Flagstar Financial (FLG) 10-Q 10 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	May. 03, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	NYB
Entity Registrant Name	NEW YORK COMMUNITY BANCORP INC
Entity Central Index Key	0000910073
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		435,452,463

CONSOLIDATED STATEMENTS OF COND

CONSOLIDATED STATEMENTS OF CONDITION (USD $)
In Thousands	Mar. 31, 2010	Dec. 31, 2009
Assets:
Cash and cash equivalents	$2,547,889	$2,670,857
Securities available for sale:
Mortgage-related ($609,519 and $602,233 pledged, respectively)	679,912	774,205
Other securities ($316,411 and $302,022 pledged, respectively)	424,384	744,441
Total available-for-sale securities	1,104,296	1,518,646
Securities held to maturity:
Mortgage-related ($2,181,431 and $2,459,161 pledged, respectively) (fair value of $2,268,566 and $2,551,608, respectively)	2,187,537	2,465,956
Other securities ($1,770,266 and $1,564,585 pledged, respectively) (fair value of $2,242,142 and $1,698,054, respectively)	2,257,643	1,757,641
Total held-to-maturity securities	4,445,180	4,223,597
Total securities	5,549,476	5,742,243
Loans held for sale	764,358
Non-covered loans held for investment, net of deferred loan fees and costs	23,417,756	23,376,599
Less: Allowance for loan losses	(137,443)	(127,491)
Non-covered loans held for investment, net	23,280,313	23,249,108
Covered loans (includes $351.3 million of loans held for sale at December 31, 2009)	4,759,139	5,016,100
Total loans, net	28,803,810	28,265,208
Federal Home Loan Bank ("FHLB") stock, at cost	444,118	496,742
Premises and equipment, net	202,514	205,165
FDIC loss share receivable	796,841	743,276
Goodwill	2,436,401	2,436,401
Core deposit intangibles, net	101,108	105,764
Bank-owned life insurance	722,171	715,962
Other assets (includes $44.6 million of other real estate owned ("OREO") covered by FDIC loss sharing agreements at March 31, 2010)	826,409	772,251
Total assets	42,430,737	42,153,869
Deposits:
NOW and money market accounts	7,966,846	7,706,288
Savings accounts	3,873,954	3,788,294
Certificates of deposit	9,185,762	9,053,891
Non-interest-bearing accounts	1,704,659	1,767,938
Total deposits	22,731,221	22,316,411
Borrowed funds:
FHLB advances	8,670,024	8,955,769
Repurchase agreements	4,125,000	4,125,000
Total wholesale borrowings	12,795,024	13,080,769
Junior subordinated debentures	427,251	427,371
Other borrowings	653,575	656,546
Total borrowed funds	13,875,850	14,164,686
Other liabilities	410,205	305,870
Total liabilities	37,017,276	36,786,967
Stockholders' equity:
Preferred stock at par $0.01 (5,000,000 shares authorized; none issued)
Common stock at par $0.01 (600,000,000 shares authorized; 435,441,094 and 433,197,332 shares issued, respectively; 435,441,094 and 433,197,332 shares outstanding, respectively)	4,354	4,332
Paid-in capital in excess of par	5,272,490	5,238,231
Retained earnings	191,185	175,193
Unallocated common stock held by Employee Stock Ownership Plan ("ESOP")	(716)	(951)
Accumulated other comprehensive loss, net of tax:
Net unrealized loss on available-for-sale securities and the non-credit portion of other-than-temporary impairment ("OTTI") losses, net of tax	(11,232)	(6,274)
Net unrealized loss on securities transferred from available for sale to held to maturity, net of tax	(3,752)	(3,927)
Net unrealized loss on pension and post-retirement obligations, net of tax	(38,868)	(39,702)
Total accumulated other comprehensive loss, net of tax	(53,852)	(49,903)
Total stockholders' equity	5,413,461	5,366,902
Total liabilities and stockholders' equity	$42,430,737	$42,153,869

1_CONSOLIDATED STATEMENTS OF CO

CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) (USD $)
	Mar. 31, 2010	Dec. 31, 2009
Mortgage-related, pledged	$609,519,000	$602,233,000
Other securities, pledged	316,411,000	302,022,000
Mortgage-related, pledged	2,181,431,000	2,459,161,000
Mortgage-related, fair value	2,268,566,000	2,551,608,000
Other securities, pledged	1,770,266,000	1,564,585,000
Other securities, fair value	2,242,142,000	1,698,054,000
Covered loans, loans held for sale		351,300
Other assets, other real estate owned ("OREO") covered by FDIC loss sharing agreements	$44,600
Preferred stock, par	0.01	0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Common stock, par	0.01	0.01
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	435,441,094	433,197,332
Common stock, shares outstanding	435,441,094	433,197,332

