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): October 20, 1999
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
NOT APPLICABLE
(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 October 20, 1999, Astoria Financial Corporation issued limited
financial information for the three and nine months ended September 30, 1999.
A press release, issued on October 20, 1999, detailing the foregoing is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
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
----------- -----------
99.1 Press Release issued October 20, 1999
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, Esq.
Senior Vice President and General Counsel
Dated: October 20, 1999
3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
99.1 Press Release issued October 20, 1999
4
EXHIBIT 99.1
<PAGE>
NEWS RELEASE
CONTACT: PETER J. CUNNINGHAM
FIRST VICE PRESIDENT
INVESTOR RELATIONS
(516) 327-7877
FOR IMMEDIATE RELEASE
ASTORIA FINANCIAL CORPORATION REPORTS THIRD QUARTER EPS OF $1.25
(CASH EARNINGS OF $1.40 PER SHARE)
QUARTERLY CASH DIVIDEND OF $0.24 PER COMMON SHARE DECLARED
LAKE SUCCESS, NEW YORK - OCTOBER 20, 1999 -- Astoria Financial Corporation
(Nasdaq:ASFC), the holding company for Astoria Federal Savings and Loan
Association, today reported net income of $66.9 million or $1.25 diluted
earnings per common share for the quarter ended September 30, 1999. For the nine
months ended September 30, 1999, net income totaled $176.1 million or $3.24
diluted earnings per common share. The 1999 third quarter and nine month results
include a net gain on the sale and disposition of upstate New York banking
offices and certain loan production offices, net of taxes, of $11.9 million, or
$0.23 per common share, and $11.1 million, or $0.21 per common share,
respectively. Operating earnings (net income excluding the net gain on the sale
and disposition of banking and loan production offices) for the third quarter
ended September 30, 1999 increased to $55.0 million, or $1.02 diluted operating
earnings per common share, from operating earnings of $24.9 million, or $0.44
diluted operating earnings per common share, for the comparable 1998 period. For
the nine month period ended September 30, 1999, operating earnings increased to
$165.0 million, or $3.03 diluted earnings per common share, from operating
earnings of $100.6 million, or $1.82 diluted operating earnings per common
share, for the comparable 1998 period. Prior year third quarter and nine month
results have been restated to reflect the pooling of interests accounting
treatment with respect to the Long Island Bancorp, Inc. ("LIB") acquisition
following the close of business on September 30, 1998.
1
<PAGE>
Commenting on the third quarter results, George L. Engelke, Jr.,
Chairman, President and Chief Executive Officer of Astoria, said, "Contributing
to our solid third quarter results were a 28% decrease in operating expenses and
a 19% increase in net interest income from the prior year period, as well as the
positive effects of our stock repurchase program. This performance reflects the
success achieved in completing the LIB acquisition smoothly and on a timely
basis and validates our strategy of enhancing operating efficiencies through
strategic in-market acquisitions."
OPERATING CASH EARNINGS AND RELATED RETURNS
Cash earnings, which represent the amount by which tangible equity
changes each period due to operating results, include reported earnings plus the
non-cash charges for goodwill amortization and amortization relating to certain
employee stock plans and related tax benefit. Tangible equity generation from
operations, or cash earnings, is a measure of Astoria's financial capacity for
growth, share repurchases and/or payment of dividends. Operating cash earnings
increased tangible equity in the 1999 third quarter by $63.1 million, or 14.6%
more than operating earnings. (Please see page 9).
Operating cash earnings available to common shareholders were $61.6
million, or $1.18 diluted operating cash earnings per common share for the 1999
third quarter, an increase of 66.4% and 68.6%, respectively, over the $37.0
million, or $0.70 diluted operating cash earnings per common share reported for
the 1998 third quarter. For the nine months ended September 30, 1999, operating
cash earnings available to common shareholders were $186.1 million, or $3.51
diluted operating cash earnings per common share, an increase of 40.2% and
39.8%, respectively, over the $132.7 million, or $2.51 diluted operating cash
earnings per common share for the comparable 1998 period.
