LAKE SUCCESS, N.Y., July 22 /PRNewswire-FirstCall/ -- Astoria Financial Corporation (NYSE: AF) ("Astoria", the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $2.7 million, or $0.03 diluted earnings per share ("EPS"), (operating income of $10.1 million, or $0.11 operating EPS), for the quarter ended June 30, 2009, compared to $33.5 million, or $0.37 EPS for the comparable 2008 period. For the six months ended June 30, 2009, net income totaled $11.5 million, or $0.12 EPS (operating income of $22.4 million, or $0.24 operating EPS), compared to $62.4 million, or $0.68 EPS, for the comparable 2008 period.
Included in the 2009 second quarter results are two charges totaling $11.4 million ($7.4 million, or $0.08 EPS, after-tax), which are not routine to our core operations: the FDIC deposit insurance special assessment totaling $9.9 million and a $1.5 million lower of cost or market write-down on a former mortgage origination building held-for-sale ("Mortgage building write-down"). Included in the six month period ended June 30, 2009, in addition to the aforementioned items, is an other-than-temporary impairment ("OTTI"), non-cash charge of $5.3 million ($3.4 million, or $0.04 EPS, after-tax) reported in the 2009 first quarter, to write-off the remaining cost basis of our investment in Freddie Mac preferred stock. Operating income and operating EPS, representing net income and EPS determined in accordance with generally accepted accounting principles ("GAAP") excluding the after-tax effects of the FDIC deposit insurance special assessment, the OTTI charge and the Mortgage building write-down, are non-GAAP measures which provide a meaningful comparison for effectively evaluating Astoria's operating results. Operating income and operating EPS equaled net income and diluted EPS for the 2008 second quarter and six months. Please refer to the reconciliation of GAAP measures and non-GAAP measures table in this release.
Commenting on the second quarter results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, stated, "On an operating basis, our year over year quarter and six month results were primarily affected by increased credit costs associated with the national recession and, on a linked quarter basis, from a reduction in interest earning assets resulting from shrinkage of the securities and loan portfolios due primarily to repayments in the second quarter, coupled with a lag in deploying excess liquidity. During the second half of 2009, we expect to deploy the excess liquidity into higher yielding assets, which will have a positive impact on net income and the net interest margin. Additionally, we expect problem assets to remain at manageable levels as we pro-actively address our non-performing loans."
Board Declares Quarterly Cash Dividend of $0.13 Per Share
The Board of Directors of the Company, at their July 22, 2009 meeting, declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on September 1, 2009 to shareholders of record as of August 17, 2009. This is the fifty-seventh consecutive quarterly cash dividend declared by the Company.
Second Quarter and Six Month Earnings Summary
Net interest income for the quarter ended June 30, 2009 increased to $109.1 million, or 18%, from $92.6 million for the 2008 second quarter. For the six months ended June 30, 2009, net interest income increased to $220.7 million, or 27%, compared to $173.4 million for the comparable 2008 period.
The net interest margin for the quarter ended June 30, 2009 was 2.16%, unchanged from the previous quarter and 35 basis points higher than 1.81% for the 2008 second quarter. On a linked quarter basis, excess liquidity reduced the margin five basis points. The year-over-year increase in the margin was due to the cost of liabilities declining more rapidly than the yield on interest earning assets.
"We expect a resumption of net interest margin expansion in the third quarter, as we realize the benefit from deploying excess liquidity into higher yielding assets coupled with the repricing benefit from maturing non-Liquid CDs with interest rates considerably above current market rates, which will be somewhat offset by a decline in asset yields. Non-Liquid CDs totaling $3.2 billion are scheduled to mature in the 2009 second half, with a weighted average rate of 3.32%. Non-Liquid CDs were issued or repriced in June 2009 at a weighted average rate of 1.73%. Further illustrating the pace of decline in deposit costs, the average cost of deposits for the second quarter was 2.42%, while the weighted average cost of deposits at quarter-end was 2.30%," Mr. Engelke noted.
For the quarter ended June 30, 2009, a $50.0 million provision for loan losses was recorded which was equal to the provision for the previous quarter and greater than the $7.0 million provision for the 2008 second quarter. For the six months ended June 30, 2009, provision for loan losses totaled $100.0 million compared to $11.0 million for the comparable period in 2008. Mr. Engelke noted, "The 2009 provisions recognize the impact that the continued weakness in both the national housing market and the economy in general, particularly increasing unemployment, have had on our overall level of loan delinquencies and loan charge-offs."
