Margin Increases 12 Basis Points from Third Quarter;
Quarterly Cash Dividend of $0.13 Per Share Declared
Company Declines to Participate in the U.S. Treasury's Capital Purchase Program
LAKE SUCCESS, N.Y., Jan. 28 /PRNewswire-FirstCall/ -- Astoria Financial Corporation (NYSE: AF) ("Astoria," the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal", the "Bank"), today reported net income of $29.4 million, or $0.33 diluted earnings per share ("EPS"), (operating income of $22.1 million, or $0.24 operating EPS), for the quarter ended December 31, 2008 compared to $19.7 million, or $0.22 EPS, (operating income of $33.0 million, or $0.36 operating EPS), for the 2007 fourth quarter.(a)
For the year ended December 31, 2008, net income totaled $75.3 million, or $0.83 EPS, (operating income of $125.8 million, or $1.39 operating EPS) compared to $124.8 million, or $1.36 EPS, (operating income of $138.1 million, or $1.50 operating EPS) for the year ended December 31, 2007.(b)
Operating income and operating EPS, representing net income and EPS determined in accordance with generally accepted accounting principles ("GAAP") excluding the effects of the after-tax, non-cash OTTI charges, provide a meaningful comparison for effectively evaluating Astoria's operating results. For a reconciliation of operating income and operating EPS to GAAP net income and EPS, please refer to the tables on page 14.
Commenting on the quarter and full year results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted "We are pleased with the fundamental operating performance of Astoria during the fourth quarter and the year, including an improvement in net interest income and the net interest margin. Unfortunately, these improvements were achieved against a backdrop of a severely deteriorating economy including continued and growing weakness in the national housing market which negatively impacted our overall results. During the fourth quarter, job losses accelerated more rapidly than expected, resulting in higher loan delinquencies, foreclosures, credit costs and loan loss provisions."
Board Declares Quarterly Cash Dividend of $0.13 Per Share
Based on fourth quarter operating EPS and in light of continued economic uncertainty, the Board of Directors of the Company, at their January 28, 2009 meeting, declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on March 2, 2009 to shareholders of record as of February 17, 2009. This represents the fifty-fifth consecutive quarterly cash dividend declared by the Company. Commenting on the dividend action, Mr. Engelke stated, "The decision to reduce the quarterly cash dividend is based on, among other things, the dividend payout ratio coupled with our desire to retain capital during this challenging economic environment."
Board Sets Annual Shareholders' Meeting Date
The Board of Directors, at their January 28, 2009 meeting, established May 20, 2009 as the date for the Astoria Annual Meeting of Shareholders, with a voting record date of March 23, 2009.
Fourth Quarter and Full Year Earnings Summary
Net interest income for the quarter ended December 31, 2008 increased $7.9 million, or 7.4%, from the 2008 third quarter, and $33.0 million, or 40.3%, from the 2007 fourth quarter to $114.9 million. For the year ended December 31, 2008, net interest income increased $61.9 million, or 18.5%, from December 31, 2007 to $395.4 million.
Astoria's net interest margin for the quarter ended December 31, 2008 increased to 2.18%, 12 basis points above the 2008 third quarter and 61 basis points above the quarter ended December 31, 2007. The interest rate spread for the 2008 fourth quarter increased to 2.08% from 1.96% for the 2008 third quarter and from 1.45% for the 2007 fourth quarter. The increases were primarily due to decreases in the cost of interest bearing-liabilities. During the 2008 fourth quarter, $1.8 billion of CDs (excluding Liquid CDs), with a weighted average rate of 4.07%, matured and $2.2 billion of CDs were issued or repriced with a weighted average rate of 3.59%.
For the year ended December 31, 2008, the net interest margin increased to 1.91% from 1.62% for the year ended December 31, 2007 due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets.
For the quarter ended December 31, 2008, a $45.0 million provision for loan losses was recorded compared to $13.0 million for the previous quarter and $2.0 million for the 2007 fourth quarter. For the year ended December 31, 2008, the provisions for loan losses totaled $69.0 million compared to $2.5 million for 2007. Commenting on the increased provision during 2008, Mr. Engelke noted, "The increase recognizes the rise in loan delinquencies, non-performing loans and charge-offs directly related to the continued deterioration in the housing market and increasing weakness in the overall economy, particularly, the accelerating pace of job losses."
Non-interest income for the quarter ended December 31, 2008 totaled $19.2 million compared to $22.6 million, excluding a pre-tax OTTI non-cash charge of $20.5 million, for the comparable 2007 period. For the year ended December 31, 2008, non-interest income totaled $88.9 million, excluding a pre-tax OTTI non-cash charge of $77.7 million, compared to $96.3 million for the comparable 2007 period, excluding the aforementioned OTTI charge recorded in the 2007 fourth quarter.
