EX-99.1 2 af6454ex991.htm EXHIBIT 99.1

Exhibit 99.1

Astoria Financial Corporation Announces Second Quarter EPS of $0.49

Quarterly Cash Dividend of $0.24 Per Common Share Declared

          LAKE SUCCESS, N.Y., July 20 /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 $47.8 million, or $0.49 diluted earnings per share (“EPS”), for the quarter ended June 30, 2006, compared to $57.4 million, or $0.55 EPS, for the 2005 second quarter.  For the 2006 second quarter, annualized returns on average equity, average tangible equity and average assets were 14.94%, 17.48% and 0.87%, respectively, compared to 16.66%, 19.24% and 1.00%, respectively, for the comparable 2005 period.

          For the six months ended June 30, 2006, net income totaled $96.7 million, or $0.98 EPS, compared to $116.9 million, or $1.12 EPS, for the comparable 2005 period.  For the six months ended June 30, 2006, annualized returns on average equity, average tangible equity and average assets were 14.87%, 17.34% and 0.87%, respectively, compared to 17.02%, 19.68% and 1.01%, respectively, for the comparable 2005 period.

 

First Half 2006 Balance Sheet Highlights:

 

 

 

 

 

-

Deposits increased $282 million, or 4% annualized

 

 

 

 

 

 

--

Core deposits(1) increased $195 million, or 7% annualized

 

 

 

 

 

-

Loan portfolio increased $241 million, or 3% annualized

 

 

 

 

 

 

--

Multifamily/Commercial Real Estate (“CRE”) loan portfolio increased $184 million, or 9% annualized

 

 

 

 

 

-

Securities portfolio decreased $701 million, or 21% annualized

 

 

 

 

 

-

Borrowings decreased $735 million, or 19% annualized

 

 

 

 

 

-

Repurchased 4.7 million shares

          Commenting on the 2006 second quarter results, George L. Engelke, Jr., Chairman, President and Chief Executive Officer of Astoria, noted, “The effect of seventeen interest rate increases by the Federal Reserve over the past two years has resulted in a prolonged flat to inverted yield curve environment which, in addition to putting pressure on our net interest margin and earnings, continues to limit profitable growth opportunities.  While we have been somewhat successful in mitigating the negative impact on our margin through reductions of our securities and borrowings, a sustained flat to inverted yield curve will continue to exert downward pressure on our margin and earnings.  During this challenging period we will continue our strategy of shrinking the balance sheet by reducing the securities portfolio and borrowings, growing loans and deposits and repurchasing our stock.” 

          Board Declares Quarterly Cash Dividend of $0.24 Per Share

          The Board of Directors of the Company, at their July 19, 2006 meeting, declared a quarterly cash dividend of $0.24 per common share.  The dividend is payable on September 1, 2006 to shareholders of record as of August 15, 2006. This is the forty-fifth consecutive quarterly cash dividend declared by the Company. 

          Eleventh Stock Repurchase Program Continues

          During the second quarter, Astoria repurchased 2.2 million shares of its common stock at an average cost of $30.58 per share.  During the six month period ended June 30, 2006 Astoria repurchased a total of 4.7 million shares, completing its tenth stock repurchase program and commencing its eleventh stock repurchase program in the first quarter.  Under the current stock repurchase program, 5.6 million shares of the 10 million shares authorized remain available for repurchase. 


          Second Quarter and Six Month Earnings Summary

          Net interest income for the quarter ended June 30, 2006 totaled $101.3 million compared to $111.5 million for the 2006 first quarter and $121.3 million for the second quarter a year ago.  For the six months ended June 30, 2006, net interest income totaled $212.9 million compared to $246.6 million for the comparable 2005 six month period.

          Astoria’s net interest margin for the quarter ended June 30, 2006 declined to 1.92% from 2.10% for the previous quarter and 2.21% for the quarter ended June 30, 2005, primarily due to the cost of interest-bearing liabilities rising more rapidly than the yield on interest-earning assets.  The Company’s core interest rate spread (the difference between the yield on loans and the cost of deposits) for the 2006 second quarter declined to 2.63% from 2.84% for the 2006 first quarter and 3.09% for the second quarter a year ago.

          Non-interest income for the quarter ended June 30, 2006 increased $3.2 million to $25.7 million from $22.5 million for the 2005 second quarter.  The increase is primarily due to an increase in mortgage banking income, net, primarily due to a $1.3 million recovery in the mortgage servicing rights (“MSR”) valuation allowance in the 2006 second quarter compared to a $2.5 million MSR impairment charge in the 2005 second quarter.

          For the six months ended June 30, 2006, non-interest income totaled $44.6 million compared to $47.3 million for the comparable 2005 period.  The decline was primarily due to a $5.5 million, pre-tax, charge related to the termination of interest rate swap agreements in the 2006 first quarter, partially offset by increases in mortgage banking income, net, of $2.2 million and customer service and other loan fees of $1.3 million.

