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Exhibit 99.3
UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following Unaudited Pro Forma Combined Condensed Consolidated
Statement of Financial Condition combines the historical Consolidated Statements
of Financial Condition of the Company and the Greater giving effect to the
consummation of the Greater's merger into the Association, using the purchase
method of accounting and giving effect to the related pro forma adjustments
described in the accompanying Notes to the Unaudited Pro Forma Combined
Condensed Consolidated Financial Statements. A description of the Merger, which
was consummated following the close of business on September 30, 1997, is set
forth in Item 2 of the Company's Form 8-K Current Report dated October 3, 1997
and is incorporated by reference herein. The following pro forma combined
condensed consolidated financial information is required pursuant to Article 11
of Regulation S-X. The Unaudited Pro Forma Combined Condensed Consolidated
Statements of Operations for the Year Ended December 31, 1996 and the Nine
Months Ended September 30, 1997 combine the historical consolidated statements
of operations of the Company and the Greater giving effect to the Merger as if
the Merger had become effective on January 1, 1996, using the purchase method of
accounting and giving effect to the related pro forma adjustments described in
the accompanying Notes to the Unaudited Pro Forma Combined Condensed
Consolidated Financial Statements.
The unaudited pro forma combined condensed consolidated financial
statements included herein are presented for informational purposes only. This
information includes various estimates and may not necessarily be indicative of
the financial position or results of operations that would have occurred if the
Merger had been consummated on the date or at the beginning of the periods
indicated or which may be obtained in the future. The Unaudited Pro Forma
Combined Condensed Consolidated Statements of Operations for the Year Ended
December 31, 1996 and the Nine Months Ended September 30, 1997 do not reflect
anticipated cost savings to be recognized by the Company subsequent to the
consummation of the Merger. The unaudited pro forma combined condensed
consolidated financial statements and accompanying notes should be read in
conjunction with and are qualified in their entirety by reference to the
historical financial statements and related notes thereto of the Company and the
Greater which are incorporated by reference herein.
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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND THE GREATER NEW YORK SAVINGS
BANK AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL CONDITION AS OF SEPTEMBER 30, 1997
(IN THOUSANDS)
HISTORICAL PRO FORMA PRO FORMA
COMPANY GREATER ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
ASSETS
Cash and due from banks ............................... $ 96,537 $ 21,247 $ (74,428)(E) $ 43,356
Federal funds sold and repurchase agreements .......... 67,000 8,175 -- 75,175
Securities available-for-sale (at estimated fair value) 1,860,464 196,340 1,068,502 (F) 3,125,306
Securities held-to-maturity ........................... 2,222,270 1,064,776 3,726 (D) 2,222,270
(1,068,502)(F)
Federal Home Loan Bank of New York Stock .............. 35,800 24,250 -- 60,050
Loans and real estate held-for-sale ................... -- -- 269,358 (F) 223,106
(46,252)(D)
Loans receivable ...................................... 3,365,417 917,561 13,131 (D) 4,057,761
(238,348)(F)
Less allowance for loan losses ...................... (14,464) (40,357) 14,830 (D) (39,991)
------------ ------------ ------------ ------------
Loans receivable, net ............................... 3,350,953 877,204 (210,387) 4,017,770
Real estate owned and investments in real estate, net . 10,111 31,385 (31,010)(F) 10,486
Accrued interest receivable ........................... 44,348 12,840 -- 57,188
Premises and equipment, net ........................... 84,435 29,630 (2,319)(D) 111,746
Excess of cost over fair value of net assets acquired
and other intangibles ............................... 93,937 -- 165,010 (E) 258,947
Other assets .......................................... 38,508 87,229 24,895 (D) 102,862
(19,497)(F)
13,483 (D)
(41,756)(E)
------------ ------------ ------------ ------------
Total Assets ..................................... $ 7,904,363 $ 2,353,076 $ 50,823 $ 10,308,262
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits ............................................ $ 4,559,692 $ 1,598,072 $ 3,240 (D) $ 6,161,004
Borrowed funds ...................................... 2,636,509 507,774 (13,949)(D) 3,130,334
Accrued expenses and other liabilities .............. 98,378 39,209 5,757 (D) 123,847
(19,497)(F)
------------ ------------ ------------ ------------
Total Liabilities ................................ 7,294,579 2,145,055 (24,449) 9,415,185
------------ ------------ ------------ ------------
