[ASTORIA FINANCIAL CORPORATION LOGO] NEWS RELEASE
One Astoria Federal Plaza, Lake Success, NY 11042-1085 (516) 327-3000
FOR IMMEDIATE RELEASE CONTACT: PETER J. CUNNINGHAM
FIRST VICE PRESIDENT,
INVESTOR RELATIONS
(516) 327-7877
IR@ASTORIAFEDERAL.COM
ASTORIA FINANCIAL CORPORATION ANNOUNCES 20% INCREASE IN THIRD QUARTER 2002 EPS
TO $0.72
QUARTERLY CASH DIVIDEND OF $0.20 PER COMMON SHARE DECLARED; 9TH STOCK REPURCHASE
PLAN APPROVED
LAKE SUCCESS, NEW YORK - OCTOBER 17, 2002 - Astoria Financial Corporation (NYSE:
AF) ("Astoria"), the holding company for Astoria Federal Savings and Loan
Association ("Astoria Federal"), today reported net income of $62.2 million, or
$0.72 diluted earnings per common share, for the quarter ended September 30,
2002, compared to the 2001 third quarter net income of $56.5 million, or $0.60
diluted earnings per common share, representing increases of 10% and 20%,
respectively. For the 2002 third quarter, returns on average equity, average
tangible equity and average assets increased to 15.72%, 17.81% and 1.14%,
respectively, from 14.17%, 16.12% and 1.00%, respectively, for the comparable
2001 period.
For the nine months ended September 30, 2002, net income totaled $187.4
million, or $2.13 diluted earnings per common share, compared to net income of
$168.1 million, or $1.75 diluted earnings per common share for the comparable
2001 period, representing increases of 11% and 22%, respectively. Included in
the 2002 third quarter and nine month results is the benefit derived from the
adoption of SFAS No. 142, which eliminated goodwill amortization of $4.8
million, or $0.06 per diluted common share, per quarter. The 2001 nine month
results include a charge reflecting the cumulative effect of an accounting
change, net of tax, of $2.3 million, or $0.03 per diluted common share, related
to the implementation of SFAS No. 133 in the 2001 first quarter.
THIRD QUARTER 2002 HIGHLIGHTS:
PROFITABILITY:
- Diluted EPS: $0.72, up 20% from third quarter last year
- Return on average assets: 1.14%, up 14% from third quarter last year
- Return on average equity: 15.72%, up 11% from third quarter last year
- Return on average tangible equity: 17.81%, up 10% from third quarter
last year
1
RETAIL BANKING:
- Deposits total $11.2 billion, up $387.1 million, or 4%, from September
30, 2001
- Core deposits total $5.9 billion, up $457.1 million, or 8%, from
September 30, 2001; core deposits represent 53% of total deposits
- Checking deposits total $1.3 billion, up $226.6 million, or 21%, from
September 30, 2001; 21,000 checking accounts opened during third
quarter of 2002; 78,000 opened during the twelve months ended
September 30, 2002
- Business checking deposits total $153.4 million, up $48.6 million, or
46%, from September 30, 2001
- Customer service fees increased to $15.6 million, up $2.1 million, or
16%, from the 2001 third quarter
MORTGAGE LENDING:
- Multifamily/Commercial real estate loan volume totaled $313.9 million
and $761.0 million for the three and nine month periods ended
September 30, 2002, an increase of 104% and 92% over the comparable
2001 periods
- Multifamily/Commercial real estate portfolio totaled $2.2 billion, up
$633.9 million, or 40% from September 30, 2001
- Loans receivable totaled $12.4 billion, up $428.6 million, or 4%, from
September 30, 2001
Commenting on the third quarter results, George L. Engelke, Jr.,
Chairman, President and Chief Executive Officer of Astoria, said, "The continued
decline in long term interest rates during the third quarter accelerated the
flattening of the U.S Treasury yield curve resulting in unprecedented mortgage
loan and MBS prepayments, lower yielding reinvestment opportunities and somewhat
less than a commensurate benefit on the liability side of the balance sheet.
Notwithstanding these events, Astoria generated double digit earnings growth
over the prior year and solid returns for the third quarter."
