Quarterly Cash Dividend of $0.24 Per Common Share Declared
LAKE SUCCESS, N.Y., July 20 /PRNewswire-FirstCall/ -- Astoria Financial
Corporation (NYSE: AF) ("Astoria"), the holding company for Astoria Federal
Savings and Loan Association ("Astoria Federal"), today reported net income
of $47.8 million, or $0.49 diluted earnings per share ("EPS"), for the
quarter ended June 30, 2006, compared to $57.4 million, or $0.55 EPS, for
the 2005 second quarter. For the 2006 second quarter, annualized returns on
average equity, average tangible equity and average assets were 14.94%,
17.48% and 0.87%, respectively, compared to 16.66%, 19.24% and 1.00%,
respectively, for the comparable 2005 period.
For the six months ended June 30, 2006, net income totaled $96.7
million, or $0.98 EPS, compared to $116.9 million, or $1.12 EPS, for the
comparable 2005 period. For the six months ended June 30, 2006, annualized
returns on average equity, average tangible equity and average assets were
14.87%, 17.34% and 0.87%, respectively, compared to 17.02%, 19.68% and
1.01%, respectively, for the comparable 2005 period.
First Half 2006 Balance Sheet Highlights:
- Deposits increased $282 million, or 4% annualized
-- Core deposits(1) increased $195 million, or 7% annualized
- Loan portfolio increased $241 million, or 3% annualized
-- Multifamily/Commercial Real Estate ("CRE") loan portfolio increased
$184 million, or 9% annualized
- Securities portfolio decreased $701 million, or 21% annualized
- Borrowings decreased $735 million, or 19% annualized
- Repurchased 4.7 million shares
Commenting on the 2006 second quarter results, George L. Engelke, Jr.,
Chairman, President and Chief Executive Officer of Astoria, noted, "The
effect of seventeen interest rate increases by the Federal Reserve over the
past two years has resulted in a prolonged flat to inverted yield curve
environment which, in addition to putting pressure on our net interest
margin and earnings, continues to limit profitable growth opportunities.
While we have been somewhat successful in mitigating the negative impact on
our margin through reductions of our securities and borrowings, a sustained
flat to inverted yield curve will continue to exert downward pressure on
our margin and earnings. During this challenging period we will continue
our strategy of shrinking the balance sheet by reducing the securities
portfolio and borrowings, growing loans and deposits and repurchasing our
stock."
Board Declares Quarterly Cash Dividend of $0.24 Per Share
The Board of Directors of the Company, at their July 19, 2006 meeting,
declared a quarterly cash dividend of $0.24 per common share. The dividend
is payable on September 1, 2006 to shareholders of record as of August 15,
2006. This is the forty-fifth consecutive quarterly cash dividend declared
by the Company.
Eleventh Stock Repurchase Program Continues
During the second quarter, Astoria repurchased 2.2 million shares of
its common stock at an average cost of $30.58 per share. During the six
month period ended June 30, 2006 Astoria repurchased a total of 4.7 million
shares, completing its tenth stock repurchase program and commencing its
eleventh stock repurchase program in the first quarter. Under the current
stock repurchase program, 5.6 million shares of the 10 million shares
authorized remain available for repurchase.
Second Quarter and Six Month Earnings Summary
Net interest income for the quarter ended June 30, 2006 totaled $101.3
million compared to $111.5 million for the 2006 first quarter and $121.3
million for the second quarter a year ago. For the six months ended June
30, 2006, net interest income totaled $212.9 million compared to $246.6
million for the comparable 2005 six month period.
Astoria's net interest margin for the quarter ended June 30, 2006
declined to 1.92% from 2.10% for the previous quarter and 2.21% for the
quarter ended June 30, 2005, primarily due to the cost of interest-bearing
liabilities rising more rapidly than the yield on interest-earning assets.
The Company's core interest rate spread (the difference between the yield
on loans and the cost of deposits) for the 2006 second quarter declined to
2.63% from 2.84% for the 2006 first quarter and 3.09% for the second
quarter a year ago.
Non-interest income for the quarter ended June 30, 2006 increased $3.2
million to $25.7 million from $22.5 million for the 2005 second quarter.
