New York Community Bancorp, Inc. Reports 2nd Quarter 2006 Diluted Cash EPS of $0.26 & Diluted Operating EPS of $0.24, Excluding a Post-Merger Repositioning Charge, & Diluted GAAP EPS of $0.18 (1) (2).WESTBURY Westbury, residential village (1990 pop. 13,060), Nassau co., SE N.Y., on Long Island; settled 1650, inc. 1932. The State Univ. of New York's Westbury campus is located in the village. Harness races are held at Roosevelt Raceway there. , N.Y. -- New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Community Bancorp, Inc. (NYSE NYSE See: New York Stock Exchange : NYB NYB Not Your Business ):
Board of Directors Declares $0.25 Per Share Quarterly Cash Dividend
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2nd Quarter 2006 Highlights
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-- The Company completed its acquisition of Atlantic Bank of New
York on April 28th, using the proceeds from a secondary
offering of 24.5 million shares of common stock.
-- The Company's net interest margin rose 8 basis points to 2.22%
linked-quarter, reflecting the Atlantic Bank transaction and
the post-merger repositioning of the balance sheet.
-- Loans outstanding totaled $19.4 billion at the end of the
quarter, reflecting loans acquired in the Atlantic Bank
transaction and second quarter originations of $1.0 billion.
-- The Company sold $1.2 billion of securities in connection with
the Atlantic Bank transaction, and used a portion of the
proceeds to prepay $886.1 million of wholesale borrowings with
a weighted average rate of 5.93%.
-- Securities were reduced to $5.3 billion at quarter-end,
representing 18.5% of total assets.
-- $1.2 billion of wholesale borrowings were extended during the
quarter to an average call date of 2.4 years.
-- Tangible stockholders' equity equaled 5.69% of tangible assets
at quarter-end, excluding after-tax net unrealized losses on
securities; including such losses, the ratio was 5.41%. (3)
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Reporting earnings for the first time since its acquisition of Atlantic Bank of New York
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Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before of $69.4 million, or $0.24 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. (2) An $18.8 million, or $0.06 per diluted share, post-merger repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. charge, stemming stemming - stemmer from the prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. of certain wholesale borrowings and the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of the Company's interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreements, resulted in the Company reporting second quarter 2006 GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings of $50.6 million, or $0.18 per diluted share. The Company also reported second quarter 2006 cash earnings of $76.1 million, or $0.26 per diluted share, absent the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. charge. (1) In the first quarter of 2006, the Company recorded operating earnings of $70.0 million, or $0.26 per diluted share, excluding an after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. loss of $3.6 million, or $0.01 per diluted share, on the interest rate swaps that were terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: in the second quarter of the year. (2) Including this loss, the Company's first quarter 2006 GAAP earnings equaled $66.4 million, or $0.25 per diluted share. In the second quarter of 2005, the Company's GAAP earnings were the same as its operating earnings, and amounted to $86.5 million, or $0.33 per diluted share. For the six months ended June June: see month. 30, 2006, the Company recorded operating earnings of $139.4 million, or $0.50 per diluted share, and GAAP earnings of $117.0 million, or $0.42 per diluted share. In addition to the post-merger repositioning charge recorded in the second quarter, the Company's six-month 2006 GAAP earnings include the impact of the aforementioned after-tax mark-to-market loss on interest rate swaps. For the six months ended June 30, 2005, the Company recorded GAAP and operating earnings of $177.6 million, equivalent to diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.68. (2) Commenting on the Company's second quarter performance, President and Chief Executive Officer Joseph R. Ficalora stated, "The addition of Atlantic Bank's balance sheet provided us with the opportunity to reposition our assets and liabilities during the quarter, enabling us to further prepare for the period ahead. "One key result of our actions was the expansion of our net interest margin, which rose eight basis points, linked-quarter, to 2.22%. The improvement in our margin was the first in nine consecutive quarters, a meaningful achievement in the current rate environment. "The benefit of the Atlantic Bank transaction is also apparent in the current mix of our assets and the significant repositioning of our liabilities. Within weeks of completing the acquisition, we sold $1.2 billion of securities acquired in the Atlantic Bank and Long Island Financial Corp. transactions, and used a portion of the proceeds to prepay pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. $886.1 million of wholesale borrowings with a weighted average
rate of 5.93%. As a result, the ratio of wholesale borrowings to total
assets has been reduced to its lowest level since the third quarter of
2002. In connection with the repositioning of our liabilities following
the Atlantic Bank transaction, we also chose to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. our interest
rate swap agreements. While the post-merger repositioning resulted in a
charge against our second quarter GAAP earnings, the merit of these
actions is reflected in the improvement in our net interest margin and
in the way we now are positioned to face the challenge of market and
interest rate risk," Mr. Ficalora said."We also reduced our balance of brokered deposits by $261 million during the quarter while, at the same time, enjoying a $1.3 billion linked-quarter increase in total deposits to $13.6 billion. Included in the latter increase was a $472 million rise in core deposits, to $7.4 billion, driven by a $472 million increase in non-interest-bearing accounts, to $1.3 billion. "Not all of the quarter's highlights were acquisition-related," Mr. Ficalora noted. "Total loans were up more than 14% on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, net of the merger-related increase, with six-month originations totaling $2.9 billion, including $1.0 billion in the last three months. At the same time, the quality of our assets has continued to be solid, with non-performing assets equaling 0.11% of total assets at both June 30th and December December: see month. 31st. We also are pleased by the improvement in our tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. capital measures. At the end of June, our tangible stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. equaled 5.69% of tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. , excluding after-tax net unrealized securities losses, signifying Signifyin' (slang) is an African-American rhetorical device featuring indirect communication or persuasion and the creating of new meanings for old words and signs. Signifying, in this sense, includes repetition and difference, implication and association, combining words and a linked-quarter increase of 40 basis points. Including the unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. , the ratio was 5.41% at the end of the second quarter, up 38 basis points from the ratio at March 31st." Board of Directors Declares $0.25 Per Share Quarterly Cash Dividend "In the months ahead, we look forward to completing the integration of our commercial bank systems, to realizing the related cost savings, and to fostering a culture of service and sales throughout our 166 banking offices. We believe that our recent actions will enhance our future earnings, and support the continued payment of our $0.25 per share dividend," Mr. Ficalora said. "Reiterating our commitment to maintaining the dividend at its current level, the Board of Directors last night declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. a $0.25 per share dividend, payable on August 15, 2006 to shareholders of record at the close of business on August 4th." Balance Sheet Summary The Company recorded total assets of $28.7 billion at June 30, 2006, up $1.6 billion, or 5.9%, from the March 31, 2006 balance and up $2.4 billion, or 9.3%, from the balance recorded at December 31, 2005. While Atlantic Bank had assets of $2.8 billion