NFB North Fork Bancorporation Ny

North Fork Bancorporation, Inc. (NYSE: NFB) reported solid operating performance for the first quarter of 2006. Highlights in the current period include: -- Net income of $210 million and diluted earnings per share of $.46. -- A net interest margin of 3.56% substantially unchanged from the previous quarter. -- 30% annualized growth in commercial loans and 26% annualized growth in total loans, excluding residential mortgages. -- 12% annualized deposit growth. -- A 10 basis point margin improvement on residential loan sales. -- Continued reductions in the securities portfolio and residential mortgages. -- Returns on average tangible equity and average tangible assets of 29.8% and 1.71%, respectively. -- Declaration of its regular quarterly cash dividend of $.25 cents per common share. -- Announcement of the proposed acquisition by Capital One Financial Corporation ("Capital One"). Net Earnings and Returns Net income for the quarter ended March 31, 2006 was $210 million or $.46 diluted earnings per share compared to $259 million or $.55 diluted earnings per share for the comparable period in 2005. Linked quarter net income and diluted earnings per share remained substantially unchanged. The year-over-year quarterly earnings decline was caused principally by the flattened and inverted yield curve and the previously announced decision to reposition the balance sheet. This repositioning strategy has reduced securities, residential mortgages and borrowings since commencing in the second quarter 2005. "We will maintain this position in succeeding quarters as we do not see any near term prospects for an improved yield curve," said John Adam Kanas, Chairman, President and Chief Executive Officer. The Company's returns on average tangible equity and assets were 29.8% and 1.71%, respectively in the most recent quarter. In the first quarter, the Company purchased 5.1 million shares of its common stock at an average price of $25.84 per share. Approximately, 9.2 million shares remain authorized for repurchase under a previously announced plan. The Company discontinued purchasing shares since the announcement of its proposed acquisition by Capital One as described further in this quarterly earnings release. For the quarter ended March 31, 2006, net interest income and net interest margin were $417.5 million and 3.56%, respectively compared to $442 million and 3.62%, respectively for the immediately preceding quarter. The Company advised that it believes that its net interest margin will remain constant in the near term. Loans Loans held-for-investment at March 31, 2006 amounted to $34.2 billion compared to $31.9 billion in 2005. On a linked quarter basis, loans held-for-investment, excluding residential mortgages, increased by $1.2 billion, an annualized growth rate of 26%. The commercial and industrial segment increased by $484 million, an increase of 41% on an annualized basis. The Company indicated that it expects the commercial loan growth momentum will continue. Non-performing assets increased, linked quarter, to approximately $77 million. Substantially all of the increase will be offset by loan sales occurring in the second quarter at amounts approximating carrying values. Deposits Deposits at March 31, 2006 grew to $37.7 billion, an increase of $1.1 billion from the immediately preceding quarter. "This growth was accomplished despite intense competitive pressures. Our commercial component remains robust," said Mr. Kanas. Business deposits approximate one-third of total deposits at March 31, 2006. Mortgage Banking Business The Company's mortgage banking subsidiary, GreenPoint Mortgage, originated $7.8 billion in the quarter, compared to $9.4 billion, linked quarter, and $10 billion in the first quarter of 2005. These volume declines were expected. The margin on whole loan sales was 115 basis points, a 10% increase linked quarter. Gain on sale of loans was $81.7 million in the quarter compared to $91.6 million in the prior quarter. At