##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---



FORM 10-Q



---



|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- |  | ---------------------------------------------------------------------------------------



For the quarterly period ended June 30, 2003



OR



| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- |  | -----------------------------------------------------------------------------------------



For the transition period
from            to



Commission file number 0-28886



---



ROSLYN BANCORP, INC.

(Exact name of registrant as specified in its charter)



---



|Delaware                                                      |  | 11-3333218                          
|------------------------------------------------------------- |  | ------------------------------------
|(State or Other Jurisdiction ofIncorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                              | 
|One Jericho Plaza, Jericho, New York                          |  | 11753-8905                          
|(Address of Principal Executive Offices)                      |  | (Zip Code)                          



(516) 942 - 6000

(Registrants telephone number, including area code)



---



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)  Yes  x    No ̈



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



|Classes of Common Stock |  | Number of Shares Outstanding, August 4, 2003
|----------------------- |  | --------------------------------------------
|$.01 Par Value          |  | 75,826,918                                  



---



---

##### Table of Contents

FORM 10-Q

ROSLYN BANCORP, INC.

INDEX



|                             |  |                                                                                                  |  | PageNumber
|---------------------------- |  | ------------------------------------------------------------------------------------------------ |  | ----------
|PART IFINANCIAL INFORMATION |  |                                                                                                 
|                             |  |                                                                                                 
|ITEM 1.                      |  | Financial Statements (Unaudited):                                                                |  |           
|                             |  |                                                                                                 
|                             |  | Consolidated Statements of Financial Condition at June 30, 2003 and December 31, 2002            |  | 1         
|                             |  |                                                                                                 
|                             |  | Consolidated Statements of Income for the three and six months ended June 30, 2003 and 2002      |  | 2         
|                             |  |                                                                                                 
|                             |  | Consolidated Statement of Changes in Stockholders Equity for the six months ended June 30, 2003 |  | 3         
|                             |  |                                                                                                 
|                             |  | Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002            |  | 4         
|                             |  |                                                                                                 
|                             |  | Notes to Consolidated Financial Statements                                                       |  | 5         
|                             |  |                                                                                                 
|ITEM 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations            |  | 10        
|                             |  |                                                                                                 
|ITEM 3.                      |  | Quantitative and Qualitative Disclosure About Market Risk                                        |  | 27        
|                             |  |                                                                                                 
|ITEM 4.                      |  | Controls and Procedures                                                                          |  | 27        
|                            
|PART IIOTHER INFORMATION   
|                             |  |                                                                                                 
|ITEM 1.                      |  | Legal Proceedings                                                                                |  | 27        
|                             |  |                                                                                                 
|ITEM 2.                      |  | Changes in Securities and Use of Proceeds                                                        |  | 27        
|                             |  |                                                                                                 
|ITEM 3.                      |  | Defaults Upon Senior Securities                                                                  |  | 27        
|                             |  |                                                                                                 
|ITEM 4.                      |  | Submission of Matters to a Vote of Security Holders                                              |  | 27        
|                             |  |                                                                                                 
|ITEM 5.                      |  | Other Information                                                                                |  | 28        
|                             |  |                                                                                                 
|ITEM 6.                      |  | Exhibits and Reports on Form 8-K                                                                 |  | 28        
|                             | 
|Signatures                   |  | 30                                                                                              
|                             | 
|Certifications               |  | 32                                                                                              



---

##### Table of Contents

PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT



This Quarterly Report, including information included or incorporated by reference, contains
statements which are not historical facts but forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995, with respect to the financial condition, results of operations, plans, objectives,
future performance and business of Roslyn Bancorp, Inc. and its subsidiaries (the Company). These forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently
anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents that the Company files with the Securities and Exchange Commission (the SEC) from time to time.



Forward-looking statements may be identified by the use of such words as project,
believe, expect, anticipate, should, planned, estimated, intend and potential. Examples of forward-looking statements include, but are not limited to,
possible or assumed estimates with respect to the Companys financial condition, expected or anticipated revenue, results of operations and the Companys business, including with respect to earnings growth (on the basis of accounting
principles generally accepted in the United States of America (GAAP) and on a non-GAAP cash basis); asset quality and levels of non-performing assets; resolution of non-performing assets; origination volume in the Companys consumer, commercial
and other lending businesses; results of operations from real estate joint ventures; demand for the Companys products and services, including, among other things, retail deposit products sold through retail branches, including the
Companys de novo branches; current and future capital management programs; non-interest income, including fees from services and product sales; tangible capital generation; market share; expenses; and other business operations and strategies,
each of which are subject to various factors which could cause actual results to differ materially from these estimates. The Companys ability to predict results or the actual effect of future plans or strategies is inherently uncertain.



Factors which could have a material adverse effect on the Companys
operations include, but are not limited to prevailing economic conditions; changes in interest rates; changes in loan demand; changes in real estate values; changes in competition; changes in retail banking revenues; changes in revenues from sales
of non-deposit investment products; the level of real estate joint venture activities; the level of defaults on loans owed to the Company; losses and prepayments on loans made by the Company, whether held in portfolio or sold in the secondary
markets; changes in accounting principles, policies or guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or other legal issues; risks and uncertainties related to acquisitions and related integration and
restructuring activities; and other economic, competitive, governmental, regulatory, and technological factors affecting the Companys operations, pricing, products and services or the operations, pricing and products of the Companys real
estate joint ventures.



Forward-looking statements are made as of the date of
this document, and, except as required by applicable law, the Company assumes no obligation to update forward-looking statements or to update the reasons why actual results could differ from those projected in forward-looking statements. You should
consider these risks and uncertainties in evaluating forward-looking statements and you should not place undue reliance on these statements.



Forward-looking statements also include, with limitation, those statements relating the anticipated effects of the Companys proposed merger with New York Community
Bancorp, Inc. The following factors, among others, could cause the actual results of the merger to differ materially from expectations: the ability of the companies to obtain the required shareholder or regulatory approvals of the merger; the
imposition of any regulatory conditions or requirements on the merger; the ability of the companies to consummate the merger; the ability to successfully integrate the companies following the merger, including integration of data processing systems
and retention of key personnel; a materially adverse change in the financial condition, operations, or projected or actual earnings of either company; the ability to fully realize the expected cost savings and revenues; the ability to realize the
expected cost savings and revenues on a timely basis; and any material change in the local markets in which each company operates.



---

##### Table of Contents

ROSLYN BANCORP, INC.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)

(In thousands, except
share amounts)



|                                                                                                                                                                                           |  | June 30, 2003 |            |   | December 31, 2002 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ---------- | - | ----------------- | -
|ASSETS                                                                                                                                                                                     |  |               |            |   |                   |  
|Cash and cash equivalents:                                                                                                                                                                 |  |               |            |   |                   |  
|Cash and cash items                                                                                                                                                                        |  | $             | 11,673     |   |                   | $
|Due from banks                                                                                                                                                                             |  |               | 58,355     |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total cash and cash equivalents                                                                                                                                                            |  |               | 70,028     |   |                   |  
|Money market investments                                                                                                                                                                   |  |               |           |   |                   |  
|Securities:                                                                                                                                                                                |  |               |            |   |                   |  
|Debt securities held-to-maturity, net (fair value of $279,798 and $377,393 at June 30, 2003 and December 31, 2002,
respectively)                                                           |  |               | 283,491    |   |                   |  
|Debt and equity securities available-for-sale, net                                                                                                                                         |  |               | 1,047,628  |   |                   |  
|Mortgage-backed and mortgage related securities available-for-sale, net (securities pledged of $2,980,993 and $3,377,061 at June
30, 2003 and December 31, 2002, respectively)             |  |               | 5,509,183  |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total securities available-for-sale, net                                                                                                                                                   |  |               | 6,840,302  |   |                   |  
|Federal Home Loan Bank of New York stock, at cost                                                                                                                                          |  |               | 83,290     |   |                   |  
|Loans held-for-sale                                                                                                                                                                        |  |               | 5,969      |   |                   |  
|Loans receivable held for investment, net:                                                                                                                                                 |  |               |            |   |                   |  
|Real estate loans, net                                                                                                                                                                     |  |               | 3,271,741  |   |                   |  
|Consumer and other loans, net                                                                                                                                                              |  |               | 280,467    |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total loans receivable held for investment, net                                                                                                                                            |  |               | 3,552,208  |   |                   |  
|Allowance for loan losses                                                                                                                                                                  |  |               | (44,326    | ) |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total loans receivable held for investment, net of allowance for loan losses                                                                                                               |  |               | 3,507,882  |   |                   |  
|Banking house and equipment, net                                                                                                                                                           |  |               | 40,681     |   |                   |  
|Accrued interest receivable                                                                                                                                                                |  |               | 54,802     |   |                   |  
|Deferred tax asset, net                                                                                                                                                                    |  |               | 7,557      |   |                   |  
|Other assets                                                                                                                                                                               |  |               | 198,938    |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total assets                                                                                                                                                                               |  | $             | 10,809,449 |   |                   | $
|                                                                                                                                                                                           |  |               |            |   |                   |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                       |  |               |            |   |                   |  
|Liabilities:                                                                                                                                                                               |  |               |            |   |                   |  
|Deposits:                                                                                                                                                                                  |  |               |            |   |                   |  
|Savings accounts                                                                                                                                                                           |  | $             | 1,294,058  |   |                   | $
|Certificates of deposit                                                                                                                                                                    |  |               | 3,379,231  |   |                   |  
|Money market accounts                                                                                                                                                                      |  |               | 830,689    |   |                   |  
|Interest-bearing demand deposit accounts                                                                                                                                                   |  |               | 342,314    |   |                   |  
|Demand deposit accounts                                                                                                                                                                    |  |               | 238,823    |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total deposits                                                                                                                                                                             |  |               | 6,085,115  |   |                   |  
|Official checks outstanding                                                                                                                                                                |  |               | 39,541     |   |                   |  
|Borrowed funds:                                                                                                                                                                            |  |               |            |   |                   |  
|Reverse-repurchase agreements                                                                                                                                                              |  |               | 2,410,299  |   |                   |  
|Senior notes                                                                                                                                                                               |  |               | 189,784    |   |                   |  
|Other borrowings                                                                                                                                                                           |  |               | 1,380,798  |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total borrowed funds payable                                                                                                                                                               |  |               | 3,980,881  |   |                   |  
|Accrued interest payable and dividends                                                                                                                                                     |  |               | 28,467     |   |                   |  
|Mortgagors escrow and security deposits                                                                                                                                                   |  |               | 20,413     |   |                   |  
|Accrued taxes payable                                                                                                                                                                      |  |               | 12,465     |   |                   |  
|Accrued expenses and other liabilities                                                                                                                                                     |  |               | 41,648     |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total liabilities                                                                                                                                                                          |  |               | 10,208,530 |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Guaranteed preferred beneficial interest in junior subordinated debentures                                                                                                                 |  |               | 63,000     |   |                   |  
|                                                                                                                                                                                           |  |              
|Stockholders equity:                                                                                                                                                                      |  |               |            |   |                   |  
|Preferred stock, $0.01 par value, 10,000,000 shares authorized; none issued                                                                                                                |  |               |           |   |                   |  
|Common stock, $0.01 par value, 200,000,000 shares authorized; 118,811,472 shares issued; 75,826,918 and 80,752,923 shares
outstanding at June 30, 2003 and December 31, 2002, respectively |  |               | 1,188      |   |                   |  
|Additional paid-in-capital                                                                                                                                                                 |  |               | 509,800    |   |                   |  
|Retained earningspartially restricted                                                                                                                                                     |  |               | 728,088    |   |                   |  
|Accumulated other comprehensive income:                                                                                                                                                    |  |               |            |   |                   |  
|Net unrealized gain on securities available-for-sale, net of tax                                                                                                                           |  |               | 20,961     |   |                   |  
|Unallocated common stock held by Employee Stock Ownership Plan (ESOP)                                                                                                                      |  |               | (42,147    | ) |                   |  
|Unearned common stock held by Stock-Based Incentive Plan (SBIP)                                                                                                                            |  |               | (15,266    | ) |                   |  
|Common stock held by Supplemental Executive Retirement Plan (SERP), at cost (173,696 and 548,800 shares at June 30, 2003 and December 31, 2002)                                            |  |               | (3,235     | ) |                   |  
|Treasury stock, at cost (42,984,554 and 38,058,549 shares at June 30, 2003 and December 31, 2002, respectively)                                                                            |  |               | (661,470   | ) |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total stockholders equity                                                                                                                                                                 |  |               | 537,919    |   |                   |  
|                                                                                                                                                                                           |  |               |            |   |                   |  
|Total liabilities and stockholders equity                                                                                                                                                 |  | $             | 10,809,449 |   |                   | $
|                                                                                                                                                                                           |  |               |            |   |                   |  



See accompanying notes
to consolidated financial statements.



