Exhibit 99.1
Exhibit 99.1
STRATEGIES & STRENGTHS
2003 Investor Presentation February 2004
Forward-looking Statements and Risk Factors
This presentation, and other written materials and oral statements made by management, may contain certain forward-looking statements regarding the Company’s prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of said safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words “plan,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or other similar expressions. The Company’s ability to predict results or the actual effects of its plans and strategies, including the recent merger with Roslyn Bancorp, Inc., is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.
The following factors, among others, could cause the actual results of the merger to differ materially from the expectations stated in this presentation: the ability to successfully integrate the companies following the merger, including the retention of key personnel; the ability to effect the proposed restructuring; the ability to fully realize the expected cost savings and revenues; and the ability to realize the expected cost savings and revenues on a timely basis.
Factors that could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to, changes in general economic conditions; interest rates, deposit flows, loan demand, real estate values, competition, and demand for financial services and loan, deposit, and investment products in the Company’s local markets; changes in the quality or composition of the loan or investment portfolios; changes in accounting principles, policies, or guidelines; changes in legislation and regulation; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; war or terrorist activities; and other economic, competitive, governmental, regulatory, geopolitical, and technological factors affecting the Company’s operations, pricing, and services.
The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
2
Strength: Our Mission
Our primary goal is the creation of shareholder value.
The mission of New York Community Bancorp, Inc. is to create shareholder value by consistently delivering the thrift industry’s top financial performance, and by providing those who live and work in the New York metro region with easy access to the full range of financial products and services they seek.
3
Strength: Our Balance Sheet
With assets of $23.4 billion, we are the nation’s 4th largest thrift.
(dollars in billions)
At Y-O-Y 5-Year 10-Year
12/31/03 Increase CAGR CAGR
Total assets $ 23.4 107.2% 68.1% 35.9%
Mortgage loans $ 10.2 88.5 47.0 29.4
Multi-family loans $ 7.4 64.2 42.8 32.9
Total loan originations $ 4.3 69.1 54.8 36.1
Total deposits $ 10.3 96.5 56.4 28.7
Core deposits $ 6.0 80.5 73.5 29.0
Stockholders’ equity $ 2.9 116.7 80.6 31.0
Market cap (a) $ 9.6 214.9 72.3 51.0
(a) At 3/1/04 as compared to 12/31/02, 12/31/98, and 12/31/93.
4
Strength: Market Leader
We are a leading lender, depository, and producer of revenues in our chosen market.
The leading producer of multi-family loans for portfolio in New York City (a) The second largest thrift depository in Queens, Staten Island, and Nassau County (a) The second largest thrift depository in the New York metro region (a)(b) The leading supermarket banking franchise in the New York metro region (a) Ranked within the top 3% of U.S. thrifts generating income from investment product sales (c)
(a) SNL DataSource
(b) NY metro region includes Queens, Staten Island, Brooklyn, Nassau, and Suffolk counties. (c) Singer’s Annuity and Funds Report
5
Strength: Performance
We have been ranked the nation’s top-performing large thrift for the past 5 years. (a)
(in millions, except per share data)
Y-O-Y 5-Year 10-Year
2003 Increase CAGR CAGR
Earnings $ 323.4 41.1% 64.4 % 38.9%
Diluted EPS 2.20 31.7 37.4 30.0
Cash Earnings (b) 379.2 46.0 54.0 33.9
Diluted Cash EPS (b) 2.58 36.5 29.1 25.5
Net Interest Income 505.0 35.3 49.1 27.0
Fee and Other Income (c) 98.1 15.7 107.5 48.5
(a) May 2003 ThriftINVESTOR
(b) Please see reconciliation to GAAP earnings on page 35, #1.
(c) Excludes net securities gains and gain on sale of branches.
6
Strategies: Multi-family Lending
We have a profitable, efficient, and risk-averse lending niche.
Strategy Results
Rent-controlled / rent-stabilized Produces higher term yields
buildings generate stable cash flow than alternative 1-4 year assets
5-year fixed / 5-year adjustable term Is more efficient to produce and
service
Pre-payment penalties: 5-4-3-2-1
points Is more resilient against
economic stress
Average term to refinance: 4 years
Reduces interest rate risk
Average loan at 12/31/03: $2.5 mn
Reduces credit risk (no net
Average LTV ratio at 12/31/03:
charge-offs since 1987)
59.4%
Enhances asset quality
Increases earnings
7
Strength: Multi-family Lending
We are the leading producer of multi-family loans for portfolio in New York City.