The operating cash return on average tangible equity for the third
quarter and nine months ended September 30, 1999 was 23.17% and 21.94%,
respectively, versus 12.06% and 14.73%, respectively, for the comparable 1998
periods. Commenting on the significance of this important ratio, Mr. Engelke
noted, "The operating cash return on average tangible equity, a key measure of
our financial performance, increased for the third quarter and nine months of
1999 by over 92% and 49%, respectively, over the comparable 1998 periods
reflecting the successful integration of LIB, efficiencies realized and the
effective deployment of capital." The operating cash returns on average assets
for the third quarter and nine months ended September 30, 1999 were 1.10% and
1.12%, respectively, versus 0.82% and 1.02%, respectively, for the comparable
1998 periods.
BOARD DECLARES QUARTERLY CASH DIVIDEND; SIXTH STOCK REPURCHASE PROGRAM UNDERWAY
The Board of Directors, at their October 20, 1999 meeting, declared a
quarterly cash dividend of $0.24 per common share. The dividend is payable on
December 1, 1999 to shareholders of record at the close of business on November
15, 1999. This is the eighteenth consecutive quarterly cash dividend declared by
the Company.
2
<PAGE>
During the third quarter, Astoria Financial, under its previously
announced stock repurchase program, purchased 586,500 shares of its common
stock. A total of 1,503,700 shares, or 27.3% of the approximately 5.5 million
shares authorized under the program, have been purchased since the program
commenced on April 21, 1999 at a total cost of $66.7 million. Additional
purchases may be made from time to time through April 20, 2001 in open-market or
privately negotiated transactions.
1999 THIRD QUARTER AND NINE MONTH EARNINGS SUMMARY
Net interest income for the third quarter of 1999 increased 18.7% to
$133.2 million from $112.3 million for the 1998 third quarter. For the nine
months ended September 30, 1999, net interest income increased 21.8% to $405.8
million from $333.2 million for the first nine months of 1998. The increases for
the three and nine month periods are primarily attributable to the growth in
average interest-earning assets, principally mortgage-backed securities and
mortgage loans.
Astoria's net interest margin was 2.39% and 2.47%, respectively, for
the quarter and nine months ended September 30, 1999 compared to 2.52% and
2.62%, respectively, for the comparable 1998 periods. The 1999 third quarter net
interest margin was seven basis points lower than the 1999 second quarter, of
which five basis points were attributable to one additional day of interest
expense in the third quarter.
The provision for loan losses for the quarter and nine months ended
September 30, 1999 were $1.0 and $3.1 million, respectively, compared to $5.2
million and $8.8 million for the comparable 1998 periods. The reduced provision
reflects the effect of a 33.2%, or $28.5 million decline in non-performing loans
since September 30, 1998. The resulting ratio of the allowance for loan losses
to non-performing loans was 129.2% at September 30, 1999 compared to 88.8% at
September 30, 1998.
Non-interest income for the quarter ended September 30, 1999 was $36.8
million which included a $20.4 million net gain on the sale and disposition of
upstate New York banking offices and certain loan production offices, compared
to $8.3 million for the 1998 third quarter which included a $4.1 million gain on
sales of securities. Non-interest income for the first nine months of 1999,
totaled $69.9 million which included a $19.2 million net gain on the sale and
disposition of upstate New York banking offices and certain loan production
offices and a $714,000 gain on sale of securities, compared to $48.1 million for
the nine months of 1998 which included a $15.3 million gain on sale of
securities.
Total non-interest expense decreased by 24.6% to $54.0 million for the
quarter ended September 30, 1999 from $71.7 million for the 1998 third quarter
and decreased 15.1% to $168.9 million for the first nine months of 1999 from
$199.0 million for the first nine months of 1998.
3
<PAGE>
General and administrative expense ("G&A"), excluding non-cash
amortization expense relating to certain employee stock plans ("cash G&A"), for
the quarter and nine months ended September 30, 1999, totaled $45.8 million and
$142.3 million, respectively, compared to $63.0 million and $168.5 million,
respectively, for the comparable 1998 periods. Importantly, Astoria's ratio of
cash G&A expense to average assets decreased to 0.80% and 0.84%, for the quarter
and nine month periods ended September 30, 1999, from 1.35% and 1.26%,
respectively, for the comparable periods last year. The cash efficiency ratio
for the quarter and first nine months of 1999 was 30.59% and 31.25%,
respectively, compared to 54.11% and 46.03%, respectively, for the comparable
1998 periods. Mr. Engelke commented, "The continuing downward trend in these
very important operating ratios is evidence of both our keen focus on efficiency
and our ability to drive efficiency through acquisitions."