at April 28, 2006, the date of the acquisition, the Company sold $1.2 billion of securities acquired in the Atlantic Bank and Long Island Financial Corp. transactions, and utilized the proceeds to reduce its higher-cost wholesale borrowings and brokered deposits, as further discussed under "Sources of Funds." Loans The Company recorded total loans of $19.4 billion at the close of the second quarter, representing 67.7% of total assets and a $2.4 billion, or 14.2%, increase from the balance recorded at December 31, 2005. In addition to originations of $2.9 billion, including $1.0 billion in the second quarter, the increase in the loan portfolio reflects the loans acquired in the Atlantic Bank transaction. At the date of the acquisition, Atlantic Bank had total loans of $1.2 billion, including multi-family loans of $440.7 million; commercial real estate loans of $237.4 million; construction loans of $62.1 million; one-to-four family loans of $31.8 million; and other loans of $436.8 million, including $406.4 million of commercial business loans. The growth of the loan portfolio was partially tempered by loan repayments of $1.7 billion in the six months ended June 30, 2006, including $952.0 million in the second quarter of the year. Multi-family loans accounted for $1.9 billion, or 64.6%, of year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. originations, and $508.3 million, or 48.5%, of loans produced in the second quarter of the year. Reflecting the volume of loans produced, as well as those acquired in the Atlantic Bank transaction, the portfolio of multi-family loans rose $1.7 billion, or 13.0%, from the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2005 balance to $14.5 billion, and represented 74.7% of total loans at June 30, 2006. The multi-family loan portfolio had an average principal balance of $3.6 million and an average loan-to-value ratio Loan-to-value ratio (LTV) The ratio of money borrowed on a property to the property's fair market value. of 63.9% at that date. The expected weighted average life of the portfolio was 3.7 years. Commercial real estate loans accounted for $3.0 billion, or 15.6%, of total loans at the close of the current quarter, and were up $152.2 million, or 5.3%, from the year-end 2005 amount. In addition to the loans acquired in the Atlantic Bank transaction, the increase reflects six-month originations totaling $213.3 million, including $118.8 million in the second quarter of the year. At June 30, 2006, the commercial real estate loan portfolio had an average principal balance of $2.2 million and an average loan-to-value ratio of 56.9%. The expected weighted average life of the portfolio was 3.3 years at that date. Construction loans totaled $1.0 billion at the close of the second quarter, and were up $154.5 million, or 18.1% from the year-end 2005 amount. The growth of the portfolio was largely due to organic loan production, with six-month originations totaling $567.8 million, including $272.3 million in the second quarter of the year. Other loans rose to $610.9 million at the close of the second quarter from $175.1 million at the end of December and from $183.1 million at the trailing quarter-end. Included in the June 30, 2006 amount were commercial business loans of $570.6 million, primarily reflecting the loans acquired with Atlantic Bank. In addition, the Company originated other loans of $133.2 million in the second quarter, up from $71.6 million in the first quarter of the year. Included in the second quarter amount were commercial business loans of $130.2 million. At the present time, the Company has a pipeline of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $604 million, including approximately $383 million of multi-family loans. The level of the pipeline is a function of various factors, including the current rate environment, which has limited loan refinancing Refinancing An extension and/or increase in amount of existing debt. activity in recent quarters, and competition for product, which has increased during this time. Asset Quality The quality of the Company's assets continued to be solid, with non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. representing 0.16% of total loans at the end of the second quarter, as compared to 0.14% and 0.16%, respectively, at March 31, 2006 and December 31, 2005. At June 30, 2006, non-performing loans totaled $30.4 million, up $4.9 million and $2.8 million, respectively, from the trailing quarter- and year-end levels, primarily reflecting loans acquired in the transaction with Atlantic Bank. With other real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most holding steady at $1.3 million, non-performing assets totaled $31.7 million, $26.8 million, and $28.9 million, and represented 0.11%, 0.10%, and 0.11% of total assets, at June 30, 2006, March 31, 2006, and December 31, 2005, respectively. Reflecting charge-offs of $153,000 in the first six months of the year and the loan loss allowance acquired in the Atlantic Bank transaction, the allowance for loan losses totaled $85.7 million at June 30, 2006, an increase from $79.7 million at December 31, 2005. The June 30, 2006 amount was equivalent to 0.44% of total loans, as compared to 0.47% at the end of December, and to 282.05% of non-performing loans, as compared to 289.17% at year-end. The Company recorded no provision for loan losses during the current or year-earlier six-month period. Securities The securities portfolio totaled $5.3 billion and represented 18.5% of total assets at the close of the second quarter, as compared to $5.6 billion, representing 21.4% of total assets, at December 31, 2005. Available-for-sale securities represented $2.2 billion, or 41.2%, of total securities at the close of the second quarter, and were down $195.1 million, or 8.2%, from the balance recorded at year-end. Included in the June 30, 2006 amount were mortgage-related securities of $1.8 billion, representing 81.3% of the total at that date. Reflecting the increase in market interest rates over the past two quarters, the after-tax net unrealized loss on available-for-sale securities rose to $67.9 million at the close of the second quarter from $43.4 million at December 31, 2005. The remainder of the securities portfolio consisted of held-to-maturity securities Held-to-Maturity Securities Debt securities that a firm has the ability and intent to hold until maturity. Notes: These are reported at amortized cost, therefore, they are not affected by swings in the financial markets. See also: Debt, Maturity totaling $3.1 billion, down $134.8 million, or 4.1%, from the year-end 2005 amount. The held-to-maturity securities portfolio consisted of mortgage-related securities totaling $1.5 billion and other securities totaling $1.6 billion at June 30, 2006. Goodwill and Core Deposit Intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. Reflecting the Atlantic Bank transaction, goodwill rose $169.1 million to $2.1 billion and core deposit intangibles ("CDI CDI compact disc interactive: a system for storing a mix of software, data, audio, and compressed video for interactive use under processor control ") rose $29.9 million to $116.5 million from the balances recorded at December 31, 2005. The CDI stemming from the Atlantic Bank transaction will be amortized on an accelerated basis over a period of ten years. Sources of Funds The Company has been funding the growth of its loan portfolio through four primary sources: the reduction of the securities portfolio through a combination of sales and repayments; cash flows generated through the repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of loans; an increase in deposits; and the use of wholesale borrowings. Deposits rose $1.5 billion in the first six months of the year to $13.6 billion, and were up $1.3 billion, or 10.7%, from the balance at March 31, 2006. While the Atlantic Bank transaction contributed deposits of $1.8 billion at the end of April, the increase was partly offset by a strategic decline in higher-cost brokered deposits. Core deposits represented $7.4 billion, or 54.2%, of total deposits at the close of the second quarter, as compared to $6.9 billion, or 56.1%, at March 31, 2006 and $6.9 billion, or 56.7%, at December 31, 2005. The linked-quarter increase was largely due to a $471.6 million, or 54.9%, rise in non-interest-bearing accounts to $1.3 billion, and a $302.1 million, or 12.8%, rise in savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: to $2.7 billion. These increases combined to offset a $301.6 million decline in NOW and money market accounts to $3.4 billion, primarily reflecting the aforementioned reduction in brokered deposits. Certificates of deposit ("CDs") represented $6.2 billion, or 45.8%, of total deposits at the close of the second quarter, and were up $838.8 million, or 15.5%, from the trailing quarter-end balance and $993.7 million, or 18.9%, from the balance recorded at December 31, 2005. The increase is not only indicative indicative: see mood. of the CDs acquired in the Atlantic Bank transaction but also the growing popularity of term deposits during a time of rising short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. . Wholesale borrowings totaled $10.3 billion at June 30, 2006, up $540.6 million from the year-end 2005 balance but down $54.3 million from the balance at March 31, 2006. During the quarter, the Company prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay ment n. higher-cost wholesale borrowings in the amount of $886.1