1



---

##### Table of Contents

ROSLYN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except
per share amounts)



|                                                     |  | For the Three MonthsEnded June 30, |         |      | For the Six MonthsEnded June 30, |        
|---------------------------------------------------- |  | ---------------------------------- | ------- | ---- | -------------------------------- | -------
|                                                     |  | 2003                               |         | 2002 |                                  |        
|Interest income:                                     |  |                                    |         |      |                                  |        
|Money market investments                             |  | $                                  | 170     |      | $                                | 342    
|Debt and equity securities                           |  |                                    | 20,922  |      |                                  | 23,669 
|Mortgage-backed and mortgage related securities      |  |                                    | 65,921  |      |                                  | 68,389 
|Real estate loans                                    |  |                                    | 49,579  |      |                                  | 54,812 
|Consumer and other loans                             |  |                                    | 3,192   |      |                                  | 4,301  
|                                                     |  |                                    |         |      |                                  |        
|Total interest income                                |  |                                    | 139,784 |      |                                  | 151,513
|                                                     |  |                                    |         |      |                                  |        
|Interest expense:                                    |  |                                    |         |      |                                  |        
|Deposits                                             |  |                                    | 31,047  |      |                                  | 32,797 
|Borrowed funds                                       |  |                                    | 47,040  |      |                                  | 48,713 
|                                                     |  |                                    |         |      |                                  |        
|Total interest expense                               |  |                                    | 78,087  |      |                                  | 81,510 
|                                                     |  |                                    |         |      |                                  |        
|Net interest income before provision for loan losses |  |                                    | 61,697  |      |                                  | 70,003 
|Provision for loan losses                            |  |                                    | 500     |      |                                  | 750    
|                                                     |  |                                    |         |      |                                  |        
|Net interest income after provision for loan losses  |  |                                    | 61,197  |      |                                  | 69,253 
|                                                     |  |                                    |         |      |                                  |        
|Non-interest income:                                 |  |                                    |         |      |                                  |        
|Fees and service charges                             |  |                                    | 5,236   |      |                                  | 4,497  
|Net gains on securities                              |  |                                    | 4,151   |      |                                  | 15     
|Income from bank owned life insurance                |  |                                    | 1,781   |      |                                  | 1,883  
|Joint venture income (loss)                          |  |                                    |        |      |                                  | 5,234  
|Other non-interest income                            |  |                                    | 370     |      |                                  | 414    
|                                                     |  |                                    |         |      |                                  |        
|Total non-interest income                            |  |                                    | 11,538  |      |                                  | 12,043 
|                                                     |  |                                    |         |      |                                  |        
|Non-interest expense:                                |  |                                    |         |      |                                  |        
|General and administrative expenses:                 |  |                                    |         |      |                                  |        
|Compensation and employee benefits                   |  |                                    | 11,080  |      |                                  | 13,927 
|Occupancy and equipment                              |  |                                    | 3,611   |      |                                  | 3,193  
|Deposit insurance premiums                           |  |                                    | 234     |      |                                  | 209    
|Advertising and promotion                            |  |                                    | 500     |      |                                  | 744    
|Other non-interest expenses                          |  |                                    | 4,325   |      |                                  | 5,111  
|                                                     |  |                                    |         |      |                                  |        
|Total general and administrative expenses            |  |                                    | 19,750  |      |                                  | 23,184 
|Amortization of intangible assets                    |  |                                    | 32      |      |                                  | 32     
|Real estate operations, net                          |  |                                    | 16      |      |                                  | (9     
|Capital trust securities                             |  |                                    | 860     |      |                                  | 943    
|Prepayment penalties on debt extinguishments         |  |                                    |        |      |                                  |       
|                                                     |  |                                    |         |      |                                  |        
|Total non-interest expense                           |  |                                    | 20,658  |      |                                  | 24,150 
|                                                     |  |                                    |         |      |                                  |        
|Income before provision for income taxes             |  |                                    | 52,077  |      |                                  | 57,146 
|Provision for income taxes                           |  |                                    | 16,465  |      |                                  | 20,405 
|                                                     |  |                                    |         |      |                                  |        
|Net income                                           |  | $                                  | 35,612  |      | $                                | 36,741 
|                                                     |  |                                    |         |      |                                  |        
|Basic earnings per common share                      |  | $                                  | 0.49    |      | $                                | 0.46   
|                                                     |  |                                    |         |      |                                  |        
|Diluted earnings per common share                    |  | $                                  | 0.49    |      | $                                | 0.45   
|                                                     |  |                                    |         |      |                                  |        



See accompanying notes
to consolidated financial statements.



2



---

##### Table of Contents

ROSLYN BANCORP, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY

(Unaudited)

(In thousands, except
per share amount)



|                                                                             |  | Commonstock |       | Additionalpaid-in- capital |   | Retainedearnings- partiallyrestricted |  |   | Accumulatedothercomprehensiveincome |   | Unallocatedcommonstockheld byESOP |   |        | Unearnedcommonstockheld bySBIP |   |         | Commonstock held bySERP, atcost |  |   | Treasurystock, atcost |   |  | Total stockholdersequity |       
|---------------------------------------------------------------------------- |  | ----------- | ----- | -------------------------- | - | ------------------------------------- |  | - | ----------------------------------- | - | --------------------------------- | - | ------ | ------------------------------ | - | ------- | ------------------------------- |  | - | --------------------- | - |  | ------------------------- | ------
|Balance at December 31, 2002                                                 |  | $           | 1,188 |                            | $ | 509,053                               |  | $ | 682,853                             |   |                                   | $ | 4,047  |                                | $ | (43,044 | )                               |  | $ | (3,575                | ) |  | $                         | (5,997
|Comprehensive income:                                                        |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Net income                                                                   |  |             |       |                            |   |                                       |  |   | 73,070                              |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Other comprehensive income, net of tax:                                      |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Net unrealized gain on securities,net of reclassification adjustment (1) (2) |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   | 16,914 |                                |   |         |                                 |  |   |                       |   |  |                           |       
|                                                                             |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Total comprehensive income                                                   |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|                                                                             |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Exercise of stock options and related tax benefit                            |  |             |       |                            |   |                                       |  |   | (5,635                              | ) |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Allocation of ESOP stock                                                     |  |             |       |                            |   | 747                                   |  |   |                                     |   |                                   |   |        |                                |   | 897     |                                 |  |   |                       |   |  |                           |       
|Amortization of SBIP stock awards                                            |  |             |       |                            |   |                                       |  |   | 81                                  |   |                                   |   |        |                                |   |         |                                 |  |   | 2,385                 |   |  |                           |       
|Distribution of SERP stock                                                   |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           | 3,775 
|Cash dividends on common stock ($0.305 per share)                            |  |             |       |                            |   |                                       |  |   | (22,281                             | ) |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Common stock acquired, at cost                                               |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   | (14,076               | ) |  |                           | (1,013
|                                                                             |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       
|Balance at June 30, 2003                                                     |  | $           | 1,188 |                            | $ | 509,800                               |  | $ | 728,088                             |   |                                   | $ | 20,961 |                                | $ | (42,147 | )                               |  | $ | (15,266               | ) |  | $                         | (3,235
|                                                                             |  |             |       |                            |   |                                       |  |   |                                     |   |                                   |   |        |                                |   |         |                                 |  |   |                       |   |  |                           |       

---

|(1) |  | Disclosure of reclassification amount, net of tax, for the six months ended June 30, 2003:
|--- |  | ------------------------------------------------------------------------------------------



|Net unrealized appreciation arising during the period, net of tax                  |  | $ | 21,362
|---------------------------------------------------------------------------------- |  | - | ------
|Less: Reclassification adjustment for net gains included in net income, net of tax |  |   | 4,448 
|                                                                                   |  |   |       
|Net unrealized gain on securities, net of tax                                      |  | $ | 16,914
|                                                                                   |  |   |       



|(2) |  | The tax expense relating to the net unrealized appreciation on securities during the six months ended June 30, 2003 was $14.8 million. The tax expense relating to the
reclassification adjustment for net gains was $3.2 million for the six months ended June 30, 2003.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



See accompanying notes to consolidated financial statements.



3



---

##### Table of Contents

ROSLYN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



|                                                                                                         |  | For the Six Months EndedJune 30, |           
|-------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----------
|                                                                                                         |  | 2003                             |           
|Cash flows from operating activities:                                                                    |  |                                  |           
|Net income                                                                                               |  | $                                | 73,070    
|Adjustments to reconcile net income to net cash provided by operating activities:                        |  |                                  |           
|Provision for loan losses                                                                                |  |                                  | 1,000     
|Provision for other real estate owned losses                                                             |  |                                  | 53        
|Amortization of intangible assets                                                                        |  |                                  | 63        
|Depreciation and amortization                                                                            |  |                                  | 2,375     
|Accretion of discounts in excess of amortization of premiums                                             |  |                                  | (11,724   
|ESOP and SBIP expense, net                                                                               |  |                                  | 4,110     
|Originations of loans held-for-sale, net of sales                                                        |  |                                  | 6,333     
|Net gains on sales of loans                                                                              |  |                                  | (666      
|Net gains on securities                                                                                  |  |                                  | (7,635    
|Net gains on sales of real estate owned                                                                  |  |                                  | (14       
|Net gains on sales of fixed assets                                                                       |  |                                  |          
|Income from bank owned life insurance                                                                    |  |                                  | (3,594    
|Income taxes deferred and tax benefits attributable to stock plans                                       |  |                                  | 3,287     
|Changes in assets and liabilities:                                                                       |  |                                  |           
|Decrease (increase) in accrued interest receivable                                                       |  |                                  | 3,466     
|Decrease in other assets                                                                                 |  |                                  | 371       
|Increase (decrease) in official checks outstanding                                                       |  |                                  | 1,191     
|Increase in accrued interest payable and dividends                                                       |  |                                  | 400       
|Decrease in accrued taxes payable                                                                        |  |                                  | (6,481    
|Increase (decrease) in accrued expenses and other liabilities                                            |  |                                  | 599       
|Net decrease in deferred loan costs and fees                                                             |  |                                  | 2,412     
|                                                                                                         |  |                                  |           
|Net cash provided by operating activities                                                                |  |                                  | 68,616    
|                                                                                                         |  |                                  |           
|Cash flows from investing activities:                                                                    |  |                                  |           
|Net redemption of Federal Home Loan Bank stock                                                           |  |                                  | 13,750    
|Purchases of securities held-to-maturity                                                                 |  |                                  | (211,454  
|Proceeds from calls of securities held-to-maturity                                                       |  |                                  | 313,606   
|Proceeds from sales and repayments of securities available-for-sale                                      |  |                                  | 6,775,014 
|Purchases of securities available-for-sale                                                               |  |                                  | (6,355,547
|Net loan (originations) repayments                                                                       |  |                                  | (398,164  
|Investment in real estate joint venture                                                                  |  |                                  |          
|Purchases of banking house and equipment, net                                                            |  |                                  | (3,498    
|Proceeds from sales of other real estate owned                                                           |  |                                  | 601       
|                                                                                                         |  |                                  |           
|Net cash provided by (used in) investing activities                                                      |  |                                  | 134,308   
|                                                                                                         |  |                                  |           
|Cash flows from financing activities:                                                                    |  |                                  |           
|Increase in demand deposit, money market and savings accounts                                            |  |                                  | 124,503   
|Increase in certificates of deposit                                                                      |  |                                  | 249,762   
|Increase (decrease) in short-term reverse-repurchase agreements and other borrowings                     |  |                                  | 61,709    
|(Decrease) increase in long-term reverse-repurchase agreements and other borrowings                      |  |                                  | (600,000  
|Net proceeds from issuance of guaranteed preferred beneficial interest in junior subordinated debentures |  |                                  |          
|Decrease in mortgagors escrow and security deposits                                                     |  |                                  | (3,883    
|Net cash used in exercise of stock options                                                               |  |                                  | (8,922    
|Cash dividends paid on common stock                                                                      |  |                                  | (22,281   
|Cost to repurchase treasury stock                                                                        |  |                                  | (93,459   
|Net proceeds from distribution of SERP stock                                                             |  |                                  | 2,762     
|Cost to repurchase SBIP stock                                                                            |  |                                  | (14,076   
|                                                                                                         |  |                                  |           
|Net cash (used in) provided by financing activities                                                      |  |                                  | (303,885  
|                                                                                                         |  |                                  |           
|Net decrease in cash and cash equivalents                                                                |  |                                  | (100,961  
|Cash and cash equivalents at beginning of period                                                         |  |                                  | 170,989   
|                                                                                                         |  |                                  |           
|Cash and cash equivalents at end of period                                                               |  | $                                | 70,028    
|                                                                                                         |  |                                  |           
|Supplemental disclosures of cash flow information:                                                       |  |                                  |           
|Cash paid during the period for:                                                                         |  |                                  |           
|Interest on deposits and borrowed funds                                                                  |  | $                                | 157,853   
|                                                                                                         |  |                                  |           
|Income taxes                                                                                             |  | $                                | 38,677    
|                                                                                                         |  |                                  |           
|Non-cash investing activities:                                                                           |  |                                  |           
|Additions to other real estate owned                                                                     |  | $                                | 136       
|                                                                                                         |  |                                  |           



See accompanying notes
to consolidated financial statements.



4



---

##### Table of Contents

ROSLYN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



|1. |  | BASIS OF PRESENTATION
|-- |  | ---------------------



The accompanying consolidated financial statements include the accounts of Roslyn Bancorp, Inc. (on a stand alone basis, the Holding Company) and with its wholly-owned
subsidiaries (collectively, the Company). Roslyn Bancorp, Inc. is the holding company for The Roslyn Savings Bank and its subsidiaries (collectively, the Bank).



The consolidated financial statements included herein reflect all normal recurring adjustments which, in the opinion of management, are necessary to present a fair
statement of the results for the interim periods presented. Such adjustments are the only adjustments made to the consolidated financial statements contained herein. The results of operations for the three and six months ended June 30, 2003 are not
necessarily indicative of the results of operations that may be expected for the entire year. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in
the United States of America (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). When necessary, certain reclassifications have been made to prior period amounts to conform
to the current period presentation. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys 2002 Annual Report on Form 10-K.



|2. |  | NEW ACCOUNTING PRONOUNCEMENTS
|-- |  | -----------------------------



In May 2003, the Financial Accounting Standards Board (FASB) issued Statement of Accounting Standards (SFAS) No. 150, Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity. SFAS No. 150 addresses the accounting for certain financial instruments that, under previous guidance, issuers could account for as equity. The statement requires that those instruments be
classified as liabilities in statements of financial position.



