Astoria Financial Corporation Announces Fourth Quarter EPS of $0.09
Quarterly Cash Dividend of $0.13 Per Share Declared
LAKE SUCCESS, N.Y., Jan. 27 /PRNewswire-FirstCall/ -- Astoria Financial Corporation (NYSE: AF) ("Astoria," the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal", the "Bank"), today reported net income of $8.1 million, or $0.09 diluted earnings per share ("EPS") for the quarter ended December 31, 2009 compared to $29.4 million, or $0.32 EPS, (operating income of $22.1 million, or $0.24 operating EPS), for the 2008 fourth quarter.(a) Operating income equaled net income for the 2009 fourth quarter.
For the year ended December 31, 2009, net income totaled $27.7 million, or $0.30 EPS, (operating income of $38.6 million, or $0.42 operating EPS) compared to $75.3 million, or $0.82 EPS, (operating income of $125.8 million, or $1.38 operating EPS) for the year ended December 31, 2008.(b)
Operating income and operating EPS, representing net income and EPS determined in accordance with generally accepted accounting principles ("GAAP") excluding the effects of certain items that are not routine to our core operations, provide a meaningful comparison for evaluating Astoria's operating results and are detailed in the footnotes below. For a reconciliation of GAAP and non-GAAP measures, please refer to the "Reconciliation of GAAP and non-GAAP Measures" table included in this release.
Commenting on the quarter and full year results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted "While the decreases in the year-over-year fourth quarter and full year results reflect the effect of a prolonged and severe job loss recession that has resulted in increased loan delinquencies, higher credit costs and non-performing loans as compared to a year ago, the fundamental operating performance of the Company on a linked quarter basis is encouraging. Specifically, the improvement in net interest income and the net interest margin coupled with the stabilizing trend in non-performing loans, will have a positive impact on earnings in future quarters."
(a) Included in the 2008 fourth quarter is a tax benefit of $7.4 million, or $0.08 per diluted share, due to a tax adjustment related to the recognition of the 2008 third quarter other-than-temporary impairment ("OTTI") charge relating to Freddie Mac preferred stock.
(b) Included in the year ended December 31, 2009 are pre-tax charges totaling $16.7 million ($10.9 million, after-tax, or $0.12 per diluted share). These included an FDIC deposit insurance special assessment totaling $9.9 million, a $1.6 million lower of cost or market write-down on a former mortgage origination building, both recorded in the 2009 second quarter, and an OTTI, non-cash charge of $5.3 million recorded in the 2009 first quarter related to Freddie Mac preferred stock. Included in the year ended December 31, 2008, is an OTTI non-cash, pre-tax charge totaling $77.7 million ($50.5 million, after-tax, or $0.56 per diluted share) relating to Freddie Mac preferred stock.
Board Declares Quarterly Cash Dividend of $0.13 Per Share
The Board of Directors of the Company, at their January 27, 2010 meeting, declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on March 1, 2010 to shareholders of record as of February 16, 2010. This is the fifty-ninth consecutive quarterly cash dividend declared by the Company.
Board Sets Annual Shareholders' Meeting Date
The Board of Directors of the Company, at their January 27, 2010 meeting, established May 19, 2010 as the date for the Annual Meeting of Shareholders, with a voting record date of March 24, 2010.
Fourth Quarter and Full Year Earnings Summary
Net interest income for the quarter ended December 31, 2009 totaled $105.0 million compared to $103.1 million for the 2009 third quarter and $114.9 million for the 2008 fourth quarter. For the year ended December 31, 2009, net interest income increased $33.4 million, or 8.4%, from the year ended December 31, 2008, to $428.8 million.
Astoria's net interest margin for the quarter ended December 31, 2009 increased to 2.15%, 8 basis points above the 2009 third quarter and was just 3 basis points lower than the 2008 fourth quarter. The linked quarter increase was due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets. During the 2009 fourth quarter, $2.2 billion of CDs matured (excluding Liquid CDs), with a weighted average rate of 3.28% and an original weighted average maturity of 12 months, and $1.6 billion of CDs were issued or repriced, with a weighted average rate of 1.59% and a weighted average maturity of 18 months.
For the year ended December 31, 2009, the margin was 2.13%, 22 basis points higher than the margin for the year ended December 31, 2008. The increase, like that of the linked quarter increase, was primarily due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets. For the year ended December 31, 2009, $7.6 billion of CDs matured (excluding Liquid CDs), with a weighted average rate of 3.31% and an original weighted average maturity of 12 months, and $6.5 billion of CDs were issued or repriced, with a weighted average rate of 1.94% and a weighted average maturity of 14 months. "We have been successful in reducing the cost of CDs while extending the maturity terms in an effort to improve interest rate risk sensitivity," Mr. Engelke noted. During 2009, the one-year cumulative interest rate sensitivity gap was reduced to negative 6.77% at December 31, 2009 compared to negative 19.06% at December 31, 2008, primarily due to increased mortgage cash flow, as well as a significant increase in mortgage loans repricing into one-year ARMs, coupled with the aforementioned extension of CD maturities. For additional detail regarding the yields on interest-earning assets and costs on interest-bearing liabilities please refer to the "Average Balance Sheets" tables included in this release.
For the quarter ended December 31, 2009, a $50.0 million provision for loan losses was recorded which was equal to the provision for the previous quarter and $5.0 million greater than the $45.0 million provision for the 2008 fourth quarter. For the year ended December 31, 2009, provisions for loan losses totaled $200.0 million compared to $69.0 million for 2008. Mr. Engelke noted, "The significant increase in the 2009 provisions recognizes the deterioration in the financial condition of many prime residential borrowers during the year, due to the severity of a prolonged job loss recession, weakness in the national housing market and a decline in real estate values, which resulted in higher loan delinquencies, credit costs and non-performing loans."
