Quarterly Cash Dividend of $0.20 Per Common Share Declared
LAKE SUCCESS, N.Y., April 21 /PRNewswire-FirstCall/ -- Astoria Financial
Corporation (NYSE: AF) ("Astoria"), the holding company for Astoria Federal
Savings and Loan Association ("Astoria Federal"), today reported net income
increased to $59.5 million, or $0.57 diluted earnings per share ("EPS"), for
the quarter ended March 31, 2005, up 11% and 21%, respectively, from $53.4
million, or $0.47 diluted EPS, for the 2004 first quarter. For the 2005 first
quarter, annualized returns on average equity, average tangible equity and
average assets increased to 17.42%, 20.15% and 1.02%, respectively, from
15.05%, 17.31% and 0.95%, respectively, for the comparable 2004 period.
First Quarter 2005 Highlights:
* Diluted EPS: $0.57, increased $0.10, or 21%, from comparable period
last year
* Net interest margin: 2.24%, increased 10 basis points, or 5%, from
comparable period last year
* Return on average equity: 17.42%, increased 16% from comparable period
last year
* Return on average tangible equity: 20.15%, increased 16% from comparable
period last year
* Return on average assets: 1.02%, increased 7% from comparable period
last year
* Total deposits increased $246 million, or 8% annualized
-- Core deposits (1) increased $99 million, or 7% annualized
-- Cost of core deposits: 44 basis points
* Loan portfolio increased $297 million, or 9% annualized
-- Multifamily/Commercial Real Estate ("CRE") loan portfolios
increased $110 million, or 13% annualized, and represent 27% of
total loans
-- One-to-Four Family loan portfolio increased $178 million, or 8%
annualized
* Securities portfolio declined $388 million, or 18% annualized
* Borrowings declined $488 million, or 21% annualized
* Non-performing assets declined $3.4 million to $30.1 million, or 0.13%
of total assets
* Repurchased 1.1 million common shares
(1) Includes savings, money market, checking and Liquid CD accounts
Commenting on the first quarter results, George L. Engelke, Jr., Chairman,
President and Chief Executive Officer of Astoria, noted, "Our financial
performance in the first quarter was marked by solid increases in earnings,
earnings per share and related returns, reflecting our success in improving
the quality of the balance sheet and earnings through robust growth of retail
deposits and mortgage loans, both core businesses."
Board Declares Quarterly Cash Dividend of $0.20 Per Share
The Board of Directors of the Company, at their April 20, 2005 meeting,
declared a quarterly cash dividend of $0.20 per common share. The dividend is
payable on June 1, 2005 to shareholders of record as of May 16, 2005. This is
the fortieth consecutive quarterly cash dividend declared by the Company.
Tenth Stock Repurchase Program Continues
During the first quarter, Astoria repurchased 1.1 million shares of its
common stock at an average cost of $25.53 per share. To date, under the tenth
program that commenced during the 2004 third quarter, Astoria has repurchased
6.3 million shares of the 12 million shares authorized.
First Quarter 2005 Earnings Summary
Net interest income for the quarter ended March 31, 2005 totaled $125.2
million, an increase of 9% from $114.5 million a year ago, primarily
attributable to an increase in interest earning assets and a decline in the
cost of liabilities.
Astoria's net interest margin for the quarter ended March 31, 2005
increased ten basis points from a year ago to 2.24%, primarily due to a
decline in the cost of liabilities as higher cost borrowings were repriced at
lower rates. On a linked quarter basis, the net interest margin increased six
basis points, due to the benefit derived from two less days of interest
expense in the first quarter compared to the fourth quarter.
Non-interest income for the quarter ended March 31, 2005 totaled $24.7
million compared to $22.1 million for the 2004 first quarter. The improvement
is due to increases in customer service fees of $1.2 million and mortgage
banking income, net, of $4.0 million as described below, partially offset by
the absence of gains on sales of securities in the 2005 first quarter compared
to gains on sales of securities of $2.4 million for the 2004 first quarter.
