Margin Increases 25 Basis Points from Second Quarter
Quarterly Cash Dividend of $0.26 Per Share Declared
LAKE SUCCESS, N.Y., Oct. 15 /PRNewswire-FirstCall/ -- Astoria Financial
Corporation (NYSE: AF) ("Astoria," the "Company"), the holding company for
Astoria Federal Savings and Loan Association ("Astoria Federal"), today
reported a net loss of $16.5 million (operating income of $41.4 million),
or $0.18 diluted loss per share (operating earnings per share ("EPS") of
$0.46), for the quarter ended September 30, 2008 compared to net income of
$35.3 million, or $0.39 EPS, for the 2007 third quarter.
For the nine months ended September 30, 2008, net income totaled $45.9
million (operating income of $103.8 million), or $0.51 diluted earnings per
share (operating EPS of $1.14), compared to $105.1 million, or $1.14 EPS,
for the comparable 2007 period.
Included in the third quarter and nine month 2008 results is an
other-than-temporary impairment, after-tax, non-cash charge ("OTTI"), of
$57.9 million, or $0.64 per diluted share, relating to Freddie Mac
preferred stock. The OTTI reduced the carrying amount of two perpetual
preferred stock issues of Freddie Mac to a combined market value of $5.3
million at September 30, 2008. The tax benefit recognized on the OTTI was
based on the treatment of the OTTI as a capital loss, which limited the tax
benefit to the Company. Subsequently, on October 3, 2008, the Emergency
Economic Stabilization Act was enacted which includes a provision
permitting banks to recognize OTTI charges relating to Freddie Mac
preferred stock as an ordinary loss, increasing the tax benefit to the
Company. Had the Company recognized the OTTI as an ordinary loss for the
quarter ended September 30, 2008, the OTTI recorded would have been $50.5
million, or $0.56 per diluted share. The Company will recognize the
additional tax benefit in the quarter ending December 31, 2008 totaling
approximately $7.4 million, or $0.08 per diluted share. The perpetual
preferred stock issues are held in the Company's available-for-sale
securities portfolio. Prior to this charge, impairment was recorded as an
unrealized mark-to-market loss on securities available-for-sale and
reflected as a reduction to equity through other comprehensive income.
Operating income and operating EPS, representing net income and EPS
determined in accordance with generally accepted accounting principles
("GAAP") excluding the effects of the after-tax, non-cash OTTI charge noted
above, provide a more meaningful comparison for effectively evaluating
Astoria's operating results. For a reconciliation of operating income and
operating EPS to GAAP net income and EPS, please refer to the table on page
14.
Third Quarter 2008 Financial Highlights:
-- Operating EPS of $0.46, up 24% from the 2008 second quarter EPS
-- Margin increased 25 basis points from the linked quarter to 2.06%
-- Loan portfolio increased $542 million, or 13% annualized
-- One-to-four family loan portfolio increased $533 million, or 18%
annualized
-- Mortgage loan production increased $251 million, or 23%, from the 2007
third quarter and totaled $1.3 billion
-- One-to-four family loan production increased $187 million, or 19%,
from the 2007 third quarter and totaled $1.2 billion
Commenting on the 2008 third quarter results, George L. Engelke, Jr.,
Chairman and Chief Executive Officer of Astoria, noted, "We are pleased
with the solid fundamental operating results achieved in the third quarter,
despite the continued deterioration of the national housing market. The
positive operating results are due to lower liability costs, solid quality
loan growth and an increase in retail deposits. As we anticipated, our
non-performing loans and delinquencies increased, however, significant
margin improvement helped mitigate the impact of the increases."
Board Declares Quarterly Cash Dividend of $0.26 Per Share
The Board of Directors of the Company, at their October 15, 2008
meeting, declared a quarterly cash dividend of $0.26 per share. The
dividend is payable on December 1, 2008 to shareholders of record as of
November 17, 2008. This is the fifty-fourth consecutive quarterly cash
dividend declared by the Company.
Third Quarter and Nine Month Earnings Summary
Net interest income for the quarter ended September 30, 2008 increased
$14.5 million, or 16%, from the 2008 second quarter and $25.9 million, or
32%, from the 2007 third quarter to $107.1 million. For the nine months
ended September 30, 2008, net interest income increased $28.8 million, or
11%, from the comparable 2007 period, to $280.4 million.
