WESTBURY, N.Y.--(BUSINESS WIRE)--
New York Community Bancorp, Inc. (NYSE: NYB):
-- Significant Earnings Growth: Diluted GAAP EPS rose 42.9% year-over-year,
to $0.30, while diluted operating EPS rose 28.6%, to $0.27 and diluted
cash EPS rose 36.0% to $0.34. (1) (2)
-- Solid Multi-Family Loan Growth: At $15.7 billion, multi-family loans
were up 14.4%, annualized, on a linked-quarter basis and 11.9%
year-over-year.
-- Strong Loan Production at Substantial Spreads:Loan originations totaled
$1.5 billion in the quarter and included $854.4 million of multi-family
loans. The average yield on multi-family and commercial real estate
loans originated during the quarter was 384 basis points higher than the
average five-year Constant Maturity Treasury rate (the "five-year CMT").
-- Asset Quality: Net charge-offs equaled 0.016% of average loans in the
quarter, in contrast to the SNL Bank & Thrift Index measure of 2.41%.
Non-performing assets equaled 0.35% of total assets at the end of
December, in contrast to the Index measure of 2.03%. (3)
-- Net Interest Margin Expansion: At 2.87%, the margin was up 51 basis
points year-over-year and 19 basis points linked-quarter. (4)
-- Improved Operating Efficiency Ratio:The operating efficiency ratio
improved to 35.94% from 38.01% in the trailing quarter and from 43.44%
in the year-earlier three months.(5)
-- Continued Capital Strength:The ratio of adjusted tangible stockholders'
equity to adjusted tangible assets was 5.94% at the end of December,
excluding the accumulated other comprehensive loss, net of tax (the
"AOCL"). Including the AOCL, the ratio of tangible stockholders' equity
to tangible assets was 5.66%.(6)
Please Note: All footnotes to the text are located at the end
of this release.
New York Community Bancorp, Inc. (NYSE: NYB) (the "Company") today
reported fourth quarter 2008 GAAP earnings of $102.2 million,
representing a year-over-year increase of $34.9 million, or 51.7%. The
Company's GAAP earnings equaled $0.30 per diluted share in the current
fourth quarter, signifying an increase of $0.09, or 42.9%. The Company
also reported its highest operating earnings in 17 quarters, as fourth
quarter 2008 operating earnings rose $24.9 million, or 36.9%, to $92.4
million, equivalent to a $0.06, or 28.6%, year-over-year increase in
diluted operating earnings per share to $0.27. (1)
Included in the Company's fourth quarter 2008 GAAP earnings was a
non-taxable gain of $16.0 million, or $0.05 per diluted share, recorded
in connection with the repurchase of $42.2 million of debt; and a
non-cash after-tax other-than-temporary impairment ("OTTI") charge of
$6.2 million, or $0.02 per diluted share, on certain pooled trust
preferred securities.
The Company also reported fourth quarter 2008 cash earnings of $115.6
million, up $35.8 million, or 44.8%, from the year-earlier amount.
Similarly, the Company's fourth quarter 2008 diluted cash earnings per
share rose $0.09, or 36.0%, year-over-year to $0.34. (2)
4Q 2008 Diluted Operating Earnings Are
the Company's Strongest Since 3Q 2004
Commenting on the Company's fourth quarter 2008 performance, Chairman,
President, and Chief Executive Officer Joseph R. Ficalora stated, "We
are understandably pleased by our fourth quarter performance and the
degree to which it verified a point we've made throughout our public
life: that a decline in the credit cycle would provide us with an
opportunity to increase our multi-family lending, to expand our net
interest margin, and to generate a meaningful level of earnings growth.
"On an operating basis, our earnings rose to $92.4 million, the highest
level recorded since the third quarter of 2004. Similarly, our operating
earnings equaled $0.27 on a diluted per-share basis--the highest we've
seen since the fourth quarter of 2005. The twelve-month figures were
also gratifying, with 2008 operating earnings rising 17.1%
year-over-year to $322.5 million, and diluted operating earnings per
share rising 9.1% to $0.96 over the twelve-month period. (1)
"The growth of our earnings was driven, in part, by an increase in
multi-family lending, which was facilitated by the exit of several key
competitors over the course of the year. Of the $5.9 billion of loans we
produced in 2008, $3.2 billion were secured by multi-family buildings,
and the vast majority of those loans fell within our rent-regulated
niche.
"We also reduced our funding costs over the course of the quarter, as
the FOMC lowered the fed funds rate to a range of zero to 25 basis
points.
"The cumulative result of our loan growth and the reduction in
higher-cost funding was significant margin expansion over the course of
2008. At 2.87%, our fourth quarter margin was up 19 basis points from
the third-quarter measure and up 51 basis points year-over-year. That
the increase in our margins was achieved despite a decline in prepayment
penalty income--as refinancing activity diminished--only serves to
underscore the validity of our business strategies. Prepayment penalty
income fell $2.1 million year-over-year to $2.4 million in the fourth
quarter, and declined from $57.6 million in 2007 to $24.9 million in
2008.
"While the deterioration of the economy has resulted in non-performing
assets and net charge-offs rising beyond our traditional levels, as
expected, our measures of asset quality continue to distinguish us from
our industry as a whole. Net charge-offs totaled $3.4 million in the
current fourth quarter, and represented a modest 0.016% of average
loans. In addition, while non-performing assets rose to $114.8 million,
the ratio of non-performing assets to total assets was a comparatively
modest 0.35% at quarter-end.
"In contrast, the ratio of net charge-offs to average loans for the
industry was 2.41%, based on the SNL Bank & Thrift Index, and the ratio
of non-performing assets to total assets for the industry was 2.03%." (3)
Board of Directors Declares $0.25 per
Share Dividend, Payable on February 17, 2009
"Reflecting our fourth quarter earnings growth, and our confidence in
our ability to generate strong earnings going forward, the Board of
Directors last night declared a $0.25 per share dividend, payable on
February 17th to shareholders of record at February 6, 2009. Our ability
to maintain our quarterly dividend at this level for 20 consecutive
quarters also reflects our continued capital strength. Our cash
earnings--which have historically been a meaningful measure of our
ability to create capital--rose 44.8% year-over-year, to $115.6 million
in the current fourth quarter, and on a diluted per-share basis rose
36.0% to $0.34. (2)
"As we announced on January 13th, our decision to decline a capital
infusion under the U.S. Treasury's Troubled Asset Relief Program was
based upon our solid capital position, as well as the consistent
strength of our balance sheet. That decision was clearly appropriate,
given the consistently solid regulatory capital measures recorded by our
two subsidiary banks. With leverage capital ratios of 7.13% and 10.33%
at the end of December, for example, the Community Bank and the
Commercial Bank exceeded the requirements for well-capitalized
classification by 213 and 533 basis points."
Balance Sheet Summary at December 31,
2008
Assets totaled $32.5 billion at the close of the current fourth quarter,
up $327.4 million from the trailing quarter-end balance and $1.9
billion, or 6.2%, from the balance recorded at December 31, 2007.
Loans
Loans represented $22.2 billion, or 68.4%, of total assets at the close
of the current fourth quarter, and were up $680.4 million, or 12.7%
annualized, on a linked-quarter basis and $1.8 billion, or 9.0%,
year-over-year. The three- and twelve-month increases were driven by
organic loan production. The Company originated $5.9 billion of loans in
2008, as compared to $4.9 billion in 2007, a year-over-year increase of
21.2%. Fourth quarter originations accounted for $1.5 billion of the
volume in 2008.
