SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
---------------------------
Date of report (Date of earliest event reported): January 20, 2000
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 January 20, 2000, Astoria Financial Corporation issued limited
financial information for the three-and twelve-month periods ended December 31,
1999.
A press release, issued on January 20, 2000, 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 January 20, 2000
-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.
Executive Vice President and General
Counsel
Dated: January 20, 2000
3
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
99.1 Press Release issued January 20, 2000
4
EXHIBIT 99.1
<PAGE>
[Letterhead of Astoria Financial Corporation]
CONTACT: PETER J. CUNNINGHAM
FIRST VICE PRESIDENT
INVESTOR RELATIONS
(516) 327-7877
FOR IMMEDIATE RELEASE
ASTORIA FINANCIAL REPORTS 4Q99 EPS OF $1.14;
FULL YEAR EPS OF $4.37 (4Q99 AND FULL YEAR OPERATING EPS OF
$1.14 AND $4.16 VS $0.82 AND $2.64 FOR 1998 PERIODS)
QUARTERLY CASH DIVIDEND OF $0.24 PER COMMON SHARE DECLARED
LAKE SUCCESS, NY, JANUARY 20, 2000 - Astoria Financial Corporation ("Astoria")
(Nasdaq: ASFC), the holding company for Astoria Federal Savings and Loan
Association ("Astoria Federal"), today reported net income of $59.5 million, or
$1.14 diluted earnings per common share for the quarter ended December 31, 1999.
For the fiscal year ended December 31, 1999, the Company reported net income of
$235.7 million, or $4.37 diluted earnings per common share. This compares to
1998's fourth quarter and fiscal year results of a net loss of $55.5 million, or
$1.11 loss per common share, and net income of $45.0 million, or $0.74 diluted
earnings per common share, respectively.
The 1999 fourth quarter net income includes the full year tax benefit
derived from a corporate restructuring of several subsidiaries completed in the
fourth quarter and the benefit of an adjustment recorded to employee benefit
expense in the fourth quarter related to the Company's pension accruals totaling
approximately $4.0 million, after-tax, or $0.08 diluted earnings per common
share.
The 1999 fiscal year results include the net gain of $11.3 million,
after-tax, or $0.21 diluted earnings per common share, on the sale and
disposition of five upstate New York banking offices and certain loan production
offices. The 1999 fiscal year results, excluding the branch and office sales,
were $224.3 million, or $4.16 diluted earnings per common share.
The prior year fourth quarter and full year results include $100.3
million of infrequently occurring charges, after-tax, primarily associated with
the acquisition of Long Island Bancorp, Inc. ("LIB") following the close of
business September 30, 1998. The 1998 fourth quarter and fiscal year
<PAGE>
results, excluding the infrequently occurring charges were $44.8 million, or
$0.82 diluted earnings per common share and $145.4 million, or $2.64 diluted
earnings per common share, respectively.
OPERATING EARNINGS
Operating earnings are net income excluding the sale and disposition of
banking and loan production offices in 1999 and the infrequently occurring
charges in 1998. Fourth quarter 1999 operating earnings of $59.5 million, or
$1.14 diluted operating earnings per common share were 33% and 39% greater than
the 1998 fourth quarter operating results of $44.8 million, or $0.82 diluted
operating earnings per common share. The 1999 fiscal year operating results of
$224.3 million, or $4.16 diluted operating earnings per common share, were 54%
and 58% greater than the 1998 fiscal year operating results of $145.4 million,
or $2.64 diluted operating earnings per common share. Operating earnings for the
quarter and year-to-date generated annualized returns on average equity of
18.67% and 16.48%, respectively, compared to 12.16% and 9.76%, respectively, for
the comparable 1998 periods, and generated returns on average assets of 1.05%
and 0.99%, respectively, compared to 0.91% and 0.79%, respectively, for the
comparable 1998 periods.
Commenting on the Company's results, George L. Engelke, Jr., Chairman,
President and Chief Executive Officer noted, "The financial results achieved in
1999 reflect the significant earnings accretion anticipated and realized as a
result of the successful completion and integration of the LIB acquisition and
validate the effective implementation of our in-market acquisition strategy that
has steadily enhanced operating earnings and driven operating efficiency."