March 31, 2006, the mortgage loan pipeline was $5.7 billion. In the quarter, the Company recovered approximately $15.7 million of the temporary impairment on its mortgage servicing rights. At March 31, 2006, net mortgage servicing rights were $276 million, or 97 basis points of the unpaid principal balance of the related serviced loans. Cash Dividend On March 28, 2006, the Board declared its regular quarterly dividend of $.25 per common share. The dividend will be payable May 15, 2006, to shareholders of record at the close of business on April 28, 2006. Pending Acquisition On March 12, 2006, Capital One and North Fork announced that a definitive agreement had been signed under which Capital One will acquire North Fork. The transaction is subject to shareholder approval from both companies and 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 $58 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. In connection with the proposed merger, Capital One will file with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 that will include a joint proxy statement of Capital One and North Fork that also constitutes a prospectus of Capital One. Capital One and North Fork will mail the joint proxy statement/prospectus to their respective stockholders. Investors and security holders are urged to read the joint proxy statement/prospectus regarding the proposed merger when it becomes available because it will contain important information. You may obtain a free copy of the joint proxy statement/prospectus (when available) 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 (when it is available) 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 will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. 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 their definitive proxy statement filed with the SEC on March 30, 2005. 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 March 31, Dec. 31, March 31, (in thousands, except per share amounts) 2006 2005 2005 --------- -------- --------- Interest Income: Loans Held-for-Investment $505,736 $486,263 $452,217 Loans Held-for-Sale 63,692 75,468 66,848 Mortgage-Backed Securities 99,515 104,415 142,007 Other Securities 28,645 28,934 29,407 Money Market Investments 542 455 733 --------- -------- --------- Total Interest Income 698,130 695,535 691,212 --------- -------- --------- Interest Expense: Savings, NOW & Money Market Deposits 117,433 102,255 69,596 Time Deposits 59,790 56,376 33,466 Federal Funds Purchased and Collateralized Borrowings 83,474 72,842 99,007 Other Borrowings 19,956 22,123 17,824 --------- -------- -------- Total Interest Expense 280,653 253,596 219,893 --------- -------- -------- Net Interest Income 417,477 441,939 471,319 Provision for Loan Losses 9,000 9,000 9,000 --------- -------- -------- Net Interest Income after Provision for Loan Losses 408,477 432,939 462,319 --------- -------- -------- Non-Interest Income: Mortgage Banking Income 96,072 92,648 111,096 Customer Related Fees & Service Charges 41,103 40,984 42,006 Investment Management, Commissions & Trust Fees 9,669 8,824 11,071 Other Operating Income 14,510 11,417 14,077 Securities Gains/(Losses), net 6,722 (6,220) 4,635 Gain on Sale of Other Investments - 15,108 - --------- -------- -------- Total Non-Interest Income 168,076 162,761 182,885 --------- -------- -------- Non-Interest Expense: Employee Compensation & Benefits 141,311 139,298 135,369 Occupancy & Equipment, net 51,292 50,169 45,954 Amortization of Identifiable Intangibles 8,859 9,244 9,133 Other Operating Expenses 56,716 60,310 56,197 Facility Closures Expense - 15,382 - --------- -------- -------- Total Non-Interest Expense 258,178 274,403 246,653 --------- -------- -------- Income Before Income Taxes 318,375 321,297 398,551 Provision for Income Taxes 108,247 110,847 139,516 --------- -------- -------- Net Income $210,128 $210,450 $259,035 ========= ======== ========= Earnings Per Share: Basic $ 0.46 $ 0.45 $ 0.56 Diluted $ 0.46 $ 0.45 $ 0.55 See accompanying notes appended to