LAKE SUCCESS, N.Y., Jan. 26, 2011 /PRNewswire/ -- Astoria Financial Corporation ("Astoria", the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $23.8 million, or $0.25 diluted earnings per share ("diluted EPS"), for the quarter ended December 31, 2010, increases of 193% and 178%, respectively, over net income of $8.1 million, or $0.09 diluted EPS, for the quarter ended December 31, 2009. For the year ended December 31, 2010, net income totaled $73.7 million, or $0.78 diluted EPS, compared to $27.7 million, or $0.30 diluted EPS, for the year ended December 31, 2009, increases of 166% and 160%, respectively.
The year ended December 31, 2010 includes net charges totaling $3.2 million ($2.1 million, or $0.02 per share, after-tax), which are not routine to our core operations. The year ended December 31, 2009 includes charges totaling $16.7 million ($10.9 million, or $0.12 per share, after-tax,) which are not routine to our core operations. For further details of such items, please refer to the "Reconciliation of GAAP Measures to Non-GAAP Measures" table included in this release.
Commenting on the fourth quarter and full year results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, stated, "I am very pleased to report significantly improved earnings for both the fourth quarter and full year, despite a reduction of the balance sheet during the year. The improvements are due primarily to lower credit costs, reflecting an overall improvement in asset quality, particularly lower loan delinquencies and non-performing loans."
Full Year Financial Highlights -- Net interest margin increased 22 basis points, or 10%, to 2.35% -- Net income increased $46.0 million, or 166%, to $73.7 million -- Diluted EPS increased $0.48, or 160%, to $0.78 -- Low cost savings, money market and checking accounts increased $535.2 million, or 13%, to $4.6 billion -- Early stage loan delinquencies (30-89 days past due) decreased $69.1 million, or 24%, to $220.1 million -- Non-performing loans decreased $17.9 million, or 4%, to $390.7 million -- Total loan delinquencies decreased $87.0 million, or 12%, to $610.8 million -- Coverage ratio (allowance for loan losses to total loans) increased 19 basis points, or 15%, to 1.42% -- The Company's tangible common equity ratio increased 80 basis points to 5.90% -- Astoria Federal's leverage and tangible capital ratios increased 105 basis points to 7.94% -- Astoria Federal's tier 1 risk-based capital ratio increased 161 basis points to 13.33% Executive Management Changes Scheduled
George L. Engelke, Jr. 72, Chairman and Chief Executive Officer of both the Company and Astoria Federal, announced today that, effective July 1, 2011, he will relinquish his position as Chief Executive Officer of both organizations, after which time he will continue to serve as Chairman. The Board also announced today that Monte N. Redman, 60, President and Chief Operating Officer of the Company and Astoria Federal, will become President and Chief Executive Officer of both organizations effective July 1, 2011.
In announcing his decision, Mr. Engelke stated, "After a wonderful forty year career at Astoria Federal, including 22 years as Chief Executive Officer, it is the right time to step down as CEO. I am very proud of the accomplishments achieved over this period, particularly our conversion to a public company in 1993 and the fivefold growth in our balance sheet and the expansion of our retail banking franchise to its current leadership position in the markets in which we operate. And, as the past two years presented financial institutions with unprecedented challenges, I am also very gratified that the execution of our conservative business model helped us remain profitable throughout this period. I am also very pleased that the Board will be designating Monte Redman as CEO. With over 33 years of experience at Astoria in various executive capacities, including the past three years as President and Chief Operating Officer, he has clearly demonstrated his ability to serve in this position. I look forward to continuing to serve Astoria as Chairman of the Board."
Board Declares Quarterly Cash Dividend of $0.13 Per Share; Sets Annual Shareholders Meeting Date
The Board of Directors of the Company, at their January 26, 2011 meeting, declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on March 1, 2011 to shareholders of record as of February 15, 2011. This is the sixty-third consecutive quarterly cash dividend declared by the Company.
The Board also established May 18, 2011 as the date for the Annual Meeting of Shareholders, with a voting record date of March 25, 2011.
Fourth Quarter and Full Year Earnings Summary
Net interest income for the quarter ended December 31, 2010 totaled $101.2 million compared to $105.0 million for the 2009 fourth quarter. For the year ended December 31, 2010, net interest income increased to $433.6 million from $428.8 million for the year ended December 31, 2009.
The net interest margin for the quarter ended December 31, 2010 was 2.32%, unchanged from the previous quarter and 17 basis points higher than the 2009 fourth quarter. The net interest margin for the full year 2010 was 2.35%, 22 basis points higher than the 2009 full year margin. 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.
The yield on interest-earning assets for the 2010 fourth quarter declined nine basis points from the previous quarter and 32 basis points from the 2009 fourth quarter, while the cost of interest-earning liabilities declined nine basis points and 51 basis points, respectively. For the full year 2010, the yield on interest-earning assets declined 33 basis points and the cost of interest-bearing liabilities declined 57 basis points, compared to the full year 2009.
