FORM S-4
As Filed With The Securities And Exchange Commission on April 25, 2001
Registration No. 333-    ·    


 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
 

NEW YORK COMMUNITY BANCORP, INC.
(Exact name of Registrant as specified in its charter)
 

 
Delaware    6712    06-1377322  
(State or other    (Primary Standard Industrial    (I.R.S. Employer  
jurisdiction of incorporation)    Classification Code Number)    Identification Number )
 
615 Merrick Avenue
Westbury, New York 11590
(516) 683-4100
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
 

 
Joseph R. Ficalora
Chairman, President and Chief Executive Officer
615 Merrick Avenue
Westbury, New York 11590
(516) 683-4100
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 

 
With copies to:
Mark J. Menting, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000
Douglas P. Faucette, Esq.
Muldoon Murphy & Faucette LLP
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016
(202) 362-0840
 
                  Approximate date of commencement of the proposed sale of the securities to the public:    As soon as practicable after this Registration Statement becomes effective.
 
                  If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  ¨
 
                  If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨                       
 
                  If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨                      

 
CALCULATION OF REGISTRATION FEE


Title of each class of securities to be registered    Amount
to be
registered
   Proposed
maximum
offering price
per share of
common stock
   Proposed
maximum
aggregate
offering price
   Amount of
registration fee

Common stock, par value $0.01 per share, together with
    Preferred Stock Purchase Rights, if any(1)  
   30,000,000(2)    N/A    $884,558,824    $221,140(3)


(1)
As of the date hereof, rights to purchase Series A Junior Participating Preferred Stock issued pursuant to the Stockholder Protection Rights Agreement, dated as of January 16, 1996 and amended on March 27, 2001, between New York Community Bancorp, Inc. (“New York Community”), a Delaware corporation, and Mellon Investor Services LLC, as Rights Agent (the “Rights”), are attached to and trade with the common stock, par value $0.01 per share of New York Community. The value of the attributable Rights, if any, is reflected in the market price of New York Community’s common stock.
(2)
Represents the maximum number of shares of New York Community common stock, including associated Rights, estimated to be issuable upon the consummation of the merger of Richmond County Financial Corp. (“Richmond County”), a Delaware corporation, with and into New York Community, based on the number of shares of Richmond County common stock, par value $0.01 per share, outstanding, or reserved for issuance under various plans, immediately prior to the merger and the exchange of each such share of Richmond County common stock for 1.02 shares of New York Community common stock.
(3)
Pursuant to Rules 457(c) and 457(f) under the Securities Act of 1933, as amended, the registration fee is based on the average of the high and low sales prices of Richmond County common stock, as reported on the Nasdaq National Market on April 18, 2001, and computed based on the estimated maximum number of such shares that may be exchanged for the New York Community common stock being registered.
 

 
                  The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the commission, acting pursuant to said section 8(a), may determine.
 


 
Subject to completion, dated April 25, 2001
 
[LOGO RCBK]
[LOGO NYCB]
 
MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT
 
                  The boards of directors of New York Community Bancorp, Inc. and Richmond County Financial Corp. have unanimously approved a merger of equals designed to create a financial institution with a larger and more dynamic presence in the New York metropolitan area and New Jersey. We believe the combined company will be able to create substantially more stockholder value than could be achieved by either company individually. After completion of the merger, we expect that current New York Community stockholders will own approximately 60% of the combined company on a fully diluted basis and Richmond County stockholders will own approximately 40% of the combined company.
 
                  If the merger is completed, Richmond County stockholders will receive 1.02 shares of New York Community common stock for each share of Richmond County common stock. New York Community stockholders will continue to own their existing New York Community shares. The implied value of one share of Richmond County common stock on     ·     was $     ·    , based on the closing price of New York Community common stock on that date. This value will fluctuate prior to completion of the merger.
 
                  Richmond County stockholders generally will not recognize any federal income tax gain or loss on the exchange of shares of Richmond County common stock for shares of New York Community common stock, except to the extent of cash received in lieu of fractional shares.
 
                  We cannot complete the merger unless the stockholders of both our companies approve it. Each of us will hold a special meeting of our stockholders to vote on this merger proposal. Your vote is important. Whether or not you plan to attend your stockholders’ meeting, please take the time to submit your proxy with voting instructions in accordance with the instructions contained in this document. If you do not vote, it will have the same effect as voting against the merger. The places, dates and times of the special meetings are as follows:
 
For Richmond County stockholders:
    ·     , 2001
    ·     , local time
·
·
    ·     ,     ·    
 
Richmond County’s board of directors unanimously recommends that Richmond County stockholders vote FOR adoption of the merger agreement.
 
For New York Community stockholders:
    ·     , 2001
    ·     , local time
Sheraton LaGuardia East Hotel
135-20 39th Avenue
Flushing, New York
 
New York Community’s board of directors unanimously recommends that New York Community stockholders vote FOR adoption of the merger agreement.
 
 
                  This document describes the stockholder meetings, the merger, the documents related to the merger and other related matters. Please read this entire document carefully. You can also obtain information about our companies from documents that we have filed with the Securities and Exchange Commission.
 
[signature]
 
MICHAEL F. MANZULLI
Chairman and Chief Executive Officer
Richmond County Financial Corp.
[signature]
 
JOSEPH R. FICALORA
Chairman, President and Chief Executive Officer
New York Community Bancorp, Inc.
 
                  New York Community common stock is quoted on the Nasdaq National Market under the symbol “NYCB.” Richmond County common stock is quoted on the Nasdaq National Market under the symbol “RCBK.”
 
 
                  Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved the New York Community common stock to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense. The shares of New York Community common stock are not savings or deposit accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.
 
 
                  The date of this joint proxy statement/prospectus is     ·    , 2001, and it is first being mailed or otherwise delivered to New York Community stockholders and Richmond County stockholders on or about     ·    , 2001.
The information in this joint proxy statement/prospectus is not complete and may be changed. We may not issue the common stock to be issued in connection with the merger described in this joint proxy statement/prospectus until the registration statement filed with the SEC is effective. Any representation to the contrary is a criminal offense.
 
REFERENCES TO ADDITIONAL INFORMATION
 
                  This document incorporates important business and financial information about New York Community and Richmond County from documents that are not included in or delivered with this document. You can obtain documents incorporated by reference in this document, other than certain exhibits to those documents, by requesting them in writing or by telephone from the appropriate company at the following addresses:
 
Richmond County Financial Corp.
1214 Castleton Avenue
Staten Island, New York 10310
Attention: Carolynn Orisino
Assistant Vice President
Investor Relations
Telephone: (718) 815-7048
New York Community Bancorp, Inc.
615 Merrick Avenue
Westbury, New York 11590
Attention: Ilene A. Angarola
First Vice President
Investor Relations
Telephone: (516) 683-4420
 
                  You will not be charged for any of these documents that you request. New York Community and Richmond County stockholders requesting documents should do so by     ·    , 2001 in order to receive them before the special meetings.
 
See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·    .
 
VOTE ELECTRONICALLY OR BY TELEPHONE
 
                  Richmond County stockholders of record may submit their proxies:
 
· 
through the internet by visiting a web site established for that purpose at http://www.     ·    .com/    ·     and following the instructions; or
 
· 
by telephone by calling the toll-free number (    ·    )    ·    -    ·     on a touch-tone phone and following the recorded instructions.
 
New York Community Bancorp, Inc.
 
615 Merrick Avenue
Westbury, New York 11590
 
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
 
To the Stockholders of New York Community Bancorp, Inc.:
 
                  NOTICE IS HEREBY GIVEN that a special meeting of New York Community stockholders will be held at the Sheraton LaGuardia East Hotel, 135-20 39th Avenue, Flushing, New York at     ·    , local time, on     ·     , 2001. The purpose of the New York Community special meeting is to consider and to vote upon the following matters:
 
·
a proposal to adopt the Agreement and Plan of Merger, dated as of March 27, 2001, by and between New York Community Bancorp, Inc. and Richmond County Financial Corp., pursuant to which Richmond County will be merged with and into New York Community; and
 
·
such other business as may properly come before the New York Community special meeting or any adjournment or postponement thereof.
 
                  In the merger, New York Community will be the surviving corporation, and each share of Richmond County common stock will be converted into 1.02 shares of New York Community common stock. Your attention is directed to the joint proxy statement/prospectus accompanying this notice for a complete discussion of the merger. A copy of the merger agreement is included as Appendix A to the accompanying joint proxy statement/prospectus.
 
                  The New York Community board of directors has fixed the close of business on     ·    , 2001 as the record date for the New York Community special meeting, and only New York Community stockholders of record at such time will be entitled to receive notice of and to vote at the special meeting or any adjournment or postponement thereof. In order for the merger agreement to be adopted, the holders of a majority of the shares of New York Community common stock outstanding and entitled to vote thereon on the record date must vote in favor of the merger agreement. Therefore, your vote is very important. A complete list of New York Community stockholders entitled to vote at the New York Community special meeting will be made available for inspection by any New York Community stockholder for ten days prior to the New York Community special meeting at the principal executive offices of New York Community and at the time and place of the New York Community special meeting.
 
                  All New York Community stockholders entitled to notice of, and to vote at, the New York Community special meeting are cordially invited to attend the New York Community special meeting in person. However, to ensure your representation at the special meeting, please submit your proxy with voting instructions. You may submit your proxy with voting instructions by mail if you promptly complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of New York Community common stock who is present at the New York Community special meeting may vote in person instead of by proxy, thereby canceling any previous proxy. In any event, a proxy may be revoked in writing at any time before the New York Community special meeting.
 
                  The New York Community board of directors has unanimously approved the merger agreement and unanimously recommends that New York Community stockholders vote “FOR” adoption of the merger agreement.
 
                  YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.
 
BY ORDER OF THE BOARD OF DIRECTORS,
 
[Signature]
MICHAEL J. LINCKS
Executive Vice President and Corporate Secretary
 
Westbury, New York
    ·     , 2001
 
Richmond County Financial Corp.
 
1214 Castleton Avenue
Staten Island, New York 10310
 
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
 
                  Richmond County Financial Corp. will hold a special meeting of stockholders at the     ·     at     ·    , local time, on     ·    , 2001 to consider and vote upon the following matters:
 
·
a proposal to adopt the Agreement and Plan of Merger, dated as of March 27, 2001, by and between New York Community Bancorp, Inc. and Richmond County Financial Corp., pursuant to which Richmond County will be merged with and into New York Community; and
 
·
such other business as may properly come before the special meeting of stockholders or any adjournment or postponement of the meeting.
 
                  In the merger, New York Community will be the surviving corporation and you will receive 1.02 shares of New York Community common stock for each share of Richmond County common stock that you own. Your attention is directed to the joint proxy statement/prospectus accompanying this notice for a complete discussion of the merger. A copy of the merger agreement is included as Appendix A to the accompanying joint proxy statement/prospectus.
 
                  The Richmond County board of directors has fixed the close of business on     ·    , 2001 as the record date for the Richmond County special meeting. This means that Richmond County stockholders of record at such time are entitled to notice of and to vote at the Richmond County special meeting or any adjournment or postponement of the meeting. A complete list of Richmond County stockholders entitled to vote at the Richmond County special meeting will be made available for inspection by any Richmond County stockholder for ten days prior to the Richmond County special meeting at the principal executive offices of Richmond County and at the time and place of the Richmond County special meeting. In order for the merger agreement to be adopted, the holders of a majority of the Richmond County shares outstanding and entitled to vote thereon must vote in favor of the merger agreement.
 
                  Whether or not you plan to attend the special meeting, please submit your proxy with voting instructions. To submit your proxy by mail, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. Alternatively, you may use the toll-free number shown on the proxy card or visit the web site noted on your proxy card to vote on the internet. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of Richmond County common stock who is present at the Richmond County special meeting may vote in person instead of by proxy, thereby canceling any previous proxy. In any event, a proxy may be revoked in writing at any time before the Richmond County special meeting.
 
                  The Richmond County board of directors has unanimously approved the merger agreement and unanimously recommends that Richmond County stockholders vote “FOR” adoption of the merger agreement.
 
By Order of the Board of Directors,
 
[Signature]
Diane L. DeLillo, Esq.
Corporate Secretary
 
Staten Island, New York
 
    ·     , 2001
 
                  YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING.
TABLE OF CONTENTS
 
QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES FOR THE SPECIAL
      MEETINGS
     Q&A-1
 
SUMMARY      1
 
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF NEW YORK
      COMMUNITY
     8
 
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF RICHMOND COUNTY      10
 
SELECTED CONSOLIDATED UNAUDITED PRO FORMA FINANCIAL DATA      12
 
COMPARATIVE PER SHARE DATA      14
 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS      15
 
THE NEW YORK COMMUNITY SPECIAL MEETING      16
Matters to Be Considered      16
Proxies      16
Solicitation of Proxies      17
Record Date      17
Voting Rights and Vote Required      17
Recommendation of the Board of Directors      18
Attending the Meeting      18
Participants in New York Community’s and New York Community Bank’s Benefit Plans      18
 
THE RICHMOND COUNTY SPECIAL MEETING      19
Matters to Be Considered      19
Proxies      19
Voting by Telephone or the Internet      20
Solicitation of Proxies      20
Record Date      20
Voting Rights and Vote Required      21
Recommendation of the Board of Directors      21
Attending the Meeting      22
Participants in Richmond County’s and Richmond County Savings’ Benefit Plans      22
 
INFORMATION ABOUT THE COMPANIES      23
 
THE MERGER      24
General      24
Structure      24
Background of the Merger      25
New York Community’s Reasons for the Merger; Recommendation of New York Community’s Board
      of Directors
     27
Richmond County’s Reasons for the Merger; Recommendation of Richmond County’s Board of
      Directors
     29
Opinions of Financial Advisors      31
Opinion of Salomon Smith Barney to New York Community      32
Opinion of Sandler O’Neill to Richmond County      40
Opinion of Lehman Brothers to Richmond County      47
Board of Directors and Management of New York Community Following the Merger      54
Distribution of New York Community Certificates      55
Fractional Shares      56
Public Trading Markets      56
New York Community Dividends      57
Absence of Appraisal Rights      57
Resales of New York Community Stock by Affiliates      57
Regulatory Approvals Required for the Merger      58
Interests of Richmond County’s Directors and Officers in the Merger that Differ From Your Interests      59
New York Community Employee Benefit Plans      62
 
THE MERGER AGREEMENT      63
Terms of the Merger      63
Treatment of Richmond County Stock Options      63
Closing and Effective Time of the Merger      63
Representations, Warranties, Covenants and Agreements      64
Declaration and Payment of Dividends      64
Agreement Not to Solicit Other Offers      64
Expenses and Fees      65
Conditions to Consummation of the Merger      65
Possible Alternative Merger Structure      65
Amendment, Waiver and Termination of the Merger Agreement      66
 
THE STOCK OPTION AGREEMENTS      67
The Stock Options      67
Purpose of the Stock Option Agreements      67
Exercise; Expiration      67
Rights Under the Stock Option Agreements      68
 
ACCOUNTING TREATMENT      70
 
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER      71
 
DESCRIPTION OF NEW YORK COMMUNITY CAPITAL STOCK      73
General      73
Common Stock      73
Preferred Stock      74
 
NEW YORK COMMUNITY STOCKHOLDER PROTECTION RIGHTS AGREEMENT      75
 
COMPARISON OF STOCKHOLDERS’ RIGHTS      77
General      77
Comparison of Stockholders’ Rights      77
 
DISCUSSION OF ANTI-TAKEOVER PROTECTION IN NEW YORK COMMUNITY’S CERTIFICATE
      OF INCORPORATION AND BYLAWS
     79
General      79
Authorized Stock      79
Classification of Board of Directors; No Cumulative Voting      79
Size of Board; Vacancies; Removal of Directors      79
Special Meetings of Stockholders      80
Stockholder Action by Unanimous Written Consent      80
Amendment of Certificate of Incorporation and Bylaws      80
 
COMPARATIVE MARKET PRICES AND DIVIDENDS      81
 
PRO FORMA FINANCIAL INFORMATION      82
Unaudited Pro Forma Combined Condensed Consolidated Statement of Financial Condition      82
Unaudited Pro Forma Combined Condensed Consolidated Statement of Financial Condition As of
      March 31, 2001
     83
Unaudited Pro Forma Combined Condensed Consolidated Statement of Income For the Year Ended
      December 31, 2000
     84
Unaudited Pro Forma Combined Condensed Consolidated Statement of Income For the Three Months
      Ended March 31, 2001
     85
 
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL
      STATEMENTS
     86
 
EXPERTS      89
 
OTHER MATTERS      89
New York Community 2002 Annual Meeting Stockholder Proposals      89
Richmond County 2001 Annual Meeting Stockholder Proposals      90
 
WHERE YOU CAN FIND MORE INFORMATION      91
 
APPENDICES:
 
APPENDIX A
 
Agreement and Plan of Merger, dated as of March 27, 2001, by and between New York Community
      County Bancorp, Inc. and Richmond County Financial Corp.
     A
 
APPENDIX B
 
Stock Option Agreement, dated as of March 27, 2001, between New York Community Bancorp, Inc., as
      issuer, and Richmond County Financial Corp., as grantee
     B-1
 
APPENDIX C
 
Stock Option Agreement, dated as of March 27, 2001, between New York Community Bancorp, Inc., as
      grantee, and Richmond County Financial Corp., as issuer
     C-1
 
APPENDIX D
 
Opinion of Salomon Smith Barney Inc.      D-1
 
APPENDIX E
 
Opinion of Sandler O’Neill & Partners, L.P.      E-1
 
APPENDIX F
 
Opinion of Lehman Brothers Inc.      F-1
QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES FOR THE SPECIAL MEETINGS
 
 
Q: 
What do I need to do now?
 
A: 
After you have carefully read this document, indicate on your proxy card how you want your shares to be voted. Then complete, sign, date and mail your proxy card in the enclosed postage paid return envelope as soon as possible. If you are a Richmond County stockholder, you may vote by telephone or the internet instead. This will enable your shares to be represented and voted at the New York Community special meeting or the Richmond County special meeting.
 
Q: 
Why is my vote important?
 
A: 
If you do not return your proxy card or vote in person at the appropriate special meeting, it will be more difficult for New York Community and Richmond County to obtain the necessary quorum to hold their special meetings. In addition, the failure of a New York Community or a Richmond County stockholder to vote, by proxy or in person, will have the same effect as a vote against the merger agreement. The merger must be approved by the holders of a majority of the outstanding shares of New York Community common stock and Richmond County common stock entitled to vote at the respective special meetings called for the purpose of voting on the proposal to adopt the merger agreement.
 
Q: 
If my shares are held in street name by my broker, will my broker automatically vote my shares for me?
 
A: 
No. Your broker will not be able to vote your shares without instructions from you. You should instruct your broker to vote your shares, following the directions your broker provides. Please check the voting form used by your broker to see if it offers telephone or internet voting.
 
Q: 
What if I fail to instruct my broker?
 
A: 
If you fail to instruct your broker to vote your shares and the broker submits an unvoted proxy, the resulting broker non-vote will be counted toward a quorum at the respective special meeting, but it will have the same effect as a vote against the merger agreement.
 
Q: 
Can I attend the special meeting and vote my shares in person?
 
A: 
Yes. All stockholders are invited to attend their special meeting. Stockholders of record can vote in person at the special meeting. If a broker holds your shares in street name, then you are not the stockholder of record and you must ask your broker how you can vote at the special meeting.
 
Q: 
Can I change my vote?
 
A: 
Yes. If you have not voted through your broker, there are three ways you can change your vote after you have submitted your proxy card.
 
· 
First, you may send a written notice to the person to whom you submitted your proxy stating that you would like to revoke your proxy.
 
· 
Second, you may complete and submit a new proxy card or vote again by telephone or the internet. The latest vote actually received by New York Community or Richmond County, as the case may be, before the stockholders meeting will be counted, and any earlier votes will be revoked.
 
· 
Third, you may attend the New York Community special meeting, or the Richmond County special meeting, as the case may be, and vote in person. Any earlier proxy will thereby be revoked. However, simply attending the meeting without voting will not revoke your proxy.
 
If you have instructed a broker to vote your shares, you must follow directions you receive from your broker in order to change or revoke your vote.
 
Q: 
If I am a Richmond County stockholder, should I send in my stock certificates now?
 
A: 
No. You should not send in your stock certificates at this time. Richmond County stockholders will need to exchange their Richmond County stock certificates for New York Community stock certificates after we complete the merger. We will send you instructions for exchanging Richmond County stock certificates at that time. New York Community stockholders do not need to exchange their stock certificates as a result of the merger.
 
Q. 
When do you expect to complete the merger?
 
A: 
We expect to complete the merger in the third quarter of 2001. However, we cannot assure you when or if the merger will occur. We must first obtain the approvals of our stockholders at the special meetings and the necessary regulatory approvals.
 
Q: 
Whom should I call with questions?
 
A: 
New York Community stockholders should call the New York Community Investor Relations Department at (516) 683-4420 with any questions about the merger and related transactions.
 
Richmond County stockholders should call the Richmond County Investor Relations Department at (718) 815-7048 with any questions about the merger and related transactions.
SUMMARY
 
                  This summary highlights selected information from this document. It does not contain all of the information that is important to you. We urge you to read carefully the entire document and the other documents to which we refer in order to fully understand the merger and the related transactions. See “Where You Can Find More Information” on page     ·    . Each item in this summary refers to the page of this document on which that subject is discussed in more detail.
 
Richmond County Stockholders Will Receive 1.02 Shares of New York Community Common Stock per Share of Richmond County Common Stock (page      ·    )
 
                  As a result of the merger, each Richmond County stockholder will receive 1.02 shares of New York Community common stock for each share of Richmond common stock held. We sometimes refer to this 1.02-to-1 ratio as the exchange ratio. Prior to the New York Community 3-for-2 stock split paid on March 29, 2001, the exchange ratio was 0.68 of a share of New York Community for each share of Richmond County. Upon completion of the merger, New York Community stockholders will own approximately 60% of the combined company and Richmond County stockholders will own approximately 40% of the combined company. New York Community will not issue any fractional shares. Richmond County stockholders will instead receive an amount in cash based on the last reported sale price of New York Community common stock on the trading day immediately prior to the date on which the merger is completed.
 
Example:    If you hold 110 shares of Richmond County common stock, you will receive 112 shares of New York Community common stock and a cash payment in lieu of the 0.2 of a share that you otherwise would have received.
 
Comparative Market Prices and Share Information (pages     ·     and     ·    )
 
                  New York Community common stock is quoted on the Nasdaq National Market under the symbol “NYCB.” Richmond County common stock is quoted on the Nasdaq National Market under the symbol “RCBK.” The following table sets forth the closing sale prices of New York Community common stock and Richmond County common stock as reported on the Nasdaq National Market on March 27, 2001, the last trading day before we announced the merger, and on     ·    , 2001, the last practicable trading day before the distribution of this document. This table also shows the implied value of one share of Richmond County common stock, which we calculated by multiplying the closing price of New York Community common stock on those dates by 1.02.
 
     New York
Community
Common
Stock(1)

   Richmond
County
Common
Stock

   Implied Value
of One Share
of Richmond
County
Common
Stock

March 27, 2001    $  27.37    $  26.75    $  27.91
    ·    , 2001    $    ·        $    ·        $    ·    

(1)
Adjusted for 3-for-2 stock split on March 29, 2001.
 
                  The market prices of both New York Community common stock and Richmond County common stock will fluctuate prior to the merger. Therefore, you should obtain current market quotations for New York Community common stock and Richmond County common stock.
 
Generally Tax-Free Transaction to Richmond County Stockholders (page     ·    )
 
                  The merger has been structured as a tax-free reorganization for federal income tax purposes. Accordingly, holders of Richmond County common stock generally will not recognize any gain or loss for federal income tax purposes on the exchange of their Richmond County common stock for New York Community common stock in the merger, except for any gain or loss that may result from the receipt of cash instead of a fractional share of New York Community common stock. The companies, as well as the current stockholders of New York Community common stock, generally will not recognize gain or loss as a result of the merger. It is a condition to the obligations of Richmond County and New York Community to complete the merger that each receive an opinion from its outside tax counsel that the merger will be a tax-free reorganization for federal income tax purposes.
 
                  The federal income tax consequences described above may not apply to some holders of Richmond County common stock, including some types of holders specifically referred to on page     ·    . Your tax consequences will depend on your own personal situation. Accordingly, we strongly urge you to consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.
 
New York Community’s Dividend Policy (page     ·    )
 
                  During 2000, New York Community paid cash dividends totaling $0.67 per share (adjusted for the 3-for-2 stock split). New York Community currently pays a quarterly dividend of $    ·     per share (adjusted for the 3-for-2 stock split), which is expected to continue, although the New York Community board of directors may change this dividend policy at any time.
 
Our Reasons for the Merger (pages     ·     and     ·     )
 
                  Our companies are proposing to merge because we believe that:
 
·
by combining them we can create a stronger company that will provide significant benefits to our stockholders and customers alike;
 
·
by bringing our customers and banking products together we can do a better job of increasing our combined revenues and earnings than we could if we did not merge; and
 
·
the merger will strengthen the combined company’s position as a competitor in the financial services industry, which is rapidly changing and growing more competitive.
 
New York Community’s Board of Directors Recommends You Vote FOR Adoption of the Merger Agreement (page     ·    )
 
                  New York Community’s board of directors believes that the merger is in the best interests of New York Community and its stockholders and has unanimously approved the merger agreement. New York Community’s board of directors unanimously recommends that New York Community stockholders vote “FOR” adoption of the merger agreement.
 
Richmond County’s Board of Directors Recommends You Vote FOR Adoption of the Merger Agreement (page     ·    )
 
                  Richmond County’s board of directors believes that the merger is fair to Richmond County’s stockholders and in the best interests of Richmond County and its stockholders and has unanimously approved the merger agreement. Richmond County’s board of directors unanimously recommends that Richmond County stockholders vote “FOR” adoption of the merger agreement.
 
New York Community’s Financial Advisor Says the Exchange Ratio Is Fair, from a Financial Point of View, to New York Community (page      ·    )
 
                  In deciding to approve the merger, the New York Community board of directors considered the opinion of its financial advisor, Salomon Smith Barney, Inc., which has given an opinion to New York Community’s board of directors that the exchange ratio is fair to New York Community from a financial point of view. A copy of this opinion is attached to this document as Appendix D. New York Community stockholders should read the opinion completely and carefully to understand the assumptions made, matters considered and limitations on the review undertaken by Salomon Smith Barney in providing its opinion. New York Community has paid $1,000,000 to Salomon Smith Barney and has agreed to pay an additional $2,750,000 to Salomon Smith Barney upon the completion of the merger.
 
Richmond County’s Financial Advisors Say the Exchange Ratio Is Fair, from a Financial Point of View, to Richmond County’s Stockholders (page      ·    )
 
                  In deciding to approve the merger, the Richmond County board of directors considered the opinions of its financial advisors, Sandler O’Neill & Partners, L.P. and Lehman Brothers Inc., which were given to Richmond County’s board of directors, that the exchange ratio of 1.02 shares of New York Community common stock for each share of Richmond County common stock is fair to Richmond County’s stockholders from a financial point of view. Copies of these opinions are attached to this document as Appendices E and F, respectively. Richmond County stockholders should read the opinions completely and carefully to understand the assumptions made, matters considered and limitations of the review undertaken by Sandler O’Neill & Partners, L.P. and Lehman Brothers Inc. in providing their opinions. Richmond County has paid $750,000 to Sandler O’Neill & Partners, L.P., and has agreed to pay Sandler O’Neill & Partners, L.P. an additional $3,000,000 upon the completion of the merger. Richmond County paid $250,000 to Lehman Brothers and has agreed to pay Lehman Brothers an additional $100,000 upon the mailing of the proxy materials to stockholders and an additional $1,650,000 upon the completion of the merger.
 
Neither New York Community nor Richmond County Stockholders Have Appraisal Rights (page     ·    )
 
                  Both companies are incorporated under Delaware law. Under Delaware law, neither the stockholders of New York Community nor the stockholders of Richmond County have any right to a court determination, in a proceeding known as an appraisal, of the fair value of their shares in connection with the merger.
 
Information about the Companies (page     ·    )
 
New York Community Bancorp, Inc.
 
                  New York Community Bancorp, Inc., also referred to as New York Community, a Delaware corporation and bank holding company organized in 1993, is the parent holding company for New York Community Bank, a savings bank chartered in New York and subject to regulation by the New York State Banking Department and its deposit insurer, the Federal Deposit Insurance Corporation. New York Community Bank is a community-oriented financial institution with operations in the greater metropolitan New York area. New York Community Bank is primarily engaged in attracting retail deposits from the general public and investing those deposits, together with funds generated through operations, in the origination of mortgage loans on multi-family properties and one-to-four family homes. In addition, through New York Community Bank, New York Community also originates commercial real estate loans, construction loans, home equity loans and other consumer loans. At March 31, 2001, New York Community had total assets of $4.6 billion, deposits of $3.2 billion and total stockholders’ equity of $286.4 million, and for the first three months of 2001 had net income of $27.6 million.
 
