Exhibit 99.1
[LOGO OF ASTORIA FINANCIAL CORPORATION] NEWS RELEASE
One Astoria Federal Plaza, Lake Success, NY 11042-1085 (516) 327-3000
FOR IMMEDIATE RELEASE
Contact: Peter J. Cunningham
First Vice President, Investor Relations
(516) 327-7877
ir@astoriafederal.com
ASTORIA FINANCIAL CORPORATION ANNOUNCES FOURTH QUARTER EPS OF $0.57;
FULL YEAR EPS OF $2.26
QUARTERLY CASH DIVIDEND INCREASED 20% TO $0.24 PER SHARE
Lake Success, New York - January 26, 2006 - Astoria Financial Corporation (NYSE:
AF) ("Astoria"), the holding company for Astoria Federal Savings and Loan
Association ("Astoria Federal"), today reported net income of $57.7 million, or
$0.57 diluted earnings per share ("EPS"), for the quarter ended December 31,
2005, compared to $50.5 million ($60.1 million operating earnings), or $0.48 EPS
($0.57 operating EPS), for the 2004 fourth quarter. For the 2005 fourth quarter,
annualized returns on average equity, average tangible equity and average assets
were 16.97%, 19.64% and 1.03%, respectively, compared to 14.75% (17.54% on an
operating basis), 17.05% (20.28% on an operating basis) and 0.87% (1.04% on an
operating basis), respectively, for the comparable 2004 period.
For the year ended December 31, 2005, net income totaled $233.8 million, or
$2.26 EPS, compared to $219.5 million ($229.1 million operating earnings), or
$2.00 EPS ($2.09 operating EPS) for the comparable 2004 period. For the year
ended December 31, 2005, returns on average equity, average tangible equity and
average assets totaled 17.06%, 19.72%, and 1.02%, respectively, compared to
15.81% (16.50% on an operating basis), 18.25% (19.04% on an operating basis) and
0.97% (1.01% on an operating basis), respectively, for the comparable 2004
period.
Operating earnings, operating EPS and operating returns for the 2004 fourth
quarter and full year reflect net income and EPS determined in accordance with
generally accepted accounting principles ("GAAP") adjusted to exclude the effect
of a fourth quarter other-than-temporary impairment after-tax non-cash charge of
$9.6 million, or $0.09 EPS. For a reconciliation of 2004 operating earnings and
operating EPS to 2004 GAAP net income and EPS, please refer to the table on page
13.
1
2005 FOURTH QUARTER FINANCIAL HIGHLIGHTS:
o Loan portfolio increased $285 million, or 8% annualized
o Multifamily/Commercial Real Estate ("CRE") loan portfolio
increased $45 million, or 5% annualized
o One-to-Four Family loan portfolio increased $248 million, or
10% annualized
o Securities portfolio decreased $516 million, or 29% annualized
o Borrowings decreased $162 million, or 8% annualized
o Assets decreased $250 million, or 4% annualized
o Repurchased 2.5 million shares
2005 FULL YEAR FINANCIAL HIGHLIGHTS:
o Loan portfolio increased $1.1 billion, or 9%, to $14.4 billion at
December 31, 2005
o Multifamily/CRE loan portfolio increased $399 million, or
11%, to $3.9 billion at December 31, 2005 and represents 27%
of total loans
o One-to-Four Family loan portfolio increased $703 million, or
8%, to $9.8 billion at December 31, 2005
o Securities portfolio decreased $2.1 billion, or 25%, to $6.6 billion
at December 31, 2005
o Deposits increased $487 million, or 4%, to $12.8 billion at December
31, 2005
o Borrowings decreased $1.5 billion, or 16%, to $7.9 billion at December
31, 2005
o Assets decreased $1.0 billion, or 4%, to $22.4 billion at December 31,
2005
o Repurchased 6.6 million shares
Commenting on the fourth quarter and full year results, George L. Engelke,
Jr., Chairman, President and Chief Executive Officer of Astoria, noted, "While
the interest rate environment became increasingly challenging during the fourth
quarter with the confluence of rising short-term interest rates and declining
long-term interest rates producing an inverted yield curve, Astoria continued to
produce strong earnings and returns."