BOARD DECLARES QUARTERLY CASH DIVIDEND
The Board of Directors of the Company, at their October 16, 2002
meeting, declared a quarterly cash dividend of $0.20 per common share. The
dividend is payable on December 2, 2002 to shareholders of record as of November
15, 2002. This is the thirtieth consecutive quarterly cash dividend declared by
the Company.
ISSUANCE OF $200 MILLION SENIOR NOTES
The Company, on October 16, 2002, completed the previously announced
issuance of $200 million aggregate principal amount of 5.75% Senior Notes due
2012, the proceeds of which are expected to be used for general corporate
purposes, including stock repurchases.
EIGHTH STOCK REPURCHASE PROGRAM CONTINUES; NINTH STOCK REPURCHASE PROGRAM
AUTHORIZED
During the third quarter, Astoria repurchased 1.5 million shares of its
common stock at an average cost of $29.84 per share. In addition, following the
close of the third quarter, the Company purchased an additional 185,000 shares
of its common stock. To date, under the eighth program that commenced in
September 2001, Astoria has repurchased 7.4 million shares.
2
The Company also announced that the Board of Directors, at their
October 16, 2002 meeting, approved the Company's ninth stock repurchase program
which authorizes the purchase of an additional 10 million shares, or
approximately 11% of its outstanding common stock in open-market or privately
negotiated transactions over a two year period. The newly approved repurchase
program will commence immediately following the completion of the eighth
repurchase program in which approximately 2.6 million shares remain.
BALANCE SHEET SUMMARY & TRENDS
Assets at September 30, 2002 totaled $21.9 billion compared to $22.0
billion at the end of the previous quarter and $22.7 billion at December 31,
2001. Key balance sheet highlights outlining the cumulative effect of the
Company's balance sheet repositioning since December 31, 1999 follow:
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
CHANGE
12/31/99 12/31/00 12/31/02 9/30/02 12/31/99-9/30/02
ASSETS .................... $22,697 $22,337 $22,668 $21,904 - 3%
LOANS ..................... $10,286 $11,422 $12,167 $12,421 + 21%
MBS ....................... $ 9,287 $ 7,875 $ 7,074 $ 6,790 - 27%
DEPOSITS .................. $ 9,555 $10,072 $10,904 $11,181 + 17%
CORE DEPOSITS ............. $ 4,625 $ 4,922 $ 5,743 $ 5,941 + 28%
CHECKING .................. $ 878 $ 1,005 $ 1,200 $ 1,306 + 49%
BORROWINGS ................ $11,402 $10,197 $ 9,699 $ 8,649 - 24%
EQUITY .................... $ 1,197 $ 1,513 $ 1,543 $ 1,585 + 32%
BOOK VALUE ................ $ 11.09 $ 14.74 $ 16.44 $ 17.50 + 58%
PER SHARE
TANGIBLE .................. $ 8.92 $ 12.68 $ 14.40 $ 15.39 + 73%
BOOK VALUE
PER SHARE
Mortgage loan originations and purchases for the quarter ended
September 30, 2002 totaled $1.3 billion, compared to $1.2 billion for the
comparable 2001 period. For the nine months ended September 30, 2002, loan
volume increased 30% to $4.0 billion from $3.1 billion for the 2001 comparable
period. For the quarter ended September 30, 2002, 1-4 family loans,
predominantly 3/1 and 5/1 adjustable rate mortgage ("ARM") loans, represented
75% of mortgage originations; 25% of mortgage originations were multifamily and
commercial real estate ("CRE") loans. For the nine months ended September 30,
2002, 80% of loan originations were 1-4 family loans and 19% were multifamily
and CRE loans.
For the quarter and nine months ended September 30, 2002, multifamily
and CRE loan originations increased to $313.9 million and $761.0 million,
respectively, up 104% and 92%, respectively, over the 2001 comparable periods.
The combined portfolios of multifamily and CRE loans grew during the first nine
months of 2002 at an annualized rate of 40% to $2.2 billion, or 18% of total
loans at September 30, 2002. The average loan-to-value ratio of the multifamily
and CRE loan portfolio is less than 65%, based on current principal balance and
original appraised value. The average loan outstanding in that portfolio is
3
under $1 million.
