##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-K


|  |  |                                                                                                                                                 
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|þ |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
    For the Fiscal Year Ended December 31, 2005        
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
    For the transition period
    from           to

0-23229


(Commission File Number)


INDEPENDENCE COMMUNITY BANK CORP.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                            
|------------------------------------------------------------------ |  | -------------------------------------------
|Delaware                                                           |  | 11-3387931                                 
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification Number)
|195 Montague Street, Brooklyn, New York                            |  | 11201                                      
|(Address of principal executive office)                            |  | (Zip Code)                                 

(718) 722-5300


(Registrants telephone number, including area code)


Securities Registered Pursuant to Section 12(b) of the
Act:


None


Securities Registered Pursuant to Section 12(g) of the
Act:


Common Stock, par value $.01 per share


(Title of Class)


þ o


o þ


þ o


S-K 10-K 10-K. o


12-b-2 þ o o


o þ














---



##### 



INDEPENDENCE COMMUNITY BANK CORP.


2005 ANNUAL REPORT ON FORM 10-K


TABLE OF CONTENTS







|                                                               |  |                                                                                                                                             |  |    
|-------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------- |  | ---
|PART I                                                         |  |                                                                                                                                             |  |    
|ITEM 1.                                                        |  | BUSINESS                                                                                                                                    |  |    
|                                                               |  | Independence Community Bank Corp.                                                                                                           |  | 1  
|                                                               |  | Independence Community Bank                                                                                                                 |  | 1  
|                                                               |  | Change in Fiscal Year End                                                                                                                   |  | 2  
|                                                               |  | Market Area and Competition                                                                                                                 |  | 2  
|                                                               |  | Forward Looking Information                                                                                                                 |  | 4  
|                                                               |  | Available Information                                                                                                                       |  | 4  
|                                                               |  | Lending Activities                                                                                                                          |  | 4  
|                                                               |  | Asset Quality                                                                                                                               |  | 17 
|                                                               |  | Investment Activities                                                                                                                       |  | 23 
|                                                               |  | Sources of Funds                                                                                                                            |  | 27 
|                                                               |  | Employees                                                                                                                                   |  | 31 
|                                                               |  | Subsidiaries                                                                                                                                |  | 31 
|                                                               |  | Regulation                                                                                                                                  |  | 33 
|                                                               |  | Taxation                                                                                                                                    |  | 42 
|ITEM 1A.                                                       |  | Risk Factors                                                                                                                                |  | 44 
|ITEM 1B.                                                       |  | Unresolved Staff Comments                                                                                                                   |  | 47 
|ITEM 2.                                                        |  | Properties                                                                                                                                  |  | 48 
|ITEM 3.                                                        |  | Legal Proceedings                                                                                                                           |  | 48 
|ITEM 4.                                                        |  | Submission of Matters to a Vote of Security
    Holders                                                                                     |  | 48 
|                                                              
|PART II                                                        |  |                                                                                                                                             |  |    
|ITEM 5.                                                        |  | Market for Independence Community Bank
    Corp.s Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities |  | 49 
|ITEM 6.                                                        |  | Selected Financial Data                                                                                                                     |  | 51 
|ITEM 7.                                                        |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                                   |  | 53 
|ITEM 7A.                                                       |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                                              |  | 77 
|ITEM 8.                                                        |  | Financial Statements and Supplementary
    Data                                                                                             |  | 82 
|ITEM 9.                                                        |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                                                    |  | 141
|ITEM 9A.                                                       |  | Controls and Procedures                                                                                                                     |  | 141
|ITEM 9B.                                                       |  | Other Information                                                                                                                           |  | 141
|                                                              
|PART III                                                       |  |                                                                                                                                             |  |    
|ITEM 10.                                                       |  | Directors and Executive Officers of
    Independence Community Bank Corp.                                                                   |  | 142
|ITEM 11.                                                       |  | Executive Compensation                                                                                                                      |  | 148
|ITEM 12.                                                       |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                                          |  | 157
|ITEM 13.                                                       |  | Certain Relationships and Related
    Transactions                                                                                          |  | 160
|ITEM 14.                                                       |  | Principal Accounting Fees and Services                                                                                                      |  | 161
|                                                              
|PART IV                                                        |  |                                                                                                                                             |  |    
|ITEM 15.                                                       |  | Exhibits, Financial Statement Schedules                                                                                                     |  | 162
|SIGNATURES                                                     |  | 165                                                                                                                                        
|EX-10.5: AMENDED AND RESTATED CHANGE IN CONTROL SEVERENCE PLAN
|EX-10.25: CHANGE IN CONTROL SEVERENCE PLAN                    
|EX-10.27: INCENTIVE COMPENSATION PLAN                         
|EX-10.28: EMPLOYMENT AND NONCOMPETITION AGREEMENT             
|EX-23.1: CONSENT OF ERNST & YOUNG LLP                         
|EX-31.1: CERTIFICATION                                        
|EX-31.2: CERTIFICATION                                        
|EX-32.1: CERTIFICATION                                        
|EX-32.2: CERTIFICATION                                        





---



##### Table of Contents






PART I





ITEM 1.      Business





Independence Community Bank Corp.





















Independence Community Bank




1



---



##### Table of Contents










Change in Fiscal Year End







Market Area and Competition






2



---



##### Table of Contents



















3



---



##### Table of Contents






Forward Looking Information


10-K







Available Information


1-800-SEC-0330 10-K.





Lending Activities


General.


4



---



##### Table of Contents









5



---



##### Table of Contents



Loan Portfolio and Loans Available-for-Sale Composition.


|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       |  |       |      |   |   |           |           |  |  |       |      |  
|----------------------------------------------- | --------------------------------------------------- | --------------- | ---------- | --------- | ----- |  | ----- | ------ | ------- | - | ---------- | --------- |  | ------- | ----- | ---- | ----- | - | --------- | --------- |  |  | ----- | ------- | - | ------ | --------- | --------- | ----- |  | ----- | ---- | - | - | --------- | --------- |  |  | ----- | ---- | -
|                                                |                                                     | At December 31, |           
|                                                |                                                     |                 |           
|                                                |                                                     | 2005            |            |           | 2004  |  |       | 2003   |         |   | 2002       |           |  | 2001    |      
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |      
|                                                |                                                     |                 |            | Percent   |       |  |       |        | Percent |   |            |           |  | Percent |       |      |       |   | Percent   |           |  |  |       | Percent |  
|                                                |                                                     |                 |            | of        |       |  |       |        | of      |   |            |           |  | of      |       |      |       |   | of        |           |  |  |       | of      |  
|(Dollars in Thousands)                          |                                                     | Amount          |            |           | Total |  |       | Amount |         |   | Total      |           |  | Amount  |       |      | Total |   |           | Amount    |  |  | Total |         |   | Amount |           |           | Total | 
|                                                |                                                    
|Loan portfolio:                                 |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       |  |       |      |   |   |           |           |  |  |       |     
|Mortgage loans:                                 |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       |  |       |      |   |   |           |           |  |  |       |     
|                                                | Single-family residential and cooperative apartment |                 | $          | 1,932,516 |       |  |       | 15.7   | %       |   | $          | 2,490,062 |  |         |       | 22.1 | %     |   | $         | 284,367   |  |  |       | 4.6     | % |        | $         | 556,279   |       |  |       | 9.5  | % |   | $         | 849,140   |  |  |       | 14.6 | %
|                                                | Multi-family residential
    (1)                    |                 |            | 4,743,308 |       |  |       | 38.6   |         |   |            | 3,800,649 |  |         |       | 33.8 |       |   |           | 2,821,706 |  |  |       | 45.7    |   |        |           | 2,436,666 |       |  |       | 41.9 |   |   |           | 2,731,513 |  |  |       | 46.5 |  
|                                                | Commercial real estate                              |                 |            | 3,687,226 |       |  |       | 30.0   |         |   |            | 3,034,254 |  |         |       | 27.0 |       |   |           | 1,612,711 |  |  |       | 26.2    |   |        |           | 1,312,760 |       |  |       | 22.6 |   |   |           | 1,019,379 |  |  |       | 17.3 |  
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Total principal balance  mortgage loans        |                                                     |                 | 10,363,050 |           |       |  | 84.3  |        |         |   | 9,324,965  |           |  |         | 82.9  |      |       |   | 4,718,784 |           |  |  | 76.5  |         |   |        | 4,305,705 |           |       |  | 74.0  |      |   |   | 4,600,032 |           |  |  | 78.4  |     
|                                                | Less net deferred fees                              |                 |            | 10,753    |       |  |       | 0.1    |         |   |            | 9,875     |  |         |       | 0.1  |       |   |           | 4,396     |  |  |       | 0.1     |   |        |           | 7,665     |       |  |       | 0.1  |   |   |           | 11,198    |  |  |       | 0.2  |  
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Total mortgage loans on real estate             |                                                     |                 | 10,352,297 |           |       |  | 84.2  |        |         |   | 9,315,090  |           |  |         | 82.8  |      |       |   | 4,714,388 |           |  |  | 76.4  |         |   |        | 4,298,040 |           |       |  | 73.9  |      |   |   | 4,588,834 |           |  |  | 78.2  |     
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Commercial business loans, net of deferred fees |                                                     |                 | 977,022    |           |       |  | 7.9   |        |         |   | 809,392    |           |  |         | 7.2   |      |       |   | 606,204   |           |  |  | 9.8   |         |   |        | 598,267   |           |       |  | 10.3  |      |   |   | 665,829   |           |  |  | 11.3  |     
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Other loans:                                    |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       |  |       |      |   |   |           |           |  |  |       |     
|                                                | Mortgage warehouse lines of credit                  |                 |            | 453,541   |       |  |       | 3.7    |         |   |            | 659,942   |  |         |       | 5.9  |       |   |           | 527,254   |  |  |       | 8.5     |   |        |           | 692,434   |       |  |       | 11.9 |   |   |           | 446,542   |  |  |       | 7.6  |  
|                                                | Home equity loans and lines of credit               |                 |            | 481,597   |       |  |       | 3.9    |         |   |            | 416,351   |  |         |       | 3.7  |       |   |           | 296,986   |  |  |       | 4.8     |   |        |           | 201,952   |       |  |       | 3.5  |   |   |           | 141,905   |  |  |       | 2.4  |  
|                                                | Consumer and other loans                            |                 |            | 35,913    |       |  |       | 0.3    |         |   |            | 47,817    |  |         |       | 0.4  |       |   |           | 27,538    |  |  |       | 0.5     |   |        |           | 26,971    |       |  |       | 0.4  |   |   |           | 32,002    |  |  |       | 0.5  |  
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Total principal balance  other loans           |                                                     |                 | 971,051    |           |       |  | 7.9   |        |         |   | 1,124,110  |           |  |         | 10.0  |      |       |   | 851,778   |           |  |  | 13.8  |         |   |        | 921,357   |           |       |  | 15.8  |      |   |   | 620,449   |           |  |  | 10.5  |     
|                                                | Less unearned discounts and deferred fees           |                 |            |          |       |  |       | 0.0    |         |   |            |          |  |         |       | 0.0  |       |   |           | 139       |  |  |       | 0.0     |   |        |           | 291       |       |  |       | 0.0  |   |   |           | 677       |  |  |       | 0.0  |  
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Total other loans                               |                                                     |                 | 971,051    |           |       |  | 7.9   |        |         |   | 1,124,110  |           |  |         | 10.0  |      |       |   | 851,639   |           |  |  | 13.8  |         |   |        | 921,066   |           |       |  | 15.8  |      |   |   | 619,772   |           |  |  | 10.5  |     
|Total loans receivable                          |                                                     |                 | 12,300,370 |           |       |  | 100.0 | %      |         |   | 11,248,592 |           |  |         | 100.0 | %    |       |   | 6,172,231 |           |  |  | 100.0 | %       |   |        | 5,817,373 |           |       |  | 100.0 | %    |   |   | 5,874,435 |           |  |  | 100.0 | %   
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Less allowance for loan losses                  |                                                     |                 | 101,467    |           |       |  |       |        |         |   | 101,435    |           |  |         |       |      |       |   | 79,503    |           |  |  |       |         |   |        | 80,547    |           |       |  |       |      |   |   | 78,239    |           |  |  |       |     
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Loans receivable, net                           |                                                     | $               | 12,198,903 |           |       |  |       |        |         | $ | 11,147,157 |           |  |         |       |      |       | $ | 6,092,728 |           |  |  |       |         |   | $      | 5,736,826 |           |       |  |       |      |   | $ | 5,796,196 |           |  |  |       |     
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Loans available- for-sale:                      |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       |  |       |      |   |   |           |           |  |  |       |     
|                                                | Single-family residential                           |                 | $          | 4,172     |       |  |       |        |         |   | $          | 74,121    |  |         |       |      |       |   | $         | 2,687     |  |  |       |         |   |        | $         | 7,576     |       |  |       |      |   |   | $         | 3,696     |  |  |       |      |  
|                                                | Multi-family residential                            |                 |            | 17,900    |       |  |       |        |         |   |            | 22,550    |  |         |       |      |       |   |           | 3,235     |  |  |       |         |   |        |           | 106,803   |       |  |       |      |   |   |           |          |  |  |       |      |  
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 
|Total loans available- for-sale                 |                                                     | $               | 22,072     |           |       |  |       |        |         | $ | 96,671     |           |  |         |       |      |       | $ | 5,922     |           |  |  |       |         |   | $      | 114,379   |           |       |  |       |      |   | $ | 3,696     |           |  |  |       |     
|                                                |                                                     |                 |            |           |       |  |       |        |         |   |            |           |  |         |       |      |       |   |           |           |  |  |       |         |   |        |           |           |       | 






|    |                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes loans secured by mixed-use (combined residential and
    commercial use) properties. At December 31, 2005 and 2004,
    such loans totaled $2.18 billion and $1.59 billion,
    respectively.

6



---



##### Table of Contents



Contractual Principal Repayments and Interest Rates.


|                                 |                                                            |                                                                      |         |           |            |  |         |         |         |  |         |         |         |      |        |         |           |  |        |           |         |  |            |           |           |  |        |         |           |  |        |           |           | 
|-------------------------------- | ---------------------------------------------------------- | -------------------------------------------------------------------- | ------- | --------- | ---------- |  | ------- | ------- | ------- |  | ------- | ------- | ------- | ---- | ------ | ------- | --------- |  | ------ | --------- | ------- |  | ---------- | --------- | --------- |  | ------ | ------- | --------- |  | ------ | --------- | --------- | 
|                                 |                                                            | Principal Repayments Contractually Due in Year(s) Ended December 31, |        
|                                 |                                                            |                                                                      |        
|                                 |                                                            | Total at                                                             |         |           |           
|                                 |                                                            | December 31,                                                         |         |           |           
|(In Thousands)                   |                                                            | 2005                                                                 |         |           | 2006       |  |         | 2007    |         |  | 2008    |         |         | 2009 |        |         | 2010-2015 |  |        | 2016-2021 |         |  | Thereafter |          
|                                 |                                                           
|Mortgage loans:                  |                                                            |                                                                      |         |           |            |  |         |         |         |  |         |         |         |      |        |         |           |  |        |           |         |  |            |           |           |  |        |         |           |  |        |          
|                                 | Single-family residential and cooperative
    apartment(1) |                                                                      | $       | 1,893,562 |            |  | $       | 7,870   |         |  | $       | 3,119   |         |      | $      | 5,744   |           |  | $      | 10,227    |         |  | $          | 109,409   |           |  | $      | 274,393 |           |  | $      | 1,482,800 |          
|                                 | Multi-family
    residential(2)(3)                         |                                                                      |         | 4,742,034 |            |  |         | 40,073  |         |  |         | 103,466 |         |      |        | 163,160 |           |  |        | 460,578   |         |  |            | 3,093,541 |           |  |        | 847,236 |           |  |        | 33,980    |          
|                                 | Commercial real
    estate(3)                              |                                                                      |         | 3,687,226 |            |  |         | 153,824 |         |  |         | 134,522 |         |      |        | 129,127 |           |  |        | 271,681   |         |  |            | 2,174,027 |           |  |        | 533,598 |           |  |        | 290,447   |          
|Commercial business
    loans(4) |                                                            |                                                                      | 982,225 |           |            |  | 293,047 |         |         |  | 110,662 |         |         |      | 53,224 |         |           |  | 78,319 |           |         |  | 316,115    |           |           |  | 79,371 |         |           |  | 51,487 |          
|Other loans:                     |                                                            |                                                                      |         |           |            |  |         |         |         |  |         |         |         |      |        |         |           |  |        |           |         |  |            |           |           |  |        |         |           |  |        |          
|                                 | Mortgage warehouse lines of credit                         |                                                                      |         | 453,541   |            |  |         | 453,541 |         |  |         |        |         |      |        |        |           |  |        |          |         |  |            |          |           |  |        |        |           |  |        |          |          
|                                 | Consumer and other
    loans(5)                            |                                                                      |         | 517,510   |            |  |         | 18,716  |         |  |         | 7,158   |         |      |        | 11,643  |           |  |        | 23,205    |         |  |            | 263,981   |           |  |        | 166,708 |           |  |        | 26,099    |          
|                                 |                                                            |                                                                      |         |           |            |  |         |         |         |  |         |         |         |      |        |         |           |  |        |           |         |  |            |          
|                                 |                                                            | Total(6)                                                             |         | $         | 12,276,098 |  |         | $       | 967,071 |  |         | $       | 358,927 |      |        | $       | 362,898   |  |        | $         | 844,010 |  |            | $         | 5,957,073 |  |        | $       | 1,901,306 |  |        | $         | 1,884,813 | 
|                                 |                                                            |                                                                      |         |           |            |  |         |         |         |  |         |         |         |      |        |         |           |  |        |           |         |  |            |          






|    |                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Does not include $39.0 million of single-family residential
    loans serviced by others.                                                                                                                            
|   
|(2) | Does not include $1.3 million of multi-family residential
    loans serviced by others.                                                                                                                              
|   
|(3) | Multi-family residential and commercial real estate loans are
    generally originated with a term to maturity of five to seven
    years and may be extended by the borrower for an additional
    five-year period.
|   
|(4) | Does not include $5.2 million of deferred fees.                                                                                                                                                                      
|   
|(5) | Includes home equity loans and lines of credit, FHA and
    conventional home improvement loans, automobile loans, passbook
    loans and secured and unsecured personal loans.                                      
|   
|(6) | Of the $11.31 billion of loan principal repayments
    contractually due after December 31, 2006,
    $9.09 billion have fixed rates of interest and
    $2.22 billion have adjustable rates of interest.            

Loan Originations, Purchases, Sales and Servicing.






7



---



##### Table of Contents



















8



---



##### Table of Contents













9



---



##### Table of Contents



Loan Activity. available-for


|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |            |   |            |            |            | 
|------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | ---------- | --------- | ---------- | - | ---------- | ---------- | ---------- | - | ---------- | ---------- | ---------- | 
|                                                                                                  |                                                                         | Year Ended December 31,                                                                     |           
|                                                                                                  |                                                                         |                                                                                             |           
|(In Thousands)                                                                                    |                                                                         | 2005                                                                                        |            |           | 2004       |   |            | 2003       |           
|                                                                                                  |                                                                        
|Total principal balance of loans and loans available-for-sale
    held at the beginning of period |                                                                         | $                                                                                           | 11,360,818 |           |            | $ | 6,188,498  |            |            | $ | 5,944,961  |           
|Acquired from SIB acquisition                                                                     |                                                                         |                                                                                             |           |           |            |   | 3,856,856  |            |            |   |           |           
|Originations of loans for portfolio:                                                              |                                                                         |                                                                                             |            |           |            |   |            |            |            |   |            |           
|                                                                                                  | Single-family residential and cooperative apartment                     |                                                                                             |            | 13,013    |            |   |            | 143,386    |            |   |            | 13,710     |           
|                                                                                                  | Multi-family residential                                                |                                                                                             |            | 1,626,639 |            |   |            | 2,419,918  |            |   |            | 1,131,460  |           
|                                                                                                  | Commercial real estate                                                  |                                                                                             |            | 1,202,280 |            |   |            | 1,474,481  |            |   |            | 651,862    |           
|                                                                                                  | Commercial business loans                                               |                                                                                             |            | 603,808   |            |   |            | 375,987    |            |   |            | 289,930    |           
|                                                                                                  | Mortgage warehouse lines of
    credit(1)                               |                                                                                             |            | 9,977,225 |            |   |            | 10,187,771 |            |   |            | 10,291,152 |           
|                                                                                                  | Consumer(2)                                                             |                                                                                             |            | 272,434   |            |   |            | 229,342    |            |   |            | 239,165    |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total originations for portfolio                                                            |            |           | 13,695,399 |   |            |            | 14,830,885 |   |            |            | 12,617,279 | 
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|Originations of loans for sale:                                                                   |                                                                         |                                                                                             |            |           |            |   |            |            |            |   |            |           
|                                                                                                  | Single-family residential                                               |                                                                                             |            | 83,323    |            |   |            | 122,813    |            |   |            | 172,459    |           
|                                                                                                  | Multi-family residential                                                |                                                                                             |            | 1,177,609 |            |   |            | 1,141,099  |            |   |            | 1,621,584  |           
|                                                                                                  | Commercial business loans                                               |                                                                                             |            | 3,676     |            |   |            | 3,377      |            |   |            | 4,066      |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total originations of loans for sale                                                        |            |           | 1,264,608  |   |            |            | 1,267,289  |   |            |            | 1,798,109  | 
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|Purchases of loans:                                                                               |                                                                         |                                                                                             |            |           |            |   |            |            |            |   |            |           
|                                                                                                  | Mortgage warehouse lines of credit                                      |                                                                                             |            |          |            |   |            |           |            |   |            | 76,334     |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total purchases                                                                             |            |           |           |   |            |            |           |   |            |            | 76,334     | 
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total originations and purchases                                                            |            |           | 14,960,007 |   |            |            | 16,098,174 |   |            |            | 14,491,722 | 
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|Loans sold:                                                                                       |                                                                         |                                                                                             |            |           |            |   |            |            |            |   |            |           
|                                                                                                  | Single-family residential                                               |                                                                                             |            | 95,851    |            |   |            | 348,935    |            |   |            | 174,208    |           
|                                                                                                  | Multi-family residential                                                |                                                                                             |            | 1,570,602 |            |   |            | 2,074,725  |            |   |            | 1,727,329  |           
|                                                                                                  | Commercial business loans                                               |                                                                                             |            | 3,676     |            |   |            | 3,373      |            |   |            | 4,066      |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total sold                                                                                  |            |           | 1,670,129  |   |            |            | 2,427,033  |   |            |            | 1,905,603  | 
|Repayments(3)                                                                                     |                                                                         |                                                                                             | 12,312,298 |           |            |   | 12,355,677 |            |            |   | 12,342,582 |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|Net loan activity                                                                                 |                                                                         |                                                                                             | 977,580    |           |            |   | 5,172,320  |            |            |   | 243,537    |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total principal balance of loans and loans available-for-sale
    held at the end of period |            |           | 12,338,398 |   |            |            | 11,360,818 |   |            |            | 6,188,498  | 
|Less:                                                                                             |                                                                         |                                                                                             |            |           |            |   |            |            |            |   |            |           
|                                                                                                  | Discounts on loans purchased and net deferred fees at end of
    period |                                                                                             |            | 15,956    |            |   |            | 15,555     |            |   |            | 10,345     |           
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           
|                                                                                                  |                                                                         | Total loans and loans available-for-sale at end of period                                   |            | $         | 12,322,442 |   |            | $          | 11,345,263 |   |            | $          | 6,178,153  | 
|                                                                                                  |                                                                         |                                                                                             |            |           |            |   |            |            |           






|    |                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents advances on the lines of credit.                                                                                                                                                                                        
|   
|(2) | Includes home equity loans and lines of credit, FHA and
    conventional home improvement loans, automobile loans, passbook
    loans and secured and unsecured personal loans.                                                    
|   
|(3) | Includes repayment of mortgage warehouse line advances
    ($10.18 billion for mortgage warehouse lines of credit
    during the year ended December 31, 2005) and loans
    charged-off or transferred to other real estate owned.

Multi-Family Residential and Commercial Real Estate
Lending.


10



---



##### Table of Contents







|                            |                          |                              |   |         |             |  |   |             |         |  |   |        |        | 
|--------------------------- | ------------------------ | ---------------------------- | - | ------- | ----------- |  | - | ----------- | ------- |  | - | ------ | ------ | 
|                            |                          | Year Ended December 31, 2005 |  
|                            |                          |                              |  
|                            |                          | Baltimore-                   |   |         |            
|                            |                          | Washington                   |   |         | Florida     |  |   | Chicago     |        
|(Dollars in Thousands)      |                          | Market Area                  |   |         | Market Area |  |   | Market Area |        
|                            |                         
|Originations for portfolio: |                          |                              |   |         |             |  |   |             |         |  |   |       
|                            | Multi-family residential |                              | $ | 196,747 |             |  | $ | 186,444     |         |  | $ | 38,910 |       
|                            | Commercial real estate   |                              |   | 38,764  |             |  |   | 78,860      |         |  |   | 3,769  |       
|Originations for sale:      |                          |                              |   |         |             |  |   |             |         |  |   |       
|                            | Multi-family residential |                              |   | 248,355 |             |  |   | 262,365     |         |  |   | 11,910 |       
|                            |                          |                              |   |         |             |  |   |             |        
|                            |                          | Total originations           |   | $       | 483,866     |  |   | $           | 527,669 |  |   | $      | 54,589 | 
|                            |                          |                              |   |         |             |  |   |             |        

|                            |                          |                              |   |         |             |  |   |             |         |  |   |   |   | 
|--------------------------- | ------------------------ | ---------------------------- | - | ------- | ----------- |  | - | ----------- | ------- |  | - | - | - | 
|                            |                          | Year Ended December 31, 2004
|                            |                          |                             
|                            |                          | Baltimore-                   |   |         |            
|                            |                          | Washington                   |   |         | Florida     |  |   | Chicago    
|(Dollars in Thousands)      |                          | Market Area                  |   |         | Market Area |  |   | Market Area
|                           
|Originations for portfolio: |                          |                              |   |         |             |  |   |             |         |  |   |  
|                            | Multi-family residential |                              | $ | 126,696 |             |  | $ | 88,748      |         |  | $ |  |  
|                            | Commercial real estate   |                              |   | 66,965  |             |  |   | 113,223     |         |  |   |  |  
|Originations for sale:      |                          |                              |   |         |             |  |   |             |         |  |   |  
|                            | Multi-family residential |                              |   | 140,860 |             |  |   | 82,861      |         |  |   |  |  
|                            |                          |                              |   |         |             |  |   |             |        
|                            |                          | Total originations           |   | $       | 334,521     |  |   | $           | 284,832 |  |   | $ |  | 
|                            |                          |                              |   |         |             |  |   |             |        







11



---



##### Table of Contents











12



---



##### Table of Contents



















13



---



##### Table of Contents





Single-Family Residential and Cooperative Apartment
Lending.








Commercial Business Lending Activities.




14



---



##### Table of Contents







Mortgage Warehouse Lines of Credit.






Consumer Lending Activities.


15



---



##### Table of Contents







Loan Approval Authority and Underwriting.










16



---



##### Table of Contents



Loan Origination and Loan Fees.







Asset Quality






17



---



##### Table of Contents



Delinquent loans.


|                                       |                                                     |                      |    |           |                      |   |       |                      |           |  |                 |    |  |            |        |       |                 |  |           |          |  |   |          |           |  |          |     |    |           |   |        |          |  |  |          |    |  |   |        |        |  |  |     |    |  |   |        |       | 
|-------------------------------------- | --------------------------------------------------- | -------------------- | -- | --------- | -------------------- | - | ----- | -------------------- | --------- |  | --------------- | -- |  | ---------- | ------ | ----- | --------------- |  | --------- | -------- |  | - | -------- | --------- |  | -------- | --- | -- | --------- | - | ------ | -------- |  |  | -------- | -- |  | - | ------ | ------ |  |  | --- | -- |  | - | ------ | ----- | 
|                                       |                                                     | At December 31, 2005 |    |           | At December 31, 2004 |   |       | At December 31, 2003 |          
|                                       |                                                     |                      |    |           |                      |   |       |                      |          
|                                       |                                                     | 60-89 Days           |    |           | 90 Days or More      |   |       | 60-89 Days           |           |  | 90 Days or More |    |  | 60-89 Days |        |       | 90 Days or More | 
|                                       |                                                     |                      |    |           |                      |   |       |                      |           |  |                 |    |  |            |        |       |                 | 
|                                       |                                                     |                      |    | Principal |                      |   |       |                      | Principal |  |                 |    |  | Principal  |        |       |                 |  | Principal |          |  |   |          | Principal |  |          |     |    | Principal |  
|                                       |                                                     | Number               |    |           | Balance              |   |       | Number               |           |  | Balance         |    |  | Number     |        |       | Balance         |  |           | Number   |  |   | Balance  |           |  | Number   |     |    | Balance   |   |        | Number   |  |  | Balance  |   
|(Dollars in Thousands)                 |                                                     | of Loans             |    |           | of Loans             |   |       | of Loans             |           |  | of Loans        |    |  | of Loans   |        |       | of Loans        |  |           | of Loans |  |   | of Loans |           |  | of Loans |     |    | of Loans  |   |        | of Loans |  |  | of Loans |   
|                                       |                                                    
|Mortgage loans:                        |                                                     |                      |    |           |                      |   |       |                      |           |  |                 |    |  |            |        |       |                 |  |           |          |  |   |          |           |  |          |     |    |           |   |        |          |  |  |          |    |  |   |        |        |  |  |     |    |  |   |        |      
|                                       | Single-family residential and cooperative apartment |                      |    | 13        |                      |   | $     | 2,824                |           |  |                 | 33 |  |            | $      | 3,175 |                 |  |           | 52       |  |   | $        | 7,855     |  |          |     | 67 |           |   | $      | 7,495    |  |  |          | 18 |  |   | $      | 1,217  |  |  |     | 20 |  |   | $      | 1,526 | 
|                                       | Multi-family residential                            |                      |    | 2         |                      |   |       | 438                  |           |  |                 | 4  |  |            |        | 184   |                 |  |           | 3        |  |   |          | 508       |  |          |     | 6  |           |   |        | 1,083    |  |  |          | 4  |  |   |        | 936    |  |  |     | 4  |  |   |        | 673   | 
|                                       | Commercial real estate                              |                      |    | 4         |                      |   |       | 742                  |           |  |                 | 22 |  |            |        | 6,869 |                 |  |           | 7        |  |   |          | 4,041     |  |          |     | 27 |           |   |        | 10,005   |  |  |          | 2  |  |   |        | 14,400 |  |  |     | 17 |  |   |        | 7,600 | 
|Commercial business loans              |                                                     |                      | 7  |           |                      |   | 4,177 |                      |           |  | 36              |    |  |            | 7,292  |       |                 |  | 22        |          |  |   | 7,637    |           |  |          | 52  |    |           |   | 17,895 |          |  |  | 2        |    |  |   | 285    |        |  |  | 40  |    |  |   | 10,392 |      
|Consumer and other
    loans(1)        |                                                     |                      | 24 |           |                      |   | 83    |                      |           |  | 26              |    |  |            | 314    |       |                 |  | 34        |          |  |   | 143      |           |  |          | 34  |    |           |   | 327    |          |  |  | 34       |    |  |   | 138    |        |  |  | 42  |    |  |   | 880    |      
|                                       |                                                     |                      |    |           |                      |   |       |                      |           |  |                 |    |  |            |        |       |                 |  |           |          |  |   |          |           |  |          |     |    |           |   |        |          |  |  |          |   
|Total                                  |                                                     |                      | 50 |           |                      | $ | 8,264 |                      |           |  | 121             |    |  | $          | 17,834 |       |                 |  | 118       |          |  | $ | 20,184   |           |  |          | 186 |    |           | $ | 36,805 |          |  |  | 60       |    |  | $ | 16,976 |        |  |  | 123 |    |  | $ | 21,071 |      
|                                       |                                                     |                      |    |           |                      |   |       |                      |           |  |                 |    |  |            |        |       |                 |  |           |          |  |   |          |           |  |          |     |    |           |   |        |          |  |  |          |   
|Delinquent loans to total
    loans(2) |                                                     |                      |    |           |                      |   | 0.07  | %                    |           |  |                 |    |  |            | 0.14   | %     |                 |  |           |          |  |   | 0.18     | %         |  |          |     |    |           |   | 0.33   | %        |  |  |          |    |  |   | 0.28   | %      |  |  |     |    |  |   | 0.34   | %    
|                                       |                                                     |                      |    |           |                      |   |       |                      |           |  |                 |    |  |            |        |       |                 |  |           |          |  |   |          |           |  |          |     |    |           |   |        |          |  |  |          |   






|    |                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes home equity loans and lines of credit, FHA and
    conventional home improvement loans, automobile loans, passbook
    loans, piano loans, overdraft checking loans and secured and
    unsecured personal loans.
|   
|(2) | Total loans includes loans receivable less deferred loan fees
    and unamortized discounts, net.                                                                                                                         

18



---



##### Table of Contents



Non-Performing Assets.


|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       |        | 
|-------------------------------------------------------------- | ----------------------------- | --------------------------------------------------- | ----------------------------- | ------ | ----- | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ------ | ----- | ------ | 
|                                                               |                               | At December 31,                                     |                              
|                                                               |                               |                                                     |                              
|(Dollars in Thousands)                                         |                               | 2005                                                |                               |        | 2004  |        |        | 2003   |        |        | 2002   |        |        | 2001   |       
|                                                               |                              
|Non-accrual loans:                                             |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                               | Mortgage loans:               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |      
|                                                               |                               | Single-family residential and cooperative apartment |                               | $      | 3,175 |        |        | $      | 7,495  |        |        | $      | 1,526  |        |        | $      | 3,041  |        |        | $      | 4,172 |       
|                                                               |                               | Multi-family residential                            |                               |        | 792   |        |        |        | 1,394  |        |        |        | 1,131  |        |        |        | 1,136  |        |        |        | 2,312 |       
|                                                               |                               | Commercial real estate                              |                               |        | 8,351 |        |        |        | 12,517 |        |        |        | 20,061 |        |        |        | 11,738 |        |        |        | 6,780 |       
|                                                               | Commercial business loans     |                                                     |                               | 15,707 |       |        |        | 22,002 |        |        |        | 12,244 |        |        |        | 22,495 |        |        |        | 13,313 |      
|                                                               | Other
    loans(1)            |                                                     |                               | 300    |       |        |        | 236    |        |        |        | 840    |        |        |        | 568    |        |        |        | 1,225  |      
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|                                                               |                               |                                                     | Total non-accrual loans       |        |       | 28,325 |        |        |        | 43,644 |        |        |        | 35,802 |        |        |        | 38,978 |        |        |       | 27,802 | 
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|Loans past due 90 days or more as to:                          |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |        |        |        |        |        |       
|                                                               | Interest and accruing         |                                                     |                               | 86     |       |        |        | 117    |        |        |        | 40     |        |        |        | 152    |        |        |        | 130    |      
|                                                               | Principal and
    accruing(2) |                                                     |                               | 8,722  |       |        |        | 5,517  |        |        |        | 742    |        |        |        | 2,482  |        |        |        | 18,089 |      
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|                                                               |                               |                                                     | Total past due accruing loans |        |       | 8,808  |        |        |        | 5,634  |        |        |        | 782    |        |        |        | 2,634  |        |        |       | 18,219 | 
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|Total non-performing loans                                     |                               |                                                     | 37,133                        |        |       |        | 49,278 |        |        |        | 36,584 |        |        |        | 41,612 |        |        |        | 46,021 |       
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|Other real estate owned,
    net(3)                            |                               |                                                     | 1,279                         |        |       |        | 2,512  |        |        |        | 15     |        |        |        | 7      |        |        |        | 130    |       
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|Total non-performing
    assets(4)                             |                               | $                                                   | 38,412                        |        |       | $      | 51,790 |        |        | $      | 36,599 |        |        | $      | 41,619 |        |        | $      | 46,151 |       
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|Restructured loans                                             |                               | $                                                   | 4,045                         |        |       | $      | 4,198  |        |        | $      | 4,345  |        |        | $      | 4,674  |        |        | $      | 4,717  |       
|                                                               |                               |                                                     |                               |        |       |        |        |        |        |        |        |        |        |        |       
|                                                              
|Non-performing loans as a percent of total loans               |                               |                                                     | 0.30                          | %      |       |        | 0.44   | %      |        |        | 0.59   | %      |        |        | 0.72   | %      |        |        | 0.78   | %     
|                                                              
|Non-performing assets as a percent of total assets             |                               |                                                     | 0.20                          | %      |       |        | 0.29   | %      |        |        | 0.38   | %      |        |        | 0.52   | %      |        |        | 0.61   | %     
|                                                              
|Allowance for loan losses as a percent of total loans          |                               |                                                     | 0.82                          | %      |       |        | 0.90   | %      |        |        | 1.29   | %      |        |        | 1.38   | %      |        |        | 1.33   | %     
|                                                              
|Allowance for loan losses as a percent of non-performing loans |                               |                                                     | 273.25                        | %      |       |        | 205.84 | %      |        |        | 217.32 | %      |        |        | 193.57 | %      |        |        | 170.01 | %     






|    |                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists primarily of home equity loans and lines of credit and
    FHA home improvement loans.                                                                                                                
|   
|(2) | Reflects loans that are 90 days or more past maturity which
    continue to make payments on a basis consistent with the
    original repayment schedule.                                                      
|   
|(3) | Net of related valuation allowances.                                                                                                                                                                           
|   
|(4) | Non-performing assets consist of non-performing loans and OREO.
    Non-performing loans consist of (i) non-accrual loans and
    (ii) accruing loans 90 days or more past due as to
    interest or principal.

19



---



##### Table of Contents











Criticized and Classified Assets.




20



---



##### Table of Contents



non-accrual


Allowance for Loan Losses.










