Exhibit 99.1
ASTORIA FINANCIAL CORPORATION ANNOUNCES 13% INCREASE IN FOURTH QUARTER EPS
TO $0.71 (OPERATING EPS $0.85); FULL YEAR EPS INCREASES 20% TO $3.00
(OPERATING EPS $3.13)
Quarterly Cash Dividend Increased 20% to $0.30 Per Share;
3-for-2 Stock Split Declared
LAKE SUCCESS, N.Y., Jan. 20 /PRNewswire-FirstCall/ -- Astoria Financial
Corporation (NYSE: AF) ("Astoria"), the holding company for Astoria Federal
Savings and Loan Association ("Astoria Federal"), today reported net income
increased to $50.5 million, or $0.71 diluted earnings per share ("EPS"), for the
quarter ended December 31, 2004, up 5% and 13%, respectively, from $48.0
million, or $0.63 EPS, for the 2003 fourth quarter. For the twelve months ended
December 31, 2004, net income increased to $219.5 million, or $3.00 EPS, up 12%
and 20%, respectively, from $196.8 million, or $2.49 EPS for the comparable 2003
period. Included in the fourth quarter and full year 2004 results is an
other-than-temporary impairment after-tax non-cash charge of $9.6 million, or
$0.14 and $0.13 EPS, respectively, as reported in a press release dated January
14, 2005.
Operating earnings, operating EPS and operating returns, representing net
income and EPS determined in accordance with generally accepted accounting
principles ("GAAP") excluding the effects of the after-tax non-cash charge noted
above, provide a meaningful comparison for effectively evaluating Astoria's
operating results. For a reconciliation of operating earnings and operating EPS
to GAAP net income, EPS and related returns, please refer to the table on page
13.
2004 Fourth Quarter Financial Highlights:
* Operating EPS: $0.85, up 35% from comparable period last year
* Net interest income: $120.9 million, up 28% from comparable period last
year
* Net interest margin: 2.18%, up 25% from comparable period last year
* Operating return on average assets: 1.04%, up 24% from comparable
period last year
* Operating return on average equity: 17.54%, up 29% from comparable
period last year
* Operating return on average tangible equity: 20.28%, up 30% from
comparable period last year
2004 Full Year Financial Highlights:
* Operating EPS: $3.13, up 26% from comparable period last year
* Net interest income: $470.6 million, up 24% from comparable period last
year
* Net interest margin: 2.17%, up 22% from comparable period last year
* Operating return on average assets: 1.01%, up 16% from comparable
period last year
* Operating return on average equity: 16.50%, up 24% from comparable
period last year
* Operating return on average tangible equity: 19.04%, up 26% from
comparable period last year
* Total deposits increased $1.1 billion, or 10%, to $12.3 billion at
December 31, 2004
* Total loans increased $576.3 million, or 5%, to $13.3 billion at December
31, 2004
* Multifamily/Commercial Real Estate ("CRE") loan portfolio increased $393.1
million, or 13%, to $3.5 billion at December 31, 2004 and represents 27%
of total loans
* Non-performing assets to total assets remains at just 14 basis points
Commenting on the fourth quarter and full year results, George L. Engelke,
Jr., Chairman, President and Chief Executive Officer of Astoria, noted, "The
quarter and full year operating results announced today were marked by
double-digit growth in operating earnings, operating earnings per share and
related returns and were favorably impacted by strong deposit and loan growth."
Board Increases Quarterly Cash Dividend 20%; Declares 3-for-2 Stock Split
The Company also announced that the Board of Directors, at their January
19, 2005 meeting, declared a quarterly cash dividend of $0.30 per share, an
increase of 20%, and declared a three-for-two stock split in the form of a 50%
stock dividend. The cash dividend, representing the thirty-ninth consecutive
quarterly cash dividend declared, will be paid on the total number of shares
held before the stock split. Shareholders will receive three shares of Astoria
Financial Corporation common stock for every two shares owned as of the close of
business on the record date. The new shares will be distributed and the cash
dividend is payable on March 1, 2005 to shareholders of record at the close of
business on February 15, 2005. As a result of the stock split, the number of
common shares outstanding will increase to approximately 110 million. Commenting
on the Board's action, Mr. Engelke said, "The increase in the cash dividend is
an indication of the Board's continued confidence in the fundamental strength of
the Company and its future prospects. The stock split should also benefit
shareholders by increasing liquidity and enhancing the marketability of our
common stock."
