Astoria Financial Corporation Announces 21% Increase in First
Quarter EPS to $0.57 Quarterly Cash Dividend of $0.20 Per Common
Share Declared LAKE SUCCESS, N.Y., April 21 /PRNewswire-FirstCall/
-- Astoria Financial Corporation (NYSE:AF) ("Astoria"), the holding
company for Astoria Federal Savings and Loan Association ("Astoria
Federal"), today reported net income increased to $59.5 million, or
$0.57 diluted earnings per share ("EPS"), for the quarter ended
March 31, 2005, up 11% and 21%, respectively, from $53.4 million,
or $0.47 diluted EPS, for the 2004 first quarter. For the 2005
first quarter, annualized returns on average equity, average
tangible equity and average assets increased to 17.42%, 20.15% and
1.02%, respectively, from 15.05%, 17.31% and 0.95%, respectively,
for the comparable 2004 period. First Quarter 2005 Highlights: *
Diluted EPS: $0.57, increased $0.10, or 21%, from comparable period
last year * Net interest margin: 2.24%, increased 10 basis points,
or 5%, from comparable period last year * Return on average equity:
17.42%, increased 16% from comparable period last year * Return on
average tangible equity: 20.15%, increased 16% from comparable
period last year * Return on average assets: 1.02%, increased 7%
from comparable period last year * Total deposits increased $246
million, or 8% annualized -- Core deposits (1) increased $99
million, or 7% annualized -- Cost of core deposits: 44 basis points
* Loan portfolio increased $297 million, or 9% annualized --
Multifamily/Commercial Real Estate ("CRE") loan portfolios
increased $110 million, or 13% annualized, and represent 27% of
total loans -- One-to-Four Family loan portfolio increased $178
million, or 8% annualized * Securities portfolio declined $388
million, or 18% annualized * Borrowings declined $488 million, or
21% annualized * Non-performing assets declined $3.4 million to
$30.1 million, or 0.13% of total assets * Repurchased 1.1 million
common shares (1) Includes savings, money market, checking and
Liquid CD accounts Commenting on the first quarter results, George
L. Engelke, Jr., Chairman, President and Chief Executive Officer of
Astoria, noted, "Our financial performance in the first quarter was
marked by solid increases in earnings, earnings per share and
related returns, reflecting our success in improving the quality of
the balance sheet and earnings through robust growth of retail
deposits and mortgage loans, both core businesses." Board Declares
Quarterly Cash Dividend of $0.20 Per Share The Board of Directors
of the Company, at their April 20, 2005 meeting, declared a
quarterly cash dividend of $0.20 per common share. The dividend is
payable on June 1, 2005 to shareholders of record as of May 16,
2005. This is the fortieth consecutive quarterly cash dividend
declared by the Company. Tenth Stock Repurchase Program Continues
During the first quarter, Astoria repurchased 1.1 million shares of
its common stock at an average cost of $25.53 per share. To date,
under the tenth program that commenced during the 2004 third
quarter, Astoria has repurchased 6.3 million shares of the 12
million shares authorized. First Quarter 2005 Earnings Summary Net
interest income for the quarter ended March 31, 2005 totaled $125.2
million, an increase of 9% from $114.5 million a year ago,
primarily attributable to an increase in interest earning assets
and a decline in the cost of liabilities. Astoria's net interest
margin for the quarter ended March 31, 2005 increased ten basis
points from a year ago to 2.24%, primarily due to a decline in the
cost of liabilities as higher cost borrowings were repriced at
lower rates. On a linked quarter basis, the net interest margin
increased six basis points, due to the benefit derived from two
less days of interest expense in the first quarter compared to the
fourth quarter. Non-interest income for the quarter ended March 31,
2005 totaled $24.7 million compared to $22.1 million for the 2004
first quarter. The improvement is due to increases in customer
service fees of $1.2 million and mortgage banking income, net, of
$4.0 million as described below, partially offset by the absence of
gains on sales of securities in the 2005 first quarter compared to
gains on sales of securities of $2.4 million for the 2004 first
quarter. The components of mortgage banking income, net, which is
included in non- interest income, are detailed below: (Dollars in
millions) 1Q05 1Q04 Loan servicing fees $ 1.3 $ 1.5 Amortization of
MSR* (1.5) (2.0) MSR* valuation adjustments 2.4 (1.3) Net gain on
sale of loans 0.7 0.7 Mortgage banking income, net $ 2.9 $(1.1)
*Mortgage servicing rights General and administrative expense
("G&A") for the quarter ended March 31, 2005 totaled $60.5
million compared to $57.0 million for the comparable 2004 period.