Consistent with the Company's emphasis on multi-family loan production,
the multi-family loan portfolio represented $15.7 billion, or 70.9%, of
total loans at the end of this December, up $546.0 million, or 14.4%
annualized, from the September 30th balance and $1.7 billion, or 11.9%,
from the balance recorded at December 31, 2007. At December 31, 2008,
the average multi-family loan had a principal balance of $3.9 million.
The multi-family loan portfolio had an average loan-to-value ratio
("LTV") of 61.2% and an expected weighted average life of 3.8 years at
that date.
The year-over-year increase in multi-family loans was fueled by
twelve-month originations of $3.2 billion, which exceeded the prior
year's volume by 29.8%. Fourth quarter 2008 multi-family loan
originations totaled $854.4 million, a 13.9% increase from the
year-earlier amount.
The growth of the portfolio was attributable to a decline in competition
as several lenders exited the market completely or reduced their focus
on the Company's multi-family niche. Competition began to ease in the
second half of 2007, with the departure of the conduit lenders, and
continued to ease with the exit of two other major lenders and the
conservatorship of Fannie Mae and Freddie Mac in 2008. With fewer
lenders vying for multi-family loans in its niche market, the Company
experienced a marked increase in loan demand and production, with new
originations featuring increasingly wider spreads.
Commercial real estate ("CRE") loans represented $4.6 billion, or 20.5%,
of total loans at the close of the current fourth quarter, and were up
$292.6 million on a linked-quarter basis and $725.1 million
year-over-year. At December 31, 2008, the average CRE loan had a
principal balance of $2.5 million. The CRE loan portfolio had an average
LTV of 55.2% and an expected weighted average life of 3.4 years at that
date.
The growth of the CRE loan portfolio was fueled by organic loan
production, with twelve-month originations rising $440.6 million
year-over-year to $1.1 billion. The volume of CRE loans produced in 2008
included fourth quarter originations of $328.9 million.
In concert with its increased focus on multi-family and CRE lending, the
Company steadily reduced its construction loan portfolio over the course
of the year. Originations generally were limited to advances of funds
that were committed prior to the weakening of the real estate market,
and declined by $175.4 million, or 32.0%, from the volume recorded in
2007 to $373.0 million in 2008. Construction loans represented $776.6
million, or 3.5%, of total loans at the close of the current fourth
quarter, a 31.7% decline from $1.1 billion, representing 5.6% of total
loans, at the prior year-end.
Loan growth was also tempered by a $114.5 million decline in one- to
four-family loans to $266.3 million, representing 1.2% of total loans at
the close of the current fourth quarter, while other loans declined
$91.8 million to $872.7 million, representing 3.9% of total loans.
Commercial and industrial ("C&I") loans represented 81.6% of other loans
at quarter-end.
Due to the significant volume of loans produced in the fourth quarter of
2008---which included several loans that had been expected to close in
the current first quarter--as well as the incomplete status of several
loans that are being processed at this time, the Company's pipeline is
approximately $602 million at present and includes approximately $403
million of multi-family loans. Notwithstanding the decline in market
conditions, the volume of loans to be produced in the current quarter is
expected to exceed these amounts.
Asset Quality
Notwithstanding an increase in net charge-offs and non-performing
assets, the Company's asset quality measures continued to rank among the
industry's best in 2008. In the fourth quarter of the year, the Company
recorded net charge-offs of $3.4 million, equivalent to 0.016% of
average loans. For the SNL Bank & Thrift Index, the comparable fourth
quarter 2008 measure was 2.41%. (3)
Non-performing loans rose to $113.7 million at December 31, 2008 from
$61.4 million and $22.2 million, respectively, at September 30, 2008 and
December 31, 2007, and represented 0.51% of total loans at the current
fourth quarter-end. Notwithstanding the three- and twelve-month
increases, the ratio compared favorably with the SNL Bank & Thrift Index
measure of 2.18%. (3)
The balance of other real estate owned rose to $1.1 million at the close
of the quarter, representing a three-month increase of $777,000 and a
twelve-month increase of $449,000. As a result, non-performing assets
represented $114.8 million, or 0.35%, of total assets at the end of this
December, well below the current SNL Bank & Thrift Index measure of
2.03%. (3)
While no loan loss provisions were set aside in the twelve months ended
December 31, 2007, the Company set aside total provisions of $7.7
million in the twelve months ended December 31, 2008. Included in the
twelve-month amount was a fourth quarter 2008 loan loss provision of
$5.6 million. In the trailing quarter, the loan loss provision totaled
$400,000. Reflecting the fourth quarter provision and the aforementioned
net charge-offs, the allowance for loan losses rose to $94.4 million at
the end of this December, an increase from $92.1 million and $92.8
million, respectively, at September 30, 2008 and December 31, 2007.
Securities
Securities accounted for $5.9 billion, or 18.2%, of total assets at the
close of the current fourth quarter, down $185.6 million from the
September 30th balance and up $157.6 million from the December 31, 2007
amount. The linked-quarter reduction was the result of a $102.7 million
decline in available-for-sale securities to $1.0 billion and an $82.9
million decline in held-to-maturity securities to $4.9 billion. The
year-over-year increase in securities was the net effect of a $528.3
million increase in securities held to maturity and a $370.8 million
reduction in securities available for sale. In view of the volatility
and weakness in the capital markets, the Company has been limiting its
investments to government-sponsored enterprise ("GSE") securities. At
December 31, 2008, approximately 90% of the securities portfolio
consisted of GSE securities.
The after-tax net unrealized loss on available-for-sale securities rose
to $32.5 million at December 31, 2008 from $13.6 million at the end of
the trailing quarter and from $7.6 million at December 31, 2007. The
increase reflects the higher spreads in the fixed income market, which
are a function of the continued weakness in the economy.
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
wholesale funding sources, the Company has typically refrained from
pricing its retail deposits at the higher end of the market in order to
contain its funding costs, as it did in the last three months. Thus,
while the Company has the capacity to increase deposits through its
extensive branch network, it opted to utilize wholesale funds, including
brokered deposits, to enhance its liquidity during a quarter when such
funding was more attractively priced.
At December 31, 2008, deposits totaled $14.3 billion, representing a
$105.9 million increase from the September 30th balance and a $1.1
billion, or 8.6%, increase from the balance recorded at December 31,
2007. NOW and money market accounts totaled $3.8 billion at the end of
the current fourth quarter, signifying a three-month increase of $480.6
million and a twelve-month increase of $1.4 billion. The year-over-year
increase in deposits was also due to a $115.0 million rise in savings
accounts to $2.6 billion; however, the year-end 2008 balance of savings
accounts was down $61.9 million from the balance recorded at September
30, 2008.
The increase in NOW and money market accounts was partly offset by
reductions in certificates of deposit ("CDs") and non-interest-bearing
accounts at December 31, 2008. CDs accounted for $6.8 billion, or 47.6%,
of total deposits at the close of the current fourth quarter, and were
down $220.5 million and $116.1 million, respectively, over the three-
and twelve-month periods. Non-interest-bearing accounts totaled $1.0
billion at the close of the current fourth quarter, and were down $92.4
million and $226.0 million, respectively, over the three- and
twelve-month periods.