(in millions)
Loan Originations
5-YR CAGR:
$ 3,383
54.8%
10-YR CAGR:
Multi-family Loan Originations
36.3%
All Other Loan Originations $ 501
$ 2,059
$ 69 $ 74
$ 359
$ 77
$ 67 $ 791
$ 603 $ 542
$ 410
$ 129
1993 1998 1999 2000 2001 2002 2003
Total $ 196 $ 487 $ 677 $ 616 $ 1,150 $ 2,560 $ 4,330
8
Strength: Multi-family Lending
Multi-family loans represented 70.2% of the total loan portfolio at 12/31/03.
(in millions)
n g $ 3,131
Loans Outstanding
Multi-family Loans Outstanding
All Other Loans Outstanding
Total Loans Outstanding
5-YR CAGR:
47.7%
10-YR CAGR:
29.5%
$3,131
$7,369
$ 995
$ 2,149
$ 4,494
$ 262 $ 1,690
$ 3,255
$ 257
$ 360 $ 1,946
$ 1,239 $ 1,348
$ 429
12/31/93 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
Total $ 789 $ 1,496 $ 1,610 $ 3,636 $ 5,404 $ 5,489 $ 10,500
9
Strategies: Community Banking
We consistently place an emphasis on community banking.
Strategy Results
Retain name of acquired bank Capitalizes on brand equity
Maintain tradition of personal Promotes customer loyalty
service
Provides cross-selling
Offer traditional banking products opportunities
and alternative investment products
Offsets competition from
Address needs of consumers and commercial banks
small businesses
Enhances visibility
Contribute to community
organizations through charitable
foundations
10
Strategies: Community Banking
We emphasize convenience and exceptional customer service.
Hours: Weekend, extended evening, and early-bird
hours
Products & services: A full-service menu of traditional banking
products and services, complemented by an
extensive range of alternative investment
products
Multiple service channels: Traditional and in-store branches; bank online,
by phone, or by mail
Easy access: Walk-up windows, drive-up bays, ATMs
Staffing: Over 400 licensed retail personnel in addition
to a fully commissioned sales force
Technology: State-of-the-art ATMs and online real time
processing on an IP frame
11
Strength: Community Banking
Our structure recognizes and capitalizes on the brand equity of our divisional banks.
Market Traditional In-store
Division Served Branches Branches Total
Queens 24 8 32
Long Island 32 27 60(a)
Staten Island 17 5 23(b)
Brooklyn 4 5 9
Westchester & Other NYC - 6 6
Hudson County, NJ 4 - 4
Essex & Union Counties, NJ 4 1 5
85 52 139(b)
(a) Includes one traditional branch in the Bronx (b) Includes a customer convenience center
12
Strategies: Deposit Mix
Earnings growth has been supported by our low-cost mix of deposits.
Strategy Results
Emphasize core deposits Reduces funding costs
Offer alternative investment Provides cross-selling
products opportunities
Run-off higher cost CDs Discourages hot money
Enhances net interest income
and margin
Generates fee income
Increases earnings
13
Strength: Deposit Mix
We are the 2nd largest thrift depository in the New York metro region.
(in billions)
Deposit Mix
5-YR CAGR:
73.5%
10-YR CAGR:
Core Deposits
29.0%
CDs
$ 2.4 $ 1.9
$ 1.9 $ 3.0 $ 3.3
$ 0.7 $ 0.7 $ 1.4
$ 0.4
$ 0.5 $ 0.4 $ 0.4
12/31/93 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
Total Deposits: $ 0.8 $ 1.1 $ 1.1 $ 3.3 $ 5.4 $ 5.3 $ 10.3
Core / Total Deposits: 56.5% 34.4% 38.8% 42.5% 55.8% 62.9% 57.8%
Loans / Total Deposits: 94.2% 135.7% 150.0% 111.6% 99.2% 104.3% 101.7%
14
Strategies: Risk Management
Our risk-averse nature is reflected in our strategic mix of assets and liabilities.
Strategy Results
Emphasize multi-family lending in Reduces interest rate risk
NYC
Reduces credit risk
Originate subdivision construction
Reduces extension risk
loans on Long Island
Contains expenses
Originate 1-4 family and consumer
loans on a conduit basis Enhances consistency of net
interest margin
Emphasize core deposits
Increases earnings
Offer third-party investment
products
Run off higher cost CDs
15
Strength: Risk Management
Our balance sheet structure has shielded our margin from interest rate volatility.
