[ASTORIA FINANCIAL CORPORATION LOGO] NEWS RELEASE
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 FOURTH QUARTER EPS TO
$0.73 AND 21% INCREASE IN FULL YEAR EPS TO $2.85
QUARTERLY CASH DIVIDEND OF $0.20 PER COMMON SHARE DECLARED;
ANNUAL MEETING DATE SET
LAKE SUCCESS, NEW YORK - JANUARY 23, 2003 - Astoria Financial Corporation (NYSE:
AF) ("Astoria"), the holding company for Astoria Federal Savings and Loan
Association ("Astoria Federal"), today reported net income of $61.1 million, or
$0.73 diluted earnings per common share, for the quarter ended December 31,
2002, compared to net income of $54.8 million, or $0.61 diluted earnings per
common share for the 2001 fourth quarter, representing increases of 11% and 20%,
respectively. For the 2002 fourth quarter, returns on average equity, average
tangible equity and average assets increased to 15.66%, 17.77% and 1.11%,
respectively, from 14.09%, 16.02% and 0.97%, respectively, for the comparable
2001 period.
Net income for the full year 2002 totaled a record $248.4 million, or
$2.85 diluted earnings per common share, compared to net income of $222.9
million, or $2.35 diluted earnings per common share for 2001, representing
increases of 11% and 21%, respectively. For 2002, returns on average equity,
average tangible equity and average assets increased to 15.87%, 18.00%, and
1.12%, respectively, from 14.13%, 16.13% and 0.99%, respectively, for 2001.
Included in the 2002 results is the benefit derived from the adoption of
SFAS No. 142, which eliminated goodwill amortization of $4.8 million, or $0.06
diluted earnings per common share, per quarter. The 2001 results include a
charge reflecting the cumulative effect of an accounting change, net of tax, of
$2.3 million, or $0.03 diluted earnings per common share, related to the
implementation of SFAS No. 133 in the 2001 first quarter.
2002 HIGHLIGHTS:
PROFITABILITY:
- Diluted EPS: $2.85, up 21% from 2001
- Return on average assets: 1.12%, up 13% from 2001
- Return on average equity: 15.87%, up 12% from 2001
1
- Return on average tangible equity: 18.00%, up 12% from 2001
RETAIL BANKING:
- Deposits total $11.1 billion, up $164 million, or 1%, from December
31, 2001
- Core deposits total $5.9 billion, up $171 million, or 3%, from
December 31, 2001; core deposits represent 53% of total deposits
- Checking deposits total $1.4 billion, up $183 million, or 15%, from
December 31, 2001; 83,000 checking accounts opened during 2002
- Business checking deposits (included in checking deposits above)
total $159 million, up $46 million, or 41%, from December 31, 2001
- Customer service fees increased to $60 million, up $8 million, or
16%, from 2001
MORTGAGE LENDING:
- Record Multifamily and Commercial real estate ("CRE") loan volume of
$1.0 billion for 2002, an increase of 71% over 2001
- One-to-four family loan volume of $4.5 billion for 2002, an increase
of 15% over 2001
- Record home equity lines of credit of $278 million opened in 2002,
an increase of 88% over 2001
- Multifamily and CRE portfolios total $2.3 billion, up $652 million,
or 39% from December 31, 2001, representing 19% of total loans
- One-to-four family portfolio totals $9.2 billion, down $896 million,
or 9% from December 31, 2001, representing 77% of total loans
- Home equity and other loans portfolio totals $373 million, up $132
million, or 55% from December 31, 2001, representing 3% of total
loans
Commenting on the Company's results, George L. Engelke, Jr., Chairman,
President and Chief Executive Officer of Astoria, said, "I am pleased to report
double-digit earnings growth in both the fourth quarter and year despite the
extraordinarily high level of mortgage loan and MBS repayments that accelerated
through the fourth quarter and resulted in more than 50% of our assets being
redeployed at lower rates during the year."
