Quarterly Cash Dividend of $0.13 Per Share Declared
LAKE SUCCESS, N.Y., July 21, 2010 /PRNewswire via COMTEX/ --
Astoria Financial Corporation (NYSE: AF) ("Astoria", the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $15.5 million, or $0.17 EPS, for the quarter ended June 30, 2010, compared to $2.7 million, or $0.03 EPS, for the comparable 2009 period. For the six months ended June 30, 2010, net income totaled $28.5 million, or $0.30 EPS, compared to $11.5 million, or $0.12 EPS, for the comparable 2009 period. Included in the 2010 second quarter and six month results are net charges totaling $3.2 million (or $2.1 million, or $0.02 per share, after-tax), which are not routine to our core operations and are excluded from operating income and operating EPS. For further details and a reconciliation of GAAP and non-GAAP measures, please refer to the "Reconciliation of GAAP Measures to non-GAAP Measures" tables included in this release.
Operating income and operating EPS for the quarter and six months ended June 30, 2010 totaled $17.6 million, or $0.19, and $30.6 million, or $0.33, respectively, compared to $10.1 million, or $0.11, and $22.4 million, or $0.24, respectively, for the comparable 2009 periods.
Commenting on the second quarter results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, stated, "I am pleased to report continued earnings improvement in the 2010 second quarter, a significant achievement considering our balance sheet contracted during the quarter. The improvement is due, primarily, to lower credit costs."
Board Declares Quarterly Cash Dividend of $0.13 Per Share
The Board of Directors of the Company, at their July 21, 2010 meeting, declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on September 1, 2010 to shareholders of record as of August 16, 2010. This is the sixty-first consecutive quarterly cash dividend declared by the Company.
Second Quarter and Six Month Earnings Summary
Net interest income for the quarter ended June 30, 2010 increased to $111.9 million from $109.1 million for the 2009 second quarter. For the six months ended June 30, 2010, net interest income increased to $226.3 million from $220.7 million for the comparable 2009 period.
The net interest margin for the quarter ended June 30, 2010 was 2.37%, two basis points lower than the previous quarter and 21 basis points higher than 2.16% for the 2009 second quarter. The linked quarter decrease was due to the effect of one extra day of interest expense and the extension of borrowings in the 2010 second quarter. During the 2010 second quarter $325 million of borrowings were extended with an average maturity of 3.3 years and a weighted average rate of 1.93% which resulted in excess liquidity at quarter-end pending the deployment of the proceeds. The year-over-year increase in the margin was due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets.
For the six months ended June 30, 2010, the net interest margin increased 22 basis points to 2.38% from 2.16% for the comparable 2009 period.
For the quarter ended June 30, 2010, a $35.0 million provision for loan losses was recorded, $10.0 million lower than the $45.0 million provision for the previous quarter and $15.0 million lower than the provision for the 2009 second quarter. For the six months ended June 30, 2010, the provision for loan losses totaled $80.0 million, $20.0 million lower than the provision for the comparable 2009 period. Mr. Engelke noted, "The lower provision for loan losses recognizes the stabilization in our asset quality and the improvement in the economy in general. We remain cautiously optimistic that these trends will continue."
Non-interest income for the quarter ended June 30, 2010 totaled $23.2 million compared to $20.4 million for the 2009 second quarter. Non-interest income for the quarter ended June 30, 2010, excluding the previously announced goodwill litigation settlement, partially offset by a write-down of premises and equipment, totaled $18.5 million compared to $22.0 million for the 2009 second quarter, excluding a write-down of premises and equipment. This decrease is due to lower mortgage banking fee income, net, and lower customer service fees.
Non-interest income for the six months ended June 30, 2010 totaled $41.9 million compared to $36.4 million for the comparable 2009 period. For the six months ended June 30, 2010, non-interest income, excluding the aforementioned items, totaled $37.2 million compared to $43.3 million for the comparable 2009 period, excluding a write-down of premises and equipment and an other-than-temporary impairment write-down of Freddie Mac securities. This decrease is due primarily to lower customer service fees, the absence of security gains in the 2010 six month period and lower mortgage banking fee income, net.
General and administrative ("G&A") expense for the quarter and six months ended June 30, 2010 totaled $75.8 million and $144.1 million, respectively, compared to $76.0 million and $140.0 million, respectively, for the comparable 2009 periods. Excluding the recently announced McAnaney litigation settlement, G&A expense for the quarter and six months ended June 30, 2010 totaled $68.0 million and $136.2 million, respectively, compared to $66.2 million and $130.1 million, respectively, for the 2009 second quarter and six months, excluding the FDIC special assessment. The six month increase is primarily due to increased compensation and benefits expense and higher FDIC insurance premiums.
For further details and a reconciliation of GAAP measures to non-GAAP measures, please refer to the "Reconciliation of GAAP Measures to non-GAAP Measures" tables included in this release.
Balance Sheet Summary
Total assets decreased $391.0 million from the previous quarter and $582.2 million from December 31, 2009 and totaled $19.7 billion at June 30, 2010. The loan portfolio declined $271.5 million from the previous quarter and $414.4 million from December 31, 2009 and totaled $15.4 billion at June 30, 2010. The one-to-four family portfolio totaled $11.7 billion at June 30, 2010 compared to $11.8 billion at March 31, 2010 and $11.9 billion at December 31, 2009. The combined multifamily/commercial real estate portfolio totaled $3.2 billion at June 30, 2010 compared to $3.3 billion at March 31, 2010 and $3.4 billion at December 31, 2009.