Non-interest income for the quarter ended December 31, 2009 totaled $23.3 million compared to $19.2 million for the comparable 2008 quarter. The $4.1 million increase is primarily due to security gains of $1.5 million and net mortgage banking income of $805,000 compared to a $2.2 million net mortgage banking loss in the 2008 fourth quarter. For the year ended December 31, 2009, non-interest income (excluding a $5.3 OTTI charge and a $1.6 million building write-down) totaled $86.7 million compared to $88.9 million (excluding a $77.7 million OTTI charge) for the comparable 2008 period. The $2.2 million decrease is primarily due to a $7.8 million decrease in bank owned life insurance income, a $4.6 million decrease in customer service fees and $2.3 million, net, in lower of cost or market write-downs on non-performing loans held-for-sale during 2009, partially offset by $7.4 million in securities gains and a $6.0 million increase in mortgage banking income, net.
General and administrative expense ("G&A") for the quarter ended December 31, 2009 totaled $66.8 million compared to $63.2 million for the 2009 third quarter and $56.2 million for the 2008 fourth quarter. The linked quarter increase was primarily due to a $1.8 million increase in ESOP expense, a $1.0 million increase in real estate owned related expense and a $702,000 increase in advertising expense. The fourth quarter year over year increase was due primarily to a $6.0 million increase in FDIC deposit insurance premiums and a $5.2 million increase in compensation and benefits expense, primarily due to increased pension expense.
For the year ended December 31, 2009, G&A totaled $270.1 million compared to $233.3 million. The $36.8 million increase was primarily due to an $8.5 million increase in compensation and benefits expense primarily due to increased pension expense partially offset by lower ESOP expense, a $22.1 million increase in regular FDIC deposit insurance premiums and a $9.9 million FDIC deposit insurance special assessment in the 2009 second quarter, partially offset by lower occupancy, equipment and systems expense and lower advertising expense.
Balance Sheet Summary
Total assets decreased $421.1 million and $1.7 billion for the quarter and twelve months ended December 31, 2009, respectively, and totaled $20.3 billion. The decrease for the fourth quarter was due to a $189.1 million decrease in the loan portfolio and $293.7 million decrease in the securities portfolio. The full year decrease was due to decreases of $454.3 million in the one-to-four family loan portfolio, $426.9 million in the multi-family/commercial real estate ("CRE") mortgage loan portfolios and $858.7 million in the securities portfolio. At December 31, 2009, the one-to-four family loan portfolio totaled $11.9 billion, the multi-family/CRE portfolio totaled $3.4 billion and the securities portfolio totaled $3.2 billion.
For the quarter and twelve months ended December 31, 2009, one-to-four family loan originations for portfolio totaled $916.4 million and $3.1 billion, respectively, compared to $422.7 million and $3.7 billion, respectively, for the comparable 2008 periods. One-to-four family loan prepayments for the quarter and twelve months ended December 31, 2009 totaled $891.3 million and $3.1 billion, respectively, compared to $330.3 million and $2.6 billion, respectively, for the comparable 2008 periods. The loan-to-value ratio of the one-to-four family loan production for portfolio for the 2009 fourth quarter and full year averaged 61% and 58%, respectively, at origination and the individual loan amount averaged $700,000 and $715,000, respectively.
Deposits for the quarter ended December 31, 2009 decreased $406.4 million from the previous quarter and $667.7 million from December 31, 2008, and totaled $12.8 billion at December 31, 2009. The decreases were due primarily to decreases in CDs. Commenting on deposit flows, Mr. Engelke noted, "During the fourth quarter and throughout the year, accelerated mortgage prepayment activity, which outpaced our loan production, influenced our decision to reduce higher cost CDs. Important to note, low-cost savings, money market and checking deposits increased $426.3 million, or 11.9%, for the twelve months ended December 31, 2009. Also important to note, total deposits are comprised of retail deposits and do not include any broker or municipal deposits."
Borrowings for the quarter ended December 31, 2009 increased $40.1 million from the previous quarter and decreased $1.1 billion from December 31, 2008 to $5.9 billion.
Stockholders' equity totaled $1.2 billion, or 5.97% of total assets at December 31, 2009. Astoria Federal continues to be designated as well-capitalized with core, tangible, risk-based and Tier 1 risk-based capital ratios of 6.89%, 6.89%, 12.99% and 11.72%, respectively, at December 31, 2009.
Asset Quality
Non-performing loans ("NPL"), including troubled debt restructurings ("TDR") of $57.2 million, totaled $408.6 million, or 2.02% of total assets, at December 31, 2009, essentially flat from the previous quarter. During the 2009 fourth quarter, $13.1 million of non-performing loans were either sold or classified as held-for-sale. At December 31, 2009, one-to-four family non-performing loans totaled $330.1 million and multi-family/CRE/construction non-performing loans totaled $73.7 million compared to $323.8 million and $80.8 million, respectively, at September 30, 2009. Important to note, of the $330.1 million of non-performing one-to-four family loans, $228.5 million, or 69%, represent residential loans which, at 180 days delinquent and annually thereafter, were reviewed and adjusted, as needed, to the estimated fair value of the underlying collateral at such time, less estimated selling costs. Commenting on asset quality, Mr. Engelke noted, "Although non-performing loans have increased from a year ago, they have stabilized on a linked quarter basis. In addition, although early stage loan delinquencies have increased slightly from the previous quarter, they are down from a year ago."
