NFB North Fork Bancorporation Ny

North Fork Bancorporation, Inc. (NYSE: NFB) reported advances in earnings and earnings per share, loan and deposit growth, improvements in asset quality, record originations from its mortgage banking company and a repositioned balance sheet. Highlights in the current period include: -- 122% increase in earnings for the second quarter compared to 2004, with a 13% increase in diluted earnings per share. -- Returns on average tangible equity and tangible assets of 34.5% and 1.96%, excluding the MSR expense. -- 27% annualized growth in commercial demand deposits. -- 30% annualized growth in commercial loans. -- 10% annualized growth in total deposits. -- 20% decline in non-performing assets. -- Record mortgage loan originations of $12.4 billion from the Company's mortgage banking subsidiary as gain on sale margins improved. -- A balance sheet repositioning reducing securities by $2 billion and borrowings by $1.5 billion. "We have taken measures this quarter to improve our balance sheet and earnings quality as we prepare for a more favorable interest rate environment," said John Adam Kanas, Chairman, President and Chief Executive Officer. The Company's tangible equity to tangible asset ratio rose to 5.88%. Net Earnings and Returns Net income for the quarter ended June 30, 2005 was $242 million or $.51 diluted earnings per share compared to $109 million or diluted earnings per share of $.45 for the comparable period in 2004, a 122% increase in earnings and a 13% increase in diluted earnings per share. Diluted earnings per share for the quarter ended June 30, 2005, excluding the effects of the MSR expense discussed below, was $.56. Net income for the six-month period ended June 30, 2005 was $501 million or diluted earnings per share of $1.06 compared to $212 million or diluted earnings per share of $.91, increases of 137% and 16%, respectively. The Company's returns on average tangible equity and assets in the current quarter excluding the effect of the MSR expense were 34.51% and 1.96%, respectively. For the quarter ended June 30, 2005, net interest income and net interest margin were $462.1 million and 3.59%, respectively, compared to $234.1 million and 4.26% in 2004. On a linked quarter basis, net interest income declined modestly as the net interest margin declined by 20 basis points. The margin decline was caused primarily by the rising cost of funds, a flattening yield curve and aggressive consumer deposit pricing. The net interest margin is expected to stabilize for the remainder of the year. Considering the prevailing interest rate environment, the Company repositioned its balance sheet in the current quarter. Short-term borrowings were reduced by approximately $1.5 billion using proceeds received from the sale of $1.4 billion in securities and $1 billion in residential loans from its held-for-investment portfolio. The combined yield on the securities and loans sold was 4.83%. Gains from these asset sales are set forth separately in the consolidated statement of income. All of the asset sales occurred in the latter part of June 2005 and had no effect on average interest earning assets for the current quarter. Loans Loans held-for-investment at June 30, 2005 amounted to $32.5 billion compared to $15.4 billion at June 30, 2004. Sustained organic growth and loans acquired from the GreenPoint acquisition account for the increase. On a linked quarter basis, loans held-for-investment increased by $626 million for an annualized growth rate of 8%. Interest rate sensitive commercial loans increased 30% to $9.6 billion, on an annualized basis. Commercial and industrial loans rose to $3.9 billion, an increase of 55% on an annualized basis. The 1-4 residential loan portfolio declined modestly in the current quarter, a trend that will continue. "Our commercial loan pipeline and opportunities to acquire new business relationships are soaring," said Mr. Kanas. "We see no interruption of these upward trends," he added. On a linked quarter basis, non-performing assets declined by approximately $34 million or 20%. The entire reduction was in the non-performing loans category. Net charge-offs in the quarter were a modest 20 basis points. The overall allowance for loan losses to non-performing loans improved to 270%. The allowance for loan losses of $218 million, when allocated between residential mortgages and all other commercial loans, was .36% and 1.22%, respectively. "We will aggressively pursue our bulk sales program of non-performing assets," said Mr. Kanas. In the quarter, the Company sold approximately $21 million of non-performing loans, incurring a charge off of approximately $1 million. Deposits At June 30, 2005 total deposits were $37.5 billion, a linked quarter increase of approximately $1 billion or an annualized growth rate of 10%. This growth was achieved despite a $700 million linked quarter decline in consumer deposits, substantially all of which were rate sensitive consumer deposits from the former GreenPoint branches. Demand deposits rose to $7.6 billion at quarter end for a linked quarter increase of $480 million, or an annualized growth rate of 27%. All of the Company's local competitors are aggressively pricing consumer deposits in an effort to gain or retain market share. The Company has chosen to maintain its pricing discipline for consumer deposits, focusing instead on commercial business. Substantially, all of the Company's demand deposits relate to commercial customers. Total commercial deposits constitute 25% of total deposits at June 30, 2005. "The payoff of the GreenPoint transaction is ahead of us as commercial customers begin to populate those branches," said John Kanas. Mortgage Banking Business The Company's mortgage banking subsidiary, GreenPoint Mortgage, achieved record originations of $12.4 billion in the quarter, an increase of 24%, linked quarter. The spread on loan sales improved to 131 basis points, due in part to the changing product mix. Gain on the sale of loans improved to $121 million in the quarter from $105 million in the prior quarter. At quarter end, the mortgage pipeline was $7.6 billion. During the quarter, the Company recorded a temporary impairment charge of approximately $35 million on its mortgage servicing rights asset resulting primarily from increased prepayment assumptions caused by the Treasury yield curve at June 30, 2005. The benchmark 10-year Treasury yield was 3.94% at June 30, 2005 compared to 4.50% at March 31, 2005. The Company expects to recover a majority of this impairment as rates increase and prepayment speeds slow in future quarters. Approximately one half of the reserve would have been recovered with the 10 year Treasury closing at 4.21% on July 18. At June 30, 2005, mortgage servicing rights of $253 million, net of reserve, was 82 basis points of the unpaid principal balance of the related loans serviced. Cash Dividend On June 28, 2005, the Board declared its regular quarterly dividend of $.22 per common share. The dividend will be payable August 15, 2005, to shareholders of record at the close of business on July 29, 2005. Audio Webcast A recorded audio webcast reviewing North Fork's results will be available at 8:30 a.m. Eastern Time on July 20, 2005. It is available through the Company's website www.northforkbank.com. From the homepage, click on Quarterly Earnings Announcement, July 20, 2005. A call-in number is also available by dialing (US and Canada) 877-660-6853, Account #286, Conference ID: 161839 or (International) 201-612-7415, Account #286, Conference ID: 161839. The webcast will be archived for 5 business days. * * * North Fork is a regional bank holding company headquartered in New York conducting commercial and retail banking from approximately 358 branch locations in the Tri-State area, with a complementary national mortgage banking business. * * * This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about North Fork's plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of North Fork's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in the interest rate environment; changes in the securities and real estate markets; increased competition and its effect on pricing, spending, third-party relationships and revenues; and the risk of new and changing regulation in the U.S. and internationally. Additional factors that could cause North Fork's results to differ materially from those described in the forward-looking statements can be found in the 2004 Annual Report on Form 10-K of North Fork (including under the heading "Forward-Looking Statements"), and in the Quarterly Reports on Form 10-Q of North Fork filed with the Securities and Exchange Commission ("SEC") and available at the SEC's internet site (http://www.sec.gov). The forward-looking statements in this press release speak only as of the