Goodwill litigation expense in the 1999 third quarter totaled $1.1
million compared to $421,000 reported in the 1998 third quarter. For the nine
months ended September 30, 1999 goodwill litigation expense totaled $4.0 million
compared to $1.1 million in the comparable 1998 period.
BALANCE SHEET SUMMARY
Total assets at September 30, 1999 totaled $22.86 billion, compared to
$23.10 billion reported at June 30, 1999.
Mortgage lending activity for the three and nine month periods ended
September 30, 1999, as detailed in the table below, was concentrated in
one-to-four family mortgage loans. The decrease in loan origination activity
during 1999 was primarily due to decreased levels of mortgage refinance
activity, due to a general rise in the level of interest rates, together with a
focus on originating loans for portfolio rather than for sale in the secondary
market. Additionally, the increase in market interest rates also reduced the
level of loan prepayments. In the 1999 third quarter, loan prepayments declined
and totaled $333.9 million compared to $443.9 million in the 1999 second
quarter. Loans sold during the three and nine month periods ended September 30,
1999 totaled $52.8 million and $441.9 million, respectively, and were primarily
30 year and 15 year fixed-rate, one-to-four family loans.
MORTGAGE LOAN PRODUCTION
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
DELIVERY CHANNEL:
Broker $450.8 million $577.6 million
Retail 198.8 million 615.0 million
Third Party 96.5 million 48.8 million
------------- ---------------
TOTAL $746.1 MILLION $1,241.4 MILLION
4
<PAGE>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
DELIVERY CHANNEL:
Broker $1,781.7 million $1,827.2 million
Retail 1,047.6 million 1,861.5 million
Third Party 280.6 million 171.1 million
---------------- ---------------
TOTAL $3,109.9 MILLION $3,859.8 MILLION
Loans held-for-investment, net, at September 30, 1999 totaled $9.93
billion, increasing $259.2 million, or 2.7% from June 30, 1999. For the nine
month period ended September 30, 1999, loans held-for investment, net, increased
$1.19 billion, or 13.7%. The increases were concentrated in one-to-four family
mortgage loans. While the loan portfolio continued to grow in the third quarter,
non-performing assets declined to $64.0 million, or 0.28% of total assets at
September 30, 1999, from $75.4 million, or 0.33% of total assets at June 30,
1999. Mortgage-backed and other securities totaled $11.52 billion at September
30, 1999, a decrease of $467.6 million from June 30, 1999.
Deposits at September 30, 1999 totaled $9.44 billion, a decline of
$185.9 million from June 30, 1999. The decrease includes $156 million of deposit
liabilities in five upstate New York banking offices that were sold in the third
quarter. Deposits in Astoria Federal's remaining 87 banking offices average $109
million per office. At September 30, 1999, core deposits, including savings,
NOW, money manager and money market accounts, comprised 48.5% of total deposits,
substantially unchanged from the prior quarter. Borrowings at September 30,
1999, primarily medium and long-term, totaled $11.66 billion compared to $11.73
billion at June 30, 1999.
At September 30, 1999, the cumulative one-year interest rate
sensitivity gap was positive 2.29% compared to positive 5.18% at December 31,
1998.
Stockholders' equity was $1.36 billion, or 5.94% of total assets at
September 30, 1999, compared to $1.34 billion, or 5.80% of total assets, at June
30, 1999 and $1.46 billion, or 7.10% at December 31, 1998. The change in
stockholders' equity in the third quarter was primarily attributable to the
positive effect of net income and the amortization relating to stock plans and
related tax benefit, offset by the repurchase of common shares during the third
quarter, the increase in the unrealized loss on securities, net of taxes,
component and dividends paid. The third quarter increase from $203.0 million to
$222.3 million in the unrealized loss on securities, net of taxes, component of
stockholders' equity, is a reflection of the effect of increasing market
interest rates since June 30, 1999 on the available-for-sale securities
portfolio and is not the result of any actual sales transactions from that
portfolio. Astoria Federal continues to maintain capital ratios in excess of
regulatory requirements. At September 30, 1999, core, tangible and risk-based
capital ratios were 5.55%, 5.55% and 14.50%, respectively.