          The components of mortgage banking income (loss), net, which is included in non-interest income, are detailed below:

(Dollars in millions)

 

2Q06

 

2Q05

 

1H06

 

1H05

 

 

 

 

 

 

Loan servicing fees

 

$

1.1

 

$

1.3

 

$

2.3

 

$

2.6

 

Amortization of MSR

 

 

(0.9

)

 

(1.3

)

 

(1.9

)

 

(2.7

)

MSR valuation adjustments

 

 

1.3

 

 

(2.5

)

 

2.0

 

 

(0.1

)

Net gain on sale of loans

 

 

0.6

 

 

0.9

 

 

1.2

 

 

1.6

 

Mortgage banking income (loss), net

 

$

2.1

 

$

(1.6

)

$

3.6

 

$

1.4

 

          General and administrative expense (“G&A”) for the quarter ended June 30, 2006 declined $2.4 million to $55.2 million from $57.6 million for the comparable 2005 period due primarily to lower compensation and benefit expenses and lower goodwill litigation expense (included in other G&A expense).  On a linked quarter basis, G&A declined $1.1 million, primarily due to reduced pension and incentive compensation accruals.

          For the six months ended June 30, 2006, G&A declined $6.6 million to $111.5 million from $118.1 million for the comparable 2005 period.  The decrease was primarily due to a $4.3 million decrease in goodwill litigation expense, a $1.9 million decrease in advertising expense, a $1.9 million decrease in compensation and benefits expense, partially offset by a $1.3 million increase in occupancy, equipment and systems expense. 

          Balance Sheet Summary

          Due to the continued flat to inverted yield curve during the second quarter, spread availability continued to narrow.  Accordingly, we continued to reduce our balance sheet through the reduction of non-core business activities.  Total securities for the quarter ended June 30, 2006 declined $356.5 million, or 23% annualized, to $5.9 billion at June 30, 2006, representing 27% of total assets, of which $1.6 billion, or 8% of total assets, are categorized as available-for-sale.  Borrowings declined in the second quarter of 2006 by $391.8 million, or 21% annualized, to $7.2 billion at June 30, 2006, representing 33% of total assets.

          For the six months ended June 30, 2006 total securities declined $701.6 million, or 21% annualized, and borrowings declined $734.9 million, or 19% annualized.  Total assets declined $376.5 million from March 31, 2006 and $518.8 million from December 31, 2005 and total $21.9 billion at June 30, 2006.


          Key balance sheet highlights, reflecting the improvement in the quality of the Company’s balance sheet since December 31, 1999, follow:

(Dollars in millions)

 

12/31/99

 

12/31/01

 

12/31/03

 

12/31/05

 

06/30/06

 

% Change
12/31/99-
06/30/06

 

 

 

 

 

 

 

 

Assets

 

$

22,700

 

$

22,672

 

$

22,462

 

$

22,380

 

$

21,861

 

 

.  4

%

Loans

 

$

10,286

 

$

12,167

 

$

12,687

 

$

14,392

 

$

14,633

 

 

+ 42

%

Securities

 

$

10,763

 

$

8,013

 

$

8,448

 

$

6,572

 

$

5,871

 

 

. 45

%

Deposits

 

$

9,555

 

$

10,904

 

$

11,187

 

$

12,810

 

$

13,092

 

 

+ 37

%

Borrowings

 

$

11,528

 

$

9,826

 

$

9,632

 

$

7,938

 

$

7,203

 

 

. 38

%

          The following table illustrates this improvement on an outstanding per share basis:

Amount per share

 

12/31/99

 

12/31/01

 

12/31/03

 

12/31/05

 

06/30/06

 

% Change

 

CAGR

 

 

 

 

 

 

 

 

 

Loans

 

$

66.28

 

$

89.36

 

$

107.51

 

$

137.11

 

$

144.80

 

 

118

%

 

13

%

Deposits

 

$

61.57

 

$

80.09

 

$

94.80

 

$

122.04

 

$

129.55

 

 

110

%

 

12

%

          During the 2006 second quarter, the 1-4 family mortgage loan portfolio decreased slightly and totaled $9.8 billion at June 30, 2006.  For the quarter ended June 30, 2006, 1-4 family loan originations and purchases totaled $554.3 million compared to $707.1 million for the 2005 second quarter.  Of the 2006 second quarter production, 78% consisted of 3/1 and 5/1 adjustable rate mortgage loans.

          For the six months ended June 30, 2006, the 1-4 family mortgage loan portfolio increased $66.1 million.  For the six month period ended June 30, 2006, 1-4 family loan originations and purchases totaled $1.1 billion compared to $1.4 billion in the year-ago six month period.

          During the 2006 second quarter, the multifamily and CRE loan portfolio increased $72.5 million, or 7% annualized, to $4.1 billion, or 28% of total loans, at June 30, 2006.  Multifamily and CRE loan originations totaled $183.7 million for the 2006 second quarter compared to $241.9 million for the comparable 2005 period.  The average loan-to-value ratio of the multifamily and CRE loan portfolio continues to be less than 65%, based on current principal balance and original appraised value, and the average loan balance is less than $1 million.