the financial data and summaries. North Fork Bancorporation, Inc. Consolidated Balance Sheets (Unaudited) March 31, December 31, March 31, (in thousands, except per share 2006 2005 2005 amounts) ----------- ----------- ----------- Assets: Cash & Due from Banks $ 940,045 $ 1,037,406 $ 712,195 Money Market Investments 146,962 24,843 40,809 Securities: Available-for-Sale 10,615,327 11,295,977 14,983,603 Held-to-Maturity 101,486 104,210 133,745 ----------- ----------- ----------- Total Securities 10,716,813 11,400,187 15,117,348 ----------- ----------- ----------- Loans: Loans Held-for-Sale 4,190,465 4,359,267 5,350,823 Loans Held-for-Investment 34,202,653 33,232,236 31,857,021 Less: Allowance for Loan Losses 221,256 217,939 215,307 ----------- ----------- ----------- Net Loans Held-for- Investment 33,981,397 33,014,297 31,641,714 ----------- ----------- ----------- Goodwill 5,918,116 5,918,116 5,886,693 Identifiable Intangibles 105,232 114,091 141,601 Premises & Equipment 444,546 438,040 417,900 Mortgage Servicing Rights 276,191 267,424 283,268 Accrued Income Receivable 209,458 205,892 213,195 Other Assets 776,155 837,308 974,854 ----------- ----------- ----------- Total Assets $57,705,380 $57,616,871 $60,780,400 =========== =========== =========== Liabilities and Stockholders' Equity: Deposits: Demand $ 7,440,561 $ 7,639,231 $ 7,106,826 Savings, NOW & Money Market 22,097,622 20,910,161 21,725,437 Time 8,155,517 8,067,181 7,705,470 ----------- ----------- ----------- Total Deposits 37,693,700 36,616,573 36,537,733 ----------- ----------- ----------- Federal Funds Purchased & Collateralized Borrowings 8,820,804 9,700,621 12,931,678 Other Borrowings 1,455,851 1,477,364 1,484,468 ----------- ----------- ----------- Total Borrowings 10,276,655 11,177,985 14,416,146 ----------- ----------- ----------- Accrued Interest Payable 128,822 102,229 81,387 Dividends Payable 115,880 116,754 104,924 Accrued Expenses & Other Liabilities 544,618 601,089 632,019 ----------- ----------- ----------- Total Liabilities $48,759,675 $48,614,630 $51,772,209 ----------- ----------- ----------- Stockholders' Equity: Common Stock, par value $0.01; authorized 1,000,000,000 shares; issued 480,682,118 shares at March 31, 2006 $ 4,807 $ 4,806 $ 4,775 Additional Paid in Capital 7,027,189 7,035,314 7,004,048 Retained Earnings 2,675,536 2,581,047 2,218,134 Accumulated Other Comprehensive Loss (167,116) (108,898) (87,300) Deferred Compensation (146,800) (154,772) (121,011) Treasury Stock at cost, 17,161,919 shares at March 31, 2006 (447,911) (355,256) (10,455) ----------- ----------- ----------- Total Stockholders' Equity 8,945,705 9,002,241 9,008,191 ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $57,705,380 $57,616,871 $60,780,400 =========== =========== =========== See accompanying notes appended to the financial data and summaries North Fork Bancorporation, Inc. Selected Financial Data and Balance Sheet Components (Unaudited) March 31, December 31, March 31, SELECTED FINANCIAL DATA: 2006 2005 2005 ----------- ----------- ----------- (in thousands, except ratios and per share amounts) Per Share: Net Income - Basic $0.46 $0.45 $0.56 Net Income - Diluted $0.46 $0.45 $0.55 Average Shares Outstanding - Basic 453,917 463,336 466,476 Average Shares Outstanding - Diluted 458,871 467,868 473,314 Cash Dividends $0.25 $0.25 $0.22 Dividend Payout Ratio 55% 55% 41% Tangible Book Value $6.30 $6.36 $6.25 Selected Financial Data: Return on Average Total Assets 1.49% 1.43% 1.74% Return on Average Tangible Assets (1) 1.71% 1.65% 1.98% Return on Average Equity 9.50% 9.12% 11.65% Return on Average Tangible Equity (1) 29.77% 27.50% 35.94% Tangible Equity to Tangible Assets 5.65% 5.76% 5.44% Efficiency Ratio (2) 43.14% 41.17% 35.96% Yield on Interest Earning Assets 5.88% 5.64% 5.52% Cost of Funds 2.82% 2.48% 2.04% Net Interest Margin 3.56% 3.62% 3.79% March 31, December 31, March 31, 2006 2005 2005 ----------- ----------- ----------- Risk Based Capital: Tier 1 9.92% 10.26% 10.31% Total 12.30% 12.73% 12.86% Leverage