NFB (NYSE:NFB)
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North Fork Bancorporation, Inc. (NYSE:NFB):
Highlights in the current period include:
-- Net income of $221 million and diluted earnings per share of
$.48.
-- A net interest margin of 3.53%, substantially unchanged from
the previous quarter.
-- 39% annualized growth in commercial loans and 35% annualized
growth in total loans, excluding residential mortgages.
-- Returns on average tangible equity and average tangible assets
of 30.1% and 1.74%, respectively.
-- A 15 basis point margin improvement on residential loan sales.
-- Declaration of its regular quarterly cash dividend of $.25
cents per common share.
-- Continued reductions in the securities portfolio and
residential mortgages.
-- Ongoing progress in connection with the proposed acquisition
by Capital One Financial Corporation ("Capital One").
Net Earnings and Returns
Net income for the quarter ended June 30, 2006 was $221 million or
$.48 diluted earnings per share compared to $242 million or $.51
diluted earnings per share for the comparable period in 2005. Linked
quarter net income and diluted earnings per share improved modestly.
Net income for the six-month period ended June 30, 2005 was $431
million or diluted earnings per share of $.94 compared to $501 million
or diluted earnings per share of $1.06.
The Company's returns on average tangible equity and assets were
30.1% and 1.74%, respectively in the most recent quarter.
For the quarter ended June 30, 2006, net interest income and net
interest margin were $429.9 million and 3.53%, respectively compared
to $417.5 million and 3.56%, respectively for the immediately
preceding quarter.
Net interest income and margin for the six-months ended June 30,
2006 were $847.4 million and 3.55%, respectively compared to $933.4
million and 3.69%, respectively for 2005. The year over year decline
reflects the difficult banking and interest rate environment.
Loans
Loans held-for-investment at June 30, 2006 amounted to $35.6
billion compared to $32.5 billion in 2005. On a linked quarter basis,
loans held-for-investment, excluding residential mortgages, increased
by $1.7 billion, an annualized growth rate of 35%. The commercial and
industrial segment increased by $613 million, an increase of 47% on an
annualized basis. The Company expects the commercial loan growth
momentum will continue despite intense pricing competition.
As expected, non-performing assets declined linked quarter by
approximately $19.8 million to $57.7 million. Charge-offs were a
modest 7 basis points.
Deposits
Deposits at June 30, 2006 were $36.8 billion, declining slightly
from the previous quarter. Business deposits remain a significant
component of total deposits. "We have chosen to be prudent and not
seek higher cost deposits in this marketplace," said John Adam Kanas,
Chairman, President and Chief Executive Officer.
Mortgage Banking Business
The Company's mortgage banking subsidiary, GreenPoint Mortgage,
originated $9.9 billion in the quarter, compared to $7.8 billion,
linked quarter, and $12.4 billion in the second quarter of 2005. The
Company anticipates that origination volume will be strong despite the
challenging interest rate environment. The margin on whole loan sales
was 130 basis points, a 13% increase linked quarter. Gain on sale of
loans was $102.3 million in the quarter compared to $81.7 million in
the prior quarter. At June 30, 2006, the mortgage loan pipeline
increased to $6.2 billion linked quarter.
At June 30, 2006, net mortgage servicing rights were $272 million,
or 97 basis points of the unpaid principal balance of the related
serviced loans.
Cash Dividend
On June 27, 2006, the Board declared its regular quarterly
dividend of $.25 per common share. The dividend will be payable August
15, 2006, to shareholders of record at the close of business on July
28, 2006.
Pending Acquisition
The Company reported that it was pleased with the progress toward
the pending acquisition by Capital One. The special shareholders'
meeting to approve the transaction is scheduled for August 22, 2006.
It is also subject to customary regulatory approvals. The transaction
is expected to close in the fourth quarter of 2006. See Additional
Information about the Proposed Merger with Capital One below.
