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): April 2, 1998
ASTORIA FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-22228 11-3170868
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
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
NONE
(Former name or former address, if changed since last report)
<PAGE>
ITEMS 1 THROUGH 4, 6, 8 & 9. NOT APPLICABLE
ITEM 5. OTHER EVENTS.
On April 2, 1998, Astoria Financial Corporation, a Delaware corporation
("Astoria Financial"), entered into an Agreement and Plan of Merger (the "Merger
Agreement"), by and between Astoria Financial and Long Island Bancorp, Inc., a
Delaware corporation ("LIB"). The Merger Agreement provides, among other things,
that LIB will be merged with and into Astoria Financial, with Astoria Financial
being the surviving corporation (the "Merger").
Pursuant to the Merger Agreement, each share of common stock of LIB
issued and outstanding at the Effective Time (as defined in the Merger
Agreement) will be converted into the right to receive 1.15 shares of Astoria
Financial common stock, provided, however, that no fraction of a share of
Astoria Financial common stock will be issued in the Merger.
Consummation of the Merger is subject to the satisfaction of certain
conditions, including approval of the shareholders of both Astoria Financial and
LIB and approval of the appropriate regulatory agencies.
LIB has the right to terminate the Merger Agreement if the market value
of Astoria Financial Common Stock (as defined in the Merger Agreement) falls
below $49.76 per share and such decline in value is 17.5% greater than the
percentage decline of a group of similar financial institutions, unless Astoria
Financial delivers to LIB shareholders shares of Astoria Financial common stock
having a minimum value established pursuant to a formula set forth in the Merger
Agreement.
In connection with the Merger Agreement, Astoria Financial and LIB each
granted to the other a stock option pursuant to Stock Option Agreements, dated
as of April 2, 1998, pursuant to which each of Astoria Financial and LIB may
purchase up to 19.9% of the other's issued and outstanding shares of common
stock, upon the terms and conditions stated therein. The Merger Agreement also
includes a provision for a $60 million termination fee that is payable to
Astoria Financial if the transaction is not completed under certain
circumstances. Both the Merger Agreement and the Stock Option Agreement granted
to Astoria Financial provide that the total profit to Astoria Financial from the
value of the stock options and termination fee may not exceed $60 million plus
reasonable out-of-pocket expenses.
This Current Report on Form 8-K may contain certain forward-looking
statements regarding Astoria Financial's acquisition of LIB, including cost
savings to be realized, earnings accretion, transaction charges and other
opportunities following the acquisition which are based on management's current
expectations regarding economic, legislative and regulatory issues. The factors
which may cause future results to vary materially include, but are not limited
to, general economic conditions, changes in interest rates, deposit flows, loan
demand, real estate values, and competition; changes in accounting principles,
policies, or guidelines; changes in legislation or regulation; and other
economic, competitive, governmental, regulatory, and technological factors
affecting each company's operations, pricing, products and services.
Astoria Financial and LIB publicly announced the Merger in a press
release dated April 3, 1998, a copy of which is attached hereto as Exhibit 99.1.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits. The following Exhibits are filed as part of this
report:
EXHIBIT NO. DESCRIPTION
2.1 Agreement and Plan of Merger, dated as of
April 2, 1998, by and between Astoria
Financial Corporation and Long Island
Bancorp, Inc.*
4.1 Stock Option Agreement, dated as of April 2, 1998,
by and between Astoria Financial Corporation and
Long Island Bancorp, Inc.*
4.2 Stock Option Agreement, dated as of April 2, 1998,
by and between Astoria Financial Corporation and
Long Island Bancorp, Inc.*
99.1 Press Release issued on April 3, 1998.
99.2 Analyst Presentation.
- ----------------------
* To be filed by amendment.
2
<PAGE>
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
By: /s/ Alan P. Eggleston
-----------------------------------
Alan P. Eggleston
Executive Vice President and
General Counsel
Dated: April 3, 1998
3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
2.1 Agreement and Plan of Merger, dated as of April 2,
1998, by and between Astoria Financial Corporation
and Long Island Bancorp, Inc.*
4.1 Stock Option Agreement, dated as of April 2, 1998,
by and between Astoria Financial Corporation and
Long Island Bancorp, Inc.*
4.2 Stock Option Agreement, dated as of April 2, 1998,
by and between Astoria Financial Corporation and
Long Island Bancorp, Inc.*
99.1 Press Release issued on April 3, 1998.
99.2 Analyst Presentation.
- ------------------------
* To be filed by amendment.
4
CONTACTS: PETER J. CUNNINGHAM ROGER TEURFS
VICE PRESIDENT, INVESTOR RELATIONS CORPORATE SECRETARY
ASTORIA FINANCIAL CORPORATION LONG ISLAND BANCORP, INC.