Astoria's net interest margin for the quarter ended September 30, 2008
increased to 2.06%, 25 basis points above the 2008 second quarter and 48
basis points above the 2007 third quarter. The increases were primarily due
to decreases in the cost of interest bearing-liabilities. During the 2008
third quarter, $2.3 billion of CDs (excluding Liquid CDs), with a weighted
average rate of 4.25%, matured and $2.6 billion of CDs were issued or
repriced with a weighted average rate of 3.64%. During the 2008 fourth
quarter, CDs (excluding Liquid CDs) totaling $1.7 billion, with a weighted
average rate of 4.11% are scheduled to mature.
For the quarter ended September 30, 2008, a $13.0 million provision for
loan losses was recorded compared to $7.0 million for the previous quarter
and $500,000 for the 2007 third quarter. For the nine months ended
September 30, 2008, the provision for loan losses totaled $24.0 million
compared to $500,000 for the comparable 2007 period. The increases
recognize the rise in non-performing loans against a backdrop of continued
deterioration in the housing market and weakness in the overall economy as
well as the Company's loan growth. The provision for the 2008 fourth
quarter is expected to remain at or increase somewhat from the 2008 third
quarter provision.
Non-interest income for the quarter and nine months ended September 30,
2008 included a $77.7 million pre-tax OTTI. Excluding the OTTI,
non-interest income totaled $22.4 million for the quarter ended September
30, 2008 compared to $24.8 million for the comparable 2007 period. The
decrease is primarily due to a gain on the sale of an equity security
position recorded in the 2007 third quarter. For the nine months ended
September 30, 2008, non interest income totaled $69.7 million, excluding
the OTTI, compared to $73.7 million for the comparable 2007 period. The
decrease is primarily due to the aforementioned gain on sale and the
receipt of insurance proceeds in 2007.
General and administrative expense ("G&A") for the quarter ended
September 30, 2008 decreased $1.2 million, to $58.8 million, from the 2008
second quarter and increased $2.3 million from the 2007 third quarter. The
linked quarter decrease is primarily due to lower compensation and benefits
expense and other expense, including lower goodwill litigation expense,
partially offset by increased advertising expense. The year over year
increase is due primarily to increases in compensation and benefits expense
and advertising expense.
For the nine months ended September 30, 2008, G&A expense increased
$4.6 million compared to the nine months ended September 30, 2007, to
$177.0 million. The increase was primarily due to an increase in
compensation and benefits expense and REO expense, partially offset by a
decrease in goodwill litigation expense.
The operating effective tax rate, which excludes the tax benefit
related to the OTTI, was reduced to approximately 28% for the quarter ended
September 30, 2008 due to the release of accruals for previous tax
positions that statutorily expired. It is expected that the fourth quarter
operating effective tax rate will return to a more normal level of
approximately 34%.
Balance Sheet Summary
For the quarter and nine months ended September 30, 2008, the total
loan portfolio increased $542.4 million and $567.7 million, respectively,
to $16.7 billion. The loan growth was funded primarily with wholesale
borrowings and, to a lesser extent, retail deposits. Total loan production
for the quarter and nine months ended September 30, 2008 increased to $1.3
billion and $3.7 billion, respectively, from $1.1 billion and $3.3 billion,
respectively, for the comparable 2007 periods.
For the quarter and nine months ended September 30, 2008, the
one-to-four family mortgage loan portfolio increased $533.3 million and
$731.0 million, respectively, to $12.4 billion. One-to-four family loan
originations and purchases for the quarter and nine months ended September
30, 2008 increased 19% and 11%, respectively, to $1.2 billion and $3.3
billion, respectively, from $982.0 million and $3.0 billion, respectively,
for the comparable 2007 periods. One-to-four family loan prepayments for
the quarter and nine months ended September 30, 2008 totaled $516.9 million
and $2.2 billion, respectively, compared to $430.4 million and $1.5
billion, respectively, for the comparable 2007 periods. Indicative of
Astoria's conservative underwriting standards, the loan-to-value ("LTV")
ratio of the 2008 third quarter one-to-four family loan production for
portfolio averaged approximately 58%. The loan amounts averaged
approximately $680,000.
For the quarter ended September 30, 2008, the multi-family and
commercial real estate ("CRE") loan portfolio increased $9.7 million and
for the nine months ended September 30, 2008 decreased $122.4 million.
Multi-family and CRE loan originations totaled $154.1 million and $347.9
million, for the three and nine months ended September 30, 2008 compared to
$90.5 million and $344.4 million for the comparable 2007 periods. At
September 30, 2008, the combined multi-family and CRE loan portfolio
totaled $3.9 billion, or 23% of total loans. The loan-to-value ratio of the
2008 third quarter combined multi-family and CRE loan production averaged
approximately 52% and the loan amounts averaged approximately $2.0 million.
