[ASTORIA LETTERHEAD] NEWS RELEASE
CONTACT: PETER J. CUNNINGHAM
FIRST VICE PRESIDENT, INVESTOR RELATIONS
516-327-7877
ir@astoriafederal.com
FOR IMMEDIATE RELEASE
ASTORIA FINANCIAL CORPORATION EXPECTS LOWER EPS GROWTH FOR THE THIRD
QUARTER AND FULL YEAR; NEW GUIDANCE FOR THE 2002 3Q IS $0.72 -
$0.74 PER SHARE AND FOR THE FULL YEAR IS $2.85 - $2.90 PER SHARE
Lake Success, New York, September 10, 2002 -- Astoria Financial Corporation
(NYSE: AF) announced today that it expects third quarter diluted earnings per
share ("EPS") to be lower than the current First Call and IBES consensus
estimates of $0.77 per share. The Company indicated that, assuming interest
rates and mortgage loan refinance activity remain unchanged, it is likely that
third quarter EPS will be in a range of $0.72 - $0.74 per share, which
represents growth of between 20% - 23% over the 2001 third quarter. The Company
attributed the lower EPS growth to the impact of the sustained low level of
interest rates, particularly after the decline during the summer, that, among
other things, is resulting in historically high mortgage loan and
mortgage-backed securities ("MBS") prepayments and low yielding reinvestment
opportunities. The Company also noted that if interest rates and cash flow
continue at current levels for the remainder of the year, that fourth quarter
EPS will likely be within the third quarter EPS range announced today. With
these assumptions, EPS guidance for 2002 would range from $2.85 - $2.90 per
share, down from previous guidance of $2.95 - $3.00 per share. The lower
earnings range would result in growth of 21% - 23% over 2001 EPS.
Commenting on the current outlook, George L. Engelke, Jr., Astoria's
Chairman, President and Chief Executive Officer, stated, "While we are
continuing to benefit from lower interest rates on the liability side of the
balance sheet, cash flows from mortgage loan and MBS prepayments have recently
accelerated dramatically, exceeding our previous estimates. The low level of
interest rates and extraordinarily high levels of cash flow have slowed the
growth of our net interest margin and EPS.
We are now expecting our 2002 third quarter margin to be up 9% - 11% over the
2001 third quarter and up 6% - 8% for the full year. On a linked quarter basis,
the margin will be somewhat lower. Clearly, any modest increase in interest
rates, which are currently at historic lows, will improve our earnings outlook."
ASSET QUALITY REMAINS EXCELLENT
The Company noted that asset quality remains very high with no adverse
trends being noted. At August 31, 2002, non-performing assets totaled $31.5
million and represented 0.14% of total assets, below the levels reported at June
30, 2002.
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; 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 other
areas in which we do business, or conditions in the securities markets or the
banking industry may be less favorable than we currently anticipate; legislation
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 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, the holding company for Astoria Federal
Savings and Loan Association with assets of $22.0 billion, is the largest thrift
institution headquartered in New York and fifth largest in the United States.
Astoria Federal embraces its philosophy of Putting people first by providing its
700,000 customers and the 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 commands the third 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 its banking offices and loan
production offices in New York, an extensive broker network in fifteen states,
primarily the East Coast, and through correspondent relationships in forty-four
states.
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