Borrowed funds totaled $13.5 billion at December 31, 2008 and were up
$177.2 million and $581.0 million, respectively, from the balances
recorded at September 30, 2008 and December 31, 2007. Wholesale
borrowings represented $12.3 billion of the year-end 2008 total,
signifying a linked-quarter reduction of $307.1 million and a
year-over-year increase of $149.5 million. Wholesale borrowings
represented 38.0% of total assets at the close of the current fourth
quarter, down from 39.4% and 39.9%, respectively, at the earlier dates.
Other borrowings totaled $669.4 million at the close of the current
fourth quarter, and were up $484.4 million on a linked-quarter basis and
$432.2 million year-over-year. The year-end 2008 balance reflects the
issuance of $602.0 million of fixed rate senior notes under the FDIC's
Temporary Liquidity Guarantee Program in December 2008.
Stockholders' Equity
The Company recorded stockholders' equity of $4.2 billion at the close
of the current fourth quarter, representing a three-month reduction of
$44.0 million and a year-over-year increase of $36.9 million. The
December 31, 2008 balance was equivalent to 13.00% of total assets and a
book value of $12.25 per share. 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 December
31, 2008, book value per share was calculated based on 344,353,808
shares.
Tangible stockholders' equity totaled $1.7 billion at December 31, 2008,
down $38.6 million from the September 30th balance but up $61.3 million
from the balance recorded at December 31, 2007. The linked-quarter
decline reflects an increase in the accumulated other comprehensive
loss, net of tax (the "AOCL") to $87.3 million, which included an $18.0
million rise in after-tax net unrealized securities losses to $37.2
million; and a $43.8 million rise in the non-cash unrecognized loss
related to the Company's pension and post-retirement plan obligations to
$50.1 million, as the value of the assets in those plans declined. The
year-over-year increase in tangible stockholders' equity largely
reflects the benefit of the Company's common stock offering in May 2008.
The issuance of 17.9 million shares generated net proceeds of $339.2
million; of this amount, $199.2 million served to mitigate the impact of
a debt repositioning charge recorded in the second quarter of the year.(6)
Excluding the AOCL, adjusted tangible stockholders' equity represented
5.94% of adjusted tangible assets at the close of the current fourth
quarter; including the AOCL, the Company's tangible stockholders' equity
represented 5.66% of tangible assets at the same date.(5)
The Company's subsidiary banks also reported solid levels of capital at
the close of the current fourth quarter, and continued to exceed the
requirements for classification as "well capitalized" institutions under
the FDIC Improvement Act. At December 31, 2008, New York Community Bank
had a leverage capital ratio of 7.13%, which was 213 basis points above
the minimum required for "well-capitalized" classification, and New York
Commercial Bank had a leverage capital ratio of 10.33%, exceeding the
minimum required for such classification by 533 basis points.
Earnings Summary for the Three Months
Ended December 31, 2008
In the fourth quarter of 2008, the Company recorded a non-taxable gain
of $16.0 million in connection with the repurchase of certain debt, as
well as a non-cash after-tax charge of $6.2 million for the OTTI of
certain pooled trust preferred securities. The net effect was a $9.8
million, or $0.03 per diluted share, increase in the Company's fourth
quarter 2008 GAAP earnings to $102.2 million, or $0.30 per diluted
share. Excluding the gain on debt repurchase and the OTTI charge, the
Company generated fourth quarter 2008 operating earnings of $92.4
million, or $0.27 per diluted share. (1)
The Company's fourth quarter 2008 earnings were primarily driven by
higher net interest income and the expansion of its net interest margin,
which more than offset the impact of an increase in the provision for
loan losses. Operating expenses fell year-over-year, supporting the rise
in fourth quarter 2008 earnings, but were up modestly from the level
recorded in the trailing three-month period.
In the third quarter of 2008, the Company recorded a non-cash pre-tax
charge of $44.2 million for the OTTI of its investments in Lehman
Brothers Holdings, Inc. and Freddie Mac perpetual preferred stock, as
well as certain pooled trust preferred and other equity securities. The
charge was equivalent to $26.7 million, or $0.08 per diluted share, on
an after-tax basis, and reduced the Company's GAAP earnings for the
quarter to $58.1 million, or $0.17 per diluted share. Excluding this
charge, the Company generated third quarter 2008 operating earnings of
$84.8 million, or $0.25 per diluted share. (1)
In the fourth quarter of 2007, the Company recorded a $2.2 million
pre-tax charge for the allocation of ESOP shares in connection with its
2007 merger transactions (the "merger-related charge") and a $1.0
million pre-tax charge stemming from its membership interest in Visa
U.S.A., a Visa Inc. subsidiary (the "Visa litigation charge"). The $2.8
million after-tax impact of the combined charges was largely offset by a
$2.6 million benefit stemming from certain tax audit developments.
Reflecting these items, the Company recorded GAAP earnings of $67.4
million, or $0.21 per diluted share, in the fourth quarter of 2007.
Excluding these items, the Company recorded fourth quarter 2007
operating earnings of $67.5 million, or $0.21 per diluted share. (1)
Net Interest Income
Year-over-year Comparison
Net interest income rose to $201.6 million in the current fourth quarter
from $154.4 million in the year-earlier three months. The $47.2 million,
or 30.6%, increase was fueled by a $12.0 million increase in interest
income to $411.1 million coupled with a $35.2 million reduction in
interest expense to $209.5 million.
The year-over-year increase in interest income was driven by a $1.8
billion rise in average interest-earning assets to $28.2 billion, as the
average balance of loans rose $1.8 billion, or 9.3%, to $21.6 billion
and the average balance of securities rose $86.6 million to $6.5 billion.
The interest income produced by loans rose $17.4 million year-over-year
to $320.1 million, as the higher average balance more than offset the
impact of a 20-basis point decline in the average yield to 5.92%. The
reduction in the average yield was partly due to a $2.1 million decline
in prepayment penalty income to $2.4 million, as refinancing activity
decreased in the face of growing economic uncertainty. In addition,
while the average yield on the Company's multi-family and CRE loans
exceeded the average five-year CMT by 384 and 228 basis points,
respectively, in the current and year-earlier fourth quarters, the
average five-year CMT declined to 2.17% from 3.80% during the respective
periods. Furthermore, declines in the prime rate of interest and other
indices resulted in the yields on construction and other loans declining
over the course of the year.
While the average balance of securities rose year-over-year, as
mentioned, the interest income produced by such assets declined by $2.8
million to $90.9 million in the fourth quarter of 2008. The decline was
a function of a 25-basis point reduction in the average yield on such
assets to 5.55%.
The reduction in interest expense was primarily due to a decline in
funding costs as the FOMC reduced the federal funds rate, enabling the
Company to substantially reduce its average cost of interest-bearing
deposits, as well as its average cost of borrowed funds. In addition, in
the second quarter of the year, the Company replaced $4.0 billion of
higher-cost borrowed funds with $3.8 billion of lower-cost wholesale
borrowings.
As a result, the average cost of interest-bearing deposits declined 101
basis points to 2.37% from the year-earlier average, and the average
cost of borrowed funds fell 55 basis points, to 3.90%. The benefit of
these reductions more than offset the impact of a $1.4 billion rise in
the average balance of interest-bearing deposits to $13.5 billion and a
$526.0 million rise in the average balance of borrowed funds to $13.2
billion, respectively. The net effect was a $22.8 million decline in the
interest expense produced by interest-bearing deposits to $80.4 million,
and a $12.4 million decline in the interest expense produced by borrowed
funds to $129.1 million. As a result, the interest expense produced by
interest-bearing liabilities in the current fourth quarter was $35.2
million lower than the year-earlier level, the net effect of a $1.9
billion increase in the average balance to $26.7 billion and an 80-basis
point reduction in the average cost of funds to 3.13%.
