FOR IMMEDIATE RELEASE
Contact: | | Peter J. Cunningham |
| | | First Vice President, Investor Relations |
| | | (516) 327-7877 |
| | | ir@astoriafederal.com |
ASTORIA FINANCIAL CORPORATION ANNOUNCES THIRD QUARTER EPS OF $0.39
Quarterly Cash Dividend of $0.26 Per Common Share Declared
Lake Success, New York, October 18, 2007 -- Astoria Financial Corporation (NYSE: AF) (“Astoria,” the “Company”), the holding company for Astoria Federal Savings and Loan Association (“Astoria Federal”), today reported net income of $35.3 million, or $0.39 diluted earnings per share (“EPS”), for the quarter ended September 30, 2007, compared to $41.1 million, or $0.43 EPS, for the 2006 third quarter. For the 2007 third quarter, annualized returns on average equity, average tangible equity and average assets were 11.82%, 13.99% and 0.66%, respectively, compared to 13.06%, 15.31% and 0.76%, respectively, for the comparable 2006 period.
For the nine months ended September 30, 2007, net income totaled $105.1 million, or $1.14 EPS, compared to $137.8 million, or $1.40 EPS, for the comparable 2006 period. For the nine months ended September 30, 2007, annualized returns on average equity, average tangible equity and average assets were 11.67%, 13.79% and 0.65%, respectively, compared to 14.27%, 16.67% and 0.84%, respectively, for the comparable 2006 period.
Commenting on the quarterly results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted, “The 2007 third quarter operating results were in line with our expectations and continued to reflect the impact of a prolonged flat-to-inverted yield curve. The recent decrease in interest rates by the Federal Reserve has produced a positively sloped yield curve and a more favorable operating environment for us going forward.”
Board Declares Quarterly Cash Dividend of $0.26 Per Share
The Board of Directors of the Company, at their October 17, 2007 meeting, declared a quarterly cash dividend of $0.26 per common share. The dividend is payable on December 3, 2007 to shareholders of record as of November 15, 2007. This is the fiftieth consecutive quarterly cash dividend declared by the Company.
Eleventh Stock Repurchase Program Completed; Twelfth Stock Repurchase Program Commenced
During the 2007 third quarter, Astoria completed its eleventh stock repurchase program and commenced its twelfth stock repurchase program, repurchasing 750,000 shares of its common stock at an average cost of $25.38 per share. During the nine month period ended September 30, 2007 Astoria repurchased a total of 2.5 million shares. Under the twelfth program, 9.4 million shares remain available for repurchase.
Third Quarter and Nine Month Earnings Summary
Net interest income for the quarter ended September 30, 2007 totaled $81.2 million compared to $82.9 million for the 2007 second quarter and $90.7 million for the third quarter a year ago. For the nine months ended September 30, 2007, net interest income totaled $251.6 million compared to $303.5 million for the comparable 2006 nine month period.
Astoria’s net interest margin for the quarter ended September 30, 2007 was 1.58% compared to 1.62% for the 2007 second quarter and 1.75% for the quarter ended September 30, 2006. For the nine months ended September 30, 2007, the net interest margin was 1.63% compared to 1.93% for the 2006 nine month period. The four basis point decrease, on a linked quarter basis, is due to one extra day of interest expense in the 2007 third quarter. The year over year quarter and nine month decreases are due to the cost of interest-bearing liabilities rising more rapidly than the yield on interest-earning assets.
Non-interest income for the quarter ended September 30, 2007 increased $1.9 million to $24.8 million from $22.9 million for the 2007 third quarter, due entirely to a gain on the sale of an equity security position.
For the nine months ended September 30, 2007, non-interest income totaled $73.7 million compared to $67.5 million for the comparable 2006 period. Non-interest income for the 2006 nine month period included a $5.5 million, pre-tax, charge related to the termination of interest rate swap agreements in the 2006 first quarter.
The components of mortgage banking income, net, which is included in non-interest income, are detailed below:
(Dollars in millions) | | 3Q07 | | 3Q06 | | 9 Mos. 07 | | 9 Mos. 06 | |
| Loan servicing fees | | $ | 1.0 | | $ | 1.1 | | $ | 3.0 | | $ | 3.4 | |
| Amortization of MSR* | | | (0.7 | ) | | (0.9 | ) | | (2.6 | ) | | (2.8 | ) |
| MSR* valuation adjustments | | | (0.4 | ) | | (0.5 | ) | | 0.3 | | | 1.5 | |
| Net gain on sale of loans | | | 0.3 | | | 0.5 | | | 1.3 | | | 1.7 | |
| Mortgage banking income, net | | $ | 0.2 | | $ | 0.2 | | $ | 2.0 | | $ | 3.8 | |
* Mortgage servicing rights
General and administrative expense (“G&A”) for the quarter ended September 30, 2007 declined $2.2 million to $56.5 million from $58.7 million for the 2007 second quarter and increased $3.2 million from the 2006 third quarter. The linked quarter decrease is primarily due to lower goodwill litigation and advertising expense. The third quarter year over year increase is due primarily to an increase in compensation and benefits expense.
For the nine months ended September 30, 2007, G&A increased $7.6 million to $172.4 million from $164.8 million for the comparable 2006 period. The increase was primarily due to increases in compensation and benefits and goodwill litigation expense.
Income tax expense for the quarter ended September 30, 2007 decreased $2.8 million from the prior quarter to $13.6 million, for an effective tax rate of 27.9%, due to the release of accruals for previous tax positions that have statutorily expired. It is expected that the fourth quarter effective tax rate should return to a more normal level of approximately 30%.