BOARD DECLARES QUARTERLY CASH DIVIDEND; SETS ANNUAL SHAREHOLDER MEETING DATE
The Board of Directors, at their January 19, 2000 meeting, declared a
quarterly cash dividend of $0.24 per common share. The dividend is payable on
March 1, 2000 to common shareholders of record at the close of business on
February 15, 2000. This is the nineteenth consecutive quarterly cash dividend
declared by the Company.
The Board of Directors also established May 17, 2000 as the date for
the Annual Meeting of Shareholders, with a record date of March 24, 2000.
2
<PAGE>
SIXTH STOCK REPURCHASE PROGRAM
During the fourth quarter, Astoria, under its previously announced
stock repurchase program, purchased 2.8 million shares of its common stock. A
total of 4.3 million shares, or 78% of the 5.5 million shares authorized under
the program, have been purchased since the program commenced on April 21, 1999
at a total cost of $159.4 million. Additional purchases may be made from time to
time through April 20, 2001 in open-market or privately negotiated transactions.
OPERATING CASH EARNINGS AND RELATED RETURNS
Operating cash earnings, which represent the amount by which tangible
equity changes each period due to operating results, include operating earnings
plus non-cash charges for goodwill amortization and amortization relating to
certain employee stock plans and related tax benefit. Tangible equity generation
from operations, or operating 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 fourth quarter and full year
by $67.2 million and $257.6 million, respectively, or 13% and 15% more than
operating earnings would indicate, respectively. Please refer to the data
presented on page 10.
Operating cash earnings available to common shareholders were $65.7
million, or $1.29 diluted operating cash earnings per common share for the 1999
fourth quarter, increases of 24% and 29%, respectively, over the $53.0 million
operating cash earnings, or $1.00 diluted operating cash earnings per common
share for the 1998 fourth quarter. For the fiscal year 1999, operating cash
earnings available to common shareholders were $251.6 million, or $4.79 diluted
operating cash earnings per common share, increases of 35% and 36%,
respectively, over the $185.7 million operating cash earnings, or $3.51 diluted
operating cash earnings per common share for the comparable 1998 period.
Operating cash earnings for the fourth quarter and fiscal year ended
December 31, 1999 generated annualized returns on average tangible equity of
25.63% and 22.86%, respectively, versus 17.78% and 15.53%, respectively, for the
comparable 1998 periods, and generated annualized returns on average assets of
1.18% and 1.13%, respectively, versus 1.11% and 1.05%, respectively, for the
comparable 1998 periods.
3
<PAGE>
1999 FOURTH QUARTER AND FULL YEAR EARNINGS SUMMARY
Net interest income for the fourth quarter of 1999 increased 16% to
$134.1 million, from $115.8 million in the 1998 fourth quarter. For the fiscal
year ended December 31, 1999, net interest income increased 20%, or $90.9
million, to $539.9 million, from $449.0 million for 1998. The quarter and fiscal
year increases are attributable to the increase in average interest-earning
assets primarily in the mortgage loan and mortgage-backed securities portfolios,
partially offset by a lower net interest margin.
Astoria's net interest margin was 2.41% for the quarter ended December
31, 1999, compared to 2.39% for the previous quarter and 2.47% for the 1998
fourth quarter. For the year ended December 31, 1999, the net interest margin
was 2.46% compared to 2.58% for the 1998 full year period.
Non-interest income, exclusive of net gains (losses) on the sale of
securities of $25,000 and $(4.3) million for the fourth quarter 1999 and 1998,
respectively, totaled $16.8 million for the fourth quarter of 1999 compared to
$18.4 million for the 1998 fourth quarter. The 1998 fourth quarter non-interest
income also includes an increase in loan servicing fees due to a positive
valuation adjustment of $4.3 million to mortgage servicing rights.