million, in connection with the acquisition of Atlantic Bank. The
decline in wholesale borrowings and the $260.6 million reduction in
brokered deposits reflect the strategic use of the cash flows generated
by post-merger securities sales and repayments to reduce the
Company's funding costs. In keeping with this objective, the
Company also extended $1.2 billion of wholesale borrowings during the
quarter to an average call date of 2.4 years. Year-to-date, the Company
has repositioned $4.1 billion of wholesale borrowings, including $2.5
billion that were extended to an average call date of 2.6 years and $1.6
billion that were modified mod·i·fy v. mod·i·fied, mod·i·fy·ing, mod·i·fies v.tr. 1. To change in form or character; alter. 2. . Stockholders' Equity The Company recorded total stockholders' equity of $3.7 billion at June 30, 2006, up $372.5 million from the March 31, 2006 balance and up $372.3 million from the balance recorded at December 31, 2005. The June 30, 2006 amount was equivalent to 12.9% of total assets and a book value of $12.62 per share, based on 293,062,701 shares. Tangible stockholders' equity, which is calculated by subtracting goodwill and CDI from total stockholders' equity, equaled $1.4 billion at the close of the second quarter, and was up $169.9 million from the March 31st balance and $173.2 million from the balance recorded at December 31st. Excluding after-tax net unrealized losses on securities, the Company's tangible stockholders' equity equaled 5.69% of total tangible assets at the close of the second quarter, up 40 basis points and 28 basis points, respectively, from the measures recorded at the earlier dates. Including after-tax net unrealized losses on securities, the respective measures were 5.41%, 5.03%, and 5.19%. The increase in tangible stockholders' equity reflects the benefit of the Atlantic Bank transaction and the issuance of 24.5 million shares of common stock in a secondary offering on the 18th of April to finance the acquisition. (3) At June 30, 2006, the Company's capital ratios continued to exceed the minimum federal requirements for a bank holding company. In addition, the capital ratios for the Company's primary subsidiaries, New York Community Bank
New York Community Bank is the banking division of the publicly traded company New York Community Bancorp. and New York Commercial Bank, continued to exceed the minimum levels required for classification as a "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. " institution under the FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). Improvement Act. Earnings Summary for the Three Months Ended June 30, 2006 Net Interest Income The Company recorded second quarter 2006 net interest income of $139.4 million, down $9.7 million from the year-earlier level but up $10.7 million from the level recorded in the first quarter of 2006. The linked-quarter increase was the net effect of a $28.1 million, or 8.8%, rise in interest income to $347.6 million and a $17.4 million, or 9.1%, rise in interest expense to $208.1 million. The linked-quarter rise in interest income was driven by a $1.5 billion increase in the average balance of interest-earning assets to $25.1 billion and a 12-basis point increase in the average yield to 5.54%. The average balance of loans rose $1.3 billion to $18.9 billion on a linked-quarter basis, while the average yield rose 14 basis points to 5.76%. As a result, the interest income produced by loans rose $25.0 million to $272.5 million from the level recorded in the first quarter of the year. The increase in the interest income produced by loans was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the two-month benefit of the loans acquired in the Atlantic Bank transaction, the volume of loans originated, and the modest rise in the five-year Constant Maturity Treasury rate during the three-month period. These contributing factors more than offset the impact of a $1.3 million decline in prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. during the quarter to $717,000. The Atlantic Bank transaction also contributed to an $803,000 increase in the interest income produced by mortgage-related securities to $38.2 million and a $2.0 million increase in the interest income produced by other securities, to $36.4 million. The increase attributed to mortgage-related securities was the net effect of an $806,000 reduction in the average balance to $3.6 billion and a ten-basis point increase in the average yield to 4.29%. The increase attributed to other securities was the result of a $133.7 million rise in the average balance to $2.5 billion and a one-basis point rise in the average yield to 5.74%. The linked-quarter rise in interest expense stemmed stemmed adj. 1. Having the stems removed. 2. Provided with a stem or a specific type of stem. Often used in combination: stemmed goblets; long-stemmed roses. from a $992.3 million increase in the average balance of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities to $23.4 billion and an 11-basis point increase in the average cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. to 3.56%. The growth in the average balance was primarily due to the deposits acquired in the Atlantic Bank transaction, while the higher average cost was primarily due to the steady rise in short-term interest rates. Core deposits generated second quarter 2006 interest expense of $35.3 million, up $6.3 million from the level recorded in the first quarter of the year. In addition to a 12-basis point rise in the average cost of such funds to 1.85%, the increase in interest expense was due to an $858.3 million rise in the average balance of core deposits to $7.6 billion, including a $242.2 million increase in average NOW and money market accounts to $3.8 billion and a $193.3 million increase in average savings accounts to $2.6 billion. Non-interest-bearing accounts represented $1.3 billion, or 16.4%, of average core deposits in the second quarter, and were up $422.8 million from the average balance recorded in the first quarter of 2006. CDs generated second quarter 2006 interest expense of $59.5 million, up $11.0 million from the level recorded in the trailing three-month period. The linked-quarter increase stemmed from a $583.1 million rise in the average balance to $5.9 billion and a 35-basis point rise in the average cost of such funds to 4.07%. In addition to the CDs acquired in the Atlantic Bank transaction, the average balance reflects the growing popularity of term deposits during an extended period of rising short-term interest rates. Borrowed funds generated second quarter 2006 interest expense of $113.3 million, a modest $146,000 increase from the level recorded in the first quarter of the year. During the second quarter, the average balance of borrowed funds fell $88.2 million to $11.0 billion, accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by a one-basis point drop in the average cost of such funds to 4.13%. These reductions are directly attributable to the post-merger repositioning of the Company's wholesale borrowings, which included the prepayment of borrowings totaling $886.1 million and the extension of $1.2 billion to an average call date of 2.4 years. In concert with the linked-quarter rise in interest income, and as expected, the Company realized a linked-quarter improvement in its net interest margin in connection with the acquisition of Atlantic Bank and the related post-merger repositioning. The margin equaled 2.22% in the three months ended June 30, 2006, down 51 basis points from the year-earlier measure, but up eight basis points from the margin recorded in the first quarter of 2006. Prior to the current second quarter, the Company's margin had declined for eight consecutive quarters, beginning with the second quarter of 2004. Non-interest Income In the second