Richmond County Financial Corp.
 
                  Richmond County Financial Corp., referred to in this document as Richmond County, is the holding company for Richmond County Savings Bank, a New York state chartered stock savings bank founded in 1886. Together with its three divisional banks, First Savings Bank of New Jersey, Ironbound Bank and South Jersey Savings Bank, Richmond County Savings operates 15 banking offices on Staten Island, one banking office in Brooklyn, 11 banking offices in the counties of Camden, Gloucester, Essex, Hudson and Union, New Jersey and multi-family loan processing center in Jericho, Long Island. Richmond County Savings has pending agreements to acquire two additional banking offices on Staten Island and five banking offices in Atlantic County, New Jersey, together with a total of approximately $300 million in deposits and $61 million in small business and consumer loans. At March 31, 2001, Richmond County had total assets of $3.4 billion, deposits of $2.2 billion and stockholders’ equity of $329.5 million, and for the nine months ended March 31, 2001 had net income of $28.8 million.
 
The Merger Agreement; Expected Closing Time; Termination of the Merger Agreement (page     ·    )
 
                  The merger agreement is attached as Appendix A to this document. We encourage you to read it in its entirety because it is the legal document governing the merger.
 
Merger Expected to Occur in Third Quarter of 2001 (page     ·    )
 
                  The merger will occur only after all of the conditions to its completion have been satisfied or waived. Currently, we anticipate that the merger will be consummated in the third quarter of 2001.
 
Conditions That Must Be Satisfied or Waived for the Merger to Occur (page     ·    )
 
                  As more fully described in this document and the merger agreement, the completion of the merger depends on a number of conditions being satisfied or waived, including receipt of stockholder and regulatory approvals and tax opinions.
 
                  We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed.
 
Termination of the Merger Agreement (page     ·    )
 
                  We may agree to terminate the merger agreement before completing the merger, even after adoption of the merger agreement by our stockholders, as long as the termination is approved by each of our boards of directors.
 
                  Also, either of us may decide to terminate the merger agreement before our stockholders vote if the other party fails to recommend the adoption of the merger agreement to its stockholders.
 
                  In addition, either of us may decide to terminate the merger agreement, even after adoption of the merger agreement by our stockholders, if certain conditions in the merger agreement have not been met, such as obtaining the necessary regulatory approvals, or the other party’s material breach of a representation or warranty.
 
Richmond County’s Directors and Officers have Financial Interests in the Merger (page     ·    )
 
                  Richmond County’s directors and officers have interests in the merger as individuals in addition to, or different from, their interests as stockholders. Each of the New York Community board of directors and the Richmond County board of directors was aware of these interests of Richmond County directors and officers and considered them in its decision to approve the merger agreement. These interests include employment and noncompetition agreements that New York Community and Richmond County entered into with the principal executive officers of Richmond County, cash payments and other benefits that may be due to other executive officers under existing employment and change in control agreements in the event of termination following the merger, payments due as a result of the termination of existing Richmond County benefit plans, acceleration of vesting options and restricted stock as a result of the merger and the right to continued indemnification and insurance coverage by New York Community for acts or omissions occurring prior to the merger.
 
Board of Directors and Management of New York Community Following the Merger (page     ·    )
 
                  The present management of our respective companies will share the responsibilities for managing the combined company. The board of directors of New York Community upon completion of the merger will consist of nine members, five of whom (including Joseph R. Ficalora) will be selected by the Chief Executive Officer of New York Community and four of whom (including Michael F. Manzulli) will be selected by the Chief Executive Officer of Richmond County.
 
                  Michael F. Manzulli will become the Chairman of the Board of Directors of the surviving corporation and New York Community Bank, Joseph R. Ficalora will remain the President and Chief Executive Officer of the surviving corporation and Chief Executive Officer of New York Community Bank, Anthony E. Burke will become a Senior Executive Vice President and the Chief Operating Officer of the surviving corporation and President and Chief Operating Officer of New York Community Bank, and Thomas R. Cangemi will become an Executive Vice President of the surviving corporation and New York Community Bank.
 
Accounting Treatment of the Merger by New York Community (page    ·    )
 
                  New York Community will account for the merger as a purchase for financial reporting purposes.
 
A Comparison of the Rights of Holders of New York Community and Richmond County Stock; the Rights of Richmond County Stockholders will be Governed by New Governing Documents after the Merger (page     ·    )
 
                  The rights of Richmond County stockholders will not materially change as a result of the merger, due to the similarity of the New York Community and Richmond County governing documents and due to the fact that both companies are incorporated under Delaware law. Richmond County’s stockholders’ rights will only change to the extent that New York Community’s governing documents are different from Richmond County’s, while New York Community’s stockholders’ rights will not change as a result of the merger. This document contains descriptions of the stockholder rights under each of the New York Community and Richmond County governing documents, and describes the material differences between them.
 
New York Community Granted a Stock Option to Richmond County (page     ·    )
 
                  To induce Richmond County to enter into the merger agreement, New York Community granted Richmond County an option to purchase up to 8,648,081 shares of New York Community common stock at a price per share of $27.20 (the number of shares and the price per share are adjusted to reflect the March 29, 2001 3-for-2 stock split); however, in no case may Richmond County acquire more than 19.9% of the outstanding shares of New York Community common stock pursuant to this stock option agreement. Richmond County cannot exercise this option unless the merger is not completed and specified triggering events occur. These events generally relate to business combinations or acquisition transactions involving New York Community and a third party. We do not know of any event that has occurred as of the date of this document that would allow Richmond County to exercise this option.
 
                  The option could have the effect of discouraging other companies from trying to acquire New York Community until the merger is completed. Upon the occurrence of certain triggering events, New York Community may be required to repurchase the option and any shares purchased under it at a predetermined price, or Richmond County may choose to surrender the option to New York Community for a cash payment of $22 million.
 
                  The New York Community stock option agreement is attached to this document as Appendix B.
 
Richmond County Granted a Stock Option to New York Community (page     ·    )
 
                  To induce New York Community to enter into the merger agreement, Richmond County granted New York Community an option to purchase up to 5,281,566 shares of Richmond County common stock at a price per share of $26.50; however, in no case may New York Community acquire more than 19.9% of the outstanding shares of Richmond County common stock pursuant to this stock option agreement. New York Community cannot exercise this option unless the merger is not completed and specified triggering events occur. These events generally relate to business combinations or acquisition transactions involving Richmond County and a third party. We do not know of any event that has occurred as of the date of this document that would allow New York Community to exercise this option.
 
                  The option could have the effect of discouraging other companies from trying to acquire Richmond County until the merger is completed. Upon the occurrence of certain triggering events, Richmond County may be required to repurchase the option and any shares purchased under it at a predetermined price, or New York Community may choose to surrender the option to Richmond County for a cash payment of $22 million.
 
                  The Richmond County stock option agreement is attached to this document as Appendix C.
 
New York Community Stockholder Protection Rights Agreement (page     ·    )
 
                  On January 16, 1996, New York Community adopted a stockholder protection rights agreement, pursuant to which each issued share of New York Community common stock has attached to it one right to purchase, under conditions described in the agreement and summarized in this document, a fraction of a share of participating preferred stock of New York Community. The New York Community stockholder protection rights agreement, including rights thereunder currently held by New York Community stockholders, will remain in place after the merger. Each share of New York Community common stock issued pursuant to the merger will have attached to it one right to purchase a fraction of a share of participating preferred stock of New York Community. See “NEW YORK COMMUNITY STOCKHOLDER PROTECTION RIGHTS AGREEMENT” on page     ·     for a description of this agreement.
 
Regulatory Approvals We Must Obtain for the Merger (page     ·    )
 
                  We cannot complete the merger unless we obtain the approval of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the New York State Banking Department and the New Jersey Department of Banking and Insurance. We expect to make the necessary filings in the future with the Federal Deposit Insurance Corporation, the New York State Banking Department and the New Jersey Department of Banking and Insurance, and we expect to request a waiver of the approval requirements of the Federal Reserve Board.
 
                  Although we do not know of any reason why we cannot obtain these regulatory approvals in a timely manner, we cannot be certain when or if we will obtain them.
 
The Merger (page     ·    )
 
                  We are proposing a merger of equals of New York Community and Richmond County. In the merger, Richmond County will merge with and into New York Community, with New York Community as the surviving corporation. After the merger is completed, Richmond County Savings Bank will be merged with New York Community Bank with New York Community Bank as the surviving bank. New York Community, the surviving corporation, will continue to be called “New York Community Bancorp, Inc.”
 
New York Community will Hold its Special Meeting on     ·    , 2001 (page     ·    )
 
                  The New York Community special meeting will be held on     ·    , 2001, at     ·    , local time, at the Sheraton LaGuardia East Hotel, 135-20 39th Avenue, Flushing, New York. At the New York Community special meeting New York Community stockholders will be asked:
 
1. 
To adopt the merger agreement; and
 
2. 
To act on such other matters as may be properly brought before the New York Community special meeting.
 
                  Record Date.    New York Community stockholders may cast one vote at the New York Community special meeting for each share of New York Community common stock that was owned at the close of business on     ·    , 2001. At that date, there were     ·     shares of New York Community common stock entitled to be voted at the special meeting.
 
                  Required Vote.    To adopt the merger agreement, the holders of a majority of the outstanding shares of New York Community common stock entitled to vote must vote in favor of the merger agreement. Because approval is based on the affirmative vote of a majority of shares outstanding, a New York Community stockholder’s failure to vote, a broker non-vote or an abstention will have the same effect as a vote against the merger.
 
                  As of the New York Community record date, directors and executive officers of New York Community and their affiliates beneficially owned or had the right to vote     ·     shares of New York Community common stock, or     ·    % of the outstanding New York Community common stock entitled to be voted at the special meeting. At that date, directors and executive officers of Richmond County and their affiliates, including Richmond County, beneficially owned or had the right to vote     ·     shares of New York Community common stock entitled to be voted at the meeting, or less than     ·     % of the outstanding New York Community common stock.
 
Richmond County will Hold its Special Meeting on     ·    , 2001 (page     ·    )
 
                  The Richmond County special meeting will be held on     ·    , 2001, at     ·    , local time, at     ·    . At the Richmond County special meeting, Richmond County stockholders will be asked:
 
                  1. To adopt the merger agreement; and
 
                  2. To act on such other matters as may be properly brought before the Richmond County special meeting.
 
                  Record Date.    Richmond County stockholders may cast one vote at the Richmond County special meeting for each share of Richmond County common stock that you owned at the close of business on     ·    , 2001. At that date, there were     ·     shares of Richmond County common stock entitled to be voted at the special meeting.
 
                  Required Vote.    To adopt the merger agreement, the holders of a majority of the outstanding shares of Richmond County common stock entitled to be voted must vote in favor of the merger agreement. Because approval is based on the affirmative vote of a majority of shares outstanding, a Richmond County stockholder’s failure to vote, a broker non-vote or an abstention will have the same effect as a vote against the merger.
 
                  As of the Richmond County record date, directors and executive officers of Richmond County and their affiliates beneficially owned or had the right to vote     ·     shares of Richmond County common stock, or     ·    % of the outstanding Richmond County common stock entitled to be voted at the special meeting. At that date, directors and executive officers of New York Community and their affiliates, including New York Community, beneficially owned or had the right to vote     ·      shares of Richmond County common stock entitled to be voted at the meeting, or less than     ·    % of the outstanding Richmond County common stock.
 
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF NEW YORK COMMUNITY
 
                  Set forth below are highlights from New York Community’s consolidated financial data as of and for the years ended December 31, 1996 through 2000 and New York Community’s unaudited consolidated financial data as of and for the three months ended March 31, 2001 and 2000. The results of operations for the three months ended March 31, 2001 are not necessarily indicative of the results of operations for the full year or any other interim period. New York Community’s management prepared the unaudited information on the same basis as it prepared New York Community’s audited consolidated financial statements. In the opinion of New York Community’s management, this information reflects all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of this data for those dates. You should read this information in conjunction with New York Community’s consolidated financial statements and related notes included in New York Community’s Annual Report on Form 10-K for the year ended December 31, 2000[, and New York Community’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001,] which is [are] incorporated by reference in this joint proxy statement/prospectus and from which this information is derived. See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·     .
 
     At or for the
Three Months
Ended March 31,

     At or for the Year Ended December 31,
     2001
     2000
     2000
     1999
     1998
     1997
     1996
       (Unaudited)      (Dollars in thousands)
Earnings Summary:                                   
Interest income      $      84,358      $      36,269      $    174,832      $    143,123        $    134,277      $    117,734      $    102,304  
Interest expense      49,228      19,826      101,751      74,220        65,755      55,336      44,784  
     
  
  
  
     
  
  
  
Net interest income      35,130      16,443      73,081      68,903        68,522      62,398      57,520  
Reversal of provision for loan losses      —        —        —        (2,400 )      —        —        (2,000 )
     
  
  
  
     
  
  
  
Net interest income after provision for
    loan losses
     35,130      16,443      73,081      71,303        68,522      62,398      59,520  
Non-interest income      28,481      1,111      21,645      2,523        2,554      2,305      2,445  
Non-interest expense      20,902      5,638      49,824      21,390        25,953      27,084      23,271  
     
  
  
  
     
  
  
  
Income before income tax expense      42,709      11,916      44,902      52,436        45,123      37,619      38,694  
Income tax expense      15,065      4,322      20,425      20,772        18,179      14,355      17,755  
     
  
  
  
     
  
  
  
Net income      $      27,644      $        7,594      $      24,477      $      31,664        $      26,944      $      23,264      $      20,939  
     
  
  
  
     
  
  
  
 
Share Data(1):                                   
Weighted average common shares
    outstanding (in thousands):
                                  
Basic      40,889      26,804      28,269      27,790        28,638      30,682      34,824  
Diluted      41,574      27,218      29,297      28,410        30,272      32,736      36,701  
Net income per common share:                                   
Basic      $          0.68      $          0.28      $          0.87      $          1.14        $          0.94      $          0.76      $          0.60  
Diluted      0.66      0.28      0.83      1.11        0.89      0.71      0.57  
Cash dividends per common share      0.17      0.17      0.67      0.67        0.45      0.27      0.17  
Book value per common share      7.05      4.95      7.41      5.01        5.42      5.88      6.29  
 
Balance Sheet Summary:                                   
Securities available for sale      $    342,449      $      11,755      $    303,734      $      12,806        $        4,656      $        2,617      $          —    
Securities held to maturity      183,509      186,669      224,457      186,731        171,960      144,717      160,227  
Loans receivable, net       3,168,770       1,681,091       3,616,386       1,601,079         1,486,519       1,395,003       1,146,152  
Total assets      4,634,508      1,985,648      4,710,785      1,906,835        1,746,882      1,603,269      1,358,656  
Total deposits      3,213,814      1,053,241      3,257,194      1,076,018        1,102,285      1,069,161      1,023,930  
Total stockholders’ equity      286,363      134,332      307,410      137,141        149,406      170,515      211,419  
       At or for the
Three Months
Ended March 31,

     At or for the Year Ended December 31,
       2001
     2000
     2000
     1999
     1998
     1997
     1996
       (Unaudited)      (Dollars in thousands)
Performance Ratios:                                   
Return on average assets      2.39 %      1.58 %      1.06 %      1.69 %      1.62 %      1.61 %      1.63 %
Return on average stockholders’ equity      39.49        23.49        13.24        22.99        17.32        12.95        10.10  
Dividend payout      25.76        60.71        80.72        60.36        50.56        38.03        29.82  
Average equity to average assets      6.05        6.74        8.03        7.37        9.38        12.48        16.17  
Net interest margin(2)      3.25        3.58        3.33        3.79        4.24        4.45        4.63  
Efficiency ratio(3)      30.53        32.12        52.60        29.95        36.51        41.86        38.81  
 
Asset Quality Data:                                   
Allowance for loan losses to loans receivable, net      0.57 %      0.42 %      0.50 %      0.44 %      0.63 %      0.68 %      0.82 %
Non-performing loans(4)      $8,733        $3,189        $9,092        $3,108        $6,193        $7,692        $9,659  
Non-performing loans to loans receivable, net(4)      0.28 %      0.19 %      0.25 %      0.19 %      0.42 %      0.55 %      0.84 %
Non-performing assets to total assets(5)(6)      0.19        0.16        0.19        0.17        0.38        0.54        0.76  

(1)
Reflects shares issued as a result of a 4-for-3 stock split on August 22, 1996, and 3-for-2 stock splits on April 10 and October 1, 1997, September 29, 1998 and March 29, 2001.
(2)
Net interest margin represents net interest income divided by average interest-earning assets.
(3)
Efficiency ratio represents operating expense divided by the sum of net interest income plus operating income.
(4)
Non-performing loans consist of all mortgage loans delinquent 90 days or more.
(5)
Non-performing assets consist of all non-performing loans and real estate acquired in foreclosure.
(6)
For the periods indicated, New York Community had no troubled debt restructurings.
 
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF RICHMOND COUNTY
 
                  Set forth below are highlights from Richmond County’s consolidated financial data as of and for the years ended June 30, 1996 through 2000 and Richmond County’s unaudited consolidated financial data as of and for the nine months ended March 31, 2001 and 2000. The results of operations for the nine months ended March 31, 2001 are not necessarily indicative of the results of operations for the full year or any other interim period. Richmond County’s management prepared the unaudited information on the same basis as it prepared Richmond County’s audited consolidated financial statements. In the opinion of Richmond County’s management, this information reflects all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of this data for those dates. You should read this information in conjunction with Richmond County’s consolidated financial statements and related notes included in Richmond County’s Annual Report on Form 10-K for the year ended June 30, 2000[, and Richmond County’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2001,] which is [are] incorporated by reference in this joint proxy statement/prospectus and from which this information is derived. See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·    .
 
       At or for the
Nine Months
Ended March 31,

     At or for the Year Ended June 30,
       2001
     2000
     2000
     1999
     1998
     1997
     1996
       (Unaudited)      (Dollars in thousands)
Earnings Summary:                                   
Interest income      $    168,371      $    144,328      $    194,537      $    132,574      $      86,754        $  65,781      $  59,063
Interest expense      89,370      72,678      98,269      62,231      37,512        27,707      26,254
     
  
  
  
  
     
  
Net interest income      79,001      71,650      96,268      70,343      49,242        38,074      32,809
Provision for loan losses      900      900      1,200      2,550      2,200        1,080      1,600
     
  
  
  
  
     
  
Net interest income after provision for loan
    losses
     78,101      70,750      95,068      67,793      47,042        36,994      31,209
Non-interest income      11,174      10,535      7,176      11,389      3,601        2,861      2,827
Non-interest expense      44,323      38,980      52,303      36,360      44,046 (1)      19,667      18,503
     
  
  
  
  
     
  
Income before income tax expense      44,952      42,305      49,941      42,822      6,597        20,188      15,533
Income tax expense      16,103      15,359      13,672      16,178      2,071        9,463      6,803
     
  
  
  
  
     
  
Net income      $      28,849      $      26,946      $      36,269      $      26,644      $        4,526        $  10,725      $    8,730
     
  
  
  
  
     
  
 
Share Data:                                   
Weighted average common shares
    outstanding (in thousands):
                                  
Basic      24,107      27,182      26,683      24,808      24,328        N/A      N/A
Diluted      24,854      27,409      26,892      24,808      24,328        N/A      N/A
Net income per common share:                                   
Basic      $          1.20      $          0.99      $          1.36      $          1.07      $        (0.16 )(2)      N/A      N/A
Diluted      1.16      0.98      1.35      1.07      (0.16 )(2)      N/A      N/A
Cash dividends per common share      0.53      0.39      0.55      0.35      0.11        N/A      N/A
Book value per common share      12.70      12.39      12.45      12.20      12.44        N/A      N/A
 
Balance Sheet Summary:                                   
Securities available for sale      $1,233,018      $1,032,493      $    964,931      $1,164,455      $    843,194        $  47,104      $  23,053
Loans receivable, net(3)      1,707,131      1,588,732      1,573,808      1,313,527      644,469        496,258      419,270
Total assets      3,356,045      2,902,522       2,881,221      2,760,095       1,595,844         993,370       914,483
Total deposits      2,189,702      1,746,904      1,789,876      1,619,470      950,808        885,818      819,216
Stockholders’ equity      329,540      316,934      306,410      370,211      328,595        100,865      89,901
       At or for the
Nine Months
Ended March 31,

     For the Year Ended June 30,
       2001
     2000
     2000
     1999
     1998
     1997
     1996
       (Unaudited)      (Dollars in thousands)
Performance Ratios: (4)                                   
Return on average assets      1.21 %      1.26 %      1.27 %      1.36 %      1.26 %      1.13 %      0.99 %
Return on average stockholders’ equity      12.38        10.52        10.94        8.30        8.36        11.25        10.25  
Dividend payout      44.26        37.94        38.11        28.60        29.19        N/A        N/A  
Average equity to average assets      9.74        12.02        11.64        16.35        15.05        10.07        9.70  
Net interest margin (5)      3.53        3.57        3.57        3.73        4.10        4.22        3.96  
Efficiency ratio (6)          ·                ·            44.77        46.25        45.75        46.08        51.04  
 
Asset Quality Data:                                   
Allowance for loan losses to total loans      1.10 %      0.91 %      0.93 %      1.05 %      1.12 %      1.10 %      1.14 %
Non-performing loans      $10,681        $5,033        $4,719        $5,857        $5,534        $3,877        $3,820  
Non-performing loans to total loans      0.62 %      0.31 %      0.30 %      0.45 %      0.85 %      0.78 %      0.91 %
Non-performing assets to total assets      0.32        0.20        0.18        0.25        0.37        0.46        0.48  

(1)
Includes the one-time non-recurring charge of $19.6 million ($11.2 million, net of tax) for funding of the Richmond County Savings Foundation.
(2)
Pro forma earnings per share for fiscal 1998, calculated as if Richmond County Savings had converted to stock form as of July 1, 1997, was $0.19.
(3)
Loans receivable, net, consist of gross loans receivable, plus unamortized premiums, less unamortized discounts, plus deferred loan costs, less deferred loan fees and the allowance for loan losses. The allowance for loan losses at March 31, 2001 and 2000 and at June 30, 2000, 1999, 1998, 1997, and 1996 was $19.1 million, $14.6 million, $14.7 million, $13.9 million, $7.3 million, $5.5 million and $4.8 million, respectively.
(4)
All performance ratios for the year ended June 30, 1998, exclude the one-time non-recurring charge of $19.6 million ($11.2 million net of tax) for the funding of the Richmond County Savings Foundation. Average balances for fiscal 1997 and 1996 are based on average month-end balances. Average balances for all other periods are based on daily average balances. Ratios for the nine months ended March 31, 2001 and 2000 are annualized.
(5)
Net interest margin represents net interest income as a percent of average interest-earning assets.
(6)
Efficiency ratio represents operating expense divided by the sum of net interest income plus operating income.
 
SELECTED CONSOLIDATED UNAUDITED PRO FORMA FINANCIAL DATA
(In thousands, except shares and per share amounts)
 
                  The following table shows information about our financial condition and operations, including per share data and financial ratios, after giving effect to the merger. This information is called pro forma information in this document. The tables set forth the information as if the merger had become effective on March 31, 2001, with respect to financial condition data, and at the beginning of the periods presented, with respect to operations data. The pro forma data in the tables assume that the merger is accounted for using the purchase method of accounting. This table should be read in conjunction with, and is qualified in its entirety by, the historical financial statements, including the notes thereto, of New York Community and Richmond County incorporated by reference herein and the more detailed pro forma financial information, including the notes thereto, appearing elsewhere in this joint proxy statement/prospectus. See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·     and “PRO FORMA FINANCIAL INFORMATION” on page     ·    .
 
                  We anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during these periods.
 
       As of
March 31, 2001

Selected Statement of Financial Condition Data:     
Total assets      $8,416,110
Securities available-for-sale      1,573,617
Securities held-to-maturity      288,618
Loans receivable, net      4,885,901
Deposits      5,418,516
Borrowed funds      1,880,126
Stockholders’ equity      1,016,816
 
       For the
Three Months Ended
March 31, 2001

     For the
Twelve Months Ended
December 31, 2000

Selected Statements of Income Data:          
Interest income      $    142,304      $    384,802
Interest expense      75,866      196,510
     
    
Net interest income      66,438      188,292
Provision for loan losses      300      1,200
     
    
Net interest income after provision for loan losses      66,138      187,092
Non-interest income      32,146      28,954
Non-interest expense      41,211      126,589
     
    
Income before income taxes      57,073      89,457
Income taxes      20,551      34,280
     
    
Net income      $      36,522      $      55,177
     
    
Weighted Average Common Shares:          
Basic      65,471,323      53,665,829
Diluted      66,770,509      55,040,239
       At or for the
Three Months Ended
March 31, 2001

     At or for the
Twelve Months Ended
December 31, 2000

Per Common Share Data(1)          
Basic earnings per common share      $  0.56        $  1.03  
Diluted earnings per common share      0.55        1.00  
Cash dividends declared      0.17        0.66  
Book value       15.02        N/A  
 
Selected Financial Ratios(1)          
Return on total pro forma assets(2)      1.75 %      0.67 %
Return on total pro forma stockholders’ equity(3)      14.42        5.32  
Stockholders’ equity to total assets      12.10        12.41  
General and administrative expense to total pro forma assets(4)      1.58        1.20  
Efficiency ratio(5)      33.88         46.20 %

(1)
Per Common Share Data and Selected Financial Ratios are presented only for data relating to the pro forma combined condensed consolidated statements of income for the year ended December 31, 2000 and for the three months ended March 31, 2001, and data relating to the pro forma combined condensed consolidated statement of financial condition at March 31, 2001. Pro forma assets and pro forma stockholders’ equity for the periods presented were calculated assuming the merger was consummated on March 31, 2001.
(2)
Calculated by dividing pro forma net income by pro forma assets at the end of the period reported.
(3)
Calculated by dividing pro forma net income by pro forma stockholders’ equity at the end of the period reported.
(4)
Calculated by dividing pro forma general and administrative expense by pro forma assets at the end of the period reported.
(5)
Efficiency ratio represents pro forma operating expense divided by the sum of pro forma net interest income plus operating income.
 
COMPARATIVE PER SHARE DATA
 
                  The following table sets forth for New York Community common stock and Richmond County common stock certain historical, pro forma and pro forma equivalent per share financial information. The pro forma and pro forma equivalent per share information gives effect to the merger as if the merger had been effective on the dates presented, in the case of the book value data presented, and as if the merger had become effective at the beginning of the periods presented, in the case of the net income and dividends declared data presented. The pro forma data in the tables assumes that the merger is accounted for using the purchase method of accounting. See “ACCOUNTING TREATMENT” on page     ·    . The information in the following table is based on, and should be read together with, the historical financial information that we have presented in our prior filings with the Securities and Exchange Commission and the pro forma financial information that appears elsewhere in this document. See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·     and “PRO FORMA FINANCIAL INFORMATION” on page     ·    .
 
                  We anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during these periods.
 
     New York
Community
Historical(1)

   Richmond
County
Historical(2)

   Pro Forma
Combined

   Per Equivalent
Richmond
County Share(3)

Net income for the twelve Months ended
     December 31, 2000:
           
          Basic    $0.87    $1.49    $1.03 (4)    $1.05
          Diluted    0.83    1.47    1.00 (4)    1.02
Net income for the three months ended March 31,
     2001:
           
          Basic    0.68    0.41    0.56      0.57
          Diluted    0.66    0.40    0.55      0.56
Cash Dividends Declared            
For the twelve Months ended December 31, 2000    0.67    0.65    0.67 (5)    0.68
For the three months ended March 31, 2001    0.17    0.18    0.17 (5)    0.17
 
Book Value            
As of December 31, 2000    7.41    12.56    N/A      N/A
As of March 31, 2001    7.05    12.70    15.02      15.32

(1)
Amounts have been restated to reflect the shares issued pursuant to the 3-for-2 stock split on March 29, 2001.
(2)
Richmond County historical information is calculated as though Richmond County’s fiscal year ended on December 31.
(3)
Per equivalent Richmond County share is pro forma combined multiplied by 1.02.
(4)
The pro forma net income per share amounts are calculated by totaling the historical net income (adjusted for pro forma adjustments) of New York Community and Richmond County and dividing the resulting amount by the average pro forma shares of New York Community and Richmond County giving effect to the merger. The average pro forma shares of New York Community and Richmond County reflect New York Community’s historical basic and diluted shares, plus historical basic and diluted average shares of Richmond County as adjusted for an exchange ratio of 1.02 shares of New York Community common stock for each share of Richmond County common stock. The pro forma net income per share amounts do not take into consideration any operating efficiencies that may be realized as a result of, and stock purchases that may be made in contemplation of, the merger.
(5)
Pro forma cash dividends represent the New York Community historical amount.
 
