<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K/A
CURRENT REPORT
AMENDMENT NO. 1
----------------------
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1998
------------------
ASTORIA FINANCIAL CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-22228 11-3170868
- ------------------------------- ----------------------- -------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation or organization) Identification No.)
One Astoria Federal Plaza, Lake Success, New York 11042-1085
- ------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 327-3000
--------------
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
The Registrant hereby amends the items, financial statements, exhibits
or other portions of its Current Report on Form 8-K dated September 30, 1998
and filed on October 5, 1998 as set forth herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a)(1) The following documents have been filed on December 29, 1997 with the
Securities and Exchange Commission (the "Commission") by Long Island Bancorp,
Inc. as part of Long Island Bancorp, Inc.'s Annual Report on Form 10-K for the
year ended September 30, 1997 pursuant to the Securities Exchange Act of 1934,
as amended, and are incorporated by reference in this Form 8-K/A:
a) Consolidated Statements of Financial Condition as of September
30, 1997 and 1996;
b) Consolidated Statements of Income for the Years Ended
September 30, 1997, 1996 and 1995;
c) Consolidated Statements of Changes in Stockholders' Equity for
the Years Ended September 30, 1997, 1996 and 1995;
d) Consolidated Statements of Cash Flows for the Years Ended
September 30, 1997, 1996 and 1995;
e) Notes to Consolidated Financial Statements;
f) Independent Auditors' Report dated as of October 21, 1997.
(a)(2) The following unaudited consolidated financial statements as of and for
the nine months ended September 30, 1998 of Long Island Bancorp, Inc. and
Subsidiary are attached hereto as Exhibit No. 99.2 and are incorporated herein
by reference:
a) Consolidated Statement of Financial Condition as of September
30, 1998.
b) Consolidated Statements of Operations for the nine months
ended September 30, 1998 and 1997.
c) Consolidated Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997.
d) Notes to Consolidated Financial Statements.
(b) The pro forma financial information that is required pursuant to Article 11
of Regulation S-X is attached hereto as Exhibit No. 99.3 and is incorporated
herein by reference.
(c) Exhibits:
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of the 2nd day of April
1998, by and between Astoria Financial Corporation and Long
Island Bancorp, Inc., as amended. *
23.1 Consent of Independent Certified Public Accountants dated as
of December 10, 1998.
99.1 Press Release issued on October 1, 1998. **
99.2 Long Island Bancorp, Inc. and Subsidiary Unaudited
Consolidated Financial Statements as of September 30, 1998 and
for the nine months ended September 30, 1998 and 1997.
<PAGE> 3
99.3 Astoria Financial Corporation and Subsidiary and Long Island
Bancorp, Inc. and Subsidiary, Unaudited Pro Forma Combined
Condensed Consolidated Statement of Financial Condition as of
September 30, 1998 and Statements of Operations for the Nine
Months Ended September 30, 1998 and for the Year Ended
December 31, 1997 and related notes.
* This exhibit has been previously filed by the Registrant with the Form
S-4 (Registration No. 333-58897) filed by Astoria Financial Corporation
on July 14, 1998, and is incorporated herein by reference.
** This exhibit has been previously filed by the Registrant with the Form
8-K filed by Astoria Financial Corporation on October 5, 1998, and is
incorporated herein by reference.
2
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASTORIA FINANCIAL CORPORATION
/s/ Monte N. Redman
------------------------------
Monte N. Redman
Executive Vice President
and Chief Financial Officer
(Principal Accounting Officer)
Dated: December 11, 1998
-----------------
3
<PAGE> 5
Exhibit Index
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated as of the 2nd day of April
1998, by and between Astoria Financial Corporation and Long
Island Bancorp, Inc., as amended.*
23.1 Consent of Independent Certified Public Accountants dated as
of December 10, 1998.