The Company's strong multifamily and CRE lending efforts are reflected
in the growth of this portfolio since 1999:
CHANGE
(DOLLARS IN MILLIONS) 12/31/99 12/31/00 12/31/01 9/30/02 12/31/99-9/30/02
MULTIFAMILY/CRE LOANS $1,014 $1,282 $1,693 $2,200 +117%
% OF TOTAL LOANS 10% 11% 14% 18% +80%
Commenting on these solid results, Mr. Engelke said, "We have achieved
great success in building a top quality, low-risk multifamily and commercial
real estate loan portfolio and expect to continue to produce strong,
double-digit growth in the future. By the end of 2003, we expect this portfolio
to increase to approximately 25% of total loans."
Mortgage loan prepayments for the quarter ended September 30, 2002
increased dramatically and totaled $1.2 billion as compared to $826.2 million
for the previous quarter and $680.1 million for the 2001 third quarter. For the
nine-month period ended September 30, 2002, mortgage loan prepayments totaled
$3.0 billion as compared to $1.9 billion for the nine months ended September 30,
2001. Due to the historically high level of mortgage loan prepayments, the total
loan portfolio decreased slightly during the third quarter to $12.4 billion from
$12.5 billion at the end of the 2002 second quarter. For the nine months ended
September 30, 2002, the loan portfolio increased $253.5 million from $12.2
billion at December 31, 2001.
At September 30, 2002, non-performing loans declined to $32.3 million,
or 0.15% of total assets, from $32.4 million, or 0.15% of total assets, at June
30, 2002 and $37.1 million, or 0.16% of total assets, at December 31, 2001. Net
charge-offs for the quarter and nine months ended September 30, 2002 were
$258,000 and $944,000, respectively, or an annualized rate of one basis point of
average total loans outstanding. The ratio of the allowance for loan losses to
non-performing loans was 259% at September 30, 2002 compared to 258% at June 30,
2002 and 222% at December 31, 2001. Commenting on the superior asset quality,
Mr. Engelke noted, "The quality of our assets continues to remain excellent as
evidenced by our very low level of loan delinquencies and non-performing assets.
Net charge-offs for this year's third quarter and nine months were negligible
and are indicative of our conservative lending policies and the fact that over
99% of our loan portfolio is secured by real estate with a loan-to-value ratio
averaging less than 64%, based upon original appraised value and current
principal balance."
Mortgage-backed securities ("MBS") totaled $6.8 billion at September
30, 2002, a decrease of $283.6 million from December 31, 2001 and an increase of
$111.3 million from June 30, 2002. For the quarter ended September 30, 2002, MBS
repayments totaled $1.4 billion compared to $948.5 million in the 2002 second
quarter and $837.2 million for the 2001 third quarter. For the nine months ended
September 30, 2002 MBS repayments totaled $3.8 billion compared to $1.9 billion
for the comparable 2001 period.
Deposits were down slightly from June 30, 2002 and were up $276.9
million for the nine months ended September 30, 2002 to $11.2 billion at
September 30, 2002. Core deposits, which exclude certificate of deposit
accounts, totaled $5.9 billion, representing 53% of total deposits at September
30, 2002,
4
compared to $5.7 billion at December 31, 2001. Checking account balances for the
2002 third quarter increased $44.4 million from the previous quarter and totaled
$1.3 billion, or 22% of core deposits, at September 30, 2002.
The success of our small business banking initiatives was reflected in
the strong growth in business deposits, including business savings and checking
accounts. At September 30, 2002, business deposits totaled $216.9 million, up
44% from September 30, 2001.
Borrowings at September 30, 2002 totaled $8.6 billion. The following
table details future borrowing maturities and weighted average rates:
CONTRACTUAL TOTAL AMOUNT WEIGHTED
--------------------------------------------------------------------------------
MATURITY MATURING AVERAGE RATE
4Q02 $600 Million 6.45%
1Q03 $350 Million 6.99%
2Q03 $300 Million 6.27%
3Q03 $350 Million 5.30%
4Q03 $800 Million 5.81%
------------- -----
Through 2003 $ 2.4 Billion 6.12%
2004 $ 3.4 Billion 5.12%
Beyond 2004 $ 2.8 Billion 5.41%
------------- -----
Total(1) $ 8.6 Billion 5.49%
In addition to the above maturities, an opportunity is available for
lowering our cost of funds over the next twelve months as approximately $2.4
billion of CDs with an average rate of 3.02% will mature. During the month of
September 2002, CDs were issued or repriced at an average rate of 1.76%.