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $)
In Thousands, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Interest Income:
Mortgage and other loans	$413,675	$321,717
Securities and money market investments	68,703	78,389
Total interest income	482,378	400,106
Interest Expense:
NOW and money market accounts	16,431	7,563
Savings accounts	5,745	4,216
Certificates of deposit	37,553	52,723
Borrowed funds	128,065	128,689
Total interest expense	187,794	193,191
Net interest income	294,584	206,915
Provision for loan losses	20,000	6,000
Net interest income after provision for loan losses	274,584	200,915
Non-Interest Income:
Total loss on OTTI of securities	(13,185)
Less: Non-credit portion of OTTI recorded in other comprehensive income (before taxes)	12,462
Net loss on OTTI recognized in earnings	(723)
Fee income	13,965	9,291
Bank-owned life insurance	7,401	6,840
Net loss on sale of securities	(8)
Gain on debt repurchase	293
Other	34,116	6,045
Total non-interest income	55,044	22,176
Operating expenses:
Compensation and benefits	66,900	42,422
Occupancy and equipment	21,665	18,736
General and administrative	40,290	22,753
Total operating expenses	128,855	83,911
Amortization of core deposit intangibles	7,892	5,687
Total non-interest expense	136,747	89,598
Income before income taxes	192,881	133,493
Income tax expense	68,732	44,804
Net Income	124,149	88,689
Other comprehensive income, net of tax:
Change in net unrealized (loss) gain on securities and non-credit portion of OTTI for the period	(4,783)	8,030
Change in pension and post-retirement obligations	834	1,203
Total comprehensive income, net of tax	$120,200	$97,922
Basic earnings per share	0.29	0.26
Diluted earnings per share	0.29	0.26

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (USD $)
In Thousands	Common Stock (Par Value	Paid-in Capital in Excess of Par	Retained Earnings	Treasury Stock	Unallocated Common Stock Held by ESOP	Accumulated Other Comprehensive Loss, net of tax	Total
Balance at beginning of year at Dec. 31, 2009	$4,332	$5,238,231	$175,193		($951)	($49,903)	$5,366,902
Allocation of ESOP stock		920
Change in net unrealized gain on securities available for sale, net of tax of $1,408						2,219
Purchase of common stock (116,066 shares)				(1,706)
Net income			124,149				124,149
Earned portion of ESOP					235
Non-credit portion of OTTI losses recognized in other comprehensive income, net of tax of $4,838						(7,624)
Dividends paid on common stock ($0.25 per share)			(108,157)
Compensation expense related to restricted stock awards		2,902
Amortization of net unrealized loss on securities transferred from available for sale to held to maturity, net of tax of $111						175
Change in pension and post-retirement obligations, net of tax of $529						834
Exercise of stock options	1	1,528		1,044
Shares issued for restricted stock awards (353,944 shares)	4	(666)		662
Reclassification adjustment for loss on sale and OTTI of securities, net of tax of $284						447
Tax effect of stock plans		657
Shares issued in connection with the direct stock purchase feature of the Dividend Reinvestment and Stock Purchase Plan ("DRP") (1,766,482 shares)	17	28,918
Balance at end of period at Mar. 31, 2010	$4,354	$5,272,490	$191,185		($716)	($53,852)	$5,413,461

2_CONSOLIDATED STATEMENT OF CHA

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) (USD $)
In Thousands, except Share data	3 Months Ended Mar. 31, 2010 Common Stock (Par Value
Common Stock (Par Value: $0.01):
Exercise of stock options, shares	123,336
Shares issued for restricted stock awards, shares	353,944
Shares issued in connection with the direct stock purchase feature of the Dividend Reinvestment and Stock Purchase Plan (DRP), shares	1,766,482
Retained Earnings:
Dividends paid on common stock, per share	0.25
Treasury Stock:
Purchase of common stock, shares	116,066
Exercise of stock options, shares	70,510
Shares issued for restricted stock awards, shares	45,556
Accumulated Other Comprehensive Loss, net of tax:
Change in net unrealized gain on securities available for sale, tax	$1,408
Non-credit portion of OTTI losses recognized in other comprehensive income, tax	4,838
Amortization of net unrealized loss on securities transferred from available for sale to held to maturity, tax	111
Change in pension and post-retirement obligations, tax	529
Reclassification adjustment for loss on sale and OTTI of securities, tax	$284