99.1 Press Release issued on October 1, 1998.**
99.2 Long Island Bancorp, Inc. and Subsidiary Unaudited
Consolidated Financial Statements as of September 30, 1998 and
for the nine months ended September 30, 1998 and 1997.
99.3 Astoria Financial Corporation and Subsidiary and Long Island
Bancorp, Inc. and Subsidiary, Unaudited Pro Forma Combined
Condensed Consolidated Statement of Financial Condition as of
September 30, 1998 and Statements of Operations for the Nine
Months Ended September 30, 1998 and for the Year Ended
December 31, 1997 and related notes.
* This exhibit has been previously filed by the Registrant with the
Form S-4 Amendment No. 1 (Registration No. 333-58897) filed by
Astoria Financial Corporation on July 14, 1998, and is incorporated
herein reference.
** This exhibit has been previously filed by the Registrant with the
Form 8-K filed by Astoria Financial Corporation on October 5, 1998,
and is incorporated herein by reference.
4
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Certified Public Accountants
KPMG Peat Marwick LLP Letterhead
345 Park Avenue
New York, NY 10154
The Board of Directors
Astoria Financial Corporation as acquiror of
Long Island Bancorp, Inc.
We consent to incorporation by reference in the Current Report Amendment No. 1
on Form 8-K/A of Astoria Financial Corporation of our report dated October 21,
1997, related to the consolidated statements of financial condition of Long
Island Bancorp, Inc. and Subsidiary as of September 30, 1997 and 1996, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for each of the years in the three-year period ended September
30, 1997, which report is included in the Annual Report to Stockholders of Long
Island Bancorp, Inc. for the year 1997, which report has been incorporated by
reference in the September 30, 1997 Annual Report on Form 10-K of Long Island
Bancorp, Inc.
/s/ KPMG PEAT MARWICK LLP
New York, New York
December 10, 1998
5
<PAGE> 1
EXHIBIT 99.2
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
AS OF SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
A S S E T S
<S> <C>
Cash and cash equivalents (including interest-earning assets of $77,344) $ 119,390
Investment in debt and equity securities, net:
Available-for-sale ................................................. 298,977
Mortgage-backed securities, net:
Held-to-maturity (estimated fair value of $18,742) ................. 20,582
Available-for-sale ................................................. 2,156,872
Stock in Federal Home Loan Bank of New York, at cost .................... 50,548
Loans held for sale ..................................................... 308,250
Loans receivable held for investment, net:
Real estate loans, net ............................................. 3,240,205
Commercial loans, net .............................................. 9,089
Other loans, net ................................................... 179,401
-----------
Loans, net ......................................................... 3,428,695
Less allowance for possible loan losses ............................ (37,938)
-----------
Total loans receivable held for investment, net .................... 3,390,757
Mortgage servicing rights, net .......................................... 43,613
Office properties and equipment, net .................................... 82,748
Accrued interest receivable, net ........................................ 39,754
Investment in real estate and premises, net ............................. 4,718
Deferred taxes .......................................................... 3,626
Excess of cost over fair value of net assets acquired ................... 3,971
Prepaid expenses and other assets ....................................... 58,840
-----------
Total assets ............................................................ $ 6,582,646
===========
L I A B I L I T I E S A N D S T O C K H O L D E R S ' E Q U I T Y
Liabilities:
Deposits ........................................................... $ 3,583,048
Official checks outstanding ........................................ 33,128
Borrowed funds, net ................................................ 2,256,697
Mortgagors' escrow payments ........................................ 74,330
Accrued expenses and other liabilities ............................. 54,401
-----------
Total liabilities ....................................................... 6,001,604
Stockholders' equity:
Preferred stock ($0.01 par value, 5,000,000 shares authorized;
none issued) ..................................................... --
Common stock ($0.01 par value, 130,000,000 shares authorized;