21



---



##### Table of Contents











|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |        |       |  |   |        |       | 
|----------------------------------------------------------------------------------------- | --------------------------------------------- | ----------------------- | ------- | ----- | ------------ | - | ------- | ------ |  | ----------- | ------ | ----- |  | ---- | ------ | ----- |  | - | ------ | ----- | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  | Nine Months |       
|                                                                                          |                                               |                         |         | Ended |             
|                                                                                          |                                               | Year Ended December 31, |         |       | December 31, |  
|                                                                                          |                                               |                         |         |       |              |  
|(Dollars in Thousands)                                                                    |                                               | 2005                    |         |       | 2004         |   |         | 2003   |  |             | 2002   |       |  | 2001 |       
|                                                                                          |                                              
|Allowance at beginning of period                                                          |                                               | $                       | 101,435 |       |              | $ | 79,503  |        |  | $           | 80,547 |       |  | $    | 78,239 |       |  | $ | 71,716 |      
|Allowance of acquired institution (SIB)                                                   |                                               |                         |        |       |              |   | 24,069  |        |  |             |       |       |  |      |       |       |  |   |       |      
|Provision:                                                                                |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |        |       |  |   |        |      
|                                                                                          | Mortgage loans                                |                         |         |      |              |   |         | 2,000  |  |             |        | 2,300 |  |      |        | 3,733 |  |   |        | 4,200 | 
|                                                                                          | Commercial business and other
    loans(1)    |                         |         |      |              |   |         |       |  |             |        | 1,200 |  |      |        | 4,267 |  |   |        | 3,675 | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|                                                                                          | Total provision                               |                         |         |      |              |   |         | 2,000  |  |             |        | 3,500 |  |      |        | 8,000 |  |   |        | 7,875 | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|Charge-offs:                                                                              |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |        |       |  |   |        |      
|                                                                                          | Mortgage loans                                |                         |         | 97    |              |   |         | 1,227  |  |             |        | 6,202 |  |      |        | 1,159 |  |   |        | 850   | 
|                                                                                          | Commercial business and other
    loans(1)(2) |                         |         | 2,982 |              |   |         | 10,500 |  |             |        | 1,179 |  |      |        | 7,202 |  |   |        | 1,756 | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|                                                                                          | Total charge-offs                             |                         |         | 3,079 |              |   |         | 11,727 |  |             |        | 7,381 |  |      |        | 8,361 |  |   |        | 2,606 | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|Recoveries:                                                                               |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |        |       |  |   |        |      
|                                                                                          | Mortgage loans                                |                         |         | 455   |              |   |         | 5,775  |  |             |        | 364   |  |      |        | 1,170 |  |   |        | 83    | 
|                                                                                          | Commercial business and other
    loans(1)    |                         |         | 2,656 |              |   |         | 1,815  |  |             |        | 2,473 |  |      |        | 1,499 |  |   |        | 1,171 | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|                                                                                          | Total recoveries                              |                         |         | 3,111 |              |   |         | 7,590  |  |             |        | 2,837 |  |      |        | 2,669 |  |   |        | 1,254 | 
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|Net loans recovered /(charged-off)                                                        |                                               |                         | 32      |       |              |   | (4,137  | )      |  |             | (4,544 | )     |  |      | (5,692 | )     |  |   | (1,352 | )    
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|Allowance at end of period                                                                |                                               | $                       | 101,467 |       |              | $ | 101,435 |        |  | $           | 79,503 |       |  | $    | 80,547 |       |  | $ | 78,239 |      
|                                                                                          |                                               |                         |         |       |              |   |         |        |  |             |        |       |  |      |       
|Net loans charged-off to allowance for loan losses                                        |                                               |                         | N/A     |       |              |   | 4.08    | %      |  |             | 5.72   | %     |  |      | 7.07   | %     |  |   | 1.73   | %    
|Net loans charged-off to average loans outstanding during year                            |                                               |                         | N/A     |       |              |   | 0.04    | %      |  |             | 0.08   | %     |  |      | 0.10   | %     |  |   | 0.02   | %    
|Allowance for possible loan losses as a percent of total loans                            |                                               |                         | 0.82    | %     |              |   | 0.90    | %      |  |             | 1.29   | %     |  |      | 1.38   | %     |  |   | 1.33   | %    
|Allowance for possible loan losses as a percent of total
    non-performing loans
    (3) |                                               |                         | 273.25  | %     |              |   | 205.84  | %      |  |             | 217.32 | %     |  |      | 193.57 | %     |  |   | 170.01 | %    






|    |                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes commercial business loans, mortgage warehouse lines of
    credit, home equity loans and lines of credit, automobile loans
    and secured and unsecured personal loans.
|   
|(2) | Includes a $9.2 million charge-off related to the mortgage
    warehouse line of credit portfolio in 2004.                                                                       
|   
|(3) | Non-performing loans consist of (i) non-accrual loans and
    (ii) accruing loans 90 days or more past due as to
    interest or principal.                                      

22



---



##### Table of Contents





|                                   |  |                 |         |  |            |  |           |           |  |   |            |           |  |           |       |   |            |   |        |           |  |           |            |   |  |           |        |  |            |  |       |   |  |   |        |  |  |  |       |  
|---------------------------------- |  | --------------- | ------- |  | ---------- |  | --------- | --------- |  | - | ---------- | --------- |  | --------- | ----- | - | ---------- | - | ------ | --------- |  | --------- | ---------- | - |  | --------- | ------ |  | ---------- |  | ----- | - |  | - | ------ |  |  |  | ----- | -
|                                   |  | At December 31, |        
|                                   |  |                 |        
|                                   |  | 2005            |         |  | 2004       |  |           | 2003      |  |   | 2002       |           |  | 2001      |      
|                                   |  |                 |         |  |            |  |           |           |  |   |            |           |  |           |      
|                                   |  | Amount of       |         |  |            |  | Amount of |           |  |   |            | Amount of |  |           |       |   | Amount of  |   |        |           |  | Amount of |            |   | 
|(Dollars in Thousands)             |  | Allowance       |         |  | Percent(1) |  |           | Allowance |  |   | Percent(1) |           |  | Allowance |       |   | Percent(1) |   |        | Allowance |  |           | Percent(1) |   |  | Allowance |        |  | Percent(1) | 
|                                   | 
|Mortgage loans                     |  | $               | 77,425  |  |            |  | 84.2      | %         |  | $ | 71,867     |           |  |           | 82.8  | % |            | $ | 56,549 |           |  |           | 76.4       | % |  | $         | 52,087 |  |            |  | 73.9  | % |  | $ | 53,094 |  |  |  | 78.1  | %
|Commercial business loans          |  |                 | 17,729  |  |            |  | 7.9       |           |  |   | 22,191     |           |  |           | 7.2   |   |            |   | 16,974 |           |  |           | 9.8        |   |  |           | 22,927 |  |            |  | 10.3  |   |  |   | 18,595 |  |  |  | 11.3  |  
|Mortgage warehouse lines of credit |  |                 | 4,226   |  |            |  | 3.7       |           |  |   | 5,161      |           |  |           | 5.9   |   |            |   | 4,016  |           |  |           | 8.5        |   |  |           | 3,516  |  |            |  | 11.9  |   |  |   | 4,349  |  |  |  | 7.6   |  
|Other
    loans(2)                 |  |                 | 2,087   |  |            |  | 4.2       |           |  |   | 2,216      |           |  |           | 4.1   |   |            |   | 1,964  |           |  |           | 5.3        |   |  |           | 2,017  |  |            |  | 3.9   |   |  |   | 2,201  |  |  |  | 3.0   |  
|                                   |  |                 |         |  |            |  |           |           |  |   |            |           |  |           |       |   |            |   |        |           |  |           |            |   |  |           |        |  |            | 
|Total                              |  | $               | 101,467 |  |            |  | 100.0     | %         |  | $ | 101,435    |           |  |           | 100.0 | % |            | $ | 79,503 |           |  |           | 100.0      | % |  | $         | 80,547 |  |            |  | 100.0 | % |  | $ | 78,239 |  |  |  | 100.0 | %
|                                   |  |                 |         |  |            |  |           |           |  |   |            |           |  |           |       |   |            |   |        |           |  |           |            |   |  |           |        |  |            | 






|    |                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Percent of loans in each category to total loans.                                                                                                                            
|   
|(2) | Includes home equity loans and lines of credit, FHA home
    improvement loans, student loans, automobile loans, passbook
    loans and secured and unsecured personal loans.

Environmental Issues









Investment Activities


Investment Policies.




23



---



##### Table of Contents



Mortgage-Related Securities.










24



---



##### Table of Contents







|                                                                                          |  |                         |           |       |      |   |           |       |  |   |            |  
|----------------------------------------------------------------------------------------- |  | ----------------------- | --------- | ----- | ---- | - | --------- | ----- |  | - | ---------- | -
|                                                                                          |  | Year Ended December 31, |          
|                                                                                          |  |                         |          
|(In Thousands)                                                                            |  | 2005                    |           |       | 2004 |   |           | 2003  | 
|                                                                                          | 
|Mortgage-related securities at beginning of period                                        |  | $                       | 3,479,482 |       |      | $ | 2,211,755 |       |  | $ | 1,038,742  |  
|Acquired from SIB acquisition                                                             |  |                         |          |       |      |   | 1,620,015 |       |  |   |           |  
|Purchases                                                                                 |  |                         | 910,503   |       |      |   | 840,250   |       |  |   | 2,823,123  |  
|Sales                                                                                     |  |                         | (417,551  | ) (1) |      |   | (158,340  | ) (1) |  |   |           |  
|Repayments, prepayments and maturities                                                    |  |                         | (734,641  | )     |      |   | (997,105  | )     |  |   | (1,627,540 | )
|Amortization of premiums                                                                  |  |                         | (16,902   | )     |      |   | (19,388   | )     |  |   | (26,216    | )
|Accretion of discounts                                                                    |  |                         | 577       |       |      |   | 1,345     |       |  |   | 2,002      |  
|Change in unrealized gains/(losses) on available-for-sale
    mortgage-related securities |  |                         | (65,879   | )     |      |   | (19,050   | )     |  |   | 1,644      |  
|                                                                                          |  |                         |           |       |      |   |           |       | 
|Mortgage-related securities at end of period                                              |  | $                       | 3,155,589 |       |      | $ | 3,479,482 |       |  | $ | 2,211,755  |  
|                                                                                          |  |                         |           |       |      |   |           |       | 






|    |                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company recognized a net gain of $3.3 million and
    $2.9 million on the sale of mortgage-related securities
    during the years ended December 31, 2005 and 2004,
    respectively. No gain or loss was recognized for the year ended
    December 31, 2003.

Investment Securities.


25



---



##### Table of Contents





|                                                                                    |  |                         |          |       |      |   |          |       |  |   |          |      
|----------------------------------------------------------------------------------- |  | ----------------------- | -------- | ----- | ---- | - | -------- | ----- |  | - | -------- | -----
|                                                                                    |  | Year Ended December 31, |         
|                                                                                    |  |                         |         
|(In Thousands)                                                                      |  | 2005                    |          |       | 2004 |   |          | 2003  | 
|                                                                                    | 
|Investment securities at beginning of period                                        |  | $                       | 454,305  |       |      | $ | 296,945  |       |  | $ | 224,908  |      
|Acquired from SIB acquisition                                                       |  |                         |         |       |      |   | 469,947  |       |  |   |         |      
|Purchases                                                                           |  |                         | 188,907  |       |      |   | 186,291  |       |  |   | 225,240  |      
|Sales                                                                               |  |                         | (59,887  | ) (1) |      |   | (155,495 | ) (1) |  |   | (48,410  | ) (1)
|Maturities, calls and repayments                                                    |  |                         | (160,206 | )     |      |   | (332,330 | )     |  |   | (101,535 | )    
|Amortization of premium                                                             |  |                         | (130     | )     |      |   | (726     | )     |  |   | (223     | )    
|Accretion of discounts                                                              |  |                         | 124      |       |      |   | 187      |       |  |   | 128      |      
|Other-than-temporary impairment charge on securities                                |  |                         |         |       |      |   | (12,737  | )     |  |   |         |      
|Change in unrealized gains/(losses) on available-for-sale
    investment securities |  |                         | (4,202   | )     |      |   | 2,223    |       |  |   | (3,163   | )    
|                                                                                    |  |                         |          |       |      |   |          |       | 
|Investment securities at end of period                                              |  | $                       | 418,911  |       |      | $ | 454,305  |       |  | $ | 296,945  |      
|                                                                                    |  |                         |          |       |      |   |          |       | 






|    |                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company recognized net gains of $3.3 million,
    $1.0 million and $0.5 million on the sale of
    investment securities during the years ended December 31, 2005,
    2004 and 2003, respectively.



|                                    |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |         |           |   |           |         |           |   |           |         | 
|----------------------------------- | ---------------------------- | --------------------------------- | --------------------------- | - | ---------- | ------- | --------- | --------- | --------- | ------- | ---------- | - | --------- | --------- | --------- | - | ---------- | ------- | --------- | - | --------- | ------- | --------- | - | --------- | ------- | 
|                                    |                              | At December 31,                   |                            
|                                    |                              |                                   |                            
|                                    |                              | 2005                              |                             |   | 2004       |         |           | 2003      |          
|                                    |                              |                                   |                             |   |            |         |           |           |          
|                                    |                              | Amortized                         |                             |   | Estimated  |         |           | Amortized |           |         | Estimated  |   |           | Amortized |           |   | Estimated  |        
|(In Thousands)                      |                              | Cost                              |                             |   | Fair Value |         |           | Cost      |           |         | Fair Value |   |           | Cost      |           |   | Fair Value |        
|                                    |                             
|Available-for-sale:                 |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |         |           |   |           |         |           |  
|                                    | Investment securities:       |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |         |           |   |           |         |           |   |          
|                                    |                              | U.S. Government and agencies      |                             | $ | 231,716    |         |           | $         | 227,662   |         |            | $ | 212,016   |           |           | $ | 212,068    |         |           | $ | 15,549    |         |           | $ | 15,585    |        
|                                    |                              | Corporate                         |                             |   | 95,342     |         |           |           | 95,441    |         |            |   | 89,093    |           |           |   | 89,381     |         |           |   | 119,013   |         |           |   | 119,575   |        
|                                    |                              | Municipal                         |                             |   | 160        |         |           |           | 161       |         |            |   | 4,630     |           |           |   | 4,866      |         |           |   | 4,282     |         |           |   | 4,590     |        
|                                    |                              | Equity Securities:                |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |         |           |   |           |         |           |   |           |        
|                                    |                              |                                   | Preferred                   |   |            | 94,350  |           |           |           | 95,578  |            |   |           | 146,604   |           |   |            | 146,930 |           |   |           | 158,462 |           |   |           | 155,869 | 
|                                    |                              |                                   | Common                      |   |            | 69      |           |           |           | 69      |            |   |           | 486       |           |   |            | 1,060   |           |   |           | 386     |           |   |           | 1,326   | 
|                                    |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |        
|                                    |                              |                                   | Total investment securities |   |            | 421,637 |           |           |           | 418,911 |            |   |           | 452,829   |           |   |            | 454,305 |           |   |           | 297,692 |           |   |           | 296,945 | 
|                                    |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |        
|                                    | Mortgage-related securities: |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |         |           |   |           |         |           |   |          
|                                    |                              | Fannie Mae                        |                             |   | 442,269    |         |           |           | 435,526   |         |            |   | 449,182   |           |           |   | 451,375    |         |           |   | 142,956   |         |           |   | 146,177   |        
|                                    |                              | GNMA                              |                             |   | 17,545     |         |           |           | 16,729    |         |            |   | 7,259     |           |           |   | 7,563      |         |           |   | 8,981     |         |           |   | 9,655     |        
|                                    |                              | Freddie Mac                       |                             |   | 699,890    |         |           |           | 688,289   |         |            |   | 973,750   |           |           |   | 978,235    |         |           |   | 5,140     |         |           |   | 5,411     |        
|                                    |                              | CMOs                              |                             |   | 2,069,694  |         |           |           | 2,015,045 |         |            |   | 2,057,221 |           |           |   | 2,042,309  |         |           |   | 2,043,558 |         |           |   | 2,050,512 |        
|                                    |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |        
|                                    |                              | Total mortgage-related securities |                             |   | 3,229,398  |         |           |           | 3,155,589 |         |            |   | 3,487,412 |           |           |   | 3,479,482  |         |           |   | 2,200,635 |         |           |   | 2,211,755 |        
|                                    |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |        
|Total securities available-for-sale |                              | $                                 | 3,651,035                   |   |            | $       | 3,574,500 |           |           | $       | 3,940,241  |   |           | $         | 3,933,787 |   |            | $       | 2,498,327 |   |           | $       | 2,508,700 |  
|                                    |                              |                                   |                             |   |            |         |           |           |           |         |            |   |           |           |           |   |            |        

26



---



##### Table of Contents





|                             |                              |                                              |   |          |           |  |  |       |          |   |           |           |           |          |  |      |           |   |          |         |         |  |           |      |      |       |   |        |         |  |  |      |      |   |   |           |           | 
|---------------------------- | ---------------------------- | -------------------------------------------- | - | -------- | --------- |  |  | ----- | -------- | - | --------- | --------- | --------- | -------- |  | ---- | --------- | - | -------- | ------- | ------- |  | --------- | ---- | ---- | ----- | - | ------ | ------- |  |  | ---- | ---- | - | - | --------- | --------- | 
|                             |                              | At December 31, 2005, Contractually Maturing |  
|                             |                              |                                              |  
|                             |                              |                                              |   | Weighted |           |  |  |       | Weighted |   |           |           |           | Weighted |  |      |           |   | Weighted |         |         | 
|                             |                              | Under 1                                      |   |          | Average   |  |  | 1-5   |          |   | Average   |           |           | 6-10     |  |      | Average   |   |          | Over 10 |         |  | Average   |      |      |      
|(Dollars in Thousands)       |                              | Year                                         |   |          | Yield (1) |  |  | Years |          |   | Yield (1) |           |           | Years    |  |      | Yield (1) |   |          | Years   |         |  | Yield (1) |      |      | Total |  
|                             |                             
|Investment securities:       |                              |                                              |   |          |           |  |  |       |          |   |           |           |           |          |  |      |           |   |          |         |         |  |           |      |      |       |   |        |         |  |  |      |      |   |   |          
|                             | U.S. Government and agencies |                                              | $ | 11,080   |           |  |  | 2.53  | %        |   | $         | 30,129    |           |          |  | 4.08 | %         |   | $        | 113,005 |         |  |           | 4.90 | %    |       | $ | 73,448 |         |  |  | 5.01 | %    |   | $ | 227,662   |          
|                             | Corporate                    |                                              |   | 1,700    |           |  |  | 5.62  |          |   |           | 8,244     |           |          |  | 4.56 |           |   |          | 9,862   |         |  |           | 4.46 |      |       |   | 75,635 |         |  |  | 4.67 |      |   |   | 95,441    |          
|                             | Municipal                    |                                              |   |         |           |  |  |      |          |   |           |          |           |          |  |     |           |   |          |        |         |  |           |     |      |       |   | 161    |         |  |  | 6.45 |      |   |   | 161       |          
|Mortgage-related securities: |                              |                                              |   |          |           |  |  |       |          |   |           |           |           |          |  |      |           |   |          |         |         |  |           |      |      |       |   |        |         |  |  |      |      |   |   |          
|                             | Fannie Mae                   |                                              |   | 5,749    |           |  |  | 3.35  |          |   |           | 285,121   |           |          |  | 4.64 |           |   |          | 125,958 |         |  |           | 4.98 |      |       |   | 18,698 |         |  |  | 5.55 |      |   |   | 435,526   |          
|                             | GNMA                         |                                              |   | 3        |           |  |  | 4.28  |          |   |           | 1,527     |           |          |  | 4.48 |           |   |          |        |         |  |           |     |      |       |   | 15,199 |         |  |  | 4.60 |      |   |   | 16,729    |          
|                             | Freddie Mac                  |                                              |   | 5,397    |           |  |  | 5.19  |          |   |           | 637,787   |           |          |  | 4.72 |           |   |          | 34,988  |         |  |           | 4.84 |      |       |   | 10,117 |         |  |  | 5.56 |      |   |   | 688,289   |          
|                             | CMOs                         |                                              |   | 107,204  |           |  |  | 5.01  |          |   |           | 1,659,547 |           |          |  | 4.53 |           |   |          | 223,779 |         |  |           | 4.70 |      |       |   | 24,515 |         |  |  | 5.50 |      |   |   | 2,015,045 |          
|                             |                              |                                              |   |          |           |  |  |       |          |   |           |           |           |          |  |      |           |   |          |         |         |  |           |      |      |       |  
|                             |                              | Total                                        |   | $        | 131,133   |  |  |       | 4.75     | % |           | $         | 2,622,355 |          |  |      | 4.58      | % |          | $       | 507,592 |  |           |      | 4.82 | %     |   | $      | 217,773 |  |  |      | 4.99 | % |   | $         | 3,478,853 | 
|                             |                              |                                              |   |          |           |  |  |       |          |   |           |           |           |          |  |      |           |   |          |         |         |  |           |      |      |       |  






|    |                                                       
|--- | ------------------------------------------------------
|(1) | The weighted average yield is based on amortized cost.




Sources of Funds


General.




Deposits. tm






27



---



##### Table of Contents





















28



---



##### Table of Contents



tm






|                                            |  |                         |            |  |      |   |           |      |  |   |           | 
|------------------------------------------- |  | ----------------------- | ---------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|                                            |  | Year Ended December 31, |           
|                                            |  |                         |           
|(In Thousands)                              |  | 2005                    |            |  | 2004 |   |           | 2003 | 
|                                            | 
|Deposits at beginning of period             |  | $                       | 9,305,064  |  |      | $ | 5,304,097 |      |  | $ | 4,940,060 | 
|Deposits of acquired institution (SI Bank)  |  |                         |           |  |      |   | 3,786,020 |      |  |   |          | 
|Other net increase before interest credited |  |                         | 1,477,352  |  |      |   | 129,588   |      |  |   | 310,780   | 
|Interest credited                           |  |                         | 162,867    |  |      |   | 85,359    |      |  |   | 53,257    | 
|                                            |  |                         |            |  |      |   |           |      | 
|Net increase in deposits                    |  |                         | 1,640,219  |  |      |   | 4,000,967 |      |  |   | 364,037   | 
|                                            |  |                         |            |  |      |   |           |      | 
|Deposits at end of period                   |  | $                       | 10,945,283 |  |      | $ | 9,305,064 |      |  | $ | 5,304,097 | 
|                                            |  |                         |            |  |      |   |           |      | 



|               |  |                 |           |  |      |   |           |      |  |   |           | 
|-------------- |  | --------------- | --------- |  | ---- | - | --------- | ---- |  | - | --------- | 
|               |  | At December 31, |          
|               |  |                 |          
|(In Thousands) |  | 2005            |           |  | 2004 |   |           | 2003 | 
|               | 
|0.01% to 1.49% |  | $               | 476,101   |  |      | $ | 889,289   |      |  | $ | 784,734   | 
|1.50% to 1.99% |  |                 | 29,043    |  |      |   | 253,834   |      |  |   | 51,754    | 
|2.00% to 2.99% |  |                 | 166,995   |  |      |   | 200,353   |      |  |   | 84,664    | 
|3.00% to 3.99% |  |                 | 1,548,185 |  |      |   | 344,084   |      |  |   | 252,363   | 
|4.00% to 4.99% |  |                 | 1,377,977 |  |      |   | 427,794   |      |  |   | 78,809    | 
|5.00% to 5.99% |  |                 | 95,487    |  |      |   | 117,955   |      |  |   | 105,348   | 
|6.00% to 6.99% |  |                 | 12,053    |  |      |   | 27,473    |      |  |   | 19,281    | 
|7.00% to 8.99% |  |                 | 9,753     |  |      |   | 10,633    |      |  |   | 1,949     | 
|               |  |                 |           |  |      |   |           |      | 
|               |  | $               | 3,715,594 |  |      | $ | 2,271,415 |      |  | $ | 1,378,902 | 
|               |  |                 |           |  |      |   |           |      | 

29



---



##### Table of Contents





|               |  |         |           |      |            |   |         |           |  |      |             |  |  |       |         |  |       |   |         |  |  |   |           | 
|-------------- |  | ------- | --------- | ---- | ---------- | - | ------- | --------- |  | ---- | ----------- |  |  | ----- | ------- |  | ----- | - | ------- |  |  | - | --------- | 
|               |  |         |           | Over |            |   | Over    |           |  | Over |             |  |  |       |        
|               |  | Six     |           |      | Six Months |   |         | One Year  |  |      | Two Years   |  |  | Over  |         |  |      
|               |  | Months  |           |      | Through    |   |         | Through   |  |      | Through     |  |  | Three |         |  |      
|(In Thousands) |  | Or Less |           |      | One Year   |   |         | Two Years |  |      | Three Years |  |  | Years |         |  | Total |  
|               | 
|0.01% to 1.49% |  | $       | 360,837   |      |            | $ | 95,826  |           |  | $    | 16,355      |  |  | $     | 2,865   |  |       | $ | 218     |  |  | $ | 476,101   | 
|1.50% to 1.99% |  |         | 6,715     |      |            |   | 1,377   |           |  |      | 20,118      |  |  |       | 831     |  |       |   | 2       |  |  |   | 29,043    | 
|2.00% to 2.99% |  |         | 109,836   |      |            |   | 4,918   |           |  |      | 4,921       |  |  |       | 22,252  |  |       |   | 25,068  |  |  |   | 166,995   | 
|3.00% to 3.99% |  |         | 968,290   |      |            |   | 236,851 |           |  |      | 280,471     |  |  |       | 52,962  |  |       |   | 9,611   |  |  |   | 1,548,185 | 
|4.00% to 4.99% |  |         | 332,269   |      |            |   | 259,050 |           |  |      | 426,131     |  |  |       | 43,000  |  |       |   | 317,527 |  |  |   | 1,377,977 | 
|5.00% to 5.99% |  |         | 26,933    |      |            |   | 5,916   |           |  |      | 49,642      |  |  |       | 84      |  |       |   | 12,912  |  |  |   | 95,487    | 
|6.00% to 6.99% |  |         | 11,721    |      |            |   | 55      |           |  |      | 24          |  |  |       | 232     |  |       |   | 21      |  |  |   | 12,053    | 
|7.00% to 8.99% |  |         |          |      |            |   |        |           |  |      | 8,455       |  |  |       | 1,294   |  |       |   | 4       |  |  |   | 9,753     | 
|               |  |         |           |      |            |   |         |           |  |      |             |  |  |       |         |  |       |  
|Total          |  | $       | 1,816,601 |      |            | $ | 603,993 |           |  | $    | 806,117     |  |  | $     | 123,520 |  |       | $ | 365,363 |  |  | $ | 3,715,594 | 
|               |  |         |           |      |            |   |         |           |  |      |             |  |  |       |         |  |       |  



|                                |  |        |           | 
|------------------------------- |  | ------ | --------- | 
|(In Thousands)                  |  | Amount |          
|                                | 
|3 months or less                |  | $      | 683,382   | 
|Over 3 months through 6 months  |  |        | 327,527   | 
|Over 6 months through 12 months |  |        | 191,122   | 
|Over 12 months                  |  |        | 550,047   | 
|                                |  |        |          
|                                |  | $      | 1,752,078 | 
|                                |  |        |          

Borrowings.






30



---



##### Table of Contents













Trust Activities









Employees







Subsidiaries




Mitchamm Corp.


BNB Capital Trust.




Independence Community Investment Corp.
(ICIC).


31



---



##### Table of Contents





Independence Community Realty Corp.


Renaissance Asset Corporation.


Staten Island Funding Corporation.


Independence Community Insurance Agency, Inc.
(ICIA).


Wiljo Development Corp. (Wiljo).


Broad National Realty Corp. (BNRC).


Broad Horizons Inc.


BNB Investment Corp. (Investment Corp).


SIB Investment Corporation (SIBIC).


Bronatoreo, Inc. (Bronatoreo).


Statewide Financial Services (SFS).


SIB Financial Services Corporation (SIBFSC).


32



---



##### Table of Contents





ICM Capital L.L.C. (ICMC).


SIB Mortgage Corp. (SIBMC).


Independence Community Commercial Reinvestment Corp.
(ICCRC).


ICB Leasing Corp. (Leasing Corp.).





Regulation




The Holding Company


General.


Activities Restrictions.


33



---



##### Table of Contents









Qualified Thrift Lender Test.




34



---



##### Table of Contents





Limitations on Transactions with Affiliates.




Restrictions on Acquisitions.




Federal Securities Laws.


35



---



##### Table of Contents



The Bank


General.


Capital Requirements.






Activities and Investments of New York-Chartered Savings
Banks.


36



---



##### Table of Contents











Activities and Investments of FDIC-Insured State-Chartered
Banks.




37



---



##### Table of Contents





Regulatory Enforcement Authority.




Prompt Corrective Action.




38



---



##### Table of Contents







FDIC Insurance Premiums.












| |   |                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Maintaining basic deposit and municipal account insurance
    coverage at $100,000 but providing for a new basic insurance
    coverage for retirement accounts of $250,000. Insurance coverage
    for basic deposit and retirement accounts could be increased for
    inflation every five years in $10,000 increments beginning in
    2011.
|
| |  | Providing the FDIC with the ability to set the designated
    reserve ratio within a range of between 1.15% and 1.50%, rather
    than maintaining 1.25% at all times regardless of prevailing
    economic conditions.                                                                                                                         
|
| |  | Providing a one-time assessment credit of $4.7 billion to
    banks and savings associations in existence on December 31,
    1996. The institutions qualifying for the credit may use it to
    offset future premiums with certain limitations.                                                                                               
|
| |  | Requiring the payment of dividends of 100% of the amount that
    the insurance fund exceeds 1.5% of the estimated insured
    deposits and the payment of 50% of the amount that the insurance
    fund exceeds 1.35% of the estimated insured deposits. (when the
    reserve is greater than 1.35% but no more than 1.5%).                   
|
| |  | The merger of the SAIF and BIF must occur no later than
    July 1, 2006. Other provisions will become effective within
    90 days of the publication date of the final FDIC regulations
    implementing the legislation.                                                                                                                     

Brokered Deposits.


39



---



##### Table of Contents





Community Investment and Consumer Protection Laws.






Limitations on Dividends.






40



---



##### Table of Contents





Miscellaneous.


Federal Home Loan Bank System.






Federal Reserve System.


Sarbanes-Oxley Act of 2002




41



---



##### Table of Contents














Taxation


Federal Taxation


General.




Taxable Distributions and Recapture.




42



---



##### Table of Contents



Corporate Dividends-Received Deduction.


State and Local
Taxation


New York State and New York City Taxation.








New Jersey State Taxation.


Delaware State Taxation.


43



---



##### Table of Contents






ITEM 1A.      Risk
Factors


10-K, 10-K,




| |                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------
| | If we Fail to Complete the Merger or the Closing of the
    Merger is Significantly Delayed, it may have an Adverse Impact
    on our Business







| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Loan Portfolio Includes Commercial Real Estate,
    Commercial Business and Multi-Family Residential Loans Which
    Have a Generally Higher Risk of Loss Than Single-Family
    Residential Loans





| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Loan Origination Levels Could be Adversely Affected
    if Mortgage Broker Relationship Ceases



44



---



##### Table of Contents







| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Adverse Economic and Business Conditions in Our Market
    Area Could Cause an Increase in Loan Delinquencies and
    Non-performing Assets, Including Loan Charge-offs, Which in Turn
    May Negatively Affect the Companys Income and
    Growth.









| |                                                                                                      
| | -----------------------------------------------------------------------------------------------------
| | Competition With Other Financial Institutions Could
    Adversely Affect our Growth and Profitability









| |                                                  
| | -------------------------------------------------
| | Rising Interest Rates Could Reduce our Net Income





45



---



##### Table of Contents









| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Our Allowance for Loan Losses may be Inadequate, which
    Could Adversely Affect our Earnings







| |                                           
| | ------------------------------------------
| | Our Ability to Pay Dividends is Restricted





| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Stock Value May Suffer from Anti-Takeover Provisions
    That May Impede Potential Takeovers Other than the Pending
    Merger with Sovereign



46



---



##### Table of Contents









| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | We are Subject to Extensive Governmental
    Regulation Which May Affect our Operations





| |                                                               
| | --------------------------------------------------------------
| | Changes in the Value of Goodwill Could Reduce our
    Earnings






ITEM 1B.      Unresolved
Staff Comments




47



---



##### Table of Contents






ITEM
2.      Properties







ITEM 3.      Legal
Proceedings









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




48



---



##### Table of Contents






PART II







|        |                                                                                                                         
|------- | ------------------------------------------------------------------------------------------------------------------------
|ITEM 5. | Market for the Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities









|               |  |                   |       |  |                   |   |       |      |  |   |       |  |  |   |       | 
|-------------- |  | ----------------- | ----- |  | ----------------- | - | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|               |  | Year Ended        |       |  | Year Ended        |  
|               |  | December 31, 2005 |       |  | December 31, 2004 |  
|               |  |                   |       |  |                   |  
|               |  | High              |       |  | Low               |   |       | High |  |   | Low   | 
|               | 
|First Quarter  |  | $                 | 41.98 |  |                   | $ | 38.60 |      |  | $ | 41.41 |  |  | $ | 34.92 | 
|Second Quarter |  |                   | 39.21 |  |                   |   | 35.34 |      |  |   | 40.93 |  |  |   | 35.24 | 
|Third Quarter  |  |                   | 37.56 |  |                   |   | 33.14 |      |  |   | 40.49 |  |  |   | 35.03 | 
|Fourth Quarter |  |                   | 40.10 |  |                   |   | 30.92 |      |  |   | 43.18 |  |  |   | 36.95 | 




|               |  |                   |       |  |                   |   |       |      |  |   |       |  |  |   |       | 
|-------------- |  | ----------------- | ----- |  | ----------------- | - | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|               |  | Year Ended        |       |  | Year Ended        |  
|               |  | December 31, 2005 |       |  | December 31, 2004 |  
|               |  |                   |       |  |                   |  
|Bid            |  | High              |       |  | Low               |   |       | High |  |   | Low   | 
|               | 
|First Quarter  |  | $                 | 42.48 |  |                   | $ | 38.25 |      |  | $ | 41.45 |  |  | $ | 34.70 | 
|Second Quarter |  |                   | 39.46 |  |                   |   | 34.52 |      |  |   | 41.54 |  |  |   | 35.02 | 
|Third Quarter  |  |                   | 37.73 |  |                   |   | 32.93 |      |  |   | 40.65 |  |  |   | 34.82 | 
|Fourth Quarter |  |                   | 40.43 |  |                   |   | 30.66 |      |  |   | 43.35 |  |  |   | 36.54 | 



|               |  |                   |      |  |                   |   |      | 
|-------------- |  | ----------------- | ---- |  | ----------------- | - | ---- | 
|               |  | Year Ended        |      |  | Year Ended        |  
|               |  | December 31, 2005 |      |  | December 31, 2004 |  
|               | 
|First Quarter  |  | $                 | 0.26 |  |                   | $ | 0.22 | 
|Second Quarter |  |                   | 0.27 |  |                   |   | 0.23 | 
|Third Quarter  |  |                   | 0.27 |  |                   |   | 0.24 | 
|Fourth Quarter |  |                   | 0.27 |  |                   |   | 0.25 | 



|               |  |                   |        |  |                   |   |        | 
|-------------- |  | ----------------- | ------ |  | ----------------- | - | ------ | 
|               |  | Year Ended        |        |  | Year Ended        |  
|(In Thousands) |  | December 31, 2005 |        |  | December 31, 2004 |  
|               | 
|First Quarter  |  | $                 | 21,112 |  |                   | $ | 11,159 | 
|Second Quarter |  |                   | 21,691 |  |                   |   | 18,176 | 
|Third Quarter  |  |                   | 21,507 |  |                   |   | 19,222 | 
|Fourth Quarter |  |                   | 21,143 |  |                   |   | 20,266 | 





49



---



##### Table of Contents





|                               |  |              |   |  |               |              |                |  |                |                    |   |  |  |  |           | 
|------------------------------ |  | ------------ | - |  | ------------- | ------------ | -------------- |  | -------------- | ------------------ | - |  |  |  | --------- | 
|                               |  |              |   |  |               | Total Number |                |  |               
|                               |  |              |   |  |               | of Shares    |                |  | Maximum Number |                   
|                               |  |              |   |  |               | Purchased as |                |  | of Remaining   |                   
|                               |  | Total Number |   |  | Average Price |              | Part of a      |  |                | Shares that May Be |  
|                               |  | of Shares    |   |  | Paid per      |              | Publicly       |  |                | Purchased Under    |  
|Period                         |  | Purchased    |   |  | Share         |              | Announced Plan |  |                | the Plan           |  
|                               | 
|October 1  October 31, 2005   |  |              |  |  |               | $            |               |  |                |                    |  |  |  |  | 3,536,027 | 
|November 1  November 30, 2005 |  |              |  |  |               |              |               |  |                |                    |  |  |  |  | 3,536,027 | 
|December 1  December 31, 2005 |  |              |  |  |               |              |               |  |                |                    |  |  |  |  | 3,536,027 | 
|                               |  |              |   |  |               |              |                |  |                |                    |   | 
|Total                          |  |              |  |  |               | $            |               |  |                |                    |  |  |  |  |           | 
|                               |  |              |   |  |               |              |                |  |                |                    |   | 







