New York Community Bancorp, Inc. Reports an 84% Increase in 2nd Quarter 2002
Diluted GAAP EPS to $0.57; Raises Earnings Guidance for 2002 & Issues Earnings
Guidance for 2003
WESTBURY, N.Y.--(BUSINESS WIRE)--July 17, 2002--New York Community
Bancorp, Inc. (Nasdaq:NYCB)--
Company Estimates 2002 Diluted GAAP EPS of $2.13 - $2.15;
2003 Diluted GAAP EPS of $2.48 - $2.52
New York Community Bancorp, Inc. (Nasdaq: NYCB) today reported
second quarter 2002 earnings of $58.1 million, up 210.9% from $18.7
million in the second quarter of 2001. Included in the 2002 amount
were after-tax net securities gains of $4.1 million, which contributed
$0.04 per share to second quarter 2002 diluted earnings per share of
$0.57, up 83.9% from $0.31 in the year-earlier three months. Excluding
the after-tax gains, the Company's second quarter 2002 earnings would
have risen 189.2% to $54.1 million, and generated a 71.0% increase in
diluted earnings per share to $0.53.(1)
For the six months ended June 30, 2002, the Company reported
earnings of $104.5 million, up 125.4% from $46.3 million for the first
six months of 2001. The 2002 amount was equivalent to $1.03 on a
diluted per share basis, up from $0.75 per diluted share in the
year-earlier six months. While the 2002 amounts include after-tax net
securities gains of $5.1 million, or $0.05 per share, the 2001 amounts
include an after-tax gain of $10.3 million, or $0.17 per share, on the
sale of loans and securities in the first quarter of the year.
Excluding the respective after-tax gains, the Company's six-month 2002
earnings would have risen 175.4% to $99.4 million, and generated a
66.1% increase in diluted earnings per share to $0.98.(1)
The Company's earnings for the three and six months ended June
30, 2002 provided returns on average assets of 2.34% and 2.18%,
respectively, and returns on average stockholders' equity of 20.67%
and 19.83%.
Commenting on the Company's second quarter 2002 performance,
President and Chief Executive Officer Joseph R. Ficalora stated, "Our
second quarter earnings are, in many ways, a reflection of all we have
accomplished over the past 19 months. The momentum that began with our
acquisition of Haven Bancorp in November 2000 was enhanced by our
merger with Richmond County Financial Corp. eight months later, and
has continued with the subsequent restructuring and leveraging of our
balance sheet. The successful completion of our secondary offering in
May added more horsepower to our engine, and contributed to our
impressive second quarter 2002 asset and earnings growth. We are,
today, a highly successful $10.2 billion institution, with a
profitable and well-established niche in the multi-family lending
market; a highly efficient franchise with 108 full-service branches; a
consistently strong record of asset quality; and strong prospects for
future growth. We are also an institution with a record of significant
earnings accretion: despite the issuance of 66.5 million shares
pursuant to our recent offering and our two merger transactions, our
split-adjusted three-month diluted EPS is up 185% since we announced
the Haven acquisition two years ago. Our average assets have also
grown during this time, to $9.9 billion, up 400% from the second
quarter 2000 amount.
"We've also provided significant value to our investors," Mr.
Ficalora continued. "Our current price is 68% higher than the
split-adjusted price at which we traded the last day of 2000, which
then represented a P/E multiple of 19.9. Our current price/earnings
multiple is substantially lower--despite the significant asset and
earnings growth accomplished over the 18-month period, and implied in
our earnings projections for 2003. Based on the diluted GAAP earnings
per share we are currently projecting, our current price reflects a
2003 P/E multiple of approximately 11.
"The offering had the desired effect of boosting our tangible
equity to a level more in line with our peer group; at June 30, 2002,
our tangible stockholders' equity rose 72% to $534.1 million from the
year-end 2001 level, representing a 60% increase in tangible book
value per share. The majority of the proceeds were deployed into
multi-family loan originations, and the purchase of securities with a
favorable yield," Mr. Ficalora said. "Mortgage originations totaled
approximately $900 million for the quarter, including $733 million of
multi-family mortgage loans. Putting these numbers in context, our
previous mortgage origination record was $512 million in a quarter,
including $399 million of multi-family loans.
"The leveraged growth of our balance sheet is also apparent in the
growth of our securities portfolio. We have been vigilant in our
efforts to capitalize on the yield curve, the steepest one we've
experienced since 1993.
"Another recent achievement of note was the securitization of a
significant portion of our one-to-four family mortgage loan
portfolio," Mr. Ficalora stated. "In addition to sharpening our focus
on the multi-family market, the recent securitization supports our
objective of reducing the Bank's exposure to credit and interest rate
risk. The securitization was just the latest in a series of actions
we've taken since the Haven acquisition that have resulted in a more
risk-averse balance sheet. To date, assets totaling $4.3 billion have
been restructured, including loans and securities sold of $2.1
billion; loan repayments of $1.6 billion; and the $572 million in
loans securitized in May.