The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:
Combined 90 +
30-59 60-89 30-89 Linked Past Total
(In Days Days Days Qtr Due 30-90+
millions) Past Due Past Due Past Due Change (NPL) Past Due
-------- -------- -------- ------ ----- --------
At Dec. 31,
2008 $229.8 $70.1 $299.9 +$74.2 $238.6 $538.5
At March 31,
2009 $215.9 $105.7 $321.6 +$21.7 $336.6 $658.2
At June 30,
2009 $210.5 $109.7 $320.2 $(1.4) $360.0 $680.2
At Sept. 30,
2009 $197.6 $75.9 $273.5 $(46.7) $408.5 $682.0
At Dec. 31,
2009 $212.9 $76.3 $289.2 +$15.7 $408.6 $697.8
The table below details, as of December 31, 2009, the ten largest concentrations by state of one-to-four family loans and the respective non-performing residential loan totals in those states. More comprehensive state details are included in the "One-to-Four Family Residential Loan Portfolio-Geographic Analysis" table included in this release.
(In millions) Total 1-4 % of Total Total 1-4 NPLs as %
Family 1-4 Family Family of State
State Loans Portfolio NPLs Total
----- ----- --------- ---- -----
New York $3,079.6 25.8% $41.4 1.34%
Illinois $1,435.7 12.1% $41.5 2.89%
Connecticut $1,200.4 10.1% $28.6 2.38%
California $1,077.7 9.1% $52.2 4.84%
New Jersey $921.9 7.8% $41.6 4.51%
Massachusetts $833.3 7.0% $16.7 2.00%
Virginia $785.2 6.6% $16.2 2.06%
Maryland $761.3 6.4% $38.1 5.00%
Washington $354.7 3.0% $2.9 0.82%
Florida $267.7 2.3% $26.1 9.75%
------ -----
Top 10
States $10,717.5 90.2% $305.3 2.85%
All other
states (1) $1,177.9 9.8% $24.8 2.11%
-------- -----
Total 1-4
Family
Portfolio $11,895.4 100% $330.1 2.78%
========= === ======
(1) Includes 29 states and Washington, D.C.
Net loan charge-offs for the quarter ended December 31, 2009 totaled $32.6 million (of which $22.8 million represented one-to-four family loans and $9.2 million represented multi-family/CRE loans) compared to $33.6 million (of which $22.1 million represented one-to-four family loans and $11.1 million represented multi-family/CRE and construction loans) for the 2009 third quarter. Included in the $22.8 million of one-to-four family loan net charge-offs are $17.3 million of charge-offs on $68.5 million of non-performing loans which, at 180 days delinquent and annually thereafter, were reviewed and required an adjustment to reduce the carrying value to the estimated fair value of the underlying collateral less estimated selling costs.
Selected Asset Quality Metrics (at or for the three and twelve months ended December 31, 2009)
($ in 1-4 Multi- Consumer
millions) Family Family CRE Construction & Other Total
------ ------ --- ------------ ------- -----
Loan
portfolio
balance $11,895.4 $2,559.1 $866.8 $23.6 $330.0(1) $15,780.7(2)
Non-
performing
loans $330.1(3) $59.5 $8.7 $5.5 $4.8 $ 408.6(3)
NPLs/total
loans 2.09% 0.38% 0.06% 0.03% 0.03% 2.59%
Net charge-
offs 4Q09 $22.8 $8.3 $0.9 $0.0 $0.6 $32.6
Net charge-
offs YTD $76.8 $33.3 $2.6 $10.3 $2.0 $125.0
(1) Includes home equity loans of $302.4 million
(2) Includes $105.9 million of net unamortized premiums and deferred loan
costs
(3) Includes $228.5 million reviewed and adjusted, as needed, at 180 days
delinquent and annually thereafter
Future Outlook
Commenting on the outlook for 2010, Mr. Engelke stated, "Despite high unemployment and a weak housing market, we continue to remain cautiously optimistic as the economy begins to show signs of improvement. We are encouraged by the stabilizing trends we are seeing in non-performing loans, which if sustained, will have a positive impact on future credit costs and earnings. In the near term, as a result of the U.S. government's efforts to keep residential mortgage rates artificially low coupled with elevated conforming loan limits in many of the markets we operate in, loan prepayments will remain high and restrain loan and balance sheet growth. If and when these government programs subside, mortgage rates should return to normal market levels and we should resume loan and balance sheet growth at reasonable spreads. With respect to the net interest margin, we expect modest increases in the first half of 2010 as we continue to realize the benefit from significant CD repricing opportunities."
Astoria Financial Corporation, with assets of $20.3 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $12.8 billion, is the largest thrift depository headquartered in New York and embraces its philosophy of "Putting people first" by providing the customers and local communities it serves with quality financial products and services through 85 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states. Astoria Federal originates mortgage loans through its banking and loan production offices in New York, an extensive broker network covering sixteen states, primarily along the East Coast, and the District of Columbia, and through correspondent relationships covering seventeen states and the District of Columbia.
Earnings Conference Call January 28, 2010 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, January 28, 2010 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, conference ID # 47721913. A telephone replay will be available on January 28, 2010 from 1:00 p.m. (ET) through midnight Friday, February 5, 2010 (ET). The replay number is (800) 642-1687, ID # 47721913. The conference call will also be simultaneously webcast on the Company's website www.astoriafederal.com and archived for one year.
Forward Looking Statements
This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of such words as "anticipate," "believe," "could," "estimate," "expect," "intend," "outlook," "plan," "potential," "predict," "project," "should," "will," "would," and similar terms and phrases, including references to assumptions.
Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.