50



---



##### Table of Contents






ITEM 6.      Selected
Financial Data


|                                               |  |                 |            |  |      |   |            |      |  |   |           |  |  |      |           |  |  |   |           | 
|---------------------------------------------- |  | --------------- | ---------- |  | ---- | - | ---------- | ---- |  | - | --------- |  |  | ---- | --------- |  |  | - | --------- | 
|                                               |  | At December 31, |           
|                                               |  |                 |           
|(In Thousands)                                 |  | 2005            |            |  | 2004 |   |            | 2003 |  |   | 2002      |  |  | 2001 |          
|                                               | 
|Selected Financial Condition Data:             |  |                 |            |  |      |   |            |      |  |   |           |  |  |      |           |  |  |   |           | 
|Total assets                                   |  | $               | 19,083,120 |  |      | $ | 17,753,479 |      |  | $ | 9,546,607 |  |  | $    | 8,023,643 |  |  | $ | 7,624,798 | 
|Cash and cash equivalents                      |  |                 | 1,079,182  |  |      |   | 360,877    |      |  |   | 172,028   |  |  |      | 199,057   |  |  |   | 207,633   | 
|Investment securities available-for-sale       |  |                 | 418,911    |  |      |   | 454,305    |      |  |   | 296,945   |  |  |      | 224,908   |  |  |   | 125,803   | 
|Mortgage-related securities available-for-sale |  |                 | 3,155,589  |  |      |   | 3,479,482  |      |  |   | 2,211,755 |  |  |      | 1,038,742 |  |  |   | 902,191   | 
|Loans available-for-sale                       |  |                 | 22,072     |  |      |   | 96,671     |      |  |   | 5,922     |  |  |      | 114,379   |  |  |   | 3,696     | 
|Loans receivable, net                          |  |                 | 12,198,903 |  |      |   | 11,147,157 |      |  |   | 6,092,728 |  |  |      | 5,736,826 |  |  |   | 5,796,196 | 
|Goodwill(1)                                    |  |                 | 1,185,566  |  |      |   | 1,155,572  |      |  |   | 185,161   |  |  |      | 185,161   |  |  |   | 185,161   | 
|Identifiable intangible assets, net            |  |                 | 67,676     |  |      |   | 79,056     |      |  |   | 190       |  |  |      | 2,046     |  |  |   | 8,981     | 
|Deposits                                       |  |                 | 10,945,283 |  |      |   | 9,305,064  |      |  |   | 5,304,097 |  |  |      | 4,940,060 |  |  |   | 4,794,775 | 
|Borrowings                                     |  |                 | 4,956,729  |  |      |   | 5,511,972  |      |  |   | 2,916,300 |  |  |      | 1,931,550 |  |  |   | 1,682,788 | 
|Subordinated notes                             |  |                 | 397,260    |  |      |   | 396,332    |      |  |   | 148,429   |  |  |      |          |  |  |   |          | 
|Senior notes                                   |  |                 | 247,986    |  |      |   |           |      |  |   |          |  |  |      |          |  |  |   |          | 
|Total stockholders equity                     |  |                 | 2,285,780  |  |      |   | 2,304,043  |      |  |   | 991,111   |  |  |      | 920,268   |  |  |   | 880,533   | 

|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |         |  |  |   |         | 
|--------------------------------------------------- |  | ------------------------------- | ------- | ----- | ------------ | - | ------- | ---- |  | ------------ | ------- |  |  | ---- | ------- |  |  | - | ------- | 
|                                                    |  |                                 |         |       |              |   |         |      |  | For the Nine |        
|                                                    |  |                                 |         |       |              |   |         |      |  | Months       |        
|                                                    |  |                                 |         | Ended |             
|                                                    |  | For the Year Ended December 31, |         |       | December 31, |  
|                                                    |  |                                 |         |       |              |  
|(Dollars In Thousands, Except Per Share Data)       |  | 2005                            |         |       | 2004         |   |         | 2003 |  |              | 2002    |  |  | 2001 |        
|                                                    | 
|Selected Operating Data:                            |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |         |  |  |   |         | 
|Interest income                                     |  | $                               | 837,579 |       |              | $ | 689,408 |      |  | $            | 440,120 |  |  | $    | 485,503 |  |  | $ | 362,206 | 
|Interest expense                                    |  |                                 | 338,714 |       |              |   | 213,915 |      |  |              | 147,375 |  |  |      | 175,579 |  |  |   | 172,626 | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Net interest income                                 |  |                                 | 498,865 |       |              |   | 475,493 |      |  |              | 292,745 |  |  |      | 309,924 |  |  |   | 189,580 | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Provision for loan losses                           |  |                                 |        |       |              |   | 2,000   |      |  |              | 3,500   |  |  |      | 8,000   |  |  |   | 7,875   | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Net interest income after provision for loan losses |  |                                 | 498,865 |       |              |   | 473,493 |      |  |              | 289,245 |  |  |      | 301,924 |  |  |   | 181,705 | 
|Net gain (loss) on loans and securities             |  |                                 | 6,791   |       |              |   | (8,535  | )    |  |              | 765     |  |  |      | 557     |  |  |   | 2,850   | 
|Other non-interest income                           |  |                                 | 118,089 |       |              |   | 130,044 |      |  |              | 111,974 |  |  |      | 74,561  |  |  |   | 41,623  | 
|Amortization of intangible assets                   |  |                                 | 11,380  |       |              |   | 8,268   |      |  |              | 1,855   |  |  |      | 6,971   |  |  |   | 5,761   | 
|Other non-interest expense                          |  |                                 | 286,453 |       |              |   | 262,807 |      |  |              | 186,948 |  |  |      | 178,084 |  |  |   | 109,880 | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Income before provision for income taxes            |  |                                 | 325,912 |       |              |   | 323,927 |      |  |              | 213,181 |  |  |      | 191,987 |  |  |   | 110,537 | 
|Provision for income taxes                          |  |                                 | 112,440 |       |              |   | 111,755 |      |  |              | 76,211  |  |  |      | 69,585  |  |  |   | 40,899  | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Net income                                          |  | $                               | 213,472 |       |              | $ | 212,172 |      |  | $            | 136,970 |  |  | $    | 122,402 |  |  | $ | 69,638  | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Basic earnings per share                            |  | $                               | 2.70    |       |              | $ | 2.96    |      |  | $            | 2.74    |  |  | $    | 2.37    |  |  | $ | 1.33    | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        
|Diluted earnings per share                          |  | $                               | 2.62    |       |              | $ | 2.84    |      |  | $            | 2.60    |  |  | $    | 2.24    |  |  | $ | 1.27    | 
|                                                    |  |                                 |         |       |              |   |         |      |  |              |         |  |  |      |        

(footnotes on next page)


51



---



##### Table of Contents



|                                                                            |  |                                       |        |       |              |   |        |      |  |               |        |   |  |         |        |   |  |   |        |  
|--------------------------------------------------------------------------- |  | ------------------------------------- | ------ | ----- | ------------ | - | ------ | ---- |  | ------------- | ------ | - |  | ------- | ------ | - |  | - | ------ | -
|                                                                            |  |                                       |        |       |              |   |        |      |  | At or For the |       
|                                                                            |  |                                       |        |       |              |   |        |      |  | Nine Months   |       
|                                                                            |  |                                       |        | Ended |             
|                                                                            |  | At or For the Year Ended December 31, |        |       | December 31, |  
|                                                                            |  |                                       |        |       |              |  
|(Dollars In Thousands, Except Per Share Data)                               |  | 2005                                  |        |       | 2004         |   |        | 2003 |  |               | 2002   |   |  | 2001(2) |       
|                                                                            | 
|Key Operating Ratios and Other Data:                                        |  |                                       |        |       |              |   |        |      |  |               |        |   |  |         |        |   |  |   |        |  
|Performance
    Ratios:(3)                                                  |  |                                       |        |       |              |   |        |      |  |               |        |   |  |         |        |   |  |   |        |  
|Return on average assets                                                    |  |                                       | 1.18   | %     |              |   | 1.37   | %    |  |               | 1.58   | % |  |         | 1.56   | % |  |   | 1.27   | %
|Return on average equity                                                    |  |                                       | 9.31   |       |              |   | 11.31  |      |  |               | 14.60  |   |  |         | 13.56  |   |  |   | 11.01  |  
|Return on average tangible assets                                           |  |                                       | 1.27   |       |              |   | 1.46   |      |  |               | 1.61   |   |  |         | 1.59   |   |  |   | 1.30   |  
|Return on average tangible equity                                           |  |                                       | 20.63  |       |              |   | 21.79  |      |  |               | 18.20  |   |  |         | 17.19  |   |  |   | 14.38  |  
|Average interest-earning assets to average interest-bearing
    liabilities |  |                                       | 102.03 |       |              |   | 102.17 |      |  |               | 105.10 |   |  |         | 106.51 |   |  |   | 106.55 |  
|Interest rate
    spread(4)                                                 |  |                                       | 3.09   |       |              |   | 3.43   |      |  |               | 3.58   |   |  |         | 4.08   |   |  |   | 3.55   |  
|Net interest
    margin(4)                                                  |  |                                       | 3.13   |       |              |   | 3.46   |      |  |               | 3.68   |   |  |         | 4.23   |   |  |   | 3.77   |  
|Non-interest expense to average assets                                      |  |                                       | 1.65   |       |              |   | 1.75   |      |  |               | 2.18   |   |  |         | 2.34   |   |  |   | 2.10   |  
|Efficiency
    ratio(5)                                                     |  |                                       | 46.43  |       |              |   | 43.40  |      |  |               | 46.19  |   |  |         | 46.32  |   |  |   | 47.53  |  
|Dividend payout
    ratio(6)                                                |  |                                       | 40.84  |       |              |   | 33.10  |      |  |               | 26.15  |   |  |         | 22.32  |   |  |   | 21.26  |  
|Cash dividends declared per common share                                    |  | $                                     | 1.07   |       |              | $ | 0.94   |      |  | $             | 0.68   |   |  | $       | 0.50   |   |  | $ | 0.27   |  
|Asset Quality Ratios:                                                       |  |                                       |        |       |              |   |        |      |  |               |        |   |  |         |        |   |  |   |        |  
|Non-performing loans as a percent of total loans at end of period           |  |                                       | 0.30   | %     |              |   | 0.44   | %    |  |               | 0.59   | % |  |         | 0.72   | % |  |   | 0.78   | %
|Non-performing assets to total assets at end of
    period(7)               |  |                                       | 0.20   |       |              |   | 0.29   |      |  |               | 0.38   |   |  |         | 0.52   |   |  |   | 0.61   |  
|Allowance for loan losses to non-performing loans at end of
    period      |  |                                       | 273.25 |       |              |   | 205.84 |      |  |               | 217.32 |   |  |         | 193.57 |   |  |   | 170.01 |  
|Allowance for loan losses to total loans at end of period                   |  |                                       | 0.82   |       |              |   | 0.90   |      |  |               | 1.29   |   |  |         | 1.38   |   |  |   | 1.33   |  
|Capital and Other
    Information:(3)                                       |  |                                       |        |       |              |   |        |      |  |               |        |   |  |         |        |   |  |   |        |  
|Book value per share                                                        |  | $                                     | 27.76  |       |              | $ | 27.13  |      |  | $             | 18.19  |   |  | $       | 16.36  |   |  | $ | 15.08  |  
|Tangible book value per share                                               |  |                                       | 12.54  |       |              |   | 12.59  |      |  |               | 14.79  |   |  |         | 13.03  |   |  |   | 11.76  |  
|Equity to assets at end of period                                           |  |                                       | 11.98  | %     |              |   | 12.98  | %    |  |               | 10.38  | % |  |         | 11.47  | % |  |   | 11.54  | %
|Leverage
    capital(8)                                                     |  |                                       | 6.98   |       |              |   | 5.51   |      |  |               | 8.14   |   |  |         | 8.73   |   |  |   | 8.60   |  
|Total capital to risk-weighted assets at end of
    period(8)               |  |                                       | 12.59  |       |              |   | 11.47  |      |  |               | 12.39  |   |  |         | 11.40  |   |  |   | 12.20  |  
|Number of full-service offices at end of period                             |  |                                       | 125    |       |              |   | 122    |      |  |               | 84     |   |  |         | 73     |   |  |   | 69     |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the excess of cost over fair value of net assets
    acquired less identifiable intangible assets. See Note 9 of
    the Notes to Consolidated Financial Statements set
    forth in Item 8 hereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(2) | Where applicable, ratios have been annualized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(3) | With the exception of end of period ratios and the efficiency
    ratio, all ratios are based on average daily balances during the
    respective periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(4) | Interest rate spread represents the difference between the
    weighted-average yield on interest-earning assets and the
    weighted-average cost of interest-bearing liabilities; net
    interest margin represents net interest income as a percentage
    of average interest-earning assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(5) | Reflects adjusted operating expense (net of amortization of
    goodwill and identifiable intangible assets) as a percent of the
    aggregate of net interest income and adjusted non-interest
    income (excluding gains and losses on loans and securities).
    Amortization of identifiable intangible assets is excluded from
    the calculation since it is a non-cash expense and gains and
    losses on loans and securities are excluded since they are
    generally considered by the Companys management to be
    non-recurring in nature. The operating efficiency ratio is not a
    financial measurement required by generally accepted accounting
    principles in the United States of America. However, the Company
    believes such information is useful to investors in evaluating
    the Companys operations. The ratio would have been 47.75%
    for the year ended December 31, 2005 if the adjustments
    noted above were not made.
|   
|(6) | Represents cash dividends declared per common share as a percent
    of diluted earnings per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(7) | Non-performing assets consist of non-accrual loans, loans past
    due 90 days or more as to interest or principal repayment
    and accruing and real estate acquired through foreclosure or by
    deed-in-lieu therefore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(8) | Ratios reflect the capital position of the Bank only.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

52



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

General








Business Strategy


Controlled growth.










53



---



##### Table of Contents









Emphasis on Commercial Real Estate, Commercial Business
and Multi-family Lending.








Maintain Asset Quality.


54



---



##### Table of Contents





Stable Source of Liquidity.


Emphasis on Retail Deposits and Customer Service.


Critical Accounting Estimates






Allowance for Loan Losses.


55



---



##### Table of Contents









Goodwill.










56



---



##### Table of Contents





Deferred Tax Assets.




Changes in Financial Condition


available-for




Cash and Cash Equivalents.


Securities Available-for-Sale. available-for available-for available-for securities-to




57



---



##### Table of Contents









Loans Available-for-Sale.










Loans.


58



---



##### Table of Contents

















Non-Performing Assets.


59



---



##### Table of Contents





Allowance for Loan Losses.




Goodwill and Intangible Assets.






Bank Owned Life Insurance (BOLI).


Other Assets.




Deposits.


tm


60



---



##### Table of Contents







Borrowings.










Subordinated Notes.




Senior Notes.


Stockholders Equity.


61



---



##### Table of Contents









Contractual Obligations, Commitments, Contingent Liabilities
and Off-balance Sheet Arrangements




|                        |  |           |    |                 |          |          |           |              |            |   |               |  |  |           |         |  |       |   |         |  |  |   |           | 
|----------------------- |  | --------- | -- | --------------- | -------- | -------- | --------- | ------------ | ---------- | - | ------------- |  |  | --------- | ------- |  | ----- | - | ------- |  |  | - | --------- | 
|                        |  |           |    | Payments Due In |         
|                        |  |           |    |                 |         
|                        |  |           |    |                 |          | Over one |           |              | Over three |   |               | 
|                        |  | Note      |    |                 | One year |          |           | year through |            |   | years through |  |  | Over five |         |  |      
|(In Thousands)          |  | Reference |    |                 | or less  |          |           | three years  |            |   | five years    |  |  | years     |         |  | Total |  
|                        | 
|Core deposits           |  |           | 11 |                 |          | $        | 7,229,689 |              |            | $ |              |  |  | $         |        |  |       | $ |        |  |  | $ | 7,229,689 | 
|Certificates of deposit |  |           | 11 |                 |          |          | 2,537,083 |              |            |   | 985,596       |  |  |           | 373,207 |  |       |   | 6,137   |  |  |   | 3,902,023 | 
|FHLB advances           |  |           | 12 |                 |          |          | 1,067,878 |              |            |   | 296,336       |  |  |           | 156,962 |  |       |   | 760,240 |  |  |   | 2,281,416 | 
|Repurchase agreements   |  |           | 12 |                 |          |          | 405,772   |              |            |   | 1,986,398     |  |  |           | 657,151 |  |       |   | 219,417 |  |  |   | 3,268,738 | 
|Subordinated notes      |  |           | 13 |                 |          |          | 14,625    |              |            |   | 29,250        |  |  |           | 42,028  |  |       |   | 477,195 |  |  |   | 563,098   | 
|Senior notes            |  |           | 14 |                 |          |          | 12,250    |              |            |   | 24,500        |  |  |           | 271,177 |  |       |   |        |  |  |   | 307,927   | 
|Operating leases        |  |           | 20 |                 |          |          | 18,386    |              |            |   | 34,005        |  |  |           | 32,899  |  |       |   | 100,150 |  |  |   | 185,440   | 
|Purchase obligations    |  |           | 20 |                 |          |          | 16,907    |              |            |   |              |  |  |           |        |  |       |   |        |  |  |   | 16,907    | 



|                                                                        |                                                                       |                    |           |         |                   |   |           |         | 
|----------------------------------------------------------------------- | --------------------------------------------------------------------- | ------------------ | --------- | ------- | ----------------- | - | --------- | ------- | 
|                                                                        |                                                                       | Contract or Amount |          
|                                                                        |                                                                       |                    |          
|(In Thousands)                                                          |                                                                       | December 31, 2005  |           |         | December 31, 2004 |  
|                                                                        |                                                                      
|Financial instruments whose contract amounts represent credit
    risk: |                                                                       |                    |           |         |                   |   |           |        
|                                                                        | Commitments to extend credit  mortgage loans                         |                    | $         | 563,162 |                   |   | $         | 650,101 | 
|                                                                        | Commitments to extend credit  commercial business
    loans          |                    |           | 443,173 |                   |   |           | 267,649 | 
|                                                                        | Commitments to extend credit  mortgage warehouse
    lines of credit |                    |           | 828,177 |                   |   |           | 775,905 | 
|                                                                        | Commitments to extend credit  other loans                            |                    |           | 224,449 |                   |   |           | 212,119 | 
|                                                                        | Standby letters of credit                                             |                    |           | 35,983  |                   |   |           | 36,633  | 
|                                                                        | Commercial letters of credit                                          |                    |           | 543     |                   |   |           | 807     | 
|                                                                        |                                                                       |                    |           |         |                   |  
|Total                                                                   |                                                                       | $                  | 2,095,487 |         |                   | $ | 1,943,214 |        
|                                                                        |                                                                       |                    |           |         |                   |  



62



---



##### Table of Contents









Average Balances, Net Interest Income, Yields Earned and
Rates Paid




63



---



##### Table of Contents



|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |           |           |           |           |         |         |         |        |      |      |      |      | 
|------------------------------------------------------------------------------------ | ------------------------------------ | --------------------------------------- | ------------------------------- | ---------- | --------- | ---------- | ------- | ------- | ------- | ------- | ------- | ---- | ---- | -------- | ---------- | --------- | --------- | --------- | ------- | ------- | ------- | ------ | -------- | ---- | ---- | ---- | --------- | --------- | --------- | --------- | ------- | ------- | ------- | ------ | ---- | ---- | ---- | ---- | 
|                                                                                     |                                      | Year Ended December 31,                 |                                
|                                                                                     |                                      |                                         |                                
|                                                                                     |                                      | 2005                                    |                                 |            | 2004      |            |         | 2003    |        
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |        
|                                                                                     |                                      |                                         |                                 | Average    |           |            |         |         | Average |         |         |      |      | Average  |           
|                                                                                     |                                      | Average                                 |                                 |            |           |            | Yield/  |         |         | Average |         |      |      |          | Yield/     |           |           | Average   |         |         |         |        | Yield/   |     
|(Dollars in Thousands)                                                               |                                      | Balance                                 |                                 |            | Interest  |            |         | Cost    |         |         | Balance |      |      | Interest |            |           | Cost      |           |         | Balance |         |        | Interest |      |      | Cost |          
|                                                                                     |                                     
|Interest-earning assets:                                                             |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |           |           |           |           |         |         |         |        |      |     
|                                                                                     | Loans
    receivable(1):             |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |           |           |           |           |         |         |         |        |      |      |     
|                                                                                     |                                      | Mortgage loans                          |                                 | $          | 9,942,883 |            |         | $       | 536,125 |         |         |      | 5.39 | %        |            | $         | 8,007,134 |           |         | $       | 433,848 |        |          |      | 5.42 | %    |           | $         | 4,162,397 |           |         | $       | 276,579 |        |      |      | 6.64 | %   
|                                                                                     |                                      | Commercial business loans               |                                 |            | 855,474   |            |         |         | 58,237  |         |         |      | 6.81 |          |            |           | 768,246   |           |         |         | 46,861  |        |          |      | 6.10 |      |           |           | 564,851   |           |         |         | 37,281  |        |      |      | 6.60 |     
|                                                                                     |                                      | Mortgage warehouse lines of credit      |                                 |            | 573,767   |            |         |         | 36,160  |         |         |      | 6.22 |          |            |           | 583,696   |           |         |         | 26,555  |        |          |      | 4.47 |      |           |           | 639,052   |           |         |         | 28,652  |        |      |      | 4.48 |     
|                                                                                     |                                      | Other
    loans(2)                      |                                 |            | 496,498   |            |         |         | 28,563  |         |         |      | 5.75 |          |            |           | 407,147   |           |         |         | 21,754  |        |          |      | 5.34 |      |           |           | 268,886   |           |         |         | 15,741  |        |      |      | 5.85 |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|                                                                                     | Total loans                          |                                         |                                 | 11,868,622 |           |            |         | 659,085 |         |         |         | 5.55 |      |          |            | 9,766,223 |           |           |         | 529,018 |         |        |          | 5.41 |      |      |           | 5,635,186 |           |           |         | 358,253 |         |        |      | 6.36 |     
|                                                                                     | Investment securities                |                                         |                                 | 400,906    |           |            |         | 18,456  |         |         |         | 4.60 |      |          |            | 537,362   |           |           |         | 22,578  |         |        |          | 4.20 |      |      |           | 296,705   |           |           |         | 13,296  |         |        |      | 4.48 |     
|                                                                                     | Mortgage-related securities          |                                         |                                 | 3,368,272  |           |            |         | 148,271 |         |         |         | 4.40 |      |          |            | 3,124,201 |           |           |         | 132,809 |         |        |          | 4.25 |      |      |           | 1,765,662 |           |           |         | 62,918  |         |        |      | 3.56 |     
|                                                                                     | Other interest-earning
    assets(3) |                                         |                                 | 290,293    |           |            |         | 11,767  |         |         |         | 4.05 |      |          |            | 294,974   |           |           |         | 5,003   |         |        |          | 1.70 |      |      |           | 263,116   |           |           |         | 5,653   |         |        |      | 2.15 |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Total interest-earning assets                                                        |                                      |                                         | 15,928,093                      |            |           |            | 837,579 |         |         |         | 5.26    |      |      |          | 13,722,760 |           |           |           | 689,408 |         |         |        | 5.02     |      |      |      | 7,960,669 |           |           |           | 440,120 |         |         |        | 5.53 |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Non-interest-earning assets                                                          |                                      |                                         | 2,131,721                       |            |           |            |         |         |         |         |         |      |      |          | 1,753,873  |           |           |           |         |         |         |        |          |      |      |      | 712,017   |           |           |           |         |         |         |        |      |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Total assets                                                                         |                                      | $                                       | 18,059,814                      |            |           |            |         |         |         |         |         |      |      | $        | 15,476,633 |           |           |           |         |         |         |        |          |      |      | $    | 8,672,686 |           |           |           |         |         |         |        |      |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Interest-bearing liabilities:                                                        |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |           |           |           |           |         |         |         |        |      |     
|                                                                                     | Deposits:                            |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |           |           |           |           |         |         |         |        |      |      |     
|                                                                                     |                                      | Savings deposits                        |                                 | $          | 2,394,722 |            |         | $       | 8,398   |         |         |      | 0.35 | %        |            | $         | 2,423,565 |           |         | $       | 8,464   |        |          |      | 0.35 | %    |           | $         | 1,595,084 |           |         | $       | 7,886   |        |      |      | 0.49 | %   
|                                                                                     |                                      | Money market deposits                   |                                 |            | 689,339   |            |         |         | 13,551  |         |         |      | 1.97 |          |            |           | 795,658   |           |         |         | 12,259  |        |          |      | 1.54 |      |           |           | 251,447   |           |         |         | 2,303   |        |      |      | 0.92 |     
|                                                                                     |                                      | Active management accounts (AMA)      |                                 |            | 543,328   |            |         |         | 7,659   |         |         |      | 1.41 |          |            |           | 711,247   |           |         |         | 8,347   |        |          |      | 1.17 |      |           |           | 498,229   |           |         |         | 4,762   |        |      |      | 0.96 |     
|                                                                                     |                                      | Interest-bearing demand
    deposits(4) |                                 |            | 2,230,243 |            |         |         | 47,195  |         |         |      | 2.12 |          |            |           | 1,147,798 |           |         |         | 11,005  |        |          |      | 0.96 |      |           |           | 700,739   |           |         |         | 4,826   |        |      |      | 0.69 |     
|                                                                                     |                                      | Certificates of deposit                 |                                 |            | 2,930,696 |            |         |         | 86,065  |         |         |      | 2.94 |          |            |           | 2,005,120 |           |         |         | 31,773  |        |          |      | 1.58 |      |           |           | 1,486,302 |           |         |         | 33,480  |        |      |      | 2.25 |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|                                                                                     |                                      |                                         | Total interest-bearing deposits |            |           | 8,788,328  |         |         |         | 162,868 |         |      |      | 1.85     |            |           |           | 7,083,388 |         |         |         | 71,848 |          |      |      | 1.01 |           |           |           | 4,531,801 |         |         |         | 53,257 |      |      |      | 1.18 | 
|                                                                                     |                                      | Non-interest bearing deposits           |                                 |            | 1,500,135 |            |         |         |        |         |         |      |     |          |            |           | 1,281,445 |           |         |         |        |        |          |      |     |      |           |           | 672,952   |           |         |         |        |        |      |      |     |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|                                                                                     |                                      |                                         | Total deposits                  |            |           | 10,288,463 |         |         |         | 162,868 |         |      |      | 1.58     |            |           |           | 8,364,833 |         |         |         | 71,848 |          |      |      | 0.86 |           |           |           | 5,204,753 |         |         |         | 53,257 |      |      |      | 1.02 | 
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|                                                                                     | Subordinated notes                   |                                         |                                 | 396,797    |           |            |         | 15,621  |         |         |         | 3.94 |      |          |            | 341,230   |           |           |         | 13,279  |         |        |          | 3.89 |      |      |           | 79,253    |           |           |         | 3,029   |         |        |      | 3.82 |     
|                                                                                     | Senior notes                         |                                         |                                 | 67,959     |           |            |         | 3,445   |         |         |         | 5.07 |      |          |            |          |           |           |         |        |         |        |          |     |      |      |           |          |           |           |         |        |         |        |      |     |     
|                                                                                     | Borrowings                           |                                         |                                 | 4,858,563  |           |            |         | 156,780 |         |         |         | 3.23 |      |          |            | 4,725,871 |           |           |         | 128,788 |         |        |          | 2.73 |      |      |           | 2,290,401 |           |           |         | 91,089  |         |        |      | 3.98 |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Total interest-bearing liabilities                                                   |                                      |                                         | 15,611,782                      |            |           |            | 338,714 |         |         |         | 2.17    |      |      |          | 13,431,934 |           |           |           | 213,915 |         |         |        | 1.59     |      |      |      | 7,574,407 |           |           |           | 147,375 |         |         |        | 1.95 |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Non-interest-bearing liabilities                                                     |                                      |                                         | 156,105                         |            |           |            |         |         |         |         |         |      |      |          | 169,204    |           |           |           |         |         |         |        |          |      |      |      | 159,913   |           |           |           |         |         |         |        |      |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Total liabilities                                                                    |                                      |                                         | 15,767,887                      |            |           |            |         |         |         |         |         |      |      |          | 13,601,138 |           |           |           |         |         |         |        |          |      |      |      | 7,734,320 |           |           |           |         |         |         |        |      |     
|Total stockholders equity                                                           |                                      |                                         | 2,291,927                       |            |           |            |         |         |         |         |         |      |      |          | 1,875,495  |           |           |           |         |         |         |        |          |      |      |      | 938,366   |           |           |           |         |         |         |        |      |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Total liabilities and stockholders equity                                           |                                      | $                                       | 18,059,814                      |            |           |            |         |         |         |         |         |      |      | $        | 15,476,633 |           |           |           |         |         |         |        |          |      |      | $    | 8,672,686 |           |           |           |         |         |         |        |      |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Net interest-earning assets                                                          |                                      | $                                       | 316,311                         |            |           |            |         |         |         |         |         |      |      | $        | 290,826    |           |           |           |         |         |         |        |          |      |      | $    | 386,262   |           |           |           |         |         |         |        |      |     
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Net interest income/ interest rate spread                                            |                                      |                                         |                                 |            |           | $          | 498,865 |         |         |         | 3.09    | %    |      |          |            |           |           | $         | 475,493 |         |         |        | 3.43     | %    |      |      |           |           |           | $         | 292,745 |         |         |        | 3.58 | %   
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Net interest margin                                                                  |                                      |                                         |                                 |            |           |            |         |         |         |         | 3.13    | %    |      |          |            |           |           |           |         |         |         |        | 3.46     | %    |      |      |           |           |           |           |         |         |         |        | 3.68 | %   
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          
|Ratio of average interest-earning assets to average
    interest-bearing liabilities |                                      |                                         |                                 |            |           |            |         |         |         |         | 1.02    | x    |      |          |            |           |           |           |         |         |         |        | 1.02     | x    |      |      |           |           |           |           |         |         |         |        | 1.05 | x   
|                                                                                     |                                      |                                         |                                 |            |           |            |         |         |         |         |         |      |      |          |            |           |           |           |         |         |         |        |          |      |      |      |          






|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average balance of loans receivable includes loans
    available-for-sale and non-performing loans. Interest on
    non-performing loans is recognized on a cash basis.    
|   
|(2) | Includes home equity loans and lines of credit, FHA and
    conventional home improvement loans, automobile loans, passbook
    loans and secured and unsecured personal loans.
|   
|(3) | Includes federal funds sold, interest-earning bank deposits and
    FHLB stock.                                                                                                
|   
|(4) | Includes NOW (including Independence RewardsPlus
    Checkingtm
    product) and checking accounts.                                                                            

64



---



##### Table of Contents



Rate/ Volume Analysis




|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |        |         |         |         |        |         |         |         |        | 
|--------------------------------- | ----------------------------------------------------------- | ---------------------------------- | -------------- | ------ | ------------------------------- | ------ | -------- | ----------------- | ------- | ------ | --------- | ------- | ------- | ------ | ---- | ------- | ---------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------ | 
|                                  |                                                             | Year Ended                         |                |        | Year Ended                      |       
|                                  |                                                             | December 31, 2005 to               |                |        | December 31, 2004 to Year Ended |       
|                                  |                                                             | Year Ended December 31, 2004       |                |        | December 31, 2003               |       
|                                  |                                                             |                                    |                |        |                                 |       
|                                  |                                                             | Increase                           |                |        |                                 |        | Increase |                   |         |       
|                                  |                                                             | (Decrease) due to                  |                |        | Total Net                       |        |          | (Decrease) due to |         |        | Total Net |        
|                                  |                                                             |                                    |                |        | Increase                        |        |          |                   |         |        | Increase  |        
|(In Thousands)                    |                                                             | Rate                               |                |        | Volume                          |        |          | (Decrease)        |         |        | Rate      |         |         | Volume |      |         | (Decrease) |       
|                                  |                                                            
|Interest-earning assets:          |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |        |         |         |         |        |         |        
|                                  | Loans receivable:                                           |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |        |         |         |         |        |         |         |        
|                                  |                                                             | Mortgage
    loans(1)              |                | $      | (5,354                          | )      |          | $                 | 107,631 |        |           | $       | 102,277 |        |      | $       | (51,572    | )      |         | $       | 208,841 |        |         | $       | 157,269 |       
|                                  |                                                             | Commercial business loans          |                |        | 5,758                           |        |          |                   | 5,618   |        |           |         | 11,376  |        |      |         | (3,001     | )      |         |         | 12,581  |        |         |         | 9,580   |       
|                                  |                                                             | Mortgage warehouse lines of credit |                |        | 10,065                          |        |          |                   | (460    | )      |           |         | 9,605   |        |      |         | (53        | )      |         |         | (2,044  | )      |         |         | (2,097  | )     
|                                  |                                                             | Other loans(2)                     |                |        | 1,764                           |        |          |                   | 5,045   |        |           |         | 6,809   |        |      |         | (1,474     | )      |         |         | 7,487   |        |         |         | 6,013   |       
|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |       
|                                  | Total loans receivable                                      |                                    |                | 12,233 |                                 |        |          | 117,834           |         |        |           | 130,067 |         |        |      | (56,100 | )          |        |         | 226,865 |         |        |         | 170,765 |        
|                                  | Investment securities                                       |                                    |                | 2,002  |                                 |        |          | (6,124            | )       |        |           | (4,122  | )       |        |      | (879    | )          |        |         | 10,161  |         |        |         | 9,282   |        
|                                  | Mortgage-related securities                                 |                                    |                | 4,811  |                                 |        |          | 10,651            |         |        |           | 15,462  |         |        |      | 14,052  |            |        |         | 55,839  |         |        |         | 69,891  |        
|                                  | Other interest-earning assets                               |                                    |                | 6,844  |                                 |        |          | (80               | )       |        |           | 6,764   |         |        |      | (1,279  | )          |        |         | 629     |         |        |         | (650    | )      
|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |       
|                                  | Total net change in income on interest-earning assets       |                                    |                | 25,890 |                                 |        |          | 122,281           |         |        |           | 148,171 |         |        |      | (44,206 | )          |        |         | 293,494 |         |        |         | 249,288 |        
|Interest-bearing liabilities:     |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |        |         |         |         |        |         |        
|                                  | Deposits:                                                   |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |        |         |         |         |        |         |         |        
|                                  |                                                             | Savings deposits                   |                |        |                                |        |          |                   | (66     | )      |           |         | (66     | )      |      |         | (2,808     | )      |         |         | 3,386   |        |         |         | 578     |       
|                                  |                                                             | Money market deposits              |                |        | 3,089                           |        |          |                   | (1,797  | )      |           |         | 1,292   |        |      |         | 2,372      |        |         |         | 7,584   |        |         |         | 9,956   |       
|                                  |                                                             | AMA deposits                       |                |        | 1,510                           |        |          |                   | (2,198  | )      |           |         | (688    | )      |      |         | 1,255      |        |         |         | 2,330   |        |         |         | 3,585   |       
|                                  |                                                             | Interest-bearing demand deposits   |                |        | 20,338                          |        |          |                   | 15,852  |        |           |         | 36,190  |        |      |         | 2,352      |        |         |         | 3,827   |        |         |         | 6,179   |       
|                                  |                                                             | Certificates of deposit            |                |        | 35,213                          |        |          |                   | 19,079  |        |           |         | 54,292  |        |      |         | (11,539    | )      |         |         | 9,832   |        |         |         | (1,707  | )     
|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |       
|                                  |                                                             |                                    | Total deposits |        |                                 | 60,150 |          |                   |         | 30,870 |           |         |         | 91,020 |      |         |            | (8,368 | )       |         |         | 26,959 |         |         |         | 18,591 | 
|                                  | Borrowings                                                  |                                    |                | 24,277 |                                 |        |          | 3,715             |         |        |           | 27,992  |         |        |      | (35,595 | )          |        |         | 73,294  |         |        |         | 37,699  |        
|                                  | Subordinated notes                                          |                                    |                | 172    |                                 |        |          | 2,170             |         |        |           | 2,342   |         |        |      | 56      |            |        |         | 10,194  |         |        |         | 10,250  |        
|                                  | Senior notes                                                |                                    |                |       |                                 |        |          | 3,445             |         |        |           | 3,445   |         |        |      |        |            |        |         |        |         |        |         |        |        
|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |       
|                                  | Total net change in expense on interest-bearing liabilities |                                    |                | 84,599 |                                 |        |          | 40,200            |         |        |           | 124,799 |         |        |      | (43,907 | )          |        |         | 110,447 |         |        |         | 66,540  |        
|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |       
|Net change in net interest income |                                                             | $                                  | (58,709        | )      |                                 | $      | 82,081   |                   |         | $      | 23,372    |         |         | $      | (299 | )       |            | $      | 183,047 |         |         | $      | 182,748 |        
|                                  |                                                             |                                    |                |        |                                 |        |          |                   |         |        |           |         |         |        |      |         |            |       






|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes loans available-for-sale.                                                                                                                                             
|   
|(2) | Includes home equity loans and lines of credit, FHA and
    conventional home improvement loans, automobile loans, passbook
    loans and secured and unsecured personal loans.

65



---



##### Table of Contents



Comparison of Results of Operations for the Year Ended
December 31, 2005 and the Year Ended December 31,
2004


General.






Net Interest Income.














66



---



##### Table of Contents















tm






67



---



##### Table of Contents









Provision for Loan Losses.




Non-Interest Income.






68



---



##### Table of Contents

















Non-Interest Expense.




69



---



##### Table of Contents

















Income Taxes.


Comparison of Results of Operations for the Year Ended
December 31, 2004 and the Year Ended December 31,
2003


General.


70



---



##### Table of Contents





Net Interest Income.


















71



---



##### Table of Contents

















72



---



##### Table of Contents







Provision for Loan Losses.




Non-Interest Income.






73



---



##### Table of Contents

















Non-Interest Expense.




74



---



##### Table of Contents









Sarbanes-Oxley






Income Taxes.






Regulatory Capital Requirements




75



---



##### Table of Contents





Liquidity














76



---



##### Table of Contents





Impact of Inflation and Changing Prices




Impact of New Accounting Pronouncements









|         |                                                               
|-------- | --------------------------------------------------------------
|ITEM 7A. | Quantitative and Qualitative Disclosures about Market
    Risk

General.










77



---



##### Table of Contents











Net Interest Income Simulation Model.








Gap Analysis.


78



---



##### Table of Contents













79



---



##### Table of Contents





|                                                                        |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            |  |  |            |            |  |  |            |            | 
|----------------------------------------------------------------------- | ------------------------------------------ | ----------- | --------- | --------- | ------------- | - | ---------- | -------------- | - | - | ----------- | --------- | - | ------------ | --------- | --------- | ----- | - | --------- | ---------- |  |  | ---------- | ---------- |  |  | ---------- | ---------- | 
|(In Thousands)                                                          |                                            | 0 - 90 Days |           |           | 91 - 180 Days |   |            | 181 - 365 Days |   |   | 1 - 5 Years |           |   | Over 5 Years |           |           | Total |   |           | Fair Value | 
|                                                                        |                                           
|Interest-earning assets:                                                |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            |  |  |            |            |  |  |            |           
|                                                                        | Mortgage
    loans(1)                      |             | $         | 489,131   |               |   | $          | 256,947        |   |   | $           | 526,246   |   |              | $         | 4,877,735 |       |   | $         | 4,224,310  |  |  | $          | 10,374,369 |  |  | $          | 10,303,636 | 
|                                                                        | Commercial business and other loans        |             |           | 1,044,765 |               |   |            | 87,658         |   |   |             | 159,242   |   |              |           | 461,690   |       |   |           | 194,718    |  |  |            | 1,948,073  |  |  |            | 1,926,808  | 
|                                                                        | Securities
    available-for-sale(2)       |             |           | 287,820   |               |   |            | 185,393        |   |   |             | 372,417   |   |              |           | 2,168,952 |       |   |           | 636,453    |  |  |            | 3,651,035  |  |  |            | 3,574,500  | 
|                                                                        | Other interest-earning
    assets(3)       |             |           | 720,246   |               |   |            |               |   |   |             |          |   |              |           |          |       |   |           | 167,294    |  |  |            | 887,540    |  |  |            | 887,540    | 
|                                                                        |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            | 
|Total interest-earning assets                                           |                                            |             | 2,541,962 |           |               |   | 529,998    |                |   |   | 1,057,905   |           |   |              | 7,508,377 |           |       |   | 5,222,775 |            |  |  | 16,861,017 |            |  |  | 16,692,484 |           
|Interest-bearing liabilities:                                           |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            |  |  |            |            |  |  |            |           
|                                                                        | Savings, NOW and money market
    deposits |             |           | 533,841   |               |   |            | 533,841        |   |   |             | 1,067,681 |   |              |           | 1,219,596 |       |   |           | 2,398,773  |  |  |            | 5,753,732  |  |  |            | 5,753,732  | 
|                                                                        | Certificates of deposit                    |             |           | 1,051,422 |               |   |            | 732,386        |   |   |             | 569,816   |   |              |           | 1,361,970 |       |   |           |           |  |  |            | 3,715,594  |  |  |            | 3,725,319  | 
|                                                                        | Borrowings                                 |             |           | 1,546,729 |               |   |            | 170,000        |   |   |             | 767,000   |   |              |           | 2,309,249 |       |   |           | 163,751    |  |  |            | 4,956,729  |  |  |            | 4,965,624  | 
|                                                                        | Subordinated notes                         |             |           | (64       | )             |   |            | (64            | ) |   |             | (128      | ) |              |           | (1,025    | )     |   |           | 398,541    |  |  |            | 397,260    |  |  |            | 380,000    | 
|                                                                        | Senior notes                               |             |           | (106      | )             |   |            | (106           | ) |   |             | (212      | ) |              |           | 248,410   |       |   |           |           |  |  |            | 247,986    |  |  |            | 243,750    | 
|                                                                        |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            | 
|Total interest-bearing liabilities                                      |                                            |             | 3,131,822 |           |               |   | 1,436,057  |                |   |   | 2,404,157   |           |   |              | 5,138,200 |           |       |   | 2,961,065 |            |  |  | 15,071,301 |            |  |  | 15,068,425 |           
|Interest sensitivity gap                                                |                                            |             | (589,860  | )         |               |   | (906,059   | )              |   |   | (1,346,252  | )         |   |              | 2,370,177 |           |       |   | 2,261,710 |            |  |  |            |            |  |  |            |           
|                                                                        |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            | 
|Cumulative interest sensitivity gap                                     |                                            | $           | (589,860  | )         |               | $ | (1,495,919 | )              |   | $ | (2,842,171  | )         |   | $            | (471,994  | )         |       | $ | 1,789,716 |            |  |  |            |            |  |  |            |           
|                                                                        |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            | 
|Cumulative interest sensitivity gap as a percentage of total
    assets |                                            |             | (3.09     | )%        |               |   | (7.84      | )%             |   |   | (14.89      | )%        |   |              | (2.47     | )%        |       |   | 9.38      | %          |  |  |            |            |  |  |            |           
|                                                                        |                                            |             |           |           |               |   |            |                |   |   |             |           |   |              |           |           |       |   |           |            | 






|    |                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based upon contractual maturity, repricing date, if applicable,
    and managements estimate of principal prepayments.
    Includes loans available-for-sale.                                                          
|   
|(2) | Based upon contractual maturity, repricing date, if applicable,
    and projected repayments of principal based upon experience.
    Amounts exclude the unrealized gains/(losses) on securities
    available-for-sale.
|   
|(3) | Includes interest-earning cash and due from banks, overnight
    deposits and FHLB stock.                                                                                                                               

NPV Analysis.




