EX-99.1 3 e16653ex99_1.txt PRESS RELEASE Exhibit 99.1 Astoria Financial Corporation Announces Fourth Quarter EPS of $0.63; Full Year EPS of $2.49 Quarterly Cash Dividend Increased 14% to $0.25 Per Common Share; Annual Meeting Date Set LAKE SUCCESS, N.Y., Jan. 22 /PRNewswire-FirstCall/ -- Astoria Financial Corporation (NYSE: AF) ("Astoria"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $48.0 million, or $0.63 diluted earnings per common share, for the quarter ended December 31, 2003, compared to net income of $61.1 million, or $0.73 diluted earnings per common share for the 2002 fourth quarter and $41.6 million, or $0.53 diluted earnings per common share, for the 2003 third quarter. For the 2003 fourth quarter, returns on average equity, average tangible equity and average assets were 13.58%, 15.63% and 0.84%, respectively, compared to 15.66%, 17.77% and 1.11%, respectively, for the comparable 2002 period, and 11.35%, 12.99% and 0.74%, respectively, for the 2003 third quarter. Net income for the full year 2003 totaled $196.8 million, or $2.49 diluted earnings per common share, compared to net income of $248.4 million, or $2.85 diluted earnings per common share for 2002. For 2003, returns on average equity, average tangible equity and average assets were 13.26%, 15.15%, and 0.87%, respectively, compared to 15.87%, 18.00% and 1.12%, respectively, for 2002. Commenting on the Company's results, George L. Engelke, Jr., Chairman, President and Chief Executive Officer of Astoria, said, "As expected, the rise in long-term interest rates in the second half of 2003 has significantly reduced mortgage refinance activity and related net premium amortization. In addition, earnings have also started to benefit from the downward repricing of our maturing borrowings. As a result, we are beginning to realize a very positive effect on the net interest margin." Board Increases Quarterly Cash Dividend 14% The Board of Directors of the Company, at their January 21, 2004 meeting, declared a quarterly cash dividend of $0.25 per common share, a 14% increase from the previous quarter's dividend. The dividend is payable on March 1, 2004 to shareholders of record as of February 17, 2004. This is the thirty-fifth consecutive quarterly cash dividend declared by the Company. Ninth Stock Repurchase Program Continues During the fourth quarter, Astoria repurchased 1.1 million shares of its common stock at an average cost of $34.66 per share. For the twelve months ended December 31, 2003, 7.1 million shares were repurchased at an average cost of $27.63 per share. To date, under the ninth program that commenced in November 2002, Astoria has repurchased 7.4 million shares of the 10 million shares authorized, at an average price of $27.59 per share. Board Sets Annual Shareholders' Meeting Date The Board of Directors, at their January 21, 2004 meeting, established May 19, 2004 as the date for the Annual Meeting of Shareholders, with a record date of March 26, 2004. Balance Sheet Summary & Trends Key balance sheet highlights including the cumulative effect of the Company's balance sheet repositioning since December 31, 1999 follow: (Dollars in millions) Change 12/31/99- 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/03 Assets $22,697 $22,337 $22,668 $21,698 $22,458 - 1% Loans $10,286 $11,422 $12,167 $12,059 $12,687 + 23% MBS $9,287 $7,875 $7,074 $7,380 $8,244 - 11% Deposits $9,555 $10,072 $10,904 $11,067 $11,187 + 17% Core Deposits* $4,625 $4,922 $5,743 $5,914 $5,685 + 23% Checking $878 $1,005 $1,200 $1,383 $1,493 + 70% Borrowings $11,524 $10,320 $9,822 $8,821 $9,628 - 16% * Excludes time deposits Mortgage loan originations and purchases for the quarter ended December 31, 2003 totaled $1.5 billion compared to $1.6 billion for the comparable 2002 period. Included in the fourth quarter mortgage loan production were one-to-four family