General and administrative expense ("G&A") for the quarter ended December 31, 2008 declined $2.6 million from the 2008 third quarter, and $2.7 million from the 2007 fourth quarter, to $56.2 million. The linked quarter decrease is primarily due to decreased compensation and benefits expense and the year over year decrease is due to lower compensation and benefits expense, partially offset by increased advertising expense. For the year ended December 31, 2008, G&A increased just $2.0 million from 2007, or less than 1%, to $233.3 million.
Balance Sheet Summary
For the 2008 fourth quarter, the loan portfolio remained essentially flat from the prior quarter and increased $557.4 million, or 3.5%, from December 31, 2007 and totaled $16.7 billion at December 31, 2008. Mortgage loan originations and purchases totaled $616.1 million for the quarter ended December 31, 2008 compared to $882.1 million for the 2007 fourth quarter. For the year ended December 31, 2008, mortgage loan originations and purchases totaled $4.3 billion compared to $4.2 billion for 2007.
For the 2008 fourth quarter, the one-to-four family mortgage loan portfolio remained relatively flat from the prior quarter and increased $721.3 million, or 6.2%, from December 31, 2007 and totaled $12.3 billion at December 31, 2008. One-to-four family loan originations and purchases totaled $449.9 million for the 2008 fourth quarter compared to $816.1 million for the 2007 fourth quarter.
One-to-four family loan originations and purchases totaled $3.8 billion for both of the years ended December 31, 2008 and 2007. The loan-to-value ratio ("LTV") of the 2008 one-to-four family loan production for portfolio averaged 57% at origination and the loan amount averaged approximately $675,000.
For the quarter ended December 31, 2008, the multi-family and commercial real estate ("CRE") loan portfolio remained relatively flat from the prior quarter. Loan originations totaled $166.2 million compared to $66.0 million for the 2007 fourth quarter.
For the year ended December 31, 2008, multi-family and CRE loan originations totaled $514.2 million compared to $410.4 million for 2007. At December 31, 2008, the combined multi-family and CRE loan portfolio totaled $3.9 billion, or 23% of total loans. The loan-to-value ratio of the 2008 multi-family/CRE loan production averaged 56% at origination and the loan amount averaged approximately $2.0 million.
For the quarter and year ended December 31, 2008, deposits increased $370.7 million, or 11.3% annualized, and $430.5 million, or 3.3%, respectively, to $13.5 billion. Total assets declined $191.3 million from the prior quarter and increased $262.7 million from December 31, 2007 and totaled $22.0 billion at December 31, 2008.
Key balance sheet highlights, reflecting the improvement in the quality of the Company's balance sheet since December 31, 1999, follow:
($in millions) 12/31/99 12/31/01 12/31/03 12/31/05
-------- -------- -------- --------
Assets $22,700 $22,672 $22,462 $22,380
Loans $10,286 $12,167 $12,687 $14,392
Securities $10,763 $8,013 $8,448 $6,572
Deposits $9,555 $10,904 $11,187 $12,810
Borrowings $11,528 $9,826 $9,632 $7,938
($in millions) 12/31/07 12/31/08 Cumulative
-------- -------- % Change
--------
Assets $21,719 $21,982 ( 3%)
Loans $16,155 $16,712 + 62%
Securities $4,371 $4,037 (62%)
Deposits $13,049 $13,480 + 41%
Borrowings $7,185 $6,965 (40%)
The following table illustrates this improvement on an outstanding per share basis:
Amount per share 12/31/99 12/31/01 12/31/03 12/31/05
---------------- -------- -------- -------- --------
Loans $66.28 $89.36 $107.51 $137.11
Deposits $61.57 $80.09 $94.80 $122.04
Amount per share 12/31/07 12/31/08 % Change CAGR
---------------- -------- -------- -------- ----
Loans $168.76 $174.30 163% 11%
Deposits $136.32 $140.59 128% 10%
Stockholders' equity was $1.2 billion, or 5.38% of total assets at December 31, 2008. Astoria Federal continues to maintain capital ratios in excess of regulatory requirements with core, tangible and risk-based capital ratios of 6.39%, 6.39% and 12.02%, respectively, at December 31, 2008.
Asset Quality
Despite the increase in non-performing loans, overall asset quality remains strong. Non-performing loans ("NPL") totaled $238.6 million at December 31, 2008, an increase of $73.8 million from the previous quarter, and represent 1.09% of total assets. At December 31, 2008, one-to-four family non-performing loans totaled $177.5 million and multi-family/CRE non-performing loans totaled $51.1 million, compared to $126.9 million and $33.6 million, respectively, at September 30, 2008.