North Fork is a regional bank holding company headquartered in New
York with approximately $59 billion in assets conducting commercial
and retail banking from more than 350 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
regarding future events, many of which by their nature are inherently
uncertain and beyond management's control. Actual results may differ
materially from those set forth in the forward-looking statements. The
following factors, among others, could cause legislative or regulatory
changes, actual results to differ from those set forth in these
forward-looking statements: changes in the interest rate environment;
changes in the securities and real estate markets; increased
competition and its effect on pricing, changes in monetary and fiscal
policies of the U.S. government, changes in accounting principles,
policies, practices or guidelines. 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 2005 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). Other risks
include the ability to obtain regulatory approvals for the
contemplated transaction with Capital One on the proposed terms and
schedule; the failure of Capital One or North Fork stockholders to
approve the transaction; the risk that the businesses will not be
integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take
longer to realize than expected; disruption from the transaction
making it more difficult to maintain relationships with customers,
employees or suppliers; competition and its effect on pricing,
spending, third-party relationships and revenues. 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.
Additional Information about the Proposed Merger with Capital One
On March 12, 2006, Capital One Financial Corporation and North
Fork Bancorporation, Inc. announced a definitive agreement under which
North Fork will merge with Capital One in a stock and cash
transaction. Capital One and North Fork stockholders are urged to read
the definitive proxy statement/prospectus regarding the proposed
merger, which was first mailed to stockholders on or about July 14,
2006, because it contains important information. You may obtain a free
copy of the joint proxy statement/prospectus and other related
documents filed by Capital One and North Fork with the SEC at the
SEC's website at www.sec.gov. The joint proxy statement/prospectus and
the other documents may also be obtained for free by accessing Capital
One's website at www.capitalone.com under the heading "Investors" and
then under the heading "SEC & Regulatory Filings" or by accessing
North Fork's website at www.northforkbank.com under the tab "Investor
Relations" and then under the heading "SEC Filings".
This release does not constitute an offer of securities for sale.
Participants in the Proposed Merger with Capital One
Capital One, North Fork and their respective directors, executive
officers and certain other members of management and employees may be
soliciting proxies from stockholders in favor of the proposed merger
with Capital One. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
the stockholders in connection with the proposed merger is set forth
in the joint proxy statement/prospectus. You can find information
about Capital One's executive officers and directors in Capital One's
definitive proxy statement filed with the SEC on March 21, 2005. You
can find information about North Fork's executive officers and
directors in the definitive joint proxy statement/prospectus. You can
obtain free copies of these documents from the Capital One or North
Fork using the contact information above.
-0-
*T
North Fork Bancorporation, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
(in thousands, except per 2006 2005 2006 2005
share amounts) -------------------------------------------
Interest Income:
Loans Held-for-Investment $531,756 $472,218 $1,037,492 $ 924,435
Loans Held-for-Sale 76,088 73,065 139,780 139,913
Mortgage-Backed Securities 96,437 133,375 195,952 275,382
Other Securities 29,173 30,124 57,818 59,531
Money Market Investments 570 662 1,112 1,395
-------------------------------------------
Total Interest Income 734,024 709,444 1,432,154 1,400,656
-------------------------------------------
Interest Expense:
Savings, NOW & Money
Market Deposits 134,731 82,455 252,164 152,051
Time Deposits 59,658 40,391 119,448 73,857
Federal Funds Purchased
and Collateralized
Borrowings 89,628 105,238 173,102 204,245
Other Borrowings 20,119 19,287 40,075 37,111
-------------------------------------------
Total Interest Expense 304,136 247,371 584,789 467,264
-------------------------------------------
Net Interest Income 429,888 462,073 847,365 933,392
Provision for Loan Losses 9,000 9,000 18,000 18,000
-------------------------------------------
Net Interest Income
after Provision for
Loan Losses 420,888 453,073 829,365 915,392
-------------------------------------------
Non-Interest Income:
Mortgage Banking Income 105,769 90,680 201,841 201,775
Customer Related Fees &
Service Charges 40,291 41,902 81,394 83,908
Investment Management,
Commissions & Trust Fees 9,127 10,287 18,796 21,358
Other Operating Income 22,500 15,378 34,857 29,456
Securities Gains, net 4,099 10,884 10,821 15,519
Trading Losses (1) (23,223) - (21,070) -
-------------------------------------------
Total Non-Interest
Income 158,563 169,131 326,639 352,016
-------------------------------------------
Non-Interest Expense:
Employee Compensation &
Benefits 145,248 139,014 286,559 274,383
Occupancy & Equipment, net 51,254 46,949 102,546 92,903
Amortization of
Identifiable Intangibles 8,859 9,133 17,718 18,266
Other Operating Expenses 55,310 54,697 112,026 110,894
Merger Related Charges -
Capital One 5,233 - 5,233 -
Settlement Recovery (2) (16,031) - (16,031) -
-------------------------------------------
Total Non-Interest
Expense 249,873 249,793 508,051 496,446
-------------------------------------------
Income Before Income Taxes 329,578 372,411 647,953 770,962
Provision for Income Taxes 108,761 130,345 217,008 269,861
-------------------------------------------
Net Income $220,817 $242,066 $ 430,945 $ 501,101
===========================================
Earnings Per Share:
Basic $ 0.49 $ 0.52 $ 0.95 $ 1.07
Diluted $ 0.48 $ 0.51 $ 0.94 $ 1.06
See accompanying notes appended to the financial data and summaries.