Tables Follow
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(In Thousands, Except Share Data)
At At
December 31, December 31,
2009 2008
---- ----
ASSETS
Cash and due from banks $71,540 $76,233
Repurchase agreements 40,030 24,060
Securities available-for-sale 860,694 1,390,440
Securities held-to-maturity (fair value of
$2,367,520 and $2,643,955, respectively) 2,317,885 2,646,862
Federal Home Loan Bank of New York stock,
at cost 178,929 211,900
Loans held-for-sale, net 34,274 5,272
Loans receivable:
Mortgage loans, net 15,447,115 16,372,383
Consumer and other loans, net 333,607 340,061
------- -------
15,780,722 16,712,444
Allowance for loan losses (194,049) (119,029)
-------- --------
Total loans receivable, net 15,586,673 16,593,415
Mortgage servicing rights, net 8,850 8,216
Accrued interest receivable 66,121 79,589
Premises and equipment, net 136,195 139,828
Goodwill 185,151 185,151
Bank owned life insurance 401,735 401,280
Real estate owned, net 46,220 25,481
Other assets 317,882 194,384
------- -------
TOTAL ASSETS $20,252,179 $21,982,111
=========== ===========
LIABILITIES
Deposits $12,812,238 $13,479,924
Reverse repurchase agreements 2,500,000 2,850,000
Federal Home Loan Bank of New York advances 3,000,000 3,738,000
Other borrowings, net 377,834 377,274
Mortgage escrow funds 114,036 133,656
Accrued expenses and other liabilities 239,457 221,488
------- -------
TOTAL LIABILITIES 19,043,565 20,800,342
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value;
(5,000,000 shares authorized; none issued
and outstanding) - -
Common stock, $.01 par value; (200,000,000
shares authorized; 166,494,888 shares
issued; and 97,083,607 and 95,881,132
shares outstanding, respectively) 1,665 1,665
Additional paid-in capital 857,662 856,021
Retained earnings 1,829,199 1,864,257
Treasury stock (69,411,281 and
70,613,756 shares, at cost, respectively) (1,434,362) (1,459,211)
Accumulated other comprehensive loss (29,779) (61,865)
Unallocated common stock held by ESOP
(4,304,635 and 5,212,668 shares,
respectively) (15,771) (19,098)
------- -------
TOTAL STOCKHOLDERS' EQUITY 1,208,614 1,181,769
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $20,252,179 $21,982,111
=========== ===========
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
----------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Interest income:
Mortgage loans:
One-to-four family $144,472 $168,298 $609,724 $637,297
Multi-family,
commercial real
estate and
construction 51,941 57,939 217,480 234,922
Consumer and
other loans 2,787 3,613 10,882 17,325
Mortgage-backed
and other securities 33,348 45,218 149,655 185,160
Federal funds sold,
repurchase agreements
and interest-earning
cash accounts 54 71 448 1,939
Federal Home Loan
Bank of New York stock 2,502 1,895 9,352 13,068
----- ----- ----- ------
Total interest income 235,104 277,034 997,541 1,089,711
------- ------- ------- ---------
Interest expense:
Deposits 67,302 92,876 315,371 393,897
Borrowings 62,847 69,213 253,401 300,430
------ ------ ------- -------
Total interest expense 130,149 162,089 568,772 694,327
------- ------- ------- -------
Net interest income 104,955 114,945 428,769 395,384
Provision for loan losses 50,000 45,000 200,000 69,000
------ ------ ------- ------
Net interest income
after provision for
loan losses 54,955 69,945 228,769 326,384
------ ------ ------- -------
Non-interest income:
Customer service fees 14,622 14,828 57,887 62,489
Other loan fees 1,081 929 3,918 3,985
Gain on sales of
securities 1,494 - 7,426 -
Other-than-temporary
impairment write-down
of securities - - (5,300) (77,696)
Mortgage banking
income (loss), net 805 (2,199) 5,567 (413)
Income from bank
owned life insurance 2,372 4,063 8,950 16,733
Other 2,975 1,587 1,353 6,082
----- ----- ----- -----
Total non-interest income 23,349 19,208 79,801 11,180
------ ------ ------ ------
Non-interest expense:
General and administrative:
Compensation
and benefits 34,105 28,886 133,318 124,846
Occupancy, equipment
and systems 16,320 16,342 64,685 66,553
Federal deposit
insurance premiums 6,568 545 24,300 2,213
Federal deposit
insurance special
assessment - - 9,851 -
Advertising 1,663 2,147 5,404 7,116
Other 8,179 8,325 32,498 32,532
----- ----- ------ ------
Total non-interest expense 66,835 56,245 270,056 233,260
------ ------ ------- -------
Income before income
tax expense 11,469 32,908 38,514 104,304
Income tax expense 3,329 3,460 10,830 28,962
----- ----- ------ ------
Net income $8,140 $29,448 $27,684 $75,342
====== ======= ======= =======
Basic earnings per
common share $0.09 $0.33 $0.30 $0.83
===== ===== ===== =====
Diluted earnings per
common share $0.09 $0.32 $0.30 $0.82
===== ===== ===== =====
Basic weighted average
common shares 90,927,734 89,749,299 90,593,060 89,580,322
Diluted weighted average
common and common
equivalent shares 90,958,013 89,966,383 90,602,189 90,406,527
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Three Months Ended December 31,
---------------------------------------
2009
------------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,082,069 $144,472 4.78%
Multi-family, commercial
real estate and
construction 3,507,603 51,941 5.92
Consumer and other loans (1) 334,514 2,787 3.33
------- -----
Total loans 15,924,186 199,200 5.00
Mortgage-backed and other
securities (2) 3,261,507 33,348 4.09
Repurchase agreements and
interest-earning cash
accounts 140,917 54 0.15
Federal Home Loan Bank stock 176,841 2,502 5.66
------- -----
Total interest-earning
assets 19,503,451 235,104 4.82
-------
Goodwill 185,151
Other non-interest-earning
assets 778,275
-------
Total assets $20,466,877
===========
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $1,986,183 2,025 0.41
Money market 327,318 362 0.44
NOW and demand deposit 1,569,940 259 0.07
Liquid certificates of
deposit 756,872 1,018 0.54
------- -----
Total core deposits 4,640,313 3,664 0.32
Certificates of deposit 8,361,153 63,638 3.04
--------- ------
Total deposits 13,001,466 67,302 2.07
Borrowings 5,830,420 62,847 4.31
--------- ------
Total interest-bearing
liabilities 18,831,886 130,149 2.76
