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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission File No. 0-14874
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
STATE BANCORP, INC.
-------------------
(Exact name of registrant as specified in its charter)
New York 11-2846511
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
699 Hillside Avenue
New Hyde Park, N.Y. 11040
- ------------------- -----
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number including area code (516) 437-1000
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($5.00 par value)
(Title of Class)
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
requirement for the past 90 days.
Yes [X] No [ ]
As of March 19, 1999, there were 6,596,471 shares of common stock outstanding
and the aggregate market value of common stock of State Bancorp, Inc. held by
nonaffiliates was approximately $118,736,000 based upon the last trade per share
known to Management.
STATE BANCORP, INC.
Form 10-K
INDEX
PART I Page
----
Item 1. Business
General 1.
Statistical Information 4.
Item 2. Properties 4.
Item 3. Legal Proceedings 5.
Item 4. Submission of Matters to a Vote of Stockholders 5.
PART II
Item 5. Market for Registrant's Common Stock and
Related Stockholder Matters 6.
Item 6. Selected Consolidated Financial Data 6.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7.
Item 8. Consolidated Financial Statements and
Supplementary Data 7.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 7.
PART III
Item 10. Directors and Executive Officers of the
Registrant 8.
Item 11. Executive Compensation 8.
Item 12. Security Ownership of Certain Beneficial
Owners and Management 9.
Item 13. Certain Relationships and Related Transactions 9.
PART IV
Item 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K 9.
Signatures 13.
Exhibits
DOCUMENTS INCORPORATED BY REFERENCE
Listed hereunder are the documents incorporated by reference and the parts of
the Form 10-K into which such documents are incorporated:
(1) The Annual Report to Stockholders for the year ended December
31, 1998. Referenced in Parts I and II of the December 31,
1998 Annual Report on Form 10-K, Items 1, 5, 6, 7 and 8.
(2) The 1999 Proxy Statement, dated March 25, 1999. Referenced in
Part III of the December 31, 1998 Annual Report on Form 10-K,
Items 10, 11, 12 and 13.
PART I
ITEM 1. BUSINESS
General
Incorporated herein by reference is the Company's 1998 Annual Report to
Stockholders. A discussion on the organization and nature of operations may be
found on page 14.
State Bancorp, Inc. (the "Company") was incorporated under the laws of the State
of New York on November 18, 1985. The acquisition by the Company of 100% of the
outstanding shares of State Bank of Long Island (the "Bank"), on a share for
share basis, was consummated as of the close of business on June 24, 1986.
The Company has no other subsidiaries and does not engage in any activities
other than acting as holding company for the common stock of the Bank. The
business of the Company is conducted through the Bank, which continues to
conduct its business in the same manner and from the same offices as it had done
before the effective date of the reorganization. The Bank, therefore, accounts
for all of the consolidated assets and revenues of the Company.
The Company is subject to supervision and regulation by the Board of Governors
of the Federal Reserve System ("Federal Reserve Board") pursuant to the Bank
Holding Company Act of 1956, as amended. The Bank is subject to periodic
examination and regulation
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by the State of New York Banking Department and the Federal Deposit Insurance
Corporation.
The Bank was organized in 1966 and is the only independent commercial bank
headquartered in New Hyde Park. It provides general banking services to
residents and businesses located substantially in the eastern end of Queens
County, Nassau County and the western end of Suffolk County. It offers a full
range of deposit products including checking, fixed and variable rate savings,
time, money market and IRA and Keogh accounts. Credit services offered include
commercial mortgages, commercial and installment loans, home equity lines of
credit, residential mortgages, letters of credit and auto loans. In addition,
the Bank provides merchant credit card services, access to annuity products, a
consumer debit card with membership in a national ATM network and, through an
alliance with U.S. Trust Company, the Bank also offers its customers access to
financial planning and wealth management services. The Bank currently has ATMs
at five of its nine branch locations. The Bank also offers its retail customers
the ability to verify their account balances, effect transfers between accounts
and access current deposit and loan rates through an automated telephone voice
response system. Commercial customers can also access this same system or they
may utilize Business Direct Access (BDA), the Company's real-time cash
management system. Through BDA, business and municipal customers can perform all
of the foregoing transactions as well as initiate wire transfers, ACH payments
and stop payment orders from a personal computer.