The increase is primarily due to an increase in mortgage banking income,
net, primarily due to a $1.3 million recovery in the mortgage servicing
rights ("MSR") valuation allowance in the 2006 second quarter compared to a
$2.5 million MSR impairment charge in the 2005 second quarter.
For the six months ended June 30, 2006, non-interest income totaled
$44.6 million compared to $47.3 million for the comparable 2005 period. The
decline was primarily due to a $5.5 million, pre-tax, charge related to the
termination of interest rate swap agreements in the 2006 first quarter,
partially offset by increases in mortgage banking income, net, of $2.2
million and customer service and other loan fees of $1.3 million.
The components of mortgage banking income (loss), net, which is
included in non-interest income, are detailed below:
(Dollars in millions) 2Q06 2Q05 1H06 1H05
Loan servicing fees $ 1.1 $ 1.3 $ 2.3 $ 2.6
Amortization of MSR (0.9) (1.3) (1.9) (2.7)
MSR valuation adjustments 1.3 (2.5) 2.0 (0.1)
Net gain on sale of loans 0.6 0.9 1.2 1.6
Mortgage banking income (loss), net $ 2.1 $(1.6) $ 3.6 $ 1.4
General and administrative expense ("G&A") for the quarter ended June
30, 2006 declined $2.4 million to $55.2 million from $57.6 million for the
comparable 2005 period due primarily to lower compensation and benefit
expenses and lower goodwill litigation expense (included in other G&A
expense). On a linked quarter basis, G&A declined $1.1 million, primarily
due to reduced pension and incentive compensation accruals.
For the six months ended June 30, 2006, G&A declined $6.6 million to
$111.5 million from $118.1 million for the comparable 2005 period. The
decrease was primarily due to a $4.3 million decrease in goodwill
litigation expense, a $1.9 million decrease in advertising expense, a $1.9
million decrease in compensation and benefits expense, partially offset by
a $1.3 million increase in occupancy, equipment and systems expense.
Balance Sheet Summary
Due to the continued flat to inverted yield curve during the second
quarter, spread availability continued to narrow. Accordingly, we continued
to reduce our balance sheet through the reduction of non-core business
activities. Total securities for the quarter ended June 30, 2006 declined
$356.5 million, or 23% annualized, to $5.9 billion at June 30, 2006,
representing 27% of total assets, of which $1.6 billion, or 8% of total
assets, are categorized as available-for-sale. Borrowings declined in the
second quarter of 2006 by $391.8 million, or 21% annualized, to $7.2
billion at June 30, 2006, representing 33% of total assets.
For the six months ended June 30, 2006 total securities declined $701.6
million, or 21% annualized, and borrowings declined $734.9 million, or 19%
annualized. Total assets declined $376.5 million from March 31, 2006 and
$518.8 million from December 31, 2005 and total $21.9 billion at June 30,
2006.
Key balance sheet highlights, reflecting the improvement in the quality
of the Company's balance sheet since December 31, 1999, follow:
(Dollars in % Change
millions) 12/31/99 12/31/01 12/31/03 12/31/05 06/30/06 12/31/99-
06/30/06
Assets $22,700 $22,672 $22,462 $22,380 $21,861 . 4%
Loans $10,286 $12,167 $12,687 $14,392 $14,633 + 42%
Securities $10,763 $ 8,013 $ 8,448 $ 6,572 $ 5,871 . 45%
Deposits $ 9,555 $10,904 $11,187 $12,810 $13,092 + 37%
Borrowings $11,528 $ 9,826 $ 9,632 $ 7,938 $ 7,203 . 38%
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 06/30/06 % Change CAGR
Loans $ 66.28 $ 89.36 $107.51 $137.11 $144.80 118% 13%
Deposits $ 61.57 $ 80.09 $ 94.80 $122.04 $129.55 110% 12%
During the 2006 second quarter, the 1-4 family mortgage loan portfolio
decreased slightly and totaled $9.8 billion at June 30, 2006. For the
quarter ended June 30, 2006, 1-4 family loan originations and purchases
totaled $554.3 million compared to $707.1 million for the 2005 second
quarter. Of the 2006 second quarter production, 78% consisted of 3/1 and
5/1 adjustable rate mortgage loans.