80



---



##### Table of Contents





|                                           |  |                       |           |                       |                 |   |          |              |  |  |        |    |  |                     |       |   |  |  |       |   
|------------------------------------------ |  | --------------------- | --------- | --------------------- | --------------- | - | -------- | ------------ |  |  | ------ | -- |  | ------------------- | ----- | - |  |  | ----- | --
|                                           |  |                       |           | NPV as % of Portfolio |                
|                                           |  | Net Portfolio Value   |           |                       | Value of Assets |  
|                                           |  |                       |           |                       |                 |  
|Change (in Basis points) in Interest Rates |  | Amount                |           |                       | $ Change        |   |          | NPV % Change |  |  | Ratio  |    |  | Change in NPV Ratio |      
|                                           | 
|                                           |  | (Dollars In Thousands |           |                       |                
|+200                                       |  | $                     | 1,444,324 |                       |                 | $ | (395,084 | )            |  |  | (21.48 | )% |  |                     | 8.29  | % |  |  | (1.64 | )%
|0                                          |  |                       | 1,839,408 |                       |                 |   |         |              |  |  |       |    |  |                     | 9.93  |   |  |  |      |   
|-100                                       |  |                       | 2,084,172 |                       |                 |   | 244,764  |              |  |  | 13.31  |    |  |                     | 10.94 |   |  |  | 1.01  |   







81



---



##### Table of Contents








|        |                                            
|------- | -------------------------------------------
|ITEM 8. | Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Shareholders


Independence Community Bank Corp.














| |                       
| | ----------------------
| | /s/ Ernst & Young, LLP
| |                       
| | Ernst & Young, LLP    





82



---



##### Table of Contents



Managements Report on Internal Control Over Financial
Reporting








| |   |                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the company;                                                                                                                                                                                                     
|
| |  | Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of the company are being made
    only in accordance with authorizations of management and the
    board of directors of the company; and
|
| |  | Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use, or disposition of
    the Companys assets that could have a material effect on
    the financial statements.                                                                                                                                                   









83



---



##### Table of Contents



Report of Independent Registered Public Accounting Firm on


Internal Control Over Financial Reporting


The Board of Directors and Shareholders Independence
Community Bank Corp.












84



---



##### Table of Contents







| |                       
| | ----------------------
| | /s/ Ernst & Young, LLP
| |                       
| | Ernst & Young, LLP    





85



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |            |           |           |            |            | 
|---------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------------ | --------- | ---------- | ---------- | --------- | --------- | ---------- | ---------- | 
|                                               |                                                                                                                                                                                                           | December 31,                                                     |                                           
|                                               |                                                                                                                                                                                                           |                                                                  |                                           
|(In Thousands, Except Share Data)              |                                                                                                                                                                                                           | 2005                                                             |                                            |           | 2004       |           
|                                               |                                                                                                                                                                                                          
|ASSETS:                                        |                                                                                                                                                                                                           |                                                                  |                                            |           |            |            |           |          
|Cash and due from banks  interest-bearing     |                                                                                                                                                                                                           | $                                                                | 710,251                                    |           |            | $          | 84,532    |          
|Cash and due from banks  non-interest-bearing |                                                                                                                                                                                                           |                                                                  | 368,931                                    |           |            |            | 276,345   |          
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total cash and cash equivalents            |           |            | 1,079,182  |           |           |            | 360,877    | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|Securities available-for-sale:                 |                                                                                                                                                                                                           |                                                                  |                                            |           |            |            |           |          
|                                               | Investment securities ($44,118 and $25,764 pledged to creditors,
    respectively)                                                                                                                        |                                                                  |                                            | 418,911   |            |            |           | 454,305   |           
|                                               | Mortgage-related securities ($2,913,711 and $2,927,519 pledged
    to creditors, respectively)                                                                                                            |                                                                  |                                            | 3,155,589 |            |            |           | 3,479,482 |           
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total securities available-for-sale        |           |            | 3,574,500  |           |           |            | 3,933,787  | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|Loans available-for-sale                       |                                                                                                                                                                                                           |                                                                  | 22,072                                     |           |            |            | 96,671    |          
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|Mortgage loans on real estate                  |                                                                                                                                                                                                           |                                                                  | 10,352,297                                 |           |            |            | 9,315,090 |          
|Other loans                                    |                                                                                                                                                                                                           |                                                                  | 1,948,073                                  |           |            |            | 1,933,502 |          
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           | Total loans                                                      |                                            |           | 12,300,370 |            |           |           | 11,248,592 |           
|                                               |                                                                                                                                                                                                           | Less: allowance for loan losses                                  |                                            |           | (101,467   | )          |           |           | (101,435   | )         
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           | Total loans, net                                                 |                                            |           | 12,198,903 |            |           |           | 11,147,157 |           
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|Premises, furniture and equipment, net         |                                                                                                                                                                                                           |                                                                  | 165,639                                    |           |            |            | 162,687   |          
|Accrued interest receivable                    |                                                                                                                                                                                                           |                                                                  | 72,518                                     |           |            |            | 64,437    |          
|Goodwill                                       |                                                                                                                                                                                                           |                                                                  | 1,185,566                                  |           |            |            | 1,155,572 |          
|Identifiable intangible assets, net            |                                                                                                                                                                                                           |                                                                  | 67,676                                     |           |            |            | 79,056    |          
|Bank owned life insurance (BOLI)             |                                                                                                                                                                                                           |                                                                  | 336,566                                    |           |            |            | 321,040   |          
|Other assets                                   |                                                                                                                                                                                                           |                                                                  | 380,498                                    |           |            |            | 432,195   |          
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total assets                               |           | $          | 19,083,120 |           |           | $          | 17,753,479 | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|LIABILITIES AND STOCKHOLDERS EQUITY:          |                                                                                                                                                                                                           |                                                                  |                                            |           |            |            |           |          
|Deposits:                                      |                                                                                                                                                                                                           |                                                                  |                                            |           |            |            |           |          
|                                               | Savings deposits                                                                                                                                                                                          |                                                                  | $                                          | 2,143,172 |            |            | $         | 2,630,416 |           
|                                               | Money market deposits                                                                                                                                                                                     |                                                                  |                                            | 561,359   |            |            |           | 752,310   |           
|                                               | Active management accounts (AMA) deposits                                                                                                                                                               |                                                                  |                                            | 310,557   |            |            |           | 948,977   |           
|                                               | Interest-bearing demand deposits                                                                                                                                                                          |                                                                  |                                            | 2,622,115 |            |            |           | 1,214,190 |           
|                                               | Non-interest-bearing demand deposits                                                                                                                                                                      |                                                                  |                                            | 1,592,486 |            |            |           | 1,487,756 |           
|                                               | Certificates of deposit                                                                                                                                                                                   |                                                                  |                                            | 3,715,594 |            |            |           | 2,271,415 |           
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total deposits                             |           |            | 10,945,283 |           |           |            | 9,305,064  | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|Borrowings                                     |                                                                                                                                                                                                           |                                                                  | 4,956,729                                  |           |            |            | 5,511,972 |          
|Subordinated notes                             |                                                                                                                                                                                                           |                                                                  | 397,260                                    |           |            |            | 396,332   |          
|Senior notes                                   |                                                                                                                                                                                                           |                                                                  | 247,986                                    |           |            |            |          |          
|Escrow and other deposits                      |                                                                                                                                                                                                           |                                                                  | 116,529                                    |           |            |            | 104,304   |          
|Accrued expenses and other liabilities         |                                                                                                                                                                                                           |                                                                  | 133,553                                    |           |            |            | 131,764   |          
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total liabilities                          |           |            | 16,797,340 |           |           |            | 15,449,436 | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|Stockholders equity:                          |                                                                                                                                                                                                           |                                                                  |                                            |           |            |            |           |          
|                                               | Common stock, $.01 par value: 250,000,000 shares
    authorized, 104,243,820 shares issued; 82,332,449 and
    84,928,719 shares outstanding at December 31, 2005 and
    December 31, 2004, respectively |                                                                  |                                            | 1,042     |            |            |           | 1,042     |           
|                                               | Additional paid-in-capital                                                                                                                                                                                |                                                                  |                                            | 1,911,370 |            |            |           | 1,900,252 |           
|                                               | Treasury stock at cost: 21,911,371 and 19,315,101 shares at
    December 31, 2005 and December 31, 2004, respectively                                                                                     |                                                                  |                                            | (463,789  | )          |            |           | (341,226  | )         
|                                               | Unallocated common stock held by ESOP                                                                                                                                                                     |                                                                  |                                            | (59,323   | )          |            |           | (64,267   | )         
|                                               | Unvested restricted stock awards under stock benefit plans                                                                                                                                                |                                                                  |                                            | (9,104    | )          |            |           | (9,701    | )         
|                                               | Retained earnings, partially restricted                                                                                                                                                                   |                                                                  |                                            | 949,721   |            |            |           | 821,702   |           
|                                               | Accumulated other comprehensive loss:                                                                                                                                                                     |                                                                  |                                            |           |            |            |           |           |           
|                                               |                                                                                                                                                                                                           | Net unrealized loss on securities available-for-sale, net of tax |                                            |           | (44,137    | )          |           |           | (3,759     | )         
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total stockholders equity                 |           |            | 2,285,780  |           |           |            | 2,304,043  | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           
|                                               |                                                                                                                                                                                                           |                                                                  | Total liabilities and stockholders equity |           | $          | 19,083,120 |           |           | $          | 17,753,479 | 
|                                               |                                                                                                                                                                                                           |                                                                  |                                            |           |            |           

See accompanying notes to consolidated financial
statements.


86



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


CONSOLIDATED STATEMENTS OF OPERATIONS


|                                         |                                                |                                                     |         |         |         |   |         |         |         |   |         |         |         | 
|---------------------------------------- | ---------------------------------------------- | --------------------------------------------------- | ------- | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                         |                                                | For the Year Ended December 31,                     |        
|                                         |                                                |                                                     |        
|(In Thousands, Except Per Share Amounts) |                                                | 2005                                                |         |         | 2004    |   |         | 2003    |        
|                                         |                                               
|Interest income:                         |                                                |                                                     |         |         |         |   |         |         |         |   |         |        
|                                         | Mortgage loans on real estate                  |                                                     | $       | 531,272 |         |   | $       | 426,942 |         |   | $       | 271,805 |        
|                                         | Other loans                                    |                                                     |         | 122,960 |         |   |         | 95,170  |         |   |         | 81,674  |        
|                                         | Loans available-for-sale                       |                                                     |         | 4,853   |         |   |         | 6,906   |         |   |         | 4,774   |        
|                                         | Investment securities                          |                                                     |         | 18,456  |         |   |         | 22,578  |         |   |         | 13,296  |        
|                                         | Mortgage-related securities                    |                                                     |         | 148,271 |         |   |         | 132,809 |         |   |         | 62,918  |        
|                                         | Other                                          |                                                     |         | 11,767  |         |   |         | 5,003   |         |   |         | 5,653   |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Total interest income                               |         |         | 837,579 |   |         |         | 689,408 |   |         |         | 440,120 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Interest expense:                        |                                                |                                                     |         |         |         |   |         |         |         |   |         |        
|                                         | Deposits                                       |                                                     |         | 162,868 |         |   |         | 71,848  |         |   |         | 53,257  |        
|                                         | Borrowings                                     |                                                     |         | 156,780 |         |   |         | 128,788 |         |   |         | 91,089  |        
|                                         | Subordinated notes                             |                                                     |         | 15,621  |         |   |         | 13,279  |         |   |         | 3,029   |        
|                                         | Senior notes                                   |                                                     |         | 3,445   |         |   |         |        |         |   |         |        |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Total interest expense                              |         |         | 338,714 |   |         |         | 213,915 |   |         |         | 147,375 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Net interest income                                 |         |         | 498,865 |   |         |         | 475,493 |   |         |         | 292,745 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Provision for loan losses                |                                                |                                                     |        |         |         |   | 2,000   |         |         |   | 3,500   |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Net interest income after provision for loan losses |         |         | 498,865 |   |         |         | 473,493 |   |         |         | 289,245 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Non-interest income:                     |                                                |                                                     |         |         |         |   |         |         |         |   |         |        
|                                         | Net gain (loss) on securities                  |                                                     |         | 6,637   |         |   |         | (8,816  | )       |   |         | 476     |        
|                                         | Net gain on sales of loans                     |                                                     |         | 154     |         |   |         | 281     |         |   |         | 289     |        
|                                         | Mortgage-banking activities                    |                                                     |         | 20,106  |         |   |         | 29,613  |         |   |         | 25,407  |        
|                                         | Service fees                                   |                                                     |         | 66,004  |         |   |         | 66,619  |         |   |         | 69,270  |        
|                                         | BOLI                                           |                                                     |         | 15,856  |         |   |         | 14,616  |         |   |         | 8,833   |        
|                                         | Other                                          |                                                     |         | 16,123  |         |   |         | 19,196  |         |   |         | 8,464   |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Total non-interest income                           |         |         | 124,880 |   |         |         | 121,509 |   |         |         | 112,739 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Non-interest expense:                    |                                                |                                                     |         |         |         |   |         |         |         |   |         |        
|                                         | Compensation and employee benefits             |                                                     |         | 149,122 |         |   |         | 134,924 |         |   |         | 100,262 |        
|                                         | Occupancy costs                                |                                                     |         | 52,287  |         |   |         | 43,679  |         |   |         | 26,547  |        
|                                         | Data processing fees                           |                                                     |         | 14,037  |         |   |         | 16,236  |         |   |         | 10,029  |        
|                                         | Advertising                                    |                                                     |         | 8,170   |         |   |         | 9,140   |         |   |         | 7,845   |        
|                                         | Other                                          |                                                     |         | 62,837  |         |   |         | 58,828  |         |   |         | 42,265  |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Total general and administrative expense            |         |         | 286,453 |   |         |         | 262,807 |   |         |         | 186,948 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         | Amortization of identifiable intangible assets |                                                     |         | 11,380  |         |   |         | 8,268   |         |   |         | 1,855   |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|                                         |                                                | Total non-interest expense                          |         |         | 297,833 |   |         |         | 271,075 |   |         |         | 188,803 | 
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Income before provision for income taxes |                                                |                                                     | 325,912 |         |         |   | 323,927 |         |         |   | 213,181 |        
|Provision for income taxes               |                                                |                                                     | 112,440 |         |         |   | 111,755 |         |         |   | 76,211  |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Net income                               |                                                | $                                                   | 213,472 |         |         | $ | 212,172 |         |         | $ | 136,970 |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Basic earnings per share                 |                                                | $                                                   | 2.70    |         |         | $ | 2.96    |         |         | $ | 2.74    |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Diluted earnings per share               |                                                | $                                                   | 2.62    |         |         | $ | 2.84    |         |         | $ | 2.60    |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        
|Dividends declared per common share      |                                                | $                                                   | 1.07    |         |         | $ | 0.94    |         |         | $ | 0.68    |        
|                                         |                                                |                                                     |         |         |         |   |         |         |        

See accompanying notes to consolidated financial
statements.


87



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY


|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |         |   |   |         |       |         |   |           |         |         |  
|------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ----- | ----------- | -------- | - | ------------ | -------- | ------ | - | ---------- | ----------- | - | ----------- | ------- | - | -------- | - | ------- | ------------- | - | - | ------- | ------- | - | - | ------- | ----- | ------- | - | --------- | ------- | ------- | -
|                                                                                                                   |                                                                                                                                                | Years Ended December 31, 2005, 2004 and 2003                                                               |      
|                                                                                                                   |                                                                                                                                                |                                                                                                            |      
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       | Unearned    |          |   |             
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       | Unallocated |          |   | Common Stock |          |        |   |            | Accumulated |   |             |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       | Additional  |          |   |              |          | Common |   |            | Held by     |   |             |         |   | Other    |   |         |              
|                                                                                                                   |                                                                                                                                                | Common                                                                                                     |       |             | Paid-in- |   |              | Treasury |        |   | Stock Held |             |   | Recognition |         |   | Retained |   |         | Comprehensive |   |   |        
|(In Thousands, Except Share Data)                                                                                  |                                                                                                                                                | Stock                                                                                                      |       |             | Capital  |   |              | Stock    |        |   | by ESOP    |             |   | Plan        |         |   | Earnings |   |         | Income/(Loss) |   |   | Total   |        
|                                                                                                                   |                                                                                                                                               
|Balance  December 31, 2002                                                                                        |                                                                                                                                                | $                                                                                                          | 760   |             |          | $ | 742,006      |          |        | $ | (318,182   | )           |   | $           | (74,154 | ) |          | $ | (11,782 | )             |   | $ | 575,927 |         |   | $ | 5,693   |       |         | $ | 920,268   |        
|Comprehensive income:                                                                                              |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |         |   |   |         |       |         |   |           |        
|                                                                                                                   | Net income for the year ended December 31, 2003                                                                                                |                                                                                                            |       |            |          |   |              |         |        |   |            |            |   |             |         |  |          |   |         |              |   |   |         | 136,970 |   |   |         |      |         |   |           | 136,970 |        
|                                                                                                                   | Other comprehensive income, net of tax of $3.9 million
    Change in net unrealized losses on cash flow hedges, net of tax
    of $1.1 million |                                                                                                            |       |            |          |   |              |         |        |   |            |            |   |             |         |  |          |   |         |              |   |   |         |        |   |   |         | 4,094 |         |   |           | 4,094   |        
|                                                                                                                   |                                                                                                                                                | Less: reclassification adjustment of net loss realized on cash
    flow hedges, net of tax of $1.2 million |       |             |         |   |              |          |       |   |            |             |  |             |         |   |         |   |         |               |  |   |         |         |  |   |         |       | (2,223  | ) |           |         | (2,223  | )
|                                                                                                                   |                                                                                                                                                | Change in net unrealized gains on securities available-for-sale,
    net of tax of $0.3 million            |       |             |         |   |              |          |       |   |            |             |  |             |         |   |         |   |         |               |  |   |         |         |  |   |         |       | (549    | ) |           |         | (549    | )
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Comprehensive income                                                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   | 136,970 |         |   |   | 1,322   |       |         |   | 138,292   |        
|Repurchase of common stock (2,765,900 shares)                                                                      |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   | (78,068    | )           |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | (78,068   | )      
|Valuation adjustment for deferred income tax benefit                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   | (3,070       | )        |        |   |           |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | (3,070    | )      
|Treasury stock issued for options exercised (and related tax
    benefit) and for director fees (992,717 shares)   |                                                                                                                                                |                                                                                                            |      |             |          |   | 14,360       |          |        |   | 16,162     |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 30,522    |        
|Dividends declared                                                                                                 |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   | (34,544 | )       |   |   |        |       |         |   | (34,544   | )      
|Accelerated vesting of options                                                                                     |                                                                                                                                                |                                                                                                            |      |             |          |   | 185          |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 185       |        
|Stock compensation expense                                                                                         |                                                                                                                                                |                                                                                                            |      |             |          |   | 153          |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 153       |        
|ESOP shares committed to be released                                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   | 3,674        |          |        |   |           |             |   |             | 4,943   |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 8,617     |        
|Issuance of grants and amortization of earned portion of
    restricted stock awards                               |                                                                                                                                                |                                                                                                            |      |             |          |   | 4,572        |          |        |   |           |             |   |             |        |   |          |   | 4,184   |               |   |   |        |         |   |   |        |       |         |   | 8,756     |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Balance  December 31, 2003                                                                                        |                                                                                                                                                |                                                                                                            | 760   |             |          |   | 761,880      |          |        |   | (380,088   | )           |   |             | (69,211 | ) |          |   | (7,598  | )             |   |   | 678,353 |         |   |   | 7,015   |       |         |   | 991,111   |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Comprehensive income:                                                                                              |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |         |   |   |         |       |         |   |           |        
|                                                                                                                   | Net income for the year ended December 31, 2004                                                                                                |                                                                                                            |       |            |          |   |              |         |        |   |            |            |   |             |         |  |          |   |         |              |   |   |         | 212,172 |   |   |         |      |         |   |           | 212,172 |        
|                                                                                                                   | Other comprehensive income, net of tax benefit of
    $2.5 million                                                                             |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |         |   |   |         |       |         |   |           |         |        
|                                                                                                                   |                                                                                                                                                | Change in net unrealized gains on securities available-for-sale,
    net of tax of $3.5 million            |       |             |         |   |              |          |       |   |            |             |  |             |         |   |         |   |         |               |  |   |         |         |  |   |         |       | (6,736  | ) |           |         | (6,736  | )
|                                                                                                                   |                                                                                                                                                | Less: reclassification adjustment of net gain realized in net
    income, net of tax of $2.6 million       |       |             |         |   |              |          |       |   |            |             |  |             |         |   |         |   |         |               |  |   |         |         |  |   |         |       | (4,038  | ) |           |         | (4,038  | )
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Comprehensive income                                                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   | 212,172 |         |   |   | (10,774 | )     |         |   | 201,398   |        
|Treasury stock issued for options exercised (and related tax
    benefit) and for director fees (2,252,934 shares) |                                                                                                                                                |                                                                                                            |      |             |          |   | 18,750       |          |        |   | 38,862     |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 57,612    |        
|Common stock issued in connection with Staten Island Bancorp,
    Inc. acquisition (28,200,070 shares)             |                                                                                                                                                |                                                                                                            | 282   |             |          |   | 1,106,853    |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 1,107,135 |        
|Dividends declared                                                                                                 |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   | (68,823 | )       |   |   |        |       |         |   | (68,823   | )      
|Stock compensation expense                                                                                         |                                                                                                                                                |                                                                                                            |      |             |          |   | 1,699        |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 1,699     |        
|ESOP shares committed to be released                                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   | 5,865        |          |        |   |           |             |   |             | 4,944   |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 10,809    |        
|Issuance of grants and amortization of earned portion of
    restricted stock awards                               |                                                                                                                                                |                                                                                                            |      |             |          |   | 5,205        |          |        |   |           |             |   |             |        |   |          |   | (2,103  | )             |   |   |        |         |   |   |        |       |         |   | 3,102     |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Balance  December 31, 2004                                                                                        |                                                                                                                                                |                                                                                                            | 1,042 |             |          |   | 1,900,252    |          |        |   | (341,226   | )           |   |             | (64,267 | ) |          |   | (9,701  | )             |   |   | 821,702 |         |   |   | (3,759  | )     |         |   | 2,304,043 |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Comprehensive income:                                                                                              |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |         |   |   |         |       |         |   |           |        
|                                                                                                                   | Net income for the year ended December 31, 2005                                                                                                |                                                                                                            |       |            |          |   |              |         |        |   |            |            |   |             |         |  |          |   |         |              |   |   |         | 213,472 |   |   |         |      |         |   |           | 213,472 |        
|                                                                                                                   | Other comprehensive income, net of tax benefit of
    $31.9 million                                                                            |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |         |   |   |         |       |         |   |           |         |        
|                                                                                                                   |                                                                                                                                                | Change in net unrealized losses on securities
    available-for-sale, net of tax of
    $27.3 million      |       |             |         |   |              |          |       |   |            |             |  |             |         |   |         |   |         |               |  |   |         |         |  |   |         |       | (37,522 | ) |           |         | (37,522 | )
|                                                                                                                   |                                                                                                                                                | Less: reclassification adjustment of net gains realized in net
    income, net of tax of $2.1 million      |       |             |         |   |              |          |       |   |            |             |  |             |         |   |         |   |         |               |  |   |         |         |  |   |         |       | (2,856  | ) |           |         | (2,856  | )
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Comprehensive income                                                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   | 213,472 |         |   |   | (40,378 | )     |         |   | 173,094   |        
|Treasury stock issued for options exercised (and related tax
    benefit) and for director fees (1,658,032 shares) |                                                                                                                                                |                                                                                                            |      |             |          |   | (1,657       | )        |        |   | 31,791     |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 30,134    |        
|Repurchase of common stock (4,254,302 shares)                                                                      |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   | (154,354   | )           |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | (154,354  | )      
|Dividends declared                                                                                                 |                                                                                                                                                |                                                                                                            |      |             |          |   |             |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   | (85,453 | )       |   |   |        |       |         |   | (85,453   | )      
|Stock compensation expense                                                                                         |                                                                                                                                                |                                                                                                            |      |             |          |   | 3,283        |          |        |   |           |             |   |             |        |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 3,283     |        
|ESOP shares committed to be released                                                                               |                                                                                                                                                |                                                                                                            |      |             |          |   | 5,603        |          |        |   |           |             |   |             | 4,944   |   |          |   |        |               |   |   |        |         |   |   |        |       |         |   | 10,547    |        
|Issuance of grants and amortization of earned portion of
    restricted stock awards                               |                                                                                                                                                |                                                                                                            |      |             |          |   | 3,889        |          |        |   |           |             |   |             |        |   |          |   | 597     |               |   |   |        |         |   |   |        |       |         |   | 4,486     |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        
|Balance  December 31, 2005                                                                                        |                                                                                                                                                | $                                                                                                          | 1,042 |             |          | $ | 1,911,370    |          |        | $ | (463,789   | )           |   | $           | (59,323 | ) |          | $ | (9,104  | )             |   | $ | 949,721 |         |   | $ | (44,137 | )     |         | $ | 2,285,780 |        
|                                                                                                                   |                                                                                                                                                |                                                                                                            |       |             |          |   |              |          |        |   |            |             |   |             |         |   |          |   |         |               |   |   |         |        

See accompanying notes to consolidated financial
statements.


88



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                      |  |                         |            |   |      |   |             |      |  |   |             |  
|------------------------------------------------------------------------------------- |  | ----------------------- | ---------- | - | ---- | - | ----------- | ---- |  | - | ----------- | -
|                                                                                      |  | Year Ended December 31, |           
|                                                                                      |  |                         |           
|(In Thousands)                                                                        |  | 2005                    |            |   | 2004 |   |             | 2003 | 
|                                                                                      | 
|Cash Flows from Operating Activities:                                                 |  |                         |            |   |      |   |             |      |  |   |             |  
|Net income                                                                            |  | $                       | 213,472    |   |      | $ | 212,172     |      |  | $ | 136,970     |  
|Adjustments to reconcile net income to net cash provided by
    operating activities: |  |                         |            |   |      |   |             |      |  |   |             |  
|Provision for loan losses                                                             |  |                         |           |   |      |   | 2,000       |      |  |   | 3,500       |  
|Net (gain) loss on securities                                                         |  |                         | (6,637     | ) |      |   | 8,816       |      |  |   | (476        | )
|Net gain on sale of loans                                                             |  |                         | (154       | ) |      |   | (281        | )    |  |   | (289        | )
|Originations of loans available-for-sale                                              |  |                         | (1,264,608 | ) |      |   | (1,267,289  | )    |  |   | (1,798,108  | )
|Proceeds on sales of loans available-for-sale                                         |  |                         | 1,684,275  |   |      |   | 2,442,121   |      |  |   | 1,919,941   |  
|Amortization of deferred income and premiums                                          |  |                         | (18,686    | ) |      |   | (32,347     | )    |  |   | 19,107      |  
|Amortization of identifiable intangibles                                              |  |                         | 11,380     |   |      |   | 8,268       |      |  |   | 1,855       |  
|Amortization of earned portion of ESOP and restricted stock
    awards                |  |                         | 16,311     |   |      |   | 14,962      |      |  |   | 16,603      |  
|Depreciation and amortization                                                         |  |                         | 20,683     |   |      |   | 17,503      |      |  |   | 11,561      |  
|Deferred income tax provision (benefit)                                               |  |                         | 34,446     |   |      |   | (1,349      | )    |  |   | 10,678      |  
|Increase in accrued interest receivable                                               |  |                         | (8,081     | ) |      |   | (3,379      | )    |  |   | (516        | )
|Decrease in accrued expenses and other liabilities                                    |  |                         | (528       | ) |      |   | (7,466      | )    |  |   | (73,249     | )
|Other, net                                                                            |  |                         | (42,688    | ) |      |   | 8,226       |      |  |   | (23,201     | )
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Net cash provided by operating activities                                             |  |                         | 639,185    |   |      |   | 1,401,957   |      |  |   | 224,376     |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Cash Flow from Investing Activities:                                                  |  |                         |            |   |      |   |             |      |  |   |             |  
|Loan originations and purchases                                                       |  |                         | (3,718,174 | ) |      |   | (4,643,114  | )    |  |   | (2,402,462  | )
|Principal payments on loans                                                           |  |                         | 2,125,636  |   |      |   | 2,300,128   |      |  |   | 1,802,535   |  
|Advances on mortgage warehouse lines of credit                                        |  |                         | (9,977,225 | ) |      |   | (10,187,771 | )    |  |   | (10,291,152 | )
|Repayments on mortgage warehouse lines of credit                                      |  |                         | 10,183,583 |   |      |   | 10,045,928  |      |  |   | 10,532,666  |  
|Proceeds from sale of securities available-for-sale                                   |  |                         | 484,076    |   |      |   | 317,756     |      |  |   | 48,886      |  
|Proceeds from maturities of securities available-for-sale                             |  |                         | 158,733    |   |      |   | 316,389     |      |  |   | 101,457     |  
|Principal collected on securities available-for-sale                                  |  |                         | 736,114    |   |      |   | 1,012,884   |      |  |   | 1,627,618   |  
|Purchases of securities available-for-sale                                            |  |                         | (1,099,410 | ) |      |   | (1,026,512  | )    |  |   | (3,048,363  | )
|Redemption (purchase) of Federal Home Loan Bank stock                                 |  |                         | 30,606     |   |      |   | 48,165      |      |  |   | (34,237     | )
|Cash consideration paid to acquire Staten Island Bancorp,
    Inc.                    |  |                         |           |   |      |   | (368,500    | )    |  |   |            |  
|Cash and cash equivalents acquired in Staten Island Bancorp,
    Inc. acquisition     |  |                         |           |   |      |   | 669,614     |      |  |   |            |  
|Proceeds from sale of other real estate                                               |  |                         | 1,030      |   |      |   | 1,340       |      |  |   |            |  
|Net additions to premises, furniture and equipment                                    |  |                         | (23,635    | ) |      |   | (31,836     | )    |  |   | (27,548     | )
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Net cash used in investing activities                                                 |  |                         | (1,098,666 | ) |      |   | (1,545,529  | )    |  |   | (1,690,600  | )
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Cash Flows from Financing Activities:                                                 |  |                         |            |   |      |   |             |      |  |   |             |  
|Net increase in demand and savings deposits                                           |  |                         | 196,040    |   |      |   | 451,960     |      |  |   | 574,387     |  
|Net increase (decrease) in time deposits                                              |  |                         | 1,449,743  |   |      |   | (242,577    | )    |  |   | (210,350    | )
|Proceeds from new borrowings                                                          |  |                         | 1,562,911  |   |      |   | 2,300,000   |      |  |   | 1,475,000   |  
|Repayments of borrowings                                                              |  |                         | (2,075,095 | ) |      |   | (2,399,403  | )    |  |   | (490,250    | )
|Net increase in subordinated notes                                                    |  |                         | 928        |   |      |   | 247,903     |      |  |   | 148,429     |  
|Net increase in senior notes                                                          |  |                         | 247,986    |   |      |   |            |      |  |   |            |  
|Net increase in escrow and other deposits                                             |  |                         | 12,225     |   |      |   | 5,684       |      |  |   | 41,686      |  
|Proceeds on exercise of stock options                                                 |  |                         | 22,855     |   |      |   | 37,677      |      |  |   | 12,905      |  
|Repurchase of common stock                                                            |  |                         | (154,354   | ) |      |   |            |      |  |   | (78,068     | )
|Dividends paid                                                                        |  |                         | (85,453    | ) |      |   | (68,823     | )    |  |   | (34,544     | )
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Net cash provided by financing activities                                             |  |                         | 1,177,786  |   |      |   | 332,421     |      |  |   | 1,439,195   |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Net increase (decrease) in cash and cash equivalents                                  |  |                         | 718,305    |   |      |   | 188,849     |      |  |   | (27,029     | )
|Cash and cash equivalents at beginning of period                                      |  |                         | 360,877    |   |      |   | 172,028     |      |  |   | 199,057     |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Cash and cash equivalents at end of period                                            |  | $                       | 1,079,182  |   |      | $ | 360,877     |      |  | $ | 172,028     |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Supplemental Information                                                              |  |                         |            |   |      |   |             |      |  |   |             |  
|Income taxes paid                                                                     |  | $                       | 61,682     |   |      | $ | 116,416     |      |  | $ | 53,875      |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Interest paid                                                                         |  | $                       | 337,108    |   |      | $ | 197,240     |      |  | $ | 150,923     |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Income tax benefit realized from exercise of stock options                            |  | $                       | 13,372     |   |      | $ | 16,551      |      |  | $ | 6,076       |  
|                                                                                      |  |                         |            |   |      |   |             |      | 
|Non-Cash Investing Activities                                                         |  |                         |            |   |      |   |             |      |  |   |             |  
|Common stock issued in Staten Island Bancorp, Inc. acquisition                        |  | $                       |           |   |      | $ | 1,107,135   |      |  | $ |            |  
|                                                                                      |  |                         |            |   |      |   |             |      | 

See accompanying notes to consolidated financial
statements.


89



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


December 31, 2005, 2004 and 2003




|   |                                
|-- | -------------------------------
|1. | Organization/ Form of Ownership















90



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                         
|-- | ------------------------
|2. | Mergers and Acquisitions



| |                        
| | -----------------------
| | Sovereign Bancorp, Inc.















| |                            
| | ---------------------------
| | Staten Island Bancorp, Inc.