SFAS No. 150 is
effective for all financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. The impact on the Companys consolidated statements of
financial condition upon adoption of SFAS No. 150 will be the reclassification of the guaranteed preferred beneficial interest in junior subordinated debentures from in between total liabilities and stockholders equity to borrowed funds. The
impact on the Companys consolidated statements of income upon adoption of SFAS No. 150 will be the classification of interest expense on borrowed funds related to the guaranteed preferred beneficial interest in junior subordinated debentures
(whereby previously such charges were included in non-interest expense).



In
April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, and for
hedging relationships designated after June 30, 2003. Management does not believe that the adoption of SFAS No. 149 will have a material impact on the Companys consolidated financial position or results of operations, except as stated below,
after June 30, 2003.



The guidance should be applied prospectively. The
provisions of SFAS No. 149 that relate to Statement 133 Implementation Issues that have been effective for fiscal quarters that began prior to June 15, 2003, should continue to be applied in accordance with their respective effective dates. In
addition, certain provisions relating to forward purchases or sales of when-issued securities or other securities that do not yet exist, should be applied to existing contracts as well as new contracts entered into after June 30, 2003.



5



---

##### Table of Contents

|3. |  | STOCK-BASED COMPENSATION
|-- |  | ------------------------



As allowed by SFAS No. 123, Accounting for Stock-Based Compensation, the Company adheres to the intrinsic-value-based method of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations to account for stock options granted under the Companys Stock-Based Incentive Plans (SBIP). Under this method no compensation expense is
recognized as all options granted under the SBIP had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the fair value
based method of SFAS No. 123 had been applied for the three and six months ended June 30, 2003 and 2002:



|                                                                                                                     |  | For the Three MonthsEnded June 30, |        | For the Six MonthsEnded June 30,
|-------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------- | ------ | --------------------------------
|                                                                                                                     |  | 2003                               |        | 2002                            
|Net income, as reported                                                                                              |  | $                                  | 35,612 |                                 
|Less: Total stock-based employee compensation expense determined under fair value method for all options, net of
tax |  |                                    | 814    |                                 
|                                                                                                                     |  |                                    |        |                                 
|Pro forma net income                                                                                                 |  | $                                  | 34,798 |                                 
|                                                                                                                     |  |                                    |        |                                 
|Basic earnings per share:                                                                                            |  |                                    |        |                                 
|As reported                                                                                                          |  | $                                  | 0.49   |                                 
|Pro forma                                                                                                            |  |                                    | 0.48   |                                 
|Diluted earnings per share:                                                                                          |  |                                    |        |                                 
|As reported                                                                                                          |  | $                                  | 0.49   |                                 
|Pro forma                                                                                                            |  |                                    | 0.47   |                                 



|4. |  | DEBT, EQUITY, MORTGAGE-BACKED AND MORTGAGE RELATED SECURITIES, NET
|-- |  | ------------------------------------------------------------------



The following table sets forth certain information regarding amortized cost and estimated fair values of debt, equity, mortgage-backed and mortgage related securities,
net, at June 30, 2003 and December 31, 2002:



|                                                            |  | June 30, 2003  |           | December 31, 2002   
|----------------------------------------------------------- |  | -------------- | --------- | --------------------
|                                                            |  | Amortized Cost |           | Estimated Fair Value
|                                                            |  | (In thousands)
|Held-to-maturity:                                           |  |                |           |                     
|Debt securities, net:                                       |  |                |           |                     
|United States Government agencies, net                      |  | $              | 283,491   |                     
|                                                            |  |                |           |                     
|Total debt securities held-to-maturity, net                 |  | $              | 283,491   |                     
|                                                            |  |                |           |                     
|Available-for-sale:                                         |  |                |           |                     
|Debt securities, net:                                       |  |                |           |                     
|United States Government agencies, net                      |  | $              | 379,478   |                     
|State, county and municipal                                 |  |                | 4,482     |                     
|Other                                                       |  |                | 51,000    |                     
|                                                            |  |                |           |                     
|Total debt securities, net                                  |  |                | 434,960   |                     
|                                                            |  |                |           |                     
|Equity securities, net:                                     |  |                |           |                     
|Preferred and common stock                                  |  |                | 206,215   |                     
|Trust preferreds, net                                       |  |                | 384,941   |                     
|Other                                                       |  |                | 14,933    |                     
|                                                            |  |                |           |                     
|Total equity securities, net                                |  |                | 606,089   |                     
|                                                            |  |                |           |                     
|Total debt and equity securities, net                       |  |                | 1,041,049 |                     
|                                                            |  |                |           |                     
|Mortgage-backed and mortgage related securities, net:       |  |                |           |                     
|GNMA pass-through securities, net                           |  |                | 61,763    |                     
|FNMA pass-through securities, net                           |  |                | 20,583    |                     
|FHLMC pass-through securities, net                          |  |                | 50,985    |                     
|Whole loan private collateralized mortgage obligations, net |  |                | 24,758    |                     
|Agency collateralized mortgage obligations, net             |  |                | 5,307,534 |                     
|Whole loan state agency mortgage-backed securities          |  |                | 14,385    |                     
|                                                            |  |                |           |                     
|Total mortgage-backed and mortgage related securities, net  |  |                | 5,480,008 |                     
|                                                            |  |                |           |                     
|Total securities available-for-sale, net                    |  | $              | 6,521,057 |                     
|                                                            |  |                |           |                     



6



---

##### Table of Contents

|5. |  | LOANS RECEIVABLE, NET
|-- |  | ---------------------



Loans receivable, net, at June 30, 2003 and December 31, 2002 consists of the following:



|                                                                             |  | June 30, 2003  |           |   | December 31, 2002 |  
|---------------------------------------------------------------------------- |  | -------------- | --------- | - | ----------------- | -
|                                                                             |  | (In thousands) |          
|Loans held-for-sale:                                                         |  |                |           |   |                   |  
|One-  to four-family loans                                                   |  | $              | 5,804     |   |                   | $
|Student loans                                                                |  |                | 165       |   |                   |  
|                                                                             |  |                |           |   |                   |  
|Total loans held-for-sale                                                    |  | $              | 5,969     |   |                   | $
|                                                                             |  |                |           |   |                   |  
|Loans receivable held for investment, net:                                   |  |                |           |   |                   |  
|Real estate loans:                                                           |  |                |           |   |                   |  
|One-  to four-family                                                         |  | $              | 856,006   |   |                   | $
|Multi-family                                                                 |  |                | 1,228,460 |   |                   |  
|Commercial                                                                   |  |                | 693,407   |   |                   |  
|Construction and development                                                 |  |                | 484,893   |   |                   |  
|                                                                             |  |                |           |   |                   |  
|Total real estate loans                                                      |  |                | 3,262,766 |   |                   |  
|Net unamortized discount and deferred income                                 |  |                | (138      | ) |                   |  
|Net deferred loan origination costs                                          |  |                | 9,113     |   |                   |  
|                                                                             |  |                |           |   |                   |  
|Total real estate loans, net                                                 |  |                | 3,271,741 |   |                   |  
|Consumer and other loans, net:                                               |  |                |           |   |                   |  
|Consumer and other                                                           |  |                | 107,167   |   |                   |  
|Home equity and second mortgage                                              |  |                | 171,869   |   |                   |  
|                                                                             |  |                |           |   |                   |  
|Total consumer and other loans                                               |  |                | 279,036   |   |                   |  
|Net deferred loan origination costs                                          |  |                | 1,431     |   |                   |  
|                                                                             |  |                |           |   |                   |  
|Total consumer and other loans, net                                          |  |                | 280,467   |   |                   |  
|                                                                             |  |                |           |   |                   |  
|Total loans receivable held for investment, net                              |  |                | 3,552,208 |   |                   |  
|Allowance for loan losses                                                    |  |                | (44,326   | ) |                   |  
|                                                                             |  |                |           |   |                   |  
|Total loans receivable held for investment, net of allowance for loan losses |  | $              | 3,507,882 |   |                   | $
|                                                                             |  |                |           |   |                   |  



7



---

##### Table of Contents

|6. |  | ASSET QUALITY
|-- |  | -------------



The following table sets forth information regarding non-accrual loans and real estate owned, net, at the dates indicated. It is the Companys policy generally to discontinue accruing interest on all loans that
are contractually past due 90 days or more, or when in the opinion of management such suspension is otherwise warranted. When a loan is placed on non-accrual status, the Company ceases the accrual of interest owed, and previously accrued interest
outstanding is charged against interest income. Loans are generally returned to accrual status when the loan delinquency status is less than 90 days past due and the Company has reasonable assurance that the loan will be fully collectible.



|                                                                     |  | At June 30, 2003 |        |   | At December 31, 2002 |  
|-------------------------------------------------------------------- |  | ---------------- | ------ | - | -------------------- | -
|                                                                     |  | (In thousands)   |       
|Non-accrual loans:                                                   |  |                  |        |   |                      |  
|One-  to four-family                                                 |  | $                | 4,409  |   |                      | $
|Commercial real estate                                               |  |                  | 19,262 |   |                      |  
|Home equity                                                          |  |                  | 285    |   |                      |  
|Consumer and other                                                   |  |                  | 132    |   |                      |  
|                                                                     |  |                  |        |   |                      |  
|Total non-accrual loans                                              |  |                  | 24,088 |   |                      |  
|Loans contractually past due 90 days or more and still accruing (1)  |  |                  | 3,883  |   |                      |  
|                                                                     |  |                  |        |   |                      |  
|Total non-performing loans                                           |  |                  | 27,971 |   |                      |  
|Real estate owned                                                    |  |                  | 212    |   |                      |  
|                                                                     |  |                  |        |   |                      |  
|Total non-performing assets                                          |  | $                | 28,183 |   |                      | $
|                                                                     |  |                  |        |   |                      |  
|Allowance for loan losses as a percent of total loans (2)            |  |                  | 1.25   | % |                      |  
|Allowance for loan losses as a percent of total non-performing loans |  |                  | 158.47 |   |                      |  
|Total non-performing loans as a percent of total loans (2)           |  |                  | 0.79   |   |                      |  
|Total non-performing assets as a percent of total assets             |  |                  | 0.26   |   |                      |  

---

|(1) |  | Amounts shown are comprised of U.S. Government guaranteed one- to four-family loans.
|--- |  | ------------------------------------------------------------------------------------

|(2) |  | Total loans consist of total loans receivable held for investment, net, excluding the allowance for loan losses.
|--- |  | ----------------------------------------------------------------------------------------------------------------



|7. |  | OBLIGATIONS UNDER GUARANTEES
|-- |  | ----------------------------



In November 2002 the FASB issued Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. Such Interpretation elaborates on the disclosures to be made by a guarantor about its obligations under certain guarantees issued. It also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions of this Interpretation apply to guarantees issued or modified after December 31, 2002. The Company
adopted these provisions on January 1, 2003.



The Company provides guarantees
and indemnifications to its customers to enable them to complete a wide variety of business transactions and to enhance their credit standing. During the six months ended June 30, 2003, the Company has issued or modified $3.1 million in guarantees.
The Company has recorded such guarantees at their respective fair values as an other liability. The Company deems the fair value of the guarantees to equal the consideration received. The following table summarizes the Companys
guarantees and indemnifications at June 30, 2003:



|                                      |  | Expire withinone year |        | Expire afterone year |   | Total outstandingamount |  | Maximum potential amount offuture payments
|------------------------------------- |  | --------------------- | ------ | -------------------- | - | ----------------------- |  | ------------------------------------------
|                                      |  | (In thousands)       
|Performance standby letters of credit |  | $                     | 10,959 |                      | $ |                        |  | $                                         
|Financial standby letters of credit   |  |                       | 1,440  |                      |   | 10,600                  |  |                                           
|Loans with recourse/indemnification   |  |                       |       |                      |   | 2,042                   |  |                                           
|                                      |  |                       |        |                      |   |                         |  |                                           
|                                      |  | $                     | 12,399 |                      | $ | 12,642                  |  | $                                         
|                                      |  |                       |        |                      |   |                         |  |                                           



8



---

##### Table of Contents

The maximum potential amount of future payments represents the notional amounts that could be lost under the guarantees
and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or from collateral held or pledged.



Performance standby letters of credit were issued primarily for the benefit of local municipalities on behalf of certain of the Banks
borrowers. These borrowers have a current relationship with the Bank and are primarily residential subdivision borrowers. Performance standby letters of credit obligate the Bank to make payments in the event a specified third party fails to perform
under non-financial contractual obligations. Financial standby letters of credit were issued primarily for the benefit of other financial institutions, on behalf of certain of the Banks current borrowers. Financial standby letters of credit
obligate the Bank to guarantee payment of a specified financial obligation. The Bank collects a fee upon the issuance of performance and financial standby letters of credit. These fees are initially recorded by the Bank as a liability and are
recognized into income at the expiration date of the respective guarantee. In addition, the Bank also requires adequate collateral, typically in the form of real property or personal guarantee, upon issuance of performance and financial standby
letters of credit. Loans with recourse/indemnification obligate the Bank, in the event of borrower default, to purchase loans the Company has sold or otherwise transferred to a third party.



|8. |  | PENSION PLAN
|-- |  | ------------



Based on an evaluation of the Banks non-contributory pension plan in fiscal 2002, the Bank concluded that benefit accruals under the non-contributory pension plan would cease, or freeze, on January
31, 2003. In connection with the freezing of the pension plan and the plans measurement date of February 1, 2003, the Bank, during the first quarter of 2003, recognized a one-time curtailment expense of $239,000.



|9. |  | RECENT DEVELOPMENTS
|-- |  | -------------------



On June 27, 2003 the Company announced a strategic merger with New York Community Bancorp, Inc. and signed a definitive agreement under which the two companies will combine. The transaction is expected to close in the
fourth quarter of 2003, pending shareholder and regulatory approval. Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, the Company will merge with and into New York Community Bancorp,
Inc. and The Roslyn Savings Bank will merge with, and will operate as a division of, New York Community Bank. Shareholders of the Companys common stock will receive 0.75 of a share of New York Community Bancorp, Inc. common stock in exchange
for each share of Roslyn Bancorp, Inc. common stock held at the merger date. The transaction will be tax-free to the Companys shareholders. In connection with the merger agreement, New York Community Bancorp, Inc. and Roslyn Bancorp, Inc. have
each been issued an option to purchase, under certain circumstances, up to 19.9% of the others common stock.