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
 
                  This document contains a number of forward-looking statements regarding the financial condition, results of operations and business of New York Community and Richmond County. These statements may be made directly in this document or may be incorporated in this document by reference to other documents and may include statements for the period following the completion of the merger. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” “potential” or similar expressions. Some of the factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, the following:
 
·
increases in competitive pressure among financial institutions or from non-financial institutions;
 
·
changes in the interest rate environment;
 
·
changes in deposit flows, loan demand or real estate values;
 
·
changes in accounting principles, policies or guidelines;
 
·
general economic conditions, either nationally or in some or all of the operating areas in which the combined company will be doing business, or conditions in securities markets, or the banking industry;
 
·
legislation or regulatory changes;
 
·
technological changes;
 
·
the level of realization, if any, of expected cost savings from the merger;
 
·
difficulties related to the integration of the business of New York Community and Richmond County may be greater than expected; and
 
·
revenues following the merger may be lower than expected.
 
                  Because such forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Richmond County stockholders and New York Community stockholders are cautioned not to place undue reliance on such statements, which speak only as of the date of this document or the date of any document incorporated by reference.
 
                  All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this document and attributable to New York Community or Richmond County or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, neither New York Community nor Richmond County undertakes any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. However, New York Community and Richmond County will promptly amend or supplement this document in order to reflect any facts or events arising after the effective date of this document which individually or in the aggregate represent a fundamental change in the information set forth herein.
 
THE NEW YORK COMMUNITY SPECIAL MEETING
 
                  This section contains information from New York Community for New York Community stockholders about the special meeting of stockholders it has called to consider and approve actions related to the merger.
 
                  Together with this document, we are also sending you a notice of the New York Community special meeting and a form of proxy that is solicited by our board of directors. The New York Community special meeting will be held on     ·    , 2001, at     ·    , local time, at the Sheraton LaGuardia East Hotel, 135-20 39th Avenue, Flushing, New York.
 
Matters to Be Considered
 
                  The purpose of the New York Community special meeting is to vote on a proposal for adoption of the merger agreement.
 
                  You may be asked to vote upon other matters that may properly be submitted to a vote at the New York Community special meeting. You also may be asked to vote on a proposal to adjourn or postpone the New York Community special meeting. We could use any adjournment or postponement for the purpose, among others, of allowing additional time to solicit proxies.
 
Proxies
 
                  Each copy of this document mailed to New York Community stockholders is accompanied by a form of proxy with voting instructions for submission by mail. You should complete and return the proxy card accompanying this document in order to ensure that your vote is counted at the New York Community special meeting, or any adjournment or postponement thereof, regardless of whether you plan to attend the special meeting. You may revoke your proxy at any time before the vote is taken at the special meeting by
 
·
submitting written notice of revocation to the Corporate Secretary of New York Community prior to the voting of such proxy,
 
·
submitting a properly executed proxy of a later date, or
 
·
voting in person at the special meeting; however, simply attending the special meeting without voting will not revoke an earlier proxy.
 
                  Written notices of revocation and other communications regarding the revocation of your proxy should be addressed to:
 
                  New York Community Bancorp, Inc.
                  615 Merrick Avenue
                  Westbury, New York 11590
                  Attention: Michael J. Lincks, Executive Vice President and Corporate Secretary
 
                  If your shares are held in street name, you should follow the instructions of your broker regarding revocation of proxies.
 
                  All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with the instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” adoption of the merger agreement. The New York Community board of directors is currently unaware of any other matters that may be presented for action at the special meeting. If other matters properly come before the special meeting, or any adjournment or postponement thereof, we intend that shares represented by properly submitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxies on the proxy card. However, proxies that indicate a vote against adoption of the merger agreement will not be voted in favor of adjourning or postponing the special meeting to solicit additional proxies.
 
                  New York Community stockholders should NOT send stock certificates with their proxy cards. If the merger is completed, New York Community stockholders will not need to exchange their current stock certificates.
 
Solicitation of Proxies
 
                  We will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, we will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of New York Community common stock and secure their voting instructions, if necessary. We will reimburse the record holders for their reasonable expenses in taking those actions. We have also made arrangements with Mellon Investor Services LLC to assist us in soliciting proxies and have agreed to pay them $     ·     plus reasonable expenses for these services. If necessary, we may also use several of our regular employees, who will not be specially compensated, to solicit proxies from New York Community stockholders, either personally or by telephone, telegram, facsimile or letter.
 
Record Date
 
                  The New York Community board of directors has fixed the close of business on     ·    , 2001 as the record date for determining the New York Community stockholders entitled to receive notice of and to vote at the New York Community special meeting. At that time,     ·     shares of New York Community common stock were outstanding, held by     ·     holders of record.
 
Voting Rights and Vote Required
 
                  The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of New York Community common stock is necessary to constitute a quorum at the special meeting. Abstentions and broker non-votes will be counted solely for the purpose of determining whether a quorum is present. Under the applicable Nasdaq National Market rules, brokers or members who hold shares in street name for customers who are the beneficial owners of such shares are prohibited from giving a proxy to vote those shares with respect to the merger without specific instructions from such customers. An unvoted proxy submitted by a broker is sometimes referred to as a broker non-vote.
 
                  Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of New York Community common stock entitled to vote at the New York Community special meeting. You are entitled to one vote for each share of New York Community common stock you held as of the record date. However, New York Community’s certificate of incorporation provides that stockholders of record who beneficially own in excess of 10% of the then-outstanding shares of common stock of New York Community are not entitled to any vote with respect to the shares held in excess of the 10% limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate as well as by any person acting in concert with such person or entity.
 
                  Because the affirmative vote of the holders of a majority of the outstanding shares of New York Community common stock entitled to vote at the New York Community special meeting is needed for us to proceed with the merger, the failure to vote by proxy or in person will have the same effect as a vote against the merger agreement. Abstentions and broker non-votes also will have the same effect as a vote against the merger. Accordingly, the New York Community board of directors urges New York Community stockholders to complete, date and sign the accompanying proxy card and return it promptly in the enclosed postage-paid envelope.
 
                  As of the record date:
 
·
Directors and executive officers of New York Community and their affiliates beneficially owned      ·     shares of New York Community common stock, or     ·    % of the New York Community common stock outstanding on that date.
 
·
Directors and executive officers of Richmond County and their affiliates, including Richmond County (excluding the shares subject to the New York Community stock option described in “THE STOCK OPTION AGREEMENTS” on page     ·    ), beneficially owned     ·      shares of New York Community common stock, or     ·    % of the New York Community common stock outstanding on that date.
 
Recommendation of the Board of Directors
 
                  The New York Community board of directors has unanimously approved the merger agreement and the transactions it contemplates. The New York Community board of directors determined that the merger agreement and the transactions it contemplates are advisable and in the best interests of New York Community and in the best interests of its stockholders and unanimously recommends that you vote “FOR” adoption of the merger agreement.
 
                  See “THE MERGER—New York Community’s Reasons for the Merger; Recommendation of New York Community’s Board of Directors” on page     ·     for a more detailed discussion of the New York Community board of directors’ recommendation.
 
Attending the Meeting
 
                  If you are a beneficial owner of New York Community common stock held by a broker, bank or other nominee (i.e., in “street name”), you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or letter from a bank or broker are examples of proof of ownership. If you want to vote your shares of New York Community common stock held in street name in person at the meeting, you will have to get a written proxy in your name from the broker, bank or other nominee who holds your shares.
 
Participants in New York Community’s and New York Community Bank’s Benefit Plans
 
                  If you are a participant in the New York Community Bank Employee Stock Ownership Plan, the New York Community 401(k) Plan, the Columbia Federal Savings Bank Employee Stock Ownership Plan or the Columbia Savings Bank 401(k) Thrift Incentive Savings Plan, or if you have grants of restricted stock under the Queens County Savings Bank 1993 Recognition and Retention Plan, the Haven Bancorp 1996 Incentive Plan and the Queens County Savings Bank Supplemental Executive Retirement Plan, you will have received with this joint proxy statement/prospectus voting instruction forms that reflect all shares you may vote under the plans. Under the terms of these plans, the trustee or administrator votes all shares held by the plan, but each participant may direct the trustee or administrator how to vote the shares of New York Community common stock allocated to his or her account. If you own shares through any of these plans and do not vote, the respective plan trustees or administrators will vote the shares in accordance with the terms of the respective plans. The deadline for returning your voting instructions is     ·     , 2001.
 
 
THE RICHMOND COUNTY SPECIAL MEETING
 
                  This section contains information from Richmond County for Richmond County stockholders about the special meeting of stockholders it has called to consider and approve the merger agreement.
 
                  Together with this document, we are also sending you a notice of the Richmond County special meeting and a form of proxy that is solicited by our board of directors. The special meeting will be held on     ·    , 2001 at     ·     , local time, at     ·    .
 
Matters to Be Considered
 
                  The purpose of the Richmond County special meeting is to vote on a proposal for adoption of the merger agreement.
 
                  You may be asked to vote upon any other matters that may properly be submitted to a vote at the Richmond County special meeting. You also may be asked to vote upon a proposal to adjourn or postpone the Richmond County special meeting. We could use any adjournment or postponement for the purpose, among others, of allowing additional time to solicit proxies.
 
Proxies
 
                  Each copy of this document mailed to Richmond County stockholders is accompanied by a form of proxy with voting instructions for submission by mail, telephone or the internet. You should complete and return the proxy card accompanying this document or vote by telephone or the internet to ensure that your vote is counted at the Richmond County special meeting, or any adjournment or postponement thereof, regardless of whether you plan to attend the Richmond County special meeting. You can revoke your proxy at any time before the vote is taken at the Richmond County special meeting by
 
·
submitting written notice of revocation to the Corporate Secretary of Richmond County prior to the voting of such proxy,
 
·
submitting a properly executed proxy of a later date or voting again by telephone or the internet, or
 
·
voting in person at the special meeting; however, simply attending the special meeting without voting will not revoke an earlier proxy.
 
Written notices of revocation and other communications about revoking your proxy should be addressed to:
 
                  Richmond County Financial Corp.
                  1214 Castleton Avenue
                  Staten Island, New York 10310
                  Attention: Diane DeLillo
 
If your shares are held in street name, you should follow the instructions of your broker regarding revocation of proxies.
 
                  All shares represented by valid proxies we receive through this solicitation, and not revoked, will be voted in accordance with your instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” adoption of the merger agreement. The Richmond County board of directors is presently unaware of any other matters that may be presented for action at the special meeting. If other matters do properly come before the special meeting, or any adjournment or postponement thereof, we intend that shares represented by properly submitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxies on the proxy card. However, proxies that indicate a vote against adoption of the merger agreement will not be voted in favor of adjourning or postponing the special meeting to solicit additional proxies.
 
                  Richmond County stockholders should NOT send stock certificates with their proxy cards. If the merger is completed, Richmond County stockholders will be mailed a transmittal form promptly after the completion of the merger with instructions on how to exchange their Richmond County stock certificates for stock certificates of New York Community and cash in lieu of fractional shares, if applicable.
 
Voting by Telephone or the Internet
 
                  Many stockholders of Richmond County have the option to submit their proxies or voting instructions electronically by telephone or the internet instead of submitting proxies by mail on the enclosed proxy card. Please note that there are separate arrangements for using the telephone and the internet depending on whether your shares are registered in Richmond County’s stock records in your name or in the name of a brokerage firm or bank. Richmond County stockholders should check their proxy card or voting instructions forwarded by their broker, bank or other holder of record to see which options are available.
 
                  The telephone and internet procedures described below for submitting your proxy or voting instructions are designed to authenticate stockholders’ identities, to allow stockholders to have their shares voted and to confirm that their instructions have been properly recorded. Stockholders submitting proxies or voting instructions via the internet should understand that there may be costs associated with electronic access, such as usage charges from internet access providers and telephone companies, that would be borne by the stockholder.
 
                  Richmond County holders of record may submit their proxies:
 
·
by telephone by calling the toll-free number (    ·    )    ·    -    ·     and following the recorded instructions; or
 
·
through the internet by visiting a website established for that purpose at http://www.     ·    .com/    ·     and following the instructions.
 
Solicitation of Proxies
 
                  We will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, we will request that banks, brokers, and other record holders send proxies and proxy material to the beneficial owners of Richmond County common stock and secure their voting instructions, if necessary. We will reimburse the record holders for their reasonable expenses in taking those actions. We have also made arrangements with Georgeson Shareholder Services to assist us in soliciting proxies and have agreed to pay them $     ·     plus reasonable expenses for these services. If necessary, we may use several of our regular employees, who will not be specially compensated, to solicit proxies from Richmond County stockholders, either personally or by telephone, telegram, facsimile or letter.
 
Record Date
 
                  The Richmond County board of directors has fixed the close of business on     ·    , 2001 as the record date for determining the Richmond County stockholders entitled to receive notice of and to vote at the Richmond County special meeting. At that time,     ·     shares of Richmond County common stock were outstanding, held by approximately     ·     holders of record.
 
Voting Rights and Vote Required
 
                  The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Richmond County common stock is necessary to constitute a quorum at the Richmond County special meeting. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present. Under the applicable Nasdaq National Market rules, brokers or members who hold shares in street name for customers who are the beneficial owners of such shares are prohibited from giving a proxy to vote those shares with respect to the merger without specific instructions from such customers. An unvoted proxy submitted by a broker is sometimes referred to as a broker non-vote.
 
                  Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Richmond County common stock entitled to vote at the Richmond County special meeting. You are entitled to one vote for each share of Richmond County common stock you held as of the record date. However, Richmond County’s certificate of incorporation provides that stockholders of record who beneficially own in excess of 10% of the then-outstanding shares of common stock of Richmond County are not entitled to any vote with respect to the shares held in excess of the 10% limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate as well as by any person acting in concert with such person or entity.
 
                  Because the affirmative vote of the holders of a majority of the outstanding shares of Richmond County common stock entitled to vote at the Richmond County special meeting is needed for us to proceed with the merger, the failure to vote by proxy or in person will have the same effect as a vote against the merger agreement. Abstentions and broker non-votes also will have the same effect as a vote against the merger. Accordingly, the Richmond County board of directors urges Richmond County stockholders to complete, date, and sign the accompanying proxy card and return it promptly in the enclosed postage-paid envelope.
 
                  As of the record date:
 
·
Directors and executive officers of Richmond County and their affiliates beneficially owned      ·     shares of Richmond County common stock, or     ·    % of the outstanding Richmond County common stock at that date.
 
·
Directors and executive officers of New York Community and their affiliates, including New York Community, (excluding the shares subject to the Richmond County stock option described in “THE STOCK OPTION AGREEMENTS” on page     ·) beneficially owned     ·     shares of Richmond County common stock, or less than     ·    % of the outstanding Richmond County common stock at that date.
 
Recommendation of the Board of Directors
 
                  The Richmond County board of directors has unanimously approved the merger agreement and the transactions it contemplates. The Richmond County board of directors determined that the merger agreement and the transactions it contemplates are advisable and in the best interests of Richmond County and its stockholders and unanimously recommends that you vote “FOR” adoption of the merger agreement.
 
                  See “THE MERGER—Richmond County’s Reasons for the Merger; Recommendation of the Richmond County Board of Directors” on page     ·      for a more detailed discussion of the Richmond County board of directors’ recommendation.
 
Attending the Meeting
 
                  If you are a beneficial owner of Richmond County common stock held by a broker, bank or other nominee (i.e., in “street name”), you will need proof of ownership to be admitted to the meeting. A recent brokerage statement or letter from a bank or broker are examples of proof of ownership. If you want to vote your shares of Richmond County common stock held in street name in person at the meeting, you will have to get a written proxy in your name from the broker, bank or other nominee who holds your shares.
 
Participants in Richmond County’s and Richmond County Savings’ Benefit Plans
 
                  If you are a participant in the Richmond County Savings Bank Employee Stock Ownership Plan or the Richmond County 401(k) Plan, or if you have grants of restricted stock under the Richmond County Financial Corp. 1998 Stock-Based Incentive Plan or the Richmond County Financial Corp. Stock Compensation Plan, you will have received with this joint proxy statement/prospectus voting instruction forms that reflect all shares you may vote under the plans. Under the terms of these plans, the trustee or administrator votes all shares held by the plan, but each participant may direct the trustee or administrator how to vote the shares of Richmond County common stock allocated to his or her account. If you own shares through any of these plans and do not vote, the respective plan trustees or administrators will vote the shares in accordance with the terms of the respective plans. The deadline for returning your voting instructions is     ·    , 2001.
 
INFORMATION ABOUT THE COMPANIES
 
New York Community Bancorp, Inc.
615 Merrick Avenue
Westbury, New York 11590
(516) 683-4100
 
                  New York Community Bancorp, Inc., a Delaware corporation and bank holding company organized in 1993, is a community-oriented financial institution headquartered in Westbury, New York. It is the parent holding company for New York Community Bank, a savings bank chartered in New York and subject to regulation by the New York State Banking Department. New York Community Bank’s deposits are insured by the Bank Insurance Fund, as administered by the Federal Deposit Insurance Corporation. New York Community Bank, which operates through 19 traditional and 67 in-store branch offices in New York City, Long Island, Westchester and Rockland counties, Connecticut, and New Jersey, is primarily engaged in attracting retail deposits from the general public and investing those deposits, together with funds generated through operations, in the origination of mortgage loans on multi-family properties. In addition, through New York Community Bank, New York Community also originates one-to-four-family home and commercial real estate loans, construction loans, home equity loans and other consumer loans. New York Community Bank also invests in U.S. Treasury and Government agency securities and other investment securities. New York Community Bank’s deposit gathering base is concentrated in the communities surrounding its offices, while its primary lending area extends throughout the greater metropolitan New York area. Greater metropolitan New York has been, and continues to be, an area of significant competition among financial institutions.
 
                  At March 31, 2001, New York Community had total assets of $4.6 billion, deposits of $3.2 billion and stockholders’ equity of $286.4 million, and for the first three months of 2001 had net income of $27.6 million.
 
Richmond County Financial Corp.
1214 Castleton Avenue
Staten Island, New York 10310
(718) 448-2800
 
                  Richmond County Financial Corp. is the holding company for Richmond County Savings Bank, a New York state chartered stock savings bank founded in 1886. Together with its three divisional banks, First Savings Bank of New Jersey, Ironbound Bank and South Jersey Savings Bank, Richmond County Savings operates 15 banking offices on Staten Island, one banking office in Brooklyn, 11 banking offices in the counties of Camden, Gloucester, Essex, Hudson and Union, New Jersey and a multi-family loan processing center in Jericho, Long Island. Richmond County Savings has pending agreements to acquire two additional banking offices on Staten Island and five banking offices in Atlantic County, New Jersey, together with a total of approximately $300 million in deposits and $61 million in small business and consumer loans. These branch acquisitions are expected to be completed in the second quarter of 2001.
 
                  Richmond County Savings operates as a community-oriented financial institution. Its principal business consists of accepting retail deposits from the general public in the areas surrounding its branch offices and investing those funds, together with funds generated from operations and borrowings, in residential, multifamily and commercial real estate loans. Richmond County Savings also provides a variety of other financial services to consumers and businesses in its market area. Richmond County Savings’ revenues are derived from these banking activities and its portfolios of investment and mortgage-backed and mortgage-related securities.
 
                  At March 31, 2001, Richmond County had total assets of $3.4 billion, deposits of $2.2 billion, stockholders’ equity of $329.5 million, and for the nine months ended March 31, 2001 had net income of $28.8 million.
 
THE MERGER
 
                  The following discussion contains material information pertaining to the merger. This discussion is subject, and qualified in its entirety by reference, to the merger agreement, stock option agreements and financial advisor opinions attached as Appendices to this document. We encourage you to read and review those documents as well as the discussion in this document.
 
General
 
                  This section provides material information about the merger of New York Community and Richmond County and the circumstances surrounding the merger. The next sections of this document, entitled “THE MERGER AGREEMENT” on pages     ·     through     ·     and “THE STOCK OPTION AGREEMENTS” on pages     ·     through     ·    , have additional and more detailed information regarding the legal documents that govern the merger, including information about the conditions to completion of the merger and the provisions for terminating or amending the merger agreement.
 
                  At the New York Community special meeting, New York Community stockholders will be asked to consider and vote upon a proposal to adopt the merger agreement. At the Richmond County special meeting, Richmond County stockholders will be asked to consider and vote upon a proposal to adopt the merger agreement. Adoption of the merger agreement will constitute adoption of the transactions it contemplates, including, among others, the merger of Richmond County with and into New York Community and the issuance of New York Community common stock in the merger.
 
                  We are furnishing this document to New York Community stockholders and Richmond County stockholders in connection with the solicitation of proxies by the boards of directors of New York Community and Richmond County for use at their respective special meetings of stockholders and any adjournment or postponement of the meetings.
 
Structure
 
                  The merger agreement provides for the merger of Richmond County with and into New York Community. New York Community will be the surviving corporation. Simultaneously with or immediately after the consummation of the merger, New York Community Bank and Richmond County Savings Bank will merge, with New York Community Bank being the surviving bank of the merger, if regulatory approval of such a merger is obtained. New York Community and Richmond County may alter the method of effecting the combination of the companies, provided that such change does not alter the consideration to be issued to Richmond County stockholders, alter the tax treatment of the transaction or materially impede or delay consummation of the merger.
 
                  Upon completion of the merger, Richmond County stockholders will receive 1.02 shares of New York Community common stock for each share of Richmond County common stock that they hold. If the number of shares of common stock of New York Community changes before the merger is completed because of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar event, then an appropriate and proportionate adjustment will be made to the exchange ratio. Richmond County stockholders will receive cash instead of any fractional shares of New York Community common stock that would have otherwise been issued at the completion of the merger.
 
                  As a result of the merger, New York Community stockholders immediately prior to the merger will own approximately 60%, and Richmond County stockholders immediately prior to the merger will own approximately 40%, of the outstanding New York Community common stock. These percentages are based on the number of fully-diluted shares of New York Community common stock and Richmond County common stock calculated as of     ·    , 2001.
 
                   New York Community will account for the merger as a purchase for financial reporting purposes. The merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code for federal income tax purposes.
 
Background of the Merger
 
                  The management teams of New York Community and Richmond County have been familiar with each other for many years. Members of senior management of both companies have frequently interacted through business relationships between their institutions, participation in financial services industry professional organizations and community service endeavors.
 
                  As a consequence of this relationship, the Chief Executive Officers of New York Community and Richmond County, Joseph R. Ficalora and Michael F. Manzulli, have had ongoing informal discussions about a possible combination for some time. In the winter of 1999, these discussions were expanded to include other senior executives and the financial advisors of the two companies.
 
                  On January 14, 2000, at a special meeting of the board of directors, the Richmond County board met with members of senior management, legal counsel and representatives of Sandler O’Neill to discuss the possibility of a business combination with New York Community. At that meeting, Sandler O’Neill made a detailed presentation on the various strategic alternatives available to Richmond County, including a possible business combination with New York Community. Sandler O’Neill’s presentation included a detailed presentation on the possible pricing of the proposed transaction. Richmond County’s legal advisors made a detailed presentation to the board of directors regarding the directors’ fiduciary obligations to Richmond County and its stockholders in the context of a merger.
 
                  Following this meeting, the Richmond County board of directors authorized management to negotiate with New York Community regarding a possible business combination, and Richmond County and New York Community entered into a confidentiality agreement in furtherance of the negotiation process. The parties negotiated the terms of a possible business combination from January 14 through January 19, 2000. At a meeting held on January 18, 2000, Richmond County’s board of directors, senior management, legal counsel and representatives of Sandler O’Neill met to discuss the status of the merger negotiations. At a meeting held on January 19, 2000, Richmond County’s senior management and representatives of Sandler O’Neill explained to the Richmond County board of directors that meetings with New York Community had been inconclusive and that, as a result, the negotiations had ceased. The board of directors of Richmond County instructed senior management to discontinue the negotiations but instructed senior management to maintain the lines of communication with New York Community’s senior management.
 
                  On June 27, 2000, New York Community announced the acquisition of Haven Bancorp. Following the consummation of its acquisition of Haven Bancorp in November 2000, New York Community continued its ongoing evaluation of its strategic opportunities, including a potential merger with Richmond County. At this time Messrs. Ficalora and Manzulli re-opened discussions regarding a possible business combination. Discussions on various organizational and structural issues periodically occurred between the parties until February 2001. A confidentiality agreement between the parties was executed on February 20, 2001. In the course of the discussions that followed, New York Community and Richmond County conferred with Sullivan & Cromwell and Salomon Smith Barney, and Muldoon Murphy & Faucette LLP, Sandler O’Neill and Lehman Brothers, respectively, regarding legal and financial matters related to a possible business combination. The companies performed various financial due diligence on one another in the weeks that followed.
 
                  At a meeting held on March 20, 2001, Richmond County’s senior management reviewed the status of the merger negotiations with the Richmond County board of directors. Richmond County’s senior management also reviewed with the board of directors the discussions it had with its legal and financial advisors regarding the proposed business combination. After considering all of the factors with which it was presented, the Richmond County board of directors instructed senior management to conduct a detailed legal and financial due diligence review of New York Community and pursue negotiations on a definitive merger agreement for presentation to the board of directors for its consideration.
 
                  On March 22, 2001, Sandler O’Neill made a presentation to the Richmond County board of directors at its regularly scheduled meeting describing Richmond County’s strategic alternatives, including the benefits of a business combination with New York Community. At that meeting, Richmond County’s legal advisors made a detailed presentation to Richmond County’s board of directors and senior management regarding the board of directors’ fiduciary obligations to Richmond County and its stockholders in the context of a merger with New York Community. A detailed discussion and consideration of the matter among the Richmond County board of directors, senior management, and the financial and legal advisors followed. Following these deliberations, the Richmond County board of directors instructed senior management to continue to conduct a detailed legal and financial due diligence review of New York Community and pursue negotiations on a definitive merger agreement for presentation to the board of directors for its consideration.
 
                  New York Community furnished Richmond County with a draft merger agreement on the evening of March 22, 2001. On March 23, 2001, members of Richmond County’s senior management, together with representatives of Sandler O’Neill and Lehman Brothers, met with members of New York Community’s senior management and representatives of Salomon Smith Barney to discuss due diligence and organizational issues.
 
                  The companies continued due diligence through March 26, 2001. As part of the due diligence discussions, on March 24, 2001, Salomon Smith Barney assisted New York Community’s senior management’s review of Richmond County. Sandler O’Neill and Lehman Brothers assisted Richmond County’s senior management’s review of New York Community. This review covered historical and projected operating performance, strategic review, credit quality, asset/liability management, funding strategy, regulatory relationships and capital position and management. Senior management of and counsel to both companies negotiated the merger agreement from March 22 through March 27. Each company’s financial advisors periodically participated in the negotiation process.
 
                  The New York Community board of directors held a special meeting on March 27, 2001 at which New York Community’s senior management presented to the board the proposed definitive merger agreement. Representatives of Salomon Smith Barney made a detailed presentation on the fairness of the proposed transaction to New York Community from a financial perspective. Representatives of Sullivan & Cromwell reviewed with and made a detailed presentation to the New York Community board of directors on the merger agreement and the board of directors’ fiduciary obligations in the context of a merger involving New York Community and Richmond County. A detailed discussion among the New York Community board of directors, senior management, and the financial and legal advisors followed. Following these deliberations, the New York Community board of directors unanimously voted to approve the merger agreement and instructed New York Community’s Chairman, President and Chief Executive Officer to execute the merger agreement and related documents on New York Community’s behalf.
 
                  The Richmond County board of directors also held a special meeting on March 27, 2001 at which senior management presented to the board of directors the proposed definitive merger agreement. Representatives of Sandler O’Neill and Lehman Brothers made detailed presentations on the fairness of the proposed transaction to Richmond County’s stockholders from a financial perspective. Representatives of Muldoon Murphy & Faucette LLP reviewed with and made a detailed presentation to the Richmond County board of directors on the merger agreement and reiterated the board of directors’ fiduciary obligations in the context of a merger involving Richmond County and New York Community. A detailed discussion among the Richmond County board of directors, senior management, and the financial and legal advisors followed. Following these deliberations, the Richmond County board of directors unanimously voted to approve the merger agreement and instructed Richmond County’s Chairman and Chief Executive Officer to execute the merger agreement and related documents on Richmond County’s behalf.
 
                  A definitive merger agreement was executed by the parties on the evening of March 27, 2001.
 