The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:
30-59 Days 60-89 Days 90 + Days Total 30 + Days
(In millions) Past Due Past Due Past Due (NPL) Past Due
-------- -------- -------------- --------
At December 31, 2007 $144.4 $39.1 $68.1 $251.6
At March 31, 2008 $136.3 $48.8 $106.6 $291.7
At June 30, 2008 $134.5 $51.0 $128.6 $314.1
At September 30, 2008 $171.0 $54.7 $164.8 $390.5
At December 31, 2008 $229.8 $70.1 $238.6 $538.5
The table below details, as of December 31, 2008, the states with a total of 1% or more of our one-to- four family loan portfolio and the respective non-performing loan totals in those states:
% of NPLs as %
Total 1-4 1-4 Family Total 1-4 of State/DC
(In millions) Family Loans Loan Portfolio Family NPLs Total
State/DC
New York Metro* $5,235.1 42% $50.2 0.96%
California $1,366.2 11% $28.3 2.07%
Illinois $1,305.7 11% $21.8 1.67%
Virginia $942.9 8% $17.9 1.90%
Maryland $879.1 7% $21.2 2.41%
Massachusetts $839.1 7% $7.5 0.89%
Florida $315.1 3% $15.3 4.86%
Washington $291.1 2% $0.0 0.00%
Georgia $162.0 1% $2.5 1.54%
Pennsylvania $131.4 1% $1.7 1.29%
Washington, D.C. $129.7 1% $2.5 1.93%
North Carolina $125.5 1% $1.1 0.88%
------ -- ----
Total States 1%
or More $11,722.9 95% $170.0 1.45%
Other States $626.7 5% $7.5 1.20%
------ -- ----
Total 1-4 Family
Portfolio $12,349.6 100% $177.5 1.44%
========= ==== ======
* NY, NJ, CT
Net loan charge-offs for the quarter and year ended December 31, 2008 totaled $12.3 million and $28.9 million, respectively, compared to $1.3 million and $3.5 million, respectively, for the comparable 2007 periods. For the quarter and year ended December 31, 2008, one-to-four family net loan charge-offs totaled $6.8 million and $17.1 million, respectively, compared to $1.1 million and $1.3 million, respectively, for the comparable 2007 periods. Commenting on asset quality, Mr. Engelke noted, "As a residential lender, we are vulnerable to the impact of a severe job loss recession. The significant increase in job losses and unemployment in the 2008 fourth quarter had a negative impact on the financial condition of prime residential borrowers and their ability to remain current on their mortgage loans."
Company Declines to Participate in the U.S. Treasury's Capital Purchase Program
Astoria Financial Corporation has elected not to participate in the U.S. Treasury's Capital Purchase Program ("CPP") after fully evaluating the related costs and benefits, as well as the potential impact on the long-term value of its shares. The Company disclosed on December 8, 2008 that it had received preliminary approval to issue up to $375 million of preferred stock and related warrants to the U.S. Treasury under the CPP. Commenting on the Company's decision, Mr. Engelke stated, "Based on the well-capitalized position of the Bank, with core, tangible and risk-based capital ratios of 6.39%, 6.39%, and 12.02%, respectively, the Board determined that the CPP would provide no material benefit to our shareholders and therefore, it would be in our shareholders' best interests to decline the opportunity to participate."
Future Outlook
Commenting on the outlook for 2009, Mr. Engelke stated, "The year ahead presents us with both opportunities and challenges. With respect to our fundamental operating performance, we expect that loan growth will continue in 2009 as the opportunity for portfolio lending remains strong. Tighter underwriting standards coupled with wider spreads present us with an opportunity to increase the loan portfolio with top quality loans. We expect deposit growth in 2009 will continue, particularly as the intense competition for core community deposits in 2008 has recently abated.
Industry-wide increases in pension costs and FDIC insurance premiums coupled with potentially reduced dividends on Federal Home Loan Bank of New York stock will reduce 2009 earnings. Additionally, continued weakness in the real estate market exacerbated by a severe downturn in the economy presents challenges for all financial institutions in the year ahead. Although our mortgage loan delinquencies and foreclosures have increased, the portfolio remains strong, with non-performing loans representing just 109 basis points of total assets. However, continued job losses coupled with declining real estate values will put increased pressure on the loan portfolio which, more than likely, will result in higher delinquencies and non-performing loans in 2009.
The Company expects to maintain its tangible capital ratio target at between 4.50% and 4.75% and the Bank's core and tangible ratios in excess of 6%. In addition, as a part of its capital management, the Company expects to consider alternatives, such as the offer and sale of equity or debt securities, subject to market conditions and the Company's capital needs."