mortgage loans totaling $1.0 billion, predominantly 3/1 and 5/1 adjustable rate mortgage ("ARM") loans. For the full year 2003, loan volume increased $1.7 billion to a record $7.3 billion, of which 76% was one-to-four family mortgage loans, predominantly 3/1 and 5/1 ARMs. For the quarter ended December 31, 2003, multifamily and commercial real estate ("CRE") loan originations increased 79% to $444.9 million from $249.2 million for the 2002 fourth quarter. For the full year 2003, multifamily and CRE loan originations totaled $1.7 billion, an increase of $639.9 million, or 63%, over 2002 originations. The combined portfolios of multifamily and CRE loans grew $766.1 million, or 33% to $3.1 billion, or 25% of total loans at December 31, 2003. The average loan outstanding in the combined multifamily and CRE portfolio is under $1 million and the average loan-to-value ratio of this portfolio continues to be less than 65%, based on current principal balance and original appraised value. The Company's strong multifamily and CRE lending capabilities are reflected in the growth of this portfolio since 1999: Change (Dollars in millions) 12/31/99- 12/31/99 12/31/00 12/31/01 12/31/02 12/31/03 12/31/03 Multifamily/ CRE Loans $1,014 $1,282 $1,693 $2,345 $3,111 +207% % of Total Loans 10% 11% 14% 20% 25% +150% "It is important to note that the substantial growth in our top-quality, low credit risk multifamily and CRE portfolios, capped by record loan originations in 2003, has been achieved while maintaining our strict underwriting standards. We expect solid growth in these portfolios to continue in 2004," Mr. Engelke noted. Mortgage loan prepayments for the quarter ended December 31, 2003 decreased to $894.1 million compared to $1.5 billion for both the 2002 fourth quarter and the previous 2003 quarter. For the year ended December 31, 2003, mortgage loan prepayments totaled $5.2 billion as compared to $4.5 billion for the full year 2002. Despite the very high level of refinance activity in 2003, the total loan portfolio grew by $627.6 million and totaled $12.7 billion at December 31, 2003, primarily attributable to the substantial multifamily and CRE loan growth. At December 31, 2003, non-performing loans declined to $29.7 million, or 0.13% of total assets, from $34.5 million, or 0.16% of total assets, at December 31, 2002. Net charge-offs for the quarter and year ended December 31, 2003 were $84,000 and $425,000, respectively, or less than one basis point of average loans outstanding, compared to $102,000 and $1.0 million, respectively, for the comparable 2002 periods. The ratio of the allowance for loan losses to non-performing loans increased to 280% at December 31, 2003 from 242% at December 31, 2002. Commenting on the superior asset quality, Mr. Engelke noted, "The quality of our assets continues to remain excellent as evidenced by our very low level of loan delinquencies and non-performing assets. Net charge-offs for the year were negligible, which is also indicative of our conservative lending policies and the fact that over 99% of our loan portfolio is secured by real estate with a loan-to-value ratio averaging less than 65%, based upon current principal balance and original appraised value." Mortgage-backed securities ("MBS") totaled $8.2 billion at December 31, 2003, essentially unchanged from the previous quarter, and increased $864.5 million from December 31, 2002. MBS repayments totaled $779.8 million for the 2003 fourth quarter compared to $2.3 billion for the 2002 fourth quarter and $2.5 billion for the 2003 third quarter. For the year ended December 31, 2003, MBS repayments totaled $6.9 billion compared to $6.1 billion for the comparable 2002 period. A detailed profile of the fixed rate MBS portfolio at December 31, 2003 follows: (Dollars in millions) Unamortized Book Value Premium/ Current Collateral Avg (Discount) Coupon Coupon Life Premium MBS $2,555 $27.2 5.07% 6.10% 2.7 yrs Discount/Par MBS $5,598 $(18.7) 4.15% 5.80% 3.6 yrs Total $8,153 $8.5 4.43% 5.93% 3.3 yrs Deposits were up $119.4 million for the year ended December 31, 2003 to $11.2 billion. Core deposits, which exclude certificate of deposit accounts, declined during 2003 to $5.7 billion from $5.9 billion, primarily due to a decrease in money market accounts which was partially offset by a $236.8 million increase in savings and checking accounts. Checking account balances increased to $1.5 billion at December 31, 2003, from $1.4 billion at December 31, 2002, and totaled 26% of core deposits. CD accounts increased $348.4 million in 2003 and totaled $5.5 billion at December 31, 2003. Borrowings at December 31, 2003 totaled $9.6 billion. The following table details future borrowing maturities and weighted average rates: Contractual Total Amount Weighted Maturity Maturing Average Rate 1Q04 (1) $ 1.3 Billion 1.11% 1Q04 $ 2.8 Billion 4.97% 2Q04 $ 500 Million 5.80% 3Q04 $ 20 Million 7.67% 4Q04 $ 105 Million 5.98% Total next 12 months $ 4.7 Billion 4.03% Beyond 2004 (2) $ 4.9 Billion 4.54% Total $ 9.6 Billion 4.29% (1) Overnight and other short-term borrowings. (2) Includes $2.2 billion of borrowings that have a maturity date greater than one year but can be called prior to December 31, 2004. In the fourth quarter, during which the average cost of borrowings declined by 38 basis points from the previous quarter to 4.39%, we entered into forward borrowing commitments totaling $500 million, the effect of which will be to extend a portion of the borrowings with a weighted average rate of 4.97%, scheduled to mature in the 2004 first quarter, for an average term of 3.3 years, at a weighted average rate of 3.05%. In addition, during the 2004 first quarter to date, we entered into forward borrowing commitments totaling $700 million, the effect of which will be to extend a portion of the borrowings with a weighted average rate of 4.97%, also scheduled to mature in the 2004 first quarter, for an average term of 3.7 years, at a weighted average rate of 3.01%. The remaining high cost borrowings scheduled to mature during 2004 are also expected to either be repaid or repriced at substantially lower rates which should result in a significant decline in the cost of funds. In addition to the above borrowing maturities, over the next twelve months approximately $2.7 billion of CDs with an average rate of 2.70% will mature. During the fourth quarter of 2003, $868.3 million of CDs, with an average rate of 2.46% and an average maturity at inception of 15 months, matured and $833.5 million of CDs were issued or repriced at an average rate of 2.10% and an average maturity of 18 months. The following table details CDs maturing over the next twelve months along with weighted average rates: CDs Maturing Amount Weighted Average Rate 1Q04 $ 1.1 Billion 2.26% 2Q04 $ 751 Million 2.28% 3Q04 $ 371 Million 2.69% 4Q04 $ 523 Million 4.19% Total $ 2.7 Billion 2.70% Stockholders' equity was $1.4 billion, or 6.22% of total assets, at December 31, 2003 compared to $1.6 billion, or 7.16% of total assets, at December 31, 2002. Astoria Federal continues to maintain capital ratios in excess of applicable regulatory requirements. At December 31, 2003, core, tangible and risk-based capital ratios were 7.37%, 7.37% and 15.39%, respectively. Fourth Quarter and Full Year Earnings Summary Net interest income for the quarter and year ended December 31, 2003 totaled $94.6 million and $379.5 million, respectively, compared to $111.0 million and $464.4 million, respectively, for the comparable 2002 periods. Astoria's net interest margin for the quarter ended December 31, 2003 increased to 1.74%, or 22 basis points, from the 2003 third quarter margin of 1.52%, and decreased 42 basis points from the margin of 