NFB North Fork Bancorporation Ny

North Fork Bancorporation, Inc. (NYSE: NFB) Highlights in the current period include: Net income of $203 million and diluted earnings per share of $.44. A net interest margin of 3.26%. 20% annualized growth in commercial loans and 19% annualized growth in total loans, excluding residential mortgages. Returns on average tangible equity and average tangible assets of 26.1% and 1.56%, respectively. Improved margins 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 held-for- investment. Net Earnings and Returns Net income for the quarter ended September 30, 2006 was $203 million or $.44 diluted earnings per share compared to $237 million or $.50 diluted earnings per share for the comparable period in 2005. Net income for the nine-month period ended September 30, 2006 was $634 million or diluted earnings per share of $1.38 compared to $738 million or diluted earnings per share of $1.55 for the comparable period in 2005. The Company�s returns on average tangible equity and assets were 26.1% and 1.56%, respectively in the most recent quarter. For the quarter ended September 30, 2006, the net interest income and net interest margin were $406.9 million and 3.26%, respectively compared to $429.9 million and 3.53%, respectively for the immediately preceding quarter. Net interest income and margin for the nine-months ended September 30, 2006 were $1.3 billion and 3.45%, respectively compared to $1.4 billion and 3.63%, respectively for 2005. The year over year decline reflects the challenging banking and interest rate environment. Loans Loans held-for-investment at September 30, 2006 amounted to $36.3 billion compared to $35.6 billion at June 30, 2006. On a linked quarter basis, loans held-for-investment, excluding residential mortgages, increased by $1.0 billion, an annualized growth rate of 19%. Commercial loans increased by $652 million, an increase of 20% on an annualized basis. The Company expects the commercial loan growth momentum will continue despite intense pricing competition. Non-performing assets were $62.5 million at September 30, 2006. Annualized net charge-offs were a modest 6 basis points. Deposits Deposits at September 30, 2006 were $36.5 billion, declining slightly from the previous quarter. Commercial deposits remain a significant component of total deposits. �We will concentrate on commercial relationships opting not to pursue high cost consumer deposits,� said John Adam Kanas, Chairman, President and Chief Executive Officer. Mortgage Banking Business The Company�s mortgage banking subsidiary, GreenPoint Mortgage, originated loans aggregating $9.5 billion in the quarter, compared to $9.9 billion, linked quarter. The Company believes that future origination volume will remain strong. The margin on whole loan sales was 132 basis points, improving over the previous quarter. Gain on sale of loans was $123.6 million in the quarter compared to $102.3 million in the prior quarter. At September 30, 2006, the mortgage loan pipeline was $5.9 billion. At September 30, 2006, net mortgage servicing rights were $258 million, or 93 basis points of the unpaid principal balance of the related serviced loans. During the quarter, the Company recorded a temporary impairment charge of approximately $10 million on its mortgage servicing rights asset. Cash Dividend On September 26, 2006, the Board declared its regular quarterly dividend of $.25 per common share. The dividend will be payable November 15, 2006, to shareholders of record at the close of business on October 27, 2006. Pending Acquisition As previously announced, Capital One and North Fork expect the acquisition of North Fork by Capital One will close in the fourth quarter of 2006, pending the receipt of approval of the merger by the Federal Reserve Board, and the expiration of all regulatory waiting periods. Capital One and North Fork have not yet set a definitive election deadline by which North Fork stockholders can elect whether they would prefer to receive cash or Capital One common stock in the merger. The election deadline, which is expected to be approximately five business days prior to the expected closing date, will be announced at least five business days in advance of the deadline. 