"The impact of each of these actions is apparent in our second
quarter net interest income," Mr. Ficalora continued, "which was up
164% from the year-earlier level and, on a linked-quarter basis, up
15%. The growth in our spread and margin was also quite substantial:
more than 100 basis points apiece on a year-over-year basis and, on a
linked-quarter basis, an average of 30 basis points each.
"Another trend that was reaffirmed by our second quarter
performance was an increase in revenues from third-party product
sales. Despite the divestiture of 14 branches early in the quarter, we
recorded a material increase in other income due, in part, to our
continued focus on the sale of investment products, as opposed to CDs.
As a result of our efforts, we have, today, a 62% core deposit ratio,
and a more efficient, more customer-oriented franchise than we ever
had before.
"Given the strength of our earnings to date, and our prospects
going forward, we are increasing our earnings estimates for 2002, and
providing initial guidance for 2003," Mr. Ficalora said. "We now
believe that our 2002 diluted GAAP earnings per share will range from
$2.13 to $2.15, including the $0.05 in net securities gains already
recorded, and that our 2003 results will range from $2.48 to $2.52 per
diluted share, excluding net securities gains. At the upper end of the
range, the 2003 estimate is 20% higher than our 2002 diluted EPS
projection, when the net securities gains are excluded, and 5.4%
higher than the current 2003 Street EPS consensus estimate of $2.39.
"We expect our earnings growth to be fueled by higher net interest
income, expanding spreads and margins, and an increase in other
operating income derived from fee income and revenues from third-party
product sales," Mr. Ficalora commented. "With the implementation of
additional cost controls, and a stabilized tax rate in the range of
32% to 34% going forward, we believe that these earnings forecasts are
well within our reach. We have been preparing for adversity since
early 2000 and, on a relative basis, believe we should do better than
our sector during the uncertain period ahead."
Earnings Summary for the Three Months Ended June 30, 2002
Interest Income
The Company recorded interest income of $152.3 million in the
current second quarter, up $74.0 million from the level recorded in
the year-earlier three months. The 94.5% growth rate reflects a $4.4
billion rise in the average balance of interest-earning assets to $8.5
billion, which more than offset a 35-basis point drop in the average
yield to 7.15%. The growth in interest-earning assets was primarily
driven by the Richmond County merger, the record level of loan
production over the past four quarters, and the Company's investments
in mortgage-backed securities. Mortgage and other loans generated
interest income of $105.7 million, up $42.6 million, or 67.5%, from
the year-earlier amount. The increase was fueled by a $2.3 billion, or
71.2%, rise in the average balance of loans to $5.5 billion,
representing 64.8% of average interest-earning assets, which offset a
14-basis point reduction in the average yield to 7.66%.
Mortgage-backed securities generated interest income of $37.0 million,
up $29.7 million, reflecting a $2.0 billion rise in the average
balance to $2.4 billion, which was tempered by a 22-basis point drop
in the average yield to 6.10%. Mortgage-backed securities represented
28.5% of average interest-earning assets in the second quarter of
2002.
Interest Expense
Interest expense rose $14.8 million, or 35.0%, to $56.9 million,
the net effect of a $4.0 billion increase in the average balance of
interest-bearing liabilities to $8.0 billion and a 140-basis point
reduction in the average cost of funds to 2.86%. While the higher
average balance of interest-bearing liabilities reflects increases in
borrowings and all other sources of funding, the lower cost reflects
the increased concentration of core deposits within the mix of funding
sources, the Company's focus on the sale of third-party products in
lieu of higher cost deposits, and the significant downward repricing
of CDs. Borrowings generated $31.8 million of second quarter 2002
interest expense, up $19.7 million, the net effect of a $2.1 billion
increase in the average balance to $3.2 billion, reflecting the
aforementioned leveraging program, and a 65-basis point decline in the
average cost to 4.05%. At the same time, the interest expense
generated by other sources of funds declined $5.0 million to $25.0
million, as a $2.1 billion rise in the combined average balance to
$5.3 billion was offset by a 191-basis point decline in the average
cost of funds to 1.89%. Included in the higher average balance was a
$295.5 million rise in average non-interest-bearing deposits to $480.7
million.
Net Interest Income
The results of the Company's leveraged growth strategy are
reflected in the level of its net interest income, and in the
significant expansion of its interest rate spread and net interest
margin. In the second quarter of 2002, net interest income rose to
$95.4 million, up $12.4 million on a linked-quarter basis and up $59.2
million year-over-year. At 4.29%, the Company's spread was 29 basis
points wider than the linked-quarter measure and 105 basis points
wider than the spread recorded in the second quarter of 2001.
Similarly, its net interest margin, at 4.48%, was 32 basis points and
101 basis points wider than the measures recorded in the respective
earlier periods.
Provision for Loan Losses
The provision for loan losses was once again suspended, reflecting
management's assessment of the coverage provided by the current loan
loss allowance, which considers, among other factors, the quality of
the Company's loan portfolio.