2.16% for 2002 fourth quarter. The linked quarter improvement in the net interest margin is primarily the result of a decline in the cost of liabilities as higher cost borrowings and CDs were repriced at lower rates and an increase in earning asset yields caused primarily by a decline in premium amortization. With mortgage refinancing activity dramatically subsiding, the net premium amortization on mortgage loans and MBS declined 44% to $19.4 million for the 2003 fourth quarter from $34.7 million in the previous 2003 quarter. For details on premium amortization expense, please see the following chart: MBS and Mortgage Loan Premium Amortization Trends (Dollars in millions) 1Q02 2Q02 3Q02 4Q02 Total 2002 MBS $(0.1) $ 1.0 $ 3.5 $ 9.3 $13.7 Mtg Loans $10.1 $ 8.4 $ 9.9 $10.5 $38.9 Total $10.0 $ 9.4 $13.4 $19.8 $52.6 1Q03 2Q03 3Q03 4Q03 Total 2003 MBS $13.7 $21.9 $22.6 $12.7 $ 70.9 Mtg Loans $11.3 $12.0 $12.1 $ 6.7 $ 42.1 Total $25.0 $33.9 $34.7 $19.4 $113.0 For the quarter ended December 31, 2003, the average cost of interest- bearing liabilities declined 57 basis points from the 2002 fourth quarter, primarily due to lower repricing of borrowings and retail deposits, while the average yield on interest-earning assets declined 102 basis points from a year ago, primarily due to higher levels of mortgage refinance activity throughout 2003. For the twelve months ended December 31, 2003, the net interest margin was 1.78% compared to 2.23% a year ago. Contributing to the year over year decline was a $60.4 million, or 115%, increase in net premium amortization to $113.0 million for 2003 from $52.6 million a year ago and the effect of the high level of refinance activity throughout 2003 offset, in part, by a decline in the cost of liabilities of 73 basis points, primarily due to the lower repricing of borrowings and retail deposits. "We are finally seeing a rebound in the net interest margin for the first time in twelve months and we expect this trend will continue with incremental benefit to the margin accruing throughout 2004," Mr. Engelke noted. Offsetting to some extent the future benefit to be derived from lower premium amortization expense, multifamily and CRE prepayment penalty fee income is expected to decline due to lower refinance activity in these portfolios. The table below highlights prepayment penalty income over the past eight quarters: Multifamily and CRE Loan Prepayment Penalty Income (Dollars in millions) 2002 2003 1Q02 2Q02 3Q02 4Q02 Total 1Q03 2Q03 3Q03 4Q03 Total $0.9 $0.9 $1.4 $1.7 $4.9 $2.1 $3.5 $5.8 $4.6 $16.0 Non-interest income for the quarter ended December 31, 2003 totaled $28.2 million compared to $30.9 million for the 2002 fourth quarter. For the year ended December 31, 2003, non-interest income totaled $119.6 million compared to $107.4 million for 2002. Included in the 2003 fourth quarter non-interest income was a $10.1 million gain on the sale of a joint venture and a $3.0 million increase in mortgage banking income, net, due primarily to the recovery of the MSR valuation allowance, partially offset by a $7.3 million net loss on the sale of $484.6 million of MBS, primarily issues which were purchased at a premium. Included in last year's non-interest income was the receipt in the 2002 fourth quarter of a $3.8 million net insurance settlement. The year over year net increase is primarily due to the increase in mortgage banking income, net, as detailed in the table below. (Dollars in millions) 4Q02 4Q03 2002 2003 Loan servicing fees $2.6 $1.7 $12.1 $7.9 Amortization of MSR (3.5) (2.2) (10.2) (12.8) MSR valuation adjustments (0.6) 2.9 (10.8) 3.1 Net gain on sale of loans 2.8 1.9 6.6 12.1 Mortgage banking income, net $1.3 $4.3 $(2.3) $10.3 For the quarter and year ended December 31, 2003, general and administrative expense ("G&A") totaled $50.7 million and $205.9 million, respectively, compared