[ASTORIA COMPANY LOGO] [NEWS RELEASE LOGO]
FOR IMMEDIATE RELEASE
CONTACT: PETER J. CUNNINGHAM
FIRST VICE PRESIDENT,
INVESTOR RELATIONS
(516) 327-7877
ir@astoriafederal.com
ASTORIA FINANCIAL CORPORATION REPORTS 12% INCREASE IN
THIRD QUARTER EPS TO $1.20 (CASH EARNINGS OF $1.34 PER SHARE)
BOARD INCREASES CASH DIVIDEND 10% TO $0.34 PER SHARE; DECLARES
2-FOR-1 STOCK SPLIT
LAKE SUCCESS, NEW YORK - OCTOBER 18, 2001 - Astoria Financial Corporation
(Nasdaq:ASFC) ("Astoria"), the holding company for Astoria Federal Savings and
Loan Association ("Astoria Federal"), today reported net income of $56.5
million, or $1.20 diluted earnings per common share, for the quarter ended
September 30, 2001 compared to 2000 third quarter net income of $53.7 million,
or $1.07 diluted earnings per common share. For the nine months ended September
30, 2001, operating income(1) totaled $170.3 million, or $3.54 diluted operating
earnings per common share, compared to operating income(2) of $162.6 million, or
$3.23 diluted operating earnings per common share, for the comparable 2000
period.
Commenting on the third quarter results, George L. Engelke, Jr.,
Chairman, President and Chief Executive Officer of Astoria, said, "We continue
to experience solid growth in our core businesses, mortgage lending and retail
banking, as we maintain our focus on repositioning the balance sheet. This,
combined with our focus on operating efficiently and maintaining superior asset
quality, resulted in increases in both net income and earnings per share."
--------
1 For the nine months ended September 30, 2001, operating income and
related returns exclude from net income a charge reflecting the cumulative
effect of an accounting change, net of tax, of $2.3 million, or $0.05 per
diluted common share, related to the implementation of SFAS No. 133 in the 2001
first quarter.
2 For the nine months ended September 30, 2000, operating income and
related returns exclude from net income gains, net of tax, of $2.4 million, or
$0.05 per diluted common share, related to the sale of banking offices.
1
OPERATING CASH EARNINGS AND RELATED RETURNS
Cash earnings represent the amount by which tangible equity changes
each period due to net income plus the non-cash charges for goodwill
amortization and amortization relating to certain employee stock plans. Cash
earnings increased tangible equity in the 2001 third quarter by $62.8 million,
or 11.3% more than net income. Please see page 11. Cash earnings available to
common shareholders were $61.3 million, or $1.34 diluted cash earnings per
common share for the 2001 third quarter, compared to $58.9 million, or $1.21
diluted cash earnings per common share for the 2000 third quarter.
For the nine months ended September 30, 2001, operating cash earnings(3)
available to common shareholders were $185.2 million, or $3.95 diluted operating
cash earnings per common share, compared to $178.0 million, or $3.63 diluted
operating cash earnings(4) per common share for the comparable 2000 period.
The operating cash returns on average tangible equity for the quarter
and nine months ended September 30, 2001 were 17.94% and 18.26%, respectively,
versus 21.87% and 23.53%, respectively, for the comparable 2000 periods. The
decreases from the previous year are primarily due to the significant increase
in average stockholders' equity in 2001 resulting from the decrease in the net
unrealized loss on securities, net of taxes. The operating cash returns on
average assets for the quarter and nine months ended September 30, 2001 were
1.11% and 1.13%, respectively, versus 1.09% for both the comparable 2000
periods.
BOARD INCREASES DIVIDEND 10%; DECLARES TWO-FOR-ONE STOCK SPLIT
The Company also announced that the Board of Directors, at their
October 17, 2001 meeting, declared a quarterly cash dividend of $0.34 per common
share, an increase of 10%, and declared a two-for-one stock split in the form of
a 100% stock dividend. The cash dividend will be paid on the total number of
shares held before the stock split. Shareholders will receive one additional
share of Astoria Financial Corporation common stock for each share of common
stock owned as of the close of business on the record date. The new shares will
be distributed and the cash dividend is
--------
3 For the nine months ended September 30, 2001, operating cash earnings
and related returns exclude from cash earnings a charge reflecting the
cumulative effect of an accounting change, net of tax, of $2.3 million, or $0.05
per diluted common share, related to the implementation of SFAS No. 133 in the
2001 first quarter.
4 For the nine months ended September 30, 2000, operating cash earnings
and related returns exclude from cash earnings gains, net of tax, of $2.4
million, or $0.05 per diluted common share, related to the sale of banking
offices.
