EX-99.1 3 y88459exv99w1.txt PRESS RELEASE EXHIBIT 99.1 NORTH FORK BANCORP 275 BROADHOLLOW ROAD, MELVILLE, NY 11747 (631) 844-1258 FAX (631) 844-1471 FOR IMMEDIATE RELEASE CONTACT: DANIEL M. HEALY EXECUTIVE VICE PRESIDENT CHIEF FINANCIAL OFFICER (631) 844-1258 NORTH FORK BANCORP REPORTS EARNINGS FOR THE SECOND QUARTER OF 2003, LOAN AND DEPOSIT MILESTONES, AND PROGRESS TOWARD RESTRUCTURING PLAN MELVILLE, N.Y. - JULY 16, 2003 - NORTH FORK BANCORPORATION, INC. (NYSE: NFB) reported earnings for the second quarter, robust operating trends and achievement toward its balance sheet repositioning plan. Highlights in the current period included: - Loan growth of $462 million or 16%, with continued pristine asset quality - Deposit growth of $1.1 billion or 33% and demand deposit growth of $387 million or 46% - Returns on average equity and assets of 25% and 1.7%, respectively - The repurchase of 1.7 million common shares to date at an average per share price of $34.56 - Declaration of the quarterly cash dividend of $.27 per share - Significant progress toward the previously announced balance sheet repositioning EARNINGS AND RETURNS Net income for the quarter ended June 30, 2003 was $96.1 million or diluted earnings per share of $.62 compared to $104.5 million or $.64 diluted earnings per share in 2002. Second quarter results included debt restructuring costs and gains on the sales of facilities and securities. Earnings per share in the quarter were solidly in line with previously provided estimates. Returns on average equity and assets were 25% and 1.7%, respectively. Net income for the six months ended June 30, 2003 aggregated $199.7 million or diluted earnings per share of $1.29, compared to $202.8 million and diluted earnings per share of $1.25 for the same period in the prior year. Returns on average equity and assets in 2003 were 26.4% and 1.8%, respectively. The net interest margin and net interest income experienced further compression due to the overall interest rate environment. This current environment and the prospect for continued increases in long-term interest rates were fundamental to the logic behind the balance sheet restructure. The net interest margin in the current quarter declined 36 basis points to 4.00% from the immediately preceding quarter. LOANS During the quarter ended June 30, 2003, total loans increased 16% (annualized) to $11.9 billion, while residential mortgages declined. Commercial loans were the largest contributor to the advance. "We are beginning to see the benefits of scale. As our new branches come on line and our branding campaign takes hold, our commercial growth is becoming exponential," said John Adam Kanas, Chairman, President and Chief Executive Officer. "We see no change in this upward trend in the foreseeable future, especially with the prospect of an ever improving economy," he added. At June 30, 2003, non-performing loans were $12.8 million and represent only 11 basis points of total loans. The allowance for loan losses to total loans approximated 1%. Quarterly net charge-offs were 13 basis points, consistent with prior periods. DEPOSIT ADVANCES During the quarter, total deposits increased 33% (annualized) to $14.5 billion. Cumulative deposit growth since June 30, 2002 was 18%. Demand deposits during the quarter increased by 46% (annualized) and 24% since June 30, 2002 to $3.7 billion. Commercial demand deposits, a principal focus of deposit gathering activities, comprise 64% of total demand deposits or $2.4 billion. The ability to generate deposits has been enhanced by the expansive branch network. The Company operates 172 branches in the New York metro region and plans to open an additional 26 branches in the next eighteen