to $48.8 million and $195.8 million, respectively, for the prior year periods. The G&A expense to average assets ratio for the 2003 fourth quarter and year was 0.89% and 0.91%, respectively, compared to 0.89% and 0.88%, respectively, for the comparable year ago periods. Future Outlook Commenting on the current operating environment, Mr. Engelke stated, "We are now just beginning to realize the positive benefits derived from lower premium amortization expense and lower borrowing costs. With mortgage refinance activity significantly reduced, premium amortization expense should return to more normalized levels. The reduced level of premium amortization, coupled with the incremental benefit yet to be derived from borrowings that have just recently been repriced lower and the expected benefit yet to be derived from the sizable amount of high rate borrowings which will be repaid or repriced at substantially lower rates this year, will significantly benefit net interest margin throughout 2004. At the same time, with reduced refinance activity and a projected continuation of a relatively steep Treasury yield curve, we expect to resume growth in our one-to-four family loan portfolio and continue to produce robust growth in our multifamily and CRE loan portfolios. This combination of events is expected to result in significant earnings growth throughout 2004." Astoria Financial Corporation, the holding company for Astoria Federal Savings and Loan Association with assets of $22.5 billion, is the second largest thrift institution headquartered in New York and fifth largest in the United States. Astoria Federal embraces its philosophy of Putting people first by providing its 700,000 customers and the local communities it serves with quality financial products and services through 86 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria commands the third 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 originates mortgage loans through its banking offices and loan production offices in New York, an extensive broker network in nineteen states, primarily the East Coast, and through correspondent relationships in forty-four states. 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; 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. Earnings Conference Call January 22, 2004 at 3:30 p.m. (ET) The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday afternoon, January 22 at 3:30 p.m. (ET). The toll-free dial-in number is (800) 967-7140. A replay will be available on January 22, 2004 from 7:00 p.m. (ET) through January 30, 2004, 11:59 p.m. (ET). The replay number is (888) 203-1112, passcode: 536711. The conference call will also be simultaneously webcast on the Company's website www.astoriafederal.com and archived for one year. ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, Except Share Data) At At December 31, December 31, 2003 2002 ASSETS Cash and due from banks $173,828 $167,605 Federal funds sold and repurchase agreements 65,926 510,252 Mortgage-backed securities available- for-sale 2,498,315 2,453,633 Other securities available-for-sale 156,677 338,948 Mortgage-backed securities held-to- maturity (fair value of $5,761,666 and $4,985,562, respectively) 5,745,706 4,925,891 Other securities held-to-maturity (fair value of $47,451 and $115,003, respectively) 47,021 115,366 Federal Home Loan Bank of New York stock 213,450 247,550 Loans held-for-sale, net 23,023 62,669 Loans receivable: Mortgage loans, net 12,248,772 11,680,160 Consumer and other loans, net 438,215 379,201 12,686,987 12,059,361 Allowance for loan losses (83,121) (83,546) Total loans receivable, net 12,603,866 11,975,815 Mortgage servicing rights, net 17,952 20,411 Accrued interest receivable 77,956 88,908 Premises and equipment, net 160,089 157,297 Goodwill 185,151 185,151 Bank owned life insurance 370,310 358,898 Other assets 118,395 