26,816,464 issued and 24,333,904 outstanding) .................... 268
Additional paid-in capital ....................................... 317,049
Unallocated Employee Stock Ownership Plan .......................... (17,423)
Unearned Management Recognition & Retention Plan ................... (1,069)
Unrealized gain on securities available-for-sale, net of tax ....... 6,644
Retained income-partially restricted ............................... 344,159
Treasury stock, at cost (2,482,560 shares) ......................... (68,586)
-----------
Total stockholders' equity .............................................. 581,042
-----------
Total liabilities and stockholders' equity .............................. $ 6,582,646
===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
6
<PAGE> 2
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
1998 1997
--------- ---------
Interest income:
<S> <C> <C>
Real estate loans ..................................................... $ 192,282 $ 190,684
Commercial loans ...................................................... 572 426
Other loans ........................................................... 12,990 11,913
Mortgage-backed securities ............................................ 91,832 88,111
Debt and equity securities ............................................ 22,768 11,945
--------- ---------
Total interest income ............................................... 320,444 303,079
--------- ---------
Interest expense:
Deposits .............................................................. 116,296 120,369
Borrowed funds ........................................................ 84,031 63,405
--------- ---------
Total interest expense .............................................. 200,327 183,774
--------- ---------
Net interest income ................................................. 120,117 119,305
Provision for possible loan losses ....................................... 7,900 4,500
--------- ---------
Net interest income after provision for possible loan losses ........ 112,217 114,805
Non-interest income:
Fees and other income:
Loan fees and service charges ....................................... 3,106 2,715
Loan servicing (costs) fees ......................................... (2,467) 8,649
Income from insurance and securities commissions .................... 2,233 1,992
Deposit service fees ................................................ 5,188 4,031
--------- ---------
Total fee income .................................................. 8,060 17,387
Other income ........................................................ 3,779 2,849
--------- ---------
Total fees and other income ....................................... 11,839 20,236
--------- ---------
Net gain on sale activity:
Net gains on loans and mortgage-backed securities ................... 7,037 9,089
Net gains on investment in debt and equity securities ............... 870 236
--------- ---------
Total net gain on sale activity ................................... 7,907 9,325
Net gain (loss) on investment in real estate and premises ........... 1,805 (690)
--------- ---------
Total non-interest income ......................................... 21,551 28,871
Non-interest expense:
General and administrative expense
Compensation, payroll taxes and fringe benefits ..................... 39,408 43,600
Advertising ......................................................... 1,961 3,772
Office occupancy and equipment ...................................... 15,625 16,349
Federal insurance premiums .......................................... 2,396 2,353
Other general and administrative expense ............................ 24,574 15,062
--------- ---------
Total general and administrative expense .......................... 83,964 81,136
Litigation expense - goodwill lawsuit ............................... 1,120 742
Amortization of excess of cost over fair value of net assets acquired 290 348
--------- ---------
Total non-interest expense ........................................ 85,374 82,226
--------- ---------
Income before income taxes ............................................... 48,394 61,450
Provision for income taxes ............................................... 19,140 23,964
--------- ---------
Net income ............................................................... $ 29,254 $ 37,486
========= =========
Basic earnings per common share .......................................... $ 1.31 $ 1.67
========= =========
Diluted earnings per common share ........................................ $ 1.26 $ 1.61
========= =========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
7
<PAGE> 3
LONG ISLAND BANCORP, INC.
AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
1998 1997
----------- -----------
Operating activities:
<S> <C> <C>
Net income ........................................................................... $ 29,254 $ 37,486
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for possible loan losses ................................................... 7,900 4,500
Write-off of real estate owned and investment in real estate ......................... 409 325
Gains on sale of real estate owned and investment in real estate, net ................ (721) (254)
Depreciation and amortization ........................................................ 18,516 13,206
Amortization of premiums, net of discount accretion - debt, equity and mortgage-backed
securities ......................................................................... 6,350 (298)
Accretion of discounts, net of amortization of premiums - purchase accounting &
goodwill amortization .............................................................. 164 433
Employee Stock Ownership Plan/Management Recognition & Retention Plan Expense ........ 3,081 3,587
Gains on sales of loans and mortgage-backed securities, net .......................... (7,037) (9,089)
Originations of loans held-for-sale, net of proceeds from sales ...................... (134,923) (73,312)
Gains on sales of debt and equity securities, net .................................... (870) (236)
Increase in accrued interest receivable .............................................. (6,455) (2,287)
Decrease in accrued expenses and other liabilities ................................... (2,802) (14,883)
Decrease in official checks outstanding .............................................. (32,981) (29,117)
(Decrease) increase in deferred taxes, prepaid expenses and other assets ............. (18,576) 3,647
Net decrease (increase) in unearned income ........................................... 4,326 (5,373)
----------- -----------
Net cash used by operating activities .............................................. (134,365) (71,665)
----------- -----------
Investing activities:
Proceeds from sales of debt and equity securities, available-for-sale ................ 103,780 11,144
Proceeds from sales of mortgage-backed securities, available-for-sale ................ 549,726 394,197
Proceeds from maturities of and principal payments on debt and equity securities ..... 580,839 139,589
Principal payments on mortgage-backed securities ..................................... 411,919 269,363
Purchases of debt and equity securities, available-for-sale .......................... (683,181) (122,935)
Purchases of Federal Home Loan Bank stock ............................................ (1,824) (7,970)
Purchases of mortgage-backed securities, available-for-sale .......................... (1,018,804) (252,556)
Originations and purchases of loans held-for-investment, net of principal payments ... (302,766) (652,771)
Proceeds from sale of real estate owned, office properties and equipment ............. 503 9,151
Purchases of office properties and equipment ......................................... (3,602) (6,025)
Purchase of mortgage servicing rights ................................................ -- (21)
----------- -----------
Net cash used by investing activities .............................................. (363,410) (218,834)
----------- -----------
Financing activities:
Net decrease in demand deposits, NOW accounts and savings accounts ................... (20,082) (64,287)
Net increase in mortgagors' escrow accounts .......................................... 26,161 24,937
Net (decrease) increase in certificates of deposit ................................... (139,302) 133,665
Costs to repurchase common stock ..................................................... (6,894) (18,025)
Proceeds from the exercise of stock options .......................................... 5,481 1,369
Cash dividends paid on common stock .................................................. (11,990) (10,783)
Net decrease in short-term borrowings ................................................ (154,725) (231,486)
Net increase in long-term borrowings ................................................. 797,488 331,992
----------- -----------
Net cash provided by financing activities .......................................... 496,137 167,382
----------- -----------
Decrease in cash and cash equivalents .............................................. (1,638) (123,117)
Cash and cash equivalents at the beginning of the period ............................. 121,028 166,822
----------- -----------
Cash and cash equivalents at the end of the period ................................... $ 119,390 $ 43,705
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest on deposits and borrowed funds ............................................ $ 194,966 $ 181,559
=========== ===========
Income taxes ....................................................................... $ 4,294 $ 27,722
=========== ===========
Non-cash investing activities:
Additions to real estate owned, net ................................................ $ 2,957 $ 6,586
=========== ===========
Securitization of loans ............................................................ $ 387,071 $ 489,583
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
8
<PAGE> 4
Long Island Bancorp, Inc. and Subsidiary
Notes to Unaudited Consolidated Financial Statements
1. GENERAL
The unaudited consolidated financial statements of Long Island Bancorp, Inc. and
Subsidiary ("LIB") in this report have not been audited, as they have been
prepared as of and for the nine months ended September 30, 1998 and 1997 and
presented to coincide with the reporting period of Astoria Financial Corporation
("AFC"). These statements should be read in conjunction with the audited
consolidated financial statements and related notes thereto included in LIB's
Annual Report to Shareholders and in the related Annual Report on Form 10-K for
the year ended September 30, 1997, which have been filed as Exhibits to AFC's
Registration Statement on Form S-4 as amended (File No. 333-58897) filed with
the Commission on July 14, 1998, pursuant to the Securities Act, and are
incorporated by reference in this Form 8-K/A.
