Quarterly Cash Dividend of $0.26 Per Common Share Declared LAKE
SUCCESS, N.Y., Jan. 23 /PRNewswire-FirstCall/ -- Astoria Financial
Corporation (NYSE:AF) ("Astoria," the "Company"), the holding
company for Astoria Federal Savings and Loan Association ("Astoria
Federal"), today reported net income of $19.7 million (operating
income of $33.0 million), or $0.22 diluted earnings per share
("EPS") (operating EPS of $0.36), for the quarter ended December
31, 2007, compared to $37.1 million, or $0.39 EPS, for the 2006
fourth quarter. For the year ended December 31, 2007, net income
totaled $124.8 million (operating income of $138.1 million), or
$1.36 EPS (operating EPS of $1.50), compared to $174.9 million
(operating income of $178.6 million), or $1.80 EPS (operating EPS
of $1.84), for the year ended December 31, 2006. Included in the
fourth quarter and full year 2007 results is an other-
than-temporary impairment, after-tax, non-cash charge of $13.3
million, or $0.15 EPS and $0.14 EPS, respectively, relating to
Freddie Mac preferred stock, as reported in the Company's press
release dated January 17, 2008. Operating income and operating EPS,
representing net income and EPS determined in accordance with
generally accepted accounting principles ("GAAP") excluding the
effects of the after-tax, non-cash charge noted above and a $3.7
million, after-tax, charge for the termination of our interest rate
swap agreements in the 2006 first quarter, provide a meaningful
comparison for effectively evaluating Astoria's operating results.
For a reconciliation of operating income and operating EPS to GAAP
net income and EPS, please refer to the tables titled
Reconciliation of GAAP net income to non-GAAP earnings. Commenting
on the quarter and full year results, George L. Engelke, Jr.,
Chairman and Chief Executive Officer of Astoria, noted, "The 2007
fourth quarter and full year operating results were in line with
our expectations and continued to reflect the negative impact of a
flat-to-inverted yield curve that persisted through the summer.
Subsequently, four interest rate reductions by the Federal Reserve
beginning in September, totaling 175 basis points, have produced a
positively sloped yield curve and a more favorable interest rate
environment for us going forward." Board Declares Quarterly Cash
Dividend of $0.26 Per Share The Board of Directors of the Company,
at their January 23, 2008 meeting, declared a quarterly cash
dividend of $0.26 per common share. The dividend is payable on
March 3, 2008 to shareholders of record as of February 15, 2008.
This represents the fifty-first consecutive quarterly cash dividend
declared by the Company. Twelfth Stock Repurchase Program Continues
During the 2007 fourth quarter, Astoria repurchased 505,000 shares
of its common stock at an average cost of $25.12 per share. For the
year ended December 31, 2007, Astoria repurchased a total of 3.0
million shares, completing its eleventh stock repurchase program
and commencing its twelfth stock repurchase program in the 2007
third quarter. Under the current stock repurchase program, 8.9
million shares remain available for repurchase as of January 1,
2008. Board Sets Annual Shareholders' Meeting Date The Board of
Directors, at their January 23, 2008 meeting, established May 21,
2008 as the date for the Astoria Annual Meeting of Shareholders,
with a voting record date of March 26, 2008. Supervisory Goodwill
Litigation Update In the case of the Long Island Savings Bank
goodwill claim for breach of contract, the U.S. Court of Appeals
for the Federal Circuit, on December 28, 2007, denied both
Astoria's petition for a panel rehearing and a rehearing en banc
and upheld the Court's most recent opinion which reversed an
Astoria award of $435.8 million. Management is carefully reviewing
its options with respect to any further legal action that may be
taken in this matter. In the case of the Fidelity New York goodwill
