-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RXXlUzWWItAUQEkmXmZeSLMp8Vdwim5Cb3HB23+DcDVkLvEgvF6Nzwp+ox2rxa0I TQsgWFCTLRbfS5rVNwn/1w== 0000950123-03-000615.txt : 20030127 0000950123-03-000615.hdr.sgml : 20030127 20030127160105 ACCESSION NUMBER: 0000950123-03-000615 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030123 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20030127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASTORIA FINANCIAL CORP CENTRAL INDEX KEY: 0000910322 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 113170868 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11967 FILM NUMBER: 03526017 BUSINESS ADDRESS: STREET 1: ONE ASTORIA FEDERAL PLAZA CITY: LAKE SUCCESS STATE: NY ZIP: 11042-1085 BUSINESS PHONE: 5163273000 MAIL ADDRESS: STREET 1: ONE ASTORIA FEDERAL PLAZA CITY: LAKE SUCCESS STATE: NY ZIP: 11042-1085 8-K 1 y82905e8vk.txt ASTORIA FINANCIAL CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------- FORM 8-K CURRENT REPORT --------------------------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of report (Date of earliest event reported): January 23, 2003 ASTORIA FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 0-22228 11-3170868 - ------------------------------- --------------------- ------------------- (State or other jurisdiction of (Commission File No.) (IRS Employer incorporation or organization) Identification No.) ONE ASTORIA FEDERAL PLAZA, LAKE SUCCESS, NEW YORK 11042-1085 ------------------------------------------------------------ (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (516) 327-3000 NOT APPLICABLE -------------- (Former name or former address, if changed since last report) 1 ITEMS 1 THROUGH 6 AND 8. NOT APPLICABLE ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following Exhibits are furnished as part of this report: 99.1 Press release dated January 23, 2003 which, among other things, highlights the Company's financial results for the quarter and year ended December 31, 2002. ITEM 9. REGULATION FD DISCLOSURE. On January 23, 2003, Astoria Financial Corporation reported financial results for the quarter and year ended December 31, 2002. Net income for the quarter ended December 31, 2002 totaled $61.1 million, or $0.73 diluted earnings per common share, compared to net income of $54.8 million, or $0.61 diluted earnings per common share for the 2001 fourth quarter. Net income for the full year 2002 totaled $248.4 million, or $2.85 diluted earnings per common share, compared to $222.9 million, or $2.35 diluted earnings per common share for the comparable 2001 full year period. The full text of the earnings release is included herein as Exhibit 99.1 The information provided pursuant hereto shall not be deemed incorporated by reference by any general statement incorporating by reference this Form 8-K into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under such Acts. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ASTORIA FINANCIAL CORPORATION /s/ Peter J. Cunningham -------------------------------- Peter J. Cunningham First Vice President and Director of Investor Relations Dated: January 27, 2003 EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 99.1 Press release dated January 23, 2003, which, among other things, highlights the Company's financial results for the quarter and year ended December 31, 2002. 3 EX-99.1 3 y82905exv99w1.txt PRESS RELEASE [ASTORIA FINANCIAL CORPORATION LOGO] NEWS RELEASE FOR IMMEDIATE RELEASE CONTACT: PETER J. CUNNINGHAM FIRST VICE PRESIDENT, INVESTOR RELATIONS (516) 327-7877 IR@ASTORIAFEDERAL.COM ASTORIA FINANCIAL CORPORATION ANNOUNCES 20% INCREASE IN FOURTH QUARTER EPS TO $0.73 AND 21% INCREASE IN FULL YEAR EPS TO $2.85 QUARTERLY CASH DIVIDEND OF $0.20 PER COMMON SHARE DECLARED; ANNUAL MEETING DATE SET LAKE SUCCESS, NEW YORK - JANUARY 23, 2003 - Astoria Financial Corporation (NYSE: AF) ("Astoria"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $61.1 million, or $0.73 diluted earnings per common share, for the quarter ended December 31, 2002, compared to net income of $54.8 million, or $0.61 diluted earnings per common share for the 2001 fourth quarter, representing increases of 11% and 20%, respectively. For the 2002 fourth quarter, returns on average equity, average tangible equity and average assets increased to 15.66%, 17.77% and 1.11%, respectively, from 14.09%, 16.02% and 0.97%, respectively, for the comparable 2001 period. Net income for the full year 2002 totaled a record $248.4 million, or $2.85 diluted earnings per common share, compared to net income of $222.9 million, or $2.35 diluted earnings