The results of operations for the nine months ended September 30, 1998 and 1997
are not necessarily indicative of the results that may be expected for the
entire year or any other interim period. In preparing the unaudited consolidated
financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenues and expenses.
Actual results could differ from those estimates.
2. MERGER WITH AFC
Following the close of business on September 30, 1998, LIB was acquired by and
merged with and into AFC, and LIB's subsidiary, Long Island Savings Bank, FSB
("LISB"), a federally chartered savings bank, was merged with and into the
subsidiary of AFC, Astoria Federal Savings and Loan Association. The transaction
was accounted for as a pooling of interests. Under the terms of the merger
agreement, holders of LIB common stock, par value $.01 per share, received 1.15
shares of AFC's common stock for each share of LIB stock.
3. ADJUSTMENTS TO UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Prior to the close of the merger with AFC, certain significant adjustments were
recorded by LIB. Included in the unaudited consolidated statement of operations
for the nine months ended September 30, 1998 were the following significant
adjustments:
a) Provision for possible loan losses - an additional $4.0 million provision
for possible loan losses was recorded, primarily due to increased
delinquencies experienced in the consumer loan portfolio.
b) Loan servicing costs - LIB recorded a $7.4 million provision for
impairment on its mortgage servicing rights, due to increased mortgage
refinance activity and accelerating prepayment speeds during
September 1998.
c) Other general and administrative expense - LIB recorded approximately $8.4
million for various accruals for expenses incurred during their quarter
ended September 30, 1998 and for differences between the general ledger
and various subsidiary ledgers.
9
<PAGE> 1
EXHIBIT 99.3
PRO FORMA CONDENSED COMBINED CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
The following statements set forth certain selected condensed financial
information for Astoria Financial Corporation and Subsidiary ("AFC") and Long
Island Bancorp, Inc. and Subsidiary ("LIB"), on an unaudited pro forma combined
basis giving effect to the Merger as if the Merger had become effective on
September 30, 1998, in the case of financial condition information presented,
and as if the Merger had become effective at the beginning of the periods
indicated, in the case of operations information presented. The pro forma
information in the statements assumes that the Merger is accounted for using the
pooling of interests method of accounting. Financial information for the nine
months ended September 30, 1998 combines AFC and LIB with LIB's interim
results presented to coincide with the reporting period of AFC. AFC utilizes a
fiscal year which ends on December 31 for reporting purposes, whereas LIB uses
a fiscal year which ends on September 30 for such purposes. Financial
information for the year ended December 31, 1997, combines AFC and LIB at their
respective year-end periods. These statements should be read in conjunction
with, and are qualified in their entirety, by the historical financial
statements, including the notes thereto, of AFC and LIB included elsewhere
herein with regard to LIB and included in AFC's Quarterly Report on Form 10-Q
for the three and nine months ended September 30, 1998, which is incorporated
by reference herein.
The pro forma condensed combined consolidated financial statements do not give
effect to anticipated cost savings and revenue enhancement opportunities that
could result from the Merger, or any other items of income or expense which may
result from the Merger. Additionally, the pro forma financial statements do not
give effect to any anticipated leveraging of AFC's pro forma assets. The
unaudited pro forma condensed combined consolidated financial statements are
presented for informational purposes only and are not necessarily indicative of
the combined financial position or results of operations of future periods or
indicative of the results that would have occurred had the Merger been
consummated on September 30, 1998 or at the beginning of the periods indicated
or which may occur in the future.