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 351 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 actual results to differ materially from those set forth in these forward-looking statements: changes in the interest rate environment; changes in the securities, real estate markets or the economy in general, whether nationally, internationally or regionally; increased competition and its effect on pricing, spending, third-party relationships and revenues; changes in monetary and fiscal policies of the U.S. government changes in accounting principles, policies, practices or guidelines and legislative or regulatory changes. 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 �Risk Factors�), 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 risk that the businesses will not be integrated successfully; the risk that costs and expenses relating to the merger and subsequent integration may be greater than anticipated; 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. 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 Capital One�and North Fork Transaction In connection with the proposed merger of Capital One and North Fork, Capital One filed with the Securities and Exchange Commission (the�"SEC") a Registration Statement on Form S-4 that included a joint proxy statement of Capital One and North Fork that also constitutes a prospectus of Capital One. Capital One and North Fork mailed the joint proxy statement/prospectus to their respective stockholders on or about July 14, 2006. Investors and security holders are urged to read the definitive joint proxy statement/prospectus regarding the proposed merger because it contains important information. You may obtain a free copy of the definitive 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 definitive 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. North Fork Bancorporation, Inc. Consolidated Statements of Income (Unaudited) � Three Months Nine Months Ended September 30, Ended September 30, (in thousands, except per share amounts) 2006� 2005� 2006� 2005� � Interest Income: Loans Held-for-Investment $ 559,017� $ 469,599� $ 1,596,510� $ 1,394,034� Loans Held-for-Sale 86,885� 69,840� 226,665� 209,753� Mortgage-Backed Securities 92,009� 113,921� 287,961� 389,303� Other Securities 25,986� 28,422� 83,804� 87,953� Money Market Investments 858� 508� 1,971� 1,903� Total Interest Income 764,755� 682,290� 2,196,911� 2,082,946� � Interest Expense: Savings, NOW & Money Market Deposits 144,400� 91,316� 396,565� 243,367� Time Deposits 78,378� 49,397� 197,827� 123,255� Federal Funds Purchased and Collateralized Borrowings 114,591� 86,343� 287,693� 290,588� Other Borrowings 20,482� 20,684� 60,558� 57,794� Total Interest Expense 357,851� 247,740� 942,643� 715,004� Net Interest Income 406,904� 434,550� 1,254,268� 1,367,942� Provision for Loan Losses 9,000� 9,000� 27,000� 27,000� Net Interest Income after Provision for Loan Losses 397,904� 425,550� 1,227,268� 1,340,942� � Non-Interest Income: Mortgage Banking Income 111,990� 126,415� 313,831� 328,190� Customer Related Fees & Service Charges 39,808� 41,980� 121,203� 125,888� Investment Management, Commissions & Trust Fees 9,085� 8,780� 27,881� 30,138� Other Operating Income 13,325� 12,719� 48,182� 42,177� Securities Gains, net 4,461� 840� 15,282� 16,358� Trading Gains/(Losses) (1) 9,674� -� (11,396) -� Total Non-Interest Income 188,343� 190,734� 514,983� 542,751� � Non-Interest Expense: Employee Compensation & Benefits 148,830� 136,300� 435,390� 410,684� Occupancy & Equipment, net 51,574� 49,007� 