Overall, these opportunities will help mitigate the decline in the yield on
interest earning assets resulting from the high level of prepayment and
refinance activity currently being experienced.
Stockholders' equity was $1.6 billion, or 7.23% of total assets, at
September 30, 2002 compared to $1.5 billion, or 6.81% of total assets, at
December 31, 2001. Astoria Federal continues to maintain capital ratios in
excess of applicable regulatory requirements. At September 30, 2002, core,
tangible and risk-based capital ratios were 7.04%, 7.04% and 15.14%,
respectively.
THIRD QUARTER AND NINE-MONTH EARNINGS SUMMARY
Net interest income for the three and nine-month periods ended
September 30, 2002 totaled $119.2 million and $362.7 million, respectively,
compared to $114.2 million and $355.7 million for the comparable 2001 periods.
Astoria's net interest margin for the quarter ended September 30, 2002
was 2.31%, up 19 basis points from the 2001 third quarter margin of 2.12%, and
declined 9 basis points from the previous quarter. Mr. Engelke noted, "The year
over year margin improvement is primarily the result of the downward repricing
of CDs and the repayment of borrowings. For the quarter ended September 30,
2002, the average
(1) Included are $5.7 billion of borrowings that have a maturity date after
September 30, 2003 but can be called prior to December 31, 2002.
5
cost of retail deposits declined 124 basis points from the 2001 third quarter
and declined 15 basis points from the previous quarter this year, to 2.56%.
Contributing to the decline during the third quarter of 2002 was the maturity of
$857.9 million of non-jumbo CDs, with an average rate of 3.47% and an average
maturity at inception of 13 months, and the issuance or repricing of $794.0
million of non-jumbo CDs with an average rate of 2.54% and an average maturity
of 15 months. On a linked quarter basis, 4 basis points of the decline in the
net interest margin is due to an extra day of interest expense in the third
quarter."
Non-interest income, excluding the gain on sale of securities, for the
quarter ended September 30, 2002 rose to $28.5 million from $26.9 million for
the quarter ended September 30, 2001. For the nine months ended September 30,
2002, non-interest income, excluding the gain on sale of securities in the third
quarter, totaled $84.9 million compared to $75.2 million for the comparable 2001
period. The increases for the quarter and nine months in non-interest income,
excluding gains on sales of securities, are primarily due to increases in
customer service fees and BOLI income, partially offset by a decrease in loan
servicing fees. Customer service fees for the quarter and nine months ended
September 30, 2002 increased 16% and 18%, respectively, to $15.6 million and
$44.9 million, respectively, from $13.5 million and $38.1 million, respectively,
for the 2001 comparable periods.
Gains on sales of securities for the quarter ended September 30, 2002
totaled $8.5 million, and were used as a natural hedge to offset most of the
increase in net amortization of mortgage servicing rights caused by a valuation
adjustment of $9.1 million related to the current lower interest rate
environment and projected accelerated loan prepayment speeds. There were no
gains on sales of securities in prior quarters or prior year periods.
For the quarter ended September 30, 2002, general and administrative
expense ("G&A") totaled $48.4 million, compared to $43.4 million for the
comparable prior year period and $50.0 million for the previous quarter. The
increase from the 2001 quarter is primarily due to increased compensation and
benefits expense of $4.2 million. On a linked quarter basis, G&A expense
decreased $1.6 million, due primarily to lower advertising expense and a lower
mark to market adjustment on interest rate caps. For the nine month period ended
September 30, 2002, G&A totaled $146.2 million, compared to $132.5 million in
the prior year period. The increase was due primarily to an increase in
compensation and benefits expense, which includes increased employee stock plan
amortization, and other expense, which includes market valuation adjustments on
interest rate caps.
Excluding G&A, non-interest expense for the quarter ended September 30,
2002 increased to $15.1 million from $11.0 million for the prior year period.
The increase was primarily due to an increase in net amortization of mortgage
servicing rights due to a valuation adjustment of $9.1 million related to the
current lower interest rate environment and projected accelerated loan
prepayment speeds, offset by the elimination of goodwill amortization due to the
adoption of SFAS No. 142 in January 2002. For the nine months ended September
30, 2002 non-interest expense, excluding G&A, totaled $27.0 million compared to
$33.6 million for the comparable 2001 period. The decrease resulted primarily
from the elimination of goodwill amortization and lower goodwill litigation
expense, offset by an increase in net amortization of mortgage servicing rights
due to net valuation adjustments of $10.2 million.