(516) 327-7877 (516) 547-2607
FOR IMMEDIATE RELEASE
ASTORIA FINANCIAL CORPORATION AND LONG ISLAND BANCORP, INC.
TO MERGE
STRATEGIC ALLIANCE CREATES $17 BILLION FINANCIAL INSTITUTION;
NO. 2 DEPOSIT MARKET SHARE RANKING ON LONG ISLAND
LAKE SUCCESS, NEW YORK, APRIL 3, 1998 -- Astoria Financial Corporation (Nasdaq:
ASFC) ("Astoria"), and Long Island Bancorp, Inc. (Nasdaq: LISB) ("LISB") jointly
announced today that they have signed a definitive agreement for Astoria and
LISB to merge in a tax-free exchange of common stock. Astoria Financial
Corporation, the holding company for Astoria Federal Savings and Loan
Association ("Astoria Federal"), with assets of $10.5 billion and deposits of
$6.2 billion at December 31, 1997, is the third largest thrift institution in
New York and tenth largest in the United States. Astoria Federal operates 61
banking offices, of which 53 are located in Brooklyn, Queens, Nassau and Suffolk
Counties on Long Island, and eight are located in Westchester County and upstate
New York. LISB is the parent company of The Long Island Savings Bank, FSB ("Long
Island Savings"), a federally chartered thrift institution with assets of $6.1
billion and deposits of $3.7 billion at December 31, 1997, headquartered in
Melville, Long Island. Long Island Savings operates 35 banking offices
throughout Queens, Nassau and Suffolk Counties and 22 loan production offices
located in 7 states. Upon completion of the transaction, LISB will merge into
Astoria and Long Island Savings will merge into Astoria Federal. The
transaction, which received the unanimous approval of the boards of directors of
Astoria and LISB, will be accounted for as a pooling of interests and will be
accretive to Astoria's earnings per common share in
1
<PAGE>
1999. The transaction is expected to close at the end of the third quarter of
1998.
Under the terms of the agreement, holders of LISB common stock will
receive 1.15 shares of the common stock of Astoria for each share of LISB common
stock. Using Astoria's average closing stock price for the last five business
days ending April 2, 1998, of $61.78, the exchange represents a price of $71.04
for each LISB share, approximately 3.09 times LISB's tangible book value at
December 31, 1997. The total transaction value is estimated to be $1.8 billion
based on LISB's diluted shares including ESOP shares at Astoria's average stock
price for the last five business days. The pro forma combined company will
receive the proceeds, if any, from the supervisory goodwill lawsuits of LISB and
Astoria. As a result, in addition to the value of the Astoria common stock
received, LISB shareholders, as shareholders of Astoria, will retain an interest
in the LISB supervisory goodwill lawsuit, which if valued consistent with
currently traded market instruments, would approximate $9-$12 per LISB share,
and gain an interest in the Astoria supervisory goodwill lawsuit. Astoria
shareholders, in addition to current market value, will gain an interest in the
LISB supervisory goodwill lawsuit valued, consistent with currently traded
market instruments, at $8 - $11 per share. Based upon the currently outstanding
LISB shares of common stock, it is expected that approximately 27.6 million new
shares of Astoria common stock will be issued in conjunction with the
transaction, bringing the pro forma market capitalization of the combined
company to $3.25 billion, the sixth largest thrift market capitalization
nationally.
The pro forma combined company, as of December 31, 1997, reflects total
assets of $16.6 billion, ranking Astoria the second largest publicly traded
thrift institution in New York and sixth largest nationally. It also includes
strong mortgage origination capabilities in 7 states, deposits totaling $10.0
billion and shareholders' equity of $1.5 billion. The pro forma company will
operate 96 banking offices, including 88 in the New York City metropolitan area:
31 in Nassau, 20 in Queens, 11 in Brooklyn, and 26 in Suffolk, as well as 3 in
Westchester County and 5 in the upstate counties of Chenango and Otsego.
Subsequent to the closing of the transaction, management anticipates that it
will consolidate six banking offices in communities in which both Astoria and
LISB have a presence.
Commenting on the transaction, George L. Engelke, Jr., Chairman,
President and Chief Executive Officer of Astoria said, "This strategic alliance
between two strong Long Island financial institutions forms the premier
consumer-oriented community bank on Long Island. The pro forma deposits of the
88 Long Island banking offices total $9.4 billion, or an average of $107 million
per
2
<PAGE>
banking office, resulting in a pro forma #2 market share of deposits and a 8.7%
market share in a market larger in population than 39 states in the United
States. We are confident that the transaction will not only enhance shareholder
value, but also provide long-term benefits for our customers and, particularly,
our communities. We are also delighted that John J. Conefry, Jr., whose
leadership has successfully guided LISB to its current well-capitalized and
prominent position in the Long Island market, will be joining the Board of
Directors of both Astoria Financial Corporation and Astoria Federal Savings and
Loan Association as a Vice Chairman and will also join our executive management
team. His broad knowledge and experience will serve Astoria well as we continue
to implement strategies to build our franchise, strengthen efforts in our
communities, particularly in providing banking and home mortgage expertise to
better serve the financial needs of low-to-moderate income families and
individuals, and enhance shareholder value. We also look forward to adding many
other talented Long Island Savings officers and employees to the already strong
team at Astoria. Four other current directors of LISB will also join both boards
of Astoria."