BOARD INCREASES QUARTERLY CASH DIVIDEND 20%
The Company also announced that the Board of Directors, at their January
25, 2006 meeting, declared a quarterly cash dividend of $0.24 per share, an
increase of 20%. The cash dividend is payable on March 1, 2006 to shareholders
of record as of February 15, 2006. This is the forty-third consecutive quarterly
cash dividend declared by the Company. Commenting on the Board's action, Mr.
Engelke said, "The increase in the cash dividend is evidence of the Board's
continued confidence in the fundamental strength of the Company and its
commitment to enhancing shareholder value."
TENTH STOCK REPURCHASE PROGRAM COMPLETED; ELEVENTH PROGRAM COMMENCED
During the 2005 fourth quarter, Astoria repurchased 2.5 million shares of
its common stock at an average cost of $28.37 per share. For the twelve months
ended December 31, 2005, 6.6 million shares were repurchased at an average cost
of $27.49 per share. Subsequent to December 31, 2005, the Company completed its
tenth stock repurchase program, purchasing the remaining 262,300 shares
available under that plan. The eleventh repurchase program, approved by the
Board of Directors on December 21, 2005, authorizing the repurchase of up to ten
million shares, commenced in the 2006 first quarter immediately following the
completion of the tenth repurchase program.
2
BOARD SETS ANNUAL SHAREHOLDERS' MEETING DATE
The Board of Directors, at their January 25, 2006 meeting, established May
17, 2006 as the date for the Annual Meeting of Shareholders, with a voting
record date of March 24, 2006.
FOURTH QUARTER AND FULL YEAR EARNINGS SUMMARY
Net interest income for the quarter ended December 31, 2005 totaled $113.7
million compared to $120.9 million for the same period a year ago. For the
twelve months ended December 31, 2005, net interest income increased to $478.8
million from $470.6 in the comparable 2004 period.
Astoria's net interest margin for the quarter ended December 31, 2005
declined six basis points from the same period a year ago to 2.12%. On a linked
quarter basis, the net interest margin decreased eight basis points. The
Company's core interest rate spread (the difference between the yield on loans
and the cost of deposits) for the 2005 fourth quarter declined eleven basis
points on a linked quarter basis to 2.91% and eighteen basis points from the
2004 fourth quarter. For the twelve months ended December 31, 2005, the net
interest margin increased two basis points to 2.19% from 2.17% for the 2004 full
year period. Commenting on the net interest margin, Mr. Engelke noted, "Clearly,
continuing to reduce the lower yielding securities portfolio and borrowings
while growing loans and deposits has helped mitigate margin compression in the
current yield curve environment. If the current flat to inverted yield curve
persists throughout 2006, we expect that the net interest margin will be
somewhat lower but should not decline below an average of 2.00% for the full
year."
Non-interest income for the quarter ended December 31, 2005 totaled $26.6
million compared to $22.6 million for the 2004 fourth quarter, excluding the
$16.5 million other-than-temporary impairment charge. The increase is primarily
due to an increase of $2.3 million in customer service fees and $1.3 million of
non-recurring other income.
For the twelve months ended December 31, 2005, non-interest income
increased to $102.2 million from $96.6 million for the comparable 2004 period,
excluding the $16.5 million impairment charge noted above. The increase was
primarily due to a $7.7 million, or 13%, increase in customer service fees and a
$1.3 million increase in mortgage banking income, net, partially offset by the
absence of gains on sales of securities which totaled $4.7 million in 2004.
The components of mortgage banking income, net, included in non-interest
income, are detailed below:
(Dollars in millions) 4Q05 4Q04 2005 2004
- -------------------------------- -------- -------- -------- --------
Loan servicing fees $ 1.2 $ 1.4 $ 5.0 $ 5.8
Amortization of MSR* (1.2) (1.6) (5.2) (6.8)
MSR valuation adjustments 0.1 0.3 2.7 2.2
Net gain on sale of loans 0.8 0.7 3.5 3.5
-------- -------- -------- --------
Mortgage banking income, net $ 0.9 $ 0.8 $ 6.0 $ 4.7
======== ======== ======== ========
* Mortgage servicing rights
General and administrative expense ("G&A") for the quarter ended December
31, 2005 declined to $52.7 million from $57.9 million for the 2005 third quarter
and $53.4 million for the 2004 fourth quarter. The linked quarter decrease of
$5.2 million is primarily due to the $1.9 million of expenses recorded in the
2005 third quarter related to the outsourcing of our mortgage servicing and
other company-wide cost saving initiatives, a $1.2 million reduction in ESOP
expense in the 2005 fourth quarter related to the annual adjustment of estimated
expense to actual, and lower advertising expense in the 2005 fourth quarter.