For the quarter ended December 31, 2010, a $15.0 million provision for loan losses was recorded, $5.0 million lower than the previous quarter and $35.0 million lower than the 2009 fourth quarter. For the year ended December 31, 2010, the provision for loan losses totaled $115.0 million, or $85.0 million lower than the full year provision for 2009. Mr. Engelke noted, "The significant decrease in the provision this year reflects the improving trends in asset quality over the past twelve months, notably a 24% decrease in early stage delinquencies, a 4% decrease in non-performing loans and a 12% decrease in total loan delinquencies, coupled with the high quality of loans originated for portfolio during the year, with $2.9 billion originated with loan-to-value ratios averaging approximately 61% at origination."
Non-interest income for the quarter ended December 31, 2010 totaled $20.7 million compared to $23.3 million for the 2009 fourth quarter. The decrease is primarily due to lower customer service fees, the absence of gain on sales of securities in 2010 and lower other income and income from bank owned life insurance (BOLI), partially offset by higher mortgage banking income, net.
For the year ended December 31, 2010, non-interest income totaled $81.2 million compared to $79.8 million for the year ended December 31, 2009. The increase is primarily due to an increase in other non-interest income, of which $6.2 million was from a goodwill litigation settlement in the 2010 second quarter, and an other-than-temporary impairment charge related to Freddie Mac securities recorded in the 2009 first quarter, partially offset by a gain on sales of securities in 2009 and a decrease in customer service fees for 2010 compared to 2009.
General and administrative ("G&A") expense for the quarter ended December 31, 2010 totaled $69.9 million compared to $66.8 million for the 2009 fourth quarter. The increase is primarily due to a $2.3 million increase in other expense, primarily increased real estate owned ("REO") related expense, and a $1.6 million increase in compensation and benefits expense.
For the year ended December 31, 2010, G&A expense totaled $284.9 million compared to $270.1 million for the year ended December 31, 2009. The increase was due primarily to an $8.2 million increase in compensation and benefits expense, primarily related to increases in ESOP expense and incentive and stock-based compensation, a $13.2 million increase in other expense, of which $7.9 million was related to the McAnaney litigation settlement in the 2010 second quarter and $3.1 million was attributable to an increase in REO related expenses, and a $1.4 million increase in regular FDIC insurance premiums. These increases were partially offset by a $9.9 million FDIC special assessment recorded in 2009.
Balance Sheet Summary
Total assets decreased $847.6 million from the previous quarter and $2.2 billion from December 31, 2009 and totaled $18.1 billion at December 31, 2010. The loan portfolio declined $676.1 million from the previous quarter and $1.6 billion from December 31, 2009 and totaled $14.2 billion at December 31, 2010. The one-to-four family portfolio totaled $10.9 billion at December 31, 2010 compared to $11.4 billion at September 30, 2010 and $11.9 billion at December 31, 2009. The combined multifamily/commercial real estate portfolio totaled $3.0 billion at December 31, 2010 compared to $3.1 billion at September 30, 2010 and $3.4 billion at December 31, 2009. For the quarter and year ended December 31, 2010, securities decreased $25.5 million and $612.8 million, respectively, to $2.6 billion at December 31, 2010.
Commenting on the decrease in the balance sheet, Mr. Engelke stated, "The combination of conforming 30-year fixed-rate mortgage interest rates at historic lows and high conforming loan limits, resulting from the U.S. Government's efforts to stimulate housing loan demand, has had a negative impact on jumbo hybrid ARM portfolio lenders such as Astoria, with mortgage loan prepayments outpacing our loan origination volume, resulting in a contraction of the loan portfolio and balance sheet. We have chosen not to retain for portfolio 30 year fixed-rate conforming mortgage loans or loosen our credit standards simply to facilitate balance sheet growth."
For the quarter and year ended December 31, 2010, one-to-four family loan originations for portfolio totaled $643.6 million and $2.9 billion, respectively, compared to $916.4 million and $3.1 billion, respectively, for the comparable 2009 periods. The loan-to-value ratio of the one-to-four family loan production for portfolio for the 2010 fourth quarter and full year 2010 averaged approximately 60% and 61%, respectively, at origination and the loan amount averaged approximately $734,000 for both periods. One-to-four family loan prepayments for the quarter and year ended December 31, 2010 totaled $1.0 billion and $3.4 billion, respectively, compared to $891.3 million and $3.1 billion, respectively, for the comparable 2009 periods.
Deposits at December 31, 2010 totaled $11.6 billion compared to $12.1 billion at September 30, 2010 and $12.8 billion at December 31, 2009. The decreases were due primarily to decreases in high cost CDs. In an effort to reduce future interest rate risk, during 2010, we extended approximately $1.5 billion of CDs for terms of two years or more and extended $525.0 million of borrowings for terms of three years or more. These actions, among other things, helped improve our one-year interest rate sensitivity gap to a positive 5.18% at December 31, 2010 as compared to a negative 6.77% at December 31, 2009. Importantly, low-cost savings, money market and checking account deposits increased $535.2 million, or 13%, from December 31, 2009.