Mr. Conefry commented, "We are very excited to be partnering with
Astoria, a premier community-oriented financial services institution. The
combination of our two strong companies will create a powerful retail banking
franchise in Long Island that will provide greater potential for its
shareholders, customers and communities than either institution would provide
alone."
Astoria estimates that operational efficiencies generated as a result
of the transaction will produce cost savings equal to 50%, or approximately
$52.0 million, pre-tax, of LISB's estimated 1998 general and administrative
expense. Mr. Engelke, commenting on the estimated cost savings said, "We have a
proven track record of rapidly consolidating back office systems and quickly
recognizing all anticipated cost savings, as evidenced by the speed with which
we successfully integrated The Greater New York Savings Bank (1997) and Fidelity
New York, FSB (1995) into Astoria, allowing us to recognize a substantial part
of all cost savings in the 90 days following the closing of those transactions.
We expect to approach this transaction in the same manner as our past successes
by effecting at least 75% of all anticipated cost savings by the end of the
fourth quarter of 1998 and the balance during the first half of 1999." One-time
charges in conjunction with this transaction, anticipated to be recorded in the
fourth quarter, are expected to approximate $75 million, after-tax.
In connection with the transaction, there is a provision for a
termination fee of $60 million
3
<PAGE>
payable to Astoria if the transaction is not completed under certain
circumstances. In addition, LISB and Astoria have granted cross options to
purchase shares equal to 19.9% of each other's currently outstanding common
stock under certain conditions. Stock repurchase plans have been terminated by
both companies.
The transaction is subject to approval of the shareholders of both LISB
and Astoria, approval of the Office of Thrift Supervision and the satisfaction
of certain other conditions.
<TABLE>
<CAPTION>
ASTORIA FINANCIAL CORPORATION/ LONG ISLAND BANCORP, INC.
SELECTED FINANCIAL INFORMATION
QUARTER ENDED DECEMBER 31, 1997
($ IN MILLIONS, EXCEPT PER SHARE DATA)
ASFC LISB PRO FORMA (COMBINED)
---- ---- --------------------
<S> <C> <C> <C>
Total assets $10,528.4 $6,072.5 $16,600.9
Total deposits 6,220.9 3,742.4 9,963.3
Total loans 4,345.0 3,520.7 7,865.7
Total Borrowings 3,272.8 1,614.0 4,886.8
Shareholders' Equity 899.4 557.3 1,456.7
Shareholders' Equity to Assets 8.54% 9.18% 8.77%
Net income (3 months ended) $20.9 $13.2 $34.1
Cash earnings (3 months ended) 30.8 14.5 48.9*
Non-performing assets 59.1 53.8 112.9
Non-performing assets/total assets 0.56% 0.89% 0.68%
Reserves $40.0 $33.7 $73.7
Book value per share** 32.42 23.19 26.13
Tangible book value per share** 22.57 22.98 21.24
</TABLE>
* Adjusted for fully phased-in cost savings
** Before transaction related charges
4
<PAGE>
NOTE: ASTORIA AND LISB PLAN TO HOST A JOINT CONFERENCE CALL ON FRIDAY MORNING,
APRIL 3, 1998, AT 11:00 AM (EST). INTERESTED INVESTORS AND ANALYSTS MAY
PARTICIPATE EITHER IN PERSON OR VIA CONFERENCE CALL. INVESTORS WISHING TO
PARTICIPATE BY TELEPHONE SHOULD CALL:
DOMESTIC CALLERS: 1-888-282-0380
INTERNATIONAL CALLERS: 630-395-0200
THE CONFERENCE CALL WILL BE HOSTED AT THE ST. REGIS HOTEL, 2 EAST 55TH STREET,
NEW YORK, IN THE VERSAILLES ROOM FOR THOSE INVESTORS/ANALYSTS WISHING TO ATTEND
IN PERSON.