For the quarter and six months ended June 30, 2010, one-to-four family loan originations for portfolio totaled $758.5 million and $1.6 billion, respectively, compared to $668.5 million and $1.1 billion, respectively, for the comparable 2009 periods. This was achieved while maintaining our strict underwriting standards. The loan-to-value ratio of the one-to-four family loan production for portfolio for the 2010 second quarter and six months each averaged approximately 61% at origination and the loan amount averaged approximately $755,000 and $737,000, respectively. One-to-four family loan prepayments for the quarter and six months ended June 30, 2010 totaled $748.4 million and $1.5 billion, respectively, compared to $810.1 million and $1.3 billion, respectively, for the comparable 2009 periods.
Deposits decreased $436.4 million from the previous quarter and $563.8 million from December 31, 2009 to $12.2 billion at June 30, 2010. Importantly, low-cost savings, money market and checking account deposits increased $112.2 million, or 11% annualized, from March 31, 2010 and $192.8 million, or 10% annualized, from December 31, 2009. The Company continues to focus on lengthening liabilities, both CDs and borrowings, in an effort to reduce future interest rate risk. During the first half of 2010 approximately $1 billion of CD's were extended for terms of at least 2 years with a weighted average rate of 2.58% and $525 million of borrowings were extended for an average term of 3.3 years with a weighted average rate of 2.05%.
Stockholders' equity was $1.2 billion, or 6.24% of total assets at June 30, 2010. Astoria Federal continues to be designated as well-capitalized with core, tangible, risk-based and Tier 1 risk-based capital ratios of 7.15%, 7.15%, 13.47% and 12.21%, respectively, at June 30, 2010.
Asset Quality
Non-performing loans ("NPL"), including troubled debt restructurings ("TDR") of $51.8 million, totaled $415.1 million, or 2.11% of total assets at June 30, 2010, a decrease of $4.0 million from the previous quarter. During the 2010 second quarter, $31.6 million of NPLs were either sold or classified as held-for-sale. At June 30, 2010, one-to-four family NPLs totaled $350.6 million, multi-family/CRE/construction NPLs totaled $59.2 million and consumer and other NPLs totaled $5.3 million compared to $349.5 million, $64.7 million and $4.9 million, respectively, at March 31, 2010. Important to note, of the $350.6 million of non-performing one-to-four family loans, $245.4 million, or 70%, represent residential loans which, at 180 days delinquent and annually thereafter, were reviewed and charged-off, as needed, to the estimated fair value of the underlying collateral at such time, less estimated selling costs.
The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:
(In Total
millions) 30-59 60-89 Days Combined Change 90 + Days 30-90+
30-89 Days Past
Days Past Due Days from Past Due Due
Past Due -------- Past Due Previous (NPL) ----------
-------- -------- Quarter -----
-------
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
At
March
31,
2010 $185.6 $82.7 $268.3 $(20.9) $419.1 $687.4
At June
30,
2010 $230.9 $77.5 $308.4 $40.1 $415.1 $723.5
The following table details, as of June 30, 2010, the ten largest concentrations by state of one-to-four family loans and the respective non-performing loan totals in those states. More comprehensive state details are included in the "One-to-Four Family Residential Loan Portfolio-Geographic Analysis" table included in this release.
($ in Total % of Total NPLs as
millions) 1-4 Total 1-4 %
Family 1-4 of
State Loans Family Family State
----- ------ Portfolio NPLs Total
--------- ---- -----
New York $3,157.5 27.0% $44.2 1.40%
Illinois $1,463.3 12.5% $51.6 3.53%
Connecticut $1,114.3 9.5% $29.6 2.66%
California $975.6 8.3% $45.3 4.64%
New Jersey $878.8 7.5% $49.6 5.64%
Massachusetts $831.3 7.1% $14.6 1.76%
Virginia $738.4 6.3% $20.5 2.78%
Maryland $721.9 6.2% $39.8 5.51%
Washington $350.3 3.0% $2.4 0.69%
Florida $246.4 2.1% $26.2 10.63%
------ --- -----
Top 10
States $10,477.8 89.5% $323.8 3.09%
All other
states (1) $1,231.2 10.5% $26.8 2.18%
-------- ---- -----
Total 1-4
Family
Portfolio $11,709.0 100% $350.6 2.99%
========= === ====== ====
(1) Includes 28 states and Washington, D.C.
Net loan charge-offs for the quarter ended June 30, 2010 totaled $34.7 million (including $20.1 million of one-to-four family loans and $12.6 million of multi-family/CRE loans) compared to $28.3 million (including $17.4 million of one-to-four family loans and $10.6 million of multi-family/CRE loans) for the 2010 first quarter. Included in the $20.1 million of one-to-four family loan charge-offs are $14.7 million of charge-offs on $73.2 million of non-performing loans which, at 180 days delinquent or annually thereafter, were reviewed and adjusted, as needed, to the estimated fair value of the underlying collateral less selling costs.
"While we expect non-performing loan levels may remain elevated for some time as we work through the foreclosure process, it is important to note that the loss potential remaining has been greatly reduced as a result of our having already reviewed, marked down, and charged-off as necessary, 70% of the residential non-performing loans to their adjusted fair value less selling costs," Mr. Engelke noted.