Non-interest income for the quarter ended June 30, 2009 totaled $22.0 million, excluding the Mortgage building write-down, compared to $24.8 million for the 2008 second quarter. For the six months ended June 30, 2009, non-interest income, excluding the Mortgage building write-down and the OTTI charge, totaled $43.3 million, compared to $47.3 million for the comparable 2008 period.
General and administrative ("G&A") expense for the quarter ended June 30, 2009, excluding the FDIC special assessment, totaled $66.2 million compared to $60.0 million for the 2008 second quarter. For the six months ended June 30, 2009, G&A expense totaled $130.1 million, excluding the FDIC special assessment, compared to $118.2 million for the six months ended June 30, 2008. The increases were due primarily to an increase in FDIC insurance premiums, beyond the FDIC special assessment, and compensation and benefits expense, primarily pension expense.
Balance Sheet Summary
The loan portfolio declined $449.0 million from the previous quarter and $739.5 million from December 31, 2008 and totaled $16.0 billion at June 30, 2009. The primary reason for the declines were decreases of $262.2 million and $454.5 million, respectively, in the one-to-four family loan portfolio, primarily due to accelerated prepayment activity, as well as decreases of $171.5 million and $266.2 million, respectively, in the combined multi-family and commercial real estate ("CRE") portfolio. At June 30, 2009, the one-to-four family loan portfolio totaled $11.9 billion and the multi-family/CRE portfolio totaled $3.6 billion.
For the quarter and six months ended June 30, 2009, one-to-four family loan originations for portfolio totaled $668.5 million and $1.1 billion, respectively, compared to $1.5 billion and $2.1 billion, respectively, for the comparable 2008 periods. One-to-four family loan prepayments for the quarter and six months ended June 30, 2009 totaled $810.1 million and $1.3 billion, respectively, compared to $821.3 million and $1.7 billion, respectively, for the comparable 2008 periods. The loan-to-value ("LTV") ratio of the one-to-four family loan production for portfolio for the 2009 second quarter and six months each averaged 56% at origination and the loan amount each averaged approximately $720,000. Based on our decision at the end of March 2009 to more competitively price our 5/1 jumbo ARM and retain 15 year jumbo fixed-rate loans, our loan pipeline at June 30, 2009 increased 65% from the pipeline at March 31, 2009. This was achieved while maintaining our strict underwriting standards.
Deposits were relatively flat from the previous quarter and increased $130.3 million from December 31, 2008 to $13.6 billion at June 30, 2009. Importantly, low-cost savings, money market and checking account deposits increased $93.8 million and $233.5 million for the 2009 second quarter and six months, respectively. Commenting on deposit flows, Mr. Engelke noted, "During the second quarter we reduced our focus on CD deposits and slowed deposit growth. This was done to offset the impact of accelerated mortgage prepayment activity, which outpaced our loan production. This notwithstanding, during the 2009 six month period, we achieved a 6.5% increase in low-cost savings, money market and checking deposits."
Borrowings decreased $249.9 million from the previous quarter and $1.1 billion from December 31, 2008 to $5.9 billion, at June 30, 2009. Total assets declined $303.5 million from the prior quarter and $880.8 million from December 31, 2008 to $21.1 billion at June 30, 2009.
Stockholders' equity was $1.2 billion, or 5.68% of total assets at June 30, 2009. Astoria Federal continues to be designated as well-capitalized with core, tangible, risk-based and Tier 1 risk-based capital ratios of 6.62%, 6.62%, 12.73% and 11.46%, respectively, at June 30, 2009.
Asset Quality
Non-performing loans ("NPL"), including troubled debt restructurings ("TDR") of $47.8 million, totaled $360.0 million, or 1.71% of total assets at June 30, 2009, an increase of $23.4 million from the previous quarter, net of $46.1 million of non-performing loans either sold or classified as held-for-sale. At June 30, 2009, one-to-four family non-performing loans totaled $287.9 million and multi-family/CRE non-performing loans totaled $68.2 million compared to $245.5 million and $88.7 million, respectively, at March 31, 2009. Important to note, of the $360.0 million of non-performing loans, $166.5 million, or 46%, represent residential loans which, at 180 days delinquent and annually thereafter, were reviewed and adjusted, as needed, to the estimated fair value of the underlying collateral at such time, less estimated selling costs.