5-year U.S. Treasury CMT Range: 2.78%—6.36%
3-month LIBOR Range: 1.15%—6.40%
NYB net interest margin Range: 3.33%—4.31%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
4.24% 3.79% 3.33% 3.59% 4.31% 3.94% NYB NIM
16
Strength: Risk Management
The quality of our assets reflects our underwriting standards.
No net charge-offs for 37 consecutive quarters
NPAs to total assets equaled 0.15% at 12/31/03
The allowance for loan losses equaled 228.01% of NPLs at 12/31/03
Acquired legacy lenders with a long history of successful residential construction and subdivision lending
No losses on any local-market multi-family loans in more than two decades
17
Strategies: Cost Containment
Efficiency is a key component of our financial performance.
Strategy Results
Emphasis on multi-family lending Reduces compensation and
benefits expense
Above-average deposits per
traditional branch ($113 mn at Reduces general and
12/31/03) (a) administrative expense
Franchise expansion through M & A Reduces occupancy and
equipment expense
Cost-effective de novo branch
expansion Increases fee and other income
Hub & spoke approach to in-store Increases earnings
branching
Profitable third-party alliances
(a) Excludes three recent de novo branches
18
Strength: Cost Containment
We have been ranked the nation’s 3rd most efficient bank holding company.
Efficiency Ratio
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
1999 2000 2001 2002 2003
U.S. Thrifts 63.13% 65.72% 66.42% 62.67% 65.67%
(a) (a) (a)
NYB 29.95% 30.20% 35.03% 25.32% 23.59%
(a) Core efficiency ratio; please see reconciliation to GAAP efficiency ratio on page 35, #2. Industry Data Source: SNL Financial
19
Strategies: Profitable Third-Party Alliances
We generate significant revenues through third-party alliances.
Strategy Results
Originate 1-4 family and consumer Reduces credit and interest
loans through third-party conduits rate risk
Offer third-party investment and Enhances efficiency
insurance products
Enhances customer service
Selectively participate in real
Provides cross-selling
estate joint ventures
opportunities
Increases other operating
income
Increases earnings
20
Strength: Profitable Third-Party Alliances
Fee and service-related income is expected to grow in 2004.
(in millions)
Fee and Service-related Income
5-YR CAGR: $ 82.9
100.8%
10-YR CAGR:
$ 64.0
46.0%
$ 42.4
$ 4.6
$ 1.9
$ 1.9 $ 2.5
1993 1998 1999 2000 2001 2002 2003
21
Strategies: Capital Management
We actively manage our capital.
Strategy Results
9 stock splits in 10 years, including a 4- Strengthens our capital position
for-3 split on 2/17/04
Insulates against economic
11.3 million shares repurchased in 2003 adversity
5 million share repurchase announced on 2/26/04
Facilitates merger transactions
75-fold increase in quarterly cash
Increases EPS
dividend since 1994, including an 87%
increase since 4Q ‘02 Enhances shareholder value
Approximately $483 mn of regulatory
capital raised in 2002 and 2003
$ 600 million shelf registration filed in
2Q ‘03
Approximately $400 mn generated
through follow-on offering of 13.5 mn
shares of common stock in 1Q ‘04
Strength: Capital Management
The follow-on offering benefited the Company in several ways.
Generated proceeds of approximately $400 million 39.4% accretive to tangible book value per share Accretive to diluted EPS
Bolstered capital strength and flexibility Funds multi-family loan production
Positions the Company well for future acquisitions
Supports various corporate purposes, including share buybacks
23
Strength: Capital Management
The follow-on offering was 40% accretive to tangible book value per share.
(dollars in millions, except per share amounts)
At December 31, 2003
Actual After Offering Increase
Stockholders’ equity $2,869 $3,269 $400
Tangible stockholders’ equity $851 $1,251 $400
Book value per share $ 11.40 $12.33 8.2%
Tangible book value per share $3.38 $4.72 39.6%
Equity to assets ratio 12.24% 13.71% 147bp
Tangible equity to
tangible assets ratio 3.97% 5.73% 176bp
Strategies: Accretive Merger Transactions
We have a solid record of accretive in-market transactions.