Borrowings during the quarter ended December 31, 2010 decreased $343.9 million from the previous quarter and $1.0 billion from December 31, 2009 and totaled $4.9 billion at December 31, 2010.
Stockholders' equity totaled $1.2 billion, or 6.86% of total assets at December 31, 2010. Astoria Federal continues to be designated as well-capitalized with leverage, tangible, risk-based and Tier 1 risk-based capital ratios of 7.94%, 7.94%, 14.60% and 13.33%, respectively, at December 31, 2010.
Asset Quality
Non-performing loans ("NPLs"), including troubled debt restructurings ("TDRs") of $47.5 million, totaled $390.7 million, or 2.16% of total assets at December 31, 2010, a decrease of $8.9 million from the previous quarter. During the 2010 fourth quarter, $11.6 million of NPLs were either sold or classified as held-for-sale. At December 31, 2010, one-to-four family NPLs declined to $342.3 million, multi-family/CRE/construction NPLs declined to $42.8 million and consumer and other NPLs increased to $5.6 million compared to $345.7 million, $48.9 million and $5.0 million, respectively, at September 30, 2010. Of the $342.3 million of one-to-four family NPLs, $257.4 million, or 75%, represent residential loans which, at 180 days delinquent and annually thereafter, were reviewed and charged-off, as needed, to the estimated fair value of the underlying collateral at such time, less estimated selling costs.
The following table illustrates loan migration trends from 30 days delinquent to 90+ days delinquent:
30-59 60-89 Change 90 + Total Days Days Combined from Days 30-90+ Days 30-89 Past Past Due Past Due Days Previous Past Due Due ($ in millions) -------- -------- Past Due Quarter (NPLs) ---- -------- ------- ------ 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 At Sept. 30, 2010 $181.6 $70.4 $252.0 $(56.4) $399.6 $651.6 At Dec. 31, 2010 $165.8 $54.3 $220.1 $(31.9) $390.7 $610.8
The table below details, as of December 31, 2010, the ten largest concentrations by state of one-to-four family loans and the respective non-performing loan totals in those states. More comprehensive state details are included in the "One-to-Four Family Residential Loan Portfolio-Geographic Analysis" table included in this release.
% of ($ in Total Total NPLs millions) Total 1-4 1-4 1-4 as % Family Family of State Loans Loan Family State ----- ------ Portfolio NPLs Total --------- ---- ----- New York $3,049.1 28.0% $47.0 1.54% Illinois $1,331.0 12.3% $48.0 3.61% Connecticut $986.6 9.1% $32.6 3.30% California $854.1 7.9% $44.4 5.20% New Jersey $810.4 7.5% $49.9 6.16% Massachusetts $750.5 6.9% $8.3 1.11% Virginia $682.0 6.3% $16.8 2.46% Maryland $665.1 6.1% $43.6 6.56% Washington $310.5 2.9% $1.5 0.48% Florida $227.3 2.1% $25.3 11.13% ------ ----- Top 10 States $9,666.6 89.1% $317.4 3.28% All other states (1) $1,188.5 10.9% $24.9 2.10% -------- ----- Total 1-4 Family Portfolio $10,855.1 100% $342.3 3.15% ========= === ====== (1) Includes 28 states and Washington, D.C.
Net loan charge-offs for the quarter ended December 31, 2010 totaled $19.7 million (including $15.6 million of one-to-four family loans and $2.6 million of multi-family/CRE loans) compared to $24.8 million (including $18.4 million of one-to-four family loans and $5.4 million of multi-family/CRE loans) for the previous quarter. Included in the $15.6 million of one-to-four family net loan charge-offs are $12.6 million of charge-offs on $47.7 million of NPLs which, at 180 days delinquent and annually thereafter, were reviewed in the 2010 fourth quarter and charged-off, as needed, to the estimated fair value of the underlying collateral less selling costs. "While we expect NPL levels will remain elevated for some time, it is important to note that the loss potential remaining has been greatly reduced as a result of our having already reviewed, marked down, and charged-off as necessary, 75% of the residential NPLs to their adjusted fair value less selling costs," Mr. Engelke noted.