The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:
Combined Change Total
30-59 60-89 30-89 from 90 + Days 30-90+
Days Days Days Previous Past Due Days
(In millions) Past Due Past Due Past Due Quarter (NPL) Past Due
At June 30,
2008 $134.5 $51.0 $185.5 +$0.4 $128.6 $314.1
At Sept. 30,
2008 $171.0 $54.7 $225.7 +$40.2 $164.8 $390.5
At Dec. 31,
2008 $229.8 $70.1 $299.9 +$74.2 $238.6 $538.5
At March 31,
2009 $215.9 $105.7 $321.6 +$21.7 $336.6 $658.2
At June 30,
2009 $210.5 $109.7 $320.2 $(1.4) $360.0 $680.2
The table below details, as of June 30, 2009, the ten largest concentrations by state of one-to-four family loans and the respective non-performing loan totals in those states. More comprehensive state details are included in the table at the end of this release.
(In millions)
Total 1-4 % of 1-4 Total 1-4 NPLs as %
Family Family Loan Family of State
State Loans Portfolio NPLs Total
----- -------- --------- ------- -------
New York $2,904.2 24% $31.0 1.07%
Illinois $1,310.1 11% $30.9 2.36%
California $1,235.4 10% $47.9 3.88%
Connecticut $1,234.9 10% $24.1 1.95%
New Jersey $962.2 8% $28.4 2.95%
Virginia $854.7 7% $24.5 2.87%
Massachusetts $839.8 7% $14.9 1.77%
Maryland $815.2 7% $37.7 4.62%
Washington $320.1 3% $2.3 0.72%
Florida $289.9 2% $20.6 7.11%
------ -----
Top 10 States $10,766.5 91%(1) $262.3 2.44%
All other
states (2) $1,128.6 9% $25.6 2.27%
-------- -----
Total 1-4 Family
Portfolio $11,895.1 100% $287.9 2.42%
========= ==== ======
(1) Does not foot due to rounding.
(2) Includes 29 states and Washington, DC
Net loan charge-offs for the quarter ended June 30, 2009 totaled $38.9 million (of which $20.6 million represented one-to-four family loans and $17.7 million represented multi-family/CRE loans) compared to $19.8 million (of which $11.2 million represented one-to-four family loans and $8.2 million represented multi-family/CRE loans) for the 2009 first quarter. Included in the $20.6 million of one-to-four family loan charge-offs are $13.9 million of charge-offs on $67.4 million of non-performing loans which, at 180 days delinquent, were reviewed and adjusted to the estimated fair value of the underlying collateral less estimated selling costs. Included in the $17.7 million of multi-family/CRE loan charge-offs were $15.7 million on $46.1 million of non-performing loans that were either sold or classified as held-for-sale. Commenting on asset quality, Mr. Engelke noted, "The prolonged recession and high unemployment continues to strain the financial condition of prime residential borrowers and their ability to remain current on their mortgage loans and the ability of tenants in multi-family properties to pay rent on their apartments. Important to note, although we experienced increased foreclosures, credit costs and non-performing loans, the pace of growth in non-performing loans slowed from the previous two quarters. Additionally, loans delinquent 30-89 days decreased $1.4 million from March 31, 2009, considerably less than the $21.7 million and $74.2 million increases, respectively, in the previous two quarters."
Future Outlook
Commenting on the outlook for the remainder of 2009, Mr. Engelke stated, "The year continues to present us with both opportunities and challenges. Although we are encouraged by the linked quarter decline in 30-89 day loan delinquencies and the reduced pace of growth in non-performing loans, we expect that job losses and economic weakness will continue to put pressure on borrowers. This may result in somewhat higher delinquencies and non-performing loans; however, credit costs should continue to remain manageable.
With respect to our fundamental operating performance, we expect increases in net interest income and the net interest margin going forward as we begin to realize the benefit from the deployment of excess liquidity, coupled with significant CD maturities throughout the year at rates that are considerably above current market rates. With respect to loan growth, although our mortgage loan pipeline has increased 65% this quarter, lower market rates for 30-year conforming mortgage loans coupled with the increased conforming loan limits in many of the markets we operate in, will accelerate loan prepayments in our one-to-four family loan portfolio and will temper loan growth in the near term."
Astoria Financial Corporation, with assets of $21.1 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $13.6 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 sixteen states, primarily along the East Coast, and the District of Columbia, and through correspondent relationships covering seventeen states and the District of Columbia.