For the six months ended June 30, 2006, the 1-4 family mortgage loan
portfolio increased $66.1 million. For the six month period ended June 30,
2006, 1-4 family loan originations and purchases totaled $1.1 billion
compared to $1.4 billion in the year-ago six month period.
During the 2006 second quarter, the multifamily and CRE loan portfolio
increased $72.5 million, or 7% annualized, to $4.1 billion, or 28% of total
loans, at June 30, 2006. Multifamily and CRE loan originations totaled
$183.7 million for the 2006 second quarter compared to $241.9 million for
the comparable 2005 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.
For the six month period ended June 30, 2006, the multifamily and CRE
loan portfolio increased $184.4 million, or 9% annualized. Multifamily and
CRE loan originations totaled $401.1 million for the 2006 six month period
compared to $498.5 million in the year-ago six month period.
At June 30, 2006, non-performing loans totaled $54.3 million, or 0.25%
of total assets, compared to $50.0 million, or 0.23% of total assets, at
March 31, 2006. Net charge-offs for the quarter and six months ended June
30, 2006 totaled $80,000 and $96,000, respectively, or an annualized rate
of less than one basis point of the average total loans outstanding for
each period. The ratio of the allowance for loan losses to non-performing
loans at June 30, 2006 was 149%.
Deposits for the second quarter increased $103.3 million to $13.1
billion at June 30, 2006, primarily due to an increase in Liquid CD
accounts, which increased core deposits $101.2 million to $5.5 billion with
an average cost of 1.05%. During the 2006 second quarter, our efforts to
extend deposit liabilities resulted in $1.8 billion of non-Liquid CDs
issued or repriced at a weighted average rate of 4.83% with a weighted
average maturity of 13 months.
For the six months ended June 30, 2006, deposits increased $281.8
million, or 4% annualized, due primarily to an increase in core deposits,
primarily Liquid CD accounts. In addition, for the six months ended June
30, 2006, $3.2 billion of non-Liquid CDs were issued or repriced at a
weighted average rate of 4.65% with a weighted average maturity of 12
months.
Stockholders' equity was $1.3 billion, or 5.80% of total assets at June
30, 2006. Astoria Federal continues to maintain capital ratios in excess of
regulatory requirements with core, tangible and risk-based capital ratios
of 6.53%, 6.53% and 12.22%, respectively, at June 30, 2006.
Future Outlook
Commenting on the outlook for the second half of 2006, Mr. Engelke
stated, "The operating environment continues to remain challenging as a
result of rising short term interest rates and a continued flat to inverted
yield curve which will result in a slightly lower net interest margin for
the year than previously forecast. We expect to continue our strategy of
shrinking the balance sheet through reductions in the securities portfolio
and borrowings through normal cash flow, while we emphasize deposit and
loan growth, all of which will continue to improve the quality of both the
balance sheet and earnings. As we reduce the size of the balance sheet, we
will continue to focus on the repurchase of our stock as a very desirable
use of capital. 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 $21.9 billion is the sixth
largest thrift institution in the United States. Established in 1888,
Astoria Federal is the largest thrift depository headquartered in New York
with deposits of $13.1 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 38 individual states. Astoria Federal originates mortgage
loans through its banking offices and loan production offices in New York,
an extensive broker network covering twenty-four states, primarily the East
Coast, and the District of Columbia, and through correspondent
relationships covering forty- four states and the District of Columbia.
Earnings Conference Call July 20, 2006 at 3:30 p.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will
host an earnings conference call Thursday afternoon, July 20, 2006 at 3:30
p.m. (ET). The toll-free dial-in number is (800) 967-7140.
A telephone replay will be available on July 20, 2006 from 7:00 p.m.
(ET) through Friday, July 28, 2006, 11:59 p.m. (ET). The replay number is
(888) 203-1112, passcode: 4153753. 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.