Selected Asset Quality Metrics
(at or for the three months ended June 30, 2010)
($ in millions) 1-4 Multi- Consumer
Family family CRE Construction & Other Total
------ ------ --- ------------ ------- -----
Loan
portfolio
balance $11,709.0 $2,397.2 $820.9 $16.7 $323.5(1) $15,366.3(2)
Non-
performing
loans $350.6(3) $52.1(4) $1.6 $5.5 $5.3 $415.1(3)
NPLs/total
loans 2.28% 0.34% 0.01% 0.04% 0.03% 2.70%
Net charge-
offs 2Q10 $20.1 $11.1 $1.5 $1.5 $0.5 $34.7
Net charge-
offs YTD $37.5 $17.4 $5.8 $1.5 $0.9 $63.1
(1) Includes home equity loans of $295.8 million
(2) Includes $99.1 million of net unamortized premiums and
deferred loan costs
(3) Includes $245.4 million reviewed and adjusted, as
needed, at 180 days delinquent and annually thereafter
(4) Includes $18.6 million of TDRs performing in
accordance with their modified terms
Future Outlook
Commenting on the outlook for 2010, Mr. Engelke stated, "With the national economic recovery underway, and despite the fact that the pace appears to be moderating and the housing market remains soft, the long-term outlook for our credit quality is improving. This should translate into lower credit costs and further improvement in our financial performance. In terms of loan and balance sheet growth, as long as the U.S. government continues to subsidize the residential mortgage market with programs designed to keep 30-year fixed-rate conforming loans below normal market rate levels, coupled with expanded conforming loan limits in many of the markets we operate in, we do not anticipate our loan production increasing at this time which, more than likely, will result in a slightly smaller loan portfolio and balance sheet."
Earnings Conference Call July 22, 2010 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, July 22, 2010 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, ID# 83093432. A telephone replay will be available on July 22, 2010 from 1:00 p.m. (ET) through midnight July 31, 2010 (ET). The replay number is (800) 642-1687, ID#: 83093432. The conference call will also be simultaneously webcast on the Company's website http://www.astoriafederal.com/ and archived for one year.
Astoria Financial Corporation, with assets of $19.7 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $12.2 billion, is the largest thrift depository 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 sixteen states, primarily along the East Coast, and the District of Columbia, and through correspondent relationships covering seventeen states and the District of Columbia.
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.
Tables Follow
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------
(In Thousands, Except Share Data)
At At
December
June 30, 31,
2010 2009
---- ----
ASSETS
------
Cash and due from banks $319,997 $71,540
Repurchase agreements 41,900 40,030
Securities available-for-sale 728,616 860,694
Securities held-to-maturity (fair
value of $2,069,935 and $2,367,520,
respectively)
2,008,109 2,317,885
Federal Home Loan Bank of New York
stock, at cost 185,768 178,929
Loans held-for-sale, net 34,859 34,274
Loans receivable:
Mortgage loans, net 15,039,766 15,447,115
Consumer and other loans, net 326,561 333,607
-------
15,366,327 15,780,722
Allowance for loan losses (210,999) (194,049)
-------- --------
Total loans receivable, net 15,155,328 15,586,673
Mortgage servicing rights, net 8,649 8,850
Accrued interest receivable 65,653 66,121
Premises and equipment, net 133,765 136,195
Goodwill 185,151 185,151
Bank owned life insurance 406,087 401,735
Real estate owned, net 54,428 46,220
Other assets 341,688 317,882
------- -------
TOTAL ASSETS $19,669,998 $20,252,179
=========== ===========
LIABILITIES
-----------
Deposits $12,248,441 $12,812,238
Reverse repurchase agreements 2,200,000 2,500,000
Federal Home Loan Bank of New York
advances 3,235,000 3,000,000
Other borrowings, net 378,019 377,834
Mortgage escrow funds 131,578 114,036
Accrued expenses and other liabilities 249,915 239,457
------- -------
TOTAL LIABILITIES 18,442,953 19,043,565
---------- ----------
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
97,891,753 and 97,083,607 shares
outstanding, respectively)
1,665 1,665
Additional paid-in capital 855,352 857,662
Retained earnings 1,827,098 1,829,199
Treasury stock (68,603,135 and
69,411,281 shares, at cost,
respectively) (1,417,661) (1,434,362)
Accumulated other comprehensive loss (25,092) (29,779)
Unallocated common stock held by ESOP
(3,907,866 and 4,304,635 shares,
respectively)
(14,317) (15,771)
TOTAL STOCKHOLDERS' EQUITY 1,227,045 1,208,614
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $19,669,998 $20,252,179
=========== ===========
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(In Thousands, Except Share Data)
For the Three
Months Ended
June 30,
--------
2010 2009
---- ----
Interest income:
Mortgage loans:
One-to-four family $136,750 $154,547
Multi-family, commercial real estate and
construction 49,598 55,978
Consumer and other loans 2,668 2,657
Mortgage-backed and other securities 29,636 37,223
Repurchase agreements and interest-
earning cash accounts 54 215