Earnings Conference Call July 23, 2009 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, July 23, 2009 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, ID# 14032640. A telephone replay will be available on July 23, 2009 from 1:00 p.m. (ET) through July 31, 2009, 11:59 p.m. (ET). The replay number is (800) 642-1687, ID#: 14032640. 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 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 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.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
---------------------------------------------
(In Thousands, Except Share Data)
At At
June 30, December 31,
2009 2008
---- ----
ASSETS
------
Cash and due from banks $406,341 $76,233
Repurchase agreements 29,790 24,060
Securities available-for-
sale 1,127,259 1,390,440
Securities held-to-maturity
(fair value of $2,425,467
and $2,643,955,
respectively) 2,384,681 2,646,862
Federal Home Loan Bank of
New York stock, at cost 177,454 211,900
Loans held-for-sale, net 91,184 5,272
Loans receivable:
Mortgage loans, net 15,638,589 16,372,383
Consumer and other loans,
net 334,317 340,061
------- -------
15,972,906 16,712,444
Allowance for loan
losses (160,271) (119,029)
-------- --------
Total loans receivable,
net 15,812,635 16,593,415
Mortgage servicing rights,
net 9,602 8,216
Accrued interest receivable 75,010 79,589
Premises and equipment, net 137,420 139,828
Goodwill 185,151 185,151
Bank owned life insurance 401,493 401,280
Other assets 263,308 219,865
------- -------
TOTAL ASSETS $21,101,328 $21,982,111
=========== ===========
LIABILITIES
-----------
Deposits $13,610,181 $13,479,924
Reverse repurchase
agreements 2,550,000 2,850,000
Federal Home Loan Bank of
New York advances 2,960,000 3,738,000
Other borrowings, net 377,573 377,274
Mortgage escrow funds 132,831 133,656
Accrued expenses and other
liabilities 273,099 221,488
------- -------
TOTAL LIABILITIES 19,903,684 20,800,342
---------- ----------
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 97,058,454 and 95,881,132
shares outstanding,
respectively) 1,665 1,665
Additional paid-in capital 851,781 856,021
Retained earnings 1,837,187 1,864,257
Treasury stock (69,436,434
and 70,613,756 shares, at
cost, respectively) (1,434,881) (1,459,211)
Accumulated other
comprehensive loss (41,150) (61,865)
Unallocated common stock
held by ESOP (4,628,634 and
5,212,668 shares,
respectively) (16,958) (19,098)
------- -------
TOTAL STOCKHOLDERS' EQUITY 1,197,644 1,181,769
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $21,101,328 $21,982,111
=========== ===========
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands, Except Share Data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Interest income:
Mortgage loans:
One-to-four family $154,547 $152,247 $317,487 $305,845
Multi-family, commercial
real estate and
construction 55,978 58,686 112,592 119,001
Consumer and other loans 2,657 4,177 5,335 9,609
Mortgage-backed and other
securities 37,223 46,708 80,327 94,601
Federal funds sold,
repurchase agreements and
interest-earning
cash accounts 215 1,018 231 1,654
Federal Home Loan Bank of
New York stock 2,677 3,803 4,363 8,025
----- ----- ----- -----
Total interest income 253,297 266,639 520,335 538,735
------- ------- ------- -------
Interest expense:
Deposits 81,961 97,851 172,721 208,054
Borrowings 62,282 76,208 126,883 157,315
------ ------ ------- -------
Total interest expense 144,243 174,059 299,604 365,369
------- ------- ------- -------
Net interest income 109,054 92,580 220,731 173,366
Provision for loan losses 50,000 7,000 100,000 11,000
------ ----- ------- ------
Net interest income
after provision for
loan losses 59,054 85,580 120,731 162,366
------ ------ ------- -------
Non-interest income:
Customer service fees 14,240 16,775 29,079 31,909
Other loan fees 939 1,090 1,878 2,129
Gain on sales of securities - - 2,112 -
Other-than-temporary
impairment write-down of
securities - - (5,300) -
Mortgage banking income, net 3,357 1,575 3,826 2,025
Income from bank owned life
insurance 2,468 4,008 4,447 8,397
Other (574) 1,385 330 2,810
---- ----- --- -----
Total non-interest income 20,430 24,833 36,372 47,270
------ ------ ------ ------