"It is important to note that the double-digit increase in total loan
production has been achieved without sacrificing asset quality, as
reflected in the very low average LTV ratios," Mr. Engelke noted.
Asset Quality
Despite the increase in non-performing loans, overall asset quality
remains strong. Non-performing loans ("NPL") totaled $164.8 million at
September 30, 2008, an increase of $36.2 million from the previous quarter,
and represent just 0.74% of total assets. At September 30, 2008,
one-to-four family non-performing loans totaled $126.9 million and
multi-family/CRE non-performing loans totaled $33.6 million, compared to
$101.0 million and $24.5 million, respectively, at June 30, 2008.
The comparative table below illustrates loan migration from 30 days
delinquent to 90+ days delinquent:
30-59 Days 60-89 Days 90 + Days Total 30 + Days
(In millions) Past Due Past Due Past Due (NPL) Past Due
-------- -------- -------------- --------
At December 31,
2007 $144.4 $39.1 $68.1 $251.6
At March 31, 2008 $136.3 $48.8 $106.6 $291.7
At June 30, 2008 $134.5 $51.0 $128.6 $314.1
At September 30,
2008 $171.0 $54.7 $164.8 $390.5
The table below details, as of September 30, 2008, the states with a
total of 1% or more of our one-to- four family loan portfolio and the
respective non-performing loan totals in those states:
(In millions) % of 1-4
Family Total 1-4 NPLs as % of
Total 1-4 Loan Family State/DC
State/DC Family Loans Portfolio NPLs Total
-------- ------------ ---------- --------- -----------------
New York
Metro* $5,212.5 42% $38.2 0.73%
California $1,408.4 11% $17.4 1.24%
Illinois $1,302.4 11% $14.4 1.11%
Virginia $962.9 8% $13.2 1.37%
Maryland $889.3 7% $14.9 1.68%
Massachusetts $841.7 7% $5.0 0.59%
Florida $321.7 3% $13.0 4.04%
Washington $269.7 2% $0.0 0.00%
Georgia $164.8 1% $1.1 0.67%
Washington
D.C. $133.6 1% $2.0 1.50%
Pennsylvania $130.9 1% $2.0 1.53%
------ -- ----
Total States
1% or More $11,637.9 94% $121.2 1.04%
Other States $721.4 6% $5.7 0.79%
------ -- ----
Total 1-4
Family
Portfolio $12,359.3 100% $126.9 1.03%
========= ==== ======
* NY, NJ, CT
Net loan charge-offs for the quarter and nine months ended September
30, 2008 totaled $8.5 million and $16.6 million, respectively, compared to
net loan charge-offs of $1.6 million and $2.2 million, respectively, for
the 2007 comparable periods. For the quarter and nine months ended
September 30, 2008, one-to-four family net loan charge-offs totaled $5.3
million and $10.2 million, respectively.
Commenting on asset quality, Mr. Engelke noted, "Although we have never
actively participated in high-risk sub-prime residential lending, as a
geographically diversified residential lender, we are not immune to the
negative consequences arising from overall economic weakness and, in
particular, the deterioration in the housing industry nationally. As
expected, non-performing loans and charge-offs increased in the third
quarter, however our overall asset quality remains strong, with
non-performing loans representing just 74 basis points of total assets. We
expect that non-performing loans and charge-offs will continue to increase
as the housing market continues to decline and overall economic weakness
persists but should, nonetheless, remain at manageable levels."
Balance Sheet Summary (Continued)
Deposits increased $20.1 million and $59.7 million for the quarter and
nine months ended September 30, 2008 and totaled $13.1 billion. Total
assets increased $553.4 million and $454.1 million for the quarter and nine
months ended September 30, 2008 and totaled $22.2 billion.