The Company and New York Community Bancorp, Inc. will be filing a joint proxy statement/prospectus and other relevant documents concerning the merger with the United
States Securities and Exchange Commission. The Company urges investors to read the joint proxy statement/prospectus and any other relevant documents to be filed with the SEC, because they contain important information.



9



---

##### Table of Contents

MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Overview



Roslyn Bancorp, Inc. is a savings and loan holding company regulated by the Office of Thrift Supervision. The primary operating subsidiary
of Roslyn Bancorp, Inc. is The Roslyn Savings Bank, a New York State chartered stock savings bank, and its subsidiaries (collectively, the Bank). While the following discussion of financial condition and results of operations includes the collective
results of Roslyn Bancorp, Inc. (on a stand alone basis, the Holding Company) and with its subsidiaries (collectively, the Company), this discussion principally reflects the Banks activities.



Critical Accounting Policies



The Company has identified the accounting policies below as critical to the understanding of
the Companys results of operations. Certain accounting policies are considered to be important to the portrayal of the Companys financial condition, since they require management to make complex or subjective judgments, some of which may
relate to matters that are inherently uncertain. The inherent sensitivity of the Companys consolidated financial statements to critical accounting policies and the use of judgments, estimates and assumptions could result in material
differences in the Companys results of operations or financial condition.



Allowance for Loan LossesThe Company has determined that the methodology used in determining the level of its allowance for loan losses is critical in the presentation and understanding of the Companys consolidated
financial statements. The allowance for loan losses represents managements estimate of probable losses inherent in the loan portfolio. This evaluation process is subject to numerous estimates and judgments. The frequency of default, risk
ratings and loss recovery rates, among other things, are considered in this evaluation, as are the size and diversity of individual large credits. Changes in these estimates could have a direct impact on the provision for loan losses and could
result in a change in the allowance. While management uses available information to determine losses on loans, future additions to the allowance may be necessary based, among other things, on unanticipated changes in economic conditions,
particularly in the New York Metropolitan area.



In evaluating the loan
portfolio, management takes into consideration numerous factors such as the Companys loan growth, prior loss experience, present risks of the loan portfolio, risk ratings assigned by lending personnel, ratings assigned by the Companys
independent loan review function, the present financial condition of borrowers, current economic conditions and other portfolio risk characteristics. The Companys formalized process for assessing the adequacy of the allowance for loan losses
and the resultant need, if any, for periodic provisions to the allowance charged to income entails both individual loan analyses and loan pool analyses. The individual loan analyses are periodically performed on individually significant loans, or
when otherwise deemed necessary, and primarily encompass multi-family, commercial real estate and construction and development loans. The result of these analyses may result in the allocation of the overall allowance to specific allowances for
individual loans considered impaired and non-impaired.



The loan pool analyses
are performed on the balance of the Companys loan portfolio, which were not individually reviewed. The pools consist of aggregations of homogeneous loans, primarily one- to four-family residential and consumer loans, having similar credit risk
characteristics. Examples of pools defined by the Company for this purpose are Company-originated, fixed-rate residential loans; Company-originated, adjustable-rate residential loans; purchased fixed-rate residential loans; outside-serviced
residential loans; residential second mortgage loans; participations in conventional first mortgage loans; residential construction loans; commercial construction loans, etc. For each such defined pool there is a set of sub-pools based upon
delinquency status, including: current, 30-59 days, 60-89 days, 90-119 days and 120+ days (the latter two sub-pools are considered to be classified by the Company). For each sub-pool, the Company has developed a range of allowances
necessary to adequately provide for probable losses inherent in that pool of loans. These ranges are based upon a number of factors, including the risk characteristics of the pool,



10



---

##### Table of Contents

actual loss and migration experience, expected loss and migration experience considering current economic conditions,
industry norms and the relative seasoning of the pool. The ranges of allowance developed by the Company are applied to the outstanding principal balance of the loans in each sub-pool; as a result, further specific and general allocations of the
overall allowance are made (the allocations for the classified sub-pools are considered specific and the allocations for the non-classified sub-pools are considered general).



The Companys allowance for loan losses also takes into consideration known and expected trends that are likely to affect the
creditworthiness of the loan portfolio as a whole, such as national and local economic conditions, unemployment conditions in the local lending area and the timeliness of court foreclosure proceedings in the Companys lending areas. Management
continues to believe that the Companys allowance for loan losses at June 30, 2003 is both appropriate in the circumstances and adequate to provide for estimated probable losses inherent in the loan portfolio.



Employee Benefit PlansThe Company provides a range of benefits to its employees
and retired employees, including pensions and post-retirement health care and life insurance benefits. The Company records annual amounts relating to these plans based on calculations specified by accounting principles generally accepted in the
United States of America (GAAP), which include various actuarial assumptions, such as discount rates, assumed rates of return, assumed rates of compensation increases, turnover rates and health care cost trends. The Company reviews its actuarial
assumptions on an annual basis and makes modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. As required by GAAP, the effect of the modifications are generally recorded or amortized over future
periods. The Company believes that the assumptions utilized in recording its obligations under its employee benefit plans are reasonable based upon the advice of its actuaries.



Investment in Debt and Equity SecuritiesCertain of the Companys fixed income securities classified as available-for-sale
are not publicly traded, and quoted market prices are not available from brokers or investment bankers on these securities. The change in the fair value of these available-for-sale securities is recorded in other comprehensive income as an
unrealized gain or loss. The Company calculates the fair value of these securities based upon assumptions established through the use of pricing models and discounted cash flows of similar outstanding securities. Realized gains and losses on sales
of securities are computed using the specific identification method. The Company conducts a periodic review and evaluation of the securities portfolio to determine if the value of any security has declined below its carrying value and whether such
decline is other than temporary.



Income TaxesThe Company has
established reserves for possible payments to various taxing authorities with respect to the admissibility and timing of tax deductions. Management has made certain assumptions and judgments concerning the eventual outcome of these items. The
Company continually reviews those assumptions and judgments to reflect any changes that may have arisen concerning these items.



Comparison of Financial Condition at June 30, 2003 and December 31, 2002



Total Assets



Total assets at June 30, 2003 were $10.81 billion, a decrease of $210.8 million, or 1.9%, from $11.02 billion at December 31, 2002. This decrease primarily was due to a decrease in the debt and equity securities
portfolio, partially offset by increases in mortgage-backed and mortgage related securities and total loans receivable held for investment, net. Debt and equity securities, net, decreased $563.8 million, or 29.8%, to $1.33 billion at June 30, 2003,
as compared to $1.89 billion at December 31, 2002. The decrease in debt and equity securities, net, was principally due to calls of such securities during the six months ended June 30, 2003. Mortgage-backed and mortgage related securities increased
$90.5 million, or 1.7%, from $5.42 billion at December 31, 2002 to $5.51 billion at June 30, 2003. Total loans receivable held for investment, net, increased $395.5 million, or 12.5%, to $3.55 billion at June 30, 2003, as compared to $3.16 billion
at December 31, 2002. The increases in the mortgage-backed and mortgage related securities and loan portfolios were primarily due to managements strategy of deploying proceeds from deposits and principal repayments on loans and securities into
mortgage-backed and mortgage related securities and construction, multi-family and commercial real estate loans, as well as utilizing those funds to repay borrowings.



11



---

##### Table of Contents

Total Liabilities



Total liabilities at June 30, 2003 were $10.21 billion, a decrease of $172.2 million, or 1.7%, from $10.38 billion at December 31, 2002. The decrease in total liabilities
principally was due to a decrease in total borrowed funds. Total borrowed funds decreased $538.3 million, or 11.9%, from $4.52 billion at December 31, 2002 to $3.98 billion at June 30, 2003. Included in borrowed funds at June 30, 2003 and December
31, 2002 was $189.8 million of the Companys senior notes. The Company utilizes borrowings, primarily in the form of reverse-repurchase agreements and Federal Home Loan Bank (FHLB) borrowings and to the extent considered necessary by
management, to fund asset growth. The decrease in borrowed funds was partially offset by an increase in total deposits. Total deposits increased $374.3 million, or 6.6%, from $5.71 billion at December 31, 2002 to $6.09 billion at June 30, 2003. The
increase in total deposits reflects the Banks continued emphasis on attracting deposits through the addition of de novo branches, new product offerings and competitive pricing. Additionally, certificates of deposit increased $249.8 million, or
8.0%, from $3.13 billion at December 31, 2002 to $3.38 billion at June 30, 2003. The increase in certificates of deposit includes a net increase of $180.7 million in brokered deposits. The Company had acquisitions of $200.4 million and maturities of
$19.7 million of brokered deposits during the six months ended June 30, 2003. At June 30, 2003 and December 31, 2002, brokered deposits totaled $405.6 million and $224.9 million, respectively.



Capital Securities



On March 20, 2002 Roslyn Preferred Trust I (RPT I), a Delaware statutory business trust and a wholly-owned subsidiary of the Company, issued
$63.0 million aggregate liquidation amount of floating rate guaranteed preferred beneficial interests in Junior Subordinated Debentures (the Capital Securities) due April 1, 2032, at a distribution rate equal to the 6-month LIBOR plus 360 basis
points, resetting on a semi-annual basis. The maximum distribution rate on the Capital Securities is 12.0% through April 1, 2007, with no maximum thereafter. The Company may redeem the Capital Securities, in whole or in part, at any time on or after
April 1, 2007. At June 30, 2003 the distribution rate was 4.86%.



Stockholders Equity



Stockholders equity decreased
$38.6 million, or 6.7%, to $537.9 million at June 30, 2003 from $576.5 million at December 31, 2002. The decrease was due to dividends paid on the Companys common stock of $22.3 million, the $5.6 million effect of stock options exercised, the
purchase of $93.5 million, or 4,926,005 shares, of treasury stock and the purchase of $14.1 million, or 725,000 shares, of the Companys common stock by the Stock-Based Incentive Plan. Additionally, during the second quarter of 2003, the
Supplemental Executive Retirement Plan (the SERP) purchased 52,533 shares of the Companys common stock at an aggregate price of $1.0 million. Offsetting these decreases were net income for the six months ended June 30, 2003 of $73.1 million,
the amortization of unallocated and unearned common stock held by the Companys stock-related plans of $4.1 million, the distribution of 427,637 shares, or $3.8 million, of the Companys common stock by the SERP and an increase of $16.9
million in the net unrealized gains on securities available-for-sale from December 31, 2002.



12



---

##### Table of Contents

Analysis of Net Interest Income



Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net
interest income depends upon the volume of average interest-earning assets and average interest-bearing liabilities and the interest rates earned or paid on them.



The following table sets forth certain information regarding the Companys consolidated average statements of financial condition and
the Companys average yields on interest-earning assets and average costs of interest-bearing liabilities for the periods indicated. Such yields and costs are derived by dividing income or expense, annualized, by the average balance of
interest-earning assets or interest-bearing liabilities, respectively. Average balances are derived from average daily balances and include non-performing assets. The yields and costs include fees that are considered adjustments to yields and costs.



|                                                                 |  | For the Three Months Ended June 30, |           
|---------------------------------------------------------------- |  | ----------------------------------- | ----------
|                                                                 |  | 2003                                |           
|                                                                 |  | AverageBalance                      |           
|                                                                 |  | (Dollars in thousands)              |           
|Assets:                                                          |  |                                     |           
|Interest-earning assets:                                         |  |                                     |           
|Money market investments                                         |  | $                                   | 59,694    
|Debt and equity securities, net                                  |  |                                     | 1,701,885 
|Mortgage-backed and mortgage                                     |  |                                     |           
|related securities, net                                          |  |                                     | 5,800,394 
|Real estate loans, net                                           |  |                                     | 3,065,362 
|Consumer and other loans, net                                    |  |                                     | 283,394   
|                                                                 |  |                                     |           
|Total interest-earning assets                                    |  |                                     | 10,910,729
|                                                                 |  |                                     |           
|Non-interest-earning assets                                      |  |                                     | 417,222   
|                                                                 |  |                                     |           
|Total assets                                                     |  | $                                   | 11,327,951
|                                                                 |  |                                     |           
|Liabilities and Stockholders Equity:                            |  |                                     |           
|                                                                 |  |                                     |           
|Interest-bearing liabilities:                                    |  |                                     |           
|Money market accounts                                            |  | $                                   | 873,621   
|Savings accounts                                                 |  |                                     | 1,309,311 
|Super NOW and NOW accounts                                       |  |                                     | 326,866   
|Certificates of deposit                                          |  |                                     | 3,373,030 
|                                                                 |  |                                     |           
|Total interest-bearing deposits                                  |  |                                     | 5,882,828 
|Borrowed funds                                                   |  |                                     | 4,488,447 
|                                                                 |  |                                     |           
|Total interest-bearing liabilities                               |  |                                     | 10,371,275
|                                                                 |  |                                     |           
|Non-interest-bearing liabilities                                 |  |                                     | 418,625   
|                                                                 |  |                                     |           
|Total liabilities                                                |  |                                     | 10,789,900
|Stockholders equity                                             |  |                                     | 538,051   
|                                                                 |  |                                     |           
|Total liabilities and stockholders equity                       |  | $                                   | 11,327,951
|                                                                 |  |                                     |           
|Net interest income/interest rate spread                         |  |                                     |           
|                                                                 |  |                                     |           
|Net interest margin                                              |  |                                     |           
|                                                                 |  |                                     |           
|Ratio of interest-earning assets to interest-bearing liabilities |  |                                     |           
|                                                                 |  |                                     |           