claim, on January 8, 2008, the U.S. Court of Federal Claims awarded
Astoria $16.0 million in damages from the U.S. government for
breach of contract. Management is carefully reviewing the decision
and anticipates that the U.S. government, given its practice in
similar cases, may file an appeal. If so, no assurance can be given
as to the timing, content or ultimate outcome of the appeal. Fourth
Quarter and Full Year Earnings Summary Net interest income, before
the provision for loan losses, for the quarter ended December 31,
2007 increased to $81.9 million from $81.2 million for the 2007
third quarter, and declined from $86.9 million for the 2006 fourth
quarter. For the year ended December 31, 2007, net interest income,
before provision for loan losses, totaled $333.5 million compared
to $390.4 million for the year ended December 31, 2006. Astoria's
net interest margin for the quarter ended December 31, 2007 was
1.57% compared to 1.58% for the 2007 third quarter and 1.69% for
the quarter ended December 31, 2006. For the year ended December
31, 2007, the net interest margin was 1.62% compared to 1.87% for
the year ended December 31, 2006. The year-over-year quarter and
full year decreases are due to the cost of interest-bearing
liabilities rising more rapidly than the yield on interest-earning
assets. Commenting on the net interest margin, Mr. Engelke noted,
"The margin for the 2007 fourth quarter, in line with our
expectations, represents an inflection point, with gradual
improvement expected throughout 2008." Non-interest income for the
quarter ended December 31, 2007 totaled $2.1 million, including the
previously announced other-than-temporary impairment non-cash
pre-tax charge of $20.5 million, compared to $23.9 million for the
comparable 2006 period. The decrease is primarily due to the
impairment charge noted above and a decrease of $1.7 million in
mortgage banking income, net, as detailed below. For the year ended
December 31, 2007, non interest income totaled $75.8 million,
including the aforementioned non-cash charge, compared to $91.4
million for 2006, including the $5.5 million pre-tax charge for the
termination of interest rate swap agreements as noted earlier. The
components of mortgage banking (loss) income, net, which is
included in non-interest income, are detailed below: (Dollars in
millions) 4Q07 4Q06 FY 2007 FY 2006 Loan servicing fees $1.0 $1.0
$4.1 $4.4 Amortization of MSR* (0.9) (0.9) (3.5) (3.7) MSR*
valuation adjustments (1.2) 0.5 (1.0) 2.0 Net gain on sale of loans
0.4 0.4 1.7 2.1 Mortgage banking (loss) income, net $(0.7) $1.0
$1.3 $4.8 * Mortgage servicing rights General and administrative
expense ("G&A") for the quarter ended December 31, 2007
increased $2.4 million, to $58.9 million from $56.5 million for the
2007 third quarter, and $1.9 million from $57.0 million for the
2006 fourth quarter. The linked quarter and year-over-year quarter
increases are primarily due to increased compensation and benefits
expense, including increased ESOP expense, and goodwill litigation
expense partially offset by lower advertising expense. For the full
year 2007, G&A increased $9.5 million to $231.3 million from
$221.8 million for the full year 2006. The increase was primarily
due to increases in compensation and benefits expense and goodwill
litigation expense, partially offset by lower advertising expense.
Income tax expense for the quarter ended December 31, 2007
decreased $13.2 million from the 2006 fourth quarter to $3.5
million due primarily to lower net income resulting from the
non-cash pre-tax impairment charge of $20.5 million incurred in the
2007 fourth quarter. It is expected that the effective tax rate for
2008 should return to a more normal level of approximately 31%.
Balance Sheet Summary For the 2007 fourth quarter, the loan
portfolio increased $201.7 million from the prior quarter, or 5% on
an annualized basis, to $16.2 billion at December 31, 2007.