BOARD DECLARES QUARTERLY CASH DIVIDEND
The Board of Directors of the Company, at their January 22, 2003 meeting,
declared a quarterly cash dividend of $0.20 per common share. The dividend is
payable on March 3, 2003 to shareholders of record as of February 18, 2003. This
is the thirty-first consecutive quarterly cash dividend declared by the Company.
EIGHTH STOCK REPURCHASE PROGRAM COMPLETED; NINTH STOCK REPURCHASE PROGRAM
COMMENCES
During the fourth quarter, Astoria completed its eighth stock repurchase
program and immediately commenced its previously announced ninth program,
purchasing a combined 3.1 million shares of its common stock under both programs
at an average cost of $26.20 per share. For 2002, the Company repurchased 7.3
million of its common shares at a cost of $211.1 million, or $28.98 per share.
Under the
2
ninth program, 9.6 million of common shares remain authorized for repurchase.
ISSUANCE OF $250 MILLION OF SENIOR NOTES
During the 2002 fourth quarter, as previously announced, the Company
issued $250 million aggregate principal amount of 5.75% Senior Notes due 2012.
The proceeds are to be used for general corporate purposes, including stock
repurchases.
BOARD SETS ANNUAL SHAREHOLDERS' MEETING DATE
The Board of Directors, at their January 22, 2003 meeting, established May
21, 2003 as the date for the Annual Meeting of Shareholders, with a record date
of March 26, 2003.
BALANCE SHEET SUMMARY & TRENDS
Assets at December 31, 2002 totaled $21.7 billion compared to $21.9
billion at the end of the previous quarter and $22.7 billion at December 31,
2001. Key balance sheet highlights including the cumulative effect of the
Company's balance sheet repositioning since December 31, 1999 follow:
CHANGE
(DOLLARS IN MILLIONS) 12/31/99 12/31/00 12/31/01 12/31/02 12/31/99-12/31/02
-------- -------- -------- -------- -----------------
ASSETS $22,697 $22,337 $22,668 $21,698 - 4%
LOANS $10,286 $11,422 $12,167 $12,059 + 17%
MBS $ 9,287 $ 7,875 $ 7,074 $ 7,380 - 21%
DEPOSITS $ 9,555 $10,072 $10,904 $11,067 + 16%
CORE DEPOSITS $ 4,625 $ 4,922 $ 5,743 $ 5,914 + 28%
CHECKING $ 878 $ 1,005 $ 1,200 $ 1,383 + 58%
BORROWINGS $11,524 $10,320 $ 9,822 $ 8,821 - 23%
Mortgage loan originations and purchases for the quarter ended December
31, 2002 totaled $1.6 billion compared to $1.5 billion for the comparable 2001
period and $1.3 billion for the 2002 third quarter. Included in the fourth
quarter mortgage loan production were one-to-four family mortgage loans totaling
$1.3 billion, predominantly 3/1 and 5/1 adjustable rate mortgage ("ARM") loans.
For the full year 2002, loan volume increased $1.0 billion to a record $5.6
billion, of which 81% were one-to-four family mortgage loans, predominantly 3/1
and 5/1 ARMs.
For the quarter ended December 31, 2002, multifamily and CRE loan
originations totaled $249.2 million compared to $195.8 million for the 2001
fourth quarter and $313.9 million for the 2002 third quarter. For the full year
2002, multifamily and CRE loan originations totaled $1.0 billion, an increase of
$418.4 million, or 71%, over 2001 originations. The combined portfolios of
multifamily and CRE loans grew 39% to $2.3 billion, or 19% of total loans at
December 31, 2002. The average loan-to-value ratio of the multifamily and CRE
loan portfolios is less than 65%, based on current principal balance and
original appraised value. The average loan outstanding in these portfolios is
under $1 million.