New York Community’s Reasons for the Merger; Recommendation of New York Community’s Board of Directors
 
                  The New York Community board of directors believes that the merger presents an excellent opportunity to combine and expand two complementary banking operations. The New York Community board consulted with financial and other advisors and determined that the merger was consistent with the strategic plans of New York Community and was in the best interests of New York Community and its stockholders. In reaching its conclusion to approve the merger agreement, the New York Community board considered a number of factors, including the following:
 
·
Market-based exchange ratio / merger-of-equals.    The board took into account that the exchange ratio for Richmond County common stock into New York Community common stock was determined to be consistent with the median exchange ratio over 30 and 90 day periods. In connection with this review, the board considered the relative contributions of earnings, assets, liabilities and equity of the two parties to the combined company.
 
·
Cost savings.    The board observed that the synergies expected from the merger should result in expense savings. In making this determination, fully phased-in annual pre-tax expense reductions of $17.6 million, comprised of $12.0 million of operating expense savings (representing an estimated 11% of the combined company’s operating expenses) and $5.6 million of Richmond County’s employee stock ownership plan and management retention plan expense savings, were identified by management following a due diligence review of the businesses of New York Community and Richmond County. Based on an expected third quarter 2001 closing, these cost saving actions are expected to result in $2.2 million in pre-tax (or $1.4 million after-tax) expense reductions for the year 2001 (assuming 50% of cost savings are realized in the year 2001) and $17.6 million in pre-tax (or $11.4 million after-tax) expense reductions for the year 2002 (assuming 100% of cost savings are realized in 2002 and cost savings increase by 3%).
 
·
Effect on earnings per share.    The board noted that the merger is expected to be 2% accretive to earnings in 2002 under current GAAP rules, 17% accretive to cash earnings in 2002 and 12 to 17% accretive to earnings in 2002 under proposed GAAP rules.
 
·
Revenue enhancements.    The board took note that the complementary nature of the respective geographic markets, business products and skills of New York Community and Richmond County should result in enhanced revenue opportunities as products are cross-marketed and distributed over broader geographic and customer bases. Management of New York Community and Richmond County anticipate future revenue enhancement initiatives, however, at this time, no amounts were considered in the projected benefits of the merger.
 
·
Richmond County’s past performance.    The board assessed the strength of Richmond County’s financial performance on a stand-alone basis.
 
·
Attractive markets.    The board noted the complementary and compatible nature of New York Community’s and Richmond County’s contiguous geographic markets, which it believed to present a desirable strategic opportunity for geographic expansion and diversification. In particular, the board considered that:
 
w
the combination of the two businesses will provide New York Community with broader coverage in its traditional market, the greater New York City metropolitan area;
 
w
the merger presents New York Community with the ability to more quickly and effectively enter into attractive neighboring markets including Staten Island and Northern New Jersey; and
 
w
the resulting institution‘s branch network and franchise would be concentrated in one of the most affluent and populous regions in the country.
 
·
Ability to integrate.    The board took note of the integration capabilities of New York Community and Richmond County. In this regard, the board evaluated several key factors, including:
 
w
That customer disruption in the transition phase would not be significant due to the limited overlap and complementary nature of the markets served by New York Community and Richmond County and the fact that no branches would be closed;
 
w
That the combined company would benefit from the strong management teams of each of New York Community and Richmond County and that, because a number of key senior management positions had already been decided, management would be better able to focus on integration early in the process; and
 
w
The record of New York Community in integrating acquisitions smoothly while retaining profitability, having participated in the successful acquisition of Haven Bancorp, Inc. in 2000.
 
·
Continuity.    The board considered the ability of New York Community to retain continuity of management and of corporate structure, including retention of five directors and the chief executive officer position, as well as its governing documents.
 
·
Greater financial resources.    The board considered that New York Community would have greater resources and broader product offerings, enabling it to capitalize on various business opportunities, to realize enhanced returns on capital and to provide expanded services to its customer base.
 
·
Due diligence.    The board considered the reports of management and outside advisors concerning the operations, financial condition and prospects of Richmond County.
 
·
Strategic merger of equals.    The board reviewed the terms of the merger agreement and the stock option agreements, including the strategic merger-of-equals concept, which provides for reciprocal representations and warranties, conditions to closing and termination rights. In addition, the board compared the terms and resulting management structure of the merger with those of other recent mergers of this type.
 
·
Stock prices.    The board weighed the historical and current market prices of New York Community common stock and Richmond County common stock.
 
·
Salomon Smith Barney opinion.    The board evaluated the detailed financial analyses and presentation of Salomon Smith Barney as well as its opinion that, based on and subject to the considerations set forth in the opinion, the New York Community exchange ratio is fair from a financial point of view to New York Community.
 
                  The New York Community board of directors realizes that there can be no assurance about future results, including results expected or considered in the factors listed above, such as assumptions regarding price-to-earnings multiples, potential revenue enhancements, anticipated cost savings and earnings accretion. However, the board concluded that the potential positive factors outweighed the potential risks of consummating the merger.
 
                   The foregoing discussion of the information and factors considered by the New York Community board of directors is not exhaustive, but includes all material factors considered by the New York Community board of directors. In view of the wide variety of factors considered by the New York Community board of directors in connection with its evaluation of the merger and the complexity of such matters, the New York Community board of directors did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. The New York Community board of directors conducted a discussion of the factors described above, including asking questions of New York Community’s management and New York Community’s legal and financial advisors, and reached general consensus that the merger was in the best interests of New York Community and New York Community stockholders. In considering the factors described above, individual members of the New York Community board of directors may have given different weight to different factors. The New York Community board of directors relied on the experience and expertise of its financial advisor for quantitative analysis of the financial terms of the merger. See “THE MERGER—Opinions of Financial Advisors—Opinion of Salomon Smith Barney to New York Community” on page     ·    . It should be noted that this explanation of the New York Community board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS” on page     ·    .
 
                  The New York Community board of directors determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of New York Community and its stockholders. The New York Community board of directors also determined that the merger agreement and the transactions contemplated thereby are consistent with, and in furtherance of New York Community’s business strategies. Accordingly, the New York Community board of directors unanimously approved the merger agreement and unanimously recommends that New York Community stockholders vote “FOR” adoption of the merger agreement.
 
Richmond County’s Reasons for the Merger; Recommendation of Richmond County’s Board of Directors
 
                  Richmond County’s board of directors has unanimously approved the merger agreement and recommends that Richmond County stockholders vote “FOR” adoption of the merger agreement.
 
                  The Richmond County board believes that the consummation of the merger presents a unique opportunity to combine two like-minded companies to create a stronger company that is well positioned in the competitive New York metropolitan area. Richmond County’s board of directors has determined that the merger and the merger agreement are fair to, and in the best interests of, Richmond County and its stockholders. In approving the merger agreement, the Richmond County board consulted with legal counsel as to its legal duties and the terms of the merger agreement and with its financial advisors with respect to the financial aspects and fairness of the transaction from a financial point of view. In arriving at its determination, the Richmond County board also considered a number of factors, including the following:
 
·
Due diligence.    Information concerning the businesses, earnings, operations, financial condition and prospects of Richmond County and New York Community, both individually and as a combined entity. The Richmond County Board also took into account the results of Richmond County’s due diligence review of New York Community.
 
·
Sandler O’Neill and Lehman Brothers opinions.    The opinions rendered by Sandler O’Neill and Lehman Brothers, as financial advisors to Richmond County, that the exchange ratio is fair, from a financial standpoint, to Richmond County stockholders (see “THE MERGER—Opinions of Financial Advisors—Opinion of Sandler O’Neill to Richmond County” on page     ·     and “THE MERGER—Opinions of Financial Advisors—Opinion of Lehman Brothers to Richmond County” on page     ·    ).
 
·
Strategic merger of equals.    The terms of the merger agreement and the structure of the merger, including the reciprocal stock option agreements, and that the merger is intended to qualify as a transaction of a type that is generally tax-free for U.S. federal income tax purposes and as a purchase for accounting purposes.
 
·
Ownership of surviving corporation.    The fact that, upon completion of the merger, stockholders of Richmond County will own, in the aggregate, approximately 40% of New York Community.
 
·
Attractive markets.    The fact that there is no overlap of Richmond County Savings Bank’s branch offices and New York Community Bank’s branch offices, and that, as a result, there are no planned layoffs of Richmond County Savings Bank branch employees.
 
·
Organization of New York Community Bank.    The fact that Richmond County Savings Bank will remain a division of New York Community Bank for at least three years following the merger.
 
·
New York Community’s past performance.    The board assessed the strength of New York Community’s financial performance on a stand-alone basis.
 
·
Proposed management.    The proposed management of the combined company, including that: Michael F. Manzulli will serve as Chairman of New York Community and New York Community Bank; Anthony E. Burke will serve as Senior Executive Vice President and Chief Operating Officer of New York Community and President and Chief Operating Officer of New York Community Bank; Thomas R. Cangemi will serve as an Executive Vice President of New York Community and New York Community Bank; four of New York Community’s nine directors will be persons who currently serve as a director of Richmond County; and Richmond County’s directors will serve on a divisional board for the Richmond County Savings Bank division of New York Community Bank for at least three years following the merger.
 
·
Historical trading prices.    The historical trading prices for Richmond County common stock.
 
·
Pro forma financial information.    Pro forma financial information on the merger, including the pro forma book value and earnings per share.
 
·
Complementary businesses.    The complementary nature of the businesses of Richmond County and New York Community, particularly because the companies are both strong multi-family lending and deposit originators in primarily adjacent markets.
 
·
Historical and prospective financial information.    The financial information reviewed by management, Sandler O’Neill and Lehman Brothers with the Richmond County board of directors regarding New York Community and the performance of New York Community’s common stock on both a historical and prospective basis and the strategic fit between the parties, including the combination of Richmond County’s and New York Community’s deposit gathering and multi-family loan origination abilities across the New York metropolitan area; and
 
·
Contributions.    The contributions of each of the parties to a combined institution with respect to market capitalization, financial condition, and results of operation.
 
·
Common vision.    The belief of Richmond County’s senior management and board of directors that Richmond County and New York Community share a common vision with respect to delivering financial performance and stockholder value.
 
·
Strategic alternatives.    Richmond County’s alternatives to the merger, including the range of possible values of those alternatives and the timing and likelihood of actually receiving those values.
 
·
Regulatory approval.    The likelihood that the merger will be approved by the appropriate regulatory authorities.
 
·
Economic conditions.    The current and prospective economic, competitive and regulatory environment facing Richmond County, including: national and local economic conditions; the competitive environment for thrifts and other financial institutions generally; the increased competition resulting from recent legislation allowing non-banks to conduct banking activities; the trend toward consolidation in the financial services industry; and the likely effect of the foregoing factors on Richmond County’s potential growth, development, productivity and profitability.
 
·
Effect of merger.    The effect of the merger on Richmond County’s customers and communities served by Richmond County and its employees.
 
                  The foregoing discussion of the information and factors considered by the Richmond County board of directors is not exhaustive, but includes all material factors considered by the Richmond County board of directors. In view of the wide variety of factors considered by the Richmond County board of directors in connection with its evaluation of the merger and the complexity of such matters, the Richmond County board of directors did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. The Richmond County board of directors conducted a discussion of the factors described above, including asking questions of Richmond County’s management and Richmond County’s legal and financial advisors, and reached general consensus that the merger was in the best interests of Richmond County and Richmond County stockholders. In considering the factors described above, individual members of the Richmond County board of directors may have given different weight to different factors. The Richmond County board of directors relied on the experience and expertise of its financial advisors for quantitative analysis of the financial terms of the merger. See “THE MERGER—Opinions of Financial Advisors—Opinion of Sandler O’Neill to Richmond County” on page     ·     and “THE MERGER—Opinions of Financial Advisors—Opinion of Lehman Brothers to Richmond County” and page     ·    . It should be noted that this explanation of the Richmond County board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS” on page     ·    .
 
                  The Richmond County board of directors determined that the merger agreement and the transactions contemplated thereby are advisable and in the best interests of Richmond County and its stockholders. The Richmond County board of directors also determined that the merger agreement and the transactions contemplated thereby are consistent with, and in furtherance of Richmond County’s business strategies. Accordingly, the Richmond County board of directors has unanimously approved the merger agreement and unanimously recommends that Richmond County stockholders vote “FOR” adoption of the merger agreement.
 
Opinions of Financial Advisors
 
                  New York Community engaged Salomon Smith Barney Inc. as its financial advisor and Richmond County engaged Sandler O’Neill & Partners, L.P. and Lehman Brothers Inc. as its financial advisors in connection with the merger based on their experience and expertise. Salomon Smith Barney Inc., Sandler O’Neill & Partners, L.P. and Lehman Brothers Inc. are internationally recognized investment banking firms that have substantial experience in transactions similar to the merger.
 
Opinion of Salomon Smith Barney to New York Community
 
                  New York Community retained Salomon Smith Barney to act as financial advisor in connection with the merger. Pursuant to Salomon Smith Barney’s engagement letter with New York Community dated January 8, 2001, Salomon Smith Barney rendered an opinion to the New York Community board of directors on March 27, 2001 to the effect that, based upon and subject to the considerations set forth in its opinion, Salomon Smith Barney’s experience as investment bankers, its work described below and other factors it deemed relevant, as of that date, the exchange ratio was fair, from a financial point of view, to New York Community.
 
                  The full text of Salomon Smith Barney’s opinion, which sets forth the assumptions made, general procedures followed, matters considered and limits on the review undertaken, is included as Appendix D to this document. The summary of Salomon Smith Barney’s opinion set forth below is qualified in its entirety by reference to the full text of the opinion. Stockholders are urged to read Salomon Smith Barney’s opinion carefully and in its entirety.
 
                  In arriving at its opinion, Salomon Smith Barney:
 
·
reviewed a draft of the merger agreement;
 
·
held discussions with certain senior officers, directors, representatives and advisors of New York Community and certain senior officers, representatives and advisors of Richmond County concerning the businesses, operations and prospects of New York Community and Richmond County;
 
·
examined certain publicly available business and financial information relating to New York Community and Richmond County;
 
·
discussed other information relating to New York Community and Richmond County with their respective managements, including information relating to certain strategic implications and operational benefits anticipated to result from the merger;
 
·
reviewed the financial terms of the merger as set forth in the draft merger agreement in relation to current and historical market prices and trading volumes of the common stock of each of New York Community and Richmond County, historical and other operating data of New York Community and Richmond County, publicly available forecasts published by equity analysts as to the future earnings of New York Community and Richmond County, and the historical and forecasted capitalization and financial condition of New York Community and Richmond County;
 
·
considered, to the extent publicly available, the financial terms of certain other similar transactions that Salomon Smith Barney considered relevant in evaluating the exchange ratio;
 
·
analyzed certain financial, stock market and other publicly available information relating to the businesses of other companies whose operations Salomon Smith Barney considered relevant in evaluating those of New York Community and Richmond County;
 
·
evaluated the pro forma financial impact of the merger on New York Community; and
 
·
conducted other analyses and examinations and considered other information and financial, economic and market criteria as Salomon Smith Barney deemed appropriate in arriving at its opinion.
 
                   In rendering its opinion, Salomon Smith Barney assumed and relied upon, without independent verification, the accuracy and completeness of all financial and other information and data publicly available or furnished to or otherwise reviewed by or discussed with Salomon Smith Barney and further relied on the assurances of management of New York Community and Richmond County that they were not aware of any facts that would make any of that information inaccurate or misleading. With respect to financial forecasts regarding New York Community and Richmond County, except with respect to cost savings and operating synergies related to the merger, Salomon Smith Barney relied on publicly available third-party equity research forecasts, and it expressed no view with respect to such forecasts or the assumptions on which they were based. With respect to forecasts of cost savings and operating synergies forecasted by the managements of New York Community and Richmond County to result from the merger, Salomon Smith Barney was advised by the managements of New York Community and Richmond County that such forecasts were reasonably prepared on bases reflecting the best currently available estimates and judgments of managements of New York Community and Richmond County as to the strategic implications and operational benefits anticipated to result from the merger. Salomon Smith Barney expressed no view with respect to such forecasts and other information and data or the assumptions on which they were based. Salomon Smith Barney is not an expert in the evaluation of loan or lease portfolios for purposes of assessing the adequacy of the allowances for losses with respect to those portfolios and, although Salomon Smith Barney participated in a review of selected Richmond County credit files at New York Community’s request, Salomon Smith Barney has not made an independent evaluation of the adequacy of such allowances of New York Community or Richmond County. With the consent of New York Community’s board of directors, Salomon Smith Barney assumed that the aggregate allowances for such losses for each of New York Community and Richmond County are in the aggregate adequate to cover such losses. Salomon Smith Barney has not made or been provided with an independent evaluation or appraisal of any of the other assets or liabilities, contingent or otherwise, of New York Community or Richmond County nor has Salomon Smith Barney made any physical inspection of the properties or assets of New York Community or Richmond County. Representatives of New York Community advised Salomon Smith Barney, and Salomon Smith Barney assumed, that the final terms of the merger agreement would not vary materially from those set forth in the draft reviewed by Salomon Smith Barney. Salomon Smith Barney assumed, with the consent of New York Community’s board, that the merger will be treated as a tax-free reorganization for federal income tax purposes and that it will be accounted for as a purchase in accordance with generally accepted accounting principles. Salomon Smith Barney further assumed that the merger will be consummated in a timely fashion and in accordance with the terms of the merger agreement, without waiver of any of the conditions to the merger contained in the merger agreement.
 
                  Salomon Smith Barney’s opinion relates to the relative values of New York Community and Richmond County. Salomon Smith Barney did not express any opinion as to what the value of New York Community’s common stock actually will be when issued in the merger or the price at which New York Community’s common stock will trade subsequent to the announcement or consummation of the merger. Salomon Smith Barney was not asked to consider, and Salomon Smith Barney’s opinion did not address, the relative merits of the merger as compared to any alternative business strategies that might exist for New York Community or the effect of any other transaction in which New York Community might engage. Salomon Smith Barney’s opinion necessarily was based on information available to it, and financial, stock market, and other conditions and circumstances existing and disclosed to Salomon Smith Barney as of the date of the opinion.
 
                  Salomon Smith Barney’s advisory services and its opinion were provided for the information of New York Community’s board of directors in its evaluation of the merger, and Salomon Smith Barney’s opinion is not intended to be and does not constitute a recommendation to any stockholder as to how that stockholder should vote on any matter relating to the proposed merger.
 
                  In connection with rendering its opinion, Salomon Smith Barney made a presentation to New York Community’s board of directors on March 27, 2001 with respect to the material analyses performed by Salomon Smith Barney in evaluating the fairness of the exchange ratio to New York Community from a financial point of view. The following is a summary of that presentation. The summary includes information presented in tabular format. In order to understand fully the financial analyses used by Salomon Smith Barney, these tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The following quantitative information, to the extent it is based on market data, is, except as otherwise indicated, based on market data as it existed at or prior to March 26, 2001 and is not necessarily indicative of current or future market conditions.
 
                  Comparable Companies Analyses.     Salomon Smith Barney reviewed publicly available financial and operating information for the following nine financial institutions that Salomon Smith Barney considered comparable to Richmond County. We sometimes refer to these institutions as the “Peer Group.”

 

·    Astoria Financial Corporation ·   Independence Community Bank Corp.
 
             
·   Dime Bancorp, Inc. ·  
North Fork Bancorporation, Inc.
 
             
·   Dime Community Bancshares ·   Roslyn Bancorp, Inc.  
             
·   Flushing Financial Corporation ·   Staten Island Bancorp, Inc.  
             
·   GreenPoint Financial Corp.        

 

                  For each institution in the Peer Group, Salomon Smith Barney computed the ratio of the closing price of the institution’s common stock on March 26, 2001 to the institution’s estimated earnings per common share (EPS) for 2001, estimated cash EPS, which is determined by adding per share amortization of intangibles and stock benefit plans to EPS (CEPS), for 2001, estimated EPS for 2002, estimated CEPS for 2002, book value per share and tangible book value per share. Information regarding book value per share and tangible book value per share was based on publicly available financial data as of December 31, 2000. Information regarding EPS and CEPS was based on median estimates published by Institutional Brokers Estimate System (IBES) as of March 14, 2001. IBES is a data service that monitors and publishes compilations of earnings estimates by selected research analysts. The following table sets forth the results of these analyses.

 
       Range for
Peer Group

     Median for
Peer Group

          Multiple of market price to Peer Group institutions’:              
          Estimated 2001 EPS      10.1x-14.8x      12.4x
          Estimated 2002 EPS      9.2x-13.1x      11.5x
          Estimated 2001 CEPS      8.0x-13.4x      11.1x
          Estimated 2002 CEPS      7.4x-11.9x      10.1x
          Book value per share      1.26x-3.25x      1.59x
          Tangible book value per share      1.51x-4.50x      2.14x
 
                  Based on this data, Salomon Smith Barney derived a reference range for the implied per share value of Richmond County common stock. Salomon Smith Barney also assumed that a control premium of 30% would be paid in respect of the shares of Richmond County common stock. The ranges of implied per share value of Richmond County common stock derived by Salomon Smith Barney were as follows:
 
Using IBES EPS Estimates      $19.51 to $23.85
Plus 30% Change in Control Premium      $25.36 to $31.00
 
                  Salomon Smith Barney noted that the exchange ratio of 0.68 of a share (prior to the 3-for-2 stock split) of New York Community common stock for each share of Richmond County common stock had an implied value of $27.74 per share of Richmond County common stock based upon the closing price of New York Community common stock on March 26, 2001. While this implied value was above the reference range of the implied per share value of Richmond County common stock without the change in control premium, it was within the range established after applying the assumed 30% control premium. Salomon Smith Barney also noted that each of the New York Community common stock and the Richmond County common stock historically has traded at prices reflecting higher EPS multiples than the common stocks of the Peer Group.
 
                  Precedent Transactions Analysis.     Salomon Smith Barney analyzed publicly available financial, operating and stock market information for selected comparable merger transactions in the thrift industry announced since January 1, 1997. Salomon Smith Barney divided these transactions into the following three groups (in each case, the first-named company is the acquiror and the second-named company is the acquired company in the transaction):
 
·
New York Thrift Transactions.    The following six transactions with acquired thrifts operating in the State of New York and involving an aggregate purchase price in excess of $250 million were included in this group: North Fork Bancorporation, Inc./Reliance Bancorp Inc.; North Fork Bancorporation/JSB Financial Inc.; Roslyn Bancorp/TR Financial Corp.; Astoria Financial Corp./Long Island Bancorp, Inc.; North Fork Bancorporation/New York Bancorp Inc.; and Astoria Financial Corp./Greater New York Savings Bank.
 
·
Northeast Thrift Transactions.    The following 17 transactions with acquired thrifts operating in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island or Vermont and involving an aggregate purchase price in excess of $250 million were included in this group: North Fork Bancorporation, Inc./Reliance Bancorp Inc.; North Fork Bancorporation, Inc./JSB Financial Inc.; Sovereign Bancorp, Inc./Peoples Bancorp Inc.; Peoples Heritage Financial Group/SIS Bancorp Inc.; Charter One Financial, Inc./ALBANK Financial Corporation; Roslyn Bancorp/TR Financial Corp.; Astoria Financial Corp./Long Island Bancorp, Inc.; UST Corp./Affiliated Community Bancorp; First Empire State Corp./ONBANCorp; Peoples Heritage Financial Group/CFX Corp.; Webster Financial Corp./Eagle Financial Corp.; North Fork Bancorporation, Inc./New York Bancorp Inc.; Sovereign Bancorp, Inc./ML Bancorp Inc.; Charter One Financial, Inc./RCSB Financial; Astoria Financial Corp./Greater New York Savings Bank; Summit Bancorp/Collective Bancorp; and Sovereign Bancorp, Inc./Bankers Corp.
 
·
National Thrift Transactions.    The following 20 transactions in the United States with transaction values in excess of $500 million were included in this group: Washington Mutual, Inc./Bank United Corp.; North Fork Bancorporation, Inc./JSB Financial Inc.; Charter One Financial, Inc./St. Paul Bancorp; Charter One Financial, Inc./ALBANK Financial Corporation; Roslyn Bancorp/TR Financial Corp.; Astoria Financial Corp./Long Island Bancorp, Inc.; Washington Mutual, Inc./H.F. Ahmanson & Company; Commercial Federal Corporation/First Colorado Bancorp, Inc.; Fifth Third Bancorp/CitFed Bancorp, Inc.; Fifth Third Bancorp/State Savings Co.; First Empire State Corp./ONBANCorp; Peoples Heritage Financial Group/CFX Corp.; North Fork Bancorporation, Inc./New York Bancorp Inc.; H.F. Ahmanson & Company/Coast Savings Financial Corp.; Star Banc Corporation/Great Financial Corporation; Charter One Financial, Inc./RCSB Financial; Associated Banc-Corp/First Financial Corp.; Marshall & Ilsley Corp./Security Capital Corp.; Washington Mutual, Inc./Great Western Financial Corp.; and Summit Bancorp/Collective Bancorp.
 
                  Salomon Smith Barney derived for each of the precedent transactions:
 
·
the ratio of the per share price in the transaction to the acquired company’s (1) EPS for the last twelve-month period for which results were available (LTM), (2) book value per share, and (3) tangible book value per share;
 
·
the premium implied by the per share price in the transaction to the market price per share of the acquired company’s common stock on the last trading day prior to the announcement of the transaction;
 
·
the premium implied by the per share price in the transaction to the market price per share of the acquired company’s common stock one month prior to the announcement of the transaction; and
 
·
the premium implied by the per share price in the transaction to the acquired company’s deposits.
 
                  The results of these analyses are summarized in the following table:
 
       Precedent Transactions
       Range
     Median
New York Thrift Transactions
Ratio of transaction price to acquired company’s:
          LTM EPS      15.0x-33.3x      22.3x
          Book value per share      1.53x-4.63x      2.51x
          Tangible book value per share      1.53x-4.63x      2.94x
Implied premium of transaction price to market price on last trading day prior to
     announcement
     3.3%-46.6%      9.2%
Implied premium of transaction price to market price one month prior to
     announcement
     10.5%-62.4%      19.4%
Implied premium of transaction price to deposits      8.5%-38.7%      25.6%
 
Northeast Thrift Transactions
Ratio of transaction price to acquired company’s:
          LTM EPS      15.0x-45.2x      21.9x
          Book value per share      1.10x-4.63x      2.52x
          Tangible book value per share      1.13x-4.63x      2.85x
Implied premium of transaction price to market price on last trading day prior to
     announcement
     3.3%-46.6%      21.9%
Implied premium of transaction price to market price one month prior to
     announcement
     10.5%-62.4%      34.3%
Implied premium of transaction price to deposits      8.5%-38.7%      20.9%
 
National Thrift Transactions
Ratio of transaction price to acquired company’s:
          LTM EPS      10.6x-33.3x      22.3x
          Book value per share      1.53x-4.72x      2.72x
          Tangible book value per share      1.53x-5.49x      2.88x
Implied premium of transaction price to market price on last trading day prior to
     announcement
     (13.6)%-46.6%      14.6%
Implied premium of transaction price to market price one month prior to
     announcement
     (6.7)%-68.7%      25.5%
Implied premium of transaction price to deposits      7.2%-38.7%      21.2%
 
                  Using financial information for Richmond County as of December 31, 2000, Salomon Smith Barney derived a reference range for the implied per share value of Richmond County common stock based on results derived for each category of precedent transactions. Those ranges are as follows:
 
New York Thrift Transactions      $27.28 to $33.34
Northeast Thrift Transactions      $28.14 to $34.40
National Thrift Transactions      $28.34 to $34.64
 
                   Salomon Smith Barney noted that the implied value per share of Richmond County common stock ($27.74) based on the exchange ratio and the closing price of New York Community common stock on March 26, 2001 was within or below all three reference ranges of the implied per share value of Richmond County common stock derived by Salomon Smith Barney in its precedent transactions analysis.
 
                  Discounted Cash Flow Analysis.     Salomon Smith Barney performed a discounted cash flow analysis to estimate a range of implied value per share of Richmond County common stock as of March 26, 2001, including certain expenses and cost savings expected to result from the merger. In this analysis, Salomon Smith Barney assumed a weighted average cost of capital of 11.9% to derive the present value of (1) Richmond County’s estimated free cash flows available to stockholders from 2001 through 2005, plus (2) Richmond County’s terminal value at the end of fiscal 2005. Terminal values for Richmond County were calculated based on a range of 12.0x to 15.0x estimated 2006 EPS. In performing this analysis, Salomon Smith Barney used IBES estimates of EPS as of March 14, 2001 for Richmond County and an estimated long-term annual growth rate for Richmond County’s EPS (also obtained from IBES) of 11.5%. EPS data were adjusted to account for management’s assumptions of cost savings resulting from the merger of 31.9% of Richmond County’s pre-tax overhead expense, taking into account the benefit expected to be obtained from the termination of Richmond County’s employee stock ownership plan and management retention plan as a result of the merger (50% achievable in 2001 and 100% achievable in 2002, with an annual growth rate of such cost savings of 3% per year after 2002). In determining cash flows available to stockholders, Salomon Smith Barney used the following dividend payout ratios (i.e., percentages of adjusted EPS payable to stockholders), which assume the maintenance of a constant ratio of tangible common equity to tangible assets of 6.5%: (1) 72.0% in 2001; (2) 76.2% in 2002; (3) 77.1% in 2003; (4) 77.9% in 2004; and (4) 78.8% in 2005.
 