Other Operating Income
In addition to the significant growth in its second quarter net
interest income, the Company recorded a significant rise in other
operating income, year-over-year. Other operating income rose $16.9
million, or 151.4%, to $28.0 million in the current second quarter,
the result of a $3.0 million rise in fee income to $10.8 million, a
$7.9 million rise in other income to $10.9 million, and a $5.9 million
rise in net securities gains to $6.3 million. Excluding the net
securities gains, other operating income rose $11.0 million
year-over-year to $21.7 million, representing 18.6% of total revenues
in the second quarter of 2002. The growth in fee income largely
reflects the merger-related expansion of the branch network, while the
growth in other income reflects revenues from third-party product
sales, income from the Company's investment in Bank-owned Life
Insurance ("BOLI"), and income from the Company's 100% equity interest
in Peter B. Cannell & Co., Inc. ("PBC"), an investment advisory firm.
Non-interest Expense
The Company recorded non-interest expense of $34.8 million in the
current second quarter, up from $19.0 million in the year-earlier
three months. Operating expense accounted for $33.3 million and $17.6
million, respectively, of the 2002 and 2001 totals, while the
amortization of core deposit intangibles ("CDI") accounted for the
remaining $1.5 million in the current second quarter and the
amortization of goodwill accounted for the remaining $1.5 million in
the year-earlier three months. The Company adopted SFAS Nos. 141 and
142 on January 1, 2002; accordingly, the goodwill stemming from the
Haven acquisition has been discontinued; the amortization of the CDI
stemming from the Richmond County merger is expected to continue
through 2011.
The higher level of operating expense reflects the net addition of
22 branches to the franchise, and the first quarter 2002 acquisition
of the remaining 53% equity interest in PBC. Compensation and benefits
expense rose $11.3 million to $19.2 million in the current second
quarter, while occupancy and equipment expense rose $1.9 million to
$5.6 million. Partly reflecting promotional costs, and the costs of
supporting an expanded branch network, general and administrative
("G&A") expense rose $1.7 million to $7.0 million; other expense rose
approximately $900,000 to $1.6 million. The increase in operating
expense was sufficiently offset by the growth in net interest income
and other operating income to produce an improvement in the efficiency
ratio to 27.00% in the current second quarter from 37.11% in the
year-earlier three months.
Income Tax Expense
Largely reflecting a $60.3 million rise in pre-tax income to $88.6
million, income tax expense rose $20.9 million year-over-year to $30.5
million. The higher level of pre-tax income earned in the current
second quarter also resulted in an increase in the effective tax rate
to 34.39%.
Earnings Summary for the Six Months Ended June 30, 2002
Interest Income
The Company recorded interest income of $293.4 million in the
current six-month period, up $130.8 million from the level recorded in
the year-earlier six months. The 80.4% increase was fueled by a $4.0
billion rise in the average balance of interest-earning assets to $8.3
billion, which more than offset a 44-basis point decline in the
average yield to 7.12%. The growth in interest-earning assets was
driven by the Richmond County merger, the record level of mortgage
loan production, and the Company's investments in mortgage-backed
securities.
Mortgage and other loans generated interest income of $206.1
million, up $72.5 million, or 54.3%, from the year-earlier amount. The
increase stemmed from a $2.0 billion, or 56.6%, rise in the average
balance of loans to $5.5 billion, representing 65.8% of average
interest-earning assets, and was tempered by a five-basis point drop
in the average yield to 7.60%. Mortgage-backed securities generated
interest income of $69.3 million in the current six-month period, up
$59.2 million from the level recorded in the first six months of 2001.
The increase was fueled by a $2.0 billion rise in the average balance
to $2.3 billion, representing 27.7% of average interest-earning
assets, and tempered by a 37-basis point drop in the average yield to
6.07%.
Interest Expense
Interest expense rose $23.6 million, or 25.8%, to $114.9 million
in the current six-month period, the net effect of a $3.7 billion
increase in the average balance of interest-bearing liabilities to
$7.8 billion and a 154-basis point reduction in the average cost of
funds to 2.97%. Borrowings produced six-month 2002 interest expense of
$60.9 million, up $32.8 million from the year-earlier amount. The
increase was the net effect of a $1.9 billion rise in the average
balance to $2.9 billion and a 124-basis point decline in the average
cost of such funds to 4.24%. At the same time, the interest expense
produced by other sources of funds declined $9.2 million to $54.0
million, as a $2.1 billion rise in the average balance to $5.4 billion
was offset by a 190-basis point decline in the average cost to 2.03%.
Reflected in the higher average balance of other funding sources was a
$265.4 million rise in average non-interest-bearing deposits to $463.8
million.
Net Interest Income
The Company's net interest income rose 150.2% in the current
six-month period from the level recorded in the first six months of
2001. Boosted by the significant growth in interest-earning assets,
net interest income rose to $178.5 million, up $107.2 million from the
year-earlier amount. The growth in net interest income was paralleled
by an expanding spread and margin, with the former measure rising 110
basis points year-over-year to 4.15%, and the latter measure rising
102 basis points year-over-year to 4.33%.