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Cash Flows from Operating Activities:
Net income	$124,149	$88,689
Adjustments to reconcile net income to net cash used in operating activities:
Provision for loan losses	20,000	6,000
Depreciation and amortization	4,935	5,024
Amortization of premiums (accretion of discounts), net	1,881	(532)
Net change in net deferred loan origination costs and fees	1,846	(322)
Amortization of core deposit intangibles	7,892	5,687
Net loss on sale of securities	8
Net gain on sale of loans	(7,558)	(108)
Stock plan-related compensation	4,057	3,485
Loss on OTTI of securities recognized in earnings	723
Changes in assets and liabilities:
Decrease (increase) in deferred tax asset, net	1,235	(2,879)
Increase in other assets	(22,767)	(15,602)
Increase (decrease) in other liabilities	98,575	(165,410)
Origination of loans held for sale	(1,349,160)	(17,661)
Proceeds from sale of loans originated for sale	911,038	15,446
Net cash used in operating activities	(203,146)	(78,183)
Cash Flows from Investing Activities:
Proceeds from repayment of securities held to maturity	332,077	929,929
Proceeds from repayment of securities available for sale	420,315	52,966
Proceeds from sale of securities available for sale	660
Purchase of securities held to maturity	(565,524)	(822,245)
Net redemption (purchase) of FHLB stock	56,211	(15,745)
Net decrease (increase) in loans	84,698	(103,622)
Purchase of premises and equipment, net	(2,284)	(657)
Net cash acquired in business combinations	140,895
Net cash provided by investing activities	467,048	40,626
Cash Flows from Financing Activities:
Net increase (decrease) in deposits	24,168	(123,384)
Net increase in short-term borrowed funds		159,900
Net (decrease) increase in long-term borrowed funds	(333,340)	49,897
Tax effect of stock plans	657	1,887
Cash dividends paid on common stock	(108,157)	(86,079)
Treasury stock purchases	(1,706)	(624)
Net cash received from stock option exercises	2,573	25
Proceeds from issuance of common stock, net	28,935
Net cash (used in) provided by financing activities	(386,870)	1,622
Net decrease in cash and cash equivalents	(122,968)	(35,935)
Cash and cash equivalents at beginning of period	2,670,857	203,216
Cash and cash equivalents at end of period	2,547,889	167,281
Supplemental information:
Cash paid for interest	203,198	190,489
Cash paid for income taxes	18,819	66,053
Non-cash investing and financing activities:
Transfers to other real estate owned from loans	$1,634	$561

Basis of Presentation

Basis of Presentation
	3 Months Ended Mar. 31, 2010
Basis of Presentation	Note 1. Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of New York Community Bancorp, Inc. and subsidiaries (the Company), including its two bank subsidiaries, New York Community Bank (the Community Bank) and New York Commercial Bank (the Commercial Bank). The unaudited consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary to present a fair statement of the results for the periods presented. There are no other adjustments reflected in the accompanying consolidated financial statements. The results of operations for the three months ended March31, 2010 are not necessarily indicative of the results of operations that may be expected for all of 2010. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). The unaudited consolidated financial statements include the accounts of the Company and other entities in which the Company has a controlling financial interest. All inter-company balances and transactions have been eliminated. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys 2009 Annual Report on Form 10-K. Certain reclassifications have been made to the prior-period consolidated financial statements to conform to the current-period presentation.