A RECORDED PLAYBACK OF THE INVESTOR CALL WILL BE AVAILABLE THROUGH APRIL 7, 1998
AT 1-888-566-0686 (DOMESTIC CALLERS) AND 402-998-0107 (INTERNATIONAL CALLERS)
RESERVATION #4823
THIS RELEASE MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS REGARDING THE
MERGER WITH LONG ISLAND BANCORP, INC., INCLUDING COST SAVINGS TO BE REALIZED,
EARNINGS ACCRETION, TRANSACTION CHARGES AND OTHER OPPORTUNITIES FOLLOWING THE
ACQUISITION WHICH ARE BASED ON MANAGEMENT'S CURRENT EXPECTATIONS REGARDING
ECONOMIC, LEGISLATIVE, AND REGULATORY ISSUES. THE FACTORS WHICH MAY CAUSE FUTURE
RESULTS TO VARY MATERIALLY INCLUDE, BUT ARE NOT LIMITED TO GENERAL ECONOMIC
CONDITIONS, CHANGES IN INTEREST RATES, DEPOSIT FLOWS, LOAN DEMAND, REAL ESTATE
VALUES, AND COMPETITION; CHANGES IN ACCOUNTING PRINCIPLES, POLICIES, OR
GUIDELINES; CHANGES IN LEGISLATION OR REGULATION; AND OTHER ECONOMIC,
COMPETITIVE, GOVERNMENTAL, REGULATORY, AND TECHNOLOGICAL FACTORS AFFECTING EACH
COMPANY'S OPERATIONS, PRICING, PRODUCTS AND SERVICES.
# # #
5
________________________________________________________________________________
Astoria Financial
Merger With
Long Island Bancorp
A Strategic Alliance
Creating Long Island's Premier
Community Bank
[GRAPHIC OF LONG ISLAND]
April 3, 1998
________________________________________________________________________________
Astoria Financial Long Island
Corporation Bancorp
<PAGE>
Forward-Looking Information
________________________________________________________________________________
This presentation contains estimates of future operating results for 1998, 1999
and 2000 for both Astoria and LISB on a stand-alone and pro forma combined
basis, as well as estimates of financial condition, operating efficiencies and
revenue creation on a combined basis. These estimates constitute forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995), which involve significant risks and uncertainties. Actual results may
differ materially from the results discussed in these forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, general economic conditions, changes in interest rates, deposit
flows, loan demand, real estate values, and competition; changes in accounting
principles, policies, or guidelines; changes in legislation or regulation; and
other economic, competitive, governmental, regulatory, and technological factors
affecting each Company's operations, pricing, products and services.
[LOGO] [LOGO]
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Astoria Financial - 2 - Long Island
Corporation Bancorp
<PAGE>
Transaction Highlights
________________________________________________________________________________
Enhances Astoria's franchise value
o Creates the #2 ranked deposit market share in Long Island (Nassau, Suffolk,
Queens and Brooklyn) after Chase Manhattan Bank
o Population of this market (6.9 million) exceeds the population of 39
individual U.S. States
Accretive to earnings per share
Pro forma market capitalization of approximately $3.25 billion(a) before
recognition of goodwill litigation value
Pro forma company to have one of the largest goodwill litigation claims
o Amount of goodwill written off by the combined companies in excess of $625
million
o Represents value implied by market trading instruments of approximately
$570 to $740 million
[LOGO] [LOGO]
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Astoria Financial - 3 - Long Island
Corporation Bancorp
<PAGE>
Transaction Terms
________________________________________________________________________________
Fixed Exchange Ratio 1.15 shares of Astoria for each Long
Island Bancorp share
Indicated Deal Value(a) $1.8 billion
Price Per LISB Share(b) $71.04
Accounting/Tax Treatment Pooling of interests/Tax-free exchange
Proceeds of Goodwill Lawsuits To be shared by pro forma company
Reciprocal Stock Purchase Options 19.9% of each company's shares
outstanding
Termination Fee $60 million
(a) Based on diluted shares (including ESOP shares)
(b) Based on Astoria's average closing stock price of $61.78 for the five
trading days ended 4/2/98
[LOGO] [LOGO]
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Astoria Financial - 4 - Long Island
Corporation Bancorp
<PAGE>
Experienced Management Team
________________________________________________________________________________
George L. Engelke, Jr. Chairman, President and CEO