quarter of 2006, the Company recorded non-interest income of $28.2 million, a reduction from $29.9 million in the year-earlier quarter but an increase from $27.3 million in the first quarter of 2006. Included in the first quarter amount was a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta mark-to-market loss of $6.1 million on the Company's interest rate swap agreements. In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the aforementioned post-merger repositioning of its liabilities, the Company terminated its interest rate swap agreements in the second quarter of 2006. The first quarter 2006 mark-to-market loss was partially offset by net securities gains of $2.8 million during that quarter; the Company recorded no net gains or losses on securities in the second quarter of the year. Fee income totaled $14.4 million in the current second quarter, up $3.3 million from the year-earlier level but down $2.1 million from the level recorded in the first quarter of 2006. While fee income was otherwise boosted by the addition of depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. accounts in the Atlantic Bank acquisition, the increase in fees on depository accounts was offset by a $3.6 million linked-quarter reduction in prepayment penalties to $4.6 million. Other non-interest income totaled $13.9 million in the current second quarter, as compared to $14.1 million in the trailing quarter and to $16.0 million in the year-earlier three months. While the Company realized a linked-quarter increase in income from the sale of third-party investment products and its investment in Bank-owned Life Insurance, these increases were offset by declines in its other sources of revenues. Non-interest Expense In connection with the post-merger repositioning of its liabilities in the current second quarter, the Company recorded a pre-tax charge of $26.5 million for the prepayment of certain wholesale borrowings and a pre-tax charge of $1.1 million for the termination of its interest rate swap agreements. Excluding these post-merger repositioning charges (which were equivalent to $18.0 million and $760,000, respectively, on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. ), the Company's second quarter 2006 non-interest expense amounted to $65.6 million, as compared to $58.6 million and $52.2 million in the trailing and year-earlier quarters, respectively. The linked-quarter increase in non-interest expense largely reflects the impact of the Atlantic Bank transaction, which accounted for a $1.2 million rise in CDI amortization to $4.5 million and contributed to a $5.8 million rise in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. to $61.1 million. The latter increase primarily reflects the acquisition-related addition of 17 branches and the associated expansion of the commercial bank's staff. In addition, the Company continued to upgrade its information technology and its branch network during the three months ended June 30, 2006. Notwithstanding the linked-quarter increase in operating expenses, the Company's efficiency ratio equaled 36.45% in the current second quarter, a modest increase from 35.44% in the first quarter of the year. The efficiency ratio is calculated by dividing the Company's operating expenses for the quarter by the sum of its net interest income and non-interest income during the same period. Income Tax Expense The Company recorded second quarter 2006 income tax expense of $23.9 million, down from $40.3 million in the year-earlier quarter and from $31.1 million in the first quarter of 2006. The linked-quarter reduction was attributable to a $23.0 million decline in pre-tax income to $74.5 million, largely reflecting the impact of the aforementioned post-merger repositioning charge. The effective tax rate was 32.05% in the current second quarter and 31.89% in the trailing three-month period. Post-Earnings Conference Call The Company will host a conference call on July July: see month. 26, 2006 at 9:30 a.m. (ET) to discuss the highlights of its second quarter 2006 performance, including the benefits of its acquisition of Atlantic Bank on April 28th. The conference call may be accessed by dialing 800-500-0311 (for domestic calls) or 719-457-2698 (for international calls) and providing the following access code: 9610548. A replay of the conference call will be available approximately two hours following completion of the call through midnight on August 4th, 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 web cast, and may be accessed by visiting the Company's web site, www.myNYCB.com, clicking on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ," and following the prompts. The web cast will be archived through 5:00 p.m. on August 7, 2006. New York Community Bancorp, Inc. is the $28.7 billion holding company for New York Community Bank and New York Commercial Bank, and the leading producer of multi-family loans for portfolio in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . A New York State-chartered savings bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. with 137 offices serving New York City, Long Island, Westchester Westchester is the name of some places in the United States of America:
Roslyn may refer to: In places:
In Canada:
Roosevelt, uninc. residential town (1990 pop. 15,030), Nassau co., SE N.Y., on Long Island. A large retail business exists in Roosevelt, and the town has become the county's busiest economic area. Savings Bank, CFS CFS abbr. chronic fatigue syndrome CFS, n.pr See syndrome, chronic fatigue. CFS Chronic fatigue syndrome, see there Bank, First Savings Bank of New Jersey, and Ironbound i·ron·bound adj. 1. Bound with iron. 2. Rigid and unyielding: an ironbound moral code. 3. Bound with rocks and cliffs: ironbound coasts. Bank. New York Commercial Bank has 29 branches serving Manhattan Manhattan, indigenous people of North America Manhattan (mănhăt`ən), indigenous people of North America of the Algonquian-Wakashan linguistic stock (see Native American languages). , Queens, Brooklyn Brooklyn (br  k`lĭn), borough of New York City (1990 pop. 2,300,664), 71 sq mi (184 sq km), coextensive with Kings co., SE N.Y. , Westchester County, and
Long Island and is the region's 17th largest commercial bank
depository. Additional information about New York Community Bancorp,
Inc. and its bank subsidiaries is available at www.myNYCB.com.Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and Associated Risk Factors This release, like other written and oral communications presented by the Company and our authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: 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 a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions for forward-looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 our future plans, strategies, and expectations, are generally identified by use of the words "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "seek," "strive," "try," or future or conditional Subject to change; dependent upon or granted based on the occurrence of a future, uncertain event. A conditional payment is the payment of a debt or obligation contingent upon the performance of a certain specified act. 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 locally 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, future cash flows, or the market value of our assets; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. in the markets we serve; 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 related revenue synergies and cost savings within expected time frames; potential exposure to unknown or contingent liabilities Contingent Liability 1. The possibility of an obligation to pay certain sums dependent on future events. 2. Defined obligations by a company that must be met, but the probability of payment is minimal. Notes: 1. of companies targeted for acquisition; our ability to retain key members of management; our timely development of new lines of business and competitive products or services within existing lines of business in a changing environment, and the acceptance of such products or services by our customers; any interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. or breach of security resulting in failures or disruptions in customer account management, general ledger General Ledger A company's accounting records. This formal ledger contains all the financial accounts and statements of a business. Notes: The ledger uses two columns: one records debits, the other has offsetting credits. , deposit, loan, or other systems; the outcome of pending or threatened litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , or of other matters before regulatory agencies regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. , or of matters resulting from regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. 