date of the press release, and North Fork assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. -0- *T North Fork Bancorporation, Inc. Consolidated Statements of Income (Unaudited) Three Months Ended Six Months Ended (in thousands, except per June 30, June 30, June 30, June 30, share amounts) 2005 2004 2005 2004 --------- --------- ---------- --------- Interest Income: Loans Held-for-Investment $472,218 $213,002 $924,435 $407,202 Loans Held-for-Sale 73,065 - 139,913 - Mortgage-Backed Securities 133,375 72,031 275,382 131,168 Other Securities 30,124 17,874 59,531 31,997 Money Market Investments 662 467 1,395 670 --------- --------- ---------- --------- Total Interest Income 709,444 303,374 1,400,656 571,037 --------- --------- ---------- --------- Interest Expense: Savings, NOW & Money Market Deposits 82,455 19,108 152,051 34,119 Time Deposits 40,391 12,311 73,857 23,047 Federal Funds Purchased & Collateralized Borrowings 105,238 31,308 204,245 59,911 Other Borrowings 19,287 6,552 37,111 13,036 --------- --------- ---------- --------- Total Interest Expense 247,371 69,279 467,264 130,113 --------- --------- ---------- --------- Net Interest Income 462,073 234,095 933,392 440,924 Provision for Loan Losses 9,000 6,500 18,000 13,000 --------- --------- ---------- --------- Net Interest Income after Provision for Loan Losses 453,073 227,595 915,392 427,924 --------- --------- ---------- --------- Non-Interest Income: Gain on Sale of Loans Held- for-Sale 120,575 302 225,944 591 Customer Related Fees & Service Charges 41,902 23,417 83,908 45,188 Mortgage Servicing Fees 4,035 1,016 9,611 1,888 Investment Management, Commissions & Trust Fees 10,287 4,099 21,358 8,023 Other Operating Income 12,126 6,817 26,354 13,802 --------- --------- ---------- --------- Subtotal 188,925 35,651 367,175 69,492 --------- --------- ---------- --------- Temporary Impairment Charge - Mortgage Servicing Rights (34,971) - (34,971) - Securities Gains/(Losses), net 10,884 (475) 15,519 7,413 Gain on Sale of Loans Held- for-Investment 4,293 - 4,293 - --------- --------- ---------- --------- Total Non-Interest Income 169,131 35,176 352,016 76,905 --------- --------- ---------- --------- Non-Interest Expense: Employee Compensation & Benefits 139,014 55,224 274,383 106,301 Occupancy & Equipment, net 46,949 20,074 92,903 37,699 Amortization of Identifiable Intangibles 9,133 1,889 18,266 2,670 Other Operating Expenses 54,697 21,181 110,894 39,127 --------- --------- ---------- --------- Total Non-Interest Expense 249,793 98,368 496,446 185,797 --------- --------- ---------- --------- Income Before Income Taxes 372,411 164,403 770,962 319,032 Provision for Income Taxes 130,345 55,404 269,861 107,514 --------- --------- ---------- --------- Net Income $242,066 $108,999 $501,101 $211,518 ========= ========= ========== ========= Earnings Per Share: Basic $0.52 $0.46 $1.07 $0.92 Diluted $0.51 $0.45 $1.06 $0.91 *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Consolidated Balance Sheets (Unaudited) (in thousands, except per share June 30, March 31, December 31, June 30, amounts) 2005 2005 2004 2004 ------------ ------------ ------------ ------------ Assets: Cash & Due from Banks $826,921 $712,195 $972,506 $528,772 Money Market Investments 38,023 40,809 90,394 16,140 Securities: Available-for- Sale 12,924,780 14,983,603 15,444,625 8,762,663 Held-to-Maturity 118,429 133,745 142,573 152,201 ------------ ------------ ------------ ------------ Total Securities 13,043,209 15,117,348 15,587,198 8,914,864 ------------ ------------ ------------ ------------ Loans: Loans Held-for- Sale 6,398,119 5,350,823 5,775,945 2,902 Loans Held-for- Investment 32,482,774 31,857,021 30,453,334 15,385,568 Less: Allowance for Loan Losses 217,872 215,307 211,097 138,008 ------------ ------------ ------------ ------------ Net Loans Held-for- Invest- ment 32,264,902 31,641,714 30,242,237 15,247,560 ------------ ------------ ------------ ------------ Goodwill 5,888,195 5,886,693 5,878,277 1,003,668 Identifiable Intangibles 132,468 141,601 150,734 49,447 Premises & Equipment 426,099 417,900 416,003 220,379 Mortgage Servicing Rights 253,482 283,268 254,857 - Accrued Income Receivable 205,678 213,195 205,189 107,495 Other Assets 908,593 974,854 1,093,715 380,632 ------------ ------------ ------------ ------------ Total Assets $60,385,689 $60,780,400 $60,667,055 $26,471,859 ============ ============ ============ ============ Liabilities and Stockholders' Equity: Deposits: Demand $7,586,939 $7,106,826 $6,738,302 $5,259,052 Savings, NOW & Money Market 21,659,890 21,725,437 20,598,994 10,816,194 Time 8,219,517 7,705,470 7,475,132 3,761,211 ------------ ------------ ------------ ------------ Total Deposits 37,466,346 36,537,733 34,812,428 19,836,457 ------------ ------------ ------------ ------------ Federal Funds Purchased & Collateralized Borrowings 11,387,571 12,931,678 14,593,027 3,138,935 Other Borrowings 1,506,337 1,484,468 1,506,318 724,166 ------------ ------------ ------------ ------------ Total Borrowings 12,893,908 14,416,146 16,099,345 3,863,101 ------------ ------------ ------------ ------------ Accrued Expenses & Other Liabilities 809,155 818,330 874,203 460,714 ------------ ------------ ------------ ------------ Total Liabilities $51,169,409 $51,772,209 $51,785,976 $24,160,272 ------------ ------------ ------------ ------------ Stockholders' Equity: Common Stock, par value $0.01; authorized 1,000,000,000 shares; issued 479,207,610 shares at June 30, 2005 $4,792 $4,775 $4,745 $1,931 Additional Paid in Capital 7,007,286 7,004,048 6,968,493 1,121,040 Retained Earnings 2,354,784 2,218,134 2,064,148 1,930,379 Accumulated Other Comprehensive (Loss)/Income (21,076) (87,300) 240 (61,784) Deferred Compensation (115,160) (121,011) (125,174) (84,294) Treasury Stock at Cost; 623,892 shares at June 30, 2005 (14,346) (10,455) (31,373) (595,685) ------------ ------------ ------------ ------------ Total Stock- holders' Equity 9,216,280 9,008,191 8,881,079 2,311,587 ------------ ------------ ------------ ------------ Total Liabilities and Stock- holders' Equity $60,385,689 $60,780,400 $60,667,055 $26,471,859 ============ ============ ============ ============ *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Selected Financial Data and Balance Sheet Components (Unaudited) *T -0- *T Three Months Six Months Ended Ended June 30, June 30, June 30, June 30, SELECTED FINANCIAL DATA: 2005 2004 2005 2004 -------- -------- -------- -------- (in thousands, except ratios and per share amounts) Per Share: Net Income - Basic $0.52 $0.46 $1.07 $0.92 Net Income - Diluted $0.51 $0.45 $1.06 $0.91 Average Shares Outstanding - Basic 469,413 236,984 467,953 229,734 Average Shares Outstanding - Diluted 474,909 240,474 474,118 233,606 Cash Dividends $0.22 $0.20 $0.44 $0.40 Dividend Payout Ratio 44% 47% 42% 46% Book Value $19.26 $8.95 $19.26 $8.95 Tangible Book Value $6.68 $4.87 $6.68 $4.87 Selected Financial Data: Return on Average Total Assets 1.58% 1.78% 1.66% 1.86% Return on Average Tangible Assets (1) 1.79% 1.86% 1.89% 1.93% Return on Average Tangible Assets excluding MSR Impairment (1) 1.96% - 1.97% - Return on Average Equity 10.59% 22.92% 11.11% 24.56% Return on Average Tangible Equity (1) 31.61% 38.23% 33.71% 37.49% Return on Average Tangible Equity excluding MSR Impairment (1) 34.51% - 35.20% - Tangible Equity to Tangible Assets 5.88% 4.96% 5.88% 4.96% Efficiency Ratio (2) 36.43% 35.56% 36.19% 35.49% Yield on Interest Earning Assets (3) 5.46% 5.49% 5.49% 5.53% Cost of Funds 2.24% 1.61% 2.14% 1.61% Net Interest Margin (3) 3.59% 4.26% 3.69% 4.30% June March December June 30, 31, 31, 30, 2005 2005 2004 2004 -------- -------- -------- -------- Risk Based Capital: Tier 1 10.47% 10.35% 9.90% 9.86% Total 12.97% 12.90% 12.50% 13.90% Leverage Ratio 6.56% 6.48% 6.22% 6.63% *T -0- *T June 30, March 31, December 31, June 30, 2005 2005 2004 2004 ------------ ------------ ------------ ------------ Quarterly Average Balance Sheet: Total Assets $61,480,463 $60,206,882 $58,746,739 $24,617,030 Securities 14,556,278 15,195,094 15,315,473 8,625,227 Loans Held-for- Sale 5,754,088 4,990,885 4,887,454 2,902 Loans Held-for- Investment 32,631,577 31,284,812 29,883,578 13,931,563 Goodwill & Identifiable Intangibles 6,024,208 6,027,487 5,833,655 752,748 Demand Deposits 7,290,545 6,853,159 6,593,969 4,825,135 Interest Bearing Deposits 29,670,895 28,738,597 27,302,465 13,391,765 Federal Funds Purchased & Collateralized Borrowings 13,095,195 13,371,436 13,859,327 3,182,388 Other Borrowings 1,484,336 1,505,984 1,516,032 762,358 Stockholders' Equity 9,170,671 9,017,358 8,820,845 1,912,760 Tangible Stockholders' Equity 3,146,463 2,989,871 2,987,190 1,160,012 *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Selected Financial Data and Balance Sheet Components (Unaudited) BALANCE SHEET COMPONENTS: The following table shows