Stockholders' Equity:
Preferred stock ..................................... -- 2,000 (2,000)(G) 2,000
2,000 (E)
Common stock ........................................ 264 15,669 (15,669)(G) 264
Additional paid-in capital .......................... 341,109 175,287 (175,287)(G) 491,937
150,828 (E)
Retained earnings ................................... 416,840 27,501 (27,501)(G) 416,840
Treasury stock ...................................... (130,465) -- 130,465 (E) --
Net unrealized gains on securities
net of taxes ...................................... 8,258 1,028 (1,028)(G) 8,258
Unallocated common stock held by ESOP ............... (22,247) (13,464) 13,464 (G) (22,247)
Unearned common stock held by the RRPs .............. (3,975) -- -- (3,975)
------------ ------------ ------------ ------------
Total stockholders' equity ....................... 609,784 208,021 75,272 893,077
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity ....... $ 7,904,363 $ 2,353,076 $ 50,823 $ 10,308,262
============ ============ ============ ============
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND THE GREATER NEW YORK SAVINGS
BANK AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO FORMA PRO FORMA
COMPANY GREATER ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
Total interest income .......................... $ 491,174 $ 176,934 $ (6,619)(H) $ 661,489
Total interest expense ......................... 304,481 104,577 (1,144)(H) 407,914
------------ ------------ ------------ ------------
Net interest income ............................ 186,693 72,357 (5,475) 253,575
Provision for loan losses ...................... 3,963 1,500 -- 5,463
------------ ------------ ------------ ------------
Net interest income after provision for
loan losses .................................. 182,730 70,857 (5,475) 248,112
Non-interest income ............................ 13,722 10,797 -- 24,519
Non-interest expense:
General and administrative ................... 96,165 48,151 -- 144,316
Real estate operations, net .................. (2,723) 3,457 -- 734
(Recovery of) provision for real estate losses (1,747) 500 -- (1,247)
Amortization of excess of cost over
fair value of net assets acquired .......... 8,684 -- 11,001(L) 19,685
SAIF recapitalization assessment ............... 28,545 -- -- 28,545
------------ ------------ ------------ ------------
Total non-interest expense ..................... 128,924 52,108 11,001 192,033
------------ ------------ ------------ ------------
Income before income taxes ..................... 67,528 29,546 (16,476) 80,598
Income taxes ................................... 30,675 11,047 (5,131) 36,591(I)
------------ ------------ ------------ ------------
Net income ..................................... $ 36,853 $ 18,499 $ (11,345) $ 44,007
============ ============ ============ ============
Primary weighted average number of
common stock and common stock
equivalents outstanding during the year ...... 20,872,779 13,528,303 26,658,154(J)
Fully diluted weighted average number
of common stock and common stock equivalents
outstanding during the year .................. 21,581,770 15,134,708 27,367,145(J)
Net income per common share:
Primary ...................................... $ 1.77 $ 0.83 $ 1.43(K)
Fully diluted ................................ $ 1.71 $ 0.77 $ 1.39(K)
============= ============ ===============
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND THE GREATER NEW YORK SAVINGS
BANK AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO FORMA PRO FORMA
COMPANY GREATER ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
Total interest income ........................ $ 401,460 $ 130,323 $ (4,973)(H) $ 526,810
Total interest expense ....................... 252,467 76,150 (879)(H) 327,738
------------ ------------ ------------ ------------
Net interest income .......................... 148,993 54,173 (4,094) 199,072
Provision for loan losses .................... 2,809 21,500 -- 24,309
------------ ------------ ------------ ------------
Net interest income after provision for
loan losses ................................ 146,184 32,673 (4,094) 174,763
Non-interest income (loss) ................... 14,861 (1,289) -- 13,572
Non-interest expense:
General and administrative ................. 71,976 37,165 -- 109,141
Real estate operations, net ................ 276 3,535 -- 3,811
Provision for real estate losses ........... 387 500 -- 887
Amortization of excess of cost over
fair value of net assets acquired ........ 6,330 -- 8,251(L) 14,581
------------ ------------ ------------ ------------
Total non-interest expense ................... 78,969 41,200 8,251 128,420
------------ ------------ ------------ ------------
Income (loss) before income taxes ............ 82,076 (9,816) (12,345) 59,915
Income taxes expense (benefit) ............... 34,543 (3,668) (5,659) 25,216(I)
------------ ------------ ------------ ------------
Net income (loss) ............................ $ 47,533 $ (6,148) $ (6,686) $ 34,699
