (iv) any material interest of such stockholder in such business. Notwithstanding anything in these Bylaws to the contrary, no business shall be brought before or conducted at an annual meeting except in accordance with the provisions of this Section 6(b). The Officer of the Corporation or other person presiding over the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 6(b) and, if he or she should so determine, he or she shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be transacted. At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting by or at the direction of the Board of Directors. (c) Only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible for the election as Directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this Section 6(c). For a nomination to be brought properly before the meeting, other than those made by or at the direction of the Board of Directors, a stockholder must have made timely notice of the proposed nomination in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered or mailed to and received at the principal executive offices of the Corporation not less than ninety (90) days prior to the date of the meeting; provided, however, that in the event that less than one hundred (100) days' notice or prior disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice to the Secretary shall set forth (i) as to each person whom such stockholder proposes to nominate for election or re-election as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (ii) as to the stockholder giving the notice (a) the name and address, as they appear on the Corporation's books, of such stockholder and (b) the class and number of shares of the Corporation's capital stock that are beneficially owned by such stockholder. At the request of the Board of Directors any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the provisions of this Section 6(c). The Officer of the Corporation or other person presiding at the meeting shall, if the facts so warrant, determine that a nomination was not made in accordance with such provisions and, if he or she shall so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded. Section 7. Proxies and Voting. At any meeting of the stockholders, every stockholder entitled to vote may vote in person or by proxy authorized by an instrument in writing filed in accordance with the procedure established for the meeting. Any facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission. All voting, including on the election of Directors but excepting where otherwise required by law or by the governing documents of the Corporation, may be made by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballot, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedures established for the meeting. The Corporation shall, in advance of any meeting of stockholder, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast. Section 8. Stock List. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in his or her name, shall be open to the examination of any such stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The stock list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them. Section 9. Consent of Stockholders in Lieu of Meeting. Subject to the rights of the holders of any class of series of preferred stock of the Corporation, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. ARTICLE II - BOARD OF DIRECTORS Section 1. General Powers, Number and Term of Office. The business and affairs of the Corporation shall be under the direction of its Board of Directors. The number of Directors who shall constitute the Whole Board shall be such number as the Board of Directors shall from time to time have designated except in the absence of such designation shall be seven. The Board of Directors shall annually elect a Chairman of the Board from among its members who shall, when present, preside at its meetings. The Directors, other than those who may be elected by the holders of any class or series of Preferred Stock, shall be divided, with respect to the time for which they severally hold office, into three classes, with the term of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years thereafter, with each Director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, Directors elected to succeed those Directors whose terms then expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election, with each Director to hold office until his or her successor shall have been duly elected and qualified. Section 2. Vacancies and Newly Created Directorships. Subject to the rights of the holders of any class or series of Preferred Stock, and unless the Board of Directors otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled only by a majority vote of the Directors then in office, though less than a quorum, and Directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires and until such Director's successor shall have been duly elected and qualified. No decrease in the number of authorized directors constituting the Board shall shorten the term of any incumbent Director. Section 3. Regular Meetings. Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all Directors. A notice of each regular meeting shall not be required. Section 4. Special Meetings. Special meetings of the Board of Directors may be called by one- third (1/3) of the Directors then in office (rounded up to the nearest whole number), by the Chairman of the Board or the President and shall be held at such place, on such date, and at such time as they, or he or she, shall fix. Notice of the place, date, and time of each such special meeting shall be given each Director by whom it is not waived by mailing written notice not less than five (5) days before the meeting or by telegraphing or telexing or by facsimile transmission of the same not less than twenty-four (24) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting. Section 5. Quorum. At any meeting of the Board of Directors, a majority of the Whole Board shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date, or time, without further notice or waiver thereof. Section 6. Participation in Meetings by Conference Telephone. Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting. Section 7. Conduct of Business. At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the Directors present, except as otherwise provided herein or required by law. Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors. Section 8. Powers. The Board of Directors may, except as otherwise required by law, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, including, without limiting the generality of the foregoing, the unqualified power: (1) To declare dividends from time to time in accordance with law; (2) To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine; (3) To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith; (4) To remove any Officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any Officer upon any other person for the time being; (5) To confer upon any Officer of the Corporation the power to appoint, remove and suspend subordinate Officers, employees and agents; (6) To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for Directors, Officers, employees and agents of the Corporation and its subsidiaries as it may determine; (7) To adopt from time to time such insurance, retirement, and other benefit plans for Directors, Officers, employees and agents of the Corporation and its subsidiaries as it may determine; and, (8) To adopt from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation's business and affairs. Section 9. Compensation of Directors. Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as Directors, including, without limitation, their services as members of committees of the Board of Directors. ARTICLE III - COMMITTEES Section 1. Committees of the Board of Directors. The Board of Directors, by a vote of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for these committees and any others provided for herein, elect a Director or Directors to serve as the member or members, designating, if it desires, other Directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any committee so designated may exercise the power and authority of the Board of Directors to declare a dividend, to authorize the issuance of stock or to adopt a certificate of ownership and merger pursuant to Section 253 of the Delaware General Corporation Law if the resolution which designates the committee or a supplemental resolution of the Board of Directors shall so provide. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. Section 2. Conduct of Business. Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; one-third (1/3) of the members shall constitute a quorum unless the committee shall consist of one (1) or two (2) members, in which event one (1) member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee. Section 3. Nominating Committee. The Board of Directors shall appoint a Nominating Committee of the Board, consisting of not less than three (3) members. The Nominating Committee shall have authority (a) to review any nominations for election to the Board of Directors made by a stockholder of the Corporation pursuant to Section 6(c) (ii) of Article I of these By-laws to determine compliance with such By- law and (b) to recommend to the Whole Board nominees for election to the Board of Directors to replace those Directors whose terms expire at the annual meeting of stockholders next ensuing. ARTICLE IV - OFFICERS Section 1. Generally. (a) The Board of Directors as soon as may be practicable after the annual meeting of stockholders shall choose a Chairman of the Board, a Chief Executive Officer and President, one or more Vice Presidents, a Secretary and a Treasurer and from time to time may choose such other officers as it may deem proper. The Chairman of the Board shall be chosen from among the Directors. Any number of offices may be held by the same person. (b) The term of office of all Officers shall be until the next annual election of Officers and until their respective successors are chosen but any Officer may be removed from office at any time by the affirmative vote of a majority of the authorized number of Directors then constituting the Board of Directors. (c) All Officers chosen by the Board of Directors shall have such powers and duties as generally pertain to their respective Offices, subject to the specific provisions of this ARTICLE IV. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof. Section 2. Chairman of the Board of Directors. The Chairman of the Board shall, subject to the provisions of these Bylaws and to the direction of the Board of Directors, serve in general executive capacity and unless the Board has designated another person, when present, shall preside at all meetings of the stockholders of the Corporation. The Chairman of the Board shall perform all duties and have all powers which are commonly incident to the office of Chairman of the Board or which are delegated to him or her by the Board of Directors. He or she shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized. Section 3. President and Chief Executive Officer. The President and Chief Executive Officer (the "President") shall have general responsibility for the management and control of the business and affairs of the Corporation and shall perform all duties and have all powers which are commonly incident to the offices of President and Chief Executive Officer or which are delegated to him or her by the Board of Directors. Subject to the direction of the Board of Directors, the President shall have power to sign all stock certificates, contracts and other instruments of the Corporation which are authorized and shall have general supervision of all of the other Officers (other than the Chairman of the Board), employees and agents of the Corporation. Section 4. Vice President. The Vice President or Vice Presidents shall perform the duties of the President in his or her absence or during his or her disability to act. In addition, the Vice Presidents shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them by the Board of Directors, the Chairman of the Board or the President. A Vice President or Vice Presidents may be designated as Executive Vice President, Senior Vice President or First Vice President Section 5. Secretary. The Secretary or Assistant Secretary shall issue notices of meetings, shall keep their minutes, shall have charge of the seal and the corporate books, shall perform such other duties and exercise such other powers as are usually incident to such office and/or such other duties and powers as are properly