3
For the twelve months ended December 31, 2005, G&A totaled $228.7 million
compared to $225.0 million for the comparable 2004 period. The Company expects
the G&A expense level for 2006 to be at or slightly lower than total G&A
expenses for 2005 due to the benefit derived from outsourcing mortgage servicing
and other company-wide cost-saving initiatives undertaken in the 2005 third
quarter, offset by normal annual salary and other expense increases.
BALANCE SHEET SUMMARY
Due to the further flattening and inversion of the yield curve during the
fourth quarter, spread availability continued to narrow. Accordingly, we
continued to reduce our balance sheet through the reduction of non-core business
activities. Total securities for the quarter ended December 31, 2005 decreased
$516.2 million, or 29% annualized, to $6.6 billion at December 31, 2005, or 29%
of total assets, of which $1.8 billion, or 8% of total assets, are categorized
as available-for-sale. Borrowings decreased $162.0 million in the fourth quarter
of 2005, or 8% annualized, to $7.9 billion at December 31, 2005, representing
35% of total assets.
For the twelve months ended December 31, 2005, total securities decreased
$2.1 billion, or 25%, and borrowings decreased $1.5 billion, or 16%. Total
assets decreased $250.4 million from September 30, 2005 and $1.0 billion from
December 31, 2004 and total $22.4 billion at December 31, 2005.
Key balance sheet highlights, reflecting the improvement in the quality of
the Company's balance sheet since December 31, 1999, follow:
CHANGE
(DOLLARS IN MILLIONS) 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 12/31/99-12/31/05
- --------------------- -------- -------- -------- -------- -------- -------- -------- -----------------
Assets $ 22,700 $ 22,341 $ 22,672 $ 21,702 $ 22,462 $ 23,416 $ 22,380 - 1%
Loans $ 10,286 $ 11,422 $ 12,167 $ 12,059 $ 12,687 $ 13,263 $ 14,392 + 40%
Securities $ 10,763 $ 9,415 $ 8,013 $ 7,834 $ 8,448 $ 8,710 $ 6,572 - 39%
Deposits $ 9,555 $ 10,072 $ 10,904 $ 11,067 $ 11,187 $ 12,323 $ 12,810 + 34%
Borrowings $ 11,528 $ 10,324 $ 9,826 $ 8,825 $ 9,632 $ 9,470 $ 7,938 - 31%
During the 2005 fourth quarter, the 1-4 family mortgage loan portfolio
increased $248.4 million, or 10% annualized, to $9.8 billion at December 31,
2005. Originations and purchases totaled $837.6 million for the 2005 fourth
quarter compared to $1.0 billion in the year-ago fourth quarter of which 70% and
73%, respectively, consisted of 3/1 and 5/1 hybrid adjustable rate mortgage
loans.
For the year ended December 31, 2005, the 1-4 family mortgage loan
portfolio increased $703.2 million, or 8%. One-to-four family loan originations
and purchases for 2005 increased to $3.3 billion from $3.2 billion for the
comparable 2004 period of which 76% and 73%, respectively, consisted of 3/1 and
5/1 hybrid adjustable rate mortgage loans.
During the 2005 fourth quarter, the multifamily and CRE loan portfolio
increased $45.1 million, or 5% annualized, to $3.9 billion at December 31, 2005,
or 27% of total loans outstanding. Multifamily and CRE loan originations totaled
$183.9 million for the 2005 fourth quarter compared to $190.5 million for the
comparable 2004 period. For the year ended December 31, 2005, the multifamily
and CRE loan portfolio increased $398.9 million, or 11%. Multifamily and CRE
loan originations for 2005 totaled $952.9 million compared to $1.1 billion for
2004. The average loan-to-value ratio of the combined multifamily and CRE loan
portfolio 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.