154,121� 141,910� Amortization of Identifiable Intangibles 8,859� 9,133� 26,578� 27,400� Other Operating Expenses 54,814� 59,560� 166,839� 170,454� Merger Related Charges - Capital One 13,668� -� 18,900� -� Debt Restructuring Costs 5,356� -� 5,356� -� Settlement Recovery (2) -� -� (16,031) -� Total Non-Interest Expense 283,101� 254,000� 791,153� 750,448� Income Before Income Taxes 303,146� 362,284� 951,098� 1,133,245� Provision for Income Taxes 100,038� 124,988� 317,046� 394,848� Net Income $ 203,108� $ 237,296� $ 634,052� $ 738,397� � Earnings Per Share: Basic $ 0.45� $ 0.50� $ 1.39� $ 1.58� Diluted $ 0.44� $ 0.50� $ 1.38� $ 1.55� See accompanying notes appended to the financial data and summaries. North Fork Bancorporation, Inc. Consolidated Balance Sheets (Unaudited) � September 30, June 30, December 31, September 30, (in thousands, except per share amounts) 2006� 2006� 2005� 2005� Assets: Cash & Due from Banks $ 961,425� $ 1,000,195� $ 1,037,406� $ 740,251� Money Market Investments 114,832� 22,295� 24,843� 17,808� Securities: Available-for-Sale 9,500,424� 9,867,618� 11,295,977� 11,989,260� Held-to-Maturity 93,265� 97,344� 104,210� 114,505� Total Securities 9,593,689� 9,964,962� 11,400,187� 12,103,765� Loans: Loans Held-for-Sale 4,672,939� 5,406,341� 4,359,267� 4,701,550� � Loans Held-for-Investment 36,258,634� 35,551,560� 33,232,236� 32,672,962� Less: Allowance for Loan Losses 228,544� 224,571� 217,939� 220,347� Net Loans Held-for-Investment 36,030,090� 35,326,989� 33,014,297� 32,452,615� Goodwill 5,918,116� 5,918,116� 5,918,116� 5,914,562� Identifiable Intangibles 87,513� 96,373� 114,091� 123,334� Premises & Equipment 448,762� 447,633� 438,040� 433,775� Mortgage Servicing Rights 258,190� 272,543� 267,424� 267,347� Accrued Income Receivable 218,934� 213,492� 205,892� 198,909� Other Assets 584,823� 712,896� 837,308� 946,477� Total Assets $ 58,889,313� $ 59,381,835� $ 57,616,871� $ 57,900,393� � Liabilities and Stockholders' Equity: Deposits: Demand $ 7,300,158� $ 7,561,888� $ 7,639,231� $ 7,478,359� Savings, NOW & Money Market 21,129,366� 21,377,573� 20,910,161� 21,115,093� Time 8,118,045� 7,875,144� 8,067,181� 8,218,634� Total Deposits 36,547,569� 36,814,605� 36,616,573� 36,812,086� Federal Funds Purchased & Collateralized Borrowings 10,732,348� 11,249,615� 9,700,621� 9,572,995� Other Borrowings 1,469,761� 1,463,066� 1,477,364� 1,485,392� Total Borrowings 12,202,109� 12,712,681� 11,177,985� 11,058,387� � Accrued Interest Payable 133,893� 135,351� 102,229� 91,376� Dividends Payable 116,530� 116,437� 116,754� 105,153� Accrued Expenses & Other Liabilities 631,105� 540,184� 601,089� 568,846� Total Liabilities $ 49,631,206� $ 50,319,258� $ 48,614,630� $ 48,635,848� � Stockholders' Equity: Common Stock, par value $0.01; authorized 1,000,000,000 shares; issued 480,682,118 shares at September 30, 2006 $ 4,807� $ 4,807� $ 4,806� $ 4,799� Additional Paid in Capital 6,881,364� 6,875,810� 7,035,314� 7,020,325� Retained Earnings 2,866,058� 2,779,501� 2,581,047� 2,486,847� Accumulated Other Comprehensive Loss (114,346) (207,161) (108,898) (89,052) Deferred Compensation -� -� (154,772) (109,111) Treasury Stock at Cost, 14,562,066 shares at September 30, 2006 (379,776) (390,380) (355,256) (49,263) Total Stockholders' Equity 9,258,107� 9,062,577� 9,002,241� 9,264,545� Total Liabilities and Stockholders' Equity $ 58,889,313� $ 59,381,835� $ 57,616,871� $ 57,900,393� See accompanying notes appended to the financial data and summaries North Fork Bancorporation, Inc. Selected Financial Data and Balance Sheet Components (Unaudited) � Three Months Nine Months Ended September 30, Ended September 30, SELECTED FINANCIAL DATA: 2006� 2005� 2006� 2005� (in thousands, except ratios and per share amounts) � Per Share: Net Income - Basic $0.45� $0.50� $1.39� $1.58� Net Income - Diluted $0.44� $0.50� $1.38� $1.55� Average Shares Outstanding - Basic 456,100� 470,004� 