Ratio 6.86% 6.70% 6.48% March 31, December 31, March 31, 2006 2005 2005 ----------- ----------- ----------- Quarterly Average Balance Sheet: Total Assets $57,374,851 $58,232,383 $60,206,882 Securities 11,114,452 11,786,052 15,195,094 Loans Held-for-Sale 4,295,898 5,221,652 4,990,885 Loans Held-for-Investment 33,644,505 32,846,757 31,284,812 Goodwill & Identifiable Intangibles 6,028,859 6,034,399 6,027,487 Demand Deposits 7,337,189 7,771,142 6,853,159 Interest Bearing Deposits 29,606,505 29,368,629 28,738,597 Federal Funds Purchased & Collateralized Borrowings 9,332,211 9,740,160 13,371,436 Other Borrowings 1,476,106 1,484,866 1,505,984 Stockholders' Equity 8,971,503 9,157,876 9,017,358 Tangible Stockholders' Equity 2,942,644 3,123,477 2,989,871 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) March 31, December 31, March 31, Securities - Available-for-Sale: 2006 2005 2005 ----------- ----------- ----------- Collateralized Mortgage Obligations $ 6,559,446 $ 6,921,074 $ 9,670,492 Agency Pass-Through Certificates 1,773,735 1,956,487 2,491,331 State & Municipal Obligations 858,651 881,238 979,304 Equity Securities 612,219 675,525 776,108 U.S. Treasury & Government Agencies 185,872 231,152 357,407 Other Securities 625,404 630,501 708,961 ----------- ----------- ----------- Total Securities Available- for-Sale $10,615,327 $11,295,977 $14,983,603 Securities Held-to-Maturity 101,486 104,210 133,745 ----------- ----------- ----------- Total Securities $10,716,813 $11,400,187 $15,117,348 =========== =========== =========== The following table presents the components of the loans held-for-sale and held-for-investment portfolios for the periods ended: March 31, December 31, March 31, (in thousands) 2006 2005 2005 ----------- ----------- ----------- Loans Held-For-Sale: Residential Mortgages $ 3,505,357 $ 3,824,547 $ 4,239,366 Home Equity 647,542 496,656 1,061,352 ----------- ----------- ----------- Total 4,152,899 4,321,203 5,300,718 Deferred Origination Costs 37,566 38,064 50,105 ----------- ----------- ----------- Total Loans Held-For-Sale $ 4,190,465 $ 4,359,267 $ 5,350,823 =========== =========== =========== March 31, December 31, March 31, (in thousands) 2006 2005 2005 ----------- ----------- ----------- Loans Held-For-Investment: Commercial Mortgages $ 6,538,810 $ 6,206,416 $ 5,535,281 Commercial & Industrial 5,193,904 4,709,440 3,408,006 ----------- ----------- ----------- Total Commercial 11,732,714 10,915,856 8,943,287 Residential Mortgages 14,861,680 15,068,443 16,445,902 Multi-Family Mortgages 4,827,642 4,821,642 4,328,879 Consumer 1,619,812 1,558,782 1,554,499 Construction and Land 1,122,917 829,273 541,280 ----------- ----------- ----------- Total $34,164,765 $33,193,996 $31,813,847 Deferred Origination Costs, net 37,888 38,240 43,174 ----------- ----------- ----------- Total Loans Held-For- Investment $34,202,653 $33,232,236 $31,857,021 =========== =========== =========== 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: March 31, Dec. 31, March 31, (in thousands) 2006 2005 2005 --------- -------- --------- Non-Performing Assets: Commercial Mortgages $ 3,664 $ 498 $ 11,459 Commercial & Industrial 10,277 7,970 8,152 --------- -------- --------- Total Commercial 13,941 8,468 19,611 Residential Mortgages 24,924 19,315 91,411 Multi-Family Mortgages 135 550 1,293 Consumer 1,771 2,684 2,527 Construction and Land - - - Non-Performing Loans Held-For-Investment $ 40,771 $31,017 $114,842 Non-Performing Loans Held-For-Sale 31,201 13,931 45,780 Other Real Estate 5,455 4,101 14,243 --------- -------- --------- Total Non-Performing Assets $ 77,427 $49,049 $174,865 ========= ======== ========= Ratios: Allowance for Loan Losses to Non- Performing Loans Held-for-Investment 543% 703% 187% Allowance for Loan Losses to Total Loans Held-for-Investment 0.65% 0.66% 0.68% Non-Performing Loans to Total Loans Held- for-Investment 0.12% 0.09% 0.36% Non-Performing Assets to Total Assets 0.13% 0.09% 0.29% Quarterly Net Charge-offs to Average Loans Held-for-Investment 