Key balance sheet highlights, reflecting the improvement in the quality
of the Company's balance sheet since December 31, 1999, follow:
($ in
millions) 12/31/99 12/31/01 12/31/03 12/31/05
-------- -------- -------- --------
Assets $22,700 $22,672 $22,462 $22,380
Loans $10,286 $12,167 $12,687 $14,392
Securities $10,763 $8,013 $8,448 $6,572
Deposits $9,555 $10,904 $11,187 $12,810
Borrowings $11,528 $9,826 $9,632 $7,938
($ in
millions) 12/31/07 9/30/08 Cumulative
-------- ------- % Change
--------
Assets $21,719 $22,173 ( 2%)
Loans $16,155 $16,723 + 63%
Securities $4,371 $4,159 (61%)
Deposits $13,049 $13,109 + 37%
Borrowings $7,185 $7,500 (35%)
The following table illustrates the above improvement on an outstanding
per share basis:
Amount per
share 12/31/99 12/31/01 12/31/03 12/31/05
---------------- -------- -------- -------- --------
Loans $66.28 $89.36 $107.51 $137.11
Deposits $61.57 $80.09 $94.80 $122.04
Amount per
share 12/31/07 9/30/08 % Change CAGR
---------------- -------- ------- -------- ----
Loans $168.76 $174.51 163% 12%
Deposits $136.32 $136.80 122% 10%
Stockholders' equity was $1.2 billion, or 5.37% of total assets at
September 30, 2008. Astoria Federal continues to maintain capital ratios in
excess of regulatory requirements with core, tangible and risk-based
capital ratios of 6.16%, 6.16 % and 11.43%, respectively, at September 30,
2008.
Future Outlook
Commenting on the outlook for the remainder of 2008, Mr. Engelke
stated, "We expect the net interest margin will continue to increase in the
fourth quarter as we realize the full benefit from liabilities which
repriced lower in the third quarter and the additional benefit from lower
deposit costs in the fourth quarter and modest earning asset growth. With
respect to asset quality, as the housing crisis continues and the economy
remains weak with job losses increasing, the challenges facing residential
lenders will continue. Accordingly, we expect our non-performing assets and
loan delinquencies will increase somewhat in the 2008 fourth quarter but
should, nonetheless, remain at manageable levels. The Company's tangible
capital ratio target remains between 4.50% and 4.75%."
Astoria Financial Corporation, with assets of $22.2 billion, is the
holding company for Astoria Federal Savings and Loan Association.
Established in 1888, Astoria Federal, with deposits in New York totaling
$13.1 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, 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 and loan
production offices in New York, an extensive broker network covering
eighteen states, primarily the East Coast, and the District of Columbia,
and through correspondent relationships covering nineteen states and the
District of Columbia.
Earnings Conference Call October 16, 2008 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will
host an earnings conference call Thursday morning, October 16, 2008 at
10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, conference
ID # 64189352. A telephone replay will be available on October 16, 2008
from 1:00 p.m. (ET) through Friday, October 24, 2008, 11:59 p.m. (ET). The
replay number is (800) 642-1687, ID # 64189352. 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 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.
Page 8
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(In Thousands, Except Share Data)
At At
September 30, December 31,
2008 2007
---- ----
ASSETS
------
Cash and due from banks $71,964 $93,972
Repurchase agreements 56,000 24,218
Securities
available-for-sale 1,397,660 1,313,306
Securities held-to-maturity
(fair value of $2,730,051 and
$3,013,014, respectively) 2,761,473 3,057,544
Federal Home Loan Bank of
New York stock, at cost 226,835 201,490
Loans held-for-sale, net 8,748 6,306
Loans receivable:
Mortgage loans, net 16,384,459 15,791,962
Consumer and other
loans, net 338,278 363,052
------- -------
16,722,737 16,155,014
Allowance for loan losses (86,318) (78,946)
------- -------
Total loans receivable, net 16,636,419 16,076,068
Mortgage servicing rights,
net 11,485 12,910
Accrued interest receivable 82,381 79,132
Premises and equipment, net 138,533 139,563
Goodwill 185,151 185,151
Bank owned life insurance 401,443 398,280
Other assets 195,358 131,428
------- -------
TOTAL ASSETS $22,173,450 $21,719,368
=========== ===========
LIABILITIES
-----------
Deposits $13,109,183 $13,049,438
Reverse repurchase
agreements 3,050,000 3,730,000
Federal Home Loan Bank of
New York advances 4,073,100 3,058,000
Other borrowings, net 377,124 396,658
Mortgage escrow funds 163,374 129,412
Accrued expenses and other
liabilities 210,775 144,516
------- -------
TOTAL LIABILITIES 20,983,556 20,508,024
---------- ----------
STOCKHOLDERS' EQUITY
--------------------
Preferred stock, $1.00 par
value; (5,000,000 shares
authorized; none issued
and outstanding) - -
Common stock, $.01 par value;
(200,000,000 shares
authorized; 166,494,888
shares issued; and 95,829,245
and 95,728,562 shares
outstanding, respectively) 1,665 1,665