There is strong competition in the area serviced by the Bank from branches of
several savings banks and savings and loan associations, as well as branches of
the major New York City banks. Of these, the Bank is considerably smaller in
size than virtually all
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of its commercial competitors, and approximates the size of only one or two of
its thrift competitors. Nonetheless, the Bank has demonstrated the ability to
compete profitably with larger financial institutions.
The Bank's business is not of a seasonal nature nor does it depend on one or a
few large customers for its existence. The Bank does not have any foreign
commitments, with the exception of letters of credit issued on behalf of several
of its depositors. The Bank's nature and conduct of business have remained
unchanged since year end 1995.
In 1979, the Bank established New Hyde Park Leasing Corporation to lease various
types of commercial equipment. During 1994, the Bank established SB ORE Corp.
to hold foreclosed property acquired in connection with extensions of credit. In
1998, the Bank established SB Portfolio Management Corp. and SB Financial
Services Corp. SB Portfolio Management Corp. provides investment management
services to the Bank while SB Financial Services Corp. provides balance sheet
management services such as interest rate risk modeling and asset/liability
management reporting along with general advisory services to the Bank and each
of its subsidiaries. SB Portfolio Management Corp. and SB Financial Services
Corp. are each based in Wilmington, Delaware. Total operating income and income
before income taxes of these subsidiaries are less than ten percent of the
respective amounts for the consolidated entity.
Compliance with provisions regulating environmental controls will have no effect
upon the capital expenditures, earnings or competitive position of the Company.
The Company employed 202 full-time and part-time officers and employees as of
December 31, 1998.
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Statistical Information
- -----------------------
Statistical information is furnished pursuant to the requirements of Guide 3
(Statistical Disclosure by Bank Holding Companies) promulgated under the
Securities Act of 1933.
Incorporated by reference is the Company's 1998 Annual Report to stockholders.
The Company's statistical information may be found on pages 38 - 44.
ITEM 2. PROPERTIES
The main office of the Company is located at the Bank's main branch at 699
Hillside Avenue, New Hyde Park, N.Y. The lease on the land used by the Bank
expires on March 27, 2009 and contains an option to renew for an additional
ten-year period.
The Bank's lending division is located at Two Jericho Plaza, Jericho, N.Y. This
lease expires on March 31, 2007.
The Bank operates full service branches at 501 North Broadway, Jericho, N.Y.; 2
Lincoln Avenue, Rockville Centre, N.Y.; 580 East Jericho Turnpike, Huntington,
N.Y.; 740 Veterans Memorial Highway, Hauppauge, N.Y.; 339 Nassau Boulevard,
Garden City South, N.Y., 135 South Street, Oyster Bay, N.Y., 4250 Veterans
Memorial highway, Holbrook, N.Y. and 27 Smith Street, Farmingdale, N.Y. The
Jericho lease expires on October 31, 2011 and contains a twelve-year renewal
option. The Rockville Centre lease expires on May 31, 2000 and has no renewal
options. The Huntington lease expires on December 31, 2003 and has one five-year
renewal option. The Bank's operations center is also located in the Huntington
facility. The Hauppauge lease expires June 30, 2005 and contains two ten-year
renewal options. The Holbrook lease expires on October 31, 2002 and contains two
five-year renewal options. The Farmingdale lease also expires on October 31,
2002
4
and it has three five-year renewal options. The Garden City South and Oyster Bay
facilities are owned by the Company.
The fixtures and equipment contained in these operating facilities are owned or
leased by the Bank. The Company considers that all of its premises, fixtures and
equipment are adequate for the conduct of its business.
ITEM 3. LEGAL PROCEEDINGS
Neither the Company nor the Bank is a party to any pending legal proceedings,
other than ordinary, routine litigation incidental to the banking business. In
the opinion of management, liabilities, if any, resulting from these matters
would not have a material adverse effect on the consolidated financial
statements of the Company or the Bank.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
There were no matters submitted to a vote of stockholders during the quarter
ended December 31, 1998.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
(a) Incorporated herein by reference is the Company's 1998 Annual Report to
Stockholders. The Company's common stock market data for the past three
years may be found on page 44 thereof.