Linked-quarter Comparison
Net interest income rose $19.7 million, or 10.8%, in the current fourth
quarter from the level recorded in the third quarter of 2008. The
increase was attributable to a $12.7 million rise in interest income
coupled with a $7.0 million decline in interest expense.
The linked-quarter increase in interest income was primarily fueled by
loan production, which boosted the average balance of loans by $576.0
million over the three-month period. While the average yield on loans
fell 10 basis points, partly reflecting a $1.5 million decline in
prepayment penalty income, the interest income produced by loans rose
$3.3 million during the three months ended December 31, 2008.
The increase in interest income was also fueled by a $9.5 million
increase in the interest income produced by securities, as a $381.2
million rise in the average balance was accompanied by a 27-basis point
rise in the average yield. The higher yield reflects the acceleration of
cash flows on certain securities.
The linked-quarter reduction in interest expense was the net effect of a
$1.0 billion increase in the average balance of interest-bearing
liabilities and a 23-basis point decline in the average cost of funds.
Reflecting the decline in short-term interest rates over the course of
the quarter, the cost of interest-bearing deposits declined 29 basis
points from the trailing quarter level, and the cost of borrowed funds
declined by 17 basis points.
The interest expense produced by interest-bearing deposits declined by
$6.0 million, as the reduction in the average cost exceeded the impact
of a $577.3 million rise in the average balance of such funds.
Similarly, the interest expense produced by borrowed funds declined by
$987,000 linked quarter, as the impact of a $440.2 million rise in the
average balance was exceeded by the lower average cost.
Net Interest Margin
The substantial reduction in funding costs combined with the growth in
interest-earning assets to produce significant margin expansion in the
fourth quarter of 2008. At 2.87%, the margin was up 19 basis points from
the trailing-quarter measure and 51 basis points year-over-year. The
three- and twelve-month increases were somewhat tempered by the
aforementioned decline in prepayment penalty income, which added three
basis points to the Company's current fourth quarter margin, as compared
to five basis points in the trailing quarter and seven basis points in
the fourth quarter of 2007.
Provision for Loan Losses
The Company recorded loan loss provisions of $5.6 million in the current
fourth quarter and $400,000 in the three months ended September 30,
2008. The increase was based on management's assessment of the adequacy
of the loan loss allowance at year-end, which considered, among other
factors, the level of non-performing loans recorded during the fourth
quarter and the current economic environment. The Company did not record
a loan loss provision in the fourth quarter of 2007.
Non-interest Income (Loss)
The Company recorded non-interest income of $29.0 million in the current
fourth quarter, as compared to $26.5 million in the year-earlier three
months. The year-over-year increase was primarily due to the $16.0
million gain on debt repurchase, which more than offset the $10.6
million OTTI charge. In addition, BOLI income rose $966,000
year-over-year to $7.7 million in the fourth quarter of 2008. These
increases were partly offset by a $1.1 million reduction in fee income
to $10.0 million and by a $2.9 million decline in other income to $5.8
million. The latter decline primarily reflects a $1.3 million reduction
in the revenues produced by Peter B. Cannell & Co., Inc. ("PBC") in the
wake of the broad decline in the capital markets.
By comparison, the Company recorded a non-interest loss of $19.3 million
in the trailing quarter, reflecting an OTTI charge of $44.2 million,
which exceeded the sum of the fee income, BOLI income, and other income
produced during that time. On a linked-quarter basis, the fee income
generated in the fourth quarter of 2008 was $407,000 less than the
trailing-quarter level. In addition, the other income produced in the
current fourth quarter declined $1.6 million over the three-month
period. The linked-quarter decline in other income was attributable to a
$1.0 million reduction in the revenues produced through the sale of
third-party investment products and to an $800,000 reduction in revenues
produced by PBC. These reductions were tempered by a linked-quarter
increase of $723,000 in BOLI income.
Please see the reconciliations of the Company's GAAP and operating
earnings for the three months ended December 31, 2008, September 30,
2008, and December 31, 2007 that appear later in this release for a
further discussion of the impact of the aforementioned gains and losses
on the Company's financial performance in the respective periods.
Non-interest Expense
The Company recorded non-interest expense of $86.7 million in the
current fourth quarter, signifying a linked-quarter increase of $2.3
million and a $1.3 million reduction year-over-year. The linked-quarter
increase was due to a $2.3 million rise in operating expenses to $80.9
million, as a $2.0 million reduction in compensation and benefits
expense to $40.8 million was exceeded by a $562,000 increase in
occupancy and equipment expense to $18.1 million, and by a $3.8 million
increase in general and administrative ("G&A") expense to $22.0 million.
The reduction in compensation and benefits expense primarily reflects a
decline in post-retirement benefits plan-related expenses, while the
increase in G&A expense was primarily due to an increase in FDIC
insurance premiums, together with higher advertising costs and
professional fees.
The year-over-year reduction in operating expenses reflects a $1.1
million decline in occupancy and equipment expense, partly reflecting
the closure of three branches, together with a $694,000 reduction in
compensation and benefits expense. The benefit of these declines was
only partly offset by an $844,000 increase in G&A expense.
Also included in fourth quarter 2008 non-interest expense was core
deposit intangible ("CDI") amortization of $5.7 million, down $24,000
and $345,000, respectively, over the three- and twelve-month periods.
Reflecting the increase in revenues and the level of operating expenses
recorded, the Company's GAAP efficiency ratio improved to 35.09% in the
current fourth quarter from 48.34% and 45.24%, respectively, in the
trailing and year-earlier three months. On an operating basis, the
Company's efficiency ratio improved to 35.94% in the current fourth
quarter from 38.01% and 43.44%, respectively, in the earlier periods. (5)
Income Tax Expense
The Company recorded pre-tax income of $138.4 million and income tax
expense of $36.1 million in the current fourth quarter, as compared to
pre-tax income of $93.0 million and income tax expense of $25.6 million
in the fourth quarter of 2007. The $10.6 million OTTI charge and the
$16.0 million non-taxable gain on debt repurchase contributed to the
Company's recording an effective tax rate of 26.12% in the current
fourth quarter, as compared to 27.54% in the year-earlier three months.
In the third quarter of 2008, the Company recorded income tax expense of
$19.7 million, as the $44.2 million OTTI charge reduced the Company's
pre-tax income to $77.8 million, contributing to the Company's recording
an effective tax rate of 25.38%.
Company Profile
New York Community Bancorp, Inc. is the holding company for New York
Community Bank, with 178 locations in Metro New York and New Jersey, and
New York Commercial Bank, with 38 locations in Manhattan, Queens,
Brooklyn, Westchester County, and Long Island, in New York. At December
31, 2008, the Company ranked 25th among U.S. banks and thrifts, with
total assets of $32.5 billion, and 20th among publicly traded banks and
thrifts, with a $4.1 billion market cap. In addition, the Company is a
leading producer of multi-family loans in New York City with an emphasis
on loans secured by rent-regulated properties.
Reflecting its growth through a series of accretive mergers and
acquisitions, the Community Bank currently operates through six local
divisions: Queens County Savings Bank, Roslyn Savings Bank, Richmond
County Savings Bank, Roosevelt Savings Bank, Synergy Bank, and Garden
State Community Bank. Similarly, the Commercial Bank operates 19 of its
branches under the name Atlantic Bank. Additional information about New
York Community Bancorp, Inc. and its bank subsidiaries is available at www.myNYCB.com
and www.NewYorkCommercialBank.com.