Other Operating Income
The Company recorded other operating income of $47.8 million in
the current six-month period, up $8.2 million, or 20.1%, from the
six-month 2001 amount. Fee income accounted for $6.3 million of the
increase, having risen 39.8% to $22.0 million, while other income
accounted for $3.1 million of the increase, having grown 20.5% to
$18.0 million. The higher levels of fee and other income were partly
tempered by a $1.2 million reduction in net securities gains to $7.8
million, absent which the Company would have recorded other operating
income of $40.0 million. While the benefit of the Richmond County
merger is reflected in the higher levels of both fee and other income,
the latter increase also reflects revenues from third-party product
sales, income from the Company's BOLI investment, and revenues
generated by the Company's first quarter 2002 investment in the
remaining 53% equity interest in PBC.
Non-interest Expense
In the first six months of 2002, the Company recorded non-interest
expense of $70.0 million, up $30.0 million from the level recorded in
the first six months of 2001. The 2002 amount reflects a $30.0 million
increase in operating expense to $67.0 million, and CDI amortization
in the amount of $3.0 million. The latter amount was comparable to the
amount of goodwill amortization recorded in the six months ended June
30, 2001.
The year-over-year increase in operating expense stemmed from all
expense categories: an $18.1 million rise in compensation and benefits
expense to $35.7 million; a $4.6 million rise in occupancy and
equipment expense to $11.7 million; a $5.6 million rise in G&A expense
to $16.6 million; and a $1.7 million rise in other operating expense
to $3.1 million. The higher costs were primarily due to the Richmond
County merger and the PBC acquisition, which generated additions in
staff and office space. The growth in operating expense was
sufficiently offset by the higher levels of net interest income and
other operating income to produce a 374-basis point improvement in the
efficiency ratio to 29.60%.
Income Tax Expense
Reflecting an $85.3 million increase in pre-tax income to $156.3
million, the Company recorded income tax expense of $51.8 million,
with an effective tax rate of 33.17%, in the current six-month period,
as compared to $24.7 million, with an effective tax rate of 34.73%, in
the six months ended June 30, 2001.
Balance Sheet Summary
Notwithstanding the sale of securities in the current second
quarter, the Company recorded a $1.0 billion, or 11.3%, rise in total
assets from the December 31, 2001 level to $10.2 billion at June 30,
2002. Asset growth was primarily driven by a record level of mortgage
loan production, with six-month originations exceeding $1.4 billion,
including approximately $900 million during the second quarter of the
year. The second quarter production was consistent with the planned
leveraging of the proceeds from the Company's aforementioned secondary
offering. With another $605.0 million in the pipeline two weeks into
the third quarter, the Company is on target to achieve or exceed its
loan production projections for 2002.
Loans
Consistent with the Company's focus on multi-family mortgage
lending, the portfolio of multi-family mortgage loans rose $774.4
million, or 23.8%, to $4.0 billion, representing 76.6% of total
mortgage loans at June 30, 2002. The average loan in the portfolio had
a principal balance of $1.7 million and a loan-to-value ratio of
58.8%. Multi-family mortgage loans represented $733.3 million, or
81.6%, of second quarter originations, and $1.1 billion, or 80.2%, of
originations year-to-date.
Largely reflecting the securitization of one-to-four family
mortgage loans totaling $572.5 million, the portfolio of one-to-four
family mortgage loans declined $750.5 million to $567.8 million at
June 30, 2002. While the growth in multi-family mortgage loans offset
the bulk of the reduction in one-to-four family loans outstanding,
total mortgage loans declined $30.1 million to $5.3 billion at that
date. The decline in outstanding mortgage loans was partly offset by a
$42.2 million rise in commercial real estate loans to $519.8 million,
after six-month originations of $100.7 million, including $81.9
million in the second quarter of 2002. At the same time, the balance
of construction loans declined $6.2 million to $146.2 million, after
six-month originations of $50.6 million, including second quarter
originations of $24.9 million. Other loans, meanwhile, declined $28.7
million to $88.2 million, largely reflecting the sale of home equity
loans in the second quarter of the year.
Asset Quality
The Company's record of asset quality was extended in the current
second quarter, with no net charge-offs being recorded, and with
non-performing assets declining $1.0 million from the March 31, 2002
level and $3.9 million from the level recorded at December 31, 2001.
At June 30, 2002, non-performing assets totaled $13.8 million,
representing 0.14% of total assets, as compared to $14.9 million, or
0.16% of total assets, and $17.7 million, or 0.19% of total assets, at
the respective earlier dates.
Non-performing loans totaled $13.7 million, or 0.26% of loans,
net, at the close of the second quarter, as compared to $14.6 million,
or 0.27% of loans, net, and $17.5 million, or 0.33% of loans, net, at
March 31, 2002 and December 31, 2001, respectively. Included in the
June 30, 2002 amount were mortgage loans in foreclosure of $11.2
million and loans 90 days or more delinquent of $2.5 million.
Foreclosed real estate amounted to approximately $145,000 at the close
of the second quarter, as compared to approximately $249,000 at each
of the earlier dates.