5
<PAGE>
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association with assets of $22.9 billion, is the largest thrift
institution in New York and sixth largest in the United States. Astoria Federal,
through its 87 banking offices, provides retail banking, mortgage and consumer
loan services to 700,000 customers. Astoria commands the second largest deposit
market share in the attractive Long Island market, which includes Brooklyn,
Queens, Nassau and Suffolk counties with a population exceeding that of 39
individual states. Astoria originates mortgage loans through its banking and
loan production offices in the metropolitan New York area and through an
extensive broker network in thirteen states: New York, New Jersey, Connecticut,
Pennsylvania, Massachusetts, Delaware, Maryland, Ohio, Virginia, North Carolina,
South Carolina, Georgia and Florida.
Note: Astoria Financial Corporation's news releases are available on its web
site: HTTP://WWW.ASFC.COM or by fax, at no charge, through PR Newswire's
"Company News on Call" at (800) 758-5804, extension 104529.
THIS RELEASE MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS AND MAY BE
IDENTIFIED BY THE USE OF SUCH WORDS AS "BELIEVE," "EXPECT," "ANTICIPATE,"
"SHOULD," "PLANNED," "ESTIMATED," AND "POTENTIAL." EXAMPLES OF FORWARD LOOKING
STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, ESTIMATES WITH RESPECT TO THE
FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY THAT ARE
SUBJECT TO VARIOUS FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THESE ESTIMATES. THESE FACTORS 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 THE
COMPANY'S OPERATIONS, PRICING, PRODUCTS, AND SERVICES.
Tables Follow
6
<PAGE>
Page 7
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
- ----------------------------------------------
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
At At
September 30, December 31,
1999 1998
------------- --------------
<S> <C> <C>
ASSETS
- ------
Cash and due from banks $ 114,328 $ 126,945
Federal funds sold and repurchase agreements 127,209 266,437
Mortgage-backed securities available-for-sale 8,887,451 7,553,834
Other securities available-for-sale 667,498 642,610
Mortgage-backed securities held-to-maturity
(estimated fair value of $1,129,039 and $1,141,145, respectively) 1,131,636 1,136,799
Other securities held-to-maturity (estimated fair value of
$781,393 and $982,295, respectively) 829,020 972,012
Federal Home Loan Bank of New York stock 262,000 210,250
Loans held-for-sale 38,478 212,909
Loans receivable held-for-investment:
Mortgage loans, net 9,823,261 8,583,355
Consumer and other loans, net 184,299 230,367
------------- --------------
10,007,560 8,813,722
Less allowance for loan losses 74,332 74,403
------------- --------------
Total loans receivable held-for-investment, net 9,933,228 8,739,319
Mortgage servicing rights, net 49,957 50,237
Accrued interest receivable 115,563 102,288
Premises and equipment, net 177,557 161,629
Goodwill 228,778 245,862
Other assets 301,055 166,610
------------- --------------
TOTAL ASSETS $ 22,863,758 $ 20,587,741
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits $ 9,440,223 $ 9,668,286
Reverse repurchase agreements 9,776,800 7,291,800
Federal Home Loan Bank of New York advances 1,410,087 1,210,170
Other borrowings 477,685 520,827
Mortgage escrow funds 143,001 116,106
Accrued expenses and other liabilities 257,219 318,168
------------- --------------
TOTAL LIABILITIES 21,505,015 19,125,357
------------- --------------
Stockholders' equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized:
Series A (325,000 shares authorized and -0- shares issued and
outstanding) - -
Series B (2,000,000 shares authorized, issued and outstanding) 2,000 2,000
Common stock, $.01 par value; (200,000,000 shares authorized;
55,498,296 and 54,655,095 shares issued, respectively; and
54,340,443 and 54,655,095 shares outstanding, respectively) 555 547
Additional paid-in capital 797,541 767,846
Retained earnings - substantially restricted 864,741 742,679
Treasury stock (1,157,853 shares, at cost) (50,086) -