455,107� 468,644� Average Shares Outstanding - Diluted 460,872� 475,627� 460,083� 474,957� Cash Dividends $0.25� $0.22� $0.75� $0.66� Dividend Payout Ratio 57% 44% 55% 43% Tangible Book Value $6.98� $6.75� $6.98� $6.75� Selected Financial Data: Return on Average Total Assets 1.36% 1.60% 1.45% 1.64% Return on Average Tangible Assets (3) 1.56% 1.83% 1.67% 1.87% Return on Average Equity 8.77% 10.13% 9.35% 10.78% Return on Average Tangible Equity (3) 26.12% 29.43% 28.59% 32.21% Tangible Equity to Tangible Assets 6.15% 6.22% 6.15% 6.22% Efficiency Ratio (4) 42.13% 39.15% 42.03% 37.14% Yield on Interest Earning Assets 6.03% 5.47% 5.96% 5.48% Cost of Funds 3.38% 2.39% 3.06% 2.22% Net Interest Margin 3.26% 3.52% 3.45% 3.63% � September 30, June 30, December 31, September 30, 2006� 2006� 2005� 2005� Risk Based Capital: Tier 1 10.60% 10.26% 10.26% 11.00% Total 12.98% 12.61% 12.73% 13.57% Leverage Ratio 7.14% 7.04% 6.70% 7.09% � September 30, June 30, December 31, September 30, 2006� 2006� 2005� 2005� � Quarterly Average Balance Sheet: Total Assets $59,193,751� $58,400,693� $58,232,383� $58,731,915� Securities 10,066,545� 10,718,973� 11,786,052� 12,531,822� Loans Held-for-Sale 5,329,621� 4,978,945� 5,221,652� 5,401,495� Loans Held-for-Investment 35,788,526� 34,654,439� 32,846,757� 32,361,793� Goodwill & Identifiable Intangibles 6,011,167� 6,019,964� 6,034,399� 6,014,839� Demand Deposits 7,315,287� 7,414,598� 7,771,142� 7,547,759� Interest Bearing Deposits 29,229,550� 29,907,110� 29,368,629� 29,642,762� Federal Funds Purchased & Collateralized Borrowings 11,299,427� 9,845,733� 9,740,160� 10,057,604� Other Borrowings 1,461,561� 1,454,216� 1,484,866� 1,505,651� Stockholders' Equity 9,186,913� 9,044,461� 9,157,876� 9,293,861� Tangible Stockholders' Equity 3,175,746� 3,024,497� 3,123,477� 3,279,022� 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) September 30, June 30, December 31, September 30, Securities - Available-for-Sale: 2006� 2006� 2005� 2005� Collateralized Mortgage Obligations $6,032,854� $6,215,558� $6,921,074� $7,391,107� Agency Pass-Through Certificates 1,638,178� 1,685,025� 1,956,487� 2,138,524� State & Municipal Obligations 669,488� 663,997� 881,238� 844,866� Equity Securities 618,751� 724,836� 675,525� 669,072� U.S. Treasury & Government Agencies 211,113� 184,003� 231,152� 272,247� Other Securities 330,040� 394,199� 630,501� 673,444� Total Securities Available-for-Sale $9,500,424� $9,867,618� $11,295,977� $11,989,260� Total Securities Held-to-Maturity 93,265� 97,344� 104,210� 114,505� Total Securities $9,593,689� $9,964,962� $11,400,187� $12,103,765� � � � The following table presents the components of the held-for-sale and held-for-investment loan portfolios for the periods ended: � � (in thousands) September 30, June 30, December 31, September 30, Loans Held-For-Sale: 2006� 2006� 2005� 2005� Residential Mortgages $4,228,290� $4,319,709� $3,824,547� $4,225,128� Home Equity 399,629� 1,035,928� 496,656� 434,824� Total 4,627,919� 5,355,637� 4,321,203� 4,659,952� Deferred Origination Costs 45,020� 50,704� 38,064� 41,598� Total Loans Held-For-Sale $4,672,939� $5,406,341� $4,359,267� $4,701,550� � � (in thousands) September 30, June 30, December 31, September 30, Loans Held-For-Investment: 2006� 2006� 2005� 2005� Commercial Mortgages $7,465,052� $7,079,501� $6,206,416� $5,896,835� Commercial & Industrial 6,073,098� 5,806,928� 4,709,440� 4,324,758� Total Commercial 13,538,150� 12,886,429� 10,915,856� 10,221,593� Residential Mortgages 14,237,428� 14,519,282� 15,068,443� 15,508,008� Multi-Family Mortgages 5,272,860� 5,134,232� 4,821,642� 4,626,777� Consumer 1,894,712� 1,749,383� 1,558,782� 1,569,386� Construction and Land 1,272,784� 1,222,981� 829,273� 716,049� Total $36,215,934� $35,512,307� $33,193,996� $32,641,813� Deferred Origination Costs, net 42,700� 39,253� 38,240� 31,149� Total Loans Held-For-Investment $36,258,634� $35,551,560� $33,232,236� $32,672,962� 