Board of Directors Declares $0.25 per
Share Quarterly Cash Dividend
3Q 2009 Performance Highlights
-- Substantial Net Interest Income Growth:Net interest income rose 24.5%
year-over-year and 4.0% linked quarter, to $226.4 million.
-- Substantial Net Interest Margin Expansion:The margin rose 49 basis
points year-over-year and 11 basis points linked-quarter to 3.17%.
-- Strong Cash Earnings Growth: Cash earnings rose 19.4% year-over-year, to
$114.3 million, equivalent to a $0.05, or 17.9%, rise in diluted cash
earnings per share to $0.33.(2)
-- Solid Operating Earnings: Despite an increase in FDIC insurance premiums
and the provision for loan losses, operating earnings rose 6.4%
year-over-year, to $90.2 million, equivalent to a $0.01 increase in
diluted operating earnings per share to $0.26.(1)
-- Strong Operating Efficiency:At 35.85%, the operating efficiency ratio
reflected linked-quarter and year-over-year improvements of 87 and 216
basis points, respectively.(3)
-- Continued Loan Production at Substantial Spreads:Loans grew at an
annualized rate of 4.6% in the quarter, reflecting third quarter
originations of $921.1 million. Together, multi-family and commercial
real estate loan originations totaled $705.8 million and featured an
average yield that was 338 basis points above the average five-year
Constant Maturity Treasury rate.
-- Above-Average Asset Quality: Net charge-offs equaled 0.03% of average
loans in the quarter, as compared to 0.81% for the SNL Bank & Thrift
Index. Non-performing assets represented 1.45% of total assets at the
end of September, as compared to the Index measure of 3.05%.(4)
-- Reduced Securities Portfolio:Securities represented 16.6% of total
assets at quarter-end, the lowest level since the second quarter of
2001.
-- Increasing Capital Strength:Excluding accumulated other comprehensive
loss, net of tax ("AOCL"), the ratio of adjusted tangible stockholders'
equity to adjusted tangible assets equaled 6.25% at September 30, 2009.
Including AOCL, the ratio of tangible stockholders' equity to tangible
assets equaled 6.03%.(5)
Please Note: All footnotes to the text are located at the end
of this release.
WESTBURY, N.Y.--(BUSINESS WIRE)--
New York Community Bancorp, Inc. (NYSE: NYB) (the "Company") today
reported that its third quarter 2009 GAAP earnings rose $40.5 million,
or 69.8%, year-over-year to $98.6 million, representing an $0.11, or
64.7%, increase in diluted GAAP earnings per share to $0.28. Operating
earnings rose to $90.2 million, or $0.26 per diluted share, in the
current third quarter from $84.8 million, or $0.25 per diluted share, in
the third quarter of 2008. (1)
The Company's third quarter 2009 GAAP earnings were increased by a $13.3
million, or $0.04 per diluted share, adjustment to income tax expense,
primarily reflecting the resolution of various tax audits, and by a $3.4
million, or $0.01 per diluted share, after-tax gain on the exchange of
its Bifurcated Option Note Unit SecuritiESSM ("BONUSES
units") in August 2009. These contributions to third quarter 2009 GAAP
earnings were partly offset by a non-cash after-tax charge of $7.9
million, or $0.02 per diluted share, for the other-than-temporary
impairment ("OTTI") of certain investment securities. In the third
quarter of 2008, the Company's GAAP earnings were reduced by non-cash
after-tax OTTI charges of $26.7 million, equivalent to $0.08 per diluted
share.
The Company also reported cash earnings of $114.3 million, or $0.33 per
diluted share, in the current third quarter, which added $15.7 million,
or 16.0%, more to tangible capital than its third quarter GAAP earnings
alone. (2) (5)
Commenting on the Company's current third quarter performance, Chairman,
President, and Chief Executive Officer Joseph R. Ficalora stated,
"Although the local economy continues to be anemic, we generated solid
GAAP, cash, and operating earnings during the last three months.
Notably, our cash earnings rose more than 19% to $114.3 million,
tantamount to a five cent, or 18%, rise in diluted cash earnings per
share.(2) Operating earnings also rose year-over-year, to
$90.2 million, equivalent to a penny increase in diluted operating
earnings per share. Furthermore, these increases occurred despite
a $14.6 million rise in our provision for loan losses and an $8.0
million increase in our FDIC insurance premiums. Year-to-date, FDIC
insurance premiums totaled $37.1 million, including the special
assessment, an increase from $2.4 million in the first nine months of
2008. (1)
"Earnings growth was largely driven by a year-over-year increase in net
interest income, as the average balance of interest-earning assets rose
in tandem with a decline in our funding costs. While the average yield
on interest-earning assets fell 25 basis points, to 5.60% from the
year-earlier level, the average cost of funds declined 79 basis points,
to 2.58%. Similarly, our net interest margin rose to 3.17% in the
quarter, despite the adverse impact of lower prepayment penalty income
and the reversal of interest on loans that transitioned to non-accrual
status. In fact, our current third quarter margin was 11 basis points
higher than the trailing-quarter measure and 49 basis points higher than
the measure recorded in the third quarter of last year.
"In addition, our operating efficiency ratio improved to 35.85% in the
current third quarter, despite the higher level of FDIC insurance
premiums. (3)
"Another third quarter highlight was the strengthening of our tangible
capital position, with tangible stockholders' equity equaling 6.25% of
tangible assets, a nine-month increase of 31 basis points, excluding
accumulated other comprehensive loss. Including AOCL in the calculation,
the ratio improved 37 basis points to 6.03%.(5) These
improvements were attributable to the strength of our cash earnings and
the aforementioned exchange of BONUSES units, plus the issuance of 5.9
million common shares totaling $64.7 million through the direct purchase
component of our Dividend Reinvestment and Stock Purchase Plan."
Board of Directors Declares $0.25 per
Share Dividend, Payable on November 17th
"In view of our growing capital strength, and the increased contribution
of our cash earnings, the Board of Directors last night declared a
quarterly cash dividend of $0.25 per share, payable on November 17th to
shareholders of record at the close of business on November 6th.
"Turning to asset quality, non-performing loans represented 2.00% of
total loans at the end of September, yet our third quarter net
charge-offs--at $6.4 million--represented a mere 0.03% of average loans.
This significant difference between the volume of non-performing loans
and the volume of net charge-offs is consistent with our past
performance, as is the degree to which our measures of asset quality
compare favorably with those of our industry as a whole. In the third
quarter of 2009, the ratio of net charge-offs to average loans was 0.81%
for the SNL Bank & Thrift Index, and the ratio of non-performing loans
to total loans for the Index was 4.13% at quarter-end.
"While we continue to be distinguished by the well below-average level
of our net charge-offs, we increased our loan loss allowance by
recording a third quarter loan loss provision of $15.0 million. As a
result, the allowance for loan losses grew to $106.7 million at the end
of the quarter, an $8.6 million increase from the trailing quarter-end
amount.
"Although certain economic data suggests that the recession has ended,
the Metro New York region we serve continues to be under duress.
Notwithstanding that the linked-quarter percentage increase in
non-performing loans was substantially less than the two prior
linked-quarter increases, we have yet to turn the corner with regard to
asset quality. That said, our demonstrated ability to generate operating
and cash earnings against this challenging backdrop is one of the many
qualities that make this company unique. With the capital and the
capacity to withstand this credit cycle, we expect to see continued
earnings growth in the quarters ahead," Mr. Ficalora said.
Earnings for the Nine Months Ended
September 30, 2009
For the nine months ended September 30, 2009, the Company reported GAAP
earnings of $243.7 million, or $0.70 per diluted share, in contrast to a
loss of $24.3 million, or $0.08 per diluted share, in the first nine
months of 2008. During this time, the Company's nine-month operating
earnings rose $36.9 million, or 16.0%, to $266.9 million, equivalent to
an $0.08, or 11.6%, increase in diluted operating earnings per share to
$0.77.(1)
In addition, the Company reported cash earnings of $303.1 million in the
current nine-month period, equivalent to diluted cash earnings per share
of $0.88. (2)
The Company's nine-month 2009 GAAP earnings reflect the impact of OTTI
charges recorded in both the second and third quarters, together with
the impact of the FDIC special assessment recorded during this time.
After-tax, the OTTI charge and the FDIC special assessment equaled $32.1
million and $8.9 million, equivalent to $0.09 and $0.03 per diluted
share, respectively. The impact of these items was tempered by the
benefit of an adjustment to income tax expense of $14.3 million, or
$0.04 per diluted share.