-------
Non-interest-bearing
liabilities 431,510
-------
Total liabilities 19,263,396
Stockholders' equity 1,203,481
---------
Total liabilities and
stockholders' equity $20,466,877
===========
Net interest income/net
interest rate spread (3) $104,955 2.06%
======== ====
Net interest-earning assets/
net interest margin (4) $671,565 2.15%
======== ====
Ratio of interest-earning
assets to interest-bearing
liabilities 1.04x
=====
For the Three Months Ended December 31,
---------------------------------------
2008
------------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,500,269 $168,298 5.39%
Multi-family, commercial
real estate and
construction 3,927,039 57,939 5.90
Consumer and other loans (1) 339,951 3,613 4.25
------- -----
Total loans 16,767,259 229,850 5.48
Mortgage-backed and other
securities (2) 4,101,024 45,218 4.41
Repurchase agreements and
interest-earning cash
accounts 37,974 71 0.75
Federal Home Loan Bank stock 223,571 1,895 3.39
------- -----
Total interest-earning
assets 21,129,828 277,034 5.24
-------
Goodwill 185,151
Other non-interest-earning
assets 774,382
-------
Total assets $22,089,361
===========
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $1,830,246 1,866 0.41
Money market 294,471 775 1.05
NOW and demand deposit 1,449,421 323 0.09
Liquid certificates of
deposit 1,019,222 6,210 2.44
--------- -----
Total core deposits 4,593,360 9,174 0.80
Certificates of deposit 8,602,462 83,702 3.89
--------- ------
Total deposits 13,195,822 92,876 2.82
Borrowings 7,312,640 69,213 3.79
--------- ------
Total interest-bearing
liabilities 20,508,462 162,089 3.16
-------
Non-interest-bearing
liabilities 390,758
-------
Total liabilities 20,899,220
Stockholders' equity 1,190,141
---------
Total liabilities and
stockholders' equity $22,089,361
===========
Net interest income/net
interest rate spread (3) $114,945 2.08%
======== ====
Net interest-earning assets/
net interest margin (4) $621,366 2.18%
======== ====
Ratio of interest-earning
assets to interest-bearing
liabilities 1.03x
=====
(1) Mortgage loans and consumer and other loans include loans held-
for-sale and non-performing loans and exclude the allowance for
loan losses.
(2) Securities available-for-sale are included at average
amortized cost.
(3) Net interest rate spread represents the difference between the
average yield on average interest-earning assets and the average
cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average interest-earning assets.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Twelve Months Ended December 31,
----------------------------------------
2009
----------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,166,413 $609,724 5.01%
Multi-family, commercial real
estate and construction 3,680,486 217,480 5.91
Consumer and other loans (1) 336,545 10,882 3.23
------- ------
Total loans 16,183,444 838,086 5.18
Mortgage-backed and other
securities (2) 3,494,966 149,655 4.28
Federal funds sold, repurchase
agreements and interest-earning
cash accounts 226,689 448 0.20
Federal Home Loan Bank stock 181,472 9,352 5.15
------- -----
Total interest-earning assets 20,086,571 997,541 4.97
-------
Goodwill 185,151
Other non-interest-earning
assets 822,036
-------
Total assets $21,093,758
===========
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $1,928,842 7,806 0.40
Money market 317,168 2,095 0.66
NOW and demand deposit 1,534,131 1,064 0.07
Liquid certificates of deposit 884,436 10,659 1.21
------- ------
Total core deposits 4,664,577 21,624 0.46
Certificates of deposit 8,728,580 293,747 3.37
--------- -------
Total deposits 13,393,157 315,371 2.35
Borrowings 6,051,655 253,401 4.19
--------- -------
Total interest-bearing
liabilities 19,444,812 568,772 2.93
-------
Non-interest-bearing
liabilities 451,677
-------
Total liabilities 19,896,489
Stockholders' equity 1,197,269
---------
Total liabilities and
stockholders' equity $21,093,758
===========
Net interest income/net
interest rate spread (3) $428,769 2.04%
======== ====
Net interest-earning assets/
net interest margin (4) $641,759 2.13%
======== ====
Ratio of interest-earning
assets to interest-bearing
liabilities 1.03x
=====
For the Twelve Months Ended December 31,
----------------------------------------
2008
-----------------------------
Average
Average Yield/
Balance Interest Cost
------- -------- ----
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,962,010 $637,297 5.33%
Multi-family, commercial
real estate and
construction 3,947,413 234,922 5.95
Consumer and other loans (1) 345,019 17,325 5.02
------- ------
Total loans 16,254,442 889,544 5.47
Mortgage-backed and other
securities (2) 4,194,320 185,160 4.41
Federal funds sold,
repurchase agreements and
interest-earning cash
accounts 88,650 1,939 2.19
Federal Home Loan Bank stock 207,535 13,068 6.30
------- ------
Total interest-earning
assets 20,744,947 1,089,711 5.25
---------
Goodwill 185,151
Other non-interest-earning
assets 820,216
-------
Total assets $21,750,314
===========
Liabilities and stockholders'
equity:
Interest-bearing liabilities:
Savings $1,863,622 7,551 0.41
Money market 311,910 3,189 1.02
NOW and demand deposit 1,470,402 1,290 0.09
Liquid certificates of
deposit 1,225,153 36,792 3.00
--------- ------
Total core deposits 4,871,087 48,822 1.00
Certificates of deposit 8,192,114 345,075 4.21
--------- -------
Total deposits 13,063,201 393,897 3.02
Borrowings 7,069,155 300,430 4.25
--------- -------
Total interest-bearing
liabilities 20,132,356 694,327 3.45
-------
Non-interest-bearing
liabilities 410,082
-------
Total liabilities 20,542,438
Stockholders' equity 1,207,876
---------
Total liabilities and
stockholders' equity $21,750,314
===========
Net interest income/net
interest rate spread (3) $395,384 1.80%
======== ====
Net interest-earning assets/
net interest margin (4) $612,591 1.91%
======== ====
Ratio of interest-earning
assets to interest-bearing
liabilities 1.03x
=====
(1) Mortgage loans and consumer and other loans include loans held-
for-sale and non-performing loans and exclude the allowance for
loan losses.