2
payable on December 3, 2001 to shareholders of record at the close of business
on November 15, 2001. As a result of the stock split, the number of common
shares outstanding will increase to approximately 92 million. Commenting on the
Board's action, Mr. Engelke said, "These actions are an indication of the
Board's continued confidence in the fundamental strength of the Company and its
future prospects."
EIGHTH STOCK REPURCHASE PROGRAM COMMENCES
During the third quarter, Astoria completed its seventh stock
repurchase program and commenced its eighth program which authorizes the
repurchase of up to 5 million shares of common stock (10 million shares, as
adjusted for the stock split). Under both programs, Astoria repurchased 2.2
million shares of its common stock during the third quarter at an average price
of $58.64. For the nine month period, the Company repurchased 4.4 million shares
at a cost of $250 million and at an average price of $56.88. Under the eighth
program, the Company has repurchased 755,700 shares (1.5 million shares, as
adjusted for the stock split) of the 5 million shares authorized (10 million
shares, as adjusted for the stock split). Additional purchases may be made from
time to time in open-market or privately negotiated transactions.
THIRD QUARTER AND NINE MONTH EARNINGS SUMMARY
Net interest income for the quarter ended September 30, 2001 totaled
$114.2 million compared to $124.6 million for the 2000 third quarter and $118.1
million for the 2001 second quarter. For the nine months ended September 30,
2001, net interest income totaled $355.7 million compared to $384.7 million for
the comparable 2000 period.
Astoria's net interest margin for the quarter ended September 30, 2001
was 2.12% compared to 2.29% for the 2000 third quarter and 2.21% for the quarter
ended June 30, 2001. Commenting on the change in margin from the 2001 second
quarter, Mr. Engelke stated, "The decrease in the net interest margin is
primarily due to the increase in the level of liquidity resulting from cash flow
from operations, loans and securities repayments and deposit growth exceeding
loan originations and other investments, and one additional day of interest
expense in the third quarter. The higher level of liquidity reduced the margin 8
basis points and the one additional day of interest expense reduced the margin 5
basis points. While we expect to experience a slight improvement in the margin
for the fourth quarter, we expect meaningful margin expansion in 2002 as we
begin to benefit from the
3
repricing and/or extinguishment of $1.9 billion in borrowings with an average
rate of 6.80% maturing during 2002 (please see schedule on page 6 for details)
and the benefit we will derive from the lower cost of our retail deposits."
Non-interest income for the quarter and nine months ended September 30,
2001 totaled $26.9 million and $75.2 million, respectively, compared to $18.4
million and $56.9 million, respectively, for the comparable 2000 periods. The
2000 nine month period includes $4.0 million in net gains on the disposition of
banking offices. The increases in non-interest income are primarily due to
income derived from the BOLI program implemented in the 2000 fourth quarter and
increases in customer service and other loan fees. Customer service and other
loan fees for the quarter ended September 30, 2001 increased 17.0% to $15.1
million from $12.9 million in the 2000 third quarter. For the nine months ended
September 30, 2001, customer service and other loan fees increased 18.1% to
$42.7 million compared to $36.2 million for the comparable 2000 nine month
period. The Company expects continued growth in non-interest income.
General and administrative expense ("G&A"), excluding non-cash
amortization expense relating to certain employee stock plans ("cash G&A"), for
the quarter and nine months ended September 30, 2001, totaled $41.8 million and
$127.6 million, respectively, compared to $41.7 million and $128.0 million,
respectively, for the comparable 2000 periods. The ratio of cash G&A expense to
average assets was 0.74% and 0.76% for the quarter and nine month periods ended
September 30, 2001, respectively, compared to 0.75% and 0.76%, respectively, for
the comparable periods last year. The cash efficiency ratios for the third
quarter and nine months of 2001 were 29.61% and 29.60%, respectively, compared
to 29.18% and 29.26%, respectively, for the comparable 2000 periods. Mr. Engelke
commented, "Our very superior operating efficiency, which is reflected in these
operating ratios, continues to enhance our operating performance. We will
continue to remain focused on maintaining these strong operating efficiency
ratios."