John J. Conefry, Jr. Vice Chairman
Gerard C. Keegan Vice Chairman
Monte N. Redman Chief Financial Officer
Board Composition: Five LISB Directors to
join Ten Astoria Directors
[LOGO] [LOGO]
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Astoria Financial - 5 - Long Island
Corporation Bancorp
<PAGE>
Transaction Pricing(a)
________________________________________________________________________________
<TABLE>
<CAPTION>
LISB
Transaction
with
LISB Deployment of Recent Thrift Astoria
Transaction(b) Excess Capital(c) Transactions(d) Multiples
_____________ ________________ ______________ _________
<S> <C> <C> <C> <C>
Price/Book Value 3.06x -- 3.16x 1.91x
Price/Tangible Book Value 3.09 -- 3.53 2.74
Price/Calendarized Earnings
1998 Earnings(E)(e) 30.5 23.1 21.2 18.2
1999 Earnings(E)(e) 27.6 21.4 18.9 16.5
1999 Earnings with Synergies(f) 18.2 15.3 14.6 --
Core Deposit Premium 31% -- 30% --
</TABLE>
(a) Excludes value of supervisory goodwill litigation
(b) Based on Astoria's average closing stock price of $61.78 for the five
trading days ended 4/2/98
(c) Represents 8.0% post-tax return on tangible equity in excess of 5.5%
(d) Median for all pooling thrift deals greater than $500 million since 6/30/97
(e) Based on First Call quarterly estimates as of 4/2/98 and growth rate of
10.3%
(f) Assuming fully phased-in cost savings of 50% of LISB's projected 1998
expenses; recent thrift transactions multiple represents deal price to
estimated earnings for calendar year following announcement of deal
[LOGO] [LOGO]
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Astoria Financial - 6 - Long Island
Corporation Bancorp
<PAGE>
Transaction Status
________________________________________________________________________________
o Definitive agreement signed
o Due diligence completed
o Subject to normal regulatory and
shareholder approvals
o Targeted to close end of third quarter 1998
[LOGO] [LOGO]
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Astoria Financial - 7 - Long Island
Corporation Bancorp
<PAGE>
Transaction Rationale
________________________________________________________________________________
o Strategically compelling market share gains
o #2 ranked player in large, diverse market
o Nassau/Suffolk is the third-ranked MSA in terms of median household
income in the entire U.S.
o Accretive to EPS
o Identified cost savings in excess of $50 million annually
o Significant additional value elements
o Supervisory goodwill litigation
o Revenue enhancements potential
o Low risk in-market transaction
o Creates a highly efficient premier community bank
[LOGO] [LOGO]
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Astoria Financial - 8 - Long Island
Corporation Bancorp
<PAGE>
A Powerful Combination
________________________________________________________________________________
Long Island's Premier Community Bank
At December 31, 1997
($ in millions)
Astoria LISB Combined(a)
_______ ____ __________
Total Assets $10,528 $6,073 $16,601
Deposits $6,221 $3,742 $9,963
Core Deposit %(b) 43.5% 43.3%(c) 43.4%
# of Banking Offices 61 35 96
Average Deposits per Banking Office $102 $107 $104
Loans, Net $4,305 $3,487 $7,792
Loan Originations, Fiscal Year 1997 1,280 2,204 3,484
Loans Serviced for Others 142 4,500(c) 4,642
Supervisory Goodwill Amount(d) $135 $500 $635
(a) Before acquisition effects
(b) Core deposits include passbook, savings, checking and money market accounts
(c) As of 9/30/97
(d) Approximately, based on amount at time of FIRREA as per original
amortization schedule
[LOGO] [LOGO]
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Astoria Financial - 9 - Long Island
Corporation Bancorp
<PAGE>
Creating a Long Island Powerhouse
________________________________________________________________________________
Banking Offices and Deposit Share Ranking on
Long Island
[Triangle Graphic] Astoria Banking Offices
[Star Graphic] LISB Banking Offices
[MAP OF BROOKLYN, QUEENS, NASSAU, AND SUFFOLK COUNTIES DEPICTING
THE LOCATION OF ASTORIA BANKING OFFICES AND LISB BANKING OFFICES]
Queens (#2)
Brooklyn (#7)
Nassau (#2)
Suffolk (#3)(a)
Overall Ranking: #2
(a) #4 before adjustment to exclude $3.5 billion in non-branch deposits at
Fleet's Melville branch
[LOGO] [LOGO]
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Astoria Financial - 10 - Long Island
Corporation Bancorp
<PAGE>