The Company's strong multifamily and CRE lending capabilities are
reflected in the growth of this portfolio since 1999:
3
CHANGE
(DOLLARS IN MILLIONS) 12/31/99 12/31/00 12/31/01 12/31/02 12/31/99-12/31/02
-------- -------- -------- -------- -----------------
MULTIFAMILY/CRE LOANS $1,014 $1,282 $1,693 $2,345 +131%
% OF TOTAL LOANS 10% 11% 14% 19% + 90%
"This past year was one of spectacular growth in multifamily and
commercial real estate lending. This was accomplished without any change in our
focus on top quality, low credit risk lending standards. We will continue our
strong growth in multifamily and CRE lending and expect these portfolios to
approximate 25% of total loans by the end of 2003," Mr. Engelke noted.
Mortgage loan prepayments for the quarter ended December 31, 2002
increased to $1.5 billion compared to $1.1 billion for the 2001 fourth quarter
and $1.2 billion for the previous quarter. For the year ended December 31, 2002,
mortgage loan prepayments totaled $4.5 billion as compared to $3.0 billion for
the full year 2001. Due to the historically high level of mortgage loan
prepayments, the total loan portfolio decreased slightly during the year to
$12.1 billion from $12.2 billion at December 31, 2001.
At December 31, 2002, non-performing loans declined to $34.5 million, or
0.16% of total assets, from $37.1 million, or 0.16% of total assets, at December
31, 2001. Net charge-offs for the quarter ended December 31, 2002 were $102,000.
For the full year 2002, net charge-offs were $1.0 million, or one basis point of
average total loans outstanding. The ratio of the allowance for loan losses to
non-performing loans was 242% at December 31, 2002 compared to 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 the
year were negligible, which is 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 current principal
balance and original appraised value."
Mortgage-backed securities ("MBS") totaled $7.4 billion at December 31,
2002, an increase of $305.5 million from December 31, 2001 and $589.1 million
from September 30, 2002. For the quarter ended December 31, 2002, MBS repayments
totaled $2.3 billion compared to $1.1 billion for the 2001 fourth quarter and
$1.4 billion for the 2002 third quarter. For the year ended December 31, 2002,
MBS repayments totaled $6.1 billion compared to $3.0 billion for the comparable
2001 period.
Deposits were up $163.5 million for the year ended December 31, 2002 to
$11.1 billion and were down $113.4 million on a linked quarter basis. Core
deposits, which exclude certificate of deposit accounts, increased to $5.9
billion from $5.7 billion at December 31, 2001 and represent 53% of total
deposits at December 31, 2002. Checking account balances at December 31, 2002
increased 15% to $1.4 billion from December 31, 2001 and represent 23% of core
deposits at December 31, 2002. At December 31, 2002, the average checking
account balance was $4,000, an increase of 8% from $3,700 at the end of 2001.
Additionally, the success of our small business banking initiatives was
reflected in the strong growth of business deposits, including business savings
and checking accounts. At December 31, 2002, business deposits totaled $220.3
million, up 38% from December 31, 2001.
4
Borrowings declined $1.0 billion during 2002 and totaled $8.8 billion at
December 31, 2002. The following table details future borrowing maturities and
weighted average rates:
CONTRACTUAL TOTAL AMOUNT WEIGHTED
MATURITY MATURING AVERAGE RATE
1Q03 $850 Million 3.71%
2Q03 $200 Million 6.49%
3Q03 $350 Million 5.30%
4Q03 $800 Million 5.81%
------------
Through 2003 $ 2.2 Billion 4.98%
1Q04 $ 2.8 Billion 4.97%
Remainder of 2004 $ 0.6 Billion 5.89%
Beyond 2004 $ 3.2 Billion 5.59%
--------------
Total(1) $ 8.8 Billion 5.26%
==============
In addition to the above maturities, over the next twelve months
approximately $2.4 billion of CDs with an average rate of 2.88% will mature.
During the month of December 2002, CDs were issued or repriced at an average
rate of 1.53%.
Stockholders' equity was $1.6 billion, or 7.16% of total assets, at
December 31, 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 December 31, 2002, core,
tangible and risk-based capital ratios were 7.23%, 7.23% and 15.44%,
respectively.
FOURTH QUARTER AND FULL YEAR EARNINGS SUMMARY
Net interest income for the quarter and year ended December 31, 2002
totaled $111.0 million and $464.4 million, respectively, compared to $110.6
million and $457.0 million for the comparable 2001 periods.