10
<PAGE> 2
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
LONG ISLAND BANCORP, INC. AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(Unaudited)
At September 30, 1998
<TABLE>
<CAPTION>
Astoria
Financial Long Island Pro Forma Astoria
Corp. Bancorp (7) Adjustments Pro Forma
------------- ------------- ----------- -----------
(Dollars In Thousands)
ASSETS:
<S> <C> <C> <C> <C>
Cash and due from banks................................... $ 22,244 $ 62,450 $ $ 84,694
Federal funds sold and repurchase agreements.............. 283,016 56,940 339,956
Securities available-for-sale (at estimated fair value)... 4,488,253 2,455,849 6,944,102
Securities held-to-maturity............................... 2,259,882 20,582 2,280,464
Federal Home Loan Bank of New York stock.................. 98,750 50,548 149,298
Loans held-for-sale....................................... 10,837 308,250 319,087
Loans receivable held-for-investment: 5,036,058 3,428,695 8,464,753
Less allowance for loan losses....................... 38,483 37,938 76,421
------------ ------------ ----------- -----------
Loans receivable held-for-investment, net............ 4,997,575 3,390,757 8,388,332
Mortgage servicing rights................................. - 43,613 43,613
Real estate owned and investments in real estate, net..... 11,542 4,718 16,260
Accrued interest receivable............................... 67,946 39,754 107,700
Premises and equipment, net............................... 122,860 82,748 (49,772) (4) 155,836
Goodwill.................................................. 248,177 3,971 252,148
Other assets.............................................. 101,974 62,466 (26,193) (4) 138,247
------------ ------------ ----------- -----------
TOTAL ASSETS.............................................. $ 12,713,056 $ 6,582,646 (75,965) $19,219,737
============ ============ =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits............................................. $ 6,093,440 $ 3,583,048 $ $ 9,676,488
Borrowed Funds....................................... 5,490,142 2,256,697 7,746,839
Mortgage escrow funds................................ 59,489 74,330 133,819
Accrued expenses and other liabilities............... 109,062 87,529 16,560 (4) 213,151
------------ ------------ ----------- -----------
TOTAL LIABILITIES........................................ 11,752,133 6,001,604 16,560 17,770,297
------------ ------------ ----------- -----------
Stockholders' equity:
Preferred stock...................................... 2,000 - 2,000
Common stock......................................... 266 268 12 (2) 546
Additional paid-in capital........................... 513,150 317,049 (69,667) (2,5,6) 760,532
Retained earnings - substantially restricted......... 464,270 344,159 (92,525) (4) 715,904
Treasury stock ...................................... (8) (68,586) 68,586 (5) (8)
Accumulated other comprehensive income:
Net unrealized gains on securities, net of taxes.. 1,511 6,644 8,155
Unallocated common stock held by ESOP................ (19,297) (17,423) (36,720)
Unearned common stock held by RRPs................... (969) (1,069) 1,069 (6) (969)
------------ ------------ ----------- -----------
TOTAL STOCKHOLDERS' EQUITY................................ 960,923 581,042 (92,525) $ 1,449,440
------------ ------------ ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................ $ 12,713,056 $ 6,582,646 $ (75,965) $19,219,737
============ ============ =========== ===========
</TABLE>
See "Notes to Pro Forma Condensed Combined Consolidated Financial Statements
(Unaudited)."