Full year non-interest income, exclusive of the net gain on the sale of
securities of $739,000 and $11.0 million for 1999 and 1998, respectively, and
the 1999 net gain on the sale and disposition of upstate New York banking and
certain loan production offices of $19.2 million, totaled $66.8 million for 1999
compared to $51.3 million for 1998.
General and administrative ("G&A") expense, excluding non-cash
amortization expense relating to certain employee stock plans ("cash G&A"), for
the quarter ended December 31, 1999, totaled $43.1 million compared to $46.2
million for the comparable 1998 period. For the fiscal year 1999, cash G&A
expense totaled $185.3 million compared to $214.7 million for the prior year.
The decrease in cash G&A expense is attributable to the full recognition of the
cost savings associated with the acquisition of LIB at the end of the third
quarter of 1998 and the cost savings associated with the sale and disposition of
five upstate banking offices and certain loan production offices in 1999. The
fourth quarter 1999 compensation and benefits expense includes a reduction to
pension expense of approximately $1.7 million ($1.0 million, after-tax, or $0.02
diluted earnings per common share) to adjust the estimated expense for the full
year to the actuarially calculated accrual.
4
<PAGE>
Astoria's ratio of cash G&A expense to average assets decreased to
0.76% and 0.82%, respectively, for the quarter and fiscal year ended December
31, 1999, from 0.94% and 1.17%, respectively, for the comparable 1998 periods.
The cash efficiency ratios for the quarter and fiscal year ended December 31,
1999 were 28.54% and 30.57%, respectively, compared to 34.43% and 42.92% for the
comparable 1998 periods. Commenting on the improved operating efficiency, Mr.
Engelke said, "Our superior operating efficiency was a strong contributor toward
the very positive earnings we produced in 1999."
Goodwill litigation expense for the 1999 fourth quarter totaled $2.4
million compared to $545,000 for the comparable 1998 quarter. For the fiscal
year, goodwill litigation expense totaled $6.4 million compared to $1.7 million
for the comparable 1998 period.
Capital trust securities expense for the 1999 fourth quarter of $2.2
million is attributable to the issuance of $125.0 million of trust preferred
securities completed on October 28, 1999 at a fixed rate of 9.75% per year.
The effective income tax rate for the 1999 fourth quarter was 37.8%.
Included in fourth quarter income tax expense is the full fiscal year tax
benefit derived from a corporate restructuring of several subsidiaries completed
in the fourth quarter which increased net income by approximately $3.0 million,
or $0.06 diluted earnings per common share. On a normalized basis, our effective
income tax rate for the fourth quarter ended December 31, 1999 would have
approximated 41.0%.
BALANCE SHEET SUMMARY
Total assets at December 31, 1999 totaled $22.7 billion compared to
$22.9 billion at the end of the previous quarter. For the fiscal year, assets
increased $2.1 billion, or 10%, from $20.6 billion reported at fiscal year end
1998. The increase for the fiscal year was due primarily to the increases in the
mortgage loan and mortgage-backed securities portfolios which were funded
primarily through medium and long-term borrowings.
Mortgage lending activity for the quarter and fiscal year ended
December 31, 1999, as detailed in the table below, remained concentrated in
one-to-four family mortgage loans.
5
<PAGE>
<TABLE>
<CAPTION>
LOAN ORIGINATIONS
FOURTH FISCAL QUARTER ENDED FOURTH FISCAL QUARTER ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
DELIVERY CHANNEL:
Broker $ 295.0 million $ 627.1 million
Retail 219.0 million 683.3 million
Third Party 137.1 million 16.4 million
--------------- ----------------
TOTAL $ 651.1 million $1,326.8 million
FISCAL YEAR ENDED FISCAL YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
DELIVERY CHANNEL:
Broker $2,076.7 million $2,454.3 million
Retail 1,266.6 million 2,544.8 million
Third Party 417.7 million 187.5 million
---------------- ----------------
TOTAL $3,761.0 million $5,186.6 million
</TABLE>
Loans receivable, held for investment, net, increased $279.3 million,
or 3% in the 1999 fourth quarter and $1.5 billion, or 17% in the fiscal year
1999. Commenting on the mortgage loan portfolio growth Mr. Engelke said, "The
decrease in mortgage loan originations in the 1999 fourth quarter and full year
periods is due primarily to the significant decrease in mortgage refinance
activity in the latter part of 1999 and the sale of certain loan production
offices that primarily originated loans for sale in the secondary market.
