LAKE SUCCESS, N.Y., Oct. 21 /PRNewswire-FirstCall/ -- Astoria Financial Corporation ("Astoria", or the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $8.0 million, or $0.09 diluted earnings per share ("EPS"), for the quarter ended September 30, 2009 compared to a net loss of $16.5 million, or $0.19 diluted loss per share, for the quarter ended September 30, 2008. For the nine months ended September 30, 2009, net income totaled $19.5 million, or $0.21 EPS, compared to $45.9 million, or $0.50 EPS, for the comparable 2008 period.
Included in the nine months ended September 30, 2009 are pre-tax charges totaling $16.7 million ($10.9 million, after-tax, or $0.12 EPS) which are not routine to our core operations: an FDIC deposit insurance special assessment totaling $9.9 million, a $1.5 million lower of cost or market write-down on a former mortgage origination building, both recorded in the 2009 second quarter, and an other-than-temporary impairment ("OTTI"), non-cash charge of $5.3 million recorded in the 2009 first quarter related to Freddie Mac preferred stock. Included in last year's third quarter and nine month net income and EPS is an OTTI non-cash pre-tax charge of $77.7 million ($57.9 million, after-tax, or $0.64 EPS) relating to Freddie Mac preferred stock.
Operating income and operating EPS, representing net income and EPS based upon generally accepted accounting principles ("GAAP") excluding the aforementioned items, are non-GAAP measures which provide a meaningful comparison for evaluating Astoria's operating results.
For the quarter ended September 30, 2009, operating income of $8.0 million, or $0.09 operating EPS equaled net income and EPS compared to operating income of $41.4 million, or $0.45 operating EPS, for the quarter ended September 30, 2008. For the nine months ended September 30, 2009 operating income totaled $30.4 million, or $0.33 operating EPS compared to $103.8 million, or $1.14 operating EPS for the nine months ended September 30, 2008. 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 2009 third quarter results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, stated, "Our results for the third quarter continue to reflect the impact of elevated credit costs associated with a weak national housing market and high unemployment. In addition, loan growth was tempered as a result of the continued effects of the U.S. government subsidies to the residential mortgage market in the form of lower mortgage interest rates and higher conforming loan limits. With respect to credit quality, although non-performing loans increased as anticipated, we are encouraged by the second consecutive quarterly decline in early stage (30-89 day) loan delinquencies, particularly the $46.7 million decline from the 2009 second quarter."
Board Declares Quarterly Cash Dividend of $0.13 Per Share
The Board of Directors of the Company, at their October 21, 2009 meeting, declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on December 1, 2009 to shareholders of record as of November 16, 2009. This is the fifty-eighth consecutive quarterly cash dividend declared by the Company.
Third Quarter and Nine Month Earnings Summary
Net interest income for the quarter ended September 30, 2009 totaled $103.1 million compared to $107.1 million for the 2008 third quarter. For the nine months ended September 30, 2009, net interest income increased to $323.8 million, or 15%, from $280.4 million for the comparable 2008 period.
The net interest margin for the quarter ended September 30, 2009 was 2.07% compared to 2.06% for the 2008 third quarter and 2.16% for the 2009 second quarter. On a linked quarter basis, the margin declined nine basis points due to several factors including lower loan rates on new and refinanced mortgage loans which are below current portfolio yields and an increased amount of hybrid ARMs repricing into one-year ARMs at lower rates. "Going forward, we expect margin growth to resume as we realize the benefit from higher yields on deployed excess liquidity coupled with a full quarter benefit from the lower certificate of deposit ("CD") repricing during the third quarter and the partial effect from lower CD repricing expected in the fourth quarter, all of which should more than offset the effect of lower loan and asset yields. Non-Liquid CDs totaling $2.2 billion and $2.4 billion are scheduled to mature in the 2009 fourth quarter and 2010 first quarter, respectively, with a weighted average rate of 3.31% and 3.00%, respectively. Non-Liquid CDs were issued or repriced in September 2009 at a weighted average rate of 1.02%. Further illustrating the pace of decline in deposit costs, the weighted average cost of deposits for the 2009 third quarter was 2.25%, while the weighted average cost of deposits at quarter-end was 2.16%. On the asset side, during the 2009 fourth quarter and 2010 first quarter, a total of $1.2 billion of hybrid ARM loans, with a weighted average rate of 5.16%, are scheduled to reprice," Mr. Engelke noted.
For the quarter ended September 30, 2009, a $50.0 million provision for loan losses was recorded which was equal to the provision for the previous quarter and greater than the $13.0 million provision for the 2008 third quarter. For the nine months ended September 30, 2009, provisions for loan losses totaled $150.0 million compared to $24.0 million for the comparable period in 2008. Mr. Engelke noted, "The 2009 provisions recognize the impact that the continued weakness in both the national housing market and the economy in general, particularly increasing unemployment, have had on the overall level of non-performing loans and loan charge-offs."