Tenth Stock Repurchase Program Continues
During the 2004 fourth quarter, Astoria repurchased 1.5 million shares of
its common stock at an average cost of $39.12 per share. For the twelve months
ended December 31, 2004, 6.0 million shares were repurchased at an average cost
of $37.23 per share. The tenth repurchase program, which commenced during the
2004 third quarter and authorizes the repurchase of eight million shares, has
approximately 4.6 million shares remaining.
Board Sets Annual Shareholders' Meeting Date
The Board of Directors, at their January 19, 2005 meeting, established May
18, 2005 as the date for the Annual Meeting of Shareholders, with a voting
record date of March 25, 2005.
Balance Sheet Summary
Total assets increased to $23.4 billion at December 31, 2004 from $22.8
billion at September 30, 2004 and $22.5 billion at December 31, 2003, primarily
due to strong loan growth. For the quarter ended December 31, 2004, total loans
increased $459.1 million, or 14% annualized, to $13.3 billion at December 31,
2004. Total loan originations and purchases were $1.2 billion for the 2004
fourth quarter compared to $1.5 billion for the 2003 fourth quarter. The volume
decrease was the result of reduced mortgage loan refinance activity due to
higher interest rates in 2004 as compared to 2003. Mortgage loan prepayments for
the 2004 fourth quarter totaled $618.1 million compared to $894.1 million during
the 2003 fourth quarter.
During the 2004 fourth quarter, the 1-4 family mortgage loan portfolio
increased $368.9 million, or 17% annualized, to $9.1 billion at December 31,
2004. Loan originations and purchases totaled $1.0 billion for both the 2004 and
2003 fourth quarters, of which over 70% each year consisted of 3/1 and 5/1
adjustable rate mortgage loans. 1-4 family loan prepayments for the 2004 fourth
quarter totaled $503.7 million compared to $656.7 million in the year ago fourth
quarter. Commenting on the 1-4 family loan growth, Mr. Engelke noted, "As
anticipated, reduced prepayment activity and continued strong loan origination
volume has enabled us to turn the corner with respect to increasing the 1-4
family loan portfolio. We expect the strong growth of this portfolio to continue
in 2005."
During the 2004 fourth quarter, the multifamily/CRE mortgage loan portfolio
increased $58.7 million to $3.5 billion at December 31, 2004. Originations
totaled $190.5 million for the 2004 fourth quarter compared to $444.9 million
for the 2003 fourth quarter. The volume of multifamily/CRE originations declined
in the 2004 fourth quarter as we maintained our pricing discipline in this very
competitive market. Prepayments for the 2004 fourth quarter totaled $114.4
million compared to $237.4 million in the year ago fourth quarter.
For the twelve months ended December 31, 2004, total loans increased $576.3
million and loan originations and purchases totaled $4.3 billion compared to
$7.3 billion for the comparable 2003 period. The decrease in mortgage loan
volume was due to reduced mortgage loan refinance activity due to higher
interest rates in 2004 as compared to 2003. Mortgage loan prepayments for the
twelve months ended December 31, 2004 totaled $3.0 billion compared to $5.2
billion for the comparable 2003 period.
For the twelve months ended December 31, 2004, 1-4 family loans increased
$83.7 million compared to a $238.3 million decrease in the portfolio for the
twelve months ended December 31, 2003. Originations and purchases of 1-4 family
loans for 2004 totaled $3.2 billion compared to $5.6 billion for the comparable
2003 period. 1-4 family mortgage loan prepayments for the twelve months ended
December 31, 2004 totaled $2.4 billion compared to $4.4 billion for the
comparable 2003 period.
For the twelve months ended December 31, 2004, multifamily and CRE loans
increased $393.1 million, or 13%, to $3.5 billion. Originations decreased $595.7
million to $1.1 billion compared to $1.7 billion for the 2003 twelve month
period. Prepayments for the full year totaled $603.4 million compared to $832.0
million for 2003. The average loan-to-value ratio of the combined multifamily
and CRE loan portfolios continues to be less than 65%, based on current
principal balance and original appraised value, and the average loan balance is
less than $1 million.