Astoria Financial Corporation, with assets of $22.0 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $13.5 billion, is the largest thrift depository headquartered in New York and embraces its philosophy of "Putting people first" by providing the customers and local communities it serves with quality financial products and services through 85 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 and loan production offices in New York, an extensive broker network covering eighteen states, primarily the East Coast, and the District of Columbia, and through correspondent relationships covering nineteen states and the District of Columbia.
Earnings Conference Call January 29, 2009 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, January 29, 2009 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, conference ID # 78667060. A telephone replay will be available on January 29, 2009 from 1:00 p.m. (ET) through Friday, February 6, 2009, 11:59 p.m. (ET). The replay number is (800) 642-1687, ID #78667060. The conference call will also be simultaneously webcast 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 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 real estate or 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 be determined adverse to us or 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.
Tables Follow
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(In Thousands, Except Share Data)
At At
December 31, December 31,
2008 2007
----------- -----------
ASSETS
------
Cash and due from banks $76,233 $93,972
Repurchase agreements 24,060 24,218
Securities available-for-
sale 1,390,440 1,313,306
Securities held-to-maturity
(fair value of $2,643,955
and $3,013,014,
respectively) 2,646,862 3,057,544
Federal Home Loan Bank
of New York stock, at cost 211,900 201,490
Loans held-for-sale, net 5,272 6,306
Loans receivable:
Mortgage loans, net 16,372,383 15,791,962
Consumer and other
loans, net 340,061 363,052
------- -------
16,712,444 16,155,014
Allowance for loan
losses (119,029) (78,946)
-------- -------
Total loans receivable,
net 16,593,415 16,076,068
Mortgage servicing rights,
net 8,216 12,910
Accrued interest receivable 79,589 79,132
Premises and equipment, net 139,828 139,563
Goodwill 185,151 185,151
Bank owned life insurance 401,280 398,280
Other assets 219,865 131,428
------- -------
TOTAL ASSETS $21,982,111 $21,719,368
=========== ===========
LIABILITIES
-----------
Deposits $13,479,924 $13,049,438
Reverse repurchase
agreements 2,850,000 3,730,000
Federal Home Loan Bank
of New York advances 3,738,000 3,058,000
Other borrowings, net 377,274 396,658
Mortgage escrow funds 133,656 129,412
Accrued expenses and other
liabilities 221,488 144,516
------- -------
TOTAL LIABILITIES 20,800,342 20,508,024
---------- ----------
STOCKHOLDERS' EQUITY
--------------------
Preferred stock, $1.00 par
value; (5,000,000 shares
authorized; none issued
and outstanding) - -
Common stock, $.01 par
value; (200,000,000
shares authorized;
166,494,888 shares issued;
and 95,881,132 and
95,728,562 shares
outstanding, respectively) 1,665 1,665
Additional paid-in capital 856,021 846,227
Retained earnings 1,864,257 1,883,902
Treasury stock (70,613,756
and 70,766,326 shares, at
cost, respectively) (1,459,211) (1,459,865)
Accumulated other
comprehensive loss (61,865) (39,476)
Unallocated common stock
held by ESOP (5,212,668
and 5,761,391 shares,
respectively) (19,098) (21,109)
------- -------
TOTAL STOCKHOLDERS'
EQUITY 1,181,769 1,211,344
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $21,982,111 $21,719,368
=========== ===========
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands, Except Share Data)
For the Three Months For the Twelve Months
Ended Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
Interest income:
Mortgage loans:
One-to-four family $168,298 $159,134 $637,297 $587,863
Multi-family,
commercial real
estate and construction 57,939 62,376 234,922 254,536
Consumer and other loans 3,613 6,700 17,325 30,178
Mortgage-backed and
other securities 45,218 50,913 185,160 219,040
Federal funds sold and
repurchase agreements 71 259 1,939 2,071
Federal Home Loan Bank
of New York stock 1,895 3,388 13,068 11,634
----- ----- ------ ------
Total interest income 277,034 282,770 1,089,711 1,105,322
------- ------- --------- ---------
Interest expense:
Deposits 92,876 114,635 393,897 456,039
Borrowings 69,213 86,202 300,430 315,755
------ ------ ------- -------
Total interest expense 162,089 200,837 694,327 771,794
------- ------- ------- -------
Net interest income 114,945 81,933 395,384 333,528