Selected Asset Quality Metrics (at or for the three and twelve months ended December 31, 2010) ($ in millions) 1-4 Multi- CRE Family family --- ------ ------ Loan portfolio balance $10,855.1 $2,187.9 $771.7 Non- performing loans $342.3(3) $30.2(4) $6.5 NPLs/total loans 2.41% 0.21% 0.05% Net charge- offs 4Q10 $15.6 $2.6 $0.0 Net charge- offs YTD $71.7 $25.0 $6.2 ($ in millions) Construction Consumer Total ------------ & Other ----- ------- Loan portfolio balance $15.1 $309.3(1) $14,223.0(2) Non- performing loans $6.1 $5.6 $390.7 NPLs/total loans 0.04% 0.04% 2.75% Net charge- offs 4Q10 $0.8 $0.7 $19.7 Net charge- offs YTD $2.3 $2.4 $107.6 (1) Includes home equity loans of $282.5 million (2) Includes $84.0 million of net unamortized premiums and deferred loan costs (3) Includes $257.4 million of NPLs reviewed and charged-off, as needed, at 180 days delinquent and annually thereafter (4) Includes $12.4 million of TDRs performing in accordance with their modified terms Future Outlook
Commenting on the near-term outlook, Mr. Engelke stated, "We remain cautiously optimistic with respect to the outlook for credit quality and we expect credit costs will continue to decline over the next several quarters. However, the operating environment for residential mortgage portfolio lenders remains challenging. While the U.S. government continues to subsidize the residential mortgage market, the recent interest rate increase in 30 year fixed-rate mortgage loans should result in lower loan prepayments which will, more than likely, result in less portfolio shrinkage. For 2011, we anticipate maintaining a relatively stable net interest margin which, when coupled with lower credit costs, should mitigate the earnings impact from a smaller average balance sheet and the anticipated impact of higher FDIC insurance premium expense. In the meantime, we will continue to strengthen the balance sheet by continuing to originate quality residential mortgage loans for portfolio. We expect capital levels will continue to increase as earnings continue to improve which should position us to take advantage of future balance sheet growth opportunities that may arise."
Earnings Conference Call January 27, 2011 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, January 27, 2011 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, ID# 32093033. A telephone replay will be available on January 27, 2011 from 1:00 p.m. (ET) through midnight February 5, 2011 (ET). The replay number is (800) 642-1687, ID#: 32093033. 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 $18.1 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $11.6 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 31, December 31, 2010 2009 ---- ---- ASSETS ------ Cash and due from banks $67,476 $71,540 Repurchase agreements 51,540 40,030 Securities available-for-sale 561,953 860,694 Securities held-to-maturity (fair value of $2,042,110 and $2,367,520, respectively) 2,003,784 2,317,885 Federal Home Loan Bank of New York stock, at cost 149,174 178,929 Loans held-for-sale, net 44,870 34,274 Loans receivable: Mortgage loans, net 13,911,200 15,447,115 Consumer and other loans, net 311,847 333,607 14,223,047 15,780,722 Allowance for loan losses (201,499) (194,049) Total loans receivable, net 14,021,548 15,586,673 Mortgage servicing rights, net 9,204 8,850 Accrued interest receivable 55,492 66,121 Premises and equipment, net 133,362 136,195 Goodwill 185,151 185,151 Bank owned life insurance 410,418 401,735 Real estate owned, net 63,782 46,220 Other assets 331,515 317,882 ------- ------- TOTAL ASSETS $18,089,269 $20,252,179 =========== =========== LIABILITIES ----------- Deposits $11,599,000 $12,812,238 Reverse repurchase agreements 2,100,000 2,500,000 Federal Home Loan Bank of New York advances 2,391,000 3,000,000 Other borrowings, net 378,204 377,834 Mortgage escrow funds 109,374 114,036 Accrued expenses and other liabilities 269,911 239,457 TOTAL LIABILITIES 16,847,489 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 97,877,469 and 97,083,607 shares outstanding, respectively) 1,665 1,665 Additional paid-in capital 864,744 857,662 Retained earnings 1,848,095 1,829,199 Treasury stock (68,617,419 and 69,411,281 shares, at cost, respectively) (1,417,956) (1,434,362) Accumulated other comprehensive loss (42,161) (29,779) Unallocated common stock held by ESOP (3,441,130 and 4,304,635 shares, respectively) (12,607) (15,771) TOTAL STOCKHOLDERS' EQUITY 1,241,780 1,208,614 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $18,089,269 $20,252,179 =========== =========== ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (In Thousands, Except Share Data) For the Three Months Ended December 31, ------------ 2010 2009 ---- ---- Interest income: One-to-four family mortgage loans $120,679 $144,472 Multi-family, commercial real estate and construction mortgage loans 47,372 51,941 Consumer and other loans 2,597 2,787 Mortgage-backed and other securities 22,887 33,348 Repurchase agreements and