Notwithstanding the decrease in originations, we continued to experience solid
net loan portfolio growth due to the strength and increased breadth of our
mortgage origination network and the slowdown in mortgage prepayment activity
due to higher interest rates."
While the loan portfolio continued to increase, non-performing loans
declined to $53.4 million, or 0.24% of total assets at December 31, 1999, from
$57.5 million, or 0.25% of total assets at September 30, 1999, and the ratio of
allowance for loan losses to non-performing loans at December 31, 1999 increased
to 143.49% from 129.21% at September 30, 1999.
Mortgage-backed securities and other securities totaled $10.8 billion
at December 31, 1999, a decrease of $752.9 million from $11.5 billion at
September 30, 1999.
At December 31, 1999, deposits totaled $9.6 billion, compared to $9.7
billion at December 31, 1998. The decrease is primarily due to the sale of the
upstate New York banking office deposits totaling $156 million in the 1999 third
quarter. Deposits increased in the 1999 fourth quarter by $114.3 million.
Importantly, Astoria's core deposits, which include passbook, money market and
checking accounts, increased to 48.4% of total deposits at December 31, 1999,
from 47.8% at December 31, 1998. Borrowings at December 31, 1999 totaled $11.4
billion compared to $11.7 billion at the end of the previous quarter.
Stockholders' equity at December 31, 1999 was $1.2 billion, or 5.27% of
total assets, compared to $1.4 billion, or 5.94% of total assets at September
30, 1999. The change in stockholders' equity in
6
<PAGE>
the fourth 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 fourth quarter, the
increase in the unrealized loss on securities available-for-sale, net of taxes,
and dividends paid. The 1999 fourth quarter increase from $222.3 million to
$344.2 million in the unrealized loss on securities available-for-sale, net of
taxes, component of stockholders' equity, is a reflection of the effect of
increasing market interest rates since September 30, 1999 on the available-
for-sale securities portfolio market value and is not the result of any sale
transactions from that portfolio. Astoria Federal continues to maintain capital
ratios in excess of regulatory requirements. At December 31, 1999, core,
tangible and risk-based capital ratios were 5.98%, 5.98% and 15.33%,
respectively.
Astoria Financial Corporation, the holding company for Astoria Federal
Savings and Loan Association with assets of $22.7 billion, is the largest thrift
institution in New York and fifth largest in the United States. Astoria Federal,
through its 87 banking offices, provides retail banking, mortgage and consumer
loan services to 700,000 customers and 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 Federal 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
7
<PAGE>
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
- ----------------------------------------------
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
AT AT
DECEMBER 31, DECEMBER 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
- ------
Cash and due from banks $ 154,918 $ 126,945
Federal funds sold and repurchase agreements 335,653 266,437
Mortgage-backed securities available-for-sale 8,204,977 7,553,834
Other securities available-for-sale 657,772 642,610
Mortgage-backed securities held-to-maturity
(estimated fair value of $1,071,251 and $1,141,145, respectively) 1,082,261 1,136,799
Other securities held-to-maturity (estimated fair value of
$772,356 and $982,295, respectively) 817,696 972,012
Federal Home Loan Bank of New York stock 265,250 210,250
Loans held-for-sale 11,376 212,909
Loans receivable held-for-investment:
Mortgage loans, net 10,113,216 8,583,355
Consumer and other loans, net 175,858 230,367
