Exhibit 99.1
New York Community Bancorp Reports Record 2003 Earnings,
Including a 39% rise in 4Q Diluted EPS to $0.64 -1-
and a 32% rise in 12-Mos. Diluted EPS to $2.20 -1-
WESTBURY, N.Y.--(BUSINESS WIRE)--Jan. 26, 2004--
2004 Diluted EPS Estimates Raised to a Range of $2.85 - $2.90(1)
2003 Performance Highlights
-- Quarter and 12-month net income grew 74% and 41%
year-over-year ("Y-O-Y")
-- ROA & ROE were 2.16% and 19.71% for the quarter, 2.26% and
20.74% for the year
-- Cash ROA & ROE were 2.74% and 24.96% for the quarter, 2.65%
and 24.32% for the year(2)
-- Net interest income grew 50% in the quarter on a sequential
basis and 80% Y-O-Y
-- Fee and other income rose 20% Y-O-Y in the quarter, 16% in the
year
-- The core efficiency ratio was 21.95% for the quarter, 23.59%
for the year(3)
-- The cash efficiency ratio was 20.59% for the quarter, 22.13%
for the year(2)
-- At $2.0 billion, fourth quarter loan originations were up 139%
sequentially, 69% Y-O-Y
-- Multi-family loans totaled $7.4 billion at 12/31/03, up 64% Y-
O-Y; excluding loans acquired in the Roslyn merger,
multi-family loan growth amounted to 33%
-- No net charge-offs were recorded for the 37th consecutive
quarter
New York Community Bancorp, Inc. (NYSE: NYB) today reported
earnings for the first time since completing its merger with Roslyn
Bancorp, Inc. ("Roslyn") on October 31, 2003. Reflecting two months of
combined operations, the Company reported fourth quarter 2003 net
income of $112.1 million, signifying a 74.0% increase from $64.4
million in the fourth quarter of 2002. The 2003 amount was equivalent
to $0.64 on a diluted per share basis, reflecting a 39.1% increase
from $0.46 in the year-earlier three months.(1)(4)
For the twelve months ended December 31, 2003, the Company
reported net income of $323.4 million, signifying a 41.1% increase
from $229.2 million in 2002. The 2003 amount was equivalent to $2.20
on a diluted per share basis, reflecting a 31.7% year-over-year
increase from $1.67.(1)(4)
In addition to the benefits of the Roslyn merger, the Company's
three- and twelve-month 2003 earnings reflect a pre-tax net gain of
$37.6 million stemming from the sale of the branches comprising its
South Jersey Bank Division on December 19, 2003. Equivalent to $22.7
million, or $0.13 per diluted share, on an after-tax basis, the net
gain offset an after-tax merger-related charge of $19.0 million, or
$0.11 per diluted share.
The Company also reported 2003 cash earnings of $379.2 million,
including $141.9 million in the fourth quarter of the year. The
full-year amount was equivalent to $2.58 on a diluted per-share basis,
up 36.5% from $1.89 in the year-earlier twelve months. The fourth
quarter amount was equivalent to $0.81 on a diluted per-share basis,
up 62.0% year-over-year from $0.50. The Company's 2003 cash earnings
thus contributed $55.8 million, or 17.3%, more to tangible capital
than its comparable GAAP earnings; its fourth quarter 2003 cash
earnings contributed $29.9 million, or 26.6%, more to tangible capital
than its comparable GAAP earnings alone.(2)
Commenting on the Company's performance, President and Chief
Executive Officer Joseph R. Ficalora stated, "Our fourth quarter and
full-year performance accomplished two important objectives. First,
they underscored the merits of our merger with Roslyn Bancorp; second,
they underscored our capacity as a multi-family lender and the
magnitude of our multi-family market niche. The first of these was
clearly conveyed by the year-over-year growth in our earnings, and the
second by the record volume of multi-family mortgage loans produced.
"At $0.64, our diluted earnings per share not only exceeded the
Street's expectations, but also our original projections for the
fourth quarter of the year. While $0.02 can be attributed to the sale
of our South Jersey Bank Division in December less certain
merger-related charges, the $0.62 remaining was five cents ahead of
the First Call consensus and represents a year-over-year increase of
35%," Mr. Ficalora said.
"During the quarter, we deployed most of the cash flows derived
from securities sales and repayments into the production of
multi-family mortgage loans," Mr. Ficalora noted. "Originations
totaled $1.6 billion in the quarter, boosting our year-to-date
production past $3.3 billion. That's $1.3 billion, or 64%, above our
2002 volume, and--perhaps even more telling--equal to the total
volume of multi-family loans produced from 2000 through 2002. At
year-end, multi-family loans totaled $7.4 billion; excluding $1.4
billion of such loans acquired in the merger, the year-over-year
portfolio growth was well in excess of the 20% growth originally
projected, amounting to approximately 33%. Total loans rose 91%
year-over-year to $10.5 billion; excluding $3.6 billion of loans
acquired in the merger, the year-over-year portfolio growth was
approximately 26%. With a current pipeline in excess of $1.4 billion,
it would appear that 2004 is off to a solid start, as well," Mr.
Ficalora said.
"While the production of multi-family mortgage loans has been our
primary post-merger focus, the repositioning of our securities
portfolio has also been an important focal point. Securities totaled
$9.5 billion at the end of December, representing a $2.3 billion
reduction since the Roslyn merger was announced.
"Another achievement that augurs well for our 2004 performance was
the level of net interest income we recorded in the fourth quarter of
2003," Mr. Ficalora stated. "At $173 million, our net interest income
was up 50% on a linked-quarter basis and up 80% year-over-year.