4
At December 31, 2005, non-performing loans increased to $65.0 million, or
0.29% of total assets, from $37.9 million, or 0.17% of total assets, at
September 30, 2005. We discontinue accruing interest on mortgage loans when such
loans become 90 days delinquent as to the interest due, even though in some
instances the borrower has only missed two payments. As of December 31, 2005 and
September 30, 2005, $28.1 million and $11.2 million, respectively, of loans
classified as non-performing had missed just two payments. As of December 31,
2005, 1-4 family non-performing loans totaled $35.7 million and had an average
LTV of 65% and multifamily/CRE non-performing loans totaled $28.8 million and
had an average LTV of 68% with an average debt coverage ratio of 1.76.
On November 30, 2005, the Company completed the outsourcing of its mortgage
servicing operations and systems. Typically, with conversions of this magnitude,
some disruptions in payment processing and loan collection efforts occur which
usually take up to 90 days after outsourcing to return to normal.
Net charge-offs for the quarter and year ended December 31, 2005 totaled
$888,000 and $1.6 million, respectively, or an annualized rate of two basis
points and one basis point, respectively, of average total loans outstanding.
The ratio of the allowance for loan losses to non-performing loans at December
31, 2005 was 125%.
Deposits increased $4.8 million from September 30, 2005 and total $12.8
billion at December 31, 2005. For the year ended December 31, 2005, deposits
increased $487.2 million, or 4%. These increases are primarily due to increases
in medium-term and Liquid CD accounts. During 2005, we have grown our
medium-term CD accounts at interest rates significantly below alternative
funding sources which, in addition to contributing to the management of interest
rate risk, permits us to reduce our borrowing levels and continues to produce
new customers from our communities, creating relationship development
opportunities. For the year ended December 31, 2005, $4.1 billion of non-Liquid
CD accounts were issued or repriced at an average rate of 3.45% and an average
maturity of 13 months. Since the introduction of our Liquid CD account in the
2005 first quarter, balances have grown to $619.8 million at December 31, 2005.
Core deposits, including Liquid CD accounts, at December 31, 2005 total $5.3
billion, with an average rate of 0.74%.
Stockholders' equity was $1.4 billion, or 6.03% of total assets at December
31, 2005. Astoria Federal continues to maintain capital ratios in excess of
regulatory requirements with core, tangible and risk-based capital ratios of
6.53%, 6.53% and 12.53%, respectively, at December 31, 2005.
5
FUTURE OUTLOOK
Commenting on the outlook for 2006, Mr. Engelke stated, "We expect the
operating environment to remain challenging throughout 2006 as rising short-term
interest rates and relatively stable long-term interest rates exert further
pressure on the net interest margin. As a result, we expect to continue our
strategy of shrinking the balance sheet through a reduction in the securities
portfolio and borrowings of approximately $1.5 billion each through normal cash
flow, while we emphasize deposit and loan growth, all of which will continue to
improve both the quality of the balance sheet and earnings. Overall, these
activities should result in a further reduction in the balance sheet of
approximately $1 billion, similar to the 2005 reduction, and a continued modest
compression of the net interest margin throughout 2006. As we continue to reduce
the size of the balance sheet during this challenging interest rate environment,
we will continue to focus on the repurchase of our stock as a very desirable use
of capital."
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association, with assets of $22.4 billion is the sixth largest
thrift institution in the United States. Established in 1888, Astoria Federal is
the largest thrift depository headquartered in New York with deposits of $12.8
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, 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 38 individual states. Astoria Federal originates
mortgage loans through its banking offices and loan production offices in New
York, an extensive broker network in twenty-three states, primarily the East
Coast, and the District of Columbia, and through correspondent relationships in
forty-four states and the District of Columbia.
EARNINGS CONFERENCE CALL JANUARY 26, 2006 AT 3:30 P.M. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host
an earnings conference call Thursday afternoon, January 26, 2006 at 3:30 p.m.
(ET). The toll-free dial-in number is (800) 967-7140. A telephone replay will be
available on January 26, 2006 from 7:00 p.m. (ET) through February 3, 2006,
11:59 p.m. (ET). The replay number is (888) 203-1112, passcode: 5734845. The
conference call will also be simultaneously Fwebcast on the Company's website
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.