North Fork Bancorporation, Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands, June 30, March 31, December 31, June 30,
except per share 2006 2006 2005 2005
amounts) ---------------------------------------------------
Assets:
Cash & Due from
Banks $ 1,000,195 $ 940,045 $ 1,037,406 $ 826,921
Money Market
Investments 22,295 146,962 24,843 38,023
Securities:
Available-for-
Sale 9,867,618 10,615,327 11,295,977 12,924,780
Held-to-Maturity 97,344 101,486 104,210 118,429
---------------------------------------------------
Total Securities 9,964,962 10,716,813 11,400,187 13,043,209
---------------------------------------------------
Loans:
Loans Held-for-
Sale 5,406,341 4,190,465 4,359,267 6,398,119
Loans Held-for-
Investment 35,551,560 34,202,653 33,232,236 32,482,774
Less: Allowance
for Loan Losses 224,571 221,256 217,939 217,872
---------------------------------------------------
Net Loans Held-
for-Investment 35,326,989 33,981,397 33,014,297 32,264,902
---------------------------------------------------
Goodwill 5,918,116 5,918,116 5,918,116 5,888,195
Identifiable
Intangibles 96,373 105,232 114,091 132,468
Premises &
Equipment 447,633 444,546 438,040 426,099
Mortgage Servicing
Rights 272,543 276,191 267,424 253,482
Accrued Income
Receivable 213,492 209,458 205,892 205,678
Other Assets 712,896 776,155 837,308 908,593
---------------------------------------------------
Total Assets $59,381,835 $57,705,380 $57,616,871 $60,385,689
===================================================
Liabilities and Stockholders' Equity:
Deposits:
Demand $ 7,561,888 $ 7,440,561 $ 7,639,231 $ 7,586,939
Savings, NOW &
Money Market 21,377,573 22,097,622 20,910,161 21,659,890
Time 7,875,144 8,155,517 8,067,181 8,219,517
---------------------------------------------------
Total Deposits 36,814,605 37,693,700 36,616,573 37,466,346
---------------------------------------------------
Federal Funds
Purchased &
Collateralized
Borrowings 11,249,615 8,820,804 9,700,621 11,387,571
Other Borrowings 1,463,066 1,455,851 1,477,364 1,506,337
---------------------------------------------------
Total
Borrowings 12,712,681 10,276,655 11,177,985 12,893,908
---------------------------------------------------
Accrued Interest
Payable 135,351 128,822 102,229 81,138
Dividends Payable 116,437 115,880 116,754 105,288
Accrued Expenses &
Other Liabilities 540,184 544,618 601,089 622,729
---------------------------------------------------
Total
Liabilities $50,319,258 $48,759,675 $48,614,630 $51,169,409
---------------------------------------------------
Stockholders' Equity:
Common Stock, par
value $0.01;
authorized
1,000,000,000
shares; issued
480,682,118
shares at June
30, 2006 $ 4,807 $ 4,807 $ 4,806 $ 4,792
Additional Paid in
Capital 6,875,810 6,880,389 7,035,314 7,007,286
Retained Earnings 2,779,501 2,675,536 2,581,047 2,354,784
Accumulated Other
Comprehensive
Loss (207,161) (167,116) (108,898) (21,076)
Deferred
Compensation - - (154,772) (115,160)
Treasury Stock at
Cost, 14,934,674
shares at June
30, 2006 (390,380) (447,911) (355,256) (14,346)
---------------------------------------------------
Total
Stockholders'
Equity 9,062,577 8,945,705 9,002,241 9,216,280
---------------------------------------------------
Total
Liabilities and
Stockholders'
Equity $59,381,835 $57,705,380 $57,616,871 $60,385,689
===================================================
See accompanying notes appended to the financial data and summaries
North Fork Bancorporation, Inc.