Mortgage loan originations and purchases totaled $882.1 million for
the quarter ended December 31, 2007 compared to $1.1 billion for
the 2006 fourth quarter. For the year ended December 31, 2007, the
loan portfolio increased $1.2 billion, or 8%, and mortgage loan
originations and purchases totaled $4.2 billion compared to $3.4
billion for 2006. For the 2007 fourth quarter, the one-to-four
family mortgage loan portfolio increased $278.6 million from the
prior quarter, or 10% annualized, to $11.6 billion at December 31,
2007. One-to-four family loan originations and purchases totaled
$816.1 million for the 2007 fourth quarter compared to $948.7
million for the 2006 fourth quarter. Of the 2007 fourth quarter
one- to-four family loan production for portfolio, 71% consisted of
3/1 and 5/1 hybrid adjustable rate mortgage loans. For the year
ended December 31, 2007, the one-to-four family mortgage loan
portfolio increased $1.4 billion, or 14%. Loan originations and
purchases totaled $3.8 billion for 2007 compared to $2.7 billion
for 2006. The loan-to- value ratio of the 2007 one-to-four family
loan production for portfolio averaged 65% at origination and the
loan amount averaged approximately $550,000. Of the 2007 production
for portfolio, 78% consisted of 3/1 and 5/1 hybrid adjustable rate
mortgage loans. For the quarter ended December 31, 2007, the
multi-family and commercial real estate ("CRE") loan portfolio
decreased $56.0 million from the prior quarter, primarily due to
lower loan originations which totaled $66.0 million compared to
$105.0 million for the 2006 fourth quarter. At December 31, 2007,
the combined multi-family and CRE loan portfolio totaled $4.0
billion, or 25% of total loans. For the year ended December 31,
2007, the multi-family and CRE loan portfolio decreased $110.4
million primarily due to lower loan originations which totaled
$410.4 million compared to $664.4 million for the comparable 2006
period. The loan-to-value ratio of the 2007 multi-family/CRE loan
production averaged 65% at origination and the loan amount averaged
approximately $1.3 million. Asset Quality For the quarter ended
December 31, 2007, non-performing loans increased $24.0 million
from the previous quarter to $106.3 million, or 0.49% of total
assets, primarily due to an increase in one-to-four family
non-performing loans. Loans that have missed only two payments and
are currently included in non-performing loans totaled $38.3
million at December 31, 2007, an increase of $14.2 million from the
previous quarter and represent 59% of the total increase in
non-performing loans in the 2007 fourth quarter. At December 31,
2007, one-to-four family non-performing loans totaled $89.4 million
and multi- family non-performing loans totaled $14.2 million. Mr.
Engelke noted, "While we have never actively participated in
high-risk residential mortgage lending, as a geographically
diversified lender, we are not immune to some negative consequences
arising from overall economic weakness and, in particular, a sharp
downturn in the housing industry nationally. Accordingly, although
our total loan delinquencies remained stable on a linked quarter
basis, our non- performing loans increased as noted above;
therefore, we anticipate that our non-performing loans and credit
costs could increase somewhat during 2008, but our asset quality
should remain strong as we maintain conservative underwriting
standards." Net loan charge-offs for the quarter ended December 31,
2007 totaled $1.3 million compared to $1.6 million for the previous
quarter and net recoveries of $12,000 for the 2006 fourth quarter.
For the year ended December 31, 2007, net loan charge-offs totaled
$3.5 million, or just two basis points of average loans, compared
to $1.2 million, or one basis point of average loans, for the year
ended December 31, 2006. For the quarter ended December 31, 2007,
Astoria recorded a $2.0 million provision for loan losses, up from
$500,000 recorded in the previous quarter. For the year ended
December 31, 2007, provision for loan losses totaled $2.5 million
compared to no provision in 2006. For the quarter and year ended
December 31, 2007, deposits decreased $216.6 million and $174.6
million, respectively, to $13.0 billion. "During the fourth
quarter, retail deposit pricing remained very competitive even as
short-term market interest rates declined. As a result of our
efforts to maintain deposit pricing discipline, we have taken
advantage of lower cost borrowings for funding some of our loan
growth during this quarter," Mr. Engelke noted. For the quarter and
year ended December 31, 2007, securities decreased $197.7 million
and $968.8 million, respectively, to $4.4 billion, or 20% of total
assets at December 31, 2007. For the quarter and year ended
December 31, 2007, borrowings increased $255.2 million and $348.7
million, respectively, to $7.2 billion, or 33% of total assets at
December 31, 2007. Total assets were essentially unchanged from the
previous quarter and increased $164.8 million from December 31,
2006 to $21.7 billion at December 31, 2007. Key balance sheet
highlights, reflecting the improvement in the quality of the
Company's balance sheet since December 31, 1999, follow: ($ in
millions) Cumu- lative 12/31/99 12/31/01 12/31/03 12/31/05 12/31/06
12/31/07 % Change Assets $22,700 $22,672 $22,462 $22,380 $21,555
$21,719 (4%) Loans $10,286 $12,167 $12,687 $14,392 $14,972 $16,155
+ 57% Securities $10,763 $8,013 $8,448 $6,572 $5,340 $4,371 (59%)