6
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.
7
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
- ----------------------------------------------
(In Thousands, Except Share Data)
At At
December 31, December 31,
2005 2004
------------ ------------
ASSETS
- ------
Cash and due from banks $ 169,234 $ 138,809
Repurchase agreements 182,803 267,578
Mortgage-backed and other securities available-for-sale 1,841,351 2,406,883
Mortgage-backed and other securities held-to-maturity
(fair value of $4,627,013 and $6,306,760, respectively) 4,730,953 6,302,936
Federal Home Loan Bank of New York stock, at cost 145,247 163,700
Loans held-for-sale, net 23,651 23,802
Loans receivable:
Mortgage loans, net 13,879,804 12,746,134
Consumer and other loans, net 512,489 517,145
------------ ------------
14,392,293 13,263,279
Allowance for loan losses (81,159) (82,758)
------------ ------------
Total loans receivable, net 14,311,134 13,180,521
Mortgage servicing rights, net 16,502 16,799
Accrued interest receivable 80,318 79,144
Premises and equipment, net 151,494 157,107
Goodwill 185,151 185,151
Bank owned life insurance 382,613 374,719
Other assets 159,820 118,720
------------ ------------
TOTAL ASSETS $ 22,380,271 $ 23,415,869
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits $ 12,810,455 $ 12,323,257
Reverse repurchase agreements 5,780,000 7,080,000
Federal Home Loan Bank of New York advances 1,724,000 1,934,000
Other borrowings, net 433,526 455,835
Mortgage escrow funds 124,929 122,088
Accrued expenses and other liabilities 157,134 130,925
------------ ------------
TOTAL LIABILITIES 21,030,044 22,046,105
------------ ------------
Stockholders' equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized:
Series A (1,800,000 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; 166,494,888
shares issued; and 104,967,280 and 110,304,669 shares
outstanding, respectively) 1,665 1,665
Additional paid-in capital 824,102 811,777
Deferred compensation (5,636) -
Retained earnings 1,774,924 1,623,571
Treasury stock (61,527,608 and 56,190,219 shares, at cost, respectively) (1,171,604) (1,013,726)
Accumulated other comprehensive loss (49,536) (28,592)
Unallocated common stock held by ESOP
(6,465,273 and 6,802,146 shares, respectively) (23,688) (24,931)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,350,227 1,369,764
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,380,271 $ 23,415,869
============ ============
8
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- ---------------------------------
(In Thousands, Except Share Data)
For the Three Months Ended For the Twelve Months Ended
December 31, December 31,
----------------------------- -----------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
Interest income:
Mortgage loans:
One-to-four family $ 120,331 $ 107,375 $ 459,929 $ 428,229
Multi-family, commercial real estate
and construction 61,672 55,821 239,119 220,703
Consumer and other loans 8,705 6,239 31,160 21,312
Mortgage-backed and other securities 76,106 97,454 340,626 371,044
Federal funds sold and repurchase agreements 2,257 439 6,123 1,140
Federal Home Loan Bank of New York stock 1,630 836 6,030 3,473
------------- ------------- ------------- -------------
Total interest income 270,701 268,164 1,082,987 1,045,901
------------- ------------- ------------- -------------
Interest expense:
Deposits 77,471 64,181 281,399 237,429
Borrowed funds 79,546 83,104 322,808 337,906
------------- ------------- ------------- -------------
Total interest expense 157,017 147,285 604,207 575,335
------------- ------------- ------------- -------------
Net interest income 113,684 120,879 478,780 470,566
Provision for loan losses - - - -
------------- ------------- ------------- -------------
Net interest income after provision for loan losses 113,684 120,879 478,780 470,566
------------- ------------- ------------- -------------
Non-interest income:
Customer service fees 17,207 14,905 66,256 58,524
Other loan fees 1,337 1,169 4,980 4,805
Net gain on sales of securities - - - 4,651
Other-than-temporary impairment write-down of securities - (16,520) - (16,520)