The Company's strong multifamily and CRE lending capabilities are reflected
in the growth of these portfolios since 1999:
Change
(Dollars in millions) 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/99-12/31/04
- ---------------------- -------- -------- -------- -------- -------- -------- ------------------
Multifamily/ CRE Loans $ 1,014 $ 1,282 $ 1,693 $ 2,345 $ 3,111 $ 3,504 +246%
% of Total Loans 10% 11% 14% 20% 25% 27% +170%
At December 31, 2004, non-performing loans totaled $32.6 million, or 0.14%
of total assets compared to $29.7 million, or 0.13% of total assets, at December
31, 2003. Net charge-offs for the quarter and year ended December 31, 2004
totaled just $45,000 and $363,000, respectively, or an annualized rate of less
than one basis point of average total loans outstanding. The ratio of the
allowance for loan losses to non-performing loans at December 31, 2004 was 254%.
Mortgage-backed securities ("MBS") totaled $8.5 billion, or 36% of total
assets, at December 31, 2004, unchanged from the previous quarter and up $298.0
million from year-end 2003. Of the total at year-end 2004, $2.3 billion, equal
to 10% of total assets, are categorized as available-for-sale.
During the 2004 fourth quarter, deposits increased $153.4 million to $12.3
billion at December 31, 2004, primarily due to an increase in certificate of
deposit ("CD") accounts. During the 2004 fourth quarter, $960.0 million of CDs
with a weighted average rate of 3.17% and an average original term of 23 months
matured and $1.1 billion of CDs were issued or repriced at a weighted average
rate of 2.82% for an average term of 19 months. Checking accounts grew at an
annualized rate of 12% in the 2004 fourth quarter to $1.6 billion from $1.5
billion at the end of the 2004 third quarter.
For the twelve months ended December 31, 2004, deposits increased $1.1
billion, or 10%, primarily due to an increase in CD accounts. During the twelve
month period, $3.9 billion of CDs, with a weighted average rate of 2.45% and an
average original term of 16 months matured and $5.0 billion of CDs were issued
or repriced at a weighted average rate of 2.66% for an average original term of
20 months.
Our small business banking initiatives continue to produce solid growth in
business deposits. These deposits, including savings, checking and money market
accounts, totaled $277.3 million at December 31, 2004, an increase of $40.2
million, or 17%, from December 31, 2003.
According to Mr. Engelke, "The strong growth in deposits reflects the
continued success of a marketing campaign focusing on medium and long-term
deposits that, in addition to contributing to the management of interest rate
risk, continues to produce new customers from our communities, creating
relationship development opportunities. For example, of the new customers and
existing customers without checking accounts who opened the promotional CD
accounts, approximately 23% also opened low-cost checking accounts, the linchpin
for building long-term profitable customer relationships."
Borrowings at December 31, 2004 totaled $9.5 billion, an increase of $549.9
million from the previous quarter-end and a decrease of $162.2 million from
December 31, 2003. The increase in borrowings in the 2004 fourth quarter
primarily funded mortgage loan growth that exceeded deposit growth and provided
temporary liquidity to fund a dividend payment to Astoria from Astoria Federal.
It is anticipated that borrowings will be reduced during the 2005 first quarter
by anticipated deposit inflows and securities cash flow.
Stockholders' equity was $1.4 billion, or 5.85% of total assets at December
31, 2004. Astoria Federal continues to maintain capital ratios in excess of
regulatory requirements with core, tangible and risk-based capital ratios of
5.99%, 5.99% and 12.44%, respectively, at December 31, 2004.
Fourth Quarter and Full Year Earnings Summary
Net interest income for the quarter ended December 31, 2004 increased 28% to
$120.9 million from $94.6 million for the 2003 fourth quarter and, for the
twelve months ended December 31, 2004, increased 24% to $470.6 million from
$379.5 million for the comparable 2003 twelve month period.