Deposits $9,555 $10,904 $11,187 $12,810 $13,224 $13,049 + 37%
Borrowings $11,528 $9,826 $9,632 $7,938 $6,836 $7,185 (38%) The
following table illustrates this improvement on an outstanding per
share basis: Amount 12/31/ 12/31/ 12/31/ 12/31/ 12/31/ 12/31/ % per
share 99 01 03 05 06 07 Change CAGR Loans $66.28 $89.36 $107.51
$137.11 $152.44 $168.76 155% 12% Deposits $61.57 $80.09 $94.80
$122.04 $134.65 $136.32 121% 10% Stockholders' equity was $1.2
billion, or 5.58% of total assets at December 31, 2007. Astoria
Federal continues to maintain capital ratios in excess of
regulatory requirements with core, tangible and risk-based capital
ratios of 6.58%, 6.58% and 12.04%, respectively, at December 31,
2007. Future Outlook Commenting on the outlook for 2008, Mr.
Engelke stated, "The decrease in short-term interest rates by the
Federal Reserve has produced a more positively sloped yield curve
and a more favorable interest rate environment for us going
forward. We anticipate the yield curve will remain positively
sloped and steepen further in 2008 which should result in improved
opportunities for earnings growth and an expansion of our net
interest margin. Our focus going forward will be to continue to
capitalize on residential mortgage market opportunities that result
in improved loan volumes and mortgage spreads. Loan growth may be
tempered somewhat as we have reduced the number of states in which
we will originate residential loans due to the advanced economic
declines in those markets. This is evidenced by the loan pipeline
at December 31, 2007 which, at $1.1 billion, is $221.4 million
lower than the loan pipeline at September 30, 2007. Deposit growth
will remain a focus; however, in the near term, if competitive
pricing continues, we will fund some of our loan growth with lower
cost borrowings. We expect to continue to maintain the Company's
tangible capital levels between 4.50% and 4.75%." Astoria Financial
Corporation, with assets of $21.7 billion, is the holding company
for Astoria Federal Savings and Loan Association. Established in
1888, Astoria Federal, with deposits in New York totaling $13.0
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 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 38 individual
states. Astoria Federal originates mortgage loans through its
banking offices and loan production offices in New York, an
extensive broker network covering twenty-two states, primarily the
East Coast, and the District of Columbia, and through correspondent
relationships covering twenty-nine states and the District of
Columbia. Earnings Conference Call January 24, 2008 at 10:00 a.m.
(ET) The Company, as previously announced, indicated that Mr.
Engelke will host an earnings conference call Thursday morning,
January 24, 2008 at 10:00 a.m. (ET). The toll-free dial-in number
is (888) 562-3356, conference ID #28876927. A telephone replay will
be available on January 24, 2008 from 1:00 p.m. (ET) through
Friday, February 1, 2008. The replay number is (800) 642-1687, ID #
28876927. 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.
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION (In Thousands, Except Share Data)
At At December 31, December 31, 2007 2006 ASSETS Cash and due from
banks $93,972 $134,016 Repurchase agreements 24,218 71,694
Securities available-for-sale 1,313,306 1,560,325 Securities
held-to-maturity (fair value of $3,013,014 and $3,681,514,
respectively) 3,057,544 3,779,356 Federal Home Loan Bank of New
York stock, at cost 201,490 153,640 Loans held-for-sale, net 6,306
16,542 Loans receivable: Mortgage loans, net 15,791,962 14,532,503
Consumer and other loans, net 363,052 439,188 16,155,014 14,971,691
Allowance for loan losses (78,946) (79,942) Total loans receivable,
net 16,076,068 14,891,749 Mortgage servicing rights, net 12,910
15,944 Accrued interest receivable 79,132 78,761 Premises and
equipment, net 139,563 145,231 Goodwill 185,151 185,151 Bank owned
life insurance 398,280 385,952 Other assets 131,428 136,158 TOTAL