(2) Securities available-for-sale are included at average
amortized cost.
(3) Net interest rate spread represents the difference between the
average yield on average interest-earning assets and the average
cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average interest-earning assets.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL RATIOS AND OTHER DATA
For the At or For the
Three Months Ended Twelve Months Ended
December 31, December 31,
----------- ------------
2009 2008 2009 2008
---- ---- ---- ----
(Annualized)
Selected Returns and Financial
Ratios
------------------------------
Return on average
stockholders' equity 2.71 % 9.90 % 2.31 % 6.24 %
Return on average tangible
stockholders' equity (1) 3.20 11.72 2.74 7.37
Return on average assets 0.16 0.53 0.13 0.35
General and administrative
expense to average assets 1.31 1.02 1.28 1.07
Efficiency ratio (2) 52.09 41.93 53.10 57.37
Net interest rate spread 2.06 2.08 2.04 1.80
Net interest margin 2.15 2.18 2.13 1.91
Selected Non-GAAP Returns
and Financial Ratios (3)
-------------------------
Non-GAAP return on average
stockholders' equity 2.71 % 7.42 % 3.22 % 10.42%
Non-GAAP return on average
tangible stockholders'
equity (1) 3.20 8.78 3.81 12.30
Non-GAAP return on average
assets 0.16 0.40 0.18 0.58
Non-GAAP general and
administrative expense to
average assets 1.31 1.02 1.23 1.07
Non-GAAP efficiency ratio (2) 52.09 41.93 50.48 48.17
Asset Quality Data (dollars
in thousands)
---------------------------
Non-performing assets (4) $454,792 $264,101
Non-performing loans (4) 408,572 238,620
Loans delinquent 90 days or
more and still accruing
interest 600 33
Non-accrual loans 407,972 238,587
Loans 60-89 days delinquent 76,314 70,062
Loans 30-59 days delinquent 212,894 229,834
Net charge-offs $32,589 $12,289 124,980 28,917
Non-performing loans/total
loans 2.59 % 1.43 %
Non-performing loans/total
assets 2.02 1.09
Non-performing assets/total
assets 2.25 1.20
Allowance for loan losses/
non-performing loans 47.49 49.88
Allowance for loan losses/
non-accrual loans 47.56 49.89
Allowance for loan losses/
total loans 1.23 0.71
Net charge-offs to average
loans outstanding 0.82 % 0.29 % 0.77 0.18
Capital Ratios (Astoria Federal)
--------------------------------
Tangible 6.89 % 6.39 %
Core 6.89 6.39
Risk-based 12.99 12.02
Tier 1 risk-based 11.72 11.07
Other Data
----------
Cash dividends paid per common
share $0.13 $0.26 $0.52 $1.04
Book value per share (5) 13.03 13.03
Tangible book value per
share (6) 11.03 10.99
Tangible stockholders' equity/
tangible assets (1) (7) 5.10 % 4.57 %
Mortgage loans serviced for
others (in thousands) $1,379,259 $1,225,656
Full time equivalent employees 1,592 1,575
(1) Tangible stockholders' equity represents stockholders' equity less
goodwill.
(2) Efficiency ratio represents general and administrative expense divided
by the sum of net interest income plus non-interest income.
(3) See page 14 for a reconciliation of GAAP measures to non-GAAP measures
for the three and twelve months ended December 31, 2009 and 2008.
(4) Non-performing assets and non-performing loans include, but are not
limited to, one-to-four family mortgage loans which at 180 days past
due we obtained an estimate of collateral value and charged-off any
portion of the loan in excess of the estimated collateral value less
estimated selling costs.
(5) Book value per share represents stockholders' equity divided by
outstanding shares, excluding unallocated Employee Stock Ownership
Plan, or ESOP, shares.
(6) Tangible book value per share represents stockholders' equity less
goodwill divided by outstanding shares, excluding unallocated ESOP
shares.