Federal Home Loan Bank of New York stock 1,921 2,677
----- -----
Total interest income 220,627 253,297
Interest expense:
Deposits 49,496 81,961
Borrowings 59,182 62,282
------ ------
Total interest expense 108,678 144,243
------- -------
Net interest income 111,949 109,054
Provision for loan losses 35,000 50,000
Net interest income after provision for
loan losses 76,949 59,054
Non-interest income:
Customer service fees 13,372 14,240
Other loan fees 866 939
Gain on sales of securities - -
Other-than-temporary impairment write-
down of securities - -
Mortgage banking income, net 600 3,383
Income from bank owned life insurance 2,376 2,468
Other 5,958 (600)
----- ----
Total non-interest income 23,172 20,430
Non-interest expense:
General and administrative:
Compensation and benefits 34,634 33,363
Occupancy, equipment and systems 16,637 16,065
Federal deposit insurance premiums 6,616 6,899
Federal deposit insurance special
assessment - 9,851
Advertising 994 1,221
Other 16,947 8,622
Total non-interest expense 75,828 76,021
------ ------
Income before income tax expense 24,293 3,463
Income tax expense 8,747 763
----- ---
Net income $15,546 $2,700
======= ======
Basic earnings per common share $0.17 $0.03
===== =====
Diluted earnings per common share $0.17 $0.03
===== =====
Basic weighted average common shares 91,621,997 90,525,669
Diluted weighted average common and
common equivalent shares 91,621,997 90,525,669
For the Six Months
Ended
June 30,
--------
2010 2009
---- ----
Interest income:
Mortgage loans:
One-to-four family $277,704 $317,487
Multi-family, commercial real estate and
construction 100,723 112,592
Consumer and other loans 5,319 5,335
Mortgage-backed and other securities 60,983 80,327
Repurchase agreements and interest-
earning cash accounts 69 231
Federal Home Loan Bank of New York stock 4,417 4,363
----- -----
Total interest income 449,215 520,335
Interest expense:
Deposits 103,038 172,721
Borrowings 119,876 126,883
------- -------
Total interest expense 222,914 299,604
------- -------
Net interest income 226,301 220,731
Provision for loan losses 80,000 100,000
Net interest income after provision for
loan losses 146,301 120,731
Non-interest income:
Customer service fees 26,665 29,079
Other loan fees 1,572 1,878
Gain on sales of securities - 2,112
Other-than-temporary impairment write-
down of securities - (5,300)
Mortgage banking income, net 2,157 3,879
Income from bank owned life insurance 4,352 4,447
Other 7,118 277
----- ---
Total non-interest income 41,864 36,372
Non-interest expense:
General and administrative:
Compensation and benefits 69,885 67,363
Occupancy, equipment and systems 33,086 32,396
Federal deposit insurance premiums 13,213 10,804
Federal deposit insurance special
assessment - 9,851
Advertising 2,814 2,780
Other 25,089 16,788
Total non-interest expense 144,087 139,982
------- -------
Income before income tax expense 44,078 17,121
Income tax expense 15,606 5,625
------ -----
Net income $28,472 $11,496
======= =======
Basic earnings per common share $0.30 $0.12
===== =====
Diluted earnings per common share $0.30 $0.12
===== =====
Basic weighted average common shares 91,541,675 90,370,279
Diluted weighted average common and
common equivalent shares 91,541,742 90,370,400
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Three Months Ended June 30,
-----------------------------------
2010
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning
assets:
Mortgage loans (1):
One-to-four family $11,891,353 $136,750 4.60%
Multi-family,
commercial real
estate and
construction 3,332,007 49,598 5.95
Consumer and other
loans (1) 328,613 2,668 3.25
------- -----
Total loans 15,551,973 189,016 4.86
Mortgage-backed and
other securities
(2) 3,003,555 29,636 3.95
Repurchase
agreements and
interest-earning
cash accounts 127,810 54 0.17
Federal Home Loan
Bank stock 174,339 1,921 4.41
------- -----
Total interest-
earning assets 18,857,677 220,627 4.68
-------
Goodwill 185,151
Other non-interest-
earning assets 852,970
-------
Total assets $19,895,798
===========
Liabilities and
stockholders'
equity:
Interest-bearing
liabilities:
Savings $2,150,272 2,167 0.40
Money market 337,851 374 0.44
NOW and demand
deposit 1,684,022 271 0.06
Liquid certificates
of deposit 622,381 769 0.49
------- ---
Total core deposits 4,794,526 3,581 0.30
Certificates of
deposit 7,732,442 45,915 2.38
--------- ------
Total deposits 12,526,968 49,496 1.58
Borrowings 5,727,065 59,182 4.13
--------- ------
Total interest-
bearing liabilities 18,254,033 108,678 2.38
-------
Non-interest-
bearing liabilities 421,163
-------
Total liabilities 18,675,196
Stockholders' equity 1,220,602
---------
Total liabilities
and stockholders'
equity $19,895,798
===========
Net interest income/
net interest
rate spread (3) $111,949 2.30%
======== ====
Net interest-
earning assets/net
interest margin (4) $603,644 2.37%
======== ====
Ratio of interest-
earning assets
to interest-bearing
liabilities 1.03x
=====
For the Three Months Ended June 30,
-----------------------------------
2009
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning
assets:
Mortgage loans
(1):
One-to-four
family $12,143,060 $154,547 5.09%
Multi-family,
commercial real
estate and
construction 3,745,255 55,978 5.98
Consumer and other
loans (1) 337,085 2,657 3.15
------- -----
Total loans 16,225,400 213,182 5.26
Mortgage-backed
and other
securities (2) 3,389,962 37,223 4.39
Repurchase
agreements and
interest-earning
cash accounts 373,430 215 0.23
Federal Home Loan
Bank stock 178,107 2,677 6.01
------- -----
Total interest-
earning assets 20,166,899 253,297 5.02
-------
Goodwill 185,151
Other non-
interest-earning
assets 864,792
-------
Total assets $21,216,842
===========
Liabilities and
stockholders'
equity:
Interest-bearing
liabilities:
Savings $1,927,125 1,945 0.40
Money market 317,167 607 0.77
NOW and demand
deposit 1,550,791 269 0.07
Liquid
certificates of
deposit 943,623 2,956 1.25
------- -----
Total core
deposits 4,738,706 5,777 0.49
Certificates of
deposit 8,822,247 76,184 3.45
--------- ------
Total deposits 13,560,953 81,961 2.42
Borrowings 5,969,501 62,282 4.17
--------- ------
Total interest-
bearing
liabilities 19,530,454 144,243 2.95
-------
Non-interest-
bearing
liabilities 485,819
-------
Total liabilities 20,016,273
Stockholders'
equity 1,200,569
---------
Total liabilities
and stockholders'
equity $21,216,842
===========
Net interest
income/net
interest
rate spread (3) $109,054 2.07%
======== ====
Net interest-
earning assets/
net
interest margin
(4) $636,445 2.16%
======== ====
Ratio of interest-
earning assets
to interest-
bearing
liabilities 1.03x
=====
(1) Mortgage loans and consumer and other loans include loans held-
for-sale and non-performing loans and exclude the allowance for
loan losses.
(2) Securities available-for-sale are included at average amortized cost.
(3) Net interest rate spread represents the difference between the
average yield on average interest-earning assets and the average
cost of average interest-bearing liabilities.
(4) Net interest margin represents net interest income divided by
average interest-earning assets.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEETS
----------------------
(Dollars in Thousands)
For the Six Months Ended June 30,
---------------------------------
2010
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $11,947,176 $277,704 4.65%
Multi-family, commercial
real estate and
construction 3,379,096 100,723 5.96
Consumer and other loans
(1) 330,474 5,319 3.22
------- -----
Total loans 15,656,746 383,746 4.90
Mortgage-backed and other
securities (2) 3,071,338 60,983 3.97
Repurchase agreements and
interest-earning cash
accounts 104,714 69 0.13
Federal Home Loan Bank
stock 178,784 4,417 4.94
------- -----
Total interest-earning
assets 19,011,582 449,215 4.73
-------
Goodwill 185,151
Other non-interest-
earning assets 874,848
-------
Total assets $20,071,581
===========
Liabilities and
stockholders' equity:
Interest-bearing
liabilities:
Savings $2,110,242 4,232 0.40
Money market 333,447 732 0.44
NOW and demand deposit 1,650,178 528 0.06
Liquid certificates of
deposit 647,369 1,592 0.49
------- -----
Total core deposits 4,741,236 7,084 0.30
Certificates of deposit 7,858,888 95,954 2.44
--------- ------
Total deposits 12,600,124 103,038 1.64
Borrowings 5,834,163 119,876 4.11
--------- -------
Total interest-bearing
liabilities 18,434,287 222,914 2.42
-------
Non-interest-bearing
liabilities 421,905
-------
Total liabilities 18,856,192
Stockholders' equity 1,215,389
---------
Total liabilities and
stockholders' equity $20,071,581
===========
Net interest income/net
interest rate spread (3) $226,301 2.31%
======== ====
Net interest-earning
assets/net interest
margin (4) $577,295 2.38%
======== ====
Ratio of interest-earning
assets to interest-
bearing liabilities 1.03x
=====
For the Six Months Ended June 30,
---------------------------------
2009
Average
Average Yield/
Balance Interest Cost
(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family $12,257,408 $317,487 5.18%
Multi-family, commercial
real estate and
construction 3,803,712 112,592 5.92
Consumer and other loans
(1) 338,727 5,335 3.15
------- -----
Total loans 16,399,847 435,414 5.31
Mortgage-backed and
other securities (2) 3,635,847 80,327 4.42
Repurchase agreements and
interest-earning cash
accounts 233,408 231 0.20
Federal Home Loan Bank
stock 185,954 4,363 4.69
------- -----
Total interest-earning
assets 20,455,056 520,335 5.09
-------
Goodwill 185,151
Other non-interest-
earning assets 827,412
-------
Total assets $21,467,619
===========
Liabilities and
stockholders' equity:
Interest-bearing
liabilities:
Savings $1,888,572 3,792 0.40
Money market 306,082 1,286 0.84
NOW and demand deposit 1,510,098 547 0.07
Liquid certificates of
deposit 961,573 7,933 1.65
------- -----
Total core deposits 4,666,325 13,558 0.58
Certificates of deposit 8,910,252 159,163 3.57
--------- -------
Total deposits 13,576,577 172,721 2.54
Borrowings 6,248,305 126,883 4.06
--------- -------
Total interest-bearing
liabilities 19,824,882 299,604 3.02
-------
Non-interest-bearing
liabilities 448,195
-------
Total liabilities 20,273,077
Stockholders' equity 1,194,542