The components of mortgage banking income, net, which is included in non-
interest income, are detailed below:
(Dollars in millions) 1Q05 1Q04
Loan servicing fees $ 1.3 $ 1.5
Amortization of MSR* (1.5) (2.0)
MSR* valuation adjustments 2.4 (1.3)
Net gain on sale of loans 0.7 0.7
Mortgage banking income, net $ 2.9 $(1.1)
*Mortgage servicing rights
General and administrative expense ("G&A") for the quarter ended March 31,
2005 totaled $60.5 million compared to $57.0 million for the comparable 2004
period. The increase is primarily due to increased advertising expense
related to, among other things, the introduction of a business deposit
marketing campaign and $1.8 million of increased goodwill litigation expense
associated with the commencement of the trial of the Long Island Bancorp case
in January 2005, partially offset by lower compensation and benefits expense
and occupancy, equipment and systems expense. G&A expenses in future quarters
this year are expected to be somewhat lower due to reduced advertising and
goodwill litigation expense.
Balance Sheet Summary
Due to the current flattening yield curve environment and lower spread
availability, as previously announced, we reduced our non-core business
activities during the first quarter of 2005. Total securities declined $387.6
million, or 18% annualized, to $8.3 billion at March 31, 2005 representing 36%
of total assets, of which $2.2 billion, or 10% of total assets, are
categorized as available-for-sale. Borrowings also declined in the first
quarter by $488.4 million, or 21% annualized, to $9.0 billion at March 31,
2005 representing 39% of total assets. Total assets declined $165.4 million
from December 31, 2004 to $23.3 billion at March 31, 2005 while our core
lending and deposit businesses grew.
Key balance sheet highlights, reflecting the improvement in the quality of
the Company's balance sheet since December 31, 1999, follow:
(Dollars in millions) 12/31/99 12/31/00 12/31/01 12/31/02
Assets $22,700 $22,341 $22,672 $21,702
Loans $10,286 $11,422 $12,167 $12,059
MBS & Other Sec. $10,763 $9,415 $8,013 $7,834
Deposits $9,555 $10,072 $10,904 $11,067
Core Deposits (1) $4,625 $4,922 $5,743 $5,914
Borrowings $11,528 $10,324 $9,826 $8,825
Change
(Dollars in millions) 12/31/03 12/31/04 3/31/05 12/31/99-
3/31/05
Assets $22,462 $23,416 $23,250 +2%
Loans $12,687 $13,263 $13,560 +32%
MBS & Other Sec. $8,448 $8,710 $8,322 -23%
Deposits $11,187 $12,323 $12,569 +32%
Core Deposits (1) $5,685 $5,475 $5,574 +21%
Borrowings $9,632 $9,470 $8,981 -22%
(1) Includes savings, money market, checking and Liquid CD accounts
During the 2005 first quarter, the 1-4 family mortgage loan portfolio
increased $177.6 million, or 8% annualized, to $9.2 billion at March 31, 2005.
Loan originations and purchases totaled $726.8 million for the 2005 first
quarter compared to $617.3 million in the year-ago first quarter. 77% of the
2005 first quarter production consisted of 3/1 and 5/1 hybrid adjustable rate
mortgage loans.
During the 2005 first quarter, the multifamily and CRE loan portfolio
increased $110.3 million, or 13% annualized, to $3.6 billion at March 31,
2005. Originations totaled $256.6 million for the 2005 first quarter compared
to $240.0 million for the comparable 2004 period. The average loan-to-value
ratio of the 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.
At March 31, 2005, non-performing loans declined to $29.7 million, or
0.13%, of total assets from $32.6 million, or 0.14% of total assets, at
December 31, 2004. Net charge-offs for the 2005 first quarter totaled just
$28,000, or an annualized rate of less than one basis point of the average
total loans outstanding. The ratio of the allowance for loan losses to non-
performing loans at March 31, 2005 was 279%.
Deposits for the quarter ended March 31, 2005 increased $246.1 million, or
8% on an annualized basis, to $12.6 billion from $12.3 billion at December 31,
2004. The increase was due, in part, to an increase in core deposits
resulting from the successful introduction of a Liquid CD account during the
quarter. Total core deposits rose $99.2 million, or 7% annualized, to $5.6
billion at March 31, 2005. The cost of core deposits was just 44 basis
points, up 8 basis points from the previous quarter.