Balance Sheet Summary
For the 2007 third quarter, the loan portfolio increased $371.0 million from the prior quarter, or 9.5% on an annualized basis, to $16.0 billion at September 30, 2007. Loan originations and purchases totaled $1.1 billion for the quarter ended September 30, 2007 compared to $868.6 million for the 2006 third quarter.
For the nine months ended September 30, 2007, the loan portfolio increased $981.6 million. Loan originations and purchases totaled $3.3 billion for the nine months ended September 30, 2007 compared to $2.4 billion for the comparable 2006 period. The loan pipeline at September 30, 2007 totaled $1.4 billion, an increase of $330.1 million over the pipeline at June 30, 2007.
For the 2007 third quarter, the one-to-four family mortgage loan portfolio increased $440.1 million from the prior quarter, or 16.1% annualized, to $11.3 billion at September 30, 2007. One-to-four family loan originations and purchases totaled $982.0 million for the 2007 third quarter compared to $706.6 million for the 2006 third quarter. Of the 2007 third quarter one-to-four family loan production, 74% consisted of 3/1 and 5/1 hybrid adjustable rate mortgage loans.
For the nine months ended September 30, 2007, the one-to-four family mortgage loan portfolio increased $1.1 billion. Loan originations and purchases totaled $3.0 billion for the 2007 nine month period compared to $1.8 billion for the 2006 nine month period. Of the 2007 nine month one-to-four family loan production, 75% consisted of 3/1 and 5/1 hybrid adjustable rate mortgage loans.
For the 2007 third quarter, the multi-family and commercial real estate (“CRE”) loan portfolio decreased $32.6 million from the prior quarter, primarily due to lower loan originations which totaled $90.5 million compared to loan originations of $158.2 million for the comparable 2006 period. At September 30, 2007, the combined multi-family and CRE loan portfolio totaled $4.0 billion, or 25% of total loans.
For the nine months ended September 30, 2007, the multi-family and CRE loan portfolio decreased $54.4 million primarily due to lower loan originations which totaled $344.4 million compared to $559.4 million for the 2006 nine month period. The average loan-to-value ratio of the combined multi-family and CRE loan portfolio continues to be less than 65%, based on current principal balance and original appraised value, and the average loan balance is less than $1 million.
For the quarter ended September 30, 2007, non-performing loans increased $18.3 million from the previous quarter to $82.3 million, or 0.38% of total assets, primarily due to an increase in one-to-four family non-performing loans. As of September 30, 2007, one-to-four family non-performing loans totaled $68.2 million and multi-family and CRE non-performing loans totaled $9.4 million. The ratio of the allowance for loan losses to non-performing loans at September 30, 2007 was 95%.
Net loan charge-offs for the quarter ended September 30, 2007 totaled $1.6 million compared to net loan charge-offs of $1.1 million for the 2006 third quarter. The 2007 third quarter charge-offs include a $1.5 million charge-off on a non-performing construction loan which was sold. For the nine months ended September 30, 2007, net loan charge-offs totaled $2.2 million, or just two basis points, annualized, of average loans, compared to $1.2 million, or one basis point, annualized, of average loans, for the 2006 nine month period.
For the quarter ended September 30, 2007, Astoria recorded a $500,000 provision for loan losses, the first provision in a number of years. Mr. Engelke noted, “Our asset quality remains strong and net charge-offs remain very low. However, in recognition of, among other things, the recent increase in non-performing loans, an addition to our loan loss reserve was appropriate.”
For the quarter and nine months ended September 30, 2007, deposits decreased $181.9 million and increased $42.0 million, respectively, to $13.3 billion. “During the third quarter, retail deposit pricing remained very competitive even as short-term market interest rates declined. As a result of our efforts to maintain deposit pricing discipline, we have taken advantage of lower cost borrowings for funding some of our loan growth this quarter,” Mr. Engelke noted.
For the quarter and nine months ended September 30, 2007, securities decreased $219.1million and $771.1 million, respectively, to $4.6 billion, or 21% of total assets at September 30, 2007. For the quarter and nine months ended September 30, 2007, borrowings increased $231.2 million and $93.5 million, respectively, to $6.9 billion, or 32% of total assets at September 30, 2007. Total assets increased $96.2 million from the previous quarter and $191.6 million from December 31, 2006 and totaled $21.7 billion at September 30, 2007.
Key balance sheet highlights, reflecting the improvement in the quality of the Company’s balance sheet since December 31, 1999, follow:
| ($ in millions) | | 12/31/99 | | 12/31/01 | | 12/31/03 | | 12/31/05 | | 12/31/06 | | 09/30/07 | | Cumulative % Change | |
Assets | | $ | 22,700 | | $ | 22,672 | | $ | 22,462 | | $ | 22,380 | | $ | 21,555 | | $ | 21,746 | | | ( 4 | %) |
Loans | | $ | 10,286 | | $ | 12,167 | | $ | 12,687 | | $ | 14,392 | | $ | 14,972 | | $ | 15,953 | | | + 55 | % |
Securities | | $ | 10,763 | | $ | 8,013 | | $ | 8,448 | | $ | 6,572 | | $ | 5,340 | | $ | 4,569 | | | (58 | %) |
Deposits | | $ | 9,555 | | $ | 10,904 | | $ | 11,187 | | $ | 12,810 | | $ | 13,224 | | $ | 13,266 | | | + 39 | % |
Borrowings | | $ | 11,528 | | $ | 9,826 | | $ | 9,632 | | $ | 7,938 | | $ | 6,836 | | $ | 6,930 | | | (40 | %) |
The following table illustrates this improvement on an outstanding per share basis:
Amount per share | | 12/31/99 | | 12/31/01 | | 12/31/03 | | 12/31/05 | | 12/31/06 | | 09/30/07 | | % Change | | CAGR | |
Loans | | $ | 66.28 | | $ | 89.36 | | $ | 107.51 | | $ | 137.11 | | $ | 152.44 | | $ | 165.83 | | | 150 | % | | 13 | % |
Deposits | | $ | 61.57 | | $ | 80.09 | | $ | 94.80 | | $ | 122.04 | | $ | 134.65 | | $ | 137.90 | | | 124 | % | | 11 | % |
Stockholders’ equity was $1.2 billion, or 5.54% of total assets at September 30, 2007. Astoria Federal continues to maintain capital ratios in excess of regulatory requirements with core, tangible and risk-based capital ratios of 6.60%, 6.60% and 12.08%, respectively, at September 30, 2007.