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 Reserve Requirements Requirements regarding the amount of funds that banks must hold in reserve against deposits made by their customers. This money must be in the bank's vaults or at the closest Federal Reserve Bank. based upon the periodic review thereof under relevant regulatory and accounting requirements; changes in banking, securities, tax, environmental, and insurance laws, regulations, and policies, and the ability to comply with such changes in a timely manner; changes in accounting principles, policies, practices, or guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. ; changes in legislation and regulation; operational issues stemming from, and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. necessitated by, the potential need to adapt to industry changes in information technology systems, on which we are highly dependent; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. and the Federal Reserve Board; war or terrorist activities; and other economic, competitive, governmental, regulatory, and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. factors affecting our operations, pricing, and services. Additionally, the timing and occurrence or non-occurrence of events may be subject to circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or beyond our control. 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 may be required by applicable law or regulation, the Company disclaims any obligation to update any forward-looking statements. (1) Please see the reconciliation of GAAP and cash earnings and adjusted cash earnings. (2) Please see the reconciliation of GAAP and operating earnings. (3) Please see the reconciliation of stockholders' equity and tangible stockholders' equity. - Financial Statements and Highlights Follow -
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF CONDITION
(in thousands, except share data)
June 30, December 31,
2006 2005
------------- -------------
(unaudited)
Assets
Cash and cash equivalents $ 242,631 $ 231,803
Securities available for sale:
Mortgage-related securities 1,774,785 1,967,770
Other securities 409,280 411,444
Securities held to maturity:
Mortgage-related securities 1,481,319 1,606,468
Other securities 1,641,891 1,651,570
------------- -------------
Total securities 5,307,275 5,637,252
Mortgage loans:
Multi-family 14,527,529 12,857,210
Commercial real estate 3,039,701 2,887,452
Construction 1,008,639 854,161
1-4 family 259,887 254,510
------------- ------------
Total mortgage loans 18,835,756 16,853,333
Other loans 610,855 175,069
------------- -------------
Total loans 19,446,611 17,028,402
Less: Allowance for loan losses (85,656) (79,705)
------------- -------------
Loans, net 19,360,955 16,948,697
Federal Home Loan Bank of New York stock,
at cost 369,877 330,212
Premises and equipment, net 197,375 140,279
Goodwill 2,149,824 1,980,689
Core deposit intangibles 116,478 86,533
Other assets 984,409 928,240
------------- -------------
Total assets $28,728,824 $26,283,705
============= =============
Liabilities and Stockholders' Equity
Deposits:
NOW and money market accounts $ 3,378,983 $ 3,576,983
Savings accounts 2,663,126 2,434,990
Certificates of deposit 6,240,737 5,247,029
Non-interest-bearing accounts 1,331,239 845,897
------------- -------------
Total deposits 13,614,085 12,104,899
------------- -------------
Official checks outstanding 43,715 43,438
Borrowed funds:
Wholesale borrowings 10,257,974 9,717,392
Junior subordinated debentures 456,898 454,197
Other borrowings 355,370 357,069
------------- -------------
Total borrowed funds 11,070,242 10,528,658
Mortgagors' escrow 71,513 63,051
Other liabilities 232,099 218,782
------------- -------------
Total liabilities 25,031,654 22,958,828
------------- -------------
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; 295,109,954 and
273,396,452 shares issued; 295,056,819
and 269,776,791 shares outstanding,
respectively) 2,951 2,734
Paid-in capital in excess of par 3,331,161 3,012,655
Retained earnings (partially restricted) 452,291 475,501
Less: Treasury stock (53,135 and
3,619,661 shares, respectively) (1,220) (100,169)
Unallocated common stock held by
ESOP (6,281) (6,874)
Common stock held by SERP (3,113) (3,113)
Net unrealized loss on securities
available for sale, net of tax (67,913) (43,359)
Net unrealized loss on securities
transferred to held to maturity, net of
tax (10,706) (12,498)
------------- -------------
Total stockholders' equity 3,697,170 3,324,877
------------- -------------
Total liabilities and stockholders' equity $28,728,824 $26,283,705
============= =============
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
For the Three Months For the Six Months
Ended Ended
-------------------------------- ---------------------
June 30, March 31, June 30, June 30, June 30,
2006 2006 2005 2006 2005
---------- ---------- ---------- ---------- ----------
Interest
Income:
Mortgage and
other loans $272,469 $247,465 $207,826 $519,934 $396,118
Mortgage-
related
securities 38,241 37,438 51,139 75,679 111,136
Other
securities 36,369 34,408 32,027 70,777 65,928
Money market
investments 478 166 137 644 341
--------- ---------- --------- ---------- ----------
Total interest
income 347,557 319,477 291,129 667,034 573,523
--------- ---------- --------- ---------- ----------
Interest
Expense:
NOW and money
market
accounts 30,834 26,349 20,015 57,183 32,406
Savings
accounts 4,434 2,658 3,346 7,092 7,349
Certificates
of deposit 59,475 48,492 24,049 107,967 44,137
Borrowed funds 113,330 113,184 94,521 226,514 181,611
Mortgagors'
escrow 56 54 67 110 133
--------- ---------- --------- ---------- ----------
Total interest
expense 208,129 190,737 141,998 398,866 265,636
--------- ---------- --------- ---------- ----------
Net interest
income 139,428 128,740 149,131 268,168 307,887
Provision for
loan losses -- -- -- -- --
--------- ---------- --------- ---------- ----------
Net interest
income after
provision for
loan losses 139,428 128,740 149,131 268,168 307,887
--------- ---------- --------- ---------- ----------
Non-interest
Income:
Fee income 14,356 16,484 11,049 30,840 23,960
Net securities
gains -- 2,823 2,868 2,823 2,916
Loss on mark-
to-market of
interest rate
swaps -- (6,071) -- (6,071) --
Other 13,891 14,098 15,969 27,989 35,018
--------- ---------- --------- ---------- ----------
Total non-
interest
income 28,247 27,334 29,886 55,581 61,894
--------- ---------- --------- ---------- ----------
Non-interest
Expense:
Operating
expenses:
Compensation
and benefits 32,517 29,541 25,159 62,058 50,560
Occupancy and
equipment 13,959 12,060 11,085 26,019 22,473
General and
admini-
strative 13,124 12,510 11,119 25,634 23,107
Other 1,516 1,208 1,953 2,724 3,809
--------- ---------- --------- ---------- ----------
Total operating
expenses 61,116 55,319 49,316 116,435 99,949
Post-merger
repositioning
charge 27,609 -- -- 27,609 --
Amortization
of core
deposit
intangibles 4,467 3,306 2,930 7,773 5,873
--------- ---------- --------- ---------- ----------
Total non-
interest
expense 93,192 58,625 52,246 151,817 105,822
--------- ---------- --------- ---------- ----------
Income before
income taxes 74,483 97,449 126,771 171,932 263,959
Income tax
expense 23,871 31,074 40,299 54,945 86,405
--------- ---------- --------- ---------- ----------
Net Income $ 50,612 $ 66,375 $ 86,472 $116,987 $177,554
========= ========== ========= ========== ==========
Basic
earnings per
share $0.18 $0.25 $0.33 $0.42 $0.68
========= ========== ========= ========== ==========
Diluted
earnings per
share $0.18 $0.25 $0.33 $0.42 $0.68
========= ========== ========= ========== ==========
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATION OF GAAP AND OPERATING EARNINGS