months, including 5 in New Jersey. Additionally, the Company has an ongoing branch upgrade program providing for greater marketplace identity, accessibility and convenience. "Our effort to have North Fork identified as the bank of choice for entrepreneurs and consumers is gaining traction. The branch network has proven pivotal," said John Kanas. CAPITAL MANAGEMENT AND BALANCE SHEET RESTRUCTURING PLAN As previously announced, the Company embarked upon a balance sheet restructuring plan, whereby it committed to reduce the securities portfolio by approximately $2.5 - $3.0 billion through a combination of sales and portfolio cash flows by December 31, 2003. Approximately $1.1 billion of securities were sold or committed for sale in June 2003. The sales proceeds and monthly cash flows have and will be used to reduce borrowings. As part of the plan, approximately $1 billion of long-term borrowings were restructured. The full amount of the debt restructuring has been completed. Management believes that it will accomplish its repositioning goal by year-end 2003. "We are ahead of our original plan," said Mr. Kanas. "Furthermore, the recent upward trend in longer term interest rates supports our decision," he said. In connection with the foregoing, the Board of Directors authorized an increase in the Company's share repurchase program to 8 million shares. Since the announcement, 1.7 million shares at an average price of $34.56 have been purchased under this new authorization. On June 24, 2003, the Company declared its regular quarterly dividend of $.27 cents per common share payable August 15, 2003, to shareholders of record at the close of business July 25, 2003. The Company declared its dividend policy to be 40-50% of earnings. OTHER OPERATING INCOME AND EXPENSE The Company continued to make strides in non-interest income and fee generation, excluding the effects of net security gains and other items. "Our goal is to create more fee opportunities without entering into businesses or introducing new products with lower returns and higher degrees of volatility," said Mr. Kanas. The Company's core efficiency ratio of 34.8% continues as one of the industry's best. * * * This release contains certain forward-looking statements. Examples of forward-looking statements include, but are not limited to, estimates with respect to the financial condition, results of operations and business of the Company that are subject to various factors which could cause actual results to differ materially from these estimates. These factors include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand and competition, changes in legislation or regulation, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental, regulatory, and technological factors affecting NFB's operations, pricing, products and services. Investors are encouraged to access NFB's periodic reports filed with the Securities and Exchange Commission for financial and business information regarding the Company. NORTH FORK BANCORPORATION, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, JUNE 30, JUNE 30, (in thousands, except per share amounts) 2003 2002 2003 2002 -------- -------- -------- -------- INTEREST INCOME: Loans $195,826 $199,918 $392,747 $394,589 Securities 86,416 93,068 185,877 183,968 Money Market Investments 95 173 269 401 -------- -------- -------- -------- Total Interest Income 282,337 293,159 578,893 578,958 -------- -------- -------- -------- INTEREST EXPENSE: Savings, NOW & Money Market Deposits 14,476 16,068 29,236 30,684 Time Deposits 9,419 14,726 19,472 34,121 Certificates of Deposit, $100,000 & Over 4,801 6,334 9,904 14,222 Federal Funds Purchased & Collateralized Borrowings 44,359 40,921 91,974 