interest-earning cash accounts 133 54 Federal Home Loan Bank of New York stock 2,855 2,502 ----- ----- Total interest income 196,523 235,104 Interest expense: Deposits 41,833 67,302 Borrowings 53,449 62,847 ------ ------ Total interest expense 95,282 130,149 ------ ------- Net interest income 101,241 104,955 Provision for loan losses 15,000 50,000 Net interest income after provision for loan losses 86,241 54,955 Non-interest income: Customer service fees 12,101 14,622 Other loan fees 906 1,081 Gain on sales of securities - 1,494 Other-than-temporary impairment write-down of securities - - Mortgage banking income, net 3,434 805 Income from bank owned life insurance 1,948 2,372 Other 2,323 2,975 ----- ----- Total non-interest income 20,712 23,349 Non-interest expense: General and administrative: Compensation and benefits 35,655 34,105 Occupancy, equipment and systems 15,906 16,320 Federal deposit insurance premiums 6,006 6,568 Federal deposit insurance special assessment - - Advertising 1,909 1,663 Other 10,451 8,179 ------ ----- Total non-interest expense 69,927 66,835 ------ ------ Income before income tax expense 37,026 11,469 Income tax expense 13,215 3,329 ------ ----- Net income $23,811 $8,140 ======= ====== Basic earnings per common share $0.25 $0.09 ===== ===== Diluted earnings per common share $0.25 $0.09 ===== ===== Basic weighted average common shares 92,153,490 90,927,734 Diluted weighted average common and common equivalent shares 92,153,490 90,958,013 For the Twelve Months Ended December 31, ------------ 2010 2009 ---- ---- Interest income: One-to-four family mortgage loans $529,319 $609,724 Multi-family, commercial real estate and construction mortgage loans 196,541 217,480 Consumer and other loans 10,572 10,882 Mortgage-backed and other securities 109,206 149,655 Repurchase agreements and interest-earning cash accounts 390 448 Federal Home Loan Bank of New York stock 9,271 9,352 ----- ----- Total interest income 855,299 997,541 Interest expense: Deposits 191,015 315,371 Borrowings 230,717 253,401 ------- ------- Total interest expense 421,732 568,772 ------- ------- Net interest income 433,567 428,769 Provision for loan losses 115,000 200,000 Net interest income after provision for loan losses 318,567 228,769 Non-interest income: Customer service fees 51,229 57,887 Other loan fees 3,452 3,918 Gain on sales of securities - 7,426 Other-than-temporary impairment write-down of securities - (5,300) Mortgage banking income, net 6,222 5,567 Income from bank owned life insurance 8,683 8,950 Other 11,602 1,353 ------ ----- Total non-interest income 81,188 79,801 Non-interest expense: General and administrative: Compensation and benefits 141,539 133,318 Occupancy, equipment and systems 65,498 64,685 Federal deposit insurance premiums 25,728 24,300 Federal deposit insurance special assessment - 9,851 Advertising 6,466 5,404 Other 45,687 32,498 ------ ------ Total non-interest expense 284,918 270,056 ------- ------- Income before income tax expense 114,837 38,514 Income tax expense 41,103 10,830 ------ ------ Net income $73,734 $27,684 ======= ======= Basic earnings per common share $0.78 $0.30 ===== ===== Diluted earnings per common share $0.78 $0.30 ===== ===== Basic weighted average common shares 91,776,907 90,593,060 Diluted weighted average common and common equivalent shares 91,776,941 90,602,189 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS ---------------------- (Dollars in Thousands) For the Three Months Ended December 31, --------------------------------------- 2010 ---- Average Average Yield/ Balance Interest Cost ------- -------- ---- (Annualized) Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $11,214,431 $120,679 4.30% Multi-family, commercial real estate and construction 3,079,728 47,372 6.15 Consumer and other loans (1) 317,612 2,597 3.27 ------- ----- Total loans 14,611,771 170,648 4.67 Mortgage-backed and other securities (2) 2,470,933 22,887 3.70 Repurchase agreements and interest-earning cash accounts 245,709 133 0.22 Federal Home Loan Bank stock 158,462 2,855 7.21 ------- ----- Total interest- earning assets 17,486,875 196,523 4.50 ------- Goodwill 185,151 Other non-interest- earning assets 973,942 Total assets $18,645,968 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $2,319,613 2,361 0.41 Money market 366,292 416 0.45 NOW and demand deposit 1,715,423 285 0.07 Liquid certificates of deposit 503,905 356 0.28 ------- --- Total core deposits 4,905,233 3,418 0.28 Certificates of deposit 6,923,070 38,415 2.22 --------- ------ Total deposits 11,828,303 41,833 1.41 Borrowings 5,088,098 53,449 4.20 --------- ------ Total interest- bearing liabilities 16,916,401 95,282 2.25 ------ Non-interest- bearing liabilities 487,265 Total liabilities 17,403,666 Stockholders' equity 1,242,302 --------- Total liabilities and stockholders' equity $18,645,968 =========== Net interest income/ net interest rate spread (3) $101,241 2.25% ======== ==== Net interest-earning assets/net interest margin (4) $570,474 