Although operating earnings are not a measure of performance calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, the Company believes that operating earnings are an important indication of its ability to generate earnings through ongoing operations. The Company calculated its operating earnings for the three months ended June 30, 2006 by subtracting from non-interest expense the pre-tax charge of $26.5 million stemming from the prepayment of certain wholesale borrowings and the pre-tax charge of $1.1 million stemming from the termination of its interest rate swap agreements following the Atlantic Bank acquisition, referred to collectively in the table below as the "post-merger repositioning charge." To calculate its operating earnings for the six months ended June 30, 2006, the Company subtracted from non-interest expense the pre-tax post-merger repositioning charge recorded in the second quarter, and added back to non-interest income the pre-tax non-cash loss on the mark-to-market of interest rate swaps that had been recorded in the first quarter of the year, in the amount of $6.1 million. Because operating earnings reflect only those income and expense items that are generally recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. , the Company believes that they are useful to investors seeking to evaluate its ongoing operating performance and to compare its performance with other companies in the banking industry that also report operating earnings. 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 prepared in accordance with GAAP. Moreover, the manner in which the Company calculates its operating earnings may differ from that of other companies reporting measures with similar names. A reconciliation of the Company's GAAP and operating earnings for the three months ended June 30, 2006 and March 31, 2006, and for the six months ended June 30, 2006 follows. The Company's operating earnings for the three and six months ended June 30, 2005 were the same as its GAAP earnings in the corresponding periods.
For the For the
Three Months Ended Six Months Ended
-------------------------------- ----------------------
(in thousands,
except per June 30, March 31, June 30, June 30, June 30,
share data) 2006 2006 2005 2006 2005
---------- ---------- ---------- ----------- ----------
GAAP Earnings $50,612 $66,375 $86,472 $116,987 $177,554
Adjustments to
GAAP earnings:
Loss on mark-
to-market of
interest
rate swaps -- 6,071 -- 6,071 --
Post-merger
repositioning
charge 27,609 -- -- 27,609 --
Income tax
effect on
adjustments (8,849) (2,434) -- (11,283) --
--------- --------- --------- ---------- ---------
Operating
earnings $69,372 $70,012 $86,472 $139,384 $177,554
========= ========= ========= ========== =========
Diluted GAAP
Earnings per
Share $0.18 $0.25 $0.33 $0.42 $0.68
Adjustments to
diluted GAAP
earnings per
share:
Loss on mark-
to-market of
interest
rate swaps -- 0.01 -- 0.01 --
Post-merger
repositioning
charge 0.06 -- -- 0.07 --
--------- --------- --------- ---------- ---------
Diluted
operating
earnings per
share $0.24 $0.26 $0.33 $0.50 $0.68
========= ========= ========= ========== =========
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATION OF GAAP AND CASH EARNINGS AND ADJUSTED CASH EARNINGS
While neither cash earnings nor adjusted cash earnings are measures of performance calculated in accordance with GAAP, the Company believes that these measures are important because of their contribution to tangible stockholders' equity.(1) The Company calculates cash earnings by adding back to GAAP earnings certain items that have been charged against net income, but that have been 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. For the three and six months ended June 30, 2006, the Company also reported adjusted cash earnings, in order to provide investors with an indication of its ability to generate cash earnings through ongoing operations. The Company's adjusted cash earnings were calculated by excluding from its cash earnings the post-merger repositioning charge recorded in the three and six months ended June 30, 2006 and the loss on the mark-to-market of interest rate swaps recorded in the three months ended March 31, 2006 and the six months ended June 30, 2006. Neither cash earnings nor adjusted cash earnings should be considered in isolation or as a substitute for net income, cash flows from operating activities, or other income or cash flow statement data prepared in accordance with GAAP. Moreover, the manner in which the Company calculates cash earnings and adjusted cash earnings may differ from that of other companies reporting measures with similar names. A reconciliation of the Company's GAAP and cash earnings and adjusted cash earnings for the three months ended June 30, 2006, March 31, 2006, and June 30, 2005 and for the six months ended June 30, 2006 and June 30, 2005 follows:
For the Three Months For the Six Months
Ended Ended
----------------------------- --------------------
(in thousands,
except per share June 30, March 31, June 30, June 30, June 30,
data) 2006 2006 2005 2006 2005
--------- --------- --------- ---------- ---------
GAAP Earnings $50,612 $66,375 $86,472 $116,987 $177,554
Additional
contributions to
tangible
stockholders'
equity:
Amortization and
appreciation of
shares held in
ESOP 1,568 1,615 1,792 3,183 3,636
Associated tax
benefits 178 19 242 197 1,391
Dividends on
unallocated ESOP
shares 545 546 1,164 1,091 2,328
Amortization of
core deposit
intangibles 4,467 3,306 2,930 7,773 5,873
--------- --------- --------- ---------- ---------
Total additional
contributions to
tangible
stockholders'
equity 6,758 5,486 6,128 12,244 13,228
--------- --------- --------- ---------- ---------
Cash earnings $57,370 $71,861 $92,600 $129,231 $190,782
========= ========= ========= ========== =========
Diluted GAAP
Earnings per Share $0.18 $0.25 $0.33 $0.42 $0.68
Additional
contributions to
diluted cash
earnings per share:
Amortization and
appreciation of
shares held in
ESOP -- 0.01 0.01 0.01 0.01
Associated tax
benefits -- -- -- -- 0.01
Dividends on
unallocated ESOP
shares -- -- -- -- 0.01
Amortization of
core deposit
intangibles 0.02 0.01 0.01 0.03 0.02
--------- --------- --------- ---------- ---------
Total additional
contributions to
diluted cash
earnings per share 0.02 0.02 0.02 0.04 0.05
--------- --------- --------- ---------- ---------
Diluted cash
earnings per share $0.20 $0.27 $0.35 $0.46 $0.73
========= ========= ========= ========== =========
Cash Earnings $57,370 $71,861 $92,600 $129,231 $190,782
Adjustments to cash
earnings:
Loss on mark-to-
market of
interest rate
swaps -- 6,071 -- 6,071 --
Post-merger
repositioning
charge 27,609 -- -- 27,609 --
Income tax effect on
adjustments (8,849) (2,434) -- (11,283) --
--------- --------- --------- ---------- ---------
Adjusted cash
earnings $76,130 $75,498 $92,600 $151,628 $190,782
========= ========= ========= ========== =========
Diluted Cash
Earnings per Share $0.20 $0.27 $0.35 $0.46 $0.73
Loss on mark-to-
market of
interest rate
swaps -- 0.01 -- 0.01 --
Post-merger
repositioning
charge 0.06 -- -- 0.07 --
--------- --------- --------- ---------- ---------
Adjusted diluted
cash earnings per
share $0.26 $0.28 $0.35 $0.54 $0.73
========= ========= ========= ========== =========
(1) Please see the reconciliation of stockholders' equity and tangible
stockholders' equity.
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATION OF STOCKHOLDERS' EQUITY
AND TANGIBLE STOCKHOLDERS' EQUITY
Although tangible stockholders' equity is not a measure of capital calculated in accordance with GAAP, the Company believes that it is an important indication of its ability to grow both organically and through business combinations, as well as its ability to pay dividends and to engage in various capital management strategies, including the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of Company shares. The Company calculates tangible stockholders' equity by subtracting from stockholders' equity the total of its goodwill and core deposit intangibles ("CDI"). To calculate its ratio of tangible stockholders' equity to tangible assets, the Company subtracts the total of goodwill and CDI from both stockholders' equity and total assets. The Company's tangible book value is calculated by dividing its tangible stockholders' equity by the number of shares outstanding less any unallocated ESOP ESOP See: Employee Stock Ownership Plan ESOP See Employee Stock Ownership Plan (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 its 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. Tangible stockholders' equity should not be considered in isolation or as a substitute for stockholders' equity or any other capital measure prepared in accordance with GAAP. Moreover, the manner in which the Company calculates its tangible stockholders' equity and the related tangible capital measures may differ from that of other companies reporting measures of capital with similar names. A reconciliation of the Company's stockholders' equity and tangible stockholders' equity, total assets and tangible assets, and net income and adjusted net income at or for the three months ended June 30, 2006, March 31, 2006, and June 30, 2005 and the six months ended June 30, 2006 and June 30, 2005 follows:
At or for the
Three Months Ended
-----------------------------------------
June 30, March 31, Dec. 31,
(in thousands) 2006 2006 2005
------------- ------------- -------------