the securities portfolio composition for the periods ended: (in thousands) Securities - Available-for- June 30, March 31, December 31, June 30, Sale: 2005 2005 2004 2004 ------------ ------------ ------------ ----------- Collateralized Mortgage Obligations $8,158,319 $9,670,492 $9,820,056 $4,906,742 Agency Pass- Through Certificates 2,335,485 2,491,331 2,737,067 2,165,407 State & Municipal Obligations 771,349 979,304 920,112 594,466 Equity Securities 693,509 776,108 794,005 189,681 U.S. Treasury & Government Agencies 277,806 357,407 363,775 265,256 Other Securities (4) 688,312 708,961 809,610 641,111 ------------ ------------ ------------ ----------- Total Securities Available- for-Sale $12,924,780 $14,983,603 $15,444,625 $8,762,663 Securities Held-to- Maturity 118,429 133,745 142,573 152,201 ------------ ------------ ------------ ----------- Total Securities $13,043,209 $15,117,348 $15,587,198 $8,914,864 ============ ============ ============ =========== *T -0- *T The following table represents the components of the loans held-for- sale and held-for-investment portfolios for the periods ended: June 30, March 31, December 31, June 30, (in thousands) 2005 2005 2004 2004 ------------ ------------ ------------ ------------ Loans Held-for- Sale: Residential Mortgages $5,481,104 $4,239,366 $4,339,581 $2,902 Home Equity 852,137 1,061,352 1,380,247 - ------------ ------------ ------------ ------------ Total 6,333,241 5,300,718 5,719,828 2,902 Deferred Origination Costs 64,878 50,105 56,117 - ------------ ------------ ------------ ------------ Total Loans Held-for-Sale $6,398,119 $5,350,823 $5,775,945 $2,902 ============ ============ ============ ============ June 30, March 31, December 31, June 30, (in thousands) 2005 2005 2004 2004 ------------ ------------ ------------ ------------ Loans Held-for- Investment: Commercial Mortgages $5,725,316 $5,535,281 $5,369,656 $3,536,517 Commercial & Industrial 3,879,830 3,408,006 3,046,820 2,529,253 ------------ ------------ ------------ ------------ Total Commercial 9,605,146 8,943,287 8,416,476 6,065,770 Residential Mortgages 16,176,829 16,445,902 15,668,938 3,327,047 Multi-Family Mortgages 4,485,420 4,328,879 4,254,405 3,824,615 Consumer 1,521,869 1,554,499 1,604,863 1,751,240 Construction and Land 653,002 541,280 480,162 453,922 ------------ ------------ ------------ ------------ Total $32,442,266 $31,813,847 $30,424,844 $15,422,594 Unearned Income & Deferred Costs 40,508 43,174 28,490 (37,026) ------------ ------------ ------------ ------------ Total Loans Held-for- Investment $32,482,774 $31,857,021 $30,453,334 $15,385,568 ============ ============ ============ ============ *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Selected Financial Data and Balance Sheet Components (Unaudited) *T -0- *T The following tables represent the components of non-performing assets for the periods ended: June 30, March 31, December 31, June 30, (dollars in thousands) 2005 2005 2004 2004 --------- --------- --------- -------- Non-Performing Assets: Commercial Mortgages $6,409 $11,459 $16,890 $2,623 Commercial & Industrial 7,768 8,152 8,730 7,256 --------- --------- --------- -------- Total Commercial 14,177 19,611 25,620 9,879 Residential Mortgages 63,979 91,411 103,745 4,004 Multi-Family Mortgages 44 1,293 1,290 - Consumer 2,179 2,527 3,178 1,872 Construction and Land 308 - - 49 --------- --------- --------- -------- Non-Performing Loans Held- for-Investment $80,687 $114,842 $133,833 $15,804 Non-Performing Loans Held- for-Sale 45,377 45,780 60,858 - Other Real Estate 14,557 14,243 17,410 435 --------- --------- --------- -------- Total Non-Performing Assets $140,621 $174,865 $212,101 $16,239 ========= ========= ========= ======== June March December June 30, 31, 31, 30, 2005 2005 2004 2004 --------- --------- --------- -------- Allowance for Loan Losses to Non-Performing Loans Held-for- Investment 270% 187% 158% 873% Allowance for Loan Losses to Total Loans Held-for- Investment 0.67% 0.68% 0.69% 0.90% Non-Performing Loans Held-for- Investment to Total Loans Held-for-Investment 0.25% 0.36% 0.44% 0.10% Non-Performing Assets to Total Assets 0.23% 0.29% 0.35% 0.06% Quarterly Net Charge-offs to Average Loans Held-for- Investment 0.20% 0.06% 0.14% 0.09% *T -0- *T The following table represents the impact of allocating the allowance for loan losses as of June 30, 2005 and March 31, 2005, into our two primary portfolio segments: June 30, 