Reflecting the record volume of loans produced, as well as the Roslyn
merger, our average balance of interest-earning assets nearly doubled
to $18 billion, reflecting only two months of combined results. In
2004, we would expect to see continued growth in our net interest
income, as we continue to deploy more of our cash flows into
higher-yielding multi-family loans.
"We also were extremely pleased by our fourth quarter spread and
margin," Mr. Ficalora continued. "While we had expected the merger to
produce a substantial level of compression, the actual measures we
recorded were higher than the pro forma measures we had projected when
the merger was announced. Reflecting the change in market interest
rates and the profitable deployment of our cash flows into higher
yielding assets, our fourth quarter spread and margin amounted to
3.80% and 3.84%. Based on the current rate environment, we would
expect to sustain these measures throughout the quarters ahead.
"While line-item growth was a significant component of our
post-merger performance," Mr. Ficalora added, "consistency also proved
to be an important theme. Despite the dramatic growth in the balance
of mortgage loans outstanding, the ratio of non-performing assets to
total assets at the end of December was unchanged from the
year-earlier measure, 0.15%. We also maintained our efficiency,
despite the net expansion of our franchise from 110 to 139 branches.
Excluding the merger-related charge and the substantial net gain on
the sale of our South Jersey Bank Division, our efficiency ratio
improved significantly, to 21.95%.(3) Having successfully completed
the integration of our information systems early in January, we expect
to realize meaningful cost savings throughout the year."
10-Year Compound Annual Growth Rates
"Not to be overlooked in our discussion of 2003 earnings is the
significant level of earnings and asset growth we've achieved in our
ten years as a stock-form bank," Mr. Ficalora said. "In the ten years
ended December 31, 2003, our earnings grew at a compound annual growth
rate of 38.9%; on a diluted per share basis, the CAGR is an impressive
30.0%. Our assets rose at a CAGR of 35.9% over the past 40 quarters,
boosted by merger transactions and the production of multi-family
loans. At $7.4 billion, our year-end portfolio of such loans reflects
a ten-year CAGR of 32.9%."
"During this time, our shareholders have received a significant
return on their investment," Mr. Ficalora noted. "From the time of our
IPO through January 23, 2004, when our stock traded at a 52-week high
of $41.10, the total return to our charter investors was 4,106%. From
the time the Roslyn merger was announced through that date, the total
return was also impressive, amounting to 54% in little more than six
months. Based on the growth in our market price and the projected
growth in our earnings, we announced a 4-for-3 stock split in the form
of a 33-1/3% stock dividend on the 15th of January and a 12% increase
in our quarterly cash dividend on January 21st."
Increase in Projected 2004 Diluted Earnings Per Share
"Reflecting the strength of our fourth quarter 2003 results, and
our confidence in our ability to efficiently generate revenue growth
over the next four quarters while maintaining the quality of our
assets, we have increased our projections for 2004 diluted earnings
per share," Mr. Ficalora stated. "At the time the Roslyn merger was
announced, we intended to achieve 10% earnings accretion, with 2004
diluted earnings per share of $2.53. At this time, we expect our 2004
diluted earnings per share to range from $2.85 to $2.90, suggesting
potential earnings accretion of 26% from our original stand-alone
projection, and a better than 34% increase above the core earnings of
$2.17(5) we recorded in 2003.
"Once our 4-for-3 stock split takes place on February 17th, our
2003 diluted earnings per share will adjust to $1.65 and our 2004
diluted earnings per share estimates will adjust to a range of $2.14
to $2.18, including $0.47 to $0.49 for the first quarter of the year.
As with any forward-looking statements, there are risk factors to be
considered. Investors are asked to see the discussion on page 13 of
this release," Mr. Ficalora said.
Fourth Quarter 2003 Earnings Summary
Net Interest Income
The significant level of earnings growth achieved in the current
fourth quarter was driven by a dramatic rise in net interest income,
to $172.8 million. Net interest income rose $57.3 million, or 49.6%,
on a linked-quarter basis and $76.9 million, or 80.2%, year-over-year.
The year-over-year increase was the net effect of a $100.1 million, or
65.9%, rise in interest income to $251.8 million and a $23.1 million,
or 41.5%, rise in interest expense to $79.0 million.
Several factors contributed to the significant increase in net
interest income, including the record volume of mortgage loans
produced; the interest-earning assets acquired in the merger; and the
leveraged growth of the Company's securities portfolio in the first
nine months of the year. In addition, the liquidity generated by the
securities portfolio in the current fourth quarter was primarily
invested in higher yielding multi-family loans and mortgage-related
securities. The result was an $8.9 billion, or 98.0%, rise in the
average balance of interest-earning assets to $18.0 billion, which
more than offset a 108-basis point decline in the average yield to
5.60%.
These factors were supported by a reduction in funding costs, as
the Company increased its mix of low-cost borrowings and deposits
during a period of historically low market interest rates. While the
average balance of interest-bearing liabilities rose $9.1 billion to
$17.5 billion, the increase was tempered by an 85-basis point decline
in the average cost of funds to 1.80%.
The Company's spread and margin equaled 3.80% and 3.84% in the
fourth quarter of 2003, as compared to 3.95% and 4.04% in the trailing
quarter and to 4.03% and 4.22% in the year-earlier three months. The
significant compression that was expected to follow the combination
with Roslyn was largely offset by the deployment of the Company's cash
flows into higher yielding assets during a time of rising market
interest rates.
Provision for Loan Losses
The Company suspended the provision for loan losses in the current
fourth quarter, consistent with its practice since the third quarter
of 1995. The decision was based on management's assessment of the
current loan loss allowance and the current and historic performance
of the mortgage loan portfolio. Reflecting the addition of Roslyn's
$37.8 million loan loss allowance, the allowance for loan losses grew
to $78.3 million, representing 228.01% of non-performing loans and
0.75% of loans, net, at December 31, 2003. In addition, the fourth
quarter of 2003 was the Company's 37th consecutive quarter without any
net charge-offs against the loan loss allowance.