Selected Financial Data and Balance Sheet Components
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
SELECTED FINANCIAL 2006 2005 2006 2005
DATA: ------------------------------------------------
(in thousands, except
ratios and per share
amounts)
Per Share:
Net Income - Basic $0.49 $0.52 $0.95 $1.07
Net Income - Diluted $0.48 $0.51 $0.94 $1.06
Average Shares
Outstanding - Basic 455,279 469,413 454,601 467,953
Average Shares
Outstanding -
Diluted 460,495 474,909 459,699 474,118
Cash Dividends $0.25 $0.22 $0.50 $0.44
Dividend Payout
Ratio 53% 44% 54% 42%
Tangible Book Value $6.54 $6.68 $6.54 $6.68
Selected Financial
Data:
Return on Average
Total Assets 1.52% 1.58% 1.50% 1.66%
Return on Average
Tangible Assets (3) 1.74% 1.79% 1.72% 1.89%
Return on Average
Equity 9.79% 10.59% 9.65% 11.11%
Return on Average
Tangible Equity (3) 30.07% 31.61% 29.92% 33.71%
Tangible Equity to
Tangible Assets 5.71% 5.88% 5.71% 5.88%
Efficiency Ratio (4) 40.69% 36.43% 43.51% 36.19%
Yield on Interest
Earning Assets 5.95% 5.46% 5.92% 5.49%
Cost of Funds 2.96% 2.24% 2.89% 2.14%
Net Interest Margin 3.53% 3.59% 3.55% 3.69%
June 30, March 31, December 31, June 30,
2006 2006 2005 2005
------------------------------------------------
Risk Based Capital:
Tier 1 10.29% 10.01% 10.26% 10.50%
Total 12.64% 12.40% 12.73% 13.01%
Leverage Ratio 7.08% 6.86% 6.70% 6.56%
June 30, March 31, December 31, June 30,
2006 2006 2005 2005
------------------------------------------------
Quarterly Average
Balance Sheet:
Total Assets $58,400,693 $57,374,851 $58,232,383 $61,480,463
Securities 10,718,973 11,114,452 11,786,052 14,556,278
Loans Held-for-Sale 4,978,945 4,295,898 5,221,652 5,754,088
Loans Held-for-
Investment 34,654,439 33,644,505 32,846,757 32,631,577
Goodwill &
Identifiable
Intangibles 6,019,964 6,028,859 6,034,399 6,024,208
Demand Deposits 7,414,598 7,337,189 7,771,142 7,290,545
Interest Bearing
Deposits 29,907,110 29,606,505 29,368,629 29,670,895
Federal Funds
Purchased &
Collateralized
Borrowings 9,845,733 9,332,211 9,740,160 13,095,195
Other Borrowings 1,454,216 1,476,106 1,484,866 1,484,336
Stockholders' Equity 9,044,461 8,971,503 9,157,876 9,170,671
Tangible Stockholders'
Equity 3,024,497 2,942,644 3,123,477 3,146,463
See accompanying notes appended to the financial data and summaries
North Fork Bancorporation, Inc.