The increase is primarily due to increased advertising expense
related to, among other things, the introduction of a business
deposit marketing campaign and $1.8 million of increased goodwill
litigation expense associated with the commencement of the trial of
the Long Island Bancorp case in January 2005, partially offset by
lower compensation and benefits expense and occupancy, equipment
and systems expense. G&A expenses in future quarters this year
are expected to be somewhat lower due to reduced advertising and
goodwill litigation expense. Balance Sheet Summary Due to the
current flattening yield curve environment and lower spread
availability, as previously announced, we reduced our non-core
business activities during the first quarter of 2005. Total
securities declined $387.6 million, or 18% annualized, to $8.3
billion at March 31, 2005 representing 36% of total assets, of
which $2.2 billion, or 10% of total assets, are categorized as
available-for-sale. Borrowings also declined in the first quarter
by $488.4 million, or 21% annualized, to $9.0 billion at March 31,
2005 representing 39% of total assets. Total assets declined $165.4
million from December 31, 2004 to $23.3 billion at March 31, 2005
while our core lending and deposit businesses grew. Key balance
sheet highlights, reflecting the improvement in the quality of the
Company's balance sheet since December 31, 1999, follow: (Dollars
in millions) 12/31/99 12/31/00 12/31/01 12/31/02 Assets $22,700
$22,341 $22,672 $21,702 Loans $10,286 $11,422 $12,167 $12,059 MBS
& Other Sec. $10,763 $9,415 $8,013 $7,834 Deposits $9,555
$10,072 $10,904 $11,067 Core Deposits (1) $4,625 $4,922 $5,743
$5,914 Borrowings $11,528 $10,324 $9,826 $8,825 Change (Dollars in
millions) 12/31/03 12/31/04 3/31/05 12/31/99- 3/31/05 Assets
$22,462 $23,416 $23,250 +2% Loans $12,687 $13,263 $13,560 +32% MBS
& Other Sec. $8,448 $8,710 $8,322 -23% Deposits $11,187 $12,323
$12,569 +32% Core Deposits (1) $5,685 $5,475 $5,574 +21% Borrowings
$9,632 $9,470 $8,981 -22% (1) Includes savings, money market,
checking and Liquid CD accounts During the 2005 first quarter, the
1-4 family mortgage loan portfolio increased $177.6 million, or 8%
annualized, to $9.2 billion at March 31, 2005. Loan originations
and purchases totaled $726.8 million for the 2005 first quarter
compared to $617.3 million in the year-ago first quarter. 77% of
the 2005 first quarter production consisted of 3/1 and 5/1 hybrid
adjustable rate mortgage loans. During the 2005 first quarter, the
multifamily and CRE loan portfolio increased $110.3 million, or 13%
annualized, to $3.6 billion at March 31, 2005. Originations totaled
$256.6 million for the 2005 first quarter compared to $240.0
million for the comparable 2004 period. The average loan-to-value
ratio of the multifamily and CRE loan portfolio continues to be
less than 65%, based on current principal balance and original
appraised value, and the average loan balance is less than $1
million. At March 31, 2005, non-performing loans declined to $29.7
million, or 0.13%, of total assets from $32.6 million, or 0.14% of
total assets, at December 31, 2004. Net charge-offs for the 2005
first quarter totaled just $28,000, or an annualized rate of less
than one basis point of the average total loans outstanding. The
ratio of the allowance for loan losses to non- performing loans at
March 31, 2005 was 279%. Deposits for the quarter ended March 31,
2005 increased $246.1 million, or 8% on an annualized basis, to
$12.6 billion from $12.3 billion at December 31, 2004. The increase
was due, in part, to an increase in core deposits resulting from
the successful introduction of a Liquid CD account during the
quarter. Total core deposits rose $99.2 million, or 7% annualized,
to $5.6 billion at March 31, 2005. The cost of core deposits was
just 44 basis points, up 8 basis points from the previous quarter.