80,824 Subordinated Debt 7,120 -- 14,345 -- Capital Securities 2,290 4,689 4,640 9,829 -------- -------- -------- -------- Total Interest Expense 82,465 82,738 169,571 169,680 -------- -------- -------- -------- Net Interest Income 199,872 210,421 409,322 409,278 Provision for Loan Losses 6,500 6,250 12,750 12,500 -------- -------- -------- -------- Net Interest Income after Provision for Loan Losses 193,372 204,171 396,572 396,778 -------- -------- -------- -------- NON-INTEREST INCOME: Customer Related Fees & Service Charges 20,460 18,918 40,626 37,304 Investment Management, Commissions & Trust Fees 3,892 4,844 7,016 9,594 Mortgage Banking Operations 3,199 1,361 6,017 2,629 Check Cashing Fees 1,265 713 2,261 1,476 Gain on Sale of Facilities 10,980 -- 10,980 -- Other Operating Income 3,964 3,519 8,510 6,025 Securities Gains, net 3,699 353 6,296 1,381 -------- -------- -------- -------- Total Non-Interest Income 47,459 29,708 81,706 58,409 -------- -------- -------- -------- NON-INTEREST EXPENSE: Employee Compensation & Benefits 49,075 43,148 96,415 83,813 Occupancy & Equipment, net 16,389 13,968 31,910 26,880 Other Operating Expenses 16,894 16,343 33,711 33,046 Debt Restructuring Costs (4) 11,955 -- 11,955 -- Amortization of Identifiable Intangibles 892 952 1,784 1,904 -------- -------- -------- -------- Total Non-Interest Expense 95,205 74,411 175,775 145,643 -------- -------- -------- -------- Income Before Income Taxes 145,626 159,468 302,503 309,544 Provision for Income Taxes 49,513 55,017 102,851 106,793 -------- -------- -------- -------- Net Income $ 96,113 $104,451 $199,652 $202,751 ======== ======== ======== ======== Net Income - Basic $ 0.63 $ 0.65 $ 1.30 $ 1.26 Net Income - Diluted $ 0.62 $ 0.64 $ 1.29 $ 1.25
See accompanying notes appended to the financial data and summaries NORTH FORK BANCORPORATION, INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, MARCH 31, DECEMBER 31, JUNE 30, (in thousands) 2003 2003 2002 2002 ------------ ------------ ------------ ------------ ASSETS: Cash & Due from Banks $ 406,694 $ 376,355 $ 396,725 $ 377,870 Money Market Investments 63,799 47,693 27,613 19,990 Due from Brokers (4) 464,351 -- -- -- Securities Held-for-Sale (4) 613,628 -- -- -- Securities: Available-for-Sale 8,100,465 9,509,222 8,555,892 6,562,072 Held-to-Maturity 221,378 252,364 307,878 522,296 ------------ ------------ ------------ ------------ Total Securities 8,321,843 9,761,586 8,863,770 7,084,368 ------------ ------------ ------------ ------------ Loans, Net of Unearned Income 11,897,433 11,435,423 11,369,139 11,041,392 Less: Allowance for Loan Losses 117,753 115,087 114,995 109,998 ------------ ------------ ------------ ------------ Net Loans 11,779,680 11,320,336 11,254,144 10,931,394 ------------ ------------ ------------ ------------ Goodwill 410,495 410,495 407,132 406,762 Identifiable Intangibles 14,548 15,440 16,332 18,236 Premises & Equipment 143,374 140,517 132,529 118,205 Other Assets 312,989 319,478 314,856 254,719 ------------ ------------ ------------ ------------ Total Assets $ 22,531,401 $ 22,391,900 $ 21,413,101 $ 19,211,544 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY: Demand Deposits $ 3,746,741 $ 3,359,885 $ 3,417,534 $ 3,026,061 Savings Deposits 3,665,580 3,532,326 3,440,573 3,316,204 NOW & Money Market Deposits 3,960,731 3,376,108 3,347,385 2,817,384 Time Deposits 1,922,407 1,932,743 1,949,559 2,094,068 Certificates of Deposit, $100,000 & Over 1,176,835 1,171,386 1,037,479 978,497 ------------ ------------ ------------ ------------ Total Deposits 14,472,294 13,372,448 13,192,530 12,232,214 ------------ ------------ ------------ ------------ Federal Funds Purchased & Collateralized Borrowings (4) 5,141,500 6,077,000 