                  Based on these assumptions, Salomon Smith Barney derived a reference range for the implied per share value of Richmond County common stock of $25.66 to $30.46. Salomon Smith Barney noted that the implied value per share of Richmond County common stock ($27.74) based on the exchange ratio and the closing price of New York Community common stock on March 26, 2001 was within the reference range of the implied per share value of Richmond County common stock derived by Salomon Smith Barney in its precedent transactions analysis.
 
                  Contribution Analysis.    Salomon Smith Barney analyzed the relative contribution that New York Community and Richmond County would each be making to the combined company with respect to certain financial and operating data. Salomon Smith Barney based its analyses on financial data at or for the twelve month period ended December 31, 2000 and did not consider cost savings, restructuring adjustments or other expected effects of the merger. Salomon Smith Barney noted that the income statement data for New York Community with respect to the twelve months ended December 31, 2000 included only one month of income associated with Haven Bancorp, which was acquired by New York Community on November 30, 2000. Estimated income statement data with respect to New York Community for 2001 and 2002 include the projected impact of the Haven Bancorp acquisition for the entirety of those periods.
 
     New York Community’s
Contribution to the
Combined Company

   Richmond County’s
Contribution to the
Combined Company

Income Statement Data
          2000 net interest income      42.2 %      57.8 %
          2000 provision for loan losses      0.0        100.0  
          2000 non interest income      36.8        63.2  
          2000 non interest expense      31.9        68.1  
          2000 pretax income      49.6        50.4  
          2000 net income      49.2        50.8  
 
          2001 estimated net income      61.5        38.5  
          2002 estimated net income      61.6        38.4  
          2001 estimated cash net income      60.4        39.6  
          2002 estimated cash net income      60.6        39.4  
 
Balance Sheet Data (as of 12/31/00)
          Securities      37.0 %      63.0 %
          Gross loans      65.7        34.3  
          Allowance for loan losses      46.5        53.5  
          Total assets      57.3        42.7  
          Deposits      57.7        42.3  
          Total equity      49.4        50.6  
 
          Tangible common equity      46.8        53.2  
          Tier 1 capital      53.3        46.7  
          Market capitalization (as of March 26, 2001)      60.0        40.0  
          Average market capitalization (last 30 days)      59.0        41.0  
          Average market capitalization (last six months)      56.7        43.3  
 
                   Salomon Smith Barney observed that these data were consistent with the 59.8% and 40.2% pro forma fully diluted equity interest in the combined company of the current common stockholders of New York Community and Richmond County, respectively, resulting from the merger.
 
                  Forecasted Pro Forma Financial Analysis.     Salomon Smith Barney analyzed the estimated financial impact of the merger on New York Community’s EPS and CEPS. In performing this analysis, Salomon Smith Barney relied on IBES estimates of EPS, adjusted to account for management’s assumptions of cost savings resulting from the merger (as described above). Based on this analysis, Salomon Smith Barney determined that the merger would be dilutive to New York Community’s EPS in 2001 by 0.4%, accretive to New York Community’s EPS in 2002 by 1.6% and accretive to New York Community’s CEPS by 2.4% and 16.5% in 2001 and 2002, respectively.
 
*    *    *
 
                  The preceding discussion is a summary of the material financial analyses furnished by Salomon Smith Barney to New York Community’s board of directors but it does not purport to be a complete description of the analyses performed by Salomon Smith Barney or of its presentations to New York Community’s board of directors. The preparation of financial analyses and fairness opinions is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description. Salomon Smith Barney made no attempt to assign specific weights to particular analyses or factors considered, but rather made qualitative judgments as to the significance and relevance of all the analyses and factors considered and determined to give its fairness opinion as described above. Accordingly, Salomon Smith Barney believes that its analyses, and the summary set forth above, must be considered as a whole, and that selecting portions of the analyses and of the factors considered by Salomon Smith Barney, without considering all of the analyses and factors, could create a misleading or incomplete view of the processes underlying the analyses conducted by Salomon Smith Barney and its opinion. With regard to the Peer Group public trading levels or precedent transaction analyses summarized above, Salomon Smith Barney selected the Peer Group and transactions on the basis of various factors, including the size and location of New York Community; however, no company utilized as a comparison in these analyses, and no transaction utilized as a comparison in the precedent transaction analysis summarized above, is identical to New York Community, Richmond County or the merger. As a result, these analyses are not purely mathematical, but also take into account differences in financial and operating characteristics of the Peer Group companies and other factors that could affect the transaction or public trading value of the Peer Group and transactions to which New York Community and Richmond County and the merger are being compared. In its analyses, Salomon Smith Barney made numerous assumptions with respect to New York Community, Richmond County, industry performance, general business, economic, market and financial conditions, and other matters, many of which are beyond the control of New York Community and Richmond County. Any estimates contained in Salomon Smith Barney’s analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by these analyses. Estimates of values of companies do not purport to be appraisals or necessarily to reflect the prices at which companies may actually be sold. Because these estimates are inherently subject to uncertainty, none of New York Community, Richmond County, New York Community board of directors, Salomon Smith Barney or any other person assumes responsibility if future results or actual values differ materially from the estimates.
 
                  Salomon Smith Barney’s analyses were prepared solely as part of Salomon Smith Barney’s analysis of the fairness of the exchange ratio in the merger and were provided to New York Community’s board of directors in connection therewith. The opinion of Salomon Smith Barney was only one of the many factors taken into consideration by New York Community’s board of directors in making its determination to approve the merger agreement and the merger. See “New York Community’s Reasons For the Merger; Recommendation of New York Community’s Board of Directors” on page     ·    .
 
                  Salomon Smith Barney is an internationally recognized investment banking firm engaged, among other things, in the valuation of businesses and their securities in connection with mergers and acquisitions, restructurings, leveraged buyouts, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. New York Community selected Salomon Smith Barney to act as its financial advisor on the basis of Salomon Smith Barney’s international reputation. Salomon Smith Barney and its predecessors and affiliates have previously rendered investment banking services to New York Community unrelated to the merger, for which Salomon Smith Barney has received customary compensation. In the ordinary course of its business, Salomon Smith Barney and its affiliates may actively trade or hold the securities of both New York Community and Richmond County for its own account and for the account of customers and, accordingly, may at any time hold a long or short position in these securities. Salomon Smith Barney and its affiliates, including Citigroup Inc. and its affiliates, may maintain other business relationships with New York Community and Richmond County and their respective affiliates.
 
                  Pursuant to Salomon Smith Barney’s engagement letter, New York Community has paid Salomon Smith Barney for its services rendered in connection with the merger $1,000,000, and has agreed to pay Salomon Smith Barney an additional $2,750,000 upon consummation of the merger. New York Community has also agreed to reimburse Salomon Smith Barney for its reasonable travel and other out-of-pocket expenses incurred in connection with its engagement, including the reasonable fees and disbursements of its counsel, and to indemnify Salomon Smith Barney against specific liabilities and expenses relating to or arising out of its engagement, including liabilities under the federal securities laws.
 
Opinion of Sandler O’Neill to Richmond County
 
                  By letter agreement dated as of March 22, 2001, Richmond County retained Sandler O’Neill as an independent financial advisor in connection with Richmond County’s consideration of a possible merger with New York Community. At the request of Richmond County’s board of directors, representatives of Sandler O’Neill attended the March 27, 2001 meeting at which the board considered and approved the merger agreement. At the meeting, Sandler O’Neill delivered to the Richmond County board its oral opinion, subsequently confirmed in writing, that, as of that date, the merger exchange ratio was fair to Richmond County stockholders from a financial point of view. The full text of Sandler O’Neill’s March 27, 2001 opinion is attached as Appendix E to this joint proxy statement/prospectus. The opinion outlines the procedures followed, assumptions made, matters considered and qualifications and limitations on the review undertaken by Sandler O’Neill in rendering the opinion. The description of the opinion set forth below is qualified in its entirety by reference to the opinion. Richmond County stockholders are urged to read the opinion carefully and in its entirety in connection with their consideration of the proposed merger.
 
                  Sandler O’Neill’s opinion was directed to the Richmond County board and was provided to the board for its information in connection with its consideration of the merger. The opinion is directed only to the fairness of the exchange ratio to Richmond County stockholders from a financial point of view. It does not address the underlying business decision of Richmond County to engage in the merger or any other aspect of the merger and is not a recommendation to any Richmond County stockholder as to how such stockholder should vote at the special meeting with respect to the merger or any other matter.
 
                  In arriving at its opinion, Sandler O’Neill reviewed and considered, among other things:
 
·
the merger agreement and certain of the annexes thereto;
 
·
the stock option agreements dated March 27, 2001 between Richmond County and New York Community;
 
·
certain publicly available financial statements and other historical financial information of Richmond County that it deemed relevant;
 
·
certain publicly available financial statements and other historical financial information of New York Community that it deemed relevant;
 
·
consensus earnings per share estimates for Richmond County for the fiscal years ending June 30, 2001 and 2002 published by IBES and the views of senior management of Richmond County, based on limited discussions with members of senior management of Richmond County, regarding Richmond County’s past and present business, financial condition, results of operations and future prospects;
 
·
consensus earnings per share estimates for New York Community for the years ending December 31, 2001 and 2002 published by IBES and the views of senior management of New York Community, based on limited discussions with members of senior management of New York Community, regarding New York Community’s past and present business, financial condition, results of operations and future prospects;
 
·
the pro forma financial impact of the merger, taking into consideration the amounts and timing of the transaction costs, purchase accounting adjustments, and cost savings and operating synergies which the managements of Richmond County and New York Community estimate will result from the merger;
 
·
the relative contributions of Richmond County and New York Community to the combined company;
 
·
the publicly reported historical price and trading activity for Richmond County’s and New York Community’s common stock, including a comparison of certain financial and stock market information for Richmond County and New York Community with similar publicly available information for certain other companies the securities of which are publicly traded;
 
·
the financial terms of certain recent business combinations in the financial institutions industry, including certain business combinations structured as mergers of equals, to the extent publicly available;
 
·
the current market environment generally and the banking environment in particular; and
 
·
such other information, financial studies, analyses and investigations and financial, economic and market criteria as they are considered relevant.
 
                  Sandler O’Neill was not asked to, and did not, solicit indications of interest in a potential transaction from other third parties.
 
                  In performing its reviews and analyses and in rendering its opinion, Sandler O’Neill assumed and relied upon the accuracy and completeness of all the financial information, analyses and other information that was publicly available or otherwise furnished to, reviewed by or discussed with it and further relied on the assurances of management of Richmond County and New York Community that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. Sandler O’Neill was not asked to and did not undertake an independent verification of the accuracy or completeness of any of such information and it does not assume any responsibility or liability for the accuracy or completeness of any of such information. Sandler O’Neill did not make an independent evaluation or appraisal of the assets, the collateral securing assets or the liabilities, contingent or otherwise, of Richmond County or New York Community or any of their respective subsidiaries, or the collectibility of any such assets, nor was it furnished with any such evaluations or appraisals. Sandler O’Neill is not an expert in the evaluation of allowances for loan losses and it has not made an independent evaluation of the adequacy of the allowance for loan losses of Richmond County or New York Community, nor has it reviewed any individual credit files relating to Richmond County or New York Community. With Richmond County’s consent, Sandler O’Neill has assumed that the respective allowances for loan losses for both Richmond County and New York Community are adequate to cover such losses and will be adequate on a pro forma basis for the combined entity. In addition, Sandler O’Neill has not conducted any physical inspection of the properties or facilities of Richmond County or New York Community. Sandler O’Neill is not an accounting firm and it has relied, with Richmond County’s consent, on the reports of the independent accountants of Richmond County and New York Community for the accuracy and completeness of the audited financial statements furnished to them. At the direction of Richmond County, the earnings projections for Richmond County on a stand-alone basis used by Sandler O’Neill in its analyses were based on published IBES consensus earnings estimates. At the direction of New York Community, the earnings projections for New York Community on a stand-alone basis used by Sandler O’Neill in its analyses were based on published IBES consensus earnings estimates. With respect to such estimates and with respect to all projections of transaction costs, purchase accounting adjustments and expected cost savings and operating synergies prepared by and reviewed with the managements of Richmond County and New York Community and used by Sandler O’Neill in its analyses, Sandler O’Neill assumed, with Richmond County’s consent, that they reflected the best currently available estimates and judgments of the respective managements of the respective future financial performances of Richmond County and New York Community and that such performances will be achieved. Sandler O’Neill expressed no opinion as to such financial projections or estimates or the assumptions on which they were based. The projections and earnings estimates used and relied upon by Sandler O’Neill in its analyses were based on numerous variables and assumptions that are inherently uncertain; accordingly, actual results could vary materially from those set forth in such projections and estimates.
 
                  Sandler O’Neill’s opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. Sandler O’Neill assumed, in all respects material to its analysis, that all of the representations and warranties contained in the merger agreement and all related agreements are true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the Agreement are not waived. Sandler O’Neill also assumed, with Richmond County’s consent, that there has been no material change in Richmond County’s or New York Community’s assets, financial condition, results of operations, business or prospects since the date of the last publicly filed financial statements available to them, that Richmond County and New York Community will remain as going concerns for all periods relevant to its analyses, and that the merger will be accounted for as a purchase and will qualify as a tax-free reorganization for federal income tax purposes.
 
                  In rendering its March 27, 2001 opinion, Sandler O’Neill performed a variety of financial analyses. The following is a summary of the material analyses performed by Sandler O’Neill, but is not a complete description of all the analyses underlying Sandler O’Neill’s opinion. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. Sandler O’Neill believes that its analyses must be considered as a whole and that selecting only portions of the factors and analyses, or attempting to ascribe relative weights to such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in Sandler O’Neill’s comparative analyses described below is identical to Richmond County or New York Community and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions is not merely mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of Richmond County or New York Community and the companies to which they are being compared.
 
                  In performing its analyses, Sandler O’Neill also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of Richmond County, New York Community and Sandler O’Neill. The analyses performed by Sandler O’Neill are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. Sandler O’Neill prepared its analyses solely for purposes of rendering its opinion and provided such analyses to the Richmond County board at the March 27th meeting. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, Sandler O’Neill’s analyses do not necessarily reflect the value of Richmond County common stock or New York Community common stock or the prices at which Richmond County common stock or New York Community common stock may be sold at any time.
 
                  Summary of Proposal.    Sandler O’Neill reviewed the financial terms of the proposed transaction. Based on the closing price of New York Community common stock on March 26, 2001 of $40.80 and a pre-split exchange ratio of 0.68 of a share of New York Community common stock for each share of Richmond County common stock, Sandler O’Neill calculated an implied transaction value per share of Richmond County common stock of $27.74. The implied aggregate transaction value was approximately $779 million, based upon 28,087,893 diluted shares of Richmond County common stock outstanding, which was determined using the treasury stock method at the implied value of $27.74. Based upon the implied transaction value per share and Richmond County’s December 31, 2000 financial information, Sandler O’Neill calculated the following ratios:
 
Implied value/Book value      2.21x
Implied value/Tangible book value      2.84
Implied value/Last twelve months’ EPS      18.75
Implied value/Projected 2001 EPS      16.04
 
                   For purposes of Sandler O’Neill’s analyses, earnings per share were based on diluted earnings per share. Sandler O’Neill noted that the implied transaction value represented a 4.7% premium over the March 26, 2001 closing price of Richmond County common stock of $26.50.
 
                  Stock Trading History.    Sandler O’Neill reviewed the history of the reported trading prices and volume of Richmond County common stock and New York Community common stock, and the relationship between the movements in the prices of Richmond County common stock and New York Community common stock, respectively, to movements in certain stock indices, including the Standard & Poor’s 500 Index, the Nasdaq Bank Index and the median performance of a composite peer group of publicly traded savings institutions for each of Richmond County and New York Community selected by Sandler O’Neill. During the one year period ended March 26, 2001, Richmond County’s common stock outperformed each of the indices to which it was compared, and New York Community’s common stock outperformed each of the indices to which it was compared.
 
       Beginning Index Value
March 23, 2000

     Ending Index Value
March 26, 2001

Richmond County      100.00 %      158.21 %
Richmond County Peer Group      100.00        150.63  
Nasdaq Bank Index      100.00        119.53  
S&P 500 Index      100.00        75.47  
 
       Beginning Index
Value March 23, 2000

     Ending Index Value
March 26, 2001

New York Community      100.00 %      209.23 %
New York Community Peer Group      100.00        142.69  
Nasdaq Bank Index      100.00        119.53  
S&P 500 Index      100.00        75.47  
 
                  Comparable Company Analysis.     Sandler O’Neill used publicly available information to compare selected financial and market trading information for Richmond County and New York Community and two groups of savings institutions selected by Sandler O’Neill, a regional group and a highly valued group. The regional group consisted of Richmond County, New York Community and the following nine publicly traded regional savings institutions:
 
Commonwealth Bancorp Inc.
First Sentinel Bancorp Inc.
PennFed Financial Services Inc.
Staten Island Bancorp Inc.
WSFS Financial Corp.
Dime Community Bancshares Inc.
Independence Community Bank Corp.
Roslyn Bancorp Inc.
Waypoint Financial Corp.
 
                  The highly valued group consisted of the following 10 publicly traded savings institutions which had a return on average equity greater than 13% (based on last twelve months’ earnings) and a price-to-tangible book value greater than 150%:
 
Coastal Bancorp Inc.
First Federal Capital Corp.
First Financial Holdings Inc.
MetroWest Bank
Roslyn Bancorp Inc.
First Essex Bancorp Inc.
FirstFed Financial Corp.
MAF Bancorp Inc.
People’s Bancshares Inc.
Washington Federal Inc.
 
                  The analysis compared publicly available financial information for Richmond County, New York Community and the median data for each of the regional group and highly valued group as of and for each of the years ended December 31, 1995 through 2000. The table below sets forth the comparative data as of and for the twelve months ended December 31, 2000 with pricing data as of March 23, 2001.
 
       Richmond
County

     New York
Community

     Regional
Group

     Highly Valued
Group

Total assets      $3,213,063        $4,715,138        $3,213,063        $2,722,169  
Tangible equity/total assets      7.62 %      4.02 %      7.56 %      6.03 %
Intangible assets/total equity      22.32        38.41        10.67        6.38  
Net loans/total assets      56.60        76.70        60.24        68.92  
Gross loans/total deposits      87.78        111.58        101.07        110.10  
Total borrowings/total assets      24.62        22.00        25.72        35.09  
Non-performing assets/total assets      0.34        0.19        0.20        0.19  
Loan loss reserves/gross loans      1.02        0.50        0.86        0.89  
Net interest margin      3.54        3.33        2.99        2.85  
Non-interest income/average assets      0.46 (1)      0.32        0.33        0.47  
Non-interest expense/average assets      1.84 (1)      1.17        1.74        2.04  
Efficiency ratio      44.91        32.95        44.91        52.48  
Return on average assets      1.23 (1)      1.76        0.92        1.02  
Return on average equity      12.05 (1)      21.97        10.96        15.68  
EPS growth rate      20.33        21.63        13.89        16.25  
Price/tangible book value per share      270.24        583.42        166.45        183.92  
Price/earnings per share      17.82 x      19.62 x      15.41 x      10.97 x
Dividend yield      2.27 %      2.51 %      2.19 %      3.09 %
Dividend payout ratio      40.54        48.08        33.49        36.23  

(1)
Average assets and average equity used in this calculation are derived from total assets and total equity at September 30, 2000 and December 31, 2000.
 
                  Analysis of Selected Merger Transactions.     Sandler O’Neill reviewed certain transactions announced after January 1, 2000 involving publicly traded savings institutions as acquired institutions. Sandler O’Neill reviewed 12 transactions announced nationwide with transaction values greater than $100 million and 10 transactions announced in the Mid-Atlantic region with transaction values greater than $15 million. Sandler O’Neill reviewed the multiples of transaction value to last four quarters’ earnings, transaction value to book value, transaction value to tangible book value and transaction value to total deposits and computed high, low, mean and median multiples for the respective groups of transactions. Sandler O’Neill also computed the same multiples for the merger, based upon the implied transaction value per share of $27.74 and Richmond County’s December 31, 2000 financial information.
 
       Nationwide Transactions
     Richmond County
Multiples

       High
     Low
     Mean
     Median
Transaction value/LTM EPS      25.66 x      4.56 x      14.95 x      14.36 x      18.75 x
Transaction value/Book value      224.0 %      81.2 %      152.6 %      152.6 %      220.9 %
Transaction value/Tangible book value      230.4        89.4        159.4        153.2        284.3  
Transaction value/Total deposits      32.3        8.7        19.5        18.7        32.6  
 
       Mid-Atlantic Transactions
     Richmond County
Multiples

       High
     Low
     Mean
     Median
Transaction value/LTM EPS      28.95 x      14.62 x      21.77 x      19.68 x      18.75 x
Transaction value/Book value      169.1 %      91.7 %      134.4 %      132.9 %      220.9 %
Transaction value/Tangible book value      171.3        91.7        134.7        133.4        284.3  
Transaction value/Total deposits      40.6        8.7        25.1        26.3        32.6  
 
                   Sandler O’Neill also reviewed 14 transactions structured as mergers of equals announced since January 1, 1995 involving publicly traded commercial banks and savings institutions with transaction values greater than $100 million. Sandler O’Neill reviewed the premium to market for such transactions based on the acquired institution’s price one day prior to announcement of the transaction and computed high, low, mean and median premiums for the group of transactions. This analysis indicated that the premiums ranged from a high of 48.0% to a low of 2.4%, with a median of 16.2%. Based upon the implied transaction value per share of $27.74 and the closing price of Richmond County’s common stock on March 26, 2001 of $26.50, the premium to closing stock price was 4.7%.
 
                  Discounted Dividend Stream and Terminal Value Analysis.    Sandler O’Neill also performed an analysis which estimated the future stream of after-tax dividend flows of Richmond County through December 31, 2004 under various circumstances, assuming Richmond County’s current dividend payout ratio and that Richmond County performed in accordance with the IBES estimates reviewed with management. For periods after 2002, Sandler O’Neill assumed an annual growth rate of earning assets of approximately 6%. To approximate the terminal value of Richmond County common stock at December 31, 2004, Sandler O’Neill applied price/earnings multiples ranging from 10x to 20x and applied multiples of tangible book value ranging from 100% to 350%. The dividend income streams and terminal values were then discounted to present values using different discount rates ranging from 9% to 15% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Richmond County common stock. As illustrated in the following table, this analysis indicated an imputed range of values per share of Richmond County common stock of $16.07 to $36.42 when applying the price/earnings multiples and $10.87 to $39.03 when applying multiples of tangible book value.
 
       Price/Earnings Multiples
     Tangible Book Value Multiples
Discount Rate
     10x
     14x
     16x
     20x
     1.0x
     2.0x
     3.50x
9%      $19.66      $26.37      $29.72      $36.42      $13.23      $23.55      $39.03
11      18.36      24.59      27.71      33.94      12.37      21.97      36.36
13      17.16      22.97      25.87      31.67      11.59      20.52      33.92
15      16.07      21.48      24.18      29.59      10.87      19.20      31.69
 
                  In connection with its analysis, Sandler O’Neill considered and discussed with the Richmond County board how the present value analysis would be affected by changes in the underlying assumptions, including variations with respect to the growth rate of assets, net income and dividend payout ratio. Sandler O’Neill noted that the discounted dividend stream and terminal value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results.
 
                  Pro Forma Merger Analysis.     Sandler O’Neill analyzed certain potential pro forma effects of the merger, based upon (1) an exchange ratio of 1.02 and an implied transaction value of $27.74 per share of Richmond County’s common stock, (2) financial forecasts for each company based on IBES estimates for each of Richmond County and New York Community, (3) assumptions regarding the economic environment, accounting and tax treatment of the merger, charges associated with the merger, operating efficiencies and other adjustments determined by the senior managements of Richmond County and New York Community. In performing its pro forma analysis, Sandler O’Neill considered and discussed with the Richmond County board the impact of the FASB’s proposed changes in accounting for business combinations. As illustrated in the following table, this analysis indicated that, in the first full year following the merger, the merger would be accretive to Richmond County’s projected earnings per share. Also, the analysis indicated that the merger would be accretive to New York Community’s earnings per share for the same period. The actual results achieved by Richmond County and New York Community may vary from projected results and the variations may be material.
 
       Richmond County
     New York Community(2)
Year ending December 31, 2002
     Stand-alone
     Pro Forma(1)
     Stand-alone
     Pro Forma
Projected EPS—Current GAAP      $1.90      $1.97      $1.90      $1.93
Projected EPS—Proposed GAAP      2.13      2.31      2.04      2.27
Projected cash EPS      2.19      2.41      2.04      2.37

(1)
Determined by multiplying the New York Community values by the exchange ratio.
(2)
Adjusted for March 29, 2001 stock split.
 
                  Contribution Analysis.    Sandler O’Neill reviewed the relative contributions to be made by Richmond County and New York Community to the combined institution based on financial information of Richmond County and New York Community for the year ended December 31, 2000, adjusted in the case of Richmond County for its pending branch acquisition. The percentage of pro forma shares owned was determined using an exchange ratio of 1.02 and excludes the unallocated shares held in Richmond County’s ESOP. This analysis indicated that the implied contributions to the combined entity were as follows:
 
       Richmond
County

     New York
Community

Total assets      42.67 %      57.33 %
Total cash and securities      63.63        36.37  
Total net loans      34.20        65.80  
Total intangibles      45.24        54.76  
Total deposits      42.32        57.68  
Total borrowings      43.26        56.74  
Tangible equity      53.48        46.52  
Total equity      50.63        49.37  
2001 estimated GAAP net income      38.03        61.97  
2001 estimated cash net income      39.01        60.99  
Percentage of pro forma shares owned      40.00        60.00  
 
                  Sandler O’Neill is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, Sandler O’Neill is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions. Sandler O’Neill has previously rendered investment banking services to Richmond County unrelated to the merger, for which Sandler O’Neill received customary compensation. Richmond County selected Sandler O’Neill to act as its financial advisor on the basis of Sandler O’Neill’s reputation and its prior experience and familiarity with Richmond County.
 
                  Richmond County has paid Sandler O’Neill $750,000 for its services in connection with the merger and has agreed to pay Sandler O’Neill an additional $3,000,000 upon consummation of the merger. Richmond County has also agreed to reimburse Sandler O’Neill for its reasonable out-of-pocket expenses incurred in connection with its engagement and to indemnify Sandler O’Neill and its affiliates and their respective partners, directors, officers, employees, agents, and controlling persons against certain expenses and liabilities, including liabilities under securities laws. In the ordinary course of its business as a broker-dealer, Sandler O’Neill may also purchase securities from and sell securities to Richmond County and New York Community and may actively trade the equity or debt securities of Richmond County and New York Community and their respective affiliates for its own account and for the accounts of customers and, accordingly, may at any time hold a long or short position in such securities.
 
Opinion of Lehman Brothers to Richmond County
 
                  In March 2001, the Richmond County board of directors engaged Lehman Brothers to act as its financial advisor with respect to pursuing a merger of equals with New York Community. On March 27, 2001, Lehman Brothers rendered its opinion to the Richmond County board of directors that as of such date, from a financial point of view, the exchange ratio of 0.68 shares of New York Community common stock (adjusted to 1.02 shares following the 3-for-2 New York Community stock split on March 29, 2001) for each share of Richmond County common stock to be offered to Richmond County’s stockholders in the merger was fair to such stockholders.
 
                  The full text of Lehman Brothers’ written opinion, dated March 27, 2001 (the “Lehman Brothers Opinion”) is attached as Appendix F to this joint proxy statement/prospectus. Stockholders may read such opinion for a discussion of the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Lehman Brothers in rendering its opinion. The following is a summary of the Lehman Brothers Opinion and the methodology that Lehman Brothers used to render its fairness opinion.
 
                  Lehman Brothers’ advisory services and opinion were provided for the information and assistance of the Richmond County board of directors in connection with its consideration of the merger. The Lehman Brothers Opinion is not intended to be and does not constitute a recommendation to any stockholder of Richmond County as to how such stockholder should vote in connection with the merger. Lehman Brothers was not requested to opine as to, and the Lehman Brothers Opinion does not address, Richmond County’s underlying business decision to proceed with or effect the merger.
 