Business Combinations

Business Combinations
	3 Months Ended Mar. 31, 2010
Business Combinations	Note 2: Business Combinations AmTrust Bank On December4, 2009, the Community Bank acquired certain assets and assumed certain liabilities of AmTrust Bank (AmTrust) from the FDIC in an FDIC-assisted transaction (the AmTrust acquisition). Headquartered in Cleveland, Ohio, AmTrust was a savings bank that operated 29 branches in Ohio, 25 branches in Florida, and 12 branches in Arizona. The purpose of the AmTrust acquisition was to expand the Companys footprint into new markets, and to enhance its funding mix with the acquisition of low-cost core deposits. As part of the Purchase and Assumption Agreement entered into by the Community Bank with the FDIC, the Community Bank entered into loss sharing agreements, in accordance with which the FDIC will cover a substantial portion of any future losses on the acquired loans. The acquired loans that are subject to the loss sharing agreements are collectively referred to as covered loans.Under the terms of the loss sharing agreements, the FDIC is obligated to reimburse the Community Bank for 80% of losses up to $907.0 million and 95% of losses in excess of $907.0 million with respect to the covered loans. In addition, the Community Bank will reimburse the FDIC for 80% of recoveries with respect to losses for which the FDIC paid the Community Bank 80% reimbursement, and for 95% of recoveries with respect to losses for which the FDIC paid the Community Bank 95% reimbursement under the loss sharing agreements. The expected net reimbursements under the loss sharing agreements were recorded as an indemnification asset (an FDIC loss share receivable) at an estimated fair value of $740.0 million on the acquisition date. The loss sharing agreements are subject to the Company following certain servicing procedures, as specified in the loss sharing agreements with the FDIC. Furthermore, the Community Bank has agreed to pay to the FDIC, on January18, 2020 (the True-Up Measurement Date), half of the amount, if positive, calculated as (1)$181,400,000 minus (2)the sum of (a)25% of the asset discount bid made in connection with the AmTrust acquisition; (b)25% of the Cumulative Shared-Loss Payments (as defined below); and (c)the sum of the period servicing amounts for every consecutive twelve-month period prior to, and ending on, the True-Up Measurement Date in respect of each of the shared loss agreements during which the applicable shared loss agreement is in effect (with such period servicing amounts to equal, for any twelve-month period with respect to which each of the shared loss agreements during which such shared loss agreement is in effect, the product of the simple average of the principal amount of shared loss loans and shared loss assets at the beginning and end of such period and 1%). For the purposes of the above calculation, Cumulative Shared-Loss Payments means (i)the aggregate of all of the payments made or payable to the Community Bank under the shared-loss agreements minus (ii)the aggregate of all of the payments made or payable to the FDIC under the shared-loss agreements. These reimbursable losses and recoveries are based on the book value of the relevant loans as determined by

Stock-Based Compensation

Stock-Based Compensation
	3 Months Ended Mar. 31, 2010
Stock-Based Compensation	Note 3. Stock-Based Compensation At March31, 2010, the Company had 4,653,558 shares available for grant as options, restricted stock, or other forms of related rights under the New York Community Bancorp, Inc. 2006 Stock Incentive Plan (the 2006 Stock Incentive Plan). Under the 2006 Stock Incentive Plan, the Company granted 399,500 shares of restricted stock in the three months ended March31, 2010, with an average fair value of $16.29 per share on the date of grant and a vesting period of five years. Compensation and benefits expense related to restricted stock grants is recognized on a straight-line basis over the vesting period, and totaled $2.9 million and $2.5 million, respectively, in the three months ended March31, 2010 and 2009. A summary of activity with regard to restricted stock awards during the three months ended March31, 2010 is presented in the following table: FortheThreeMonths Ended March31, 2010 NumberofShares WeightedAverage Grant Date Fair Value Unvested at January 1, 2010 3,000,824 $13.95 Granted 399,500 16.29 Vested (156,700 ) 15.00 Forfeited Unvested at March 31, 2010 3,243,624 14.19 As of March31, 2010, unrecognized compensation costs relating to unvested restricted stock totaled $39.8 million. This amount will be recognized over a remaining weighted average period of 3.9 years. In addition, the Company had eleven stock option plans at March31, 2010: the 1993 and 1997 New York Community Bancorp, Inc. Stock Option Plans; the 1993 and 1996 Haven Bancorp, Inc. Stock Option Plans; the 1998 Richmond County Financial Corp. Stock Compensation Plan; the T R Financial Corp. 1993 Incentive Stock Option Plan; the Roslyn Bancorp, Inc. 1997 and 2001 Stock-based Incentive Plans; the 1998 Long Island Financial Corp. Stock Option Plan; and the 2003 and 2004 Synergy Financial Group, Inc. Stock Option Plans (all eleven plans collectively referred to as the Stock Option Plans). All stock options granted under the Stock Option Plans expire ten years from the date of grant. Using the modified prospective approach, the Company recognizes compensation costs related to share-based payments at fair value on the date of grant, and recognizes such costs in the financial statements over the vesting period during which the employee provides service in exchange for the award. However, as there were no unvested options at any time during the three months ended March31, 2010 or the year ended December31, 2009, the Company did not record any compensation and benefits expense relating to stock options during these periods. Generally, the Company issues new shares of common stock to satisfy the exercise of options. The Company may also use common stock held in Treasury to satisfy the exercise of options. In such event, the difference between the average cost of Treasury shares and the exercise price is recorded as an adjustment to retained earnings or paid-in capital on the date of exercise. At March31, 2010, there were 12,838,385 stock options outstanding. The number of shares available for future issuance under the Stock Option Plans wa