91



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










3.     Summary of Significant
Accounting Policies






| |                                                          
| | ---------------------------------------------------------
| | Principles of Consolidation and Basis of
    Presentation





92



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                              
| | -----------------------------
| | Securities Available-for-Sale





| |                                   
| | ----------------------------------
| | Loans and Loans Available-for-Sale











93



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                          
| | -------------------------
| | Allowance for Loan Losses









| |                                            
| | -------------------------------------------
| | Loan Servicing Assets and Retained Recourse





94



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                  
| | ---------------------------------
| | Premises, Furniture and Equipment



|                        |  |               
|----------------------- |  | --------------
|Buildings               |  | 10 to 30 years
|Furniture and equipment |  | 3 to 10 years 
|Automobiles             |  | 3 years       





| |                                            
| | -------------------------------------------
| | Goodwill and Identifiable Intangible Assets







| |                        
| | -----------------------
| | Other Real Estate Owned





| |                          
| | -------------------------
| | Bank Owned Life Insurance





| |                                 
| | --------------------------------
| | Derivative Financial Instruments



95



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


















| |                  
| | -----------------
| | Advertising Costs





| |             
| | ------------
| | Income Taxes



96



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                   
| | ------------------
| | Earnings Per Share





| |                  
| | -----------------
| | Employee Benefits











97



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                     
| | --------------------
| | Comprehensive Income





| |                  
| | -----------------
| | Segment Reporting





| |               
| | --------------
| | Treasury Stock





| |                                      
| | -------------------------------------
| | Consolidated Statements of Cash Flows





| |                                        
| | ---------------------------------------
| | Impact of New Accounting Pronouncements





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | The Meaning of Other-Than-Temporary Impairment and its
    Application to Certain Investments



98



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                         
| | ----------------------------------------
| | Accounting Changes and Error Corrections





| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | Accounting and Disclosure Requirements Related to the
    Medicare Prescription Drug, Improvement and Modernization Act of
    2003

106-2




| |                                                                
| | ---------------------------------------------------------------
| | FASB Statement No. 123 (revised 2004) 
    Share-Based Payment



99



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


4.     Securities
Available-for-Sale




|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |         |        |   |           |           |         | 
|----------------------------------- | ---------------------------------------- | ---------------------------- | --------- | --------- | ---------- | - | ----- | ---------- | ----- | --------- | ------- | ------- | ------ | - | --------- | --------- | ------- | 
|                                    |                                          | December 31, 2005            |          
|                                    |                                          |                              |          
|                                    |                                          |                              |           | Gross     |            |   | Gross |            |       | Estimated |        
|                                    |                                          | Amortized                    |           |           | Unrealized |   |       | Unrealized |       |           | Fair    |        
|(In Thousands)                      |                                          | Cost                         |           |           | Gains      |   |       | Losses     |       |           | Value   |        
|                                    |                                         
|Investment securities:              |                                          |                              |           |           |            |   |       |            |       |           |         |         |        |   |           |          
|                                    | Debt securities:                         |                              |           |           |            |   |       |            |       |           |         |         |        |   |           |           |        
|                                    |                                          | U.S. Government and agencies |           | $         | 231,716    |   |       | $          | 1     |           |         | $       | (4,055 | ) |           | $         | 227,662 | 
|                                    |                                          | Corporate                    |           |           | 95,342     |   |       |            | 133   |           |         |         | (34    | ) |           |           | 95,441  | 
|                                    |                                          | Municipal                    |           |           | 160        |   |       |            | 1     |           |         |         |       |   |           |           | 161     | 
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|                                    | Total debt securities                    |                              |           | 327,218   |            |   |       | 135        |       |           |         | (4,089  | )      |   |           | 323,264   |        
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|                                    | Equity securities:                       |                              |           |           |            |   |       |            |       |           |         |         |        |   |           |           |        
|                                    |                                          | Preferred                    |           |           | 94,350     |   |       |            | 3,136 |           |         |         | (1,908 | ) |           |           | 95,578  | 
|                                    |                                          | Common                       |           |           | 69         |   |       |            |      |           |         |         |       |   |           |           | 69      | 
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|                                    | Total equity securities                  |                              |           | 94,419    |            |   |       | 3,136      |       |           |         | (1,908  | )      |   |           | 95,647    |        
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|Total investment securities         |                                          |                              | 421,637   |           |            |   | 3,271 |            |       |           | (5,997  | )       |        |   | 418,911   |          
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|Mortgage-related securities:        |                                          |                              |           |           |            |   |       |            |       |           |         |         |        |   |           |          
|                                    | Fannie Mae pass through certificates     |                              |           | 442,269   |            |   |       | 1,399      |       |           |         | (8,142  | )      |   |           | 435,526   |        
|                                    | GNMA pass through certificates           |                              |           | 17,545    |            |   |       |           |       |           |         | (816    | )      |   |           | 16,729    |        
|                                    | Freddie Mac pass through certificates    |                              |           | 699,890   |            |   |       | 18         |       |           |         | (11,619 | )      |   |           | 688,289   |        
|                                    | Collateralized mortgage obligation bonds |                              |           | 2,069,694 |            |   |       | 218        |       |           |         | (54,867 | )      |   |           | 2,015,045 |        
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|Total mortgage-related securities   |                                          |                              | 3,229,398 |           |            |   | 1,635 |            |       |           | (75,444 | )       |        |   | 3,155,589 |          
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        
|Total securities available-for-sale |                                          | $                            | 3,651,035 |           |            | $ | 4,906 |            |       | $         | (81,441 | )       |        | $ | 3,574,500 |          
|                                    |                                          |                              |           |           |            |   |       |            |       |           |         |        

|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |         |      |   |           |           |         | 
|----------------------------------- | ---------------------------------------- | ---------------------------- | --------- | --------- | ---------- | - | ------ | ---------- | ----- | --------- | ------- | ------- | ---- | - | --------- | --------- | ------- | 
|                                    |                                          | December 31, 2004            |          
|                                    |                                          |                              |          
|                                    |                                          |                              |           | Gross     |            |   | Gross  |            |       | Estimated |        
|                                    |                                          | Amortized                    |           |           | Unrealized |   |        | Unrealized |       |           | Fair    |        
|(In Thousands)                      |                                          | Cost                         |           |           | Gains      |   |        | Losses     |       |           | Value   |        
|                                    |                                         
|Investment securities:              |                                          |                              |           |           |            |   |        |            |       |           |         |         |      |   |           |          
|                                    | Debt securities:                         |                              |           |           |            |   |        |            |       |           |         |         |      |   |           |           |        
|                                    |                                          | U.S. Government and agencies |           | $         | 212,016    |   |        | $          | 1,002 |           |         | $       | (950 | ) |           | $         | 212,068 | 
|                                    |                                          | Corporate                    |           |           | 89,093     |   |        |            | 604   |           |         |         | (316 | ) |           |           | 89,381  | 
|                                    |                                          | Municipal                    |           |           | 4,630      |   |        |            | 236   |           |         |         |     |   |           |           | 4,866   | 
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|                                    | Total debt securities                    |                              |           | 305,739   |            |   |        | 1,842      |       |           |         | (1,266  | )    |   |           | 306,315   |        
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|                                    | Equity securities:                       |                              |           |           |            |   |        |            |       |           |         |         |      |   |           |           |        
|                                    |                                          | Preferred                    |           |           | 146,604    |   |        |            | 1,100 |           |         |         | (774 | ) |           |           | 146,930 | 
|                                    |                                          | Common                       |           |           | 486        |   |        |            | 583   |           |         |         | (9   | ) |           |           | 1,060   | 
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|                                    | Total equity securities                  |                              |           | 147,090   |            |   |        | 1,683      |       |           |         | (783    | )    |   |           | 147,990   |        
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|Total investment securities         |                                          |                              | 452,829   |           |            |   | 3,525  |            |       |           | (2,049  | )       |      |   | 454,305   |          
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|Mortgage-related securities:        |                                          |                              |           |           |            |   |        |            |       |           |         |         |      |   |           |          
|                                    | Fannie Mae pass through certificates     |                              |           | 449,182   |            |   |        | 4,405      |       |           |         | (2,212  | )    |   |           | 451,375   |        
|                                    | GNMA pass through certificates           |                              |           | 7,259     |            |   |        | 330        |       |           |         | (26     | )    |   |           | 7,563     |        
|                                    | Freddie Mac pass through certificates    |                              |           | 973,750   |            |   |        | 5,070      |       |           |         | (585    | )    |   |           | 978,235   |        
|                                    | Collateralized mortgage obligation bonds |                              |           | 2,057,221 |            |   |        | 3,400      |       |           |         | (18,312 | )    |   |           | 2,042,309 |        
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|Total mortgage-related securities   |                                          |                              | 3,487,412 |           |            |   | 13,205 |            |       |           | (21,135 | )       |      |   | 3,479,482 |          
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        
|Total securities available-for-sale |                                          | $                            | 3,940,241 |           |            | $ | 16,730 |            |       | $         | (23,184 | )       |      | $ | 3,933,787 |          
|                                    |                                          |                              |           |           |            |   |        |            |       |           |         |        

100



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |       |        |   |           |         |           | 
|----------------------------------- | ----------------------- | ---------------------------------------- | ------ | ----- | ---------------- | - | --------- | ---------- | ------- | - | ---------- | ----- | ------ | - | --------- | ------- | --------- | 
|                                    |                         | At December 31, 2005                     |       
|                                    |                         |                                          |       
|                                    |                         | Under One Year                           |        |       | One Year or More |  
|                                    |                         |                                          |        |       |                  |  
|                                    |                         | Gross                                    |        |       |                  |   | Gross     |            |         |  
|                                    |                         | Unrealized                               |        |       | Estimated        |   |           | Unrealized |         |   | Estimated  |      
|(In Thousands)                      |                         | Losses                                   |        |       | Fair Value       |   |           | Losses     |         |   | Fair Value |      
|                                    |                        
|Investment securities:              |                         |                                          |        |       |                  |   |           |            |         |   |            |       |        |   |           |        
|                                    | Debt securities:        |                                          |        |       |                  |   |           |            |         |   |            |       |        |   |           |         |          
|                                    |                         | U.S. Government and agencies             |        | $     | 2,051            |   |           | $          | 117,322 |   |            | $     | 2,005  |   |           | $       | 109,202   | 
|                                    |                         | Corporate                                |        |       | 34               |   |           |            | 3,202   |   |            |       |       |   |           |         | 8,375     | 
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|                                    | Total debt securities   |                                          |        | 2,085 |                  |   |           | 120,524    |         |   |            | 2,005 |        |   |           | 117,577 |          
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|                                    | Equity securities:      |                                          |        |       |                  |   |           |            |         |   |            |       |        |   |           |         |          
|                                    |                         | Preferred                                |        |       | 673              |   |           |            | 21,837  |   |            |       | 1,234  |   |           |         | 10,843    | 
|                                    |                         | Common                                   |        |       |                 |   |           |            | 69      |   |            |       |       |   |           |         |          | 
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|                                    | Total equity securities |                                          |        | 673   |                  |   |           | 21,906     |         |   |            | 1,234 |        |   |           | 10,843  |          
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|Total investment securities         |                         |                                          | 2,758  |       |                  |   | 142,430   |            |         |   | 3,239      |       |        |   | 128,420   |        
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|Mortgage-related securities:        |                         |                                          |        |       |                  |   |           |            |         |   |            |       |        |   |           |        
|                                    |                         | Fannie Mae pass through certificates     |        |       | 2,702            |   |           |            | 214,322 |   |            |       | 5,439  |   |           |         | 170,507   | 
|                                    |                         | GNMA pass through certificates           |        |       | 777              |   |           |            | 15,202  |   |            |       | 38     |   |           |         | 1,527     | 
|                                    |                         | Freddie Mac pass through certificates    |        |       | 9,367            |   |           |            | 597,051 |   |            |       | 2,253  |   |           |         | 89,675    | 
|                                    |                         | Collateralized mortgage obligation bonds |        |       | 10,924           |   |           |            | 568,627 |   |            |       | 43,944 |   |           |         | 1,370,545 | 
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|Total mortgage-related securities   |                         |                                          | 23,770 |       |                  |   | 1,395,202 |            |         |   | 51,674     |       |        |   | 1,632,254 |        
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      
|Total securities available-for-sale |                         | $                                        | 26,528 |       |                  | $ | 1,537,632 |            |         | $ | 54,913     |       |        | $ | 1,760,674 |        
|                                    |                         |                                          |        |       |                  |   |           |            |         |   |            |      









101



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                    |  |                         |         |  |      |   |         |      |  |   |        | 
|------------------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------ | 
|                    |  | Year Ended December 31, |        
|                    |  |                         |        
|(In Thousands)      |  | 2005                    |         |  | 2004 |   |         | 2003 | 
|                    | 
|Proceeds from sales |  | $                       | 484,076 |  |      | $ | 317,756 |      |  | $ | 48,886 | 
|Gross gains         |  |                         | 6,637   |  |      |   | 6,242   |      |  |   | 476    | 
|Gross losses        |  |                         |        |  |      |   | 2,321   |      |  |   |       | 



|                             |  |                   |         |  |            |   |         | 
|---------------------------- |  | ----------------- | ------- |  | ---------- | - | ------- | 
|                             |  | December 31, 2005 |        
|                             |  |                   |        
|                             |  | Amortized         |         |  | Estimated  |  
|(In Thousands)               |  | Cost              |         |  | Fair Value |  
|                             | 
|One year or less             |  | $                 | 12,895  |  |            | $ | 12,780  | 
|One year through five years  |  |                   | 38,749  |  |            |   | 38,373  | 
|Five years through ten years |  |                   | 124,875 |  |            |   | 122,867 | 
|Over ten years               |  |                   | 150,699 |  |            |   | 149,244 | 
|                             |  |                   |         |  |            |  
|                             |  | $                 | 327,218 |  |            | $ | 323,264 | 
|                             |  |                   |         |  |            |  



|                             |  |                   |           |  |            |   |           | 
|---------------------------- |  | ----------------- | --------- |  | ---------- | - | --------- | 
|                             |  | December 31, 2005 |          
|                             |  |                   |          
|                             |  | Amortized         |           |  | Estimated  |  
|(In Thousands)               |  | Cost              |           |  | Fair Value |  
|                             | 
|One year or less             |  | $                 | 119,297   |  |            | $ | 118,353   | 
|One year through five years  |  |                   | 2,646,822 |  |            |   | 2,583,982 | 
|Five years through ten years |  |                   | 393,767   |  |            |   | 384,725   | 
|Over ten years               |  |                   | 69,512    |  |            |   | 68,529    | 
|                             |  |                   |           |  |            |  
|                             |  | $                 | 3,229,398 |  |            | $ | 3,155,589 | 
|                             |  |                   |           |  |            |  

102



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


5.     Loans Available-for-Sale and
Loan Servicing Assets




|                               |                           |              |        |        |      |   |        |        | 
|------------------------------ | ------------------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | 
|                               |                           | December 31, |       
|                               |                           |              |       
|(In Thousands)                 |                           | 2005         |        |        | 2004 |  
|                               |                          
|Loans available-for-sale:      |                           |              |        |        |      |   |        |       
|                               | Single-family residential |              | $      | 4,172  |      |   | $      | 74,121 | 
|                               | Multi-family residential  |              |        | 17,900 |      |   |        | 22,550 | 
|                               |                           |              |        |        |      |  
|Total loans available-for-sale |                           | $            | 22,072 |        |      | $ | 96,671 |       
|                               |                           |              |        |        |      |  



| |                             
| | ----------------------------
| | Fannie Mae Loan Sale Program







103



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















|                               |                                              |                         |        |        |      |   |        |         |   |   |       |        |  
|------------------------------ | -------------------------------------------- | ----------------------- | ------ | ------ | ---- | - | ------ | ------- | - | - | ----- | ------ | -
|                               |                                              | Year Ended December 31, |       
|                               |                                              |                         |       
|(In Thousands)                 |                                              | 2005                    |        |        | 2004 |   |        | 2003    |  
|                               |                                             
|Balance at beginning of period |                                              | $                       | 18,100 |        |      | $ | 7,772  |         |   | $ | 6,445 |       
|                               | Loan servicing asset of acquired institution |                         |        |       |      |   |        | 7,687   |   |   |       |       |  
|                               | Capitalized servicing asset                  |                         |        | 4,070  |      |   |        | 13,555  |   |   |       | 7,307  |  
|                               | Reduction of servicing asset                 |                         |        | (8,280 | )    |   |        | (10,914 | ) |   |       | (5,980 | )
|                               |                                              |                         |        |        |      |   |        |         |  
|Balance at end of period       |                                              | $                       | 13,890 |        |      | $ | 18,100 |         |   | $ | 7,772 |       
|                               |                                              |                         |        |        |      |   |        |         |  



| |                       
| | ----------------------
| | Fannie Mae DUS Program



104



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                                
| | -------------------------------
| | Single-Family Loan Sale Program







| |                          
| | -------------------------
| | Mortgage-Banking Activity



|                                                     |  |                         |        |   |      |   |         |      |  |   |        |  
|---------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                     |  | Year Ended December 31, |       
|                                                     |  |                         |       
|(In Thousands)                                       |  | 2005                    |        |   | 2004 |   |         | 2003 | 
|                                                     | 
|Origination fees                                     |  | $                       | 1,808  |   |      | $ | 2,105   |      |  | $ | 9,046  |  
|Servicing fees                                       |  |                         | 10,212 |   |      |   | 8,724   |      |  |   | 3,609  |  
|Gain on sales                                        |  |                         | 16,366 |   |      |   | 29,362  |      |  |   | 18,396 |  
|Change in fair value of loan commitments             |  |                         | 249    |   |      |   | (4,749  | )    |  |   | 3,261  |  
|Change in fair value of forward loan sale agreements |  |                         | (249   | ) |      |   | 4,749   |      |  |   | (3,261 | )
|Amortization of loan servicing asset                 |  |                         | (8,280 | ) |      |   | (10,578 | )    |  |   | (5,644 | )
|                                                     |  |                         |        |   |      |   |         |      | 
|Total mortgage-banking activity income               |  | $                       | 20,106 |   |      | $ | 29,613  |      |  | $ | 25,407 |  
|                                                     |  |                         |        |   |      |   |         |      | 



105



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


6.     Loans Receivable, Net




|                                                |                                                     |              |            |           |      |   |            |           | 
|----------------------------------------------- | --------------------------------------------------- | ------------ | ---------- | --------- | ---- | - | ---------- | --------- | 
|                                                |                                                     | December 31, |           
|                                                |                                                     |              |           
|(In Thousands)                                  |                                                     | 2005         |            |           | 2004 |  
|                                                |                                                    
|Mortgage loans:                                 |                                                     |              |            |           |      |   |            |          
|                                                | Single-family residential and cooperative apartment |              | $          | 1,932,516 |      |   | $          | 2,490,062 | 
|                                                | Multi-family residential                            |              |            | 4,743,308 |      |   |            | 3,800,649 | 
|                                                | Commercial real estate                              |              |            | 3,687,226 |      |   |            | 3,034,254 | 
|                                                |                                                     |              |            |           |      |  
|Total principal balance  mortgage loans        |                                                     |              | 10,363,050 |           |      |   | 9,324,965  |          
|Less net deferred fees                          |                                                     |              | 10,753     |           |      |   | 9,875      |          
|                                                |                                                     |              |            |           |      |  
|Total mortgage loans                            |                                                     |              | 10,352,297 |           |      |   | 9,315,090  |          
|Commercial business loans, net of deferred fees |                                                     |              | 977,022    |           |      |   | 809,392    |          
|Other loans:                                    |                                                     |              |            |           |      |   |            |          
|                                                | Mortgage warehouse lines of credit                  |              |            | 453,541   |      |   |            | 659,942   | 
|                                                | Home equity loans and lines of credit               |              |            | 481,597   |      |   |            | 416,351   | 
|                                                | Consumer and other loans                            |              |            | 35,913    |      |   |            | 47,817    | 
|                                                |                                                     |              |            |           |      |  
|Total other loans                               |                                                     |              | 971,051    |           |      |   | 1,124,110  |          
|Total loans receivable                          |                                                     |              | 12,300,370 |           |      |   | 11,248,592 |          
|                                                |                                                     |              |            |           |      |  
|Less allowance for loan losses                  |                                                     |              | 101,467    |           |      |   | 101,435    |          
|                                                |                                                     |              |            |           |      |  
|Loans receivable, net                           |                                                     | $            | 12,198,903 |           |      | $ | 11,147,157 |          
|                                                |                                                     |              |            |           |      |  





106



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                            |                          |                              |   |         |             |  |   |             |  |  |   |        | 
|--------------------------- | ------------------------ | ---------------------------- | - | ------- | ----------- |  | - | ----------- |  |  | - | ------ | 
|                            |                          | Year Ended December 31, 2005 |  
|                            |                          |                              |  
|                            |                          | Baltimore-                   |   |         |            
|                            |                          | Washington                   |   |         | Florida     |  |   | Chicago     | 
|(Dollars in Thousands)      |                          | Market Area                  |   |         | Market Area |  |   | Market Area | 
|                            |                         
|Originations for portfolio: |                          |                              |   |         |             |  |   |             |  |  |   |       
|                            | Multi-family residential |                              | $ | 196,747 |             |  | $ | 186,444     |  |  | $ | 38,910 | 
|                            | Commercial real estate   |                              |   | 38,764  |             |  |   | 78,860      |  |  |   | 3,769  | 
|Originations for sale:      |                          |                              |   |         |             |  |   |             |  |  |   |       
|                            | Multi-family residential |                              |   | 248,355 |             |  |   | 262,365     |  |  |   | 11,910 | 
|                            |                          |                              |   |         |             |  |   |             | 
|                            | Total originations       |                              | $ | 483,866 |             |  | $ | 527,669     |  |  | $ | 54,589 | 
|                            |                          |                              |   |         |             |  |   |             | 



|                            |                          |                              |   |         |             |  |   |             |  |  |   |   | 
|--------------------------- | ------------------------ | ---------------------------- | - | ------- | ----------- |  | - | ----------- |  |  | - | - | 
|                            |                          | Year Ended December 31, 2004
|                            |                          |                             
|                            |                          | Baltimore-                   |   |         |            
|                            |                          | Washington                   |   |         | Florida     |  |   | Chicago    
|(Dollars in Thousands)      |                          | Market Area                  |   |         | Market Area |  |   | Market Area
|                           
|Originations for portfolio: |                          |                              |   |         |             |  |   |             |  |  |   |  
|                            | Multi-family residential |                              | $ | 126,696 |             |  | $ | 88,748      |  |  | $ |  | 
|                            | Commercial real estate   |                              |   | 66,965  |             |  |   | 113,223     |  |  |   |  | 
|Originations for sale:      |                          |                              |   |         |             |  |   |             |  |  |   |  
|                            | Multi-family residential |                              |   | 140,860 |             |  |   | 82,861      |  |  |   |  | 
|                            |                          |                              |   |         |             |  |   |             | 
|                            | Total originations       |                              | $ | 334,521 |             |  | $ | 284,832     |  |  | $ |  | 
|                            |                          |                              |   |         |             |  |   |             | 



107



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                   |                         |                              |         |         |             |   |         |             |  |   |        |        | 
|---------------------------------- | ----------------------- | ---------------------------- | ------- | ------- | ----------- | - | ------- | ----------- |  | - | ------ | ------ | 
|                                   |                         | Year Ended December 31, 2005 |        
|                                   |                         |                              |        
|                                   |                         | Baltimore-                   |         |         |            
|                                   |                         | Washington                   |         |         | Florida     |   |         | Chicago     | 
|(Dollars in Thousands)             |                         | Market Area                  |         |         | Market Area |   |         | Market Area | 
|                                   |                        
|Mortgage warehouse lines of credit |                         | $                            | 154,194 |         |             | $ |        |             |  | $ |       |       
|Multi-family residential           |                         |                              | 335,589 |         |             |   | 278,181 |             |  |   | 38,732 |       
|Commercial real estate             |                         |                              | 109,208 |         |             |   | 209,693 |             |  |   | 3,769  |       
|Commercial business loans          |                         |                              | 5,412   |         |             |   | 536     |             |  |   |       |       
|                                   |                         |                              |         |         |             |   |         |             | 
|                                   | Total loans outstanding |                              | $       | 604,403 |             |   | $       | 488,410     |  |   | $      | 42,501 | 
|                                   |                         |                              |         |         |             |   |         |             | 

|                                   |                         |                              |         |         |             |   |         |             |  |   |   |   | 
|---------------------------------- | ----------------------- | ---------------------------- | ------- | ------- | ----------- | - | ------- | ----------- |  | - | - | - | 
|                                   |                         | Year Ended December 31, 2004
|                                   |                         |                             
|                                   |                         | Baltimore-                   |         |         |            
|                                   |                         | Washington                   |         |         | Florida     |   |         | Chicago    
|(Dollars in Thousands)             |                         | Market Area                  |         |         | Market Area |   |         | Market Area
|                                  
|Mortgage warehouse lines of credit |                         | $                            | 84,000  |         |             | $ |        |             |  | $ |  |  
|Multi-family residential           |                         |                              | 171,351 |         |             |   | 107,539 |             |  |   |  |  
|Commercial real estate             |                         |                              | 72,698  |         |             |   | 117,695 |             |  |   |  |  
|Commercial business loans          |                         |                              | 949     |         |             |   | 18,171  |             |  |   |  |  
|                                   |                         |                              |         |         |             |   |         |             | 
|                                   | Total loans outstanding |                              | $       | 328,998 |             |   | $       | 243,405     |  |   | $ |  | 
|                                   |                         |                              |         |         |             |   |         |             | 







108



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                               |  |              |        |  |      |   |        | 
|---------------------------------------------- |  | ------------ | ------ |  | ---- | - | ------ | 
|                                               |  | December 31, |       
|                                               |  |              |       
|(In Thousands)                                 |  | 2005         |        |  | 2004 |  
|                                               | 
|Impaired loans with associated allowance       |  | $            | 11,039 |  |      | $ | 10,200 | 
|Impaired loans without associated allowance    |  |              | 10,246 |  |      |   | 17,593 | 
|                                               |  |              |        |  |      |  
|Total impaired loans                           |  | $            | 21,285 |  |      | $ | 27,793 | 
|                                               |  |              |        |  |      |  
|Allowance for credit losses for impaired loans |  | $            | 1,065  |  |      | $ | 990    | 
|                                               |  |              |        |  |      |  



7.     Allowance for Loan Losses




|                                  |  |                         |         |  |      |   |         |      |  |   |        |  
|--------------------------------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------ | -
|                                  |  | Year Ended December 31, |        
|                                  |  |                         |        
|(In Thousands)                    |  | 2005                    |         |  | 2004 |   |         | 2003 | 
|                                  | 
|Allowance at beginning of period  |  | $                       | 101,435 |  |      | $ | 79,503  |      |  | $ | 80,547 |  
|Allowance of acquired institution |  |                         |        |  |      |   | 24,069  |      |  |   |       |  
|Provision charged to operations   |  |                         |        |  |      |   | 2,000   |      |  |   | 3,500  |  
|Net recoveries (charge-offs)      |  |                         | 32      |  |      |   | (4,137  | )    |  |   | (4,544 | )
|                                  |  |                         |         |  |      |   |         |      | 
|Allowance at end of period        |  | $                       | 101,467 |  |      | $ | 101,435 |      |  | $ | 79,503 |  
|                                  |  |                         |         |  |      |   |         |      | 



8.     Premises, Furniture and
Equipment




|                                               |  |              |         |  |      |   |         | 
|---------------------------------------------- |  | ------------ | ------- |  | ---- | - | ------- | 
|                                               |  | December 31, |        
|                                               |  |              |        
|(In Thousands)                                 |  | 2005         |         |  | 2004 |  
|                                               | 
|Land                                           |  | $            | 15,157  |  |      | $ | 14,164  | 
|Buildings and improvements                     |  |              | 102,629 |  |      |   | 108,697 | 
|Leasehold improvements                         |  |              | 58,063  |  |      |   | 43,840  | 
|Furniture and equipment                        |  |              | 74,819  |  |      |   | 60,890  | 
|                                               |  |              |         |  |      |  
|                                               |  |              | 250,668 |  |      |   | 227,591 | 
|Less accumulated depreciation and amortization |  |              | 85,029  |  |      |   | 64,904  | 
|                                               |  |              |         |  |      |  
|Total premises, furniture and equipment        |  | $            | 165,639 |  |      | $ | 162,687 | 
|                                               |  |              |         |  |      |  



109



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


9.     Goodwill and Identifiable
Intangible Assets












|                             |                     |                      |   |        |                      |  |     |          |  |       |          |        |  |              |     |        |          |  |   |        |  |  |   |        | 
|---------------------------- | ------------------- | -------------------- | - | ------ | -------------------- |  | --- | -------- |  | ----- | -------- | ------ |  | ------------ | --- | ------ | -------- |  | - | ------ |  |  | - | ------ | 
|                             |                     | At December 31, 2005 |   |        | At December 31, 2004 | 
|                             |                     |                      |   |        |                      | 
|                             |                     | Gross                |   |        |                      |  | Net |          |  | Gross |          |        |  |              | Net |       
|                             |                     | Carrying             |   |        | Accumulated          |  |     | Carrying |  |       | Carrying |        |  | Accumulated  |     |        | Carrying | 
|(In Thousands)               |                     | Amount               |   |        | Amortization         |  |     | Amount   |  |       | Amount   |        |  | Amortization |     |        | Amount   | 
|                             |                    
|Amortized intangible assets: |                     |                      |   |        |                      |  |     |          |  |       |          |        |  |              |     |        |          |  |   |        |  |  |   |       
|                             | Deposit intangibles |                      | $ | 87,133 |                      |  | $   | 19,457   |  |       | $        | 67,676 |  |              | $   | 91,129 |          |  | $ | 12,073 |  |  | $ | 79,056 | 
|                             |                     |                      |   |        |                      |  |     |          |  |       |          |        |  |              |     |        |          | 



|                    |  |        |        | 
|------------------- |  | ------ | ------ | 
|(In Thousands)      |  | Amount |       
|                    | 
|2006                |  | $      | 10,496 | 
|2007                |  |        | 9,612  | 
|2008                |  |        | 8,728  | 
|2009                |  |        | 7,844  | 
|2010                |  |        | 6,960  | 
|2011 and thereafter |  |        | 24,036 | 



110



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


10.     Other Assets




|                                             |  |              |         |  |      |   |         | 
|-------------------------------------------- |  | ------------ | ------- |  | ---- | - | ------- | 
|                                             |  | December 31, |        
|                                             |  |              |        
|(In Thousands)                               |  | 2005         |         |  | 2004 |  
|                                             | 
|FHLB stock                                   |  | $            | 167,294 |  |      | $ | 197,900 | 
|Net deferred tax asset                       |  |              | 73,873  |  |      |   | 78,844  | 
|Loan servicing assets                        |  |              | 13,890  |  |      |   | 18,100  | 
|Equity investment in mortgage brokerage firm |  |              | 27,531  |  |      |   | 29,183  | 
|Prepaid expenses                             |  |              | 25,327  |  |      |   | 24,234  | 
|Other real estate                            |  |              | 1,279   |  |      |   | 2,512   | 
|Accounts receivable                          |  |              | 45,134  |  |      |   | 62,124  | 
|Other                                        |  |              | 26,170  |  |      |   | 19,298  | 
|                                             |  |              |         |  |      |  
|Total other assets                           |  | $            | 380,498 |  |      | $ | 432,195 | 
|                                             |  |              |         |  |      |  







11.     Deposits




|                            |                     |              |           |            |         |  |      |           |          |   |           |           |  |  |      |      | 
|--------------------------- | ------------------- | ------------ | --------- | ---------- | ------- |  | ---- | --------- | -------- | - | --------- | --------- |  |  | ---- | ---- | 
|                            |                     | December 31, |          
|                            |                     |              |          
|                            |                     | 2005         |           |            | 2004    | 
|                            |                     |              |           |            |         | 
|                            |                     |              |           | Weighted   |         |  |      |           | Weighted |  
|                            |                     | Deposit      |           |            | Average |  |      | Deposit   |          |   | Average   |          
|(Dollars in Thousands)      |                     | Liability    |           |            | Rate    |  |      | Liability |          |   | Rate      |          
|                            |                    
|Savings                     |                     | $            | 2,143,172 |            |         |  | 0.29 | %         |          | $ | 2,630,416 |           |  |  | 0.38 | %   
|Money market                |                     |              | 561,359   |            |         |  | 1.04 |           |          |   | 752,310   |           |  |  | 1.59 |     
|Active management accounts  |                     |              | 310,557   |            |         |  | 1.46 |           |          |   | 948,977   |           |  |  | 1.43 |     
|Interest-bearing demand     |                     |              | 2,622,115 |            |         |  | 2.64 |           |          |   | 1,214,190 |           |  |  | 1.35 |     
|Non-interest-bearing demand |                     |              | 1,592,486 |            |         |  |     |           |          |   | 1,487,756 |           |  |  |     |     
|                            |                     |              |           |            |         |  |      |           |          |   |           |          
|                            | Total core deposits |              |           | 7,229,689  |         |  |      | 1.58      |          |   |           | 7,033,649 |  |  |      | 0.93 | 
|Certificates of deposit     |                     |              | 3,715,594 |            |         |  | 3.32 |           |          |   | 2,271,415 |           |  |  | 2.58 |     
|                            |                     |              |           |            |         |  |      |           |          |   |           |          
|                            | Total deposits      |              | $         | 10,945,283 |         |  |      | 1.91      |          |   | $         | 9,305,064 |  |  |      | 1.19 | 
|                            |                     |              |           |            |         |  |      |           |          |   |           |          

111



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|               |  |              |           |  |      |   |           | 
|-------------- |  | ------------ | --------- |  | ---- | - | --------- | 
|               |  | December 31, |          
|               |  |              |          
|(In Thousands) |  | 2005         |           |  | 2004 |  
|               | 
|One year       |  | $            | 2,420,594 |  |      | $ | 1,214,030 | 
|Two years      |  |              | 806,117   |  |      |   | 200,539   | 
|Three years    |  |              | 123,520   |  |      |   | 473,550   | 
|Four years     |  |              | 268,115   |  |      |   | 100,859   | 
|Thereafter     |  |              | 97,248    |  |      |   | 282,437   | 
|               |  |              |           |  |      |  
|               |  | $            | 3,715,594 |  |      | $ | 2,271,415 | 
|               |  |              |           |  |      |  





12.     Borrowings




|                                       |  |              |           |  |      |   |           | 
|-------------------------------------- |  | ------------ | --------- |  | ---- | - | --------- | 
|                                       |  | December 31, |          
|                                       |  |              |          
|(In Thousands)                         |  | 2005         |           |  | 2004 |  
|                                       | 
|FHLB advances and overnight borrowings |  | $            | 2,043,000 |  |      | $ | 2,588,938 | 
|Repurchase agreements                  |  |              | 2,913,729 |  |      |   | 2,923,034 | 
|                                       |  |              |           |  |      |  
|Total borrowings                       |  | $            | 4,956,729 |  |      | $ | 5,511,972 | 
|                                       |  |              |           |  |      |  



| |                                          
| | -----------------------------------------
| | FHLB-NY Advances and Overnight Borrowings



|                                                            |  |                          |           |   |      |   |           |  
|----------------------------------------------------------- |  | ------------------------ | --------- | - | ---- | - | --------- | -
|                                                            |  | At or for the Year Ended |          
|                                                            |  | December 31,             |          
|                                                            |  |                          |          
|(Dollars In Thousands)                                      |  | 2005                     |           |   | 2004 |  
|                                                            | 
|Balance outstanding at end of year                          |  | $                        | 2,043,000 |   |      | $ | 2,558,938 |  
|Maximum amount outstanding at any month end during the year |  |                          | 2,408,000 |   |      |   | 3,048,000 |  
|Average outstanding balance during the year                 |  |                          | 1,964,275 |   |      |   | 2,404,148 |  
|Weighted average interest rate paid                         |  |                          | 2.71      | % |      |   | 2.23      | %
|Weighted average interest rate at year end                  |  |                          | 4.19      | % |      |   | 3.72      | %



112



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |        |           | 
|----------------------- |  | ------ | --------- | 
|(In Thousands)          |  | Amount |          
|                        | 
|Year ended December 31: |  |        |           | 
|2006                    |  | $      | 1,020,000 | 
|2007                    |  |        | 140,000   | 
|2008                    |  |        | 78,000    | 
|2009                    |  |        | 35,000    | 
|2010                    |  |        | 55,000    | 
|Thereafter(1)           |  |        | 715,000   | 
|                        |  |        |          
|                        |  | $      | 2,043,000 | 
|                        |  |        |          






|    |                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Although the contractual maturities of these borrowings are
    between five and ten years, the FHLB has the right to call these
    advances beginning in the third year after the advance was made.
    Such advances callable by the FHLB total $570.0 million in
    2006 and $100.0 million in 2007.



| |                      
| | ---------------------
| | Repurchase Agreements





|                                                            |  |                          |           |   |      |   |           |  
|----------------------------------------------------------- |  | ------------------------ | --------- | - | ---- | - | --------- | -
|                                                            |  | At or for the Year Ended |          
|                                                            |  | December 31,             |          
|                                                            |  |                          |          
|(Dollars In Thousands)                                      |  | 2005                     |           |   | 2004 |  
|                                                            | 
|Balance outstanding at end of year                          |  | $                        | 2,913,729 |   |      | $ | 2,923,034 |  
|Maximum amount outstanding at any month end during the year |  |                          | 3,109,179 |   |      |   | 2,953,972 |  
|Average outstanding balance during the year                 |  |                          | 2,894,288 |   |      |   | 2,333,877 |  
|Weighted average interest rate paid                         |  |                          | 3.58      | % |      |   | 3.22      | %
|Weighted average interest rate at year end                  |  |                          | 4.09      | % |      |   | 3.75      | %

113



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |        |           | 
|----------------------- |  | ------ | --------- | 
|(In Thousands)          |  | Amount |          
|                        | 
|Year ended December 31: |  |        |           | 
|2006                    |  | $      | 295,711   | 
|2007                    |  |        | 850,000   | 
|2008                    |  |        | 977,018   | 
|2009                    |  |        | 65,000    | 
|2010                    |  |        | 526,000   | 
|Thereafter              |  |        | 200,000   | 
|                        |  |        |          
|                        |  | $      | 2,913,729 | 
|                        |  |        |          

13.     Subordinated Notes








14.     Senior Notes




15.     Earnings Per Share




114



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                         |                                                                                        |                                 |      |         |      |   |      |         |  |   |      |         | 
|---------------------------------------- | -------------------------------------------------------------------------------------- | ------------------------------- | ---- | ------- | ---- | - | ---- | ------- |  | - | ---- | ------- | 
|                                         |                                                                                        | For the Year Ended December 31, |     
|                                         |                                                                                        |                                 |     
|(In Thousands, Except Per Share Amounts) |                                                                                        | 2005                            |      |         | 2004 |   |      | 2003    | 
|                                         |                                                                                       
|Numerator:                               |                                                                                        |                                 |      |         |      |   |      |         |  |   |      |        
|                                         | Net income                                                                             |                                 | $    | 213,472 |      |   | $    | 212,172 |  |   | $    | 136,970 | 
|                                         |                                                                                        |                                 |      |         |      |   |      |         | 
|Denominator:                             |                                                                                        |                                 |      |         |      |   |      |         |  |   |      |        
|                                         | Weighted average number of common shares outstanding 
    basic                       |                                 |      | 79,163  |      |   |      | 71,560  |  |   |      | 49,993  | 
|                                         | Weighted average number of common stock equivalents (restricted
    stock and options) |                                 |      | 2,387   |      |   |      | 3,057   |  |   |      | 2,650   | 
|                                         |                                                                                        |                                 |      |         |      |   |      |         | 
|                                         | Weighted average number of common shares and common stock
    equivalents  diluted    |                                 |      | 81,550  |      |   |      | 74,617  |  |   |      | 52,643  | 
|                                         |                                                                                        |                                 |      |         |      |   |      |         | 
|Basic earning per share                  |                                                                                        | $                               | 2.70 |         |      | $ | 2.96 |         |  | $ | 2.74 |        
|                                         |                                                                                        |                                 |      |         |      |   |      |         | 
|Diluted earnings per share               |                                                                                        | $                               | 2.62 |         |      | $ | 2.84 |         |  | $ | 2.60 |        
|                                         |                                                                                        |                                 |      |         |      |   |      |         | 



16.     Benefit Plans




| |             
| | ------------
| | Pension Plan







115



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                             |  |                         |        |   |      |   |        |  
|---------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | -
|                                                                             |  | Year Ended December 31, |       
|                                                                             |  |                         |       
|(In Thousands)                                                               |  | 2005                    |        |   | 2004 |  
|                                                                             | 
|Projected benefit obligation at beginning of year                            |  | $                       | 77,674 |   |      | $ | 49,831 |  
|Projected benefit obligation for Staten Island Plan at beginning
    of year |  |                         |       |   |      |   | 24,920 |  
|Service cost                                                                 |  |                         | 1,476  |   |      |   | 1,479  |  
|Interest cost                                                                |  |                         | 4,751  |   |      |   | 4,633  |  
|Actuarial loss                                                               |  |                         | 8,890  |   |      |   | 603    |  
|Benefits paid                                                                |  |                         | (3,907 | ) |      |   | (3,792 | )
|                                                                             |  |                         |        |   |      |  
|Projected benefit obligation at end of year                                  |  | $                       | 88,884 |   |      | $ | 77,674 |  
|                                                                             |  |                         |        |   |      |  



|                                                             |  |              |        |   |      |   |        |  
|------------------------------------------------------------ |  | ------------ | ------ | - | ---- | - | ------ | -
|                                                             |  | December 31, |       
|                                                             |  |              |       
|(In Thousands)                                               |  | 2005         |        |   | 2004 |  
|                                                             | 
|Fair value of Plan assets at beginning of year               |  | $            | 77,671 |   |      | $ | 50,644 |  
|Fair value of Staten Island Plan assets at beginning of year |  |              |       |   |      |   | 25,311 |  
|Actual return on Plan assets                                 |  |              | 6,267  |   |      |   | 5,250  |  
|Employer contributions                                       |  |              | 1,784  |   |      |   | 258    |  
|Benefits paid                                                |  |              | (3,907 | ) |      |   | (3,792 | )
|                                                             |  |              |        |   |      |  
|Fair value of Plan assets at end of year                     |  | $            | 81,815 |   |      | $ | 77,671 |  
|                                                             |  |              |        |   |      |  
|Funded status                                                |  | $            | (7,069 | ) |      | $ | (3     | )
|Amount contributed during the fourth quarter                 |  |              | 24     |   |      |   | 24     |  
|Unrecognized net asset                                       |  |              |       |   |      |   | (203   | )
|Unrecognized prior service cost                              |  |              | (2,360 | ) |      |   | (3,450 | )
|Unrecognized actuarial loss                                  |  |              | 21,331 |   |      |   | 12,577 |  
|                                                             |  |              |        |   |      |  
|Prepaid pension cost at December 31, 2005 and 2004           |  | $            | 11,926 |   |      | $ | 8,945  |  
|                                                             |  |              |        |   |      |  





|                     |                          |                 |        |        |      |   |        |       | 
|-------------------- | ------------------------ | --------------- | ------ | ------ | ---- | - | ------ | ----- | 
|                     |                          | At December 31, |       
|                     |                          |                 |       
|(In Thousands)       |                          | 2005            |        |        | 2004 |  
|                     |                         
|Prepaid pension cost |                          | $               | 16,652 |        |      | $ | 13,717 |      
|Accrued pension cost |                          |                 | (4,726 | )      |      |   | (4,772 | )    
|                     |                          |                 |        |        |      |  
|                     | Net prepaid pension cost |                 | $      | 11,926 |      |   | $      | 8,945 | 
|                     |                          |                 |        |        |      |  