ASSETS $21,719,368 $21,554,519 LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: Deposits $13,049,438 $13,224,024 Reverse repurchase
agreements 3,730,000 4,480,000 Federal Home Loan Bank of New York
advances 3,058,000 1,940,000 Other borrowings, net 396,658 416,002
Mortgage escrow funds 129,412 132,080 Accrued expenses and other
liabilities 144,516 146,659 TOTAL LIABILITIES 20,508,024 20,338,765
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 95,728,562, and 98,211,827 shares outstanding,
respectively) 1,665 1,665 Additional paid-in capital 846,227
828,940 Retained earnings 1,883,902 1,856,528 Treasury stock
(70,766,326 and 68,283,061 shares, at cost, respectively)
(1,459,865) (1,390,495) Accumulated other comprehensive loss
(39,476) (58,330) Unallocated common stock held by ESOP (5,761,391
and 6,155,918 shares, respectively) (21,109) (22,554) TOTAL
STOCKHOLDERS' EQUITY 1,211,344 1,215,754 TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $21,719,368 $21,554,519 ASTORIA FINANCIAL
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In
Thousands, Except Share Data) For the Three Months For the Twelve
Months Ended Ended December 31, December 31, 2007 2006 2007 2006
Interest income: Mortgage loans: One-to-four family $159,134
$131,879 $587,863 $510,105 Multi-family, commercial real estate and
construction 62,376 67,064 254,536 259,242 Consumer and other loans
6,700 8,817 30,178 35,735 Mortgage-backed and other securities
50,913 62,162 219,040 267,535 Federal funds sold and repurchase
agreements 259 1,205 2,071 6,410 Federal Home Loan Bank of New York
stock 3,388 2,252 11,634 7,787 Total interest income 282,770
273,379 1,105,322 1,086,814 Interest expense: Deposits 114,635
109,413 456,039 384,770 Borrowings 86,202 77,110 315,755 311,659
Total interest expense 200,837 186,523 771,794 696,429 Net interest
income 81,933 86,856 333,528 390,385 Provision for loan losses
2,000 - 2,500 - Net interest income after provision for loan losses
79,933 86,856 331,028 390,385 Non-interest income: Customer service
fees 15,713 15,615 62,961 64,823 Other loan fees 1,258 1,303 4,739
4,058 Net gain on sales of securities 216 - 2,208 -
Other-than-temporary impairment write-down of securities (20,484) -
(20,484) - Mortgage banking (loss) income, net (661) 1,035 1,334
4,845 Income from bank owned life insurance 4,381 4,066 17,109
16,129 Other 1,685 1,843 7,923 1,495 Total non-interest income
2,108 23,862 75,790 91,350 Non-interest expense: General and
administrative: Compensation and benefits 32,279 29,985 124,036
116,408 Occupancy, equipment and systems 16,580 16,825 65,754
66,034 Federal deposit insurance premiums 393 409 1,595 1,672
Advertising 1,281 2,079 6,563 7,747 Other 8,369 7,662 33,325 29,942
Total non-interest expense 58,902 56,960 231,273 221,803 Income
before income tax expense 23,139 53,758 175,545 259,932 Income tax
expense 3,466 16,652 50,723 85,035 Net income $19,673 $37,106
$124,822 $174,897 Basic earnings per common share $0.22 $0.40 $1.38
$1.85 Diluted earnings per common share $0.22 $0.39 $1.36 $1.80
Basic weighted average common shares 89,680,349 92,354,297
90,490,118 94,754,732 Diluted weighted average common and common
equivalent shares 91,117,693 94,735,740 92,092,725 97,280,150
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL
RATIOS AND OTHER DATA For the At or For the Three Months Ended
Twelve Months Ended December 31, December 31, 2007 2006 2007 2006
(Annualized) Selected Returns and Financial Ratios Return on
average stockholders' equity 6.55% 11.99% 10.39% 13.73% Return on
average tangible stockholders' equity (1) 7.74 14.09 12.28 16.06
Return on average assets 0.36 0.69 0.58 0.80 General and
administrative expense to average assets 1.08 1.06 1.07 1.01
Efficiency ratio (2) 70.09 51.45 56.50 46.04 Net interest rate
spread (3) 1.45 1.57 1.50 1.76 Net interest margin (4) 1.57 1.69
1.62 1.87 Selected Non-GAAP Returns and Financial Ratios (5)
Non-GAAP return on average stockholders' equity 10.98% 11.99%
11.50% 14.01% Non-GAAP return on average tangible stockholders'