Future Outlook
Commenting on the outlook for the remainder of 2007 and 2008, Mr. Engelke stated, “The recent decrease in short-term interest rates by the Federal Reserve has produced a more positively sloped yield curve and a more favorable operating environment for us going forward. In addition, the recent dislocation in the secondary residential mortgage market has resulted in improved loan volumes and mortgage spreads for portfolio lenders such as Astoria. We anticipate the yield curve will remain positively sloped for the remainder of 2007 and 2008 which should result in earning asset growth and an expansion of our net interest margin in 2008. Our focus going forward will be to continue to capitalize on residential mortgage market dislocations, which we believe will produce robust quality loan growth. Deposit growth will remain a focus; however, in the near term, if competitive pricing continues, we may fund some of our loan growth with lower cost borrowings and normal cash flow from the securities portfolio. We expect to continue to maintain the Company’s tangible capital levels between 4.50% and 4.75%.”
Astoria Financial Corporation, the holding company for Astoria Federal Savings and Loan Association, with assets of $21.7 billion is the sixth largest thrift institution in the United States. Established in 1888, Astoria Federal is the largest thrift depository headquartered in New York with deposits of $13.3 billion and embraces its philosophy of “Putting people first” by providing the customers and local communities it serves with quality financial products and services through 86 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states. Astoria Federal originates mortgage loans through its banking offices and loan production offices in New York, an extensive broker network covering twenty-six states, primarily the East Coast, and the District of Columbia, and through correspondent relationships covering forty-three states and the District of Columbia.
| Earnings Conference Call October 18, 2007 at 3:30 p.m. (ET) The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday afternoon, October 18, 2007 at 3:30 p.m. (ET). The toll-free dial-in number is (888) 562-3356, conference ID #9240715. A telephone replay will be available on October 18, 2007 from 7:00 p.m. (ET) through Friday, October 26, 2007, 11:59 p.m. (ET). The replay number is (877) 519-4471, ID # 9240715. The conference call will also be simultaneously webcast on the Company’s website www.astoriafederal.com and archived for one year. |
Forward Looking Statements
This document contains a number of forward-looking statements 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. These statements may be identified by the use of such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,�� and similar terms and phrases, including references to assumptions.
Forward-looking statements are based on various assumptions and analyses made by us in light of our management’s experience and its perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
| | | At September 30, | | At December 31, | |
| | | 2007 | | 2006 | |
| ASSETS | | | | | |
| Cash and due from banks | | $ | 123,314 | | $ | 134,016 | |
| Repurchase agreements | | | 34,143 | | | 71,694 | |
| Securities available-for-sale | | | 1,358,362 | | | 1,560,325 | |
| Securities held-to-maturity (fair value of $3,140,725 and $3,681,514, respectively) | | | 3,210,217 | | | 3,779,356 | |
| Federal Home Loan Bank of New York | | | | | | | |
| stock, at cost | | | 180,631 | | | 153,640 | |
| Loans held-for-sale, net | | | 8,796 | | | 16,542 | |
| Loans receivable: | | | | | | | |
| Mortgage loans, net | | | 15,576,834 | | | 14,532,503 | |
| Consumer and other loans, net | | | 376,445 | | | 439,188 | |
| | | | 15,953,279 | | | 14,971,691 | |
| Allowance for loan losses | | | (78,254 | ) | | (79,942 | ) |
| Total loans receivable, net | | | 15,875,025 | | | 14,891,749 | |
| Mortgage servicing rights, net | | | 14,589 | | | 15,944 | |
| Accrued interest receivable | | | 82,193 | | | 78,761 | |
| Premises and equipment, net | | | 141,131 | | | 145,231 | |
| Goodwill | | | 185,151 | | | 185,151 | |
| Bank owned life insurance | | | 393,899 | | | 385,952 | |
| Other assets | | | 138,651 | | | 136,158 | |
| | | | | | | | |
| TOTAL ASSETS | | $ | 21,746,102 | | $ | 21,554,519 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
| Liabilities: | | | | | | | |
| Deposits | | $ | 13,265,995 | | $ | 13,224,024 | |
| Reverse repurchase agreements | | | 3,980,000 | | | 4,480,000 | |
| Federal Home Loan Bank of New York | | | | | | | |
| advances | | | 2,553,000 | | | 1,940,000 | |