2.32% ======== ==== Ratio of interest- earning assets to interest-bearing liabilities 1.03x ===== For the Three Months Ended December 31, --------------------------------------- 2009 ---- Average Average Yield/ Balance Interest Cost ------- -------- ---- (Annualized) Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $12,082,069 $144,472 4.78% Multi-family, commercial real estate and construction 3,507,603 51,941 5.92 Consumer and other loans (1) 334,514 2,787 3.33 ------- ----- Total loans 15,924,186 199,200 5.00 Mortgage-backed and other securities (2) 3,261,507 33,348 4.09 Repurchase agreements and interest-earning cash accounts 140,917 54 0.15 Federal Home Loan Bank stock 176,841 2,502 5.66 ------- ----- Total interest- earning assets 19,503,451 235,104 4.82 ------- Goodwill 185,151 Other non-interest- earning assets 778,275 Total assets $20,466,877 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $1,986,183 2,025 0.41 Money market 327,318 362 0.44 NOW and demand deposit 1,569,940 259 0.07 Liquid certificates of deposit 756,872 1,018 0.54 ------- ----- Total core deposits 4,640,313 3,664 0.32 Certificates of deposit 8,361,153 63,638 3.04 --------- ------ Total deposits 13,001,466 67,302 2.07 Borrowings 5,830,420 62,847 4.31 --------- ------ Total interest- bearing liabilities 18,831,886 130,149 2.76 ------- Non-interest- bearing liabilities 431,510 Total liabilities 19,263,396 Stockholders' equity 1,203,481 --------- Total liabilities and stockholders' equity $20,466,877 =========== Net interest income/ net interest rate spread (3) $104,955 2.06% ======== ==== Net interest-earning assets/net interest margin (4) $671,565 2.15% ======== ==== Ratio of interest- earning assets to interest-bearing liabilities 1.04x ===== (1) Mortgage loans and consumer and other loans include loans held- for-sale and non-performing loans and exclude the allowance for loan losses. (2) Securities available-for-sale are included at average amortized cost. (3) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities. (4) Net interest margin represents net interest income divided by average interest-earning assets. ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS ---------------------- (Dollars in Thousands) For the Twelve Months Ended December 31, ---------------------------------------- 2010 Average Average Yield/ Balance Interest Cost Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $11,694,736 $529,319 4.53% Multi-family, commercial real estate and construction 3,258,928 196,541 6.03 Consumer and other loans (1) 325,579 10,572 3.25 ------- ------ Total loans 15,279,243 736,432 4.82 Mortgage-backed and other securities (2) 2,790,097 109,206 3.91 Repurchase agreements and interest-earning cash accounts 197,584 390 0.20 Federal Home Loan Bank stock 172,511 9,271 5.37 ------- ----- Total interest- earning assets 18,439,435 855,299 4.64 ------- Goodwill 185,151 Other non-interest- earning assets 902,804 ------- Total assets $19,527,390 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $2,187,047 8,838 0.40 Money market 343,996 1,533 0.45 NOW and demand deposit 1,675,680 1,092 0.07 Liquid certificates of deposit 595,693 2,637 0.44 ------- ----- Total core deposits 4,802,416 14,100 0.29 Certificates of deposit 7,496,429 176,915 2.36 --------- ------- Total deposits 12,298,845 191,015 1.55 Borrowings 5,568,740 230,717 4.14 --------- ------- Total interest- bearing liabilities 17,867,585 421,732 2.36 ------- Non-interest- bearing liabilities 434,347 ------- Total liabilities 18,301,932 Stockholders' equity 1,225,458 --------- Total liabilities and stockholders' equity $19,527,390 =========== Net interest income/ net interest rate spread (3) $433,567 2.28% ======== ==== Net interest- earning assets/net interest margin (4) $571,850 2.35% ======== ==== Ratio of interest- earning assets to interest-bearing liabilities 1.03x ===== For the Twelve Months Ended December 31, ---------------------------------------- 2009 Average Average Yield/ Balance Interest Cost Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $12,166,413 $609,724 5.01% Multi-family, commercial real estate and construction 3,680,486 217,480 5.91 Consumer and other loans (1) 336,545 10,882 3.23 ------- ------ Total loans 16,183,444 838,086 5.18 Mortgage-backed and other securities (2) 3,494,966 149,655 4.28 Repurchase agreements and interest-earning cash accounts 226,689 448 0.20 Federal Home Loan Bank stock 181,472 9,352 5.15 ------- ----- Total interest- earning assets 20,086,571 997,541 4.97 ------- Goodwill 185,151 Other non- interest-earning assets 822,036 ------- Total assets $21,093,758 =========== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $1,928,842 7,806 0.40 Money market 317,168 2,095 0.66 NOW and demand deposit 1,534,131 1,064 0.07 Liquid certificates of deposit 884,436 10,659 1.21 ------- ------ Total core deposits 4,664,577 21,624 0.46 Certificates of deposit 8,728,580 293,747 3.37 --------- ------- Total deposits 13,393,157 315,371 2.35 