(1) Core deposits include savings, money market, checking and Liquid CD
accounts.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
At At
June 30, December 31,
2006 2005
ASSETS
Cash and due from banks $ 139,330 $ 169,234
Repurchase agreements 148,570 182,803
Securities available-for-sale 1,646,866 1,841,351
Securities held-to-maturity
(fair value of $4,059,226 and
$4,627,013, respectively) 4,223,867 4,730,953
Federal Home Loan Bank of New York stock,
at cost 137,355 145,247
Loans held-for-sale, net 16,549 23,651
Loans receivable:
Mortgage loans, net 14,154,518 13,879,804
Consumer and other loans, net 478,094 512,489
14,632,612 14,392,293
Allowance for loan losses (81,063) (81,159)
Total loans receivable, net 14,551,549 14,311,134
Mortgage servicing rights, net 17,246 16,502
Accrued interest receivable 76,973 80,318
Premises and equipment, net 148,511 151,494
Goodwill 185,151 185,151
Bank owned life insurance 382,176 382,613
Other assets 187,332 159,820
TOTAL ASSETS $21,861,475 $22,380,271
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $13,092,232 $12,810,455
Reverse repurchase agreements 5,180,000 5,780,000
Federal Home Loan Bank of New York
advances 1,587,000 1,724,000
Other borrowings, net 435,662 433,526
Mortgage escrow funds 143,056 124,929
Accrued expenses and other liabilities 155,390 157,134
TOTAL LIABILITIES 20,593,340 21,030,044
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
101,055,435 and 104,967,280
shares outstanding, respectively) 1,665 1,665
Additional paid-in capital 834,794 824,102
Retained earnings 1,820,876 1,774,924
Treasury stock (65,439,453 and
61,527,608 shares, at cost,
respectively) (1,296,676) (1,171,604)
Accumulated other comprehensive
loss (69,418) (49,536)
Unallocated common stock held by
ESOP
(6,306,603 and 6,465,273 shares,
respectively) (23,106) (23,688)
Deferred compensation - (5,636)
TOTAL STOCKHOLDERS' EQUITY 1,268,135 1,350,227
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $21,861,475 $22,380,271
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2006 2005 2006 2005
Interest income:
Mortgage loans:
One-to-four family $125,606 $112,898 $250,491 $224,480
Multi-family,
commercial real
estate and
construction 63,986 58,300 126,245 116,496
Consumer and other
loans 8,972 7,475 17,819 14,256
Mortgage-backed and
other securities 68,532 88,526 140,427 182,448
Repurchase agreements 2,296 1,361 3,939 2,810
Federal Home Loan
Bank of New York
stock 1,797 1,650 3,486 2,823
Total interest income 271,189 270,210 542,407 543,313
Interest expense:
Deposits 90,549 67,065 173,254 132,025
Borrowings 79,324 81,798 156,291 164,728
Total interest expense 169,873 148,863 329,545 296,753
Net interest income 101,316 121,347 212,862 246,560
Provision for loan
losses - - - -
Net interest income
after provision for
loan losses 101,316 121,347 212,862 246,560
Non-interest income:
Customer service
fees 16,440 16,305 33,038 31,251
Other loan fees 962 1,082 1,772 2,246
Mortgage banking
income (loss), net 2,147 (1,582) 3,629 1,364
Income from bank
owned life
insurance 4,031 4,190 8,106 8,365
Other 2,147 2,531 (1,921) 4,042
Total non-interest
income 25,727 22,526 44,624 47,268
Non-interest expense:
General and
administrative:
Compensation and
benefits 28,528 29,967 58,839 60,757
Occupancy,
equipment and
systems 16,297 15,787 33,105 31,812
Federal deposit
insurance
premiums 415 447 849 895
Advertising 1,902 1,870 3,829 5,775