(b) At December 31, 1998, the approximate number of equity
stockholders were as follows:
(1) (2)
Title of Class Number of Record Holders
-------------- ------------------------
Common Stock 1,325
(c) Annual cash dividends of 52, 42, and 35 cents per share,
restated to give retroactive effect to stock dividends and
splits, were paid in 1998, 1997, and 1996, respectively. The
Company paid a 5% stock dividend in 1998, declared a six for
five stock split in 1997 and paid a stock dividend of 8% in
1996. It is the Company's expectation that dividends will
continue to be paid in the future.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
(a) Incorporated herein by reference is the Company's 1998 Annual
Report to Stockholders. The Company's five year summary of
operations may be found on page 44.
(b) Additional years are not considered necessary to keep the
above referenced summary from being misleading.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(a) Incorporated herein by reference is the Company's 1998 Annual
Report to Stockholders. Management's Discussion and Analysis
of Financial Condition and Results of Operations may be found
on pages 25 - 37.
(b) There are no known trends or any known demands, commitments,
events or uncertainties which will result in, or which are
reasonably likely to result in, the Company's liquidity
increasing, or decreasing, in any material way.
(c) As of December 31, 1998, the Company had no material
commitments for capital expenditures.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated herein by reference is the Company's 1998 Annual Report to
Stockholders. The Company's audited Consolidated Balance Sheets as of the
close of the last two years may be found on page 10. Reference again is made to
State Bancorp, Inc.'s 1998 Annual Report to Stockholders for the Company's
audited Statements of Consolidated Earnings, Cash Flows and Stockholders' Equity
and Comprehensive Income for each of the three years in the period ended
December 31, 1998. These items may be found on pages 11 - 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
NONE
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Incorporated herein by reference is the Company's 1999 Proxy
Statement, dated March 25, 1999. The identification of the
directors of the Company may be found on pages 11 - 12.
(b) Incorporated herein by reference is the Company's 1999 Proxy
Statement, dated March 25, 1999. The identification of the
executive officers of the Company may be found under
"Principal Officers" on page 2.
There exists no family relationships between any director or
executive officer.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference is the Company's 1999 Proxy Statement, dated
March 25, 1999. Management remuneration may be found on page 3.
8
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference is the Company's 1999 Proxy Statement, dated
March 25, 1999. Security ownership of certain beneficial owners and management
may be found on page 14.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated herein by reference is the Company's 1999 Proxy Statement, dated
March 25, 1999. Certain relationships and related transactions may be found on
page 10.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements
Included in the 1998 Annual Report to Stockholders of State Bancorp,
Inc. and enclosed herewith, are the following financial statements and
notes thereon:
- Consolidated Balance Sheets as of December 31, 1998 and 1997.
- Consolidated Statements of Income for the years ended December
31, 1998, 1997 and 1996.
- Consolidated Statements of Cash Flows for the years ended December
31, 1998, 1997 and 1996.
- Consolidated Statements of Stockholders' Equity and Comprehensive
Income for the years ended December 31, 1998, 1997 and 1996.
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Notes to Consolidated Financial Statements
- Summary of Significant Accounting and Reporting Policies (1)
- Securities Held to Maturity and Securities Available for Sale (2)
- Loans - Net (3)
- Bank Premises and Equipment - Net (4)
- Other Assets (5)
- Lines of Credit and Borrowed Funds (6)
- Income Taxes (7)
- Incentive Stock Option Plans (8)
- Employee Benefit Plans (9)
- Commitments and Contingent Liabilities (10)
- State Bancorp, Inc. (Parent Company Only) (11)
- Financial Instruments with Off-Balance Sheet Risk (12)
- Disclosures About Fair Value of Financial Instruments (13)
- Regulatory Matters (14)
Independent Auditors' Report
Schedules are omitted because they are not applicable or because
required information is shown in the consolidated financial statements
or the notes thereto.
(b) A report on Form 8-K was filed on December 30, 1998 which indicated
that the Company's Board of Directors authorized an increase in it
stock repurchase program under which the Company may buy back up to
200,000 shares of its common stock. This amount represents
approximately three percent of the company's
10
current shares outstanding. The Board had previouly authorized the
repurchase of up to 50,000 shares at its February 1998 meeting.
