EXHIBIT 99.1
New York Community Bancorp, Inc. Improves Its Interest Rate Risk
Profile by Deleveraging Its Balance Sheet and Extending
Its Liabilities
WESTBURY, N.Y.--(BUSINESS WIRE)--July 1, 2004--
Company Provides 2004, 2005 Earnings Estimates;
Board Declares $0.25 Per Share Quarterly Cash Dividend
Pursuant to the review of strategic alternatives it announced on
May 9th, New York Community Bancorp, Inc. (NYSE: NYB) today announced
that it has deleveraged its balance sheet and extended its liabilities
to improve its interest rate risk profile.
In connection with this strategy, the Company sold $5.0 billion of
available-for-sale securities with an average yield of 4.62% and an
expected weighted average life of six years in the current rate
environment. The sale resulted in a one-time after-tax charge of
approximately $95 million, or $0.35 per diluted share, which will
result in the Company recording second quarter 2004 diluted GAAP
earnings per share in the range of $0.15 to $0.16.
The proceeds from the sale of securities were utilized to reduce
the Company's short-term borrowings by $5.0 billion. As a result of
the deleveraging, collateralized wholesale borrowings were reduced to
$9.9 billion at June 30, 2004, representing approximately 41% of total
assets at that date. In addition, the Company extended $2.4 billion of
short-term borrowings to a three-year average maturity, with an
average cost of 3.32%.
The Company's total investment securities portfolio was reduced to
approximately $8.5 billion at June 30, 2004, representing
approximately 35% of total assets. Included in the quarter-end total
were approximately $1 billion of investment securities that were
transferred from "available for sale" to "held to maturity" and that
had a net unrealized depreciation, net of tax, of approximately $29
million at the time the transfer took place. Securities available for
sale totaled $3.9 billion at June 30, 2004, including $3.6 billion of
mortgage-backed and -related securities with an expected weighted
average life of approximately four years. The net unrealized
depreciation, net of tax, on the total available-for-sale portfolio
was approximately $84 million at quarter-end. It is management's
expectation that this portfolio will be further reduced through
principal repayments over time.
Commenting on the Company's actions, President and Chief Executive
Officer Joseph R. Ficalora stated, "The deleveraging of the balance
sheet and the extension of liabilities improved the Company's interest
rate risk profile, neutralizing our one-year interest rate sensitivity
gap to approximately 0% at the second quarter's end.
"The Company is currently projecting 2004 diluted GAAP earnings
per share in the range of $1.42 to $1.47," Mr. Ficalora noted.
"Excluding the impact of the one-time charge in the second quarter,
2004 diluted core earnings per share would be expected to range from
$1.77 to $1.82, including second quarter diluted earnings per share in
the range of $0.50 to $0.51.
"Reflecting the full-year impact of the reduction in
interest-earning assets during the recent quarter, the Company is
currently projecting diluted earnings per share in the range of $1.65
to $1.70 for 2005," Mr. Ficalora continued. "Our 2004 and 2005
estimates assume a 200-basis point increase in short-term interest
rates and a flattening yield curve over the next four quarters, as
well as interest-earning asset growth of approximately 10%, primarily
driven by loan production. In addition, these projections reflect our
expectation that the securities still remaining will continue to
provide us with cash flows to support the growth of our loan
portfolio.
"Although near-term earnings will be reduced, the deleveraging of
the balance sheet will enhance the Company's capital position," Mr.
Ficalora added. "The Company's tangible common equity ratio was
approximately 4.5% at the close of the second quarter; its Tier 1
leverage capital ratio on a consolidated basis at June 30th was
approximately 7.6%."
Commenting further on the actions taken in the second quarter, Mr.
Ficalora stated, "The Board of Directors and management team have been
actively engaged in a detailed analysis of our balance sheet and of
the options available to us. Throughout our deliberations, our
foremost consideration has been the creation of long-term shareholder
value, consistent with the focus we have maintained throughout our
public life.