During the first quarter, we also continued to grow our medium-term
CD deposits at a significant discount to alternative funding
sources that, in addition to contributing to the management of
interest rate risk, permits us to reduce our borrowing levels and
continues to produce new customers from our communities, creating
relationship development opportunities. During the 2005 first
quarter, $1.0 billion of CDs, with an average rate of 3.10% and an
average original maturity of 25 months matured and $1.1 billion of
non-Liquid CDs were issued or repriced at an average rate of 3.00%
and an average maturity of 20 months. Stockholders' equity was $1.4
billion, or 5.88% of total assets at March 31, 2005. Astoria
Federal continues to maintain capital ratios in excess of
regulatory requirements with core, tangible and risk-based capital
ratios of 6.31%, 6.31% and 12.82%, respectively, at March 31, 2005.
Future Outlook Commenting on the outlook for 2005, Mr. Engelke
stated, "We continue to face a challenging operating environment as
a result of rising short term interest rates and a continuing
flattening of the yield curve. Accordingly, we anticipate a
continued shrinkage of the balance sheet with the reduction in
borrowings and securities through normal cash flow, while we
continue to grow deposits and loans, all of which will continue to
improve the quality of the balance sheet and earnings. This
strategy should better position us to take advantage of more
profitable asset growth opportunities when the yield curve
steepens." Astoria Financial Corporation, the holding company for
Astoria Federal Savings and Loan Association, with assets of $23.3
billion is the fifth largest thrift institution in the United
States. Established in 1888, Astoria Federal is the largest thrift
depository headquartered in New York with deposits of $12.6 billion
and embraces its philosophy of Putting people first by providing
the customers and local communities it serves with quality
financial products and services through 86 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 39 individual
states. Astoria Federal originates mortgage loans through its
banking offices and loan production offices in New York, an
extensive broker network in twenty-three states, primarily the East
Coast and the District of Columbia, and through correspondent
relationships in forty-four states and the District of Columbia.
Earnings Conference Call April 21, 2005 at 3:30 p.m. (ET) The
Company, as previously announced, indicated that Mr. Engelke will
host an earnings conference call Thursday afternoon, April 21, 2005
at 3:30 p.m. (ET). The toll-free dial-in number is (800) 269-6183.
A replay will be available on April 21, 2005 from 7:00 p.m. (ET)
through April 29, 2005, 11:59 p.m. (ET). The replay number is (888)
203-1112, passcode: 3750147. 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 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 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. ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands,
Except Share Data) At At March 31, December 31, 2005 2004 ASSETS
Cash and due from banks $120,110 $138,809 Repurchase agreements
219,500 267,578 Mortgage-backed and other securities
available-for-sale 2,241,648 2,406,883 Mortgage-backed and other
securities held-to-maturity (fair value of $6,000,015 and
$6,306,760, respectively) 6,080,565 6,302,936 Federal Home Loan
Bank of New York stock, at cost 124,300 163,700 Loans
held-for-sale, net 32,549 23,802 Loans receivable: Mortgage loans,
net 13,039,149 12,746,134 Consumer and other loans, net 521,327
517,145 13,560,476 13,263,279 Allowance for loan losses (82,730)
(82,758) Total loans receivable, net 13,477,746 13,180,521 Mortgage
servicing rights, net 18,535 16,799 Accrued interest receivable
80,291 79,144 Premises and equipment, net 155,402 157,107 Goodwill
185,151 185,151 Bank owned life insurance 378,894 374,719 Other
assets 135,732 118,720 TOTAL ASSETS $23,250,423 $23,415,869
LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits
$12,569,369 $12,323,257 Reverse repurchase agreements 7,580,000
7,080,000 Federal Home Loan Bank of New York advances 944,000
1,934,000 Other borrowings, net 457,441 455,835 Mortgage escrow
funds 168,991 122,088 Accrued expenses and other liabilities
164,120 130,925 TOTAL LIABILITIES 21,883,921 22,046,105