Provision for loan losses 45,000 2,000 69,000 2,500
------ ----- ------ -----
Net interest income after
provision for loan losses 69,945 79,933 326,384 331,028
------ ------ ------- -------
Non-interest income:
Customer service fees 14,828 15,713 62,489 62,961
Other loan fees 929 1,258 3,985 4,739
Gain on sales of
securities - 216 - 2,208
Other-than-temporary
impairment
write-down of securities - (20,484) (77,696) (20,484)
Mortgage banking
(loss) income, net (2,201) (661) (457) 1,334
Income from bank
owned life insurance 4,063 4,381 16,733 17,109
Other 1,589 1,685 6,126 7,923
----- ----- ----- -----
Total non-interest income 19,208 2,108 11,180 75,790
------ ----- ------ ------
Non-interest expense:
General and administrative:
Compensation and benefits 28,886 32,279 124,846 124,036
Occupancy, equipment and
systems 16,342 16,580 66,553 65,754
Federal deposit
insurance premiums 545 393 2,213 1,595
Advertising 2,147 1,281 7,116 6,563
Other 8,325 8,369 32,532 33,325
----- ----- ------ ------
Total non-interest expense 56,245 58,902 233,260 231,273
------ ------ ------- -------
Income before
income tax expense 32,908 23,139 104,304 175,545
Income tax expense 3,460 3,466 28,962 50,723
----- ----- ------ ------
Net income $29,448 $19,673 $75,342 $124,822
======= ======= ======= ========
Basic earnings
per common share $0.33 $0.22 $0.84 $1.38
===== ===== ===== =====
Diluted earnings
per common share $0.33 $0.22 $0.83 $1.36
===== ===== ===== =====
Basic weighted
average common
shares 89,749,299 89,680,349 89,580,322 90,490,118
Diluted weighted
average common and
common equivalent shares 90,306,377 91,117,693 90,687,902 92,092,725
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
----------------------------------------
For the At or For
Three Months Ended Twelve Months Ended
December 31, December 31,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
(Annualized)
Selected Returns and
Financial Ratios
--------------------
Return on average
stockholders' equity 9.90% 6.55% 6.24% 10.39%
Return on average
tangible stockholders'
equity (1) 11.72 7.74 7.37 12.28
Return on average assets 0.53 0.36 0.35 0.58
General and administrative
expense to average assets 1.02 1.08 1.07 1.07
Efficiency ratio (2) 41.93 70.09 57.37 56.50
Net interest rate
spread (3) 2.08 1.45 1.80 1.50
Net interest margin (4) 2.18 1.57 1.91 1.62
Selected Non-GAAP Returns
and Financial Ratios (5)
-------------------------
Non-GAAP return on average
stockholders' equity 7.42% 10.98% 10.42% 11.50%
Non-GAAP return on
average tangible
stockholders' equity (1) 8.78 12.98 12.30 13.59
Non-GAAP return on
average assets 0.40 0.61 0.58 0.64
Non-GAAP efficiency
ratio (2) 41.93 56.35 48.17 53.81
Dividend payout ratio 108.33 72.22 74.82 69.33
Asset Quality Data
(dollars in thousands) (6)
--------------------------
Non-performing assets $264,101 $77,191
Non-performing loans 238,620 68,076
Loans delinquent 90
days or more and
still accruing
interest 33 474
Non-accrual loans 238,587 67,602
Loans 60-89 days delinquent 70,062 39,081
Loans 30-59 days delinquent 229,834 144,425
Net charge-offs $12,289 $1,308 28,917 3,496
Non-performing
loans/total loans 1.43% 0.42%
Non-performing loans/
total assets 1.09 0.31
Non-performing
assets/total assets 1.20 0.36
Allowance for
loan losses/non-
performing loans 49.88 115.97
Allowance for
loan losses/non-
accrual loans 49.89 116.78
Allowance for loan
losses/total loans 0.71 0.49
Net charge-offs
to average loans
outstanding 0.29% 0.03% 0.18 0.02
Capital Ratios
(Astoria Federal)
------------------
Tangible 6.39% 6.58%
Core 6.39 6.58
Risk-based 12.02 12.04
Other Data
-----------
Cash dividends paid
per common share $0.26 $0.26 $1.04 $1.04
Book value per share (7) 13.03 13.46
Tangible book value
per share (8) 10.99 11.41
Tangible
stockholders'
equity/tangible
assets (1) (9) 4.57% 4.77%
Mortgage loans
serviced for
others (in
thousands) $1,225,656 $1,272,220
Full time equivalent
employees 1,575 1,615
(1) Tangible stockholders' equity represents stockholders' equity less
goodwill.
(2) 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) The information presented for the three and twelve months ended
December 31, 2008 and 2007 represents pro forma calculations which
are not in conformity with U.S. generally accepted accounting
principles, or GAAP. The information excludes the other-than-
temporary impairment write-down of securities charges and related tax
effects recorded in 2008 and 2007. See page 14 for a reconciliation
of GAAP net income to non-GAAP net income for the three and twelve
months ended December 31, 2008 and 2007.