Non-interest expense:
General and administrative:
Compensation and
benefits 33,363 32,375 67,363 64,366
Occupancy, equipment
and systems 16,065 16,847 32,396 33,751
Federal deposit
insurance premiums 6,899 548 10,804 1,119
Federal deposit insurance
special assessment 9,851 - 9,851 -
Advertising 1,221 1,550 2,780 2,623
Other 8,622 8,662 16,788 16,352
----- ----- ------ ------
Total non-interest expense 76,021 59,982 139,982 118,211
------ ------ ------- -------
Income before income tax expense 3,463 50,431 17,121 91,425
Income tax expense 763 16,981 5,625 29,072
--- ------ ----- ------
Net income $2,700 $33,450 $11,496 $62,353
====== ======= ======= =======
Basic earnings per common share $0.03 $0.37 $0.12 $0.69
===== ===== ===== =====
Diluted earnings per common
share $0.03 $0.37 $0.12 $0.68
===== ===== ===== =====
Basic weighted average
common shares 90,525,669 89,550,934 90,370,279 89,511,918
Diluted weighted
average common and
common equivalent shares 90,525,669 90,594,880 90,370,400 90,670,546
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Three Months Ended June 30,
2009
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,143,060 $154,547 5.09%
Multi-family, commercial
real
estate and
construction 3,745,255 55,978 5.98
Consumer and other loans (1) 337,085 2,657 3.15
------- -----
Total loans 16,225,400 213,182 5.26
Mortgage-backed and other
securities (2) 3,389,962 37,223 4.39
Federal funds sold, repurchase
agreements and
interest-earning cash
accounts 373,430 215 0.23
Federal Home Loan Bank stock 178,107 2,677 6.01
------- -----
Total interest-earning
assets 20,166,899 253,297 5.02
-------
Goodwill 185,151
Other non-interest-earning
assets 864,792
-------
Total assets $21,216,842
===========
Liabilities and stockholders'
equity:
Interest-bearing
liabilities:
Savings $1,927,125 1,945 0.40
Money market 317,167 607 0.77
NOW and demand deposit 1,550,791 269 0.07
Liquid certificates of deposit 943,623 2,956 1.25
------- -----
Total core deposits 4,738,706 5,777 0.49
Certificates of deposit 8,822,247 76,184 3.45
--------- ------
Total deposits 13,560,953 81,961 2.42
Borrowings 5,969,501 62,282 4.17
--------- ------
Total interest-bearing
liabilities 19,530,454 144,243 2.95
-------
Non-interest-bearing
liabilities 485,819
-------
Total liabilities 20,016,273
Stockholders' equity 1,200,569
---------
Total liabilities and
stockholders'
equity $21,216,842
===========
Net interest income/net interest
rate spread (3) $109,054 2.07%
======== ====
Net interest-earning assets/net
interest margin (4) $636,445 2.16%
======== ====
Ratio of interest-earning assets
to interest-bearing
liabilities 1.03x
=====
For the Three Months Ended June 30,
2008
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,558,547 $152,247 5.27%
Multi-family, commercial
real
estate and
construction 3,941,587 58,686 5.96
Consumer and other loans (1) 345,242 4,177 4.84
------- -----
Total loans 15,845,376 215,110 5.43
Mortgage-backed and other
securities (2) 4,234,398 46,708 4.41
Federal funds sold, repurchase
agreements and
interest-earning cash
accounts 183,413 1,018 2.22
Federal Home Loan Bank stock 194,783 3,803 7.81
------- -----
Total interest-earning
assets 20,457,970 266,639 5.21
-------
Goodwill 185,151
Other non-interest-earning
assets 844,802
-------
Total assets $21,487,923
===========
Liabilities and stockholders'
equity:
Interest-bearing
liabilities:
Savings $1,884,583 1,899 0.40
Money market 317,185 799 1.01
NOW and demand deposit 1,508,664 319 0.08
Liquid certificates of deposit 1,302,494 8,894 2.73
--------- -----
Total core deposits 5,012,926 11,911 0.95
Certificates of deposit 8,008,650 85,940 4.29
--------- ------
Total deposits 13,021,576 97,851 3.01
Borrowings 6,802,152 76,208 4.48
--------- ------
Total interest-bearing
liabilities 19,823,728 174,059 3.51
-------
Non-interest-bearing
liabilities 443,235
-------
Total liabilities 20,266,963
Stockholders' equity 1,220,960
---------
Total liabilities and
stockholders'
equity $21,487,923
===========
Net interest income/net interest
rate spread (3) $92,580 1.70%
======= ====
Net interest-earning assets/net
interest margin (4) $634,242 1.81%
======== ====
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.