---------
Total liabilities and
stockholders' equity $21,467,619
===========
Net interest income/net
interest rate spread (3) $220,731 2.07%
======== ====
Net interest-earning
assets/net interest
margin (4) $630,174 2.16%
======== ====
Ratio of interest-
earning assets to
interest-bearing
liabilities 1.03x
=====
(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
Three Months
Ended
June 30,
2010 2009
Selected Returns and Financial Ratios
(annualized)
-------------------------------------
Return on average stockholders'
equity 5.09% 0.90%
Return on average tangible
stockholders' equity (1) 6.01 1.06
Return on average assets 0.31 0.05
General and administrative expense to
average assets 1.52 1.43
Efficiency ratio (2) 56.12 58.71
Net interest rate spread 2.30 2.07
Net interest margin 2.37 2.16
Selected Non-GAAP Returns and
Financial Ratios (annualized) (3)
----------------------------------
Non-GAAP return on average
stockholders' equity 5.78% 3.38%
Non-GAAP return on average tangible
stockholders' equity (1) 6.81 3.99
Non-GAAP return on average assets 0.35 0.19
Non-GAAP general and administrative
expense to average assets 1.37 1.25
Non-GAAP efficiency ratio (2) 52.10 50.48
Asset Quality Data (dollars in
thousands)
------------------------------
Non-performing assets (4)
Non-performing loans (4)
Loans delinquent 90 days or more and
still accruing interest
Non-accrual loans
Loans 60-89 days delinquent
Loans 30-59 days delinquent
Net charge-offs $34,749 $38,916
Non-performing loans/total loans
Non-performing loans/total assets
Non-performing assets/total assets
Allowance for loan losses/non-
performing loans
Allowance for loan losses/non-
accrual loans
Allowance for loan losses/total
loans
Net charge-offs to average loans
outstanding (annualized) 0.89% 0.96%
Capital Ratios (Astoria Federal)
--------------------------------
Tangible
Core
Risk-based
Tier 1 risk-based
Other Data
----------
Cash dividends paid per common share $0.13 $0.13
Book value per share (5)
Tangible book value per share (6)
Tangible stockholders' equity/
tangible assets (1) (7)
Mortgage loans serviced for others
(in thousands)
Full time equivalent employees
At or For the
Six Months Ended
June 30,
2010 2009
Selected Returns and Financial
Ratios (annualized)
------------------------------
Return on average stockholders'
equity 4.69% 1.92%
Return on average tangible
stockholders' equity (1) 5.53 2.28
Return on average assets 0.28 0.11
General and administrative
expense to average assets 1.44 1.30
Efficiency ratio (2) 53.73 54.45
Net interest rate spread 2.31 2.07
Net interest margin 2.38 2.16
Selected Non-GAAP Returns and
Financial Ratios (annualized)
(3)
------------------------------
Non-GAAP return on average
stockholders' equity 5.03% 3.75%
Non-GAAP return on average
tangible stockholders' equity
(1) 5.93 4.43
Non-GAAP return on average
assets 0.30 0.21
Non-GAAP general and
administrative expense to
average assets 1.36 1.21
Non-GAAP efficiency ratio (2) 51.70 49.29
Asset Quality Data (dollars in
thousands)
------------------------------
Non-performing assets (4) $469,533 $391,945
Non-performing loans (4) 415,105 360,002
Loans delinquent 90 days or
more and still accruing
interest 455 4,660
Non-accrual loans 414,650 355,342
Loans 60-89 days delinquent 77,468 109,749
Loans 30-59 days delinquent 230,914 210,468
Net charge-offs 63,050 58,758
Non-performing loans/total
loans 2.70% 2.25%
Non-performing loans/total
assets 2.11 1.71
Non-performing assets/total
assets 2.39 1.86
Allowance for loan losses/non-
performing loans 50.83 44.52
Allowance for loan losses/non-
accrual loans 50.89 45.10
Allowance for loan losses/
total loans 1.37 1.00
Net charge-offs to average
loans outstanding (annualized) 0.81 0.72
Capital Ratios (Astoria
Federal)
-----------------------
Tangible 7.15% 6.62%
Core 7.15 6.62
Risk-based 13.47 12.73
Tier 1 risk-based 12.21 11.46
Other Data
----------
Cash dividends paid per common
share $0.26 $0.26
Book value per share (5) 13.06 12.96
Tangible book value per share
(6) 11.09 10.95
Tangible stockholders' equity/
tangible assets (1) (7) 5.35% 4.84%
Mortgage loans serviced for
others (in thousands) $1,412,836 $1,273,689
Full time equivalent employees 1,565 1,585
(1) Tangible stockholders' equity represents stockholders' equity
less goodwill.
(2) Efficiency ratio represents general and administrative expense
divided by the sum of net interest income plus non-interest income.
(3) See page 13 for a reconciliation of GAAP measures to non-GAAP
measures for the three and six months ended June 30, 2010 and 2009.
(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 and annually thereafter we obtained an estimate of
collateral value and charged-off any portion of the loan in excess
of the estimated collateral value less estimated selling costs.
(5) Book value per share represents stockholders' equity divided by
outstanding shares, excluding unallocated Employee Stock Ownership
Plan, or ESOP, shares.
(6) Tangible book value per share represents stockholders' equity
less goodwill divided by outstanding shares, excluding unallocated
ESOP shares.