During the first quarter, we also continued to grow our medium-term CD
deposits at a significant discount to alternative funding sources that, 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. During the
2005 first quarter, $1.0 billion of CDs, with an average rate of 3.10% and an
average original maturity of 25 months matured and $1.1 billion of non-Liquid
CDs were issued or repriced at an average rate of 3.00% and an average
maturity of 20 months.
Stockholders' equity was $1.4 billion, or 5.88% of total assets at March
31, 2005. Astoria Federal continues to maintain capital ratios in excess of
regulatory requirements with core, tangible and risk-based capital ratios of
6.31%, 6.31% and 12.82%, respectively, at March 31, 2005.
Future Outlook
Commenting on the outlook for 2005, Mr. Engelke stated, "We continue to
face a challenging operating environment as a result of rising short term
interest rates and a continuing flattening of the yield curve. Accordingly,
we anticipate a continued shrinkage of the balance sheet with the reduction in
borrowings and securities through normal cash flow, while we continue to grow
deposits and loans, all of which will continue to improve the quality of the
balance sheet and earnings. This strategy should better position us to take
advantage of more profitable asset growth opportunities when the yield curve
steepens."
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association, with assets of $23.3 billion is the fifth
largest thrift institution in the United States. Established in 1888, Astoria
Federal is the largest thrift depository headquartered in New York with
deposits of $12.6 billion and embraces its philosophy of Putting people first
by providing the customers and local communities it serves with quality
financial products and services through 86 convenient banking office locations
and multiple delivery channels, including its enhanced website,
http://www.astoriafederal.com. Astoria Federal commands the fourth largest
deposit market share in the attractive Long Island market, which includes
Brooklyn, Queens, Nassau and Suffolk counties with a population exceeding that
of 39 individual states. Astoria Federal originates mortgage loans through
its banking offices and loan production offices in New York, an extensive
broker network in twenty-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 April 21, 2005 at 3:30 p.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host
an earnings conference call Thursday afternoon, April 21, 2005 at 3:30 p.m.
(ET). The toll-free dial-in number is (800) 269-6183.
A replay will be available on April 21, 2005 from 7:00 p.m. (ET) through
April 29, 2005, 11:59 p.m. (ET). The replay number is (888) 203-1112,
passcode: 3750147. The conference call will also be simultaneously webcast on
the Company's website http://www.astoriafederal.com and archived for one year.
Forward Looking Statements
This document contains a number of forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These statements may
be identified by the use of such words as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "outlook," "plan," "potential," "predict,"
"project," "should," "will," "would" and similar terms and phrases, including
references to assumptions.
Forward-looking statements are based on various assumptions and analyses
made by us in light of our management's experience and its perception of
historical trends, current conditions and expected future developments, as
well as other factors we believe are appropriate under the circumstances.
These statements are not guarantees of future performance and are subject to
risks, uncertainties and other factors (many of which are beyond our control)
that could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. These factors
include, without limitation, the following: the timing and occurrence or non-
occurrence of events may be subject to circumstances beyond our control; there
may be increases in competitive pressure among financial institutions or from
non-financial institutions; changes in the interest rate environment may
reduce interest margins or affect the value of our investments; changes in
deposit flows, loan demand or real estate values may adversely affect our
business; changes in accounting principles, policies or guidelines may cause
our financial condition to be perceived differently; general economic
conditions, either nationally or locally in some or all of the areas in which
we do business, or conditions in the securities markets or the banking
industry may be less favorable than we currently anticipate; legislative or
regulatory changes may adversely affect our business; applicable technological
changes may be more difficult or expensive than we anticipate; success or
consummation of new business initiatives may be more difficult or expensive
than we anticipate; or litigation or matters before regulatory agencies,
whether currently existing or commencing in the future, may delay the
occurrence or non-occurrence of events longer than we anticipate. We assume
no obligation to update any forward-looking statements to reflect events or
circumstances after the date of this document.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