per common share for 2001, representing increases of 11% and 21%, respectively. For 2002, returns on average equity, average tangible equity and average assets increased to 15.87%, 18.00%, and 1.12%, respectively, from 14.13%, 16.13% and 0.99%, respectively, for 2001. Included in the 2002 results is the benefit derived from the adoption of SFAS No. 142, which eliminated goodwill amortization of $4.8 million, or $0.06 diluted earnings per common share, per quarter. The 2001 results include a charge reflecting the cumulative effect of an accounting change, net of tax, of $2.3 million, or $0.03 diluted earnings per common share, related to the implementation of SFAS No. 133 in the 2001 first quarter. 2002 HIGHLIGHTS: PROFITABILITY: - Diluted EPS: $2.85, up 21% from 2001 - Return on average assets: 1.12%, up 13% from 2001 - Return on average equity: 15.87%, up 12% from 2001 1 - Return on average tangible equity: 18.00%, up 12% from 2001 RETAIL BANKING: - Deposits total $11.1 billion, up $164 million, or 1%, from December 31, 2001 - Core deposits total $5.9 billion, up $171 million, or 3%, from December 31, 2001; core deposits represent 53% of total deposits - Checking deposits total $1.4 billion, up $183 million, or 15%, from December 31, 2001; 83,000 checking accounts opened during 2002 - Business checking deposits (included in checking deposits above) total $159 million, up $46 million, or 41%, from December 31, 2001 - Customer service fees increased to $60 million, up $8 million, or 16%, from 2001 MORTGAGE LENDING: - Record Multifamily and Commercial real estate ("CRE") loan volume of $1.0 billion for 2002, an increase of 71% over 2001 - One-to-four family loan volume of $4.5 billion for 2002, an increase of 15% over 2001 - Record home equity lines of credit of $278 million opened in 2002, an increase of 88% over 2001 - Multifamily and CRE portfolios total $2.3 billion, up $652 million, or 39% from December 31, 2001, representing 19% of total loans - One-to-four family portfolio totals $9.2 billion, down $896 million, or 9% from December 31, 2001, representing 77% of total loans - Home equity and other loans portfolio totals $373 million, up $132 million, or 55% from December 31, 2001, representing 3% of total loans Commenting on the Company's results, George L. Engelke, Jr., Chairman, President and Chief Executive Officer of Astoria, said, "I am pleased to report double-digit earnings growth in both the fourth quarter and year despite the extraordinarily high level of mortgage loan and MBS repayments that accelerated through the fourth quarter and resulted in more than 50% of our assets being redeployed at lower rates during the year." BOARD DECLARES QUARTERLY CASH DIVIDEND The Board of Directors of the Company, at their January 22, 2003 meeting, declared a quarterly cash dividend of $0.20 per common share. The dividend is payable on March 3, 2003 to shareholders of record as of February 18, 2003. This is the thirty-first consecutive quarterly cash dividend declared by the Company. EIGHTH STOCK REPURCHASE PROGRAM COMPLETED; NINTH STOCK REPURCHASE PROGRAM COMMENCES During the fourth quarter, Astoria completed its eighth stock repurchase program and immediately commenced its previously announced ninth program, purchasing a combined 3.1 million shares of its common stock under both programs at an average cost of $26.20 per share. For 2002, the Company repurchased 7.3 million of its common shares at a cost of $211.1 million, or $28.98 per share. Under the 2 ninth program, 9.6 million of common shares remain authorized for repurchase. ISSUANCE OF $250 MILLION OF SENIOR NOTES During the 2002 fourth quarter, as previously announced, the Company issued $250 million aggregate principal amount of 5.75% Senior Notes due 2012. The proceeds are to be used for general corporate purposes, including stock repurchases. BOARD SETS ANNUAL SHAREHOLDERS' MEETING DATE The Board of Directors, at their January 22, 2003 meeting, established May 21, 2003 as the date for the Annual Meeting of Shareholders, with a record date of March 26, 2003. BALANCE SHEET SUMMARY & TRENDS Assets at December 31, 2002 totaled $21.7 billion compared to $21.9 billion at the end of the previous quarter and $22.7 billion at December 31, 2001. Key balance sheet highlights including the cumulative effect of the Company's balance sheet repositioning since December 31, 1999 follow:
CHANGE (DOLLARS IN MILLIONS) 12/31/99 12/31/00 12/31/01 12/31/02 12/31/99-12/31/02 -------- -------- -------- -------- ----------------- ASSETS $22,697 $22,337 $22,668 $21,698 - 4% LOANS $10,286 $11,422 $12,167 $12,059 + 17% MBS $ 9,287 $ 7,875 $ 7,074 $ 7,380 - 21% DEPOSITS $ 9,555 $10,072 $10,904 $11,067 + 16% CORE DEPOSITS $ 4,625 $ 4,922 $ 5,743 $ 5,914 + 28% CHECKING $ 878 $ 1,005 $ 1,200 $ 1,383 + 58% BORROWINGS $11,524 $10,320 $ 9,822 $ 8,821 - 23%
Mortgage loan originations and purchases for the quarter ended December 31, 2002 totaled $1.6 billion compared to $1.5 billion for the comparable 2001 period and $1.3 billion for the 2002 third quarter. Included in the fourth quarter mortgage loan production were one-to-four family mortgage loans totaling $1.3 billion, predominantly 3/1 and 5/1 adjustable rate mortgage ("ARM") loans. For the full year 2002, loan volume increased $1.0 billion to a record $5.6 billion, of which 81% were one-to-four family mortgage loans, predominantly 3/1 and 5/1 ARMs. For the quarter ended December 31, 2002, multifamily and CRE loan originations totaled $249.2 million compared to $195.8 million for the 2001 fourth quarter and $313.9 million for the 2002 third quarter. For the full year 2002, multifamily and CRE loan originations totaled $1.0 billion, an increase of $418.4 million, or 71%, over 2001 originations. The combined portfolios of multifamily and CRE loans grew 39% to $2.3 billion, or 19% of total loans at December 31, 2002. The average loan-to-value ratio of the multifamily and CRE loan portfolios is less than 65%, based on current principal balance and original appraised value. The average loan outstanding in these portfolios is under $1 million. The Company's strong multifamily and CRE lending capabilities are reflected in the growth of this portfolio since 1999: 3
CHANGE (DOLLARS IN MILLIONS) 12/31/99 12/31/00 12/31/01 12/31/02 12/31/99-12/31/02 -------- -------- -------- -------- ----------------- MULTIFAMILY/CRE LOANS $1,014 $1,282 $1,693 $2,345 +131% % OF TOTAL LOANS 10% 11% 14% 19% + 90%
"This past year was one of spectacular growth in multifamily and commercial real estate lending. This was accomplished without any change in our focus on top quality, low credit risk lending standards. We will continue our strong growth in multifamily and CRE lending and expect these portfolios to approximate 25% of total loans by the end of 2003," Mr. Engelke noted. Mortgage loan prepayments for the quarter ended December 31, 2002 increased to $1.5 billion compared to $1.1 billion for the 2001 fourth quarter and $1.2 billion for the previous quarter. For the year ended December 31, 2002, mortgage loan prepayments totaled $4.5 billion as compared to $3.0 billion for the full year 2001. Due to the historically high level of mortgage loan prepayments, the total loan portfolio decreased slightly during the year to $12.1 billion from $12.2 billion at December 31, 2001. At December 31, 2002, non-performing loans declined to $34.5 million, or 0.16% of total assets, from $37.1 million, or 0.16% of total assets, at December 31, 2001. Net charge-offs for the quarter ended December 31, 2002 were $102,000. For the full year 2002, net charge-offs were $1.0 million, or one basis point of average total loans outstanding. The ratio of the allowance for loan losses to non-performing loans was 242% at December 31, 2002 compared to 222% at December 31, 2001. 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 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 64%, based upon current principal balance and original appraised value." Mortgage-backed securities ("MBS") totaled $7.4 billion at December 31, 2002, an increase of $305.5 million from December 31, 2001 and $589.1 million from September 30, 2002. For the quarter ended December 31, 2002, MBS repayments totaled $2.3 billion compared to $1.1 billion for the 2001 fourth quarter and $1.4 billion for the 2002 third quarter. For the year ended December 31, 2002, MBS repayments totaled $6.1 billion compared to $3.0 billion for the comparable 2001 period. Deposits were up $163.5 million for the year ended December 31, 2002 to $11.1 billion and were down $113.4 million on a linked quarter basis. Core deposits, which exclude certificate of deposit accounts, increased to $5.9 billion from $5.7 billion at December 31, 2001 and represent 53% of total deposits at December 31, 2002. Checking account balances at December 31, 2002 increased 15% to $1.4 billion from December 31, 2001 and represent 23% of core deposits at December 31, 2002. At December 31, 2002, the average checking account balance was $4,000, an increase of 8% from $3,700 at the end of 2001. Additionally, the success of our small business banking initiatives was reflected in the strong growth of business deposits, including business savings and checking accounts. At December 31, 2002, business deposits totaled $220.3 million, up 38% from December 31, 2001. 4 Borrowings declined $1.0 billion during 2002 and totaled $8.8 billion at December 31, 2002. The following table details future borrowing maturities and weighted average rates:
CONTRACTUAL TOTAL AMOUNT WEIGHTED MATURITY MATURING AVERAGE RATE 1Q03 $850 Million 3.71% 2Q03 $200 Million 6.49% 3Q03 $350 Million 5.30% 4Q03 $800 Million 5.81% ------------ Through 2003 $ 2.2 Billion 4.98% 1Q04 $ 2.8 Billion 4.97% Remainder of 2004 $ 0.6 Billion 5.89% Beyond 2004 $ 3.2 Billion 5.59% -------------- Total(1) $ 8.8 Billion 5.26% ==============
In addition to the above maturities, over the next twelve months approximately $2.4 billion of CDs with an average rate of 2.88% will mature. During the month of December 2002, CDs were issued or repriced at an average rate of 1.53%. Stockholders' equity was $1.6 billion, or 7.16% of total assets, at December 31, 2002 compared to $1.5 billion, or 6.81% of total assets, at December 31, 2001. Astoria Federal continues to maintain capital ratios in excess of applicable regulatory requirements. At December 31, 2002, core, tangible and risk-based capital ratios were 7.23%, 7.23% and 15.44%, respectively. FOURTH QUARTER AND FULL YEAR EARNINGS SUMMARY Net interest income for the quarter and year ended December 31, 2002 totaled $111.0 million and $464.4 million, respectively, compared to $110.6 million and $457.0 million for the comparable 2001 periods. During the fourth quarter, the Company entered into an interest rate swap agreement that had the effect of converting our $125 million of capital trust securities ("Securities") from a 9.75% fixed rate instrument into a variable rate, LIBOR-based instrument. As a result of this transaction, the Securities were reclassified as borrowings and the capital securities expense, previously classified as non-interest expense, was reclassified as interest expense. All prior periods have been restated to conform to the current presentation. Astoria's net interest margin for the quarter ended December 31, 2002 increased to 2.16%, or 11 basis points over the 2001 fourth quarter margin of 2.05% and decreased 9 basis points from the restated margin of 2.25% for the previous quarter. Seven of the nine basis point decrease from the linked quarter is attributable to the $250 million senior debt issued in the fourth quarter. The year over year improvement in the net interest margin is a result of the cost of deposits and borrowings declining more rapidly than the - -------- (1) Included are $5.4 billion of borrowings that have a maturity greater than one year but can be called prior to March 31, 2003. 5 decline in asset yields. For the quarter ended December 31, 2002, the average cost of interest-bearing liabilities declined 84 basis points from the 2001 fourth quarter to 3.67% while the average yield on interest-earning assets declined only 61 basis points to 5.77%. Non-interest income for the quarter and year ended December 31, 2002 rose 37% and 19%, respectively, to $30.9 million and $107.4 million from $22.6 million and $90.1 million, for the respective periods in 2001. The increases for the quarter and year are primarily due to increases in customer service fees, net gain on sales of securities, BOLI income and the receipt in the 2002 fourth quarter of a $3.8 million net insurance settlement regarding the previously disclosed Weil litigation. Customer service fees for the quarter and year ended December 31, 2002 increased 10% and 16%, respectively, to $15.3 million and $60.2 million, respectively, from $13.9 million and $52.0 million, respectively, for the 2001 comparable periods. Included in non-interest income is mortgage banking income, net, the components of which are detailed below:
(DOLLARS IN MILLIONS) 4Q02 4Q01 2002 2001 Loan servicing fees $ 2.6 $ 3.5 $ 12.1 $ 15.1 Amortization of MSR* (3.5) (3.2) (10.2) (9.6) MSR valuation adjustments* (0.6) 0.1 (10.8) (1.3) Net gain on sale of loans 2.8 0.7 6.6 3.3 ---- ---- ----- ----- Mortgage banking income, net $ 1.3 $ 1.1 $ (2.3) $ 7.5 ==== ==== ===== =====
* Previously classified as non-interest expense During the 2002 fourth quarter, a gain on sales of securities of $2.3 million was recognized in order to offset an anticipated increase in the mortgage servicing valuation allowance. Since such valuation allowance increase was minimal, we used the gain on the sale of securities to offset a prepayment penalty of $2.2 million incurred on the prepayment of $100 million of high cost borrowings. The following table details the fourth quarter and full year offsets to MSR valuation adjustments:
(DOLLARS IN MILLIONS) 4Q02 4Q01 2002 2001 MSR valuation adjustments $ (0.6) $ 0.1 $ (10.8) $ (1.3) Net gain on sales of securities 2.3 -0- 10.8 -0- Extinguishment of debt (2.2) -0- (2.2) -0- ----- ------- ------- -------- Net impact on pre-tax income $ (0.5) $ 0.1 $ (2.2) $ (1.3) ======= ======= ======== ========
For the quarter ended December 31, 2002, general and administrative expense ("G&A") totaled $48.8 million, compared to $44.1 million for the prior year period. The increase from the 2001 quarter is primarily due to increased compensation and pension expense. For the year ended December 31, 2002, G&A totaled $195.8 million, compared to $178.8 million for 2001. The increase was due primarily to increased compensation and pension expense, increased employee stock plan amortization and negative market valuation adjustments on interest rate caps. The efficiency ratio for the 2002 fourth quarter was 34.42% compared to 33.09% for the 2001 fourth 6 quarter. For 2002, the efficiency ratio was 34.25% compared to 32.68% in 2001. FUTURE OUTLOOK Commenting on the current operating environment, Mr. Engelke stated, "We are operating in a unique financial atmosphere with interest rates at forty-year lows, major geopolitical uncertainties and a lackluster economy. We currently anticipate the continuation of the existing low interest rate environment and the extraordinarily high levels of cash flow throughout the first half of 2003. Accordingly, we expect quarterly earnings in the first half of 2003 to resemble the 2002 fourth quarter results excluding the impact of the Weil litigation insurance settlement. Our current projections are for interest rates to rise and cash flows to recede in the second half of the year. If that transpires, earnings growth should resume. If a continuation of the current environment persists, we would not expect any significant growth in earnings during 2003 and might experience some downward pressure on earnings. Clearly, if interest rates increase earlier, positive earnings momentum will resume earlier." EARNINGS CONFERENCE CALL, JANUARY 24 AT 9:30 A.M. (ET) The Company will host an earnings conference call tomorrow morning, January 24 at 9:30 a.m. (ET) to discuss fourth quarter and full year operating results. The toll-free dial-in number is (877) 692-2086. A replay will be available on January 24, 2003 from 1:00 p.m. (ET) through January 31, 2003, 11:59 p.m. (ET) The replay number is (877) 519-4471, passcode: 3677261. The conference call will also be simultaneously webcast on the Company's investor relations website at http://ir.astoriafederal.com and archived through February 7, 2003. RISK FACTORS AND FORWARD LOOKING STATEMENTS This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended, and Section 21E of the Securities 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 other areas in which we do business, or 7 conditions in the securities markets or the banking industry may be less favorable than we currently anticipate; legislation or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than we anticipate. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document. Astoria Financial Corporation, the holding company for Astoria Federal Savings and Loan Association with assets of approximately $22 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 fifteen states, primarily the East Coast, and through correspondent relationships in forty-four states. Tables Follow 8 Page 9 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In Thousands, Except Share Data)
At At December 31, December 31, 2002 2001 ------------ ------------ ASSETS Cash and due from banks $ 167,605 $ 144,694 Federal funds sold and repurchase agreements 510,252 1,309,164 Mortgage-backed securities available-for-sale 2,453,633 3,014,963 Other securities available-for-sale 338,948 534,220 Mortgage-backed securities held-to-maturity (fair value of $4,985,562 and $4,062,749, respectively) 4,925,891 4,059,087 Other securities held-to-maturity (fair value of $115,003 and $405,451, respectively) 115,366 404,841 Federal Home Loan Bank of New York stock 247,550 250,450 Loans held-for-sale 62,669 43,390 Loans receivable: Mortgage loans, net 11,680,160 11,924,134 Consumer and other loans, net 379,201 243,127 ------------ ------------ 12,059,361 12,167,261 Allowance for loan losses (83,546) (82,285) ------------ ------------ Total loans receivable, net 11,975,815 12,084,976 Mortgage servicing rights, net 20,411 35,295 Accrued interest receivable 88,908 96,273 Premises and equipment, net 