In addition to including after-tax OTTI charges of $56.5 million, the
Company's nine-month 2008 GAAP earnings were reduced by an after-tax
debt repositioning charge of $199.2 million and a $2.3 million after-tax
litigation settlement charge. Combined, the three charges reduced the
Company's nine-month 2008 GAAP earnings by $258.0 million, or $0.78 per
diluted share. A gain on debt redemption and a gain relating to the
Company's membership interest in Visa added $0.01 to its diluted GAAP
earnings per share in the same period.
Balance Sheet Summary at September 30,
2009
The Company recorded total assets of $32.9 billion at the end of
September, a $24.3 million increase from the June 30th balance and a
$417.6 million increase from the balance at December 31, 2008.
Loans
Loans represented $23.0 billion, or 70.1%, of total assets at the close
of the third quarter, representing a three-month increase of $261.6
million and a nine-month increase of $846.5 million. Multi-family loans
represented $16.5 billion, or 71.5%, of the September 30, 2009 total,
and were up $249.3 million and $746.9 million, respectively, over the
three- and nine-month periods. Commercial real estate ("CRE") loans
accounted for $4.9 billion, or 21.2%, of the loan portfolio at the end
of September and were up $100.3 million and $322.4 million,
respectively, over the three- and nine-month periods.
At September 30, 2009, the average multi-family loan had a principal
balance of $4.0 million and the average CRE loan had a principal balance
of $2.7 million. The multi-family and CRE loan portfolios had average
loan-to-value ratios ("LTVs") of 61.0% and 54.4%, respectively, at the
close of the quarter, and expected weighted average lives of 4.0 years
and 3.6 years, respectively.
The remainder of the loan portfolio at September 30, 2009 consisted of
one- to four-family loans of $226.4 million; acquisition, development,
and construction ("ADC") loans of $666.2 million; and other loans of
$800.2 million, representing 1.0%, 2.9%, and 3.5%, of total loans,
respectively. Reflecting management's focus on reducing these portfolios
during a prolonged period of economic weakness, the balance of one- to
four-family loans was down $14.0 million and $39.9 million,
respectively, over the three- and nine-month periods, while the balance
of ADC loans declined $59.9 million and $110.4 million, respectively,
during these times. Similarly, the balance of other loans at the end of
September was down $14.1 million and $72.5 million, respectively, from
the balances recorded at June 30, 2009 and December 31, 2008. Included
in the September 30th balance of other loans were commercial &
industrial ("C&I") loans of $674.2 million, reflecting a nine-month
decline of $38.2 million.
The nine-month increase in total loans was the net effect of
originations totaling $2.6 billion and repayments totaling $1.8 billion,
including third-quarter originations and repayments of $921.1 million
and $660.2 million, respectively. Multi-family and CRE loans accounted
for $1.4 billion and $511.0 million, respectively, of the Company's
year-to-date originations, and for $561.6 million and $144.2 million,
respectively, of loans produced in the third quarter of 2009.
At the present time, the Company has a pipeline of approximately $807
million, including approximately $566 million of multi-family loans and
approximately $137 million of CRE loans.
Asset Quality
The Company recorded net charge-offs of $6.4 million in the current
third quarter, as compared to $9.2 million and $1.1 million,
respectively, in the trailing quarter and year-earlier three months. Net
charge-offs represented 0.03% of average loans in the current third
quarter, as compared to 0.04% and 0.01%, respectively, in the earlier
periods. In addition, the Company's ratio of net charge-offs to average
loans was substantially lower than the 0.81% average for the SNL Bank &
Thrift Index.(5) Multi-family loans and CRE loans accounted
for $1.4 million and $321,000 of the current third quarter's net
charge-offs, with ADC and other loans accounting for $1.0 million and
$3.7 million, respectively.
Although non-performing assets rose on a linked-quarter basis, the
magnitude of the percentage increase was substantially smaller than the
linked-quarter increases in the first and second quarters of this year.
At September 30, 2009, non-performing assets represented $475.7 million,
or 1.45%, of total assets, as compared to $341.6 million, or 1.04%, at
the end of June. Included in the respective amounts were non-performing
loans of $460.4 million and $340.2 million, and other real estate owned
("ORE") of $15.3 million and $1.5 million, respectively. Multi-family
loans accounted for $277.0 million of non-performing loans at the end of
the quarter, with CRE loans and ADC loans accounting for $69.1 million
and $81.3 million, respectively. The remainder consisted of one- to
four-family loans of $14.2 million and other loans of $18.8 million.
The increase in ORE was primarily attributable to the foreclosure of a
$13.6 million apartment complex, located in southern New Jersey, which
the Company has placed under new management. The property is in the
process of being readied for sale.
Loans 30 to 89 days delinquent totaled $221.2 million at the end of
September, a $58.0 million increase from the trailing quarter-end amount.
The significant difference between the volume of non-performing loans
recorded and the actual losses realized in the final disposition of such
loans or the underlying properties has been a long-standing distinction
between the Company and its industry. Accordingly, the Company believes
that the significant increase in non-performing loans it has experienced
in recent quarters will not necessarily result in a comparable increase
in losses. Nonetheless, in view of the severity of the credit cycle, the
Company recorded a $15.0 million provision for loan losses in the
current third quarter, bringing the nine-month loan loss provision to
$33.0 million. The third quarter provision was $3.0 million higher than
the provision recorded in the trailing quarter and $14.6 million higher
than the year-earlier amount. Reflecting a nine-month loan loss
provision of $33.0 million and nine-month net charge-offs of $20.7
million, the allowance for loan losses rose from $94.4 million at the
end of December to $106.7 million at September 30, 2009.
Securities
Securities accounted for $5.5 billion, or 16.6%, of total assets at the
end of September, down from $5.6 billion, or 17.2% of total assets, at
the close of the second quarter and from $5.9 billion, or 18.2% of total
assets, at December 31, 2008. Government-sponsored enterprise ("GSE")
securities represented approximately 90% of the securities portfolio at
each of the respective period-ends.
The three- and nine-month declines in the securities portfolio reflect
declines in the balances of held-to-maturity securities and securities
available for sale. Held-to-maturity securities totaled $4.6 billion at
the end of September, signifying reductions of $147.7 million and $249.0
million, respectively. Available-for-sale securities totaled $813.0
million at the end of September, and were down $36.1 million and $197.5
million, respectively, over the three- and nine-month periods.
Although the reduction in securities was primarily due to repayments, it
also reflects the Company's assessment in the current and trailing
quarters of certain pooled trust preferred and other debt securities as
other-than-temporarily impaired, due to the deferral of interest
payments on the underlying collateral. The OTTI that was recognized in
the current third quarter contributed to a $6.8 million, or 23.8%,
linked-quarter decline in the after-tax net unrealized loss on
securities and a nine-month decline of $15.5 million, or 41.7%.
Funding Sources
In addition to the cash flows generated through loan and securities
repayments, the Company's funding primarily stems from deposits and
borrowed funds. Depending on the availability and attractiveness of
certain funding facilities, the Company typically has refrained from
pricing its retail deposits at the higher end of the market in order to
contain its funding costs. While the Company has the capacity to
increase deposits through its extensive branch network, it opted to
utilize certain wholesale funding to enhance its liquidity during the
quarter when such funding was more attractively priced.
Deposits totaled $14.5 billion at the end of September, representing a
three-month increase of $113.8 million and a nine-month increase of
$92.3 million. While certificates of deposit ("CDs") declined $275.8
million and $1.0 billion, respectively, to $5.8 billion, these
reductions were exceeded by three- and nine-month increases in NOW and
money market accounts, savings accounts, and non-interest-bearing
accounts.
NOW and money market accounts totaled $4.7 billion at the end of
September, a $260.2 million increase from the June 30th balance and an
$865.7 million increase from the balance at December 31, 2008. Savings
accounts rose $124.7 million to $2.9 billion over the course of the
quarter, and were up $249.3 million from the balance recorded at
year-end. Non-interest-bearing accounts totaled $1.1 billion at the end
of September, and were up $4.8 million and $3.5 million, respectively,
over the three- and nine-month periods.
Borrowed funds totaled $13.9 billion at the end of September, down
$195.1 million from the June 30th balance, and up $367.2 million from
the balance at December 31, 2008. The linked-quarter decline was the
result of a $146.4 million reduction in wholesale borrowings to $12.8
billion and a $48.8 million decline in junior subordinated debentures to
$435.2 million. The latter reduction was attributable to the
aforementioned BONUSES unit exchange.
The nine-month increase in borrowed funds was largely due to a $416.1
million increase in wholesale borrowings, which exceeded the impact of
the reduction in junior subordinated debentures stemming from the third
quarter 2009 BONUSES unit exchange. Included in wholesale borrowings at
September 30, 2009 were Federal Home Loan Bank of New York ("FHLB-NY")
advances of $8.1 billion and repurchase agreements of $4.2 billion, up
$366.1 million and down $285.0 million, respectively, from the balances
at year-end 2008.