Securities and Mortgage-backed Securities
Capitalizing on the favorable yield curve, the Company increased
its investments in short-term mortgage-backed securities during the
first and second quarters, contributing to a $1.1 billion increase in
the balance of securities available for sale to $3.4 billion at June
30, 2002. The increase in the portfolio also reflects the
aforementioned securitization of one-to-four family mortgage loans and
their subsequent reclassification as available-for-sale securities.
Asset growth was also fueled by an $80.8 million increase in
securities held to maturity to $284.0 million, and tempered by a $6.2
million reduction in mortgage-backed securities held to maturity.
While the Company has increased its investments in mortgage-backed
securities, such securities are typically classified as available for
sale.
Core Deposit Intangibles and Goodwill
Primarily reflecting the first quarter 2002 acquisition of the
remaining 53% equity interest in PBC, goodwill, net, rose to $624.4
million at June 30, 2002 from $614.7 million at December 31, 2001. In
accordance with SFAS Nos. 141 and 142, the goodwill stemming from the
Company's acquisition of Haven in 2000 is no longer being amortized;
however, the CDI stemming from the Richmond County merger is being
amortized at a rate of $1.5 million per quarter, or $6.0 million per
year. In accordance with SFAS No. 142, the Company tested its goodwill
as of January 1, 2002 for impairment in the second quarter, and found
none to exist at that date.
Funding Sources
Notwithstanding the aforementioned divestiture of 14 in-store
branches during the second quarter, core deposits rose $225.1 million
from the year-end 2001 balance to $3.3 billion at June 30, 2002. The
2002 amount represented 61.8% of total deposits, and consisted of NOW
and money market accounts of $1.1 billion, savings accounts of $1.7
billion, and non-interest-bearing accounts of $481.6 million. CDs
totaled $2.0 billion at quarter's end, representing 38.2% of total
deposits, having declined $391.0 million from the balance recorded at
December 31, 2001. The net effect of the core deposit growth and the
decline in higher cost deposits was a $165.9 million reduction in
total deposits to $5.3 billion at June 30, 2002.
The restructuring of the Company's liabilities coincides with the
significant volume of third-party products sold throughout the branch
network during the first six months of 2002. While the Company's focus
on investment product sales generates other operating income, it also
supports the establishment of customer relationships.
The Company opened two traditional branches and one supermarket
branch during the second quarter; an additional supermarket branch was
opened on July 14th, bringing the total number of banking offices to
109.
While the Company's leveraging strategy is reflected in the
substantial growth of its assets, it is likewise reflected in its
growing balance of borrowings. At June 30, 2002, the Company's
borrowings totaled $3.5 billion, up $1.0 billion from the December 31,
2001 amount. Included in the 2002 amount were Federal Home Loan Bank
advances of $1.8 billion, reverse repurchase agreements of $1.6
billion, and trust-preferred securities of $191.9 million.
Stockholders' Equity
Stockholders' equity totaled $1.2 billion at June 30, 2002, up
$229.9 million from the balance recorded at December 31, 2001. The
2002 amount was equivalent to 11.85% of total assets and a book value
of $11.58 per share, based on 104,753,036 shares. Tangible
stockholders' equity totaled $534.1 million, representing 5.22% of
total assets and a tangible book value of $5.10 per share. In addition
to the $147.5 million in net proceeds from the sale of 5,865,000
shares in the secondary offering, which were issued from the Treasury
account, and six-month 2002 cash earnings of $126.4 million, the 2002
amount reflects the distribution of cash dividends totaling $36.9
million and the allocation of $50.1 million toward the repurchase of
1,829,982 shares. Under the current share repurchase program, there
were 1,486,805 shares still available for repurchase at June 30, 2002.
New York Community Bancorp, Inc. is the holding company for New
York Community Bank and the ninth largest thrift in the nation, based
on market capitalization at June 30, 2002. The Bank serves its
customers through a network of 109 banking offices in New York City,
Long Island, Westchester County, and New Jersey, and operates through
six divisions: Queens County Savings Bank, Richmond County Savings
Bank, CFS Bank, First Savings Bank of New Jersey, Ironbound Bank, and
South Jersey Bank. In addition to operating the largest supermarket
banking franchise in the metro New York region, with 54 in-store
branches, the Bank is the largest producer of multi-family mortgage
loans for portfolio in New York City.
The Company will host a conference call at 9:30 a.m. Eastern Time
today to discuss its second quarter 2002 performance and its full-year
earnings outlook for 2002 and 2003. The call may be accessed at
www.myNYCB.com, the Company's web site, or by calling 1-800-289-0494
(domestic calls) or 1-913-981-5520 (international calls), and
providing the confirmation code 177056. The conference call will be
archived through 5:00 p.m. on July 26, 2002 at the web site and will
be available through midnight on July 22, 2002 at 1-888-203-1112 for
domestic calls and 1-719-457-0820 for international calls.
Forward-Looking Statements and Associated Risk Factors
This release, and the associated post-earnings conference call and
webcast, contain certain forward-looking statements with regard to the
Company's prospective performance and strategies within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. The Company
intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and is including
this statement for purposes of said safe harbor provisions.