During the fourth quarter, the Company entered into an interest rate swap
agreement that had the effect of converting our $125 million of capital trust
securities ("Securities") from a 9.75% fixed rate instrument into a variable
rate, LIBOR-based instrument. As a result of this transaction, the Securities
were reclassified as borrowings and the capital securities expense, previously
classified as non-interest expense, was reclassified as interest expense. All
prior periods have been restated to conform to the current presentation.
Astoria's net interest margin for the quarter ended December 31, 2002
increased to 2.16%, or 11 basis points over the 2001 fourth quarter margin of
2.05% and decreased 9 basis points from the restated margin of 2.25% for the
previous quarter. Seven of the nine basis point decrease from the linked quarter
is attributable to the $250 million senior debt issued in the fourth quarter.
The year over year improvement in the net interest margin is a result of the
cost of deposits and borrowings declining more rapidly than the
- --------
(1) Included are $5.4 billion of borrowings that have a maturity greater than
one year but can be called prior to March 31, 2003.
5
decline in asset yields. For the quarter ended December 31, 2002, the average
cost of interest-bearing liabilities declined 84 basis points from the 2001
fourth quarter to 3.67% while the average yield on interest-earning assets
declined only 61 basis points to 5.77%.
Non-interest income for the quarter and year ended December 31, 2002 rose
37% and 19%, respectively, to $30.9 million and $107.4 million from $22.6
million and $90.1 million, for the respective periods in 2001. The increases for
the quarter and year are primarily due to increases in customer service fees,
net gain on sales of securities, BOLI income and the receipt in the 2002 fourth
quarter of a $3.8 million net insurance settlement regarding the previously
disclosed Weil litigation. Customer service fees for the quarter and year ended
December 31, 2002 increased 10% and 16%, respectively, to $15.3 million and
$60.2 million, respectively, from $13.9 million and $52.0 million, respectively,
for the 2001 comparable periods. Included in non-interest income is mortgage
banking income, net, the components of which are detailed below:
(DOLLARS IN MILLIONS) 4Q02 4Q01 2002 2001
Loan servicing fees $ 2.6 $ 3.5 $ 12.1 $ 15.1
Amortization of MSR* (3.5) (3.2) (10.2) (9.6)
MSR valuation adjustments* (0.6) 0.1 (10.8) (1.3)
Net gain on sale of loans 2.8 0.7 6.6 3.3
---- ---- ----- -----
Mortgage banking income, net $ 1.3 $ 1.1 $ (2.3) $ 7.5
==== ==== ===== =====
* Previously classified as non-interest expense
During the 2002 fourth quarter, a gain on sales of securities of $2.3
million was recognized in order to offset an anticipated increase in the
mortgage servicing valuation allowance. Since such valuation allowance increase
was minimal, we used the gain on the sale of securities to offset a prepayment
penalty of $2.2 million incurred on the prepayment of $100 million of high cost
borrowings. The following table details the fourth quarter and full year offsets
to MSR valuation adjustments:
(DOLLARS IN MILLIONS) 4Q02 4Q01 2002 2001
MSR valuation adjustments $ (0.6) $ 0.1 $ (10.8) $ (1.3)
Net gain on sales of securities 2.3 -0- 10.8 -0-
Extinguishment of debt (2.2) -0- (2.2) -0-
----- ------- ------- --------
Net impact on pre-tax income $ (0.5) $ 0.1 $ (2.2) $ (1.3)
======= ======= ======== ========
For the quarter ended December 31, 2002, general and administrative
expense ("G&A") totaled $48.8 million, compared to $44.1 million for the prior
year period. The increase from the 2001 quarter is primarily due to increased
compensation and pension expense. For the year ended December 31, 2002, G&A
totaled $195.8 million, compared to $178.8 million for 2001. The increase was
due primarily to increased compensation and pension expense, increased employee
stock plan amortization and negative market valuation adjustments on interest
rate caps.