Other Operating Income
Earnings were also boosted by a 141.6% rise in other operating
income to $73.5 million from $30.4 million in the year-earlier three
months. In addition to the $37.6 million gain on the sale of the South
Jersey Bank Division in December, the increase stemmed from a $4.5
million, or 30.4%, rise in fee income to $19.1 million; a $393,000
rise in net securities gains to $5.7 million; and a $647,000 rise
in other income to $11.1 million.
Other operating income represented 29.9% of total revenues in the
current fourth quarter, up from 24.1% in the fourth quarter of 2002.
Defined as the sum of net interest income and other operating income,
total revenues rose 95.0% year-over-year to $246.4 million from $126.3
million. Excluding the aforementioned gain on the sale of the South
Jersey Bank Division, the Company would have recorded other operating
income of $35.9 million in the current fourth quarter, and total
revenues would have risen 65.2% year-over-year to $208.7 million.
Non-interest Expense
Non-interest expense totaled $68.6 million in the current fourth
quarter, as compared to $33.7 million in the fourth quarter of 2002.
The amortization of core deposit intangible ("CDI") accounted for
$2.4 million of the 2003 total and $1.5 million of the year-earlier
amount. The difference reflects the CDI stemming from the Roslyn
merger, which totaled $54.4 million and is expected to amortize on a
straight-line basis over a period of 10 years, including $5.4 million
in 2004. The Company has been amortizing the CDI stemming from its
merger with Richmond County Financial Corp. ("Richmond County") at a
rate of $1.5 million per quarter since that transaction was completed
on July 31, 2001.
Operating expenses accounted for $66.2 million of total
non-interest expense in the current fourth quarter, as compared to
$32.2 million in the year-earlier three months. Included in the 2003
amount was a charge of $20.4 million stemming from the allocation of
ESOP shares in connection with the merger, which represented the bulk
of a $26.6 million increase in compensation and benefits expense to
$44.1 million. The increase in operating expenses also reflects a $3.5
million increase in occupancy and equipment expense to $9.0 million; a
$3.1 million increase in general and administrative ("G&A") expense to
$10.6 million; and an $821,000 increase in other expenses to $2.6
million. These increases primarily reflect the expansion of the branch
network in connection with the Roslyn merger, and the costs of
staffing and operating a significantly larger bank.
Reflecting the efficient operation of both institutions, the
combined Company's efficiency ratio reached a record low. Excluding
the aforementioned merger-related charge and the net gain on the sale
of the South Jersey Bank Division from the calculation, the efficiency
ratio equaled 21.95%(3) in the current fourth quarter, a strong
contrast with the linked-quarter measure of 24.18% and the
year-earlier measure of 26.10%.
Income Tax Expense
Income tax expense totaled $65.7 million in the current fourth
quarter, as compared to $28.2 million in the fourth quarter of 2002.
The increase reflects an $85.1 million rise in pre-tax income to
$177.7 million and a rise in the effective tax rate to 36.9% from
30.4%. The latter increase was primarily due to the non-deductibility
of the merger-related charge recorded in compensation and benefits
expense.
Earnings Summary for the Twelve Months Ended December 31, 2003
Net Interest Income
Net interest income rose $131.7 million year-over-year to $505.0
million, the net effect of a $149.7 million, or 25.0%, increase in
interest income to $749.2 million and a $17.9 million, or 7.9%,
increase in interest expense to $244.2 million. The increase was
largely driven by the same combination of factors that fueled the
growth in fourth quarter net interest income: the leveraged growth of
the Company's securities portfolio during the year's first three
quarters; the record volume of loans produced over the course of the
year; the replenishment of the asset mix with higher-yielding assets
as long-term rates started rising; and the interest-earning assets
acquired in the Roslyn merger on October 31st. The result was a $4.2
billion, or 48.1%, rise in the average balance of interest-earning
assets to $12.8 billion, which more than offset a 108-basis point drop
in the average yield to 5.84%.
The growth in 2003 net interest income was further supported by a
reduction in the average balance of CDs leading up to the Roslyn
merger, and by a reduction in the cost of core deposits and
borrowings, in concert with market interest rates. In the first nine
months of 2003, the Company took advantage of the steepest yield curve
in more than a decade to leverage the growth of its balance sheet.
Borrowings increased significantly during the first three quarters and
were further augmented by the merger on October 31st. At the same
time, the Company continued to realize a shift in its mix of deposits,
with core deposits increasing as the concentration of CDs declined.
While the average balance of interest-bearing liabilities thus rose
$4.0 billion, or 49.2%, to $12.1 billion in 2003, the increase was
significantly tempered by a 78-basis point decline in the average cost
of funds to 2.02%.
The increase in net interest income occurred despite a 30-basis
point decline in the Company's spread to 3.82% from the year-earlier
measure and a 37-basis point decline in its margin to 3.94% during the
same time. While a number of factors contributed to the reductions,
other factors served as an offset: The pressure imposed by the merger
and by the Company's leveraging program were somewhat tempered by the
rise in market interest rates during the last two quarters and by the
Company's subsequent deployment of cash flows into higher yielding
loans and securities. The latter factors also served to offset the
impact of the Company's share repurchase program. During the year, the
Company repurchased 8,461,031 shares for a total of $237.9 million.
Other Operating Income
Earnings growth was also fueled by a $62.2 million rise in other
operating income to $164.0 million, representing 24.5% of total
revenues in 2003. The year-over-year increase was partially due to the
$37.6 million gain on the sale of the South Jersey Bank Division.