89,435 TOTAL ASSETS $22,457,665 $21,697,829 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $11,186,594 $11,067,196 Reverse repurchase agreements 7,235,000 6,285,000 Federal Home Loan Bank of New York advances 1,924,000 2,064,000 Other borrowings, net 469,171 472,180 Mortgage escrow funds 108,635 104,353 Accrued expenses and other liabilities 137,734 151,102 TOTAL LIABILITIES 21,061,134 20,143,831 Stockholders' equity: Preferred stock, $1.00 par value; 5,000,000 shares authorized: Series A (1,225,000 shares authorized and - 0 - shares issued and outstanding) - - Series B (2,000,000 shares authorized; - 0 - and 2,000,000 shares issued and outstanding, respectively) - 2,000 Common stock, $.01 par value; (200,000,000 shares authorized; 110,996,592 shares issued; and 78,670,254 and 84,805,817 shares outstanding, respectively) 1,110 1,110 Additional paid-in capital 798,583 840,186 Retained earnings 1,481,546 1,368,062 Treasury stock (32,326,338 and 26,190,775 shares, at cost, respectively) (811,993) (639,579) Accumulated other comprehensive (loss) income (46,489) 9,800 Unallocated common stock held by ESOP (4,771,943 and 5,018,500 shares, respectively) (26,226) (27,581) TOTAL STOCKHOLDERS' EQUITY 1,396,531 1,553,998 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $22,457,665 $21,697,829 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Share Data) For the Three Months For the Twelve Months Ended December 31, Ended December 31, 2003 2002 2003 2002 Interest income: Mortgage loans: One-to-four family $111,409 $142,101 $466,544 $626,251 Multi-family, commercial real estate and construction 54,701 44,963 203,785 162,677 Consumer and other loans 4,779 4,912 19,247 17,623 Mortgage-backed securities 83,685 88,350 337,222 377,623 Other securities 3,561 13,477 28,955 69,211 Federal funds sold and repurchase agreements 102 1,914 1,538 12,877 Total interest income 258,237 295,717 1,057,291 1,266,262 Interest expense: Deposits 54,645 62,528 225,251 288,000 Borrowed funds 108,945 122,185 452,502 513,838 Total interest expense 163,590 184,713 677,753 801,838 Net interest income 94,647 111,004 379,538 464,424 Provision for loan losses - - - 2,307 Net interest income after provision for loan losses 94,647 111,004 379,538 462,117 Non-interest income: Customer service fees 14,163 15,272 59,841 60,190 Other loan fees 1,688 1,774 7,556 7,696 Net (loss) gain on sales of securities (7,319) 2,283 7,346 10,772 Mortgage banking income, net 4,277 1,282 10,291 (2,261) Income from bank owned life insurance 4,801 5,471 19,978 21,398 Other 10,633 4,825 14,549 9,612 Total non-interest income 28,243 30,907 119,561 107,407 Non-interest expense: General and administrative: Compensation and benefits 26,770 27,702 110,349 106,704 Occupancy, equipment and systems 15,024 13,525 59,892 53,125 Federal deposit insurance premiums 456 500 1,896 1,996 Advertising 1,090 1,251 5,833 4,806 Other 7,323 5,863 27,907 29,196 Total general and administrative 50,663 48,841 205,877 195,827 Extinguishment of debt - 2,202 - 2,202 Total non-interest expense 50,663 51,043 205,877 198,029 Income before income tax expense 72,227 90,868 293,222 371,495 Income tax expense 24,268 29,804 96,376 123,066 Net income 47,959 61,064 196,846 248,429 Preferred dividends declared - (1,500) (4,500) (6,000) Net income available to common shareholders $47,959 $59,564 $192,346 $242,429 Basic earnings per common share $0.65 $0.73 $2.52 $2.90 Diluted earnings per common share $0.63 $0.73 $2.49 $2.85 Basic weighted average common shares 74,316,446 81,086,769 76,383,304 83,514,927 Diluted weighted average common and common equivalent shares 75,637,477 81,945,229 77,294,705 84,919,651 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES SELECTED FINANCIAL RATIOS AND OTHER DATA At or For the At or For the Three Months Ended Twelve Months Ended December 31, December 31, 2003 2002 