                  In arriving at its opinion, Lehman Brothers reviewed and analyzed:
 
·
the merger agreement and the specific terms of the proposed transaction;
 
·
such publicly available information concerning Richmond County and New York Community that Lehman Brothers believed to be relevant to its analysis, including, without limitation, each of the periodic reports filed by Richmond County since June 30, 2000 and the Annual Report on Form 10-K for the fiscal year ended December 31, 2000 filed by New York Community;
 
·
financial and operating information with respect to the business, operations and prospects of Richmond County and New York Community furnished by Richmond County and New York Community including the amounts and timing of the proposed cost savings and operating synergies that the managements of New York Community and Richmond County estimate will result from the combination of the businesses of Richmond County and New York Community (the “Expected Synergies”);
 
·
a trading history of the common stock of Richmond County and New York Community from March 23, 2000 to March 26, 2001 and a comparison of that trading history with each other and with those of companies that Lehman Brothers deemed relevant;
 
·
a comparison of the historical financial results and present financial condition of Richmond County and New York Community with each other and with those of other companies that Lehman Brothers deemed relevant;
 
·
a comparison of the financial terms of the merger with the financial terms of certain other transactions that Lehman Brothers deemed relevant;
 
·
an analysis of the relative contributions of Richmond County and New York Community to the pro forma combined company;
 
·
the potential pro forma impact of the merger on the future financial performance of the combined company, including the Expected Synergies; and
 
·
third party research reports on both Richmond County and New York Community.
 
                  In addition, Lehman Brothers had discussions with the managements of Richmond County and New York Community concerning their respective businesses, operations, assets, financial conditions and prospects and undertook such other studies, analyses and investigations as Lehman Brothers deemed appropriate.
 
                  In arriving at its opinion, Lehman Brothers assumed and relied upon the accuracy and completeness of the financial and other information used by Lehman Brothers without assuming any responsibility for independent verification of such information. Lehman Brothers further relied upon the assurances of the managements of Richmond County and New York Community that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. Neither Richmond County nor New York Community provided Lehman Brothers with projections of the future financial performance of either company on a stand-alone basis and instead directed Lehman Brothers to use the published estimates of third party research analysts. Upon the advice of Richmond County, Lehman Brothers has assumed that such published estimates of third party research analysts are a reasonable basis upon which to evaluate the future financial performance of Richmond County and that Richmond County will perform substantially in accordance with such estimates. Upon the advice of New York Community, Lehman Brothers has assumed that such published estimates of third party research analysts are a reasonable basis upon which to evaluate the future financial performance of New York Community and that New York Community will perform substantially in accordance with such estimates. Upon the advice of Richmond County and New York Community, Lehman Brothers also assumed that the amounts and timing of the Expected Synergies are reasonable and that the Expected Synergies will be realized substantially in accordance with such estimates. In arriving at its opinion, Lehman Brothers did not conduct a physical inspection of the properties and facilities of Richmond County and did not make or obtain any evaluations or appraisals of the assets or liabilities of Richmond County. In addition, Lehman Brothers is not an expert in the evaluation of loan portfolios or allowances for loan and real estate owned losses and, upon advice of Richmond County, Lehman Brothers has assumed that the allowances for loan and real estate owned losses provided to it by Richmond County and used by it in the opinion are in the aggregate adequate to cover all such losses. In addition, Richmond County has not authorized Lehman Brothers to solicit, and Lehman Brothers has not solicited, any indications of interest from any third party with respect to the purchase of all or a part of the Richmond County’s business. Upon advice of Richmond County, Lehman Brothers assumed that the merger will be accounted for as a purchase for accounting purposes, and in discussions with Richmond County and its legal advisors, Lehman Brothers assumed that the merger will qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code and therefore qualify for tax-free treatment for Richmond County stockholders. The Lehman Brothers Opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of the opinion.
 
                  In connection with rendering its opinion, Lehman Brothers performed certain financial, comparative and other analyses as described below. In arriving at its opinion, Lehman Brothers did not ascribe a specific range of value to Richmond County or New York Community, but rather made its determination as to the fairness, from a financial point of view, of the exchange ratio to be offered to Richmond County’s stockholders in the merger on the basis of financial and comparative analyses described below. The preparation of a fairness opinion involves various determinations as to the most appropriate and relevant methods of financial and comparative analysis and the application of those methods to the particular circumstances, and therefore, such an opinion is not readily susceptible to summary description. Furthermore, in arriving at its opinion, Lehman Brothers did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Lehman Brothers believes that its analyses must be considered as a whole and that considering any portion of such analyses and factors, without considering all analyses and factors as a whole, could create a misleading or incomplete view of the process underlying its opinion. In its analyses, Lehman Brothers made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of Richmond County and New York Community. None of Richmond County, New York Community, Lehman Brothers or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses were not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth therein. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the prices at which businesses actually may be sold.
 
                  The following is a summary of the material financial analyses used by Lehman Brothers in connection with providing its opinion to the Richmond County board of directors. Certain of the summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by Lehman Brothers, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Accordingly, the analyses listed in the tables and described below must be considered as a whole. Considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the Lehman Brothers Opinion.
 
                  Comparable Company Analysis.     Using publicly available information, Lehman Brothers compared selected financial data of Richmond County and New York Community with similar data of selected companies engaged in businesses considered by Lehman Brothers to be comparable to that of Richmond County and New York Community. Specifically, Lehman Brothers included in its review the following New York depository institutions:

 

 

·   Dime Bancorp;
·   Astoria Financial;
·   Greenpoint Financial, Inc.;
·   North Fork Bancorp;
·  
Roslyn Bancorp
·   Flushing Financial;
·   Independence Community Bank;
·   Staten Island Bancorp; and
·   Dime Community Bancshares

                  For each of Richmond County, New York Community and the selected New York depository institutions, Lehman Brothers calculated the ratio of the market price per share to the mean earnings per share estimates according to generally accepted accounting principles (GAAP) for the calendar years 2001 and 2002 reported by IBES, which is a service widely used by the investment community to gather earnings estimates from various research analysts. Lehman Brothers also calculated the ratio of the market price per share to the mean earnings per share estimates on a cash basis; that is, excluding the effect of amortization of intangibles and stock benefit plans on earnings per share estimates. Lehman Brothers estimated the mean earnings per share estimates on a cash basis using third party research reports. Lehman Brothers also calculated the ratios of the market price per share to both the book value per share and the tangible book value per share as of December 31, 2000. Lehman Brothers then compared those ratios for New York Community and the selected companies to similar ratios calculated for Richmond County at the transaction price that were based on the estimates for Richmond County’s earnings per share as estimated by third party research analysts. Lehman Brothers arrived at the transaction price by multiplying New York Community’s closing price on March 26, 2001 by the exchange ratio of 0.68 (prior to the 3-for-2 stock split). The following table presents the earnings and book value per share multiples.

 
       Price/GAAP
Earnings
Multiples

     Price/Cash
Earnings
Multiples

     Price/CY 2000
Book Value
Multiples

       CY 2001
     CY 2002
     CY 2001
     CY 2002
     Book
Value

     Tangible
Book
Value

Comparable Company Multiples (as of 3/26/01)                              
Richmond County Based on Transaction Price      16.0 x      14.6 x      13.3 x      12.0 x      2.36 x      3.14 x
New York Community      15.8        14.3        13.5        12.4        3.85        6.25  
Median of Selected New York Depository
     Institutions
     12.2        11.1        10.8        9.8        1.60        2.09  
Mean of Selected New York Depository Institutions      12.5        11.3        10.8        9.9        1.90        2.40  
 
                  Because of the inherent differences between the businesses, operations, financial conditions and prospects of Richmond County and New York Community and the businesses, operations, financial conditions and prospects of the companies included in the comparable company group, Lehman Brothers believed that it was inappropriate to rely solely on the quantitative results of the analysis, and accordingly, also made qualitative judgments concerning differences between the financial and operating characteristics of Richmond County, New York Community and the companies in the comparable company group that would affect the public trading values of Richmond County, New York Community and the comparable companies. Lehman Brothers concluded that such analysis was supportive of its opinion as to the fairness of the exchange ratio to be offered to Richmond County’s stockholders in the merger.
 
                  Stock Trading History.     Lehman Brothers considered various historical data concerning the history of the trading prices for Richmond County common stock, New York Community common stock, an index of the stock prices of the New York depository institutions comparable to Richmond County and New York Community, and the Lehman Brothers Thrift Index for the period from March 27, 2000 to March 26, 2001. The Lehman Brothers Thrift Index includes the following thrifts:
 
·  Andover Bancorp
·  Astoria Financial
·  Charter One Bancorp
·  Commercial Federal
·  Dime Community
·  Dime Bancorp
·  First Federal Financial
·  Flagstar Bancorp
·  Golden West Financial
·  Greenpoint Financial
·  Golden State
·  Independence Community Bancorp
·  People’s Bank
·  Roslyn Bancorp
·  Sovereign Bancorp
·  Washington Federal
·  Washington Mutual
 
Lehman Brothers concluded that such analysis was supportive of its opinion as to the fairness of the exchange ratio to be offered to Richmond County’s stockholders in the merger. The following table shows the historical trading data.
 
     Percent Change
     3/27/00—3/26/01
Stock Price Performance:
Richmond County      57 %
New York Community      109  
Comparable New York Depository Institutions      65  
Lehman Brothers Thrift Index      64  
 
                  Historical Exchange Ratio Analysis.     Lehman Brothers also compared the historical per share prices of Richmond County and New York Community during different periods during the one year period prior to March 26, 2001 in order to determine the implied average exchange ratio that existed for those periods. The following table indicates the average exchange ratio of Richmond County common stock for New York Community common stock for the periods indicated:
 
     Implied Exchange Ratio
March 26, 2001      0.6495 x
10 Day Average      0.6638  
20 Day Average      0.6810  
30 Day Average      0.6773  
60 Day Average      0.6856  
YTD Average      0.6845  
6 Month Average      0.7290  
1 Year Average      0.7833  
Transaction Exchange Ratio      0.6800  
 
                  Lehman Brothers concluded that such analysis was supportive of its opinion as to the fairness of the exchange ratio to be offered to Richmond County’s stockholders in the merger.
 
                  Comparable Transactions Analysis.     Lehman Brothers analyzed other merger of equals transactions in the United States financial services industry over the period from July 1995 that were considered relevant. The merger of equals transactions analyzed were:
 
· 
Firstar/U.S. Bancorp;
 
· 
National Commerce/CCB Financial;
 
· 
Fleet Financial Group/BankBoston;
 
· 
UNUM Corp./Provident;
 
· 
Star Banc/Firstar;
 
· 
Norwest/Wells Fargo;
 
·
Citizens Bancshares/Mid Am;
 
·
Bank One/First Chicago NBD;
 
·
NationsBank/BankAmerica;
 
·
Travelers/Citicorp;
 
·
Chemical Banking Corp./Chase Manhattan; and
 
·
NBD Corp./First Chicago.
 
                  The analysis indicated that the premiums offered relative to the closing stock prices prior to the announcement of the transactions ranged from -3.0% to 27.1%, with a median premium of 7.3%. The premium to the closing stock price prior to announcement to be received by Richmond County stockholders is 4.3%. In addition, Lehman Brothers reviewed the board and management split and relative contributions to pro forma market capitalization, total assets, total equity of the other merger of equals transactions. The following table shows the premiums offered along with the board and ownership split of the comparable merger to equals transactions.
 
       1-Day Market
Premium

     Ownership
Split

     Board
Split

Firstar Corp./U.S. Bancorp      21.4 %      50% / 50%      56% / 44 %
National Commerce/CCB Financial      25.1        53 / 47      50 / 50  
Fleet Financial/BankBoston      12.9        62 / 38      55 / 45  
UNUM Corp./Provident      5.3        58 / 42      53 / 47  
Star Banc/Firstar      27.1        49 / 51      56 / 44  
Norwest/Wells Fargo      9.3        47 / 53      50 / 50  
Citizens Bancshares/Mid Am      3.7        49 / 51      50 / 50  
Bank One/First Chicago NBD      6.4        60 / 40      50 / 50  
NationsBank/BankAmerica      0.0        55 / 45      55 / 45  
Travelers/Citicorp      7.9        50 / 50      50 / 50  
Chemical Banking Corp./Chase Manhattan      6.7        57 / 43      57 / 43  
NBD Corp./First Chicago      -3.0        49 / 51      50 / 50  
Median      7.3  
NYCB/RCBK      4.7        62 / 38      55 / 45  
 
                  Because the reasons for and circumstances surrounding each of the precedent transactions were different and because of the inherent differences in the businesses, operations, financial conditions and prospects of Richmond County and New York Community and the businesses, operations, financial conditions and prospects of the companies included in the comparable transactions group, Lehman Brothers believed that a purely quantitative comparable transaction analysis would not be particularly meaningful in the context of the merger. Lehman Brothers believed that the appropriate use of a comparable transaction analysis in this instance would involve qualitative judgments concerning the differences between the characteristics of these transactions and the merger which would affect the acquisition values of the acquired companies and Richmond County and New York Community.
 
                  Discounted Dividend Analysis.     As part of its analysis, Lehman Brothers prepared a discounted dividend model that was based upon financial projections as estimated by third party research analysts. To determine a projected dividend stream that Richmond County could generate, Lehman Brothers assumed a constant tangible equity to tangible asset ratio of 6.50%. Lehman Brothers used after tax discount rates of 12% to 13% and a terminal value based on a range of multiples of estimated net income in 2006 of 13.0x to 14.0x. Based on these discount rates and terminal values, Lehman Brothers calculated the implied stand-alone equity value per share of Richmond County common stock at approximately $28.00 to $31.00. Lehman Brothers then prepared a discounted dividend model valuing the combined pro forma company. Lehman Brothers also used after tax discount rates of 12% to 13% and a terminal value based on a range of multiples of estimated net income in 2006 of 13.0x to 14.0x in conducting this analysis. Based on these discount rates and terminal values, Lehman Brothers calculated the implied equity value per share of the combined pro forma company’s common stock at approximately $44.00 to $48.00. Based on the exchange ratio of 0.68 of a share (prior to the 3-for-2 stock split) of New York Community’s common stock to be offered for each share of Richmond County common stock, the value to be received by each Richmond County stockholder for every one share of Richmond County common stock was calculated at approximately $30.00 to $33.00. Lehman Brothers concluded that such analysis was supportive of its opinion as to the fairness of the exchange ratio to be offered to Richmond County’s stockholders in the merger. As indicated above, this analysis is not necessarily indicative of actual values or actual future results and does not purport to reflect the prices at which any securities may trade at the present or at any time in the future. Discounted dividend analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including earnings growth rates, dividend payout rates, terminal values and discount rates.
 
                  Contribution Analysis.     Lehman Brothers utilized publicly available historical financial data regarding Richmond County and New York Community and estimates for the future financial performance of Richmond County and New York Community to calculate the relative contributions of Richmond County and New York Community to the pro forma combined company with respect to assets, gross loans, deposits, equity, tangible equity, GAAP and cash net income for the calendar years 2001 and 2002. Lehman Brothers calculated the contributions based on third party research analyst estimates. Lehman Brothers also reviewed the pro forma ownership of the combined company. Lehman Brothers concluded that such analysis was supportive of its opinion as to the fairness of the exchange ratio to be offered to Richmond County’s stockholders in the merger. The following table shows the contribution to total assets, gross loans, deposits, equity, tangible equity and calendar years 2001 and 2002 GAAP and cash net income by both Richmond County and New York Community as well as the pro forma ownership percentages of Richmond County and New York Community.
 
       New York Community
Contribution

     Richmond County
Contribution

Total Assets      57.3 %      42.7 %
Total Gross Loans      66.5        33.5  
Total Deposits      55.0        45.0  
Total Equity      49.4        50.6  
Total Tangible Equity      46.0        54.0  
2001 Estimated GAAP Net Income      61.8        38.2  
2002 Estimated GAAP Net Income      61.8        38.2  
2001 Estimated Cash Net Income      61.2        38.8  
2002 Estimated Cash Net Income      60.7        39.3  
Pro Forma Ownership      61.6        38.4  
 
                  Pro Forma Analysis.     Lehman Brothers analyzed the pro forma effect of the transaction on the earnings per share of Richmond County. For the purposes of this analysis, Lehman Brothers assumed (i) a $27.74 per share price for Richmond County common stock acquired pursuant to the merger, (ii) a $40.80 per share price for New York Community common stock (the closing market price per share on March 26, 2001), (iii) a transaction structure with 100% stock consideration, (iv) financial forecasts for each company based on third party research estimates, and (v) cost savings and synergies from the transaction determined by the management of Richmond County and New York Community. Lehman Brothers estimated that, based on the assumptions described above, the pro forma impact of the transaction on the GAAP earnings per share of Richmond County would be 4.6% accretive and the pro forma impact of the transaction on the cash earnings per share of Richmond County would be 12.1% accretive in the first year following the transaction. The financial forecasts that underlie this analysis are subject to substantial uncertainty and, therefore, actual results may be substantially different.
 
                   Lehman Brothers is an internationally recognized investment banking firm and, as part of its investment banking activities, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. The Richmond County board of directors selected Lehman Brothers because of its expertise, reputation and familiarity with Richmond County, New York Community and the thrift industry generally and because its investment banking professionals have substantial experience in transactions comparable to the merger.
 
                  As compensation for its services in connection with the merger, Richmond County paid Lehman Brothers $250,000 upon the announcement of the transaction. An additional $100,000 will be paid upon the mailing of the proxy materials to stockholders. An additional payment of $1,650,000 will be paid to Lehman Brothers at the closing of the transaction. In addition, Richmond County has agreed to reimburse Lehman Brothers for reasonable out-of-pocket expenses incurred in connection with the merger and to indemnify Lehman Brothers for certain liabilities that may arise out of its engagement by Richmond County and the rendering of the Lehman Brothers Opinion. Lehman Brothers has previously rendered investment banking services to New York Community and received customary fees for such services.
 
                  In the ordinary course of its business, Lehman Brothers may actively trade in the debt and equity securities of Richmond County and New York Community for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities.
 
Board of Directors and Management of New York Community Following the Merger
 
                  Board of Directors of New York Community.     Upon completion of the merger, the board of directors of New York Community will consist of nine persons, five of whom (including Joseph R. Ficalora) will be selected by the Chief Executive Officer of New York Community from among the existing directors of New York Community and four of whom (including Michael F. Manzulli) will be selected by the Chief Executive Officer of Richmond County from among the existing directors of Richmond County. Unless two thirds of the directors decide otherwise, until the annual meeting of stockholders in 2004, any vacancy on the board of directors created by a designee of New York Community or Richmond County will be filled with a new director selected by a majority of the remaining designees of New York Community or Richmond County, as applicable, on the New York Community board of directors. To date, the Chief Executive Officers of New York Community and Richmond County have not designated the individuals who will serve as directors of New York Community upon completion of the merger.
 
                  Executive Officers of New York Community.     Upon completion of the merger, the executive officers of the combined company will be comprised of members of the current management of New York Community and Richmond County. The principal executive officers of New York Community upon completion of the merger will be as follows:
 
Name and Current Position
   Position With the Combined Company
Michael F. Manzulli
Chairman and Chief Executive Officer
of Richmond County
     Chairman
Joseph R. Ficalora
Chairman, Chief Executive Officer
and President of New York Community
     Chief Executive Officer and President
Anthony E. Burke
President and Chief Operating Officer
of Richmond County
     Senior Executive Vice President and Chief
Operating Officer
Name and Current Position
   Position With the Combined Company
Robert Wann
Executive Vice President, Comptroller and
Chief Financial Officer of New York Community
     Executive Vice President, Comptroller and Chief
Financial Officer
Michael J. Lincks
Executive Vice President and Corporate Secretary
of New York Community
     Executive Vice President and Corporate Secretary
James J. O’Donovan
Executive Vice President of New York Community
     Executive Vice President—Lending
Thomas R. Cangemi
Executive Vice President and Chief Financial Officer
of Richmond County
     Executive Vice President—Capital Markets
 
                   Information about the current New York Community directors and executive officers can be found in New York Community’s proxy statement, which is incorporated by reference into New York Community’s Annual Report on Form 10-K for the year ended December 31, 2000. Information about the current Richmond County directors and executive officers can be found in Richmond County’s proxy statement, which is incorporated by reference into Richmond County’s Annual Report on Form 10-K for the year ended June 30, 2000. New York Community’s and Richmond County’s Annual Reports on Form 10-K are incorporated by reference into this joint proxy statement/prospectus. See “WHERE YOU CAN FIND MORE INFORMATION.”
 
                  In connection with the merger agreement, New York Community and Richmond County have entered into employment agreements and noncompetition agreements with Michael F. Manzulli, the current Chairman of the Board and Chief Executive Officer of Richmond County, Anthony E. Burke, the current President and Chief Operating Officer of Richmond County, and Thomas R. Cangemi, the current Executive Vice President and Chief Financial Officer of Richmond County, which will take effect at the completion of the merger and have a term of 3 years.
 
                  For more information see “THE MERGER—Interests of Richmond County’s Directors and Officers in the Merger that Differ From Your Interests” on page     ·    .
 
Distribution of New York Community Certificates
 
                  At or prior to the completion of the merger, New York Community will cause to be deposited, with a bank or trust company acting as exchange agent, certificates representing shares of New York Community common stock for the benefit of the holders of certificates representing shares of Richmond County common stock and cash in lieu of any fractional shares that would otherwise be issued in the merger.
 
                  Promptly after the completion of the merger, New York Community will cause the exchange agent to send transmittal materials to each holder of a Richmond County stock certificate for use in exchanging Richmond County stock certificates for certificates representing shares of New York Community common stock and cash in lieu of fractional shares, if applicable. Holders of Richmond County stock certificates should NOT surrender their Richmond County stock certificates for exchange until they receive the letter of transmittal and instructions. The exchange agent will deliver certificates for New York Community common stock and/or a check instead of any fractional shares of New York Community common stock once it receives the properly completed transmittal materials together with certificates representing a holder’s shares of Richmond County common stock.
 
                  Richmond County stock certificates may be exchanged for New York Community stock certificates with the exchange agent for up to one year after the completion of the merger. At the end of that period, any New York Community stock certificates and cash will be returned to New York Community. Any holders of Richmond County stock certificates who have not exchanged their certificates will be entitled to look only to New York Community, and only as general creditors of New York Community, for New York Community stock certificates and any cash to be received instead of fractional shares of New York Community common stock.
 
                  If your Richmond County stock certificate has been lost, stolen or destroyed you may receive a New York Community stock certificate upon the making of an affidavit of that fact. New York Community may require you to post a bond in a reasonable amount as an indemnity against any claim that may be made against New York Community with respect to the lost, stolen or destroyed Richmond County stock certificate.
 
                  After completion of the merger, there will be no further transfers on the stock transfer books of Richmond County.
 
Fractional Shares
 
                  New York Community will not issue any fractional shares of New York Community common stock. Instead, a Richmond County stockholder who would otherwise have received a fraction of a share of New York Community common stock will receive an amount of cash equal to the fraction of a share of New York Community common stock to which such holder would otherwise be entitled multiplied by the average of the high and low per share sales price of New York Community common stock on the trading day immediately preceding the consummation of the merger as reported on the Nasdaq National Market.
 
Public Trading Markets
 
                  New York Community common stock is currently included for quotation on the Nasdaq National Market under the symbol “NYCB.” Richmond County common stock is currently included for quotation on the Nasdaq National Market under the symbol “RCBK.” Upon completion of the merger, Richmond County common stock will be delisted from the Nasdaq National Market and deregistered under the Securities Exchange Act of 1934, as amended. The newly issued New York Community common stock issuable pursuant to the merger agreement will be included for quotation on the Nasdaq National Market.
 
                  The shares of New York Community common stock to be issued in connection with the merger will be freely transferable under the Securities Act, except for shares issued to any stockholder who may be deemed to be an affiliate of Richmond County, as discussed in “THE MERGER—Resales of New York Community Stock by Affiliates” on page     ·    .
 
                  As reported on the Nasdaq National Market, the closing sale price per share of New York Community common stock on March 27, 2001 was $27.37 (adjusted for the 3-for-2 stock split paid on March 29, 2001). The closing sale price per share of Richmond County common stock on March 27, 2001 was $26.75, as reported on the Nasdaq National Market. Based on these closing sale prices per share, the implied per share value of Richmond County common stock was $27.91 as of that date. The closing sale price per share of New York Community common stock on the Nasdaq National Market on     ·    , 2001, the last practicable trading day before the date of this document, was $    ·    . The closing sale price per share of Richmond County common stock on the Nasdaq National Market on     ·    , 2001, the last practicable trading day before the date of this document, was $    ·    . The implied per share value of Richmond County common stock was $    ·     as of that date. The implied value of one share of Richmond County common stock as of these dates was calculated by multiplying New York Community’s closing sale price per share by 1.02, the exchange ratio. Because the stock price of both of our companies will fluctuate, you should obtain current quotations of these prices.
 
                  New York Community may from time to time repurchase shares of New York Community common stock. Richmond County may from time to time repurchase shares of Richmond County common stock. New York Community may, during the course of the solicitation being made by this joint proxy statement/prospectus, be bidding for and purchasing shares of Richmond County common stock. Richmond County may, during the course of the solicitation being made by this joint proxy statement/prospectus, be bidding for and purchasing shares of New York Community common stock.
 
New York Community Dividends
 
                  New York Community currently pays a quarterly dividend of $    ·     per share (adjusted for the 3-for-2 stock split), which is expected to continue, although the New York Community board of directors may change this dividend policy at any time. During 2000, Richmond County paid cash dividends totaling $0.65 per share, and New York Community paid cash dividends totaling $0.67 (adjusted for the 3-for-2 stock split) per share.
 
                  New York Community stockholders will be entitled to receive dividends when and if declared by the New York Community board of directors out of funds legally available for dividends. The New York Community board of directors will periodically consider the payment of dividends, taking into account New York Community’s financial condition and level of net income, New York Community’s future prospects, economic conditions, industry practices and other factors, including applicable banking laws and regulations as discussed in “REGULATION AND SUPERVISION OF NEW YORK COMMUNITY AFTER THE MERGER” on pages     ·     .
 
Absence of Appraisal Rights
 
                  Appraisal rights are statutory rights that enable stockholders who object to extraordinary transactions, such as mergers, to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Appraisal rights are not available in all circumstances, and exceptions to such rights are set forth in the laws of Delaware, which is the state of incorporation of both New York Community and Richmond County. These exceptions are applicable with respect to the rights of New York Community stockholders and Richmond County stockholders in the merger.
 
                  Neither Richmond County nor New York Community stockholders are entitled to appraisal rights under Delaware law in connection with the merger because the shares of each of Richmond County common stock and New York Community common stock are designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.
 
Resales of New York Community Stock by Affiliates
 
                  Affiliates of Richmond County, as defined under Rule 145 under the Securities Act of 1933, as amended, generally may not sell their shares of New York Community common stock acquired in the merger except pursuant to an effective registration statement under the Securities Act or an applicable exemption from the registration requirements of the Securities Act, including Rules 144 and 145 issued by the Securities and Exchange Commission under the Securities Act. Affiliates include directors, executive officers, and beneficial owners of 10% or more of any class of capital stock.
 
                  Under the merger agreement, Richmond County agreed to, and has provided New York Community with a list of the persons who, to Richmond County’s knowledge, may be deemed to be affiliates of Richmond County. Richmond County has also delivered a letter of agreement from each of these persons by which that person agrees, among other things, not to offer to sell, transfer or otherwise dispose of any of the shares of New York Community common stock distributed to him or her pursuant to the merger except in compliance with Rules 144 and Rule 145 under the Securities Act, in a transaction that, in the opinion of counsel reasonably satisfactory to New York Community, is otherwise exempt from the registration requirements of the Securities Act, or in an offering registered under the Securities Act. New York Community may place restrictive legends on its common stock certificates that are issued to persons who are deemed to be affiliates of Richmond County under the Securities Act.
 
                  This document does not cover any resales of New York Community common stock received in the merger by any person who may be deemed an affiliate of Richmond County.
 
Regulatory Approvals Required for the Merger
 
                  We have agreed to make or cause to be made all filings required in order to obtain all regulatory approvals required to consummate the transactions contemplated by the merger agreement, which includes approvals from the Federal Reserve Board and the Federal Deposit Insurance Corporation.
 
                  Federal Reserve Board.     Consummation of the merger will require New York Community to receive either the prior approval of the Federal Reserve Board or the waiver of such approval requirement, in each case as provided under the Bank Holding Company Act of 1956, as amended. We expect to request a waiver of the approval requirements of the Federal Reserve Board on     ·    , 2001.
 
                  Federal Deposit Insurance Corporation.     As the primary federal regulator of New York Community Bank and Richmond County Savings Bank, the FDIC is required under the Bank Merger Act to approve the merger of Richmond County Savings Bank into New York Community Bank. We expect to file this application to the Federal Deposit Insurance Corporation on     ·     , 2001.
 
                  State Regulatory Authorities.     We expect to file the necessary applications or notifications in the future with the New York State Banking Department and the New Jersey Department of Banking and Insurance as the merger may be considered to cause acquisitions or changes in control of subsidiaries of Richmond County doing business in New York and New Jersey. In addition, the merger may be reviewed by the attorneys general in the states where New York Community and Richmond County own banking subsidiaries. Such authorities may be empowered under the applicable state laws and regulations to investigate and/or disapprove the merger under the circumstances and based upon the review set forth in applicable state laws and regulations.
 