Astoria's net interest margin for the quarter ended December 31, 2004 was
2.18% compared to 2.25% on a linked quarter basis and 1.74% for the prior year
fourth quarter. The 7 basis point linked quarter decrease was attributable to a
slightly higher cost of funds and a slightly lower yield on earning assets due
to, among other things, the flattening of the yield curve. The 44 basis point
fourth quarter year over year increase in the net interest margin is primarily
attributable to lower premium amortization expense. For the twelve months ended
December 31, 2004, the net interest margin increased 39 basis points to 2.17%
from 1.78% for the full year 2003. The increase is primarily due to a 72%
decline in net premium amortization expense, or $81.0 million, to $32.0 million
for 2004 from $113.0 million for 2003. Details are highlighted in the following
chart:
MBS and Mortgage Loan Net Premium Amortization Trends
Year Over Year Linked Quarter
------------------- ------------------
(Dollars in millions) 4Q03 3Q04 4Q04 $ Change % Change $ Change % Change
- ---------------------- -------- -------- -------- -------- -------- -------- --------
MBS $ 12.7 $ 0.9 $ 0.3 $ (12.4) (98)% $ (0.6) (67)%
Mortgage Loans $ 6.7 $ 4.8 $ 5.0 $ (1.7) (25)% $ 0.2 4%
Total $ 19.4 $ 5.7 $ 5.3 $ (14.1) (73)% $ (0.4) (7)%
Twelve Months Ended December 31,
(Dollars in millions) 2003 2004 $ Change % Change
- ---------------------- -------- -------- -------- --------
MBS $ 70.9 $ 8.1 $ (62.8) (89)%
Mortgage Loans $ 42.1 $ 23.9 $ (18.2) (43)%
Total $ 113.0 $ 32.0 $ (81.0) (72)%
Non-interest income for the quarter ended December 31, 2004 totaled $22.6
million, excluding the previously announced other-than-temporary impairment
non-cash pre-tax charge of $16.5 million, compared to $28.2 million for the
comparable 2003 period. For the year ended December 31, 2004, non-interest
income totaled $96.6 million, excluding the previously announced
other-than-temporary impairment non-cash pre-tax charge of $16.5 million,
compared to $119.6 million for 2003. The decreases for the fourth quarter and
full year were primarily due to lower other income and lower mortgage banking
income, net, which is further described below. In the 2003 fourth quarter, other
income included a $10.1 million gain on the sale of a joint venture. No net gain
on sales of securities was recorded in the 2004 fourth quarter compared to a net
loss of $7.3 million recorded in the 2003 fourth quarter. For the full year 2004
net gain on sales of securities totaled $4.7 million compared to $7.3 million in
2003.
Mortgage banking income, net, which is included in non-interest income,
decreased during the 2004 fourth quarter and full year as compared to the
respective 2003 periods as detailed in the table below:
(Dollars in millions) 4Q04 4Q03 2004 2003
- ---------------------------- -------- -------- -------- --------
Loan servicing fees $ 1.4 $ 1.7 $ 5.8 $ 7.9
Amortization of MSR* (1.6) (2.2) (6.8) (12.8)
MSR valuation adjustments 0.3 2.9 2.2 3.1
Net gain on sale of loans 0.7 1.9 3.5 12.1
Mortgage banking income, net $ 0.8 $ 4.3 $ 4.7 $ 10.3
*Mortgage servicing rights
General and administrative expense ("G&A") for the quarter and twelve months
ended December 31, 2004 totaled $53.4 million and $225.0 million, respectively,
compared to $50.7 million and $205.9 million in the comparable 2003 periods. The
increases are due primarily to increased compensation and benefits expense;
occupancy, equipment and systems expense, due to, among other things, systems
enhancements over the past year; a $3.2 million arbitration award settlement in
the 2004 third quarter; and increased goodwill litigation expense incurred in
connection with the commencement of a goodwill lawsuit trial this week.
Future Outlook
Commenting on the outlook for 2005, Mr. Engelke stated, "The slope of the
U.S. Treasury yield curve, which has flattened considerably in 2004 and is
projected to continue to flatten during 2005, presents a challenge.
Nevertheless, we should continue to experience solid core business growth.
Deposit growth is expected to remain robust as we launch several new deposit
products, specifically a short-term Liquid CD account and a new business money
market account, to augment our very successful efforts in attracting medium term
CD accounts. We will also continue to focus on building our checking account
deposit base, which we view as the linchpin to building long-term, profitable
customer relationships. With respect to mortgage lending, particularly 1-4
family lending, we are encouraged by the strength of the purchase mortgage
market and the reduced level of loan prepayments, which should result in
continued strong 1-4 family loan portfolio growth in 2005. We also anticipate
solid growth in the multifamily/CRE loan portfolios in 2005. Notwithstanding
core business growth, based on the projected further flattening of the yield
curve, we expect to limit asset growth by reducing the securities and borrowing
portfolios by approximately $1 billion each through normal cash flow in 2005. At
the same time, we will continue to repurchase our stock, as we continue to view
this activity as a very desirable use of capital."
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association, with assets of $23.4 billion is the fifth largest
thrift institution in the United States. Established in 1888, Astoria Federal is
the largest thrift depository headquartered in New York with deposits of $12.3
billion and embraces its philosophy of Putting people first by providing the
customers and local communities it serves with quality financial products and
services through 86 convenient banking office locations and multiple delivery
channels, including its enhanced website, http://www.astoriafederal.com. Astoria
Federal commands the fourth largest deposit market share in the attractive Long
Island market, which includes Brooklyn, Queens, Nassau and Suffolk counties with
a population exceeding that of 39 individual states. Astoria Federal originates
mortgage loans through its banking offices and loan production offices in New
York, an extensive broker network in twenty-four states, primarily the East
Coast, and through correspondent relationships in forty-four states.