Excluding this gain, other operating income would have totaled $126.4
million, signifying a $24.6 million, or 24.1%, rise from $101.8
million in the prior year.
The remainder of the increase in other operating income stemmed
from a $15.2 million, or 32.1%, rise in fee income to $62.7 million
and an $11.3 million, or 66.2%, rise in net securities gains to $28.2
million. These increases were slightly tempered by a $1.9 million
decline in other income, primarily reflecting a reduction in revenues
derived from third-party product sales.
Non-interest Expense
Non-interest expense totaled $176.3 million in 2003, as compared
to $139.1 million in the year-earlier twelve months. CDI amortization
accounted for $6.9 million of the 2003 total and $6.0 million of the
2002 amount. The difference reflects the addition of the CDI
amortization stemming from the Roslyn merger in October to the CDI
amortization stemming from the Richmond County merger in July 2001.
Operating expenses totaled $169.4 million in 2003, signifying a
$36.3 million increase from the total recorded in the prior year. The
27.3% increase primarily stemmed from a $30.6 million rise in
compensation and benefits expense to $102.7 million, reflecting the
aforementioned merger-related charge of $20.4 million and the higher
costs of staffing a significantly larger bank. While other expenses
were up $463,000 year-over-year to $6.4 million, occupancy and
equipment expense rose $3.5 million to $26.8 million and G&A expense
rose $1.7 million to $33.5 million. Like the increase in compensation
and benefits expense, these increases were largely merger-related, and
reflect the additional costs of operating an expanded branch network.
In addition, the Company's occupancy and equipment expense reflects
upgrades to its headquarters and several of its branches, and
enhancements to its information technology.
Despite the increase, the Company's 2003 operating expenses
equaled 1.18% of average assets, an improvement from 1.33% of average
assets in 2002. Excluding the aforementioned merger-related charge and
net gain on the sale of the South Jersey Bank Division, the Company's
efficiency ratio would have equaled 23.59% (3) during the current
twelve-month period, as compared to the year-earlier measure of
25.32%.
Income Tax Expense
The Company recorded 2003 income tax expense of $169.3 million, as
compared to $106.8 million in 2002. The increase reflects a $156.7
million, or 46.6%, rise in pre-tax income to $492.7 million and a rise
in the effective tax rate to 34.4% from 31.8%. While the higher rate
in 2003 was primarily due to the non-deductibility of the
aforementioned merger-related charge, the lower rate in 2002 was
attributable to the implementation of certain tax planning strategies
during the year.
Balance Sheet Summary
The asset growth recorded in 2003 exceeded all prior Company
records, as total assets rose 107.2% to $23.4 billion from $11.3
billion at December 31, 2002. In addition to the assets acquired in
the Roslyn merger, the Company originated a record volume of mortgage
loans over the past four quarters, and also established a record for
production in the last three months of the year. While the Company had
pursued a strategy of leveraged growth for several quarters, its
primary focus shifted in connection with the merger announcement to a
strategy of balance sheet repositioning. The significant level of
funding that stemmed from the liquidity of its securities portfolio
was largely deployed into multi-family loan originations, thus
increasing the Company's asset yields while, at the same time,
maintaining its use of wholesale borrowings.
Loans
In the twelve months ended December 31, 2003, the Company
originated total loans of $4.3 billion, including $2.0 billion in the
fourth quarter of the year. Reflecting the magnitude of its niche as a
multi-family lender, the Company originated $3.4 billion of such loans
in 2003, including fourth quarter originations of $1.6 billion.
Multi-family loans totaled $7.4 billion at year-end 2003, representing
a $2.9 billion, or 64.2%, rise from the year-earlier balance, and
70.2% of the total loan portfolio. While the Roslyn merger contributed
multi-family loans of $1.4 billion, the increase in multi-family
mortgage loans was primarily due to organic growth.
At December 31, 2003, loans outstanding totaled $10.5 billion,
signifying a year-over-year increase of $5.0 billion, or 91.5%. In
addition to the portfolio growth that stemmed from multi-family
lending, the Company realized significant growth in construction,
commercial real estate, and one-to-four family loans. Reflecting the
addition of Roslyn's loans and a record level of originations, the
Company realized a $911.7 million rise in commercial real estate loans
to $1.4 billion (after twelve-month originations of $461.4 million)
and a $526.5 million rise in construction loans to $643.5 million
(after twelve-month originations of $140.8 million). One-to-four
family loans rose $465.2 million year-over-year to $731.0 million,
reflecting the addition of Roslyn's loan portfolio. The Company's
one-to-four family loans are typically originated on a conduit basis,
and sold to a third party within ten days of closing. Such loans
totaled $301.7 million in 2003. Other loans totaled $311.6 million at
December 31, 2003, up $232.8 million, also reflecting the addition of
Roslyn's portfolio.
Asset Quality
Notwithstanding the dramatic rise in the balance of loans
outstanding, the Company maintained its record of asset quality in
2003. In addition to achieving its 37th consecutive quarter without
any net charge-offs against the loan loss allowance, the Company's
asset quality ratios remained essentially unchanged from its earlier
measures, despite the addition of Roslyn's non-performing loans. At
December 31, 2003 and 2002, non-performing assets respectively totaled
$34.4 million and $16.5 million, equivalent to 0.15% of total assets
at each of the corresponding dates. Non-performing loans accounted for
$34.3 million and $16.3 million, respectively, of the year-end 2003
and 2002 totals and were equivalent to 0.33% and 0.30% of loans, net.
The year-end 2003 ratios also reflect a modest change from the
September 30, 2003 measures, when non-performing assets represented
0.10% of total assets and non-performing loans were equivalent to
0.21% of loans, net.