equity (1) 12.98 14.09 13.59 16.40 Non-GAAP return on average
assets 0.61 0.69 0.64 0.82 Non-GAAP efficiency ratio (2) 56.35
51.45 53.81 45.53 Asset Quality Data (dollars in thousands)
Non-performing loans/total loans 0.66% 0.40% Non-performing
loans/total assets 0.49 0.28 Non-performing assets/ total assets
0.53 0.28 Allowance for loan losses/ non-performing loans 74.25
134.55 Allowance for loan losses/ non-accrual loans 74.58 135.66
Allowance for loan losses/ total loans 0.49 0.53 Net charge-offs to
average loans outstanding 0.03% 0.00% 0.02 0.01 Non-performing
assets $115,443 $60,043 Non-performing loans 106,328 59,416 Loans
90 days past maturity but still accruing interest 474 488
Non-accrual loans (6) 105,854 58,928 Net charge-offs $1,308 $(12)
3,496 1,217 Capital Ratios (Astoria Federal) Tangible 6.58% 6.61%
Core 6.58 6.61 Risk-based 12.04 12.25 Other Data Cash dividends
paid per common share $0.26 $0.24 $1.04 $0.96 Dividend payout ratio
118.18% 61.54% 76.47% 53.33% Book value per share (7) $13.46 $13.21
Tangible book value per share (8) $11.41 $11.20 Tangible
stockholders' equity/tangible assets (1) (9) 4.77% 4.82% Mortgage
loans serviced for others (in thousands) $1,272,220 $1,363,591 Full
time equivalent employees 1,615 1,626 (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) 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) The information presented for the
three and twelve months ended December 31, 2007 and the twelve
months ended December 31, 2006 represents pro forma calculations
which are not in conformity with U.S. generally accepted accounting
principles, or GAAP. The 2007 information excludes the $13.3
million, after tax, ($20.5 million, before tax),
other-than-temporary impairment write-down of securities charge
recorded in the 2007 fourth quarter. The 2006 information excludes
the $3.7 million, after tax, ($5.5 million, before tax), charge for
the termination of our interest rate swap agreements recorded in
the 2006 first quarter. See page 14 for a reconciliation of GAAP
net income to non-GAAP earnings for the three and twelve months
ended December 31, 2007 and the twelve months ended December 31,
2006. (6) Non-accrual loans include $38.3 million at December 31,
2007 and $17.3 million at December 31, 2006 of loans which have
only missed two payments. (7) Book value per share represents
stockholders' equity divided by outstanding shares, excluding
unallocated Employee Stock Ownership Plan, or ESOP, shares. (8)
Tangible book value per share represents stockholders' equity less
goodwill divided by outstanding shares, excluding unallocated ESOP
shares. (9) Tangible assets represent assets less goodwill. ASTORIA
FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS
(Dollars in Thousands) For the Three Months Ended December 31, 2007
Average Average Yield/ Balance Interest Cost (Annualized) Assets:
Interest-earning assets: Mortgage loans (1): One-to-four family
$11,660,354 $159,134 5.46% Multi-family, commercial real estate and
construction 4,106,141 62,376 6.08 Consumer and other loans (1)
369,314 6,700 7.26 Total loans 16,135,809 228,210 5.66
Mortgage-backed and other securities (2) 4,506,034 50,913 4.52
Repurchase agreements 22,229 259 4.66 Federal Home Loan Bank stock
199,389 3,388 6.80 Total interest-earning assets 20,863,461 282,770
5.42 Goodwill 185,151 Other non-interest-earning assets 744,171
Total assets $21,792,783 Liabilities and stockholders' equity:
Interest-bearing liabilities: Savings $1,914,907 1,949 0.41 Money
market 340,611 847 0.99 NOW and demand deposit 1,448,161 312 0.09
Liquid certificates of deposit 1,444,935 16,074 4.45 Total core
deposits 5,148,614 19,182 1.49 Certificates of deposit 7,919,713
95,453 4.82 Total deposits 13,068,327 114,635 3.51 Borrowings
7,165,719 86,202 4.81 Total interest-bearing liabilities 20,234,046
200,837 3.97 Non-interest-bearing liabilities 356,703 Total
liabilities 20,590,749 Stockholders' equity 1,202,034 Total
liabilities and stockholders' equity $21,792,783 Net interest