Additional paid-in capital 850,777 846,227
Retained earnings 1,858,618 1,883,902
Treasury stock (70,665,643
and 70,766,326 shares, at
cost, respectively) (1,460,288) (1,459,865)
Accumulated other
comprehensive loss (41,076) (39,476)
Unallocated common stock held
by ESOP (5,404,849 and 5,761,391
shares, respectively) (19,802) (21,109)
------- -------
TOTAL STOCKHOLDERS' EQUITY 1,189,894 1,211,344
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $22,173,450 $21,719,368
=========== ===========
Page 9
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands, Except Share Data)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
Interest income:
Mortgage loans:
One-to-four family $163,154 $150,645 $468,999 $428,729
Multi-family,
commercial real estate
and construction 57,982 63,052 176,983 192,160
Consumer and other loans 4,103 7,472 13,712 23,478
Mortgage-backed and other
securities 45,341 53,227 139,942 168,127
Federal funds sold and
repurchase agreements 214 337 1,868 1,812
Federal Home Loan Bank of
New York stock 3,148 2,899 11,173 8,246
----- ----- ------ -----
Total interest income 273,942 277,632 812,677 822,552
------- ------- ------- -------
Interest expense:
Deposits 92,967 116,950 301,021 341,404
Borrowings 73,902 79,505 231,217 229,553
------ ------ ------- -------
Total interest expense 166,869 196,455 532,238 570,957
------- ------- ------- -------
Net interest income 107,073 81,177 280,439 251,595
Provision for loan losses 13,000 500 24,000 500
------ --- ------ ---
Net interest income after
provision for loan losses 94,073 80,677 256,439 251,095
------ ------ ------- -------
Non-interest (loss) income:
Customer service fees 15,752 15,920 47,661 47,248
Other loan fees 927 1,153 3,056 3,481
Gain on sales of securities - 1,992 - 1,992
Other-than-temporary
impairment write-down
of securities (77,696) - (77,696) -
Mortgage banking (loss)
income, net (281) 155 1,744 1,995
Income from bank owned life
insurance 4,273 4,238 12,670 12,728
Other 1,727 1,347 4,537 6,238
----- ----- ----- -----
Total non-interest (loss)
income (55,298) 24,805 (8,028) 73,682
------- ------ ------ ------
Non-interest expense:
General and administrative:
Compensation and
benefits 31,594 30,587 95,960 91,757
Occupancy, equipment
and systems 16,460 16,159 50,211 49,174
Federal deposit
insurance premiums 549 388 1,668 1,202
Advertising 2,346 1,390 4,969 5,282
Other 7,855 8,020 24,207 24,956
----- ----- ------ ------
Total non-interest expense 58,804 56,544 177,015 172,371
------ ------ ------- -------
(Loss) income before income
tax (benefit) expense (20,029) 48,938 71,396 152,406
Income tax (benefit) expense (3,570) 13,630 25,502 47,257
------ ------ ------ ------
Net (loss) income $(16,459) $35,308 $45,894 $105,149
======== ======= ======= ========
Basic (loss) earnings per
common share $(0.18) $0.39 $0.51 $1.16
====== ===== ===== =====
Diluted (loss) earnings per
common share $(0.18) $0.39 $0.51 $1.14
====== ===== ===== =====
Basic weighted average
common shares 89,546,664 90,174,456 89,523,584 90,763,008
Diluted weighted average
common and common
equivalent shares 90,614,601 91,543,600 90,814,665 92,420,702
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES Page 10
SELECTED FINANCIAL RATIOS AND OTHER DATA
----------------------------------------
For the At or For the
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
2008 2007 2008 2007
---- ---- ---- ----
Selected
Returns and
Financial
Ratios
(annualized)
-------------
Return on
average
stockholders'
equity (5.47)% 11.82% 5.04% 11.67%
Return on average
tangible
stockholders'
equity (1) (6.47) 13.99 5.95 13.79
Return on average
assets (0.30) 0.66 0.28 0.65
General and
administrative
expense to
average assets 1.07 1.05 1.09 1.07
Efficiency ratio (2) 113.58 53.35 64.98 52.99
Net interest rate
spread (3) 1.96 1.46 1.71 1.52
Net interest
margin (4) 2.06 1.58 1.81 1.63
Selected
Non-GAAP
Returns and
Financial
Ratios
(annualized) (5)
-----------------
Non-GAAP
return on
average
stockholders'
equity 13.77% 11.82% 11.41% 11.67%
Non-GAAP
return on
average
tangible
stockholders'
equity (1) 16.28 13.99 13.46 13.79
Non-GAAP
return on
average assets 0.76 0.66 0.64 0.65
Non-GAAP
efficiency
ratio (2) 45.42 53.35 50.56 52.99
Dividend payout
ratio 56.52 66.67 68.42 68.42
Asset
Quality
Data
(dollars in
thousands) (6)
---------------
Non-performing
assets $187,063 $62,510
Non-performing
loans 164,769 58,174
Loans
delinquent
90 days
or more
and still
accruing
interest 23 3,103
Non-accrual
loans 164,746 55,071
Loans 60-89 days
delinquent 54,742 25,805
Loans 30-59 days
delinquent 170,981 148,571
Net charge-offs $8,525 $1,645 16,628 2,188
Non-performing
loans/total loans 0.99% 0.36%
Non-performing
loans/total assets 0.74 0.27
Non-performing
assets/total
assets 0.84 0.29
Allowance for loan
losses/non-performing
loans 52.39 134.52
Allowance for loan
losses/non-accrual
loans 52.39 142.10
Allowance for
loan
losses/total
loans 0.52 0.49
Net
charge-offs
to average
loans
outstanding