(7) Tangible assets represent assets less goodwill.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)
At December 31, 2009 At September 30, 2009
-------------------- ---------------------
Weighted Weighted
Average Average
Balance Rate (1) Balance Rate (1)
------- ------- ------- -------
Selected interest-
earning assets:
------------------
Mortgage loans,
gross (2):
---------------
One-to-
four family $11,565,280 5.22% $11,681,844 5.36%
------------ ----------- ---- ----------- ----
Multi-family,
commercial
real estate and
construction 3,375,795 6.03 3,442,046 6.03
------------- --------- ---- --------- ----
Mortgage-backed
and other
securities (3) 3,178,579 4.04 3,472,308 4.08
--------------- --------- ---- --------- ----
Interest-bearing
liabilities:
-------------
Savings 2,041,701 0.40 1,959,171 0.40
------- --------- ---- --------- ----
Money market 326,842 0.44 330,299 0.44
------------ ------- ---- ------- ----
NOW and demand
deposit 1,646,633 0.06 1,522,017 0.06
-------------- --------- ---- --------- ----
Liquid
certificates
of deposit 711,509 0.50 812,141 0.64
------------- ------- ---- ------- ----
Total core
deposits 4,726,685 0.30 4,623,628 0.33
---------- --------- ---- --------- ----
Certificates of
deposit 8,085,553 2.79 8,594,991 3.15
--------------- --------- ---- --------- ----
Total deposits 12,812,238 1.87 13,218,619 2.16
-------------- ---------- ---- ---------- ----
Borrowings, net 5,877,834 4.17 5,837,723 4.24
--------------- --------- ---- --------- ----
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)
At December 31, 2008
--------------------
Weighted
Average
Balance Rate (1)
------- -------
Selected interest-
earning assets:
--------------
Mortgage loans,
gross (2):
---------------
One-to-four
family 12,172,075 5.64%
----------- ---------- ----
Multi-family,
commercial
real estate
and construction 3,850,762 5.98
---------------- --------- ----
Mortgage-backed and
other securities (3) 4,037,302 4.34
--------------------- --------- ----
Interest-bearing
liabilities:
-------------
Savings 1,832,790 0.40
------- --------- ----
Money market 289,135 1.03
------------ ------- ----
NOW and demand
deposit 1,466,916 0.06
-------------- --------- ----
Liquid
certificates
of deposit 981,733 2.32
------------- ------- ----
Total core
deposits 4,570,574 0.74
---------- --------- ----
Certificates of
deposit 8,909,350 3.83
--------------- --------- ----
Total deposits 13,479,924 2.78
-------------- ---------- ----
Borrowings, net 6,965,274 3.72
--------------- --------- ----
(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 non-performing loans.
(3) Securities available-for-sale are reported at fair value and
securities held-to-maturity are reported at amortized cost.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(In Thousands, Except Per Share Data)
Income and expense and related financial ratios determined in
accordance with GAAP (GAAP measures), excluding the charges and
related tax effects detailed in the following tables (non-GAAP
measures) provide a meaningful comparison for effectively evaluating
Astoria's operating results.
For the Three Months Ended
--------------------------
December 31, 2009
-----------------
GAAP Adjustments Non-GAAP
--- ----------- --------
Net interest income $104,955 $- $104,955
------------------- -------- --- --------
Provision for loan losses 50,000 - 50,000
------------------------- ------ --- ------
Net interest income after
provision for loan losses 54,955 - 54,955
-------------------------- ------ --- ------
Non-interest income 23,349 - 23,349
------------------- ------ --- ------
Non-interest expense
(general and administrative
expense) 66,835 - 66,835
------ --- ------
Income before income tax
expense 11,469 - 11,469
------------------------ ------ --- ------
Income tax expense 3,329 - 3,329
------------------ ----- --- -----
Net income (2) $8,140 $- $8,140
-------------- ------ --- ------
Basic earnings per common
share (2) $0.09 $- $0.09
------------------------- ----- --- -----
Diluted earnings per common
share (2) $0.09 $- $0.09
--------------------------- ----- --- -----
For the Three Months Ended
--------------------------
December 31, 2008
-----------------
GAAP Adjustments (1) Non-GAAP
---- --------------- --------
Net interest income $114,945 $- $114,945
------------------- -------- --- --------
Provision for loan losses 45,000 - 45,000
------------------------- ------ --- ------
Net interest income after
provision for loan losses
-------------------------- 69,945 - 69,945
------ --- ------
Non-interest income 19,208 - 19,208
------------------- ------ --- ------
Non-interest expense
(general and administrative
expense) 56,245 - 56,245
------ --- ------
Income before income tax expense 32,908 - 32,908
-------------------------------- ------ --- ------
Income tax expense 3,460 7,378 10,838
------------------ ----- ----- ------
Net income (2) $29,448 $(7,378) $22,070
-------------- ------- ------- -------
Basic earnings per common
share (2) $0.33 $(0.08) $0.24(3)
------------------------- ----- ------ -------
Diluted earnings per common
share (2) $0.32 $(0.08) $0.24
--------------------------- ----- ------ -----
For the Twelve Months Ended
--------------------------
December 31, 2009
-----------------
GAAP Adjustments (4) Non-GAAP
---- -------------- --------
Net interest income $428,769 $- $428,769
------------------- -------- --- --------
Provision for loan
losses 200,000 - 200,000
------------------ ------- --- -------
Net interest income
after provision for
loan losses 228,769 - 228,769
------------------- ------- --- -------
Non-interest income 79,801 6,888 86,689
------------------- ------ ----- ------
Non-interest expense
(general and
administrative
expense) 270,056 (9,851) 260,205
------- ------- -------
Income before income
tax expense 38,514 16,739 55,253
-------------------- ------ ------ ------
Income tax expense 10,830 5,859 16,689
------------------ ------ ----- ------
Net income (2) $27,684 $10,880 $38,564
-------------- ------- ------- -------
Basic earnings per
common share (2) $0.30 $0.12 $0.42
------------------ ----- ----- -----
Diluted earnings per
common share (2) $0.30 $0.12 $0.42
-------------------- ----- ----- -----
For the Twelve Months Ended
--------------------------
December 31, 2008
-----------------
GAAP Adjustments (1) Non-GAAP
---- -------------- --------
Net interest income $395,384 $- $395,384
------------------- -------- --- --------
Provision for loan losses 69,000 - 69,000
------------------------- ------ --- ------
Net interest income
after provision for
loan losses 326,384 - 326,384
-------------------- ------- --- -------
Non-interest income 11,180 77,696 88,876
------------------- ------ ------ ------
Non-interest expense
(general and
administrative
expense) 233,260 - 233,260
-------------------- ------- --- -------
Income before income tax
expense 104,304 77,696 182,000
------------------------ ------- ------ -------
Income tax expense 28,962 27,194 56,156
------------------ ------ ------ ------
Net income (2) $75,342 $50,502 $125,844
-------------- ------- ------- --------
Basic earnings per common
share (2) $0.83 $0.56 $1.39
------------------------- ----- ----- -----
Diluted earnings per common
Share (2) $0.82 $0.56 $1.38
--------------------------- ----- ----- -----
Non-GAAP returns are calculated substituting non-GAAP net income
for net income in the corresponding ratio calculation, while the
non-GAAP general and administrative expense to average assets ratio
substitutes non-GAAP general and administrative expense (non-GAAP
non-interest expense) for general and administrative expense (non-
interest expense) in the corresponding ratio calculation.