| Other borrowings, net | | | 396,500 | | | 416,002 | |
| Mortgage escrow funds | | | 167,431 | | | 132,080 | |
| Accrued expenses and other | | | | | | | |
| liabilities | | | 177,501 | | | 146,659 | |
| | | | | | | | |
| TOTAL LIABILITIES | | | 20,540,427 | | | 20,338,765 | |
| | | | | | | | |
| Stockholders' equity: | | | | | | | |
| Preferred stock, $1.00 par value; (5,000,000 shares authorized; none issued and outstanding) Common stock, $.01 par value; (200,000,000 shares authorized; 166,494,888 shares issued; and 96,203,234 and 98,211,827 shares outstanding, respectively) | | | 1,665 | | | 1,665 | |
| Additional paid-in capital | | | 842,339 | | | 828,940 | |
| Retained earnings | | | 1,888,432 | | | 1,856,528 | |
| Treasury stock (70,291,654 and 68,283,061 shares, at cost, respectively) | | | (1,447,809 | ) | | (1,390,495 | ) |
| Accumulated other comprehensive loss | | | (57,407 | ) | | (58,330 | ) |
| Unallocated common stock held by ESOP (5,880,457 and 6,155,918 shares, respectively) | | | (21,545 | ) | | (22,554 | ) |
| | | | | | | | |
| TOTAL STOCKHOLDERS' EQUITY | | | 1,205,675 | | | 1,215,754 | |
| | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' | | | | | | | |
| EQUITY | | $ | 21,746,102 | | $ | 21,554,519 | |
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
| | | For the Three | | For the Nine | |
| | | Months Ended | | Months Ended | |
| | | September 30, | | September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| Interest income: | | | | | | | | | |
| Mortgage loans: | | | | | | | | | |
| One-to-four family | | $ | 150,645 | | $ | 127,735 | | $ | 428,729 | | $ | 378,226 | |
| Multi-family, commercial real estate and construction | | | 63,052 | | | 65,933 | | | 192,160 | | | 192,178 | |
| Consumer and other loans | | | 7,472 | | | 9,099 | | | 23,478 | | | 26,918 | |
| Mortgage-backed and other securities | | | 53,227 | | | 64,946 | | | 168,127 | | | 205,373 | |
| Federal funds sold and repurchase agreements | | | 337 | | | 1,266 | | | 1,812 | | | 5,205 | |
| Federal Home Loan Bank of New York stock | | | 2,899 | | | 2,049 | | | 8,246 | | | 5,535 | |
| Total interest income | | | 277,632 | | | 271,028 | | | 822,552 | | | 813,435 | |
| Interest expense: | | | | | | | | | | | | | |
| Deposits | | | 116,950 | | | 102,103 | | | 341,404 | | | 275,357 | |
| Borrowings | | | 79,505 | | | 78,258 | | | 229,553 | | | 234,549 | |
| Total interest expense | | | 196,455 | | | 180,361 | | | 570,957 | | | 509,906 | |
| | | | | | | | | | | | | | |
| Net interest income | | | 81,177 | | | 90,667 | | | 251,595 | | | 303,529 | |
| Provision for loan losses | | | 500 | | | - | | | 500 | | | - | |
| Net interest income after provision for loan losses | | | 80,677 | | | 90,667 | | | 251,095 | | | 303,529 | |
| Non-interest income: | | | | | | | | | | | | | |
| Customer service fees | | | 15,920 | | | 16,170 | | | 47,248 | | | 49,208 | |
| Other loan fees | | | 1,153 | | | 983 | | | 3,481 | | | 2,755 | |
| Net gain on sales of securities | | | 1,992 | | | - | | | 1,992 | | | - | |
| Mortgage banking income, net | | | 155 | | | 181 | | | 1,995 | | | 3,810 | |
| Income from bank owned life insurance | | | 4,238 | | | 3,957 | | | 12,728 | | | 12,063 | |
| Other | | | 1,347 | | | 1,573 | | | 6,238 | | | (348 | ) |
| Total non-interest income | | | 24,805 | | | 22,864 | | | 73,682 | | | 67,488 | |
| Non-interest expense: | | | | | | | | | | | | | |
| General and administrative: | | | | | | | | | | | | | |
| Compensation and benefits | | | 30,587 | | | 27,584 | | | 91,757 | | | 86,423 | |
| Occupancy, equipment and systems | | | 16,159 | | | 16,104 | | | 49,174 | | | 49,209 | |
| Federal deposit insurance premiums | | | 388 | | | 414 | | | 1,202 | | | 1,263 | |
| Advertising | | | 1,390 | | | 1,839 | | | 5,282 | | | 5,668 | |
| Other | | | 8,020 | | | 7,374 | | | 24,956 | | | 22,280 | |
| Total non-interest expense | | | 56,544 | | | 53,315 | | | 172,371 | | | 164,843 | |
| | | | | | | | | | | | | | |
| Income before income tax expense | | | 48,938 | | | 60,216 | | | 152,406 | | | 206,174 | |
| Income tax expense | | | 13,630 | | | 19,122 | | | 47,257 | | | 68,383 | |
| | | | | | | | | | | | | | |
| Net income | | $ | 35,308 | | $ | 41,094 | | $ | 105,149 | | $ | 137,791 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Basic earnings per common share | | $ | 0.39 | | $ | 0.44 | | $ | 1.16 | | $ | 1.44 | |
| | | | | | | | | | | | | | |
| Diluted earnings per common share | | $ | 0.39 | | $ | 0.43 | | $ | 1.14 | | $ | 1.40 | |
| | | | | | | | | | | | | | |
| Basic weighted average common shares | | | 90,174,456 | | | 93,944,367 | | | 90,763,008 | | | 95,563,670 | |