0.07% 0.14% 0.06% The following table presents the impact of allocating the allowance for loan losses as of March 31, 2006 and December 31, 2005 into our portfolio segments: March 31, 2006 --------------------------------------- Commercial & Residential & All Other (dollars in thousands) Total Multi-Family Loans --------------------------------------- Loans Held for Investment $ 34,202,653 $19,727,210 $14,475,443 Allowance for Loan Losses 221,256 64,217 157,039 Non-Performing Loans Held-for- Investment 40,771 25,059 15,712 Allowance for Loan Losses to Loans-Held-for-Investment 0.65% 0.33% 1.08% ============ =========== =========== Allowance for Loan Losses to Non-Performing Loans Held-for-Investment 543% 256% 999% ============ =========== =========== December 31, 2005 -------------------------------------- Commercial & Residential & All Other (dollars in thousands) Total Multi-Family Loans -------------------------------------- Loans Held for Investment $33,232,236 $19,928,325 $13,303,911 Allowance for Loan Losses 217,939 72,481 145,458 Non-Performing Loans Held-for- Investment 31,017 19,865 11,152 Allowance for Loan Losses to Loans-Held-for-Investment 0.66% 0.36% 1.09% =========== =========== =========== Allowance for Loan Losses to Non-Performing Loans Held-for-Investment 703% 365% 1304% =========== =========== =========== 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: 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 ======== For the Three Months Ended: December 31, 2005 ------------------------------- Average Average (dollars in thousands ) Balance Interest Rate ------------------------------- Interest Earning Assets: Loans Held-for-Investment $32,846,757 $488,643 5.90% Loans Held-for-Sale 5,221,652 75,468 5.73% Securities 11,786,052 144,064 4.85% Money Market Investments 35,311 493 5.54% ----------------------- Total Interest Earning Assets 49,889,772 708,668 5.64% ----------------------- Non-Interest Earning Assets: Cash and Due from Banks $ 1,005,731 Other Assets 7,336,880 ------------- Total Assets $58,232,383 ============= Interest Bearing Liabilities: Savings, NOW & Money Market Deposits $21,229,823 $102,255 1.91% Time Deposits 8,138,806 56,376 2.75% ----------------------- Total Savings and Time Deposits 29,368,629 158,631 2.14% Fed. Funds Purchased & Collateralized Borrowings 9,740,160 72,842 2.97% Other Borrowings 1,484,866 22,123 5.91% ----------------------- Total Borrowings 11,225,026 94,965 3.36% ----------------------- Total Interest Bearing Liabilities 40,593,655 253,596 2.48% ----------------------- Interest Rate Spread 3.16% Non-Interest Bearing Liabilities: Demand Deposits $ 7,771,142 Other Liabilities 709,710 ------------- Total Liabilities 49,074,507 Stockholders' Equity 9,157,876 ------------- Total Liabilities and Stockholders' Equity $58,232,383 ============= Net Interest Income and Net Interest Margin $455,072 3.62% Less: Tax Equivalent Adjustment (13,133) --------- Net Interest Income $441,939 ========= 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 sales volume for GreenPoint Mortgage for the periods indicated: Quarterly Highlights ------------------------------------ (Dollars in thousands) March 31, Dec. 31, Sept. 30, 2006 2005 2005 ----------- ----------- ----------- Comparative Mortgage Loan Volumes Total Applications Received $15,278,074 $15,613,973 17,254,701 =========== =========== =========== Loans Originated: Specialty Products (a) $ 4,034,289 $ 4,787,403 4,827,831 Home Equity 1,002,615 1,114,617 1,280,684 Jumbo/Agency 2,734,867 3,488,135 4,302,550 ----------- ----------- ----------- Total Loans Originated $ 7,771,771 $ 9,390,155 $10,411,065 =========== =========== =========== Pipeline (b) $ 5,722,902 $ 5,325,629 $ 6,376,081 Interest Rate Lock Commitments (c) 2,498,841 2,386,809 2,349,097 Loans Held-for-Sale 4,190,165 4,359,267 4,701,550 Loans Sales (3): Specialty Products $ 4,032,031 $ 4,570,651 $ 5,061,097 Home Equity 916,017 865,665 1,500,767 Jumbo/Agency 2,188,749 3,277,851 4,381,960 ----------- ----------- ----------- Total Loan Sales $ 7,136,797 $ 8,714,167 $10,943,824 =========== =========== =========== Average Margin on Loan Sales: Specialty Products 1.23% 1.18% 1.13% Home Equity 1.69% 1.49% 1.88% Jumbo/Agency 0.77% 0.76% 0.65% ----------- ----------- ----------- Average Margin on Loan Sales 1.15% 1.05% 1.04% =========== =========== =========== Gains on Sale of Loans: (3) Specialty Products $ 49,426 $ 53,867 $ 56,956 Home Equity 15,499 12,929 28,172 Jumbo/Agency 16,824 24,819 28,459 ----------- ----------- ----------- Total Gain on Sale of Loans (d)$ 81,749 $ 91,615 $ 113,587 =========== =========== =========== ------------------------ (Dollars in thousands) June 30, March 31, 2005 2005 ----------- ----------- Comparative Mortgage Loan Volumes Total Applications Received $21,195,474 $18,281,837 =========== =========== Loans Originated: Specialty Products (a) $ 5,302,469 $ 4,231,111 Home Equity 1,566,306 1,488,748 Jumbo/Agency 5,553,487 4,313,058 ----------- ----------- Total Loans Originated $12,422,262 $10,032,917 =========== =========== Pipeline (b) $ 7,594,398 $ 7,407,671 Interest Rate Lock Commitments (c) 2,891,179 2,523,344 Loans Held-for-Sale 6,398,119 5,350,823 Loans Sales (3): Specialty Products $ 4,394,898 $ 4,333,784 Home Equity 1,466,771 1,580,497 Jumbo/Agency 3,240,177 2,438,998 ----------- ----------- Total Loan Sales $ 9,101,846 $ 8,353,279 =========== =========== Average Margin on Loan Sales: Specialty Products 1.35% 1.45% Home Equity 2.05% 1.45% Jumbo/Agency 0.92% 0.84% ----------- ----------- Average Margin on Loan Sales 1.31% 1.27% =========== =========== Gains on Sale of Loans: (3) Specialty Products $ 59,455 $ 62,750 Home Equity 30,139 22,858 Jumbo/Agency 29,655 20,551 ----------- ----------- Total Gain on Sale of Loans (d) $ 119,249 $ 106,159 =========== =========== (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 a specific period of time. (d) Gain on sale of loans for March 31, 2005 differed from amounts reported under generally accepted accounting principles due to a fair value adjustment on loans held-for-sale totaling $0.8 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 March 31, Dec. 31, March 31, (in thousands) 2006 2005 2005 -------- -------- -------- Gain on Sale of Loans Held-for-Sale (a) $ 81,749 $ 91,615 $105,369 Mortgage Banking Fees, net 22,230 22,318 25,716 Amortization of Mortgage Servicing Rights (23,598) (23,590) (19,989) Temporary Impairment Recovery - Mortgage Servicing Rights 15,691 2,305 0 -------- -------- -------- Total Mortgage Banking Income $ 96,072 $ 92,648 $111,096 ======== ======== ======== (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) 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 March 31, December 31, March 31, (dollars in thousands) 2006 2005 2005 ----------- ----------- ----------- Net Income, as reported $ 210,128 $ 210,450 $ 259,035 Add: Amortization of Identifiable Intangible Assets, net of taxes 5,847 6,054 5,937 ----------- ----------- ----------- Net Income, as adjusted $ 215,975 $ 216,504 $ 264,972 =========== =========== =========== Average Total Assets $57,374,851 $58,232,383 $60,206,882 Less: Average Goodwill 5,918,116 5,914,615 5,879,891 Less: Average Identifiable Intangible Assets 110,743 119,784 147,596 ----------- ----------- ----------- Average Total Tangible Assets $51,345,992 $52,197,984 $54,179,395 =========== =========== =========== Average Stockholders' Equity $ 8,971,503 $ 9,157,876 $ 9,017,358 Less: Average Goodwill 5,918,116 5,914,615 5,879,891 Less: Average Identifiable Intangible Assets 110,743 119,784 147,596 ----------- ----------- ----------- Average Total Tangible Stockholders' Equity $ 2,942,644 $ 3,123,477 $ 2,989,871 =========== =========== =========== Return on Average Tangible Assets 1.71% 1.65% 1.98% Return on Average Tangible Stockholders' Equity 29.77% 27.50% 35.94% (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 facility closures expense 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 gain on sale of other investments. *T