BALANCE SHEET SUMMARY
Total assets at September 30, 2001 totaled $22.7 billion, compared to
$22.5 billion reported at June 30, 2001. During the third quarter, the
repositioning of the balance sheet continued. Highlights of our progress for the
last twenty-four months follow:
4
PROGRESS IN REPOSITIONING BALANCE SHEET AND INCREASING SHAREHOLDER VALUE
------------------------------------------------------------------------
(DOLLARS IN MILLIONS, EXCEPT BOOK VALUE AND TANGIBLE BOOK VALUE)
CHANGE
9/30/99 3/31/00 9/30/00 3/31/01 9/30/01 9/30/99-9/30/01
------- ------- ------- ------- ------- ---------------
ASSETS $22,864 $22,590 $22,202 $22,642 $22,691 - 0.8%
LOANS $10,008 $10,545 $11,086 $11,497 $11,992 + 19.8%
DEPOSITS $ 9,440 $ 9,781 $ 9,852 $10,338 $10,793 + 14.3%
CORE DEPOSITS $ 4,583 $ 4,795 $ 4,876 $ 5,115 $ 5,484 + 19.7%
MBS $10,019 $ 8,895 $ 8,037 $ 7,722 $ 7,150 - 28.6%
BORROWINGS $11,665 $11,010 $10,452 $10,150 $ 9,849 - 15.6%
EQUITY $ 1,359 $ 1,254 $ 1,365 $ 1,603 $ 1,549 + 14.0%
BOOK VALUE $ 24.08 $ 23.46 $ 26.23 $ 31.73 $ 32.51 + 35.0%
TANGIBLE $ 19.87 $ 19.19 $ 22.05 $ 27.64 $ 28.39 + 42.9%
BOOK VALUE
Mortgage loan originations and purchases for the quarter and nine
months ended September 30, 2001 totaled $1.2 billion and $3.1 billion,
respectively, up 78.2% and 58.0%, respectively, from $682.4 million and $1.9
billion for the comparable 2000 periods and were concentrated primarily in
one-to- four family mortgage loans. Importantly, multifamily and commercial real
estate originations increased 46.2% to $316.0 million for the nine month period
ended September 30, 2001 from $216.1 million for the comparable 2000 period.
Loan prepayments for the quarter ended September 30, 2001 declined to $680.1
million from $750.8 million for the second quarter. For the nine months ended
September 30, 2001, loan prepayments totaled $1.9 billion compared to $806.4
million for the comparable 2000 period. "The strong loan origination volume for
the 2001 third quarter is due to the continuation of a favorable interest rate
environment and high mortgage refinance activity. Notwithstanding the high level
of loan prepayments in the third quarter, our loan portfolio, net, increased to
$12.0 billion at September 30, 2001 from $11.7 billion at June 30, 2001. With a
mortgage loan pipeline of approximately $1.5 billion at September 30, 2001 and a
continued reduction in the level of our securities portfolios, we are well
positioned to continue building our mortgage loan portfolio which should have a
positive effect on our net interest margin," Mr. Engelke noted.
At September 30, 2001, non-performing loans totaled $33.5 million, or
0.15% of total assets, compared to $36.2 million, or 0.16% of total assets at
September 30, 2000. The ratio of allowance for loan losses to non-performing
loans was 244.8% at September 30, 2001 compared to 218.1% at September 30, 2000.
Commenting on the superior asset quality, Mr. Engelke noted, "Astoria continues
5
to be well positioned to withstand any further slowdown in the economy based
upon our very conservative lending policies and the fact that more than 93% of
our loan portfolio is secured by residential real estate with loan-to-value
ratios averaging less than 65%, based upon original appraised values and current
principal balances."
Mortgage-backed securities totaled $7.2 billion at September 30, 2001,
a decrease of $108 million from June 30, 2001. For the nine months ended
September 30, 2001, mortgage-backed securities declined $725 million.
Deposits at September 30, 2001 totaled $10.8 billion, an increase of
$159 million from June 30, 2001 and $722 million from December 31, 2000.
Importantly, core deposits, which include passbook savings, checking and money
market accounts, increased $146 million during the 2001 third quarter to $5.5
billion, and represent 50.8% of total deposits at September 30, 2001 compared to
48.9% of total deposits at December 31, 2000. Core deposits increased $562
million during the nine months ended September 30, 2001, or 15.2% on an
annualized basis. Borrowings at September 30, 2001 totaled $9.8 billion and
declined $348 million from December 31, 2000. The following table details
borrowing maturities over the next two years:
WEIGHTED
MATURITY TOTAL AMOUNT MATURING AVERAGE RATE
-------- --------------------- ------------
4Q01 $150 Million 5.26%
1Q02 $850 Million 7.02%
2Q02 $300 Million 7.00%
3Q02 $150 Million 6.84%
4Q02 $600 Million 6.38%
1Q03 $350 Million 6.97%
2Q03 $300 Million 6.17%
3Q03 $350 Million 5.30%
------------ ----------
Within 2 Years $3.1 Billion 6.51%
Over 2 Years $6.7 Billion 5.37%
------------ ----------
Total(5) $9.8 Billion 5.73%
Stockholders' equity was $1.5 billion, or 6.83% of total assets at
September 30, 2001, compared to $1.5 billion, or 6.77% of total assets, at
December 31, 2000. Astoria Federal continues to maintain
--------
5 Included are borrowings of $5.8 billion that have a maturity date
greater than one year from September 30, 2001, but can be called prior to
September 30, 2002.