income/net interest rate spread $81,933 1.45% Net interest-earning
assets/net interest margin $629,415 1.57% Ratio of interest-earning
assets to interest-bearing liabilities 1.03x For the Three Months
Ended December 31, 2006 Average Average Yield/ Balance Interest
Cost (Annualized) Assets: Interest-earning assets: Mortgage loans
(1): One-to-four family $10,173,855 $131,879 5.19% Multi-family,
commercial real estate and construction 4,242,832 67,064 6.32
Consumer and other loans (1) 449,440 8,817 7.85 Total loans
14,866,127 207,760 5.59 Mortgage-backed and other securities (2)
5,495,739 62,162 4.52 Repurchase agreements 90,752 1,205 5.31
Federal Home Loan Bank stock 147,227 2,252 6.12 Total
interest-earning assets 20,599,845 273,379 5.31 Goodwill 185,151
Other non-interest-earning assets 782,146 Total assets $21,567,142
Liabilities and stockholders' equity: Interest-bearing liabilities:
Savings $2,162,998 2,198 0.41 Money market 456,617 1,152 1.01 NOW
and demand deposit 1,462,088 215 0.06 Liquid certificates of
deposit 1,420,831 17,824 5.02 Total core deposits 5,502,534 21,389
1.55 Certificates of deposit 7,617,237 88,024 4.62 Total deposits
13,119,771 109,413 3.34 Borrowings 6,848,655 77,110 4.50 Total
interest-bearing liabilities 19,968,426 186,523 3.74
Non-interest-bearing liabilities 360,334 Total liabilities
20,328,760 Stockholders' equity 1,238,382 Total liabilities and
stockholders' equity $21,567,142 Net interest income/net interest
rate spread $86,856 1.57% Net interest-earning assets/net interest
margin $631,419 1.69% 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. ASTORIA
FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS
(Dollars in Thousands) For the Twelve Months Ended December 31,
2007 Average Average Yield/ Balance Interest Cost Assets:
Interest-earning assets: Mortgage loans (1): One-to-four family
$10,995,688 $587,863 5.35% Multi-family, commercial real estate and
construction 4,171,915 254,536 6.10 Consumer and other loans (1)
397,476 30,178 7.59 Total loans 15,565,079 872,577 5.61
Mortgage-backed and other securities (2) 4,850,753 219,040 4.52
Federal funds sold and repurchase agreements 39,838 2,071 5.20
Federal Home Loan Bank stock 167,651 11,634 6.94 Total
interest-earning assets 20,623,321 1,105,322 5.36 Goodwill 185,151
Other non-interest-earning assets 753,377 Total assets $21,561,849
Liabilities and stockholders' equity: Interest-bearing liabilities:
Savings $2,014,253 8,126 0.40 Money market 379,634 3,780 1.00 NOW
and demand deposit 1,465,463 951 0.06 Liquid certificates of
deposit 1,549,774 73,352 4.73 Total core deposits 5,409,124 86,209
1.59 Certificates of deposit 7,823,767 369,830 4.73 Total deposits
13,232,891 456,039 3.45 Borrowings 6,776,394 315,755 4.66 Total
interest-bearing liabilities 20,009,285 771,794 3.86
Non-interest-bearing liabilities 351,080 Total liabilities
20,360,365 Stockholders' equity 1,201,484 Total liabilities and
stockholders' equity $21,561,849 Net interest income/net interest
rate spread $333,528 1.50% Net interest-earning assets/net interest
margin $614,036 1.62% Ratio of interest-earning assets to
interest-bearing liabilities 1.03x For the Twelve Months Ended
December 31, 2006 Average Average Yield/ Balance Interest Cost
Assets: Interest-earning assets: Mortgage loans (1): One-to-four
family $9,984,760 $510,105 5.11% Multi-family, commercial real
estate and construction 4,204,883 259,242 6.17 Consumer and other
loans (1) 478,447 35,735 7.47 Total loans 14,668,090 805,082 5.49
Mortgage-backed and other securities (2) 5,946,591 267,535 4.50
Federal funds sold and repurchase agreements 131,418 6,410 4.88
Federal Home Loan Bank stock 143,002 7,787 5.45 Total
interest-earning assets 20,889,101 1,086,814 5.20 Goodwill 185,151
Other non-interest-earning assets 786,062 Total assets $21,860,314
Liabilities and stockholders' equity: Interest-bearing liabilities:
Savings $2,325,346 9,362 0.40 Money market 536,549 5,287 0.99 NOW
and demand deposit 1,500,131 877 0.06 Liquid certificates of
deposit 1,092,533 50,460 4.62 Total core deposits 5,454,559 65,986