------------ ------------
10,289,074 8,813,722
Less allowance for loan losses 76,578 74,403
------------ ------------
Total loans receivable held-for-investment, net 10,212,496 8,739,319
Mortgage servicing rights, net 48,369 50,237
Accrued interest receivable 110,668 102,288
Premises and equipment, net 176,813 161,629
Goodwill 223,945 245,862
Other assets 394,342 166,610
------------ ------------
TOTAL ASSETS $ 22,696,536 $ 20,587,741
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Liabilities:
Deposits $ 9,554,534 $ 9,668,286
Reverse repurchase agreements 9,276,800 7,291,800
Federal Home Loan Bank of New York advances 1,610,058 1,210,170
Other borrowings 514,663 520,827
Mortgage escrow funds 120,350 116,106
Accrued expenses and other liabilities 298,219 318,168
------------ ------------
TOTAL LIABILITIES 21,374,624 19,125,357
------------ ------------
Guaranteed preferred beneficial interest in
junior subordinated debentures 125,000 -
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
51,730,959 and 54,655,095 shares outstanding, respectively) 555 547
Additional paid-in capital 800,414 767,846
Retained earnings - substantially restricted 908,236 742,679
Treasury stock (3,767,337 shares, at cost) (137,071) -
Accumulated other comprehensive income:
Net unrealized loss on securities, net of taxes (344,198) (14,566)
Unallocated common stock held by ESOPs (32,955) (35,908)
Unearned common stock held by RRP (69) (214)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,196,912 1,462,384
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,696,536 $ 20,587,741
============ ============
</TABLE>
8
<PAGE>
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- ---------------------------------
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31
-------------------------- -----------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest income:
Mortgage loans $ 177,609 $ 154,647 $ 679,623 $ 612,606
Consumer and other loans 4,488 5,826 19,285 24,422
Mortgage-backed securities 160,853 124,578 658,140 438,934
Other securities 32,159 32,449 129,030 132,414
Federal funds sold and repurchase agreements 3,615 4,938 9,201 16,072
----------- ----------- ----------- -----------
Total interest income 378,724 322,438 1,495,279 1,224,448
----------- ----------- ----------- -----------
Interest expense:
Deposits 92,053 93,468 363,156 399,602
Borrowed funds 152,545 113,146 592,175 375,863
----------- ----------- ----------- -----------
Total interest expense 244,598 206,614 955,331 775,465
----------- ----------- ----------- -----------
Net interest income 134,126 115,824 539,948 448,983
Provision for loan losses 1,000 6,600 4,119 15,380
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 133,126 109,224 535,829 433,603
----------- ----------- ----------- -----------
Non-interest income:
Customer service and other loan fees 10,655 9,572 39,965 34,619
Loan servicing fees 3,242 7,289 15,377 5,162
Gain (loss) on sales of securities 25 (4,277) 739 10,976
Gain on sales of loans 85 626 3,340 1,990
Net gain on disposition of banking and loan
production offices - - 19,206 -
Operating income from real estate joint ventures 1,124 - 3,892 1,735
Other 1,706 904 4,177 7,781
----------- ----------- ----------- -----------
Total non-interest income 16,837 14,114 86,696 62,263
----------- ----------- ----------- -----------
Non-interest expense:
General and administrative:
Compensation and benefits 19,393 22,851 89,979 101,045
Employee stock plans amortization 1,852 3,636 9,927 18,195
Occupancy, equipment and systems 13,370 14,633 53,726 57,688
Federal deposit insurance premiums 1,085 1,457 4,537 5,931
Advertising 988 666 6,926 4,782
Other 8,227 6,600 30,171 45,247
----------- ----------- ----------- -----------