Selected Financial Data and Balance Sheet Components
(Unaudited)
BALANCE SHEET COMPONENTS:
The following table presents the composition of the securities
portfolio for the periods ended:
(in thousands) June 30, March 31, December 31, June 30,
2006 2006 2005 2005
------------------------------------------------
Securities -
Available-for-Sale:
Collateralized
Mortgage
Obligations $6,215,558 $6,559,446 $6,921,074 $8,158,319
Agency Pass-Through
Certificates 1,685,025 1,773,735 1,956,487 2,335,485
State & Municipal
Obligations 663,997 858,651 881,238 771,349
Equity Securities 724,836 612,219 675,525 693,509
U.S. Treasury &
Government Agencies 184,003 185,872 231,152 277,806
Other Securities 394,199 625,404 630,501 688,312
------------------------------------------------
Total Securities
Available-for-Sale $9,867,618 $10,615,327 $11,295,977 $12,924,780
Total Securities
Held-to-Maturity 97,344 101,486 104,210 118,429
------------------------------------------------
Total Securities $9,964,962 $10,716,813 $11,400,187 $13,043,209
================================================
The following table presents the components of the held-for-sale and
held-for-investment loan portfolios for the periods ended:
(in thousands) June 30, March 31, December 31, June 30,
2006 2006 2005 2005
------------------------------------------------
Loans Held-For-Sale:
Residential
Mortgages $4,319,709 $3,505,357 $3,824,547 $5,481,104
Home Equity 1,035,928 647,542 496,656 852,137
------------------------------------------------
Total 5,355,637 4,152,899 4,321,203 6,333,241
Deferred Origination
Costs 50,704 37,566 38,064 64,878
------------------------------------------------
Total Loans Held-
For-Sale $5,406,341 $4,190,465 $4,359,267 $6,398,119
================================================
(in thousands) June 30, March 31, December 31, June 30,
2006 2006 2005 2005
------------------------------------------------
Loans Held-For-
Investment:
Commercial Mortgages $7,079,501 $6,538,810 $6,206,416 $5,725,316
Commercial &
Industrial 5,806,928 5,193,904 4,709,440 3,879,830
------------------------------------------------
Total Commercial 12,886,429 11,732,714 10,915,856 9,605,146
Residential
Mortgages 14,519,282 14,861,680 15,068,443 16,176,829
Multi-Family
Mortgages 5,134,232 4,827,642 4,821,642 4,485,420
Consumer 1,749,383 1,619,812 1,558,782 1,521,869
Construction and
Land 1,222,981 1,122,917 829,273 653,002
------------------------------------------------
Total $35,512,307 $34,164,765 $33,193,996 $32,442,266
Deferred Origination
Costs, net 39,253 37,888 38,240 40,508
------------------------------------------------
Total Loans Held-
For-Investment $35,551,560 $34,202,653 $33,232,236 $32,482,774
================================================
See accompanying notes appended to the financial data and summaries
North Fork Bancorporation, Inc.