6
The efficiency ratio for the 2002 third quarter was 32.74% compared to
32.56% for the 2002 second quarter and 30.72% for the comparable quarter last
year.
FOURTH QUARTER 2002 OUTLOOK
Commenting on the current operating environment, Mr. Engelke stated,
"Despite the difficult operating environment we are currently experiencing due
to the flattened U.S Treasury yield curve and the absolute low level of interest
rates, we are reiterating our 2002 fourth quarter earnings per share guidance of
between $0.72 - $0.74 per share, which represents an 18% - 21% increase over the
2001 fourth quarter EPS. Clearly, any modest increase in long-term interest
rates will improve our earnings outlook."
RISK FACTORS AND FORWARD LOOKING STATEMENT
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 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.
EARNINGS CONFERENCE CALL, OCTOBER 18 AT 9:30 A.M. (ET)
The Company will host an earnings conference call tomorrow morning,
October 18 at 9:30 a.m. (ET) to discuss, in addition to third quarter operating
results, the outlook for the remainder of 2002. The toll-free dial-in number is
(877) 692-2086. A replay will be available on October 18, 2002 from 1:00 p.m.
(ET) through October 25, 2002, 11:59 p.m. The replay number is (877) 519-4471,
passcode: 3539746. The
7
conference call will also be simultaneously webcast on
its investor relations website at http://ir.astoriafederal.com and archived
through October 25, 2002.
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association with assets of $22 billion, is the second largest
thrift institution headquartered in New York and sixth 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.
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,
2002 2001
------------ ------------
ASSETS
Cash and due from banks $ 144,601 $ 144,694
Federal funds sold and repurchase agreements 843,883 1,309,164
Mortgage-backed securities available-for-sale 2,408,655 3,014,963
Other securities available-for-sale 494,093 534,220
Mortgage-backed securities held-to-maturity
(fair value of $4,438,277 and $4,062,749, respectively) 4,381,751 4,059,087
Other securities held-to-maturity (fair value of $105,342
and $405,451, respectively) 104,500 404,841
Federal Home Loan Bank of New York stock 225,473 250,450
Loans held-for-sale 32,348 43,390
Loans receivable:
Mortgage loans, net 12,067,433 11,924,134
Consumer and other loans, net 353,349 243,127
------------ ------------
12,420,782 12,167,261
Allowance for loan losses (83,648) (82,285)
------------ ------------
Total loans receivable, net 12,337,134 12,084,976
Mortgage servicing rights, net 22,399 35,295
Accrued interest receivable 95,197 96,273
Premises and equipment, net 155,600 149,753
Goodwill 185,151 185,151
Bank owned life insurance 357,669 242,751
Other assets 115,822 112,698
------------ ------------
TOTAL ASSETS $ 21,904,276 $ 22,667,706
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 11,180,578 $ 10,903,693
Reverse repurchase agreements 6,585,000 7,385,000
Federal Home Loan Bank of New York advances 1,964,450 1,914,000
Other borrowings, net 99,203 399,587
Mortgage escrow funds 149,772 116,395
Accrued expenses and other liabilities 215,539 281,445
------------ ------------
TOTAL LIABILITIES 20,194,542 21,000,120
------------ ------------
Guaranteed preferred beneficial interest in
junior subordinated debentures (capital trust securities) 125,000 125,000
Stockholders' equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized:
Series A (1,225,000 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; 110,996,592
shares issued; and 87,690,468 and 90,766,744 shares
outstanding, respectively) 1,110 1,110
Additional paid-in capital 836,525 822,652
Retained earnings 1,327,038 1,207,742