| Diluted weighted average common and common equivalent shares | | | 91,543,600 | | | 96,489,271 | | | 92,420,702 | | | 98,137,080 | |
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
| | | For the | | At or For the | |
| | | Three Months Ended | | Nine Months Ended | |
| | | September 30, | | September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
| | | | | | | | | | |
| Selected Returns and Financial Ratios (annualized) | | | | | | | | | | | | | |
| Return on average stockholders' equity | | | 11.82 | % | | 13.06 | % | | 11.67 | % | | 14.27 | % |
| Return on average tangible stockholders' equity (1) | | | 13.99 | | | 15.31 | | | 13.79 | | | 16.67 | |
| Return on average assets | | | 0.66 | | | 0.76 | | | 0.65 | | | 0.84 | |
| General and administrative expense to average assets | | | 1.05 | | | 0.98 | | | 1.07 | | | 1.00 | |
| Efficiency ratio (2) | | | 53.35 | | | | | | | | | | |
| Net interest rate spread(3) | | | 1.46 | | | 1.64 | | | 1.52 | | | 1.83 | |
| Net interest margin (4) | | | 1.58 | | | 1.75 | | | 1.63 | | | 1.93 | |
| | | | | | | | | | | | | | |
| Selected Non-GAAP Returns and Financial Ratios (annualized) (5) | | | | | | | | | | | | | |
| Non-GAAP return on average stockholders' equity | | | | | | | | | 11.67 | % | | 14.65 | |
| Non-GAAP return on average tangible stockholders' equity (1) | | | | | | | | | 13.79 | | | 17.11 | |
| Non-GAAP return on average assets | | | | | | | | | 0.65 | | | 0.86 | |
| Non-GAAP efficiency ratio (2) | | | | | | | | | 52.99 | | | 43.79 | |
| | | | | | | | | | | | | | |
| Asset Quality Data (dollars in thousands) | | | | | | | | | | | | | |
| Non-performing loans/total loans | | | | | | | | | 0.52 | % | | 0.37 | |
| Non-performing loans/total assets | | | | | | | | | 0.38 | | | 0.25 | |
| Non-performing assets/total assets | | | | | | | | | 0.40 | | | 0.26 | |
| Allowance for loan losses/non-performing loans | | | | | | | | | 95.06 | | | 145.16 | |
| Allowance for loan losses/non-accrual loans | | | | | | | | | 98.79 | | | 146.50 | |
| Allowance for loan losses/total loans | | | | | | | | | 0.49 | | | 0.54 | |
| Net charge-offs to average loans outstanding (annualized) | | | 0.04 % | | | 0.03% | | | 0.02 | | | 0.01 | |
| | | | | | | | | | | | | | |
| Non-performing assets | | | | | | | | | 86,653 | | $ | 55,488 | |
| Non-performing loans | | | | | | | | | 82,317 | | | 55,063 | |
| Loans 90 days past maturity but still accruing interest | | | | | | | | | 3,103 | | | 502 | |
| Non-accrual loans (6) | | | | | | | | | 79,214 | | | 54,561 | |
| Net charge-offs | | $ | 1,645 | | $ | 1,133 | | | 2,188 | | | 1,229 | |
| | | | | | | | | | | | | | |
| Capital Ratios (Astoria Federal) | | | | | | | | | | | | | |
| Tangible | | | | | | | | | 6.60 | % | | 6.84 | |
| Core | | | | | | | | | 6.60 | | | 6.84 | |
| Risk-based | | | | | | | | | 12.08 | | | 12.66 | |
| | | | | | | | | | | | | | |
| Other Data | | | | | | | | | | | | | |
| Cash dividends paid per common share | | $ | 0.26 | | $ | 0.24 | | $ | 0.78 | | $ | 0.72 | |
| Dividend payout ratio | | | 66.67 | % | | 55.81 | % | | 68.42 | % | | 51.43 | % |
| Book value per share (7) | | | | | | | | | 13.35 | | $ | 13.55 | |
| Tangible book value per share (8) | | | | | | | | | 11.30 | | $ | 11.56 | |
| Tangible stockholders' equity/tangible assets (1) (9) | | | | | | | | | 4.73 | % | | 5.02 | |
| Mortgage loans serviced for others (in thousands) | | | | | | | | | 1,286,661 | | $ | 1,394,240 | |
| Full time equivalent employees | | | | | | | | | 1,629 | | | 1,597 | |
| (1) | Tangible stockholders' equity represents stockholders' equity less goodwill. |
| (2) | The efficiency ratio represents general and administrative expense divided by the sum of net interest income plus non-interest income. |
| (3) | Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. |
| (4) | Net interest margin represents net interest income divided by average interest-earning assets. |
| (5) | The information presented for the nine months ended September 30, 2006 represents pro forma calculations which are not in conformity with U.S. generally accepted accounting principles, or GAAP. The 2006 information excludes the $3.6 million, after tax, ($5.5 million, before tax) charge for the termination of our interest rate swap agreements recorded in the 2006 first quarter. See page 12 for a reconciliation of GAAP net income to non-GAAP earnings for the nine months ended September 30, 2006. |
| (6) | Non-accrual loans include $24.1 million at September 30, 2007 and $19.8 million at September 30, 2006 of loans which have only missed two payments. |
| (7) | Book value per share represents stockholders' equity divided by outstanding shares, excluding unallocated Employee Stock Ownership Plan, or ESOP, shares. |