Other 8,077 9,492 14,906 18,836
Total non-interest
expense 55,219 57,563 111,528 118,075
Income before income
tax expense 71,824 86,310 145,958 175,753
Income tax expense 24,061 28,914 49,261 58,878
Net income $ 47,763 $ 57,396 $ 96,697 $116,875
Basic earnings per
common share $ 0.50 $ 0.56 $ 1.00 $ 1.14
Diluted earnings per
common share $ 0.49 $ 0.55 $ 0.98 $ 1.12
Basic weighted average
common shares 95,477,528 102,253,984 96,386,742 102,704,734
Diluted weighted
average common and
common equivalent
shares 98,059,723 104,184,538 98,974,405 104,568,500
SELECTED FINANCIAL RATIOS AND OTHER DATA
For the At or For the
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Selected Returns and Financial
Ratios (annualized)
Return on average
stockholders' equity 14.94 % 16.66 % 14.87 % 17.02 %
Return on average
tangible stockholders'
equity(1) 17.48 19.24 17.34 19.68
Return on average assets 0.87 1.00 0.87 1.01
General and administrative
expense to average assets 1.00 1.00 1.01 1.02
Efficiency ratio (2) 43.46 40.01 43.31 40.19
Net interest rate
spread (3) 1.82 2.12 1.91 2.14
Net interest margin (4) 1.92 2.21 2.01 2.22
Selected Non-GAAP Returns
and Financial Ratios
(annualized) (5)
Non-GAAP return on average
stockholders' equity 15.43 % 17.02 %
Non-GAAP return on average
tangible stockholders'
equity (1) 17.99 19.68
Non-GAAP return on average
assets 0.91 1.01
Non-GAAP efficiency ratio (2) 42.42 40.19
Asset Quality Data
(dollars in thousands)
Non-performing loans/
total loans 0.37 % 0.21 %
Non-performing loans/
total assets 0.25 0.13
Non-performing assets/
total assets 0.25 0.13
Allowance for loan losses/
non-performing loans 149.31 287.86
Allowance for loan losses/
non-accrual loans 150.81 308.11
Allowance for loan losses/
total loans 0.55 0.60
Net charge-offs to average
loans outstanding
(annualized) 0.00 % 0.01 % 0.00 0.00
Non-performing assets $55,361 $30,080
Non-performing loans 54,290 28,666
Loans 90 days past
maturity but still
accruing interest 537 1,884
Non-accrual loans 53,753 26,782
Net charge-offs $ 80 $ 211 96 239
Capital Ratios (Astoria
Federal)
Tangible 6.53 % 6.71 %
Core 6.53 6.71
Risk-based 12.22 13.33
Other Data
Cash dividends paid
per common share $ 0.24 $ 0.20 $ 0.48 $ 0.40
Dividend payout ratio 48.98 % 36.36 % 48.98 % 35.71 %
Book value per share (6) $13.38 $13.71
Tangible book value
per share (7) 11.43 11.88
Average equity/average
assets 5.81 % 5.98 % 5.88 % 5.91 %
Mortgage loans serviced
for others (in thousands) $1,430,746 $1,605,071
Full time equivalent
employees 1,635 1,864
(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) The information presented for the six months ended June 30, 2006
represents pro forma calculations which are not in conformity with
U.S. generally accepted accounting principles, or GAAP. The 2006
information excludes the $3.6 million, after tax, ($5.5 million,
before tax) charge for the termination of our interest rate swap
agreements recorded in the 2006 first quarter. See page 12 for a
reconciliation of GAAP net income to non-GAAP earnings for the six
months ended June 30, 2006.
(6) Book value per share represents stockholders' equity divided by
outstanding shares, excluding unallocated Employee Stock Ownership
Plan, or ESOP, shares.
(7) Tangible book value per share represents stockholders' equity less
goodwill divided by outstanding shares, excluding unallocated ESOP
shares.