157,297 149,753 Goodwill 185,151 185,151 Bank owned life insurance 358,898 242,751 Other assets 89,435 112,698 ------------ ------------ TOTAL ASSETS $ 21,697,829 $ 22,667,706 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits $ 11,067,196 $ 10,903,693 Reverse repurchase agreements 6,285,000 7,385,000 Federal Home Loan Bank of New York advances 2,064,000 1,914,000 Other borrowings, net 472,180 522,795 Mortgage escrow funds 104,353 116,395 Accrued expenses and other liabilities 151,102 283,237 ------------ ------------ TOTAL LIABILITIES 20,143,831 21,125,120 ------------ ------------ 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, issued and outstanding) 2,000 2,000 Common stock, $.01 par value; (200,000,000 shares authorized; 110,996,592 shares issued; and 84,805,817 and 90,766,744 shares outstanding, respectively) 1,110 1,110 Additional paid-in capital 840,186 822,652 Retained earnings 1,368,062 1,207,742 Treasury stock (26,190,775 and 20,229,848 shares, at cost, respectively) (639,579) (459,471) Accumulated other comprehensive income (loss) 9,800 (1,967) Unallocated common stock held by ESOP (27,581) (29,480) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 1,553,998 1,542,586 ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,697,829 $ 22,667,706 ============ ============
Page 10 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Share Data)
For the Three Months Ended For the Twelve Months Ended December 31, December 31, ------------------------------- ------------------------------- 2002 2001 2002 2001 ------------ ------------ ------------ ------------ Interest income: Mortgage loans $ 187,064 $ 204,862 $ 788,928 $ 818,759 Consumer and other loans 4,912 4,140 17,623 17,853 Mortgage-backed securities 88,350 107,620 377,623 462,621 Other securities 13,477 21,023 69,211 107,315 Federal funds sold and repurchase agreements 1,914 6,655 12,877 32,015 ------------ ------------ ------------ ------------ Total interest income 295,717 344,300 1,266,262 1,438,563 ------------ ------------ ------------ ------------ Interest expense: Deposits 62,528 88,158 288,000 399,989 Borrowed funds 122,185 145,571 513,838 581,616 ------------ ------------ ------------ ------------ Total interest expense 184,713 233,729 801,838 981,605 ------------ ------------ ------------ ------------ Net interest income 111,004 110,571 464,424 456,958 Provision for loan losses -- 1,002 2,307 4,028 ------------ ------------ ------------ ------------ Net interest income after provision for loan losses 111,004 109,569 462,117 452,930 ------------ ------------ ------------ ------------ Non-interest income: Customer service fees 15,272 13,932 60,190 52,027 Other loan fees 1,774 2,234 7,696 6,864 Net gain on sales of securities 2,283 -- 10,772 -- Mortgage banking income, net 1,282 1,094 (2,261) 7,515 Income from bank owned life insurance 5,471 4,264 21,398 16,848 Other 4,825 1,108 9,612 6,851 ------------ ------------ ------------ ------------ Total non-interest income 30,907 22,632 107,407 90,105 ------------ ------------ ------------ ------------ Non-interest expense: General and administrative: Compensation and benefits 27,702 24,779 106,704 92,823 Occupancy, equipment and systems 13,525 13,067 53,125 52,390 Federal deposit insurance premiums 500 503 1,996 1,996 Advertising 1,251 688 4,806 4,947 Other 5,863 5,034 29,196 26,611 ------------ ------------ ------------ ------------ Total general and administrative 48,841 44,071 195,827 178,767 Extinguishment of debt 2,202 -- 2,202 -- Amortization of goodwill -- 4,769 -- 19,078 ------------ ------------ ------------ ------------ Total non-interest expense 51,043 48,840 198,029 197,845 ------------ ------------ ------------ ------------ Income before income tax expense and cumulative effect of accounting change 90,868 83,361 371,495 345,190 Income tax expense 29,804 28,554 123,066 120,036 ------------ ------------ ------------ ------------ Income before cumulative effect of accounting change 61,064 54,807 248,429 225,154 Cumulative effect of accounting change, net of tax -- -- -- (2,294) ------------ ------------ ------------ ------------ Net income 61,064 54,807 248,429 222,860 Preferred dividends declared (1,500) (1,500) (6,000) (6,000) ------------ ------------ ------------ ------------ Net income available to common shareholders $ 59,564 $ 53,307 $ 242,429 $ 216,860 ============ ============ ============ ============ Basic earnings per common share: Income before accounting change $ 0.73 $ 0.62 $ 2.90 $ 2.43 Cumulative effect of accounting change, net of tax -- -- -- (0.03) ------------ ------------ ------------ ------------ Net basic earnings per common share $ 0.73 $ 0.62 $ 2.90 $ 2.40 ============ ============ ============ ============ Diluted earnings per common share: Income before accounting change $ 0.73 $ 0.61 $ 2.85 $ 2.38 Cumulative effect of accounting change, net of tax -- -- -- (0.03) ------------ ------------ ------------ ------------ Net diluted earnings per common share $ 0.73 $ 0.61 $ 2.85 $ 2.35 ============ ============ ============ ============ Basic weighted average common shares 81,086,769 86,290,774 83,514,927 90,450,157 Diluted weighted average common and common equivalent shares 81,945,229 87,756,068 84,919,651 92,174,012