2005 ---------------------------------------- Residential & Commercial & All Other (dollars in thousands) Total Multi-Family Loans ------------ ------------ -------------- Loans Held-for-Investment $32,442,266 $20,662,249 $11,780,017 Allowance for Loan Losses Allocated $217,872 $74,304 $143,568 Non-Performing Loans Held- for-Investment $80,687 $64,023 $16,664 Allowance for Loan Losses to Loans Held-for-Investment 0.67% 0.36% 1.22% ============ ============ ============== Allowance for Loan Losses to Non-Performing Loans Held-for- Investment 270% 116% 862% ============ ============ ============== March 31, 2005 ---------------------------------------- Residential & Commercial & All Other (dollars in thousands) Total Multi-Family Loans ------------ ------------ -------------- Loans Held-for-Investment $31,813,847 $20,774,781 $11,039,066 Allowance for Loan Losses Allocated $215,307 $76,104 $139,203 Non-Performing Loans Held- for-Investment $114,842 $92,704 $22,138 Allowance for Loan Losses to Loans Held-for-Investment 0.68% 0.37% 1.26% ============ ============ ============== Allowance for Loan Losses to Non-Performing Loans Held-for- Investment 187% 82% 629% ============ ============ ============== *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Net Interest Margin Analysis (Unaudited) The following table presents on a linked quarter basis, an analysis of net interest income by each major category of interest earning assets and interest bearing liabilities: For the Three Months Ended: June 30, 2005 ------------------------------------ Average Average (dollars in thousands) Balance Interest Rate ------------ ------------ ---------- Interest Earning Assets: Loans Held-for-Investment (3) $32,631,577 $473,933 5.83% Loan Held-for-Sale 5,754,088 73,065 5.09% Securities (3) 14,556,278 173,698 4.79% Money Market Investments (3) 87,406 684 3.14% ------------ ------------ Total Interest Earning Assets $53,029,349 $721,380 5.46% ------------ ------------ Non-Interest Earning Assets: Cash and Due from Banks $1,015,667 Other Assets 7,435,447 ------------ Total Assets $61,480,463 ------------ Interest Bearing Liabilities: Savings, NOW & Money Market Deposits $21,794,356 $82,455 1.52% Time Deposits 7,876,539 40,391 2.06% ------------ ------------ Total Savings and Time Deposits 29,670,895 122,846 1.66% Fed. Funds Purchased & Collateralized Borrowings 13,095,195 105,238 3.22% Other Borrowings 1,484,336 19,286 5.21% ------------ ------------ Total Borrowings 14,579,531 124,524 3.43% ------------ ------------ Total Interest Bearing Liabilities $44,250,426 $247,370 2.24% ------------ ------------ Interest Rate Spread 3.21% Non-Interest Bearing Liabilities: Demand Deposits $7,290,545 Other Liabilities 768,821 ------------ Total Liabilities 52,309,792 Stockholders' Equity 9,170,671 ------------ Total Liabilities and Stockholders' Equity $61,480,463 ------------ Net Interest Income and Net Interest Margin $474,010 3.59% Less: Tax Equivalent Adjustment (11,937) ------------ Net Interest Income $462,073 For the Three Months Ended: March 31, 2005 ------------------------------------ Average Average (dollars in thousands) Balance Interest Rate ------------- ----------- ---------- Interest Earning Assets: Loans Held-for-Investment (3) $31,284,812 $453,563 5.88% Loan Held-for-Sale 4,990,885 66,848 5.43% Securities (3) 15,195,094 180,687 4.82% Money Market Investments (3) 86,989 747 3.48% ------------- ----------- Total Interest Earning Assets $51,557,780 $701,845 5.52% ------------- ----------- Non-Interest Earning Assets: Cash and Due from Banks $1,056,382 Other Assets 7,592,720 ------------- Total Assets $60,206,882 ------------- Interest Bearing Liabilities: Savings, NOW & Money Market Deposits $21,179,399 $69,596 1.33% Time Deposits 7,559,198 33,466 1.80% ------------- ----------- Total Savings and Time Deposits 28,738,597 103,062 1.45% Fed. Funds Purchased & Collateralized Borrowings 13,371,436 99,007 3.00% Other Borrowings 1,505,984 17,824 4.80% ------------- ----------- Total Borrowings 14,877,420 116,831 3.18% ------------- ----------- Total Interest Bearing Liabilities $43,616,017 $219,893 2.04% ------------- ----------- Interest Rate Spread 3.48% Non-Interest Bearing Liabilities: Demand Deposits $6,853,159 Other Liabilities 720,348 ------------- Total Liabilities 51,189,524 Stockholders' Equity 9,017,358 ------------- Total Liabilities and Stockholders' Equity $60,206,882 ------------- Net Interest Income and Net Interest Margin $481,952 3.79% Less: Tax Equivalent Adjustment (10,633) ----------- Net Interest Income $471,319 *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Mortgage Banking - Quarterly Highlights (Unaudited) (dollars in thousands) June 30, March 31, December 31, 2005 2005 2004 ------------ ------------ ------------ Comparative Mortgage Loan Volumes ------------------------------- Total Applications Received $21,195,474 $18,281,837 $16,403,008 ------------ ------------ ------------ Loans Originated: Specialty Products (5) $5,302,469 $4,231,111 $4,494,452 Home Equity/Seconds 1,566,306 1,488,748 1,630,798 Jumbo/Agency 5,553,487 4,302,340 4,316,658 ------------ ------------ ------------ $12,422,262 $10,022,199 $10,441,908 ============ ============ ============ Pipeline (6) $7,594,398 $7,407,671 $6,264,104 Interest Rate Lock Commitments (7) 2,891,179 2,523,344 1,950,504 Loans Held-for-Sale 6,398,119 5,350,823 5,775,945 Mortgage Loans Sold and Average Margins (8) ------------------------------- Whole Loan Sales: Specialty Products $4,394,898 $4,333,784 $3,783,245 Home Equity/Seconds 1,466,771 1,580,497 953,463 Jumbo/Agency 3,240,177 2,438,998 2,753,521 ------------ ------------ ------------ Total Whole Loan Sales $9,101,846 $8,353,279 $7,490,229 ============ ============ ============ Gain on Sale of Whole Loans (9) $119,249 $106,159 $109,297 Margins on Whole Loans: Specialty Products 1.35% 1.45% 1.84% Home Equity/Seconds 2.02% 1.45% 1.30% Jumbo/Agency 0.93% 0.84% 0.99% ------------ ------------ ------------ Total Whole Loan Sales 1.31% 1.27% 1.46% ============ ============ ============ Gains on Sale of Whole Loans: Specialty Products $59,455 $62,750 $69,759 Home Equity/Seconds 29,613 22,858 12,395 Jumbo/Agency 30,181 20,551 27,143 ------------ ------------ ------------ Total Whole Loan Sales $119,249 $106,159 $109,297 ============ ============ ============ GreenPoint Mortgage Pre-Acquisition Financial Information -------------------------- (dollars in thousands) September 30, June 30, 2004 2004 ------------ ------------- Comparative Mortgage Loan Volumes ------------------------------- Total Applications Received $17,001,566 $19,868,351 ------------ ------------- Loans Originated: Specialty Products (5) $3,860,338 $3,452,674 Home Equity/Seconds 1,613,625 1,255,026 Jumbo/Agency 4,513,854 6,460,685 ------------ ------------- $9,987,817 $11,168,385 ============ ============= Pipeline (6) $7,623,547 $8,641,744 Interest Rate Lock Commitments (7) 2,512,433 2,559,331 Loans Held-for-Sale 5,060,115 5,240,641 Mortgage Loans Sold and Average Margins (8) ------------------------------- Whole Loan Sales: Specialty Products $3,262,425 $3,029,038 Home Equity/Seconds 1,288,899 588,597 Jumbo/Agency 3,349,777 3,904,792 ------------ ------------- Total Whole Loan Sales $7,901,101 $7,522,427 ============ ============= Gain on Sale of Whole Loans (9) $105,104 $123,332 Margins on Whole Loans: Specialty Products 1.64% 2.60% Home Equity/Seconds 1.55% 1.81% Jumbo/Agency 0.94% 0.87% ------------ ------------- Total Whole Loan Sales 1.33% 1.64% ============ ============= Gains on Sale of Whole Loans: Specialty Products $53,530 $78,698 Home Equity/Seconds 20,031 10,636 Jumbo/Agency 31,543 33,998 ------------ ------------- Total Whole Loan Sales $105,104 $123,332 ============ ============= *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Notes to the Financial Data and Summaries This press release contains certain supplemental financial information, described in the following notes, which has been determined by methods other than Generally Accepted Accounting Principles ("GAAP") that management uses in its analysis of the Company's performance. Management believes these non-GAAP financial measures provide information useful to investors in understanding the underlying operational performance of the Company, its business and performance trends and facilitates comparisons with the performance of others in the financial services industry. (1) Return on average tangible assets and return on average tangible equity, which represent non-GAAP measures are computed, on an annualized basis, as follows: Return on average tangible assets is computed by dividing net income, plus amortization of identifiable intangible assets, net of taxes by average total assets less average goodwill and average identifiable intangible assets. Return on average