Accumulated other comprehensive income:
Net unrealized loss on securities, net of taxes (222,258) (14,566)
Unallocated common stock held by ESOP (33,645) (35,908)
Unearned common stock held by RRPs (105) (214)
------------- --------------
TOTAL STOCKHOLDERS' EQUITY 1,358,743 1,462,384
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,863,758 $ 20,587,741
============= ==============
</TABLE>
<PAGE>
Page 8
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
- ---------------------------------
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ -----------------------------
1999 1998 (1) 1999 1998 (1)
------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Interest income:
Mortgage loans $ 172,208 $ 155,824 $ 502,014 $ 457,959
Consumer and other loans 4,726 6,192 14,797 18,596
Mortgage-backed securities 167,422 113,025 497,287 314,356
Other securities 31,854 34,080 96,871 99,965
Federal funds sold and repurchase agreements 2,237 3,921 5,586 11,134
------------ ------------- ------------ ------------
Total interest income 378,447 313,042 1,116,555 902,010
------------ ------------- ------------ ------------
Interest expense:
Deposits 91,496 100,530 271,103 306,134
Borrowed funds 153,714 100,242 439,630 262,717
------------ ------------- ------------ ------------
Total interest expense 245,210 200,772 710,733 568,851
------------ ------------- ------------ ------------
Net interest income 133,237 112,270 405,822 333,159
Provision for loan losses 1,026 5,166 3,119 8,780
------------ ------------- ------------ ------------
Net interest income after provision for loan losses 132,211 107,104 402,703 324,379
------------ ------------- ------------ ------------
Non-interest income:
Customer service and other loan fees 10,435 9,127 29,310 25,047
Loan servicing fees 2,813 (5,810) 12,135 (2,127)
Gain on sales of securities - 4,132 714 15,253
Gain (loss) on sales of loans 209 (844) 3,255 1,364
Net gain on disposition of branch and loan production offices 20,447 - 19,206 -
Operating income from real estate joint ventures 2,084 - 2,768 1,735
Other 790 1,674 2,471 6,877
------------ ------------- ------------ ------------
Total non-interest income 36,778 8,279 69,859 48,149
------------ ------------- ------------ ------------
Non-interest expense:
General and administrative:
Compensation and benefits 22,542 26,601 70,586 78,194
Employee stock plans amortization 2,234 3,983 8,075 14,559
Occupancy, equipment and systems 13,215 14,460 40,356 43,055
Federal deposit insurance premiums 1,055 1,713 3,452 4,474
Advertising 2,085 1,261 5,938 4,116
Other 6,862 18,949 21,944 38,647
------------ ------------- ------------ ------------
Total general and administrative 47,993 66,967 150,351 183,045
Real estate operations and provision for losses, net 116 (646) (60) 36
Goodwill litigation 1,094 421 4,041 1,120
Amortization of goodwill 4,843 4,962 14,592 14,809
------------ ------------- ------------ ------------
Total non-interest expense 54,046 71,704 168,924 199,010
------------ ------------- ------------ ------------
Income before income tax expense 114,943 43,679 303,638 173,518
Income tax expense 47,995 18,815 127,514 72,929
------------ ------------- ------------ ------------
NET INCOME 66,948 24,864 176,124 100,589
------------ ------------- ------------ ------------
Preferred dividends declared (1,500) (1,500) (4,500) (4,500)
------------ ------------- ------------ ------------
Net income available to common shareholders $ 65,448 $ 23,364 $ 171,624 $ 96,089
============ ============= ============ ============
Basic earnings per common share $ 1.27 $ 0.46 $ 3.32 $ 1.90
============ ============= ============ ============
Diluted earnings per common share $ 1.25 $ 0.44 $ 3.24 $ 1.82
============ ============= ============ ============
Basic weighted average common shares 51,417,820 51,011,647 51,736,485 50,595,090
Diluted weighted average common and common
equivalent shares 52,376,642 52,894,829 52,988,352 52,818,974
</TABLE>
(1) Restated to include Long Island Bancorp, Inc. (LIB).