Forward-looking statements, which are based on certain
assumptions, and describe future plans, strategies, and expectations
of the Company, are generally identified by use of the words
"believe," "expect," "intend," "anticipate," "estimate," "project," or
other similar expressions. The Company's ability to predict results or
the actual effects of its plans and strategies are inherently
uncertain. Accordingly, actual results may differ materially from
anticipated results. Factors that could have a material adverse effect
on the operations of the Company and its subsidiaries include, but are
not limited to, changes in market interest rates, general economic
conditions, legislation, and regulation; changes in the monetary and
fiscal policies of the U.S. Government, including policies of the U.S.
Treasury and the Federal Reserve Board; changes in the quality or
composition of the loan or investment portfolios; changes in deposit
flows, competition, and demand for financial services and loan
products in the Company's local markets; changes in local real estate
values; changes in accounting principles and guidelines; war or
terrorist activities; and other economic, competitive, governmental,
regulatory, geopolitical, and technological factors affecting the
Company's operations, pricing, and services.
Specific factors that could cause future results to vary from
current management expectations are detailed from time to time in the
Company's SEC filings, most recently including its Quarterly Report on
Form 10-Q for the three months ended March 31, 2002.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Except as required by applicable law or regulation, the
Company undertakes no obligation to update these forward-looking
statements to reflect events or circumstances that occur after the
date on which such statements were made.
(1) The 2001 amounts have been adjusted to reflect a 3-for-2 stock
split on September 20, 2001.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands)
June 30, December 31,
2002 2001
(unaudited)
--------------- -----------
Assets
Cash and due from banks $ 141,826 $ 168,449
Money market investments 1,152 10,166
Securities held to maturity
(estimated market value of $286,030
and $203,647, respectively) 284,037 203,195
Mortgage-backed securities held to
maturity (estimated market value of
$45,636 and $51,119, respectively) 44,619 50,865
Securities available for sale 3,429,320 2,374,782
Mortgage loans:
Multi-family 4,029,588 3,255,167
1-4 family 562,121 1,318,295
Commercial real estate 519,793 561,944
Construction 146,213 152,367
-------------- ------------
Total mortgage loans 5,257,715 5,287,773
Other loans 88,246 116,968
Less: Unearned loan fees (6,457) (3,054)
Allowance for loan losses (40,500) (40,500)
-------------- ------------
Loans, net 5,299,004 5,361,187
Premises and equipment, net 67,437 69,010
Goodwill, net 624,406 614,653
Core deposit intangible, net 54,500 57,500
Deferred tax asset, net 14,463 40,396
Other assets 279,119 252,432
-------------- ------------
Total assets $ 10,239,883 $ 9,202,635
============== ============
Liabilities and Stockholders' Equity
Deposits:
NOW and money market accounts $ 1,112,290 $ 948,324
Savings accounts 1,673,913 1,639,239
Certificates of deposit 2,016,955 2,407,906
Non-interest-bearing accounts 481,594 455,133
-------------- ------------
Total deposits 5,284,752 5,450,602
-------------- ------------
Official checks outstanding 26,248 87,647
Borrowings 3,545,729 2,506,828
Mortgagors' escrow 34,659 21,496
Other liabilities 135,505 152,928
-------------- ------------
Total liabilities 9,026,893 8,219,501
-------------- ------------
Stockholders' equity:
Preferred stock at par $0.01
(5,000,000 shares authorized;
none issued) -- --
Common stock at par $0.01
(150,000,000 shares authorized;
108,224,425 shares issued;
107,950,268 and 101,845,276
shares outstanding at June 30,
2002 and December 31, 2001,
respectively) 1,082 1,082
Paid-in capital in excess of par 1,011,849 898,830
Retained earnings
(substantially restricted) 182,661 167,511
Less: Treasury stock (274,157
and 6,379,149 shares,
respectively) (5,291) (78,294)
Unallocated common stock held
by ESOP (21,081) (6,556)
Common stock held by SERP (3,113) (3,113)
Unearned common stock held by
RRPs (41) (41)
Accumulated other comprehensive
income, net of tax effect 46,924 3,715
-------------- -------------
Total stockholders' equity 1,212,990 983,134
-------------- -------------
Total liabilities and stockholders'
equity $10,239,883 $9,202,635
============== =============
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ---------------------
2002 2001 2002 2001
-------------------- --------------------
Interest Income:
Mortgage and other loans $105,677 $63,099 $206,130 $133,607
Securities 9,469 5,229 17,711 14,133
Mortgage-backed securities 37,004 7,302 69,317 10,094
Money market investments 153 2,686 276 4,839
-------------------- --------------------
Total interest income 152,303 78,316 293,434 162,673