          For the six month period ended June 30, 2006, the multifamily and CRE loan portfolio increased $184.4 million, or 9% annualized.  Multifamily and CRE loan originations totaled $401.1 million for the 2006 six month period compared to $498.5 million in the year-ago six month period.

          At June 30, 2006, non-performing loans totaled $54.3 million, or 0.25% of total assets, compared to $50.0 million, or 0.23% of total assets, at March 31, 2006.  Net charge-offs for the quarter and six months ended June 30, 2006 totaled $80,000 and $96,000, respectively, or an annualized rate of less than one basis point of the average total loans outstanding for each period.  The ratio of the allowance for loan losses to non-performing loans at June 30, 2006 was 149%.

          Deposits for the second quarter increased $103.3 million to $13.1 billion at June 30, 2006, primarily due to an increase in Liquid CD accounts, which increased core deposits $101.2 million to $5.5 billion with an average cost of 1.05%.  During the 2006 second quarter, our efforts to extend deposit liabilities resulted in $1.8 billion of non-Liquid CDs issued or repriced at a weighted average rate of 4.83% with a weighted average maturity of 13 months.

          For the six months ended June 30, 2006, deposits increased $281.8 million, or 4% annualized, due primarily to an increase in core deposits, primarily Liquid CD accounts.  In addition, for the six months ended June 30, 2006, $3.2 billion of non-Liquid CDs were issued or repriced at a weighted average rate of 4.65% with a weighted average maturity of 12 months.


          Stockholders’ equity was $1.3 billion, or 5.80% of total assets at June 30, 2006.  Astoria Federal continues to maintain capital ratios in excess of regulatory requirements with core, tangible and risk-based capital ratios of 6.53%, 6.53% and 12.22%, respectively, at June 30, 2006. 

          Future Outlook

          Commenting on the outlook for the second half of 2006, Mr. Engelke stated, “The operating environment continues to remain challenging as a result of rising short term interest rates and a continued flat to inverted yield curve which will result in a slightly lower net interest margin for the year than previously forecast.  We expect to continue our strategy of shrinking the balance sheet through reductions in the securities portfolio and borrowings through normal cash flow, while we emphasize deposit and loan growth, all of which will continue to improve the quality of both the balance sheet and earnings.  As we reduce the size of the balance sheet, we will continue to focus on the repurchase of our stock as a very desirable use of capital.  This strategy should better position us to take advantage of more profitable asset growth opportunities when the yield curve steepens.” 

          Astoria Financial Corporation, the holding company for Astoria Federal Savings and Loan Association, with assets of $21.9 billion is the sixth largest thrift institution in the United States.  Established in 1888, Astoria Federal is the largest thrift depository headquartered in New York with deposits of $13.1 billion and embraces its philosophy of Putting people first by providing the customers and local communities it serves with quality financial products and services through 86 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states.  Astoria Federal originates mortgage loans through its banking offices and loan production offices in New York, an extensive broker network covering twenty-four states, primarily the East Coast, and the District of Columbia, and through correspondent relationships covering forty- four states and the District of Columbia. 

          Earnings Conference Call July 20, 2006 at 3:30 p.m. (ET)

          The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday afternoon, July 20, 2006 at 3:30 p.m. (ET).  The toll-free dial-in number is (800) 967-7140.

          A telephone replay will be available on July 20, 2006 from 7:00 p.m. (ET) through Friday, July 28, 2006, 11:59 p.m. (ET).  The replay number is (888) 203-1112, passcode: 4153753.  The conference call will also be simultaneously webcast on the Company’s website www.astoriafederal.com and archived for one year. 

          Forward Looking Statements

          This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements may be identified by the use of such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar terms and phrases, including references to assumptions.


          Forward-looking statements are based on various assumptions and analyses made by us in light of our management’s experience and its perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.  These factors include, without limitation, the following: the timing and occurrence or non- occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may delay the occurrence or non-occurrence of events longer than we anticipate.  We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document. 

(1)

Core deposits include savings, money market, checking and Liquid CD accounts.


CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)

 

 

At
June 30,
2006

 

At
December 31,
2005

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Cash and due from banks

 

$

139,330

 

$

169,234

 

Repurchase agreements

 

 

148,570

 

 

182,803

 

Securities available-for-sale

 

 

1,646,866

 

 

1,841,351

 

Securities held-to-maturity (fair value of $4,059,226 and $4,627,013, respectively)

 

 

4,223,867

 

 

4,730,953

 

Federal Home Loan Bank of New York stock, at cost

 

 

137,355

 

 

145,247

 

Loans held-for-sale, net

 

 

16,549

 

 

23,651

 

Loans receivable:

 

 

 

 

 

 

 

Mortgage loans, net

 

 

14,154,518

 

 

13,879,804

 

Consumer and other loans, net

 

 

478,094

 

 

512,489

 

 

 

 

14,632,612

 

 

14,392,293

 

Allowance for loan losses

 

 

(81,063

)

 

(81,159

)

Total loans receivable, net

 

 

14,551,549

 

 

14,311,134

 

Mortgage servicing rights, net

 

 

17,246

 

 

16,502

 

Accrued interest receivable

 

 

76,973

 

 

80,318

 