Page 11 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, ------------------- ----------------------------- 2002 2001 2002 2001 ------ ------ ----------- ----------- (Annualized) SELECTED RETURNS AND FINANCIAL RATIOS Return on average stockholders' equity (1) 15.66% 14.09% 15.87% 14.13% Return on average tangible stockholders' equity (1) 17.77 16.02 18.00 16.13 Return on average assets (1) 1.11 0.97 1.12 0.99 General and administrative expense to average assets 0.89 0.78 0.88 0.79 Efficiency ratio (2) 34.42 33.09 34.25 32.68 Net interest rate spread 2.10 1.87 2.11 1.91 Net interest margin 2.16 2.05 2.23 2.12 SELECTED CASH RATIOS (3) Cash return on average stockholders' equity 16.40% 16.12% 16.53% 15.84% Cash return on average tangible stockholders' equity 18.61 18.33 18.75 18.09 Cash return on average assets 1.16 1.11 1.17 1.11 Cash general and administrative expense to average assets 0.83 0.72 0.84 0.76 Cash efficiency ratio (2) 32.36 30.74 32.46 31.21 ASSET QUALITY DATA (DOLLARS IN THOUSANDS) Non-performing loans/total loans 0.29% 0.31% Non-performing loans/total assets 0.16 0.16 Non-performing assets/total assets 0.16 0.18 Allowance for loan losses/non-performing loans 242.04 221.70 Allowance for loan losses/non-accrual loans 249.53 229.60 Allowance for loan losses/total loans 0.69 0.68 Net charge-offs to average loans outstanding 0.00% 0.02% 0.01 0.01 Non-performing assets $ 35,608 $ 40,103 Non-performing loans 34,517 37,116 Loans 90 days past maturity but still accruing 1,035 1,277 Non-accrual loans 33,482 35,839 Net charge-offs $ 102 $ 722 1,046 1,674 CAPITAL RATIOS (ASTORIA FEDERAL) Tangible 7.23% 5.88% Core 7.23 5.88 Risk-based 15.44 13.75 OTHER DATA Cash dividends paid per common share $ 0.20 $ 0.17 $ 0.77 $ 0.61 Book value per common share 17.73 16.44 Tangible book value per common share 15.55 14.40 Average equity/average assets 7.08% 6.86% 7.07% 7.01% Mortgage loans serviced for others (in thousands) $ 2,671,085 $ 3,322,087 Full time equivalent employees 1,956 1,885
(1) Included in the 2002 results is the benefit derived from the adoption of SFAS No. 142 which eliminated goodwill amortization totaling $4.8 million for the three months ended December 31, 2001 and $19.1 million for the year ended December 31, 2001. (2) The efficiency ratio represents general and administrative expense divided by the sum of net interest income plus non-interest income. (3) The information presented represents pro forma calculations which are not in conformity with GAAP. The following items have been excluded from the return calculations: For the three months ended December 31, 2002 and 2001, a non-cash charge for amortization of employee stock plans of $2.9 million in 2002 and $3.1 million in 2001 and amortization of goodwill of $4.8 million in 2001. For the year ended December 31, 2002 and 2001, a non-cash charge for amortization of employee stock plans of $10.2 million in 2002 and $8.0 million in 2001 and amortization of goodwill of $19.1 million in 2001. The cash general and administrative expense to average assets ratio and cash efficiency ratio exclude the non-cash charge for amortization of employee stock plans. Page 12 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS (Dollars in Thousands)
For the Three Months Ended December 31, -------------------------------------------------------------------------------------- 2002 2001 --------------------------------------- ------------------------------------------- Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ------------ --------- -------- --------------- --------- --------- Assets: (Annualized) (Annualized) Interest-earning assets: Mortgage loans (1): One-to-four family $ 9,650,104 $ 142,101 5.89% $ 10,226,005 $ 170,263 6.66% Multi-family, commercial and construction 2,340,428 44,963 7.68 1,662,506 34,599 8.32 Consumer and other loans (1) 366,254 4,912 5.36 234,269 4,140 7.07 ------------ --------- --------------- --------- Total loans 12,356,786 