Non-interest income for the quarter ended September 30, 2009 totaled $20.1 million compared to $22.4 million for the 2008 third quarter, excluding the $77.7 million OTTI related to Freddie Mac preferred stock. Included in 2009 third quarter non-interest income is a $3.8 million gain on sales of securities, a $2.8 million lower of cost or market write-down on loans held-for-sale and $1.1 million MSR valuation allowance. For the nine months ended September 30, 2009, non-interest income totaled $63.3 million, excluding the OTTI charge and the mortgage building write-down and recorded in the 2009 first and second quarters, respectively, compared to $69.7 million for the comparable 2008 period, excluding the $77.7 million OTTI charge recorded in the 2008 third quarter. The 2009 three and nine month decreases were primarily due to lower BOLI income, customer service fees and other income, partially offset by gains on sales of securities and an increase in mortgage banking income, net.
General and administrative ("G&A") expense for the quarter ended September 30, 2009 totaled $63.2 million compared to $58.8 million for the 2008 third quarter. The increase was due primarily to increased FDIC insurance premiums, partially offset by lower advertising expense. For the nine months ended September 30, 2009, G&A expense totaled $193.4 million, excluding the FDIC special assessment recorded in the 2009 second quarter, compared to $177.0 million for the nine months ended September 30, 2008. The increase was due primarily to increases in regular FDIC insurance premiums, separate from the FDIC special assessment, and compensation and benefits expense, primarily pension expense.
Balance Sheet Summary
Total assets declined $428.0 million and $1.3 billion for the quarter and nine months ended September 30, 2009, respectively, and totaled $20.7 billion at September 30, 2009. The decrease for the 2009 third quarter was due to a reduction in cash due to the deployment of excess liquidity. The decrease for the nine months was due to decreases in the loan and securities portfolios. As of September 30, 2009, the net loan portfolio, which totaled $16.0 billion, decreased $3.1 million from the previous quarter and $742.6 million from December 31, 2008. The nine month decline included a decrease of $343.9 million in the one-to-four family loan portfolio and $357.1 million in the combined multi-family and commercial real estate ("CRE") portfolio. At September 30, 2009, the one-to-four family loan portfolio totaled $12.0 billion and the multi-family/CRE portfolio totaled $3.5 billion. For the quarter and nine months ended September 30, 2009, securities decreased $39.6 million and $565.0 million, respectively.
For the quarter and nine months ended September 30, 2009, one-to-four family loan originations for portfolio totaled $1.2 billion and $2.2 billion, respectively, compared to $1.1 billion and $3.2 billion, respectively, for the comparable 2008 periods. One-to-four family loan prepayments for the quarter and nine months ended September 30, 2009 totaled $939.6 million and $2.2 billion, respectively, compared to $516.9 million and $2.2 billion, respectively, for the comparable 2008 periods. The loan-to-value ("LTV") ratio of the one-to-four family loan production for portfolio for the 2009 third quarter and nine months averaged 58% and 57%, respectively, at origination and the individual loan amount averaged approximately $725,000 for both periods.
Deposits for the quarter ended September 30, 2009 decreased $391.6 million from the previous quarter and $261.3 million from December 31, 2008, and totaled $13.2 billion at September 30, 2009. The decreases were due primarily to decreases in CDs. Commenting on deposit flows, Mr. Engelke noted, "The deployment of excess liquidity during the 2009 third quarter coupled with a decrease in the loan portfolio, due to accelerated mortgage prepayment activity which outpaced our loan production, influenced our decision to reduce CDs in the third quarter." Importantly, low-cost savings, money market and checking deposits increased $222.6 million, or 6%, for the nine months ended September 30, 2009.
Borrowings for the quarter ended September 30, 2009 decreased $49.9 million from the previous quarter and $1.1 billion from December 31, 2008 to $5.8 billion, at September 30, 2009.
Stockholders' equity totaled $1.2 billion, or 5.83% of total assets at September 30, 2009. Astoria Federal continues to be designated as well-capitalized with core, tangible, risk-based and Tier 1 risk-based capital ratios of 6.72%, 6.72%, 12.77% and 11.49%, respectively, at September 30, 2009.
Asset Quality
Non-performing loans ("NPL"), including troubled debt restructurings ("TDR") of $55.4 million, totaled $408.5 million, or 1.98% of total assets at September 30, 2009, an increase of $48.5 million from the previous quarter. During the 2009 third quarter, $23.4 million of non-performing loans were either sold or classified as held-for-sale. At September 30, 2009, one-to-four family non-performing loans totaled $323.8 million and multi-family/CRE/construction non-performing loans totaled $80.8 million compared to $287.9 million and $68.2 million, respectively, at June 30, 2009. Important to note, of the $408.5 million of non-performing loans, $195.6 million, or 48%, 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.