Total Stockholders' Equity $ 3,697,170 $ 3,324,626 $ 3,324,877
Less: Goodwill (2,149,824) (1,981,053) (1,980,689)
Core deposit
intangibles (116,478) (82,614) (86,533)
------------- ------------- -------------
Tangible stockholders'
equity $ 1,430,868 $ 1,260,959 $ 1,257,655
Total Assets $28,728,824 $27,137,024 $26,283,705
Less: Goodwill (2,149,824) (1,981,053) (1,980,689)
Core deposit
intangibles (116,478) (82,614) (86,533)
------------- ------------- -------------
Tangible assets $26,462,522 $25,073,357 $24,216,483
Average Stockholders' Equity $ 3,575,874 $ 3,302,925 $ 3,176,719
Less: Average goodwill (2,100,638) (1,979,991) (1,938,147)
Average core deposit
intangibles (108,188) (85,354) (77,805)
------------- ------------- -------------
Average tangible
stockholders' equity $ 1,367,048 $ 1,237,580 $ 1,160,767
Average Assets $28,551,319 $26,777,707 $25,246,283
Less: Average goodwill (2,100,638) (1,979,991) (1,938,147)
Average core deposit
intangibles (108,188) (85,354) (77,805)
------------- ------------- -------------
Average tangible assets $26,342,493 $24,712,362 $23,230,331
Net Income $50,612 $66,375 $36,916
Add: Amortization of core
deposit intangibles,
net of tax 2,672 1,986 1,760
------------- ------------- -------------
Adjusted net income $53,284 $68,361 $38,676
At or for the
Six Months Ended
---------------------------
June 30, June 30,
(in thousands) 2006 2005
------------- -------------
Total Stockholders' Equity $ 3,697,170 $ 3,250,264
Less: Goodwill (2,149,824) (1,937,680)
Core deposit intangibles (116,478) (81,680)
------------- -------------
Tangible stockholders' equity $ 1,430,868 $ 1,230,904
Total Assets $28,728,824 $25,204,692
Less: Goodwill (2,149,824) (1,937,680)
Core deposit intangibles (116,478) (81,680)
------------- -------------
Tangible assets $26,462,522 $23,185,332
Average Stockholders' Equity $ 3,440,154 $ 3,189,977
Less: Average goodwill (2,040,647) (1,944,248)
Average core deposit intangibles (96,835) (84,872)
------------- -------------
Average tangible stockholders' equity $ 1,302,672 $ 1,160,857
Average Assets $27,669,413 $24,664,171
Less: Average goodwill (2,040,647) (1,944,248)
Average core deposit intangibles (96,835) (84,872)
------------- -------------
Average tangible assets $25,531,931 $22,635,051
Net Income $116,987 $177,554
Add: Amortization of core deposit
intangibles, net of tax 4,650 3,527
------------- -------------
Adjusted net income $121,637 $181,081
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
Three Months Ended
------------------------------
June 30, 2006
------------------------------
Average
Average Yield/
Balance Interest Cost
------------ --------- -------
Assets:
Interest-earning assets:
Mortgage and other loans, net $18,936,269 $272,469 5.76%
Mortgage-related securities 3,569,233 38,241 4.29
Other securities 2,535,177 36,369 5.74
Money market investments 44,104 478 4.35
------------ --------- -------
Total interest-earning assets 25,084,783 347,557 5.54
Non-interest-earning assets 3,466,536
------------
Total assets $28,551,319
============
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
NOW and money market accounts $ 3,803,638 $ 30,834 3.25%
Savings accounts 2,582,918 4,434 0.69
Certificates of deposit 5,866,922 59,475 4.07
Mortgagors' escrow 168,149 56 0.13
------------ --------- -------
Total interest-bearing deposits 12,421,627 94,799 3.06
Borrowed funds 10,993,660 113,330 4.13
------------ --------- -------
Total interest-bearing liabilities 23,415,287 208,129 3.56
Non-interest-bearing deposits 1,255,955
Other liabilities 304,203
------------
Total liabilities 24,975,445
Stockholders' equity 3,575,874
------------
Total liabilities and stockholders'
equity $28,551,319
============
Net interest income/interest rate spread $139,428 1.98%
========= =======
Net interest-earning assets/net interest
margin $1,669,496 2.22%
============ =======
Ratio of interest-earning assets to
interest-bearing liabilities 1.07x
=======
Core deposits $7,642,511 $35,268 1.85%
============ ========= =======
Three Months Ended
-------------------------------
March 31, 2006
------------------------------
Average
Average Yield/
Balance Interest Cost
------------ --------- -------
Assets:
Interest-earning assets:
Mortgage and other loans, net $17,624,144 $247,465 5.62%
Mortgage-related securities 3,570,039 37,438 4.19
Other securities 2,401,514 34,408 5.73
Money market investments 16,814 166 4.00
------------ --------- -------
Total interest-earning assets 23,612,511 319,477 5.42
Non-interest-earning assets 3,165,196
------------
Total assets $26,777,707
============
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
NOW and money market accounts $ 3,561,459 $ 26,349 3.00%
Savings accounts 2,389,609 2,658 0.45
Certificates of deposit 5,283,851 48,492 3.72
Mortgagors' escrow 106,149 54 0.21
------------ --------- -------
Total interest-bearing deposits 11,341,068 77,553 2.77
Borrowed funds 11,081,905 113,184 4.14
------------ --------- -------
Total interest-bearing liabilities 22,422,973 190,737 3.45
Non-interest-bearing deposits 833,156
Other liabilities 218,653
------------
Total liabilities 23,474,782
Stockholders' equity 3,302,925
------------
Total liabilities and stockholders'
equity $26,777,707
============
Net interest income/interest rate
spread $128,740 1.97%
========= =======
Net interest-earning assets/net
interest margin $1,189,538 2.14%
============ =======
Ratio of interest-earning assets to
interest-bearing liabilities 1.05x
=======
Core deposits $6,784,224 $29,007 1.73%
============ ========= =======
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
Three Months Ended June 30,
------------------------------
2006
------------------------------
Average
Average Yield/
Balance Interest Cost
------------ --------- -------
Assets:
Interest-earning assets:
Mortgage and other loans, net $18,936,269 $272,469 5.76%
Mortgage-related securities 3,569,233 38,241 4.29
Other securities 2,535,177 36,369 5.74
Money market investments 44,104 478 4.35
------------ --------- -------
Total interest-earning assets 25,084,783 347,557 5.54
Non-interest-earning assets 3,466,536
------------
Total assets $28,551,319
============
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
NOW and money market accounts $ 3,803,638 $ 30,834 3.25%
Savings accounts 2,582,918 4,434 0.69
Certificates of deposit 5,866,922 59,475 4.07
Mortgagors' escrow 168,149 56 0.13
------------ --------- -------
Total interest-bearing deposits 12,421,627 94,799 3.06
Borrowed funds 10,993,660 113,330 4.13
------------ --------- -------
Total interest-bearing liabilities 23,415,287 208,129 3.56
Non-interest-bearing deposits 1,255,955
Other liabilities 304,203
------------
Total liabilities 24,975,445
Stockholders' equity 3,575,874
------------
Total liabilities and stockholders'
equity $28,551,319
============
Net interest income/interest rate spread $139,428 1.98%
========= =======
Net interest-earning assets/net interest
margin $1,669,496 2.22%
============ =======
Ratio of interest-earning assets to
interest-bearing liabilities 1.07x
=======
Core deposits $7,642,511 $35,268 1.85%
============ ========= =======
Three Months Ended June 30,
-------------------------------
2005
------------------------------
Average
Average Yield/
Balance Interest Cost
------------ --------- -------
Assets:
Interest-earning assets:
Mortgage and other loans, net $15,159,345 $207,826 5.48%
Mortgage-related securities 4,565,084 51,139 4.48
Other securities 2,138,316 32,027 5.99
Money market investments 25,839 137 2.12
------------ --------- -------
Total interest-earning assets 21,888,584 291,129 5.32
Non-interest-earning assets 3,183,082
------------
Total assets $25,071,666
============
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
NOW and money market accounts $ 3,716,640 $ 20,015 2.15%
Savings accounts 2,711,365 3,346 0.49
Certificates of deposit 3,871,262 24,049 2.48
Mortgagors' escrow 141,046 67 0.19
------------ --------- -------
Total interest-bearing deposits 10,440,313 47,477 1.82
Borrowed funds 10,380,575 94,521 3.64
------------ --------- -------
Total interest-bearing liabilities 20,820,888 141,998 2.73
Non-interest-bearing deposits 736,350
Other liabilities 303,490
------------
Total liabilities 21,860,728
Stockholders' equity 3,210,938
------------
Total liabilities and stockholders'
equity $25,071,666
============
Net interest income/interest rate
spread $149,131 2.59%
========= =======
Net interest-earning assets/net
interest margin $1,067,696 2.73%
============ =======
Ratio of interest-earning assets to
interest-bearing liabilities 1.05x
=======
Core deposits $7,164,355 $23,361 1.30%
============ ========= =======
NEW YORK COMMUNITY BANCORP, INC.