Strategy Results
Acquired Haven Bancorp Expanded the franchise
(HAVN) on 11/30/00
Increased deposit share
Merged with Richmond County
Increased interest-earning
Financial Corp. (RCBK) on
assets
7/31/01
Increased low-cost funding
Merged with Roslyn Bancorp
(RSLN) on 10/31/03 Improved loan / deposit ratio
Increased earnings
25
Strength: Accretive Merger Transactions
We have successfully completed three accretive merger transactions in three years.
Earnings Accretion
Original Actual
2002 2002
Completed Projection Results
HAVN 11/30/00
11.8%-16.5% 129.4%
RCBK 7/31/01
Earnings Accretion
Original Revised
2004 2004
Completed Projection Projection
RSLN 10/31/03 10% 28%
26
Strength: Accretive Merger Transactions
Our franchise, value, and performance have been enhanced by merger transactions.
(dollars in billions, except per share data)
w / HAVN w / RCBK w / RSLN
12/31/99 12/31/00 12/31/01 12/31/02 12/31/03
No. of branches 14 86 120 110 139
Loan / deposit ratio 150.0% 111.6% 99.2% 104.3% 101.7%
Core deposits $ 0.4 $ 1.4 $ 3.0 $ 3.3 $ 6.0
Total assets $ 1.9 $ 4.7 $ 9.2 $ 11.3 $ 23.4
Market cap $ 0.57 $ 1.1 $ 2.3 $ 3.1 $ 9.6 (a)
Price per share $ 6.79 $ 9.19 $ 12.86 $ 16.25 $ 35.57 (a)
ROE 22.99% 19.40%(b) 18.30%(b) 19.95% 20.74%
Diluted EPS $ 0.42 $ 0.47 (c) $ 0.77 (c) $ 1.25 $ 1.65
(a) Reflects our 52-week high trading price on 3/1/04.
(b) Core ROE; please see reconciliation to GAAP ROE on page 35, #s 3 and 4. (c) Diluted core EPS; please see reconciliation to diluted GAAP EPS on page 35, #4.
27
Strategies: Balance Sheet Repositioning
The balance sheet was profitably restructured after our HAVN & RCBK transactions.
Strategy Results
Post-HAVN Reduced interest rate risk
Sold loans and securities Reduced credit risk
Downsized borrowings Reduced extension risk
Initiated origination of 1-4 family & Enhanced net interest margin
consumer loans on a conduit basis
Enhanced the quality of earnings
Increased concentration of core
deposits and shifted emphasis from Increased earnings
CDs to investment products
Post-RCBK
Sold and securitized loans
Initiated leveraged growth strategy
Increased concentration of core
deposits and shifted emphasis from
CDs to investment products
28
Strategies: Balance Sheet Repositioning
We have initiated the process of repositioning the post-RSLN balance sheet.
Strategy Results
Post-RSLN Reduces interest rate risk
Invested liquidity from the Reduces credit risk
securities portfolio into a record
Reduces extension risk
volume of multi-family loans in 4Q ‘03
Sold approximately $130 mn of home Enhances net interest margin
equity and second mortgage loans in Enhances the quality of earnings
1Q ‘04
Increases earnings
Increased core deposits while
reducing concentration of higher-cost
CDs
Replaced FHLB borrowings with
reverse repos with Wall Street firms at
favorable rates
29
Strength: Performance
We are currently projecting a 35% increase in 2004 diluted EPS.
$2.17 -
Diluted EPS Growth $ 2.20(b)
5-YR CAGR:
39.6%
$ 1.63(a)
11-YR CAGR:
30.3%
$ 1.25
$ 0.76(a)
$ 0.42 $ 0.47(a)
$ 0.12
1993 1999 2000 2001 2002 2003 2004
(a) Diluted core EPS; please see reconciliation to diluted GAAP EPS on page 35, #4.
(b) Company estimates
Strength: Performance
Several factors are expected to drive earnings growth in 2004.
Higher net interest income, reflecting a record volume of loan production, funded by an increase in core deposits and the liquidity of the securities portfolio
Higher other operating income, reflecting the full-year benefit of the Roslyn merger
The continued suspension of our loan loss provision
Continuation of our industry-leading efficiency ratio
31
Strength: Shareholder Value
From 11/23/93 to 3/1/04, the value of our shares appreciated 3,725%.