Earnings Conference Call January 20, 2005 at 3:30 p.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host
an earnings conference call Thursday afternoon, January 20, 2005 at 3:30 p.m.
(ET). The toll-free dial-in number is (800) 406-5345.
A replay will be available on January 20, 2005 from 7:00 p.m. (ET) through
January 28, 2005, 11:59 p.m. (ET). The replay number is (888) 203-1112,
passcode: 184370. The conference call will also be simultaneously webcast on the
Company's website http://www.astoriafederal.com and archived for one year.
Forward-Looking Statements
This document contains a number of 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. These statements may be
identified by the use of such words as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "outlook," "plan," "potential," "predict,"
"project," "should," "will," "would" and similar terms and phrases, including
references to assumptions.
Forward-looking statements are based on various assumptions and analyses
made by us in light of our management's experience and its perception of
historical trends, current conditions and expected future developments, as well
as other factors we believe are appropriate under the circumstances. These
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors (many of which are beyond our control) that
could cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. These factors include, without
limitation, the following: the timing and occurrence or non-occurrence of events
may be subject to circumstances beyond our control; there may be increases in
competitive pressure among financial institutions or from non-financial
institutions; changes in the interest rate environment may reduce interest
margins or affect the value of our investments; changes in deposit flows, loan
demand or real estate values may adversely affect our business; changes in
accounting principles, policies or guidelines may cause our financial condition
to be perceived differently; general economic conditions, either nationally or
locally in some or all of the areas in which we do business, or conditions in
the securities markets or the banking industry may be less favorable than we
currently anticipate; legislative or regulatory changes may adversely affect our
business; applicable technological changes may be more difficult or expensive
than we anticipate; success or consummation of new business initiatives may be
more difficult or expensive than we anticipate; or litigation or matters before
regulatory agencies, whether currently existing or commencing in the future, may
delay the occurrence or non-occurrence of events longer than we anticipate. We
assume no obligation to update any forward-looking statements to reflect events
or circumstances after the date of this document.
Page 8
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
At At
December 31, December 31,
2004 2003
------------- -------------
ASSETS
Cash and due from banks $ 138,809 $ 173,828
Federal funds sold and repurchase agreements 267,578 65,926
Mortgage-backed securities available-
for-sale 2,280,187 2,498,315
Other securities available-for-sale 126,696 156,677
Mortgage-backed securities held-to-maturity
(fair value of $6,265,283 and
$5,761,666, respectively) 6,261,883 5,745,706
Other securities held-to-maturity
(fair value of $41,477 and $47,451,
respectively) 41,053 47,021
Federal Home Loan Bank of New York stock,
at cost 163,700 213,450
Loans held-for-sale, net 23,802 23,023
Loans receivable:
Mortgage loans, net 12,746,134 12,248,772
Consumer and other loans, net 517,145 438,215
13,263,279 12,686,987
Allowance for loan losses (82,758) (83,121)
Total loans receivable, net 13,180,521 12,603,866
Mortgage servicing rights, net 16,799 17,952
Accrued interest receivable 79,144 77,956
Premises and equipment, net 157,107 160,089
Goodwill 185,151 185,151
Bank owned life insurance 374,719 370,310
Other assets 118,720 122,324
TOTAL ASSETS $ 23,415,869 $ 22,461,594
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 12,323,257 $ 11,186,594
Reverse repurchase agreements 7,080,000 7,235,000
Federal Home Loan Bank of New York
advances 1,934,000 1,924,000
Other borrowings, net 455,835 473,037
Mortgage escrow funds 122,088 108,635
Accrued expenses and other liabilities 130,925 137,797
TOTAL LIABILITIES 22,046,105 21,065,063
Stockholders' equity:
Preferred stock, $1.00 par value;
5,000,000 shares authorized:
Series A (1,225,000 shares authorized and
- 0 - shares issued and outstanding) - -
Series B (2,000,000 shares authorized and
- 0 - shares issued and outstanding) - -
Common stock, $.01 par value; (200,000,000
shares authorized; 110,996,592 shares
issued; and 73,536,446 and 78,670,254
shares outstanding, respectively) 1,110 1,110
Additional paid-in capital 811,777 798,583
Retained earnings 1,624,126 1,481,546
Treasury stock (37,460,146 and 32,326,338
shares, at cost, respectively) (1,013,726) (811,993)
Accumulated other comprehensive loss (28,592) (46,489)
Unallocated common stock held by ESOP
(4,536,441 and 4,760,054 shares,
respectively) (24,931) (26,226)
TOTAL STOCKHOLDERS' EQUITY 1,369,764 1,396,531
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 23,415,869 $ 22,461,594
Page 9
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
For the Three Months For the Twelve Months
Ended December 31, Ended December 31,
----------------------------- -----------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Interest income:
Mortgage loans:
One-to-four family $ 107,375 $ 111,409 $ 428,229 $ 466,544
Multi-family,
commercial real
estate and
construction 55,821 54,701 220,703 203,785
Consumer and other
loans 6,239 4,779 21,312 19,247
Mortgage-backed
securities 94,153 83,685 358,583 337,222
Other securities 4,137 3,561 15,934 28,955
Federal funds sold
and repurchase
agreements 439 102 1,140 1,538
Total interest income 268,164 258,237 1,045,901 1,057,291
Interest expense:
Deposits 64,181 54,645 237,429 225,251
Borrowed funds 83,104 108,945 337,906 452,502
Total interest expense 147,285 163,590 575,335 677,753
Net interest income 120,879 94,647 470,566 379,538
Provision for loan
losses - - - -
Net interest income
after provision for
loan losses 120,879 94,647 470,566 379,538
Non-interest income:
Customer service fees 14,905 14,163 58,524 59,841
Other loan fees 1,169 1,688 4,805 7,556
Net (loss) gain on
sales of securities - (7,319) 4,651 7,346
Other-than-temporary
impairment write-
down of securities (16,520) - (16,520) -
Mortgage banking
income, net 811 4,277 4,715 10,291
Income from bank
owned life insurance 4,248 4,801 17,134 19,978
Other 1,430 10,633 6,775 14,549
Total non-interest income 6,043 28,243 80,084 119,561
Non-interest expense:
General and
administrative:
Compensation and
benefits 27,138 26,770 118,684 110,349
Occupancy, equipment
and systems 16,158 15,024 64,592 59,892
Federal deposit
insurance premiums 446 456 1,775 1,896
Advertising 1,521 1,090 6,583 5,833
Other 8,177 7,323 33,377 27,907
Total non-interest
expense 53,440 50,663 225,011 205,877
Income before income
tax expense 73,482 72,227 325,639 293,222
Income tax expense 22,966 24,268 106,102 96,376
Net income 50,516 47,959 219,537 196,846
Preferred dividends
declared - - - (4,500)
Net income available to
common shareholders $ 50,516 $ 47,959 $ 219,537 $ 192,346
Basic earnings per
common share $ 0.73 $ 0.65 $ 3.05 $ 2.52
Diluted earnings per
common share $ 0.71 $ 0.63 $ 3.00 $ 2.49
Basic weighted
average common
shares 69,596,676 74,316,446 71,953,939 76,383,304
Diluted weighted
average common and
common equivalent
shares 70,895,232 75,637,477 73,204,570 77,294,705
Page 10
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
At or For the At or For the
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------- -------------------------------
2004 2003 2004 2003
-------------- -------------- -------------- --------------
(Annualized)
Selected Returns and
Financial Ratios
Return on average
stockholders'
equity 14.75% 13.58% 15.81% 13.26%
Return on average
tangible stockholders'
equity (1) 17.05 15.63 18.25 15.15
Return on average assets 0.87 0.84 0.97 0.87
General and
administrative expense
to average assets 0.92 0.89 0.99 0.91
Efficiency ratio (2) 42.10 41.23 40.86 41.25
Net interest rate
spread (3) 2.09 1.65 2.09 1.72
Net interest margin (4) 2.18 1.74 2.17 1.78
Selected Operating Returns
and Financial Ratios (5)
Operating return on
average stockholders'
equity 17.54% 13.58% 16.50% 13.26%
Operating return on
average tangible
stockholders'
equity (1) 20.28 15.63 19.04 15.15
Operating return on
average assets 1.04 0.84 1.01 0.87
Operating efficiency
ratio (2) 37.26 41.23 39.67 41.25
Asset Quality Data
(dollars in thousands)