(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.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Six Months Ended June 30,
2009
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,257,408 $317,487 5.18%
Multi-family, commercial
real
estate and
construction 3,803,712 112,592 5.92
Consumer and other loans (1) 338,727 5,335 3.15
------- -----
Total loans 16,399,847 435,414 5.31
Mortgage-backed and other
securities (2) 3,635,847 80,327 4.42
Federal funds sold, repurchase
agreements and
interest-earning cash
accounts 233,408 231 0.20
Federal Home Loan Bank stock 185,954 4,363 4.69
------- -----
Total interest-earning
assets 20,455,056 520,335 5.09
-------
Goodwill 185,151
Other non-interest-earning
assets 827,412
-------
Total assets $21,467,619
===========
Liabilities and stockholders'
equity:
Interest-bearing
liabilities:
Savings $1,888,572 3,792 0.40
Money market 306,082 1,286 0.84
NOW and demand deposit 1,510,098 547 0.07
Liquid certificates of deposit 961,573 7,933 1.65
------- -----
Total core deposits 4,666,325 13,558 0.58
Certificates of deposit 8,910,252 159,163 3.57
--------- -------
Total deposits 13,576,577 172,721 2.54
Borrowings 6,248,305 126,883 4.06
--------- -------
Total interest-bearing
liabilities 19,824,882 299,604 3.02
-------
Non-interest-bearing
liabilities 448,195
-------
Total liabilities 20,273,077
Stockholders' equity 1,194,542
---------
Total liabilities and
stockholders'
equity $21,467,619
===========
Net interest income/net interest
rate spread (3) $220,731 2.07%
======== ====
Net interest-earning assets/net
interest margin (4) $630,174 2.16%
======== ====
Ratio of interest-earning assets
to interest-bearing
liabilities 1.03x
=====
For the Six Months Ended June 30,
2008
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,590,151 $305,845 5.28%
Multi-family, commercial
real
estate and
construction 3,973,630 119,001 5.99
Consumer and other loans (1) 350,650 9,609 5.48
------- -----
Total loans 15,914,431 434,455 5.46
Mortgage-backed and other
securities (2) 4,265,655 94,601 4.44
Federal funds sold, repurchase
agreements and
interest-earning cash
accounts 138,790 1,654 2.38
Federal Home Loan Bank stock 195,449 8,025 8.21
------- -----
Total interest-earning
assets 20,514,325 538,735 5.25
-------
Goodwill 185,151
Other non-interest-earning
assets 813,624
-------
Total assets $21,513,100
===========
Liabilities and stockholders'
equity:
Interest-bearing
liabilities:
Savings $1,879,370 3,787 0.40
Money market 320,568 1,603 1.00
NOW and demand deposit 1,477,578 631 0.09
Liquid certificates of deposit 1,363,500 23,387 3.43
--------- ------
Total core deposits 5,041,016 29,408 1.17
Certificates of deposit 7,950,661 178,646 4.49
--------- -------
Total deposits 12,991,677 208,054 3.20
Borrowings 6,904,989 157,315 4.56
--------- -------
Total interest-bearing
liabilities 19,896,666 365,369 3.67
-------
Non-interest-bearing
liabilities 395,973
-------
Total liabilities 20,292,639
Stockholders' equity 1,220,461
---------
Total liabilities and
stockholders'
equity $21,513,100
===========
Net interest income/net interest
rate spread (3) $173,366 1.58%
======== ====
Net interest-earning assets/net
interest margin (4) $617,659 1.69%
======== ====
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.
(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.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
----------------------------------------
For the At or For the
Three Months Six Months
Ended Ended
June 30, June 30,
--------- ---------
2009 2008 2009 2008
---- ---- ---- ----
Selected Returns and Financial Ratios
(annualized)
--------------------
Return on average stockholders'
equity 0.90% 10.96% 1.92% 10.22%
Return on average tangible
stockholders' equity (1) 1.06 12.92 2.28 12.05
Return on average assets 0.05 0.62 0.11 0.58
General and administrative
expense to average assets 1.43 1.12 1.30 1.10
Efficiency ratio (2) 58.71 51.09 54.45 53.58
Net interest rate spread 2.07 1.70 2.07 1.58
Net interest margin 2.16 1.81 2.16 1.69
Selected Non-GAAP Returns
and Financial Ratios
(annualized) (3)
-------------------------
Non-GAAP return on average
stockholders' equity 3.38% 10.96% 3.75% 10.22%
Non-GAAP return on average tangible
stockholders' equity (1) 3.99 12.92 4.43 12.05
Non-GAAP return on average assets 0.19 0.62 0.21 0.58
Non-GAAP general and administrative
expense to average assets 1.25 1.12 1.21 1.10
Non-GAAP efficiency ratio (2) 50.48 51.09 49.29 53.58
Asset Quality Data
(dollars in thousands)
-----------------------
Non-performing assets (4) $391,945 $146,852
Non-performing loans (4) 360,002 128,603
Loans delinquent 90 days or
more and still accruing
interest 4,660 122
Non-accrual loans 355,342 128,481
Loans 60-89 days delinquent 109,749 51,035
Loans 30-59 days delinquent 210,468 134,493
Net charge-offs $38,916 $5,240 58,758 8,103
Non-performing loans/total loans 2.25% 0.79%
Non-performing loans/total assets 1.71 0.59
Non-performing assets/total assets 1.86 0.68
Allowance for loan losses/non-
performing loans 44.52 63.64
Allowance for loan losses/non-accrual
loans 45.10 63.70
Allowance for loan losses/total
loans 1.00 0.51
Net charge-offs to average loans
outstanding (annualized) 0.96% 0.13% 0.72 0.10
Capital Ratios (Astoria
Federal)
-----------------------
Tangible 6.62% 6.63%
Core 6.62 6.63
Risk-based 12.73 12.17
Tier 1 risk-based capital 11.46 11.51
Other Data
-----------
Cash dividends paid per common
share $0.13 $0.26 $0.26 $0.52
Book value per share (5) 12.96 13.54
Tangible book value per share (6) 10.95 11.49
Tangible stockholders' equity/
tangible assets (1) (7) 4.84% 4.85%
Mortgage loans serviced for
others (in thousands) $1,273,689 $1,239,745
Full time equivalent employees 1,585 1,643
(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) See page 13 for a reconciliation of GAAP measures to non-GAAP measures
for the three and six months ended June 30, 2009 and 2008.