(dollars in millions, except per share data)
Market Capitalization
Price per share (adjusted for 9 splits, including a 4-for-3 stock split on 2/17/04) Annual yield produced by $0.84 per share dividend on shares purchased at this date
57.1%
72.3%
5-YR CAGR: CAGR Since IPO: $0.93
11/23/93 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 3/1/04
90.3% 11.2% 12.3% 9.1% 6.5% 5.1% 2.9% 2.4%
32
Strength: Total Returns
Each of our merger transactions has provided an opportunity for share value creation.
Increase in
Date of Merger Total Return Quarterly Cash
Bank Announcement thru 3/1/04(a) Dividend(b)
HAVN June 27, 2000 809% 1,065%
RCBK March 27, 2001 292 217
RSLN June 27, 2003 74 35
(a) Compares NYB’s 52-week high of $35.57 on 3/1/04 to the acquiree’s closing price preceding the merger announcement; assumes dividends have been reinvested.
(b) Compares NYB’s $0.21 per share dividend to the acquiree’s pre-merger dividend.
33
Strength: Total Returns
Since 11/23/93, the total return to our charter investors has been as high as 4,786%.
Total return from 11/23/93 through the date noted, assuming dividends were reinvested Price per share (adjusted for 9 splits, including a 4-for-3 stock split on 2/17/04) Annual yield produced by $0.84 per share dividend on shares purchased at this date
63.5%
44.1%
10-YR CAGR:
5-YR CAGR:
11/23/93 12/31/98 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 3/1/04
90.3% 11.2% 12.3% 9.1% 6.5% 5.1% 2.9% 2.4%
34
Appendix
Reconciliation of GAAP and Non-GAAP Measures
1. The Company calculated its diluted cash earnings per share for 2002 by adding back to the year’s net income non-cash items totaling $30.5 million. The Company calculated its diluted cash earnings per share for 2003 by adding back to the year’s net income non-cash items totaling $55.8 million. Please see the table below for a reconciliation of the Company’s diluted cash and GAAP earnings per share for the respective periods.
For the Twelve Months Ended For the Twelve Months Ended
December 31, December 31,
2003
(in thousands, except per share data)
Net income $ 323,371 $ 229,230
Add back:
Amortization and appreciation of stock-related benefit plans 29,637 5,902
Associated tax benefits 15,041 15,860
Dividends on unallocated ESOP shares 4,218 2,718
Amortization of core deposit intangible and goodwill 6,907 6,000
Total additional contributions to tangible stockholders’ equity 55,803 30,480
Cash earnings $ 379,174 $ 259,710
Basic cash earnings per share $2.00 $ 1.43
Diluted cash earnings per share $1.94 $1.42
2. On a reported basis, the Company’s 2000, 2001, and 2003 efficiency ratios were 52.08%, 38.04%, and 26.83% respectively. The Company’s 2000 core efficiency ratio excluded a gain of $13.5 million on the sale of a Bank-owned property from other operating income and a merger-related charge of $24.8 million from operating expenses. Its 2001 core efficiency ratio excluded a gain of $39.6 million on the sale of certain assets from other operating income and a merger-related charge of $23.5 million from operating expenses. Its 2003 core efficiency ratio excluded a gain of $37.6 million on the sale of its South Jersey Bank division from other operating income and a merger-related charge of $20.4 million from operating expenses.
3. As calculated in accordance with GAAP, the Company’s 2000 and 2001 ROEs were 13.24% and 18.16%, respectively.
4. As calculated in accordance with GAAP, the Company’s 2000, 2001, and 2003 diluted earnings per share were $0.32, $0.76, and $1.65, respectively. The 2000 amount reflected a gain of $13.5 million recorded in other operating income and a charge of $24.8 million recorded in operating expenses, resulting in a net charge of $11.4 million, or $0.15 per diluted share. The 2001 amount included a gain of $39.6 million recorded in other operating income and charges of $23.5 million and $3.0 million, respectively, recorded in operating expenses and income tax expense, resulting in an after-tax net charge of $836,000, or $0.01 per diluted share. The 2003 amount included a net gain of $37.6 million on the sale of its South Jersey Bank division recorded in other operating income, and a merger-related charge of $20.4 million recorded in operating expenses, resulting in an after-tax net gain of $3.7 million, or $0.02 per share.
For More Information:
The Company trades on the NYSE under the symbol “NYB”.
Log onto our web site: www.myNYCB.com
E-mail requests to: ir@myNYCB.com
Call Investor Relations at: (516) 683-4420
Write to: New York Community Bancorp, Inc.
615 Merrick Avenue Westbury, NY 11590
2/4/04