Stockholders' Equity
Stockholders' equity totaled $4.3 billion at the end of September, a
linked-quarter increase of $129.9 million and a $121.3 million increase
from the balance recorded at December 31, 2008. The September 30, 2009
amount was equivalent to 13.20% of total assets and a book value per
share of $12.21. At June 30, 2009 and December 31, 2008, stockholders'
equity was equivalent to 12.81% and 13.00% of total assets, while book
value per share equaled $12.21 and $12.25 per share, respectively.
The Company calculates book value per share by excluding the number of
unallocated Employee Stock Ownership Plan ("ESOP") shares from the
number of shares outstanding. At September 30, 2009, June 30, 2009, and
December 31, 2008, the Company's book values per share were calculated
on the basis of 355,457,472; 344,742,899; and 344,353,808 shares,
respectively. The number of shares at the end of September includes 4.8
million shares that were issued in connection with the exchange of 1.4
million BONUSES units and 5.9 million shares totaling $64.7 million that
were issued through the direct purchase feature of the Company's
Dividend Reinvestment and Stock Purchase Plan ("DRP").
Tangible stockholders' equity equaled $1.8 billion at the end of
September, as compared to $1.7 billion at each of the earlier
period-ends. The September 30, 2009 amount was equivalent to 6.03% of
tangible assets, a 44-basis point increase from the June 30th measure
and a 37-basis point increase from the measure at year-end 2008.
Excluding AOCL from the calculation, the Company's adjusted tangible
stockholders' equity represented 6.25% of adjusted tangible assets at
the end of September, as compared to 5.83% and 5.94%, respectively, at
June 30, 2009 and December 31, 2008. The increase in these tangible
capital measures was due to the increase in cash earnings, the
aforementioned exchange of BONUSES units, and the aforementioned
issuance of shares through the Company's DRP. (5)
The Company's subsidiary banks also reported solid levels of capital at
the end of September, and continued to exceed the requirements for
classification as "well capitalized" institutions under the FDIC
Improvement Act. At September 30, 2009, New York Community Bank had a
leverage capital ratio of 7.41%, exceeding the minimum required for
"well capitalized" classification by 241 basis points. At the same time,
New York Commercial Bank had a leverage capital ratio of 10.84%,
exceeding the minimum required for such classification by 584 basis
points.
Earnings Summary for the Three Months
Ended September 30, 2009
The Company recorded third quarter 2009 GAAP earnings of $98.6 million,
up from $56.4 million and $58.1 million, respectively, in the trailing
and year-earlier three months. GAAP earnings per share rose to $0.28 in
the current third quarter from $0.16 and $0.17, respectively, in the
earlier periods.
Operating earnings rose to $90.2 million in the current third quarter
from $89.1 million and $84.8 million, respectively, in the trailing
quarter and year-earlier three months. Diluted operating earnings per
share equaled $0.26 in the three months ended September 30, 2009 and in
the trailing quarter, up from $0.25 in the three months ended September
30, 2008. (1)
The Company's third quarter 2009 operating earnings exclude the benefit
of the $13.3 million, or $0.04 per diluted share, adjustment to income
tax expense that primarily stemmed from the resolution of various tax
audits, and the $3.4 million, or $0.01 per diluted share, after-tax gain
on the exchange of its BONUSES units in August 2009. Also excluded from
current third quarter 2009 operating earnings was the impact of the
non-cash after-tax charge of $7.9 million, or $0.02 per diluted share,
for the OTTI of certain trust preferred securities. (1)
The Company's operating earnings for the second quarter of 2009 and the
third quarter of 2008 exclude the impact of non-cash after-tax OTTI
charges of $24.2 million and $26.7 million that were equivalent to $0.07
and $0.08 per diluted share, respectively. (1)
Net Interest Income
The Company recorded net interest income of $226.4 million in the
current third quarter, as compared to $217.6 million and $181.9 million,
respectively, in the trailing and year-earlier three months. The
linked-quarter and year-over-year increases were driven by a combination
of factors, including an increase in the average balance of loans; a
reduction in the cost of retail and wholesale funding; and the
extinguishment of certain trust preferred securities in connection with
the aforementioned BONUSES unit exchange.
Year-over-Year Comparison
Interest income rose $4.5 million year-over-year, to $402.9 million as a
$1.5 billion increase in the average balance of interest-earning assets
to $28.8 billion exceeded the impact of a 25-basis point reduction in
the average yield to 5.60%.
The interest income produced by loans rose $10.3 million year-over-year,
to $327.1 million, as the average balance rose $1.7 billion to $22.8
billion, more than offsetting the impact of a 27-basis point drop in the
average yield on such assets, to 5.75%. The increase in the interest
income produced by loans occurred despite a $1.6 million decline in
prepayment penalty income to $2.3 million, as the economic environment
continued to inhibit refinancing activity. The interest income on loans
was also reduced by the reversal of interest income on loans that moved
to non-accrual status during the current three-month period.
The interest income produced by securities and money market investments
fell $5.8 million year-over-year to $75.8 million, as the average
balance declined $214.3 million to $6.0 billion, and the average yield
on such assets fell 20 basis points to 5.06%.
Interest expense fell $39.9 million year-over-year to $176.6 million, as
the impact of a $1.7 billion increase in the average balance of
interest-bearing liabilities was exceeded by the benefit of a
79-basis point decrease in the average cost of funds, to 2.58%. In
addition to the historically low level of the federal funds rate, the
lower cost reflects the strategic run-off of higher-cost CDs and the
Company's strategic exchange of BONUSES units for common stock in August
of this year. In connection with the exchange, trust preferred
securities totaling $48.6 million with a rate of 6.0% were extinguished,
contributing to the reduction in the average cost of borrowed funds.
While the average balance of borrowed funds rose $1.5 billion
year-over-year, to $14.3 billion, the average cost of such funds fell 45
basis points, to 3.62%, year-over-year. As a result, the interest
expense produced by borrowed funds totaled $130.0 million in the current
third quarter, comparable to the $130.1 million produced by borrowed
funds in the year-earlier three months.
The interest expense produced by interest-bearing deposits totaled $46.5
million in the current third quarter, a $39.9 million reduction from the
year-earlier amount. While the average balance rose $113.0 million
year-over-year, to $12.9 billion, the impact of this increase was
substantially exceeded by the benefit of a 125-basis point drop in the
average cost of such funds to 1.43%.
CDs accounted for $35.5 million of the interest expense generated by
deposits, representing a year-over-year reduction of $31.8 million, or
47.3%. The reduction was the result of a $1.1 billion decline in the
average balance of such deposits, coupled with a 146-basis point decline
in the average cost to 2.40%. At September 30, 2009, $4.9 billion of CDs
with an average interest rate of 2.05% were scheduled to mature in the
next four quarters. As a result, the Company currently expects to see a
further decline in the cost of such funds during that time, absent an
increase in the federal funds rate.
NOW and money market accounts produced $7.4 million of the interest
expense generated in the current third quarter, a $6.0 million decrease
year-over-year. Although the average balance of NOW and money market
accounts rose $1.1 billion to $4.3 billion, the average cost of such
funds fell 100 basis points to 0.69% during the same time.
Similarly, the interest expense produced by savings accounts fell $2.1
million to $3.7 million, the net effect of a $61.9 million increase in
the average balance and a 32-basis point drop in the average cost to
0.52%.
Including average non-interest-bearing accounts of $1.1 billion and $1.3
billion, respectively, in the current and year-earlier third quarters,
the average cost of deposits equaled 1.31% and 2.44% in the three months
ended September 30, 2009 and 2008.
The same factors that contributed to the year-over-year increase in
third quarter 2009 net interest income contributed to the expansion of
the Company's interest rate spread and net interest margin during this
time. At 3.02%, the Company's current third quarter spread was 54 basis
points higher than the year-earlier measure and, at 3.17%, its margin
was up 49 basis points. Prepayment penalty income contributed four basis
points to the current third quarter margin, as compared to five basis
points in the year-earlier three months.
Linked-Quarter Comparison
On a linked-quarter basis, net interest income rose $8.8 million, the
result of a $1.2 million increase in interest income and a $7.5 million
reduction in interest expense.
The linked-quarter rise in interest income was the net effect of a
$336.6 million increase in the average balance of interest-earning
assets and a five-basis point decrease in the average yield. While the
average balance of loans rose $380.9 million over the course of the
quarter, the average yield on such assets held steady at 5.75%. As a
result, the interest income produced by loans rose $5.5 million on a
linked-quarter basis, exceeding the impact of a $4.2 million decline in
the interest income produced by securities and money market investments.
The latter decline was attributable to a 25-basis point decrease in the
average yield on such assets, coupled with a $44.4 million decrease in
the average balance of such funds.