Total general and administrative 44,915 49,843 195,266 232,888
Real estate operations and provision for losses,
net (126) (155) (186) (119)
Goodwill litigation 2,376 545 6,417 1,665
Capital trust securities 2,169 - 2,169 -
Amortization of goodwill 4,833 4,945 19,425 19,754
Acquisition costs and restructuring charges - 124,168 - 124,168
----------- ----------- ----------- -----------
Total non-interest expense 54,167 179,346 223,091 378,356
----------- ----------- ----------- -----------
Income (loss) before income tax expense (benefit) and
extraordinary item 95,796 (56,008) 399,434 117,510
Income tax expense (benefit) 36,250 (11,104) 163,764 61,825
----------- ----------- ----------- -----------
Income (loss) before extraordinary item 59,546 (44,904) 235,670 55,685
Extraordinary item, net of tax - (10,637) - (10,637)
----------- ----------- ----------- -----------
Net income (loss) 59,546 (55,541) 235,670 45,048
----------- ----------- ----------- -----------
Preferred dividends declared (1,500) (1,500) (6,000) (6,000)
----------- ----------- ----------- -----------
Net income (loss) available to common shareholders $ 58,046 (57,041) $ 229,670 $ 39,048
=========== =========== =========== ===========
Basic earnings (loss) per common share:
Income (loss) before extraordinary item $ 1.16 $ (0.90) $ 4.47 $ 0.98
=========== =========== =========== ===========
Extraordinary item, net of tax $ - $ (0.21) $ - $ (0.21)
=========== =========== =========== ===========
Net earnings (loss) per common share $ 1.16 $ (1.11) $ 4.47 $ 0.77
=========== =========== =========== ===========
Diluted earnings (loss) per common share:
Income (loss) before extraordinary item $ 1.14 $ (0.90) $ 4.37 $ 0.94
=========== =========== =========== ===========
Extraordinary item, net of tax $ - $ (0.21) $ - $ (0.20)
=========== =========== =========== ===========
Net earnings (loss) per common share $ 1.14 $ (1.11) $ 4.37 $ 0.74
=========== =========== =========== ===========
Basic weighted average common shares 50,208,525 51,414,390 51,351,355 50,801,598
Diluted weighted average common and common
equivalent shares 51,075,351 51,414,390 52,506,962 52,886,191
</TABLE>
9
<PAGE>
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF OPERATING CASH EARNINGS
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31,
---------------------------------------
1999 1998
-------------------- ------------------
<S> <C> <C>
Net income (loss) $ 59,546 $ (55,541)
Add back:
Acquisition, restructuring and other infrequently occurring
charges, net of tax -- 100,375
--------- ---------
Operating income 59,546 44,834
Preferred dividends declared (1,500) (1,500)
--------- ---------
Operating earnings available to common shareholders $ 58,046 $ 43,334
========= =========
Basic operating earnings per common share $ 1.16 $ 0.84
========= =========
Diluted operating earnings per common share $ 1.14 $ 0.82
========= =========
Operating earnings available to common shareholders $ 58,046 $ 43,334
Add back:
Employee stock plans amortization expense 1,852 3,636
Amortization of goodwill 4,833 4,945
Income tax benefit on amortization expense of earned portion of
RRP stock 967 1,038
--------- ---------
Operating cash earnings available to common shareholders $ 65,698 $ 52,953
========= =========
Basic operating cash earnings per common share $ 1.31 $ 1.03
========= =========
Diluted operating cash earnings per common share $ 1.29 $ 1.00
========= =========
</TABLE>
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31,
---------------------------------------
1999 1998
-------------------- ------------------
<S> <C> <C>
Net income $ 235,670 $ 45,048
Add back:
Acquisition, restructuring and other infrequently occurring
charges, net of tax -- 100,375
Less: Net gain on disposition of banking and loan production