Non-performing loans/
total loans 0.25% 0.23%
Non-performing loans/
total assets 0.14 0.13
Non-performing assets/
total assets 0.14 0.14
Allowance for loan
losses/non-performing
loans 254.02 280.10
Allowance for loan
losses/non-accrual
loans 258.57 285.51
Allowance for loan
losses/total loans 0.62 0.66
Net charge-offs to
average loans
outstanding 0.00% 0.00% 0.00 0.00
Non-performing assets $ 33,499 $ 31,311
Non-performing loans 32,579 29,676
Loans 90 days past
maturity but still
accruing interest 573 563
Non-accrual loans 32,006 29,113
Net charge-offs $ 45 $ 84 363 425
Capital Ratios
(Astoria Federal)
Tangible 5.99% 7.37%
Core 5.99 7.37
Risk-based 12.44 15.39
Other Data
Cash dividends paid
per common share $ 0.25 $ 0.22 $ 1.00 $ 0.86
Dividend payout ratio 35.21% 34.92% 33.33% 34.54%
Book value per common
share (6) $ 19.85 $ 18.89
Tangible book value
per common share (7) 17.17 16.39
Average equity/average
assets 5.90% 6.19% 6.12% 6.54%
Mortgage loans serviced
for others
(in thousands) $ 1,670,062 $ 1,895,102
Full time equivalent
employees 1,862 1,971
(1) Average tangible stockholders' equity represents average stockholders'
equity less average goodwill.
(2) The efficiency ratio represents general and administrative expense divided
by the sum of net interest income plus non-interest income.
(3) Net interest rate spread represents the difference between the average yield
on average interest-earning assets and the average cost of average
interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average
interest-earning assets.
(5) Operating returns and financial ratios exclude the other-than-temporary
impairment write-down of securities charge of $9.6 million, after tax.
(6) Book value per common share represents common stockholders' equity divided
by outstanding common shares, excluding unallocated Employee Stock Ownership
Plan, or ESOP, shares.
(7) Tangible book value per common share represents common stockholders' equity
less goodwill divided by outstanding common shares, excluding unallocated
ESOP shares.
Page 11
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Three Months Ended December 31,
----------------------------------------------------------------------------------------
2004 2003
------------------------------------------ ------------------------------------------
Average Average
Yield/ Yield/
Average Cost Average Cost
Balance Interest (Annualized) Balance Interest (Annualized)
------------ ----------- ------------ ------------ ----------- ------------
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 8,957,442 $ 107,375 4.79% $ 8,977,731 $ 111,409 4.96%
Multi-family,
commercial real estate
and construction 3,580,890 55,821 6.24 3,123,763 54,701 7.00
Consumer and
other loans (1) 508,215 6,239 4.91 429,105 4,779 4.45
Total loans 13,046,547 169,435 5.19 12,530,599 170,889 5.46
Mortgage-backed
securities (2) 8,690,529 94,153 4.33 8,692,026 83,685 3.85
Other securities (2) (3) 360,828 4,137 4.59 467,850 3,561 3.04
Federal funds sold and
repurchase agreements 92,470 439 1.90 42,225 102 0.97
Total interest-earning assets 22,190,374 268,164 4.83 21,732,700 258,237 4.75
Goodwill 185,151 185,151
Other non-interest-
earning assets 834,793 921,476
Total assets $ 23,210,318 $ 22,839,327
Liabilities and
stockholders' equity:
Interest-bearing
liabilities:
Savings $ 2,938,663 2,970 0.40 $ 2,937,759 2,955 0.40
Money market 990,967 1,788 0.72 1,264,709 1,736 0.55
NOW and demand deposit 1,569,387 237 0.06 1,471,362 222 0.06
Certificates of deposit 6,724,096 59,186 3.52 5,510,619 49,732 3.61
Total deposits 12,223,113 64,181 2.10 11,184,449 54,645 1.95
Borrowed funds 9,281,827 83,104 3.58 9,935,202 108,945 4.39
Total interest-bearing
liabilities 21,504,940 147,285 2.74 21,119,651 163,590 3.10
Non-interest-bearing
liabilities 335,102 306,936
Total liabilities 21,840,042 21,426,587
Stockholders' equity 1,370,276 1,412,740
Total liabilities and
stockholders' equity $ 23,210,318 $ 22,839,327
Net interest income/net
interest rate spread $ 120,879 2.09% $ 94,647 1.65%
Net interest-earning assets/
net interest margin $ 685,434 2.18% $ 613,049 1.74%
Ratio of interest-
earning assets to
interest-bearing liabilities 1.03x 1.03x
(1) Mortgage and consumer and other loans include loans held-for-sale and
non-performing loans and exclude the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.