13



---

##### Table of Contents

|                                                                 |  | For the Six Months Ended June 30, |           
|---------------------------------------------------------------- |  | --------------------------------- | ----------
|                                                                 |  | 2003                              |           
|                                                                 |  | AverageBalance                    |           
|                                                                 |  | (Dollars in thousands)            |           
|Assets:                                                          |  |                                   |           
|Interest-earning assets:                                         |  |                                   |           
|Money market investments                                         |  | $                                 | 61,876    
|Debt and equity securities, net                                  |  |                                   | 1,743,266 
|Mortgage-backed and mortgage                                     |  |                                   |           
|related securities, net                                          |  |                                   | 5,887,209 
|Real estate loans, net                                           |  |                                   | 2,984,402 
|Consumer and other loans, net                                    |  |                                   | 288,359   
|                                                                 |  |                                   |           
|Total interest-earning assets                                    |  |                                   | 10,965,112
|                                                                 |  |                                   |           
|Non-interest-earning assets                                      |  |                                   | 416,029   
|                                                                 |  |                                   |           
|Total assets                                                     |  | $                                 | 11,381,141
|                                                                 |  |                                   |           
|Liabilities and Stockholders Equity:                            |  |                                   |           
|                                                                 |  |                                   |           
|Interest-bearing liabilities:                                    |  |                                   |           
|Money market accounts                                            |  | $                                 | 886,937   
|Savings accounts                                                 |  |                                   | 1,281,669 
|Super NOW and NOW accounts                                       |  |                                   | 315,155   
|Certificates of deposit                                          |  |                                   | 3,327,601 
|                                                                 |  |                                   |           
|Total interest-bearing deposits                                  |  |                                   | 5,811,362 
|Borrowed funds                                                   |  |                                   | 4,605,930 
|                                                                 |  |                                   |           
|Total interest-bearing liabilities                               |  |                                   | 10,417,292
|                                                                 |  |                                   |           
|Non-interest-bearing liabilities                                 |  |                                   | 412,514   
|                                                                 |  |                                   |           
|Total liabilities                                                |  |                                   | 10,829,806
|Stockholders equity                                             |  |                                   | 551,335   
|                                                                 |  |                                   |           
|Total liabilities and stockholders equity                       |  | $                                 | 11,381,141
|                                                                 |  |                                   |           
|Net interest income/interest rate spread                         |  |                                   |           
|                                                                 |  |                                   |           
|Net interest margin                                              |  |                                   |           
|                                                                 |  |                                   |           
|Ratio of interest-earning assets to interest-bearing liabilities |  |                                   |           
|                                                                 |  |                                   |           

|
|



14



---

##### Table of Contents

Comparison of Operating Results for the Three Months Ended June 30, 2003 and 2002



General



The Company reported net income of $35.6 million, or basic earnings per share and diluted earnings per share of $0.49, for the quarter ended
June 30, 2003, compared to $36.7 million, or basic earnings per share of $0.46 and diluted earnings per share of $0.45, for the quarter ended June 30, 2002.



Interest Income



Interest income for the quarter ended June 30, 2003 decreased $11.7 million, or 7.7%, to $139.8 million from $151.5 million for the quarter ended June 30, 2002. This decrease was primarily the result of a decrease in
the average yield on total interest-earning assets from 6.49% for the quarter ended June 30, 2002 to 5.12% for the 2003 comparable quarter. This decrease in average yield was partially offset by an increase in the average interest-earning assets of
$1.57 billion, or 16.8%, to $10.91 billion for the quarter ended June 30, 2003 from $9.34 billion in the comparable quarter of 2002. The increase in average interest-earning assets from the June 30, 2002 period was attributable to a $1.31 billion
increase in the average balance of mortgage-backed and mortgage related securities, net, and an increase in the average balance of debt and equity securities, net, of $359.8 million. Partially offsetting these increases was a decrease in the average
balance of real estate loans, net, of $46.2 million and a decrease in the average balance of consumer and other loans, net, of $31.0 million from the June 30, 2002 period.



Interest income on mortgage-backed and mortgage related securities, net, decreased $2.5 million, or 3.6%, to $65.9 million for the three
months ended June 30, 2003 from $68.4 million for the same period in 2002. The decrease in the interest income on mortgage-backed and mortgage related securities, net, related to a decrease in average yield of 154 basis points from 6.09% for the
three months ended June 30, 2002 to 4.55% for the three months ended June 30, 2003. The decrease in the average yield was principally due to the low interest rate environment experienced during 2002 and 2003, which resulted in increased principal
repayments on mortgage-backed and mortgage related securities as the underlying one- to four-family loans refinanced at lower rates. The decrease in the average yield was partially offset by an increase of $1.31 billion, or 29.2%, in the average
balance of mortgage-backed and mortgage related securities, net, from $4.49 billion for the three months ended June 30, 2002 to $5.80 billion for the three months ended June 30, 2003. The increase in average balance was due to managements
decision, primarily during the first quarter of 2003, to invest the funds received from borrowings and deposit liabilities, into mortgage-backed and mortgage related securities.



Interest income on debt and equity securities, net, decreased $2.8 million, or 11.6%, to $20.9 million for the three months ended June 30,
2003 from $23.7 million for the three months ended June 30, 2002. The decrease in interest income on debt and equity securities, net, was due to a decrease of 213 basis points in the average yield from 7.05% for the three months ended June 30, 2002
to 4.92% for the three months ended June 30, 2003. The decrease was partially offset by an increase in the average balance of debt and equity securities, net, of $359.8 million, or 26.8%, from $1.34 billion for the three months ended June 30, 2002
to $1.70 billion for the three months ended June 30, 2003.



Interest income on
real estate loans, net, decreased $5.2 million, or 9.5%, to $49.6 million for the three months ended June 30, 2003 from $54.8 million for the three months ended June 30, 2002. The decrease was the result of a $46.2 million, or 1.5%, decrease in the
average balance of real estate loans, net, outstanding from $3.11 billion for the quarter ended June 30, 2002 to $3.07 billion for the quarter ended June 30, 2003. The decrease in average balance was due to a net decrease in the average balance of
one-to four-family loans of $986.3 million, partially offset by a $940.1 million net increase in the average balance of multi-family, construction and commercial real estate loans. The decrease in the interest income on real estate loans, net, was
also the result of a 58 basis point decrease in the average yield on real estate loans from 7.05% for the three months ended June 30, 2002 to 6.47% for the three months ended June 30, 2003. The decrease in the average yield was principally due to
the low interest rate environment experienced during 2002 and 2003, which has resulted in increased principal repayments on one- to four-family loans as consumers refinanced their loans at lower rates, primarily with third parties.



15



---

##### Table of Contents

Interest income on consumer and other loans, net, decreased $1.1 million, or 25.8%, to $3.2 million for the three months
ended June 30, 2003 from $4.3 million for the same period in 2002. This decrease was due to a 96 basis point decrease in the average yield on consumer and other loans, net, from 5.47% for the three months ended June 30, 2002 to 4.51% for the same
period in 2003, and a $31.0 million, or 9.9%, decrease in the average balance of consumer and other loans, net, outstanding from $314.4 million for the three months ended June 30, 2002 to $283.4 million for the three months ended June 30, 2003. The
decrease in average yield was principally due to downward re-pricing of consumer loan products, which are primarily linked to the Prime Rate, during the declining interest rate environment experienced during 2002 and into 2003.



Interest Expense



Interest expense for the three months ended June 30, 2003 was $78.1 million, compared to $81.5 million for the three months ended June 30,
2002, a decrease of $3.4 million, or 4.2%. The decrease in interest expense was the result of a 71 basis point decrease in the average cost of interest-bearing liabilities from 3.72% for the quarter ended June 30, 2002 to 3.01% for the quarter ended
June 30, 2003. The decrease in average yield was partially offset by a $1.60 billion, or 18.2%, increase in the average balance of interest-bearing liabilities from $8.77 billion for the quarter ended June 30, 2002 to $10.37 billion for the quarter
ended June 30, 2003. The increase in average interest-bearing liabilities reflects a $1.06 billion increase in the average balance of interest-bearing deposits and a $536.1 million increase in the average balance of borrowed funds as compared to the
corresponding prior year quarter.



Interest expense on interest-bearing
deposits for the three months ended June 30, 2003 decreased $1.8 million, or 5.3%, to $31.0 million from $32.8 million for the three months ended June 30, 2002. This decrease was primarily due to a 61 basis point decrease in the average rate paid on
interest-bearing deposits from 2.72% for the three months ended June 30, 2002 to 2.11% for the corresponding period in 2002. Partially offsetting the decrease in the average rate paid was an increase in the average balance of interest-bearing
deposit accounts of $1.06 billion, or 22.1%, from $4.82 billion for the three months ended June 30, 2002 to $5.88 billion for the three months ended June 30, 2003. The increase in the average balance of interest-bearing deposits was a result of
increases in average balances of money market accounts of $385.1 million, Super NOW and NOW accounts of $47.4 million, savings accounts of $300.5 million and certificates of deposits of $330.5 million for the three months ended June 30, 2003 from
the corresponding period in 2002. The increase in the average balance of money market, savings, Super NOW and NOW accounts and certificates of deposits principally was achieved by introducing new deposit products, competitive pricing and through
additional deposits generated from the Companys de novo branching strategy. Additionally, the increase in certificates of deposit includes a net increase of $224.0 million, or 168.9%, in average brokered deposits for the three months ended
June 30, 2003 from the corresponding period in 2002.



Interest expense on
borrowed funds for the three months ended June 30, 2003 decreased $1.7 million, or 3.4%, to $47.0 million from $48.7 million for the three months ended June 30, 2002. The decrease in interest expense was due to a 74 basis point decrease in the
average cost of borrowed funds from 4.93% for the three months ended June 30, 2002 to 4.19% for the corresponding period in 2003. Partially offsetting the decrease in average cost was an increase in the average balance of borrowed funds of $536.1
million, or 13.6%, from $3.95 billion for the three months ended June 30, 2002 to $4.49 billion for the three months ended June 30, 2003.



Net Interest Income



Net interest income before provision for loan losses was $61.7 million for the three months ended June 30, 2003, as compared to $70.0 million for the three months ended June 30, 2002, a decrease of $8.3 million, or
11.9%. The decrease in net interest income reflects the net effect of the reduced interest rate spread and margin experienced for the three months ended June 30, 2003, as compared to the prior year quarter. The net interest rate spread and margin
for the three months ended June 30, 2003 was 2.11% and 2.26%, respectively, as compared to 2.77% and 3.00%, respectively, for the three months ended June 30, 2002. Offsetting these decreases in net interest rate spread and margin was a $1.57 billion
increase in the average balance of interest-earning assets and $1.60 billion increase in the average balance of interest-bearing liabilities for the three months ended June 30, 2003, as compared to the corresponding prior year quarter.



16



---

##### Table of Contents

Provision for Loan Losses



The Company had a provision for loan losses for the three months ended June 30, 2003 of $500,000 as compared to $750,000 for the three
months ended June 30, 2002. The provision for loan losses for the three months ended June 30, 2003 and 2002 reflects managements qualitative and quantitative assessment of the loan portfolio, changes in the composition of the loan portfolio,
net charge-offs and prospects for collection of delinquent loans. A significant factor supporting managements provision for loan losses in 2002 and 2003 was the migration of the loan portfolio toward higher risk commercial real estate,
construction and multi-family loans. At June 30, 2003 and December 31, 2002 the allowance for loan losses amounted to $44.3 million and $43.4 million, respectively. The ratio of such allowance to total non-performing loans was 158.47% at June 30,
2003, as compared to 103.72% at December 31, 2002. Non-performing loans were $28.0 million and $41.9 million at June 30, 2003 and December 31, 2002, respectively. During the three months ended June 30, 2003 the Company had net charge-offs of
$42,000, or 0.01% of average loans. For the three months ended June 30, 2002 net charge-offs were $13,000, or 0.00% of average loans.



The allowance for loan losses as a percentage of total non-performing loans was negatively impacted by certain non-performing commercial credit relationships totaling
$18.6 million and $32.1 million at June 30, 2003 and December 31, 2002, respectively. One of the two non-performing credit relationships, with an outstanding loan balance of $13.3 million at December 31, 2002, was resolved during the quarter ended
March 31, 2003 with the sale of the four commercial properties securing the credit.



The remaining credit is an $18.6 million loan secured by two assisted living facilities in the New York Metropolitan area. A court-appointed receiver has operated the facilities since the commencement of the borrowers consolidated
bankruptcy filing in November 2001 and has actively managed the facilities cash flows and profitability since that time. Currently, the facilities are being marketed for sale. Independent third parties have valued the facilities in excess of
$16.0 million and, based upon such independent opinions of value, management believes it has allocated an appropriate amount of the allowance for loan losses that may result from this credit.