| (8) | Tangible book value per share represents stockholders' equity less goodwill divided by outstanding shares, excluding unallocated ESOP shares. |
| (9) | Tangible assets represent assets less goodwill. |
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
| | | For the Three Months Ended September 30, 2007 | |
| | | | | Interest | | Average
Yield/Cost (Annualized) | |
| | | | | | | | |
| | | | | | | | |
| Assets: | | | | | | | |
| Interest-earning assets: | | | | | | | |
| Mortgage loans (1): | | | | | | | |
| One-to-four family | | $ | 11,171,094 | | $ | 150,645 | | | 5.39 | % |
| Multi-family, commercial | | | | | | | | | | |
| real estate and construction | | | 4,154,097 | | | 63,052 | | | 6.07 | |
| Consumer and other loans (1) | | | 384,019 | | | 7,472 | | | 7.78 | |
| Total loans | | | 15,709,210 | | | 221,169 | | | 5.63 | |
| Mortgage-backed and other | | | | | | | | | | |
| securities (2) | | | 4,711,162 | | | 53,227 | | | 4.52 | |
| Repurchase agreements | | | 25,631 | | | 337 | | | 5.26 | |
| Federal Home Loan Bank stock | | | 166,938 | | | 2,899 | | | 6.95 | |
| Total interest-earning assets | | | 20,612,941 | | | 277,632 | | | 5.39 | |
| Goodwill | | | 185,151 | | | | | | | |
| Other non-interest-earning assets | | | 749,522 | | | | | | | |
| Total assets | | $ | 21,547,614 | | | | | | | |
| Liabilities and stockholders' equity: | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | |
| Savings | | $ | 1,983,161 | | | 2,016 | | | 0.41 | |
| Money market | | | 365,919 | | | 926 | | | 1.01 | |
| NOW and demand deposit | | | 1,453,669 | | | 214 | | | 0.06 | |
| Liquid certificates of deposit | | | 1,570,599 | | | 18,501 | | | 4.71 | |
| Total core deposits | | | 5,373,348 | | | 21,657 | | | 1.61 | |
| Certificates of deposit | | | 7,946,982 | | | 95,293 | | | 4.80 | |
| Total deposits | | | 13,320,330 | | | 116,950 | | | 3.51 | |
| Borrowings | | | 6,687,400 | | | 79,505 | | | 4.76 | |
| Total interest-bearing liabilities | | | 20,007,730 | | | 196,455 | | | 3.93 | |
| Non-interest-bearing liabilities | | | 345,377 | | | | | | | |
| Total liabilities | | | 20,353,107 | | | | | | | |
| Stockholders' equity | | | 1,194,507 | | | | | | | |
| Total liabilities and stockholders' | | | | | | | | | | |
| equity | | $ | 21,547,614 | | | | | | | |
| Net interest income/net interest | | | | | | | | | | |
| rate spread | | | | | $ | 81,177 | | | 1.46 | % |
| Net interest-earning assets/net | | | | | | | | | | |
| interest margin | | $ | 605,211 | | | | | | 1.58 | % |
| Ratio of interest-earning assets | | | | | | | | | | |
| to interest-bearing | | | | | | | | | | |
| liabilities | | | 1.03x | | | | | | | |
| | | For the Three Months Ended September 30, 2006 | |
| | | Average Balance | | Interest | | Average Yield/Cost (Annualized) | |
| Assets: | | | | | | | |
| Interest-earning assets: | | | | | | | |
| Mortgage loans (1): | | | | | | | |
| One-to-four family | | $ | 9,952,037 | | $ | 127,735 | | | 5.13 | % |
| Multi-family, commercial | | | | | | | | | | |
| real estate and construction | | | 4,268,318 | | | 65,933 | | | 6.18 | |
| Consumer and other loans (1) | | | 468,436 | | | 9,099 | | | 7.77 | |
| Total loans | | | 14,688,791 | | | 202,767 | | | 5.52 | |
| Mortgage-backed and other | | | | | | | | | | |
| securities (2) | | | 5,774,554 | | | 64,946 | | | 4.50 | |
| Repurchase agreements | | | 95,969 | | | 1,266 | | | 5.28 | |
| Federal Home Loan Bank stock | | | 142,998 | | | 2,049 | | | 5.73 | |
| Total interest-earning assets | | | 20,702,312 | | | 271,028 | | | 5.24 | |
| Goodwill | | | 185,151 | | | | | | | |
| Other non-interest-earning assets | | | 778,978 | | | | | | | |
| Total assets | | $ | 21,666,441 | | | | | | | |
| | | | | | | | | | | |
| Liabilities and stockholders' equity: | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | |
| Savings | | $ | 2,277,608 | | | 2,309 | | | 0.41 | |
| Money market | | | 506,959 | | | 1,281 | | | 1.01 | |
| NOW and demand deposit | | | 1,482,642 | | | 218 | | | 0.06 | |
| Liquid certificates of deposit | | | 1,243,914 | | | 15,184 | | | 4.88 | |
| Total core deposits | | | 5,511,123 | | | 18,992 | | | 1.38 | |
| Certificates of deposit | | | 7,505,903 | | | 83,111 | | | 4.43 | |
| Total deposits | | | 13,017,026 | | | 102,103 | | | 3.14 | |
| Borrowings | | | 7,045,962 | | | 78,258 | | | 4.44 | |
| Total interest-bearing liabilities | | | 20,062,988 | | | 180,361 | | | 3.60 | |
| Non-interest-bearing liabilities | | | 344,467 | | | | | | | |
| Total liabilities | | | 20,407,455 | | | | | | | |
| Stockholders' equity | | | 1,258,986 | | | | | | | |