(6) Loans totaling $38.3 million have been reclassified from non-accrual
to 60-89 days delinquent as of December 31, 2007 to conform the
December 31, 2007 information to the current year presentation. The
related December 31, 2007 asset quality ratios have been revised as
necessary.
(7) Book value per share represents stockholders' equity divided by
outstanding shares, excluding unallocated Employee Stock Ownership
Plan, or ESOP, shares.
(8) Tangible book value per share represents stockholders' equity less
goodwill divided by outstanding shares, excluding unallocated ESOP
shares.
(9) Tangible assets represent assets less goodwill.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Three Months
Ended December 31,
2008
-----------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,500,269 $168,298 5.39%
Multi-family, commercial
real estate and
construction 3,927,039 57,939 5.90
Consumer and other loans (1) 339,951 3,613 4.25
------- -----
Total loans 16,767,259 229,850 5.48
Mortgage-backed and other
securities (2) 4,101,024 45,218 4.41
Repurchase agreements 37,974 71 0.75
Federal Home Loan Bank stock 223,571 1,895 3.39
------- -----
Total interest-earning assets 21,129,828 277,034 5.24
-------
Goodwill 185,151
Other non-interest-earning
assets 774,382
-------
Total assets $22,089,361
===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $1,830,246 1,866 0.41
Money market 294,471 775 1.05
NOW and demand deposit 1,449,421 323 0.09
Liquid certificates of
deposit 1,019,222 6,210 2.44
--------- -----
Total core deposits 4,593,360 9,174 0.80
Certificates of deposit 8,602,462 83,702 3.89
--------- ------
Total deposits 13,195,822 92,876 2.82
Borrowings 7,312,640 69,213 3.79
--------- ------
Total interest-bearing
liabilities 20,508,462 162,089 3.16
-------
Non-interest-bearing
liabilities 390,758
-------
Total liabilities 20,899,220
Stockholders' equity 1,190,141
---------
Total liabilities and
stockholders' equity $22,089,361
===========
Net interest income/net interest
rate spread $114,945 2.08%
======== ====
Net interest-earning assets/net
interest margin $621,366 2.18%
======== ====
Ratio of interest-earning assets
to interest-bearing
liabilities 1.03x
=====
For the Three Months
Ended December 31,
2007
-----------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,660,354 $159,134 5.46%
Multi-family, commercial
real estate and
construction 4,106,141 62,376 6.08
Consumer and other loans (1) 369,314 6,700 7.26
------- -----
Total loans 16,135,809 228,210 5.66
Mortgage-backed and other
securities (2) 4,506,034 50,913 4.52
Repurchase agreements 22,229 259 4.66
Federal Home Loan Bank stock 199,389 3,388 6.80
------- -----
Total interest-earning assets 20,863,461 282,770 5.42
-------
Goodwill 185,151
Other non-interest-earning
assets 744,171
-------
Total assets $21,792,783
===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $1,914,907 1,949 0.41
Money market 340,611 847 0.99
NOW and demand deposit 1,448,161 312 0.09
Liquid certificates of
deposit 1,444,935 16,074 4.45
--------- ------
Total core deposits 5,148,614 19,182 1.49
Certificates of deposit 7,919,713 95,453 4.82
--------- ------
Total deposits 13,068,327 114,635 3.51
Borrowings 7,165,719 86,202 4.81
--------- ------
Total interest-bearing
liabilities 20,234,046 200,837 3.97
-------
Non-interest-bearing
liabilities 356,703
-------
Total liabilities 20,590,749
Stockholders' equity 1,202,034
---------
Total liabilities and
stockholders' equity $21,792,783
===========
Net interest income/net interest
rate spread $81,933 1.45%
======= ====
Net interest-earning assets/net
interest margin $629,415 1.57%
======== ====
Ratio of interest-earning assets
to interest-bearing
liabilities 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 included at average amortized
cost.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Twelve Months
Ended December 31,
2008
---------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,962,010 $637,297 5.33%
Multi-family, commercial real
estate and construction 3,947,413 234,922 5.95
Consumer and other loans (1) 345,019 17,325 5.02
------- ------
Total loans 16,254,442 889,544 5.47
Mortgage-backed and other
securities (2) 4,194,320 185,160 4.41
Federal funds sold and repurchase
agreements 88,650 1,939 2.19
Federal Home Loan Bank stock 207,535 13,068 6.30
------- ------
Total interest-earning assets 20,744,947 1,089,711 5.25
---------
Goodwill 185,151
Other non-interest-earning assets 820,216
-------
Total assets $21,750,314
===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $1,863,622 7,551 0.41
Money market 311,910 3,189 1.02