                  The merger cannot proceed in the absence of the above approvals. We cannot assure you that these regulatory approvals will be obtained, and, if obtained, we cannot assure you as to the date of any such approvals or the absence of any litigation challenging such approvals. Likewise, we cannot assure you that the United States Department of Justice or any state attorney general will not attempt to challenge the merger on antitrust grounds, and, if such a challenge is made, we cannot assure you as to its result.
 
                  Pursuant to the Bank Holding Company Act, the merger may not be consummated until 30 days after Federal Reserve Board approval, during which time the United States Department of Justice may challenge the merger on antitrust grounds. The commencement of an antitrust action would stay the effectiveness of the Federal Reserve Board’s approval unless a court specifically ordered otherwise. With the approval of the Federal Reserve Board and the concurrence of the Department of Justice, the waiting period may be reduced to no less than 15 days. New York Community and Richmond County believe that the merger does not raise substantial antitrust or other significant regulatory concerns and that they will be able to obtain all requisite regulatory approvals on a timely basis without the imposition of any condition that would have a material adverse effect on New York Community or Richmond County.
 
                  We are not aware of any material governmental approvals or actions that are required for completion of the merger other than those described above. It is presently contemplated that if any such additional governmental approvals or actions are required, such approvals or actions will be sought. There can be no assurance, however, that any such additional approvals or actions will be obtained.
 
Interests of Richmond County’s Directors and Officers in the Merger that Differ From Your Interests
 
                  Some members of Richmond County’s management and board of directors may have interests in the merger that are in addition to or different from the interests of New York Community stockholders and Richmond County. Our boards of directors were aware of these interests and considered them in approving the merger agreement.
 
                  New Employment Arrangements.     Michael F. Manzulli, Chairman and Chief Executive Officer of Richmond County, Anthony E. Burke, President and Chief Operating Officer of Richmond County, and Thomas R. Cangemi, Executive Vice President and Chief Financial Officer of Richmond County, have entered into employment agreements with New York Community, Richmond County and Richmond County Savings Bank relating to their employment after the completion of the merger. These employment agreements supersede their current employment agreements with Richmond County and Richmond County Savings. In consideration of the termination of their current employment agreements, Richmond County and Richmond County Savings Bank have agreed not to terminate the executives’ employment without just cause prior to the effective time of the merger.
 
                  Under their new employment agreements, Mr. Manzulli will serve as Chairman of the Board of New York Community and New York Community Bank, Mr. Burke will serve as Senior Executive Vice President and Chief Operating Officer of New York Community and President and Chief Operating Officer of New York Community Bank, and Mr. Cangemi will serve as an Executive Vice President of New York Community and New York Community Bank.
 
                  The employment agreements have a term of three years and will extend on a daily basis unless the New York Community board of directors or the executive gives written notice of non-renewal. The employment agreements provide that the executive’s base salary will be not less than the executive’s base salary with Richmond County immediately prior to the merger and will be reviewed annually. In addition to the base salary, the employment agreements provide for, among other things, participation in benefits plans and other fringe benefits applicable to executive personnel.
 
                  Under the employment agreements, New York Community may terminate the executive for cause, as defined in the employment agreements, at any time. If New York Community chooses to terminate the executive’s employment for reasons other than for cause, or if the executive resigns after specific circumstances set forth in the employment agreements that constitute constructive termination, New York Community would be required to honor the terms of the agreements through the expiration of the then current term, including payment of current cash compensation and continuation of employee benefits.
 
                  The employment agreements also provide for severance payments to the executive if his employment is terminated following a change in control of New York Community. These payments will equal the greater of (1) the payments and benefits that would be due for the remaining term of the agreement or (2) three times the average of the five preceding taxable years’ annual compensation, excluding stock option-related income. New York Community would also continue the executive’s life, health, and disability coverage for thirty-six months, and would continue certain fringe benefits for the remainder of the term. The executive would also be entitled to receive an additional tax indemnification payment if payments under the employment agreement or otherwise triggered liability under Internal Revenue Code Section 4999 for the excise tax applicable to “excess parachute payments.”
 
                  New York Community will pay all reasonable costs and legal fees paid or incurred by the executive under any dispute or question of interpretation relating to the employment agreements if the executive is successful on the merits in a legal judgment, arbitration or settlement. The employment agreements also provide that New York Community will indemnify the executive to the fullest extent legally allowable for all expenses and liabilities he may incur in connection with any suit or proceeding in which he may be involved by reason of his having been a director or officer of New York Community.
 
                   In consideration of having accepted employment with New York Community, Messrs. Manzulli, Burke and Cangemi will receive retention bonuses of $500,000, $750,000 and $500,000, respectively, upon completion of the merger. However, if the executive voluntarily terminates employment prior to 180 days following completion of the merger or is terminated for cause within that period, he must return the percentage of the bonus that his total number of days of employment bears to 180 days. In consideration of the termination of their current employment agreements, Messrs. Manzulli, Burke and Cangemi will receive payments of approximately $    ·    , $    ·     and $     ·    , respectively, provided that such payments will be reduced (i) to the extent necessary to avoid treatment under the Internal Revenue Code as excess parachute payments and (ii) so that the total sum of this payment, the retention bonuses, and the amounts payable to each of Messrs. Manzulli, Burke and Cangemi under his respective non-competition agreement does not exceed $    ·     million, $     ·     million and $    ·     million, respectively.
 
                  Noncompetition Agreements.     Messrs. Manzulli, Burke and Cangemi have also entered into noncompetition agreements with New York Community and Richmond County. In consideration for having entered into the noncompetition agreements, Messrs. Manzulli, Burke and Cangemi will receive payments estimated to total $    ·    , $     ·     and $    ·    , respectively. These amounts are based on a preliminary valuation of the noncompetition agreement by an independent valuation expert and may be adjusted based upon the final valuation report. These payments will be made at the closing of the merger provided that the executive is still employed by Richmond County at that time.
 
                  Pursuant to the noncompetition agreements, each executive has agreed to keep confidential all business-related information about New York Community and Richmond County and to return all confidential information upon termination of employment. Each executive has further agreed that while employed by New York Community and for the 12-month period following termination of employment, he will not (1) own, manage, operate, join, control or otherwise carry on or be engaged in any business competitive with that of New York Community, (2) solicit or induce any employee of New York Community to terminate employment with New York Community in order to enter into any employment relationship with him or a competitor of New York Community, or (3) solicit any customer of New York Community to stop doing business with it or to interfere with or damage any relationship between New York Community and any of its customers. Mr. Manzulli’s noncompetition agreement has a minimum term of 60 months following the completion of the merger and Messrs. Burke’s and Cangemi’s noncompetition agreements have a minimum term of 36 months following the completion of the merger.
 
                  Effect of the Merger on Richmond County’s Supplemental Executive Retirement Plan.    Richmond County’s Supplemental Executive Retirement Plan provides eligible individuals with benefits that Richmond County would have provided to the individual under its tax qualified retirement plans, but that it cannot provide under such plans as a result of certain limitations imposed by the Internal Revenue Code. Messrs. Manzulli and Burke participate in the SERP. In addition to providing for benefits lost under the ESOP as a result of the Internal Revenue Code limitations, the SERP also provides benefits to designated individuals who retire before the complete scheduled repayment of the ESOP loan. For purposes of the SERP, a participant will be deemed to have retired upon a change in control regardless of whether his employment continues. Generally, upon such an event, the SERP provides the individual with a benefit equal to what the individual would have received under the ESOP and the SERP had he remained employed throughout the scheduled term of the ESOP loan less the benefits actually provided on his behalf under the ESOP and the SERP. Richmond County estimates that, pursuant to the terms of the SERP, Mr. Manzulli will be entitled to payments totaling $    ·     and Mr. Burke will be entitled to payments totaling $    ·    .
 
                  Equity-Based Awards.    Pursuant to the terms of Richmond County’s equity-based compensation plans, including plans assumed by Richmond County in connection with previous acquisitions, all unvested options to purchase Richmond County common stock held by Richmond County’s executive officers and directors will become vested and exercisable upon completion of the merger. In addition, upon completion of the merger, restrictions will lapse with respect to shares of restricted stock issued under Richmond County’s equity-based compensation plans. Notwithstanding the terms of these plans, Messrs. Manzulli, Burke and Cangemi presently intend to waive the accelerated vesting of their stock options. The following table sets forth the number of unvested options and shares of unvested restricted stock held by executive officers and directors of Richmond County as of April 30, 2001:
 
Name
     Number of
Unvested Options

     Weighted Average
Exercise Price

     Number of
Shares of
Restricted Stock

Michael F. Manzulli      396,353      $14.25      158,541
Anthony E. Burke      237,811      14.25      95,124
Thomas R. Cangemi      158,541      14.25      63,416
All other Richmond County executive officers as a group
     (13 persons)
     178,360      14.78      72,539
Richmond County outside directors as a group
     (7 persons)
     553,045      14.74      184,090
 
                  The merger agreement provides that, upon completion of the merger, each outstanding and unexercised option to acquire shares of Richmond County common stock will cease to represent the right to acquire shares of Richmond County common stock and will become a right to acquire New York Community common stock. The number of shares and the exercise price subject to the converted options will be adjusted for the exchange ratio in the merger. The duration and other terms of the new New York Community options will be the same as the prior Richmond County options.
 
                  Effects of the Merger on Existing Richmond County Employment and Change in Control Agreements.    The merger will affect employment arrangements that Richmond County has with various officers other than Messrs. Manzulli, Burke and Cangemi under existing employment and change in control agreements. The employment agreements provide for severance payments to the executive if his or her employment is terminated following a change in control of Richmond County. These payments will equal the greater of (1) the payments due for the remaining term of the agreement or (2) two or three times the average of the five preceding taxable years’ annual compensation. Each executive will also be provided with 24 or 36 months of welfare benefit continuation. No severance payment may exceed three times the executive’s annual compensation and, if any payment would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code, such payment will be reduced to $1 less than an amount equal to three times the executive’s “base amount” as determined in accordance with Section 280G. Assuming that the merger is completed in the third quarter of 2001 and all individuals with employment agreements are terminated, the aggregate payments due under the employment agreements would be approximately $    ·     .
 
                  The change in control agreements provide for severance payments to the executive if his or her employment is terminated following a change in control of Richmond County. These payments will equal one or two times the average of the five preceding taxable years’ annual base salary plus bonus. Each executive will also be provided with 12 or 24 months of welfare benefit continuation. If any payment would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code, such payment will be reduced to $1 less than an amount equal to three times the executive’s “base amount” as determined in accordance with Section 280G. Assuming that the merger is completed in the third quarter of 2001 and all individuals with change in control agreements are terminated, the aggregate payments due under the change in control agreements would be approximately $    ·    .
 
                  Termination of Richmond County ESOP.     Richmond County’s employee stock ownership plan will terminate upon completion of the merger. The plan will sell sufficient unallocated shares of stock so that it will be able to repay its existing loan from Richmond County and will allocate any surplus New York Community common stock to the accounts of the plan participants, including the executive officers of Richmond County, as investment earnings in proportion to their account balances as of the termination date of the plan, to the extent allowed under applicable law and the governing documents of the plan. All participants will be fully vested in their accounts as of completion of the merger.
 
                   Divisional Board of Directors.     The merger agreement provides that following completion of the merger, New York Community will establish a divisional board of directors for the Richmond County Saving Bank division of New York Community Bank and will appoint to it the former directors of Richmond County. The purpose of the divisional board is to advise New York Community with respect to deposit and lending activities in Richmond County’s market area and to develop customer relationships. Each member of the divisional board will be appointed to an initial term of three years. Each member of the divisional board who is not also a director or employee of New York Community will receive an annual retainer fee for such services that is equal to his current compensation as a director of Richmond County.
 
                  Protection of Richmond County Directors and Officers Against Claims.    New York Community has agreed to indemnify and hold harmless each present and former director and officer of Richmond County from liability and expenses arising out of matters existing or occurring at or prior to the consummation of the merger to the fullest extent such persons would have been indemnified as a director, officer or employee of Richmond County or any of its subsidiaries under Delaware law and Richmond County’s certificate of incorporation and bylaws. This indemnification extends to liability arising out of the transactions contemplated by the merger agreement. New York Community has also agreed to advance any costs to each of these persons as they are incurred to the fullest extent permitted under Delaware law. New York Community has also agreed that it will maintain a policy of directors’ and officers’ liability insurance coverage for the benefit of Richmond County’s directors and officers for six years following consummation of the merger, subject to certain limitations on the amount of premiums to be paid.
 
New York Community Employee Benefit Plans
 
                  The merger agreement provides that as soon as practicable after the completion of the merger, New York Community and New York Community Bank will implement a program of compensation and benefits designed to cover all similarly situated employees of New York Community and New York Community Bank on a uniform basis. At New York Community’s discretion, this program may contain any combination of new plans, continuation of plans maintained by New York Community or New York Community Bank and continuation of plans maintained by Richmond County or Richmond County Savings Bank immediately prior to the merger.
 
                  The new plans instituted by New York Community shall recognize, for purposes of eligibility, participation, and vesting (but not for benefit accrual), except for purposes of any post-retirement, health and life insurance benefits, all service with New York Community, New York Community Bank, Richmond County and Richmond County Bank as service with New York Community or New York Community Bank. New York Community will also assume all obligations of Richmond County and Richmond County Savings Bank in accordance with the terms of Richmond County’s or Richmond County Savings’ plans, contracts, arrangements or understandings as identified in Richmond County’s disclosure schedule.
 
THE MERGER AGREEMENT
 
                  The following describes certain aspects of the proposed merger, including material provisions of the merger agreement. The following description of the merger agreement is subject to, and qualified in its entirety by reference to, the merger agreement, which is attached as Appendix A to this document and is incorporated by reference into this document. We urge you to read the merger agreement carefully and in its entirety.
 
Terms of the Merger
 
                  The merger agreement provides for the merger of Richmond County with and into New York Community. New York Community will be the surviving corporation after the merger. Each share of Richmond County common stock issued and outstanding immediately prior to the completion of the merger, except for certain shares of Richmond County common stock, will be converted into 1.02 shares of New York Community common stock, which already gives effect to the 3-for-2 stock split paid on March 29, 2001 to holders of New York Community common stock.
 
                  New York Community will not issue any fractional shares of New York Community in the merger. Instead, a Richmond County stockholder who otherwise would have received a fraction of a share of New York Community common stock will receive an amount in cash. This cash amount shall be determined by multiplying the fraction of a share of New York Community common stock to which such holder would otherwise be entitled by the average of the high and low per share sales price of New York Community common stock on the trading day immediately preceding the consummation of the merger as reported on the Nasdaq National Market.
 
Treatment of Richmond County Stock Options
 
                  At the effective time of the merger, each outstanding Richmond County stock option granted under the Richmond County stock option plans will be converted into fully vested options to purchase New York Community common stock.
 
                  The number of shares of New York Community common stock underlying the new New York Community option will equal the number of shares of Richmond County common stock to which the corresponding Richmond County option was subject immediately prior to the effective time, multiplied by the 1.02 exchange ratio. The per share exercise price of each new New York Community option will equal the exercise price of the corresponding Richmond County option immediately prior to the effective time divided by the 1.02 exchange ratio. All other terms of the Richmond County stock options will remain unchanged after the conversion.
 
                  New York Community has agreed to assume Richmond County’s obligations with respect to the Richmond County stock options that are converted into New York Community options as described above. New York Community has agreed to file a registration statement with the SEC on an appropriate form to the extent necessary to register New York Community common stock subject to the converted options.
 
Closing and Effective Time of the Merger
 
                  The merger will be consummated only if all of the following occur:
 
·
the merger agreement is adopted by New York Community stockholders,
 
·
the merger agreement is adopted by Richmond County stockholders,
 
·
we obtain all required consents and approvals, and
 
·
all other conditions to the merger discussed in this document and the merger agreement are either satisfied or waived.
 
                  The merger will become effective when a certificate of merger is filed with the Secretary of State of the State of Delaware, or at a later time as may be agreed upon by us and indicated in the certificate of merger in accordance with applicable law. In the merger agreement, we have agreed to use reasonable best efforts to cause the completion of the merger to occur on the last day of the month in which the satisfaction or waiver of certain conditions specified in the merger agreement occur, or on another mutually agreed date. It is currently anticipated that the effective time will occur during the third quarter of 2001, but we cannot guarantee when or if the merger will be consummated.
 
Representations, Warranties, Covenants and Agreements
 
                  The merger agreement contains reciprocal representations and warranties of Richmond County and New York Community relating to their respective businesses that are customary in merger transactions. With the exception of certain representations that must be true and correct in all material respects, no representation will be deemed untrue or incorrect as a consequence of the existence or absence of any fact or event unless that fact or event has had or is reasonably likely to have a material adverse effect on the company making the representation. The representations in the merger agreement do not survive the effective time of the merger.
 
                  New York Community and Richmond County have each undertaken customary covenants that place restrictions on it and its subsidiaries until the effective time of the merger. In general, New York Community and its subsidiaries and Richmond County and its subsidiaries are required to conduct their business in the ordinary and usual course and to use their reasonable best efforts to preserve intact their business organizations and assets and to maintain their rights, franchises and relationships with others having business dealings with them. New York Community and Richmond County have also agreed to various specific restrictions that are substantially reciprocal relating to the conduct of their respective businesses. The merger agreement also contains mutual covenants relating to the preparation of this joint proxy statement/prospectus and the holding of special meetings of New York Community and Richmond County stockholders, access to information of the other party and public announcements with respect to the transactions contemplated by the merger agreement.
 
Declaration and Payment of Dividends
 
                  We have agreed that, until the merger is completed, we will each only pay regular quarterly dividends or distributions, provided that New York Community’s dividends do not exceed $0.25 per share per quarter and Richmond County’s dividends do not exceed $0.18 per share per quarter. We have also agreed to coordinate our declaration of dividends so that holders of Richmond County common stock or New York Community common stock will not receive two dividends, or fail to receive one dividend, for any quarter with respect to their Richmond County common stock and/or New York Community common stock and any New York Community common stock any such holder receives in the merger.
 
Agreement Not to Solicit Other Offers
 
                  New York Community and Richmond County have also agreed that they will not, and will cause its subsidiaries and representatives and subsidiaries’ representatives not to, initiate, solicit or encourage any inquiries or any offer relating to a merger, acquisition or other transaction involving the purchase of all or a substantial part of the assets or any equity securities of New York Community and Richmond County or their subsidiaries, respectively. Subject to the discharge of fiduciary duties, New York Community and Richmond County have also agreed not to negotiate or provide any confidential information relating to any such acquisition proposal. New York Community and Richmond County have agreed that they will immediately advise each other following the receipt of any acquisition proposal.
 
Expenses and Fees
 
                  In general, each party will be responsible for all expenses incurred by it in connection with the negotiation and consummation of the transactions contemplated by the merger agreement. However, New York Community and Richmond County will each pay one-half of the following expenses: (i) the costs (excluding the fees and disbursements of counsel and accountants) incurred in connection with the preparation (including copying and printing) of this joint proxy statement/prospectus and applications to governmental entities for the approval of the merger and (ii) all listing, filing or registration fees, including fees paid for filing the joint proxy statement/prospectus with the SEC and fees paid for filings with governmental entities.
 
Conditions to Consummation of the Merger
 
                  Our respective obligations to consummate the merger are subject to the fulfillment or waiver of certain conditions, including:
 
·
the adoption of the merger agreement by the holders of the requisite number of shares of New York Community common stock and Richmond County common stock;
 
·
the receipt and effectiveness of all governmental and other approvals, registrations and consents and the expiration of all related waiting periods required to consummate the merger and to issue New York Community common stock;
 
·
the absence of action by any court or other governmental entity that prohibits consummation of the transactions contemplated by the merger agreement;
 
·
the registration statement with respect to the New York Community common stock to be issued pursuant to the merger shall have become effective under the Securities Act and no stop order suspending the effectiveness of the registration statement will have been issued and no proceedings for that purpose will have been initiated or threatened by the SEC or any other governmental entity;
 
·
all permits and other authorizations under the securities laws and other authorizations necessary to consummate the merger and to issue the shares of New York Community common stock in the merger will have been received and be in full force and effect;
 
·
the truth and correctness of the representations and warranties of each of us in the merger agreement, subject to certain specified exceptions, and the performance by each of us in all material respects of our obligations under the merger agreement;
 
·
the receipt of an opinion of each of our tax counsel with respect to the federal income tax effects of the merger; and
 
·
the delivery by each of us of certificates indicating the truth and correctness of the representations and warranties of each of us in the merger agreement.
 
                  We cannot provide assurance as to when or if all of the conditions to the merger can or will be satisfied or waived by the appropriate party. As of the date of this document, we have no reason to believe that any of these conditions will not be satisfied.
 
Possible Alternative Merger Structure
 
                  The merger agreement provides that New York Community and Richmond County may mutually agree to change the structure of the merger. No change may be made that:
 
· 
adversely affects what Richmond County stockholders would receive in the merger,
 
· 
adversely affects the tax treatment of the merger, or
 
· 
materially impedes or delays consummation of the merger.
 
Amendment, Waiver and Termination of the Merger Agreement
 
                  The merger agreement may be amended or modified, in accordance with applicable law, by our written agreement. The provisions of the merger agreement may be waived by the party benefited by those provisions.
 
                  The merger agreement may be terminated, and the merger abandoned, by us at any time before the merger is scheduled to be completed if both of our boards of directors vote to do so. In addition, the merger agreement may be terminated, and the merger abandoned, by action of a majority of either of our entire boards of directors if
 
· 
the merger is not consummated by February 27, 2002, unless the failure to consummate the merger is due to the failure to comply by the terminating party with any provision contained in the merger agreement,
 
· 
any governmental approval, consent or authorization required for the consummation of the merger is denied, or any court or governmental authority having jurisdiction over either of us shall have issued a final, non-appealable order enjoining or otherwise prohibiting consummation of the transactions contemplated in the merger agreement,
 
· 
the stockholders of either New York Community or Richmond County fail to adopt the merger agreement at the special stockholders’ meetings called for the purpose of considering and voting upon the merger agreement, provided that the terminating party has recommended to its stockholders the approval of the merger agreement,
 
· 
the non-terminating party materially breaches any representation, warranty, covenant or agreement contained in the merger agreement that causes the failure of certain conditions to closing and such breach cannot be or has not been cured within 30 days after written notice of such breach is given, or
 
· 
the board of directors of the non-terminating party, at any time prior to the special meeting of stockholders of the non-terminating party, failed to make or withdraw, or materially modified or changed, its approval or recommendation of the merger agreement and the merger.
 
                  Effect of Termination.    If the merger agreement is terminated, it will become void and there will be no liability on the part of New York Community or Richmond County, except that:
 
· 
termination will not relieve a breaching party from liability for any willful breach giving rise to such termination,
 
· 
New York Community and Richmond County will keep confidential and will not use any information obtained from the other party for any purpose unrelated to the consummation of the transactions contemplated by the merger agreement. New York Community and Richmond County will also promptly return all copies of documents containing information and data regarding the other party, and
 
· 
New York Community and Richmond County will each bear its own expenses in connection with the merger agreement and the transactions contemplated thereby, except as otherwise provided in the merger agreement.
 
 
THE STOCK OPTION AGREEMENTS
 
                  The following description, which sets forth the material provisions of the New York Community stock option agreement and the Richmond County stock option agreement, is subject to the full text of, and qualified in its entirety by reference to, the stock option agreements, which are attached as Appendices B and C to this document and are incorporated by reference into this document. You are urged to read this document carefully and in its entirety.
 
The Stock Options
 
                  At the same time we entered into the merger agreement, we also entered into reciprocal stock option agreements. Under the terms of the stock option granted by New York Community to Richmond County, Richmond County may purchase up to 8,648,081 shares of New York Community common stock at an exercise price of $27.20 per share (the number of shares and the exercise price are adjusted to reflect the 3-for-2 stock split paid March 29, 2001). Under the terms of the stock option granted by Richmond County to New York Community, New York Community may purchase up to 5,281,566 shares of Richmond County common stock at an exercise price of $26.50 per share. These exercise prices represent our closing stock prices on March 26, 2001, the day prior to the execution of the merger agreement and the stock option agreements. The terms of these stock option agreements are substantially identical and are summarized below.
 
Purpose of the Stock Option Agreements
 
                  The stock option agreements may have the effect of making an acquisition or other business combination of either New York Community or Richmond County by or with a third party more costly because of the need in any transaction to acquire any shares issued pursuant to the stock option agreements or because of any cash payments made pursuant to the stock option agreements. The stock option agreements may, therefore, discourage certain third parties from proposing an alternative transaction to the current merger proposed by us, including one that might be more favorable from a financial point of view to the stockholders of New York Community or Richmond County, as the case may be, than the merger. Also, following consultation with our respective independent accountants, we believe that the exercise or repurchase of either of the stock options is likely to prohibit another acquiror from accounting for any acquisition of the issuer of the stock option using the pooling-of-interests accounting method for a period of two years.
 
                  To our best knowledge, no event giving rise to the right to exercise the stock option has occurred as of the date of this document.
 
Exercise; Expiration
 
                  Each of New York Community and Richmond County can exercise its option if both an initial triggering event and a subsequent triggering event occur prior to the occurrence of an exercise termination event, as these terms are described below. The purchase of any shares of New York Community or Richmond County stock pursuant to the options is subject to compliance with applicable law, which may require regulatory approval.
 
                  The stock option agreements describe a number of different events as initial triggering events. Generally, an initial triggering event will occur if New York Community or Richmond County enter into, propose to enter into, or are the subject of an acquisition transaction or a proposed acquisition transaction other than the merger agreement.
 
                  As used in each stock option agreement, the term acquisition transaction means:
 
·
a merger or consolidation or any similar transaction, or bona fide proposal of such a transaction, involving New York Community or Richmond County, other than certain mergers (i) involving only New York Community or Richmond County and its subsidiaries or (ii) after which the common stockholders of New York Community or Richmond County immediately prior thereto in the aggregate own or continue to own at least 60% of the common stock of New York Community or Richmond County;
 
·
a purchase, lease or other acquisition of all or any substantial part of the assets or deposits of New York Community or Richmond County or any of their respective significant subsidiaries; or
 
·
a purchase or other acquisition of securities representing 25% or more of the voting power of New York Community or Richmond County or any of their respective significant subsidiaries.
 
                  Each stock option agreement generally defines the term subsequent triggering event to mean any of the following events or transactions:
 
· 
the acquisition by a third party of beneficial ownership of 25% or more of the outstanding common stock of New York Community or Richmond County; or
 
· 
the occurrence of an initial triggering event.
 
                  Each stock option agreement defines the term exercise termination event to mean any of the following:
 
· 
completion of the merger;
 
· 
termination of the merger agreement in accordance with its terms before an initial triggering event, provided that this would not include a termination of the merger agreement by New York Community or Richmond County based on a willful breach by Richmond County or New York Community, respectively, of a representation, warranty, covenant or other agreement contained in the merger agreement; or
 
· 
the passage of 12 months, subject to extension in order to obtain required regulatory approvals, after termination of the merger agreement, if the termination follows the occurrence of an initial triggering event or is a termination of the merger agreement by New York Community or Richmond County based on a willful breach by Richmond County or New York Community, respectively, of a representation, warranty, covenant or other agreement contained in the merger agreement.
 
                  If either option becomes exercisable, it may be exercised in whole or in part within six months following the subsequent triggering event. New York Community and Richmond County’s right to exercise the option and certain other rights under the stock option agreements are subject to an extension in order to obtain required regulatory approvals and comply with applicable regulatory waiting periods and to avoid liability under the short-swing trading restrictions contained in Section 16(b) of the Securities Exchange Act. Nevertheless, neither New York Community nor Richmond County may exercise its option if it is in breach of any of its covenants or agreements under the merger agreement.
 
Rights Under the Stock Option Agreements
 
                  At any time after a repurchase event, as this term is described below, and prior to the date that is 12 months immediately thereafter, upon the request of New York Community or Richmond County, Richmond County and New York Community, respectively, may be required to repurchase the option and all or any part of the shares issued under the option. The repurchase of the option will be at a price per share equal to the amount by which the market/offer price, as that term is defined in the stock option agreement, exceeds the option price. The term repurchase event is defined to mean:
 
· 
the acquisition by any third party of beneficial ownership of 50% or more of the then-outstanding shares of New York Community or Richmond County’s common stock; or
 
· 
the consummation of an acquisition transaction, provided that for purposes of the definition of repurchase event, the percentage referred to in the third definition of acquisition transaction above is 50% rather than 25%.
 