(4) Non-performing assets and non-performing loans include, but are not
limited to, one-to-four family mortgage loans which at 180 days past due
we obtained an estimate of collateral value and charged-off any portion of
the loan in excess of the estimated collateral value less estimated
selling costs.
(5) Book value per share represents stockholders' equity divided by
outstanding shares, excluding unallocated Employee Stock Ownership Plan,
or ESOP, shares.
(6) Tangible book value per share represents stockholders' equity less
goodwill divided by outstanding shares, excluding unallocated ESOP shares.
(7) Tangible assets represent assets less goodwill.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
-------------------------------
(Dollars in Thousands)
At June 30, At March 31, At June 30,
2009 2009 2008
------------ ------------- ------------
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 $11,895,071 5.52% $12,157,308 5.61% $11,825,962 5.64%
Multi-family,
commercial
real estate
and
construction 3,636,761 5.98 3,815,643 5.97 3,905,610 5.90
Mortgage-backed
and other
securities (3) 3,511,940 4.17 3,682,650 4.31 4,203,529 4.32
Interest-bearing
liabilities:
Savings 1,942,933 0.40 1,890,372 0.40 1,886,470 0.40
Money market 321,005 0.64 308,352 0.82 316,607 1.02
NOW and demand
deposit 1,558,429 0.06 1,529,856 0.06 1,506,549 0.06
Liquid
certificates
of deposit 904,283 0.95 977,387 1.69 1,246,359 2.47
------- ------- ---------
Total core
deposits 4,726,650 0.41 4,705,967 0.58 4,955,985 0.86
Certificates of
deposit 8,883,531 3.31 8,923,211 3.61 8,133,061 4.10
--------- --------- ---------
Total deposits 13,610,181 2.30 13,629,178 2.57 13,089,046 2.87
Borrowings, net 5,887,573 4.25 6,137,423 4.11 6,937,975 4.28
(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 MEASURES TO NON-GAAP MEASURES
----------------------------------------------------
(In Thousands, Except Per Share Data)
Income and expense and related financial ratios determined in accordance
with GAAP (GAAP measures), excluding the charges and related tax effects
detailed in the following table (non-GAAP measures) provide a meaningful
comparison for effectively evaluating Astoria's operating results. For
the three and six months ended June 30, 2008, non-GAAP measures equaled
GAAP measures.
For the Three Months Ended For the Six Months Ended
June 30, 2009 June 30, 2009
------------- -------------
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
---- ----------- -------- ---- ----------- --------
Net interest
income $109,054 $- $109,054 $220,731 $- $220,731
Provision for
loan losses 50,000 - 50,000 100,000 - 100,000
------ -- ------ ------- -- -------
Net interest
income after
provision for
loan losses 59,054 - 59,054 120,731 - 120,731
Non-interest
income (1) 20,430 1,588 22,018 36,372 6,888 43,260
Non-interest
expense
(general and
administrative
expense) (2) 76,021 (9,851) 66,170 139,982 (9,851) 130,131
------ ------ ------ ------- ------ -------
Income before
income tax
expense 3,463 11,439 14,902 17,121 16,739 33,860
Income tax
expense 763 4,004 4,767 5,625 5,859 11,484
--- ----- ----- ----- ----- ------
Net income (3) $2,700 $7,435 $10,135 $11,496 $10,880 $22,376
------ ------ ------- ------- ------- -------
Basic earnings
per common
share (3) $0.03 $0.08 $0.11 $0.12 $0.12 $0.24
----- ----- ----- ----- ----- -----
Diluted earnings
per common
share (3) $0.03 $0.08 $0.11 $0.12 $0.12 $0.24
----- ----- ----- ----- ----- -----
Non-GAAP returns are calculated substituting non-GAAP net income for net
income in the corresponding ratio calculation, while the non-GAAP general
and administrative expense to average assets ratio substitutes non-GAAP
general and administrative expense (non-GAAP non-interest expense) for
general and administrative expense (non-interest expense) in the
corresponding ratio calculation. Similarly, the non-GAAP efficiency ratio
substitutes non-GAAP non-interest income and non-GAAP general and
administrative expense for non-interest income and general and
administrative expense in the corresponding calculation.