Post-Earnings Conference Call
As previously announced, the Company will host a conference call on
January 27, 2009 at 9:30 a.m. (ET) to discuss its fourth quarter and
full-year 2008 performance and strategies. The conference call may be
accessed by dialing 877-741-4239 (for domestic calls) or 719-325-4792
(for international calls) and providing the following access code:
6864921. A replay will be available approximately two hours following
completion of the call through midnight on February 1st, and may be
accessed by calling 888-203-1112 (domestic) or 719-457-0820
(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 February 27, 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 markets or the banking industry; changes in
interest rates, which may affect our net income, prepayment penalties,
and other future cash flows, or the market value of our assets; changes
in deposit flows and wholesale borrowing facilities; changes in the
demand for deposit, loan, and investment products and other financial
services in the markets we serve; changes in our credit ratings; changes
in the financial or operating performance of our customers' businesses;
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 investment portfolios; changes in competitive
pressures among financial institutions or from non-financial
institutions; changes in our customer base; our ability to successfully
integrate any assets, liabilities, customers, systems, and management
personnel we may acquire into our operations, and our ability to realize
the related cost savings within the expected time frames; potential
exposure to unknown or contingent liabilities of companies we target for
acquisition; our ability to retain key members of management; 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; 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; 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; changes in estimates of future reserve requirements
based upon the periodic review thereof under relevant regulatory and
accounting requirements; changes in legislation, regulation, and
policies, including, but not limited to, those pertaining to banking,
securities, tax, environmental protection, and insurance, and the
ability to comply with such changes in a timely manner; changes in
accounting principles, policies, practices, or guidelines; 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; the ability to keep pace
with, and implement on a timely basis, technological changes; changes in
the monetary and fiscal policies of the U.S. Government, including
policies of the U.S. Treasury and the Federal Reserve Board; war or
terrorist activities; and other economic, competitive, governmental,
regulatory, and geopolitical factors affecting our operations, pricing,
and services.
Furthermore, the timing and occurrence or non-occurrence of events
may be subject to circumstances beyond the Company's control.
In addition, it should be noted that the Company routinely evaluates
opportunities to expand through acquisition and frequently conducts 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.
For a discussion of these and other risks that may cause actual
results to differ from expectations, please refer to our Annual Report
on Form 10-K for the year ended December 31, 2007, including the section
entitled "Risk Factors," and our Quarterly Reports on Form 10-Q for the
quarters ended September 30, 2008, June 30, 2008, and March 31, 2008, on
file with the U.S. Securities and Exchange Commission (the "SEC").
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Except as required by applicable law or regulation, the Company
undertakes no obligation to update these forward-looking statements to
reflect events or circumstances that occur after the date on which such
statements were made.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share data)
December 31, December 31,
2008 2007
(unaudited)
Assets
Cash and cash equivalents $ 203,216 $ 335,743
Securities available for sale:
Mortgage-related 833,684 973,324
Other 176,818 407,932
Total available-for-sale securities 1,010,502 1,381,256
Securities held to maturity:
Mortgage-related 3,164,856 2,479,483
Other 1,726,135 1,883,162
Total held-to-maturity securities 4,890,991 4,362,645
Total securities 5,901,493 5,743,901
Mortgage loans:
Multi-family 15,725,654 14,055,438
Commercial real estate 4,551,025 3,825,926
Construction 776,559 1,136,652
1-4 family 266,307 380,779
Total mortgage loans 21,319,545 19,398,795
Other loans 872,667 964,453
Total loans 22,192,212 20,363,248
Less: Allowance for loan losses (94,368 ) (92,794 )
Loans, net 22,097,844 20,270,454
Federal Home Loan Bank of New York stock, at 400,979 423,069
cost
Premises and equipment, net 217,762 214,906
Goodwill 2,436,401 2,437,404
Core deposit intangibles, net 87,780 111,123
Other assets 1,121,431 1,043,222
Total assets $ 32,466,906 $ 30,579,822
Liabilities and Stockholders' Equity
Deposits:
NOW and money market accounts $ 3,818,952 $ 2,456,756
Savings accounts 2,629,168 2,514,189
Certificates of deposit 6,796,971 6,913,036
Non-interest-bearing accounts 1,047,363 1,273,352
Total deposits 14,292,454 13,157,333
Borrowed funds:
Wholesale borrowings 12,343,064 12,193,610
Junior subordinated debentures 484,216 484,843
Other borrowings 669,430 237,219
Total borrowed funds 13,496,710 12,915,672
Mortgagors' escrow 83,194 78,468
Other liabilities 375,302 246,036
Total liabilities 28,247,660 26,397,509
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; 344,985,111 and 323,812,639 shares 3,450 3,238
issued and outstanding at the respective dates)
Paid-in capital in excess of par 4,181,599 3,812,718
Retained earnings 123,511 390,757
Unallocated common stock held by ESOP (1,995 ) (3,085 )
Accumulated other comprehensive loss, net of
tax:
Net unrealized loss on available for sale (32,506 ) (7,625 )
securities, net of tax
Net unrealized loss on securities transferred
from available for sale to held to maturity, net (4,706 ) (7,211 )
of tax
Net unrealized loss on pension and (50,107 ) (6,479 )
post-retirement obligations, net of tax
Total accumulated other comprehensive loss, net (87,319 ) (21,315 )
of tax
Total stockholders' equity 4,219,246 4,182,313