6
capital ratios in excess of regulatory requirements. At September 30, 2001,
core, tangible and risk- based capital ratios were 6.77%, 6.77% and 16.00%,
respectively.
IMPACT OF CHANGES IN ACCOUNTING FOR BUSINESS COMBINATIONS
The Financial Accounting Standards Board ("FASB") recently approved its
new standards for Business Combinations and Intangible Assets. The FASB
Statement eliminates the amortization of goodwill created with respect to
business combinations completed before the effective date of the Statement.
Effective January 2002, Astoria will cease recording goodwill amortization
amounting to approximately $19.1 million annually, or approximately $0.42 per
diluted common share.
FUTURE OUTLOOK, RISK FACTORS AND FORWARD LOOKING STATEMENT
Commenting on the current operating environment, Mr. Engelke stated,
"As a result of recent interest rate trends and forecasts coupled with the
steepening of the U.S. Treasury yield curve, we expect our core businesses to
continue to show strong growth. Our borrowing costs, which will not
significantly benefit from the decline in interest rates this year, will begin
to realize that benefit in 2002 when, as illustrated in the preceding borrowing
schedule, approximately $1.2 billion in borrowings, with an average rate of
7.01%, mature during the first six months of 2002 and an additional $750 million
in borrowings, with an average rate of 6.47%, mature in the second half of 2002.
We also expect to experience positive effects on our net interest margin due to
the benefit derived from approximately $3.2 billion in retail CDs maturing in
the next twelve months having an average rate of 4.72%. Accordingly, we remain
comfortable with the current First Call consensus EPS estimate of $1.22 for the
2001 fourth quarter ($0.61, as adjusted for the stock split). For 2002, we
remain comfortable with our previously announced earnings guidance of between
$5.90 - $5.95 diluted earnings per common share ($2.95 - $2.98, as adjusted for
the stock split)."
This release may contain certain forward-looking statements and may be
identified by the use of such words as "believe," "expect," "anticipate,"
"should," "planned," "estimated," and "potential." Examples of forward looking
statements include, but are not limited to, estimates with respect to the
financial condition, results of operations and business of the Company that are
subject to various factors which could cause actual results to differ materially
from these estimates. These factors include, but are not limited to, general
economic conditions; changes in interest rates, deposit flows, loan demand, real
estate values, and competition; changes in accounting principles, policies, or
guidelines; changes in legislation or regulation; and other economic,
competitive, governmental, regulatory, and technological factors affecting the
Company's operations, pricing, products, and services.
7
EARNINGS CONFERENCE CALL
The Company, as previously announced, indicated that Mr. Engelke will
host an earnings conference call, tomorrow morning, Friday, October 19th at 9:30
a.m. (EDT) to discuss, in addition to third quarter operating results, the
outlook for the remainder of 2001 and expectations for 2002. The toll-free
dial-in number is (800) 665-0430. A replay will be available on October 19, 2001
from 1:00 p.m. (EDT) through October 26, 2001, 11:59 p.m. The replay number is
(888) 203-1112, passcode: 616531. The conference call will also be
simultaneously webcast on its investor relations website at
http://ir.astoriafederal.com and archived through October 26th.
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association with assets of $22.7 billion, is the second largest
thrift institution in New York and sixth largest in the United States. Through
86 convenient banking office locations and multiple delivery channels, including
its enhanced website, www.astoriafederal.com, Astoria Federal provides retail
banking, mortgage, consumer and small business loan services to 700,000
customers. Astoria 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 originates mortgage loans through an extensive broker network and/or
loan production offices in fourteen states: New York, New Jersey, Connecticut,
Pennsylvania, Ohio, Illinois, Massachusetts, Delaware, Maryland, Virginia, North
Carolina, South Carolina, Georgia and Florida.