Borrowings 6,051,655 253,401 4.19 --------- ------- Total interest- bearing liabilities 19,444,812 568,772 2.93 ------- Non-interest- bearing liabilities 451,677 ------- Total liabilities 19,896,489 Stockholders' equity 1,197,269 --------- Total liabilities and stockholders' equity $21,093,758 =========== Net interest income/net interest rate spread (3) $428,769 2.04% ======== ==== Net interest- earning assets/ net interest margin (4) $641,759 2.13% ======== ==== Ratio of interest- earning assets to interest- bearing liabilities 1.03x ===== (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 December 31, ------------ 2010 2009 ---- ---- (Annualized) Selected Returns and Financial Ratios ------------------------------ Return on average stockholders' equity 7.67% 2.71% Return on average tangible stockholders' equity (1) 9.01 3.20 Return on average assets 0.51 0.16 General and administrative expense to average assets 1.50 1.31 Efficiency ratio (2) 57.34 52.09 Net interest rate spread 2.25 2.06 Net interest margin 2.32 2.15 Selected Non-GAAP Returns and Financial Ratios (3) ----------------------------- Non-GAAP return on average stockholders' equity Non-GAAP return on average tangible stockholders' equity (1) Non-GAAP return on average assets Non-GAAP general and administrative expense to average assets Non-GAAP efficiency ratio (2) 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 $19,732 $32,589 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 0.54% 0.82% Capital Ratios (Astoria Federal) ----------------------- Tangible Leverage 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 common stockholders' equity/tangible assets (1) (7) Mortgage loans serviced for others (in thousands) Full time equivalent employees At or For the Twelve Months Ended December 31, ------------ 2010 2009 ---- ---- Selected Returns and Financial Ratios ------------------------------ Return on average stockholders' equity 6.02% 2.31% Return on average tangible stockholders' equity (1) 7.09 2.74 Return on average assets 0.38 0.13 General and administrative expense to average assets 1.46 1.28 Efficiency ratio (2) 55.35 53.10 Net interest rate spread 2.28 2.04 Net interest margin 2.35 2.13 Selected Non-GAAP Returns and Financial Ratios (3) ----------------------------- Non-GAAP return on average stockholders' equity 6.19% 3.22% Non-GAAP return on average tangible stockholders' equity (1) 7.29 3.81 Non-GAAP return on average assets 0.39 0.18 Non-GAAP general and administrative expense to average assets 1.42 1.23 Non-GAAP efficiency ratio (2) 54.31 50.48 Asset Quality Data (dollars in thousands) ------------------------------ Non-performing assets (4) $454,492 $454,792 Non-performing loans (4) 390,710 408,572 Loans delinquent 90 days or more and still accruing interest 845 600 Non-accrual loans 389,865 407,972 Loans 60-89 days delinquent 54,339 76,314 Loans 30-59 days delinquent 165,810 212,894 Net charge-offs 107,550 124,980 Non-performing loans/total loans 2.75% 2.59% Non-performing loans/total assets 2.16 2.02 Non-performing assets/total assets 2.51 2.25 Allowance for loan losses/non- performing loans 51.57 47.49 Allowance for loan losses/non- accrual loans 51.68 47.56 Allowance for loan losses/ total loans 1.42 1.23 Net charge-offs to average loans outstanding 0.70 0.77 Capital Ratios (Astoria Federal) ----------------------- Tangible 7.94% 6.89% Leverage 7.94 6.89 Risk-based 14.60 12.99 Tier 1 risk-based 13.33 11.72 Other Data ---------- Cash dividends paid per common share $0.52 $0.52 Book value per share (5) 13.15 13.03 Tangible book value per share (6) 11.19 11.03 Tangible common stockholders' equity/tangible assets (1) (7) 5.90% 5.10% Mortgage loans serviced for others (in thousands) $1,443,709 $1,379,259 Full time equivalent employees 1,565 1,592 (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 the "Reconciliation of GAAP Measures to Non-GAAP Measures" table included in this release for a reconciliation of GAAP measures to non-GAAP measures for the twelve months ended December 31, 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 December 31, 2010 ----------------- Weighted Average Balance Rate (1) ------- -------- Selected interest-earning assets: Mortgage loans, gross (2): One-to-four family $10,512,746 4.73% Multi-family, commercial real estate and construction 2,931,847 6.03 Mortgage-backed and other securities (3) 2,565,737 3.83 Interest-bearing liabilities: Savings 2,399,333 0.40 Money market 376,302 0.45 NOW and demand deposit 1,774,790 0.06 Liquid certificates of deposit 468,730 0.25 ------- Total core deposits 5,019,155 0.27 Certificates of deposit 6,579,845 2.13 --------- Total deposits 11,599,000 1.33 Borrowings, net 4,869,204 4.14 At September At December 31, 30, 2010 2009 ------------ ---------------- Weighted Weighted Average Average Balance Rate (1) Balance Rate (1) ------- -------- ------- -------- Selected interest- earning assets: Mortgage loans, gross (2): One-to-four family $11,023,120 4.87% $11,565,280 