Strong Position in Core Market
________________________________________________________________________________
Nassau, Suffolk, Queens and Brooklyn
o The combined population of these four counties exceeds the population of 39
individual U.S. states
Deposits Market
Institution (millions) Share Branches
1. Chase Manhattan $16,697 15.4% 186
Astoria - Pro Forma 9,466 8.7 88
2. GreenPoint Financial Corp. 8,824 8.1 61
3. Fleet Financial Group 8,222 7.6 122
4. Dime Bancorp 8,068 7.4 51
5. Citicorp 7,726 7.1 68
6. Republic New York Corporation 6,080 5.6 49
7. Astoria 5,727 5.3 53
8. North Fork Bancorp 5,159 4.8 94
9. ABN AMRO North America 4,856 4.5 71
10. LISB 3,739 3.4 35
Total - Core Market $108,647 1,358
Source: Company data, SNL Securities. Data as of 6/30/97 adjusted for pending
acquisitions
[LOGO] [LOGO]
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Astoria Financial - 11 - Long Island
Corporation Bancorp
<PAGE>
Well Positioned in Key Markets
________________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
Nassau Queens
Institution Total Share Branches Institution Total Share Branches
<S> <C> <C> <C> <C> <C> <C> <C>
1. Chase Manhattan $4,248 13.2% 44 1. Chase Manhattan $4,330 15.2% 53
Astoria - Pro Forma 3,068 9.6 31 Astoria - Pro Forma 3,021 10.6 20
2. ABN AMRO 2,917 9.1 38 2. Citicorp 2,961 10.4 23
3. GreenPoint Financial 2,791 8.7 21 3. GreenPoint Financial 2,310 8.1 15
4. Fleet Financial 2,582 8.1 58 4. Astoria 2,031 7.2 14
5. Dime Bancorp 2,286 7.1 15 5. North Fork 1,564 5.5 19
Total $32,091 420 Total $28,416 321
</TABLE>
<TABLE>
<CAPTION>
Suffolk Brooklyn
Institution Total Share Branches Institution Total Share Branches
<S> <C> <C> <C> <C> <C> <C> <C>
1. Fleet Financial $4,764 20.5% 39 1. Chase Manhattan $4,211 16.9% 46
2. Chase Manhattan 3,908 16.8 43 2. Dime Bancorp 4,105 16.5 21
3. North Fork 2,241 9.6 47 3. Republic New York 3,670 14.8 25
Astoria - Pro Forma 2,040 8.8 26 4. GreenPoint Financial 2,903 11.7 16
4. LISB 1,564 6.7 20 5. Citicorp 2,118 8.5 18
5. Bank of New York 1,402 6.0 49 Astoria - Pro Forma 1,337 5.4 11
Total $23,276 381 Total $24,863 236
</TABLE>
Source: Company data, SNL Securities. Data as of 6/30/97 adjusted for pending
acquisitions
[LOGO] [LOGO]
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Astoria Financial - 12 - Long Island
Corporation Bancorp
<PAGE>
WELL-BALANCED ORIGINATION SOURCES
________________________________________________________________________________
LOAN ORIGINATIONS BY DELIVERY CHANNEL
($ in billions)
Retail Wholesale Total
------ --------- -----
Fiscal 1997:
Astoria $0.3 $1.0 $1.3
LISB 1.5 0.7 2.2
---- ---- ----
Combined 1.8 1.7 3.5
==== ==== ====
Projected Fiscal 1998:
Astoria 0.3 1.1 1.4
LISB 1.8 0.8 2.6
---- ---- ----
Combined 2.1 1.9 4.0
==== ==== ====
Projected Fiscal 1999:
Astoria 0.4 1.1 1.5
LISB 2.6 0.8 3.4
---- ---- ----
Combined 3.0 1.9 4.9
==== ==== ====
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Astoria Financial - 13 - Long Island
Corporation Bancorp
<PAGE>
Attractive Financial Results
________________________________________________________________________________
o 3.6% and 6.7% accretive to GAAP EPS in 1999 and 2000, respectively
o Annual expense savings in excess of $50 million pre-tax
o Represents 50% of LISB's projected 1998 general and administrative
expense base
o At least 75% of all cost saves to be realized within 3 months of closing
o Efficient deployment of excess capital/incremental cash
o No revenue enhancements assumed
[LOGO] [LOGO]
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Astoria Financial - 14 - Long Island
Corporation Bancorp
<PAGE>
Attractive EPS Accretion(a)
________________________________________________________________________________
($ in millions, except per share data)
1998P 1999P 2000P
Astoria Estimated Net Income to Common(b) $87.7 $93.8 $101.7
LISB Estimated Net Income to Common(b) 53.4 57.4 61.7
Total Estimated Net Income to Common 141.1 151.2 163.3
After-Tax Cost Savings 1.9 27.7 32.1
After-Tax Earnings on Incremental Cash/Capital(c) 7.8 28.0 44.2
Pro Forma Net Income to Common $150.7 $206.9 $239.6
Stand Alone EPS(b) $3.40 $3.75 $4.19
Pro Forma EPS(d) $3.89 $4.48
% Accretion/(Dilution) to First Call 3.6% 6.7%
% EPS Growth 14% 15%
(a) Excludes anticipated transaction-related charge
(b) Based on First Call estimates for 1998 and 199 (calendarized for LISB).