At At
March 31, December 31,
2005 2004
ASSETS
Cash and due from banks $120,110 $138,809
Repurchase agreements 219,500 267,578
Mortgage-backed and other securities
available-for-sale 2,241,648 2,406,883
Mortgage-backed and other securities
held-to-maturity (fair value of
$6,000,015 and $6,306,760, respectively) 6,080,565 6,302,936
Federal Home Loan Bank of New York
stock, at cost 124,300 163,700
Loans held-for-sale, net 32,549 23,802
Loans receivable:
Mortgage loans, net 13,039,149 12,746,134
Consumer and other loans, net 521,327 517,145
13,560,476 13,263,279
Allowance for loan losses (82,730) (82,758)
Total loans receivable, net 13,477,746 13,180,521
Mortgage servicing rights, net 18,535 16,799
Accrued interest receivable 80,291 79,144
Premises and equipment, net 155,402 157,107
Goodwill 185,151 185,151
Bank owned life insurance 378,894 374,719
Other assets 135,732 118,720
TOTAL ASSETS $23,250,423 $23,415,869
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $12,569,369 $12,323,257
Reverse repurchase agreements 7,580,000 7,080,000
Federal Home Loan Bank of New York
advances 944,000 1,934,000
Other borrowings, net 457,441 455,835
Mortgage escrow funds 168,991 122,088
Accrued expenses and other
liabilities 164,120 130,925
TOTAL LIABILITIES 21,883,921 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
109,465,965 and 110,304,669 shares
outstanding, respectively) 1,665 1,665
Additional paid-in capital 815,153 811,777
Retained earnings 1,661,275 1,623,571
Treasury stock (57,028,923 and
56,190,219 shares, at cost,
respectively) (1,037,160) (1,013,726)
Accumulated other comprehensive
loss (49,897) (28,592)
Unallocated common stock held by
ESOP (6,696,140 and 6,802,146
shares, respectively) (24,534) (24,931)
TOTAL STOCKHOLDERS' EQUITY 1,366,502 1,369,764
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $23,250,423 $23,415,869
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
For the Three Months Ended
March 31,
2005 2004
Interest income:
Mortgage loans:
One-to-four family $111,582 $111,350
Multi-family, commercial real
estate and construction 58,196 53,631
Consumer and other loans 6,781 4,890
Mortgage-backed and other
securities 93,922 90,131
Federal funds sold and repurchase
agreements 1,449 154
Federal Home Loan Bank of New York
stock 1,173 938
Total interest income 273,103 261,094
Interest expense:
Deposits 64,960 54,230
Borrowed funds 82,930 92,351
Total interest expense 147,890 146,581
Net interest income 125,213 114,513
Provision for loan losses - -
Net interest income after provision
for loan losses 125,213 114,513
Non-interest income:
Customer service fees 14,946 13,749
Other loan fees 1,164 1,262
Net gain on sales of securities - 2,372
Mortgage banking income (loss),
net 2,946 (1,118)
Income from bank owned life
insurance 4,175 4,450
Other 1,511 1,424
Total non-interest income 24,742 22,139
Non-interest expense:
General and administrative:
Compensation and benefits 30,790 31,464
Occupancy, equipment and
systems 16,025 16,717
Federal deposit insurance
premiums 448 449
Advertising 3,905 1,709
Other 9,344 6,704
Total non-interest expense 60,512 57,043
Income before income tax expense 89,443 79,609
Income tax expense 29,964 26,196
Net income $59,479 $53,413
Basic earnings per common share $0.58 $0.48
Diluted earnings per common share $0.57 $0.47
Basic weighted average common shares 103,160,491 110,874,674
Diluted weighted average common and
common equivalent shares 104,957,469 113,014,577
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
At or For the
Three Months Ended
March 31,
2005 2004
Selected Returns and Financial Ratios
(annualized)
Return on average stockholders'
equity 17.42 % 15.05 %
Return on average tangible
stockholders' equity (1) 20.15 17.31
Return on average assets 1.02 0.95
General and administrative expense
to average assets 1.03 1.02
Efficiency ratio (2) 40.35 41.74
Net interest rate spread (3) 2.16 2.05
Net interest margin (4) 2.24 2.14
Asset Quality Data (dollars in thousands)
Non-performing loans/total loans 0.22 % 0.19 %
Non-performing loans/total assets 0.13 0.11
Non-performing assets/total assets 0.13 0.12
Allowance for loan losses/
non-performing loans 278.74 337.27
Allowance for loan losses/
non-accrual loans 301.21 342.79
Allowance for loan losses/total
loans 0.61 0.65
Net charge-offs to average loans
outstanding (annualized) 0.00 0.00
Non-performing assets $30,132 $26,470
Non-performing loans 29,680 24,599
Loans 90 days past maturity but
still accruing interest 2,214 396
Non-accrual loans 27,466 24,203
Net charge-offs 28 155
Capital Ratios (Astoria Federal)
Tangible 6.31 % 7.19 %
Core 6.31 7.19
Risk-based 12.82 14.98
Other Data
Cash dividends paid per common
share $0.20 $0.16
Dividend payout ratio 35.09 % 34.04 %
Book value per common share (5) $13.30 $13.07
Tangible book value per common
share (6) 11.50 11.39
Average equity/average assets 5.83 % 6.33 %
Mortgage loans serviced for others
(in thousands) $1,644,742 $1,821,561
Full time equivalent employees 1,863 1,951
(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) Book value per common share represents common stockholders' equity
divided by outstanding common shares, excluding unallocated Employee
Stock Ownership Plan, or ESOP, shares.