The efficiency ratio for the 2002 fourth quarter was 34.42% compared to
33.09% for the 2001 fourth
6
quarter. For 2002, the efficiency ratio was 34.25% compared to 32.68% in 2001.
FUTURE OUTLOOK
Commenting on the current operating environment, Mr. Engelke stated, "We
are operating in a unique financial atmosphere with interest rates at forty-year
lows, major geopolitical uncertainties and a lackluster economy. We currently
anticipate the continuation of the existing low interest rate environment and
the extraordinarily high levels of cash flow throughout the first half of 2003.
Accordingly, we expect quarterly earnings in the first half of 2003 to resemble
the 2002 fourth quarter results excluding the impact of the Weil litigation
insurance settlement. Our current projections are for interest rates to rise and
cash flows to recede in the second half of the year. If that transpires,
earnings growth should resume. If a continuation of the current environment
persists, we would not expect any significant growth in earnings during 2003 and
might experience some downward pressure on earnings. Clearly, if interest rates
increase earlier, positive earnings momentum will resume earlier."
EARNINGS CONFERENCE CALL, JANUARY 24 AT 9:30 A.M. (ET)
The Company will host an earnings conference call tomorrow morning,
January 24 at 9:30 a.m. (ET) to discuss fourth quarter and full year operating
results. The toll-free dial-in number is (877) 692-2086. A replay will be
available on January 24, 2003 from 1:00 p.m. (ET) through January 31, 2003,
11:59 p.m. (ET) The replay number is (877) 519-4471, passcode: 3677261. The
conference call will also be simultaneously webcast on the Company's investor
relations website at http://ir.astoriafederal.com and archived through February
7, 2003.
RISK FACTORS AND FORWARD LOOKING STATEMENTS
This document contains a number of forward-looking statements within the
meaning of Section 27A of the Securities Exchange 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
7
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 approximately $22 billion, is the
second 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.
Tables Follow
8
Page 9
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
At At
December 31, December 31,
2002 2001
------------ ------------
ASSETS
Cash and due from banks $ 167,605 $ 144,694
Federal funds sold and repurchase agreements 510,252 1,309,164
Mortgage-backed securities available-for-sale 2,453,633 3,014,963
Other securities available-for-sale 338,948 534,220
Mortgage-backed securities held-to-maturity
(fair value of $4,985,562 and $4,062,749, respectively) 4,925,891 4,059,087
Other securities held-to-maturity (fair value of $115,003
and $405,451, respectively) 115,366 404,841
Federal Home Loan Bank of New York stock 247,550 250,450
Loans held-for-sale 62,669 43,390
Loans receivable:
Mortgage loans, net 11,680,160 11,924,134
Consumer and other loans, net 379,201 243,127
------------ ------------
12,059,361 12,167,261
Allowance for loan losses (83,546) (82,285)
------------ ------------
Total loans receivable, net 11,975,815 12,084,976
Mortgage servicing rights, net 20,411 35,295
Accrued interest receivable 88,908 96,273
Premises and equipment, net 157,297 149,753
Goodwill 185,151 185,151
Bank owned life insurance 358,898 242,751
Other assets 89,435 112,698
------------ ------------
TOTAL ASSETS $ 21,697,829 $ 22,667,706
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 11,067,196 $ 10,903,693
Reverse repurchase agreements 6,285,000 7,385,000
Federal Home Loan Bank of New York advances 2,064,000 1,914,000
Other borrowings, net 472,180 522,795
Mortgage escrow funds 104,353 116,395