The linked-quarter reduction in interest expense was the net effect of a
$475.0 million increase in the average balance of interest-bearing
liabilities and an 18-basis point reduction in the average cost of
funds. The interest expense produced by borrowed funds rose $1.4
million, as a $569.1 million increase in the average balance exceeded
the impact of a 15-basis point drop in the average cost of such funds.
The interest expense produced by interest-bearing deposits also
declined, by $8.9 million, the result of a $94.1 million reduction in
the average balance and a 28-basis point decline in the average cost.
The interest expense produced by CDs fell $9.1 million linked-quarter,
as the average balance declined $441.0 million and the average cost of
such funds fell 44 basis points. This reduction in CD-generated interest
expense was tempered by modest increases in the interest expense
produced by NOW and money market accounts and savings accounts, as the
average balances of such funds rose $235.4 million and $111.5 million,
respectively, more than offsetting average cost reductions of four and
one basis points. Including average non-interest-bearing deposits of
$1.1 billion and $1.2 billion, the average cost of deposits declined to
1.31% in the current third quarter from 1.56% in the second quarter of
this year.
In addition, the Company's interest rate spread rose 13 basis points
linked-quarter, while its margin rose 11 basis points.
Provision for Loan Losses
The provision for loan losses is based on management's assessment of the
adequacy of the loan loss allowance. This assessment is made
periodically and considers several factors, including the current and
historical performance of the loan portfolio and its inherent risk
characteristics; the level of non-performing loans and charge-offs;
local economic conditions; the direction of real estate values; and
current trends in regulatory supervision.
The Company recorded a $15.0 million provision for loan losses in the
current third quarter, exceeding the trailing quarter amount by $3.0
million and the third quarter 2008 amount by $14.6 million. Reflecting
the provision and net charge-offs recorded in the current third quarter,
the allowance for loan losses rose $8.6 million from the June 30, 2009
balance to $106.7 million at September 30, 2009.
For additional information about the provision for loan losses and the
loan loss allowance, please see the discussion of asset quality earlier
in this release.
Non-interest Income
The Company has three primary components of non-interest income: fee
income, income from bank-owned life insurance ("BOLI"), and other
income, primarily consisting of revenues from the sale of third-party
investment products and revenues from the Company's investment
subsidiary, Peter B. Cannell & Co., Inc. ("PBC"). The non-interest
income from these three ongoing revenue sources totaled $22.6 million in
the current third quarter, as compared to $22.0 million and $24.8
million in the trailing and year-earlier three months, respectively.
The year-over-year decrease was primarily due to a $1.4 million decline
in other income to $6.0 million as revenues from PBC and the sale of
third-party investment products fell $372,000 and $950,000,
respectively, year-over-year. The year-over-year declines in fee income
and BOLI income were more modest, with fee income falling $720,000 to
$9.7 million and BOLI income dropping $107,000, to $6.9 million during
this time. The linked-quarter rise reflects modest increases in fee
income, BOLI income, and other income.
In the third quarter of 2009, the combined revenues from the three
ongoing components of non-interest income were tempered by a $13.3
million OTTI charge. However, the Company also recorded a $5.7 million
gain on the extinguishment of trust preferred securities in connection
with the exchange of BONUSES units during this time. As a result, the
Company recorded total non-interest income of $15.1 million in the third
quarter of 2009.
In the second quarter of 2009, the combined revenues from fee income,
BOLI income, and other income were exceeded by OTTI charges of $39.7
million; similarly, the Company recorded OTTI charges of $44.2 million
in the third quarter of 2008. As a result, the Company recorded
non-interest losses of $17.7 million and $19.3 million in the three
months ended June 30, 2009 and September 30, 2008, respectively.
Non-interest Expense
In the current third quarter, non-interest expense totaled $95.5
million, down $11.9 million from the trailing-quarter level, and up
$11.1 million from the level recorded in the third quarter of 2008.
Operating expenses accounted for $90.1 million of non-interest expense
in the current third quarter, representing a linked-quarter reduction of
$11.9 million and an $11.5 million increase from the year-earlier amount.
In the second quarter of 2009, the Company's operating expenses were
increased by an FDIC special assessment of $14.0 million; an additional
$801,000 was recorded for this purpose in the third quarter of 2009.
Reflecting the FDIC special assessment, general and administrative
("G&A") expense totaled $26.3 million in the current third quarter, down
$12.7 million on a linked-quarter basis and up $8.1 million
year-over-year. The year-over-year increase was largely due to the
increase in FDIC insurance premiums.
Compensation and benefits expense totaled $46.1 million in the current
third quarter, up $1.0 million and $3.3 million, respectively, from the
levels recorded in the trailing and year-earlier three months. The
linked-quarter increase in compensation and benefits expense was partly
offset by a $207,000 reduction in occupancy and equipment expense to
$17.7 million. Year-over-year, occupancy and equipment expense rose
$115,000.
Largely reflecting the increase in net interest income, the Company's
operating efficiency ratio improved to 35.85% in the current third
quarter from 36.72% and 38.01%, respectively, in the trailing and
year-earlier three months.(3)
Income Tax Expense
The Company recorded income tax expense of $32.4 million in the current
third quarter, as compared to $24.0 million and $19.7 million,
respectively, in the trailing and year-earlier three months. While
pre-tax income rose $53.1 million year-over-year and $50.5 million
linked quarter, to $131.0 million, the level of income tax expense
recorded in the current third quarter reflects a downward adjustment of
$13.3 million, primarily in connection with the resolution of various
tax audits during this period. Similarly, the effective tax rate
declined to 24.73% in the current third quarter, from 29.85% and 25.38%,
respectively, in the trailing and year-earlier three months.
About New York Community Bancorp, Inc.
With assets of $32.9 billion at September 30, 2009, New York Community
Bancorp, Inc. is the 24th largest bank holding company in the nation and
a leading producer of multi-family loans in New York City, with an
emphasis on apartment buildings that feature below-market rents. The
Company has two bank subsidiaries: New York Community Bank, with 177
branches serving customers throughout Metro New York and New Jersey; and
New York Commercial Bank, with 35 branches serving customers in
Manhattan, Queens, Brooklyn, Long Island, and Westchester County in New
York.
Reflecting its growth through a series of acquisitions, the Community
Bank operates through five local divisions: Queens County Savings Bank
in Queens, Roslyn Savings Bank on Long Island, Richmond County Savings
Bank on Staten Island, Roosevelt Savings Bank in Brooklyn, and Garden
State Community Bank in New Jersey. Similarly, the Commercial Bank
operates 18 of its branches under the name Atlantic Bank. Information
about the Company and its bank subsidiaries is available at www.myNYCB.com
and www.NewYorkCommercialBank.com.
Post-Earnings Conference Call
The Company will host a conference call on October 28, 2009 at 9:30 a.m.
(ET) to discuss its third quarter 2009 performance and strategies. The
conference call may be accessed by dialing 800-862-9098 (for domestic
calls) or 785-424-1051 (for international calls) and providing the
following access code: 3QNYCB. A replay will be available approximately
two hours following completion of the call through midnight on November
2nd, and may be accessed by calling 800-374-1375 (domestic) or
402-220-0682 (international) and providing the same access code. The
conference call will also be webcast, and may be accessed by visiting
the Company's web site, www.myNYCB.com,
clicking on "Investor Relations," and following the prompts. The webcast
will be archived through 5:00 p.m. on November 25, 2009.
Forward-looking Statements and
Associated Risk Factors
This release, like many written and oral communications presented by New
York Community Bancorp, Inc. and our authorized officers, may contain
certain forward-looking statements regarding our prospective performance
and strategies within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, and
are including this statement for purposes of said safe harbor provisions.
Forward-looking statements, which are based on certain assumptions and
describe future plans, strategies, and expectations of the Company, are
generally identified by use of the words "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "project," "seek," "strive,"
"try," or future or conditional verbs such as "will," "would," "should,"
"could," "may," or similar expressions. Our ability to predict results
or the actual effects of our plans or strategies is inherently
uncertain. Accordingly, actual results may differ materially from
anticipated results.
There are a number of factors, many of which are beyond our control,
that could cause actual conditions, events, or results to differ
significantly from those described in our forward-looking statements.