11
<PAGE> 3
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
LONG ISLAND BANCORP, INC. AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Nine Months Ended September 30, 1998
<TABLE>
<CAPTION>
Astoria
Financial Long Island Astoria
Corp. Bancorp (7) Pro Forma
----- ----------- ---------
(Dollars in Thousands, Except Share Data)
<S> <C> <C> <C>
Interest income ....................................... $ 581,817 $ 320,193 $ 902,010
Interest expense ...................................... 368,811 200,040 568,851
------------ ------------ ------------
Net interest income ................................ 213,006 120,153 333,159
Provision for loan losses ............................. 880 7,900 8,780
------------ ------------ ------------
Net interest income after provision for loan losses 212,126 112,253 324,379
------------ ------------ ------------
Non-interest income:
Fees and other income .............................. 17,063 12,734 29,797
Net gain on sales activity ......................... 8,710 7,907 16,617
------------ ------------ ------------
Total non-interest income ............................. 25,773 20,641 46,414
------------ ------------ ------------
Non-interest expense:
General and administrative ......................... 98,033 86,132 184,165
Real estate operations and provision for losses, net 223 (1,922) (1,699)
Amortization of goodwill ........................... 14,519 290 14,809
------------ ------------ ------------
Total non-interest expense ............................ 112,775 84,500 197,275
------------ ------------ ------------
Income before income tax expense ...................... 125,124 48,394 173,518
Income tax expense .................................... 53,789 19,140 72,929
------------ ------------ ------------
Net Income ............................................ $ 71,335 $ 29,254 $ 100,589
============ ============ ============
Net income available to common shareholders ........... $ 66,835 $ 29,254 $ 96,089
============ ============ ============
Basic earnings per common share ....................... $ 2.69 $ 1.31 $ 1.90
============ ============ ============
Diluted earnings per common share ..................... $ 2.56 $ 1.26 $ 1.82
============ ============ ============
Basic weighted average common shares .................. 24,833,081 22,401,747 50,595,090(3)
Diluted weighted average common and common
equivalent shares .................................. 26,088,284 23,244,078 52,818,974(3)
</TABLE>
See "Notes to Pro Forma Condensed Combined Consolidated Financial Statements
(Unaudited)."
12
<PAGE> 4
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
LONG ISLAND BANCORP, INC. AND SUBSIDIARY
PRO FORMA CONDENSED COMBINED
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Astoria
Financial Long Island Astoria
Corp. Bancorp (7) Pro Forma
----- ----------- ---------
(In Thousands, Except Share Data)
<S> <C> <C> <C>
Interest income ................................... $ 579,401 $ 398,754 $ 978,155
Interest expense .................................. 364,350 239,241 603,591
----------- ----------- -----------
Net interest income ............................... 215,051 159,513 374,564
Provision for loan losses ......................... 3,061 6,000 9,061
----------- ----------- -----------
Net interest income after provision for loan losses 211,990 153,513 365,503
----------- ----------- -----------
Non-interest income:
Fees and other income .......................... 15,218 27,815 43,033
Net gain on sales activity ..................... 7,045 11,399 18,444
----------- ----------- -----------
Total non-interest income ......................... 22,263 39,214 61,477
----------- ----------- -----------
Non-interest expense:
General and administrative ..................... 104,075 109,596 213,671
Real estate operations and provision for losses 822 1,041 1,863
Amortization of goodwill ....................... 11,264 458 11,722
----------- ----------- -----------
Total non-interest expense ........................ 116,161 111,095 227,256
Income before income tax expense .................. 118,092 81,632 199,724
Income tax expense ................................ 49,628 32,212 81,840
----------- ----------- -----------
Net Income ........................................ $ 68,464 $ 49,420 $ 117,884
=========== =========== ===========
Net Income available to common shareholders ....... $ 66,964 $ 49,420 $ 116,384
=========== =========== ===========
Basic earnings per common share ................... $ 3.26 $ 2.20 $ 2.51
=========== =========== ===========
Diluted earnings per common share ................. $ 3.04 $ 2.12 $ 2.39
=========== =========== ===========
Basic weighted average common shares ............. 20,552,574 22,443,135 46,362,179(3)
Diluted weighted average common and
common equivalent shares .......................... 21,994,383 23,279,404 48,765,698(3)
</TABLE>
Shares and related amounts for prior periods have been restated as a result of
the implementation of SFAS No. 128.
See "Notes to Pro Forma Condensed Combined Consolidated Financial Statements
(Unaudited)."
13
<PAGE> 5
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
AND LONG ISLAND BANCORP, INC. AND SUBSIDIARY
NOTES TO PRO FORMA CONDENSED COMBINED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
(1) The pro forma financial information presented has been prepared in
conformity with generally accepted accounting principles ("GAAP") and
prevailing practices within the financial services industry. Under
GAAP, the assets and liabilities of LIB will be combined with those of
AFC at book value. In addition, the statements of operations for LIB
will be combined with those of AFC as of the earliest period presented.