<PAGE>
Page 9
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF OPERATING CASH EARNINGS
- ------------------------------------------------
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------------------------
1999 1998 (1)
------------ ------------
<S> <C> <C>
Net Income $ 66,948 $ 24,864
Less: Net gain on disposition of branch and loan production
offices, net of tax 11,909 -
------------ ------------
Operating Income 55,039 24,864
Add back:
Employee stock plans amortization expense 2,234 3,983
Amortization of goodwill 4,843 4,962
Income tax benefit on amortization expense of
earned portion of RRP stock 968 4,698
------------ ------------
Operating cash earnings 63,084 38,507
------------ ------------
Preferred dividends declared (1,500) (1,500)
------------ ------------
Operating cash earnings available to common shareholders $ 61,584 $ 37,007
============ ============
Basic operating cash earnings per common share $ 1.20 $ 0.73
============ ============
Diluted operating cash earnings per common share $ 1.18 $ 0.70
============ ============
Nine Months Ended
September 30,
------------------------------------
1999 1998 (1)
------------ ------------
Net Income $ 176,124 $ 100,589
Less: Net gain on disposition of branch and loan production
offices, net of tax 11,140 -
------------ ------------
Operating Income 164,984 100,589
Add back:
Employee stock plans amortization expense 8,075 14,559
Amortization of goodwill 14,592 14,809
Income tax benefit on amortization expense of
earned portion of RRP stock 2,903 7,264
------------ ------------
Operating cash earnings 190,554 137,221
------------ ------------
Preferred dividends declared (4,500) (4,500)
------------ ------------
Operating cash earnings available to common shareholders $ 186,054 $ 132,721
============ ============
Basic operating cash earnings per common share $ 3.60 $ 2.62
============ ============
Diluted operating cash earnings per common share $ 3.51 $ 2.51
============ ============
</TABLE>
(1) Restated to include LIB.
<PAGE>
Page 10
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
SELECTED FINANCIAL RATIOS AND OTHER DATA
- ----------------------------------------
<TABLE>
<CAPTION>
At or For the
Three Months Ended
September 30,
-----------------------------------------------
1999 1998 (1)
-------------------- --------------------
(Annualized)
<S> <C> <C>
SELECTED RETURNS
- ----------------
Return on average stockholders' equity 20.27 % 6.49 %
Return on average tangible stockholders' equity 24.59 7.79
Return on average assets 1.16 0.53
SELECTED FINANCIAL RATIOS AND MARKET DATA EXCLUDING NET GAIN ON
DISPOSITION OF BRANCH AND LOAN PRODUCTION OFFICES, NET OF TAX
- ------------------------------------------------------------------
Return on average stockholders' equity 16.66 % 6.49 %
Cash return on average stockholders' equity(2) 19.10 10.05
Return on average tangible stockholders' equity 20.22 7.79
Cash return on average tangible stockholders' equity(2) 23.17 12.06
Return on average assets 0.96 0.53
Cash return on average assets(2) 1.10 0.82
Net interest spread 2.08 2.13
Net interest margin 2.39 2.52
General and administrative expenses to average assets 0.84 1.43
Cash general and administrative expenses
to average assets(3) 0.80 1.35
Efficiency ratio 32.09 57.53
Cash efficiency ratio(3) 30.59 54.11
Cash dividends paid per common share $ 0.24 $ 0.20
Book value per common share
Tangible book value per common share
ASSET QUALITY RATIOS
- --------------------
Non-performing loans/total loans
Non-performing loans/total assets
Non-performing assets/total assets
Allowance for loan losses/non-performing loans
Allowance for loan losses/non-accrual loans
Allowance for loan losses/total loans
CAPITAL RATIOS (ASTORIA FEDERAL)
- --------------------------------
Tangible
Core
Risk-based
OTHER DATA (DOLLARS IN MILLIONS)
- --------------------------------
Average equity/average assets 5.75 % 8.21 %
Cumulative one year interest - sensitivity gap
Non-performing assets
Non-performing loans