Other real estate owned totaled $92,000 at December 31, 2003,
representing a $26,000 increase from the September 30, 2003 level and
an $83,000 reduction from the level recorded at December 31, 2002.
Securities
The repositioning of the asset mix has been the primary objective
of the Company's post-merger strategy. While the dramatic rise in
multi-family loans figured significantly in this process, the
downsizing of the securities portfolio has also been paramount. At
December 31, 2003, securities were down $2.3 billion from the balance
recorded at the time of the merger announcement. The decline reflects
principal reductions and sales from the securities portfolio of
approximately $8.4 billion, which were primarily offset by reinvested
cash flows. The liquidity generated by the securities portfolio has
been largely deployed into mortgage loan originations and
mortgage-related securities featuring higher yields.
Securities totaled $9.5 billion at year-end 2003, signifying a
$5.0 billion increase from the year-end 2002 level but a $2.3 billion
reduction, as stated, from the time the Roslyn merger was announced.
Mortgage-backed and -related securities accounted for $7.5 billion, or
79.4% of the year-end 2003 total, including $5.5 billion that were
classified as available for sale and $2.0 billion that were classified
as held to maturity. At the prior year-end, mortgage-backed and
- -related securities accounted for $3.6 billion, or 80.7%, of total
securities; of these, only $36.9 million were classified as held to
maturity. While the Company increased its investments in
mortgage-backed and -related securities during the fourth quarter, the
bulk of the increase reflects the addition of the Roslyn portfolio.
Investment securities represented the remaining $2.0 billion of
total securities at the close of the current fourth quarter, including
$1.2 billion that were held to maturity and $775.7 million that were
available for sale. While corporate bonds represented $865.5 million,
or 73.1%, of securities held to maturity, trust preferred securities
represented $275.7 million, or 23.3%, of the held-to-maturity total
and 51.5% of securities available for sale.
Funding Sources
Among the primary benefits of the Roslyn merger were the addition
of their branch network and the accompanying infusion of deposits. At
December 31, 2003, the Company recorded total deposits of $10.3
billion, up from $5.3 billion at December 31, 2002. Core deposits
represented $6.0 billion, or 57.8%, of the year-end 2003 total, as
compared to $3.3 billion, or 62.9%, at the prior year-end. The
increase stemmed from a $1.1 billion rise in NOW and money market
accounts to $2.3 billion; a $1.3 billion rise in savings accounts to
$2.9 billion; and a $255.1 million, or 54.8%, rise in
non-interest-bearing accounts to $720.2 million.
In addition to the funding derived from the merger-related growth
in deposits, the Company realized a significant level of cash flows
from principal payments on mortgage-backed and -related securities
over the course of the year. In 2003, such cash flows totaled $4.0
billion, including $833.8 million in the fourth quarter. To a certain
extent, these cash flows have taken the place of borrowings as a
source of funding for the growth of the multi-family loan portfolio.
Borrowings totaled $9.9 billion at year-end 2003, consistent with
the balance recorded upon completion of the merger, and up $5.3
billion from the balance recorded at year-end 2002. The year-over-year
increase reflects the borrowings acquired in the Roslyn merger, as
well as those committed to by the Company in the first nine months of
the year.
While the balance of borrowings rose year-over-year, the mix
underwent several changes, with a greater emphasis placed on
repurchase agreements with Wall Street brokerage firms. At December
31, 2003, such agreements represented $5.6 billion, or 56.5%, of total
borrowings, as compared to $486.1 million, representing 10.6%, at the
prior year-end. At December 31, 2003, the Company also had repurchase
agreements with the Federal Home Loan Bank of New York ("FHLB-NY") in
the amount of $1.1 billion, down from $1.5 billion at December 31,
2002.
FHLB-NY advances rose $134.6 million year-over-year to $2.4
billion, representing 24.0% and 49.0%, respectively, of total
borrowings at December 31, 2003 and 2002. The remainder of the
Company's borrowings at year-end 2003 consisted of issued debt in the
amount of $794.9 million, up $426.2 million from the year-earlier
amount.
Stockholders' Equity
At December 31, 2003, stockholders' equity totaled $2.9 billion,
up from $1.3 billion at December 31, 2002. In addition to the issuance
of 56,868,265 shares in connection with the Roslyn merger, the 2003
amount reflects cash earnings of $379.2 million, which were partly
offset by the distribution of cash dividends totaling $131.1 million
and the allocation of $237.9 million toward the repurchase of
8,461,031 shares of Company stock over the course of the year. The
latter amount includes 2,579,958 shares repurchased in the fourth
quarter, in the amount of $82.3 million, and shares purchased by
Roslyn Bancorp from the time of the merger announcement through
October 31, 2003. Under the Board of Directors' current share
repurchase authorization, there were 723,406 shares still available
for repurchase at December 31, 2003.
New York Community Bancorp, Inc. is the $23.4 billion holding
company for New York Community Bank and the third largest thrift in
the nation, based on current market capitalization. The Company
currently serves its customers through a network of 139 banking
offices in New York City, Long Island, Westchester County, and New
Jersey, and operates through seven divisions: Queens County Savings
Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt
Savings Bank, CFS Bank, First Savings Bank of New Jersey, and
Ironbound Bank. In addition to operating the largest supermarket
banking franchise in the New York metro region, with 52 in-store
branches, the Bank is one of the leading producers of multi-family
loans in New York City. Additional information about the Company and
its financial performance is available at www.myNYCB.com.
Footnotes
(1) Except as noted, per-share amounts throughout this release do
not reflect the impact of a 4-for-3 stock split scheduled to
take place at the close of business on February 17, 2004.