These factors include, but are not limited to: general economic
conditions and trends, either nationally or in some or all of the areas
in which we and our customers conduct our respective businesses;
conditions in the securities and real estate markets or the banking
industry; changes in interest rates, which may affect our net income,
prepayment penalty income, and other future cash flows, or the market
value of our assets, including our investment securities; changes in
real estate values, which could impact the quality of the assets
securing the loans in our portfolio; changes in the quality or
composition of our loan or securities portfolios; changes in competitive
pressures among financial institutions or from non-financial
institutions; changes in our customer base or in the financial or
operating performances of our customers' businesses; changes in the
demand for our deposit, loan, and investment products and other
financial services in the markets we serve; changes in deposit flows and
wholesale borrowing facilities; changes in our credit ratings or in our
ability to access the capital markets; changes in our estimates of
future reserves based upon the periodic review thereof under relevant
regulatory and accounting requirements; changes in our capital
management policies, including those regarding business combinations,
dividends, and share repurchases, among others; our ability to retain
key members of management; changes in legislation, regulation, and
policies, including, but not limited to, those pertaining to banking,
securities, taxation, environmental protection, and insurance, and the
ability to comply with such changes in a timely manner; additional FDIC
special assessments or required assessment prepayments; changes in
accounting principles, policies, practices, or guidelines; changes in
the monetary and fiscal policies of the U.S. Government, including
policies of the U.S. Treasury and the Federal Reserve Board of
Governors; our timely development of new lines of business and
competitive products or services in a changing environment, and the
acceptance of such products or services by our customers; operational
issues stemming from, and/or capital spending necessitated by, the
potential need to adapt to industry changes in information technology
systems, on which we are highly dependent; any interruption or breach of
security resulting in failures or disruptions in customer account
management, general ledger, deposit, loan, or other systems; any
interruption in customer service due to circumstances beyond our
control; potential exposure to unknown or contingent liabilities of
companies we have acquired or target for acquisition; the outcome of
pending or threatened litigation, or of other matters before regulatory
agencies, or of matters resulting from regulatory exams, whether
currently existing or commencing in the future; environmental conditions
that exist or may exist on properties owned by, leased by, or mortgaged
to the Company; war or terrorist activities; and other economic,
competitive, governmental, regulatory, and geopolitical factors
affecting our operations, pricing, and services.
In addition, it should be noted that we routinely evaluate opportunities
to expand through acquisition and frequently conduct due diligence
activities in connection with such opportunities. As a result,
acquisition discussions and, in some cases, negotiations, may take place
at any time, and acquisitions involving cash, debt, or equity securities
may occur.
Furthermore, the timing and occurrence or non-occurrence of events may
be subject to circumstances beyond our control.
Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date of this
release. Except as required by applicable law or regulation, we
undertake no obligation to update these forward-looking statements to
reflect events or circumstances that occur after the date on which such
statements were made.
- Financial Statements and Highlights Follow -
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share data)
September 30, December 31,
2009 2008
(unaudited)
Assets
Cash and cash equivalents $ 153,838 $ 203,216
Securities available for sale:
Mortgage-related 701,245 833,684
Other 111,750 176,818
Total available-for-sale securities 812,995 1,010,502
Securities held to maturity:
Mortgage-related 2,611,438 3,164,856
Other 2,030,597 1,726,135
Total held-to-maturity securities 4,642,035 4,890,991
Total securities 5,455,030 5,901,493
Mortgage loans:
Multi-family 16,472,509 15,725,654
Commercial real estate 4,873,403 4,551,025
Acquisition, development, and construction 666,196 776,559
1-4 family 226,413 266,307
Total mortgage loans 22,238,521 21,319,545
Other loans 800,205 872,667
Total loans 23,038,726 22,192,212
Less: Allowance for loan losses (106,659 ) (94,368 )
Loans, net 22,932,067 22,097,844
Federal Home Loan Bank of New York stock, at 423,028 400,979
cost
Premises and equipment, net 207,622 217,762
Goodwill 2,436,401 2,436,401
Core deposit intangibles, net 71,205 87,780
Other assets 1,205,277 1,121,431
Total assets $ 32,884,468 $ 32,466,906
Liabilities and Stockholders' Equity
Deposits:
NOW and money market accounts $ 4,684,607 $ 3,818,952
Savings accounts 2,881,393 2,632,078
Certificates of deposit 5,770,801 6,796,971
Non-interest-bearing accounts 1,131,100 1,127,647
Total deposits 14,467,901 14,375,648
Borrowed funds:
Wholesale borrowings 12,759,176 12,343,064
Junior subordinated debentures 435,227 484,216
Other borrowings 669,517 669,430
Total borrowed funds 13,863,920 13,496,710
Other liabilities 212,108 375,302
Total liabilities 28,543,929 28,247,660
Stockholders' equity:
Preferred stock at par $0.01 (5,000,000 shares -- --
authorized; none issued)
Common stock at par $0.01 (600,000,000 shares
authorized; 355,842,337 and 344,985,111 shares
issued, respectively; 355,839,733 and 3,558 3,450
344,985,111 shares outstanding at the
respective dates)
Paid-in capital in excess of par 4,297,006 4,181,599
Retained earnings 109,609 123,511
Treasury stock (2,604 and 0 shares at the (28 ) --
respective dates)
Unallocated common stock held by ESOP (1,212 ) (1,995 )
Accumulated other comprehensive loss, net of
tax:
Net unrealized loss on securities and
non-credit portion of other-than-temporary (17,619 ) (32,506 )
impairment ("OTTI") losses, net of tax
Net unrealized loss on securities transferred
from available for sale to held to maturity, (4,092 ) (4,706 )
net of tax
Pension and post-retirement obligations, net of (46,683 ) (50,107 )
tax
Total accumulated other comprehensive loss, net (68,394 ) (87,319 )
of tax
Total stockholders' equity 4,340,539 4,219,246
Total liabilities and stockholders' equity $ 32,884,468 $ 32,466,906
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Three Months Ended For the Nine Months Ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2009 2009 2008 2009 2008
Interest Income:
Mortgage and other $ 327,120 $ 321,640 $ 316,780 $ 970,477 $ 940,164
loans
Securities and money 75,816 80,056 81,619 234,261 253,859
market investments
Total interest 402,936 401,696 398,399 1,204,738 1,194,023
income
Interest Expense:
NOW and money market 7,380 7,314 13,346 22,257 40,658
accounts
Savings accounts 3,687 3,565 5,814 11,468 17,688
Certificates of 35,482 44,617 67,274 132,822 209,647
deposit
Borrowed funds 130,027 128,615 130,086 387,331 452,142
Total interest 176,576 184,111 216,520 553,878 720,135
expense
Net interest income 226,360 217,585 181,879 650,860 473,888
Provision for loan 15,000 12,000 400 33,000 2,100
losses
Net interest income
after provision for 211,360 205,585 181,479 617,860 471,788
loan losses
Non-interest Income
(Loss):
Total loss on OTTI (22,550 ) (51,073 ) (44,160 ) (73,623 ) (93,755 )
of securities
Less: Non-credit
portion of OTTI
recorded in other 9,275 11,345 -- 20,620 --
comprehensive income
(before taxes)
Net loss on OTTI
recognized in (13,275 ) (39,728 ) (44,160 ) (53,003 ) (93,755 )
earnings
Fee income 9,682 9,282 10,402 28,255 31,196
Bank-owned life 6,914 6,728 7,021 20,482 20,900
insurance
Net gain on sale of -- -- -- -- 568
securities
Gain on debt 5,717 -- -- 5,717 926
exchange/repurchases
Other 6,034 6,007 7,405 18,086 26,671
Total non-interest 15,072 (17,711 ) (19,332 ) 19,537 (13,494 )
income (loss)
Non-interest
Expense:
Operating expenses:
Compensation and 46,093 45,045 42,769 133,560 129,175
benefits
Occupancy and 17,700 17,907 17,585 54,343 52,507
equipment
General and 26,274 38,975 18,224 88,002 58,214
administrative
Total operating 90,067 101,927 78,578 275,905 239,896
expenses
Debt repositioning -- -- -- -- 285,369
charge
Amortization of core 5,412 5,476 5,757 16,575 17,610
deposit intangibles
Total non-interest 95,479 107,403 84,335 292,480 542,875
expense
Income (loss) before 130,953 80,471 77,812 344,917 (84,581 )
income taxes
Income tax expense 32,380 24,023 19,748 101,207 (60,233 )
(benefit)
Net Income (Loss) $ 98,573 $ 56,448 $ 58,064 $ 243,710 $ (24,348 )
Basic earnings $ 0.28 $ 0.16 $ 0.17 $ 0.70 $ (0.08 )
(loss) per share
Diluted earnings $ 0.28 $ 0.16 $ 0.17 $ 0.70 $ (0.08 )
(loss) per share
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATION OF GAAP AND OPERATING EARNINGS
(unaudited)
Although operating earnings are not a measure of performance calculated in
accordance with U.S. generally accepted accounting principles ("GAAP"), we
believe that operating earnings are an important indication of our ability to
generate earnings through our fundamental banking business. Since operating
earnings exclude the effects of certain items that are unusual and/or difficult
to predict, we believe that our operating earnings provide useful supplemental
information to both management and investors in evaluating the Company's
financial results.