90 days past maturity but still accruing
Non-accrual loans
Mortgage loans serviced for others
</TABLE>
<TABLE>
<CAPTION>
At or For the
Nine Months Ended
September 30,
------------------------------------------------
1999 1998 (1)
-------------------- -------------------
(Annualized)
<S> <C> <C>
SELECTED RETURNS
- ----------------
Return on average stockholders' equity 16.83 % 8.93 %
Return on average tangible stockholders' equity 20.28 10.80
Return on average assets 1.03 0.75
SELECTED FINANCIAL RATIOS AND MARKET DATA EXCLUDING NET GAIN ON
DISPOSITION OF BRANCH AND LOAN PRODUCTION OFFICES, NET OF TAX
- ------------------------------------------------------------------
Return on average stockholders' equity 15.76 % 8.93 %
Cash return on average stockholders' equity(2) 18.21 12.19
Return on average tangible stockholders' equity 19.00 10.80
Cash return on average tangible stockholders' equity(2) 21.94 14.73
Return on average assets 0.97 0.75
Cash return on average assets(2) 1.12 1.02
Net interest spread 2.17 2.21
Net interest margin 2.47 2.62
General and administrative expenses to average assets 0.88 1.37
Cash general and administrative expenses
to average assets(3) 0.84 1.26
Efficiency ratio 33.02 50.01
Cash efficiency ratio(3) 31.25 46.03
Cash dividends paid per common share $ 0.72 $ 0.60
Book value per common share 23.88 27.34
Tangible book value per common share 19.67 22.72
ASSET QUALITY RATIOS
- --------------------
Non-performing loans/total loans 0.58 % 0.98 %
Non-performing loans/total assets 0.25 0.45
Non-performing assets/total assets 0.28 0.53
Allowance for loan losses/non-performing loans 129.21 88.80
Allowance for loan losses/non-accrual loans 136.01 91.60
Allowance for loan losses/total loans 0.74 0.87
CAPITAL RATIOS (ASTORIA FEDERAL)
- --------------------------------
Tangible 5.55 % 5.84 %
Core 5.55 5.84
Risk-based 14.50 15.19
OTHER DATA (DOLLARS IN MILLIONS)
- --------------------------------
Average equity/average assets 6.15 % 8.40 %
Cumulative one year interest - sensitivity gap 2.21
Non-performing assets $ 64 $ 102
Non-performing loans 58 86
90 days past maturity but still accruing 3 3
Non-accrual loans 55 83
Mortgage loans serviced for others $ 4,544 $ 5,194
</TABLE>
(1) Restated to include LIB.
(2) Excluding non-cash charge for amortization of goodwill, employee
stock plans and related tax benefit.
(3) Excluding non-cash charge for amortization of employee stock
plans.
<PAGE>
Page 11
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
AVERAGE BALANCE SHEET
- ---------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Three Months Ended September 30,
---------------------------------------------------------------
1999
---------------------------------------------------------------
Average
Average Yield/
Balance Interest Cost
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets: Annualized)
Interest-earning assets:
Mortgage loans $ 9,723,462 $ 172,208 7.08 %
Consumer and other loans 192,741 4,726 9.81
Mortgage-backed securities (2) 10,434,731 167,422 6.42
Other securities (2) 1,809,690 31,854 7.04
Federal funds sold and
repurchase agreements 171,470 2,237 5.22
---------- ------- ----
Total interest-earning assets 22,332,094 378,447 6.78
Non-interest-earning assets 656,870
----------
Total assets $ 22,988,964
----------
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,688,840 $ 13,718 2.04 %
Certificates of deposit 4,883,535 64,517 5.28
NOW 117,747 294 1.00
Money market 1,096,111 11,979 4.37
Money manager 395,928 988 1.00
Borrowed funds 11,684,305 153,714 5.26
---------- -------
Total interest-bearing liabilities 20,866,466 245,210 4.70
-------
Non-interest-bearing liabilities 801,327
----------
Total liabilities 21,667,793
Stockholders' equity 1,321,171
----------
Total liabilities and stockholders' equity $ 22,988,964
----------
Net interest income/net interest
rate spread $ 133,237 2.08 %
------- ----
Net interest earning assets/net
interest margin $ 1,465,628 2.39 %
--------- ----
Ratio of interest-earning assets