Securities

Securities
	3 Months Ended Mar. 31, 2010
Securities	Note 4. Securities The following tables summarize the Companys portfolio of securities available for sale at March31, 2010 and December31, 2009: March31,2010 (in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Mortgage-Related Securities: GSE certificates(1) $ 243,712 $ 7,307 $ 433 $ 250,586 GSE CMOs(2) 336,961 13,993 350,954 Private label CMOs 82,325 3,953 78,372 Total mortgage-related securities $ 662,998 $ 21,300 $ 4,386 $ 679,912 Other Securities: U.S. Treasury obligations $ 292,580 $ 51 $ 210 $ 292,421 GSE debentures 19,700 15 19,715 Corporate bonds 5,810 8 802 5,016 State, county, and municipal 6,403 33 214 6,222 Capital trust notes 38,754 7,482 5,321 40,915 Preferred stock 31,400 951 10,978 21,373 Common stock 43,477 1,703 6,458 38,722 Total other securities $ 438,124 $ 10,243 $ 23,983 $ 424,384 Total securities available for sale(3) $ 1,101,122 $ 31,543 $ 28,369 $ 1,104,296 (1) Government-sponsored enterprises (2) Collateralized mortgage obligations (3) As of March31, 2010, the non-credit portion of OTTI recorded in accumulated other comprehensive loss, net of tax (AOCL) was $512,000 (before taxes). December31, 2009 (in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Loss Fair Value Mortgage-Related Securities: GSE certificates $ 264,769 $ 7,741 $ 702 $ 271,808 GSE CMOs 400,770 16,013 416,783 Private label CMOs 91,612 5,998 85,614 Total mortgage-related securities $ 757,151 $ 23,754 $ 6,700 $ 774,205 Other Securities: U.S. Treasury obligations $ 607,022 $ 21 $ 592 $ 606,451 GSE debentures 30,179 11 30,190 Corporate bonds 5,811 9 919 4,901 State, county, and municipal 6,402 38 281 6,159 Capital trust notes 39,151 5,125 5,438 38,838 Preferred stock 31,400 1,117 11,283 21,234 Common stock 42,693 1,606 7,631 36,668 Total other securities $ 762,658 $ 7,927 $ 26,144 $ 744,441 Total securities available for sale $ 1,519,809 $ 31,681 $ 32,844 $ 1,518,646 The following tables summarize the Companys portfolio of securities held to maturity at March31, 2010 and December31, 2009: March 31, 2010 (in thousands) Amortized Cost Carrying Amount(1) Gross Unrealized Gain Gross Unrealized Loss Fair Value Mortgage-Related Securities:

Loans, net

Loans, net
	3 Months Ended Mar. 31, 2010
Loans, net	Note 5. Loans, net The following table provides a summary of the Companys loan portfolio at the dates indicated: March31, 2010 December31, 2009 (dollars in thousands) Amount Percent of Non-Covered Loans Amount Percent of Non-Covered Loans Non-Covered Loans: Mortgage Loans: Multi-family $ 16,777,137 69.36 % $ 16,737,721 71.59 % Commercial real estate 5,066,793 20.95 4,988,649 21.34 Acquisition, development, and construction 648,068 2.68 666,440 2.85 One- to four-family 200,940 0.83 216,078 0.92 Loans held for sale 764,358 3.16 Total mortgage loans $ 23,457,296 96.98 $ 22,608,888 96.70 Other Loans: Commercial and industrial 623,556 2.58 653,159 2.79 Other loans 107,001 0.44 118,445 0.51 Total other loans 730,557 3.02 771,604 3.30 Total non-covered loans $ 24,187,853 100.00 % $ 23,380,492 100.00 % Net deferred loan origination fees (5,739 ) (3,893 ) Allowance for loan losses (137,443 ) (127,491 ) Total non-covered loans, net 24,044,671 23,249,108 Total Covered Loans 4,759,139 5,016,100 Loans, net $ 28,803,810 $ 28,265,208 Covered loans refer to the loans acquired from the FDIC in the AmTrust and Desert Hills acquisitions, all of which are subject to the previously mentioned loss sharing agreements. At December31, 2009, the balance of covered loans included loans held for sale of $351.3 million. Non-covered loans refer to all loans in the Companys loan portfolio excluding covered loans. Non-Covered Loans Loans Originated for Portfolio The Company is primarily a multi-family mortgage lender, with a significant portion of its loan portfolio collateralized by non-luxury apartment buildings in New York City that are largely rent-controlled and/or rent-stabilized. The Company also originates the following types of loans for portfolio: commercial real estate (CRE) loans, primarily in New York City, Long Island, and New Jersey; and, to a lesser extent, acquisition, development, and construction (ADC) loans and commercial and industrial (CI) loans. ADC loans are primarily originated for multi-family and residential tract projects in New York City and Long Island, while CI loans are made to small and mid-size businesses in New York City, Long Island, New Jersey, and Arizona on both a secured and unsecured basis for working capital, business expansion, and the purchase of machinery and equipment. Payments on multi-family and CRE loans generally depend on the income produced by the underlying properties which, in turn, depends on their successful operation and management. Accordingly, the abi