(annualized) 0.21% 0.04% 0.14 0.02
Capital
Ratios
(Astoria
Federal)
---------
Tangible 6.16% 6.60%
Core 6.16 6.60
Risk-based 11.43 12.08
Other Data
----------
Cash dividends
paid per common
share $0.26 $0.26 $0.78 $0.78
Book value per
share (7) 13.16 13.35
Tangible book
value per share (8) 11.11 11.30
Tangible
stockholders'
equity/tangible
assets (1) (9) 4.57% 4.73%
Mortgage loans
serviced for
others (in
thousands) $1,231,890 $1,286,661
Full time
equivalent
employees 1,586 1,629
(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 (loss) income.
(3) Net interest rate spread represents the difference between the average
yield on average interest-earning assets and the average cost of average
interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by average
interest-earning assets.
(5) The information presented for the three and nine months ended
September 30, 2008 represents pro forma calculations which are not in
conformity with U.S. generally accepted accounting principles, or GAAP.
The 2008 information excludes the $57.9 million, after tax, ($77.7
million, before tax), other-than-temporary impairment write-down of
securities charge recorded in the 2008 third quarter. See page 14 for a
reconciliation of GAAP net income to non-GAAP net income for the three and
nine months ended September 30, 2008.
(6) Loans totaling $24.1 million have been reclassified from non-accrual
to 60-89 days delinquent as of September 30, 2007 to conform the September
30, 2007 information to the current year presentation. The related
September 30, 2007 asset quality ratios have been revised as necessary.
(7) Book value per share represents stockholders' equity divided by
outstanding shares, excluding unallocated Employee Stock Ownership Plan,
or ESOP, shares.
(8) Tangible book value per share represents stockholders' equity less
goodwill divided by outstanding shares, excluding unallocated ESOP shares.
(9) Tangible assets represent assets less goodwill.
Page 11
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Three Months Ended
September 30,
2008
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,159,385 $163,154 5.37%
Multi-family, commercial
real estate and construction 3,915,922 57,982 5.92
Consumer and other loans (1) 338,947 4,103 4.84
------- -----
Total loans 16,414,254 225,239 5.49
Mortgage-backed and other
securities (2) 4,146,498 45,341 4.37
Federal funds sold and
repurchase agreements 40,133 214 2.13
Federal Home Loan Bank stock 215,409 3,148 5.85
------- -----
Total interest-earning assets 20,816,294 273,942 5.26
-------
Goodwill 185,151
Other non-interest-earning
assets 881,458
-------
Total assets $21,882,903
===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $1,865,841 1,898 0.41
Money market 312,224 811 1.04
NOW and demand deposit 1,477,188 336 0.09
Liquid certificates of deposit 1,157,399 7,195 2.49
--------- -----
Total core deposits 4,812,652 10,240 0.85
Certificates of deposit 8,259,422 82,727 4.01
--------- ------
Total deposits 13,072,074 92,967 2.84
Borrowings 7,150,428 73,902 4.13
--------- ------
Total interest-bearing
liabilities 20,222,502 166,869 3.30
-------
Non-interest-bearing
liabilities 457,316
-------
Total liabilities 20,679,818
Stockholders' equity 1,203,085
---------
Total liabilities and stockholders'
equity $21,882,903
===========
Net interest income/net interest
rate spread $107,073 1.96%
======== ====
Net interest-earning assets/net
interest margin $593,792 2.06%
======== ====
Ratio of interest-earning assets
to interest-bearing
liabilities 1.03x
=====
2007
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,171,094 $150,645 5.39%
Multi-family, commercial
real estate and construction 4,154,097 63,052 6.07
Consumer and other loans (1) 384,019 7,472 7.78
------- -----
Total loans 15,709,210 221,169 5.63
Mortgage-backed and other
securities (2) 4,711,162 53,227 4.52
Federal funds sold and
repurchase
agreements 25,631 337 5.26
Federal Home Loan Bank stock 166,938 2,899 6.95
------- -----
Total interest-earning assets 20,612,941 277,632 5.39
-------
Goodwill 185,151
Other non-interest-earning
assets 749,522
-------
Total assets $21,547,614
===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $1,983,161 2,016 0.41
Money market 365,919 926 1.01
NOW and demand deposit 1,453,669 214 0.06
Liquid certificates of deposit 1,570,599 18,501 4.71
--------- ------
Total core deposits 5,373,348 21,657 1.61
Certificates of deposit 7,946,982 95,293 4.80
--------- ------
Total deposits 13,320,330 116,950 3.51
Borrowings 6,687,400 79,505 4.76
--------- ------
Total interest-bearing
liabilities 20,007,730 196,455 3.93
-------
Non-interest-bearing
liabilities 345,377
-------
Total liabilities 20,353,107
Stockholders' equity 1,194,507
---------
Total liabilities and stockholders'
equity $21,547,614
===========
Net interest income/net interest
rate spread $81,177 1.46%
======= ====
Net interest-earning assets/net
interest margin $605,211 1.58%
======== ====
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.