to interest-bearing liabilities 1.07x
----
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------------------------
1998 (1)
------------------------------------------------------
Average
Average Yield/
Balance Interest Cost
------------------------------------------------------
<S> <C> <C> <C>
Assets: (Annualized)
Interest-earning assets:
Mortgage loans $ 8,457,351 $ 155,824 7.37 %
Consumer and other loans 264,112 6,192 9.38
Mortgage-backed securities (2) 6,903,916 113,025 6.55
Other securities (2) 1,939,627 34,080 7.03
Federal funds sold and
repurchase agreements 280,137 3,921 5.60
---------- -------
Total interest-earning assets 17,845,143 313,042 7.02
Non-interest-earning assets 834,563 -------
----------
Total assets $ 18,679,706
----------
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,888,979 $ 18,762 2.60 %
Certificates of deposit 5,204,569 71,503 5.50
NOW 124,974 455 1.46
Money market 758,915 8,590 4.53
Money manager 356,720 1,220 1.37
Borrowed funds 7,072,755 100,242 5.67
---------- -------
Total interest-bearing liabilities 16,406,912 200,772 4.89
-------
Non-interest-bearing liabilities 739,693
----------
Total liabilities 17,146,605
Stockholders' equity 1,533,101
----------
Total liabilities and stockholders' equity $ 18,679,706
----------
Net interest income/net interest
rate spread $ 112,270 2.13 %
------- ----
Net interest earning assets/net
interest margin $ 1,438,231 2.52 %
--------- ----
Ratio of interest-earning assets
to interest-bearing liabilities 1.09x
----
</TABLE>
(1) Restated to include LIB.
(2) Securities available-for-sale are reported at average amortized cost.
<PAGE>
Page 12
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARY
AVERAGE BALANCE SHEET
- ---------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------------------------------------------------------------
1999 1998 (1)
------------------------------------------ ----------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
- ---------------------------------------------------------------------------------------- ----------------------------------------
Assets: (Annualized) (Annualized)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Mortgage loans $ 9,374,928 $ 502,014 7.14 % $ 8,224,446 $ 457,959 7.42 %
Consumer and other loans 207,328 14,797 9.52 265,346 18,596 9.34
Mortgage-backed securities (2) 10,333,972 497,287 6.42 6,339,109 314,356 6.61
Other securities (2) 1,841,231 96,871 7.01 1,893,548 99,965 7.04
Federal funds sold and
repurchase agreements 150,831 5,586 4.94 263,336 11,134 5.64
------- ----- ------- ------
Total interest-earning assets 21,908,290 1,116,555 6.80 16,985,785 902,010 7.08
--------- -------
Non-interest-earning assets 790,341 885,117
------- -------
Total assets $ 22,698,631 $ 17,870,902
========== ==========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,726,939 $ 41,085 2.01 % $ 2,912,184 $ 56,903 2.61 %
Certificates of deposit 4,964,526 194,136 5.21 5,369,395 220,610 5.48
NOW 128,246 951 0.99 126,045 1,391 1.47
Money market 1,004,608 32,071 4.26 697,393 23,501 4.49
Money manager 386,159 2,860 0.99 352,841 3,729 1.41
Borrowed funds 11,270,505 439,630 5.20 6,119,113 262,717 5.72
---------- ------- --------- -------
Total interest-bearing liabilities 20,480,983 710,733 4.63 15,576,971 568,851 4.87
------- -------
Non-interest-bearing liabilities 822,089 792,432
------- -------
Total liabilities 21,303,072 16,369,403
Stockholders' equity 1,395,559 1,501,499
--------- ---------
Total liabilities and stockholders' equity $ 22,698,631 $ 17,870,902
========== ==========
Net interest income/net interest
rate spread $ 405,822 2.17 % $ 333,159 2.21 %
------- ---- ------- ----
Net interest earning assets/net
interest margin $ 1,427,307 2.47 % $ 1,408,814 2.62 %
------------- ---- --------- ----
Ratio of interest-earning assets
to interest-bearing liabilities 1.07x 1.09x
----- -----
</TABLE>
(1) Restated to include LIB.
(2) Securities available-for-sale are reported at average amortized cost.