                  Each stock option agreement also provides that New York Community and Richmond County may, at any time after a repurchase event and prior to the occurrence of an exercise termination event, surrender the option and any shares issued under the option held by New York Community or Richmond County to Richmond County or New York Community, respectively, for a cash fee equal to $22 million, adjusted for our purchase price of option shares surrendered and gains on sales of stock purchased under the option, provided that neither New York Community nor Richmond County may exercise its surrender right if Richmond County or New York Community, respectively, repurchases the option, or a portion of the option.
 
                  If, prior to an exercise termination event, either New York Community or Richmond County enters into certain transactions in which it is not the surviving corporation, certain fundamental changes in its capital stock occur, or it sells all or substantially all of its or its significant subsidiaries’ assets, the option will be converted into, or be exchanged for, a substitute option, at Richmond County or New York Community’s election, respectively, of
 
· 
the continuing or surviving person of a consolidation or merger with Richmond County or New York Community;
 
· 
the acquiring person in a plan of exchange in which Richmond County or New York Community is acquired;
 
· 
Richmond County or New York Community in a merger or plan of exchange in which Richmond County or New York Community is the acquiring person;
 
· 
the transferee of all or a substantial part of the consolidated assets or deposits of Richmond County or New York Community or its significant subsidiary; or
 
· 
any person that controls any of these entities, as the case may be.
 
                  The substitute option will have the same terms as the original option. However, if because of legal reasons the terms of the substitute option cannot be the same as those of the option, the terms of the substitute option will be as similar as possible and at least as advantageous to New York Community and Richmond County.
 
ACCOUNTING TREATMENT
 
                  The merger will be accounted for as a “purchase,” as that term is used under generally accepted accounting principles, for accounting and financial reporting purposes. Under purchase accounting, the assets and liabilities of Richmond County as of the effective time of the merger will be recorded at their respective fair values and added to those of New York Community. Any excess of purchase price over the fair values is recorded as goodwill. Financial statements of New York Community issued after the merger would reflect such fair values and would not be restated retroactively to reflect the historical financial position or results of operations of Richmond County.
 
                  On February 14, 2001, the Financial Accounting Standards Board (FASB) issued an exposure draft for public comment which proposes changing the method of accounting for goodwill in a purchase transaction from capitalization and amortization against earnings to capitalization and periodic evaluation for impairment. If this change were adopted by the FASB, unamortized goodwill resulting from this transaction would be reported as an asset and would not be amortized against earnings unless it became impaired based on analyses performed by New York Community on a periodic basis. The public comment period ended on March 16, 2001 and the FASB is continuing its deliberations, which may result in further changes to the proposed standards. The FASB expects to vote on the new accounting standards in late June 2001 and issue the new standards in mid-July 2001; however, there can be no assurance that the FASB will ever adopt new standards regarding accounting for goodwill and intangible assets or that any final standard will become effective in July 2001.
 
MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
 
                  The following section describes the material U.S. federal income tax consequences of the merger to holders of Richmond County common stock who hold Richmond County common stock as a capital asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended. This section does not apply to special classes of taxpayers, such as:
 
· 
financial institutions,
 
· 
insurance companies,
 
· 
tax-exempt organizations,
 
· 
dealers in securities or currencies,
 
· 
traders in securities that elect to use a mark to market method of accounting,
 
· 
persons that hold Richmond County common stock as part of a straddle or conversion transaction,
 
· 
persons who are not citizens or residents of the United States, and
 
· 
stockholders who acquired their shares of Richmond County common stock through the exercise of an employee stock option or otherwise as compensation.
 
                  The following is based upon the Internal Revenue Code, its legislative history, existing and proposed regulations thereunder and published rulings and decisions, all as currently in effect as of the date hereof, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and foreign laws are not addressed in this document. Determining the actual tax consequences of the merger to you may be complex. They will depend on your specific situation and on factors that are not within our control. You should consult with your own tax advisor as to the tax consequences of the merger in your particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local or foreign and other tax laws and of changes in those laws.
 
                  Tax Consequences of the Merger Generally.     It is a condition to the merger that Richmond County receive an opinion of its counsel, Muldoon Murphy & Faucette LLP, to the effect that (i) the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, (ii) each of Richmond County and New York Community will be a party to that reorganization within the meaning of Section 368(b) of the Internal Revenue Code and (iii) no gain or loss will be recognized by stockholders of Richmond County who receive shares of New York Community common stock in exchange for Richmond County common stock, except with respect to cash received in lieu of fractional share interests. It is also a condition to the merger that New York Community receive an opinion of its counsel, Sullivan & Cromwell, to the effect that (i) the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code, and (ii) each of Richmond County and New York Community will be a party to that reorganization within the meaning of Section 368(b) of the Internal Revenue Code.
 
                  Although the merger agreement allows us to waive this condition, we currently do not anticipate doing so.
 
                  In rendering these opinions, counsel may require and rely upon representations contained in letters and certificates to be received from Richmond County, New York Community and others. Neither of these tax opinions will be binding on the Internal Revenue Service. Neither New York Community nor Richmond County intends to request any ruling from the Internal Revenue Service as to the U.S. federal income tax consequences of the merger.
 
                   Based on the above assumptions and qualifications and certain representations of New York Community and Richmond County, in the opinion of Sullivan & Cromwell, counsel to New York Community, and Muldoon Murphy & Faucette LLP, counsel to Richmond County, for U.S. federal income tax purposes:
 
·
the merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code; 
 
·
each of New York Community and Richmond County will be a party to that reorganization within the meaning of Section 368(b) of the Internal Revenue Code;
 
·
no gain or loss will be recognized by stockholders of Richmond County who receive shares of New York Community common stock in exchange for shares of Richmond County common stock, except with respect to cash received in lieu of fractional share interests;
 
·
the holding period of New York Community common stock received in exchange for shares of Richmond County common stock will include the holding period of the Richmond County common stock for which it is exchanged; and
 
·
the basis of the New York Community common stock received in the merger will be the same as the basis of the Richmond County common stock for which it is exchanged, less any basis attributable to fractional shares for which cash is received.
 
                  Cash Received in Lieu of a Fractional Share of New York Community Common Stock.    A stockholder of Richmond County who receives cash in lieu of a fractional share of New York Community common stock will be treated as having received the fractional share pursuant to the merger and then as having exchanged the fractional share for cash in a redemption by New York Community subject to Section 302 of the Internal Revenue Code. As a result, a Richmond County stockholder will generally recognize gain or loss equal to the difference between the amount of cash received and the portion of the basis of the shares of New York Community common stock allocable to his or her fractional interest. This gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if, as of the date of the exchange, the holding period for such shares is greater than one year. Long-term capital gain of a non-corporate holder is generally subject to tax at a maximum federal tax rate of 20%.
 
                  Backup Withholding and Information Reporting.     Payments of cash to a holder surrendering shares of Richmond County common stock will be subject to information reporting and backup withholding at a rate of 31% of the cash payable to the holder, unless the holder furnishes its taxpayer identification number in the manner prescribed in applicable Treasury Regulations, certifies that such number is correct, certifies as to no loss of exemption from backup withholding, and meets certain other conditions. Any amounts withheld from payments to a holder under the backup withholding rules will be allowed as a refund or credit against the holder’s U.S. federal income tax liability, provided the required information is furnished to the Internal Revenue Service.
 
DESCRIPTION OF NEW YORK COMMUNITY CAPITAL STOCK
 
                  In this section, we describe the material features and rights of the New York Community capital stock after the merger. This summary is qualified in its entirety by reference to applicable Delaware law, New York Community’s certificate of incorporation, New York Community’s bylaws and the New York Community rights agreement, as described below. See “WHERE YOU CAN FIND MORE INFORMATION” on page    ·    .
 
General
 
                  New York Community is authorized to issue 150,000,000 shares of common stock having a par value of $0.01 per share and 5,000,000 shares of preferred stock having a par value of $0.01 per share. Each share of New York Community common stock has the same relative rights as, and is identical in all respects to, each other share of New York Community common stock.
 
                  After giving effect to the 3-for-2 stock split paid on March 29, 2001 to New York Community stockholders, as of March 27, 2001, there were 43,457,043 shares of common stock of New York Community outstanding, 2,998,293 shares of common stock of New York Community were held in treasury and 10,976,467 shares of common stock of New York Community were reserved for issuance pursuant to New York Community’s employee benefit plans and the New York Community stock option agreement. After giving effect to the merger on a pro forma basis, approximately     ·     shares of New York Community common stock will be outstanding.
 
Common Stock
 
                  Dividends.    Subject to certain regulatory restrictions, New York Community can pay dividends out of statutory surplus or from certain net profits if, as and when declared by its board of directors. Funds for New York Community dividends are generally provided through dividends from New York Community Bank. The payment of dividends by New York Community Bank is subject to limitations which are imposed by law and applicable regulation. See “New York Community Dividends” on page     ·     and “REGULATION AND SUPERVISION OF NEW YORK COMMUNITY AFTER THE MERGER” on page      ·    . The holders of common stock of New York Community are entitled to receive and share equally in such dividends as may be declared by the board of directors of New York Community out of funds legally available therefor. If New York Community issues Preferred Stock, the holders thereof may have a priority over the holders of the common stock with respect to dividends.
 
                  Voting Rights.    The holders of common stock of New York Community possess exclusive voting rights in New York Community. They elect the New York Community board of directors and act on such other matters as are required to be presented to them under Delaware law or as are otherwise presented to them by the board of directors. Each holder of common stock is entitled to one vote per share and does not have any right to cumulate votes in the election of directors. If New York Community issues preferred stock, holders of the preferred stock may also possess voting rights. Certain matters require an 80% stockholder vote, which is calculated after giving effect to a provision limiting voting rights. This provision in New York Community’s certificate of incorporation provides that stockholders who beneficially own in excess of 10% of the then-outstanding shares of common stock of New York Community are not entitled to any vote with respect to the shares held in excess of the 10% limit. A person or entity is deemed to beneficially own shares that are owned by an affiliate as well as persons acting in concert with such person or entity.
 
                  Liquidation.    In the event of any liquidation, dissolution or winding up of New York Community Bank, New York Community, as holder of New York Community Bank’s capital stock, would be entitled to receive, after payment or provision for payment of all debts and liabilities of New York Community Bank (including all deposit accounts and accrued interest thereon) and after distribution of the balance in the special liquidation account to eligible account holders, all assets of New York Community Bank available for distribution. In the event of liquidation, dissolution or winding up of New York Community, the holders of its common stock would be entitled to receive, after payment or provision for payment of all of its debts and liabilities, all of the assets of New York Community available for distribution. If Preferred Stock is issued, the holders thereof may have a priority over the holders of the New York Community common stock in the event of liquidation or dissolution.
 
                  Preemptive Rights.    Holders of New York Community common stock are not entitled to preemptive rights with respect to any shares which may be issued. The New York Community common stock is not subject to redemption.
 
Preferred Stock
 
                  Shares of New York Community preferred stock may be issued with such designations, powers, preferences and rights as the New York Community board of directors may from time to time determine. The New York Community board of directors can, without stockholder approval, issue preferred stock with voting, dividend, liquidation and conversion rights which could dilute the voting strength of the holders of the common stock and may assist management in impeding an unfriendly takeover or attempted change in control.
 
 
NEW YORK COMMUNITY STOCKHOLDER PROTECTION RIGHTS AGREEMENT
 
                  The following is a description of the rights issued under the New York Community stockholder protection rights agreement, as amended. This description is subject to, and is qualified in its entirety by reference to, the text of the rights agreement. See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·    .
 
                  Each issued share of New York Community common stock has attached to it one right issued pursuant to a Stockholder Protection Rights Agreement, dated as of January 16, 1996 and amended on March 27, 2001, between New York Community and Mellon Investor Services L.L.C., as rights agent. Each right entitles its holder to purchase one one-hundredth of a share of participating preferred stock of New York Community at an exercise price of $120, subject to adjustment, after the separation time, which means after the close of business on the earlier of
 
·
the tenth business day after commencement of a tender or exchange offer that, if consummated, would result in the offeror becoming an “acquiring person,” which is defined in the rights agreement as a person beneficially owning 10% or more of the outstanding shares of New York Community common stock; and
 
·
the tenth business day after the first date of public announcement that a person has become an acquiring person, which is also called the flip-in date.
 
                  The rights are not exercisable until the business day following the separation time. The rights expire on the earlier of
 
·
the close of business on January 16, 2006;
 
·
redemption, as described below;
 
·
an exchange for common stock, as described below; or
 
·
the merger of New York Community into another corporation pursuant to an agreement entered into prior to a flip-in date.
 
The New York Community board of directors may, at any time prior to occurrence of a flip-in date, redeem all the rights at a price of $0.01 per right.
 
                  If a flip-in date occurs, each right, other than those held by the acquiring person or any affiliate or associate of the acquiring person or by any transferees of any of these persons, will constitute the right to purchase shares of New York Community common stock having an aggregate market price equal to $240 in cash, subject to adjustment. In addition, the New York Community board of directors may, at any time between a flip-in date and the time that an acquiring person becomes the beneficial owner of more than 50% of the outstanding shares of New York Community common stock, elect to exchange the rights for shares of New York Community common stock at an exchange ratio of one share of New York Community common stock per right.
 
                  Under the rights agreement, after a flip-in date occurs, New York Community may not consolidate or merge, or engage in other similar transactions, with an acquiring person without entering into a supplemental agreement with the acquiring person providing that, upon consummation or occurrence of the transaction, each right shall thereafter constitute the right to purchase common stock of the acquiring person having an aggregate market price equal to $240 in cash, subject to adjustment.
 
                   These rights may not prevent a takeover of New York Community. The rights, however, may have antitakeover effects. The rights may cause substantial dilution to a person or group that acquires 10% or more of the outstanding New York Community common stock unless the rights are first redeemed by the New York Community board of directors.
 
                  On March 27, 2001, New York Community and Mellon amended the rights agreement to substantially prevent the merger agreement, the stock option agreements, and the merger with Richmond County triggering the provisions of the rights agreement.
 
                  A description of the rights agreement specifying the terms of the rights has been included in reports filed by New York Community under the Securities Exchange Act. See “WHERE YOU CAN FIND MORE INFORMATION” on page     ·    .
 
COMPARISON OF STOCKHOLDERS’ RIGHTS
 
General
 
                  New York Community and Richmond County are incorporated under the laws of the State of Delaware and, accordingly, the rights of New York Community stockholders and Richmond County stockholders are governed by the laws of the State of Delaware. As a result of the merger, Richmond County stockholders will become stockholders of New York Community. Thus, following the merger, the rights of Richmond County stockholders who become New York Community stockholders in the merger will continue to be governed by the laws of the State of Delaware and will also then be governed by the New York Community certificate of incorporation and the New York Community bylaws. The New York Community certificate of incorporation will be unaltered by the merger. New York Community will amend its bylaws as provided in the merger agreement. In connection with the merger, the board of directors of New York Community has amended the bylaws of New York Community as contemplated by the merger agreement with such amendment to become effective upon the consummation of the merger. The following description gives effect to such amendment.
 
Comparison of Stockholders’ Rights
 
                  Set forth on the following pages is a summary comparison of material differences between the rights of a New York Community stockholder under the New York Community certificate of incorporation, the New York Community bylaws that will be in effect at the completion of the merger, and Delaware law (right column) and the rights of a stockholder under the Richmond County certificate of incorporation, Richmond County bylaws and Delaware law (left column). The summary set forth below is not intended to provide a comprehensive summary of Delaware law or of each company’s governing documents. This summary is qualified in its entirety by reference to the full text of the New York Community certificate of incorporation and New York Community bylaws, and the Richmond County certificate of incorporation and Richmond County bylaws.
 
RICHMOND COUNTY
NEW YORK COMMUNITY
 
CAPITAL STOCK
Authorized Capital
 
75 million shares of common stock, par value $0.01 per share, 5 million shares of preferred stock, par value $0.01 per share. As of March 31, 2001, there were     ·     shares of Richmond County common stock issued and outstanding and     ·     shares reserved for issuance and no shares of preferred stock issued and outstanding.
150 million shares of common stock, par value $0.01 per share, 5 million shares of preferred stock, par value $0.01 per share. As of March 31, 2001, there were 43,457,043 shares of New York Community common stock issued and outstanding, 10,976,467 shares reserved for issuance and no shares of preferred stock issued and outstanding.
 
BOARD OF DIRECTORS
Number of Directors
 
Such number as is fixed by the board of directors from time to time. New York Community currently has eleven directors and Richmond County has nine directors. See “THE MERGER—Board of Directors and Management of New York Community Following the Merger” on page     ·     for a description of the New York Community board of directors after the merger.
 
RICHMOND COUNTY
NEW YORK COMMUNITY
 
Vacancies and Newly Created Directorships
 
Filled by a majority vote of the directors then in office. The person who fills any such vacancy holds office for the unexpired term of the director to whom such person succeeds.
Filled by a majority vote of the directors then in office. The person who fills any such vacancy holds office for the unexpired term of the director to whom such person succeeds.
 
Upon completion of the merger, the New York Community bylaws will be amended so that until the annual meeting of stockholders in 2004, unless two thirds of the directors decide otherwise, any vacancy on the board of directors created by a designee of New York Community or Richmond County will be filled with a new director selected by a majority of the remaining designees of New York Community or Richmond County, as applicable, on the New York Community board of directors.
 
Special Meeting of the Board
 
Special meetings of the board of directors may be called by one-third of the directors then in office, or by the Chairman of the Board or the President.
Upon completion of the merger, special meetings of the board of directors may be called by one-half of the directors then in office, or by the Chairman of the Board or the Chief Executive Officer.
 
Stockholder Rights Plans
 
Not applicable.
On January 16, 1996, New York Community adopted a stockholder protection rights agreement, pursuant to which each issued share of New York Community common stock has attached to it one right to purchase, under certain conditions, a fraction of a share of participating preferred stock of New York Community. The New York Community stockholder protection rights agreement, including rights thereunder currently held by New York Community stockholders, will remain in place after the merger.
 
See “NEW YORK COMMUNITY STOCK-HOLDER PROTECTION RIGHTS AGREEMENT” on page     ·    .
 
DISCUSSION OF ANTI-TAKEOVER PROTECTION IN NEW YORK COMMUNITY’S CERTIFICATE OF INCORPORATION AND BYLAWS
 
General
 
                  Certain provisions of the New York Community certificate of incorporation and bylaws may have anti-takeover effects. These provisions may discourage attempts by others to acquire control of New York Community without negotiation with the New York Community board of directors. The effect of these provisions is discussed briefly below. In addition to these provisions of the New York Community certificate of incorporation and bylaws, the rights agreement discussed in “NEW YORK COMMUNITY STOCKHOLDER PROTECTION RIGHTS AGREEMENT” on page     ·     may also have anti-takeover effects. All of the provisions discussed below are contained in New York Community’s certificate of incorporation and bylaws currently.
 
Authorized Stock
 
                  The shares of New York Community common stock and New York Community preferred stock authorized by New York Community’s certificate of incorporation but not issued provide the New York Community board of directors with the flexibility to effect certain financings, acquisitions, stock dividends, stock splits and stock-based grants without the need for a stockholder vote. The New York Community board of directors, consistent with its fiduciary duties, could also authorize the issuance of these shares, and could establish voting, conversion, liquidation and other rights for the New York Community preferred stock being issued, in an effort to deter attempts to gain control of New York Community.
 
Classification of Board of Directors; No Cumulative Voting
 
                  New York Community’s certificate of incorporation and bylaws provide that the board of directors of New York Community is divided into three classes of as nearly equal size as possible, with one class elected annually to serve for a term of three years. This classification of the New York Community board of directors may discourage a takeover of New York Community because a stockholder with a majority interest in New York Community would have to wait for at least two consecutive annual meetings of stockholders to elect a majority of the members of the New York Community board of directors. New York Community’s certificate of incorporation also does not and will not, after the merger, authorize cumulative voting for the election of directors of New York Community.
 
Size of Board; Vacancies; Removal of Directors
 
                  The provisions of New York Community’s certificate of incorporation and bylaws giving the New York Community board of directors the power to determine the exact number of directors and to fill any vacancies or newly created positions, and allowing removal of directors only for cause upon an 80% vote of stockholders are intended to insure that the classified board provisions discussed above are not circumvented by the removal of incumbent directors. Furthermore, since New York Community stockholders do not, and will not, after the merger, have the ability to call special meetings of stockholders, a stockholder seeking to have a director removed for cause generally will be able to do so only at an annual meeting of stockholders. These provisions could make the removal of any director more difficult, even if such removal were desired by the stockholders of New York Community. In addition, these provisions of New York Community’s certificate of incorporation and bylaws could make a takeover of New York Community more difficult under circumstances where the potential acquiror seeks to do so through obtaining control of the New York Community board of directors.
 
Special Meetings of Stockholders
 
                  The provisions of New York Community’s certificate of incorporation and bylaws relating to special meetings of stockholders are intended to enable the New York Community board of directors to determine if it is appropriate for New York Community to incur the expense of a special meeting in order to present a proposal to New York Community stockholders. If the New York Community board of directors determines not to call a special meeting, stockholder proposals could not be presented to the stockholders for action until the next annual meeting, or until such proposal is properly presented before an earlier duly called special meeting, because stockholders cannot call a special meeting. In addition, these provisions could make a takeover of New York Community more difficult under circumstances where the potential acquiror seeks to do so through obtaining control of the New York Community board of directors.
 
Stockholder Action by Unanimous Written Consent
 
                  The purpose of the provision in New York Community’s certificate of incorporation prohibiting stockholder action by written consent is to prevent any person or persons holding the percentage of the voting stock of New York Community otherwise required to take corporate action from taking such action without giving notice to other stockholders and without the procedures of a stockholder meeting.
 
Amendment of Certificate of Incorporation and Bylaws
 
                  The requirements in New York Community’s certificate of incorporation and bylaws for an 80% stockholder vote for the amendment of certain provisions of New York Community’s certificate of incorporation and New York Community’s bylaws is intended to prevent a stockholder who controls a majority of the New York Community stock from avoiding the requirements of important provisions of New York Community’s certificate of incorporation or bylaws simply by amending or repealing them. Thus, the holders of a minority of the shares of the New York Community stock could block the future repeal or modification of New York Community’s bylaws and certain provisions of the certificate of incorporation, even if such action were deemed beneficial by the holders of more than a majority, but less than 80%, of the New York Community stock.
 
COMPARATIVE MARKET PRICES AND DIVIDENDS
 
                  New York Community common stock and Richmond County common stock are included for quotation on the Nasdaq National Market. The following table sets forth the high and low closing prices of shares of New York Community common stock and Richmond County common stock as reported on the Nasdaq National Market, and the quarterly cash dividends declared per share for the periods indicated.
 
       New York Community
Common Stock

     Richmond County
Common Stock

       High
     Low
     Dividend(1)(2)
     High
     Low
     Dividend(3)
1998                              
          Third Quarter      $20.28      $15.22      0.11      $18.69      $11.88      0.07
          Fourth Quarter      20.75      15.17      0.13      17.13      11.31      0.08
 
1999                              
          First Quarter      21.29      17.67      0.17      16.31      14.81      0.09
          Second Quarter      24.09      17.92      0.17      19.31      14.50      0.11
          Third Quarter      22.09      17.33      0.17      20.00      18.19      0.12
          Fourth Quarter      21.92      17.17      0.17      19.25      16.88      0.13
 
2000                              
          First Quarter      18.09      11.55      0.17      18.50      16.13      0.14
          Second Quarter      14.13      11.50      0.17      19.88      16.25      0.16
          Third Quarter      19.37      12.33      0.17      24.19      17.69      0.17
          Fourth Quarter      25.21      17.00      0.17      27.25      20.88      0.18
 
2001                              
          First Quarter      29.90      22.00      0.17      29.38      23.50      0.18
          Second Quarter (through     ·    , 2001)          ·              ·              ·              ·              ·              ·    

(1) 
Pursuant to the merger agreement, New York Community may not, without the prior written consent of Richmond County, pay any dividends in excess of $0.25 per share per quarter. New York Community and Richmond County have also agreed to coordinate their declaration of dividends.
(2) 
Reflects shares issued as a result of a 4-for-3 stock split on August 22, 1996 and 3-for-2 stock splits on April 10, 1997, October 1, 1997, September 29, 1998 and March 29, 2001. New York Community’s high and low stock prices and dividends for prior periods have been adjusted to reflect the effect of such stock split.
(3) 
Pursuant to the merger agreement, Richmond County may not, without the prior written consent of New York Community, pay any dividends in excess of $0.18 per share. New York Community and Richmond County have also agreed to coordinate their declaration of dividends.
 
                  New York Community and Richmond County stockholders are advised to obtain current market quotations for New York Community common stock and Richmond County common stock. The market price of New York Community common stock will fluctuate between the date of this joint proxy statement/prospectus and the completion of the merger. No assurance can be given concerning the market price of New York Community common stock before or after the Effective Date.
 
PRO FORMA FINANCIAL INFORMATION
New York Community Bancorp, Inc. and Richmond County Financial Corp.
Unaudited Pro Forma Combined Condensed Consolidated Statement of Financial Condition and Statement of Income
 
                  The following Unaudited Pro Forma Combined Condensed Consolidated Statement of Financial Condition combines the historical Consolidated Statement of Financial Condition of New York Community and subsidiaries and the adjusted historical Consolidated Statement of Financial Condition of Richmond County and subsidiaries giving effect to the consummation of the merger on March 31, 2001, using the purchase method of accounting and giving effect to the related pro forma adjustments described in the accompanying Notes to the Unaudited Pro Forma Combined Condensed Consolidated Financial Statements. The following Unaudited Pro Forma Combined Condensed Consolidated Statements of Income for the year ended December 31, 2000 and the three months ended March 31, 2001 combine the historical Consolidated Statements of Income of New York Community and subsidiary and Richmond County and subsidiaries giving effect to the merger as if the merger had become effective at the beginning of the periods presented, using the purchase method of accounting and giving effect to the related pro forma adjustments described in the accompanying Notes to the Unaudited Pro Forma Combined Condensed Consolidated Financial Statements. Richmond County’s fiscal year ends June 30. The historical Consolidated Statement of Income of Richmond County for the year ended December 31, 2000 was prepared by adding the results of the six months ended December 31, 2000 to the results of the fiscal year ended June 30, 2000 and deducting the results of the six months ended December 31, 1999.
 
                  The unaudited pro forma combined condensed consolidated financial statements included herein are presented for informational purposes only. This information includes various estimates and may not necessarily be indicative of the financial position or results of operations that would have occurred if the merger had been consummated on the date or at the beginning of the period indicated or which may be obtained in the future. The unaudited pro forma combined condensed consolidated financial statements and accompanying notes should be read in conjunction with and are qualified in their entirety by reference to the historical financial statements and related notes thereto of New York Community and subsidiary and Richmond County and subsidiaries information and notes thereto appearing elsewhere herein.
 
                  We anticipate that the merger will provide the combined company with financial benefits that include reduced operating expenses. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during these periods.
 
New York Community Bancorp, Inc. and Richmond County Financial Corp.
Unaudited Pro Forma Combined Condensed Consolidated Statement Of Financial Condition
As of March 31, 2001
 
(In thousands)
 
       New York
Community
Historical

     Richmond
County
Historical

     Pro Forma
Adjustment

     Pro Forma
Combined

ASSETS                    
Cash and due from banks      $      82,064        $      53,156        $  (56,041 )(B)      $      76,324  
                               (42,349 )(B)            
                               39,494  (E)            
Money market investments      548,300        33,000                    581,300  
Securities available for sale      342,449        1,233,018        (14,500 )(C)      1,573,617  
                               12,650  (C)            
Securities held to maturity and FHLB Stock      183,509        105,109                    288,618  
Loans receivable      3,186,834        1,726,181        10,000  (C)      4,923,015  
Allowance for loan losses      (18,064 )      (19,050 )                  (37,114 )
Loans receivable, net      3,168,770        1,707,131        10,000        4,885,901  
Excess of cost over fair value of net assets
     acquired and other intangibles
     116,589        70,085        (70,085 )(C)      630,941  
                               514,352  (D)            
Other assets      192,827        154,546        22,416  (B)      379,409  
                               (10,000 )(C)            
                               24,680  (C)            
                               (5,060 )(C)            
       
       
       
       
  
Total assets      $4,634,508        $3,356,045        $  425,557        $8,416,110  
       
       
       
       
  
LIABILITIES                    
Deposits      $3,213,814        $2,189,702        $    15,000  (C)      $5,418,516  
Borrowings      1,033,222        814,704        32,200  (C)      1,880,126  
Other liabilities      101,109        22,099        (5,616 )(C)      100,652  
                               (16,940 )(B)            
       
       
       
       
  
Total liabilities      $4,348,145        $3,026,505        $    24,644        $7,399,294  
       
       
       
       
  
STOCKHOLDERS’ EQUITY                    
Common stock      $          465        $          327        $        (327 )(E)      $          736  
                               271  (B)          </