5,401,000 4,575,200 Subordinated Debt 493,790 499,162 499,140 -- Capital Securities 273,288 268,939 268,926 252,374 ------------ ------------ ------------ ------------ Total Borrowings 5,908,578 6,845,101 6,169,066 4,827,574 ------------ ------------ ------------ ------------ Dividends Payable 42,211 42,411 42,864 40,989 Accrued Expenses & Other Liabilities 536,217 599,853 494,588 503,908 ------------ ------------ ------------ ------------ Total Liabilities $ 20,959,300 $ 20,859,813 $ 19,899,048 $ 17,604,685 ============ ============ ============ ============ STOCKHOLDERS' EQUITY: Common stock, par value $0.01; authorized 500,000,000 shares; issued 174,580,778 shares at June 30, 2003 1,746 1,746 1,746 1,746 Additional Paid in Capital 373,851 375,513 377,311 371,342 Retained Earnings 1,705,789 1,651,882 1,590,594 1,459,840 Accumulated Other Comprehensive Income 42,019 30,916 17,991 43,204 Deferred Compensation (65,795) (68,307) (70,562) (55,961) Treasury Stock at cost; 18,245,332 shares at June 30, 2003 (485,509) (459,663) (403,027) (213,312) ------------ ------------ ------------ ------------ Total Stockholders' Equity 1,572,101 1,532,087 1,514,053 1,606,859 ------------ ------------ ------------ ------------ Total Liabilities and Stockholders' Equity $ 22,531,401 $ 22,391,900 $ 21,413,101 $ 19,211,544 ============ ============ ============ ============
See accompanying notes appended to the financial data and summaries NORTH FORK BANCORPORATION, INC. SELECTED FINANCIAL DATA AND BALANCE SHEET COMPONENTS (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED SELECTED FINANCIAL DATA JUNE 30, JUNE 30, JUNE 30, JUNE 30, (in thousands, except ratios and per share amounts) 2003 2002 2003 2002 ----------- ----------- ----------- ----------- PER SHARE: Net Income - Basic $ 0.63 $ 0.65 $ 1.30 $ 1.26 Net Income - Diluted $ 0.62 $ 0.64 $ 1.29 $ 1.25 Average Shares Outstanding - Basic 152,911 160,578 153,417 160,445 Average Shares Outstanding - Diluted 154,451 162,488 154,961 162,333 Cash Dividends $ 0.27 $ 0.25 $ 0.54 $ 0.49 Dividend Payout Ratio 44% 39% 42% 40% Book Value $ 10.06 $ 9.80 $ 10.06 $ 9.80 SELECTED FINANCIAL DATA: Return on Average Total Assets 1.73% 2.34% 1.83% 2.33% Return on Average Stockholders' Equity (1) 25.00% 26.08% 26.36% 25.89% Core Efficiency Ratio (3) 34.84% 30.34% 33.70% 30.51% Yield on Interest Earning Assets (2) 5.60% 7.16% 5.86% 7.28% Cost of Funds 1.97% 2.55% 2.06% 2.66% Net Interest Margin (2) 4.00% 5.18% 4.18% 5.18%
JUNE 30, MARCH 31, DECEMBER 31, JUNE 30, 2003 2003 2002 2002 ----------- ----------- ----------- ----------- CAPITAL RATIOS: Risk Based Capital: Tier 1 10.86% 10.94% 11.43% 13.21% Total 15.81% 16.04% 16.77% 14.26% Leverage Ratio 6.17% 6.22% 6.46% 7.91% QUARTERLY AVERAGE BALANCE SHEET: Total Assets $22,309,071 $21,655,881 $20,813,265 $17,895,471 Securities 8,927,680 8,584,874 7,876,913 5,856,302 Loans 11,696,983 11,397,521 11,311,708 10,825,814 Demand Deposits 3,550,810 3,281,234 3,235,396 2,857,358 Interest Bearing Deposits 10,273,437 9,945,217 9,617,662 9,124,434 Federal Funds Purchased & Collateralized Borrowings 5,760,450 5,718,852 5,130,264 3,659,765 Subordinated Debt 499,174 499,151 499,128 -- Capital Securities 268,943 268,928 266,682 244,373 Stockholders' Equity $ 1,578,706 $ 1,542,720 $ 1,670,584 $ 1,632,612
BALANCE SHEET COMPONENTS SECURITIES The following table shows the securities portfolio composition for the periods ended:
JUNE 30, MARCH 31, DECEMBER 31, JUNE 30, (in thousands) 2003 2003 2002 2002 ---------- ---------- ---------- ---------- Collateralized Mortgage Obligations $5,923,605 $7,525,718 $6,955,950 $5,326,617 Agency Pass-Through Certificates 882,834 778,729 635,410 797,185 State & Municipal Obligations 617,444 478,623 435,486 319,755 Equity Securities 323,501 318,830 259,092 214,505 U.S. Treasury & Government Agencies 37,419 116,417 67,544 40,119 Other Securities 537,040 543,269 510,288 386,187 ---------- ---------- ---------- ---------- Total Securities $8,321,843 $9,761,586 $8,863,770 $7,084,368 ========== ========== ========== ==========
See accompanying notes appended to the financial data and summaries NORTH FORK BANCORPORATION, INC. SELECTED FINANCIAL DATA AND BALANCE SHEET COMPONENTS, CONTINUED (UNAUDITED) Loans The following table represents the components of the loan portfolio for the periods ended:
JUNE 30, MARCH 31, DECEMBER 31, JUNE 30, (in thousands) 2003 2003 2002 2002 ----------- ----------- ----------- ----------- Multi-Family Mortgages $ 3,792,647 $ 3,652,430 $ 3,640,039 $ 3,566,676 Commercial Mortgages 2,359,316 2,221,014 2,194,092 2,049,776 Commercial 2,000,623 1,856,843 1,776,419 1,585,146 Construction and Land 290,433 273,924 232,227 231,569 Residential Mortgages 2,413,125 2,418,156 2,507,388 2,667,377 Consumer 1,068,616 1,038,195 1,040,490 957,836 ----------- ----------- ----------- ----------- Total $11,924,760 $11,460,562 $11,390,655 $11,058,380 Less: Unearned Income & Fees 27,327 25,139 21,516 16,988 ----------- ----------- ----------- ----------- Loans, net $11,897,433 $11,435,423 $11,369,139 $11,041,392 =========== =========== =========== =========== ASSET QUALITY: Non-Performing Loans $ 12,795 $ 12,870 $ 12,216 $ 14,910 Other Real Estate 295 295 295 392 ----------- ----------- ----------- ----------- Total Non-Performing Assets $ 13,090 $ 13,165 $ 12,511 $ 15,302 ----------- ----------- ----------- ----------- Allowance for Loan Losses to Non-Performing Loans 920% 894% 941% 738% Allowance for Loan Losses to Total Loans, net 0.99% 1.01% 1.01% 1.00% Non-Performing Loans to Total Loans, net 0.11% 0.11% 0.11% 0.14%
DEPOSITS The following table represents the composition of total deposits, while more specifically highlighting Manhattan for the periods ended:
JUNE 30, MARCH 31, DECEMBER 31, JUNE 30, (in thousands) 2003 2003 2002 2002 ----------- ----------- ----------- ----------- MANHATTAN DEPOSITS (25 BRANCHES) Demand Deposits $ 811,565 $ 705,742 $ 703,290 $ 541,034 Interest Bearing Deposits 1,950,365 1,783,522 1,725,925 1,339,387 ----------- ----------- ----------- ----------- Total Deposits 2,761,930 2,489,264 2,429,215 1,880,421 ALL OTHER LOCATIONS (147 BRANCHES) Demand Deposits 2,935,176 2,654,143 2,714,244 2,485,027 Interest Bearing Deposits 8,775,188 8,229,041 8,049,071 7,866,766 ----------- ----------- ----------- ----------- Total Deposits 11,710,364 10,883,184 10,763,315 10,351,793 TOTAL DEPOSITS (172 BRANCHES) Demand Deposits 3,746,741 3,359,885 3,417,534 3,026,061 Interest Bearing Deposits 10,725,553 10,012,563 9,774,996 9,206,153 ----------- ----------- ----------- ----------- Total Deposits $14,472,294 $13,372,448 $13,192,530 $12,232,214 =========== =========== =========== ===========
See accompanying notes appended to the financial data and summaries NORTH FORK BANCORPORATION, INC. NET INTEREST MARGIN ANALYSIS (UNAUDITED) The following table presents on a linked quarter basis, an analysis of net interest income by each major category of interest earning assets and interest bearing liabilities:
JUNE 30, 2003 MARCH 31, 2003 ---------------------------------------- ------------------------------------- AVERAGE AVERAGE AVERAGE AVERAGE (dollars in thousands ) BALANCE INTEREST RATE BALANCE INTEREST RATE ----------- ----------- ---------- ----------- ----------- ------- INTEREST EARNING ASSETS: Securities $ 8,927,680 $ 92,221 4.14% $ 8,584,874 $ 105,089 4.96% Loans, net 11,696,983 196,220 6.73% 11,397,521 197,269 7.02% Money Market Investments 37,132 143 1.54% 58,218 254 1.77% ----------- ----------- ----------- ----------- Total Interest Earning Assets 20,661,795 288,584 5.60% 20,040,613 302,612 6.12% ----------- ----------- ----------- ----------- NON INTEREST EARNING ASSETS: Cash and Due from Banks 415,732 409,424 Other Assets 1,231,544 1,205,844 ----------- ----------- Total Assets $22,309,071 $21,655,881 =========== =========== INTEREST BEARING LIABILITIES: Savings, NOW & Money Market Deposits $ 7,250,200 $ 14,476 0.80% $ 6,819,813 $ 14,760 0.88% Time Deposits 3,023,237 14,220 1.89% 3,125,404 15,156 1.97% ----------- ----------- ----------- ----------- Total Savings and Time Deposits 10,273,437 28,696 1.12% 9,945,217 29,916 1.22% Fed Funds Purchased & Collateralized Borrowings 5,760,450 44,359 3.09% 5,718,852 47,615 3.38% Subordinated Debt 499,174 7,120 5.72% 499,151 7,225 5.87% Capital Securities 268,943 2,290 3.42% 268,928 2,350 3.54% ----------- ----------- ----------- ----------- Total Borrowings 6,528,567 53,769 3.30% 6,486,931 57,190 3.58% ----------- ----------- ----------- ----------- Total Interest Bearing Liabilities 16,802,004 82,465 1.97% 16,432,148 87,106 2.15% ----------- ----------- ----------- ----------- Rate Spread 3.63% 3.97% NON-INTEREST BEARING LIABILITIES: Demand Deposits 3,550,810 3,281,234 Other Liabilities 377,551 399,779 ----------- ----------- Total Liabilities 20,730,365 20,113,161 Stockholders' Equity 1,578,706 1,542,720 ----------- ----------- Total Liabilities and Stockholders' Equity $22,309,071 $21,655,881 =========== =========== Net Interest Income and Net Interest Margin 206,119 4.00% 215,506 4.36% Less: Tax Equivalent Adjustment (6,247) (6,056) ----------- ----------- Net Interest Income $ 199,872 $ 209,450 =========== ===========
The following table summarizes the net interest margin for the previous five quarters:
2003 2002 -------------------------------------------- 2ND QTR 1ST QTR 4TH QTR 3RD QTR 2ND QTR ------- ------- ------- ------- ------- INTEREST EARNING ASSETS: Securities 4.14% 4.96% 5.45% 6.10% 6.72% Loans, net 6.73% 7.02% 7.12% 7.26% 7.42% Money Market Investments 1.54% 1.77% 1.96% 2.51% 2.13% ------- ------- ------- ------- ------- Total Interest Earning Assets 5.60% 6.12% 6.42% 6.81% 7.16% ======= ======= ======= ======= ======= INTEREST BEARING LIABILITIES: Total Savings and Time Deposits 1.12% 1.22% 1.30% 1.51% 1.63% Total Borrowings 3.30% 3.58% 3.89% 4.18% 4.69% ------- ------- ------- ------- ------- Total Interest Bearing Liabilities 1.97% 2.15% 2.29% 2.44% 2.55% ======= ======= ======= ======= ======= Interest Rate Spread 3.63% 3.97% 4.13% 4.37% 4.61% Net Interest Margin 4.00% 4.36% 4.58% 4.87% 5.18%
See accompanying notes appended to the financial data and summaries NORTH FORK BANCORPORATION, INC. NOTES TO FINANCIAL DATA AND SUMMARIES (1) Excludes the effect of accumulated other comprehensive income. (2) Presented on a tax equivalent basis. (3) The core efficiency ratio is defined as the ratio of non-interest expense, net of other real estate expenses, goodwill amortization and other non-recurring charges, to net interest income on a tax equivalent basis and other non-interest income net of securities gains and other non-recurring items. (4) Aggregate cash proceeds from securities sales included as held-for-sale in the accompanying balance sheet and amounts due from brokers received subsequent to June 30, 2003 were used to reduce borrowings. Certain longer-term borrowings restructured as part of the balance sheet repositioning plan resulted in a charge of approximately $12 million. It is expected that the debt restructuring will have the effect of improving net interest margin in periods subsequent to June 30, 2003.