2003 2002 (Annualized) Selected Returns and Financial Ratios Return on average stockholders' equity 13.58 % 15.66 % 13.26 % 15.87 % Return on average tangible stockholders' equity (1) 15.63 17.77 15.15 18.00 Return on average assets 0.84 1.11 0.87 1.12 General and administrative expense to average assets 0.89 0.89 0.91 0.88 Efficiency ratio (2) 41.23 34.42 41.25 34.25 Net interest rate spread (3) 1.65 2.10 1.72 2.11 Net interest margin (4) 1.74 2.16 1.78 2.23 Asset Quality Data (dollars in thousands) Non-performing loans/total loans 0.23 % 0.29 % Non-performing loans/total assets 0.13 0.16 Non-performing assets/total assets 0.14 0.16 Allowance for loan losses/non- performing loans 280.10 242.04 Allowance for loan losses/non-accrual loans 285.51 249.53 Allowance for loan losses/total loans 0.66 0.69 Net charge-offs to average loans outstanding 0.00 % 0.00 % 0.00 0.01 Non-performing assets $31,311 $35,608 Non-performing loans 29,676 34,517 Loans 90 days past maturity but still accruing interest 563 1,035 Non-accrual loans 29,113 33,482 Net charge-offs $84 $102 425 1,046 Capital Ratios (Astoria Federal) Tangible 7.37 % 7.23 % Core 7.37 7.23 Risk-based 15.39 15.44 Other Data Cash dividends paid per common share $0.22 $0.20 $0.86 $0.77 Dividend payout ratio 34.92 % 27.40 % 34.54 % 27.02 % Stockholders' equity (in thousands) $1,396,531 $1,553,998 Common stockholders' equity (in thousands) 1,396,531 1,503,998 Book value per common share (5) 18.90 18.85 Tangible book value per common share (6) 16.39 16.53 Average equity/average assets 6.19 % 7.08 % 6.55 % 7.07 % Mortgage loans serviced for others (in thousands) $1,895,102 $2,671,085 Full time equivalent employees 1,971 1,956 (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 December 31, 2003 Average Average Yield/ Balance Interest Cost Assets: (Annualized) Interest-earning assets: Mortgage loans (1): One-to-four family $8,977,731 $111,409 4.96 % Multi-family, commercial real estate and construction 3,123,763 54,701 7.00 Consumer and other loans (1) 429,105 4,779 4.45 Total loans 12,530,599 170,889 5.46 Mortgage-backed securities (2) 8,692,026 83,685 3.85 Other securities (2) (3) 467,850 3,561 3.04 Federal funds sold and repurchase agreements 42,225 102 0.97 Total interest-earning assets 21,732,700 258,237 4.75 Goodwill 185,151 Other non-interest-earning assets 917,547 Total assets $22,835,398 Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $2,937,759 2,955 0.40 Money market 1,264,709 1,736 0.55 NOW and demand deposit 1,471,362 222 0.06 Certificates of deposit 5,510,619 49,732 3.61 Total deposits 11,184,449 54,645 1.95 Borrowed funds 9,931,336 108,945 4.39 Total interest-bearing liabilities 21,115,785 163,590 3.10 Non-interest-bearing liabilities 306,873 Total liabilities 21,422,658 Stockholders' equity 1,412,740 Total liabilities and stockholders' equity $22,835,398 Net interest income/net interest rate spread $94,647 1.65 % Net interest-earning assets/net interest margin $616,915 1.74 % Ratio of interest-earning assets to interest-bearing liabilities 1.03x For the Three Months Ended December 31, 2002 Average Average Yield/ Balance Interest Cost Assets: (Annualized) Interest-earning assets: Mortgage loans (1): One-to-four family $9,650,104 $142,101 5.89 % Multi-family, commercial real estate and construction 2,340,428 44,963 7.68 Consumer and other loans (1) 366,254 4,912 5.36 Total loans 12,356,786 191,976 6.21 Mortgage-backed securities (2) 6,886,092 88,350 5.13 Other securities (2) (3) 771,038 13,477 6.99 Federal funds sold and repurchase agreements 498,048 1,914 1.54 Total interest-earning assets 20,511,964 295,717 5.77 Goodwill 185,151 Other non-interest-earning assets 1,341,603 Total assets $22,038,718 Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $2,818,110 4,489 0.64 Money market 1,744,120 4,880 1.12 NOW and demand deposit 1,359,038 526 0.15 