Similarly, the non-GAAP efficiency ratio substitutes non-GAAP non-
interest income and non-GAAP general and administrative expense for
non-interest income and general and administrative expense in the
corresponding ratio calculation.
(1) Adjustments relate to the other-than-temporary impairment write-
down of securities charge recorded in the 2008 third quarter and
subsequent tax adjustment recorded in the 2008 fourth quarter as a
result of tax changes due to the enactment of the Emergency Economic
Stabilization Act in October 2008.
(2) Non-GAAP net income and non-GAAP EPS are also referred to as
operating income and operating EPS throughout this release.
(3) Figures do not cross foot due to rounding.
(4) Non-interest income adjustment relates to the $1.6 million lower of
cost or market write-down of premises and equipment held-for-sale
recorded in the 2009 second quarter and the $5.3 million other-
than-temporary impairment write-down of securities charge recorded
in the 2009 first quarter and non-interest expense adjustment
relates to the federal deposit insurance special assessment recorded
in the 2009 second quarter.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
One-to-Four Family Residential Loan Portfolio - Geographic Analysis
(Dollars in millions)
At December 31, 2009
---------------------------------------
Non-performing
loans
Total Non-performing as % of total
State loans loans loans
----- ----- -------------- -------------
New York
Full Income $2,736.7 $22.9 0.84%
Alt A < 70% LTV $261.0 $9.1 3.49%
Alt A 70%-80% LTV $81.9 $9.4 11.48%
----- ----
State Total $3,079.6 $41.4 1.34%
Illinois
Full Income $1,170.0 $14.0 1.20%
Alt A < 70% LTV $128.1 $9.9 7.73%
Alt A 70%-80% LTV $137.6 $17.6 12.79%
------ -----
State Total $1,435.7 $41.5 2.89%
Connecticut
Full Income $1,009.0 $8.5 0.84%
Alt A < 70% LTV $126.5 $8.6 6.80%
Alt A 70%-80% LTV $64.9 $11.5 17.72%
----- -----
State Total $1,200.4 $28.6 2.38%
California
Full Income $731.6 $22.0 3.01%
Alt A < 70% LTV $175.3 $10.5 5.99%
Alt A 70%-80% LTV $170.8 $19.7 11.53%
------ -----
State Total $1,077.7 $52.2 4.84%
New Jersey
Full Income $732.3 $22.0 3.00%
Alt A < 70% LTV $96.4 $7.2 7.47%
Alt A 70%-80% LTV $93.2 $12.4 13.30%
----- -----
State Total $921.9 $41.6 4.51%
Massachusetts
Full Income $716.6 $6.7 0.93%
Alt A < 70% LTV $77.1 $3.9 5.06%
Alt A 70%-80% LTV $39.6 $6.1 15.40%
----- ----
State Total $833.3 $16.7 2.00%
Virginia
Full Income $600.8 $8.9 1.48%
Alt A < 70% LTV $76.1 $0.9 1.18%
Alt A 70%-80% LTV $108.3 $6.4 5.91%
------ ----
State Total $785.2 $16.2 2.06%
Maryland
Full Income $587.6 $12.9 2.20%
Alt A < 70% LTV $80.1 $5.8 7.24%
Alt A 70%-80% LTV $93.6 $19.4 20.73%
----- -----
State Total $761.3 $38.1 5.00%
Washington
Full Income $343.9 $1.4 0.41%
Alt A < 70% LTV $7.6 $1.5 19.74%
Alt A 70%-80% LTV $3.2 $0.0 0.00%
---- ----
State Total $354.7 $2.9 0.82%
Florida
Full Income $178.6 $13.8 7.73%
Alt A < 70% LTV $51.9 $4.9 9.44%
Alt A 70%-80% LTV $37.2 $7.4 19.89%
----- ----
State Total $267.7 $26.1 9.75%
Other States
Full Income $1,033.8 $14.2 1.37%
Alt A < 70% LTV $80.6 $3.9 4.84%
Alt A 70%-80% LTV $63.5 $6.7 10.55%
----- ----
State Total $1,177.9 $24.8 2.11%
Total all states
Full Income $9,840.9 $147.3 1.50%
Alt A < 70% LTV $1,160.7 $66.2 5.70%
Alt A 70%-80% LTV $893.8 $116.6 13.05%
------ ------
Grand total $11,895.4 $330.1 2.78%
Note: LTVs are based on current principal balances and original
appraised values
SOURCE Astoria Financial Corporation
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