offices, net of tax 11,332 --
--------- ---------
Operating income 224,338 145,423
Preferred dividends declared (6,000) (6,000)
--------- ---------
Operating earnings available to common shareholders $ 218,338 $ 139,423
========= =========
Basic operating earnings per common share $ 4.25 $ 2.74
========= =========
Diluted operating earnings per common share $ 4.16 $ 2.64
========= =========
Operating earnings available to common shareholders $ 218,338 $ 139,423
Add back:
Employee stock plans amortization expense 9,927 18,195
Amortization of goodwill 19,425 19,754
Income tax benefit on amortization expense of earned portion of
RRP stock 3,870 8,302
--------- ---------
Operating cash earnings available to common shareholders $ 251,560 $ 185,674
========= =========
Basic operating cash earnings per common share $ 4.90 $ 3.65
========= =========
Diluted operating cash earnings per common share $ 4.79 $ 3.51
========= =========
</TABLE>
10
<PAGE>
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
SELECTED FINANCIAL RATIOS AND OTHER DATA
- ----------------------------------------
At or For the Quarter Ended At or For the Year Ended
December 31, December 31,
----------------------------- ------------------------
1999 1998 1999 1998
-------------- -------------- ------------ -----------
(Annualized)
SELECTED RETURNS
- ----------------
<S> <C> <C> <C> <C>
Return on average stockholders' equity 18.67% (15.06)% 17.31% 3.02%
Return on average tangible stockholders' equity 22.71 (18.14) 20.92 3.65
Return on average assets 1.05 (1.13) 1.04 0.25
SELECTED FINANCIAL RATIOS
- -------------------------
Return on average stockholders' equity (1), (2) 18.67% 12.16% 16.48% 9.76%
Cash return on average stockholders' equity (1), (2), (3) 21.07 14.77 18.92 12.86
Return on average tangible stockholders' equity
(1), (2) 22.71 14.64 19.91 11.78
Cash return on average tangible stockholders'
equity (1), (2), (3) 25.63 17.78 22.86 15.53
Return on average assets (1), (2) 1.05 0.91 0.99 0.79
Cash return on average assets (1), (2), (3) 1.18 1.11 1.13 1.05
Net interest spread 2.07 2.15 2.14 2.20
Net interest margin 2.41 2.47 2.46 2.58
General and administrative expenses to average
assets 0.79 1.01 0.86 1.27
Cash general and administrative expenses to
average assets (4) 0.76 0.94 0.82 1.17
Efficiency ratio 29.76 37.14 32.21 46.56
Cash efficiency ratio(4) 28.54 34.43 30.57 42.92
ASSET QUALITY RATIOS
- --------------------
Non-performing loans/total loans 0.52% 1.23%
Non-performing loans/total assets 0.24 0.54
Non-performing assets/total assets 0.26 0.58
Allowance for loan losses/non-performing loans 143.49 66.99
Allowance for loan losses/non-accrual loans 151.77 70.00
Allowance for loan losses/total loans 0.75 0.83
CAPITAL RATIOS (ASTORIA FEDERAL)
- --------------------------------
Tangible 5.98% 5.35%
Core 5.98 5.35
Risk-based 15.33 13.53
OTHER DATA (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
- -------------------------------------------------------
Cash dividends paid per common share $ 0.24 $ 0.20 $ 0.96 $ 0.80
Book value per common share 22.17 25.84
Tangible book value per common share 17.84 21.34
Average equity/average assets 5.60% 7.50% 5.99% 8.13%
Non-performing assets $ 58 $ 120
Non-performing loans 53 111
90 days past maturity but still accruing 3 5
Non-accrual loans 50 106
Mortgage loans serviced for others $4,415 $4,944
</TABLE>
(1) 1999 excludes net gain on disposition of banking and loan production
offices of $11,332, net of tax.
(2) 1998 excludes acquisition, restructuring and other infrequently occurring
charges of $100,375, net of tax.
(3) Excluding non-cash charge for amortization of goodwill, employee stock
plans and related tax benefit.
(4) Excluding non-cash charge for amortization of employee stock plans.