The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:
Combined Change 90 + Days Total 30-59 60-89 30-89 from Past 30-90+ Days Days Days Previous Due Days (In millions) Past Due Past Due Past Due Quarter (NPL) Past Due -------- -------- -------- ------- ------ -------- At Sept. 30, 2008 $171.0 $54.7 $225.7 +$40.2 $164.8 $390.5 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
The table below details, as of September 30, 2009, 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 millions) Total 1-4 % of 1-4 Total 1-4 NPLs as % Family Family Loan Family of State State Loans Portfolio NPLs Total ----- ----- --------- ---- ----- New York $3,030.6 25.3% $35.3 1.16% Illinois $1,392.8 11.6% $39.4 2.83% Connecticut $1,242.1 10.3% $27.2 2.19% California $1,156.4 9.6% $53.8 4.65% New Jersey $948.0 7.9% $36.5 3.85% Massachusetts $849.3 7.1% $17.4 2.05% Virginia $823.9 6.9% $21.1 2.56% Maryland $795.2 6.6% $38.9 4.89% Washington $341.0 2.8% $2.9 0.85% Florida $277.5 2.3% $23.8 8.58% ------ ----- Top 10 States $10,856.8 90.4% $296.3 2.73% All other states (1) $1,148.9 9.6% $27.5 2.39% -------- ----- Total 1-4 Family Portfolio $12,005.7 100% $323.8 2.70% ========= ==== ====== (1) Includes 29 states and Washington, D.C.
Net loan charge-offs for the quarter ended September 30, 2009 totaled $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) compared to $38.9 million (of which $20.6 million represented one-to-four family loans and $17.7 million represented multi-family/CRE and construction loans) for the 2009 second quarter. Included in the $22.1 million of one-to-four family loan net charge-offs are $14.8 million of charge-offs on $67.0 million of non-performing loans which, at 180 days delinquent, were reviewed and required an adjustment to reduce the carrying value to the estimated fair value of the underlying collateral less estimated selling costs. Commenting on asset quality, Mr. Engelke noted, "Although non-performing loans increased from the previous quarter, as we anticipated they would, we are encouraged by the decline in early stage delinquencies, which decreased $46.7 million, or 15%, from June 30, 2009, the second consecutive quarterly decline."
Selected Asset Quality Metrics At or for the three and nine months ended September 30, 2009 ($in millions) 1-4 Multi- Constr- Consumer Family family CRE uction & Other Total ------ ------ --- ------ ------- ----- Loan portfolio balance $12,005.7 $2,619.0 $876.7 $27.2 $331.8(1) $15,969.8(2,3) Non-performing loans $323.8(4) $65.4 $10.0 $5.5 $3.8 $408.5(4) NPLs/total loans 2.03% 0.41% 0.06% 0.03% 0.02% 2.56%(3) Net charge-offs 3Q09 $22.1 $1.7 $0.1 $9.3 $0.4 $33.6 Net charge-offs YTD $53.9 $25.1 $1.7 $10.3 $1.4 $92.4 (1) Includes home equity loans of $304.1 million (2) Includes $109.5 million of net unamortized premiums and deferred loan costs (3) Does not cross foot due to rounding (4) Includes $195.6 million reviewed and adjusted, as needed, at 180 days delinquent and annually thereafter Future Outlook
Commenting on the outlook for the remainder of 2009, Mr. Engelke stated, "Although the economy is beginning to show signs of improvement, we continue to face challenges associated with high unemployment and depressed real estate values. We expect that job losses and economic weakness will continue to strain the financial condition of prime residential borrowers and their ability to remain current on their mortgage loans and the ability of tenants to pay rent in multi-family properties. This may result in somewhat higher non-performing loans, although total loan delinquencies appear to be stabilizing. We are encouraged by the consecutive quarterly decline in early stage (30-89 day) loan delinquencies. If this trend continues, it will have a positive impact on future credit costs. In the near term, as a result of low interest rates for 30-year conforming mortgage loans coupled with elevated conforming loan limits in many of the markets we operate in, loan prepayments will remain high and temper loan growth. With respect to the net interest margin, we expect modest increases going forward as we begin to realize the benefit from the reduction in excess liquidity and the significant CD repricing opportunities in the 2009 fourth quarter and 2010 first quarter."
Astoria Financial Corporation, with assets of $20.7 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $13.2 billion, is the largest thrift depository headquartered in New York and embraces its philosophy of "Putting people first" by providing the customers and local communities it serves with quality financial products and services through 85 convenient banking office locations and multiple delivery channels, including its enhanced website, http://www.astoriafederal.com/. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states. Astoria Federal originates mortgage loans through its banking and loan production offices in New York, an extensive broker network covering 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 October 22, 2009 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, October 22, 2009 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, ID# 30888872. A telephone replay will be available on October 22, 2009 from 1:00 p.m. (ET) through October 30, 2009, 11:59 p.m. (ET). The replay number is (800) 642-1687, ID#:30888872. The conference call will also be simultaneously webcast on the Company's website http://www.astoriafederal.com/ and archived for one year.