Mortgage Servicing Rights

Mortgage Servicing Rights
	3 Months Ended Mar. 31, 2010
Mortgage Servicing Rights	Note 6. Mortgage Servicing Rights The Company had mortgage servicing rights (MSRs) of $19.8 million and $10.6 million at March31, 2010 and December31, 2009, respectively. MSRs are included in other assets in the Consolidated Statements of Condition. The Company has two classes of MSRs for which it separately manages the economic risk: residential MSRs and securitized MSRs. Residential MSRs are carried at fair value, with changes in fair value recorded as a component of non-interest income in each period. The Company uses various derivative instruments to mitigate the income statement-effect of changes in fair value due to changes in valuation inputs and assumptions of its residential MSRs. MSRs do not trade in an active, open market with readily observable prices. Accordingly, the Company utilizes a valuation model that calculates the present value of estimated future cash flows. The model incorporates various assumptions, including estimates of prepayment speeds, discount rates, refinance rates, servicing costs, and ancillary income. The Company reassesses and periodically adjusts the underlying inputs and assumptions in the model to reflect market conditions and assumptions that a market participant would consider in valuing the MSR asset. The value of MSRs is significantly affected by mortgage interest rates available in the marketplace, which influence mortgage loan prepayment speeds. In general, during periods of declining interest rates, the value of MSRs declines due to increasing prepayments attributable to increased mortgage refinancing activity. Conversely, during periods of rising interest rates, the value of MSRs generally increases due to reduced mortgage refinancing activity. Securitized MSRs are carried at the lower of the initial carrying value, adjusted for amortization, or fair value and are amortized in proportion to, and over the period of, estimated net servicing income. Such MSRs are periodically evaluated for impairment based on the difference between the carrying amount and current fair value. If it is determined that impairment exists, the resultant loss is charged against earnings. The following table sets forth the changes in residential and securitized MSRs for the three months March31, 2010 and the year ended December31, 2009: For the Three Months Ended March31, 2010 For the Year Ended December31, 2009 (in thousands) Residential Securitized Residential Securitized Carrying value, beginning of year $ 8,617 $ 1,965 $ $ 3,568 Additions 9,353 Increase in fair value 41 Amortization (193 ) (1,603 ) Additions recorded at fair value in the AmTrust acquisition 8,617 Carrying value, end of period $ 18,011 $ 1,772 $ 8,617 $ 1,965

Borrowed Funds

Borrowed Funds
	3 Months Ended Mar. 31, 2010
Borrowed Funds	Note 7. Borrowed Funds The following table provides a summary of the Companys borrowed funds at the dates indicated: (in thousands) March31, 2010 December31, 2009 Wholesale borrowings: FHLB advances $ 8,670,024 $ 8,955,769 Repurchase agreements 4,125,000 4,125,000 Total wholesale borrowings 12,795,024 13,080,769 Junior subordinated debentures 427,251 427,371 Senior debt 601,775 601,746 Preferred stock of subsidiaries 51,800 54,800 Total borrowed funds $ 13,875,850 $ 14,164,686 At March31, 2010, the Company had $427.3 million of outstanding junior subordinated deferrable interest debentures (junior subordinated debentures) held by nine statutory business trusts (the Trusts) that issued guaranteed capital securities. The capital securities qualified as Tier 1 capital of the Company at that date. The Trusts are accounted for as unconsolidated subsidiaries in accordance with GAAP. The proceeds of each issuance were invested in a series of junior subordinated debentures of the Company and the underlying assets of each statutory business trust are the relevant debentures. The Company has fully and unconditionally guaranteed the obligations under each trusts capital securities to the extent set forth in a guarantee by the Company to each trust. The Trusts capital securities are each subject to mandatory redemption, in whole or in part, upon repayment of the debentures at their stated maturity or earlier redemption. The following table provides a summary of the outstanding capital securities issued by each trust and the carrying amounts of the junior subordinated debentures issued by the Company to each trust as of March31, 2010: Issuer InterestRateof CapitalSecurities and Debentures(1) Junior Subordinated Debenture Carrying Amount Capital Securities Amount Outstanding Date of Original Issue Stated Maturity FirstOptional RedemptionDate (dollars in thousands) Haven Capital Trust II 10.250 % $ 23,333 $ 22,550 May26,1999 June30,2029 June30, 2009(2) Queens County Capital Trust I 11.045 10,309 10,000 July 26, 2000 July 19, 2030 July 19, 2010 QueensStatutoryTrustI 10.600 15,464 15,000 September7,2000 September7,2030 September7,2010 New York Community Capital Trust V 6.000 143,504 137,153 November 4, 2002 November 1, 2051 November4, 2007(3) New York Community Capital Trust X 1.857 123,712 120,000 December14,2006 December15,2036 December15,2011 LIF Statutory Trust I 10.600 7,732 7,500 September 7, 2000 September 7, 2030 September 7, 2010 PennFed Capital Trust II 10.180 12,983 12,611 March 28, 2001 June 8, 2031 June 8, 2011 PennFed Capital Trust III 3.507 30,928 30,000 June 2, 2003 June 15, 2033 June 15, 2008(2) New York Community Capital Trust XI 1.939 59,286 57,500 April 16, 2007 June 30, 2037 June 30, 2012