Premises and equipment, net

 

 

148,511

 

 

151,494

 

Goodwill

 

 

185,151

 

 

185,151

 

Bank owned life insurance

 

 

382,176

 

 

382,613

 

Other assets

 

 

187,332

 

 

159,820

 

TOTAL ASSETS

 

$

21,861,475

 

$

22,380,271

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Deposits

 

$

13,092,232

 

$

12,810,455

 

Reverse repurchase agreements

 

 

5,180,000

 

 

5,780,000

 

Federal Home Loan Bank of New York advances

 

 

1,587,000

 

 

1,724,000

 

Other borrowings, net

 

 

435,662

 

 

433,526

 

Mortgage escrow funds

 

 

143,056

 

 

124,929

 

Accrued expenses and other liabilities

 

 

155,390

 

 

157,134

 

TOTAL LIABILITIES

 

 

20,593,340

 

 

21,030,044

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock, $1.00 par value; 5,000,000 shares authorized:

 

 

 

 

 

 

 

Series A (1,800,000 shares authorized and - 0 - shares issued and outstanding)

 

 

—  

 

 

—  

 

Series B (2,000,000 shares authorized and - 0 - shares issued and outstanding)

 

 

—  

 

 

—  

 

Common stock, $.01 par value; (200,000,000  shares authorized; 166,494,888 shares issued; and 101,055,435 and 104,967,280 shares outstanding, respectively)

 

 

1,665

 

 

1,665

 

Additional paid-in capital

 

 

834,794

 

 

824,102

 

Retained earnings

 

 

1,820,876

 

 

1,774,924

 

Treasury stock (65,439,453 and 61,527,608 shares, at cost, respectively)

 

 

(1,296,676

)

 

(1,171,604

)

Accumulated other comprehensive loss

 

 

(69,418

)

 

(49,536

)

Unallocated common stock held by ESOP (6,306,603 and 6,465,273 shares, respectively)

 

 

(23,106

)

 

(23,688

)

Deferred compensation

 

 

—  

 

 

(5,636

)

TOTAL STOCKHOLDERS’ EQUITY

 

 

1,268,135

 

 

1,350,227

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

21,861,475

 

$

22,380,271

 


CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)

 

 

For the Three
Months Ended
June 30,

 

For the Six
Months Ended
June 30,

 

 

 

 

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family

 

$

125,606

 

$

112,898

 

$

250,491

 

$

224,480

 

Multi-family, commercial real estate and construction

 

 

63,986

 

 

58,300

 

 

126,245

 

 

116,496

 

Consumer and other loans

 

 

8,972

 

 

7,475

 

 

17,819

 

 

14,256

 

Mortgage-backed and other securities

 

 

68,532

 

 

88,526

 

 

140,427

 

 

182,448

 

Repurchase agreements

 

 

2,296

 

 

1,361

 

 

3,939

 

 

2,810

 

Federal Home Loan Bank of New York stock

 

 

1,797

 

 

1,650

 

 

3,486

 

 

2,823

 

Total interest income

 

 

271,189

 

 

270,210

 

 

542,407

 

 

543,313

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

90,549

 

 

67,065

 

 

173,254

 

 

132,025

 

Borrowings

 

 

79,324

 

 

81,798

 

 

156,291

 

 

164,728

 

Total interest expense

 

 

169,873

 

 

148,863

 

 

329,545

 

 

296,753

 

Net interest income

 

 

101,316

 

 

121,347

 

 

212,862

 

 

246,560

 

Provision for loan losses

 

 

—  

 

 

—  

 

 

—  

 

 

—  

 

Net interest income after provision for loan losses

 

 

101,316

 

 

121,347

 

 

212,862

 

 

246,560

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

16,440

 

 

16,305

 

 

33,038

 

 

31,251

 

Other loan fees

 

 

962

 

 

1,082

 

 

1,772

 

 

2,246

 

Mortgage banking income (loss), net

 

 

2,147

 

 

(1,582

)

 

3,629

 

 

1,364

 

Income from bank owned life insurance

 

 

4,031

 

 

4,190

 

 

8,106

 

 

8,365

 

Other

 

 

2,147

 

 

2,531

 

 

(1,921

)

 

4,042

 

Total non-interest income

 

 

25,727

 

 

22,526

 

 

44,624

 

 

47,268

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative:

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

28,528

 

 

29,967

 

 

58,839

 

 

60,757

 

Occupancy, equipment and systems

 

 

16,297

 

 

15,787

 

 

33,105

 

 

31,812

 

Federal deposit insurance premiums

 

 

415

 

 

447

 

 

849

 

 

895

 

Advertising

 

 

1,902

 

 

1,870

 

 

3,829

 

 

5,775

 

Other

 

 

8,077

 

 

9,492

 

 

14,906

 

 

18,836

 

Total non-interest expense

 

 

55,219

 

 

57,563

 

 

111,528

 

 

118,075

 

Income before income tax expense

 

 

71,824

 

 

86,310

 

 

145,958

 

 

175,753

 

Income tax expense

 

 

24,061

 

 

28,914

 

 

49,261

 