Certificates of deposit 5,185,574 52,633 4.06 Total deposits 11,106,842 62,528 2.25 Borrowed funds 8,999,131 122,185 5.43 Total interest-bearing liabilities 20,105,973 184,713 3.67 Non-interest-bearing liabilities 372,728 Total liabilities 20,478,701 Stockholders' equity 1,560,017 Total liabilities and stockholders' equity $22,038,718 Net interest income/net interest rate spread $111,004 2.10 % Net interest-earning assets/net interest margin $405,991 2.16 % Ratio of interest-earning assets to interest-bearing liabilities 1.02x (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. (3) Other securities include Federal Home Loan Bank of New York stock. ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS (Dollars in Thousands) For the Twelve Months Ended December 31, 2003 Average Average Yield/ Balance Interest Cost Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $8,990,636 $466,544 5.19 % Multi-family, commercial real estate and construction 2,757,481 203,785 7.39 Consumer and other loans (1) 410,095 19,247 4.69 Total loans 12,158,212 689,576 5.67 Mortgage-backed securities (2) 8,491,108 337,222 3.97 Other securities (2) (3) 529,592 28,955 5.47 Federal funds sold and repurchase agreements 136,272 1,538 1.13 Total interest-earning assets 21,315,184 1,057,291 4.96 Goodwill 185,151 Other non-interest-earning assets 1,172,962 Total assets $22,673,297 Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $2,907,541 13,198 0.45 Money market 1,403,363 9,934 0.71 NOW and demand deposit 1,469,805 1,526 0.10 Certificates of deposit 5,419,725 200,593 3.70 Total deposits 11,200,434 225,251 2.01 Borrowed funds 9,686,459 452,502 4.67 Total interest-bearing liabilities 20,886,893 677,753 3.24 Non-interest-bearing liabilities 302,311 Total liabilities 21,189,204 Stockholders' equity 1,484,093 Total liabilities and stockholders' equity $22,673,297 Net interest income/net interest rate spread $379,538 1.72 % Net interest-earning assets/net interest margin $428,291 1.78 % Ratio of interest-earning assets to interest-bearing liabilities 1.02x For the Twelve Months Ended December 31, 2002 Average Average Yield/ Balance Interest Cost Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $10,077,810 $626,251 6.21 % Multi-family, commercial real estate and construction 2,072,805 162,677 7.85 Consumer and other loans (1) 307,103 17,623 5.74 Total loans 12,457,718 806,551 6.47 Mortgage-backed securities (2) 6,599,887 377,623 5.72 Other securities (2) (3) 1,011,280 69,211 6.84 Federal funds sold and repurchase agreements 766,906 12,877 1.68 Total interest-earning assets 20,835,791 1,266,262 6.08 Goodwill 185,151 Other non-interest-earning assets 1,116,863 Total assets $22,137,805 Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $2,754,000 29,096 1.06 Money market 1,876,107 32,512 1.73 NOW and demand deposit 1,269,866 3,176 0.25 Certificates of deposit 5,203,610 223,216 4.29 Total deposits 11,103,583 288,000 2.59 Borrowed funds 9,097,198 513,838 5.65 Total interest-bearing liabilities 20,200,781 801,838 3.97 Non-interest-bearing liabilities 372,050 Total liabilities 20,572,831 Stockholders' equity 1,564,974 Total liabilities and stockholders' equity $22,137,805 Net interest income/net interest rate spread $464,424 2.11 % Net interest-earning assets/net interest margin $635,010 2.23 % 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. (3) Other securities include Federal Home Loan Bank of New York stock. SOURCE Astoria Financial Corporation -0- 01/22/2004 /CONTACT: Peter J. Cunningham, First Vice President, Investor Relations of Astoria Financial Corporation, +1-516-327-7877, ir@astoriafederal.com / /Company News On-Call: http://www.prnewswire.com/comp/104529.html / /Web site: http://www.astoriafederal.com / (AF) CO: Astoria Financial Corporation; Astoria Federal Savings and Loan Association ST: New York IN: FIN SU: ERN CCA