(7) Tangible assets represent assets less goodwill.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
--------------------------------
(Dollars in Thousands)
At June 30, 2010
-----------------
Weighted
Average
Balance Rate (1)
------- --------
Selected interest-earning
assets:
Mortgage loans, gross (2):
One-to-four family $11,358,339 4.99%
Multi-family, commercial real
estate
and construction 3,175,604 6.04
Mortgage-backed and other
securities (3) 2,736,725 4.11
Interest-bearing liabilities:
Savings 2,183,350 0.40
Money market 337,455 0.45
NOW and demand deposit 1,687,163 0.06
Liquid certificates of deposit 607,853 0.50
-------
Total core deposits 4,815,821 0.30
Certificates of deposit 7,432,620 2.34
---------
Total deposits 12,248,441 1.54
Borrowings, net 5,813,019 4.02
At March 31, 2010
------------------
Weighted
Average
Rate
Balance (1)
------- -----
Selected interest-earning
assets:
Mortgage loans, gross (2):
One-to-four family $11,496,971 5.11%
Multi-family, commercial real
estate
and construction 3,297,433 6.03
Mortgage-backed and other
securities (3) 3,170,765 4.00
Interest-bearing liabilities:
Savings 2,110,356 0.40
Money market 331,362 0.44
NOW and demand deposit 1,654,089 0.06
Liquid certificates of deposit 644,787 0.50
-------
Total core deposits 4,740,594 0.30
Certificates of deposit 7,944,241 2.44
---------
Total deposits 12,684,835 1.64
Borrowings, net 5,761,927 4.08
At June 30, 2009
-----------------
Weighted
Average
Rate
Balance (1)
------- -----
Selected interest-earning
assets:
Mortgage loans, gross (2):
One-to-four family $11,607,171 5.51%
Multi-family, commercial real
estate
and construction 3,568,594 6.00
Mortgage-backed and other
securities (3) 3,511,940 4.17
Interest-bearing liabilities:
Savings 1,942,933 0.40
Money market 321,005 0.64
NOW and demand deposit 1,558,429 0.06
Liquid certificates of deposit 904,283 0.95
-------
Total core deposits 4,726,650 0.41
Certificates of deposit 8,883,531 3.31
---------
Total deposits 13,610,181 2.30
Borrowings, net 5,887,573 4.25
(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 adjustments
detailed in the following tables (non-GAAP measures) provide a
meaningful comparison for effectively evaluating Astoria's operating
results.
For the Three Months Ended
--------------------------
June 30, 2010
-------------
GAAP Adjustments (1) Non-GAAP
---- --------------- --------
Net interest income $111,949 $- $111,949
Provision for loan losses 35,000 - 35,000
------ --- ------
Net interest income after
provision for loan losses 76,949 - 76,949
Non-interest income 23,172 (4,635) 18,537
Non-interest expense
(general and
administrative expense) 75,828 (7,850) 67,978
------ ------ ------
Income before income tax
expense 24,293 3,215 27,508
Income tax expense 8,747 1,133 9,880
----- ----- -----
Net income (3) $15,546 $2,082 $17,628
------- ------ -------
Basic earnings per common
share (3) $0.17 $0.02 $0.19
----- ----- -----
Diluted earnings per
common share (3) $0.17 $0.02 $0.19
----- ----- -----
For the Three Months Ended
--------------------------
June 30, 2009
-------------
GAAP Adjustments (2) Non-GAAP
---- --------------- --------
Net interest income $109,054 $- $109,054
Provision for loan losses 50,000 - 50,000
------ --- ------
Net interest income after
provision for loan losses 59,054 - 59,054
Non-interest income 20,430 1,588 22,018
Non-interest expense (general
and administrative expense) 76,021 (9,851) 66,170
------ ------ ------
Income before income tax
expense 3,463 11,439 14,902
Income tax expense 763 4,004 4,767
--- ----- -----
Net income (3) $2,700 $7,435 $10,135
------ ------ -------
Basic earnings per common share
(3) $0.03 $0.08 $0.11
----- ----- -----
Diluted earnings per common
share (3) $0.03 $0.08 $0.11
----- ----- -----
For the Six Months Ended
------------------------
June 30, 2010
-------------
GAAP Adjustments (1) Non-GAAP
---- --------------- --------
Net interest income $226,301 $- $226,301
Provision for loan losses 80,000 - 80,000
------ --- ------
Net interest income after
provision for loan losses 146,301 - 146,301
Non-interest income 41,864 (4,635) 37,229
Non-interest expense (general
and administrative expense) 144,087 (7,850) 136,237
------- ------ -------
Income before income tax expense 44,078 3,215 47,293
Income tax expense 15,606 1,133 16,739
------ ----- ------
Net income (3) $28,472 $2,082 $30,554
------- ------ -------
Basic earnings per common share
(3) $0.30 $0.02 $0.33 (4)
----- ----- ----- ---
Diluted earnings per common
share (3) $0.30 $0.02 $0.33 (4)
----- ----- ----- ---
For the Six Months Ended
------------------------
June 30, 2009
-------------
GAAP Adjustments (2) Non-GAAP
---- --------------- --------
Net interest income $220,731 $- $220,731
Provision for loan losses 100,000 - 100,000
------- --- -------
Net interest income after
provision for loan losses 120,731 - 120,731
Non-interest income 36,372 6,888 43,260
Non-interest expense (general and
administrative expense) 139,982 (9,851) 130,131
------- ------ -------
Income before income tax expense 17,121 16,739 33,860
Income tax expense 5,625 5,859 11,484
----- ----- ------
Net income (3) $11,496 $10,880 $22,376
------- ------- -------
Basic earnings per common share
(3) $0.12 $0.12 $0.24
----- ----- -----
Diluted earnings per common share
(3) $0.12 $0.12 $0.24
----- ----- -----
Non-GAAP returns are calculated substituting non-GAAP net income
for net income in the corresponding ratio calculation, while the
non-GAAP general and administrative expense to average assets ratio
substitutes non-GAAP general and administrative expense (non-GAAP
non-interest expense) for general and administrative expense (non-
interest expense) in the corresponding ratio calculation.