Reflecting the split, the Company's diluted EPS for the three
and twelve months ended December 31, 2003 will adjust to $0.48
and $1.65, respectively; its projected 2004 diluted EPS
estimates will adjust to a range of $2.14 to $2.18.
(2) Please see the reconciliation of cash to GAAP earnings that
appears on page 18 of this release.
(3) On a reported basis, the Company's fourth quarter and
full-year 2003 efficiency ratios were 31.73% and 26.83%,
respectively. The Company's core efficiency ratios of 21.95%
and 23.59% for the corresponding periods both exclude the
$37.6 million gain on the sale of the Company's South Jersey
Bank Division from other operating income and a merger-related
charge of $20.4 million from operating expenses.
(4) Per-share amounts for 2002 have been adjusted to reflect a
4-for-3 stock split on May 21, 2003.
(5) On a GAAP basis, the Company recorded 2003 diluted earnings
per share of $2.20. To calculate its 2003 diluted core
earnings per share, the Company excluded from net income the
after-tax merger-related charge of $19.0 million, or $0.13 per
share, and the $22.7 million, or $0.16 per share, after-tax
gain on the sale of its South Jersey Bank Division.
Conference Call
The Company will host a conference call on January 27, 2004 at
9:00 a.m. (ET) to discuss the highlights of its 2003 earnings release
and its current diluted earnings per share projections for 2004. The
conference call may be accessed by phoning 800-901-5241 (for domestic
calls) or 617-786-2963 (for international calls) and providing the
following passcode: 82707193. Alternatively, the conference call may
be accessed by visiting the Company's web site, www.myNYCB.com,
clicking on "Investor Relations," and following the prompts. The web
cast will be archived at the Company's web site approximately two
hours following completion of the call through 5:00 p.m. on February
6, 2004; the telephone replay will be available through midnight on
February 3rd. To access the replay, please call 888-286-8010 (for
domestic calls) or 617-801-6888 (for international calls) and provide
the following passcode: 14149516.
Forward-looking Statements and Associated Risk Factors
This release, the associated conference call, and other written
materials and statements the Company may issue, may contain certain
forward-looking statements regarding its 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 "plan,"
"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, including its recent
merger with Roslyn Bancorp, is inherently uncertain. Accordingly,
actual results may differ materially from anticipated results.
The following factors, among others, could cause the actual
results of the merger to differ materially from the expectations
stated in this release: the ability to successfully integrate the
companies following the merger, including the retention of key
personnel; the ability to effect the proposed balance sheet
restructuring; the ability to fully realize the expected cost savings
and revenues; and the ability to realize the expected cost savings and
revenues on a timely basis. Additional 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 general
economic conditions; interest rates, deposit flows, loan demand, real
estate values, competition, and demand for financial services and
loan, deposit, and investment products in the Company's local markets;
changes in the quality or composition of the loan or investment
portfolios; changes in accounting principles, policies, or guidelines;
changes in 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; 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, which are
available at the Company's web site, www.myNYCB.com.
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.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share data)
December 31, December 31,
2003 2002
------------- -------------
Assets
Cash and due from banks $ 285,904 $ 96,497
Money market investments 1,167 1,148
Securities held to maturity (estimated
market value of $1,214,094 and $530,704,
respectively) 1,184,338 512,585
Mortgage-backed and -related securities
held to maturity (estimated market value
of $2,004,902 and $38,489, respectively) 2,038,560 36,947
Securities available for sale 775,657 354,989
Mortgage-backed and -related securities
available for sale 5,501,377 3,597,141
Federal Home Loan Bank of New York stock,
at cost 170,915 186,860
Mortgage loans:
Multi-family 7,369,178 4,489,202
Commercial real estate 1,445,048 533,327
1-4 family 730,963 265,724
Construction 643,548 117,013
------------- -------------
Total mortgage loans 10,188,737 5,405,266
Other loans 311,634 78,806
Less: Allowance for loan losses (78,293) (40,500)
------------- -------------
Loans, net 10,422,078 5,443,572
Premises and equipment, net 152,584 74,531
Goodwill 1,918,353 624,518
Core deposit intangible 98,993 51,500
Deferred tax asset, net 256,920 9,508
Other assets 634,491 323,296
------------- -------------
Total assets $ 23,441,337 $ 11,313,092
============= =============
Liabilities and Stockholders' Equity
Deposits:
NOW and money market accounts $ 2,300,221 $ 1,198,068
Savings accounts 2,947,044 1,643,696
Certificates of deposit 4,361,638 1,949,138
Non-interest-bearing accounts 720,203 465,140
------------- -------------
Total deposits 10,329,106 5,256,042
------------- -------------
Official checks outstanding 78,124 11,544
Borrowings 9,931,013 4,592,069
Mortgagors' escrow 31,240 13,749
Other liabilities 203,197 116,176
------------- -------------
Total liabilities 20,572,680 9,989,580