Operating earnings should not be considered in isolation or as a substitute for
net income, cash flows from operating activities, or other income or cash flow
statement data calculated in accordance with GAAP. Moreover, the manner in which
we calculate our operating earnings may differ from that of other companies
reporting measures with similar names.
Reconciliations of the Company's GAAP and operating earnings for the three
months ended September 30, 2009, June 30, 2009, and September 30, 2008 and for
the nine months ended September 30, 2009 and 2008 follow:
For the Three Months Ended For the Nine Months Ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
(in thousands,
except per share 2009 2009 2008 2009 2008
data)
GAAP Earnings (Loss) $ 98,573 $ 56,448 $ 58,064 $ 243,710 $ (24,348 )
Adjustments to GAAP
earnings (loss):
Loss on OTTI of 13,275 39,728 44,160 53,003 93,755
securities
Gain on debt (5,717 ) -- -- (5,717 ) (926 )
exchange/repurchases
FDIC special 801 13,952 -- 14,753 --
assessment
Resolution of tax (13,316 ) -- -- (14,337 ) --
audits
Debt repositioning -- -- -- -- 325,016
charge
Litigation -- -- -- -- 3,365
settlement charge
Visa-related gain -- -- -- -- (1,647 )
Income tax effect (3,401 ) (21,075 ) (17,445 ) (24,477 ) (165,151 )
Operating earnings $ 90,215 $ 89,053 $ 84,779 $ 266,935 $ 230,064
Diluted GAAP
Earnings (Loss) per $ 0.28 $ 0.16 $ 0.17 $ 0.70 $ (0.08 )
Share
Adjustments to
diluted GAAP
earnings (loss) per
share:
Loss on OTTI of 0.02 0.07 0.08 0.09 0.17
securities
Gain on debt (0.01 ) -- -- (0.01 ) (0.01 )
exchange/repurchases
FDIC special -- 0.03 -- 0.03 --
assessment
Resolution of tax (0.04 ) -- -- (0.04 ) --
audits
Debt repositioning -- -- -- -- 0.60
charge
Litigation -- -- -- -- 0.01
settlement charge
Visa-related gain -- -- -- -- (0.01 )
Diluted operating $ 0.26 $ 0.26 $ 0.25 $ 0.77 $ 0.69
earnings per share
Note: Footing differences in the table are due to rounding.
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATION OF GAAP AND CASH EARNINGS
(unaudited)
Although cash earnings are not a measure of performance calculated in accordance
with GAAP, the Company believes that this measure is important because of its
contribution to tangible stockholders' equity. (Please see the discussion and
reconciliation of stockholders' equity and tangible stockholders' equity that
appear on the following page.) The Company calculates cash earnings by adding
back to GAAP earnings certain items that have been charged against net income
but added back to tangible stockholders' equity. Unlike other expenses incurred
by the Company, such capital items represent contributions to, not reductions
of, tangible stockholders' equity. For this reason, the Company believes that
cash earnings are useful to investors seeking to evaluate its financial
performance and to compare its performance with other companies in the banking
industry that also report cash earnings.
Cash earnings should not be considered in isolation or as a substitute for net
income, cash flows from operating activities, or other income or cash flow
statement data calculated in accordance with GAAP. Moreover, the manner in which
the Company calculates cash earnings may differ from that of other companies
reporting measures with similar names.
Reconciliations of the Company's GAAP and cash earnings for the three months
ended September 30, 2009, June 30, 2009, and September 30, 2008 and for the nine
months ended September 30, 2009 follow:
For the Three Months Ended
For the Nine
(in thousands,
except per share Months Ended
data) Sept. 30, 2009 June 30, 2009 Sept. 30, 2008
Sept. 30, 2009
GAAP Earnings $ 98,573 $ 56,448 $ 58,064 $ 243,710
Additional
contributions to
tangible
stockholders'
equity:
Amortization and
appreciation of
shares held in 3,219 3,194 3,558 9,897
stock-related
benefit plans
Associated tax 2,473 (566 ) 1,375 3,794
effects
Dividends on
unallocated ESOP 157 158 244 473
shares
Amortization of
core deposit 5,412 5,476 5,757 16,575
intangibles
Gain on debt (3,381 ) -- -- (3,381 )
exchange
Loss on OTTI of 7,851 24,222 26,715 32,072
securities
Total additional
contributions to
tangible 15,731 32,484 37,649 59,430
stockholders'
equity
Cash earnings $ 114,304 $ 88,932 $ 95,713 $ 303,140
Diluted GAAP
Earnings per $ 0.28 $ 0.16 $ 0.17 $ 0.70
Share
Additional
contributions to
diluted GAAP
earnings per
share:
Amortization and
appreciation of
shares held in 0.01 0.01 0.01 0.03
stock-related
benefit plans
Associated tax 0.01 -- -- 0.02
effects
Dividends on
unallocated ESOP -- -- -- --
shares
Amortization of
core deposit 0.02 0.02 0.02 0.05
intangibles
Gain on debt (0.01 ) -- -- (0.01 )
exchange
Loss on OTTI of 0.02 0.07 0.08 0.09
securities
Total additional
contributions to
diluted GAAP 0.05 0.10 0.11 0.18
earnings per
share
Diluted cash
earnings per $ 0.33 $ 0.26 $ 0.28 $ 0.88
share
Cash Earnings
Data:
Cash return on 1.39 % 1.10 % 1.22 % 1.24 %
average assets
Cash return on
average tangible 1.51 1.19 1.33 1.35
assets (1)
Cash return on
average 10.87 8.49 9.07 9.65
stockholders'
equity
Cash return on
average tangible 26.98 21.25 22.72 24.21
stockholders'
equity (1)
Cash efficiency 34.88 41.21 36.29 37.06
ratio (2)
Please see the reconciliations of stockholders' equity and tangible
(1) stockholders' equity, total assets and tangible assets, and the related
measures on the following page.
The Company calculates its cash efficiency ratio by dividing its operating
(2) expenses by the sum of its net interest income and non-interest income
after excluding the pertinent non-cash items from its operating expenses
and non-interest income.
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATIONS OF STOCKHOLDERS' EQUITY AND TANGIBLE STOCKHOLDERS' EQUITY,
TOTAL ASSETS AND TANGIBLE ASSETS, AND THE RELATED MEASURES
(unaudited)
Although tangible stockholders' equity, adjusted tangible stockholders' equity,
tangible assets, and adjusted tangible assets are not measures that are
calculated in accordance with GAAP, management uses these non-GAAP measures in
its analysis of the Company's performance. The Company believes that these
non-GAAP measures are an important indication of its ability to grow both
organically and through business combinations, and, with respect to tangible
stockholders' equity and adjusted tangible stockholders' equity, its ability to
pay dividends and to engage in various capital management strategies.
The Company calculates tangible stockholders' equity by subtracting from
stockholders' equity the sum of its goodwill and core deposit intangibles
("CDI") and calculates tangible assets by subtracting the same sum from its
total assets. To calculate its ratio of tangible stockholders' equity to
tangible assets, the Company divides its tangible stockholders' equity by its
tangible assets, both of which include accumulated other comprehensive loss, net
of tax ("AOCL"). AOCL consists of after-tax net unrealized losses on securities
and pension and post-retirement obligations, and is recorded in the Company's
Consolidated Statements of Condition. The Company also calculates its ratio of
tangible stockholders' equity to tangible assets excluding AOCL, as its
components are impacted by changes in market conditions, including interest
rates, which fluctuate. This ratio is referred to as the ratio of "adjusted
tangible stockholders' equity to adjusted tangible assets." The Company
calculates tangible book value per share by dividing its tangible stockholders'
equity by the number of shares outstanding less any unallocated ESOP shares. To
calculate its returns on average tangible assets and average tangible
stockholders' equity, the Company adds the amortization of CDI, net of tax, back
to net income and divides the adjusted net income by its average tangible assets
and average tangible stockholders' equity, respectively. Average tangible
stockholders' equity is calculated by subtracting average goodwill and average
CDI from average stockholders' equity.