Non-Interest Income



Non-interest income decreased $505,000, or 4.2%, from $12.0 million for the quarter ended June 30, 2002 to $11.5 million for the quarter
ended June 30, 2003. The decrease in non-interest income primarily relates to a decrease of $5.2 million in joint venture income recorded for the three months ended June 30, 2002. This income recorded in the second quarter of 2002 relates to the
Companys joint venture for the development of a residential community in Oyster Bay, New York. No units remain to be delivered relating to this project. Partially offsetting this decrease was an increase in fees and service charges of
$739,000, or 16.4%, from $4.5 million for the quarter ended June 30, 2002 to $5.2 million for the quarter ended June 30, 2003. The increase in fees and service charges reflects the continued success of the Banks high performance checking
campaign. Also offsetting the decrease was an increase of $4.1 million in net gains on securities from $15,000 for the quarter ended June 30, 2002 to $4.2 million for the quarter ended June 30, 2003.



Non-Interest Expense



Non-interest expense decreased $3.5 million, or 14.5%, to $20.7 million for the quarter ended June 30, 2003, as compared to $24.2 million
for the quarter ended June 30, 2002. The decrease was primarily due to a decrease in general and administrative expenses. The decrease in general and administrative expenses relates to decreases in compensation and employee benefits expenses,
advertising and promotion expenses and other non-interest expenses.



Non-interest expense also decreased due to a decrease in capital trust securities expenses of $83,000 from $943,000 for the second quarter of 2002 to $860,000 in the second quarter of 2003. Capital trust securities expenses relate to
expenses incurred on the $63.0 million of guaranteed preferred beneficial interest in junior subordinate debentures that were issued in March of 2002. The distribution rate on the capital trust securities is equal to the 6-month LIBOR plus



17



---

##### Table of Contents

360 basis points, resetting on a semi-annual basis. At June 30, 2003 and June 30, 2002 the distribution rate was 4.86%
and 5.88%, respectively.



General and administrative expenses for the quarter
ended June 30, 2003 decreased $3.4 million, or 14.8%, to $19.8 million from $23.2 million for the quarter ended June 30, 2002. The decrease in general and administrative expenses was primarily due to the decrease in compensation and employee benefit
costs of $2.8 million, a $244,000 decrease in advertising and promotion expense and a $786,000 decrease in other non-interest expense. Partially offsetting these decreases was an increase of $418,000 in occupancy and equipment expense.



The decrease in compensation and employee benefit expense was due to an decrease in
employee stock and performance-based benefit plan expenses, which were partially offset by increased expenses relating to staffing additions for de novo branch activities. The decrease in advertising and promotion expenses primarily relates to the
higher costs in the second quarter 2002 related to the two de novo branch openings during that quarter. The decrease in other non-interest expenses was primarily due to lower residential loan servicing costs and third party relationship refunds,
offset partially by increases in data and item processing fees and other operating expenses principally relating to the increase in the number of deposit accounts. The increase in occupancy and equipment expense primarily relates to the increase in
expenses due to the operation of five de novo branches opened since the second quarter of 2002.



Income Taxes



The provision for income
taxes decreased $3.9 million, from $20.4 million recorded during the quarter ended June 30, 2002 to $16.5 million recorded during the quarter ended June 30, 2003. The decrease was attributable to the decrease in income before provision for income
taxes of $5.1 million, or 8.9%, in the second quarter of 2003 as compared to the same prior year quarter. The effective tax rate for the three months ended June 30, 2003 end 2002 was 31.6% and 35.7%, respectively.



Comparison of Operating Results for the Six Months Ended June 30, 2003 and 2002



General



The Company reported net income of $73.1 million, or basic earnings per share of $1.00 and
diluted earnings per share of $0.98, for the six months ended June 30, 2003, compared to $70.3 million, or basic earnings per share of $0.88 and diluted earnings per share of $0.86, for the six months ended June 30, 2002.



Interest Income



Interest income for the six months ended June 30, 2003 decreased $1.7 million, or 0.6%, to $290.7 million from $292.4 million for the six
months ended June 30, 2002. This decrease was primarily the result of a 119 basis point decrease in the average yield on total interest-earning assets from 6.49% for the six months ended June 30, 2002 to 5.30% for the 2003 comparable six months.
Additionally, the decrease was due to decreases in the average balances of real estate loans, net, of $206.7 million and consumer and other loans, net, of $26.2 million from the June 30, 2002 period. Partially offsetting the decrease in average
yield was an increase in average interest-earning assets of $1.96 billion, or 21.7%, to $10.97 billion for the six months ended June 30, 2003 from $9.01 billion in the comparable six months of 2002. The increase in average interest-earning assets
from the June 30, 2002 period was attributable to a $1.78 billion increase in the average balance of mortgage-backed and mortgage related securities, net, and an increase in the average balance of debt and equity securities, net, of $447.5 million.



Interest income on mortgage-backed and mortgage related securities, net,
increased $17.7 million, or 14.3%, to $141.5 million for the six months ended June 30, 2003 from $123.8 million for the same period in 2002. The increase was principally the result of an increase of $1.78 billion, or 43.2%, in the average balance of
mortgage-backed and mortgage related securities, net, from $4.11 billion for the six months ended June 30, 2002 to $5.89 billion for the six months ended June 30, 2003. This increase in average balance primarily was due to managements decision
to invest the funds received, primarily from borrowings and deposit liabilities, into mortgage-backed and mortgage related securities. The increase in the average balance was offset by a decrease in the average yield on mortgage-backed and



18



---

##### Table of Contents

mortgage related securities, net, of 121 basis points from 6.02% for the six months ended June 30, 2002 to 4.81% for the
six months ended June 30, 2003.



Interest income on debt and equity securities,
net, decreased $1.7 million, or 3.6%, to $45.3 million for the six months ended June 30, 2003 from $47.0 million for the same period in 2002. The decrease was the result of a decrease in the average yield on such securities of 206 basis points from
7.25% for the six months ended June 30, 2002 to 5.19% for the six months ended June 30, 2003. The decrease was partially offset by an increase in the average balance of debt and equity securities, net, of $447.5 million, or 34.5%, from $1.30 billion
for the six months ended June 30, 2002 to $1.74 billion for the six months ended June 30, 2003.



Interest income on real estate loans, net, decreased $15.2 million, or 13.5%, to $97.1 million for the six months ended June 30, 2003 from $112.3 million for the same period in 2002. The decrease was the result of a
$206.7 million, or 6.5%, decrease in the average balance of real estate loans, net, outstanding from $3.19 billion for the six months ended June 30, 2002 to $2.98 billion for the six months ended June 30, 2003. The decrease in average balance was
due to a net decrease in the average balance of one-to four-family loans of $1.00 billion, partially offset by a $797.7 million net increase in the average balance of multi-family, construction and commercial real estate loans. The decrease in the
interest income on real estate loans, net, was also the result of a 53 basis point decrease in the average yield on real estate loans from 7.04% for the six months ended June 30, 2002 to 6.51% for the six months ended June 30, 2003. The decrease in
the average yield was principally due to the low interest rate environment experienced during 2002 and 2003, which has resulted in increased principal repayments on one- to four-family loans as consumers refinanced their loans at lower rates,
primarily with third parties.



Interest income on consumer and other loans,
net, decreased $2.2 million, or 24.6%, to $6.5 million for the six months ended June 30, 2003 from $8.7 million for the same period in 2002. This decrease was due to a 98 basis point decrease in the average yield on consumer and other loans, net,
from 5.51% for the six months ended June 30, 2002 to 4.53% for the same period in 2003, coupled with a $26.2 million, or 8.4%, decrease in the average balance of consumer and other loans, net, outstanding from $314.6 million for the six months ended
June 30, 2002 to $288.4 million for the six months ended June 30, 2003. The decrease in average yield was principally due to downward re-pricing of consumer loan products, which are primarily linked to the Prime Rate, during the declining interest
rate environment experienced during 2002 and into 2003.



Interest Expense



Interest expense for the six months ended June 30, 2003 was $158.6
million, compared to $157.9 million for the six months ended June 30, 2002, an increase of $643,000, or 0.4%. The increase in interest expense was the result of a $1.98 billion, or 23.4%, increase in the average balance of interest-bearing
liabilities from $8.44 billion for the six months ended June 30, 2002 to $10.42 billion for the six months ended June 30, 2003. The increase in average balance was partially offset by a 70 basis point decrease in the average cost of interest-bearing
liabilities from 3.74% for the six months ended June 30, 2002 to 3.04% for the six months ended June 30, 2003. The increase in average interest-bearing liabilities reflects a $1.15 billion increase in the average balance of interest-bearing deposits
and an $819.7 million increase in the average balance of borrowed funds as compared to the corresponding prior year six months.



Interest expense on interest-bearing deposits for the six months ended June 30, 2003 increased $211,000, or 0.3%, to $64.2 million from $64.0 million for the
corresponding 2002 period. This increase was primarily due to an increase in the average balance of interest-bearing deposit accounts of $1.15 billion, or 24.8%, from $4.66 billion for the six months ended June 30, 2002 to $5.81 billion for the six
months ended June 30, 2003. The increase in the average balance of interest-bearing deposits was a result of increases in average balances of money market accounts of $440.1 million, Super NOW and NOW accounts of $45.5 million, savings accounts of
$290.7 million and certificates of deposits of $376.9 million for the six months ended June 30, 2003 from the corresponding period in 2002. The increase in the average balance of money market, savings, Super NOW and NOW accounts and certificates of
deposits principally was achieved by introducing new deposit products, competitive pricing and through additional deposits generated from the Companys de novo branching strategy. Additionally, the increase in certificates of deposit includes a
net increase of $199.3 million, or 162.8%, in average brokered deposits for the six months ended June 30, 2003 from



19



---

##### Table of Contents

the corresponding period in 2002. Partially offsetting the increase in the average balance was a 54 basis point decrease
in the average rate paid on interest-bearing deposits from 2.75% for the six months ended June 30, 2002 to 2.21% for the corresponding period in 2003.



Interest expense on borrowed funds for the six months ended June 30, 2003 increased $432,000, or 0.5%, to $94.4 million from $94.0 million for the corresponding 2002
period. The increase was primarily due to an increase in the average balance of borrowed funds of $819.7 million, or 21.6%, from $3.79 billion for the six months ended June 30, 2002 to $4.61 billion for the six months ended June 30, 2003. Partially
offsetting the increase in average balance was a 86 basis point decrease in the average cost of borrowed funds from 4.96% for the six months ended June 30, 2002 to 4.10% for the corresponding period in 2003.



Net Interest Income



Net interest income before provision for loan losses was $132.1 million for the six months ended June 30, 2003, as compared to $134.5
million for the six months ended June 30, 2002, a decrease of $2.4 million, or 1.8%. The decrease in net interest income reflects the reduced interest rate spread and margin experienced for the six months ended June 30, 2003, as compared to the
prior year six months. The net interest rate spread and margin for the six months ended June 30, 2003 was 2.26% and 2.41%, respectively, as compared to 2.75% and 2.99%, respectively, for the six months ended June 30, 2002. Offsetting the decreases
in net interest rate spread and margin was the net effect of the $1.96 billion increase in the average balance of interest-earning assets and the $1.98 billion increase in the average balance of interest-bearing liabilities for the six months ended
June 30, 2003 as compared to the corresponding prior year six months.



Provision for Loan Losses



The Company had a provision for
loan losses for the six months ended June 30, 2003 of $1.0 million, as compared to $1.5 million for the six months ended June 30, 2002. The provision for loan losses for the six months ended June 30, 2003 and 2002 reflects managements
qualitative and quantitative assessment of the loan portfolio, changes in the composition of the loan portfolio, net charge-offs and prospects for collection of delinquent loans. A significant factor supporting managements provision for loan
losses in 2002 and 2003 was the migration of the loan portfolio toward higher risk commercial real estate, construction and multi-family loans.



Non-Interest Income



Non-interest income decreased $1.4 million, or 6.0%, from $23.0 million for the six months ended June 30, 2002 to $21.6 million for the six months ended June 30, 2003. The decrease in non-interest income primarily
relates to a decrease of $10.3 million in joint venture income recorded for the six months ended June 30, 2002 as compared to the same period in 2003. The income recorded in the first six months of 2002 relates to the Companys joint venture
for the development of a residential community in Oyster Bay, New York. No units remain to be delivered relating to this project. Partially offsetting this decrease was an increase in fees and service charges of $1.3 million, or 16.0%, from $8.3
million for the six months ended June 30, 2002 to $9.6 million for the six months ended June 30, 2003. The increase in fees and service charges reflects the continued success of the Banks high performance checking campaign. Also offsetting the
decrease was a significant increase of $7.6 million in net gains on securities from $65,000 for the six months ended June 30, 2002 to $7.6 million for the six months ended June 30, 2003.



Non-Interest Expense



Non-interest expense decreased $3.2 million, or 6.8%, to $44.2 million for the six months ended June 30, 2003, as compared to $47.4 million for the same period in 2002.
The decrease in non-interest expense was attributable to a decrease in general and administrative expenses, primarily relating to decreases in compensation and employee benefits expenses, advertising and promotion expenses and other non-interest
expenses. These decreases were partially offset by prepayment penalties incurred on debt extinguishments during the six months ended June 30, 2003 and a full six months of expenses in 2003 related to capital trust securities.



20



---

##### Table of Contents

Non-interest expense decreased due to a decrease in general and administrative expenses for the six months ended June 30,
2003 of $5.6 million, or 12.0%, to $40.8 million from $46.4 million for the six months ended June 30, 2002. The decrease in general and administrative expenses was primarily due to the decrease in compensation and employee benefit costs of $4.5
million, a $601,000 decrease in advertising and promotion expense and a $1.6 million decrease in other non-interest expenses. Partially offsetting these decreases was a $1.1 million increase in occupancy and equipment expense.