Total liabilities and stockholders' equity $ 32,466,906 $ 30,579,822
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Three Months Ended For the Twelve Months Ended
December September December December 31, December 31,
31, 30, 31,
2008 2008 2007 2008 2007
Interest Income:
Mortgage and other $ 320,127 $ 316,780 $ 302,747 $ 1,260,291 $ 1,217,348
loans
Securities 90,921 81,467 93,726 341,895 319,566
Money market 58 152 2,638 2,943 29,831
investments
Total interest 411,106 398,399 399,111 1,605,129 1,566,745
income
Interest Expense:
NOW and money market 13,941 13,346 17,131 54,599 90,346
accounts
Savings accounts 4,466 5,789 7,382 22,075 27,588
Certificates of 61,968 67,274 78,613 271,615 307,764
deposit
Borrowed funds 129,099 130,086 141,544 581,241 524,391
Mortgagors' escrow 25 25 33 104 126
Total interest 209,499 216,520 244,703 929,634 950,215
expense
Net interest income 201,607 181,879 154,408 675,495 616,530
Provision for loan 5,600 400 -- 7,700 --
losses
Net interest income
after provision for 196,007 181,479 154,408 667,795 616,530
loan losses
Non-interest Income
(Loss):
Fee income 9,995 10,402 11,046 41,191 42,170
Bank-owned life 7,744 7,021 6,778 28,644 26,142
insurance
Net gain on sale of 5 -- -- 573 1,888
securities
Loss on
other-than-temporary (10,562 ) (44,160 ) -- (104,317 ) (56,958 )
impairment of
securities
Gain (loss) on debt 16,036 -- -- 16,962 (1,848 )
repurchases
Gain on sale of -- -- -- -- 64,879
bank-owned property
Other 5,805 7,405 8,674 32,476 34,819
Total non-interest 29,023 (19,332 ) 26,498 15,529 111,092
income (loss)
Non-interest
Expense:
Operating expenses:
Compensation and 40,795 42,769 41,489 169,970 159,217
benefits
Occupancy and 18,147 17,585 19,210 70,654 68,543
equipment
General and 21,980 18,224 21,136 80,194 71,815
administrative
Total operating 80,922 78,578 81,835 320,818 299,575
expenses
Debt repositioning -- -- -- 285,369 3,190
charge
Amortization of core
deposit
intangibles 5,733 5,757 6,078 23,343 22,758
Total non-interest 86,655 84,335 87,913 629,530 325,523
expense
Income before income 138,375 77,812 92,993 53,794 402,099
taxes
Income tax expense 36,143 19,748 25,613 (24,090 ) 123,017
(benefit)
Net Income $ 102,232 $ 58,064 $ 67,380 $ 77,884 $ 279,082
Basic earnings per $ 0.30 $ 0.17 $ 0.21 $ 0.23 $ 0.90
share
Diluted earnings per $ 0.30 $ 0.17 $ 0.21 $ 0.23 $ 0.90
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 December 31, 2008, September 30, 2008, and December 31, 2007 and for the twelve
months ended December 31, 2008 and 2007 follow:
For the Three Months Ended For the Twelve Months
Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
(in thousands,
except per share 2008 2008 2007 2008 2007
data)
GAAP Earnings $ 102,232 $ 58,064 $ 67,380 $ 77,884 $ 279,082
Adjustments to GAAP
earnings:
Debt repositioning -- -- -- 325,016 3,190
charge
Loss on
other-than-temporary 10,562 44,160 -- 104,317 56,958
impairment of
securities
Litigation -- -- -- 3,365 --
settlement charge
Visa-related charge -- -- 1,000 (1,647 ) 1,000
(gain)
Net gain on sale of -- -- -- -- (1,888 )
securities
Gain on sale of -- -- -- -- (64,879 )
bank-owned property
Merger-related -- -- 2,245 -- 2,245
charge
(Gain) loss on debt (16,036 ) -- -- (16,962 ) 1,848
repurchases
Benefit of tax audit -- -- (2,634 ) -- (2,634 )
developments
Income tax effect (4,316 ) (17,445 ) (476 ) (169,467 ) 392
Operating earnings $ 92,442 $ 84,779 $ 67,515 $ 322,506 $ 275,314
Diluted GAAP $ 0.30 $ 0.17 $ 0.21 $ 0.23 $ 0.90
Earnings per Share
Adjustments to
diluted GAAP
earnings per share:
Debt repositioning -- -- -- 0.60 0.01
charge
Loss on
other-than-temporary 0.02 0.08 -- 0.19 0.12
impairment of
securities
Litigation -- -- -- 0.01 --
settlement charge
Visa-related charge -- -- -- (0.01 ) --
(gain)
Net gain on sale of -- -- -- -- --
securities
Gain on sale of -- -- -- -- (0.15 )
bank-owned property
Merger-related -- -- 0.01 -- 0.01
charge
(Gain) loss on debt (0.05 ) -- -- (0.06 ) --
repurchases
Benefit of tax audit -- -- (0.01 ) -- (0.01 )
developments
Diluted operating $ 0.27 $ 0.25 $ 0.21 $ 0.96 $ 0.88
earnings per share
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATION OF GAAP AND CASH EARNINGS
(unaudited)
While 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 later
in this release.) 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 December 31, 2008, September 30, 2008, and December 31, 2007 follows:
For the
Three Months Ended
Dec. 31, Sept. 30, Dec. 31,
(in thousands, except per share data) 2008 2008 2007
GAAP Earnings $ 102,232 $ 58,064 $ 67,380
Additional contributions to tangible
stockholders' equity:
Amortization and appreciation of shares 3,236 3,558 5,143
held in stock-related benefit plans (1)
Associated tax effect (2,071 ) 1,375 216
Dividends on unallocated ESOP shares 245 244 366
Amortization of core deposit intangibles 5,733 5,757 6,078
Loss on other-than-temporary impairment of 6,246 26,715 --
securities
Visa litigation charge -- -- 650
Total additional contributions to tangible 13,389 37,649 12,453
stockholders' equity
Cash earnings $ 115,621 $ 95,713 $ 79,833
Diluted GAAP Earnings per Share $ 0.30 $ 0.17 $ 0.21
Additional contributions to diluted GAAP
earnings per share:
Amortization and appreciation of shares 0.01 0.01 0.02
held in stock-related benefit plans(1)
Associated tax effect (0.01 ) -- --
Dividends on unallocated ESOP shares -- -- --
Amortization of core deposit intangibles 0.02 0.02 0.02
Loss on other-than-temporary impairment of 0.02 0.08 --
securities
Visa litigation charge -- -- --
Total additional contributions to diluted 0.04 0.11 0.04
GAAP earnings per share
Diluted cash earnings per share $ 0.34 $ 0.28 $ 0.25
Cash Earnings Data:
Cash return on average assets 1.44 % 1.22 % 1.05 %
Cash return on average tangible assets (2) 1.56 1.33 1.15
Cash return on average stockholders' equity 11.05 9.07 7.63
Cash return on average tangible 27.90 22.72 19.59
stockholders' equity (2)
Cash efficiency ratio (3) 32.21 36.29 41.84
(1) The amount for the three months ended December 31, 2007 includes a non-cash
pre-tax merger-related charge of $2.2 million.
(2) Please see the reconciliations of stockholders' equity and tangible
stockholders' equity, total assets and tangible assets, and the related capital
measures later in this release.