Treasury stock (23,306,124 and 20,229,848 shares, at cost, respectively) (563,559) (459,471)
Accumulated other comprehensive income (loss) 9,797 (1,967)
Unallocated common stock held by ESOP (28,177) (29,480)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,584,734 1,542,586
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,904,276 $ 22,667,706
============ ============
Page 10
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- ---------------------------------
(In Thousands, Except Share Data)
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
------------------------------- ------------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Interest income:
Mortgage loans $ 196,836 $ 207,014 $ 601,864 $ 613,897
Consumer and other loans 4,792 4,364 12,711 13,713
Mortgage-backed securities 91,552 109,556 289,273 355,001
Other securities 16,629 25,705 55,734 86,292
Federal funds sold and repurchase agreements 3,571 12,082 10,963 25,360
------------ ------------ ------------ ------------
Total interest income 313,380 358,721 970,545 1,094,263
------------ ------------ ------------ ------------
Interest expense:
Deposits 71,702 101,687 225,472 311,831
Borrowed funds 122,451 142,809 382,341 426,733
------------ ------------ ------------ ------------
Total interest expense 194,153 244,496 607,813 738,564
------------ ------------ ------------ ------------
Net interest income 119,227 114,225 362,732 355,699
Provision for loan losses 301 1,001 2,307 3,026
------------ ------------ ------------ ------------
Net interest income after provision for loan losses 118,926 113,224 360,425 352,673
------------ ------------ ------------ ------------
Non-interest income:
Customer service fees 15,640 13,533 44,918 38,095
Other loan fees 2,242 1,596 5,922 4,630
Net gain on sales of securities 8,489 -- 8,489 --
Loan servicing fees 3,169 3,595 9,472 11,595
Net gain on sales of loans 1,056 877 3,902 2,602
Income from bank owned life insurance 5,683 4,098 15,927 12,584
Other 729 3,216 4,787 5,743
------------ ------------ ------------ ------------
Total non-interest income 37,008 26,915 93,417 75,249
------------ ------------ ------------ ------------
Non-interest expense:
General and administrative:
Compensation and benefits 26,645 22,466 79,002 68,044
Occupancy, equipment and systems 13,373 13,371 39,600 39,323
Federal deposit insurance premiums 492 503 1,496 1,493
Advertising 997 730 3,555 4,259
Other 6,866 6,292 22,564 19,338
------------ ------------ ------------ ------------
Total general and administrative 48,373 43,362 146,217 132,457
Net amortization of mortgage servicing rights 11,796 2,825 16,917 7,776
Goodwill litigation 209 243 769 2,116
Capital trust securities 3,103 3,104 9,312 9,312
Amortization of goodwill -- 4,811 -- 14,432
------------ ------------ ------------ ------------
Total non-interest expense 63,481 54,345 173,215 166,093
------------ ------------ ------------ ------------
Income before income tax expense and cumulative effect of
accounting change 92,453 85,794 280,627 261,829
Income tax expense 30,237 29,342 93,262 91,482
------------ ------------ ------------ ------------
Income before cumulative effect of accounting change 62,216 56,452 187,365 170,347
Cumulative effect of accounting change, net of tax -- -- -- (2,294)
------------ ------------ ------------ ------------
Net income 62,216 56,452 187,365 168,053
Preferred dividends declared (1,500) (1,500) (4,500) (4,500)
------------ ------------ ------------ ------------
Net income available to common shareholders $ 60,716 $ 54,952 $ 182,865 $ 163,553
============ ============ ============ ============
Basic earnings per common share:
Income before accounting change $ 0.73 $ 0.61 $ 2.17 $ 1.81
Cumulative effect of accounting change, net of tax -- -- -- (0.03)