 

58,878

 

Net income

 

$

47,763

 

$

57,396

 

$

96,697

 

$

116,875

 

Basic earnings per common share

 

$

0.50

 

$

0.56

 

$

1.00

 

$

1.14

 

Diluted earnings per common share

 

$

0.49

 

$

0.55

 

$

0.98

 

$

1.12

 

Basic weighted average common shares

 

 

95,477,528 

 

 

102,253,984

 

 

96,386,742 

 

 

102,704,734

 

Diluted weighted average common and common equivalent shares

 

 

98,059,723 

 

 

104,184,538

 

 

98,974,405 

 

 

104,568,500

 


SELECTED FINANCIAL RATIOS AND OTHER DATA

 

 

For the
Three Months Ended
June 30,

 

At or For the
Six Months Ended
June 30,

 

 

 

 

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

Selected Returns and Financial Ratios (annualized)

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average stockholders’ equity

 

 

14.94

%

 

16.66

%

 

14.87

%

 

17.02

%

Return on average tangible stockholders’ equity(1)

 

 

17.48

 

 

19.24

 

 

17.34

 

 

19.68

 

Return on average assets

 

 

0.87

 

 

1.00

 

 

0.87

 

 

1.01

 

General and administrative expense to average assets

 

 

1.00

 

 

1.00

 

 

1.01

 

 

1.02

 

Efficiency ratio (2)

 

 

43.46

 

 

40.01

 

 

43.31

 

 

40.19

 

Net interest rate spread (3)

 

 

1.82

 

 

2.12

 

 

1.91

 

 

2.14

 

Net interest margin (4)

 

 

1.92

 

 

2.21

 

 

2.01

 

 

2.22

 

Selected Non-GAAP Returns and Financial Ratios (annualized) (5)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP return on average stockholders’ equity

 

 

 

 

 

 

 

 

15.43

%

 

17.02

%

Non-GAAP return on average tangible stockholders’ equity (1)

 

 

 

 

 

 

 

 

17.99

 

 

19.68

 

Non-GAAP return on average assets

 

 

 

 

 

 

 

 

0.91

 

 

1.01

 

Non-GAAP efficiency ratio (2)

 

 

 

 

 

 

 

 

42.42

 

 

40.19

 

Asset Quality Data (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-performing loans/ total loans

 

 

 

 

 

 

 

 

0.37

%

 

0.21

%

Non-performing loans/ total assets

 

 

 

 

 

 

 

 

0.25

 

 

0.13

 

Non-performing assets/ total assets

 

 

 

 

 

 

 

 

0.25

 

 

0.13

 

Allowance for loan losses/ non-performing loans

 

 

 

 

 

 

 

 

149.31

 

 

287.86

 

Allowance for loan losses/ non-accrual loans

 

 

 

 

 

 

 

 

150.81

 

 

308.11

 

Allowance for loan losses/ total loans

 

 

 

 

 

 

 

 

0.55

 

 

0.60

 

Net charge-offs to average loans outstanding (annualized)

 

 

0.00

%

 

0.01

%

 

0.00

 

 

0.00

 

Non-performing assets

 

 

 

 

 

 

 

$

55,361

 

$

30,080

 

Non-performing loans

 

 

 

 

 

 

 

 

54,290

 

 

28,666

 

Loans 90 days past maturity but still accruing interest

 

 

 

 

 

 

 

 

537

 

 

1,884

 

Non-accrual loans

 

 

 

 

 

 

 

 

53,753

 

 

26,782

 

Net charge-offs

 

$

80

 

$

211

 

 

96

 

 

239

 

Capital Ratios (Astoria Federal)

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible

 

 

 

 

 

 

 

 

6.53

%

 

6.71

%

Core

 

 

 

 

 

 

 

 

6.53

 

 

6.71

 

Risk-based

 

 

 

 

 

 

 

 

12.22

 

 

13.33

 

Other Data

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends paid per common share

 

$

0.24

 

$

0.20

 

$

0.48

 

$

0.40

 

Dividend payout ratio

 

 

48.98

%

 

36.36

%

 

48.98

%

 

35.71

%

Book value per share (6)

 

 

 

 

 

 

 

$

13.38

 

$

13.71

 

Tangible book value per share (7)

 

 

 

 

 

 

 

 

11.43

 

 

11.88

 

Average equity/average assets

 

 

5.81

%

 

5.98

%

 

5.88

%

 

5.91

%

Mortgage loans serviced for others (in thousands)

 

 

 

 

 

 

 

$

1,430,746

 

$

1,605,071

 

Full time equivalent employees

 

 

 

 

 

 

 

 

1,635

 

 

1,864

 

(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)

The information presented for the six months ended June 30, 2006 represents pro forma calculations which are not in conformity with U.S. generally accepted accounting principles, or GAAP.  The 2006 information excludes the $3.6 million, after tax, ($5.5 million, before tax) charge for the termination of our interest rate swap agreements recorded in the 2006 first quarter.  See page 12 for a reconciliation of GAAP net income to non-GAAP earnings for the six months ended June 30, 2006.