Selected Financial Data and Balance Sheet Components
(Unaudited)
The following tables presents the components of non-performing assets
for the periods ended:
June 30, March 31, Dec. 31, June 30,
(in thousands) 2006 2006 2005 2005
-------------------------------------------
Non-Performing Assets:
Commercial Mortgages $ 1,833 $ 3,664 $ 498 $ 6,409
Commercial & Industrial 9,384 10,277 7,970 7,768
-------------------------------------------
Total Commercial 11,217 13,941 8,468 14,177
Residential Mortgages 14,219 24,924 19,315 63,979
Multi-Family Mortgages - 135 550 44
Consumer 1,837 1,771 2,684 2,179
Construction and Land - - - 308
-------------------------------------------
Non-Performing Loans
Held-For-Investment $ 27,273 $ 40,771 $ 31,017 $ 80,687
Non-Performing Loans
Held-For-Sale 27,148 31,201 13,931 45,377
Other Real Estate 3,255 5,455 4,101 14,557
-------------------------------------------
Total Non-Performing
Assets $ 57,676 $ 77,427 $ 49,049 $ 140,621
===========================================
Ratios:
Allowance for Loan Losses
to Non-Performing Loans
Held-for-Investment 823% 543% 703% 270%
Allowance for Loan Losses
to Total Loans Held-for-
Investment 0.63% 0.65% 0.66% 0.67%
Non-Performing Loans to
Total Loans Held-for-
Investment 0.08% 0.12% 0.09% 0.25%
Non-Performing Assets to
Total Assets 0.10% 0.13% 0.09% 0.23%
Quarterly Net Charge-offs
to Average Loans Held-
for-Investment 0.07% 0.07% 0.14% 0.08%
The following table presents the impact of allocating the allowance
for loan losses as of June 30, 2006 into our two primary portfolio
segments:
June 30, 2006
--------------------------------------
Residential Commercial &
& All Other
(dollars in thousands) Total Multi-Family Loans
--------------------------------------
Loans Held-for-Investment $35,551,560 $19,692,767 $15,858,793
Allowance for Loan Losses 224,571 61,223 163,348
Non-Performing Loans Held-for-
Investment 27,273 14,219 13,054
Allowance for Loan Losses to
Loans-Held-for-Investment 0.63% 0.31% 1.03%
======================================
Allowance for Loan Losses to
Non-Performing
Loans Held-for-Investment 823% 431% 1251%
======================================
See accompanying notes appended to the financial data and summaries
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, 2006
------------------------------
Average Average
(dollars in thousands ) Balance Interest Rate
------------------------------
Interest Earning Assets:
Loans Held-for-Investment $34,654,439 $534,972 6.19%
Loans Held-for-Sale 4,978,945 76,088 6.13%
Securities 10,718,973 136,500 5.11%
Money Market Investments 47,343 670 5.68%
----------------------
Total Interest Earning Assets 50,399,700 748,230 5.95%
----------------------
Non-Interest Earning Assets:
Cash and Due from Banks $999,159
Other Assets 7,001,834
------------
Total Assets $58,400,693
============
Interest Bearing Liabilities:
Savings, NOW & Money Market Deposits $21,707,006 $134,731 2.49%
Time Deposits 8,200,104 59,658 2.92%
----------------------
Total Savings and Time Deposits 29,907,110 194,389 2.61%
Fed. Funds Purchased & Collateralized
Borrowings 9,845,733 89,628 3.65%
Other Borrowings 1,454,216 20,119 5.55%
----------------------
Total Borrowings 11,299,949 109,747 3.90%
----------------------
Total Interest Bearing Liabilities 41,207,059 304,136 2.96%
----------------------
Interest Rate Spread 2.99%
Non-Interest Bearing Liabilities:
Demand Deposits $7,414,598
Other Liabilities 734,575
------------
Total Liabilities 49,356,232
Stockholders' Equity 9,044,461
------------
Total Liabilities and Stockholders'
Equity $58,400,693
============
Net Interest Income and Net Interest
Margin $444,094 3.53%
Less: Tax Equivalent Adjustment (14,206)
---------
Net Interest Income $429,888
=========
For the Three Months Ended: March 31, 2006
------------------------------
Average Average
(dollars in thousands ) Balance Interest Rate
------------------------------
Interest Earning Assets:
Loans Held-for-Investment $33,644,505 $508,485 6.13%
Loans Held-for-Sale 4,295,898 63,692 6.01%
Securities 11,114,452 139,340 5.08%
Money Market Investments 45,410 603 5.39%
----------------------
Total Interest Earning Assets 49,100,265 712,120 5.88%
----------------------
Non-Interest Earning Assets:
Cash and Due from Banks $1,055,709
Other Assets 7,218,877
------------
Total Assets $57,374,851
============
Interest Bearing Liabilities:
Savings, NOW & Money Market Deposits $21,500,679 $117,433 2.22%
Time Deposits 8,105,826 59,790 2.99%
----------------------
Total Savings and Time Deposits 29,606,505 177,223 2.43%
Fed. Funds Purchased & Collateralized
Borrowings 9,332,211 83,474 3.63%
Other Borrowings 1,476,106 19,956 5.48%
----------------------
Total Borrowings 10,808,317 103,430 3.88%
----------------------
Total Interest Bearing Liabilities 40,414,822 280,653 2.82%
----------------------
Interest Rate Spread 3.06%
Non-Interest Bearing Liabilities:
Demand Deposits $7,337,189
Other Liabilities 651,337
------------
Total Liabilities 48,403,348
Stockholders' Equity 8,971,503
------------
Total Liabilities and Stockholders'
Equity $57,374,851
============
Net Interest Income and Net Interest
Margin $431,467 3.56%
Less: Tax Equivalent Adjustment (13,990)
---------
Net Interest Income $417,477
=========
See accompanying notes appended to the financial data and summaries
North Fork Bancorporation, Inc.