Forward Looking Statements
This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of such words as "anticipate," "believe," "could," "estimate," "expect," "intend," "outlook," "plan," "potential," "predict," "project," "should," "will," "would," and similar terms and phrases, including references to assumptions.
Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and its perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.
Tables Follow ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ---------------------------------------------- (In Thousands, Except Share Data) At At September 30, December 31, 2009 2008 ---- ---- ASSETS ------ Cash and due from banks $87,137 $76,233 Repurchase agreements 45,380 24,060 Securities available-for-sale 954,076 1,390,440 Securities held-to-maturity (fair value of $2,575,908 and $2,643,955, respectively) 2,518,232 2,646,862 Federal Home Loan Bank of New York stock, at cost 177,199 211,900 Loans held-for-sale, net 34,841 5,272 Loans receivable: Mortgage loans, net 15,634,222 16,372,383 Consumer and other loans, net 335,585 340,061 ------- ------- 15,969,807 16,712,444 Allowance for loan losses (176,638) (119,029) -------- -------- Total loans receivable, net 15,793,169 16,593,415 Mortgage servicing rights, net 9,211 8,216 Accrued interest receivable 74,012 79,589 Premises and equipment, net 136,532 139,828 Goodwill 185,151 185,151 Bank owned life insurance 403,624 401,280 Other assets 254,715 219,865 ------- ------- TOTAL ASSETS $20,673,279 $21,982,111 =========== =========== LIABILITIES ----------- Deposits $13,218,619 $13,479,924 Reverse repurchase agreements 2,500,000 2,850,000 Federal Home Loan Bank of New York advances 2,960,000 3,738,000 Other borrowings, net 377,723 377,274 Mortgage escrow funds 150,396 133,656 Accrued expenses and other liabilities 260,662 221,488 ------- ------- TOTAL LIABILITIES 19,467,400 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 97,048,374 and 95,881,132 shares outstanding, respectively) 1,665 1,665 Additional paid-in capital 854,050 856,021 Retained earnings 1,833,377 1,864,257 Treasury stock (69,446,514 and 70,613,756 shares, at cost, respectively) (1,435,090) (1,459,211) Accumulated other comprehensive loss (31,442) (61,865) Unallocated common stock held by ESOP (4,553,093 and 5,212,668 shares, respectively) (16,681) (19,098) ------- ------- TOTAL STOCKHOLDERS' EQUITY 1,205,879 1,181,769 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $20,673,279 $21,982,111 =========== =========== ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In Thousands, Except Share Data) For the Three For the Nine Months Ended Months Ended September 30, September 30, ---------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Interest income: Mortgage loans: One-to-four family $147,765 $163,154 $465,252 $468,999 Multi-family, commercial real estate and construction 52,947 57,982 165,539 176,983 Consumer and other loans 2,760 4,103 8,095 13,712 Mortgage-backed and other securities 35,980 45,341 116,307 139,942 Federal funds sold, repurchase agreements and interest-earning cash accounts 163 214 394 1,868 Federal Home Loan Bank of New York stock 2,487 3,148 6,850 11,173 ----- ----- ----- ------ Total interest income 242,102 273,942 762,437 812,677 ------- ------- ------- ------- Interest expense: Deposits 75,348 92,967 248,069 301,021 Borrowings 63,671 73,902 190,554 231,217 ------ ------ ------- ------- Total interest expense 139,019 166,869 438,623 532,238 ------- ------- ------- ------- Net interest income 103,083 107,073 323,814 280,439 Provision for loan losses 50,000 13,000 150,000 24,000 ------ ------ ------- ------ Net interest income after provision for loan losses 53,083 94,073 173,814 256,439 ------ ------ ------- ------- Non-interest income (loss): Customer service fees 14,186 15,752 43,265 47,661 Other loan fees 959 927 2,837 3,056 Gain on sales of securities 3,820 - 5,932 - Other-than-temporary impairment write-down of securities - (77,696) (5,300) (77,696) Mortgage banking income (loss), net 883 (279) 4,762 1,786 Income from bank owned life insurance 2,131 4,273 6,578 12,670 Other (1,899) 1,725 (1,622) 4,495 ------ ----- ------ ----- Total non-interest income (loss) 20,080 (55,298) 56,452 (8,028) ------ ------- ------ ------ Non-interest expense: General and administrative: Compensation and benefits 31,850 31,594 99,213 95,960 Occupancy, equipment and systems 15,969 16,460 48,365 50,211 Federal deposit insurance premiums 6,928 549 17,732 1,668 Federal deposit insurance special assessment - - 