tangible equity is computed by dividing net income, plus amortization of identifiable intangible assets, net of taxes by average total stockholders' equity less average goodwill and average identifiable intangible assets. Return on average tangible assets excluding the MSR Impairment is computed by dividing net income, plus amortization of identifiable intangible assets and the MSR impairment charge, net of taxes, by average total assets less average goodwill and average identifiable intangible assets. Return on average tangible equity is computed by dividing net income, plus amortization of identifiable intangible assets and the MSR impairment charge, net of taxes by average total stockholders' equity less average goodwill and average identifiable intangible assets. *T -0- *T Three Months Ended Six Months Ended ------------------------- ------------------------- June 30, June 30, June 30, June 30, 2005 2004 2005 2004 ------------ ------------ ------------ ------------ (in thousands) Net Income, as Reported $242,066 $108,999 $501,101 $211,518 Add: Amortization of Identifiable Intangibles, Net of taxes 5,937 1,252 11,873 1,770 ------------ ------------ ------------ ------------ Net Income, as Adjusted $248,003 $110,251 $512,974 $213,288 ------------ ------------ ------------ ------------ Add: MSR Impairment Charge, net of taxes 22,731 - 22,731 - ------------ ------------ ------------ ------------ Net Income - as adjusted $270,734 $110,251 $535,705 $213,288 ------------ ------------ ------------ ------------ Average Total Assets: $61,480,463 $24,617,030 $60,847,190 $22,829,188 Less: Average Goodwill 5,886,175 720,988 5,883,049 565,686 Less: Average Identi- fiable Intangible Assets 138,033 31,760 142,789 22,084 ------------ ------------ ------------ ------------ Average Total Tangible Assets $55,456,255 $23,864,282 $54,821,352 $22,241,418 ------------ ------------ ------------ ------------ Average Equity: $9,170,671 $1,912,760 $9,094,438 $1,731,953 Less: Average Goodwill 5,886,175 720,988 5,883,049 565,686 Less: Average Identi- fiable Intangible Assets 138,033 31,760 142,789 22,084 ------------ ------------ ------------ ------------ Average Tangible Equity $3,146,463 $1,160,012 $3,068,600 $1,144,183 ------------ ------------ ------------ ------------ Return on Average Tangible Assets 1.79% 1.86% 1.89% 1.93% Return on Average 37.49% Tangible Equity %% -- 31.61% 38.23% 33.71% % Return on Average Tangible Assets excluding MSR Impairment 1.96% - 1.97% - Return on Average Tangible Equity excluding MSR Impairment 34.51% - 35.20% - (2) The efficiency ratio, which represents a non-GAAP measure, is defined as the ratio of non-interest expense net of amortization of identifiable intangibles and other real estate related expenses, to net interest income on a tax equivalent basis and other non-interest income net of securities gains, gains on sale of loans held-for-investment and temporary impairment charge on mortgage servicing rights. (3) Presented on a tax equivalent basis. (4) Includes retained interests in securitizations of $10.0 million, $10.8 million and $31.8 million at June 30, 2005, March 31, 2005 and December 31, 2004, respectively. (5) Specialty products include: Alt A, No Doc and A minus programs. (6) The pipeline represents applications received, but not yet funded. (7) Represents commitments to lend where the rates are guaranteed to the borrower for a specific period of time. (8) Gain on sale of whole loans and the margins on the whole loan sales include the impact of the valuation of mortgage loans held-for-sale and interest rate lock commitments, the impact of the valuation of derivatives utilized to manage the exposure to interest rate risk associated with mortgage loan commitments and mortgage loans held-for-sale, and the impact of adjustments related to reserves established for representations and warranties made in conjunction with loan sales. (9) The gain on sale of whole loans for the quarters ended June 30, 2005, March 31, 2005 and December 31, 2004, differ from the amounts reported under generally accepted accounting principles on the accompanying income statement due to the fair value adjustment of loans held-for-sale at October 1, 2004 and sold during each quarter. For the quarters ended June 30, 2005, March 31, 2005 and December 31, 2004, fair value (loss)/gain adjustments totaled $(1.3) million, $0.8 million and $56.4 million, respectively. *T