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: � September 30, June 30, December 31, September 30, (in thousands) 2006� 2006� 2005� 2005� Non-Performing Assets: Commercial Mortgages $2,119� $1,833� $498� $5,451� Commercial & Industrial 7,338� 9,384� 7,970� 8,137� Total Commercial 9,457� 11,217� 8,468� 13,588� Residential Mortgages 11,478� 14,219� 19,315� 48,257� Multi-Family Mortgages -� -� 550� 335� Consumer 2,743� 1,837� 2,684� 2,399� Construction and Land -� -� -� 600� Non-Performing Loans Held-For-Investment $23,678� $27,273� $31,017� $65,179� Non-Performing Loans Held-For-Sale 34,753� 27,148� 13,931� 33,137� Other Real Estate 4,098� 3,255� 4,101� 7,149� Total Non-Performing Assets $62,529� $57,676� $49,049� $105,465� � � Ratios: Allowance for Loan Losses to Non-Performing Loans Held-for-Investment 965% 823% 703% 338% Allowance for Loan Losses to Total Loans Held-for-Investment 0.63% 0.63% 0.66% 0.67% Non-Performing Loans to Total Loans Held-for-Investment 0.07% 0.08% 0.09% 0.20% Non-Performing Assets to Total Assets 0.11% 0.10% 0.09% 0.18% Quarterly Net Charge-offs to Average Loans Held-for-Investment 0.06% 0.07% 0.14% 0.08% The following table presents the impact of allocating the allowance for loan losses as of September 30, 2006 into our two primary portfolio segments: � � September 30, 2006 Total Residential & Multi-Family Commercial & All Other Loans (dollars in thousands) Loans Held-for-Investment $36,258,634� $19,552,988� $16,705,646� Allowance for Loan Losses 228,544� 60,526� 168,018� Non-Performing Loans Held-for-Investment 23,678� 11,478� 12,200� � Allowance for Loan Losses to Loans-Held-for-Investment 0.63% 0.31% 1.01% � Allowance for Loan Losses to Non-Performing Loans Held-for-Investment 965% 527% 1377% 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: September 30, 2006 June 30, 2006 Average Average Average Average (dollars in thousands ) Balance Interest Rate Balance Interest Rate Interest Earning Assets: Loans Held-for-Investment $35,788,526� $563,239� 6.24% $34,654,439� $534,972� 6.19% Loans Held-for-Sale 5,329,621� 86,885� 6.47% 4,978,945� 76,088� 6.13% Securities 10,066,545� 127,599� 5.03% 10,718,973� 136,500� 5.11% Money Market Investments 68,730� 1,054� 6.08% 47,343� 670� 5.68% Total Interest Earning Assets 51,253,422� 778,777� 6.03% 50,399,700� 748,230� 5.95% � Non-Interest Earning Assets: Cash and Due from Banks $980,630� $999,159� Other Assets 6,959,699� 7,001,834� Total Assets $59,193,751� $58,400,693� � Interest Bearing Liabilities: Savings, NOW & Money Market Deposits $21,117,805� $144,400� 2.71% $21,707,006� $134,731� 2.49% Time Deposits 8,111,745� 78,378� 3.83% 8,200,104� 59,658� 2.92% Total Savings and Time Deposits 29,229,550� 222,778� 3.02% 29,907,110� 194,389� 2.61% � Fed. Funds Purchased & Collateralized Borrowings 11,299,427� 114,591� 4.02% 9,845,733� 89,628� 3.65% Other Borrowings 1,461,561� 20,482� 5.56% 1,454,216� 20,119� 5.55% Total Borrowings 12,760,988� 135,073� 4.20% 11,299,949� 109,747� 3.90% Total Interest Bearing Liabilities 41,990,538� 357,851� 3.38% 41,207,059� 304,136� 2.96% Interest Rate Spread 2.65% 2.99% � Non-Interest Bearing Liabilities: Demand Deposits $7,315,287� $7,414,598� Other Liabilities 701,013� 734,575� Total Liabilities 50,006,838� 49,356,232� Stockholders' Equity 9,186,913� 9,044,461� Total Liabilities and Stockholders' Equity $59,193,751� $58,400,693� Net Interest Income and Net Interest Margin $420,926� 3.26% $444,094� 3.53% Less: Tax Equivalent Adjustment (14,022) (14,206) Net Interest Income $406,904� $429,888� 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 the periods indicated: � � Quarterly Highlights (Dollars in thousands) September 30, June 30, March 31, December 31, September 30, Comparative Mortgage Loan Volumes 2006� 2006� 2006� 2005� 2005� � Total Applications Received $17,732,328� $18,409,983� $15,278,074� $15,613,973� $17,254,701� � Loans