(3) Other securities include Federal Home Loan Bank of New York stock.
Page 12
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Twelve Months Ended December 31,
------------------------------------------------------------------------------------------------
2004 2003
---------------------------------------------- ----------------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------- ------------- ------------- ------------- ------------- ------------
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 8,894,219 $ 428,229 4.81% $ 8,990,636 $ 466,544 5.19%
Multi-family, commercial
real estate and
construction 3,419,369 220,703 6.45 2,757,481 203,785 7.39
Consumer and
other loans (1) 478,195 21,312 4.46 410,095 19,247 4.69
Total loans 12,791,783 670,244 5.24 12,158,212 689,576 5.67
Mortgage-backed
securities (2) 8,395,987 358,583 4.27 8,491,108 337,222 3.97
Other securities (2) (3) 384,033 15,934 4.15 529,592 28,955 5.47
Federal funds sold and
repurchase agreements 86,625 1,140 1.32 136,272 1,538 1.13
Total interest-earning assets 21,658,428 1,045,901 4.83 21,315,184 1,057,291 4.96
Goodwill 185,151 185,151
Other non-interest-
earning assets 848,106 1,176,908
Total assets $ 22,691,685 $ 22,677,243
Liabilities and
stockholders'
equity:
Interest-bearing
liabilities:
Savings $ 2,973,054 11,920 0.40 $ 2,907,541 13,198 0.45
Money market 1,088,915 6,379 0.59 1,403,363 9,934 0.71
NOW and demand deposit 1,534,822 921 0.06 1,469,805 1,526 0.10
Certificates of deposit 6,211,014 218,209 3.51 5,419,725 200,593 3.70
Total deposits 11,807,805 237,429 2.01 11,200,434 225,251 2.01
Borrowed funds 9,184,928 337,906 3.68 9,690,325 452,502 4.67
Total interest-bearing
liabilities 20,992,733 575,335 2.74 20,890,759 677,753 3.24
Non-interest-bearing
liabilities 310,662 302,391
Total liabilities 21,303,395 21,193,150
Stockholders' equity 1,388,290 1,484,093
Total liabilities and
stockholders' equity $ 22,691,685 $ 22,677,243
Net interest income/net
interest rate spread $ 470,566 2.09% $ 379,538 1.72%
Net interest- earning assets
/net interest margin $ 665,695 2.17% $ 424,425 1.78%
Ratio of interest-
earning assets to
interest-bearing liabilities 1.03x 1.02x
(1) Mortgage and consumer and other loans include loans held-for-sale and
non-performing loans and exclude the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.
(3) Other securities include Federal Home Loan Bank of New York stock.
Page 13
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of GAAP Net Income to Operating Earnings
For the Three Months Ended For the Twelve Months Ended
December 31, 2004 December 31, 2004
--------------------------------------- ---------------------------------------
GAAP Adjustments Operating GAAP Adjustments Operating
----------- ----------- ----------- ----------- ----------- -----------
Net interest
income after
provision
for loan
losses $ 120,879 $ - $ 120,879 $ 470,566 $ - $ 470,566
Non-interest
income 6,043 16,520 22,563 80,084 16,520 96,604
Non-interest
expense 53,440 - 53,440 225,011 - 225,011
Income before
income tax
expense 73,482 16,520 90,002 325,639 16,520 342,159
Income tax
expense 22,966 6,945 29,911 106,102 6,945 113,047
Net income $ 50,516 $ 9,575 $ 60,091 $ 219,537 $ 9,575 $ 229,112
Basic earnings
per common
share $ 0.73 $ 0.14 $ 0.86 $ 3.05 $ 0.13 $ 3.18
Diluted earnings
per common
share $ 0.71 $ 0.14 $ 0.85 $ 3.00 $ 0.13 $ 3.13
The above adjustments relate to the $16.5 million other-than-temporary
impairment write-down of $120.0 million of Freddie Mac preferred stock and the
related tax effects.
SOURCE Astoria Financial Corporation
-0- 01/20/2005
/CONTACT: Peter J. Cunningham, First Vice President, Investor Relations,
Astoria Financial Corporation, +1-516-327-7877, ir@astoriafederal.com /
/Company News On-Call: http://www.prnewswire.com/comp/104529.html /
/Web site: http://ir.astoriafederal.com
http://www.astoriafederal.com /
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