============ ============ ============ ============
Primary weighted average number of
common stock and common stock equivalents
outstanding during the year ................ 21,092,003 14,169,672 26,877,378(J)
Fully diluted weighted average number
of common stock and common stock equivalents
outstanding during the year ................ 21,211,393 14,169,672 26,996,768(J)
Net income (loss) per common share:
Primary .................................... $ 2.25 $ (0.79) $ 1.12(K)
Fully diluted .............................. $ 2.24 $ (0.79) $ 1.12(K)
============ ============= ===============
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY AND
THE GREATER NEW YORK SAVINGS BANK AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND SEPTEMBER 30, 1997
(A) Basis of Presentation
The Unaudited Pro Forma Combined Condensed Consolidated Statement of
Financial Condition of the Company and the Greater at September 30,
1997 has been prepared as if the Merger had been consummated on that
date. The Unaudited Pro Forma Combined Condensed Consolidated
Statements of Operations for the Year Ended December 31, 1996 and the
Nine Months ended September 30, 1997 were prepared as if the Merger had
been consummated on January 1, 1996. The unaudited pro forma combined
condensed consolidated financial statements are based on the historical
financial statements of the Company and the Greater after giving effect
to the Merger under the purchase method of accounting and the
assumptions and adjustments in the notes that follow.
Assumptions relating to the pro forma adjustments set forth in the
unaudited pro forma combined condensed consolidated financial
statements are summarized as follows:
(i) Estimated fair values - Estimated fair values for securities
held-to-maturity and loans were valued as of September 30, 1997. Their
resulting net purchase premiums are being amortized into interest
income to produce a constant yield-to-maturity. Estimated fair values
for deposits and borrowings were valued based upon interest rates for
comparable products as of September 30, 1997. Their resulting discount
and premium are being accreted and amortized, respectively, into
interest expense on a straight-line basis over their remaining
maturities.
(ii) The amortization of the excess of cost over fair value of net
assets acquired is being amortized on a straight-line basis over a
period of fifteen years.
(iii) Income taxes - a net deferred tax asset was recorded equal to the
deferred tax consequences associated with the differences between the
tax basis and book basis of the assets acquired and liabilities
assumed, using a statutory rate of 43.07%.
(B) The Merger Agreement required the Greater at the written request of the
Company to modify and change certain of its policies and practices,
including loan policies and practices, before the consummation of the
Merger so as to be consistent on a mutually satisfactory basis with
those of the Association subject to compliance with generally accepted
accounting principles and all applicable laws and regulations. During
the third quarter of 1997, the Greater complied with the Company's
request to record an additional provision for loan losses of
$21,000,000. The provision is reflected in the Greater's historical
Consolidated Statement of Operations for the Nine Months Ended
September 30, 1997.
(C) Under the terms of the Merger Agreement, holders of the Greater common
stock received, subject to certain election, allocation and proration
procedures, either 0.50 shares of the Company common stock or $19.00 in
cash for each share of the Greater common stock, subject to 75% of the
Greater common stock being converted into the right to receive the
Company common stock and 25% being converted into the right to receive
cash. The total cost of the transaction is summarized as follows:
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25% CASH 75% STOCK TOTAL
-------- --------- --------
(In thousands)
Greater's total common shares
outstanding (i) $ 73,288 $ 214,658(vii) $287,946
Cash-out and exchanged stock
options (ii) 41 8,571 8,612
Adjustment for shares owned
by the Company (iii) 4,560 (1,936) 2,624
Issuance of Preferred Stock
Series B (iv) -- 62,000 62,000
Total transaction costs 38,295(v) -- 38,295
-------- --------- --------
Totals $116,184(vi) $ 283,293 $399,477
======== ========= ========
<FN>
(i) Based on 15,429,124 shares of the Greater common stock outstanding as
of September 30, 1997 (excluding 240,000 shares owned by the Company -
see item (iii)), of which 25% represents 3,857,281 shares and 75%
represents 11,571,843 shares.
(ii) Represents 36,000 options cashed-out by the Greater's directors and
241,840 options which certain Greater executive officers elected to
exchange for options to purchase the Company common stock.
(iii) Calculated as if the Company elected 100% cash consideration for
240,000 shares previously owned. The previously recorded unrealized
gain on such shares reduced the excess of cost over fair value of net
assets acquired.