| Total liabilities and stockholders' | | | | | | | | | | |
| equity | | $ | 21,666,441 | | | | | | | |
| | | | | | | | | | | |
| Net interest income/net interest | | | | | | | | | | |
| rate spread | | | | | $ | 90,667 | | | 1.64 | % |
| Net interest-earning assets/net | | | | | | | | | | |
| interest margin | | $ | 639,324 | | | | | | 1.75 | % |
| Ratio of interest-earning assets | | | | | | | | | | |
| to interest-bearing | | | | | | | | | | |
| liabilities | | | 1.03x | | | | | | | |
| (1) | Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses. |
| (2) | Securities available-for-sale are included at average amortized cost. |
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
| | | For the Nine Months Ended September 30, 2007 | |
| | | Average
Balance | | Interest | | Average Yield/Cost (Annualized) | |
| Assets: | | | | | | | |
| Interest-earning assets: | | | | | | | |
| Mortgage loans (1): | | | | | | | |
| One-to-four family | | $ | 10,771,698 | | $ | 428,729 | | | 5.31 | % |
| Multi-family, commercial | | | | | | | | | | |
| real estate and construction | | | 4,194,081 | | | 192,160 | | | 6.11 | |
| Consumer and other loans (1) | | | 406,967 | | | 23,478 | | | 7.69 | |
| Total loans | | | 15,372,746 | | | 644,367 | | | 5.59 | |
| Mortgage-backed and other | | | | | | | | | | |
| securities (2) | | | 4,966,923 | | | 168,127 | | | 4.51 | |
| Federal funds sold and | | | | | | | | | | |
| repurchase agreements | | | 45,772 | | | 1,812 | | | 5.28 | |
| Federal Home Loan Bank stock | | | 156,955 | | | 8,246 | | | 7.00 | |
| Total interest-earning assets | | | 20,542,396 | | | 822,552 | | | 5.34 | |
| Goodwill | | | 185,151 | | | | | | | |
| Other non-interest-earning assets | | | 756,862 | | | | | | | |
| Total assets | | $ | 21,484,409 | | | | | | | |
| | | | | | | | | | | |
| Liabilities and stockholders' equity: | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | |
| Savings | | $ | 2,047,732 | | | 6,177 | | | 0.40 | |
| Money market | | | 392,785 | | | 2,933 | | | 1.00 | |
| NOW and demand deposit | | | 1,471,293 | | | 639 | | | 0.06 | |
| Liquid certificates of deposit | | | 1,585,104 | | | 57,278 | | | 4.82 | |
| Total core deposits | | | 5,496,914 | | | 67,027 | | | 1.63 | |
| Certificates of deposit | | | 7,791,434 | | | 274,377 | | | 4.70 | |
| Total deposits | | | 13,288,348 | | | 341,404 | | | 3.43 | |
| Borrowings | | | 6,645,192 | | | 229,553 | | | 4.61 | |
| Total interest-bearing | | | | | | | | | | |
| liabilities | | | 19,933,540 | | | 570,957 | | | 3.82 | |
| Non-interest-bearing liabilities | | | 349,186 | | | | | | | |
| Total liabilities | | | 20,282,726 | | | | | | | |
| Stockholders' equity | | | 1,201,683 | | | | | | | |
| Total liabilities and stockholders' | | | | | | | | | | |
| equity | | $ | 21,484,409 | | | | | | | |
| | | | | | | | | | | |
| Net interest income/net interest | | | | | | | | | | |
| rate spread | | | | | $ | 251,595 | | | 1.52 | % |
| Net interest-earning assets/net | | | | | | | | | | |
| interest margin | | $ | 608,856 | | | | | | 1.63 | % |
| Ratio of interest-earning assets | | | | | | | | | | |
| to interest-bearing | | | | | | | | | | |
| liabilities | | | 1.03x | | | | | | | |
| | | For the Nine Months Ended September 30, 2006 | |
| | | Average
Balance | | Interest | | Average
Yield/Cost
(Annualized) | |
| Assets: | | | | | | | |
| Interest-earning assets: | | | | | | | |
| Mortgage loans (1): | | | | | | | |
| One-to-four family | | $ | 9,921,036 | | $ | 378,226 | | | 5.08 | % |
| Multi-family, commercial | | | | | | | | | | |
| real estate and construction | | | 4,192,095 | | | 192,178 | | | 6.11 | |
| Consumer and other loans (1) | | | 488,223 | | | 26,918 | | | 7.35 | |
| Total loans | | | 14,601,354 | | | 597,322 | | | 5.45 | |
| Mortgage-backed and other | | | | | | | | | | |
| securities (2) | | | 6,098,527 | | | 205,373 | | | 4.49 | |
| Federal funds sold and | | | | | | | | | | |
| repurchase agreements | | | 145,121 | | | 5,205 | | | 4.78 | |
| Federal Home Loan Bank stock | | | 141,577 | | | 5,535 | | | 5.21 | |
| Total interest-earning assets | | | 20,986,579 | | | 813,435 | | | 5.17 | |
| Goodwill | | | 185,151 | | | | | | | |
| Other non-interest-earning assets | | | 788,337 | | | | | | | |
| Total assets | | $ | 21,960,067 | | | | | | | |
| | | | | | | | | | | |
| Liabilities and stockholders' equity: | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | |
| Savings | | $ | 2,380,057 | | | 7,164 | | | 0.40 | |
| Money market | | | 563,485 | | | 4,135 | | | 0.98 | |
| NOW and demand deposit | | | 1,512,951 | | | 662 | | | 0.06 | |
| Liquid certificates of deposit | | | 981,897 | | | 32,636 | | | 4.43 | |