Stockholders' equity: Preferred stock, $1.00 par value; 5,000,000
shares authorized: Series A (1,800,000 shares authorized and - 0 -
shares issued and outstanding) - - Series B (2,000,000 shares
authorized and - 0 - shares issued and outstanding) - - Common
stock, $.01 par value; (200,000,000 shares authorized; 166,494,888
shares issued; and 109,465,965 and 110,304,669 shares outstanding,
respectively) 1,665 1,665 Additional paid-in capital 815,153
811,777 Retained earnings 1,661,275 1,623,571 Treasury stock
(57,028,923 and 56,190,219 shares, at cost, respectively)
(1,037,160) (1,013,726) Accumulated other comprehensive loss
(49,897) (28,592) Unallocated common stock held by ESOP (6,696,140
and 6,802,146 shares, respectively) (24,534) (24,931) TOTAL
STOCKHOLDERS' EQUITY 1,366,502 1,369,764 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $23,250,423 $23,415,869 ASTORIA FINANCIAL
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In
Thousands, Except Share Data) For the Three Months Ended March 31,
2005 2004 Interest income: Mortgage loans: One-to-four family
$111,582 $111,350 Multi-family, commercial real estate and
construction 58,196 53,631 Consumer and other loans 6,781 4,890
Mortgage-backed and other securities 93,922 90,131 Federal funds
sold and repurchase agreements 1,449 154 Federal Home Loan Bank of
New York stock 1,173 938 Total interest income 273,103 261,094
Interest expense: Deposits 64,960 54,230 Borrowed funds 82,930
92,351 Total interest expense 147,890 146,581 Net interest income
125,213 114,513 Provision for loan losses - - Net interest income
after provision for loan losses 125,213 114,513 Non-interest
income: Customer service fees 14,946 13,749 Other loan fees 1,164
1,262 Net gain on sales of securities - 2,372 Mortgage banking
income (loss), net 2,946 (1,118) Income from bank owned life
insurance 4,175 4,450 Other 1,511 1,424 Total non-interest income
24,742 22,139 Non-interest expense: General and administrative:
Compensation and benefits 30,790 31,464 Occupancy, equipment and
systems 16,025 16,717 Federal deposit insurance premiums 448 449
Advertising 3,905 1,709 Other 9,344 6,704 Total non-interest
expense 60,512 57,043 Income before income tax expense 89,443
79,609 Income tax expense 29,964 26,196 Net income $59,479 $53,413
Basic earnings per common share $0.58 $0.48 Diluted earnings per
common share $0.57 $0.47 Basic weighted average common shares
103,160,491 110,874,674 Diluted weighted average common and common
equivalent shares 104,957,469 113,014,577 ASTORIA FINANCIAL
CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL RATIOS AND OTHER
DATA At or For the Three Months Ended March 31, 2005 2004 Selected
Returns and Financial Ratios (annualized) Return on average
stockholders' equity 17.42 % 15.05 % Return on average tangible
stockholders' equity (1) 20.15 17.31 Return on average assets 1.02
0.95 General and administrative expense to average assets 1.03 1.02
Efficiency ratio (2) 40.35 41.74 Net interest rate spread (3) 2.16
2.05 Net interest margin (4) 2.24 2.14 Asset Quality Data (dollars
in thousands) Non-performing loans/total loans 0.22 % 0.19 %
Non-performing loans/total assets 0.13 0.11 Non-performing
assets/total assets 0.13 0.12 Allowance for loan losses/
non-performing loans 278.74 337.27 Allowance for loan losses/
non-accrual loans 301.21 342.79 Allowance for loan losses/total
loans 0.61 0.65 Net charge-offs to average loans outstanding
(annualized) 0.00 0.00 Non-performing assets $30,132 $26,470
Non-performing loans 29,680 24,599 Loans 90 days past maturity but
still accruing interest 2,214 396 Non-accrual loans 27,466 24,203
Net charge-offs 28 155 Capital Ratios (Astoria Federal) Tangible
6.31 % 7.19 % Core 6.31 7.19 Risk-based 12.82 14.98 Other Data Cash
dividends paid per common share $0.20 $0.16 Dividend payout ratio
35.09 % 34.04 % Book value per common share (5) $13.30 $13.07
Tangible book value per common share (6) 11.50 11.39 Average
equity/average assets 5.83 % 6.33 % Mortgage loans serviced for
others (in thousands) $1,644,742 $1,821,561 Full time equivalent
employees 1,863 1,951 (1) Average tangible stockholders' equity
represents average stockholders' equity less average goodwill. (2)
The efficiency ratio represents general and administrative expense
divided by the sum of net interest income plus non-interest income.