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Three Months Ended June 30,
2006
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 9,920,003 $125,606 5.06 %
Multi-family, commercial
real estate and construction 4,214,459 63,986 6.07
Consumer and other loans (1) 490,463 8,972 7.32
Total loans 14,624,925 198,564 5.43
Mortgage-backed and other
securities (2) 6,099,829 68,532 4.49
Repurchase agreements 189,049 2,296 4.86
Federal Home Loan Bank stock 142,884 1,797 5.03
Total interest-earning assets 21,056,687 271,189 5.15
Goodwill 185,151
Other non-interest-earning assets 778,676
Total assets $22,020,514
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $ 2,396,537 2,405 0.40
Money market 563,782 1,381 0.98
NOW and demand deposit 1,540,556 224 0.06
Liquid certificates of
deposit 966,457 10,397 4.30
Total core deposits 5,467,332 14,407 1.05
Certificates of deposit 7,485,159 76,142 4.07
Total deposits 12,952,491 90,549 2.80
Borrowings 7,433,642 79,324 4.27
Total interest-bearing
liabilities 20,386,133 169,873 3.33
Non-interest-bearing liabilities 355,948
Total liabilities 20,742,081
Stockholders' equity 1,278,433
Total liabilities and
stockholders' equity $22,020,514
Net interest income/net interest
rate spread $101,316 1.82 %
Net interest-earning assets/net
interest margin $ 670,554 1.92 %
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x
For the Three Months Ended June 30,
2005
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 9,342,312 $112,898 4.83 %
Multi-family, commercial
real estate and construction 3,827,458 58,300 6.09
Consumer and other loans (1) 529,679 7,475 5.64
Total loans 13,699,449 178,673 5.22
Mortgage-backed and other
securities (2) 7,997,687 88,526 4.43
Repurchase agreements 189,058 1,361 2.88
Federal Home Loan Bank stock 126,518 1,650 5.22
Total interest-earning assets 22,012,712 270,210 4.91
Goodwill 185,151
Other non-interest-earning
assets 851,531
Total assets $23,049,394
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $ 2,827,699 2,831 0.40
Money market 848,457 2,037 0.96
NOW and demand deposit 1,597,270 235 0.06
Liquid certificates of
deposit 291,669 1,872 2.57
Total core deposits 5,565,095 6,975 0.50
Certificates of deposit 7,004,979 60,090 3.43
Total deposits 12,570,074 67,065 2.13
Borrowings 8,757,467 81,798 3.74
Total interest-bearing
liabilities 21,327,541 148,863 2.79
Non-interest-bearing
liabilities 343,422
Total liabilities 21,670,963
Stockholders' equity 1,378,431
Total liabilities and
stockholders' equity $23,049,394
Net interest income/net interest
rate spread $121,347 2.12 %
Net interest-earning assets/net
interest margin $ 685,171 2.21 %
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.
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
For the Six Months Ended June 30,
2006
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 9,905,279 $250,491 5.06 %
Multi-family, commercial
real estate and construction 4,153,353 126,245 6.08
Consumer and other loans (1) 498,280 17,819 7.15
Total loans 14,556,912 394,555 5.42
Mortgage-backed and other
securities (2) 6,263,198 140,427 4.48
Repurchase agreements 170,104 3,939 4.63
Federal Home Loan Bank stock 140,855 3,486 4.95
Total interest-earning assets 21,131,069 542,407 5.13
Goodwill 185,151
Other non-interest-earning
assets 792,174
Total assets $22,108,394
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $ 2,432,131 4,855 0.40
Money market 592,217 2,854 0.96
NOW and demand deposit 1,528,357 444 0.06
Liquid certificates of
deposit 848,717 17,452 4.11
Total core deposits 5,401,422 25,605 0.95
Certificates of deposit 7,517,750 147,649 3.93
Total deposits 12,919,172 173,254 2.68
Borrowings 7,542,721 156,291 4.14
Total interest-bearing
liabilities 20,461,893 329,545 3.22
Non-interest-bearing liabilities 345,909
Total liabilities 20,807,802
Stockholders' equity 1,300,592
Total liabilities and
stockholders' equity $22,108,394
Net interest income/net interest
rate spread $212,862 1.91 %
Net interest-earning assets/net
interest margin $ 669,176 2.01 %
Ratio of interest-earning assets
to interest-bearing liabilities 1.03x
For the Six Months Ended June 30,
2005
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $ 9,306,432 $224,480 4.82 %
Multi-family, commercial
real estate and construction 3,754,593 116,496 6.21
Consumer and other loans (1) 526,117 14,256 5.42
Total loans 13,587,142 355,232 5.23
Mortgage-backed and other
securities (2) 8,259,673 182,448 4.42
Repurchase agreements 216,177 2,810 2.60
Federal Home Loan Bank stock 134,388 2,823 4.20
Total interest-earning assets 22,197,380 543,313 4.90
Goodwill 185,151
Other non-interest-earning
assets 858,133
Total assets $23,240,664
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $ 2,848,793 5,673 0.40
Money market 881,618 3,959 0.90
NOW and demand deposit 1,578,781 465 0.06
Liquid certificates of
deposit 234,291 2,945 2.51
Total core deposits 5,543,483 13,042 0.47
Certificates of deposit 6,969,312 118,983 3.41
Total deposits 12,512,795 132,025 2.11
Borrowings 9,017,082 164,728 3.65
Total interest-bearing
liabilities 21,529,877 296,753 2.76
Non-interest-bearing liabilities 337,679
Total liabilities 21,867,556
Stockholders' equity 1,373,108
Total liabilities and
stockholders' equity $23,240,664
Net interest income/net interest
rate spread $246,560 2.14 %
Net interest-earning assets/net
interest margin $ 667,503 2.22 %
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.