9,851 - Advertising 961 2,346 3,741 4,969 Other 7,531 7,855 24,319 24,207 ----- ----- ------ ------ Total non-interest expense 63,239 58,804 203,221 177,015 ------ ------ ------- ------- Income (loss) before income tax expense (benefit) 9,924 (20,029) 27,045 71,396 Income tax expense (benefit) 1,876 (3,570) 7,501 25,502 ----- ------ ----- ------ Net income (loss) $8,048 $(16,459) $19,544 $45,894 ====== ======== ======= ======= Basic earnings (loss) per common share $0.09 $(0.19) $0.21 $0.51 ===== ====== ===== ===== Diluted earnings (loss) per common share $0.09 $(0.19) $0.21 $0.50 ===== ====== ===== ===== Basic weighted average common shares 90,696,563 89,546,664 90,480,277 89,523,584 Diluted weighted average common and common equivalent shares 90,702,558 89,546,664 90,482,356 90,552,829 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS ---------------------- (Dollars in Thousands) For the Three Months Ended September 30, ------------------------------ 2009 ------------------------------ Average Average Yield/ Balance Interest Cost ------- -------- ---- (Annualized) Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $12,071,749 $147,765 4.90% Multi-family, commercial real estate and construction 3,610,912 52,947 5.87 Consumer and other loans (1) 334,282 2,760 3.30 ------- ----- Total loans 16,016,943 203,472 5.08 Mortgage-backed and other securities (2) 3,451,257 35,980 4.17 Repurchase agreements and interest-earning cash accounts 299,242 163 0.22 Federal Home Loan Bank stock 177,285 2,487 5.61 ------- ----- Total interest-earning assets 19,944,727 242,102 4.86 ------- Goodwill 185,151 Other non-interest-earning assets 856,892 ------- Total assets $20,986,770 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $1,950,731 1,989 0.41 Money market 328,826 447 0.54 NOW and demand deposit 1,545,609 258 0.07 Liquid certificates of deposit 860,239 1,708 0.79 ------- ----- Total core deposits 4,685,405 4,402 0.38 Certificates of deposit 8,738,587 70,946 3.25 --------- ------ Total deposits 13,423,992 75,348 2.25 Borrowings 5,886,006 63,671 4.33 --------- ------ Total interest-bearing liabilities 19,309,998 139,019 2.88 ------- Non-interest-bearing liabilities 478,697 ------- Total liabilities 19,788,695 Stockholders' equity 1,198,075 --------- Total liabilities and stockholders' equity $20,986,770 =========== Net interest income/net interest rate spread (3) $103,083 1.98% ======== ==== Net interest-earning assets/net interest margin (4) $634,729 2.07% ======== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.03x ===== For the Three Months Ended September 30, ------------------------------- 2008 ------------------------------- Average Average Yield/ Balance Interest Cost ------- -------- ---- (Annualized) Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $12,159,385 $163,154 5.37% Multi-family, commercial real estate and construction 3,915,922 57,982 5.92 Consumer and other loans (1) 338,947 4,103 4.84 ------- ----- Total loans 16,414,254 225,239 5.49 Mortgage-backed and other securities (2) 4,146,498 45,341 4.37 Repurchase agreements and interest-earning cash accounts 40,133 214 2.13 Federal Home Loan Bank stock 215,409 3,148 5.85 ------- ----- Total interest-earning assets 20,816,294 273,942 5.26 ------- Goodwill 185,151 Other non-interest-earning assets 881,458 ------- Total assets $21,882,903 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $1,865,841 1,898 0.41 Money market 312,224 811 1.04 NOW and demand deposit 1,477,188 336 0.09 Liquid certificates of deposit 1,157,399 7,195 2.49 --------- ----- Total core deposits 4,812,652 10,240 0.85 Certificates of deposit 8,259,422 82,727 4.01 --------- ------ Total deposits 13,072,074 92,967 2.84 Borrowings 7,150,428 73,902 4.13 --------- ------ Total interest-bearing liabilities 20,222,502 166,869 3.30 ------- Non-interest-bearing liabilities 457,316 ------- Total liabilities 20,679,818 Stockholders' equity 1,203,085 --------- Total liabilities and stockholders' equity $21,882,903 =========== Net interest income/net interest rate spread (3) $107,073 1.96% ======== ==== Net interest-earning assets/net interest margin (4) $593,792 2.06% ======== ==== 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 Nine Months Ended September 30, -------------------------------- 2009 -------------------------------- Average Average Yield/ Balance Interest Cost ------- -------- ---- (Annualized) Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $12,194,836 $465,252 5.09% Multi-family, commercial real estate and construction 3,738,746 