1.21 Certificates of deposit 7,539,840 318,784 4.23 Total deposits
12,994,399 384,770 2.96 Borrowings 7,242,568 311,659 4.30 Total
interest-bearing liabilities 20,236,967 696,429 3.44
Non-interest-bearing liabilities 349,170 Total liabilities
20,586,137 Stockholders' equity 1,274,177 Total liabilities and
stockholders' equity $21,860,314 Net interest income/net interest
rate spread $390,385 1.76% Net interest-earning assets/net interest
margin $652,134 1.87% 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. ASTORIA
FINANCIAL CORPORATION AND SUBSIDIARIES END OF PERIOD BALANCES AND
RATES (Dollars in Thousands) At December 31, At September 30, At
December 31, 2007 2007 2006 --------------------
------------------- ----------------- Weighted Weighted Weighted
Average Average Average Balance Rate Balance Rate Balance Rate (1)
(1) (1) -------------------- ------------------- -----------------
Selected interest- earning assets: Mortgage loans, gross (2):
One-to-four family $11,628,270 5.70% $11,349,658 5.65% $10,214,146
5.48% Multi- family, commercial real estate and construc- tion
4,055,081 5.92 4,122,709 5.93 4,227,931 5.96 Mortgage- backed and
other securities (3) 4,370,850 4.33 4,568,579 4.33 5,339,681 4.35
Interest-bearing liabilities: Savings 1,891,618 0.40 1,940,322 0.40
2,129,416 0.40 Money market 333,914 0.98 352,858 1.01 435,657 0.98
NOW and demand deposit 1,478,362 0.06 1,442,840 0.06 1,496,986 0.06
Liquid 1,447,341 4.40 1,463,845 4.46 1,447,462 4.88 certificates of
deposit Total core deposits 5,151,235 1.46 5,199,865 1.49 5,509,521
1.53 Certificates of deposit 7,898,203 4.79 8,066,130 4.80
7,714,503 4.62 Total deposits 13,049,438 3.48 13,265,995 3.50
13,224,024 3.33 Borrowings, net 7,184,658 4.66 6,929,500 4.68
6,836,002 4.45 (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 NET
INCOME TO NON-GAAP EARNINGS (1) (In Thousands, Except Per Share
Data) For the Three Months Ended For the Twelve Months Ended
December 31, 2007 December 31, 2007 Adjust- Adjust- GAAP ments(2)
Non-GAAP(1) GAAP ments(2) Non-GAAP(1) Net interest income $81,933
$- $81,933 $333,528 $- $333,528 Provision for loan losses 2,000 -
2,000 2,500 - 2,500 Net interest income after provision for loan
losses 79,933 - 79,933 331,028 - 331,028 Non-interest income 2,108
20,484 22,592 75,790 20,484 96,274 Non-interest expense 58,902 -
58,902 231,273 - 231,273 Income before income tax expense 23,139
20,484 43,623 175,545 20,484 196,029 Income tax expense 3,466 7,169
10,635 50,723 7,169 57,892 Net income $19,673 $13,315 $32,988
$124,822 $13,315 $138,137 Basic earnings per common share $0.22
$0.15 $0.37 $1.38 $0.15 $1.53 Diluted earnings per common share
$0.22 $0.15 $0.36(3) $1.36 $0.14 $1.50 For the Twelve Months Ended
December 31, 2006 Adjust- Non-GAAP GAAP ments(4) (1) Net interest
income $390,385 $- $390,385 Provision for loan losses - - - Net
interest income after provision for loan losses 390,385 - 390,385
Non-interest income 91,350 5,456 96,806 Non-interest expense
221,803 - 221,803 Income before income tax expense 259,932 5,456
265,388 Income tax expense 85,035 1,785 86,820 Net income $174,897
$3,671 $178,568 Basic earnings per common share $1.85 $0.04
$1.88(3) Diluted earnings per common share $1.80 $0.04 $1.84 (1)
Non-GAAP earnings are also referred to as operating income and
operating EPS throughout this release. (2) Adjustments relate to
the other-than-temporary impairment write-down of securities charge
and the related tax effects recorded in the 2007 fourth quarter.
(3) Figures do not cross foot due to rounding. (4) Adjustments
relate to the charge for the termination of our interest rate swap
agreements and the related tax effects recorded in the 2006 first
quarter. DATASOURCE: Astoria Financial Corporation CONTACT: Peter
J. Cunningham, First Vice President, Investor Relations, Astoria
Financial Corporation, +1-516-327-7877, Web site:
http://ir.astoriafederal.com/ Company News On-Call:
http://www.prnewswire.com/comp/104529.html
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