END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)
At June 30, 2006 At March 31, 2006
Weighted Weighted
Average Average
Balance Rate (1) Balance Rate (1)
Selected interest-earning
assets:
Mortgage loans, gross (2):
One-to-four family $9,824,066 5.32 % $9,846,475 5.25 %
Multi-family,
commercial real estate
and construction 4,245,697 5.95 4,163,563 5.91
Mortgage-backed and other
securities (3) 5,870,733 4.34 6,227,251 4.34
Interest-bearing
liabilities:
Savings 2,352,923 0.40 2,438,090 0.40
Money market 537,602 1.01 598,766 0.97
NOW and demand deposit 1,535,833 0.06 1,562,612 0.06
Liquid certificates of
deposit 1,117,478 4.54 843,131 4.09
Total core deposits 5,543,836 1.20 5,442,599 0.94
Certificates of deposit 7,548,396 4.26 7,546,339 3.92
Total deposits 13,092,232 2.96 12,988,938 2.67
Borrowings, net 7,202,662 4.29 7,594,475 4.13
At June 30, 2005
Weighted
Average
Balance Rate (1)
Selected interest-earning
assets:
Mortgage loans, gross(2):
One-to-four family $9,267,038 5.08 %
Multi-family, commercial real
estate and construction 3,877,208 5.86
Mortgage-backed and other
securities (3) 7,769,396 4.35
Interest-bearing liabilities:
Savings 2,779,265 0.40
Money market 811,836 0.97
NOW and demand deposit 1,571,911 0.06
Liquid certificates of deposit 331,746 2.70
Total core deposits 5,494,758 0.53
Certificates of deposit 7,090,469 3.48
Total deposits 12,585,227 2.19
Borrowings, net 8,568,796 3.70
(1) Weighted average rates represent stated or coupon interest rates
excluding the effect of yield adjustments for premiums, discounts and
deferred loan origination fees and costs and the impact of prepayment
penalties.
(2) Mortgage loans exclude loans held-for-sale and include non-performing
loans.
(3) Securities available-for-sale are reported at fair value and
securities held-to-maturity are reported at amortized cost.
RECONCILIATION OF 2006 GAAP NET INCOME TO NON-GAAP EARNINGS
(In Thousands, Except Per Share Data)
For the Six Months Ended
June 30, 2006
GAAP Adjustments(4) Non-GAAP
Net interest income after provision
for loan losses $212,862 $ - $212,862
Non-interest income 44,624 5,456 50,080
Non-interest expense 111,528 - 111,528
Income before income tax expense 145,958 5,456 151,414
Income tax expense 49,261 1,841 51,102
Net income $ 96,697 $3,615 $100,312
Basic earnings per common share $ 1.00 $ 0.04 $ 1.04
Diluted earnings per common share $ 0.98 $ 0.04 $ 1.01(5)
(4) Adjustments relate to the $5.5 million charge for the termination of
our interest rate swap agreements and the related tax effects.
(5) Figures do not cross foot due to rounding.
SOURCE Astoria Financial Corporation
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CONTACT:
Peter J. Cunningham, First Vice President,
Investor Relations, +1-516-327-7877, ir@astoriafederal.com
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