Mortgage Banking - Quarterly Highlights
(Unaudited)
The following table presents the components of the mortgage
origination and sale volume for the periods indicated:
Quarterly Highlights
--------------------------------------
(Dollars in thousands) June 30, March 31, December 31,
Comparative Mortgage Loan 2006 2006 2005
Volumes --------------------------------------
Total Applications Received $18,409,983 $15,278,074 $15,613,973
======================================
Loans Originated:
Specialty Products (a) $4,861,775 $4,034,289 $4,787,403
Home Equity 1,281,321 1,002,615 1,114,617
Jumbo/Agency 3,746,581 2,734,867 3,488,135
--------------------------------------
Total Loans Originated $9,889,677 $7,771,771 $9,390,155
======================================
Pipeline (b) $6,246,558 $5,722,902 $5,325,629
Interest Rate Lock
Commitments (c) 2,670,377 2,498,841 2,386,809
Loans Held-for-Sale 5,406,341 4,190,165 4,359,267
Loans Sales (3):
Specialty Products $4,162,568 $4,032,031 $4,570,651
Home Equity 755,613 916,017 865,665
Jumbo/Agency 2,925,437 2,188,749 3,277,851
--------------------------------------
Total Loan Sales $7,843,618 $7,136,797 $8,714,167
======================================
Average Margin on Loan Sales:
Specialty Products 1.64% 1.23% 1.18%
Home Equity 1.25% 1.69% 1.49%
Jumbo/Agency 0.84% 0.77% 0.76%
--------------------------------------
Average Margin on Loan
Sales 1.30% 1.15% 1.05%
======================================
Gains on Sale of Loans: (3)
Specialty Products $68,419 $49,426 $53,867
Home Equity 9,413 15,499 12,929
Jumbo/Agency 24,484 16,824 24,819
--------------------------------------
Total Gain on Sale of
Loans (d) $102,316 $81,749 $91,615
======================================
Quarterly Highlights
-------------------------
(Dollars in thousands) Sept. 30, June 30,
Comparative Mortgage Loan 2005 2005
Volumes -------------------------
Total Applications Received $17,254,701 $21,195,474
=========================
Loans Originated:
Specialty Products (a) $4,827,831 $5,302,469
Home Equity 1,280,684 1,566,306
Jumbo/Agency 4,302,550 5,553,487
-------------------------
Total Loans Originated $10,411,065 $12,422,262
=========================
Pipeline (b) $6,376,081 $7,594,398
Interest Rate Lock
Commitments (c) 2,349,097 2,891,179
Loans Held-for-Sale 4,701,550 6,398,119
Loans Sales (3):
Specialty Products $5,061,097 $4,394,898
Home Equity 1,500,767 1,466,771
Jumbo/Agency 4,381,960 3,240,177
-------------------------
Total Loan Sales $10,943,824 $9,101,846
=========================
Average Margin on Loan Sales:
Specialty Products 1.13% 1.35%
Home Equity 1.88% 2.05%
Jumbo/Agency 0.65% 0.92%
-------------------------
Average Margin on Loan
Sales 1.04% 1.31%
=========================
Gains on Sale of Loans: (3)
Specialty Products $56,956 $59,455
Home Equity 28,172 30,139
Jumbo/Agency 28,459 29,655
-------------------------
Total Gain on Sale of
Loans (d) $113,587 $119,249
=========================
(a) Specialty products include: Alt A, No Doc and A minus programs.