5.22% Multi-family, commercial real estate and construction 3,069,335 6.04 3,375,795 6.03 Mortgage-backed and other securities (3) 2,591,203 4.00 3,178,579 4.04 Interest-bearing liabilities: Savings 2,234,606 0.40 2,041,701 0.40 Money market 349,883 0.45 326,842 0.44 NOW and demand deposit 1,662,000 0.06 1,646,633 0.06 Liquid certificates of deposit 546,626 0.38 711,509 0.50 ------- ------- Total core deposits 4,793,115 0.28 4,726,685 0.30 Certificates of deposit 7,314,171 2.28 8,085,553 2.79 --------- --------- Total deposits 12,107,286 1.49 12,812,238 1.87 Borrowings, net 5,213,111 4.12 5,877,834 4.17 (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 table (non-GAAP measures) provide a meaningful comparison for effectively evaluating Astoria's operating results. For the Twelve Months Ended --------------------------- December 31, 2010 ----------------- Adjustments GAAP (1) Non-GAAP ---- ------------ Net interest income $433,567 $- $433,567 Provision for loan losses 115,000 - 115,000 Net interest income after provision for loan losses 318,567 - 318,567 Non-interest income 81,188 (4,635) 76,553 Non-interest expense (general and administrative expense) 284,918 (7,850) 277,068 Income before income tax expense 114,837 3,215 118,052 Income tax expense 41,103 1,133 42,236 Net income $73,734 $2,082 $75,816 Basic earnings per common share $0.78 $0.02 $0.81 (2) Diluted earnings per common share $0.78 $0.02 $0.81 (2) For the Twelve Months Ended --------------------------- December 31, 2009 ----------------- Adjustments GAAP (3) Non-GAAP ---- ------------ -------- Net interest income $428,769 $- $428,769 Provision for loan losses 200,000 - 200,000 Net interest income after provision for loan losses 228,769 - 228,769 Non-interest income 79,801 6,888 86,689 Non-interest expense (general and administrative expense) 270,056 (9,851) 260,205 Income before income tax expense 38,514 16,739 55,253 Income tax expense 10,830 5,859 16,689 Net income $27,684 $10,880 $38,564 Basic earnings per common share $0.30 $0.12 $0.42 Diluted earnings per common share $0.30 $0.12 $0.42 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 adjustment relates to the $6.2 million goodwill litigation settlement, partially offset by the $1.5 million impairment write-down of premises and equipment, recorded in the 2010 second quarter. Non-interest expense adjustment relates to the McAnaney litigation settlement recorded in the 2010 second quarter. (2) Figures do not cross foot due to rounding. (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. Non-interest expense adjustment relates to the federal deposit insurance special assessment recorded in the 2009 second quarter. ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES One-to-Four Family Residential Loan Portfolio - Geographic Analysis ---------------------------------------------------------- (Dollars in millions) At December 31, 2010 -------------------- Non- Non- Total performing performing State loans loans loans as % of total ----- ----- ---------- loans -------- New York Full Income $2,750.7 $22.9 0.83% Alt A < 70% LTV $231.0 $13.7 5.93% Alt A 70%-80% LTV $67.4 $10.4 15.43% ----- ----- State Total $3,049.1 $47.0 1.54% Illinois Full Income $1,097.4 $19.0 1.73% Alt A < 70% LTV $116.0 $10.1 8.71% Alt A 70%-80% LTV $117.6 $18.9 16.07% ------ ----- State Total $1,331.0 $48.0 3.61% Connecticut Full Income $821.0 $11.4 1.39% Alt A < 70% LTV $115.5 $13.5 11.69% Alt A 70%-80% LTV $50.1 $7.7 15.37% ----- ---- State Total $986.6 $32.6 3.30% California Full Income $563.2 $16.9 3.00% Alt A < 70% LTV $151.3 $9.7 6.41% Alt A 70%-80% LTV $139.6 $17.8 12.75% ------ ----- State Total $854.1 $44.4 5.20% New Jersey Full Income $640.4 $26.2 4.09% Alt A < 70% LTV $86.9 $7.9 9.09% Alt A 70%-80% LTV $83.1 $15.8 19.01% ----- ----- State Total $810.4 $49.9 6.16% Massachusetts Full Income $652.5 $3.9 0.60% Alt A < 70% LTV $67.9 $1.9 2.80% Alt A 70%-80% LTV $30.1 $2.5 8.31% ----- ---- State Total $750.5 $8.3 1.11% Virginia Full Income $522.5 $4.7 0.90% Alt A < 70% LTV $67.8 $3.2 4.72% Alt A 70%-80% LTV $91.7 $8.9 9.71% ----- ---- State Total $682.0 $16.8 2.46% Maryland Full Income $509.9 $17.8 3.49% Alt A < 70% LTV $74.2 $6.6 8.89% Alt A 70%-80% LTV $81.0 $19.2 23.70% ----- ----- State Total $665.1 $43.6 6.56% Washington Full Income $302.7 $0.3 0.10% Alt A < 70% LTV $5.3 $0.0 0.00% Alt A 70%-80% LTV $2.5 $1.2 48.00% ---- ---- State Total $310.5 $1.5 0.48% Florida Full Income $155.9 $14.1 9.04% Alt A < 70% LTV $43.4 $5.4 12.44% Alt A 70%-80% LTV $28.0 $5.8 20.71% ----- ---- State Total $227.3 $25.3 11.13% Other States Full Income $1,067.8 $14.5 1.36% Alt A < 70% LTV $71.3 $4.9 6.87% Alt A 70%-80% LTV $49.4 $5.5 11.13% ----- ---- Other States Total $1,188.5 $24.9 2.10% Total all states Full Income $9,084.0 $151.7 1.67% Alt A < 70% LTV $1,030.6 $76.9 7.46% Alt A 70%-80% LTV $740.5 $113.7 15.35% ------ ------ Grand total $10,855.1 $342.3 3.15% ========= ====== 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/