NET INTEREST INCOME ANALYSIS
(dollars in thousands)
(unaudited)
Six Months Ended June 30,
------------------------------
2006
------------------------------
Average
Average Yield/
Balance Interest Cost
------------ --------- -------
Assets:
Interest-earning assets:
Mortgage and other loans, net $18,283,831 $519,934 5.69%
Mortgage-related securities 3,569,634 75,679 4.24
Other securities 2,468,715 70,777 5.73
Money market investments 30,534 644 4.25
------------ --------- -------
Total interest-earning assets 24,352,714 667,034 5.48
Non-interest-earning assets 3,316,699
------------
Total assets $27,669,413
============
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
NOW and money market accounts $ 3,683,217 $ 57,183 3.13%
Savings accounts 2,486,797 7,092 0.58
Certificates of deposit 5,576,998 107,967 3.90
Mortgagors' escrow 137,320 110 0.16
------------ --------- -------
Total interest-bearing deposits 11,884,332 172,352 2.92
Borrowed funds 11,037,539 226,514 4.14
------------ --------- -------
Total interest-bearing liabilities 22,921,871 398,866 3.51
Non-interest-bearing deposits 1,045,724
Other liabilities 261,664
------------
Total liabilities 24,229,259
Stockholders' equity 3,440,154
------------
Total liabilities and stockholders'
equity $27,669,413
============
Net interest income/interest rate spread $268,168 1.97%
========= =======
Net interest-earning assets/net interest
margin $1,430,843 2.18%
============ =======
Ratio of interest-earning assets to
interest-bearing liabilities 1.06x
=======
Core deposits $7,215,738 $64,275 1.80%
============ ========= =======
Six Months Ended June 30,
-------------------------------
2005
------------------------------
Average
Average Yield/
Balance Interest Cost
------------ --------- -------
Assets:
Interest-earning assets:
Mortgage and other loans, net $14,458,777 $396,118 5.48%
Mortgage-related securities 4,764,139 111,136 4.67
Other securities 2,170,805 65,928 6.07
Money market investments 28,559 341 2.39
------------ --------- -------
Total interest-earning assets 21,422,280 573,523 5.35
Non-interest-earning assets 3,241,891
------------
Total assets $24,664,171
============
Liabilities and Stockholders' Equity:
Interest-bearing deposits:
NOW and money market accounts $ 3,361,829 $ 32,406 1.93%
Savings accounts 2,816,014 7,349 0.52
Certificates of deposit 3,804,958 44,137 2.32
Mortgagors' escrow 115,531 133 0.23
------------ --------- -------
Total interest-bearing deposits 10,098,332 84,025 1.66
Borrowed funds 10,341,589 181,611 3.51
------------ --------- -------
Total interest-bearing liabilities 20,439,921 265,636 2.60
Non-interest-bearing deposits 732,459
Other liabilities 301,814
------------
Total liabilities 21,474,194
Stockholders' equity 3,189,977
------------
Total liabilities and stockholders'
equity $24,664,171
============
Net interest income/interest rate
spread $307,887 2.75%
========= =======
Net interest-earning assets/net
interest margin $982,359 2.87%
============ =======
Ratio of interest-earning assets to
interest-bearing liabilities 1.05x
=======
Core deposits $6,910,302 $39,755 1.15%
============ ========= =======
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(dollars in thousands, except share and per share data)
(unaudited)
For the Three Months Ended
-----------------------------------------
June 30, March 31, June 30,
2006 2006 2005
------------- ------------- -------------
GAAP EARNINGS DATA:
Net income $50,612 $66,375 $86,472
Basic earnings per share 0.18 0.25 0.33
Diluted earnings per share 0.18 0.25 0.33
Return on average assets 0.71% 0.99% 1.38%
Return on average tangible
assets (1) 0.81 1.11 1.53
Return on average
stockholders' equity 5.66 8.04 10.77
Return on average tangible
stockholders' equity (1) 15.59 22.10 29.66
Efficiency ratio (2) 36.45 35.44 27.55
Operating expenses to average
assets 0.86 0.83 0.79
Interest rate spread 1.98 1.97 2.59
Net interest margin 2.22 2.14 2.73
Shares used for basic EPS
computation 287,473,052 266,948,853 260,203,948
Shares used for diluted EPS
computation 288,948,750 268,620,320 262,349,662
OPERATING EARNINGS DATA: (3)
Operating earnings $69,372 $70,012 $86,472
Basic earnings per share 0.24 0.26 0.33
Diluted earnings per share 0.24 0.26 0.33
Return on average assets 0.97% 1.05% 1.38%
Return on average tangible
assets (1) 1.09 1.17 1.53
Return on average
stockholders' equity 7.76 8.48 10.77
Return on average tangible
stockholders' equity (1) 21.08 23.27 29.66
Efficiency ratio (2) 36.45 34.12 27.55
CASH EARNINGS DATA: (4)
Cash earnings $57,370 $71,861 $92,600
Basic cash earnings per share 0.20 0.27 0.36
Diluted cash earnings per
share 0.20 0.27 0.35
Cash return on average assets 0.80% 1.07% 1.48%
Cash return on average
tangible assets (1) 0.87 1.16 1.61
Cash return on average
stockholders' equity 6.42 8.70 11.54
Cash return on average
tangible stockholders'
equity (1) 16.79 23.23 31.13
Cash efficiency ratio (2) 35.51 34.41 26.55
ADJUSTED CASH EARNINGS DATA:
(4)
Cash earnings $76,130 $75,498 $92,600
Basic cash earnings per share 0.26 0.28 0.36
Diluted cash earnings per
share 0.26 0.28 0.35
Cash return on average assets 1.07% 1.13% 1.48%
Cash return on average
tangible assets (1) 1.16 1.22 1.61
Cash return on average
stockholders' equity 8.52 9.14 11.54
Cash return on average
tangible stockholders'
equity (1) 22.28 24.40 31.13
Cash efficiency ratio (2) 35.51 33.12 26.55
For the Six Months Ended
---------------------------
June 30, June 30,
2006 2005
------------- -------------
GAAP EARNINGS DATA:
Net income $116,987 $177,554
Basic earnings per share 0.42 0.68
Diluted earnings per share 0.42 0.68
Return on average assets 0.85% 1.44%
Return on average tangible assets (1) 0.95 1.60
Return on average stockholders' equity 6.80 11.13
Return on average tangible stockholders'
equity (1) 18.68 31.20
Efficiency ratio (2) 35.96 27.03
Operating expenses to average assets 0.84 0.81
Interest rate spread 1.97 2.75
Net interest margin 2.18 2.87
Shares used for basic EPS computation 277,267,649 260,039,096
Shares used for diluted EPS computation 278,827,109 262,287,845
OPERATING EARNINGS DATA: (3)
Operating earnings $139,384 $177,554
Basic earnings per share 0.50 0.68
Diluted earnings per share 0.50 0.68
Return on average assets 1.01% 1.44%
Return on average tangible assets (1) 1.13 1.60
Return on average stockholders' equity 8.10 11.13
Return on average tangible stockholders'
equity (1) 22.11 31.20
Efficiency ratio (2) 35.30 27.03
CASH EARNINGS DATA: (4)
Cash earnings $129,231 $190,782
Basic cash earnings per share 0.47 0.73
Diluted cash earnings per share 0.46 0.73
Cash return on average assets 0.93% 1.55%
Cash return on average tangible assets (1) 1.01 1.69
Cash return on average stockholders'
equity 7.51 11.96
Cash return on average tangible
stockholders' equity (1) 19.84 32.87
Cash efficiency ratio (2) 34.98 26.05
ADJUSTED CASH EARNINGS DATA: (4)
Cash earnings $151,628 $190,782
Basic cash earnings per share 0.55 0.73
Diluted cash earnings per share 0.54 0.73
Cash return on average assets 1.10% 1.55%
Cash return on average tangible assets (1) 1.19 1.69
Cash return on average stockholders'
equity 8.82 11.96
Cash return on average tangible
stockholders' equity (1) 23.28 32.87
Cash efficiency ratio (2) 34.34 26.05
(1) Please see the reconciliation of stockholders' equity and tangible
stockholders' equity.
(2) The Company calculates its GAAP, operating, and cash 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 and
of GAAP and cash earnings and adjusted cash earnings.
(3) Please see the reconciliation of GAAP and operating earnings.
(4) Please see the reconciliation of GAAP and cash earnings and
adjusted cash earnings.
NEW YORK COMMUNITY BANCORP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
At June 30, At March 31, At December 31,
2006 2006 2005
---------------- ---------------- ---------------
BALANCE SHEET DATA:
Book value per share $12.62 $12.39 $12.43
Tangible book value
per share (1) 4.88 4.70 4.70
Stockholders' equity
to total assets 12.87% 12.25% 12.65%
Tangible stockholders'
equity to tangible
assets (1) 5.41 5.03 5.19
Tangible stockholders'
equity to tangible
assets excluding
after-tax net
unrealized losses on
securities (1) 5.69 5.29 5.41
Shares used for book
value and tangible
book value
computation (1) 293,062,701 268,286,284 267,594,393
Total shares issued
and outstanding 295,056,819 270,374,542 269,776,791
ASSET QUALITY RATIOS:
Non-performing loans
to total loans 0.16% 0.14% 0.16%
Non-performing assets
to total assets 0.11 0.10 0.11
Allowance for loan
losses to non-
performing loans 282.05 312.08 289.17
Allowance for loan
losses to total
loans 0.44 0.44 0.47
(1) Please see the reconciliation of stockholders' equity and tangible
stockholders' equity.
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