"We determined that our best course of action would be to take the
specific steps that we have taken, and move forward with our business
model, generating earnings through our fundamental strengths: our
dominance as a multi-family lender in New York City's rent-controlled
and rent-stabilized market; the quality of our assets; the
industry-leading efficiency of our operations; and the profitability
of our branch network, with 141 banking offices.
"By taking these actions, we are better positioned to deal with
the rise in rates that, no doubt, lies before us, and to compete in a
changing market on the basis of our fundamental strengths," Mr.
Ficalora said. "In light of this decision, we can now focus on our
merits--the strengths on which our earnings and value were initially
built and will continue to grow. For example, loan originations
reached approximately $2.1 billion in the second quarter, with most of
the production occurring in our multi-family market niche.
"Multi-family loan originations totaled $1.5 billion in the second
quarter, establishing a new record, and more than doubling our first
quarter 2004 production of $706 million. As a result, our portfolio of
multi-family loans grew from $7.4 billion at year-end 2003 to
approximately $8.5 billion at June 30th, reflecting an annualized
growth rate of approximately 32%. The average multi-family loan had a
principal balance of about $2.7 million and a loan-to-value ratio of
approximately 59%. On an annualized basis, total net loans rose 27%
during this time to approximately $11.8 billion. We believe that we
are very much on track to surpass our objective of 20% net loan growth
by the end of the year," Mr. Ficalora commented.
"The growth in our niche portfolio, and the term-yield advantage
provided by its structure, have distinguished our performance during
prior periods of rising and falling interest rates. Of course,
significant moves in interest rates typically trigger changes in
credit cycles. It's fair to say that the quality of our portfolio over
multiple credit cycles has demonstrated our ability to outperform our
peers with regard to loan losses.
"It is also worthy of mention that we have initiated the process
of growing our deposit base over the last few weeks. We are encouraged
by the response of depositors to our recent efforts, and expect to see
still greater results in the quarters ahead," Mr. Ficalora said.
Board Approves Regular Quarterly Cash Dividend of $0.25 Per Share
"The ability of the repositioned Company to continue producing
industry-leading performance measures has encouraged the Board to
accelerate the declaration of our third quarter 2004 dividend," Mr.
Ficalora stated. "The Company will pay a $0.25 per share dividend on
the 17th of August to shareholders of record at the close of business
on August 5, 2004."
Second Quarter 2004 Earnings Release, Conference Call Scheduled
The Company will issue its second quarter 2004 earnings release on
July 21, 2004, at approximately 8:00 a.m. Eastern Time, and conduct a
conference call later that morning, beginning at ten o'clock. The
earnings release will be posted to the Company's web site,
www.myNYCB.com, within minutes of being issued; the conference call
will be web cast and archived at that site through 5:00 p.m. on July
28, 2004.
Information about the conference call on July 21, 2004 follows:
Access Code: 597201
Dial-in:
(Domestic): (800) 311-6662
(International): (719) 457-2696
Replay:
(Domestic): (888) 203-1112
(International): (719) 457-0820
Replay Availability: July 21, 2004 (1:00 p.m.)
- July 28, 2004 (Midnight)
New York Community Bancorp, Inc. is the holding company for New
York Community Bank and the sixth largest thrift in the nation, based
on current market capitalization. The Bank serves its customers
through a network of 141 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 mortgage loans in New York City. Additional information
about the Company is available at www.myNYCB.com.
Forward-looking Statements and Associated Risk Factors
This release, like many other written and oral communications
presented by the Company and its authorized officers, may contain
certain forward-looking statements 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 similar expressions. The Company's ability to predict results or
the actual effects of its plans or strategies, including the balance
sheet repositioning and deleveraging, is 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 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 such
forward-looking statements, which speak only as of the date of this
release. 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.
CONTACT: New York Community Bancorp, Inc.
Investor Relations:
Ilene A. Angarola, 516-683-4420