(6)

Book value per share represents stockholders’ equity divided by outstanding shares, excluding unallocated Employee Stock Ownership Plan, or ESOP, shares.

(7)

Tangible book value per share represents stockholders’ equity less goodwill divided by outstanding shares, excluding unallocated ESOP shares.


AVERAGE BALANCE SHEETS
(Dollars in Thousands)

 

 

For the Three Months Ended June 30,
2006

 

 

 

 

 

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Annualized)

 

Assets:

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Mortgage loans (1):

 

 

 

 

 

 

 

 

 

 

One-to-four family

 

$

9,920,003

 

$

125,606

 

 

5.06

%

Multi-family, commercial real estate and construction

 

 

4,214,459

 

 

63,986

 

 

6.07

 

Consumer and other loans (1)

 

 

490,463

 

 

8,972

 

 

7.32

 

Total loans

 

 

14,624,925

 

 

198,564

 

 

5.43

 

Mortgage-backed and other securities (2)

 

 

6,099,829

 

 

68,532

 

 

4.49

 

Repurchase agreements

 

 

189,049

 

 

2,296

 

 

4.86

 

Federal Home Loan Bank stock

 

 

142,884

 

 

1,797

 

 

5.03

 

Total interest-earning assets

 

 

21,056,687

 

 

271,189

 

 

5.15

 

Goodwill

 

 

185,151

 

 

 

 

 

 

 

Other non-interest-earning assets

 

 

778,676

 

 

 

 

 

 

 

Total assets

 

$

22,020,514

 

 

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Savings

 

$

2,396,537

 

 

2,405

 

 

0.40

 

Money market

 

 

563,782

 

 

1,381

 

 

0.98

 

NOW and demand deposit

 

 

1,540,556

 

 

224

 

 

0.06

 

Liquid certificates of deposit

 

 

966,457

 

 

10,397

 

 

4.30

 

Total core deposits

 

 

5,467,332

 

 

14,407

 

 

1.05

 

Certificates of deposit

 

 

7,485,159

 

 

76,142

 

 

4.07

 

Total deposits

 

 

12,952,491

 

 

90,549

 

 

2.80

 

Borrowings

 

 

7,433,642

 

 

79,324

 

 

4.27

 

Total interest-bearing liabilities

 

 

20,386,133

 

 

169,873

 

 

3.33

 

Non-interest-bearing liabilities

 

 

355,948

 

 

 

 

 

 

 

Total liabilities

 

 

20,742,081

 

 

 

 

 

 

 

Stockholders’ equity

 

 

1,278,433

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

22,020,514

 

 

 

 

 

 

 

Net interest income/net interest rate spread

 

 

 

 

$

101,316

 

 

1.82

%

Net interest-earning assets/net interest margin

 

$

670,554

 

 

 

 

 

1.92

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

1.03

x

 

 

 

 

 

 


 

 

For the Three Months Ended June 30,
2005

 

 

 

 

 

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Annualized)

 

Assets:

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Mortgage loans (1):

 

 

 

 

 

 

 

 

 

 

One-to-four family

 

$

9,342,312

 

$

112,898

 

 

4.83

%

Multi-family, commercial real estate and construction

 

 

3,827,458

 

 

58,300

 

 

6.09

 

Consumer and other loans (1)

 

 

529,679

 

 

7,475

 

 

5.64

 

Total loans

 

 

13,699,449

 

 

178,673

 

 

5.22

 

Mortgage-backed and other securities (2)

 

 

7,997,687

 

 

88,526

 

 

4.43

 

Repurchase agreements

 

 

189,058

 

 

1,361

 

 

2.88

 

Federal Home Loan Bank stock

 

 

126,518

 

 

1,650

 

 

5.22

 

Total interest-earning assets

 

 

22,012,712

 

 

270,210

 

 

4.91

 

Goodwill

 

 

185,151

 

 

 

 

 

 

 

Other non-interest-earning assets

 

 

851,531

 

 

 

 

 

 

 

Total assets

 

$

23,049,394

 

 

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Savings

 

$

2,827,699

 

 

2,831

 

 

0.40

 

Money market

 

 

848,457

 

 

2,037

 

 

0.96

 

NOW and demand deposit

 

 

1,597,270

 

 

235

 

 

0.06

 

Liquid certificates of deposit

 

 

291,669

 

 

1,872

 

 

2.57

 

Total core deposits

 

 

5,565,095

 

 

6,975

 

 

0.50

 

Certificates of deposit

 

 

7,004,979

 

 

60,090

 

 

3.43

 

Total deposits

 

 

12,570,074

 

 

67,065

 

 

2.13

 

Borrowings

 

 

8,757,467

 

 

81,798

 

 

3.74

 

Total interest-bearing liabilities

 

 

21,327,541

 

 

148,863

 

 

2.79

 

Non-interest-bearing liabilities

 

 

343,422

 

 

 

 

 

 

 

Total liabilities

 

 

21,670,963

 

 

 

 

 

 

 

Stockholders’ equity

 

 

1,378,431

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

23,049,394

 

 

 

 

 

 

 

Net interest income/net interest rate spread

 

 

 

 

$

121,347

 

 

2.12

%

Net interest-earning assets/net interest margin

 

$

685,171

 

 

 

 

 

2.21

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

1.03

x

 

 

 

 

 

 

(1)

Mortgage loans and consumer and other loans include loans held-for- sale and non-performing loans and exclude the allowance for loan losses.