11
<PAGE>
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
AVERAGE BALANCE SHEET
- ---------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
Quarter Ended December 31,
---------------------------------------------------------------------------------
1999 1998
----------------------------------------- ---------------------------------------
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 $ 9,997,667 $ 177,609 7.11% $ 8,610,419 $154,647 7.18%
Consumer and other loans 178,962 4,488 10.03 246,575 5,826 9.45
Mortgage-backed securities
(1) 9,970,298 160,853 6.45 7,623,641 124,578 6.54
Other securities (1) 1,825,451 32,159 7.05 1,861,371 32,449 6.97
Federal funds sold and
repurchase agreements 264,208 3,615 5.47 394,976 4,938 5.00
---------- --------- ----------- --------
Total interest-earning assets 22,236,586 378,724 6.81 18,736,982 322,438 6.88
--------- --------
Non-interest-earning assets 552,919 936,142
-----------
Total assets $ 22,789,505 $19,673,124
============ ===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,611,041 $ 13,256 2.03% $ 2,888,229 $ 15,340 2.12%
Certificates of deposit 4,881,791 64,253 5.26 5,083,399 68,304 5.37
NOW 124,005 309 1.00 122,135 305 1.00
Money market 1,140,123 13,245 4.65 823,212 8,607 4.18
Money manager 396,766 990 1.00 364,264 912 1.00
---------- --------- ----------- --------
Total deposits 9,153,726 92,053 4.02 9,281,239 93,468 4.03
Borrowed funds 11,472,412 152,545 5.32 8,195,403 113,146 5.52
---------- --------- ----------- --------
Total interest-bearing liabilities 20,626,138 244,598 4.74 17,476,642 206,614 4.73
--------- --------
Non-interest-bearing liabilities 887,552 721,513
------------ -----------
Total liabilities 21,513,690 18,198,155
Stockholders' equity 1,275,815 1,474,969
------------ -----------
Total liabilities and stockholders' equity $ 22,789,505 $19,673,124
============ ===========
Net interest income/net interest rate
spread $ 134,126 2.07% $115,824 2.15%
========= ----- ======== ====
Net interest earning assets/net
interest margin $ 1,610,448 2.41% $ 1,260,340 2.47%
============ ----- =========== ----
Ratio of interest-earning assets
to interest-bearing liabilities 1.08x 1.07x
------------ -----------
</TABLE>
(1) Securities available-for-sale are reported at average amortized cost.
12
<PAGE>
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEET
- ---------------------
(Dollars in Thousands)
Year Ended December 31,
----------------------------------------------------------------------------------
1999 1998
----------------------------------------- ---------------------------------------
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
-------------- -------------- --------- ----------- ------------ ------------
Assets:
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans $ 9,531,892 $ 679,623 7.13% $ 8,321,732 $ 612,606 7.36%
Consumer and other loans 200,178 19,285 9.63 260,615 24,422 9.37
Mortgage-backed securities(1) 10,242,306 658,140 6.43 6,662,882 438,934 6.59
Other securities (1) 1,837,254 129,030 7.02 1,885,438 132,414 7.02
Federal funds sold and repurchase
agreements 179,408 9,201 5.13 296,516 16,072 5.42
----------- --------- ----------- ---------
Total interest-earning assets 21,991,038 1,495,279 6.80 17,427,183 1,224,448 7.03
---------- ---------
Non-interest-earning assets 726,644 893,388
----------- -----------
Total assets $22,717,682 $18,320,571
=========== ===========
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings $ 2,697,726 $ 54,341 2.01% $ 2,889,510 $ 72,243 2.50%
Certificates of deposit 4,943,672 258,389 5.23 5,297,309 288,914 5.45
NOW 127,177 1,260 0.99 130,476 1,696 1.30
Money market 1,038,765 45,316 4.36 729,106 32,108 4.40
Money manager 388,833 3,850 0.99 366,957 4,641 1.26
----------- ---------- ----------- --------
Total deposits 9,196,173 363,156 3.95 9,413,358 399,602 4.25
Borrowed funds 11,321,397 592,175 5.23 6,642,452 375,863 5.66
----------- ---------- ----------- --------
Total interest-bearing liabilities 20,517,570 955,331 4.66 16,055,810 775,465 4.83
Non-interest-bearing liabilities 838,566 774,538
----------- -----------
Totalliabilities 21,356,136 16,830,348
Stockholders' equity 1,361,546 1,490,223
----------- -----------
Total liabilities and stockholders' equity $22,717,682 $18,320,571
=========== ===========
Net interest income/net interest
rate spread $ 539,948 2.14% $448,983 2.20%
========== ---- ======== ----
Net interest earning assets/net
interest margin $ 1,473,468 2.46% $ 1,371,373 2.58%
=========== ---- =========== ----
Ratio of interest-earning assets
to interest-bearing liabilities 1.07x 1.09x
----------- -----------
</TABLE>
(1) Securities available-for-sale are reported at average amortized cost.
13