Pension and Other Post-Retireme

Pension and Other Post-Retirement Benefits
	3 Months Ended Mar. 31, 2010
Pension and Other Post-Retirement Benefits	Note 8. Pension and Other Post-Retirement Benefits The following table sets forth certain disclosures for the Companys pension and post-retirement plans for the periods indicated: For the Three Months Ended March31, 2010 2009 (in thousands) Pension Benefits Post-Retirement Benefits Pension Benefits Post-Retirement Benefits Components of net periodic (credit) expense: Interest cost $ 1,515 $ 198 $ 1,611 $ 228 Service cost 1 Expected return on plan assets (2,866 ) (2,576 ) Unrecognized past service liability 49 (62 ) 50 (62 ) Amortization of unrecognized loss 1,286 78 1,746 76 Net periodic (credit) expense $ (16 ) $ 215 $ 831 $ 242 As discussed in the notes to the consolidated financial statements presented in the Companys 2009 Annual Report on Form 10-K, the Company expects to contribute $1.7 million to its post-retirement plan to pay premiums and claims for the fiscal year ending December31, 2010. The Company does not expect to contribute to its pension plan in 2010.

Computation of Earnings per Sha

Computation of Earnings per Share
	3 Months Ended Mar. 31, 2010
Computation of Earnings per Share	Note 9. Computation of Earnings per Share The following table presents the Companys computation of basic and diluted earnings per share for the periods indicated: Three Months Ended March31, (in thousands, except share and per share data) 2010 2009 Net income $ 124,149 $ 88,689 Less: Dividends paid on and earnings allocated to participating securities (748 ) (482 ) Earnings applicable to common stock $ 123,401 $ 88,207 Weighted average common shares outstanding 432,131,304 343,323,162 Basic earnings per common share $0.29 $0.26 Earnings applicable to common stock $ 123,401 $ 88,207 Weighted average common shares outstanding 432,131,304 343,323,162 Potential dilutive common shares(1) 315,370 77,847 Total shares for diluted earnings per share computation 432,446,674 343,401,009 Diluted earnings per common share and common share equivalents $0.29 $0.26 (1) Options to purchase 5,310,729 shares and 13,127,433 shares of the Companys common stock that were outstanding as of March31, 2010 and 2009, at respective weighted average exercise prices of $17.72 and $15.73, were not included in the respective computations of diluted earnings per share because their inclusion would have had an antidilutive effect.

Fair Value Measurement

Fair Value Measurement
	3 Months Ended Mar. 31, 2010
Fair Value Measurement	Note 10. Fair Value Measurement In 2008, the FASB issued a standard that, among other things, defined fair value, established a consistent framework for measuring fair value, and expanded disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. The standard clarified that fair value is an exit price, representing the amount that would be received when selling an asset, or paid when transferring a liability, in an orderly transaction between market participants. Fair value is thus a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 Inputs to the valuation methodology are significant unobservable inputs that reflect a companys own assumptions about the assumptions that market participants use in pricing an asset or liability. A financial instruments categorization within this valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following tables present assets and liabilities that were measured at fair value on a recurring basis as of March31, 2010 and December31, 2009, and that were included in the Companys Consolidated Statement of Condition at those dates: Fair Value Measurements at March31, 2010 Using (in thousands) QuotedPrices in Active Markets for IdenticalAssets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Netting Adjustments(1 ) Total Fair Value Mortgage-Related Securities Available for Sale: GSE certificates $ $ 350,954 $ $ $ 350,954 GSE CMOs 250,586 250,586 Private label CMOs 78,372 78,372 Total mortgage-related securities $ $ 679,912 $ $ $ 679,912 Other Securities Available for Sale: GSE debentures $ $ 19,715 $ $ $ 19,715 Corporate bonds 5,016 5,016 U. S. Treasury obligations 292,421 292,421 State, county, and municipal 6,222 6,222 Capital trust notes 15,418 25,497 40,915 Preferred stock 13,401 7,972 21,373 Common stock 38,722 38,722