------------ ------------ ------------ ------------
Net basic earnings per common share $ 0.73 $ 0.61 $ 2.17 $ 1.78
============ ============ ============ ============
Diluted earnings per common share:
Income before accounting change $ 0.72 $ 0.60 $ 2.13 $ 1.78
Cumulative effect of accounting change, net of tax -- -- -- (0.03)
------------ ------------ ------------ ------------
Net diluted earnings per common share $ 0.72 $ 0.60 $ 2.13 $ 1.75
============ ============ ============ ============
Basic weighted average common shares 83,329,044 90,123,032 84,333,207 91,851,854
Diluted weighted average common and common
equivalent shares 84,795,336 91,869,188 85,920,019 93,661,896
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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,
----------------------- --------------------------
2002 2001 2002 2001
------ ------ ---------- ----------
SELECTED RETURNS AND FINANCIAL RATIOS (ANNUALIZED)
Return on average stockholders' equity (1) 15.72% 14.17% 15.92% 14.15%
Return on average tangible stockholders' equity (1) 17.81 16.12 18.05 16.18
Return on average assets (1) 1.14 1.00 1.13 1.00
General and administrative expense to average assets 0.88 0.77 0.88 0.79
Efficiency ratio 32.74 30.72 32.69 30.74
Net interest rate spread 2.16 1.88 2.15 1.95
Net interest margin 2.31 2.12 2.31 2.21
SELECTED CASH RATIOS (ANNUALIZED) (2)
Cash return on average stockholders' equity 16.46% 15.77% 16.54% 15.78%
Cash return on average tangible stockholders' equity 18.64 17.94 18.76 18.04
Cash return on average assets 1.19 1.11 1.17 1.11
Cash general and administrative expense
to average assets 0.83 0.74 0.84 0.76
Cash efficiency ratio 30.76 29.61 31.06 29.60
ASSET QUALITY DATA (DOLLARS IN THOUSANDS)
Non-performing loans/total loans 0.26% 0.28%
Non-performing loans/total assets 0.15 0.15
Non-performing assets/total assets 0.15 0.16
Allowance for loan losses/non-performing loans 259.20 244.78
Allowance for loan losses/non-accrual loans 268.43 253.85
Allowance for loan losses/total loans 0.67 0.68
Net charge-offs to average loans outstanding (annualized) 0.01% 0.01% 0.01 0.01
Non-performing assets $ 33,149 $ 36,958
Non-performing loans 32,271 33,502
Loans 90 days past maturity but still accruing 1,109 1,197
Non-accrual loans 31,162 32,305
Net charge-offs $ 258 $ 372 944 952
CAPITAL RATIOS (ASTORIA FEDERAL)
Tangible 7.04% 6.77%
Core 7.04 6.77
Risk-based 15.14 16.00
OTHER DATA
Cash dividends paid per common share $ 0.20 $ 0.16 $ 0.57 $ 0.44
Book value per common share 17.50 16.26
Tangible book value per common share 15.39 14.19
Average equity/average assets 7.22% 7.04% 7.08% 7.05%
Mortgage loans serviced for others (in thousands) 2,916,842 3,520,604
Full time equivalent employees 1,952 1,845
(1) Included in the 2002 results is the benefit derived from the adoption of
SFAS No. 142 which eliminated goodwill amortization totaling $4.8 million
for the three months ended September 30, 2001 and $14.4 million for the
nine months ended September 30, 2001.
(2) The information presented represents pro forma calculations which are not
in conformity with GAAP. The following items have been excluded from the
return calculations: For the three months ended September 30, 2002 and
2001, a non-cash charge for amortization of employee stock plans of $2.9
million in 2002 and $1.6 million in 2001 and amortization of goodwill of
$4.8 million in 2001. For the nine months ended September 30, 2002 and
2001, a non-cash charge for amortization of employee stock plans of $7.3
million in 2002 and $4.9 million in 2001 and amortization of goodwill of
$14.4 million in 2001. The cash general and administrative expense to
average assets ratio and cash efficiency ratio exclude the non-cash charge
for amortization of employee stock plans.