Accrued expenses and other liabilities 151,102 283,237
------------ ------------
TOTAL LIABILITIES 20,143,831 21,125,120
------------ ------------
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 84,805,817 and 90,766,744 shares
outstanding, respectively) 1,110 1,110
Additional paid-in capital 840,186 822,652
Retained earnings 1,368,062 1,207,742
Treasury stock (26,190,775 and 20,229,848 shares, at cost, respectively) (639,579) (459,471)
Accumulated other comprehensive income (loss) 9,800 (1,967)
Unallocated common stock held by ESOP (27,581) (29,480)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,553,998 1,542,586
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,697,829 $ 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 Twelve Months Ended
December 31, December 31,
------------------------------- -------------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Interest income:
Mortgage loans $ 187,064 $ 204,862 $ 788,928 $ 818,759
Consumer and other loans 4,912 4,140 17,623 17,853
Mortgage-backed securities 88,350 107,620 377,623 462,621
Other securities 13,477 21,023 69,211 107,315
Federal funds sold and repurchase agreements 1,914 6,655 12,877 32,015
------------ ------------ ------------ ------------
Total interest income 295,717 344,300 1,266,262 1,438,563
------------ ------------ ------------ ------------
Interest expense:
Deposits 62,528 88,158 288,000 399,989
Borrowed funds 122,185 145,571 513,838 581,616
------------ ------------ ------------ ------------
Total interest expense 184,713 233,729 801,838 981,605
------------ ------------ ------------ ------------
Net interest income 111,004 110,571 464,424 456,958
Provision for loan losses -- 1,002 2,307 4,028
------------ ------------ ------------ ------------
Net interest income after provision for loan losses 111,004 109,569 462,117 452,930
------------ ------------ ------------ ------------
Non-interest income:
Customer service fees 15,272 13,932 60,190 52,027
Other loan fees 1,774 2,234 7,696 6,864
Net gain on sales of securities 2,283 -- 10,772 --
Mortgage banking income, net 1,282 1,094 (2,261) 7,515
Income from bank owned life insurance 5,471 4,264 21,398 16,848
Other 4,825 1,108 9,612 6,851
------------ ------------ ------------ ------------
Total non-interest income 30,907 22,632 107,407 90,105
------------ ------------ ------------ ------------
Non-interest expense:
General and administrative:
Compensation and benefits 27,702 24,779 106,704 92,823
Occupancy, equipment and systems 13,525 13,067 53,125 52,390
Federal deposit insurance premiums 500 503 1,996 1,996
Advertising 1,251 688 4,806 4,947
Other 5,863 5,034 29,196 26,611
------------ ------------ ------------ ------------
Total general and administrative 48,841 44,071 195,827 178,767
Extinguishment of debt 2,202 -- 2,202 --
Amortization of goodwill -- 4,769 -- 19,078
------------ ------------ ------------ ------------
Total non-interest expense 51,043 48,840 198,029 197,845
------------ ------------ ------------ ------------
Income before income tax expense and cumulative effect of
accounting change 90,868 83,361 371,495 345,190
Income tax expense 29,804 28,554 123,066 120,036
------------ ------------ ------------ ------------
Income before cumulative effect of accounting change 61,064 54,807 248,429 225,154
Cumulative effect of accounting change, net of tax -- -- -- (2,294)
------------ ------------ ------------ ------------
Net income 61,064 54,807 248,429 222,860
Preferred dividends declared (1,500) (1,500) (6,000) (6,000)
------------ ------------ ------------ ------------
Net income available to common shareholders $ 59,564 $ 53,307 $ 242,429 $ 216,860
============ ============ ============ ============