Note: Astoria Financial Corporation's news releases are available on its
investor relations website at http://ir.astoriafederal.com
Tables Follow
-------------
8
Page 9
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(In Thousands, Except Share Data)
At At
September 30, December 31,
2001 2000
------------------ ------------------
ASSETS
Cash and due from banks $ 135,807 $ 135,726
Federal funds sold and repurchase agreements 1,272,313 171,525
Mortgage-backed securities available-for-sale 3,630,769 7,011,185
Other securities available-for-sale 672,821 692,037
Mortgage-backed securities held-to-maturity
(fair value of $3,569,535 and $866,938, respectively) 3,519,243 863,529
Other securities held-to-maturity (fair value of $455,671
and $830,479, respectively) 452,593 848,662
Federal Home Loan Bank of New York stock 250,450 285,250
Loans held-for-sale 24,713 15,699
Loans receivable:
Mortgage loans, net 11,772,428 11,239,141
Consumer and other loans, net 219,718 183,154
------------------ ------------------
11,992,146 11,422,295
Less allowance for loan losses 82,005 79,931
------------------- ------------------
Total loans receivable, net 11,910,141 11,342,364
Mortgage servicing rights, net 36,917 40,962
Accrued interest receivable 105,721 109,439
Premises and equipment, net 150,441 154,582
Goodwill 190,217 204,649
Bank owned life insurance 242,747 251,565
Other assets 96,120 209,628
------------------ ------------------
TOTAL ASSETS $ 22,691,013 $ 22,336,802
================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 10,793,457 $ 10,071,687
Reverse repurchase agreements 7,385,000 7,785,000
Federal Home Loan Bank of New York advances 2,064,000 1,910,000
Other borrowings 399,797 502,371
Mortgage escrow funds 151,787 116,487
Accrued expenses and other liabilities 223,001 313,094
------------------ ------------------
TOTAL LIABILITIES 21,017,042 20,698,639
------------------- -------------------
Guaranteed preferred beneficial interest in
junior subordinated debentures 125,000 125,000
Stockholders' equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized:
Series A (325,000 shares authorized and -0- shares issued and outstanding) - -
Series B (2,000,000 shares authorized, issued and outstanding) 2,000 2,000
Common stock, $.01 par value; (200,000,000 shares authorized;
55,498,296 shares issued; and 46,106,599 and 49,643,554 shares
outstanding, respectively) 555 555
Additional paid-in capital 820,829 807,357
Retained earnings 1,167,354 1,059,048
Treasury stock (9,391,697 and 5,854,742 shares, at cost, respectively) (421,808) (203,632)
Accumulated other comprehensive income:
Net unrealized gain (loss) on securities, net of taxes 10,165 (121,043)
Unallocated common stock held by ESOP (30,124) (31,122)
------------------ ------------------
TOTAL STOCKHOLDERS' EQUITY 1,548,971 1,513,163
------------------ ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,691,013 $ 22,336,802
================== ==================
Page 10
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands, Except Share Data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------- ---------------------------------
2001 2000 2001 2000
------------ ------------ ------------ -------------
Interest income:
Mortgage loans $ 207,014 $ 194,874 $ 613,897 $ 566,587
Consumer and other loans 4,364 4,817 13,713 13,385
Mortgage-backed securities 109,556 141,394 355,001 443,419
Other securities 25,705 33,663 86,292 98,763
Federal funds sold and repurchase agreements 12,082 5,251 25,360 13,920
------------ ------------ ------------ -------------
Total interest income 358,721 379,999 1,094,263 1,136,074
------------ ------------ ------------ -------------
Interest expense:
Deposits 101,687 104,889 311,831 301,216
Borrowed funds 142,809 150,550 426,733 450,164
------------ ------------ ------------ -------------
Total interest expense 244,496 255,439 738,564 751,380
------------ ------------ ------------ -------------
Net interest income 114,225 124,560 355,699 384,694
Provision for loan losses 1,001 1,003 3,026 3,008
------------ ------------ ------------ -------------
Net interest income after provision for loan losses 113,224 123,557 352,673 381,686
------------ ------------ ------------ -------------
Non-interest income:
Customer service and other loan fees 15,129 12,933 42,725 36,164
Loan servicing fees 3,595 4,197 11,595 13,032
Net gain on sales of loans 877 273 2,602 568
Net gain on disposition of banking offices -- -- -- 3,976
Income from bank owned life insurance 4,098 -- 12,584 --
Other 3,216 951 5,743 3,111
------------ ------------ ------------ -------------
Total non-interest income 26,915 18,354 75,249 56,851
------------ ------------ ------------ -------------
Non-interest expense:
General and administrative:
Compensation and benefits 22,466 20,319 68,044 63,628
Occupancy, equipment and systems 13,371 12,451 39,323 39,763