-------------------- --------------------
Interest Expense:
NOW and money market
accounts 4,063 3,014 7,591 6,950
Savings accounts 5,865 2,183 11,692 4,321
Certificates of deposit 15,116 24,797 34,728 51,978
Borrowings 31,819 12,111 60,915 28,079
Mortgagors' escrow 5 8 10 12
-------------------- --------------------
Total interest expense 56,868 42,113 114,936 91,340
-------------------- --------------------
Net interest income 95,435 36,203 178,498 71,333
Provision for loan losses -- -- -- --
-------------------- --------------------
Net interest income after
provision for loan losses 95,435 36,203 178,498 71,333
-------------------- --------------------
Other Operating Income:
Fee income 10,822 7,789 21,983 15,722
Net securities gains 6,253 369 7,783 8,946
Other 10,906 2,970 18,009 14,941
-------------------- --------------------
Total other operating income 27,981 11,128 47,775 39,609
-------------------- --------------------
Non-interest Expense:
Operating expense:
Compensation and benefits 19,166 7,828 35,653 17,542
Occupancy and equipment 5,575 3,716 11,668 7,088
General and administrative 7,013 5,347 16,574 11,009
Other 1,570 675 3,091 1,348
-------------------- --------------------
Total operating expense 33,324 17,566 66,986 36,987
-------------------- --------------------
Amortization of core deposit
intangible and goodwill 1,500 1,482 3,000 2,964
-------------------- --------------------
Total non-interest expense 34,824 19,048 69,986 39,951
-------------------- --------------------
Income before income taxes 88,592 28,283 156,287 70,991
Income tax expense 30,463 9,588 51,837 24,652
-------------------- --------------------
Net income $58,129 $18,695 $104,450 $ 46,339
==================== ====================
Earnings per share(1) $0.57 $0.31 $1.04 $0.77
Diluted earnings per
share(1) $0.57 $0.31 $1.03 $0.75
==================== ====================
(1) Per share amounts for the three and six months ended June 30, 2001
have been adjusted to reflect a 3-for-2 stock split on September
20, 2001.
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
Three Months Ended June 30,
---------------------------------------
2002
---------------------------------------
Average
Average Yield/
Balance Interest Cost
------------- ---------- ----------
Assets:
Interest-earning assets:
Mortgage and other loans, net $5,535,656 $105,677 7.66%
Securities 550,168 9,469 6.90
Mortgage-backed securities 2,433,053 37,004 6.10
Money market investments 28,992 153 2.12
------------ ---------- ----------
Total interest-earning assets 8,547,869 152,303 7.15
Non-interest-earning assets 1,401,646
-------------
Total assets $9,949,515
=============
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
NOW and money market accounts $1,071,799 $ 4,063 1.52%
Savings accounts 1,682,433 5,865 1.40
Certificates of deposit 2,010,147 15,116 3.02
Borrowings 3,150,866 31,819 4.05
Mortgagors' escrow 61,223 5 0.03
------------- ---------- ----------
Total interest-bearing
liabilities 7,976,468 56,868 2.86
Non-interest-bearing deposits 480,720
Other liabilities 367,666
-------------
Total liabilities 8,824,854
Stockholders' equity 1,124,661
-------------
Total liabilities and
stockholders' equity $9,949,515
=============
Net interest income/interest
rate spread $95,435 4.29%
========== ==========
Net interest-earning assets/
net interest margin $571,401 4.48%
============= ==========
Ratio of interest-earning
assets to interest-bearing
liabilities 1.07x
==========
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
Three Months Ended June 30,
---------------------------------------
2001
---------------------------------------
Average
Average Yield/
Balance Interest Cost
------------- ---------- ---------
Assets:
Interest-earning assets:
Mortgage and other loans, net $3,234,365 $63,099 7.80%
Securities 240,118 5,229 8.71
Mortgage-backed securities 461,991 7,302 6.32
Money market investments 240,237 2,686 4.50
--------------- ---------- ------
Total interest-earning assets 4,176,711 78,316 7.50
Non-interest-earning assets 332,589
-------------
Total assets $4,509,300
=============
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
NOW and money market accounts $ 686,870 $ 3,014 1.76%
Savings accounts 513,419 2,183 1.71
Certificates of deposit 1,738,972 24,797 5.72
Borrowings 1,032,845 12,111 4.70
Mortgagors' escrow 38,233 8 0.08
------------- ---------- -----
Total interest-bearing
liabilities 4,010,340 42,113 4.26
Non-interest-bearing deposits 185,240
Other liabilities 30,951
-------------
Total liabilities 4,266,531
Stockholders' equity 282,769
-------------
Total liabilities and
stockholders' equity $4,509,300
=============
Net interest income/interest
rate spread $36,203 3.24%
========== =========
Net interest-earning assets/
net interest margin $166,372 3.47%
============= =========
Ratio of interest-earning
assets to interest-bearing
liabilities 1.04x
=========
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
Six Months Ended June 30,