(3) The Company calculates its cash efficiency ratio by dividing its operating
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 after-tax net unrealized losses on
securities and pension and post-retirement obligations. The Company also calculates its ratio
of tangible stockholders' equity to tangible assets excluding the accumulated other
comprehensive loss, net of tax (which includes both after-tax net unrealized losses on
securities and after-tax pension and post-retirement obligations), as such losses 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 capital 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 December 31, 2008, September 30, 2008, and December 31, 2007 and the twelve
months ended December 31, 2008 and 2007 follow:
At or for the At or for the
Three Months Ended Twelve Months Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2008 2008 2007 2008 2007
(in
thousands)
Total
Stockholders' $ 4,219,246 $ 4,263,231 $ 4,182,313 $ 4,219,246 $ 4,182,313
Equity
Less: (2,436,401 ) (2,436,060 ) (2,437,404 ) (2,436,401 ) (2,437,404 )
Goodwill
Core deposit (87,780 ) (93,513 ) (111,123 ) (87,780 ) (111,123 )
intangibles
Tangible
stockholders' $ 1,695,065 $ 1,733,658 $ 1,633,786 $ 1,695,065 $ 1,633,786
equity
Total Assets $ 32,466,906 $ 32,139,500 $ 30,579,822 $ 32,466,906 $ 30,579,822
Less: (2,436,401 ) (2,436,060 ) (2,437,404 ) (2,436,401 ) (2,437,404 )
Goodwill
Core deposit (87,780 ) (93,513 ) (111,123 ) (87,780 ) (111,123 )
intangibles
Tangible $ 29,942,725 $ 29,609,927 $ 28,031,295 $ 29,942,725 $ 28,031,295
assets
Tangible
Stockholders' $ 1,695,065 $ 1,733,658 $ 1,633,786 $ 1,695,065 $ 1,633,786
Equity
Add back:
Accumulated
other 87,319 25,509 21,315 87,319 21,315
comprehensive
loss, net of
tax
Adjusted
tangible $ 1,782,384 $ 1,759,167 $ 1,655,101 $ 1,782,384 $ 1,655,101
stockholders'
equity
Tangible $ 29,942,725 $ 29,609,927 $ 28,031,295 $ 29,942,725 $ 28,031,295
Assets
Add back:
Accumulated
other 87,319 25,509 21,315 87,319 21,315
comprehensive
loss, net of
tax
Adjusted
tangible $ 30,030,044 $ 29,635,436 $ 28,052,610 $ 30,030,044 $ 28,052,610
assets
Average
Stockholders' $ 4,185,087 $ 4,218,968 $ 4,182,944 $ 4,177,332 $ 3,915,942
Equity
Less: Average (2,436,173 ) (2,436,872 ) (2,437,732 ) (2,436,818 ) (2,314,729 )
goodwill
Average core
deposit (91,477 ) (97,266 ) (115,078 ) (100,148 ) (114,077 )
intangibles
Average
tangible $ 1,657,437 $ 1,684,830 $ 1,630,134 $ 1,640,366 $ 1,487,136
stockholders'
equity
Average $ 32,116,431 $ 31,285,798 $ 30,407,154 $ 31,159,776 $ 29,648,572
Assets
Less: Average (2,436,173 ) (2,436,872 ) (2,437,732 ) (2,436,818 ) (2,314,729 )
goodwill
Average core
deposit (91,477 ) (97,266 ) (115,078 ) (100,148 ) (114,077 )
intangibles
Average
tangible $ 29,588,781 $ 28,751,660 $ 27,854,344 $ 28,622,810 $ 27,219,766
assets
Net Income $ 102,232 $ 58,064 $ 67,380 $ 77,884 $ 279,082
Add back:
Amortization
of core 3,497 3,494 3,678 14,183 13,788
deposit
intangibles,
net of tax
Adjusted net $ 105,729 $ 61,558 $ 71,058 $ 92,067 $ 292,870
income
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
For the Three Months Ended December 31,
2008 2007
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 21,608,984 $ 320,127 5.92 % $ 19,766,367 $ 302,747 6.12 %
loans, net
Securities 6,547,368 90,921 5.55 6,460,817 93,726 5.80
Money market 23,687 58 0.97 191,583 2,638 5.46
investments
Total
interest-earning 28,180,039 411,106 5.83 26,418,767 399,111 6.04
assets
Non-interest-earning 3,936,392 3,988,387
assets
Total assets $ 32,116,431 $ 30,407,154
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 3,751,383 $ 13,941 1.48 % $ 2,569,245 $ 17,131 2.65 %
accounts
Savings accounts 2,638,730 4,466 0.67 2,562,258 7,382 1.14
Certificates of 6,931,005 61,968 3.56 6,826,417 78,613 4.57
deposit
Mortgagors' escrow 182,571 25 0.05 133,691 33 0.10
Total
interest-bearing 13,503,689 80,400 2.37 12,091,611 103,159 3.38
deposits
Borrowed funds 13,163,191 129,099 3.90 12,637,183 141,544 4.45
Total
interest-bearing 26,666,880 209,499 3.13 24,728,794 244,703 3.93
liabilities
Non-interest-bearing 1,062,786 1,251,657
deposits
Other liabilities 201,678 243,759
Total liabilities 27,931,344 26,224,210
Stockholders' equity 4,185,087 4,182,944
Total liabilities
and stockholders' $ 32,116,431 $ 30,407,154
equity
Net interest
income/interest rate $ 201,607 2.70 % $ 154,408 2.11 %
spread
Net interest-earning
assets/net interest $ 1,513,159 2.87 % $ 1,689,973 2.36 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.07 x
interest-bearing
liabilities
Core deposits (1) $ 7,452,899 $ 18,407 0.98 % $ 6,383,160 $ 24,513 1.52 %
(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
December 31, 2008 September 30, 2008
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 21,608,984 $ 320,127 5.92 % $ 21,032,989 $ 316,780 6.02 %
loans, net
Securities 6,547,368 90,921 5.55 6,166,138 81,467 5.28
Money market 23,687 58 0.97 39,803 152 1.52
investments
Total
interest-earning 28,180,039 411,106 5.83 27,238,930 398,399 5.85
assets
Non-interest-earning 3,936,392 4,046,868
assets
Total assets $ 32,116,431 $ 31,285,798
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 3,751,383 $ 13,941 1.48 % $ 3,139,091 $ 13,346 1.69 %
accounts
Savings accounts 2,638,730 4,466 0.67 2,745,852 5,789 0.84
Certificates of 6,931,005 61,968 3.56 6,938,374 67,274 3.86
deposit
Mortgagors' escrow 182,571 25 0.05 103,054 25 0.10
Total
interest-bearing 13,503,689 80,400 2.37 12,926,371 86,434 2.66
deposits
Borrowed funds 13,163,191 129,099 3.90 12,722,990 130,086 4.07
Total
interest-bearing 26,666,880 209,499 3.13 25,649,361 216,520 3.36
liabilities
Non-interest-bearing 1,062,786 1,167,962
deposits
Other liabilities 201,678 249,507
Total liabilities 27,931,344 27,066,830
Stockholders' equity 4,185,087 4,218,968
Total liabilities
and stockholders' $ 32,116,431 $ 31,285,798
equity
Net interest
income/interest rate $ 201,607 2.70 % $ 181,879 2.49 %
spread
Net interest-earning
assets/net interest $ 1,513,159 2.87 % $ 1,589,569 2.68 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.06 x
interest-bearing
liabilities
Core deposits (1) $ 7,452,899 $ 18,407 0.98 % $ 7,052,905 $ 19,135 1.08 %
(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 Twelve Months Ended December 31,
2008 2007
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 20,843,714 $ 1,260,291 6.05 % $ 19,425,469 $ 1,217,348 6.27 %
loans, net
Securities 6,248,079 341,895 5.47 5,873,649 319,566 5.44
Money market 106,747 2,943 2.76 594,533 29,831 5.02
investments
Total
interest-earning 27,198,540 1,605,129 5.90 25,893,651 1,566,745 6.05
assets
Non-interest-earning 3,961,236 3,754,921
assets
Total assets $ 31,159,776 $ 29,648,572
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 3,131,137 $ 54,599 1.74 % $ 2,925,648 $ 90,346 3.09 %
accounts
Savings accounts 2,617,590 22,075 0.84 2,530,191 27,588 1.09
Certificates of 6,811,031 271,615 3.99 6,683,162 307,764 4.61
deposit
Mortgagors' escrow 148,512 104 0.07 130,035 126 0.10
Total
interest-bearing 12,708,270 348,393 2.74 12,269,036 425,824 3.47
deposits
Borrowed funds 12,890,813 581,241 4.51 11,991,559 524,391 4.37
Total
interest-bearing 25,599,083 929,634 3.63 24,260,595 950,215 3.92
liabilities
Non-interest-bearing 1,170,999 1,192,683
deposits
Other liabilities 212,362 279,352
Total liabilities 26,982,444 25,732,630
Stockholders' equity 4,177,332 3,915,942
Total liabilities
and stockholders' $ 31,159,776 $ 29,648,572
equity
Net interest
income/interest rate $ 675,495 2.27 % $ 616,530 2.13 %
spread
Net interest-earning
assets/net interest $ 1,599,457 2.48 % $ 1,633,056 2.38 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.07 x
interest-bearing
liabilities
Core deposits (1) $ 6,919,726 $ 76,674 1.11 % $ 6,648,522 $ 117,934 1.77 %
(1)Refers to all deposits other than certificates of deposit.