Federal deposit insurance premiums 503 528 1,493 1,568
Advertising 730 2,756 4,259 6,992
Other 6,292 7,493 19,338 21,439
------------ ------------ ------------ -------------
Total general and administrative 43,362 43,547 132,457 133,390
Net amortization of mortgage servicing rights 2,825 2,036 7,776 5,329
Goodwill litigation 243 2,149 2,116 6,436
Capital trust securities 3,104 3,108 9,312 9,324
Amortization of goodwill 4,811 4,824 14,432 14,472
------------ ------------ ------------ -------------
Total non-interest expense 54,345 55,664 166,093 168,951
------------ ------------ ------------ -------------
Income before income tax expense and cumulative
effect of accounting change 85,794 86,247 261,829 269,586
Income tax expense 29,342 32,558 91,482 104,540
------------- ------------- ------------ -------------
Income before cumulative effect of accounting change 56,452 53,689 170,347 165,046
Cumulative effect of accounting change, net of tax -- -- (2,294) --
------------ ------------ ------------ ------------
Net income 56,452 53,689 168,053 165,046
Preferred dividends declared (1,500) (1,500) (4,500) (4,500)
------------ ------------ ------------ ------------
Net income available to common shareholders $ 54,952 $ 52,189 $ 163,553 $ 160,546
============ ============ ============ ============
Basic earnings per common share:
Income before accounting change $ 1.22 $ 1.09 $ 3.61 $ 3.33
============= ============ ============ =============
Cumulative effect of accounting change, net of tax $ -- $ -- $ 0.05 $ --
============= ============ ============ =============
Net earnings per common share $ 1.22 $ 1.09 $ 3.56 $ 3.33
============= ============ ============ =============
Diluted earnings per common share:
Income before accounting change $ 1.20 $ 1.07 $ 3.54 $ 3.28
============= ============= ============= ==============
Cumulative effect of accounting change, net of tax $ -- $ - $ 0.05 $ --
============= ============= ============= ==============
Net earnings per common share $ 1.20 $ 1.07 $ 3.49 $ 3.28
============= ============= ============= ==============
Basic weighted average common shares 45,061,516 47,784,283 45,925,927 48,252,725
Diluted weighted average common and common
equivalent shares 45,934,594 48,573,327 46,830,948 48,967,347
Page 11
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF OPERATING EARNINGS AND OPERATING CASH EARNINGS
------------------------------------------------------------------------
(In Thousands, Except Per Share Data)
Three Months Ended
September 30,
-----------------------------------------------------------
2001 2000
--------------------- ---------------------
Operating earnings (1) $ 56,452 $ 53,689
Add back:
Employee stock plans amortization expense 1,564 1,839
Amortization of goodwill 4,811 4,824
--------------------- ---------------------
Operating cash earnings 62,827 60,352
Preferred dividends declared (1,500) (1,500)
--------------------- ---------------------
Operating cash earnings available to common shareholders $ 61,327 $ 58,852
===================== =====================
Basic operating cash earnings per common share $ 1.36 $ 1.23
===================== =====================
Diluted operating cash earnings per common share $ 1.34 $ 1.21
===================== =====================
Nine Months Ended
September 30,
-----------------------------------------------------------
2001 2000
--------------------- ---------------------
Net income $ 168,053 $ 165,046
Add back: Cumulative effect of accounting change, net of tax 2,294 --
Less: Net gain on disposition of banking offices, net of tax -- 2,434
--------------------- ---------------------
Operating earnings 170,347 162,612
Preferred dividends declared (4,500) (4,500)
--------------------- ---------------------
Operating earnings available to common shareholders $ 165,847 $ 158,112
===================== =====================
Basic operating earnings per common share $ 3.61 $ 3.28
===================== =====================
Diluted operating earnings per common share $ 3.54 $ 3.23
===================== =====================
Operating earnings $ 170,347 $ 162,612
Add back:
Employee stock plans amortization expense 4,874 5,378
Amortization of goodwill 14,432 14,472
---------------------- ---------------------
Operating cash earnings 189,653 182,462
Preferred dividends declared (4,500) (4,500)
---------------------- ---------------------
Operating cash earnings available to common shareholders $ 185,153 $ 177,962
====================== =====================
Basic operating cash earnings per common share $ 4.03 $ 3.69
====================== =====================
Diluted operating cash earnings per common share $ 3.95 $ 3.63
====================== =====================
(1) For the three months ended September 30, 2001 and 2000, operating earnings
are equal to net income.