165,539 5.90 Consumer and other loans (1) 337,229 8,095 3.20 ------- ----- Total loans 16,270,811 638,886 5.24 Mortgage-backed and other securities (2) 3,573,641 116,307 4.34 Federal funds sold, repurchase agreements and interest-earning cash accounts 255,594 394 0.21 Federal Home Loan Bank stock 183,032 6,850 4.99 ------- ----- Total interest-earning assets 20,283,078 762,437 5.01 ------- Goodwill 185,151 Other non-interest-earning assets 837,257 ------- Total assets $21,305,486 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $1,909,519 5,781 0.40 Money market 313,747 1,733 0.74 NOW and demand deposit 1,522,064 805 0.07 Liquid certificates of deposit 927,424 9,641 1.39 ------- ----- Total core deposits 4,672,754 17,960 0.51 Certificates of deposit 8,852,402 230,109 3.47 --------- ------- Total deposits 13,525,156 248,069 2.45 Borrowings 6,126,211 190,554 4.15 --------- ------- Total interest-bearing liabilities 19,651,367 438,623 2.98 ------- Non-interest-bearing liabilities 458,474 ------- Total liabilities 20,109,841 Stockholders' equity 1,195,645 --------- Total liabilities and stockholders' equity $21,305,486 =========== Net interest income/net interest rate spread (3) $323,814 2.03% ======== ==== Net interest-earning assets/net interest margin (4) $631,711 2.13% ======== ==== Ratio of interest-earning assets to interest-bearing liabilities 1.03x ===== For the Nine Months Ended September 30, -------------------------------- 2008 -------------------------------- Average Average Yield/ Balance Interest Cost ------- -------- ---- (Annualized) Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $11,781,281 $468,999 5.31% Multi-family, commercial real estate and construction 3,954,253 176,983 5.97 Consumer and other loans (1) 346,720 13,712 5.27 ------- ------ Total loans 16,082,254 659,694 5.47 Mortgage-backed and other securities (2) 4,225,646 139,942 4.42 Federal funds sold, repurchase agreements and interest-earning cash accounts 105,665 1,868 2.36 Federal Home Loan Bank stock 202,151 11,173 7.37 ------- ------ Total interest-earning assets 20,615,716 812,677 5.26 ------- Goodwill 185,151 Other non-interest-earning assets 834,947 ------- Total assets $21,635,814 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $1,874,828 5,685 0.40 Money market 317,766 2,414 1.01 NOW and demand deposit 1,477,447 967 0.09 Liquid certificates of deposit 1,294,298 30,582 3.15 --------- ------ Total core deposits 4,964,339 39,648 1.06 Certificates of deposit 8,054,333 261,373 4.33 --------- ------- Total deposits 13,018,672 301,021 3.08 Borrowings 6,987,400 231,217 4.41 --------- ------- Total interest-bearing liabilities 20,006,072 532,238 3.55 ------- Non-interest-bearing liabilities 416,570 ------- Total liabilities 20,422,642 Stockholders' equity 1,213,172 --------- Total liabilities and stockholders' equity $21,635,814 =========== Net interest income/net interest rate spread (3) $280,439 1.71% ======== ==== Net interest-earning assets/net interest margin (4) $609,644 1.81% ======== ==== 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 Nine Months Ended September 30, September 30, ------------------ ----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Selected Returns and Financial Ratios (annualized) -------------------- Return on average stockholders' equity 2.69% (5.47)% 2.18% 5.04% Return on average tangible stockholders' equity (1) 3.18 (6.47) 2.58 5.95 Return on average assets 0.15 (0.30) 0.12 0.28 General and administrative expense to average assets 1.21 1.07 1.27 1.09 Efficiency ratio (2) 51.35 113.58 53.44 64.98 Net interest rate spread 1.98 1.96 2.03 1.71 Net interest margin 2.07 2.06 2.13 1.81 Selected Non-GAAP Returns and Financial Ratios (annualized) (3) ----------------- Non-GAAP return on average stockholders' equity 2.69% 13.77% 3.39% 11.41% Non-GAAP return on average tangible stockholders' equity (1) 3.18 16.28 4.01 13.46 Non-GAAP return on average assets 0.15 0.76 0.19 0.64 Non-GAAP general and administrative expense to average assets 1.21 1.07 1.21 1.09 Non-GAAP efficiency ratio (2) 51.35 45.42 49.95 50.56 Asset Quality Data (dollars in thousands) ------------------ Non-performing assets (4) $449,926 $187,063 Non-performing loans (4) 408,458 164,769 Loans delinquent 90 days or more and still accruing interest 21 23 Non-accrual loans 408,437 164,746 Loans 60-89 days delinquent 75,875 54,742 Loans 30-59 days delinquent 197,560 170,981 Net charge-offs $33,633 $8,525 92,391 16,628 Non-performing loans/ total loans 2.56% 0.99% Non-performing loans/ total