(3) Net interest rate spread represents the difference between the
average yield on average interest-earning assets and the average
cost of average interest-bearing liabilities. (4) Net interest
margin represents net interest income divided by average
interest-earning assets. (5) Book value per common share represents
common stockholders' equity divided by outstanding common shares,
excluding unallocated Employee Stock Ownership Plan, or ESOP,
shares. (6) Tangible book value per common share represents common
stockholders' equity less goodwill divided by outstanding common
shares, excluding unallocated ESOP shares. ASTORIA FINANCIAL
CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS (Dollars in
Thousands) For the Three Months Ended March 31, 2005 Average
Average Yield/ Balance Interest Cost (Annualized) Assets:
Interest-earning assets: Mortgage loans (1): One-to-four family
$9,270,153 $111,582 4.81 % Multi-family, commercial real estate and
construction 3,680,918 58,196 6.32 Consumer and other loans (1)
522,515 6,781 5.19 Total loans 13,473,586 176,559 5.24
Mortgage-backed and other securities (2) 8,524,571 93,922 4.41
Federal funds sold and repurchase agreements 243,598 1,449 2.38
Federal Home Loan Bank stock 142,347 1,173 3.30 Total
interest-earning assets 22,384,102 273,103 4.88 Goodwill 185,151
Other non-interest-earning assets 863,209 Total assets $23,432,462
Liabilities and stockholders' equity: Interest-bearing liabilities:
Savings $2,870,120 2,842 0.40 Money market 915,147 1,922 0.84 NOW
and demand deposit 1,560,087 230 0.06 Liquid certificates of
deposit 176,275 1,073 2.43 Certificates of deposit 6,933,248 58,893
3.40 Total deposits 12,454,877 64,960 2.09 Borrowed funds 9,279,580
82,930 3.57 Total interest-bearing liabilities 21,734,457 147,890
2.72 Non-interest-bearing liabilities 331,872 Total liabilities
22,066,329 Stockholders' equity 1,366,133 Total liabilities and
stockholders' equity $23,432,462 Net interest income/net interest
rate spread $125,213 2.16 % Net interest-earning assets/net
interest margin $649,645 2.24 % Ratio of interest-earning assets to
interest-bearing liabilities 1.03x For the Three Months Ended March
31, 2004 Average Average Yield/ Balance Interest Cost (Annualized)
Assets: Interest-earning assets: Mortgage loans (1): One-to-four
family $9,041,043 $111,350 4.93 % Multi-family, commercial real
estate and construction 3,253,227 53,631 6.59 Consumer and other
loans (1) 450,098 4,890 4.35 Total loans 12,744,368 169,871 5.33
Mortgage-backed and other securities (2) 8,365,022 90,131 4.31
Federal funds sold and repurchase agreements 64,895 154 0.95
Federal Home Loan Bank stock 227,810 938 1.65 Total
interest-earning assets 21,402,095 261,094 4.88 Goodwill 185,151
Other non-interest-earning assets 854,561 Total assets $22,441,807
Liabilities and stockholders' equity: Interest-bearing liabilities:
Savings $2,960,199 2,945 0.40 Money market 1,188,176 1,608 0.54 NOW
and demand deposit 1,466,733 221 0.06 Liquid certificates of
deposit - - - Certificates of deposit 5,644,019 49,456 3.51 Total
deposits 11,259,127 54,230 1.93 Borrowed funds 9,472,213 92,351
3.90 Total interest-bearing liabilities 20,731,340 146,581 2.83
Non-interest-bearing liabilities 290,865 Total liabilities
21,022,205 Stockholders' equity 1,419,602 Total liabilities and
stockholders' equity $22,441,807 Net interest income/net interest
rate spread $114,513 2.05 % Net interest-earning assets/net
interest margin $670,755 2.14 % Ratio of interest-earning assets to
interest-bearing liabilities 1.03x (1) Mortgage 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 reported at average amortized cost.
DATASOURCE: Astoria Financial Corporation CONTACT: Peter J.
Cunningham, First Vice President, Investor Relations,
+1-516-327-7877, Web site: http://ir.astoriafederal.com/
http://www.astoriafederal.com/ Company News On-Call:
http://www.prnewswire.com/comp/104529.html
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