(1) Adjustments relate to the $1.6 million lower of cost or market write
down of premises and equipment held-for-sale recorded in the 2009 second
quarter and the $5.3 million other-than-temporary impairment write-down of
securities charge recorded in the 2009 first quarter.
(2) Adjustment relates to the federal deposit insurance special assessment
recorded in the 2009 second quarter.
(3) Non-GAAP net income and non-GAAP EPS are also referred to as operating
income and operating EPS throughout this release.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
One-to-Four Family Residential Loan Portfolio - Geographic Analysis
-------------------------------------------------------------------
(Dollars in millions)
At June 30, 2009
Non-performing
Non- loans
performing as % of
State Total loans loans total loans
----- ----------- ----------- -----------
New York
Full Income $2,537.0 $15.6 0.61%
Alt A < 70% LTV $271.0 $7.7 2.84%
Alt A 70%-80% LTV $96.2 $7.7 8.00%
----- ----
State Total $2,904.2 $31.0 1.07%
Illinois
Full Income $1,023.5 $6.8 0.66%
Alt A < 70% LTV $124.0 $8.2 6.61%
Alt A 70%-80% LTV $162.6 $15.9 9.78%
------ -----
State Total $1,310.1 $30.9 2.36%
California
Full Income $852.7 $17.3 2.03%
Alt A < 70% LTV $180.4 $9.7 5.38%
Alt A 70%-80% LTV $202.3 $20.9 10.33%
------ -----
State Total $1,235.4 $47.9 3.88%
Connecticut
Full Income $1,014.3 $5.9 0.58%
Alt A < 70% LTV $137.4 $8.6 6.26%
Alt A 70%-80% LTV $83.2 $9.6 11.54%
----- ----
State Total $1,234.9 $24.1 1.95%
New Jersey
Full Income $758.3 $16.5 2.18%
Alt A < 70% LTV $94.4 $5.4 5.72%
Alt A 70%-80% LTV $109.5 $6.5 5.94%
------ ----
State Total $962.2 $28.4 2.95%
Virginia
Full Income $645.2 $11.9 1.84%
Alt A < 70% LTV $79.1 $4.4 5.56%
Alt A 70%-80% LTV $130.4 $8.2 6.29%
------ ----
State Total $854.7 $24.5 2.87%
Massachusetts
Full Income $708.3 $4.7 0.66%
Alt A < 70% LTV $82.2 $3.7 4.50%
Alt A 70%-80% LTV $49.3 $6.5 13.18%
----- ----
State Total $839.8 $14.9 1.77%
Maryland
Full Income $622.5 $12.2 1.96%
Alt A < 70% LTV $82.7 $5.1 6.17%
Alt A 70%-80% LTV $110.0 $20.4 18.55%
------ -----
State Total $815.2 $37.7 4.62%
Washington
Full Income $308.6 $0.5 0.16%
Alt A < 70% LTV $7.5 $1.8 24.00%
Alt A 70%-80% LTV $4.0 $0.0 0.00%
---- ----
State Total $320.1 $2.3 0.72%
Florida
Full Income $194.2 $9.7 4.99%
Alt A < 70% LTV $51.9 $5.5 10.60%
Alt A 70%-80% LTV $43.8 $5.4 12.33%
----- ----
State Total $289.9 $20.6 7.11%
Other States
Full Income $967.5 $15.3 1.58%
Alt A < 70% LTV $78.5 $2.9 3.69%
Alt A 70%-80% LTV $82.6 $7.4 8.96%
----- ----
State Total $1,128.6 $25.6 2.27%
Total all states
Full Income $9,632.1 $116.4 1.21%
Alt A < 70% LTV $1,189.1 $63.0 5.30%
Alt A 70%-80% LTV $1,073.9 $108.5 10.10%
-------- ------
Grand total $11,895.1 $287.9 2.42%
========= ======
Note: LTV's are based on current principal balances and original appraised
values.