---------------------------------------
2002
---------------------------------------
Average
Average Yield/
Balance Interest Cost
------------- ---------- ----------
Assets:
Interest-earning assets:
Mortgage and other loans, net $5,471,297 $206,130 7.60%
Securities 511,720 17,711 6.98
Mortgage-backed securities 2,304,244 69,317 6.07
Money market investments 29,062 276 1.92
------------- ---------- ----------
Total interest-earning assets 8,316,323 293,434 7.12
Non-interest-earning assets 1,285,908
-------------
Total assets $9,602,231
=============
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
NOW and money market accounts $1,033,429 $ 7,591 1.48%
Savings accounts 1,671,789 11,692 1.41
Certificates of deposit 2,152,471 34,728 3.25
Borrowings 2,900,325 60,915 4.24
Mortgagors' escrow 49,234 10 0.04
------------- ---------- ----------
Total interest-bearing
liabilities 7,807,248 114,936 2.97
Non-interest-bearing deposits 463,810
Other liabilities 277,741
-------------
Total liabilities 8,548,799
Stockholders' equity 1,053,432
-------------
Total liabilities and
stockholders' equity $9,602,231
=============
Net interest income/interest
rate spread $178,498 4.15%
========== ==========
Net interest-earning assets/
net interest margin $509,075 4.33%
============= ==========
Ratio of interest-earning
assets to interest-bearing
liabilities 1.07x
==========
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
Six Months Ended June 30,
---------------------------------------
2001
---------------------------------------
Average
Average Yield/
Balance Interest Cost
------------- ---------- ----------
Assets:
Interest-earning assets:
Mortgage and other loans, net $3,493,505 $133,607 7.65%
Securities 294,714 14,133 9.59
Mortgage-backed securities 313,680 10,094 6.44
Money market investments 202,380 4,839 4.83
---------- ---------- ----------
Total interest-earning assets 4,304,280 162,673 7.56
Non-interest-earning assets 314,125
-------------
Total assets $4,618,405
=============
Liabilities and Stockholders'
Equity:
Interest-bearing liabilities:
NOW and money market accounts$ 719,227 $ 6,950 1.95%
Savings accounts 504,366 4,321 1.73
Certificates of deposit 1,793,069 51,978 5.85
Borrowings 1,033,945 28,079 5.48
Mortgagors' escrow 31,023 12 0.08
------------- ---------- ----------
Total interest-bearing
liabilities 4,081,630 91,340 4.51
Non-interest-bearing deposits 198,387
Other liabilities 51,920
-------------
Total liabilities 4,331,937
Stockholders' equity 286,468
-------------
Total liabilities and
stockholders' equity $4,618,405
=============
Net interest income/interest
rate spread $71,333 3.05%
========== ==========
Net interest-earning assets/
net interest margin $222,649 3.31%
============= ==========
Ratio of interest-earning
assets to interest-bearing
liabilities 1.05x
==========
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data)
(unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------------------
2002 2001 2002 2001
---------------------------------------------
REPORTED EARNINGS DATA:
Earnings $58,129 $18,695 $104,450 $46,339
Earnings per share(1) 0.57 0.31 1.04 0.77
Diluted earnings per
share(1) 0.57 0.31 1.03 0.75
Return on average
assets 2.34 % 1.66 % 2.18 % 2.01%
Return on average
stockholders'equity 20.67 26.45 19.83 32.35
Return on average
tangible
stockholders' equity 52.16 44.60 55.78 54.08
Operating expense to
average assets 1.34 1.56 1.40 1.60
Interest rate spread 4.29 3.24 4.15 3.05
Net interest margin 4.48 3.47 4.33 3.31
Efficiency ratio 27.00 37.11 29.60 33.34
Shares used for EPS
computation 101,568,534 60,174,231 100,098,453 60,461,715
Shares used for
diluted EPS
computation 102,736,431 61,335,776 101,175,964 61,421,642
CASH EARNINGS DATA:
Earnings $61,849 $24,394 $126,356 $57,389
Earnings per share(1) 0.61 0.41 1.26 0.95
Diluted earnings per
share(1) 0.60 0.40 1.25 0.93
Return on average
assets 2.49 % 2.16 % 2.63 % 2.49%
Return on average
stockholders' equity 22.00 34.51 23.99 40.07
Operating expense to
average assets 1.28 1.46 1.33 1.51
Efficiency ratio 25.74 34.69 28.28 31.50
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data)
(unaudited)
At June 30, At December 31,
--------------------------------------
2002 2001
----------------- ------------------
BALANCE SHEET DATA:
Book value per share(1) $11.58 $10.05
Tangible book value per
share(1) 5.10 3.18
Regulatory leverage capital
ratio 7.23 % 5.95 %
Stockholders' equity to total
assets 11.85 10.68
Shares used for book value
computation(1) 104,753,036 97,774,030
Total shares issued and
outstanding(1) 107,950,268 101,845,276
ASSET QUALITY RATIOS:
Non-performing loans to loans,
net 0.26 % 0.33 %
Non-performing assets to total
assets 0.14 0.19
Allowance for loan losses to
non-performing loans 295.73 231.46
Allowance for loan losses to
loans, net 0.76 0.76
(1) 2001 amounts have been adjusted to reflect a 3-for-2 stock split
on September 20, 2001.
CONTACT: New York Community Bancorp, Inc.
Ilene A. Angarola, 516/683-4420