Originated: Specialty Products (a) $4,717,198� $4,861,775� $4,034,289� $4,787,403� $4,827,831� Home Equity 1,219,465� 1,281,321� 1,002,615� 1,114,617� 1,280,684� Jumbo/Agency 3,524,084� 3,746,581� 2,734,867� 3,488,135� 4,302,550� Total Loans Originated $9,460,747� $9,889,677� $7,771,771� $9,390,155� $10,411,065� � � Pipeline (b) $5,887,000� $6,246,558� $5,722,902� $5,325,629� $6,376,081� Interest Rate Lock Commitments (c) 2,560,499� 2,670,377� 2,498,841� 2,386,809� 2,349,097� Loans Held-for-Sale 4,672,939� 5,406,341� 4,190,165� 4,359,267� 4,701,550� � Loan Sales (3): Specialty Products $4,224,073� $4,162,568� $4,032,031� $4,570,651� $5,061,097� Home Equity 1,664,800� 755,613� 916,017� 865,665� 1,500,767� Jumbo/Agency 3,449,499� 2,925,437� 2,188,749� 3,277,851� 4,381,960� Total Loan Sales $9,338,372� $7,843,618� $7,136,797� $8,714,167� $10,943,824� � � Average Margin on Loan Sales: Specialty Products 1.76% 1.64% 1.23% 1.18% 1.13% Home Equity 1.23% 1.25% 1.69% 1.49% 1.88% Jumbo/Agency 0.83% 0.84% 0.77% 0.76% 0.65% Average Margin on Loan Sales 1.32% 1.30% 1.15% 1.05% 1.04% � Gain on Sale of Loans: (3) Specialty Products $74,477� $68,419� $49,426� $53,867� $56,956� Home Equity 20,399� 9,413� 15,499� 12,929� 28,172� Jumbo/Agency 28,748� 24,484� 16,824� 24,819� 28,459� Total Gain on Sale of Loans $123,624� $102,316� $81,749� $91,615� $113,587� � � (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. See accompanying notes appended to the financial data and summaries North Fork Bancorporation, Inc. Notes to the Financial Data and Summaries � � The table below presents the components of mortgage banking income for the periods indicated: � Three Months Nine Months Ended September 30, Ended September 30, (in thousands) 2006� 2005� 2006� 2005� � Gain on Sale of Loans Held-for-Sale (a) $123,624� $113,587� $307,688� $339,531� Mortgage Banking Fees, net 20,526� 26,471� 65,122� 77,853� Amortization of Mortgage Servicing Rights (21,526) (23,183) (66,939) (63,763) Temporary (Impairment Charge)/Recovery - Mortgage Servicing Rights (10,634) 9,540� 7,960� (25,431) Total Mortgage Banking Income $111,990� $126,415� $313,831� $328,190� � (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 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 and subsequent fluctuations of market value has been recorded as trading gains/(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 Nine Months Ended September 30, Ended September 30, (dollars in thousands) 2006� 2005� 2006� 2005� � Net Income, as Reported $203,108� $237,296� $634,052� $738,397� Add: Amortization of Identifiable Intangible Assets, Net of Taxes 5,936� 5,982� 17,720� 17,854� Net Income, as Adjusted $209,044� $243,278� $651,772� $756,251� � � Average Total Assets $59,193,751� $58,731,915� $58,329,760� $60,134,351� Less: Average Goodwill 5,918,111� 5,885,957� 5,918,115� 5,884,029� Less: Average Identifiable Intangible Assets 93,056� 128,882� 101,818� 138,103� Average Total Tangible Assets $53,182,584� $52,717,076� $52,309,827� $54,112,219� � Average Stockholders' Equity $9,186,913� $9,293,861� $9,068,415� $9,161,643� Less: Average Goodwill 5,918,111� 5,885,957� 5,918,115� 5,884,029� Less: Average Identifiable Intangible Assets 93,056� 128,882� 101,818� 138,103� Average Total Tangible Stockholders' Equity $3,175,746� $3,279,022� $3,048,482� $3,139,511� � Return on Average Tangible Assets 1.56% 1.83% 1.67% 1.87% Return on Average Tangible Stockholders' Equity 26.12% 29.43% 28.59% 32.21% (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, debt restructuring costs 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. North Fork Bancorporation, Inc. (NYSE: NFB) Highlights in the current period include: -- Net income of $203 million and diluted earnings per share of $.44. -- A net interest margin of 3.26%. -- 20% annualized growth in commercial loans and 19% annualized growth in total