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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
- ----------------------
(Dollars in Thousands)
For the Three Months Ended September 30,
-------------------------------------------------------------------------------------
2002 2001
---------------------------------------- ------------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------- ---------- ------------ ------------ ----------- ------------
Assets: (Annualized) (Annualized)
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 10,012,425 $ 154,192 6.16% $ 10,088,518 $ 174,641 6.92%
Multi-family, commercial
and construction 2,166,118 42,644 7.87 1,540,679 32,373 8.40
Consumer and other loans (1) 323,195 4,792 5.93 208,686 4,364 8.36
------------- ---------- ------------- -----------
Total loans 12,501,738 201,628 6.45 11,837,883 211,378 7.14
Mortgage-backed securities (2) 6,376,544 91,552 5.74 6,935,545 109,556 6.32
Other securities (2) (3) 927,940 16,629 7.17 1,458,258 25,705 7.05
Federal funds sold and
repurchase agreements 827,857 3,571 1.73 1,369,769 12,082 3.53
------------- ---------- ------------- -----------
Total interest-earning assets 20,634,079 313,380 6.07 21,601,455 358,721 6.64
---------- -----------
Non-interest-earning assets 1,286,755 1,033,327
------------- -------------
Total assets $ 21,920,834 $ 22,634,782
============= =============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,810,974 7,938 1.13 $ 2,507,045 12,537 2.00
Certificates of deposit 5,253,760 55,056 4.19 5,284,102 71,149 5.39
NOW 1,273,066 931 0.29 1,081,815 1,446 0.53
Money market 1,870,756 7,777 1.66 1,817,718 16,555 3.64
------------- ---------- ------------- -----------
Total deposits 11,208,556 71,702 2.56 10,690,680 101,687 3.80
Borrowed funds 8,648,634 122,451 5.66 9,847,116 142,809 5.80
------------- ---------- ------------- -----------
Total interest-bearing liabilities 19,857,190 194,153 3.91 20,537,796 244,496 4.76
---------- -----------
Non-interest-bearing liabilities 480,880 503,401
------------- -------------
Total liabilities 20,338,070 21,041,197
Stockholders' equity 1,582,764 1,593,585
------------- -------------
Total liabilities and stockholders' equity $ 21,920,834 $ 22,634,782
============= =============
Net interest income/net interest
rate spread $ 119,227 2.16% $ 114,225 1.88%
========== ====== =========== =========
Net interest-earning assets/net
interest margin $ 776,889 2.31% $ 1,063,659 2.12%
============= ====== ============= =========
Ratio of interest-earning assets
to interest-bearing liabilities 1.04x 1.05x
===== =====
(1) Mortgage loans and consumer and other loans include non-performing loans
and exclude the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.
(3) Other securities include Federal Home Loan Bank of New York Stock.
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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
- ----------------------
(Dollars in Thousands)
For the Nine Months Ended September 30,
------------------------------------------------------------------------------------
2002 2001
--------------------------------------- ------------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------- ---------- ------------ ------------- ----------- ------------
Assets: (Annualized) (Annualized)
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 10,221,945 $ 484,150 6.32% $ 10,017,683 $ 524,333 6.98%
Multi-family, commercial
and construction 1,982,618 117,714 7.92 1,427,729 89,564 8.36
Consumer and other loans (1) 287,169 12,711 5.90 197,681 13,713 9.25
------------- ---------- ------------- -----------
Total loans 12,491,732 614,575 6.56 11,643,093 627,610 7.19
Mortgage-backed securities (2) 6,503,436 289,273 5.93 7,370,584 355,001 6.42
Other securities (2) (3) 1,092,241 55,734 6.80 1,623,044 86,292 7.09
Federal funds sold and
repurchase agreements 857,510 10,963 1.70 843,876 25,360 4.01
------------- ---------- ------------- -----------
Total interest-earning assets 20,944,919 970,545 6.18 21,480,597 1,094,263 6.79
---------- -----------
Non-interest-earning assets 1,228,557 975,791
------------- -------------
Total assets $ 22,173,476 $ 22,456,388
============= =============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,732,395 24,607 1.20 $ 2,474,209 37,169 2.00
Certificates of deposit 5,209,688 170,583 4.37 5,226,746 217,544 5.55
NOW 1,239,817 2,650 0.28 1,055,295 4,301 0.54
Money market 1,920,586 27,632 1.92 1,669,733 52,817 4.22
------------- ---------- ------------- -----------
Total deposits 11,102,486 225,472 2.71 10,425,983 311,831 3.99
Borrowed funds 9,006,959 382,341 5.66 9,931,390 426,733 5.73
------------- ---------- ------------- -----------
Total interest-bearing liabilities 20,109,445 607,813 4.03 20,357,373 738,564 4.84
---------- -----------
Non-interest-bearing liabilities 495,098 515,969
------------- -------------
Total liabilities 20,604,543 20,873,342
Stockholders' equity 1,568,933 1,583,046
------------- -------------
Total liabilities and stockholders' equity $ 22,173,476 $ 22,456,388
============= =============
Net interest income/net interest
rate spread $ 362,732 2.15% $ 355,699 1.95%
========== ======== =========== =======
Net interest-earning assets/net
interest margin $ 835,474 2.31% $ 1,123,224 2.21%
============= ======== ============= =======
Ratio of interest-earning assets
to interest-bearing liabilities 1.04x 1.06x
===== =====
(1) Mortgage loans and consumer and other loans include non-performing loans
and exclude the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.
(3) Other securities include Federal Home Loan Bank of New York Stock.