The decrease in compensation and employee benefit expense was due to a decrease in employee
stock and performance-based benefit plan expenses, which were partially offset by increased expenses related to staffing additions for de novo branch activities. The decrease in advertising and promotion expenses primarily relates to the higher
costs in the first half of 2002 related to de novo branch openings during that period. The decrease in other non-interest expenses was primarily due to lower residential loan servicing costs and third party relationship refunds, offset partially by
increases in data and item processing fees and other operating expenses principally relating to the increase in the number of deposit accounts. The increase in occupancy and equipment expense primarily relates to the increase in expenses due to the
operation of five de novo branches opened since June of 2002.



Partially
offsetting the decrease in general and administrative expenses was the incurrence of $1.5 million of prepayment penalties on debt extinguishments during the six months ended June 30, 2003. No such penalties were incurred during the first six months
of 2002. Non-interest expense also was negatively impacted by an increase in capital trust securities expenses of $644,000 from $1.1 million for the six months ended June 30, 2002 to $1.7 million in the first six months of 2003. The increase in
capital trust securities expense was due to the incurrence of expense for a full six months during 2003 as compared to a partial six months in 2002. Capital trust securities expenses relate to expenses incurred on the $63.0 million of guaranteed
preferred beneficial interest in junior subordinate debentures that were issued in March of 2002.



Income Taxes



The provision for income
taxes decreased $2.7 million from $38.2 million recorded during the six months ended June 30, 2002 to $35.5 million recorded during the six months ended June 30, 2003. The effective tax rate for the six months ended June 30, 2003 and 2002 was 32.7%
and 35.2%, respectively.



Liquidity and Capital Resources



The Companys primary sources of funds are deposits, borrowings and proceeds from the
principal and interest payments on loans and securities. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and prepayment of mortgage loans and mortgage-backed securities are greatly
influenced by general interest rates, economic conditions and competition and generally are less predictable.



Another source of funding for the Holding Company is dividend payments from the Bank. Dividends paid by the Bank have primarily been used to fund common stock repurchases, pay dividends on the Companys common
stock and to repay borrowings. The Banks ability to pay dividends to the Holding Company is generally limited by New York State banking law and regulations and the regulations of the Federal Deposit Insurance Corporation and the Office of
Thrift Supervision. For the three and six months ended June 30, 2003, the Bank did not pay any dividends to the Holding Company.



As of June 30, 2003, the Company has issued $190.0 million in unsecured senior notes. Of such notes, $75.0 million are at a rate of 7.50%, which were issued at par, and
have a maturity date of December 1, 2008; $115.0 million of such notes are at a rate of 5.75%, which were issued at a price of 99.785%, and have a maturity date of November 15, 2007. The proceeds from the issuance of the unsecured senior notes were
used for general corporate purposes, including, the repurchase of the Companys common stock, the payment dividends on the Companys common stock and the



21



---

##### Table of Contents

repayment of indebtedness. In addition, the Company currently has the ability to issue an additional $10.0 million in
debt and other types of securities, with rates and terms to be determined, pursuant to the Companys $200.0 million shelf registration filed with the Securities and Exchange Commission during 2001.



On March 20, 2002 the Company, through its wholly-owned subsidiary RPT I, issued $63.0
million in floating rate Capital Securities. Such securities bear interest at the 6-month LIBOR plus 360 basis points, resetting on a semi-annual basis and are due April 1, 2032. At June 30, 2003 the distribution rate was 4.86%. The proceeds from
the issuance of the Capital Securities were used for general corporate purposes, including, among other things, the repurchase of the Companys common stock and the repayment of borrowed funds. The issuance costs, totaling $850,000, associated
with the Capital Securities issuance have been capitalized and are being amortized over the life of the security.



The primary investing activities of the Company are the origination of mortgage and construction loans and the purchase of mortgage-backed, mortgage related, debt and
equity securities. During the six months ended June 30, 2003, the Bank originated $608.9 million of construction, multi-family and commercial real estate loans, as compared to $151.0 million in the comparable 2002 period. During the six months ended
June 30, 2003 and 2002, the Bank also originated $51.0 million and $30.1 million, respectively, of one- to four-family mortgage loans. The increase in the origination of construction, multi-family and commercial real estate loans for the six months
ended June 30, 2003 as compared to the prior year period reflects the Companys strategy of de-emphasizing one- to four-family lending and capitalizing on and investing in its higher margin lending operations. Purchases of securities
available-for-sale totaled $6.36 billion and $3.22 billion during the six months ended June 30, 2003 and 2002, respectively. In addition to the aforementioned investing activities, the Company, during 2002, invested $25.0 million in a joint venture
with The Holiday Organization of Westbury, New York, for the development of a 177 unit residential community in Mt. Sinai, New York.



The Bank utilizes a private label program for the origination of one- to four-family loans through its existing branch network under a mortgage origination assistance
agreement with a third party mortgage originator. Under this program, the Bank utilizes the third partys mortgage loan origination platforms (including, among others, telephone and internet platforms) to originate loans, based on defined
underwriting criteria and in accordance with Federal National Mortgage Association guidelines, that close in the Banks name and utilize the Banks licensing. The Bank funds such loans directly, and, under a separate loan and servicing
rights purchase and sale agreement with the same third party, has the option to retain the loans in its portfolio, sell the loans to unrelated third party investors or sell the loans to the same third party at agreed upon pricing.



The Bank anticipates that it will enter into a private label agreement during the later part
of 2003 with a nationally recognized third party for the purpose of originating lines of credit and fixed-rate second mortgages. The loans will be underwritten in accordance with the Banks underwriting guidelines for these products. The loans
may be sold to the originator under a separate purchase and sale agreement at a predetermined price, or the Bank may elect to retain the originated loans for its own portfolio. Additionally, a third party servicer will service the loans originated
under this program.



The Company closely monitors its liquidity position on a
daily basis. Excess short-term liquidity is invested in overnight federal funds sold. In the event that the Company should require funds beyond its ability to generate them internally, additional sources of funds are available through the use of
reverse-repurchase agreements, FHLB advances and other borrowing facilities. At June 30, 2003, the Company had $3.98 billion in borrowed funds outstanding, as compared to $4.52 billion at December 31, 2002.



At June 30, 2003, the Company had outstanding loan commitments of $676.6 million, primarily
for construction, multi-family and home equity lines of credit. Management anticipates that it will have sufficient funds available to meet its current loan commitments.



The Banks outstanding loan commitments as of June 30, 2003 are as follows:



22



---

##### Table of Contents

|Loan Type                    |  | Amount        
|---------------------------- |  | --------------
|                             |  | (In thousands)
|One-  to four-family         |  | $             
|Commercial real estate       |  |               
|Multi-family real estate     |  |               
|Construction and development |  |               
|Consumer                     |  |               
|Home equity lines of credit  |  |               
|                             |  |               
|                             |  | $             
|                             |  |               



In the normal course of business, the
Company enters into commitments to purchase securities. As of June 30, 2003, the Company had $1.79 billion in commitments to purchase mortgage related securities. These commitments, with a weighted average yield of 3.59% and a weighted average life
of 1.27 years, settle within 30 days from June 30, 2003. At June 30, 2003, these commitments had an unrealized appreciation of approximately $366,000.



Certificates of deposit that are scheduled to mature in one year or less at June 30, 2003 totaled $2.28 billion. Based upon prior experience and the Companys
current pricing strategy, management believes that a significant portion of such deposits will remain with the Company.



The Companys most liquid assets are cash and cash equivalents, money market investments, short-term securities and securities available-for-sale. The levels of
these assets are dependent on the Companys operating, financing, lending and investment activities during any given period. At June 30, 2003 and December 31, 2002, the Company had $70.0 million and $171.0 million, respectively, in cash and
cash equivalents and money market investments. Included in money market investments were $10.5 million of short-term repurchase agreements at December 31, 2002. The Company had no short-term repurchase agreements outstanding at June 30, 2003.



During the six months ended June 30, 2003 the Company repurchased 4,926,005
shares of its common stock at an aggregate cost of $93.5 million. During the quarter ended June 30, 2003 the Company completed its ninth stock repurchase program and announced its tenth stock repurchase program, which authorizes the purchase of
approximately 7.6 million shares. As of June 30, 2003 the Company has repurchased 545,185 shares of the 7.6 million authorized in the tenth program. Future purchases of the Companys common stock will be made from time to time, in light of
market conditions, at the discretion of management.



On May 20, 2003 the
Company declared a quarterly cash dividend totaling $11.1 million, or $0.155 per common share. The dividend was paid on June 11, 2003 to shareholders of record on May 30, 2003. For the six months ended June 30, 2003 the Company has paid dividends of
$22.3 million, or $0.305 per common share.



On July 25, 2003 the Company
declared a quarterly cash dividend to $0.155 per common share. The dividend will be paid on August 15, 2003 to shareholders of record on August 5, 2003.



Interest Rate Sensitivity AnalysisManagement of Interest Rate Risk



The principal objectives of the Companys interest rate risk management are to evaluate the interest rate risk inherent in certain balance sheet accounts, to
maintain an appropriate level of risk given the Companys business strategies, operating environment, capital and liquidity requirements and performance objectives, and to manage the risk consistent with the Board of Directors approved
guidelines. Through such management, the Company seeks to reduce the vulnerability of its operations to changes in interest rates. The Companys Board of Directors reviews the Companys interest rate risk position on a monthly basis.
Additionally, an Asset/Liability Committee comprised of the Banks senior management reviews the Companys interest rate risk position on a weekly basis. Senior management also reviews, with the Board of Directors, its activities and
strategies, the effect of those activities and strategies on the Companys net interest margin, the market value of the Companys portfolio of investments and loans and the effect that changes in interest rates may have on the
Companys investment and loan portfolios and exposure limits.



The Company
has utilized the following strategies to manage interest rate risk: (1) increasing low-cost core deposits through an expanded branch network and product offerings; (2) focusing on higher margin business lines by expanding construction, commercial
real estate and multi-family lending; and (3) effectively utilizing borrowed funds and deposits



23



---

##### Table of Contents

to fund and sustain asset growth while maintaining market spreads. Management believes that reducing exposure to interest
rate fluctuations in this manner will enhance long-term profitability.



Interest Rate Sensitivity AnalysisGap Analysis



The
matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are interest rate sensitive and by monitoring an institutions interest rate sensitivity gap. An asset or
liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing
or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same specific time period. At June 30, 2003, the Companys one-year gap position was positive 37.64%. A gap is
considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate
sensitive assets. During a period of rising interest rates, an institution with a positive gap position would be in a better position to invest in higher yielding assets, which, consequently, may result in the yield of its interest-earning assets
increasing at a rate faster than its cost of interest-bearing liabilities, as opposed to if the institution had a negative gap. Accordingly, during a period of falling interest rates, an institution with a positive gap would tend to have its
interest-earning assets repricing downward at a faster rate than its interest-bearing liabilities as compared to an institution with a negative gap which, consequently, may tend to negatively affect the growth of its net interest income. The
Companys June 30, 2003 cumulative one-year gap position reflects the classification of available-for-sale and held-to-maturity securities within repricing periods based on their contractual maturities adjusted for estimated callable features
and prepayments, if any. If all available-for-sale securities at June 30, 2003 were classified within the Up to One Year maturity or repricing category, net interest-earning assets would have exceeded interest-bearing liabilities
maturing or repricing within the same period by $5.91 billion, representing a positive cumulative one-year gap position of 54.69%. Available-for-sale securities may or may not be sold, subject to managements discretion. Given the
Companys existing liquidity position and its ability to sell securities from its available-for-sale portfolio, management of the Company believes that its current gap position will not have a material adverse effect on its liquidity position.



The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at June 30, 2003, that are anticipated by the Company, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the Gap Table). Except as stated, the amount of assets and
liabilities shown which reprice or mature during a particular period was determined in accordance with the earlier of the term to reprice or the contractual maturity of the asset or liability. The Gap Table sets forth an approximation of the
projected repricing of assets and liabilities at June 30, 2003 on the basis of contractual maturities, anticipated prepayments, callable features and scheduled rate adjustments within a one year period and subsequent annual time intervals.
Prepayment rate assumptions ranging from 4% to 78% per year were applied to the real estate loan portfolio, dependent upon the loan type and coupon. Mortgage-backed and mortgage related securities were assumed to prepay at rates between 10% and 84%
annually, dependent upon the security type and pass-through rate. Money market accounts were assumed to decay (estimated deposit withdrawal activity) at 10% per annum, savings accounts were assumed to decay at 4% per annum and Super NOW and NOW
accounts were assumed to decay at 3% per annum. Prepayment and deposit decay rates can have a significant impact on the Companys estimated gap. While the Company believes such assumptions are reasonable, there can be no assurance that assumed
prepayment and decay rates will approximate actual future real estate loan and mortgage-backed and mortgage related securities principal prepayments and deposit withdrawal activity.



In addition to the foregoing, callable features of certain assets and liabilities may cause actual experience to vary from that indicated.
Included in the Gap Table are $825.5 million of callable securities at their estimated fair value and classified primarily based upon their respective call features. Of such securities, $587.7 million have been classified, using callable features,
in the Up to One Year category, $112.6 million have been classified, using callable features, in the One to Two Years category, $38.9 million have been classified, using callable features, in the Over Five Years
category and $86.3 million have been classified, according to their contractual maturity date, in the Over Five Years category. Also included in the Gap Table are $2.54 billion of callable borrowings, classified according to their



24



---

##### Table of Contents

maturity date, except for $100.0 million of such borrowings, which have been classified according to their first call
date in the Up to One Year category. If all callable borrowings at June 30, 2003 were classified according to their first call date, the Companys one-year gap position would have been positive 16.04%.