assigned thereto by the Board of Directors, the Chairman of the Board or the President. Subject to the direction of the Board of Directors, the Secretary shall have the power to sign all stock certificates. Section 6. Chief Financial Officer. The Chief Financial Officer shall have the responsibility for maintaining the financial records of the Corporation. He or she shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Chief Financial Officer shall also perform such other duties as the Board of Directors, the Chairman of the Board or the President may from time to time prescribe. Subject to the direction of the Board of Directors, the Chief Financial Officer shall have the power to sign all stock certificates. Section 7. Treasurer. The Treasurer shall assist the Chief Financial Officer. The Treasurer shall also perform such other duties as the Board of Directors, the Chairman of the Board or the President may from time to time prescribe. Section 8. Comptroller The Comptroller shall assist the Chief Financial Officer. The Comptroller shall also perform such other duties as the Board of Directors, the Chairman of the Board or the President may from time to time prescribe. Section 9. Assistant Secretaries and Other Officers. The Board of Directors may appoint one or more Assistant Secretaries and such other Officers who shall have such powers and shall perform such duties as are provided in these Bylaws or as may be assigned to them by the Board of Directors, the Chairman of the Board or the President. Section 10. Action with Respect to Securities of Other Corporations. Unless otherwise directed by the Board of Directors, the President or any Officer of the Corporation authorized by the President shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which this corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation. ARTICLE V - STOCK Section 1. Certificates of Stock. Each stockholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the Chairman of the Board or the President, and by the Secretary or an Assistant Secretary, or any Treasurer or Assistant Treasurer, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile. Section 2. Transfers of Stock. Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of Article V of these Bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor. Section 3. Record Date. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, or to receive payment of any dividend or other distribution or allotment of any rights or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of any meeting of stockholders, nor more than sixty (60) days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the next day preceding the day on which the meeting is held, and, for determining stockholders entitled to receive payment of any dividend or other distribution or allotment or rights or to exercise any rights of change, conversion or exchange of stock or for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 4. Lost, Stolen or Destroyed Certificates. In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity. Section 5. Regulations. The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish. ARTICLE VI - NOTICES. Section 1. Notices. Except as otherwise specifically provided herein or required by law, all notices required to be given to any stockholder, Director, Officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by prepaid telegram or mailgram or other courier. Any such notice shall be addressed to such stockholder, Director, Officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered, or dispatched, if delivered through the mails or by telegram or mailgram or other courier, shall be the time of the giving of the notice. Section 2. Waivers. A written waiver of any notice, signed by a stockholder, Director, Officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, Director, Officer, employee or agent. Neither the business nor the purpose of any meeting need to specified in such a waiver. ARTICLE VII - MISCELLANEOUS Section 1. Facsimile Signatures. In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof. Section 2. Corporate Seal. The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or an assistant to the Treasurer. Section 3. Reliance Upon Books, Reports and Records. Each Director, each member of any committee designated by the Board of Directors, and each Officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its Officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such Director or committee member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation. Section 4. Fiscal Year. The fiscal year of the Corporation shall be as fixed by the Board of Directors. Section 5. Time Periods. In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included. ARTICLE VIII - AMENDMENTS. The Board of Directors may amend, alter or repeal these Bylaws at any meeting of the Board, provided notice of the proposed change was given not less than two days prior to the meeting. The stockholders shall also have power to amend, alter or repeal these Bylaws at any meeting of stockholders provided notice of the proposed change was given in the notice of the meeting; provided, however, that, notwithstanding any other provisions of the Bylaws or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the voting stock required by law, the Certificate of Incorporation, any Preferred Stock Designation or these Bylaws, the affirmative votes of the holders of at least 80% of the voting power of all the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal any provisions of these Bylaws. The above Bylaws are effective as of March 24, 1993, the date of incorporation of Haven Bancorp, Inc. and incorporates all amendments through April 21, 1999. EX-27 3
9 This schedule contains summary financial information from the Consolidated Statement of Financial Condition at March 31, 1999 and the Consolidated Statement of Operations for the three months Ended March 31, 1999 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1999 MAR-31-1999 31,759 1,560,473 0 0 941,027 0 0 1,424,126 14,573 2,550,159 1,804,795 293,951 39,904 292,379 0 0 100 119,030 2,550,159 25,735 14,745 0 40,480 17,165 24,274 16,206 675 335 22,389 4,203 4,203 0 0 2,600 0.30 0.29 7.01 8,596 0 1,498 13,131 13,978 324 244 14,573 14,573 0 0
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