Neither tangible stockholders' equity, adjusted tangible stockholders' equity,
tangible assets, adjusted tangible assets, nor the related measures should be
considered in isolation or as a substitute for stockholders' equity, total
assets, or any other measure calculated in accordance with GAAP. Moreover, the
manner in which the Company calculates its tangible stockholders' equity,
adjusted tangible stockholders' equity, tangible assets, adjusted tangible
assets, and the related measures may differ from that of other companies
reporting measures with similar names. Reconciliations of the Company's
stockholders' equity, tangible stockholders' equity, and adjusted tangible
stockholders' equity; total assets, tangible assets, and adjusted tangible
assets; and the related measures at or for the three months ended September 30,
2009, June 30, 2009, and December 31, 2008 and the nine months ended September
30, 2009 and 2008 follow:
At or for the At or for the
Three Months Ended Nine Months Ended
Sept. 30, June 30, Dec. 31, Sept. 30, Sept. 30,
2009 2009 2008 2009 2008
(in
thousands)
Total
Stockholders' $ 4,340,539 $ 4,210,666 $ 4,219,246 $ 4,340,539 $ 4,263,231
Equity
Less: (2,436,401 ) (2,436,401 ) (2,436,401 ) (2,436,401 ) (2,436,060 )
Goodwill
Core deposit (71,205 ) (76,617 ) (87,780 ) (71,205 ) (93,513 )
intangibles
Tangible
stockholders' $ 1,832,933 $ 1,697,648 $ 1,695,065 $ 1,832,933 $ 1,733,658
equity
Total Assets $ 32,884,468 $ 32,860,123 $ 32,466,906 $ 32,884,468 $ 32,139,500
Less: (2,436,401 ) (2,436,401 ) (2,436,401 ) (2,436,401 ) (2,436,060 )
Goodwill
Core deposit (71,205 ) (76,617 ) (87,780 ) (71,205 ) (93,513 )
intangibles
Tangible $ 30,376,862 $ 30,347,105 $ 29,942,725 $ 30,376,862 $ 29,609,927
assets
Tangible
Stockholders' $ 1,832,933 $ 1,697,648 $ 1,695,065 $ 1,832,933 $ 1,733,658
Equity
Add back:
Accumulated
other 68,394 76,301 87,319 68,394 25,509
comprehensive
loss, net of
tax
Adjusted
tangible $ 1,901,327 $ 1,773,949 $ 1,782,384 $ 1,901,327 $ 1,759,167
stockholders'
equity
Tangible $ 30,376,862 $ 30,347,105 $ 29,942,725 $ 30,376,862 $ 29,609,927
Assets
Add back:
Accumulated
other 68,394 76,301 87,319 68,394 25,509
comprehensive
loss, net of
tax
Adjusted
tangible $ 30,445,256 $ 30,423,406 $ 30,030,044 $ 30,445,256 $ 29,635,436
assets
Average
Stockholders' $ 4,206,036 $ 4,190,524 $ 4,185,087 $ 4,186,417 $ 4,174,727
Equity
Less: Average
goodwill and (2,511,174 ) (2,516,568 ) (2,527,650 ) (2,516,604 ) (2,540,093 )
core deposit
intangibles
Average
tangible $ 1,694,862 $ 1,673,956 $ 1,657,437 $ 1,669,813 $ 1,634,634
stockholders'
equity
Average $ 32,813,508 $ 32,377,212 $ 32,116,431 $ 32,464,805 $ 30,838,563
Assets
Less: Average
goodwill and (2,511,174 ) (2,516,568 ) (2,527,650 ) (2,516,604 ) (2,540,093 )
core deposit
intangibles
Average
tangible $ 30,302,334 $ 29,860,644 $ 29,588,781 $ 29,948,201 $ 28,298,470
assets
Net Income $ 98,573 $ 56,448 $ 102,232 $ 243,710 $ (24,348 )
(Loss)
Add back:
Amortization
of core 3,302 3,340 3,497 10,111 10,686
deposit
intangibles,
net of tax
Adjusted net $ 101,875 $ 59,788 $ 105,729 $ 253,821 $ (13,662 )
income (loss)
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
For the Three Months Ended September 30,
2009 2008
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 22,763,695 $ 327,120 5.75 % $ 21,032,989 $ 316,780 6.02 %
loans, net
Securities and money 5,991,637 75,816 5.06 6,205,941 81,619 5.26
market investments
Total
interest-earning 28,755,332 402,936 5.60 27,238,930 398,399 5.85
assets
Non-interest-earning 4,058,176 4,046,868
assets
Total assets $ 32,813,508 $ 31,285,798
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 4,273,603 $ 7,380 0.69 % $ 3,139,091 $ 13,346 1.69 %
accounts
Savings accounts 2,810,906 3,687 0.52 2,748,996 5,814 0.84
Certificates of 5,854,953 35,482 2.40 6,938,374 67,274 3.86
deposit
Total
interest-bearing 12,939,462 46,549 1.43 12,826,461 86,434 2.68
deposits
Borrowed funds 14,265,133 130,027 3.62 12,722,990 130,086 4.07
Total
interest-bearing 27,204,595 176,576 2.58 25,549,451 216,520 3.37
liabilities
Non-interest-bearing 1,129,061 1,267,872
deposits
Other liabilities 273,816 249,507
Total liabilities 28,607,472 27,066,830
Stockholders' equity 4,206,036 4,218,968
Total liabilities
and stockholders' $ 32,813,508 $ 31,285,798
equity
Net interest
income/interest rate $ 226,360 3.02 % $ 181,879 2.48 %
spread
Net interest-earning
assets/net interest $ 1,550,737 3.17 % $ 1,689,479 2.68 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.07 x
interest-bearing
liabilities
Core deposits (1) $ 8,213,570 $ 11,067 0.53 % $ 7,155,959 $ 19,160 1.07 %
(1) Refers to all deposits other than certificates of deposit.
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
For the Three Months Ended
September 30, 2009 June 30, 2009
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 22,763,695 $ 327,120 5.75 % $ 22,382,786 $ 321,640 5.75 %
loans, net
Securities and money 5,991,637 75,816 5.06 6,035,990 80,056 5.31
market investments
Total
interest-earning 28,755,332 402,936 5.60 28,418,776 401,696 5.65
assets
Non-interest-earning 4,058,176 3,958,436
assets
Total assets $ 32,813,508 $ 32,377,212
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 4,273,603 $ 7,380 0.69 % $ 4,038,172 $ 7,314 0.73 %
accounts
Savings accounts 2,810,906 3,687 0.52 2,699,431 3,565 0.53
Certificates of 5,854,953 35,482 2.40 6,295,936 44,617 2.84
deposit
Total
interest-bearing 12,939,462 46,549 1.43 13,033,539 55,496 1.71
deposits
Borrowed funds 14,265,133 130,027 3.62 13,696,028 128,615 3.77
Total
interest-bearing 27,204,595 176,576 2.58 26,729,567 184,111 2.76
liabilities
Non-interest-bearing 1,129,061 1,217,281
deposits
Other liabilities 273,816 239,840
Total liabilities 28,607,472 28,186,688
Stockholders' equity 4,206,036 4,190,524
Total liabilities
and stockholders' $ 32,813,508 $ 32,377,212
equity
Net interest
income/interest rate $ 226,360 3.02 % $ 217,585 2.89 %
spread
Net interest-earning
assets/net interest $ 1,550,737 3.17 % $ 1,689,209 3.06 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.06 x
interest-bearing
liabilities
Core deposits (1) $ 8,213,570 $ 11,067 0.53 % $ 7,954,884 $ 10,879 0.55 %
(1) Refers to all deposits other than certificates of deposit.
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
For the Nine Months Ended September 30,
2009 2008
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 22,420,775 $ 970,477 5.77 % $ 20,586,762 $ 940,164 6.09 %
loans, net
Securities and money 6,075,369 234,261 5.14 6,282,224 253,859 5.39
market investments
Total
interest-earning 28,496,144 1,204,738 5.64 26,868,986 1,194,023 5.93
assets
Non-interest-earning 3,968,661 3,969,577
assets
Total assets $ 32,464,805 $ 30,838,563
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 3,993,802 $ 22,257 0.75 % $ 2,922,880 $ 40,658 1.86 %
accounts
Savings accounts 2,704,895 11,468 0.57 2,613,806 17,688 0.90
Certificates of 6,178,552 132,822 2.87 6,770,747 209,647 4.14
deposit
Total
interest-bearing 12,877,249 166,547 1.73 12,307,433 267,993 2.91
deposits
Borrowed funds 14,001,713 387,331 3.70 12,799,358 452,142 4.72
Total
interest-bearing 26,878,962 553,878 2.75 25,106,791 720,135 3.83
liabilities
Non-interest-bearing 1,163,391 1,341,096
deposits
Other liabilities 236,035 215,949
Total liabilities 28,278,388 26,663,836
Stockholders' equity 4,186,417 4,174,727
Total liabilities
and stockholders' $ 32,464,805 $ 30,838,563
equity
Net interest
income/interest rate $ 650,860 2.89 % $ 473,888 2.10 %
spread
Net interest-earning
assets/net interest $ 1,617,182 3.04 % $ 1,762,195 2.35 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.07 x
interest-bearing
liabilities
Core deposits (1) $ 7,862,088 $ 33,725 0.57 % $ 6,877,782 $ 58,346 1.13 %
(1) Refers to all deposits other than certificates of deposit.