Basic earnings per common share:
Income before accounting change $ 0.73 $ 0.62 $ 2.90 $ 2.43
Cumulative effect of accounting change, net of tax -- -- -- (0.03)
------------ ------------ ------------ ------------
Net basic earnings per common share $ 0.73 $ 0.62 $ 2.90 $ 2.40
============ ============ ============ ============
Diluted earnings per common share:
Income before accounting change $ 0.73 $ 0.61 $ 2.85 $ 2.38
Cumulative effect of accounting change, net of tax -- -- -- (0.03)
------------ ------------ ------------ ------------
Net diluted earnings per common share $ 0.73 $ 0.61 $ 2.85 $ 2.35
============ ============ ============ ============
Basic weighted average common shares 81,086,769 86,290,774 83,514,927 90,450,157
Diluted weighted average common and common
equivalent shares 81,945,229 87,756,068 84,919,651 92,174,012
Page 11
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
At or For the At or For the
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -----------------------------
2002 2001 2002 2001
------ ------ ----------- -----------
(Annualized)
SELECTED RETURNS AND FINANCIAL RATIOS
Return on average stockholders' equity (1) 15.66% 14.09% 15.87% 14.13%
Return on average tangible stockholders' equity (1) 17.77 16.02 18.00 16.13
Return on average assets (1) 1.11 0.97 1.12 0.99
General and administrative expense to average assets 0.89 0.78 0.88 0.79
Efficiency ratio (2) 34.42 33.09 34.25 32.68
Net interest rate spread 2.10 1.87 2.11 1.91
Net interest margin 2.16 2.05 2.23 2.12
SELECTED CASH RATIOS (3)
Cash return on average stockholders' equity 16.40% 16.12% 16.53% 15.84%
Cash return on average tangible stockholders' equity 18.61 18.33 18.75 18.09
Cash return on average assets 1.16 1.11 1.17 1.11
Cash general and administrative expense
to average assets 0.83 0.72 0.84 0.76
Cash efficiency ratio (2) 32.36 30.74 32.46 31.21
ASSET QUALITY DATA (DOLLARS IN THOUSANDS)
Non-performing loans/total loans 0.29% 0.31%
Non-performing loans/total assets 0.16 0.16
Non-performing assets/total assets 0.16 0.18
Allowance for loan losses/non-performing loans 242.04 221.70
Allowance for loan losses/non-accrual loans 249.53 229.60
Allowance for loan losses/total loans 0.69 0.68
Net charge-offs to average loans outstanding 0.00% 0.02% 0.01 0.01
Non-performing assets $ 35,608 $ 40,103
Non-performing loans 34,517 37,116
Loans 90 days past maturity but still accruing 1,035 1,277
Non-accrual loans 33,482 35,839
Net charge-offs $ 102 $ 722 1,046 1,674
CAPITAL RATIOS (ASTORIA FEDERAL)
Tangible 7.23% 5.88%
Core 7.23 5.88
Risk-based 15.44 13.75
OTHER DATA
Cash dividends paid per common share $ 0.20 $ 0.17 $ 0.77 $ 0.61
Book value per common share 17.73 16.44
Tangible book value per common share 15.55 14.40
Average equity/average assets 7.08% 6.86% 7.07% 7.01%
Mortgage loans serviced for others (in thousands) $ 2,671,085 $ 3,322,087
Full time equivalent employees 1,956 1,885
(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 December 31, 2001 and $19.1 million for the
year ended December 31, 2001.
(2) The efficiency ratio represents general and administrative expense divided
by the sum of net interest income plus non-interest income.
(3) 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 December 31, 2002 and
2001, a non-cash charge for amortization of employee stock plans of $2.9
million in 2002 and $3.1 million in 2001 and amortization of goodwill of
$4.8 million in 2001. For the year ended December 31, 2002 and 2001, a
non-cash charge for amortization of employee stock plans of $10.2 million
in 2002 and $8.0 million in 2001 and amortization of goodwill of $19.1
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.