------------- -------------
Stockholders' equity:
Preferred stock at par $0.01 (5,000,000
shares authorized; none issued) -- --
Common stock at par $0.01 (600,000,000
shares authorized; 194,936,632 and
144,299,234 shares issued at December
31, 2003 and 2002, respectively;
192,486,805 and 140,885,953 shares
outstanding at December 31, 2003 and
2002, respectively (1) 1,949 1,082
Paid-in capital in excess of par 2,565,620 1,104,899
Retained earnings (substantially
restricted) 434,577 275,097
Less: Treasury stock (2,449,827 and
3,413,281 shares, respectively) (1) (79,745) (69,095)
Unallocated common stock held by ESOP (15,950) (20,169)
Common stock held by SERP (3,113) (3,113)
Unearned common stock held by RRPs (41) (41)
Accumulated other comprehensive (loss)
income, net of tax (34,640) 34,852
------------- -------------
Total stockholders' equity 2,868,657 1,323,512
------------- -------------
Total liabilities and stockholders'
equity $ 23,441,337 $ 11,313,092
============= =============
(1) Share amounts for 2002 have been adjusted to reflect a 4-for-3
stock split on May 21, 2003.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
For the
Three Months Ended For the
December 31, Twelve Months Ended
(unaudited) December 31,
--------------------- --------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Interest Income:
Mortgage and other loans $139,528 $97,415 $456,672 $403,407
Securities 27,407 16,943 93,457 43,407
Mortgage-backed and
-related securities 84,509 37,000 197,868 151,670
Money market investments 341 369 1,163 1,023
--------- --------- --------- ---------
Total interest income 251,785 151,727 749,160 599,507
--------- --------- --------- ---------
Interest Expense:
NOW and money market
accounts 4,419 3,890 12,385 15,884
Savings accounts 3,669 4,408 13,200 21,534
Certificates of deposit 11,367 12,178 38,610 58,425
Borrowings 59,483 35,349 179,954 130,394
Mortgagors' escrow 34 2 36 14
--------- --------- --------- ---------
Total interest expense 78,972 55,827 244,185 226,251
--------- --------- --------- ---------
Net interest income 172,813 95,900 504,975 373,256
Provision for loan losses -- -- -- --
--------- --------- --------- ---------
Net interest income after
provision for loan losses 172,813 95,900 504,975 373,256
--------- --------- --------- ---------
Other Operating Income:
Fee income 19,097 14,643 62,654 47,443
Net securities gains 5,694 5,301 28,239 16,986
Gain on sale of branches 37,613 -- 37,613 --
Other 11,141 10,494 35,481 37,391
--------- --------- --------- ---------
Total other operating
income 73,545 30,438 163,987 101,820
--------- --------- --------- ---------
Non-interest Expense:
Operating expenses:
Compensation and benefits 44,077 17,450 102,683 72,084
Occupancy and equipment 9,014 5,518 26,779 23,230
General and administrative 10,585 7,518 33,541 31,841
Other 2,560 1,739 6,370 5,907
--------- --------- --------- ---------
Total operating expenses 66,236 32,225 169,373 133,062
Amortization of core
deposit intangible 2,407 1,500 6,907 6,000
--------- --------- --------- ---------
Total non-interest expense 68,643 33,725 176,280 139,062
--------- --------- --------- ---------
Income before income taxes 177,715 92,613 492,682 336,014
Income tax expense 65,650 28,191 169,311 106,784
--------- --------- --------- ---------
Net Income $112,065 $64,422 $323,371 $229,230
========= ========= ========= =========
Basic earnings per
share(1) $0.67 $0.47 $2.27 $1.69
========= ========= ========= =========
Diluted earnings per
share(1) $0.64 $0.46 $2.20 $1.67
========= ========= ========= =========
(1) Per-share amounts for the three and twelve months ended December
31, 2002 have been adjusted to reflect a 4-for-3 stock split on
May 21, 2003.
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
Three Months Ended December 31,
--------------------------------------------------------
2003 2002
---------------------------- ---------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
----------- --------- ------ ----------- -------- ------
Assets:
Interest-
earning
assets:
Mortgage and
other loans,
net $ 8,581,264 $139,528 6.50% $ 5,281,927 $97,415 7.38%
Securities 2,122,401 27,407 5.17 945,522 16,943 7.17
Mortgage-
backed and
-related
securities 7,152,802 84,509 4.73 2,813,736 37,000 5.26
Money market
investments 136,400 341 1.00 47,584 369 3.10
----------- --------- ------ ----------- -------- ------
Total
interest-
earning
assets 17,992,867 251,785 5.60 9,088,769 151,727 6.68
Non-interest-
earning
assets 2,762,847 1,650,422
----------- -----------
Total assets $20,755,714 $10,739,191
=========== ===========
Liabilities
and
Stockholders'
Equity:
Interest-
bearing
liabilities:
NOW and money
market
accounts $ 1,929,667 4,419 0.92 $ 1,197,528 3,890 1.30
Savings
accounts 2,545,048 3,669 0.58 1,638,834 4,408 1.08
Certificates
of deposit 3,611,460 11,367 1.26 1,883,996 12,178 2.59
Mortgagors'
escrow 62,348 34 0.22 52,766 2 0.02
----------- --------- ------ ----------- -------- ------
Total
interest-
bearing
deposits 8,148,523 19,489 0.96 4,773,124 20,478 1.72
Borrowings 9,396,467 59,483 2.53 3,642,061 35,349 3.88
----------- --------- ------ ----------- -------- ------
Total
interest-
bearing
liabilities 17,544,990 78,972 1.80 8,415,185 55,827 2.65
Non-interest-
bearing
deposits 654,762 461,659
Other
liabilities 281,257 598,796
----------- -----------
Total
liabilities 18,481,009 9,475,640
Stockholders'
equity 2,274,705 1,263,551
----------- -----------
Total
liabilities
and
stockholders'
equity $20,755,714 $10,739,191
=========== ===========