Page 12
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Nine Months Ended
September 30,
2008
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,781,281 $468,999 5.31%
Multi-family, commercial
real estate and construction 3,954,253 176,983 5.97
Consumer and other loans (1) 346,720 13,712 5.27
------- ------
Total loans 16,082,254 659,694 5.47
Mortgage-backed and other
securities (2) 4,225,646 139,942 4.42
Federal funds sold and
repurchase agreements 105,665 1,868 2.36
Federal Home Loan Bank stock 202,151 11,173 7.37
------- ------
Total interest-earning assets 20,615,716 812,677 5.26
-------
Goodwill 185,151
Other non-interest-earning
assets 834,947
-------
Total assets $21,635,814
===========
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $1,874,828 5,685 0.40
Money market 317,766 2,414 1.01
NOW and demand deposit 1,477,447 967 0.09
Liquid certificates of deposit 1,294,298 30,582 3.15
--------- ------
Total core deposits 4,964,339 39,648 1.06
Certificates of deposit 8,054,333 261,373 4.33
--------- -------
Total deposits 13,018,672 301,021 3.08
Borrowings 6,987,400 231,217 4.41
--------- -------
Total interest-bearing
liabilities 20,006,072 532,238 3.55
-------
Non-interest-bearing
liabilities 416,570
-------
Total liabilities 20,422,642
Stockholders' equity 1,213,172
---------
Total liabilities and
stockholders' equity $21,635,814
===========
Net interest income/net interest
rate spread $280,439 1.71%
======== ====
Net interest-earning assets/net
interest margin $609,644 1.81%
======== ====
Ratio of interest-earning assets
to interest-bearing
liabilities 1.03x
=====
2007
----
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $10,771,698 $428,729 5.31%
Multi-family, commercial
real estate and construction 4,194,081 192,160 6.11
Consumer and other loans (1) 406,967 23,478 7.69
------- ------
Total loans 15,372,746 644,367 5.59
Mortgage-backed and other
securities (2) 4,966,923 168,127 4.51
Federal funds sold and
repurchase agreements 45,772 1,812 5.28
Federal Home Loan Bank stock 156,955 8,246 7.00
------- -----
Total interest-earning assets 20,542,396 822,552 5.34
-------
Goodwill 185,151
Other non-interest-earning
assets 756,862
-------
Total assets $21,484,409
===========
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $2,047,732 6,177 0.40
Money market 392,785 2,933 1.00
NOW and demand deposit 1,471,293 639 0.06
Liquid certificates of deposit 1,585,104 57,278 4.82
--------- ------
Total core deposits 5,496,914 67,027 1.63
Certificates of deposit 7,791,434 274,377 4.70
--------- -------
Total deposits 13,288,348 341,404 3.43
Borrowings 6,645,192 229,553 4.61
--------- -------
Total interest-bearing
liabilities 19,933,540 570,957 3.82
-------
Non-interest-bearing
liabilities 349,186
-------
Total liabilities 20,282,726
Stockholders' equity 1,201,683
---------
Total liabilities and
stockholders'
equity $21,484,409
===========
Net interest income/net interest
rate spread $251,595 1.52%
======== ====
Net interest-earning assets/net
interest margin $608,856 1.63%
======== ====
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.