loans, excluding residential mortgages. -- Returns on average tangible equity and average tangible assets of 26.1% and 1.56%, respectively. -- Improved margins 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 held-for- investment. Net Earnings and Returns Net income for the quarter ended September 30, 2006 was $203 million or $.44 diluted earnings per share compared to $237 million or $.50 diluted earnings per share for the comparable period in 2005. Net income for the nine-month period ended September 30, 2006 was $634 million or diluted earnings per share of $1.38 compared to $738 million or diluted earnings per share of $1.55 for the comparable period in 2005. The Company's returns on average tangible equity and assets were 26.1% and 1.56%, respectively in the most recent quarter. For the quarter ended September 30, 2006, the net interest income and net interest margin were $406.9 million and 3.26%, respectively compared to $429.9 million and 3.53%, respectively for the immediately preceding quarter. Net interest income and margin for the nine-months ended September 30, 2006 were $1.3 billion and 3.45%, respectively compared to $1.4 billion and 3.63%, respectively for 2005. The year over year decline reflects the challenging banking and interest rate environment. Loans Loans held-for-investment at September 30, 2006 amounted to $36.3 billion compared to $35.6 billion at June 30, 2006. On a linked quarter basis, loans held-for-investment, excluding residential mortgages, increased by $1.0 billion, an annualized growth rate of 19%. Commercial loans increased by $652 million, an increase of 20% on an annualized basis. The Company expects the commercial loan growth momentum will continue despite intense pricing competition. Non-performing assets were $62.5 million at September 30, 2006. Annualized net charge-offs were a modest 6 basis points. Deposits Deposits at September 30, 2006 were $36.5 billion, declining slightly from the previous quarter. Commercial deposits remain a significant component of total deposits. "We will concentrate on commercial relationships opting not to pursue high cost consumer deposits," said John Adam Kanas, Chairman, President and Chief Executive Officer. Mortgage Banking Business The Company's mortgage banking subsidiary, GreenPoint Mortgage, originated loans aggregating $9.5 billion in the quarter, compared to $9.9 billion, linked quarter. The Company believes that future origination volume will remain strong. The margin on whole loan sales was 132 basis points, improving over the previous quarter. Gain on sale of loans was $123.6 million in the quarter compared to $102.3 million in the prior quarter. At September 30, 2006, the mortgage loan pipeline was $5.9 billion. At September 30, 2006, net mortgage servicing rights were $258 million, or 93 basis points of the unpaid principal balance of the related serviced loans. During the quarter, the Company recorded a temporary impairment charge of approximately $10 million on its mortgage servicing rights asset. Cash Dividend On September 26, 2006, the Board declared its regular quarterly dividend of $.25 per common share. The dividend will be payable November 15, 2006, to shareholders of record at the close of business on October 27, 2006. Pending Acquisition As previously announced, Capital One and North Fork expect the acquisition of North Fork by Capital One will close in the fourth quarter of 2006, pending the receipt of approval of the merger by the Federal Reserve Board, and the expiration of all regulatory waiting periods. Capital One and North Fork have not yet set a definitive election deadline by which North Fork stockholders can elect whether they would prefer to receive cash or Capital One common stock in the merger. The election deadline, which is expected to be approximately five business days prior to the expected closing date, will be announced at least five business days in advance of the deadline. 