2000 estimate based on earnings growth rates of 11.9% and 10.3% for Astoria
and LISB, respectively
(c) See page 17
(d) Based on 53.0 million pro forma shares outstanding in 1998, 53.2 million in
1999 and 53.5 million in 2000
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Astoria Financial - 15 - Long Island
Corporation Bancorp
<PAGE>
Estimated Expense Reductions
________________________________________________________________________________
o 50% of LISB's projected 1998 expense base
($ in millions) Total
Corporate Operations $19
Administration/Finance 8
Lending 12
Retail Banking 13
Pre-Tax Cost Savings $52
After-Tax Cost Savings $29
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Astoria Financial - 16 - Long Island
Corporation Bancorp
<PAGE>
One-Time Transaction-Related Charges
________________________________________________________________________________
($ in millions) Total
Severance and Management Payments $26
Advisory and Professional Fees 22
Facilities, Equipment and Contracts 43
Conversions 6
Other 7
Pre-Tax Charge $104
After-Tax Charge $75
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Astoria Financial - 17 - Long Island
Corporation Bancorp
<PAGE>
Earnings on Incremental Cash/Capital
________________________________________________________________________________
($ in millions)
1998E 1999E 2000E
Average Incremental Capital resulting from:
LISB Excess Equity(a) $54.7 $218.6 $218.6
Suspension of Buyback Programs(b) 45.2 140.6 246.9
Pro Forma Cost Savings 0.2 15.7 45.6
Transaction Charge (18.8) (75.0) (75.0)
----- ----- -----
Total Incremental Capital 81.3 300.0 436.1
Average Incremental Cash Resulting from:
Suspension of Buyback Programs(b) 45.2 140.6 246.9
Pro Forma Cost Savings 0.2 14.2 41.1
Transaction Charge (14.0) (55.9) (55.9)
----- ----- -----
Total Incremental Cash 31.4 98.9 232.1
After-Tax Earnings on:
Deployment of Incremental Capital(c) 6.5 24.0 34.9
Reinvestment of Incremental Cash(d) 1.3 4.0 9.3
---- ----- -----
Total Earnings on Incremental Cash/Capital $7.8 $28.0 $44.7
==== ===== =====
(a) LISB tangible equity in excess of a tangible capital ratio of 5.5%
(b) Based on analyst estimates of buyback programs
(c) Deployed at 8.0% after-tax return
(d) Reinvested at 4.0% after-tax
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Astoria Financial - 18 - Long Island
Corporation Bancorp
<PAGE>
Additional Value Elements
________________________________________________________________________________
Shareholders of Combined Company Stand to Realize
Substantial Upside from Combined Goodwill Litigation Claims
($ in millions) Approximate Supervisory Goodwill in Late 1989
$135 $500 $635
Astoria LISB Combined Amount
[BAR GRAPH DEPICTING ADDITIONAL VALUE ELEMENTS]
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Astoria Financial - 19 - Long Island
Corporation Bancorp
<PAGE>
Additional Value Elements
________________________________________________________________________________
Goodwill Litigation Upside May Be Even Greater
Based on Current Market Indicators
($ in millions) Total Value Implied by Market
Estimated After-tax
Supervisory Value Implied
Goodwill by Market
in Late 1989 Instrument
CALG2(a) $485 $435
CCPR2(a) $299 $348
Astoria/LISB
Pro Forma Based on CALG2 $635 $569
Astoria/LISB
Pro Forma Based on CCPR2 $635 $739
(a) Based on closing prices for CALG2 and CCPR2 market instruments as of
4/2/98
[BAR GRAPH DEPICTING ADDITIONAL VALUE ELEMENTS]
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Astoria Financial - 20 - Long Island
Corporation Bancorp
<PAGE>
Value Created Based on Market Indicators
________________________________________________________________________________
$69.78 $72.28 $80.24 $83.29
Approximate Additional
Value for LISB
Supervisory Goodwill -- $8.00 $10.50 $9.20 $12.28
Astoria Stock Price $61.78 $61.78 $61.78 $71.04 $71.04
Astoria Astoria Astoria LISB LISB
Stock Value Value Deal Deal
Price(a) Based on Based on Value Value
CALG2(b) CCPR2(b) Based on Based on
CALG2 CCPR2
(a) Based on Astoria's average closing stock price of $61.78 for the five
trading days ended 4/2/98
(b) Based on closing prices for CALG2 and CCPR2 market instruments as of 4/2/98
[BAR GRAPH DEPICTING VALUE CREATED BASED ON MARKET INDICATORS]
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Astoria Financial - 21 - Long Island
Corporation Bancorp
<PAGE>
Low Risk In-Market Transaction
________________________________________________________________________________
o 50% estimated cost savings
o Key areas identified as part of due diligence
o In-market transaction