Derivative Financial Instrument

Derivative Financial Instruments
	3 Months Ended Mar. 31, 2010
Derivative Financial Instruments	Note 11: Derivative Financial Instruments The Companys derivative financial instruments consist of financial forward and futures contracts, interest rate lock commitments, swaps, and options. These derivatives relate to mortgage banking operations, MSRs, and other risk management activities, and seek to mitigate or reduce the Companys exposure to losses from adverse changes in interest rates.These activities will vary in scope based on the level and volatility of interest rates, the type of assets held, and other changing market conditions. The Company held derivatives not designated as hedges with a notional amount of $2.4 billion at March31, 2010. Changes in the fair value of these derivatives are reflected in current-period earnings. The following table sets forth information concerning the Companys derivative financial instruments at March31, 2010: March31, 2010 (in thousands) Notional Amount Fair Value(1) Gain Loss Derivatives Not Designated as Hedges: Mortgage banking: Treasury options $ 55,000 $ 215 $ Eurodollar futures 300,000 433 Forward commitments to sell loans/mortgage-backed securities 1,257,000 5,045 Forward commitments to buy loans/mortgage-backed securities 50,000 344 Interest rate lock commitments 751,913 1,596 Total derivatives $ 2,413,913 $ 6,856 $ 777 (1) Derivatives in a net gain position are recorded as other assets and derivatives in a net loss position are recorded as other liabilities in the Consolidated Statements of Condition. The Company uses various financial instruments, including derivatives, in connection with its strategies to reduce price risk resulting from changes in interest rates. Derivative instruments may include interest rate lock commitments entered into with borrowers or correspondents/brokers to acquire conforming fixed and adjustable rate residential mortgage loans that will be held for sale. Other derivative instruments include Treasury options and Eurodollar futures. Gains or losses due to changes in the fair value of derivatives are recognized currently in earnings. The Company enters into forward contracts to sell fixed rate mortgage-backed securities to protect against changes in the prices of conforming fixed rate loans held for sale. Forward contracts are entered into with securities dealers in an amount related to the portion of interest rate lock commitments that are expected to close. The value of these forward sales contracts moves inversely with the value of the loans in response to changes in interest rates. To manage the price risk associated with fixed rate non-conforming mortgage loans, the Company generally enters into forward contracts on mortgage-backed securities or forward commitments to sell loans to approved investors. Short positions in Eurodollar futures contracts are used to manage price risk on adjustable rate mortgage loans held for sale. The Company also purchases put and call options to manage the risk associated with variations in the amount

Impact of Recent Accounting Pro

Impact of Recent Accounting Pronouncements
	3 Months Ended Mar. 31, 2010
Impact of Recent Accounting Pronouncements	Note 12. Impact of Recent Accounting Pronouncements In January 2010, the FASB issued a standard that requires more robust disclosures about (1)the different classes of assets and liabilities measured at fair value, (2)the valuation techniques and inputs used, (3)the activity in Level 3 fair value measurements, and (4)the transfers between Levels 1, 2, and 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll-forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December15, 2010, and for interim periods within those fiscal years. In July 2009, the FASB released the Codification as the single source of authoritative non-governmental GAAP. The Codification is effective for interim and annual periods ended after September15, 2009. All previously existing accounting standards documents are superseded. All other accounting literature not included in the Codification is non-authoritative. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become non-authoritative. Following the Codification, the FASB will not issue new standards in the form of Statements of Financial Accounting Standards, FASB Staff Positions, Emerging Issues Task Force Abstracts, or other types of pronouncements previously used. Instead, it will issue Accounting Standards Updates (ASUs), which will serve to update the Codification, provide background information about the guidance, and provide the basis for conclusions on changes to the Codification. GAAP is not intended to be changed as a result of the Codification, but the Codification will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ended after September15, 2009. In April 2009, the FASB issued new requirements regarding disclosure of fair value measurements and accounting for the impairment of securities. The requirements address fair value measurements in inactive markets consistent with the principles presented in previously issued standards; increase the frequency of fair value disclosures; and establish new principles with respect to accounting for, and presenting, impairment losses on securities. These requirements address the determination of fair values when there is no active market or where the price inputs being used represent distressed sales, and reaffirm that the objective of fair value measurement, as set forth in previously issued guidance, is to reflect how much an asset would be sold for in an orderly transaction (the exit price, as opposed