assets 1.98 0.74 Non-performing assets/ total assets 2.18 0.84 Allowance for loan losses/non- performing loans 43.25 52.39 Allowance for loan losses/ non-accrual loans 43.25 52.39 Allowance for loan losses/ total loans 1.11 0.52 Net charge-offs to average loans outstanding (annualized) 0.84% 0.21% 0.76 0.14 Capital Ratios (Astoria Federal) ------------------ Tangible 6.72% 6.19% Core 6.72 6.19 Risk-based 12.77 11.48 Tier 1 risk-based 11.49 10.80 Other Data ----------- Cash dividends paid per common share $0.13 $0.26 $0.39 $0.78 Book value per share (5) 13.04 13.16 Tangible book value per share (6) 11.04 11.11 Tangible stockholders' equity/ tangible assets (1) (7) 4.98% 4.57% Mortgage loans serviced for others (in thousands) $1,355,090 $1,231,890 Full time equivalent employees 1,573 1,586 (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 nine months ended September 30, 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 September 30, 2009 At June 30, 2009 --------------------- ------------------ Weighted Weighted Average Average Balance Rate (1) Balance Rate (1) --------- -------- ------- -------- Selected interest- earning assets: Mortgage loans, gross (2): One-to-four family $12,005,690 5.37% $11,895,071 5.52% Multi-family, commercial real estate and construction 3,522,879 6.01 3,636,761 5.98 Mortgage-backed and other securities (3) 3,472,308 4.08 3,511,940 4.17 Interest-bearing liabilities: Savings 1,959,171 0.40 1,942,933 0.40 Money market 330,299 0.44 321,005 0.64 NOW and demand deposit 1,522,017 0.06 1,558,429 0.06 Liquid certificates of deposit 812,141 0.64 904,283 0.95 ------- ------- Total core deposits 4,623,628 0.33 4,726,650 0.41 Certificates of deposit 8,594,991 3.15 8,883,531 3.31 --------- --------- Total deposits 13,218,619 2.16 13,610,181 2.30 Borrowings, net 5,837,723 4.24 5,887,573 4.25 At September 30, 2008 --------------------- Weighted Average Balance Rate (1) --------- -------- Selected interest-earning assets: Mortgage loans, gross (2): One-to-four family $12,359,266 5.65% Multi-family, commercial real estate and construction 3,913,075 5.92 Mortgage-backed and other securities (3) 4,159,133 4.35 Interest-bearing liabilities: Savings 1,842,781 0.40 Money market 302,760 1.06 NOW and demand deposit 1,440,230 0.06 Liquid certificates of deposit 1,075,485 2.47 --------- Total core deposits 4,661,256 0.82 Certificates of deposit 8,447,927 3.92 --------- Total deposits 13,109,183 2.82 Borrowings, net 7,500,224 3.86 (1) Weighted average rates represent stated or coupon interest rates excluding the effect of yield adjustments for premiums, discounts and deferred loan origination fees and costs and the impact of prepayment penalties. (2) Mortgage loans exclude loans held-for-sale and include non-performing loans. (3) Securities available-for-sale are reported at fair value and securities held-to-maturity are reported at amortized cost. ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES 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 -------------------------- September 30, 2009 ------------------ GAAP Adjustments Non-GAAP ------- ----------- -------- Net interest income $103,083 $- $103,083 Provision for loan losses 50,000 - 50,000 ------ --- ------ Net interest income after provision for loan losses 53,083 - 53,083 Non-interest income (loss) 20,080 - 20,080 Non-interest expense (general and administrative expense) 63,239 - 63,239 ------ --- ------ Income (loss) before income tax expense (benefit) 9,924 - 9,924 Income tax expense (benefit) 1,876 - 1,876 ----- --- ----- Net income (loss) (2) $8,048 $- $8,048 ------ --- ------ Basic earnings (loss) per common share (2) $0.09 $- $0.09 ----- --- ----- Diluted earnings (loss) per common share (2) $0.09 $- $0.09 ----- --- ----- For the Three Months Ended -------------------------- September 30, 2008 ------------------ Adjustments GAAP (1) Non-GAAP ------- ----------- -------- Net interest income $107,073 $- $107,073 Provision for loan losses 13,000 - 13,000 ------ --- ------ Net interest income after provision for loan losses 94,073 - 94,073 Non-interest income (loss) (55,298) 77,696 22,398 Non-interest expense (general and administrative expense) 58,804 - 58,804 ------ --- ------ Income (loss) before income tax expense (benefit) (20,029) 77,696 57,667 Income tax expense (benefit) (3,570) 19,816 16,246 ------ ------ ------ Net income (loss) (2) $(16,459) $57,880 $41,421 -------- ------- ------- Basic earnings (loss) per common share (2) $(0.19) $0.65 $0.46 ------ ----- ----- Diluted earnings (loss) per