(iv) The Company issued 2,000,000 shares of Series B preferred stock at
$1.00 par value, with a liquidation preference of $25 per share.
(v) Total transaction costs of $38,295,000 consist of the following:
Merger-related compensation and severance $22,050,000
Professional services 9,200,000
Systems and facilities conversion and other expenses 7,045,000
(vi) The funds for the 25% cash portion was or will be obtained from the
Company's normal cash flows.
(vii) The Company reissued common stock through its treasury account with an
average cost per share of $22.91. For accounting purposes, the fair
market value of the Company common stock was $37.10 per share, for
determination of total stock consideration.
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(D) Purchase accounting adjustments were estimated as follows:
(In thousands)
Greater's historical net assets at September 30, 1997 $208,021
Total
Net
Adjustment
--------------
Securities held-to-maturity 3,726
Loans and real estate held-for-sale (46,252)
Loans receivable 13,131
Allowance for loan losses 14,830
Premises and equipment (2,319)
Other assets 13,483
Deposits (3,240)
Borrowed funds 13,949
Accrued expenses (5,757)
Deferred taxes 24,895
Total effect on Net Assets 26,446
---------
Total Net Assets Recorded for Acquisition $234,467
---------
(E) The excess of cost over the fair value of net assets acquired (and
related tax effects) is set forth below:
(In thousands)
Total cost:
Cash portion $116,184(1)
Stock portion 283,293
--------
399,477
--------
Fair value of net assets acquired 234,467
--------
Total excess of cost over fair value of net asset acquired $165,010
--------
<FN>
(1) Cash portion consists of $74,428 of funds paid to the
Greater's shareholders upon closing of the Merger and $41,756
of merger-related costs which have been either paid and
deferred by the Greater and the Company or have been
accrued-for by the Company.
(F) Reclassifications of various items were recorded as follows:
Reclassified Amount
From To (In thousands)
Securities held-to-maturity Securities available-for-sale $1,068,502
Loans receivable Loans and real estate held-for-sale $ 238,348
Real estate owned and
investments in real estate, net Loans and real estate held-for-sale $ 31,010
Deferred tax asset Current taxes payable $ 19,497
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(G) Represents purchase accounting adjustments to eliminate the Greater's
stockholders' equity accounts.
(H) Pro forma adjustments to interest income and interest expense were
calculated as followed:
For the Nine Months
For the Year Ended Ended
December 31, 1996 September 30, 1997
----------------- ------------------
(In thousands)
Reduction in interest income on initial cash
outlay to fund acquisition (74,428 x 5.50%) $(4,094) $(3,070)
Amortization of premium on securities ........ (1,972) (1,479)
Amortization of premium on loans ............. (553) (424)
------- -------
Total Net Adjustments - Interest Income ... $(6,619) $(4,973)
======= =======
Amortization on premium on deposits .......... $ 1,514 $ 948
Accretion of discount on borrowings .......... (370) (69)
------- -------
Total Net Adjustments - Interest Expense .. $ 1,144 $ 879
======= =======
(I) Income tax expense was calculated using the Company's actual nine
months ended September 30, 1997 and year ended December 31, 1996
effective rates of 42.1%, and 45.4%, respectively.
(J) Primary and fully diluted weighted average number of common stock and
common stock equivalents utilized for the calculation of earnings per
share for the periods presented were calculated using the Company's
historical weighted average common stock and common stock equivalents
plus 5,785,375 shares issued to Greater shareholders under the terms of
the Merger Agreement.
(K) Net income per common share was adjusted for dividends on preferred
shares of $6,000,000 annually and $4,500,000 for the nine months ended
September 30, 1997.
(L) The following table summarizes the estimated impact of the amortization
and accretion of the purchase accounting adjustments made in connection
with the Merger on the Company's results of operations for the next
five years:
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($ in thousands)
Projected Future Excess of Cost Over Net Net Decrease
Amounts for the Year Fair Value of (Accretion) in Income
Ended December 31 Net Assets Acquired Amortization Before Taxes
----------------- ------------------- ------------ ------------
1997 $ 11,001 $ 1,381 $ 12,382
1998 11,001 1,366 12,367
1999 11,001 2,136 13,137
2000 11,001 2,548 13,549
2001 11,001 2,579 13,580
2002 and thereafter 110,005 14,052 124,057
--------- ------------ ------------
$ 165,010 $ 24,062 $ 189,072
========= ============ ============
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