116



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                       |  |                         |        |   |      |   |        |      |  |   |        |  
|-------------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                       |  | Year Ended December 31, |       
|                                                                                       |  |                         |       
|(In Thousands)                                                                         |  | 2005                    |        |   | 2004 |   |        | 2003 | 
|                                                                                       | 
|Service cost-benefits earned during the period                                         |  | $                       | 1,476  |   |      | $ | 1,479  |      |  | $ | 1,420  |  
|Interest cost on projected benefit obligation                                          |  |                         | 4,751  |   |      |   | 4,188  |      |  |   | 2,972  |  
|Expected return on Plan assets                                                         |  |                         | (6,854 | ) |      |   | (5,598 | )    |  |   | (3,415 | )
|Amortization of net assets                                                             |  |                         | (203   | ) |      |   | (203   | )    |  |   | (203   | )
|Amortization of prior service cost                                                     |  |                         | (1,090 | ) |      |   | (1,090 | )    |  |   | (1,090 | )
|Recognized net actuarial loss                                                          |  |                         | 723    |   |      |   | 686    |      |  |   | 1,462  |  
|                                                                                       |  |                         |        |   |      |   |        |      | 
|Net pension (benefit) expense for the years ended
    December 31, 2005, 2004 and 2003 |  |                         | (1,197 | ) |      |   | (538   | )    |  |   | 1,146  |  
|Net adjustment                                                                         |  |                         |       |   |      |   |       |      |  |   | (37    | )
|                                                                                       |  |                         |        |   |      |   |        |      | 
|Net pension (benefit) expense                                                          |  | $                       | (1,197 | ) |      | $ | (538   | )    |  | $ | 1,109  |  
|                                                                                       |  |                         |        |   |      |   |        |      | 

|                                                |  |      |       |  |      |  |       |      |  |  |        | 
|----------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ------ | 
|Weighted Average Assumptions as of December 31: |  | 2005 |       |  | 2004 |  |       | 2003 | 
|                                                | 
|Discount rate                                   |  |      | 5.50% |  |      |  | 6.25% |      |  |  | 6.375% | 
|Rate of compensation increase                   |  |      | 3.00% |  |      |  | 3.25% |      |  |  | 3.50%  | 
|Expected long-term return on Plan assets        |  |      | 9.00% |  |      |  | 9.00% |      |  |  | 8.00%  | 







|                         |       |              |      |       |                 |  |      |       |   |  |      |       |  
|------------------------ | ----- | ------------ | ---- | ----- | --------------- |  | ---- | ----- | - |  | ---- | ----- | -
|                         |       | Pension Plan |     
|                         |       |              |     
|                         |       | Target       |      |       |                
|                         |       | Allocation   |      |       | At December 31, | 
|                         |       |              |      |       |                 | 
|Asset Category:          |       | 2006         |      |       | 2005            |  |      | 2004  |  
|                         |      
|Equity investments       |       |              | 60.0 | %     |                 |  | 61.0 | %     |   |  | 61.0 | %    
|Fixed income investments |       |              | 40.0 |       |                 |  | 39.0 |       |   |  | 39.0 |      
|                         |       |              |      |       |                 |  |      |       |  
|                         | Total |              |      | 100.0 | %               |  |      | 100.0 | % |  |      | 100.0 | %
|                         |       |              |      |       |                 |  |      |       |  





117



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                        |             |        |   |        | 
|----------------------- | ----------- | ------ | - | ------ | 
|(In Thousands)          |             | Amount |  
|                        |            
|Year ended December 31: |             |        |   |       
|                        | 2006        |        | $ | 3,847  | 
|                        | 2007        |        |   | 4,067  | 
|                        | 2008        |        |   | 4,317  | 
|                        | 2009        |        |   | 4,516  | 
|                        | 2010        |        |   | 4,657  | 
|                        | 2011  2015 |        |   | 26,706 | 





| |                         
| | ------------------------
| | Post-retirement Benefits







118



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                  |  |              |         |   |              |   |         |  
|--------------------------------------------------------------------------------- |  | ------------ | ------- | - | ------------ | - | ------- | -
|                                                                                  |  | December 31, |         |   | December 31, |  
|(In Thousands)                                                                    |  | 2005         |         |   | 2004         |  
|                                                                                  | 
|Benefit obligation at beginning of year                                           |  | $            | 29,652  |   |              | $ | 21,651  |  
|Benefit obligation for Staten Island Plan at beginning of year                    |  |              |        |   |              |   | 7,262   |  
|Service cost                                                                      |  |              | 905     |   |              |   | 726     |  
|Interest cost                                                                     |  |              | 1,816   |   |              |   | 1,566   |  
|Actuarial gain                                                                    |  |              | (2,756  | ) |              |   | (2,287  | )
|Benefits paid                                                                     |  |              | (927    | ) |              |   | (1,021  | )
|Plan amendments                                                                   |  |              | 700     |   |              |   | 1,755   |  
|                                                                                  |  |              |         |   |              |  
|Benefit obligation at end of year                                                 |  | $            | 29,390  |   |              | $ | 29,652  |  
|                                                                                  |  |              |         |   |              |  
|Funded status                                                                     |  | $            | (29,390 | ) |              | $ | (29,652 | )
|Unrecognized transition obligation being recognized over
    20 years             |  |              | 524     |   |              |   | 582     |  
|Unrecognized net loss due to past experience difference from
    assumptions made |  |              | 3,770   |   |              |   | 6,798   |  
|Unrecognized past service liability                                               |  |              | 2,310   |   |              |   | 1,756   |  
|                                                                                  |  |              |         |   |              |  
|Accrued post-retirement benefit cost at December 31, 2005
    and 2004            |  | $            | (22,786 | ) |              | $ | (20,516 | )
|                                                                                  |  |              |         |   |              |  







|                                                                                   |  |                         |       |  |      |   |       |      |  |   |       | 
|---------------------------------------------------------------------------------- |  | ----------------------- | ----- |  | ---- | - | ----- | ---- |  | - | ----- | 
|                                                                                   |  | Year Ended December 31, |      
|                                                                                   |  |                         |      
|(In Thousands)                                                                     |  | 2005                    |       |  | 2004 |   |       | 2003 | 
|                                                                                   | 
|Service cost-benefits earned during the period                                     |  | $                       | 906   |  |      | $ | 726   |      |  | $ | 523   | 
|Interest cost on accumulated post-retirement benefit obligation                    |  |                         | 1,816 |  |      |   | 1,566 |      |  |   | 1,197 | 
|Amortization of net obligation                                                     |  |                         | 58    |  |      |   | 58    |      |  |   | 58    | 
|Amortization of unrecognized loss                                                  |  |                         | 271   |  |      |   | 537   |      |  |   | 585   | 
|Unrecognized past service liability                                                |  |                         | 146   |  |      |   |      |      |  |   |      | 
|                                                                                   |  |                         |       |  |      |   |       |      | 
|Post-retirement benefit cost-plan years ended December 31,
    2005, 2004 and 2003 |  | $                       | 3,197 |  |      | $ | 2,887 |      |  | $ | 2,363 | 
|                                                                                   |  |                         |       |  |      |   |       |      | 



119



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                              |  |                 |        |  |      |   |        | 
|----------------------------- |  | --------------- | ------ |  | ---- | - | ------ | 
|                              |  | At December 31, |       
|                              |  |                 |       
|(In Thousands)                |  | 2005            |        |  | 2004 |  
|                              | 
|Accrued post-retirement costs |  | $               | 22,786 |  |      | $ | 20,516 | 
|                              |  |                 |        |  |      |  

106-2






|                        |             |        |   |       | 
|----------------------- | ----------- | ------ | - | ----- | 
|(In Thousands)          |             | Amount |  
|                        |            
|Year ended December 31: |             |        |   |      
|                        | 2006        |        | $ | 1,132 | 
|                        | 2007        |        |   | 1,181 | 
|                        | 2008        |        |   | 1,250 | 
|                        | 2009        |        |   | 1,339 | 
|                        | 2010        |        |   | 1,416 | 
|                        | 2011  2015 |        |   | 8,486 | 





|                                                                                        |  |                 |      |   |      |  |       |  
|--------------------------------------------------------------------------------------- |  | --------------- | ---- | - | ---- |  | ----- | -
|                                                                                        |  | At December 31, |     
|                                                                                        |  |                 |     
|                                                                                        |  | 2005            |      |   | 2004 | 
|                                                                                        | 
|Health care cost trend rate assumed for next year                                       |  |                 | 9.50 | % |      |  | 10.00 | %
|Rate to which the cost trend rate is assumed to decline (the
    ultimate trend rate) |  |                 | 3.75 | % |      |  | 3.75  | %
|Year that the rate reaches the ultimate trend rate                                      |  |                 | 2012 |   |      |  | 2011  |  



|                                             |  |             |       |  |             |   |        |  
|-------------------------------------------- |  | ----------- | ----- |  | ----------- | - | ------ | -
|(In Thousands)                               |  | 1% Increase |       |  | 1% Decrease |  
|                                             | 
|Effect in total service and interest cost    |  | $           | 485   |  |             | $ | (385   | )
|Effect in post-retirement benefit obligation |  |             | 4,122 |  |             |   | (3,565 | )



| |            
| | -----------
| | 401(k) Plan

full-time


120



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                              
| | -----------------------------
| | Employee Stock Ownership Plan









121



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                    
|--- | -------------------
|17. | Stock Benefit Plans



| |                 
| | ----------------
| | Recognition Plan









122



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                               |  |                         |          |          |             |   |         |        |          |  |             |   |  |          |         |  |             |  |          |   |  |   |         | 
|------------------------------ |  | ----------------------- | -------- | -------- | ----------- | - | ------- | ------ | -------- |  | ----------- | - |  | -------- | ------- |  | ----------- |  | -------- | - |  | - | ------- | 
|                               |  | Year Ended December 31, |         
|                               |  |                         |         
|                               |  | 2005                    |          |          | 2004        |   |         | 2003   |         
|                               |  |                         |          |          |             |   |         |        |         
|                               |  |                         |          | Weighted |             |   |         |        | Weighted |  |             |   |  | Weighted |        
|                               |  |                         |          | Average  |             |   |         |        | Average  |  |             |   |  | Average  |        
|                               |  | Shares                  |          |          | Grant Value |   |         | Shares |          |  | Grant Value |   |  | Shares   |         |  | Grant Value | 
|                               | 
|Outstanding, beginning of year |  |                         | 441,425  |          |             | $ | 30.4830 |        |          |  | 363,771     |   |  | $        | 24.0877 |  |             |  | 747,205  |   |  | $ | 16.5493 | 
|Granted                        |  |                         | 147,779  |          |             |   | 38.4865 |        |          |  | 183,379     |   |  |          | 38.9202 |  |             |  | 123,522  |   |  |   | 31.9458 | 
|Vested                         |  |                         | (132,143 | )        |             |   | 27.6372 |        |          |  | (103,952    | ) |  |          | 22.9653 |  |             |  | (505,206 | ) |  |   | 14.8673 | 
|Forfeited                      |  |                         | (10,223  | )        |             |   | 31.5760 |        |          |  | (1,773      | ) |  |          | 30.0554 |  |             |  | (1,750   | ) |  |   | 13.3125 | 
|                               |  |                         |          |          |             |   |         |        |          |  |             |   |  |          |         |  |             | 
|Outstanding, end of year       |  |                         | 446,838  |          |             | $ | 34.1090 |        |          |  | 441,425     |   |  | $        | 30.4830 |  |             |  | 363,771  |   |  | $ | 24.0877 | 
|                               |  |                         |          |          |             |   |         |        |          |  |             |   |  |          |         |  |             | 



| |                   
| | ------------------
| | Stock Option Plans











123



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                       
| | ----------------------
| | 1998 Stock Option Plan







| |                          
| | -------------------------
| | 2002 Stock Incentive Plan



124



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                          
| | -------------------------
| | 2005 Stock Incentive Plan





| |                  
| | -----------------
| | Other Stock Plans





125



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |   |  |   |         |  
|------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                      |                                                                                                                                                   | Year Ended December 31, |  
|                                      |                                                                                                                                                   |                         |  
|(In Thousands, Except Per Share Data) |                                                                                                                                                   | 2005                    |   |         | 2004 |  |   | 2003    |  
|                                      |                                                                                                                                                  
|Net income:                           |                                                                                                                                                   |                         |   |         |      |  |   |         |   |  |   |        
|                                      | As reported                                                                                                                                       |                         | $ | 213,472 |      |  | $ | 212,172 |   |  | $ | 136,970 |  
|                                      | Add: Stock-based employee compensation expense included in
    reported net income, net of related tax effects (1)                                |                         |   | 6,983   |      |  |   | 4,654   |   |  |   | 5,724   |  
|                                      | Deduct: Total stock-based employee compensation expense
    determined under fair value method for all awards, net of
    related tax effects (1) |                         |   | (8,861  | )    |  |   | (8,739  | ) |  |   | (10,599 | )
|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |  
|                                      | Pro forma                                                                                                                                         |                         | $ | 211,594 |      |  | $ | 208,087 |   |  | $ | 132,095 |  
|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |  
|Basic earnings per share:             |                                                                                                                                                   |                         |   |         |      |  |   |         |   |  |   |        
|                                      | As reported                                                                                                                                       |                         | $ | 2.70    |      |  | $ | 2.96    |   |  | $ | 2.74    |  
|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |  
|                                      | Pro forma                                                                                                                                         |                         | $ | 2.67    |      |  | $ | 2.91    |   |  | $ | 2.64    |  
|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |  
|Diluted earnings per share:           |                                                                                                                                                   |                         |   |         |      |  |   |         |   |  |   |        
|                                      | As reported                                                                                                                                       |                         | $ | 2.62    |      |  | $ | 2.84    |   |  | $ | 2.60    |  
|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |  
|                                      | Pro forma                                                                                                                                         |                         | $ | 2.59    |      |  | $ | 2.79    |   |  | $ | 2.51    |  
|                                      |                                                                                                                                                   |                         |   |         |      |  |   |         |  






|    |                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes costs associated with restricted stock awards granted
    pursuant to the Recognition Plan, Stock Incentive Plan and 2005
    Stock Incentive Plan and stock option grants awarded under the
    various stock option plans.



|                                                                             |                       |                         |           |            |       |   |         |         |          |  |           |            |   |          |         |         |       |  |           |            |   |   |         |         | 
|---------------------------------------------------------------------------- | --------------------- | ----------------------- | --------- | ---------- | ----- | - | ------- | ------- | -------- |  | --------- | ---------- | - | -------- | ------- | ------- | ----- |  | --------- | ---------- | - | - | ------- | ------- | 
|                                                                             |                       | Year Ended December 31, |          
|                                                                             |                       |                         |          
|                                                                             |                       | 2005                    |           |            | 2004  |   |         | 2003    |         
|                                                                             |                       |                         |           |            |       |   |         |         |         
|                                                                             |                       |                         |           | Weighted   |       |   |         |         | Weighted |  |           |            |   | Weighted |        
|                                                                             |                       |                         |           | Average    |       |   |         |         | Average  |  |           |            |   | Average  |        
|                                                                             |                       |                         |           | Exercise   |       |   |         |         | Exercise |  |           |            |   | Exercise |        
|                                                                             |                       | Shares                  |           |            | Price |   |         | Shares  |          |  | Price     |            |   | Shares   |         |         | Price | 
|                                                                             |                      
|Outstanding, beginning of year                                               |                       |                         | 6,988,482 |            |       | $ | 20.0618 |         |          |  | 5,994,342 |            |   | $        | 16.6341 |         |       |  | 6,834,038 |            |   | $ | 15.6343 |        
|                                                                             | Granted               |                         |           | 443,880    |       |   |         | 38.4943 |          |  |           | 548,540    |   |          |         | 38.1708 |       |  |           | 235,750    |   |   |         | 34.2564 | 
|                                                                             | SIB converted options |                         |           |           |       |   |         |        |          |  |           | 2,762,184  |   |          |         | 21.3063 |       |  |           |           |   |   |         |        | 
|                                                                             | Exercised             |                         |           | (1,478,241 | )     |   |         | 15.1113 |          |  |           | (2,293,844 | ) |          |         | 17.9516 |       |  |           | (1,039,833 | ) |   |         | 13.9231 | 
|                                                                             | Forfeited/cancelled   |                         |           | (34,408    | )     |   |         | 31.9109 |          |  |           | (22,740    | ) |          |         | 24.3963 |       |  |           | (35,613    | ) |   |         | 20.5780 | 
|                                                                             |                       |                         |           |            |       |   |         |         |          |  |           |            |   |          |         |         |       | 
|Outstanding, end of year                                                     |                       |                         | 5,919,713 |            |       | $ | 22.6113 |         |          |  | 6,988,482 |            |   | $        | 20.0618 |         |       |  | 5,994,342 |            |   | $ | 16.6341 |        
|                                                                             |                       |                         |           |            |       |   |         |         |          |  |           |            |   |          |         |         |       | 
|Options exercisable at year end                                              |                       |                         | 4,679,523 |            |       |   |         |         |          |  | 5,632,863 |            |   |          |         |         |       |  | 4,740,697 |            |   |   |         |        
|Weighted average fair value per share of options granted during
    the year |                       |                         |           |            |       | $ | 10.1229 |         |          |  |           |            |   | $        | 10.6241 |         |       |  |           |            |   | $ | 10.8031 |        

126



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                        |  |                         |                 |  |      |  |                 |      |  |  |                 | 
|----------------------- |  | ----------------------- | --------------- |  | ---- |  | --------------- | ---- |  |  | --------------- | 
|                        |  | Year Ended December 31, |                
|                        |  |                         |                
|                        |  | 2005                    |                 |  | 2004 |  |                 | 2003 | 
|                        | 
|Risk free interest rate |  |                         | 3.77% - 4.45%   |  |      |  | 3.12% - 4.53%   |      |  |  | 2.90% - 3.85%   | 
|Volatility              |  |                         | 28.43% - 29.34% |  |      |  | 29.72% - 37.50% |      |  |  | 31.02% - 32.59% | 
|Expected dividend yield |  |                         | 2.67% - 3.48%   |  |      |  | 1.20% - 2.60%   |      |  |  | 1.92% - 2.37%   | 
|Expected option life    |  |                         | 6 years         |  |      |  | 6 years         |      |  |  | 6 years         | 



|                         |  |             |                     |  |              |  |     |       |  |          |         |  |  |       |           |  |  |   |         | 
|------------------------ |  | ----------- | ------------------- |  | ------------ |  | --- | ----- |  | -------- | ------- |  |  | ----- | --------- |  |  | - | ------- | 
|Options Outstanding      |  |             | Options Exercisable | 
|                         |  |             |                     | 
|                         |  | Weighted    |                     |  |              |  |    
|                         |  | Average     |                     |  | Weighted     |  |     |       |  | Weighted |        
|                         |  | Remaining   |                     |  | Average      |  |     |       |  | Average  |        
|                         |  | Contractual |                     |  | Exercise     |  |     |       |  | Exercise |        
|Range of Exercise Prices |  | Shares      |                     |  | Life (Years) |  |     | Price |  |          | Shares  |  |  | Price |          
|                         | 
|$ 0.0000  $12.0000      |  |             | 84,313              |  |              |  | 3.5 |       |  | $        | 11.1092 |  |  |       | 84,313    |  |  | $ | 11.1092 | 
|$12.0001  $16.0000      |  |             | 2,272,842           |  |              |  | 2.6 |       |  |          | 13.3321 |  |  |       | 2,272,842 |  |  |   | 13.3321 | 
|$16.0001  $24.0000      |  |             | 1,269,581           |  |              |  | 4.4 |       |  |          | 19.2347 |  |  |       | 1,161,181 |  |  |   | 19.3585 | 
|$24.0001  $30.0000      |  |             | 749,814             |  |              |  | 6.2 |       |  |          | 28.9742 |  |  |       | 540,409   |  |  |   | 29.0274 | 
|$30.0001  $36.0000      |  |             | 668,269             |  |              |  | 7.5 |       |  |          | 33.5444 |  |  |       | 464,238   |  |  |   | 32.8654 | 
|$36.0001  $41.6400      |  |             | 874,894             |  |              |  | 8.6 |       |  |          | 38.9212 |  |  |       | 156,540   |  |  |   | 38.7486 | 
|                         |  |             |                     |  |              |  |     |       |  |          |         |  |  |       |          
|                         |  |             | 5,919,713           |  |              |  | 4.9 |       |  | $        | 22.6113 |  |  |       | 4,679,523 |  |  | $ | 19.3881 | 
|                         |  |             |                     |  |              |  |     |       |  |          |         |  |  |       |          

18.     Stockholders Equity










127



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




19.     Derivative Financial
Instruments








| |                                                                                    
| | -----------------------------------------------------------------------------------
| | Loan Commitments for Loans Originated for Sale and Forward
    Loan Sale Agreements





20.     Commitments and
Contingencies




| |                        
| | -----------------------
| | Off-Balance Sheet Risks



128



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                                                                        |                                                                 |                    |           |         |                   |   |           |         | 
|----------------------------------------------------------------------- | --------------------------------------------------------------- | ------------------ | --------- | ------- | ----------------- | - | --------- | ------- | 
|                                                                        |                                                                 | Contract or Amount |          
|                                                                        |                                                                 |                    |          
|(In Thousands)                                                          |                                                                 | December 31, 2005  |           |         | December 31, 2004 |  
|                                                                        |                                                                
|Financial instruments whose contract amounts represent credit
    risk: |                                                                 |                    |           |         |                   |   |           |        
|                                                                        | Commitments to extend credit-mortgage loans                     |                    | $         | 563,162 |                   |   | $         | 650,101 | 
|                                                                        | Commitments to extend credit-commercial business loans          |                    |           | 443,173 |                   |   |           | 267,649 | 
|                                                                        | Commitments to extend credit-mortgage warehouse lines of credit |                    |           | 828,177 |                   |   |           | 775,905 | 
|                                                                        | Commitments to extend credit-other loans                        |                    |           | 224,449 |                   |   |           | 212,119 | 
|                                                                        | Standby letters of credit                                       |                    |           | 35,983  |                   |   |           | 36,633  | 
|                                                                        | Commercial letters of credit                                    |                    |           | 543     |                   |   |           | 807     | 
|                                                                        |                                                                 |                    |           |         |                   |  
|Total                                                                   |                                                                 | $                  | 2,095,487 |         |                   | $ | 1,943,214 |        
|                                                                        |                                                                 |                    |           |         |                   |  



| |                         
| | ------------------------
| | Retained Credit Exposure



129



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                  
| | -----------------
| | Lease Commitments



|                        |                     |        |   |         | 
|----------------------- | ------------------- | ------ | - | ------- | 
|(In Thousands)          |                     | Amount |  
|                        |                    
|Year ended December 31: |                     |        |   |        
|                        | 2006                |        | $ | 18,386  | 
|                        | 2007                |        |   | 17,327  | 
|                        | 2008                |        |   | 16,678  | 
|                        | 2009                |        |   | 16,089  | 
|                        | 2010 and thereafter |        |   | 116,960 | 





| |                     
| | --------------------
| | Purchase Obligations





| |                                    
| | -----------------------------------
| | Other Commitments and Contingencies



21.     Related Party
Transactions


multi-family


130



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














131



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


22.     Income Taxes




|                               |                                           |              |         |        |      |   |         |        | 
|------------------------------ | ----------------------------------------- | ------------ | ------- | ------ | ---- | - | ------- | ------ | 
|                               |                                           | December 31, |        
|                               |                                           |              |        
|(In Thousands)                 |                                           | 2005         |         |        | 2004 |  
|                               |                                          
|Deferred tax assets:           |                                           |              |         |        |      |   |         |       
|                               | Stock options and restricted stock awards |              | $       | 12,291 |      |   | $       | 16,551 | 
|                               | Allowance for loan losses                 |              |         | 46,729 |      |   |         | 56,804 | 
|                               | Securities impairment loss                |              |         |       |      |   |         | 6,806  | 
|                               | Deferred loan fees                        |              |         | 6,993  |      |   |         | 3,462  | 
|                               | Amortization of intangible assets         |              |         | 7,715  |      |   |         | 9,066  | 
|                               | Non-accrual interest                      |              |         |       |      |   |         | 1,061  | 
|                               | Employee benefits                         |              |         | 7,128  |      |   |         | 12,853 | 
|                               | Securities available-for-sale             |              |         | 32,259 |      |   |         | 2,720  | 
|                               | Representation and warranty reserve       |              |         |       |      |   |         | 2,178  | 
|                               | Other                                     |              |         | 2,396  |      |   |         | 1,333  | 
|                               |                                           |              |         |        |      |  
|Gross deferred tax assets      |                                           |              | 115,511 |        |      |   | 112,834 |       
|                               |                                           |              |         |        |      |  
|Deferred tax liabilities:      |                                           |              |         |        |      |   |         |       
|                               | Purchase accounting                       |              |         | 33,909 |      |   |         | 25,639 | 
|                               | Deferred compensation                     |              |         | 327    |      |   |         | 263    | 
|                               | Depreciation                              |              |         | 7,402  |      |   |         | 8,088  | 
|                               |                                           |              |         |        |      |  
|Gross deferred tax liabilities |                                           |              | 41,638  |        |      |   | 33,990  |       
|                               |                                           |              |         |        |      |  
|Net deferred tax assets        |                                           | $            | 73,873  |        |      | $ | 78,844  |       
|                               |                                           |              |         |        |      |  





|               |                 |                         |         |        |      |   |         |        |   |   |        |        | 
|-------------- | --------------- | ----------------------- | ------- | ------ | ---- | - | ------- | ------ | - | - | ------ | ------ | 
|               |                 | Year Ended December 31, |        
|               |                 |                         |        
|(In Thousands) |                 | 2005                    |         |        | 2004 |   |         | 2003   |  
|               |                
|Current:       |                 |                         |         |        |      |   |         |        |   |   |        |       
|               | Federal         |                         | $       | 74,970 |      |   | $       | 96,108 |   |   | $      | 60,069 | 
|               | State and local |                         |         | 3,024  |      |   |         | 16,996 |   |   |        | 5,464  | 
|               |                 |                         |         |        |      |   |         |        |  
|               |                 |                         | 77,994  |        |      |   | 113,104 |        |   |   | 65,533 |       
|               |                 |                         |         |        |      |   |         |        |  
|Deferred:      |                 |                         |         |        |      |   |         |        |   |   |        |       
|               | Federal         |                         |         | 24,381 |      |   |         | (740   | ) |   |        | 10,291 | 
|               | State and local |                         |         | 10,065 |      |   |         | (609   | ) |   |        | 387    | 
|               |                 |                         |         |        |      |   |         |        |  
|               |                 |                         | 34,446  |        |      |   | (1,349  | )      |   |   | 10,678 |       
|               |                 |                         |         |        |      |   |         |        |  
|Total          |                 | $                       | 112,440 |        |      | $ | 111,755 |        |   | $ | 76,211 |       
|               |                 |                         |         |        |      |   |         |        |  

132



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                |                                                         |                         |         |        |      |   |         |        |   |   |        |        |  
|----------------------------------------------- | ------------------------------------------------------- | ----------------------- | ------- | ------ | ---- | - | ------- | ------ | - | - | ------ | ------ | -
|                                                |                                                         | Year Ended December 31, |        
|                                                |                                                         |                         |        
|(In Thousands)                                  |                                                         | 2005                    |         |        | 2004 |   |         | 2003   |  
|                                                |                                                        
|Federal income tax provision at statutory rates |                                                         | $                       | 114,069 |        |      | $ | 113,374 |        |   | $ | 74,613 |       
|Increase (decrease) in tax resulting from:      |                                                         |                         |         |        |      |   |         |        |   |   |        |       
|                                                | State and local taxes, net of Federal income tax effect |                         |         | 8,508  |      |   |         | 10,650 |   |   |        | 3,803  |  
|                                                | New Market Tax Credit                                   |                         |         | (5,650 | )    |   |         | (5,650 | ) |   |        |       |  
|                                                | Other                                                   |                         |         | (4,487 | )    |   |         | (6,619 | ) |   |        | (2,205 | )
|                                                |                                                         |                         |         |        |      |   |         |        |  
|                                                |                                                         | $                       | 112,440 |        |      | $ | 111,755 |        |   | $ | 76,211 |       
|                                                |                                                         |                         |         |        |      |   |         |        |  









|                        |       |        |   |        | 
|----------------------- | ----- | ------ | - | ------ | 
|(In Thousands)          |       | Amount |  
|                        |      
|Year ended December 31: |       |        |   |       
|                        | 2004  |        | $ | 5,650  | 
|                        | 2005  |        |   | 5,650  | 
|                        | 2006  |        |   | 5,650  | 
|                        | 2007  |        |   | 6,780  | 
|                        | 2008  |        |   | 6,780  | 
|                        | 2009  |        |   | 6,780  | 
|                        | 2010  |        |   | 6,780  | 
|                        |       |        |  
|                        | Total |        | $ | 44,070 | 
|                        |       |        |  

133



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


23.     Regulatory Requirements








|                       |  |                |           |             |                      |  |       |                   |  |             |           |  |  |        |      |   |       |   |           |  |  |  |       |  
|---------------------- |  | -------------- | --------- | ----------- | -------------------- |  | ----- | ----------------- |  | ----------- | --------- |  |  | ------ | ---- | - | ----- | - | --------- |  |  |  | ----- | -
|                       |  |                |           |             |                      |  |       |                   |  | To Be Well- |          
|                       |  |                |           |             |                      |  |       | Capitalized Under | 
|                       |  |                |           | For Capital |                      |  | FDIC  |                  
|                       |  | Actual Amounts |           |             | Adequacy Purposes at |  |       | Guidelines        | 
|                       |  | as of 12/31/05 |           |             | 12/31/05             |  |       | at 12/31/05       | 
|                       |  |                |           |             |                      |  |       |                   | 
|(Dollars In Thousands) |  | Amount         |           |             | Ratio                |  |       | Amount            |  |             | Ratio     |  |  | Amount |      |   | Ratio |  
|                       | 
|Tier I Leverage        |  | $              | 1,185,969 |             |                      |  | 6.98  | %                 |  | $           | 679,573   |  |  |        | 4.00 | % |       | $ | 849,466   |  |  |  | 5.00  | %
|Tier I Risk-Based      |  |                | 1,185,969 |             |                      |  | 8.82  |                   |  |             | 538,073   |  |  |        | 4.00 |   |       |   | 807,110   |  |  |  | 6.00  |  
|Total Risk-Based       |  |                | 1,694,083 |             |                      |  | 12.59 |                   |  |             | 1,076,147 |  |  |        | 8.00 |   |       |   | 1,345,184 |  |  |  | 10.00 |  

|                       |  |                |           |             |                      |  |       |                   |  |             |         |  |  |        |      |   |       |   |           |  |  |  |       |  
|---------------------- |  | -------------- | --------- | ----------- | -------------------- |  | ----- | ----------------- |  | ----------- | ------- |  |  | ------ | ---- | - | ----- | - | --------- |  |  |  | ----- | -
|                       |  |                |           |             |                      |  |       |                   |  | To Be Well- |        
|                       |  |                |           |             |                      |  |       | Capitalized Under | 
|                       |  |                |           | For Capital |                      |  | FDIC  |                  
|                       |  | Actual Amounts |           |             | Adequacy Purposes at |  |       | Guidelines        | 
|                       |  | as of 12/31/04 |           |             | 12/31/04             |  |       | at 12/31/04       | 
|                       |  |                |           |             |                      |  |       |                   | 
|(Dollars In Thousands) |  | Amount         |           |             | Ratio                |  |       | Amount            |  |             | Ratio   |  |  | Amount |      |   | Ratio |  
|                       | 
|Tier I Leverage        |  | $              | 904,828   |             |                      |  | 5.51  | %                 |  | $           | 656,762 |  |  |        | 4.00 | % |       | $ | 820,953   |  |  |  | 5.00  | %
|Tier I Risk-Based      |  |                | 904,828   |             |                      |  | 7.36  |                   |  |             | 491,833 |  |  |        | 4.00 |   |       |   | 737,749   |  |  |  | 6.00  |  
|Total Risk-Based       |  |                | 1,410,734 |             |                      |  | 11.47 |                   |  |             | 983,665 |  |  |        | 8.00 |   |       |   | 1,229,582 |  |  |  | 10.00 |  

24.     Fair Value of Financial
Instruments




134



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                   |  |              |            |  |            |   |            |            |  |   |            |  |  |   |           | 
|---------------------------------- |  | ------------ | ---------- |  | ---------- | - | ---------- | ---------- |  | - | ---------- |  |  | - | --------- | 
|                                   |  | December 31, |           
|                                   |  |              |           
|                                   |  | 2005         |            |  | 2004       |  
|                                   |  |              |            |  |            |  
|(In Thousands)                     |  | Book Value   |            |  | Fair Value |   |            | Book Value |  |   | Fair Value | 
|                                   | 
|Financial Assets:                  |  |              |            |  |            |   |            |            |  |   |            |  |  |   |           | 
|Cash and due from banks            |  | $            | 1,079,182  |  |            | $ | 1,079,182  |            |  | $ | 360,877    |  |  | $ | 360,877   | 
|Securities available-for-sale      |  |              | 3,574,500  |  |            |   | 3,574,500  |            |  |   | 3,933,787  |  |  |   | 3,933,787 | 
|Loans available-for-sale           |  |              | 22,072     |  |            |   | 22,072     |            |  |   | 96,671     |  |  |   | 97,707    | 
|Mortgage loans on real estate      |  |              | 10,363,050 |  |            |   | 10,303,636 |            |  |   | 9,324,965  |  |  |   | 9,357,637 | 
|Commercial business loans          |  |              | 977,022    |  |            |   | 953,196    |            |  |   | 809,392    |  |  |   | 804,915   | 
|Mortgage warehouse lines of credit |  |              | 453,541    |  |            |   | 453,541    |            |  |   | 659,942    |  |  |   | 659,942   | 
|Other loans                        |  |              | 517,510    |  |            |   | 520,071    |            |  |   | 464,168    |  |  |   | 460,203   | 
|Accrued interest receivable        |  |              | 72,518     |  |            |   | 72,518     |            |  |   | 64,437     |  |  |   | 64,437    | 
|FHLB stock                         |  |              | 167,294    |  |            |   | 167,294    |            |  |   | 197,900    |  |  |   | 197,900   | 
|Loan servicing assets              |  |              | 13,890     |  |            |   | 34,501     |            |  |   | 18,100     |  |  |   | 26,514    | 
|Financial Liabilities:             |  |              |            |  |            |   |            |            |  |   |            |  |  |   |           | 
|Core deposits                      |  |              | 7,229,689  |  |            |   | 7,229,689  |            |  |   | 7,033,649  |  |  |   | 7,033,649 | 
|Certificates of deposit accounts   |  |              | 3,715,594  |  |            |   | 3,725,319  |            |  |   | 2,271,415  |  |  |   | 2,333,655 | 
|Borrowings                         |  |              | 4,956,729  |  |            |   | 4,965,624  |            |  |   | 5,511,972  |  |  |   | 5,627,147 | 
|Escrow and other deposits          |  |              | 116,529    |  |            |   | 116,529    |            |  |   | 104,304    |  |  |   | 104,304   | 
|Subordinated notes                 |  |              | 397,260    |  |            |   | 380,000    |            |  |   | 396,332    |  |  |   | 387,625   | 
|Senior notes                       |  |              | 247,986    |  |            |   | 243,750    |            |  |   |           |  |  |   |          | 
|Retained credit exposure           |  |              | 9,387      |  |            |   | 9,387      |            |  |   | 7,881      |  |  |   | 7,881     | 





Securities available-for-sale:


Mortgage loans on real estate:


Commercial business loans:


FHLB stock:


135



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Loan servicing assets:


Certificates of deposit:


Borrowings:


Subordinated Notes:


Senior Notes:


Retained Credit Exposure:


25.     Asset and Dividend
Restrictions








136



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                            
|--- | -------------------------------------------
|26. | Quarterly Results of Operations (unaudited)

|                                                    |               |                              |         |        |             |   |         |             |  |   |             |        |  |   |         |        | 
|--------------------------------------------------- | ------------- | ---------------------------- | ------- | ------ | ----------- | - | ------- | ----------- |  | - | ----------- | ------ |  | - | ------- | ------ | 
|                                                    |               | Year Ended December 31, 2005 |        
|                                                    |               |                              |        
|(In Thousands, Except Per Share Data)               |               | 1st Quarter                  |         |        | 2nd Quarter |   |         | 3rd Quarter |  |   | 4th Quarter |       
|                                                    |              
|Interest income                                     |               | $                            | 200,180 |        |             | $ | 203,868 |             |  | $ | 213,765     |        |  | $ | 219,766 |       
|Interest expense                                    |               |                              | 67,614  |        |             |   | 77,020  |             |  |   | 88,208      |        |  |   | 105,872 |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Net interest income                                 |               |                              | 132,566 |        |             |   | 126,848 |             |  |   | 125,557     |        |  |   | 113,894 |       
|Provision for loan losses                           |               |                              |        |        |             |   |        |             |  |   |            |        |  |   |        |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Net interest income after provision for loan losses |               |                              | 132,566 |        |             |   | 126,848 |             |  |   | 125,557     |        |  |   | 113,894 |       
|Non-interest income                                 |               |                              | 29,559  |        |             |   | 29,953  |             |  |   | 33,045      |        |  |   | 32,323  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Total income                                        |               |                              | 162,125 |        |             |   | 156,801 |             |  |   | 158,602     |        |  |   | 146,217 |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|General and administrative expense                  |               |                              | 67,958  |        |             |   | 71,289  |             |  |   | 72,794      |        |  |   | 74,412  |       
|Amortization of intangible assets                   |               |                              | 2,928   |        |             |   | 2,873   |             |  |   | 2,816       |        |  |   | 2,763   |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Income before provision for income taxes            |               |                              | 91,239  |        |             |   | 82,639  |             |  |   | 82,992      |        |  |   | 69,042  |       
|Provision for income taxes                          |               |                              | 31,478  |        |             |   | 28,510  |             |  |   | 28,632      |        |  |   | 23,820  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Net income                                          |               | $                            | 59,761  |        |             | $ | 54,129  |             |  | $ | 54,360      |        |  | $ | 45,222  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Basic earnings per common share                     |               | $                            | 0.74    |        |             | $ | 0.68    |             |  | $ | 0.69        |        |  | $ | 0.58    |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Diluted earnings per common share                   |               | $                            | 0.72    |        |             | $ | 0.66    |             |  | $ | 0.67        |        |  | $ | 0.56    |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Dividend declared per common share                  |               | $                            | 0.26    |        |             | $ | 0.27    |             |  | $ | 0.27        |        |  | $ | 0.27    |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Closing price per common share                      |               |                              |         |        |             |   |         |             |  |   |             |        |  |   |         |       
|                                                    | High          |                              | $       | 41.980 |             |   | $       | 39.210      |  |   | $           | 37.560 |  |   | $       | 40.100 | 
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|                                                    | Low           |                              | $       | 38.600 |             |   | $       | 35.340      |  |   | $           | 33.140 |  |   | $       | 30.920 | 
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|                                                    | End of period |                              | $       | 39.000 |             |   | $       | 36.930      |  |   | $           | 34.090 |  |   | $       | 39.730 | 
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       