common share (2) $(0.19) $0.64 $0.45 ------ ----- ----- For the Nine Months Ended ------------------------- September 30, 2009 ------------------ Adjustments GAAP (3) Non-GAAP ------- ----------- -------- Net interest income $323,814 $- $323,814 Provision for loan losses 150,000 - 150,000 ------- --- ------- Net interest income after provision for loan losses 173,814 - 173,814 Non-interest income (loss) 56,452 6,888 63,340 Non-interest expense (general and administrative expense) 203,221 (9,851) 193,370 ------- ------ ------- Income before income tax expense 27,045 16,739 43,784 Income tax expense 7,501 5,859 13,360 ----- ----- ------ Net income (2) $19,544 $10,880 $30,424 ------- ------- ------- Basic earnings per common share (2) $0.21 $0.12 $0.33 ----- ----- ----- Diluted earnings per common share (2) $0.21 $0.12 $0.33 ----- ----- ----- For the Nine Months Ended ------------------------- September 30, 2008 ------------------ Adjustments GAAP (1) Non-GAAP ------- ----------- -------- Net interest income $280,439 $- $280,439 Provision for loan losses 24,000 - 24,000 ------ --- ------ Net interest income after provision for loan losses 256,439 - 256,439 Non-interest income (loss) (8,028) 77,696 69,668 Non-interest expense (general and administrative expense) 177,015 - 177,015 ------- --- ------- Income before income tax expense 71,396 77,696 149,092 Income tax expense 25,502 19,816 45,318 ------ ------ ------ Net income (2) $45,894 $57,880 $103,774 ------- ------- -------- Basic earnings per common share (2) $0.51 $0.65 $1.15 (4) ----- ----- ----- -- Diluted earnings per common share (2) $0.50 $0.64 $1.14 ----- ----- ----- Non-GAAP returns are calculated substituting non-GAAP net income for net income (loss) 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 (loss) and general and administrative expense in the corresponding calculation. (1) Adjustments relate to the other-than-temporary impairment write-down of securities charge recorded in the 2008 third quarter. (2) Non-GAAP net income and non-GAAP EPS are also referred to as operating income and operating EPS throughout this release. (3) 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. (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 September 30, 2009 --------------------- Non-performing Non- loans Total performing as % of State loans loans total loans ----- ------ ----------- ----------- New York Full Income $2,678.8 $20.3 0.76% Alt A < 70% LTV $267.9 $6.9 2.58% Alt A 70%-80% LTV $83.9 $8.1 9.65% ----- ---- State Total $3,030.6 $35.3 1.16% Illinois Full Income $1,119.3 $10.7 0.96% Alt A < 70% LTV $129.4 $9.6 7.42% Alt A 70%-80% LTV $144.1 $19.1 13.25% ------ ----- State Total $1,392.8 $39.4 2.83% Connecticut Full Income $1,039.0 $7.8 0.75% Alt A < 70% LTV $132.5 $8.9 6.72% Alt A 70%-80% LTV $70.6 $10.5 14.87% ----- ----- State Total $1,242.1 $27.2 2.19% California Full Income $793.7 $21.2 2.67% Alt A < 70% LTV $183.0 $10.4 5.68% Alt A 70%-80% LTV $179.7 $22.2 12.35% ------ ----- State Total $1,156.4 $53.8 4.65% New Jersey Full Income $752.9 $20.4 2.71% Alt A < 70% LTV $97.9 $6.3 6.44% Alt A 70%-80% LTV $97.2 $9.8 10.08% ----- ---- State Total $948.0 $36.5 3.85% Massachusetts Full Income $727.3 $6.4 0.88% Alt A < 70% LTV $80.4 $4.7 5.85% Alt A 70%-80% LTV $41.6 $6.3 15.14% ----- ---- State Total $849.3 $17.4 2.05% Virginia Full Income $625.6 $8.1 1.29% Alt A < 70% LTV $84.1 $3.0 3.57% Alt A 70%-80% LTV $114.2 $10.0 8.76% ------ ----- State Total $823.9 $21.1 2.56% Maryland Full Income $614.0 $14.3 2.33% Alt A < 70% LTV $83.3 $3.1 3.72% Alt A 70%-80% LTV $97.9 $21.5 21.96% ----- ----- State Total $795.2 $38.9 4.89% Washington Full Income $329.8 $1.4 0.42% Alt A < 70% LTV $8.0 $1.5 18.75% Alt A 70%-80% LTV $3.2 $0.0 0.00% ---- ---- State Total $341.0 $2.9 0.85% Florida Full Income $185.0 $10.8 5.84% Alt A < 70% LTV $53.4 $5.2 9.74% Alt A 70%-80% LTV $39.1 $7.8 19.95% ----- ---- State Total $277.5 $23.8 8.58% Other States Full Income $996.1 $15.7 1.58% Alt A < 70% LTV $84.2 $4.3 5.11% Alt A 70%-80% LTV $68.6 $7.5 10.93% ----- ---- State Total $1,148.9 $27.5 2.39% Total all states Full Income $9,861.5 $137.1 1.39% Alt A < 70% LTV $1,204.1 $63.9 5.31% Alt A 70%-80% LTV $940.1 $122.8 13.06% ------ ------ Grand total $12,005.7 $323.8 2.70% ========= ====== Note: LTVs are based on current principal balances and original appraised values
Astoria Financial Corporation
CONTACT: Peter J. Cunningham, First Vice President, Investor Relations,
+1-516-327-7877, ir@astoriafederal.com
Web Site: http://www.astoriafederal.com/