Mortgage banking income, net 948 811 6,015 4,715
Income from bank owned life insurance 4,011 4,248 16,446 17,134
Other 3,056 1,430 8,502 6,775
------------- ------------- ------------- -------------
Total non-interest income 26,559 6,043 102,199 80,084
------------- ------------- ------------- -------------
Non-interest expense:
General and administrative:
Compensation and benefits 27,600 27,138 119,417 118,684
Occupancy, equipment and systems 15,905 16,158 63,695 64,592
Federal deposit insurance premiums 433 446 1,760 1,775
Advertising 1,275 1,521 8,815 6,583
Other 7,531 8,177 35,047 33,377
------------- ------------- ------------- -------------
Total non-interest expense 52,744 53,440 228,734 225,011
------------- ------------- ------------- -------------
Income before income tax expense 87,499 73,482 352,245 325,639
Income tax expense 29,750 22,966 118,442 106,102
------------- ------------- ------------- -------------
Net income $ 57,749 $ 50,516 $ 233,803 $ 219,537
============= ============= ============= =============
Basic earnings per common share $ 0.58 $ 0.48 $ 2.30 $ 2.03
============= ============= ============= =============
Diluted earnings per common share $ 0.57 $ 0.48 $ 2.26 $ 2.00
============= ============= ============= =============
Basic weighted average common shares 99,478,069 104,395,014 101,476,376 107,930,909
Diluted weighted average common and common
equivalent shares 101,449,368 106,342,848 103,408,637 109,806,855
9
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,
----------------------------- -----------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
(Annualized)
SELECTED RETURNS AND FINANCIAL RATIOS
- -------------------------------------
Return on average stockholders' equity 16.97% 14.75% 17.06% 15.81%
Return on average tangible stockholders' equity (1) 19.64 17.05 19.72 18.25
Return on average assets 1.03 0.87 1.02 0.97
General and administrative expense to average assets 0.94 0.92 1.00 0.99
Efficiency ratio (2) 37.61 42.10 39.37 40.86
Net interest rate spread (3) 2.03 2.09 2.11 2.09
Net interest margin (4) 2.12 2.18 2.19 2.17
SELECTED OPERATING RETURNS AND FINANCIAL RATIOS (5)
- ---------------------------------------------------
Operating return on average stockholders' equity 16.97% 17.54% 17.06% 16.50%
Operating return on average tangible stockholders' equity (1) 19.64 20.28 19.72 19.04
Operating return on average assets 1.03 1.04 1.02 1.01
Operating efficiency ratio (2) 37.61 37.26 39.37 39.67
ASSET QUALITY DATA (DOLLARS IN THOUSANDS)
- -----------------------------------------
Non-performing loans/total loans 0.45% 0.25%
Non-performing loans/total assets 0.29 0.14
Non-performing assets/total assets 0.30 0.14
Allowance for loan losses/non-performing loans 124.81 254.02
Allowance for loan losses/non-accrual loans 125.15 258.57
Allowance for loan losses/total loans 0.56 0.62
Net charge-offs to average loans outstanding 0.02% 0.00% 0.01 0.00
Non-performing assets $ 66,093 $ 33,499
Non-performing loans 65,027 32,579
Loans 90 days past maturity but still accruing interest 176 573
Non-accrual loans 64,851 32,006
Net charge-offs $ 888 $ 45 1,599 363
CAPITAL RATIOS (ASTORIA FEDERAL)
- --------------------------------
Tangible 6.53% 5.99%
Core 6.53 5.99
Risk-based 12.53 12.44
OTHER DATA
- ----------
Cash dividends paid per common share $ 0.20 $ 0.17 $ 0.80 $ 0.67
Dividend payout ratio 35.09% 35.42% 35.40% 33.50%
Book value per share (6) $ 13.71 $ 13.23
Tangible book value per share (7) 11.83 11.45
Average equity/average assets 6.06% 5.90% 5.99% 6.12%
Mortgage loans serviced for others (in thousands) $ 1,502,852 $ 1,670,062
Full time equivalent employees 1,658 1,862
(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,
recorded in the 2004 fourth quarter.
(6) Book value per share represents stockholders' equity divided by outstanding
shares, excluding unallocated Employee Stock Ownership Plan, or ESOP,
shares.
(7) Tangible book value per share represents stockholders' equity less goodwill
divided by outstanding shares, excluding unallocated ESOP shares.