AFC utilizes a fiscal year which ends on December 31 for reporting
purposes, whereas LIB uses a fiscal year which ends on September 30 for
such purposes. The unaudited pro forma condensed combined consolidated
statement of operations for the year ended December 31, 1997 combines
AFC and LIB at their respective year-end periods. The unaudited pro
forma condensed combined consolidated statement of operations for the
nine months ended September 30, 1998 includes LIB for the nine months
then ended to conform with the reporting period of AFC. Summary
unaudited operating results for LIB for the three months ended
December 31, 1997, have not been included in the unaudited pro forma
condensed combined consolidated financial statements and are
presented in the following table.
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1997
(Unaudited)
------------------
<S> <C>
Interest income .......... $104,517
Interest expense ......... 65,550
Net interest income ...... 38,967
Net income ............... 13,182
Diluted earnings per share $ 0.57
</TABLE>
(2) Pro forma adjustments to common stock and additional paid-in capital,
at September 30, 1998, reflect the Merger accounted for as a
pooling of interests, through the exchange of 27,983,435 shares of AFC
Common Stock at September 30, 1998 (using the Exchange Ratio of 1.15
and adjusted for fraction shares) for 24,333,904 actual outstanding
shares of LIB.
(3) The pro forma weighted average shares outstanding for the nine months
ended September 30, 1998 and the year ended December 31, 1997 reflect
the Exchange Ratio of 1.15 shares of AFC Common Stock for each share of
LIB Common Stock.
(4) The pro forma condensed combined consolidated statement of financial
condition reflects non-recurring merger costs and restructuring charges
of approximately $92.5 million, net of taxes, which were recognized
upon consummation of the transaction and will be reflected in AFC's
results of operations for the quarter ended December 31, 1998. Of such
amount, $26.2 million represents expenses paid and deferred by both LIB
and AFC, and thus, are reflected as a reduction of other assets. In
addition, $49.8 million of the total facility and system costs,
relates to write-downs of premises and equipment, which, after
consummation of the Merger, will be classified as held-for-sale. The
remaining amount of $16.6 million, net of taxes, represents costs to
be paid, and is reflected as accrued expenses and other liabilities.
These after-tax charges will reduce earnings per share for the period
in which such charges are recognized by approximately $1.75 (based on
pro forma diluted weighted average shares outstanding of 52,818,974
on September 30, 1998). A summary of the estimated merger costs and
restructuring charges follows:
<TABLE>
<CAPTION>
Merger Costs and
Restructuring Charges
(Dollars in Thousands)
----------------------
<S> <C>
Merger Costs ......................................... $ 17,888
Restructuring Charges:
Severance and Other Employee Expenses .......... 37,225
Facility and System Costs ...................... 64,794
Other .......................................... 4,261
--------
Total Pre-Tax Merger Costs and Restructuring
Charges ............................................ 124,168
Less: Tax Effect .................................... 31,643
--------
Total After-Tax Merger Costs and Restructuring Charges $ 92,525
========
</TABLE>
14
<PAGE> 6
The effect of the proposed charge has been reflected in the pro forma
condensed combined consolidated statement of financial condition as of
September 30, 1998; however, since this charge is non-recurring, it has
not been reflected in the pro forma combined statements of operations.
(5) Pro forma adjustments to treasury stock and additional paid-in capital,
at September 30, 1998, reflect the retirement of LIB's treasury stock.
(6) Pro forma adjustments to unearned common stock held by RRPs and
additional paid-in capital, at September 30, 1998, reflect the
cancellation of 93,004 unallocated MRP shares of LIB at a cost of
$11.50 per share.
(7) Certain reclassifications have been made to conform LIB's presentation
with AFC's presentation.
15