Page 12
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
----------------------------------------
At or For the At or For the
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ----------------------------
2001 2000 2001 2000
----------- ---------- ----------- ------------
SELECTED RETURNS (ANNUALIZED)
Return on average stockholders' equity 14.17 % 16.31 % 14.15 % 17.59 %
Return on average tangible stockholders' equity 16.12 19.45 16.18 21.28
Return on average assets 1.00 0.97 1.00 0.99
SELECTED FINANCIAL RATIOS EXCLUDING NON-OPERATING
ITEMS, NET OF TAX (ANNUALIZED) (1)
Return on average stockholders' equity 14.17 % 16.31 % 14.35 % 17.33 %
CASH RETURN ON AVERAGE STOCKHOLDERS' EQUITY (2) 15.77 18.34 15.97 19.44
Return on average tangible stockholders' equity 16.12 19.45 16.40 20.97
CASH RETURN ON AVERAGE TANGIBLE STOCKHOLDERS' EQUITY (2) 17.94 21.87 18.26 23.53
Return on average assets 1.00 0.97 1.01 0.97
CASH RETURN ON AVERAGE ASSETS (2) 1.11 1.09 1.13 1.09
Net interest rate spread 1.88 1.97 1.95 2.04
Net interest margin 2.12 2.29 2.21 2.34
General and administrative expenses to average assets 0.77 0.79 0.79 0.80
CASH GENERAL AND ADMINISTRATIVE EXPENSES
TO AVERAGE ASSETS (3) 0.74 0.75 0.76 0.76
Efficiency ratio 30.72 30.47 30.74 30.48
CASH EFFICIENCY RATIO (3) 29.61 29.18 29.60 29.26
ASSET QUALITY DATA (DOLLARS IN THOUSANDS)
Non-performing loans/total loans 0.28 % 0.33 %
Non-performing loans/total assets 0.15 0.16
Non-performing assets/total assets 0.16 0.18
Allowance for loan losses/non-performing loans 244.78 218.12
Allowance for loan losses/non-accrual loans 253.85 224.11
Allowance for loan losses/total loans 0.68 0.71
Net charge-offs to average loans outstanding (annualized) (0.01) (0.01)
Non-performing assets $ 36,958 $ 40,603
Non-performing loans 33,502 36,199
Loans 90 days past maturity but still accruing 1,197 967
Non-accrual loans 32,305 35,232
Net charge-offs (952) (629)
CAPITAL RATIOS (ASTORIA FEDERAL)
Tangible 6.77 % 6.69 %
Core 6.77 6.69
Risk-based 16.00 16.44
OTHER DATA
Cash dividends paid per common share $ 0.31 $ 0.26 $ 0.88 $ 0.76
Book value per common share 32.51 26.23
Tangible book value per common share 28.39 22.05
Mortgage loans serviced for others (in thousands) 3,520,604 4,044,741
Average equity/average assets 7.04 % 5.94 % 7.05 % 5.61 %
(1) For the nine months ended September 30, 2001, excludes a charge of $2.3
million, net of tax, for a cumulative effect of accounting change. For
the nine months ended September 30, 2000, excludes $2.4 million, net of
tax, for net gains on the disposition of banking offices.
(2) Excludes non-cash charge for amortization of goodwill and employee
stock plans.
(3) Excludes non-cash charge for amortization of employee stock plans.
Page 13
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
Three Months Ended September 30,
------------------------------------------------
2001
------------------------------------------------
Average
Average Yield/
Balance Interest Cost
---------------------------------------------------------------------------------------------
Assets: (Annualized)
Interest-earning assets:
Mortgage loans (1) $ 11,629,197 $ 207,014 7.12 %
Consumer and other loans (1) 208,686 4,364 8.36
Mortgage-backed securities (2) 6,935,545 109,556 6.32
Other securities (2) 1,458,258 25,705 7.05
Federal funds sold and
repurchase agreements 1,369,769 12,082 3.53
-------------- ------------
Total interest-earning assets 21,601,455 358,721 6.64
------------
Non-interest-earning assets 1,033,327
--------------
Total assets $ 22,634,782
==============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,507,045 $ 12,537 2.00 %
Certificates of deposit 5,284,102 71,149 5.39
NOW and money manager 1,081,815 1,446 0.53
Money market 1,817,718 16,555 3.64
-------------- ------------
Total deposits 10,690,680 101,687 3.80
Borrowed funds 9,847,116 142,809 5.80
-------------- ------------
Total interest-bearing liabilities 20,537,796 244,496 4.76
------------
Non-interest-bearing liabilities 503,401
--------------
Total liabilities 21,041,197
Stockholders' equity 1,593,585
--------------
Total liabilities and stockholders' equity $ 22,634,782
==============
Net interest income/net interest
rate spread $ 114,225 1.88 %
============ ============
Net interest earning assets/net
interest margin $ 1,063,659 2.12 %
============== ============
Ratio of interest-earning assets
to interest-bearing liabilities 1.05x
==============
Three Months Ended September 30,
----------------------------------------------------
2000
----------------------------------------------------
Average
Average Yield/
Balance Interest Cost
-------------------------------------------------------------------------------------------------
Assets: (Annualized)
Interest-earning assets:
Mortgage loans (1) $ 10,772,053 $ 194,874 7.24 %
Consumer and other loans (1) 176,353 4,817 10.93
Mortgage-backed securities (2) 8,552,747 141,394 6.61
Other securities (2) 1,897,138 33,663 7.10
Federal funds sold and
repurchase agreements 315,569 5,251 6.66
-------------- --------------
Total interest-earning assets 21,713,860 379,999 7.00
--------------
Non-interest-earning assets 449,125
--------------
Total assets $ 22,162,985
==============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,530,207 $ 12,864 2.03 %
Certificates of deposit 4,940,325 71,739 5.81
NOW and money manager 947,451 1,366 0.58
Money market 1,378,638 18,920 5.49
-------------- --------------
Total deposits 9,796,621 104,889 4.28
Borrowed funds 10,523,713 150,550 5.72
-------------- --------------
Total interest-bearing liabilities 20,320,334 255,439 5.03
--------------
Non-interest-bearing liabilities 526,135
--------------
Total liabilities 20,846,469
Stockholders' equity 1,316,516
--------------
Total liabilities and stockholders' equity $ 22,162,985
==============
Net interest income/net interest
rate spread $ 124,560 1.97 %
============== ============
Net interest earning assets/net
interest margin $ 1,393,526 2.29 %
============== ============
Ratio of interest-earning assets
to interest-bearing liabilities 1.07x
==============
(1) Mortgage and consumer loans include non-performing loans and exclude
the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.