NOW and demand deposit 1,470,402 1,290 0.09
Liquid certificates of deposit 1,225,153 36,792 3.00
--------- ------
Total core deposits 4,871,087 48,822 1.00
Certificates of deposit 8,192,114 345,075 4.21
--------- -------
Total deposits 13,063,201 393,897 3.02
Borrowings 7,069,155 300,430 4.25
--------- -------
Total interest-bearing liabilities 20,132,356 694,327 3.45
-------
Non-interest-bearing liabilities 410,082
-------
Total liabilities 20,542,438
Stockholders' equity 1,207,876
---------
Total liabilities and stockholders'
equity $21,750,314
===========
Net interest income/net interest
rate spread $395,384 1.80%
======== ====
Net interest-earning assets/net
interest margin $612,591 1.91%
======== ====
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x
=====
For the Twelve Months
Ended December 31,
2007
---------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $10,995,688 $587,863 5.35%
Multi-family, commercial real
estate and construction 4,171,915 254,536 6.10
Consumer and other loans (1) 397,476 30,178 7.59
------- ------
Total loans 15,565,079 872,577 5.61
Mortgage-backed and other
securities (2) 4,850,753 219,040 4.52
Federal funds sold and repurchase
agreements 39,838 2,071 5.20
Federal Home Loan Bank stock 167,651 11,634 6.94
------- ------
Total interest-earning assets 20,623,321 1,105,322 5.36
---------
Goodwill 185,151
Other non-interest-earning assets 753,377
-------
Total assets $21,561,849
===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $2,014,253 8,126 0.40
Money market 379,634 3,780 1.00
NOW and demand deposit 1,465,463 951 0.06
Liquid certificates of deposit 1,549,774 73,352 4.73
--------- ------
Total core deposits 5,409,124 86,209 1.59
Certificates of deposit 7,823,767 369,830 4.73
--------- -------
Total deposits 13,232,891 456,039 3.45
Borrowings 6,776,394 315,755 4.66
--------- -------
Total interest-bearing liabilities 20,009,285 771,794 3.86
-------
Non-interest-bearing liabilities 351,080
-------
Total liabilities 20,360,365
Stockholders' equity 1,201,484
---------
Total liabilities and stockholders'
equity $21,561,849
===========
Net interest income/net interest
rate spread $333,528 1.50%
======== ====
Net interest-earning assets/net
interest margin $614,036 1.62%
======== ====
Ratio of interest-earning assets
to interest-bearing liabilities 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 included at average amortized
cost.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
--------------------------------
(Dollars in Thousands)
At December 31, At September 30,
2008 2008
--------------- ----------------
Weighted Weighted
Average Average
Balance Rate (1) Balance Rate (1)
--------- -------- --------- --------
Selected interest-
earning assets:
Mortgage loans, gross
(2):
One-to-four family $12,349,617 5.65% $12,359,266 5.65%
Multi-family, commercial
real estate
and construction 3,909,619 5.98 3,913,075 5.92
Mortgage-backed and
other securities (3) 4,037,302 4.34 4,159,133 4.35
Interest-bearing
liabilities:
Savings 1,832,790 0.40 1,842,781 0.40
Money market 289,135 1.03 302,760 1.06
NOW and demand deposit 1,466,916 0.06 1,440,230 0.06
Liquid certificates of
deposit 981,733 2.32 1,075,485 2.47
------- ---------
Total core deposits 4,570,574 0.74 4,661,256 0.82
Certificates of deposit 8,909,350 3.83 8,447,927 3.92
--------- ---------
Total deposits 13,479,924 2.78 13,109,183 2.82
Borrowings, net 6,965,274 3.72 7,500,224 3.86
At December 31,
2007
---------------
Weighted
Average
Balance Rate (1)
--------- --------
Selected interest-earning assets:
Mortgage loans, gross (2):
One-to-four family $11,628,270 5.70%
Multi-family, commercial real estate
and construction 4,055,081 5.92
Mortgage-backed and other securities
(3) 4,370,850 4.33
Interest-bearing liabilities:
Savings 1,891,618 0.40
Money market 333,914 0.98
NOW and demand deposit 1,478,362 0.06
Liquid certificates of deposit 1,447,341 4.40
---------
Total core deposits 5,151,235 1.46
Certificates of deposit 7,898,203 4.79
---------
Total deposits 13,049,438 3.48
Borrowings, net 7,184,658 4.66
(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.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (1)
------------------------------------------------------------
(In Thousands, Except Per Share Data)
Non-GAAP net income, non-GAAP earnings per share and non-GAAP returns,
representing net income and earnings per share determined in accordance
with GAAP excluding the effects of the after-tax charges noted below,
provide a meaningful comparison for effectively evaluating Astoria's
operating results.