Please see the following table for an analysis of the Company's adjusted net interest income
for the twelve months ended December 31, 2008 as compared to its net interest income for the
twelve months ended December 31, 2007. The adjusted net interest income analysis for the
twelve months ended December 31, 2008 excludes the impact of the $39.6 million debt
repositioning charge recorded in the three months ended June 30, 2008.
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 twelve
months ended December 31, 2008 and 2007 as if the $39.6 million debt repositioning charge
recorded in the second quarter of 2008, and mentioned earlier in this release, 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
twelve months ended December 31, 2008 absent the impact of the debt repositioning charge:
interest expense on average 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 twelve months ended December 31, 2007.
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 Twelve Months Ended December 31,
2008 2007
Average Average
Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost
Assets:
Interest-earning
assets:
Mortgage and other $ 20,843,714 $ 1,260,291 6.05 % $ 19,425,469 $ 1,217,348 6.27 %
loans, net
Securities 6,248,079 341,895 5.47 5,873,649 319,566 5.44
Money market 106,747 2,943 2.76 594,533 29,831 5.02
investments
Total
interest-earning 27,198,540 1,605,129 5.90 25,893,651 1,566,745 6.05
assets
Non-interest-earning 3,961,236 3,754,921
assets
Total assets $ 31,159,776 $ 29,648,572
Liabilities and
Stockholders'
Equity:
Interest-bearing
deposits:
NOW and money market $ 3,131,137 $ 54,599 1.74 % $ 2,925,648 $ 90,346 3.09 %
accounts
Savings accounts 2,617,590 22,075 0.84 2,530,191 27,588 1.09
Certificates of 6,811,031 271,615 3.99 6,683,162 307,764 4.61
deposit
Mortgagors' escrow 148,512 104 0.07 130,035 126 0.10
Total
interest-bearing 12,708,270 348,393 2.74 12,269,036 425,824 3.47
deposits
Borrowed funds 12,890,813 541,594 4.20 11,991,559 524,391 4.37
Total
interest-bearing 25,599,083 889,987 3.48 24,260,595 950,215 3.92
liabilities
Non-interest-bearing 1,170,999 1,192,683
deposits
Other liabilities 212,362 279,352
Total liabilities 26,982,444 25,732,630
Stockholders' equity 4,177,332 3,915,942
Total liabilities
and stockholders' $ 31,159,776 $ 29,648,572
equity
Net interest
income/interest rate $ 715,142 2.42 % $ 616,530 2.13 %
spread
Net interest-earning
assets/net interest $ 1,599,457 2.63 % $ 1,633,056 2.38 %
margin
Ratio of
interest-earning
assets to 1.06 x 1.07 x
interest-bearing
liabilities
Core deposits (1) $ 6,919,726 $ 76,674 1.11 % $ 6,648,522 $ 117,934 1.77 %
(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 Twelve Months Ended
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2008 2008 2007 2008 2007
GAAP EARNINGS
DATA:
Net income $ 102,232 $ 58,064 $ 67,380 $ 77,884 $ 279,082
Basic
earnings per 0.30 0.17 0.21 0.23 0.90
share
Diluted
earnings per 0.30 0.17 0.21 0.23 0.90
share
Return on
average 1.27 % 0.74 % 0.89 % 0.25 % 0.94 %
assets
Return on
average 1.43 0.86 1.02 0.32 1.08
tangible
assets (1)
Return on
average 9.77 5.51 6.44 1.86 7.13
stockholders'
equity
Return on
average
tangible 25.52 14.61 17.44 5.61 19.69
stockholders'
equity (1)
Efficiency 35.09 48.34 45.24 46.43 41.17
ratio (2)
Operating
expenses to 1.01 1.00 1.08 1.03 1.01
average
assets
Interest rate 2.70 2.49 2.11 2.27 2.13
spread
Net interest 2.87 2.68 2.36 2.48 2.38
margin
Shares used
for basic EPS 342,500,098 341,971,926 321,556,331 334,657,211 309,535,954
computation
Shares used
for diluted 342,653,466 342,826,668 323,311,364 335,371,065 311,102,992
EPS
computation
OPERATING
EARNINGS
DATA:(3)
Operating $ 92,442 $ 84,779 $ 67,515 $ 322,506 $ 275,314
earnings
Basic
operating 0.27 0.25 0.21 0.96 0.89
earnings per
share
Diluted
operating 0.27 0.25 0.21 0.96 0.88
earnings per
share
Return on
average 1.15 % 1.08 % 0.89 % 1.04 % 0.93 %
assets
Return on
average 1.30 1.23 1.02 1.18 1.06
tangible
assets (1)
Return on
average 8.84 8.04 6.46 7.72 7.03
stockholders'
equity
Return on
average
tangible 23.15 20.96 17.47 20.53 19.44
stockholders'
equity (1)
Operating
efficiency 35.94 38.01 43.44 38.89 41.18
ratio (2)
(1) Please see the reconciliations of stockholders' equity and tangible stockholders' equity,
total assets and tangible assets, and the related capital measureselsewhere in this release.
(2) The Company calculates its GAAP and operating efficiency ratios by dividing 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 elsewhere in this release.
(3) Please see the reconciliations of GAAP and operating earnings elsewhere in this release.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
At December 31, At September 30, At December 31,
2008 2008 2007
BALANCE SHEET DATA:
Book value per share $ 12.25 $ 12.41 $ 12.95
Tangible book value per 4.92 5.05 5.06
share(1)
Stockholders' equity to 13.00 % 13.26 % 13.68 %
total assets
Tangible stockholders'
equity to tangible assets 5.66 5.85 5.83
(1)
Tangible stockholders'
equity to tangible assets
excluding accumulated 5.94 5.94 5.90
other comprehensive loss,
net of tax(1)
Shares used for book value
and tangible book value 344,353,808 343,467,420 322,834,839
per share computations(1)
Total shares issued and 344,985,111 344,185,347 323,812,639
outstanding
ASSET QUALITY RATIOS:
Non-performing loans to 0.51 % 0.29 % 0.11 %
total loans
Non-performing assets to 0.35 0.19 0.07
total assets
Allowance for loan losses 83.00 150.10 418.14
to non-performing loans
Allowance for loan losses 0.43 0.43 0.46
to total loans
(1) Please see the reconciliations of stockholders' equity and tangible
stockholders' equity, total assets and tangible assets, and the related capital
measures elsewhere in this release.
Footnotes to the Text
(1) Please see the reconciliations of the Company's GAAP and operating
earnings for the three months ended December 31, 2008, September 30,
2008, and December 31, 2007, and for the twelve months ended December
31, 2008 and 2007 elsewhere in this release.
(2) Please see the reconciliation of the Company's GAAP and cash
earnings for the three months ended December 31, 2008 elsewhere in this
release.
(3) The SNL Bank & Thrift Index data referenced in this release are a
weighted average of the fourth quarter 2008 and/or December 31, 2008
asset quality measures reported by 128 publicly traded American banks
and thrifts as of January 23, 2009.
(4) Please see the discussion and analysis of the Company's net interest
income and adjusted net interest income for the twelve months ended
December 31, 2008 elsewhere in this release.
(5) The Company calculates its GAAP and operating efficiency ratios by
dividing 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 elsewhere in this release.
(6) Please see the reconciliations of the Company's stockholders' equity
and tangible stockholders' equity, its total assets and tangible assets,
and the related capital measures elsewhere 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