(2)

Securities available-for-sale are included at average amortized cost.


AVERAGE BALANCE SHEETS
(Dollars in Thousands)

 

 

For the Six Months Ended June 30,
2006

 

 

 

 

 

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Annualized)

 

Assets:

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Mortgage loans (1):

 

 

 

 

 

 

 

 

 

 

One-to-four family

 

$

9,905,279

 

$

250,491

 

 

5.06

%

Multi-family, commercial real estate and construction

 

 

4,153,353

 

 

126,245

 

 

6.08

 

Consumer and other loans (1)

 

 

498,280

 

 

17,819

 

 

7.15

 

Total loans

 

 

14,556,912

 

 

394,555

 

 

5.42

 

Mortgage-backed and other securities (2)

 

 

6,263,198

 

 

140,427

 

 

4.48

 

Repurchase agreements

 

 

170,104

 

 

3,939

 

 

4.63

 

Federal Home Loan Bank stock

 

 

140,855

 

 

3,486

 

 

4.95

 

Total interest-earning assets

 

 

21,131,069

 

 

542,407

 

 

5.13

 

Goodwill

 

 

185,151

 

 

 

 

 

 

 

Other non-interest-earning assets

 

 

792,174

 

 

 

 

 

 

 

Total assets

 

$

22,108,394

 

 

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Savings

 

$

2,432,131

 

 

4,855

 

 

0.40

 

Money market

 

 

592,217

 

 

2,854

 

 

0.96

 

NOW and demand deposit

 

 

1,528,357

 

 

444

 

 

0.06

 

Liquid certificates of deposit

 

 

848,717

 

 

17,452

 

 

4.11

 

Total core deposits

 

 

5,401,422

 

 

25,605

 

 

0.95

 

Certificates of deposit

 

 

7,517,750

 

 

147,649

 

 

3.93

 

Total deposits

 

 

12,919,172

 

 

173,254

 

 

2.68

 

Borrowings

 

 

7,542,721

 

 

156,291

 

 

4.14

 

Total interest-bearing liabilities

 

 

20,461,893

 

 

329,545

 

 

3.22

 

Non-interest-bearing liabilities

 

 

345,909

 

 

 

 

 

 

 

Total liabilities

 

 

20,807,802

 

 

 

 

 

 

 

Stockholders’ equity

 

 

1,300,592

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

22,108,394

 

 

 

 

 

 

 

Net interest income/net interest rate spread

 

 

 

 

$

212,862

 

 

1.91

%

Net interest-earning assets/net interest margin

 

$

669,176

 

 

 

 

 

2.01

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

1.03

x

 

 

 

 

 

 


 

 

For the Six Months Ended June 30,
2005

 

 

 

 

 

 

Average
Balance

 

Interest

 

Average
Yield/
Cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Annualized)

 

Assets:

 

 

 

 

 

 

 

 

 

 

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

Mortgage loans (1):

 

 

 

 

 

 

 

 

 

 

One-to-four family

 

$

9,306,432

 

$

224,480

 

 

4.82

%

Multi-family, commercial real estate and construction

 

 

3,754,593

 

 

116,496

 

 

6.21

 

Consumer and other loans (1)

 

 

526,117

 

 

14,256

 

 

5.42

 

Total loans

 

 

13,587,142

 

 

355,232

 

 

5.23

 

Mortgage-backed and other securities (2)

 

 

8,259,673

 

 

182,448

 

 

4.42

 

Repurchase agreements

 

 

216,177

 

 

2,810

 

 

2.60

 

Federal Home Loan Bank stock

 

 

134,388

 

 

2,823

 

 

4.20

 

Total interest-earning assets

 

 

22,197,380

 

 

543,313

 

 

4.90

 

Goodwill

 

 

185,151

 

 

 

 

 

 

 

Other non-interest-earning assets

 

 

858,133

 

 

 

 

 

 

 

Total assets

 

$

23,240,664

 

 

 

 

 

 

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

Savings

 

$

2,848,793

 

 

5,673

 

 

0.40

 

Money market

 

 

881,618

 

 

3,959

 

 

0.90

 

NOW and demand deposit

 

 

1,578,781

 

 

465

 

 

0.06

 

Liquid certificates of deposit

 

 

234,291

 

 

2,945

 

 

2.51

 

Total core deposits

 

 

5,543,483

 

 

13,042

 

 

0.47

 

Certificates of deposit

 

 

6,969,312

 

 

118,983

 

 

3.41

 

Total deposits

 

 

12,512,795

 

 

132,025

 

 

2.11

 

Borrowings

 

 

9,017,082

 

 

164,728

 

 

3.65

 

Total interest-bearing liabilities

 

 

21,529,877

 

 

296,753

 

 

2.76

 

Non-interest-bearing liabilities

 

 

337,679

 

 

 

 

 

 

 

Total liabilities

 

 

21,867,556

 

 

 

 

 

 

 

Stockholders’ equity

 

 

1,373,108

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

23,240,664

 

 

 

 

 

 

 

Net interest income/net interest rate spread

 

 

 

 

$

246,560

 

 

2.14

%

Net interest-earning assets/net interest margin

 

$

667,503

 

 

 

 

 

2.22

%

Ratio of interest-earning assets to interest-bearing liabilities

 

 

1.03

x

 

 

 

 

 

 

(1)

Mortgage loans and consumer and other loans include loans held-for- sale and non-performing loans and exclude the allowance for loan losses.