Net interest
income/
interest rate
spread $172,813 3.80% $95,900 4.03%
========= ====== ======== ======
Net interest-
earning
assets/net
interest
margin $447,877 3.84% $673,584 4.22%
=========== ====== =========== ======
Ratio of
interest-
earning
assets to
interest-
bearing
liabilities 1.03x 1.08x
====== ======
Core deposits $5,129,477 $8,088 0.63% $3,298,021 $8,298 1.01%
=========== ========= ====== =========== ======== ======
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
Twelve Months Ended December 31,
--------------------------------------------------------
2003 2002
--------------------------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
----------- --------- ----- ----------- --------- -----
Assets:
Interest-
earning
assets:
Mortgage and
other loans,
net $ 6,415,744 $456,672 7.12% $ 5,386,479 $403,407 7.49%
Securities 1,759,172 93,457 5.31 638,424 43,407 6.80
Mortgage-
backed and
-related
securities 4,542,272 197,868 4.36 2,593,767 151,670 5.85
Money market
investments 102,920 1,163 1.13 38,838 1,023 2.63
----------- --------- ----- ----------- --------- -----
Total
interest-
earning
assets 12,820,108 749,160 5.84 8,657,508 599,507 6.92
Non-interest-
earning
assets 1,482,200 1,358,579
----------- -----------
Total assets $14,302,308 $10,016,087
=========== ===========
Liabilities
and
Stockholders'
Equity:
Interest-
bearing
liabilities:
NOW and money
market
accounts $ 1,372,702 12,385 0.90 $ 1,101,701 15,884 1.44
Savings
accounts 1,902,057 13,200 0.69 1,660,327 21,534 1.30
Certificates
of deposit 2,242,433 38,610 1.72 2,022,691 58,425 2.89
Mortgagors'
escrow 44,001 36 0.08 45,449 14 0.03
----------- --------- ----- ----------- --------- -----
Total
interest-
bearing
deposits 5,561,193 64,231 1.15 4,830,168 95,857 1.98
Borrowings 6,498,781 179,954 2.77 3,255,407 130,394 4.01
----------- --------- ----- ----------- --------- -----
Total
interest-
bearing
liabilities 12,059,974 244,185 2.02 8,085,575 226,251 2.80
Non-interest-
bearing
deposits 522,268 463,059
Other
liabilities 161,210 318,222
----------- -----------
Total
liabilities 12,743,452 8,866,856
Stockholders'
equity 1,558,856 1,149,231
----------- -----------
Total
liabilities
and
stockholders'
equity $14,302,308 $10,016,087
=========== ===========
Net interest
income/
interest rate
spread $504,975 3.82% $373,256 4.12%
========= ===== ========= =====
Net interest-
earning
assets/net
interest
margin $760,134 3.94% $571,933 4.31%
=========== ===== =========== =====
Ratio of
interest-
earning
assets to
interest-
bearing
liabilities 1.06x 1.07x
===== =====
Core deposits $3,797,027 $25,585 0.67% $3,225,087 $37,418 1.16%
=========== ========= ===== =========== ========= =====
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share data)
For the For the
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------------- ---------------------------
2003 2002 2003 2002
------------- ------------- ------------- -------------
GAAP EARNINGS
DATA:
Net income $112,065 $64,422 $323,371 $229,230
Basic earnings
per share(1) 0.67 0.47 2.27 1.69
Diluted
earnings per
share(1) 0.64 0.46 2.20 1.67
Return on
average assets 2.16% 2.40% 2.26% 2.29%
Return on
average
stockholders'
equity 19.71 20.39 20.74 19.95
Return on
average
tangible
stockholders'
equity 64.04 43.86 49.16 48.44
Operating
expenses to
average assets 1.28 1.20 1.18 1.33
Interest rate
spread 3.80 4.03 3.82 4.12
Net interest
margin 3.84 4.22 3.94 4.31
Efficiency
ratio 31.73 26.10 26.83 25.32
Shares used for
basic EPS
computation
(1) 167,825,931 137,743,295 142,370,244 135,670,184
Shares used for
diluted EPS
computation
(1) 176,237,210 139,535,275 147,227,602 137,419,476
RECONCILIATION
OF CASH
EARNINGS
TO GAAP
EARNINGS:
Net income $112,065 $64,422 $323,371 $229,230
Additional
contributions
to tangible
stockholders'
equity:
Amortization
and
appreciation
of shares
held in
stock-
related
benefit plan 23,261 1,286 29,637 5,902
Associated
tax benefits 2,995 1,133 15,041 15,860
Dividends on
unallocated
ESOP shares 1,202 763 4,218 2,718
Amortization
of core
deposit
intangible 2,407 1,500 6,907 6,000
------------- ------------- ------------- -------------
Total
additional
contributions
to tangible
stockholders'
equity 29,865 4,682 55,803 30,480
------------- ------------- ------------- -------------
Cash earnings $141,930 $69,104 $379,174 $259,710
============= ============= ============= =============
Basic cash
earnings per
share(1) $0.85 $0.50 $2.66 $1.91
============= ============= ============= =============
Diluted cash
earnings per
share(1) $0.81 $0.50 $2.58 $1.89
============= ============= ============= =============
CASH EARNINGS
DATA:
Cash return on
average assets 2.74% 2.57% 2.65% 2.59%
Cash return on
average
stockholders'
equity 24.96 21.88 24.32 22.60
Cash efficiency
ratio 20.59 23.30 22.13 25.50
At December 31, At December 31,
2003 2002
--------------- ---------------
BALANCE SHEET DATA:
Book value per share(1) $15.26 $9.73
Stockholders' equity to total assets 12.24% 11.70%
Shares used for book value
computation(1) 187,992,058 136,078,457
Total shares issued and
outstanding(1) 192,486,805 140,885,953
ASSET QUALITY RATIOS:
Non-performing loans to loans, net 0.33 % 0.30%
Non-performing assets to total assets 0.15 0.15
Allowance for loan losses to non-
performing loans 228.01 247.83
Allowance for loan losses to loans,
net 0.75 0.74
(1) 2002 amounts have been adjusted to reflect a 4-for-3 stock split
on May 21, 2003.
CONTACT: New York Community Bancorp, Inc.
Ilene A. Angarola, 516-683-4420
First Senior Vice President
Investor Relations