Page 13
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
--------------------------------
(Dollars in Thousands)
At September 30, At June 30,
2008 2008
---------------- ----------------
Weighted Weighted
Average Average
Balance Rate (1) Balance Rate (1)
--------- -------- --------- --------
Selected
interest-earning
assets:
Mortgage loans,
gross (2):
One-to-four
family $12,359,266 5.65% $11,825,962 5.64%
Multi-family,
commercial real
estate and
construction 3,913,075 5.92 3,905,610 5.90
Mortgage-backed
and other
securities (3) 4,159,133 4.35 4,203,529 4.32
Interest-bearing
liabilities:
Savings 1,842,781 0.40 1,886,470 0.40
Money market 302,760 1.06 316,607 1.02
NOW and demand
deposit 1,440,230 0.06 1,506,549 0.06
Liquid
certificates of
deposit 1,075,485 2.47 1,246,359 2.47
--------- ---------
Total core
deposits 4,661,256 0.82 4,955,985 0.86
Certificates of
deposit 8,447,927 3.92 8,133,061 4.10
--------- ---------
Total deposits 13,109,183 2.82 13,089,046 2.87
Borrowings, net 7,500,224 3.86 6,937,975 4.28
At September 30,
2007
----------------
Weighted
Average
Balance Rate (1)
--------- --------
Selected interest-earning assets:
Mortgage loans, gross (2):
One-to-four family $11,349,658 5.65%
Multi-family, commercial
real estate
and construction 4,122,709 5.93
Mortgage-backed and other
securities (3) 4,568,579 4.33
Interest-bearing liabilities:
Savings 1,940,322 0.40
Money market 352,858 1.01
NOW and demand deposit 1,442,840 0.06
Liquid certificates of
deposit 1,463,845 4.46
---------
Total core deposits 5,199,865 1.49
Certificates of deposit 8,066,130 4.80
---------
Total deposits 13,265,995 3.50
Borrowings, net 6,929,500 4.68
(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 Page 14
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (1)
------------------------------------------------------------
(In Thousands, Except Per Share Data)
Non-GAAP net income, non-GAAP earnings per share and non-GAAP returns,
representing net income and earnings per share determined in accordance
with GAAP excluding the effects of the after-tax charges noted below,
provide a meaningful comparison for effectively evaluating Astoria's
operating results.
For the Three Months Ended
September 30, 2008
------------------
Adjustments Non-GAAP
GAAP (2) (1)
------- ----------- --------
Net interest income $107,073 $- $107,073
Provision for loan losses 13,000 - 13,000
----- ---- -----
Net interest income after provision for
loan losses 94,073 - 94,073
Non-interest (loss) income (55,298) 77,696 22,398
Non-interest expense 58,804 - 58,804
----- ---- -----
(Loss) income before income tax
(benefit) expense (20,029) 77,696 57,667
Income tax (benefit) expense (3,570) 19,816 16,246
----- ----- -----
Net (loss) income $(16,459) $57,880 $41,421
------ ----- -----
Basic (loss) earnings per common share $(0.18) $0.65 $0.46 (3)
----- ---- ---- --
Diluted (loss) earnings per common share $(0.18) $0.64 $0.46
----- ---- ----
For the Nine Months Ended
September 30, 2008
------------------
Adjustments Non-GAAP
GAAP (2) (1)
---- ----------- --------
Net interest income $280,439 $- $280,439
Provision for loan losses 24,000 - 24,000
----- ---- -----
Net interest income after provision for
loan losses 256,439 - 256,439
Non-interest (loss) income (8,028) 77,696 69,668
Non-interest expense 177,015 - 177,015
------ ---- -------
(Loss) income before income tax
(benefit) expense 71,396 77,696 149,092
Income tax (benefit) expense 25,502 19,816 45,318
----- ----- -----
Net (loss) income $45,894 $57,880 $103,774
----- ----- ------
Basic (loss) earnings per common share $0.51 $0.65 $1.16
---- ---- ----
Diluted (loss) earnings per common share $0.51 $0.64 $1.14 (3)
---- ---- ---- --
-----------------------------------------
(1) Non-GAAP net income is also referred to as operating income and
operating EPS throughout this release.
(2) Adjustments relate to the other-than-temporary impairment write-down
of securities charge and the related tax effects recorded in the 2008
third quarter.
(3) Figures do not cross foot due to rounding.
SOURCE Astoria Financial Corporation
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Related links:
http://ir.astoriafederal.com
http://www.astoriafederal.com
CONTACT:
Peter J. Cunningham, First Vice President,
Investor Relations, +1-516-327-7877, ir@astoriafederal.com
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