Page 12
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Three Months Ended December 31,
--------------------------------------------------------------------------------------
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 $ 9,650,104 $ 142,101 5.89% $ 10,226,005 $ 170,263 6.66%
Multi-family, commercial
and construction 2,340,428 44,963 7.68 1,662,506 34,599 8.32
Consumer and other loans (1) 366,254 4,912 5.36 234,269 4,140 7.07
------------ --------- --------------- ---------
Total loans 12,356,786 191,976 6.21 12,122,780 209,002 6.90
Mortgage-backed securities (2) 6,886,092 88,350 5.13 7,021,780 107,620 6.13
Other securities (2) (3) 771,038 13,477 6.99 1,212,829 21,023 6.93
Federal funds sold and
repurchase agreements 498,048 1,914 1.54 1,226,800 6,655 2.17
------------ --------- --------------- ---------
Total interest-earning assets 20,511,964 295,717 5.77 21,584,189 344,300 6.38
--------- ---------
Non-interest-earning assets 1,526,754 1,099,957
------------ ---------------
Total assets $ 22,038,718 $ 22,684,146
============ ===============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,818,110 4,489 0.64 $ 2,558,805 9,114 1.42
Certificates of deposit 5,185,574 52,633 4.06 5,212,529 65,581 5.03
NOW 1,359,038 526 0.15 1,135,550 796 0.28
Money market 1,744,120 4,880 1.12 1,925,626 12,667 2.63
------------ --------- --------------- ---------
Total deposits 11,106,842 62,528 2.25 10,832,510 88,158 3.26
Borrowed funds 8,999,131 122,185 5.43 9,896,888 145,571 5.88
------------ --------- --------------- ---------
Total interest-bearing liabilities 20,105,973 184,713 3.67 20,729,398 233,729 4.51
--------- ---------
Non-interest-bearing liabilities 372,728 398,433
------------ ---------------
Total liabilities 20,478,701 21,127,831
Stockholders' equity 1,560,017 1,556,315
------------ ---------------
Total liabilities and stockholders' equity $ 22,038,718 $ 22,684,146
============ ===============
Net interest income/net interest
rate spread $ 111,004 2.10% $ 110,571 1.87%
========= ======== ========= =========
Net interest-earning assets/net
interest margin $ 405,991 2.16% $ 854,791 2.05%
============ ======== =============== =========
Ratio of interest-earning assets
to interest-bearing liabilities 1.02x 1.04x
===== =====
(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.
Page 13
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Twelve Months Ended December 31,
-------------------------------------------------------------------------------
2002 2001
-------------------------------------- -------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------ ----------- -------- ------------ ------------ -------
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 10,077,810 $ 626,251 6.21% $ 10,069,593 $ 694,596 6.90%
Multi-family, commercial
and construction 2,072,805 162,677 7.85 1,487,504 124,163 8.35
Consumer and other loans (1) 307,103 17,623 5.74 206,903 17,853 8.63
------------ ----------- ------------ ------------
Total loans 12,457,718 806,551 6.47 11,764,000 836,612 7.11
Mortgage-backed securities (2) 6,599,887 377,623 5.72 7,282,666 462,621 6.35
Other securities (2) (3) 1,011,280 69,211 6.84 1,519,647 107,315 7.06
Federal funds sold and
repurchase agreements 766,906 12,877 1.68 940,394 32,015 3.40
------------ ----------- ------------ ------------
Total interest-earning assets 20,835,791 1,266,262 6.08 21,506,707 1,438,563 6.69
----------- ------------
Non-interest-earning assets 1,302,014 1,008,224
------------ ------------
Total assets $ 22,137,805 $ 22,514,931
============ ============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,754,000 29,096 1.06 $ 2,495,532 46,283 1.85
Certificates of deposit 5,203,610 223,216 4.29 5,223,163 283,125 5.42
NOW 1,269,866 3,176 0.25 1,075,524 5,097 0.47
Money market 1,876,107 32,512 1.73 1,734,232 65,484 3.78
------------ ----------- ------------ ------------
Total deposits 11,103,583 288,000 2.59 10,528,451 399,989 3.80
Borrowed funds 9,097,198 513,838 5.65 10,014,736 581,616 5.81
------------ ----------- ------------ ------------
Total interest-bearing liabilities 20,200,781 801,838 3.97 20,543,187 981,605 4.78
----------- ------------
Non-interest-bearing liabilities 372,050 394,302
------------ ------------
Total liabilities 20,572,831 20,937,489
Stockholders' equity 1,564,974 1,577,442
------------ ------------
Total liabilities and stockholders' equity $ 22,137,805 $ 22,514,931
============ ============
Net interest income/net interest
rate spread $ 464,424 2.11% $ 456,958 1.91%
=========== ======== ============ ======
Net interest-earning assets/net
interest margin $ 635,010 2.23% $ 963,520 2.12%
============ ======== ============ ======
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x 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.