191,976 6.21 12,122,780 209,002 6.90 Mortgage-backed securities (2) 6,886,092 88,350 5.13 7,021,780 107,620 6.13 Other securities (2) (3) 771,038 13,477 6.99 1,212,829 21,023 6.93 Federal funds sold and repurchase agreements 498,048 1,914 1.54 1,226,800 6,655 2.17 ------------ --------- --------------- --------- Total interest-earning assets 20,511,964 295,717 5.77 21,584,189 344,300 6.38 --------- --------- Non-interest-earning assets 1,526,754 1,099,957 ------------ --------------- Total assets $ 22,038,718 $ 22,684,146 ============ =============== Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $ 2,818,110 4,489 0.64 $ 2,558,805 9,114 1.42 Certificates of deposit 5,185,574 52,633 4.06 5,212,529 65,581 5.03 NOW 1,359,038 526 0.15 1,135,550 796 0.28 Money market 1,744,120 4,880 1.12 1,925,626 12,667 2.63 ------------ --------- --------------- --------- Total deposits 11,106,842 62,528 2.25 10,832,510 88,158 3.26 Borrowed funds 8,999,131 122,185 5.43 9,896,888 145,571 5.88 ------------ --------- --------------- --------- Total interest-bearing liabilities 20,105,973 184,713 3.67 20,729,398 233,729 4.51 --------- --------- Non-interest-bearing liabilities 372,728 398,433 ------------ --------------- Total liabilities 20,478,701 21,127,831 Stockholders' equity 1,560,017 1,556,315 ------------ --------------- Total liabilities and stockholders' equity $ 22,038,718 $ 22,684,146 ============ =============== Net interest income/net interest rate spread $ 111,004 2.10% $ 110,571 1.87% ========= ======== ========= ========= Net interest-earning assets/net interest margin $ 405,991 2.16% $ 854,791 2.05% ============ ======== =============== ========= Ratio of interest-earning assets to interest-bearing liabilities 1.02x 1.04x ===== =====
(1) Mortgage loans and consumer and other loans include 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. Page 13 ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES AVERAGE BALANCE SHEETS (Dollars in Thousands)
For the Twelve Months Ended December 31, ------------------------------------------------------------------------------- 2002 2001 -------------------------------------- ------------------------------------- Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ------------ ----------- -------- ------------ ------------ ------- Assets: Interest-earning assets: Mortgage loans (1): One-to-four family $ 10,077,810 $ 626,251 6.21% $ 10,069,593 $ 694,596 6.90% Multi-family, commercial and construction 2,072,805 162,677 7.85 1,487,504 124,163 8.35 Consumer and other loans (1) 307,103 17,623 5.74 206,903 17,853 8.63 ------------ ----------- ------------ ------------ Total loans 12,457,718 806,551 6.47 11,764,000 836,612 7.11 Mortgage-backed securities (2) 6,599,887 377,623 5.72 7,282,666 462,621 6.35 Other securities (2) (3) 1,011,280 69,211 6.84 1,519,647 107,315 7.06 Federal funds sold and repurchase agreements 766,906 12,877 1.68 940,394 32,015 3.40 ------------ ----------- ------------ ------------ Total interest-earning assets 20,835,791 1,266,262 6.08 21,506,707 1,438,563 6.69 ----------- ------------ Non-interest-earning assets 1,302,014 1,008,224 ------------ ------------ Total assets $ 22,137,805 $ 22,514,931 ============ ============ Liabilities and stockholders' equity: Interest-bearing liabilities: Savings $ 2,754,000 29,096 1.06 $ 2,495,532 46,283 1.85 Certificates of deposit 5,203,610 223,216 4.29 5,223,163 283,125 5.42 NOW 1,269,866 3,176 0.25 1,075,524 5,097 0.47 Money market 1,876,107 32,512 1.73 1,734,232 65,484 3.78 ------------ ----------- ------------ ------------ Total deposits 11,103,583 288,000 2.59 10,528,451 399,989 3.80 Borrowed funds 9,097,198 513,838 5.65 10,014,736 581,616 5.81 ------------ ----------- ------------ ------------ Total interest-bearing liabilities 20,200,781 801,838 3.97 20,543,187 981,605 4.78 ----------- ------------ Non-interest-bearing liabilities 372,050 394,302 ------------ ------------ Total liabilities 20,572,831 20,937,489 Stockholders' equity 1,564,974 1,577,442 ------------ ------------ Total liabilities and stockholders' equity $ 22,137,805 $ 22,514,931 ============ ============ Net interest income/net interest rate spread $ 464,424 2.11% $ 456,958 1.91% =========== ======== ============ ====== Net interest-earning assets/net interest margin $ 635,010 2.23% $ 963,520 2.12% ============ ======== ============ ====== Ratio of interest-earning assets to interest-bearing liabilities 1.03x 1.05x ===== =====
(1) Mortgage loans and consumer and other loans include 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. -----END PRIVACY-ENHANCED MESSAGE-----