For the Three Months Ended
December 31, 2008
-----------------
Adjustments
GAAP (2) Non-GAAP (1)
------- ----------- ------------
Net interest income $114,945 $- $114,945
Provision for loan losses 45,000 - 45,000
------ - ------
Net interest income after
provision for loan losses 69,945 - 69,945
Non-interest income 19,208 - 19,208
Non-interest expense 56,245 - 56,245
------ - ------
Income before income tax expense 32,908 - 32,908
Income tax expense 3,460 7,378 10,838
----- ----- ------
Net income $29,448 $(7,378) $22,070
------- ------- -------
Basic earnings per common share $0.33 $(0.08) $0.25
----- ------ -----
Diluted earnings per common
share $0.33 $(0.08) $0.24 (3)
----- ------ ----- --
For the Twelve Months Ended
December 31, 2008
-----------------
Adjustments
GAAP (2) Non-GAAP (1)
---- ----------- ------------
Net interest income $395,384 $- $395,384
Provision for loan losses 69,000 - 69,000
------ - ------
Net interest income after
provision for loan losses 326,384 - 326,384
Non-interest income 11,180 77,696 88,876
Non-interest expense 233,260 - 233,260
------- - -------
Income before income tax expense 104,304 77,696 182,000
Income tax expense 28,962 27,194 56,156
------ ------ ------
Net income $75,342 $50,502 $125,844
------- ------- --------
Basic earnings per common share $0.84 $0.56 $1.40
----- ----- -----
Diluted earnings per common
share $0.83 $0.56 $1.39
----- ----- -----
For the Three Months Ended
December 31, 2007
-----------------
Adjustments
GAAP (4) Non-GAAP (1)
------- ----------- ------------
Net interest income $81,933 $- $81,933
Provision for loan losses 2,000 - 2,000
----- - -----
Net interest income after
provision for loan losses 79,933 - 79,933
Non-interest income 2,108 20,484 22,592
Non-interest expense 58,902 - 58,902
------ - ------
Income before income tax expense 23,139 20,484 43,623
Income tax expense 3,466 7,169 10,635
----- ----- ------
Net income $19,673 $13,315 $32,988
------- ------- -------
Basic earnings per common share $0.22 $0.15 $0.37
----- ----- -----
Diluted earnings per common
share $0.22 $0.15 $0.36 (3)
----- ----- ----- --
For the Twelve Months Ended
December 31, 2007
-----------------
Adjustments
GAAP (4) Non-GAAP (1)
---- ----------- ------------
Net interest income $333,528 $- $333,528
Provision for loan losses 2,500 - 2,500
----- - -----
Net interest income after
provision for loan losses 331,028 - 331,028
Non-interest income 75,790 20,484 96,274
Non-interest expense 231,273 - 231,273
------- - -------
Income before income tax expense 175,545 20,484 196,029
Income tax expense 50,723 7,169 57,892
------ ----- ------
Net income $124,822 $13,315 $138,137
-------- ------- --------
Basic earnings per common share $1.38 $0.15 $1.53
----- ----- -----
Diluted earnings per common
share $1.36 $0.14 $1.50
----- ----- -----
-------------------------------
(1) Non-GAAP net income is also referred to as operating income and
operating EPS throughout this release.
(2) Adjustments relate to the other-than-temporary impairment write-
down of securities charge and the related tax effects recorded in
the 2008 third quarter and subsequent tax adjustment recorded in the
2008 fourth quarter as a result of tax changes due to the enactment
of the Emergency Economic Stabilization Act in October 2008.
(3) Figures do not cross foot due to rounding.
(4) Adjustments relate to the other-than-temporary impairment write-
down of securities charge and the related tax effects recorded in
the 2007 fourth quarter.
(a) Included in the 2008 fourth quarter is a tax benefit of $7.4 million, or $0.08 per diluted share, due to the recognition of the 2008 third quarter other-than-temporary impairment ("OTTI") charge, relating to Freddie Mac preferred stock, as an ordinary loss for tax purposes, rather than a capital loss for tax purposes as recognized in the 2008 third quarter. Included in the 2007 fourth quarter is an OTTI, after-tax, non-cash charge totaling $13.3 million, or $0.15 per diluted share, relating to Freddie Mac preferred stock.
(b) Included in the year ended December 31, 2008, is an OTTI, after-tax, non-cash charge totaling $50.5 million, or $0.56 per diluted share, relating to Freddie Mac preferred stock. Included in the year ended December 31, 2007 is an OTTI, after-tax, non-cash charge totaling $13.3 million, or $0.14 per diluted share, relating to Freddie Mac preferred stock.