The Companys positive gap position at June 30, 2003 of 37.64% as compared to a positive
42.73% at December 31, 2002 continues to reflect the effect of prepayment activity experienced during 2002 and the first six months of 2003 in the mortgage-backed securities and real estate loan portfolios. In addition, expected maturities of
borrowed funds lengthened during the first six months of 2003. Borrowed funds maturing in one year or less decreased from 16.7% of total borrowed funds at December 31, 2002 to 0.1% of the total borrowed funds at June 30, 2003. Slightly offsetting
the lengthening of borrowed fund maturities was a shortening of certificates of deposit (CDs) maturities. CDs maturing in one year or less increased from 56.7% of total CDs at December 31, 2002 to 67.5% of total CDs at June 30, 2003.



25



---

##### Table of Contents

|                                                                                                     |  | At June 30, 2003      
|---------------------------------------------------------------------------------------------------- |  | ----------------------
|                                                                                                     |  | Up to One Year        
|                                                                                                     |  | (Dollars in thousands)
|Interest-earning assets (1):                                                                         |  |                       
|Debt and equity securities, net (2)                                                                  |  | $                     
|Mortgage-backed and mortgage related securities, net (2)                                             |  |                       
|Real estate loans, net (3) (4)                                                                       |  |                       
|Consumer and other loans, net (3) (4)                                                                |  |                       
|                                                                                                     |  |                       
|Total interest-earning assets                                                                        |  |                       
|                                                                                                     |  |                       
|Interest-bearing liabilities (1):                                                                    |  |                       
|Money market accounts                                                                                |  |                       
|Savings accounts                                                                                     |  |                       
|Super NOW and NOW accounts                                                                           |  |                       
|Certificates of deposit                                                                              |  |                       
|Borrowed funds                                                                                       |  |                       
|                                                                                                     |  |                       
|Total interest-bearing liabilities                                                                   |  |                       
|                                                                                                     |  |                       
|Interest sensitivity gap (5)                                                                         |  | $                     
|                                                                                                     |  |                       
|Cumulative interest sensitivity gap                                                                  |  | $                     
|                                                                                                     |  |                       
|Cumulative interest sensitivity gap as a percentage of total assets                                  |  |                       
|Cumulative net interest- earning assets as a percentage of cumulative interest-  bearing liabilities |  |                       

---

|(1) |  | Interest-earning assets are included in the period in which the balances are expected to be re-deployed and/or re-priced as a result of anticipated prepayments and call dates,
scheduled rate adjustments and contractual maturities.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Debt, equity and mortgage-backed and mortgage related securities, net, are shown at their respective carrying values. Included in debt and equity securities, net, is $83.3 million
of Federal Home Loan Bank stock.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | For the purpose of the gap analysis, the allowance for loan losses and non-performing loans have been excluded.
|--- |  | ---------------------------------------------------------------------------------------------------------------

|(4) |  | Loans held-for-sale are included in the Up to One Year category.
|--- |  | ------------------------------------------------------------------

|(5) |  | The interest sensitivity gap represents the difference between total interest-earning assets and total interest-bearing liabilities.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------



Certain shortcomings are inherent in the method of analysis presented in the foregoing table.
For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities
may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as adjustable-rate mortgage (ARM) loans, have features which limit
adjustments to interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels may deviate significantly from those assumed in calculating the table.
Finally, the ability of borrowers to service their ARM loans may decrease in the event of an interest rate increase. The table reflects managements estimates as to periods to repricing at particular points in time. Among the factors
considered, management monitors both current trends and its historical repricing experience with respect to particular or similar products. For example, the Bank has a number of deposit accounts, including passbook savings, Super NOW and NOW
accounts and money market accounts, which, subject to certain regulatory exceptions, may be withdrawn at any time. The Bank, based upon its historical experience, assumes that while all customers in these account categories could withdraw their
funds on any given day, not all will do so even if market interest rates were to change. As a result, different assumptions may be used at different points in time.



26



---

##### Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK



For a description of the Companys quantitative and qualitative disclosures about market risk, see the information set forth under the caption Managements Discussion and Analysis of Financial
Condition and Results of Operations-Interest Rate Sensitivity Analysis Management of Interest Rate Risk and Interest Rate Sensitivity AnalysisGap Analysis.



ITEM 4. CONTROLS AND PROCEDURES



(a)
Evaluation of disclosure controls and procedures. The Company maintains controls and procedures designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures performed within 90 days of the
filing date of this report, the chief executive officer and the chief financial officer of the Company concluded that the Companys disclosure controls and procedures were effective as of the evaluation date.



(b) Changes in internal controls. The Company made no significant changes in its
internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation of those controls by the chief executive officer and chief financial officer.



PART IIOTHER INFORMATION



Item 1. Legal Proceedings



The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings, in the aggregate, are believed by
management to be immaterial to the Companys financial condition or results of operations.



Item 2. Changes in Securities and Use of Proceeds



None.



Item 3. Defaults Upon Senior Securities



None.



Item 4. Submission of Matters to a Vote of Security Holders



On May 20, 2003 the Company held its annual meeting of stockholders for the purpose of the election of five Directors to three-year terms of office each and the ratification of the Board
of Directors appointment of KPMG LLP as the Companys independent auditors for the fiscal year ending December 31, 2003. The number of votes cast at the meeting as to each matter acted upon was as follows:



|   |  |                          |  | Number of Votes For |  | Number of VotesWithheld
|-- |  | ------------------------ |  | ------------------- |  | -----------------------
|1. |  | Election of Directors:   |  |                     |  |                        
|   |  | Thomas J. Calabrese, Jr. |  | 66,963,275          |  | 521,588                
|   |  | Spiros J. Voutsinas      |  | 66,851,295          |  | 633,568                
|   |  | Leonard Genovese         |  | 66,858,574          |  | 626,289                
|   |  | Dr. Edwin W. Martin, Jr. |  | 66,816,241          |  | 668,622                
|   |  | Richard C. Webel         |  | 66,931,134          |  | 553,729                



27



---

##### Table of Contents

The Directors whose terms continued and the years their terms expire are as follows:



|                        |  | Year Term Expires
|----------------------- |  | -----------------
|Continuing Directors:   |  |                  
|Joseph L. Mancino       |  | 2004             
|John M. Tsimbinos       |  | 2004             
|James E. Swiggett       |  | 2004             
|John R. Bransfield, Jr. |  | 2005             
|Thomas A. Doherty       |  | 2005             
|Maureen E. Clancy       |  | 2005             
|Victor C. McCuaig       |  | 2005             



| |  |    |  |                                                                                                                             |  | Number of Votes For |  | Number ofVotesAgainst |  | Number of Votes Abstaining
| |  | -- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | --------------------- |  | --------------------------
| |  | 2. |  | Ratification of appointment of KPMG LLP as independent auditors of the Company for the fiscal year ending December 31, 2003 |  | 65,914,307          |  | 1,395,085             |  | 175,471                   



Item 5. Other Information



On June 27, 2003, the Company announced a strategic merger with New York Community Bancorp, Inc. and signed a definitive agreement under which the two companies will combine. The transaction is expected to
close in the fourth quarter of 2003, pending shareholder and regulatory approval. Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, the Company will merge with and into New York
Community Bancorp, Inc. and The Roslyn Savings Bank will operate as a division of New York Community Bank. Shareholders of the Companys common stock will receive 0.75 of a share of New York Community Bancorp, Inc. common stock in exchange for
each share of Roslyn Bancorp, Inc. common stock held at the merger date. The transaction will be tax-free to Companys shareholders. In connection with the merger agreement, New York Community Bancorp, Inc. and Roslyn Bancorp, Inc. have each
been issued an option to purchase, under certain circumstances, up to 19.9% of the others common stock.



Item 6. Exhibits and Reports on Form 8-K



| | (a) |  | Exhibits
| | --- |  | --------



| | 2.1 |  | Agreement and Plan of Merger, dated as of June 27, 2003, by and between New York Community Bancorp, Inc. and Roslyn Bancorp, Inc.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------



| | 3.1 |  | Certificate of Incorporation of Roslyn Bancorp, Inc.1
| | --- |  | -----------------------------------------------------



| | 3.2 |  | Certificate of Amendment to Certificate of Incorporation of Roslyn Bancorp, Inc.2
| | --- |  | ---------------------------------------------------------------------------------



| | 3.3 |  | Third Amended and Restated Bylaws of Roslyn Bancorp, Inc.3
| | --- |  | ----------------------------------------------------------



| | 3.4 |  | Form of Stock Certificate of Roslyn Bancorp, Inc.1
| | --- |  | --------------------------------------------------



| | 4.1 |  | Shareholder Protection Rights Agreement, dated as of September 26, 2000, between Roslyn Bancorp, Inc. and Registrar and Transfer Company as Rights Agent4
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.2 |  | Amendment to Stockholder Protection Rights Agreement, dated as of June 27, 2003, between Roslyn Bancorp, Inc. and Registrar and Transfer Company as Rights Agent
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4.3 |  | Form of Senior Indenture5
| | --- |  | -------------------------



| | 4.4 |  | Form of Subordinated Indenture5
| | --- |  | -------------------------------



| | 4.5 |  | Form of Note for Senior Debt Securities5
| | --- |  | ----------------------------------------



| | 4.6 |  | The registrant will furnish upon request copies of all long-term instruments of registrant and its consolidated subsidiaries
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------



| | 10.1 |  | Stock Option Agreement, dated as of June 27, 2003, between New York Community Bancorp, Inc., as issuer, and Roslyn Bancorp, Inc., as grantee.
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| | 10.2 |  | Stock Option Agreement, dated as of June 27, 2003, between New York Community Bancorp, Inc., as grantee, and Roslyn Bancorp, Inc., as issuer.
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| | 10.3 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Joseph L. Mancino.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.4 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Joseph L. Mancino.
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.5 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Joseph L. Mancino.
| | ---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.6 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and John R. Bransfield, Jr.
| | ---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.7 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and John R. Bransfield, Jr.
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.8 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and John R. Bransfield, Jr.
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.9 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Michael P. Puorro.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.10 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Michael P. Puorro.
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.11 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Michael P. Puorro.
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.12 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and, John L. Klag.
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.13 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and John L. Klag.
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.14 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and John L. Klag.
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.15 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Nancy C. MacKenzie.
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.16 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Nancy C. MacKenzie.
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.17 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Nancy C. MacKenzie.
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.18 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Daniel L. Murphy.
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.19 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Daniel L. Murphy.
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.20 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Daniel L. Murphy.
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.21 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and R. Patrick Quinn.
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.22 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and R. Patrick Quinn.
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.23 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and R. Patrick Quinn.
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.24 |  | Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Mary Ellen McKinley.
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.25 |  | Noncompetition Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Mary Ellen McKinley.
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.26 |  | Retention Bonus Agreement, dated as of June 27, 2003, by and among New York Community Bancorp, Inc., Roslyn Bancorp, Inc., The Roslyn Savings Bank, and Mary Ellen McKinley.
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 11.0 |  | Statement re computation of per share earnings
| | ---- |  | ----------------------------------------------



| | 31.1 |  | Rule 13a-14(a)/15d-14(a) Chief Executive Officer Certification
| | ---- |  | --------------------------------------------------------------



| | 31.2 |  | Rule 13a-14(a)/15d-14(a) Chief Financial Officer Certification
| | ---- |  | --------------------------------------------------------------



| | 32.0 |  | Section 1350 Certifications
| | ---- |  | ---------------------------



| | (b) |  | Reports on Form 8-K
| | --- |  | -------------------



On April 21, 2003 Roslyn Bancorp, Inc. announced its financial results for the quarter ended March 31, 2003. The press release announcing financial
results for the quarter ended March 31, 2003 was filed as Exhibit 99.1.



On May 7, 2003 Roslyn Bancorp, Inc. announced that it was making available and distributing to current and prospective investors a written presentation. The presentation includes, among other matters, information regarding the
Companys current and historic business strategies, operations, performance and revenue projections for 2003. The presentation was furnished as Exhibit 99.1.





On June 19, 2003 Roslyn Bancorp, Inc.
announced that it was making available and distributing to current and prospective investors a written presentation that is also being posted on its web site at



| | 
| | 



28



---

##### Table of Contents

www.roslyn.com. The presentation includes, among other matters, information regarding the Companys
current and historic business strategies, operations, performance and revenue projections for 2003. The presentation was filed as Exhibit 99.1.



Notes:



|(1) |  | Incorporated by reference into this document from the Exhibits filed with the Registration Statement on Form S-1, and any amendments thereto, Registration Statement No. 333-10471,
filed with the Securities and Exchange Commission on August 20, 1996.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Incorporated by reference into this document from the Exhibits to the Companys quarterly report on Form 10-Q, Commission File No. 0-28886, filed with the Securities and
Exchange Commission on August 13, 1999.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Incorporated by reference into this document from the Exhibits to the Companys quarterly report on Form 10-Q, Commission File No. 0-28886, filed with the Securities and
Exchange Commission on August 10, 2000.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Incorporated by reference into this document from Exhibits to the Companys Form 8-A, and any amendments thereto, Commission File No. 0-28886, filed with the Securities and
Exchange Commission on September 29, 2000.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Incorporated by reference into this document from Exhibits to the Companys Form S-3, and any amendments thereto, Commission File No. 333-67282, filed with the Securities and
Exchange Commission on August 10, 2001.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



29



---

##### Table of Contents

SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                      |  |  |  | ROSLYN BANCORP, INC.
|--------------------- |  |  |  | --------------------
|                      |  |  |  | (Registrant)        
|                      |  |  | 
|Date: August 14, 2003 |  |  |  | By:                 
|                      |  |  |  |                     
|                      |  |  |  |                     
|                      |  |  | 
|Date: August 14, 2003 |  |  |  | By:                 
|                      |  |  |  |                     
|                      |  |  |  |                     



30