o Currently 6 branch closures anticipated
o Astoria has a proven consolidation track record
o Both companies have assets with strong credit quality
o Year 2000 systems compliance well underway
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Astoria Financial - 22 - Long Island
Corporation Bancorp
<PAGE>
Proven Successful Consolidation History
________________________________________________________________________________
Recent Astoria Acquisitions
($ in millions)
Greater New York (1997) Fidelity New York (1995)
Cost Savings Promised: 45%/$24 Cost Savings Promised: 30%/$7
Cost Savings Achieved: 45%/$24 Cost Savings Achieved: 30%/$7
Deposits Acquired: $1,601 Deposits Acquired: $1,053
Branches Acquired: 14 Branches Acquired: 18
Date Acquisition Date Acquisition
Closed: 9/30/97 Closed: 1/31/95
Date of Systems Date of Systems
Conversion: 10/13/97 Conversion: 2/21/95
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Astoria Financial - 23 - Long Island
Corporation Bancorp
<PAGE>
Value Proposition
________________________________________________________________________________
Strong Stock Price Performance Driven by Superior
Operating Fundamentals and Successful Acquisitions
[LINE GRAPH DEPICTING VALUE PROPOSITION]
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Astoria Financial - 24 - Long Island
Corporation Bancorp
<PAGE>
Value Proposition(a)
________________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
Tang. Estimated
Common Supervisory
Market Total Equity/ 1998 Goodwill
Cap.(b) Assets Deposits Tang. Assets(c) P/E(b) Amount
<S> <C> <C> <C> <C> <C> <C>
Astoria - Pro Forma(d) $3,247 $16,601 $9,963 7.0% 17.7x $635
North Fork 3,756 10,094 6,320 7.5 19.4 -
Dime 3,505 21,848 13,847 5.0 17.8 515
GreenPoint 3,148 13,084 10,973 5.5 17.7 -
Sovereign 3,008 17,744 9,568 4.0 14.8 N.A.
People's Bank (CT) 2,519 8,883 6,405 8.6 23.2 -
People's Heritage 2,168 9,669 6,745 5.3 16.9 -
Webster 1,334 9,177 5,736 4.8 16.0 -
Roslyn 1,058 3,601 1,942 17.4 21.5 -
</TABLE>
(a) Pro Forma for all material pending acquisitions
(b) Based on prices as of 4/2/98; P/E multiples based on First Call estimates as
of 4/2/98
(c) As of 12/31/97; for comparable companies not adjusted for pending
acquisitions; for Astoria, ratio reflects stand-alone EPS estimate
(d) Before acquisition adjustments
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Astoria Financial - 25 - Long Island
Corporation Bancorp
<PAGE>
Value Proposition - Cash Items
________________________________________________________________________________
Income Statement for the Quarter Ended
December 31, 1997
($ in millions) Astoria LISB Pro Forma(a)
Net Income $20,931 $13,182 $41,238
Amortization of Intangibles 4,934 108 5,042
ESOP and RRP Expense (incl. tax
benefit 4,909 1,248 6,157
------- ------- -------
Total Non-Cash Items 9,843 1,356 11,199
Cash Net Income $30,774 $14,538 $52,437
ROAA 0.81% 0.87% 1.00%
ROAE 9.3 9.6 11.4
Cash ROAA 1.19 0.96 1.28
Cash ROAE 13.7 10.6 14.5
Cash Return on Avg. Tangible Equity 19.3 10.7 17.8
Cash Efficiency Ratio 39.4 53.0 32.7
(a) Adjusted for fully phased-in cost savings
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Astoria Financial - 26 - Long Island
Corporation Bancorp
<PAGE>
________________________________________________________________________________
Appendix
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Astoria Financial - 27 - Long Island
Corporation Bancorp
<PAGE>
Pro Forma Balance Sheet Data
________________________________________________________________________________
At December 31, 1997
($ in millions)
Astoria LISB Pro Forma
Loans, Net $4,305 $3,487 $7,792
MBS 4,062 1,711 5,773
Intangibles 258 5 263
Total Assets 10,528 6,073 16,601
Deposits 6,221 3,742 9,963
Borrowings 3,273 1,614 4,887
Common Equity 849 557 1,406
Preferred Equity 50 - 50
Book Value/Share $32.42 $23.19 $26.13
Tangible Book Value/Share $22.57 $22.98 $21.24
(a) Before acquisition adjustments
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Astoria Financial - 28 - Long Island
Corporation Bancorp
<PAGE>
Pro Forma Asset Quality Data
________________________________________________________________________________
At December 31, 1997
($ in millions)
Astoria LISB Pro Forma
Non-Performing Loans (NPLs) $42.8 $45.9 $88.7
REO 16.3 7.9 24.2
Non-Performing Assets (NPAs) 59.1 53.8 112.9
Loan Loss Reserve 40.0 33.7 73.7
NPAs/Assets 0.56% 0.89% 0.68%
Reserves/Loans 0.93 0.91 0.92
Reserves/NPLs 93.46 73.42 83.09
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Astoria Financial - 29 - Long Island
Corporation Bancorp