(c) Exhibits
Exhibit
No. Item Method of Filing
- --- ---- ----------------
(3) Articles of incorporation
and By-Laws
a) Articles of Incorporated by reference from exhibit
incorporation B to the Company's Registration
Statement on Form S-4, file No.
33-2958, Filed February 3, 1986.
b) By-Laws, as amended Incorporated by reference from Exhibit
3b to the Company's December 31, 1997
Form 10-K.
(4) Instruments defining the Pages 22-28 of the above referenced
rights of security holders Registration Statement.
(10) Material contracts
a) Deferred compensation Incorporated by reference from exhibit
plan 10b to the Company's December 31, 1986
Form 10-K.
b) (i) Directors' Incorporated by reference from exhibit
incentive retirement 10c to the Company's December 31, 1986
plan Form 10-K.
b) (ii) Agreements of Incorporated by reference from exhibit
participants 10b (ii) to the Company's December 31,
surrendering their 1992 Form 10-K.
rights under the
directors' incentive
retirement plan.
b) (iii) Agreements of Incorporated by reference from exhibit
participants modifying 10b(iii) to the Company's December 31,
agreements described in 1995 Form 10-K.
item b) (ii)
c) 1987 incentive stock Incorporated by reference from exhibit
option plan, as amended 10c to the Company's December 31,
1991 Form 10-K.
d) 1994 incentive stock Incorporated by reference from exhibit
option plan 10d to the Company's December 31,
1993 Form 10-K.
e) (i) Change of control Incorporated by reference from exhibit
agreement no. 1 10e to the Company's December 31,
1997 Form 10-K.
e) (ii) Change of control Incorporated by reference from exhibit
agreement no. 2 10e to the Company's December 31,
1997 Form 10-K.
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e) (iii) Change of control Incorporated by reference from exhibit
agreement no. 3 10e to the Company's December 31,
1997 Form 10-K.
e) (v) Change of control Incorporated by reference from exhibit
agreement no. 5 10e to the Company's December 31,
1997 Form 10-K.
f) State Bank of Long Incorporated by reference from exhibit
Island 401k retirement 10g to the Company's December 31,
plan and trust 1987 Form 10-K.
g) State Bancorp, Inc. Incorporated by reference from exhibit
employee stock 10g to the Company's December 31,
ownership plan 1987 Form 10-K.
h) Deferred compensation Incorporated by reference from exhibit
agreement 10h to the Company's December 31,
1995 Form 10-K.
i) 1999 Incentive Stock Filed herein.
Option Plan.
(13) Annual report to Filed herein.
stockholders
(23) Independent Auditors' Filed herein.
Consent
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SIGNATURES
Pursuant to the requirements of Section 13 or 15d of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned.
STATE BANCORP, INC.
By: s/Thomas F. Goldrick, Jr., Chairman
-----------------------------------
Thomas F. Goldrick, Jr., Chairman
Date: March 22, 1999
-----------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
on the dates indicated.
Signature Title Date
- --------- ----- ----
s/Thomas F. Goldrick, Jr. Chairman of the Board 3/22/99
- ------------------------- (Principal Executive Officer) -------
Thomas F. Goldrick, Jr.
s/Daniel T. Rowe President 3/22/99
- ---------------- -------
Daniel T. Rowe
s/Richard W. Merzbacher Vice Chairman 3/22/99
- ----------------------- -------
Richard W. Merzbacher
s/Brian K. Finneran Secretary 3/22/99
- ------------------- (Principal Financial Officer) -------
Brian K. Finneran
s/Gary Holman Vice Chairman of the Board 3/22/99
- ------------- -------
Gary Holman
s/J. Robert Blumenthal Director 3/22/99
- ---------------------- -------
J. Robert Blumenthal
s/Carl R. Bruno Director 3/22/99
- --------------- -------
Carl R. Bruno
s/Arthur Dulik, Jr. Director 3/22/99
- ------------------- -------
Arthur Dulik, Jr.
s/Joseph F. Munson Director 3/22/99
- ------------------ -------
Joseph F. Munson
s/Raymond M. Piacentini Director 3/22/99
- ----------------------- -------
Raymond M. Piacentini
s/John F. Picciano Director 3/22/99
- ------------------ -------
John F. Picciano
s/Suzanne H. Rueck Director 3/22/99
- ------------------ -------
Suzanne Rueck
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