10
AVERAGE BALANCE SHEETS
- ----------------------
(Dollars in Thousands)
For the Three Months Ended December 31,
--------------------------------------------------------------------------------------
2005 2004
----------------------------------------- -----------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------ ------------ ---------- ------------ ------------ ----------
(Annualized) (Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 9,754,809 $ 120,331 4.93% $ 8,957,442 $ 107,375 4.79%
Multi-family, commercial
real estate
and construction 4,005,714 61,672 6.16 3,580,890 55,821 6.24
Consumer and other loans (1) 522,429 8,705 6.67 508,215 6,239 4.91
------------ ------------ ------------ ------------
Total loans 14,282,952 190,708 5.34 13,046,547 169,435 5.19
Mortgage-backed and other
securities (2) 6,807,465 76,106 4.47 8,898,349 97,454 4.38
Federal funds sold and
repurchase agreements 229,174 2,257 3.94 92,470 439 1.90
Federal Home Loan Bank stock 131,178 1,630 4.97 153,008 836 2.19
------------ ------------ ------------ ------------
Total interest-earning assets 21,450,769 270,701 5.05 22,190,374 268,164 4.83
------------ ------------
Goodwill 185,151 185,151
Other non-interest-earning assets 825,378 834,793
------------ ------------
Total assets $ 22,461,298 $ 23,210,318
============ ============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,564,728 2,598 0.41 $ 2,938,663 2,970 0.40
Money market 690,978 1,688 0.98 990,967 1,788 0.72
NOW and demand deposit 1,554,803 230 0.06 1,569,387 237 0.06
Liquid certificates of deposit 537,574 4,710 3.50 - - -
------------ ------------ ------------ ------------
Total core deposits 5,348,083 9,226 0.69 5,499,017 4,995 0.36
Certificates of deposit 7,419,474 68,245 3.68 6,724,096 59,186 3.52
------------ ------------ ------------ ------------
Total deposits 12,767,557 77,471 2.43 12,223,113 64,181 2.10
Borrowed funds 8,000,733 79,546 3.98 9,281,827 83,104 3.58
------------ ------------ ------------ ------------
Total interest-bearing liabilities 20,768,290 157,017 3.02 21,504,940 147,285 2.74
------------ ------------
Non-interest-bearing liabilities 331,989 335,102
------------ ------------
Total liabilities 21,100,279 21,840,042
Stockholders' equity 1,361,019 1,370,276
------------ ------------
Total liabilities and
stockholders' equity $ 22,461,298 $ 23,210,318
============ ============
Net interest income/net
interest rate spread $ 113,684 2.03% $ 120,879 2.09%
============ ========== ============ ==========
Net interest-earning assets/net
interest margin $ 682,479 2.12% $ 685,434 2.18%
============ ========== ============ ==========
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x 1.03x
============ ============
(1) Mortgage loans 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.
11
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
- ----------------------
(Dollars in Thousands)
For the Twelve Months Ended December 31,
--------------------------------------------------------------------------------------
2005 2004
----------------------------------------- -----------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
------------ ------------ ---------- ------------ ------------ ----------
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 9,461,023 $ 459,929 4.86% $ 8,894,219 $ 428,229 4.81%
Multi-family, commercial
real estate and
construction 3,862,281 239,119 6.19 3,419,369 220,703 6.45
Consumer and other loans (1) 526,071 31,160 5.92 478,195 21,312 4.46
------------ ------------ ------------ ------------
Total loans 13,849,375 730,208 5.27 12,791,783 670,244 5.24
Mortgage-backed and
other securities (2) 7,671,532 340,626 4.44 8,608,601 371,044 4.31
Federal funds sold and
repurchase agreements 195,863 6,123 3.13 86,625 1,140 1.32
Federal Home Loan Bank stock 130,759 6,030 4.61 171,419 3,473 2.03
------------ ------------ ------------ ------------
Total interest-earning assets 21,847,529 1,082,987 4.96 21,658,428 1,045,901 4.83
------------ ------------
Goodwill 185,151 185,151