137



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                                    |               |                              |         |        |             |   |         |             |  |   |             |        |  |   |         |        | 
|--------------------------------------------------- | ------------- | ---------------------------- | ------- | ------ | ----------- | - | ------- | ----------- |  | - | ----------- | ------ |  | - | ------- | ------ | 
|                                                    |               | Year Ended December 31, 2004 |        
|                                                    |               |                              |        
|(In Thousands, Except Per Share Data)               |               | 1st Quarter                  |         |        | 2nd Quarter |   |         | 3rd Quarter |  |   | 4th Quarter |       
|                                                    |              
|Interest income                                     |               | $                            | 117,615 |        |             | $ | 182,561 |             |  | $ | 193,385     |        |  | $ | 195,847 |       
|Interest expense                                    |               |                              | 36,106  |        |             |   | 51,718  |             |  |   | 61,995      |        |  |   | 64,096  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Net interest income                                 |               |                              | 81,509  |        |             |   | 130,843 |             |  |   | 131,390     |        |  |   | 131,751 |       
|Provision for loan losses                           |               |                              |        |        |             |   | 2,000   |             |  |   |            |        |  |   |        |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Net interest income after provision for loan losses |               |                              | 81,509  |        |             |   | 128,843 |             |  |   | 131,390     |        |  |   | 131,751 |       
|Non-interest income                                 |               |                              | 27,453  |        |             |   | 35,505  |             |  |   | 35,897      |        |  |   | 22,654  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Total income                                        |               |                              | 108,962 |        |             |   | 164,348 |             |  |   | 167,287     |        |  |   | 154,405 |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|General and administrative expense                  |               |                              | 49,453  |        |             |   | 70,051  |             |  |   | 71,548      |        |  |   | 71,755  |       
|Amortization of intangible assets                   |               |                              | 143     |        |             |   | 2,602   |             |  |   | 2,540       |        |  |   | 2,983   |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Income before provision for income taxes            |               |                              | 59,366  |        |             |   | 91,695  |             |  |   | 93,199      |        |  |   | 79,667  |       
|Provision for income taxes                          |               |                              | 21,223  |        |             |   | 33,447  |             |  |   | 29,785      |        |  |   | 27,300  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Net income                                          |               | $                            | 38,143  |        |             | $ | 58,248  |             |  | $ | 63,414      |        |  | $ | 52,367  |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Basic earnings per common share                     |               | $                            | 0.76    |        |             | $ | 0.77    |             |  | $ | 0.79        |        |  | $ | 0.65    |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Diluted earnings per common share                   |               | $                            | 0.72    |        |             | $ | 0.74    |             |  | $ | 0.76        |        |  | $ | 0.63    |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Dividend declared per common share                  |               | $                            | 0.22    |        |             | $ | 0.23    |             |  | $ | 0.24        |        |  | $ | 0.25    |       
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|Closing price per common share                      |               |                              |         |        |             |   |         |             |  |   |             |        |  |   |         |       
|                                                    | High          |                              | $       | 41.410 |             |   | $       | 40.930      |  |   | $           | 40.490 |  |   | $       | 43.180 | 
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|                                                    | Low           |                              | $       | 34.920 |             |   | $       | 35.240      |  |   | $           | 35.025 |  |   | $       | 36.950 | 
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       
|                                                    | End of period |                              | $       | 40.750 |             |   | $       | 36.400      |  |   | $           | 39.050 |  |   | $       | 42.580 | 
|                                                    |               |                              |         |        |             |   |         |             |  |   |             |       

138



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                          
|--- | -------------------------
|27. | Parent Company Disclosure





| |                                           
| | ------------------------------------------
| | Condensed Statement of Financial Condition

|                                           |  |              |           |  |      |   |           | 
|------------------------------------------ |  | ------------ | --------- |  | ---- | - | --------- | 
|                                           |  | December 31, |          
|                                           |  |              |          
|(In Thousands)                             |  | 2005         |           |  | 2004 |  
|                                           | 
|Assets:                                    |  |              |           |  |      |   |           | 
|Cash and cash equivalents                  |  | $            | 86,319    |  |      | $ | 38,856    | 
|Securities available-for-sale              |  |              | 10,853    |  |      |   | 50,102    | 
|Investment in and advances to subsidiaries |  |              | 2,402,277 |  |      |   | 2,153,880 | 
|Net deferred tax asset                     |  |              | 521       |  |      |   | 164       | 
|Dividends receivable                       |  |              |          |  |      |   | 25,000    | 
|Minority equity investment                 |  |              | 27,531    |  |      |   | 29,183    | 
|Other assets                               |  |              | 10,419    |  |      |   | 7,231     | 
|                                           |  |              |           |  |      |  
|Total assets                               |  | $            | 2,537,920 |  |      | $ | 2,304,416 | 
|                                           |  |              |           |  |      |  
|Liabilities:                               |  |              |           |  |      |   |           | 
|Senior notes                               |  | $            | 247,986   |  |      | $ |          | 
|Accrued expenses and other liabilities     |  |              | 4,154     |  |      |   | 373       | 
|                                           |  |              |           |  |      |  
|Total liabilities                          |  |              | 252,140   |  |      |   | 373       | 
|Stockholders equity                       |  |              | 2,285,780 |  |      |   | 2,304,043 | 
|                                           |  |              |           |  |      |  
|Total liabilities and stockholders equity |  | $            | 2,537,920 |  |      | $ | 2,304,416 | 
|                                           |  |              |           |  |      |  



| |                                  
| | ---------------------------------
| | Condensed Statement of Operations

|                                                                                        |  |                         |         |  |      |   |         |      |  |   |         | 
|--------------------------------------------------------------------------------------- |  | ----------------------- | ------- |  | ---- | - | ------- | ---- |  | - | ------- | 
|                                                                                        |  | Year Ended December 31, |        
|                                                                                        |  |                         |        
|(In Thousands)                                                                          |  | 2005                    |         |  | 2004 |   |         | 2003 | 
|                                                                                        | 
|Income:                                                                                 |  |                         |         |  |      |   |         |      |  |   |         | 
|Interest income                                                                         |  | $                       | 1,671   |  |      | $ | 355     |      |  | $ | 69      | 
|Net gain (loss) on sales of securities                                                  |  |                         | 523     |  |      |   | (181    | )    |  |   |        | 
|Income from minority equity investment                                                  |  |                         | 10,361  |  |      |   | 14,160  |      |  |   | 6,334   | 
|Other non-interest income                                                               |  |                         | 699     |  |      |   | 201     |      |  |   |        | 
|                                                                                        |  |                         |         |  |      |   |         |      | 
|                                                                                        |  |                         | 13,254  |  |      |   | 14,535  |      |  |   | 6,403   | 
|                                                                                        |  |                         |         |  |      |   |         |      | 
|Expenses:                                                                               |  |                         |         |  |      |   |         |      |  |   |         | 
|Interest expense on senior notes                                                        |  |                         | 3,445   |  |      |   |        |      |  |   |        | 
|Shareholder expense                                                                     |  |                         | 837     |  |      |   | 701     |      |  |   | 477     | 
|Other expense                                                                           |  |                         | 191     |  |      |   | 200     |      |  |   | 245     | 
|                                                                                        |  |                         |         |  |      |   |         |      | 
|                                                                                        |  |                         | 4,473   |  |      |   | 901     |      |  |   | 722     | 
|                                                                                        |  |                         |         |  |      |   |         |      | 
|Income before provision for income taxes and undistributed
    earnings of subsidiaries |  |                         | 8,781   |  |      |   | 13,634  |      |  |   | 5,681   | 
|Provision for income taxes, net                                                         |  |                         | 165     |  |      |   | 165     |      |  |   | 150     | 
|                                                                                        |  |                         |         |  |      |   |         |      | 
|Income before undistributed earnings of subsidiaries                                    |  |                         | 8,616   |  |      |   | 13,469  |      |  |   | 5,531   | 
|Equity in undistributed earnings of subsidiaries                                        |  |                         | 204,856 |  |      |   | 198,703 |      |  |   | 131,439 | 
|                                                                                        |  |                         |         |  |      |   |         |      | 
|Net income                                                                              |  | $                       | 213,472 |  |      | $ | 212,172 |      |  | $ | 136,970 | 
|                                                                                        |  |                         |         |  |      |   |         |      | 

139



---



##### Table of Contents



INDEPENDENCE COMMUNITY BANK CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                  
| | ---------------------------------
| | Condensed Statement of Cash Flows

|                                                                                      |  |                         |          |   |      |   |          |      |  |   |          |  
|------------------------------------------------------------------------------------- |  | ----------------------- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                                                                      |  | Year Ended December 31, |         
|                                                                                      |  |                         |         
|(In Thousands)                                                                        |  | 2005                    |          |   | 2004 |   |          | 2003 | 
|                                                                                      | 
|Cash flows from operating activities:                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|Net income                                                                            |  | $                       | 213,472  |   |      | $ | 212,172  |      |  | $ | 136,970  |  
|Adjustments to reconcile net income to net cash provided by
    operating activities: |  |                         |          |   |      |   |          |      |  |   |          |  
|(Gain) loss on securities                                                             |  |                         | (523     | ) |      |   | 181      |      |  |   |         |  
|(Increase) decrease in deferred income taxes                                          |  |                         | (200     | ) |      |   |         |      |  |   | 6,084    |  
|Dividends received from subsidiary                                                    |  |                         | 80,000   |   |      |   | 370,000  |      |  |   | 75,000   |  
|Decrease in other assets                                                              |  |                         | 24,273   |   |      |   | 31,946   |      |  |   | 9,031    |  
|Increase (decrease) in other liabilities                                              |  |                         | 75       |   |      |   | (97      | )    |  |   | (55      | )
|Amortization of unearned compensation of ESOP and restricted
    stock awards         |  |                         | 15,033   |   |      |   | 13,911   |      |  |   | 17,373   |  
|Accelerated vesting of stock options                                                  |  |                         | 110      |   |      |   | 206      |      |  |   | 185      |  
|Undistributed earnings of subsidiaries                                                |  |                         | (204,856 | ) |      |   | (198,703 | )    |  |   | (131,439 | )
|Other, net                                                                            |  |                         | 642      |   |      |   | (890     | )    |  |   | (542     | )
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Net cash provided by operating activities                                             |  |                         | 128,026  |   |      |   | 428,726  |      |  |   | 112,607  |  
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Cash flows from investing activities:                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|Increase in investment in subsidiary                                                  |  |                         | (150,000 | ) |      |   |         |      |  |   |         |  
|Cash and cash equivalents acquired from SIB                                           |  |                         |         |   |      |   | 10,564   |      |  |   |         |  
|Cash consideration paid to acquire SIB                                                |  |                         |         |   |      |   | (368,500 | )    |  |   |         |  
|Purchase of securities available-for-sale                                             |  |                         | (9,597   | ) |      |   | (39,000  | )    |  |   |         |  
|Principal collected on securities available-for-sale                                  |  |                         | 48,000   |   |      |   | 15,314   |      |  |   |         |  
|Proceeds on sales of securities                                                       |  |                         |         |   |      |   | 4,889    |      |  |   |         |  
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Net cash used in investing activities                                                 |  |                         | (111,597 | ) |      |   | (376,733 | )    |  |   |         |  
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Cash flows from financing activities:                                                 |  |                         |          |   |      |   |          |      |  |   |          |  
|Net increase in senior notes                                                          |  |                         | 247,986  |   |      |   |         |      |  |   |         |  
|Proceeds received on exercise of stock options                                        |  |                         | 22,855   |   |      |   | 37,677   |      |  |   | 12,905   |  
|Repurchase of common stock                                                            |  |                         | (154,354 | ) |      |   |         |      |  |   | (78,068  | )
|Dividends paid                                                                        |  |                         | (85,453  | ) |      |   | (68,823  | )    |  |   | (34,544  | )
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Net cash provided by (used in) financing activities                                   |  |                         | 31,034   |   |      |   | (31,146  | )    |  |   | (99,707  | )
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Net increase in cash and cash equivalents                                             |  |                         | 47,463   |   |      |   | 20,847   |      |  |   | 12,900   |  
|Cash and cash equivalents at beginning of period                                      |  |                         | 38,856   |   |      |   | 18,009   |      |  |   | 5,109    |  
|                                                                                      |  |                         |          |   |      |   |          |      | 
|Cash and cash equivalents at end of period                                            |  | $                       | 86,319   |   |      | $ | 38,856   |      |  | $ | 18,009   |  
|                                                                                      |  |                         |          |   |      |   |          |      | 

140



---



##### Table of Contents








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure






Item 9A.      Controls
and Procedures


Evaluation of Disclosure Controls and Procedures. 13a-15(e) 15d-15(e)


Changes in Internal Control Over Financial Reporting. 13a-15(f) 15d-15(f)


Management Report on Internal Control Over Financial
Reporting.





Item 9B.      Other
Information






141



---



##### Table of Contents






PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | Directors and Executive Officers of the Registrant

Directors




|                   |  |     |    |                             |                     |                                                                                                                                                                                                                                                                                                                                                                           |       |  |      |         |  |  |      | 
|------------------ |  | --- | -- | --------------------------- | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- |  | ---- | ------- |  |  | ---- | 
|                   |  |     |    | Principal Occupation During |                     | Director                                                                                                                                                                                                                                                                                                                                                                  |       |  | Term |        
|Name               |  | Age |    |                             | the Past Five Years |                                                                                                                                                                                                                                                                                                                                                                           | Since |  |      | Expires | 
|                   |  |     |    |                             |                     |                                                                                                                                                                                                                                                                                                                                                                           |       |  |      |         | 
|Willard N. Archie  |  |     | 62 |                             |                     | Director; retired; certified public accountant and Chief
    Executive Officer and Managing Partner of Mitchell & Titus,
    LLP, New York, New York, an accounting and management consulting
    firm, from January 1998 to December 2000. Director of Security
    Mutual Life Insurance.                                                                               |       |  | 1994 |         |  |  | 2008 | 
|Robert B. Catell*  |  |     | 69 |                             |                     | Director; Chairman and Chief Executive Officer of KeySpan Energy
    Corporation, Brooklyn, New York, since August 1998; Chairman and
    Chief Executive Officer of Brooklyn Union, Brooklyn, New York,
    since May 1996. Director of KeySpan Energy Corporation, the
    Houston Exploration Company, Keyera Facilities Insurance Fund
    and J. & W. Seligman Fund. |       |  | 1984 |         |  |  | 2008 | 
|Rohit M. Desai     |  |     | 67 |                             |                     | Director; Chairman and President of Desai Capital Management,
    Inc., New York, New York. Director of Finlay Enterprises, Inc.,
    Sitel Corporation and Triton PCS.                                                                                                                                                                                                   |       |  | 1992 |         |  |  | 2007 | 
|Harry P. Doherty** |  |     | 63 |                             |                     | Vice Chairman of the Board; previously, Chairman, President and
    Chief Executive Officer of Staten Island Bancorp, Inc., Staten
    Island, New York, from 1990 until its merger with the Company in
    April 2004.                                                                                                                                                   |       |  | 2004 |         |  |  | 2008 | 
|Chaim Y. Edelstein |  |     | 63 |                             |                     | Director; Chairman,
    7thOnline Inc.; formerly Chairman of the Board of Hills
    Stores, Inc., Canton, Massachusetts, from 1995 to 1998 and prior
    thereto, Chairman and Chief Executive Officer of the A&S
    division of Federated Department Stores from 1984 to 1994.                                                                                          |       |  | 1991 |         |  |  | 2006 | 

142



---



##### Table of Contents



|                    |  |     |    |                             |                     |                                                                                                                                                                                                                                                                                                                                                              |       |  |      |         |  |  |      | 
|------------------- |  | --- | -- | --------------------------- | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- |  | ---- | ------- |  |  | ---- | 
|                    |  |     |    | Principal Occupation During |                     | Director                                                                                                                                                                                                                                                                                                                                                     |       |  | Term |        
|Name                |  | Age |    |                             | the Past Five Years |                                                                                                                                                                                                                                                                                                                                                              | Since |  |      | Expires | 
|                    |  |     |    |                             |                     |                                                                                                                                                                                                                                                                                                                                                              |       |  |      |         | 
|Alan H. Fishman     |  |     | 59 |                             |                     | Director; President and Chief Executive Officer of the Company
    and the Bank since March 2001; previously, President and Chief
    Executive Officer of ContiFinancial Corporation from July 1999
    to December 2000 and Managing Partner of Columbia Financial
    Partners, L.P. from 1992 to March 2001. Director of KeySpan
    Energy Corporation. |       |  | 2001 |         |  |  | 2006 | 
|Charles J. Hamm     |  |     | 68 |                             |                     | Chairman of the Board; served as Chairman, President and Chief
    Executive Officer of Independence and Independence Community
    Bank from 1996 until March 2001; prior thereto, Mr. Hamm served
    as the President and Chief Executive Officer.                                                                                                        |       |  | 1975 |         |  |  | 2007 | 
|Scott M. Hand       |  |     | 63 |                             |                     | Director; Chairman and Chief Executive Officer of INCO Limited,
    a mining and metals company headquartered in Ontario, Canada
    since April 2001; formerly President of INCO Limited. Director
    of INCO Limited.                                                                                                                                     |       |  | 1987 |         |  |  | 2007 | 
|David L. Hinds**    |  |     | 59 |                             |                     | Director; retired; previously served as Managing Director for
    Global Cash Management and Trade Finance and in various other
    management positions at Deutsche Bank/Bankers Trust Company, New
    York, New York from 1970 to 2000. Director of Carver Bancorp,
    Inc. and SBLI Mutual Life Insurance Company.                                      |       |  | 2004 |         |  |  | 2007 | 
|Donald M. Karp      |  |     | 69 |                             |                     | Vice Chairman of the Board; previously, Chairman and Chief
    Executive Officer of Broad National Bancorporation, Newark, New
    Jersey, from 1991 until its merger with the Company in July 1999.                                                                                                                                                         |       |  | 1999 |         |  |  | 2006 | 
|Denis P. Kelleher** |  |     | 66 |                             |                     | Director; Chief Executive Officer of Wall Street Access
    (formerly Wall Street Investors), a financial services company,
    New York, New York, since 1981. Director of The Ireland Fund,
    Inc.                                                                                                                                                       |       |  | 2004 |         |  |  | 2006 | 
|John R. Morris**    |  |     | 67 |                             |                     | Director; self-employed; previously served in various positions
    at Merrill Lynch, New York, New York, until his retirement in
    1997, including Vice President of the Capital Markets and
    Private Client groups.                                                                                                                                   |       |  | 2004 |         |  |  | 2008 | 

143



---



##### Table of Contents



|                      |  |     |    |                             |                     |                                                                                                                                                                                                                         |       |  |      |         |  |  |      | 
|--------------------- |  | --- | -- | --------------------------- | ------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- |  | ---- | ------- |  |  | ---- | 
|                      |  |     |    | Principal Occupation During |                     | Director                                                                                                                                                                                                                |       |  | Term |        
|Name                  |  | Age |    |                             | the Past Five Years |                                                                                                                                                                                                                         | Since |  |      | Expires | 
|                      |  |     |    |                             |                     |                                                                                                                                                                                                                         |       |  |      |         | 
|Maria Fiorini Ramirez |  |     | 58 |                             |                     | Director; President and Chief Executive Officer, Maria Fiorini
    Ramirez, Inc., New York, New York, a global economic consulting
    firm, since 1992.                                                                |       |  | 2000 |         |  |  | 2007 | 
|Victor M. Richel      |  |     | 67 |                             |                     | Vice Chairman of the Board; previously, Chairman, President and
    Chief Executive Officer of Statewide Financial Corp., Jersey
    City, New Jersey, from 1995 until its merger with the Company in
    January 2000. |       |  | 2000 |         |  |  | 2006 | 






| |   |                                                                                                                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | Under the terms of the Companys bylaws, Mr. Catell
    will not be able to serve his entire term due to age limitations
    set forth in the bylaws. Mr. Catell can serve on the board
    of directors until December 31, 2007.



|   |                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|** | Elected to the board of directors in accordance with the terms
    of the Agreement and Plan of Merger between the Company and
    Staten Island Bancorp, Inc. dated as of November 24, 2003.

Executive Officers Who Are Not Directors




|                 |  |     |    |                             |                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---------------- |  | --- | -- | --------------------------- | ------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |  |     |    | Principal Occupation During
|Name             |  | Age |    |                             | the Past Five Years
|                 |  |     |    |                             |                    
|Frank W. Baier   |  |     | 40 |                             |                     | Executive Vice President, Chief Financial Officer and Treasurer
    of the Company and the Bank since August 15, 2003; previously
    served as Senior Vice President and Treasurer from June 1, 2001;
    Mr. Baier previously served with ContiFinancial Corporation in
    various capacities including Senior Vice President and Chief
    Financial Officer from 1999 until May 2001, Vice President and
    Treasurer from 1997 until 1999 and Director, Corporate Finance
    from 1996 until 1997. Mr. Baier is a certified public accountant.
|Brendan J. Dugan |  |     | 58 |                             |                     | Executive Vice President  Business Banking Division
    since November 2003; previously Chief Operating Officer,
    Commercial Markets Group, Citibank, NA, New York, New York, from
    June 2001 to August 2003; prior to that served as President and
    Chief Operating Officer, European American Bank, New York, New
    York, from 1992 to June 2001.                                                                                                                                                                                       
|Gary M. Honstedt |  |     | 56 |                             |                     | Executive Vice President  Commercial Real Estate
    Lending Division of the Bank since March 2001; previously,
    Senior Vice President  Commercial Real Estate Lending
    from April 1996 to March 2001; Mr. Honstedt joined the Bank in
    1986.                                                                                                                                                                                                                                                                                              

144



---



##### Table of Contents



|                    |  |     |    |                             |                     |                                                                                                                                                                                                                                                                                                                                                                                                                    
|------------------- |  | --- | -- | --------------------------- | ------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |  |     |    | Principal Occupation During
|Name                |  | Age |    |                             | the Past Five Years
|                    |  |     |    |                             |                    
|Harold A. McCleery  |  |     | 58 |                             |                     | Executive Vice President  Chief Credit Officer of the
    Bank since May 2001; Mr. McCleery previously served as Executive
    Vice President and Chief Credit Officer of Bank Austria U.S.
    from July 2000 until May 2001; prior thereto served as Executive
    Vice President of First Union National Bank (and its
    predecessor, First Fidelity Bank, Newark, New Jersey) from 1996
    until July 2000.
|Joseph A. Micali    |  |     | 50 |                             |                     | Executive Vice President  Operations and Technology
    since October 2005; previously Chief Operating Officer for
    TradeCard, Inc., an internet-based procurement management
    company, from November 2001 to October 2005; Senior Executive
    Vice President for Operations for Summit Bancorp from June 1997
    to May 2001.                                                                           
|Terence J. Mitchell |  |     | 53 |                             |                     | Executive Vice President  Consumer Banking Division
    of the Bank since April 1999; Executive Vice
    President  Director of Retail Banking from July 1998
    to March 1999; Mr. Mitchell joined the Bank in 1974.                                                                                                                                                                                           
|Frank S. Muzio      |  |     | 52 |                             |                     | Senior Vice President and Controller of the Bank since April
    1998; previously, Senior Vice President  Planning and
    Analysis of Dime Bancorp, Inc. subsequent to its merger with
    Anchor Bancorp, Inc. in January 1995 and served as Senior Vice
    President and Controller of Anchor Bancorp, Inc. from 1993 to
    1995. Mr. Muzio is a certified public accountant.                                
|John K. Schnock     |  |     | 62 |                             |                     | Senior Vice President, Secretary and Counsel of the Bank since
    1996 and of the Company since 1997; Mr. Schnock joined the Bank
    in 1972.                                                                                                                                                                                                                                                                    

Certain Matters Regarding the Governance of Independence


General.


Independence of the Companys Board of Directors.




145



---



##### Table of Contents



Committees of the Board of Directors.


Executive Committee. .


Audit Committee.




| |   |                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | monitor the integrity of the Companys financial reporting
    process and system of internal controls regarding finance,
    accounting and legal compliance;                                                            
|
| |  | appoint, compensate and monitor the independence and performance
    of the Companys independent auditors, as well as monitor
    the independence and performance of the Companys internal
    auditing department; and
|
| |  | provide an avenue of communication among the independent
    auditors, management, the internal auditing department and the
    board of directors.                                                                       



http://investor.myindependence.com


Compensation Committee.




| |   |                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------
| |  | establish the compensation and benefits for the president and
    chief executive officer and other executive officers of
    Independence;
|
| |  | evaluate the performance of the president and chief executive
    officer and other senior executive officers of Independence; and         
|
| |  | review, recommend and approve executive compensation, equity
    awards and benefit plans for employees of Independence.                   



Corporate Governance and Nominating Committee.


146



---



##### Table of Contents



http://investor.myindependence.com


Stockholder Nominations for the Board.


Code of Conduct and Ethics.


http://investor.myindependence.com.


Section 16(a) Beneficial Ownership Reporting
Compliance.






| |   |                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to file reports of their ownership of the Common Stock and any
    changes in that ownership with the SEC and the Nasdaq Stock
    Market, Inc. by specific dates, and
|
| |  | to furnish the Company with copies of the reports.                                                                                                                    



147



---



##### Table of Contents








|         |                       
|-------- | ----------------------
|ITEM 11. | Executive Compensation

Compensation of Executive Officers




Summary Compensation Table


|                    |                                              |        |      |                        |           |   |         |                        |            |   |            |         |  |         |         |           |           |  |        |                 |  |  |   |   |  |   |       |        | 
|------------------- | -------------------------------------------- | ------ | ---- | ---------------------- | --------- | - | ------- | ---------------------- | ---------- | - | ---------- | ------- |  | ------- | ------- | --------- | --------- |  | ------ | --------------- |  |  | - | - |  | - | ----- | ------ | 
|                    |                                              |        |      |                        |           |   |         | Long Term Compensation |            |   |           
|                    |                                              |        |      |                        |           |   |         |                        |            |   |           
|                    |                                              |        |      |                        |           |   |         | Awards                 |            |   |            |         | 
|                    |                                              |        |      |                        |           |   |         |                        |            |   |           
|                    |                                              |        |      | Annual Compensation(1) |           |   |         |                        | Securities |   |            | Payouts |  |         |        
|                    |                                              | Fiscal |      |                        |           |   |         | Restricted             |            |   | Underlying |         |  | LTIP    |         |           | All Other | 
|Principal Position  |                                              | Year   |      |                        | Salary(2) |   |         | Bonus(3)               |            |   | Stock      |         |  | Options |         |           | Payouts   |  |        | Compensation(7) | 
|                    |                                              |        |      |                        |           |   |         |                        |            |   |            |         |  |         |         |           |           |  |        |                 | 
|Alan H. Fishman     |                                              |        | 2005 |                        |           | $ | 725,000 |                        |            | $ | 150,000    |         |  | $       | 907,845 | (4)       |           |  | 60,400 |                 |  |  |  |   |  | $ | 3,000 |       
|                    | President and                                |        |      | 2004                   |           |   |         | 701,923                |            |   |            | 404,550 |  |         |         | 1,121,304 | (5)       |  |        | 60,400          |  |  |   |  |  |   |       | 28,414 | 
|                    | Chief Executive Officer                      |        |      | 2003                   |           |   |         | 575,000                |            |   |            | 310,500 |  |         |         | 243,558   | (6)       |  |        |                |  |  |   |  |  |   |       | 26,438 | 
|Frank W. Baier      |                                              |        | 2005 |                        |           | $ | 320,000 |                        |            | $ | 50,700     |         |  | $       | 334,824 | (4)       |           |  | 23,000 |                 |  |  |  |   |  | $ | 3,000 |       
|                    | Executive Vice President,                    |        |      | 2004                   |           |   |         | 312,307                |            |   |            | 125,736 |  |         |         | 387,658   | (5)       |  |        | 23,000          |  |  |   |  |  |   |       | 28,414 | 
|                    | Chief Financial Officer and
    Treasurer(8) |        |      | 2003                   |           |   |         | 245,000                |            |   |            | 116,927 |  |         |         | 501,162   | (6)       |  |        | 50,000          |  |  |   |  |  |   |       | 26,438 | 
|Brendan J. Dugan    |                                              |        | 2005 |                        |           | $ | 316,180 |                        |            | $ | 50,700     |         |  | $       | 334,824 | (4)       |           |  | 23,000 |                 |  |  |  |   |  | $ | 1,500 |       
|                    | Executive Vice President                    |        |      | 2004                   |           |   |         | 300,000                |            |   |            | 181,350 |  |         |         | 194,665   | (5)       |  |        | 23,000          |  |  |   |  |  |   |       | 21,938 | 
|                    | Business
    Banking(9)                      |        |      | 2003                   |           |   |         | 34,615                 |            |   |            | 23,507  |  |         |         | 1,135,200 | (6)       |  |        | 100,000         |  |  |   |  |  |   |       |       | 
|Gary M. Honstedt    |                                              |        | 2005 |                        |           | $ | 320,000 |                        |            | $ | 42,300     |         |  | $       | 329,487 | (4)       |           |  | 23,000 |                 |  |  |   |   |  | $ | 3,000 |       
|                    | Executive Vice President                    |        |      | 2004                   |           |   |         | 312,307                |            |   |            | 125,736 |  |         |         | 387,658   | (5)       |  |        | 23,000          |  |  |   |  |  |   |       | 58,665 | 
|                    | Commercial Real Estate Lending               |        |      | 2003                   |           |   |         | 260,000                |            |   |            | 116,927 |  |         |         | 785,862   | (6)       |  |        |                |  |  |   |  |  |   |       | 51,833 | 
|Harold A. McCleery  |                                              |        | 2005 |                        |           | $ | 320,000 |                        |            | $ | 50,700     |         |  | $       | 334,824 | (4)       |           |  | 23,000 |                 |  |  |   |   |  | $ | 3,000 |       
|                    | Executive Vice President                    |        |      | 2004                   |           |   |         | 310,769                |            |   |            | 125,736 |  |         |         | 387,658   | (5)       |  |        | 23,000          |  |  |   |  |  |   |       | 28,414 | 
|                    | Chief Credit Officer                         |        |      | 2003                   |           |   |         | 260,000                |            |   |            | 112,596 |  |         |         | 71,341    | (6)       |  |        |                |  |  |   |  |  |   |       | 26,438 | 
|Terence J. Mitchell |                                              |        | 2005 |                        |           | $ | 320,000 |                        |            | $ | 42,300     |         |  | $       | 329,487 | (4)       |           |  | 23,000 |                 |  |  |   |   |  | $ | 3,000 |       
|                    | Executive Vice President                    |        |      | 2004                   |           |   |         | 310,000                |            |   |            | 125,736 |  |         |         | 387,658   | (5)       |  |        | 23,000          |  |  |   |  |  |   |       | 66,648 | 
|                    | Consumer Banking                             |        |      | 2003                   |           |   |         | 255,000                |            |   |            | 107,738 |  |         |         | 68,253    | (6)       |  |        |                |  |  |   |  |  |   |       | 58,163 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Does not include amounts attributable to miscellaneous benefits
    received by the named executive officers. In the opinion of
    management of the Bank, the costs to the Bank of providing such
    benefits to each of the named executive officers during the
    fiscal year ended December 31, 2005 did not exceed the
    lesser of $50,000 or 10% of the total of annual salary and bonus
    reported for the individual.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | Does not include amounts deferred by an officer in prior years
    (and previously reported) and received by such officer in the
    current fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(3) | Reflects cash portion of bonus paid in February 2006, 2005 and
    2004 pursuant to the Banks Executive Management Incentive
    Compensation Plans for 2005, 2004 and 2003, respectively. A
    portion of the bonus was paid in the form of a grant of
    restricted shares of common stock of the Company, $.01 par
    value per share (the Common Stock) pursuant to the
    1998 Recognition and Retention Plan and Trust Agreement
    (Recognition Plan), the 2002 Stock Incentive Plan or
    the 2005 Stock Incentive Plan which is reported in under the
    column Long Term Compensation-Awards-Restricted
    Stock in the table.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(4) | Represents the grant in February 2006 of 2,932, 800, 800, 667,
    800 and 667 shares of restricted Common Stock to
    Messrs. Fishman, Baier, Dugan, Honstedt, McCleery and
    Mitchell, respectively, pursuant to the 2005 Stock Incentive
    Plan (the 2005 Plan) which had a value at the date
    of grant of $117,661, $32,104, $32,104, $26,767, $32,104 and
    $26,767, respectively, as a part of the bonus paid under the
    2005 Executive Management Incentive Compensation Plan. Dividends
    paid on the restricted Common Stock subject to such grants are
    held in the 2005 Plan and paid to the recipient when the
    restricted Common Stock vests. Also includes a grant of 20,308,
    7,780, 7,780, 7,780, 7,780, and 7,780 shares made in
    February 2005 to Messrs. Fishman, Baier, Dugan, Honstedt,
    McCleery and Mitchell, respectively, which vest over three years
    and had a value of $790,184, $302,720, $302,720, $302,720,
    $302,720 and $302,720, at the date of grant pursuant to the 2002
    Stock Incentive Plan. The value of the shares subject to all
    grants of restricted stock to such individuals that remained
    unvested at December 31, 2005 were $4,225,683, $1,339,696,
    $909,939, $1,469,374, $1,252,250 and $950,461 with respect to
    Messrs. Fishman, Baier, Dugan, Honstedt, McCleery and
    Mitchell, respectively.
|   
|(5) | Represents the grant in February 2005 of 8,154, 2,047, 1,919,
    2,047, 2,047 and 2,047 shares of restricted Common Stock to
    Messrs. Fishman, Baier, Dugan, Honstedt, McCleery and
    Mitchell, respectively, pursuant to the Recognition Plan which
    had a value at the date of grant of $317,272, $79,648, $74,668,
    $79,648, $79,648 and $79,648, respectively, as a part of the
    bonus paid under the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

148



---



##### Table of Contents



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 2004 Executive Management Incentive
    Compensation Plan. Dividends paid on the restricted Common Stock
    subject to such grants are held in the Recognition Plan and paid
    to the recipient when the restricted Common Stock vests. Also
    includes a grant of 20,308, 7,780, 3,031, 7,780, 7,780, and
    7,780 shares made in February 2004 under the Recognition
    Plan to Messrs. Fishman, Baier, Dugan, Honstedt, McCleery
    and Mitchell, respectively, which vest over three years and had
    a value of $803,993, $308,010, $119,997, $308,010, $308,010, and
    $308,010, at the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(6) | Represents the grant in February
    2004 of 6,152, 1,872, 245, 1,872, 1,802 and 1,724 shares of
    restricted Common Stock to Messrs. Fishman, Baier, Dugan,
    Honstedt, McCleery and Mitchell, respectively, pursuant to the
    Recognition Plan which had a value at the date of grant of
    $243,558, $74,112, $9,700, $74,112, $71,341 and $68,253,
    respectively, as a part of the bonus paid under the 2003
    Executive Management Incentive Compensation Plan. Dividends paid
    on the restricted Common Stock subject to such grants are held
    in the Recognition Plan and paid to the recipient when the
    restricted Common Stock vests. For Messrs. Baier and
    Honstedt, also includes grants of 15,000 and 25,000 shares,
    respectively, made pursuant to the Recognition Plan in July 2003
    which vest over four years and had a value of $427,050 and
    $711,750, respectively, at the date of grant. For Mr. Dugan
    includes a grant of 30,000 shares made pursuant to the
    Recognition Plan in November 2003 which vests over three years
    and had a value of $1,125,500 at the date of grant.
|   
|(7) | Consists of amounts allocated on
    behalf of Messrs. Fishman, Baier, Dugan, Honstedt, McCleery
    and Mitchell pursuant to the Companys employee stock
    ownership plan (ESOP). Figure for 2005 reflects only
    the matching contribution to the Independence Community Bank
    401(k) Savings Plan made in the ESOP. Complete 2005 allocation
    information for the ESOP is not available as of the date of the
    filing of this
    Form 10-K.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(8) | Mr. Baier was appointed
    Executive Vice President, Chief Financial Officer and Treasurer
    in August 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(9) | Mr. Dugan was appointed
    Executive Vice President  Business Banking in
    November 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Options/ SAR Grants in 2005




|                    |  |            |        |            |            |  |      |          |  |   |            |  |  |               |           |  |  |   |         | 
|------------------- |  | ---------- | ------ | ---------- | ---------- |  | ---- | -------- |  | - | ---------- |  |  | ------------- | --------- |  |  | - | ------- | 
|                    |  |            |        | % of Total |            |  |      |          |  |   |           
|                    |  |            |        | Options    |            |  |      |          |  |   |           
|                    |  | Options    |        |            | Granted to |  |      | Exercise |  |   | Expiration |  |  | Fair Value of |          
|Name                |  | Granted(1) |        |            | Employees  |  |      | Price(2) |  |   | Date       |  |  | Options(3)    |          
|                    |  |            |        |            |            |  |      |          |  |   |            |  |  |               |          
|Alan H. Fishman     |  |            | 60,400 |            |            |  | 13.6 | %        |  | $ | 38.91      |  |  |               | 2-23-2015 |  |  | $ | 621,860 | 
|Frank W. Baier      |  |            | 23,000 |            |            |  | 5.2  | %        |  |   | 38.91      |  |  |               | 2-23-2015 |  |  |   | 236,801 | 
|Brendan J. Dugan    |  |            | 23,000 |            |            |  | 5.2  | %        |  |   | 38.91      |  |  |               | 2-23-2015 |  |  |   | 236,801 | 
|Gary M. Honstedt    |  |            | 23,000 |            |            |  | 5.2  | %        |  |   | 38.91      |  |  |               | 2-23-2015 |  |  |   | 236,801 | 
|Harold A. McCleery  |  |            | 23,000 |            |            |  | 5.2  | %        |  |   | 38.91      |  |  |               | 2-23-2015 |  |  |   | 236,801 | 
|Terence J. Mitchell |  |            | 23,000 |            |            |  | 5.2  | %        |  |   | 38.91      |  |  |               | 2-23-2015 |  |  |   | 236,801 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists of stock options exercisable at the rate of
    331/3% per
    year from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(2) | The exercise price was based on the fair market value of a share
    of Common Stock on the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(3) | The fair value of the options granted was estimated using the
    Black-Scholes Pricing Model. Under such analysis, the risk-free
    interest rate was assumed to be 3.77% to 4.45% depending on the
    timing of the particular option grant, the expected life of the
    options to be six years, the expected volatility to be 28.43% to
    29.34% depending on the timing of the particular option grant,
    and the dividend yield to be 2.67% to 3.48%, depending on the
    timing of the particular option grant per share, depending on
    the date the particular option grant was made.