(b) The pipeline represents applications received, but not funded.
(c) Represents commitments to lend where the rates are guaranteed to
the borrower for specific period of time.
(d) Gain on sale of loans for June 30, 2005 differed from amounts
reported under generally accepted accounting principles due to a
fair value adjustment on loans held-for-sale totaling $(1.3)
million
See accompanying notes appended to the financial data and summaries
North Fork Bancorporation, Inc.
Mortgage Banking - Quarterly Highlights
(Unaudited)
The table below presents the components of mortgage banking income for
the periods indicated:
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
(in thousands) 2006 2005 2006 2005
---------------------------------------
Gain on Sale of Loans Held-
for-Sale (a) $102,316 $120,576 $184,064 $225,944
Mortgage Banking Fees, net 22,366 25,666 44,596 51,382
Amortization of Mortgage
Servicing Rights (21,814) (20,591) (45,412) (40,580)
Temporary (Impairment
Charge)/Recovery
- Mortgage Servicing Rights 2,901 (34,971) 18,593 (34,971)
---------------------------------------
Total Mortgage Banking
Income $105,769 $90,680 $201,841 $201,775
=======================================
(a) Gain on sale margins on loan sales include the impact of the
valuation of mortgage loans held-for-sale and interest rate lock
commitments, valuation of derivatives utilized to manage interest
rate risk associated with mortgage loan commitments and mortgage
loans held-for-sale, and adjustments related to reserves
established for representations and warranties.
See accompanying notes appended to the financial data and summaries
North Fork Bancorporation, Inc.
Notes to the Financial Data and Summaries
(1) We have reviewed our accounting treatment for all derivative
transactions and determined that certain transactions did not meet
the strict requirements of the "short cut" method of accounting
under SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities". As a result, hedge accounting was not
appropriate for these transactions since inception and have been
reclassified as trading instruments a component of other assets on
the accompanying balance sheet. The cumulative market value
fluctuation of these derivatives upon reclassification has been
recorded as trading losses on the accompanying statement of
income.
(2) Represents a release of certain accrued liabilities on corporate
guarantees pertaining to the discontinued manufactured housing
business we acquired from GreenPoint.
(3) 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.
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.
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
(dollars in 2006 2005 2006 2005
thousands) ---------------------------------------------------
Net Income, as
Reported $220,817 $242,066 $430,945 $501,101
Add: Amortization
of Identifiable
Intangible
Assets, Net of
Taxes 5,936 5,937 11,784 11,873
---------------------------------------------------
Net Income, as
Adjusted $226,753 $248,003 $442,729 $512,974
===================================================
Average Total
Assets $58,400,693 $61,480,463 $57,890,605 $60,847,190
Less: Average
Goodwill 5,918,116 5,886,175 5,918,116 5,883,049
Less: Average
Identifiable
Intangible Assets 101,848 138,033 106,271 142,789
---------------------------------------------------
Average Total
Tangible
Assets $52,380,729 $55,456,255 $51,866,218 $54,821,352
===================================================
Average
Stockholders'
Equity $9,044,461 $9,170,671 $9,008,184 $9,094,438
Less: Average
Goodwill 5,918,116 5,886,175 5,918,116 5,883,049
Less: Average
Identifiable
Intangible Assets 101,848 138,033 106,271 142,789
---------------------------------------------------
Average Total
Tangible
Stockholders'
Equity $3,024,497 $3,146,463 $2,983,797 $3,068,600
===================================================
Return on Average
Tangible Assets 1.74% 1.79% 1.72% 1.89%
Return on Average
Tangible
Stockholders'
Equity 30.07% 31.61% 29.92% 33.71%
(4) The efficiency ratio, which represents a non-GAAP measure, is
defined as the ratio of non-interest expense net of amortization
of identifiable intangibles, manufactured housing recourse
settlement and merger expenses to net interest income on a tax
equivalent basis and other non-interest income net of securities
gains/(losses), (temporary impairment)/recovery on mortgage
servicing rights and trading losses on derivative instruments.
*T