Please see the following page for an analysis of the Company's net
interest income for the nine months ended September 30, 2008 excluding
the impact of the $39.6 million debt repositioning charge recorded in
the second quarter of that year, as compared to its net interest income
for the nine months ended September 30, 2009.
NEW YORK COMMUNITY BANCORP, INC.
ADJUSTED NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
The following table presents an analysis of the Company's net interest income
for the nine months ended September 30, 2008 as if the $39.6 million debt
repositioning charge recorded in the second quarter of that year had not been
recorded. Although such adjusted net interest income is not a measure of
performance calculated in accordance with GAAP, we believe that it is an
important indication of our ability to generate net interest income through our
fundamental banking business and therefore provides useful supplemental
information to both management and investors in evaluating the Company's
financial results.
The following line items are presented in the adjusted net interest income
analysis for the nine months ended September 30, 2008 excluding the impact of
the debt repositioning charge: interest expense on borrowed funds; average cost
of borrowed funds; interest expense on average interest-bearing liabilities;
average cost of interest-bearing liabilities; net interest income; interest rate
spread; and net interest margin. No adjustments have been made to these items
for the nine months ended September 30, 2009.
None of these adjusted items should be considered in isolation or as a
substitute for net interest income or its component measures. Moreover, the
manner in which we have calculated our adjusted net interest income may differ
from that of other companies that may report a measure with a similar name.
For the Nine Months Ended September 30,
2009 2008
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 22,420,775 $ 970,477 5.77 % $ 20,586,762 $ 940,164 6.09 %
loans, net
Securities and money 6,075,369 234,261 5.14 6,282,224 253,859 5.39
market investments
Total
interest-earning 28,496,144 1,204,738 5.64 26,868,986 1,194,023 5.93
assets
Non-interest-earning 3,968,661 3,969,577
assets
Total assets $ 32,464,805 $ 30,838,563
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 3,993,802 $ 22,257 0.75 % $ 2,922,880 $ 40,658 1.86 %
accounts
Savings accounts 2,704,895 11,468 0.57 2,613,806 17,688 0.90
Certificates of 6,178,552 132,822 2.87 6,770,747 209,647 4.14
deposit
Total
interest-bearing 12,877,249 166,547 1.73 12,307,433 267,993 2.91
deposits
Borrowed funds 14,001,713 387,331 3.70 12,799,358 412,495 4.30
Total
interest-bearing 26,878,962 553,878 2.75 25,106,791 680,488 3.62
liabilities
Non-interest-bearing 1,163,391 1,341,096
deposits
Other liabilities 236,035 215,949
Total liabilities 28,278,388 26,663,836
Stockholders' equity 4,186,417 4,174,727
Total liabilities
and stockholders' $ 32,464,805 $ 30,838,563
equity
Net interest
income/interest rate $ 650,860 2.89 % $ 513,535 2.31 %
spread
Net interest-earning
assets/net interest $ 1,617,182 3.04 % $ 1,762,195 2.54 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.07 x
interest-bearing
liabilities
Core deposits (1) $ 7,862,088 $ 33,725 0.57 % $ 6,877,782 $ 58,346 1.13 %
(1) Refers to all deposits other than certificates of deposit.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share and per share data)
(unaudited)
For the Three Months Ended For the Nine Months Ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2009 2009 2008 2009 2008
GAAP EARNINGS
DATA:
Net income $98,573 $56,448 $58,064 $243,710 $(24,348 )
(loss)
Basic
earnings 0.28 0.16 0.17 0.70 (0.08 )
(loss) per
share
Diluted
earnings 0.28 0.16 0.17 0.70 (0.08 )
(loss) per
share
Return on
average 1.20 % 0.70 % 0.74 % 1.00 % (0.11 )%
assets
Return on
average 1.34 0.80 0.86 1.13 (0.06 )
tangible
assets (1)
Return on
average 9.37 5.39 5.51 7.76 (0.78 )
stockholders'
equity
Return on
average
tangible 24.04 14.29 14.61 20.27 (1.11 )
stockholders'
equity (1)
Efficiency 37.31 51.00 48.34 41.16 52.11
ratio (2)
Operating
expenses to 1.10 1.26 1.00 1.13 1.04
average
assets
Interest rate 3.02 2.89 2.48 2.89 2.10
spread
Net interest 3.17 3.06 2.68 3.04 2.35
margin
Shares used
for basic EPS 346,176,162 343,549,598 341,971,926 344,359,415 332,023,833
computation
Shares used
for diluted 346,251,189 343,625,343 342,826,668 344,435,615 332,023,833
EPS
computation
OPERATING
EARNINGS
DATA:(3)
Operating $90,215 $89,053 $84,779 $266,935 $230,064
earnings
Basic
operating 0.26 0.26 0.25 0.77 0.69
earnings per
share
Diluted
operating 0.26 0.26 0.25 0.77 0.69
earnings per
share
Return on
average 1.10 % 1.10 % 1.08 % 1.10 % 0.99 %
assets
Return on
average 1.23 1.24 1.23 1.23 1.13
tangible
assets (1)
Return on
average 8.58 8.50 8.04 8.50 7.35
stockholders'
equity
Return on
average
tangible 22.07 22.08 20.96 22.12 19.64
stockholders'
equity (1)
Operating
efficiency 35.85 36.72 38.01 36.39 40.01
ratio (2)
Interest rate 3.02 2.89 2.48 2.89 2.31 (4)
spread
Net interest 3.17 3.06 2.68 3.04 2.54 (4)
margin
Shares used
for basic 346,176,162 343,549,598 341,971,926 344,359,415 332,023,833
operating EPS
computation
Shares used
for diluted 346,251,189 343,625,343 342,826,668 344,435,615 333,142,115
operating EPS
computation
Please see the reconciliations of stockholders' equity and tangible
(1) stockholders' equity, total assets and tangible assets, and the related
measures earlier in this release.
The Company calculates its GAAP and operating efficiency ratios by dividing
(2) the respective operating expenses by the respective sums of net interest
income and non-interest income. Please see the reconciliations of GAAP and
operating earnings earlier in this release.
(3) Please see the reconciliations of GAAP and operating earnings earlier in
this release.
Please see the reconciliations of the Company's interest rate spread and
(4) net interest margin to its adjusted interest rate spread and adjusted net
interest margin for the nine months ended September 30, 2008 earlier in
this release.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
At or for the Three Months Ended
September 30, June 30, December 31,
2009 2009 2008
BALANCE SHEET DATA:
Book value per share $12.21 $12.21 $12.25
Tangible book value per share (1) 5.16 4.92 4.92
Stockholders' equity to total 13.20 % 12.81 % 13.00 %
assets
Tangible stockholders' equity to 6.03 5.59 5.66
tangible assets (1)
Tangible stockholders' equity to
tangible assets excluding 6.25 5.83 5.94
accumulated other comprehensive
loss, net of tax (1)
Shares used for book value and
tangible book value per share 355,457,472 344,742,899 344,353,808
computations (1)
Total shares issued and outstanding 355,839,733 345,208,174 344,985,111
ASSET QUALITY RATIOS:
Non-performing loans to total loans 2.00 % 1.49 % 0.51 %
Non-performing assets to total 1.45 1.04 0.35
assets
Allowance for loan losses to 23.17 28.83 83.00
non-performing loans
Allowance for loan losses to total 0.46 0.43 0.43
loans
Net charge-offs during the period
to average loans outstanding during 0.03 0.04 0.02
the period
Net charge-offs during the period
to the average allowance for loan 6.56 9.69 3.65
losses during the period
Please see the reconciliations of stockholders' equity and tangible
(1) stockholders' equity, total assets and tangible assets, and the related
measures earlier in this release.
Footnotes to the Text
(1) Please see the reconciliations of the Company's GAAP and operating earnings
that appear earlier in this release.
(2) Please see the reconciliations of the Company's GAAP and cash earnings that
appear earlier in this release.
The Company calculates its GAAP and operating efficiency ratios by dividing
(3) the respective operating expenses by the respective sums of net interest
income and non-interest income. Please see the reconciliations of GAAP and
operating earnings earlier in this release.
The SNL Bank & Thrift Index data referenced in this release is calculated
(4) by consolidating the September 30, 2009 data for 257 U.S. banks and thrifts
into a single entity at October 26, 2009.
Please see the reconciliations of the Company's stockholders' equity and
(5) tangible stockholders' equity, its total assets and tangible assets, and
the related measures earlier in this release.
Source: New York Community Bancorp, Inc.
Contact: New York Community Bancorp, Inc.
Ilene A. Angarola, 516-683-4420
Executive Vice President &
Director, Investor Relations