(2)

Securities available-for-sale are included at average amortized cost.


END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)

 

 

At June 30, 2006

 

At March 31, 2006

 

 

 

 

 

 

 

Balance

 

Weighted
Average
Rate (1)

 

Balance

 

Weighted
Average
Rate (1)

 

 

 

 

 

 

 

Selected interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loans, gross (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family

 

$

9,824,066

 

 

5.32

%

$

9,846,475

 

 

5.25

%

Multi-family, commercial real estate and construction

 

 

4,245,697

 

 

5.95

 

 

4,163,563

 

 

5.91

 

Mortgage-backed and other securities (3)

 

 

5,870,733

 

 

4.34

 

 

6,227,251

 

 

4.34

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

 

 

2,352,923

 

 

0.40

 

 

2,438,090

 

 

0.40

 

Money market

 

 

537,602

 

 

1.01

 

 

598,766

 

 

0.97

 

NOW and demand deposit

 

 

1,535,833

 

 

0.06

 

 

1,562,612

 

 

0.06

 

Liquid certificates of deposit

 

 

1,117,478

 

 

4.54

 

 

843,131

 

 

4.09

 

Total core deposits

 

 

5,543,836

 

 

1.20

 

 

5,442,599

 

 

0.94

 

Certificates of deposit

 

 

7,548,396

 

 

4.26

 

 

7,546,339

 

 

3.92

 

Total deposits

 

 

13,092,232

 

 

2.96

 

 

12,988,938

 

 

2.67

 

Borrowings, net

 

 

7,202,662

 

 

4.29

 

 

7,594,475

 

 

4.13

 


 

 

At June 30, 2005

 

 

 

 

 

 

Balance

 

Weighted
Average
Rate (1)

 

 

 

 

 

Selected interest-earning assets:

 

 

 

 

 

 

 

Mortgage loans, gross(2):

 

 

 

 

 

 

 

One-to-four family

 

$

9,267,038

 

 

5.08

%

Multi-family, commercial real estate and construction

 

 

3,877,208

 

 

5.86

 

Mortgage-backed and other securities (3)

 

 

7,769,396

 

 

4.35

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

Savings

 

 

2,779,265

 

 

0.40

 

Money market

 

 

811,836

 

 

0.97

 

NOW and demand deposit

 

 

1,571,911

 

 

0.06

 

Liquid certificates of deposit

 

 

331,746

 

 

2.70

 

Total core deposits

 

 

5,494,758

 

 

0.53

 

Certificates of deposit

 

 

7,090,469

 

 

3.48

 

Total deposits

 

 

12,585,227

 

 

2.19

 

Borrowings, net

 

 

8,568,796

 

 

3.70

 

(1)

Weighted average rates represent stated or coupon interest rates excluding the effect of yield adjustments for premiums, discounts and deferred loan origination fees and costs and the impact of prepayment penalties.

(2)

Mortgage loans exclude loans held-for-sale and include non-performing loans.

(3)

Securities available-for-sale are reported at fair value and securities held-to-maturity are reported at amortized cost.


RECONCILIATION OF 2006 GAAP NET INCOME TO NON-GAAP EARNINGS
(In Thousands, Except Per Share Data)

 

 

For the Six Months Ended
June 30, 2006

 

 

 

 

 

 

GAAP

 

Adjustments(4)

 

Non-GAAP

 

 

 

 

 

 

Net interest income after provision for loan losses

 

$

212,862

 

$

—  

 

$

212,862

 

Non-interest income

 

 

44,624

 

 

5,456

 

 

50,080

 

Non-interest expense

 

 

111,528

 

 

—  

 

 

111,528

 

Income before income tax expense

 

 

145,958

 

 

5,456

 

 

151,414

 

Income tax expense

 

 

49,261

 

 

1,841

 

 

51,102

 

Net income

 

$

96,697

 

$

3,615

 

$

100,312

 

Basic earnings per common share

 

$

1.00

 

$

0.04

 

$

1.04

 

Diluted earnings per common share

 

$

0.98

 

$

0.04

 

$

1.01

(5)

(4)

Adjustments relate to the $5.5 million charge for the termination of our interest rate swap agreements and the related tax effects.

(5)

Figures do not cross foot due to rounding.

SOURCE  Astoria Financial Corporation
                      -0-                                                                       07/20/2006
          /CONTACT:  Peter J. Cunningham, First Vice President, Investor Relations,
+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)