Other non-interest-earning assets 852,475 848,106
------------ ------------
Total assets $ 22,885,155 $ 22,691,685
============ ============
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,742,417 11,015 0.40 $ 2,973,054 11,920 0.40
Money market 804,855 7,513 0.93 1,088,915 6,379 0.59
NOW and demand deposit 1,569,419 928 0.06 1,534,822 921 0.06
Liquid certificates of deposit 350,923 10,708 3.05 - - -
------------ ------------ ------------ ------------
Total core deposits 5,467,614 30,164 0.55 5,596,791 19,220 0.34
Certificates of deposit 7,146,664 251,235 3.52 6,211,014 218,209 3.51
------------ ------------ ------------ ------------
Total deposits 12,614,278 281,399 2.23 11,807,805 237,429 2.01
Borrowed funds 8,566,812 322,808 3.77 9,184,928 337,906 3.68
------------ ------------ ------------ ------------
Total interest-bearing liabilities 21,181,090 604,207 2.85 20,992,733 575,335 2.74
------------ ------------ ------------ ------------
Non-interest-bearing liabilities 333,522 310,662
------------ ------------
Total liabilities 21,514,612 21,303,395
Stockholders' equity 1,370,543 1,388,290
------------ ------------
Total liabilities and
stockholders' equity $ 22,885,155 $ 22,691,685
============ ============
Net interest income/net
interest rate spread $ 478,780 2.11% $ 470,566 2.09%
============ ========== ============ ==========
Net interest-earning
assets/net interest margin $ 666,439 2.19% $ 665,695 2.17%
============ ========== ============ ==========
Ratio of interest-earning assets to
interest-bearing liabilities 1.03x 1.03x
============ ============
(1) Mortgage loans 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.
12
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
- --------------------------------
(Dollars in Thousands)
At December 31, 2005 At September 30, 2005 At December 31, 2004
------------------------- ------------------------- -------------------------
Weighted Weighted Weighted
Average Average Average
Balance Rate (1) Balance Rate (1) Balance Rate (1)
----------- ----------- ----------- ----------- ----------- -----------
Selected interest-earning assets:
Mortgage loans, gross (2):
One-to-four family $ 9,757,920 5.19% $ 9,509,514 5.13% $ 9,054,747 5.05%
Multi-family, commercial real estate
and construction 4,039,733 5.88 3,991,029 5.85 3,621,560 5.90
Mortgage-backed and other securities (3) 6,572,304 4.35 7,088,515 4.35 8,709,819 4.37
Interest-bearing liabilities:
Savings 2,510,897 0.40 2,636,201 0.40 2,929,120 0.40
Money market 648,730 0.95 729,552 0.97 965,288 0.80
NOW and demand deposit 1,569,859 0.06 1,547,769 0.06 1,580,714 0.06
Liquid certificates of deposit 619,784 3.66 479,372 3.29 - -
----------- ----------- -----------
Total core deposits 5,349,270 0.74 5,392,894 0.64 5,475,122 0.37
Certificates of deposit 7,461,185 3.73 7,412,756 3.58 6,848,135 3.46
----------- ----------- -----------
Total deposits 12,810,455 2.48 12,805,650 2.34 12,323,257 2.09
Borrowings, net 7,937,526 3.97 8,099,498 3.84 9,469,835 3.57
(1) Weighted average rates represent stated or coupon interest rates excluding
the effect of yield adjustments for premiums, discounts and deferred loan
origination fees and costs and the impact of prepayment penalties.
(2) Mortgage loans exclude loans held-for-sale and include non-performing
loans.
(3) Securities available-for-sale are reported at fair value and securities
held-to-maturity are reported at amortized cost.
RECONCILIATION OF 2004 GAAP NET INCOME TO OPERATING EARNINGS
- ------------------------------------------------------------
(In Thousands, Except Per Share Data)
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 $ 0.48 $ 0.09 $ 0.58 $ 2.03 $ 0.09 $ 2.12
----------- ----------- ----------- ----------- ----------- -----------
Diluted earnings per common share $ 0.48 $ 0.09 $ 0.57 $ 2.00 $ 0.09 $ 2.09
----------- ----------- ----------- ----------- ----------- -----------
The above adjustments relate to the $16.5 million other-than-temporary
impairment write-down on $120.0 million of Freddie Mac preferred stock and the
related tax effects.
13