Similarly, the non-GAAP efficiency ratio substitutes non-GAAP non-
interest income and non-GAAP general and administrative expense for
non-interest income and general and administrative expense in the
corresponding ratio calculation.
(1) Non-interest income adjustments relate to the $6.2 million
Goodwill Litigation settlement, partially offset by the $1.5 million
impairment write-down of premises and equipment. Non-interest
expense adjustments relate to the $7.9 million McAnaney Litigation
settlement.
(2) Non-interest income adjustments relate to the $1.6 million
lower of cost or market write-down of premises and equipment held-
for-sale recorded in the 2009 second quarter and the $5.3 million
other-than-temporary impairment write-down of securities charge
recorded in the 2009 first quarter. Non-interest expense
adjustments relate to the federal deposit insurance special
assessment recorded in the 2009 second quarter.
(3) Non-GAAP net income and non-GAAP EPS are also referred to as
operating income and operating EPS throughout this release.
(4) Figures do not cross foot due to rounding.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
One-to-Four Family Residential Loan Portfolio -
Geographic Analysis
-----------------------------------------------
(Dollars in millions)
At June 30, 2010
Total Non- Non-
State loans performing performing
----- ------ loans loans as %
of total
loans
---------
New York
Full Income $2,839.5 $24.8 0.87%
Alt A < 70% LTV $242.3 $9.7 4.00%
Alt A 70%-80% LTV $75.7 $9.7 12.81%
----- ----
State Total $3,157.5 $44.2 1.40%
Illinois
Full Income $1,211.8 $19.4 1.60%
Alt A < 70% LTV $122.9 $13.4 10.90%
Alt A 70%-80% LTV $128.6 $18.8 14.62%
------ -----
State Total $1,463.3 $51.6 3.53%
Connecticut
Full Income $936.5 $9.7 1.04%
Alt A < 70% LTV $121.9 $9.8 8.04%
Alt A 70%-80% LTV $55.9 $10.1 18.07%
----- -----
State Total $1,114.3 $29.6 2.66%
California
Full Income $660.4 $15.6 2.36%
Alt A < 70% LTV $160.7 $11.3 7.03%
Alt A 70%-80% LTV $154.5 $18.4 11.91%
------ -----
State Total $975.6 $45.3 4.64%
New Jersey
Full Income $699.0 $27.1 3.88%
Alt A < 70% LTV $92.7 $7.9 8.52%
Alt A 70%-80% LTV $87.1 $14.6 16.76%
----- -----
State Total $878.8 $49.6 5.64%
Massachusetts
Full Income $724.5 $6.6 0.91%
Alt A < 70% LTV $72.0 $3.4 4.72%
Alt A 70%-80% LTV $34.8 $4.6 13.22%
----- ----
State Total $831.3 $14.6 1.76%
Virginia
Full Income $566.2 $7.2 1.27%
Alt A < 70% LTV $70.8 $3.8 5.37%
Alt A 70%-80% LTV $101.4 $9.5 9.37%
------ ----
State Total $738.4 $20.5 2.78%
Maryland
Full Income $560.7 $13.7 2.44%
Alt A < 70% LTV $75.2 $5.6 7.45%
Alt A 70%-80% LTV $86.0 $20.5 23.84%
----- -----
State Total $721.9 $39.8 5.51%
Washington
Full Income $340.9 $0.9 0.26%
Alt A < 70% LTV $6.9 $1.5 21.74%
Alt A 70%-80% LTV $2.5 $0.0 0.00%
---- ----
State Total $350.3 $2.4 0.69%
Florida
Full Income $166.7 $14.7 8.82%
Alt A < 70% LTV $47.1 $5.7 12.10%
Alt A 70%-80% LTV $32.6 $5.8 17.79%
----- ----
State Total $246.4 $26.2 10.63%
Other States
Full Income $1,099.5 $16.8 1.53%
Alt A < 70% LTV $75.7 $4.1 5.42%
Alt A 70%-80% LTV $56.0 $5.9 10.54%
----- ----
Other States Total $1,231.2 $26.8 2.18%
Total all states
Full Income $9,805.7 $156.5 1.60%
Alt A < 70% LTV $1,088.2 $76.2 7.00%
Alt A 70%-80% LTV $815.1 $117.9 14.46%
------ ------
Grand total $11,709.0 $350.6 2.99%
========= ======
Note: LTVs are based on current principal balances and
original appraised values
SOURCE Astoria Financial Corporation