| Total core deposits | | | 5,438,390 | | | 44,597 | | | 1.09 | |
| Certificates of deposit | | | 7,513,758 | | | 230,760 | | | 4.09 | |
| Total deposits | | | 12,952,148 | | | 275,357 | | | 2.83 | |
| Borrowings | | | 7,375,315 | | | 234,549 | | | 4.24 | |
| Total interest-bearing | | | | | | | | | | |
| liabilities | | | 20,327,463 | | | 509,906 | | | 3.34 | |
| Non-interest-bearing liabilities | | | 345,408 | | | | | | | |
| Total liabilities | | | 20,672,871 | | | | | | | |
| Stockholders' equity | | | 1,287,196 | | | | | | | |
| Total liabilities and stockholders' | | | | | | | | | | |
| equity | | $ | 21,960,067 | | | | | | | |
| | | | | | | | | | | |
| Net interest income/net interest | | | | | | | | | | |
| rate spread | | | | | $ | 303,529 | | | 1.83 | % |
| Net interest-earning assets/net | | | | | | | | | | |
| interest margin | | $ | 659,116 | | | | | | 1.93 | % |
| Ratio of interest-earning assets | | | | | | | | | | |
| to interest-bearing | | | | | | | | | | |
| liabilities | | | 1.03x | | | | | | | |
| (1) | Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses. |
| (2) | Securities available-for-sale are included at average amortized cost. |
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)
| | | At September 30, 2007 | | At June 30, 2007 | | At September 30, 2006 | |
| | | | | Weighted | | | | Weighted | | | | Weighted | |
| | | | | Average | | | | Average | | | | Average | |
| | | Balance | | Rate(1) | | Balance | | | | | | Rate(1) | |
| | | | | | | | | | | | | | |
| Selected interest-earning assets: | | | | | | | | | | | | | |
| Mortgage loans, gross (2): | | | | | | | | | | | | | |
| One-to-four family | | $ | 11,349,658 | | | 5.65 | % | $ | 10,909,568 | | | 5.58 | % | $ | 9,931,184 | | | 5.40 | % |
| Multi-family, commercial real estate and construction | | | 4,122,709 | | | 5.93 | | | 4,179,772 | | | 5.94 | | | 4,268,679 | | | 5.96 | |
| Mortgage-backed and other securities (3) | | | 4,568,579 | | | 4.33 | | | 4,787,635 | | | 4.34 | | | 5,598,523 | | | 4.34 | |
| | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | |
| Savings | | | 1,940,322 | | | 0.40 | | | 2,025,132 | | | 0.40 | | | 2,209,535 | | | 0.40 | |
| Money market | | | 352,858 | | | 1.01 | | | 377,455 | | | 1.00 | | | 478,932 | | | 1.00 | |
| NOW and demand deposit | | | 1,442,840 | | | 0.06 | | | 1,489,624 | | | 0.06 | | | 1,466,725 | | | 0.06 | |
| Liquid certificates of deposit | | | 1,463,845 | | | 4.46 | | | 1,664,176 | | | 4.83 | | | 1,402,562 | | | 5.05 | |
| Total core deposits | | | 5,199,865 | | | 1.49 | | | 5,556,387 | | | 1.68 | | | 5,557,754 | | | 1.54 | |
| Certificates of deposit | | | 8,066,130 | | | 4.80 | | | 7,891,469 | | | 4.76 | | | 7,619,252 | | | 4.54 | |
| Total deposits | | | 13,265,995 | | | 3.50 | | | 13,447,856 | | | 3.49 | | | 13,177,006 | | | 3.27 | |
| Borrowings, net | | | 6,929,500 | | | 4.68 | | | 6,698,342 | | | 4.62 | | | 6,824,359 | | | 4.38 | |
| (1) | Weighted average rates represent stated or coupon interest rates excluding the effect of yield adjustments for premiums, discounts and deferred loan origination fees and costs and the impact of prepayment penalties. |
| (2) | Mortgage loans exclude loans held-for-sale and include non-performing loans. |
| (3) | Securities available-for-sale are reported at fair value and securities held-to-maturity are reported at amortized cost. |
RECONCILIATION OF 2006 GAAP NET INCOME TO NON-GAAP EARNINGS
(In Thousands, Except Per Share Data)
| | | For the Nine Months Ended September 30, 2006 | |
| | | GAAP | | Adjustments(4) | | Non-GAAP | |
| Net interest income after provision for loan losses | | $ | 303,529 | | $ | - | | $ | 303,529 | |
| Non-interest income | | | 67,488 | | | 5,456 | | | 72,944 | |
| Non-interest expense | | | 164,843 | | | - | | | 164,843 | |
| Income before income tax | | | 206,174 | | | 5,456 | | | 211,630 | |
| Income tax expense | | | 68,383 | | | 1,810 | | | 70,193 | |
| Net income | | $ | 137,791 | | $ | 3,646 | | $ | 141,437 | |
| | | | | | | | | | | |
| Basic earnings per common share | | $ | 1.44 | | $ | 0.04 | | $ | 1.48 | |
| Diluted earnings per common share | | $ | 1.40 | | $ | 0.04 | | $ | 1.44 | |
| (4) | Adjustments relate to the $5.5 million charge for the termination of our interest rate swap agreements and the related tax effects. |
SOURCE Astoria Financial Corporation
-0- 10/18/2007
/CONTACT: Peter J. Cunningham, First Vice President, Investor Relations, of Astoria Financial Corporation, +1-516-327-7877, ir@astoriafederal.com/
/Company News On-Call: http://www.prnewswire.com/comp/104529.html /
/Web site: http://www.astoriafederal.com
http://ir.astoriafederal.com /
(AF)