(6) Tangible book value per common share represents common stockholders'
equity less goodwill divided by outstanding common shares, excluding
unallocated ESOP shares.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Three Months Ended March 31,
2005
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $9,270,153 $111,582 4.81 %
Multi-family, commercial
real
estate and construction 3,680,918 58,196 6.32
Consumer and other loans (1) 522,515 6,781 5.19
Total loans 13,473,586 176,559 5.24
Mortgage-backed and other
securities (2) 8,524,571 93,922 4.41
Federal funds sold and
repurchase agreements 243,598 1,449 2.38
Federal Home Loan Bank stock 142,347 1,173 3.30
Total interest-earning assets 22,384,102 273,103 4.88
Goodwill 185,151
Other non-interest-earning
assets 863,209
Total assets $23,432,462
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $2,870,120 2,842 0.40
Money market 915,147 1,922 0.84
NOW and demand deposit 1,560,087 230 0.06
Liquid certificates of
deposit 176,275 1,073 2.43
Certificates of deposit 6,933,248 58,893 3.40
Total deposits 12,454,877 64,960 2.09
Borrowed funds 9,279,580 82,930 3.57
Total interest-bearing
liabilities 21,734,457 147,890 2.72
Non-interest-bearing liabilities 331,872
Total liabilities 22,066,329
Stockholders' equity 1,366,133
Total liabilities and
stockholders' equity $23,432,462
Net interest income/net interest
rate spread $125,213 2.16 %
Net interest-earning assets/net
interest margin $649,645 2.24 %
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x
For the Three Months Ended March 31,
2004
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $9,041,043 $111,350 4.93 %
Multi-family, commercial
real estate and
construction 3,253,227 53,631 6.59
Consumer and other loans (1) 450,098 4,890 4.35
Total loans 12,744,368 169,871 5.33
Mortgage-backed and other
securities (2) 8,365,022 90,131 4.31
Federal funds sold and
repurchase agreements 64,895 154 0.95
Federal Home Loan Bank stock 227,810 938 1.65
Total interest-earning assets 21,402,095 261,094 4.88
Goodwill 185,151
Other non-interest-earning
assets 854,561
Total assets $22,441,807
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $2,960,199 2,945 0.40
Money market 1,188,176 1,608 0.54
NOW and demand deposit 1,466,733 221 0.06
Liquid certificates of
deposit - - -
Certificates of deposit 5,644,019 49,456 3.51
Total deposits 11,259,127 54,230 1.93
Borrowed funds 9,472,213 92,351 3.90
Total interest-bearing
liabilities 20,731,340 146,581 2.83
Non-interest-bearing liabilities 290,865
Total liabilities 21,022,205
Stockholders' equity 1,419,602
Total liabilities and
stockholders' equity $22,441,807
Net interest income/net interest
rate spread $114,513 2.05 %
Net interest-earning assets/net
interest margin $670,755 2.14 %
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x
(1) Mortgage and consumer and other loans include loans held-for-sale and
non-performing loans and exclude the allowance for loan losses.
(2) Securities available-for-sale are reported at average amortized cost.
SOURCE Astoria Financial Corporation
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Related links:
http://ir.astoriafederal.com
http://www.astoriafederal.com
Company News On-Call:
http://www.prnewswire.com/comp/104529.html
CONTACT:
Peter J. Cunningham, First Vice President,
Investor Relations, +1-516-327-7877, ir@astoriafederal.com
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