Page 14
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
Nine Months Ended September 30,
------------------------------------------------
2001
------------------------------------------------
Average
Average Yield/
Balance Interest Cost
---------------------------------------------------------------------------------------------
Assets: (Annualized)
Interest-earning assets:
Mortgage loans (1) $ 11,445,412 $ 613,897 7.15 %
Consumer and other loans (1) 197,681 13,713 9.25
Mortgage-backed securities (2) 7,370,584 355,001 6.42
Other securities (2) 1,623,044 86,292 7.09
Federal funds sold and
repurchase agreements 843,876 25,360 4.01
-------------- ------------
Total interest-earning assets 21,480,597 1,094,263 6.79
------------
Non-interest-earning assets 975,791
--------------
Total assets $ 22,456,388
==============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,474,209 $ 37,169 2.00 %
Certificates of deposit 5,226,746 217,544 5.55
NOW and money manager 1,055,295 4,301 0.54
Money market 1,669,733 52,817 4.22
-------------- ------------
Total deposits 10,425,983 311,831 3.99
Borrowed funds 9,931,390 426,733 5.73
-------------- ------------
Total interest-bearing liabilities 20,357,373 738,564 4.84
------------
Non-interest-bearing liabilities 515,969
--------------
Total liabilities 20,873,342
Stockholders' equity 1,583,046
--------------
Total liabilities and stockholders' equity $ 22,456,388
==============
Net interest income/net interest
rate spread $ 355,699 1.95 %
============ ============
Net interest earning assets/net
interest margin $ 1,123,224 2.21 %
============== ============
Ratio of interest-earning assets
to interest-bearing liabilities 1.06x
==============
Nine Months Ended September 30,
----------------------------------------------------
2000
----------------------------------------------------
Average
Average Yield/
Balance Interest Cost
----------------------------------------------------------------------------------------------------
Assets: (Annualized)
Interest-earning assets:
Mortgage loans (1) $ 10,510,923 $ 566,587 7.19 %
Consumer and other loans (1) 174,778 13,385 10.21
Mortgage-backed securities (2) 9,028,021 443,419 6.55
Other securities (2) 1,876,043 98,763 7.02
Federal funds sold and
repurchase agreements 296,785 13,920 6.25
-------------- --------------
Total interest-earning assets 21,886,550 1,136,074 6.92
--------------
Non-interest-earning assets 433,497
--------------
Total assets $ 22,320,047
==============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,557,121 $ 38,659 2.02 %
Certificates of deposit 4,941,305 207,461 5.60
NOW and money manager 930,113 4,049 0.58
Money market 1,298,538 51,047 5.24
-------------- --------------
Total deposits 9,727,077 301,216 4.13
Borrowed funds 10,810,106 450,164 5.55
-------------- --------------
Total interest-bearing liabilities 20,537,183 751,380 4.88
--------------
Non-interest-bearing liabilities 531,597
--------------
Total liabilities 21,068,780
Stockholders' equity 1,251,267
--------------
Total liabilities and stockholders' equity $ 22,320,047
==============
Net interest income/net interest
rate spread $ 384,694 2.04 %
============== ============
Net interest earning assets/net
interest margin $ 1,349,367 2.34 %
============== ============
Ratio of interest-earning assets
to interest-bearing liabilities 1.07x
==============
(1) Mortgage and consumer loans include non-performing loans and exclude
the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.