149



---



##### Table of Contents



Aggregated Option Exercises in 2005 and Year-end Option
Values




|                    |  |             |   |  |          |                       |                     |  |                      |                        |         |  |             |  |         |               |  |   |           |  |  |   |           | 
|------------------- |  | ----------- | - |  | -------- | --------------------- | ------------------- |  | -------------------- | ---------------------- | ------- |  | ----------- |  | ------- | ------------- |  | - | --------- |  |  | - | --------- | 
|                    |  |             |   |  |          | Number of Unexercised |                     |  | Value of Unexercised |                       
|                    |  | Shares      |   |  |          |                       | Options at Year End |  |                      | Options at Year End(1) |        
|                    |  | Acquired on |   |  | Value    |                       |                     |  |                      |                        |        
|Name                |  | Exercise    |   |  | Realized |                       | Exercisable         |  |                      | Unexercisable          |         |  | Exercisable |  |         | Unexercisable | 
|                    |  |             |   |  |          |                       |                     |  |                      |                        |         |  |             |  |         |               | 
|Alan H. Fishman     |  |             |  |  |          | $                     |                    |  |                      |                        | 337,600 |  |             |  | 193,200 |               |  | $ | 6,360,628 |  |  | $ | 1,717,570 | 
|Frank W. Baier      |  |             |  |  |          |                       |                    |  |                      |                        | 77,750  |  |             |  | 78,250  |               |  |   | 1,111,745 |  |  |   | 523,335   | 
|Brendan J. Dugan    |  |             |  |  |          |                       |                    |  |                      |                        | 55,750  |  |             |  | 90,250  |               |  |   | 95,305    |  |  |   | 115,775   | 
|Gary. M. Honstedt   |  |             |  |  |          |                       |                    |  |                      |                        | 88,250  |  |             |  | 57,750  |               |  |   | 1,496,755 |  |  |   | 260,575   | 
|Harold A. McCleery  |  |             |  |  |          |                       |                    |  |                      |                        | 83,250  |  |             |  | 62,750  |               |  |   | 1,242,805 |  |  |   | 364,775   | 
|Terence J. Mitchell |  |             |  |  |          |                       |                    |  |                      |                        | 201,554 |  |             |  | 51,500  |               |  |   | 4,638,266 |  |  |   | 140,075   | 






|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(1) | Based on a per share market price of $39.73 at December 30,
    2005 (the last trading day in 2005).



| |                                    
| | -----------------------------------
| | Severance and Employment Agreements











150



---



##### Table of Contents







24-month






| |         
| | --------
| | Benefits

Retirement Plan.


151



---



##### Table of Contents





|                   |  |                        |         |  |    |   |         |    |  |   |         |  |  |   |         | 
|------------------ |  | ---------------------- | ------- |  | -- | - | ------- | -- |  | - | ------- |  |  | - | ------- | 
|                   |  | Years of Service(1)(2) |        
|                   |  |                        |        
|Remuneration(3)(4) |  | 15                     |         |  | 20 |   |         | 25 |  |   | 30      | 
|                   |  |                        |         |  |    |   |         |    |  |   |         | 
|$ 125,000          |  | $                      | 37,500  |  |    | $ | 50,000  |    |  | $ | 62,500  |  |  | $ | 75,000  | 
|150,000            |  |                        | 45,000  |  |    |   | 60,000  |    |  |   | 75,000  |  |  |   | 90,000  | 
|175,000            |  |                        | 52,500  |  |    |   | 70,000  |    |  |   | 87,500  |  |  |   | 105,000 | 
|200,000            |  |                        | 60,000  |  |    |   | 80,000  |    |  |   | 100,000 |  |  |   | 120,000 | 
|225,000            |  |                        | 67,500  |  |    |   | 90,000  |    |  |   | 112,500 |  |  |   | 135,000 | 
|250,000            |  |                        | 75,000  |  |    |   | 100,000 |    |  |   | 125,000 |  |  |   | 150,000 | 
|300,000            |  |                        | 90,000  |  |    |   | 120,000 |    |  |   | 150,000 |  |  |   | 180,000 | 
|400,000            |  |                        | 120,000 |  |    |   | 160,000 |    |  |   | 200,000 |  |  |   | 240,000 | 
|450,000            |  |                        | 135,000 |  |    |   | 180,000 |    |  |   | 225,000 |  |  |   | 270,000 | 
|500,000            |  |                        | 150,000 |  |    |   | 200,000 |    |  |   | 250,000 |  |  |   | 300,000 | 
|600,000            |  |                        | 180,000 |  |    |   | 240,000 |    |  |   | 300,000 |  |  |   | 360,000 | 
|700,000            |  |                        | 210,000 |  |    |   | 280,000 |    |  |   | 350,000 |  |  |   | 420,000 | 
|800,000            |  |                        | 240,000 |  |    |   | 320,000 |    |  |   | 400,000 |  |  |   | 480,000 | 
|900,000            |  |                        | 270,000 |  |    |   | 360,000 |    |  |   | 450,000 |  |  |   | 540,000 | 
|1,000,000          |  |                        | 300,000 |  |    |   | 400,000 |    |  |   | 500,000 |  |  |   | 600,000 | 






|    |                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The annual retirement benefits shown in the table do not reflect
    a deduction for Social Security benefits. There are no other
    offsets to benefits. The amounts reflect the maximum benefit;
    the benefit amounts payable could be less if based in whole or
    in part on service after August 1, 2000.               
|   
|(2) | The maximum years of service credited for benefit purposes is
    30 years.                                                                                                                                                                                                                                                       
|   
|(3) | The average annual final compensation for computing benefits
    under the pension plan cannot exceed $220,000 (as adjusted for
    subsequent years pursuant to Internal Revenue Code provisions).
    Benefits in excess of the limitation are provided through the
    Supplemental Executive Retirement Plan, discussed below.
|   
|(4) | For the fiscal year of the pension plan beginning on
    January 1, 2006, the maximum annual benefit payable under
    the pension plan cannot exceed $175,000 (as adjusted for
    subsequent years pursuant to Internal Revenue Code provisions).                                                                               



|                    |  |                   |    |      |                |   |         | 
|------------------- |  | ----------------- | -- | ---- | -------------- | - | ------- | 
|                    |  | Years of Credited |    |      | Average Annual |  
|                    |  | Service           |    |      | Earnings       |  
|                    |  |                   |    |      |                |  
|Gary M. Honstedt    |  |                   | 19 | 7/12 |                | $ | 358,725 | 
|Terence J. Mitchell |  |                   | 30 |      |                | $ | 384,365 | 



Supplemental Executive Retirement Plan.


152



---



##### Table of Contents





| |                          
| | -------------------------
| | Compensation of Directors







| |                                                                
| | ---------------------------------------------------------------
| | Compensation Committee Interlocks and Insider
    Participation





| |                                     
| | ------------------------------------
| | Report of the Compensation Committee



Compensation Philosophy




153



---



##### Table of Contents











| |                                       
| | --------------------------------------
| | Components of the Compensation Program



Base Salary.


Annual Incentive Compensation.




Long-term Incentive Compensation.


154



---



##### Table of Contents





Deductibility of Executive Compensation.


Compensation of the President and Chief Executive
Officer.








Review of Executive Compensation








155



---



##### Table of Contents





The Compensation Committee


|                        |  |                      
|----------------------- |  | ---------------------
|Scott M. Hand, Chairman |  | David L. Hinds       
|Willard N. Archie       |  | Maria Fiorini Ramirez
|Chaim Y. Edelstein      |  |                      

PERFORMANCE GRAPH







|                                  |  |  |               |        |  |  |          |   |        |  |          |  |   |        |          |  |  |   |          |  |  |  |          |        |  |  |  |   |        |  | 
|--------------------------------- |  |  | ------------- | ------ |  |  | -------- | - | ------ |  | -------- |  | - | ------ | -------- |  |  | - | -------- |  |  |  | -------- | ------ |  |  |  | - | ------ |  | 
|                                  |  | 
|                                  |  |  | Period Ending |        | 
|                                  |  |  |               |        | 
|Index                             |  |  | 12/31/00      |        |  |  | 12/31/01 |   |        |  | 12/31/02 |  |   |        | 12/31/03 |  |  |   | 12/31/04 |  |  |  | 12/31/05 |        | 
|                                  |  | 
|Independence Community Bank Corp. |  |  | $             | 100.00 |  |  |          | $ | 145.40 |  |          |  | $ | 165.01 |          |  |  | $ | 239.15   |  |  |  | $        | 290.26 |  |  |  | $ | 278.66 |  | 
|                                  |  |  |               |        |  |  |          |   |        |  |          |  |   |        |          |  |  |   |          |  |  |  |          |        | 
|NASDAQ Composite                  |  |  |               | 100.00 |  |  |          |   | 79.18  |  |          |  |   | 54.44  |          |  |  |   | 82.09    |  |  |  |          | 89.59  |  |  |  |   | 91.54  |  | 
|                                  |  |  |               |        |  |  |          |   |        |  |          |  |   |        |          |  |  |   |          |  |  |  |          |        | 
|SNL $5B to $10B Thrift Index      |  |  |               | 100.00 |  |  |          |   | 115.02 |  |          |  |   | 137.00 |          |  |  |   | 198.41   |  |  |  |          | 223.22 |  |  |  |   | 205.75 |  | 
|                                  |  |  |               |        |  |  |          |   |        |  |          |  |   |        |          |  |  |   |          |  |  |  |          |        | 
|SNL $10B+ Thrift Index            |  |  |               | 100.00 |  |  |          |   | 96.90  |  |          |  |   | 112.64 |          |  |  |   | 156.75   |  |  |  |          | 174.20 |  |  |  |   | 186.55 |  | 
|                                  |  |  |               |        |  |  |          |   |        |  |          |  |   |        |          |  |  |   |          |  |  |  |          |        | 

156



---



##### Table of Contents








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|ITEM 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters

Beneficial Ownership of Common Stock




|                                                             |                                     |                                  |           |              |                     |  |     |     |  
|------------------------------------------------------------ | ----------------------------------- | -------------------------------- | --------- | ------------ | ------------------- |  | --- | --- | -
|                                                             |                                     | Amount and Nature of Beneficial  |           | Percent of  
|Name of Beneficial Owner or Number of Persons in Group       |                                     | Ownership as of March 1, 2006(1) |           | Common Stock
|                                                             |                                     |                                  |           |             
|Independence Community Bank Corp.                            |                                     |                                  | 5,169,659 | (2)          |                     |  | 6.3 | %  
|                                                             | Employee Stock Ownership Plan Trust |                                  |           |              |                     |  |     |     |  
|                                                             | 195 Montague Street                 |                                  |           |              |                     |  |     |     |  
|                                                             | Brooklyn, New York 11201            |                                  |           |              |                     |  |     |     |  
|Private Capital Management, L.P.                             |                                     |                                  | 6,127,626 | (3)          |                     |  | 7.4 | %  
|                                                             | 8889 Pelican Bay Boulevard          |                                  |           |              |                     |  |     |     |  
|                                                             | Naples, Florida 34108               |                                  |           |              |                     |  |     |     |  
|Directors:                                                   |                                     |                                  |           |              |                     |  |     |    
|                                                             | Willard N. Archie                   |                                  |           | 170,946      | (4)(5)              |  |     | *   |  
|                                                             | Robert B. Catell                    |                                  |           | 291,792      | (4)(5)              |  |     | *   |  
|                                                             | Rohit M. Desai                      |                                  |           | 288,128      | (4)(5)              |  |     | *   |  
|                                                             | Harry P. Doherty                    |                                  |           | 819,146      | (5)(6)(10)          |  |     | *   |  
|                                                             | Chaim Y. Edelstein                  |                                  |           | 246,329      | (5)(11)             |  |     | *   |  
|                                                             | Alan H. Fishman                     |                                  |           | 794,579      | (4)(5)(7)(8)(9)(10) |  |     | *   |  
|                                                             | Charles J. Hamm                     |                                  |           | 926,123      | (4)(5)              |  |     | 1.1 | %
|                                                             | Scott M. Hand                       |                                  |           | 224,164      | (4)(5)              |  |     | *   |  
|                                                             | David L. Hinds                      |                                  |           | 17,511       | (5)                 |  |     | *   |  
|                                                             | Donald M. Karp                      |                                  |           | 780,411      | (5)(12)             |  |     | *   |  
|                                                             | Denis P. Kelleher                   |                                  |           | 209,046      | (4)(5)(13)          |  |     | *   |  
|                                                             | John R. Morris                      |                                  |           | 116,765      | (5)(14)             |  |     | *   |  
|                                                             | Maria Fiorini Ramirez               |                                  |           | 23,684       | (4)(5)              |  |     | *   |  
|                                                             | Victor M. Richel                    |                                  |           | 37,878       | (5)(10)             |  |     | *   |  
|Other Senior Executive Officers:                             |                                     |                                  |           |              |                     |  |     |    
|                                                             | Frank W. Baier                      |                                  |           | 187,698      | (5)(7)(9)           |  |     | *   |  
|                                                             | Brendan J. Dugan                    |                                  |           | 134,933      | (4)(5)(7)(9)(10)    |  |     | *   |  
|                                                             | Gary M. Honstedt                    |                                  |           | 203,630      | (5)(7)(9)(10)       |  |     | *   |  
|                                                             | Harold A. McCleery                  |                                  |           | 175,458      | (5)(7)(9)           |  |     | *   |  
|                                                             | Terence J. Mitchell                 |                                  |           | 387,367      | (4)(5)(7)(9)(10)    |  |     | *   |  
|All directors and executive officers as a group (22 persons) |                                     |                                  | 6,246,198 | (15)         |                     |  | 7.6 | %  






| |   |                                                                       
| | - | ----------------------------------------------------------------------
| | * | Represents less than 1% of the outstanding shares of Common
    Stock.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The number of shares beneficially owned by the persons set forth
    above is determined under rules under Section 13 of the
    Exchange Act, and the information is not necessarily indicative
    of beneficial ownership for any other purpose. Under such rules,
    an individual is considered to beneficially own any shares of
    Common Stock if he or she directly or indirectly has or shares:
    (i) voting power, which includes the power to vote or to
    direct the voting of the shares, or (ii) investment power,
    which includes the power to dispose

157



---



##### Table of Contents



| |  |                                                                                                                                                                                     
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | or direct the disposition of the
    shares. Unless otherwise indicated, an individual has sole
    voting power and sole investment power with respect to the
    indicated shares.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | The Independence Community Bank Corp. Employee Stock Ownership
    Plan Trust (Trust) was established pursuant to the
    Independence Community Bank Corp. Employee Stock Ownership Plan
    (ESOP). RSGroup Trust Company is the trustee
    (Trustee) of the Trust. As of December 31, 2005
    1,789,937 of the shares held by the ESOP had been allocated to
    the accounts of participating employees. Under the terms of the
    ESOP, the Trustee will generally vote the allocated shares held
    in the ESOP in accordance with the instructions of the
    participating employees. Unallocated shares held in the ESOP
    will generally be voted in the same ratio on any matter as those
    allocated shares for which instructions are given, subject in
    each case to the fiduciary duties of the ESOP trustees and
    applicable law. Any allocated shares which abstain on the
    proposal will be disregarded in determining the percentage of
    stock voted for and against each proposal by the participants
    and beneficiaries. Allocated shares for which no timely
    instructions are received will be voted by the Trustee who will
    vote such shares in the same proportion as those allocated
    shares for which timely instructions were received. The amount
    of Common Stock beneficially owned by all directors and
    executive officers as a group does not include the shares held
    by the ESOP, other than shares allocated to an executive officer
    as a participant.
|
| | (3) | Based solely on a Schedule 13G/ A, dated February 14,
    2006, filed by Private Capital Management, L.P.
    (PCM), a registered investment adviser, Bruce S.
    Sherman and Gregg J. Powers, chief executive officer and
    president of PCM, respectively. PCM and Messrs. Sherman and
    Powers exercise in these capacities shared voting power and
    shared dispositive power with respect to the
    6,127,626 shares of Common Stock held by PCMs clients
    and managed by PCM.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (4) | Includes shares held by the Independence Community Bank Corp.
    Deferred Compensation Plan (the Deferred Compensation
    Plan), over which each director and executive officer
    named below disclaims beneficial ownership except to the extent
    of his or her personal pecuniary interest therein, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

|                      |  |               |         | 
|--------------------- |  | ------------- | ------- | 
|Name                  |  | No. of Shares |        
|                      |  |               |        
|Willard N. Archie     |  |               | 43,945  | 
|Robert B. Catell      |  |               | 89,943  | 
|Rohit M. Desai        |  |               | 92,349  | 
|Brendan J. Dugan      |  |               | 21,185  | 
|Alan H. Fishman       |  |               | 183,547 | 
|Charles J. Hamm       |  |               | 389,360 | 
|Scott M. Hand         |  |               | 57,421  | 
|Denis Kelleher        |  |               | 2,900   | 
|Terence J. Mitchell   |  |               | 109,256 | 
|Maria Fiorini Ramirez |  |               | 11,434  | 



| |     |                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | Includes shares subject to stock options which are currently or
    will first become exercisable within 60 days of
    March 1, 2006 as follows:

|                      |  |                |         | 
|--------------------- |  | -------------- | ------- | 
|Name                  |  | No. of Options |        
|                      |  |                |        
|Willard N. Archie     |  |                | 104,779 | 
|Frank W. Baier        |  |                | 91,167  | 
|Robert B. Catell      |  |                | 194,779 | 
|Rohit M. Desai        |  |                | 194,779 | 
|Harry P. Doherty      |  |                | 233,740 | 
|Brendan J. Dugan      |  |                | 69,167  | 
|Chaim Y. Edelstein    |  |                | 164,779 | 
|Alan H. Fishman       |  |                | 432,834 | 
|Charles J. Hamm       |  |                | 482,368 | 
|Scott M. Hand         |  |                | 142,750 | 
|David L. Hinds        |  |                | 15,987  | 
|Gary M. Honstedt      |  |                | 106,667 | 
|Donald M. Karp        |  |                | 1,250   | 
|Denis P. Kelleher     |  |                | 38,449  | 
|Harold A. McCleery    |  |                | 96,667  | 
|Terence J. Mitchell   |  |                | 214,971 | 
|John R. Morris        |  |                | 52,694  | 
|Maria Fiorini Ramirez |  |                | 12,250  | 
|Victor M. Richel      |  |                | 2,750   | 

158



---



##### Table of Contents





| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | Includes 5,089 shares held by the Staten Island Bancorp
    Directors Deferred Compensation Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (7) | Includes with respect to the following persons shares allocated
    to each individual pursuant to grants made under the Recognition
    Plan, the 2002 Plan or the 2005 Stock Incentive Plan but which
    have not vested. Included in the total number of shares
    beneficially owned by Messrs. Fishman, Baier, Dugan,
    Honstedt, McCleery and Mitchell are 52,932, 30,800, 20,800,
    25,667, 25,800 and 20,667 shares respectively, which have
    been awarded pursuant to the 2005 Plan as of March 1, 2006,
    but are unfunded as of such date.

|                    |  |               |         | 
|------------------- |  | ------------- | ------- | 
|Name                |  | No. of Shares |        
|                    |  |               |        
|Frank W. Baier      |  |               | 62,848  | 
|Brendan J. Dugan    |  |               | 42,972  | 
|Alan H. Fishman     |  |               | 152,035 | 
|Gary M. Honstedt    |  |               | 60,715  | 
|Harold A. McCleery  |  |               | 55,325  | 
|Terence J. Mitchell |  |               | 42,666  | 



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (8) | Includes 141,616 shares awarded under the Recognition Plan,
    the 2002 Plan and the 2005 Plan for Mr. Fishman which are
    contingent upon the achievement of certain performance goals
    established pursuant to the terms of the Plans. Until such
    performance goals are satisfied and the shares vest, such shares
    are voted by the trustees of the Recognition Plan. Such shares
    are included in the amount shown in Footnote 7 for
    Mr. Fishman.
|
| | (9) | Includes allocated shares held in the ESOP and shares
    contributed by the Company on the following individuals
    behalf based on their contributions to the 401(k) Plan as of
    December 31, 2004. Information about the December 31,
    2005 ESOP allocation is not available as of the date of filing
    of this Form 10-K.                                                                                                                                  

|                    |  |               |        | 
|------------------- |  | ------------- | ------ | 
|Name                |  | No. of Shares |       
|                    |  |               |       
|Alan H. Fishman     |  |               | 2,158  | 
|Frank W. Baier      |  |               | 2,158  | 
|Brendan J. Dugan    |  |               | 480    | 
|Gary M. Honstedt    |  |               | 10,959 | 
|Harold A. McCleery  |  |               | 2,158  | 
|Terence J. Mitchell |  |               | 13,280 | 



|     |                                                    
|---- | ---------------------------------------------------
|(10) | Includes shares held in the 401(k) Plan as follows:

|                    |  |               |         | 
|------------------- |  | ------------- | ------- | 
|Name                |  | No. of Shares |        
|                    |  |               |        
|Harry P. Doherty    |  |               | 116,837 | 
|Brendan J. Dugan    |  |               | 467     | 
|Alan H. Fishman     |  |               | 2,009   | 
|Gary M. Honstedt    |  |               | 6,866   | 
|Terence J. Mitchell |  |               | 5,281   | 
|Victor M. Richel    |  |               | 10,426  | 



| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | Does not include any shares contributed to the 401(k) Plan on
    their behalf by the Company and held in the ESOP. See
    Footnote 9 above.



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(11) | Does not include 1,000 shares owned by
    Mr. Edelsteins son.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|(12) | Includes 276,953 shares under shared voting and dispositive
    authority with Harriet M. Alpert, 41,841 shares owned by
    Mr. Karps spouse, 67 shares owned by a company
    of which Mr. Karp is a director, and 92,899 shares
    held in various trusts of which Mr. Karp or his spouse is
    the trustee, as to which Mr. Karp disclaims beneficial
    ownership.                                                                                                                                                                                                                                                                                                                  
|    
|(13) | Includes 54,366 shares held by the Staten Island Bancorp
    Directors Deferred Compensation Plan, 1,858 shares
    owned by Mr. Kellehers spouse and 20,000 shares
    held by Wall Street Access, as to which Mr. Kelleher
    disclaims beneficial ownership.                                                                                                                                                                                                                                                                                                                                                                                                                           
|    
|(14) | Includes 29,433 shares held individually by
    Mr. Morris spouse and 4,241 shares held by
    Mr. Morris in his individual retirement account.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    
|(15) | Includes 81,929 shares held by the Recognition Plan, the
    2002 Plan and the 2005 Plan which may be voted by directors and
    executive officers pending vesting and distribution,
    8,886 shares held by the Recognition Plan and the 2002 Plan
    which are voted by the trustees thereof (such shares are
    excluded from the shares beneficially owned by each of such
    directors), 49,921 shares allocated to executive officers
    pursuant to the ESOP and 2,724,577 shares which may be
    acquired by directors and executive officers upon the exercise
    of stock options which are currently or will first become
    exercisable within 60 days of March 1, 2006.

159



---



##### Table of Contents



Existence of Change of Control of the Company




Equity Compensation Plans






|                                                                  |       |                   |           |           |                   |            |                     |                      |  |  |           |           | 
|----------------------------------------------------------------- | ----- | ----------------- | --------- | --------- | ----------------- | ---------- | ------------------- | -------------------- |  |  | --------- | --------- | 
|                                                                  |       |                   |           |           |                   | Number of  |                    
|                                                                  |       |                   |           |           |                   | securities |                    
|                                                                  |       | Number of         |           |           |                   |            | remaining available |                     
|                                                                  |       | securities to be  |           |           | Weighted-         |            |                     | for future issuance  | 
|                                                                  |       | issued upon       |           |           | average exercise  |            |                     | under equity         | 
|                                                                  |       | exercise of       |           |           | price of          |            |                     | compensation         | 
|                                                                  |       | outstanding       |           |           | outstanding       |            |                     | plans (excluding     | 
|                                                                  |       | options, warrants |           |           | options, warrants |            |                     | securities reflected | 
|                                                                  |       | and rights        |           |           | and rights        |            |                     | in column (a))       | 
|Plan Category                                                     |       | (a)               |           |           | (b)               |            |                     | (c)                  | 
|                                                                  |       |                   |           |           |                   |            |                     |                      | 
|Equity compensation plans approved by security holders            |       |                   | 5,208,442 | (1)       |                   | $          | 22.27               | (1)                  |  |  | 4,154,500 | (2)(3)   
|Equity compensation plans not approved by security
    holders(4) |       |                   | 5,000     |           |                   |            | 12.94               |                      |  |  |          |          
|                                                                  |       |                   |           |           |                   |            |                     |                      |  |  |           |          
|                                                                  | Total |                   |           | 5,213,442 |                   |            | $                   | 22.26                |  |  |           | 4,154,500 | 
|                                                                  |       |                   |           |           |                   |            |                     |                      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Included in such number are 446,838 shares which are subject to
    restricted stock grants which were not vested as of
    December 31, 2005. The weighted average exercise price
    excludes restricted stock grants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(2) | Does not take into account shares available for future issuance
    under the Directors Fee Plan, under which the $30,000
    annual retainer payable to each of the Companys
    non-employee directors and Directors Emeritus is payable in
    shares of Common Stock. Because the number of shares of Common
    Stock issuable under the Directors Fee Plan is based on a
    formula and not a specific reserve amount, the number of shares
    which may be issued pursuant to this plan in the future is not
    determinable. This plan was approved by stockholders in May
    2001. During the year ended December 31, 2005, a total of
    13,867 shares were issued under this plan.
|   
|(3) | The table does not include information for equity compensation
    plans assumed by the Holding Company in connection with mergers
    and acquisitions of the companies which originally established
    those plans. As of December 31, 2005, a total of
    1,153,109 shares of Common Stock were issuable upon
    exercise of outstanding options under those assumed plans and
    the weighted average exercise price of those outstanding options
    was $24.06 per share.                                                                                                                                                                                                                  
|   
|(4) | Consists of a single grant of options to a non-employee director
    upon appointment to the Board of Directors of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      






|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | Certain Relationships and Related Transactions



160



---



##### Table of Contents










|         |                                       
|-------- | --------------------------------------
|ITEM 14. | Principal Accounting Fees and Services

General








Audit Fees




|                          |  |                         |           |  |      |   |           | 
|------------------------- |  | ----------------------- | --------- |  | ---- | - | --------- | 
|                          |  | Year Ended December 31, |          
|                          |  |                         |          
|                          |  | 2005                    |           |  | 2004 |  
|                          |  |                         |           |  |      |  
|Audit
    fees(1)         |  | $                       | 995,000   |  |      | $ | 945,000   | 
|Audit-related
    fees(2) |  |                         | 258,000   |  |      |   | 94,500    | 
|Tax fees                  |  |                         |          |  |      |   |          | 
|All other fees            |  |                         | 119       |  |      |   | 1,938     | 
|                          |  |                         |           |  |      |  
|Total                     |  | $                       | 1,253,119 |  |      | $ | 1,041,438 | 
|                          |  |                         |           |  |      |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Audit fees consist of fees incurred in connection with the audit
    of the Companys annual financial statements and the review
    of the interim financial statements included in the
    Companys quarterly reports filed with the SEC, as well as
    work generally only the independent registered public accounting
    firm can reasonably be expected to provide, such as statutory
    audits, consents and assistance with and review of documents
    filed with the SEC.
|   
|(2) | Audit-related fees primarily consist of fees incurred in
    connection with audits of the financial statements of our
    employee benefit plans and review of registration statements and
    during 2004, services performed in connection with the merger
    with Staten Island Bancorp.                                                                                                                                                                                          



161



---



##### Table of Contents





de minimis





PART IV







|         |                                        
|-------- | ---------------------------------------
|ITEM 15. | Exhibits, Financial Statement Schedules

Documents Filed as Part of this Report




| |     |                                                                                         
| | --- | ----------------------------------------------------------------------------------------
| | (1) | The following financial statements are incorporated by reference
    from Item 8 hereof:



| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | Report of Independent Registered Public Accounting Firm
    Consolidated Statements of Financial Condition as of
    December 31, 2005 and 2004.
|
| | Consolidated Statements of Operations for the Years Ended
    December 31, 2005, 2004 and 2003.                                                 
|
| | Consolidated Statements of Changes in Stockholders Equity
    for the Years Ended December 31, 2005, 2004 and 2003.                            
|
| | Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2005, 2004 and 2003.                                                 
|
| | Notes to Consolidated Financial Statements.                                                                                                     



| |     |                                                                                                                                                                                                                                                                                                                 
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | All schedules for which provision is made in the applicable
    accounting regulations of the SEC are omitted because of the
    absence of conditions under which they are required or because
    the required information is included in the consolidated
    financial statements and related notes thereto.
|
| | (3) | The following exhibits are filed as part of this
    Form 10-K, and
    this list includes the Exhibit Index.                                                                                                                                                                                                   

162



---



##### Table of Contents



EXHIBIT INDEX


| |       |      |  |                                                                                                                                                                                                      
| | ----- | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2.1   | (1)  |  | Agreement and Plan of Merger by and among Sovereign Bancorp,
    Inc., Iceland Acquisition Corp. and Independence Community Bank
    Corp.                                                           
| | 3.1   | (2)  |  | Articles of Incorporation of Independence Community Bank Corp.                                                                                                                                       
| | 3.2   | (3)  |  | Bylaws, as amended, of Independence Community Bank Corp.                                                                                                                                             
| | 3.3   | (4)  |  | Amendment to Certificate of Incorporation of Independence
    Community Bank Corp.                                                                                                                   
| | 4.0   | (2)  |  | Specimen Stock Certificate of Independence Community Bank Corp.                                                                                                                                      
| | 10.1  | (2)  |  | Form of Change of Control Agreement entered into among
    Independence Community Bank Corp., Independence Community Bank
    and certain senior executive officers of the Company and the
    Bank.*
| | 10.2  | (2)  |  | Form of Change in Control Agreement entered into between
    Independence Community Bank and certain officers thereof.*                                                                              
| | 10.3  | (2)  |  | Form of Change of Control Agreement entered into among
    Independence Community Bank Corp., Independence Community Bank
    and certain executive officers of the Company and the Bank.*           
| | 10.4  | (2)  |  | Form of Change of Control Agreement entered into between
    Independence Community Bank and certain executive officers
    thereof.*                                                                
| | 10.5  |      |  | Independence Community Bank Amended and Restated Change in
    Control Severance Plan.*                                                                                                              
| | 10.6  | (5)  |  | 1998 Stock Option Plan.*                                                                                                                                                                             
| | 10.7  | (5)  |  | 1998 Recognition and Retention Plan and Trust Agreement.*                                                                                                                                            
| | 10.8  | (6)  |  | Broad National Bancorporation Incentive Stock Option Plan.*                                                                                                                                          
| | 10.9  | (6)  |  | 1993 Broad National Incentive Stock Option Plan.*                                                                                                                                                    
| | 10.10 | (6)  |  | 1993 Broad National Directors Non-Statutory Stock Option Plan.*                                                                                                                                      
| | 10.11 | (6)  |  | 1996 Broad National Incentive Stock Option Plan.*                                                                                                                                                    
| | 10.12 | (6)  |  | 1996 Broad National Bancorporation Directors Non-Statutory Stock
    Option Plan.*                                                                                                                   
| | 10.13 | (7)  |  | 1996 Statewide Financial Corporation Incentive Stock Option
    Plan.*                                                                                                                               
| | 10.14 | (8)  |  | Amended and Restated Deferred Compensation Plan.*                                                                                                                                                    
| | 10.15 | (9)  |  | Directors Fiscal 2002 Stock Retainer Plan.*                                                                                                                                                          
| | 10.16 | (10) |  | Directors Fee Plan.*                                                                                                                                                                                 
| | 10.17 | (11) |  | Independence Community Bank Executive Management Incentive
    Compensation Plan (April 1, 2001-December 31, 2001).*                                                                                 
| | 10.18 | (12) |  | Independence Community Bank Executive Management Incentive
    Compensation Plan (January 1, 2002-December 31, 2002).*                                                                               
| | 10.19 | (13) |  | 2002 Stock Incentive Plan.*                                                                                                                                                                          
| | 10.20 | (14) |  | Independence Community Bank Executive Management Incentive
    Compensation Plan (January 1, 2003-December 31, 2003).*                                                                               
| | 10.21 | (14) |  | Form of Amendment Number One to Change in Control Severance
    Agreements.                                                                                                                          
| | 10.22 | (4)  |  | Amendment No. 1 to the SI Bank &
    Trust Deferred Compensation Plan A.                                                                                                                           
| | 10.23 | (15) |  | 1998 Staten Island Bancorp, Inc. Amended and Restated Stock
    Option Plan.*                                                                                                                        
| | 10.24 | (16) |  | Independence Community Bank Executive Management Incentive
    Compensation Plan (January 1, 2004-December 31, 2004).*                                                                               
| | 10.25 |      |  | Independence Community Bank Job Group 1 Change in Control
    Severance Plan*                                                                                                                        
| | 10.26 | (17) |  | 2005 Stock Incentive Plan*                                                                                                                                                                           
| | 10.27 |      |  | Independence Community Bank Executive Management Incentive
    Compensation Plan (January 1, 2005-December 31, 2005).*                                                                               
| | 10.28 |      |  | Employment and Noncompetition Agreement between Independence
    Community Bank Corp., Independence Community Bank and
    Harry P. Doherty.*                                                        

163



---



##### Table of Contents



| |      |      |  |                                                                                                                                                                        
| | ---- | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 11.0 |      |  | Statement re computation of per share earnings 
    Reference is made to Item 8. Financial Statements and
    Supplementary Data for the required information.      
| | 18.1 | (16) |  | Letter re change in accounting principles.                                                                                                                             
| | 21.0 |      |  | Subsidiaries of the Registrant  Reference is made to
    Item 1. Business for the required information.                                                             
| | 23.1 |      |  | Consent of Ernst & Young LLP                                                                                                                                           
| | 31.1 |      |  | Certification pursuant to Rule 13a-14 of the Securities
    Exchange Act of 1934, as amended, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
| | 31.2 |      |  | Certification pursuant to Rule 13a-14 of the Securities
    Exchange Act of 1934, as amended, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
| | 32.1 |      |  | Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                        
| | 32.2 |      |  | Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                        






|    |                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated herein by reference from the Companys Current
    Report on Form 8-K filed by the Company with the SEC on
    October 27, 2005.                                                 
|   
|(2) | Incorporated herein by reference from the Companys
    Registration Statement on Form S-1 (Registration
    No. 333-30757) filed by the Company with the SEC on
    July 3, 1997.            
|   
|(3) | Incorporated herein by reference from the Companys
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2002 filed by the Company with the SEC on
    November 14, 2002.
|   
|(4) | Incorporated herein by reference from the Companys
    Quarterly Report on Form 10-Q for the quarter ended
    September 30, 2004 filed by the Company with the SEC on
    November 8, 2004. 
|   
|(5) | Incorporated herein by reference from the Companys
    definitive proxy statement filed by the Company with the SEC on
    August 17, 1998.                                                  
|   
|(6) | Incorporated herein by reference from the Companys
    registration statement on Form S-8 (Registration
    No. 333-85981) filed by the Company with the SEC on
    August 26, 1999.         
|   
|(7) | Incorporated herein by reference from the Companys
    registration statement on Form S-8 (Registration
    No. 333-95767) filed by the Company with the SEC on
    January 31, 2000.        
|   
|(8) | Incorporated herein by reference from the Companys Current
    Report on Form 8-K filed by the Company with the SEC on
    April 28, 2005.                                                   
|   
|(9) | Incorporated herein by reference from the Companys Annual
    Report on Form 10-K for the fiscal year ended
    March 31, 2001 filed by the Company with the SEC on
    June 22, 2001.       



|     |                                                                                                                                                                                                                   
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated herein by reference from the Companys
    definitive proxy statement filed by the Company with the SEC on
    June 22, 2001.                                                                        
|    
|(11) | Incorporated herein by reference from the Companys Annual
    Report on Form 10-KT for the transition period from
    April 1, 2001 to December 31, 2001 filed by the
    Company with the SEC on March 28, 2002.
|    
|(12) | Incorporated herein by reference from the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2002 filed by the Company with the SEC on
    March 31, 2003.                       
|    
|(13) | Incorporated herein by reference from the Companys
    definitive proxy statement filed by the Company with the SEC on
    April 10, 2002.                                                                       
|    
|(14) | Incorporated herein by reference from the Companys Annual
    Report on Form 10-K for the fiscal year ended
    December 31, 2003 filed by the Company with the SEC on
    March 10, 2004.                       
|    
|(15) | Incorporated herein by reference from the Companys
    registration statement on Form S-8 (Registration
    No. 333-111562) filed by the Company with the SEC on
    April 23, 2004.                             
|    
|(16) | Incorporated by reference from the Companys Annual Report
    on Form 10-K for the fiscal year ended December 31,
    2004 filed by the Company on March 11, 2005.                                               
|    
|(17) | Incorporated herein by reference from the Companys
    definitive proxy statement filed by the Company with the SEC on
    April 18, 2005.                                                                       



| |   |                                                     
| | - | ----------------------------------------------------
| | * | Denotes management compensation plan or arrangement.





164



---



##### Table of Contents






SIGNATURES






| |                                      
| | -------------------------------------
| | Independence Community
    Bank Corp.
|
| | /s/ Alan H. Fishman                  
| |                                      
| | Alan H. Fishman                      
| | President and Chief Executive Officer





|                                         |  |                                                                                                   |  |                |  |     
|---------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | -------------- |  | ----
|                                         |  | Name                                                                                              |  |                |  | Date
|                                         |  |                                                                                                   |  |                |  |     
|                                        
|/s/ Charles J. HammCharles J. Hamm       |  | Chairman of the Board                                                                             |  | March 15, 2006
|                                        
|/s/ Harry P. DohertyHarry P. Doherty     |  | Vice Chairman of the Board                                                                        |  | March 15, 2006
|                                        
|/s/ Donald M. KarpDonald M. Karp         |  | Vice Chairman of the Board                                                                        |  | March 15, 2006
|                                        
|/s/ Victor M. RichelVictor M. Richel     |  | Vice Chairman of the Board                                                                        |  | March 15, 2006
|                                        
|/s/ Alan H. FishmanAlan H. Fishman       |  | President and Chief Executive Officer                                                             |  | March 15, 2006
|                                        
|/s/ Frank W. BaierFrank W. Baier         |  | Executive Vice President, Chief Financial Officer, Treasurer and
    Principal Accounting Officer |  | March 15, 2006
|                                        
|/s/ Willard N. ArchieWillard N. Archie   |  | Director                                                                                          |  | March 15, 2006
|                                        
|/s/Robert B. Catell                      |  | Director                                                                                          |  | March 15, 2006
|                                        
|/s/ Rohit M. DesaiRohit M. Desai         |  | Director                                                                                          |  | March 15, 2006
|                                        
|/s/ Chaim Y. EdelsteinChaim Y. Edelstein |  | Director                                                                                          |  | March 15, 2006

165



---



##### Table of Contents



|                                                   |  |          |  |                |  |     
|-------------------------------------------------- |  | -------- |  | -------------- |  | ----
|                                                   |  | Name     |  |                |  | Date
|                                                   |  |          |  |                |  |     
|                                                  
|/s/ Scott M. HandScott M. Hand                     |  | Director |  | March 15, 2006
|                                                  
|/s/ David L. HindsDavid L. Hinds                   |  | Director |  | March 15, 2006
|                                                  
|/s/Dennis P. Kelleher                              |  | Director |  | March 15, 2006
|                                                  
|/s/ John R. MorrisJohn R. Morris                   |  | Director |  | March 15, 2006
|                                                  
|/s/ Maria Fiorini
    RamirezMaria Fiorini Ramirez |  | Director |  | March 15, 2006

166