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 351 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 actual results to differ materially from those set forth in these forward-looking statements: changes in the interest rate environment; changes in the securities, real estate markets or the economy in general, whether nationally, internationally or regionally; increased competition and its effect on pricing, spending, third-party relationships and revenues; changes in monetary and fiscal policies of the U.S. government changes in accounting principles, policies, practices or guidelines and legislative or regulatory changes. 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 "Risk Factors"), 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 risk that the businesses will not be integrated successfully; the risk that costs and expenses relating to the merger and subsequent integration may be greater than anticipated; 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. 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 Capital One and North Fork Transaction In connection with the proposed merger of Capital One and North Fork, Capital One filed with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 that included a joint proxy statement of Capital One and North Fork that also constitutes a prospectus of Capital One. Capital One and North Fork mailed the joint proxy statement/prospectus to their respective stockholders on or about July 14, 2006. Investors and security holders are urged to read the definitive joint proxy statement/prospectus regarding the proposed merger because it contains important information. You may obtain a free copy of the definitive 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 definitive 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. -0- *T North Fork Bancorporation, Inc. Consolidated Statements of Income (Unaudited) Three Months Nine Months Ended September 30, Ended September 30, ------------------- ----------------------- (in thousands, except per share amounts) 2006 2005 2006 2005 --------- --------- ----------- ----------- Interest Income: Loans Held-for-Investment $559,017 $469,599 $1,596,510 $1,394,034 Loans Held-for-Sale 86,885 69,840 226,665 209,753 Mortgage-Backed Securities 92,009 113,921 287,961 389,303 Other Securities 25,986 28,422 83,804 87,953 Money Market Investments 858 508 1,971 1,903 --------- --------- ----------- ----------- Total Interest Income 764,755 682,290 2,196,911 2,082,946 --------- --------- ----------- ----------- Interest Expense: Savings, NOW & Money Market Deposits 144,400 91,316 396,565 243,367 Time Deposits 78,378 49,397 197,827 123,255 Federal Funds Purchased and Collateralized Borrowings 114,591 86,343 287,693 290,588 Other Borrowings 20,482 20,684 60,558 57,794 --------- --------- ----------- ----------- Total Interest Expense 357,851 247,740 942,643 715,004 --------- --------- ----------- ----------- Net Interest Income 406,904 434,550 1,254,268 1,367,942 Provision for Loan Losses 9,000 9,000 27,000 27,000 --------- --------- ----------- ----------- Net Interest Income after Provision for Loan Losses 397,904 425,550 1,227,268 1,340,942 --------- --------- ----------- ----------- Non-Interest Income: Mortgage Banking Income 111,990 126,415 313,831 328,190 Customer Related Fees & Service Charges 39,808 41,980 121,203 125,888 Investment Management, Commissions & Trust Fees 9,085 8,780 27,881 30,138 Other Operating Income 13,325 12,719 48,182 42,177 Securities Gains, net 4,461 840 15,282 16,358 Trading Gains/(Losses) (1) 9,674 - (11,396) - --------- --------- ----------- ----------- Total Non-Interest Income 188,343 190,734 514,983 542,751 --------- --------- ----------- ----------- Non-Interest Expense: Employee Compensation & Benefits 148,830 136,300 435,390 410,684 Occupancy & Equipment, net 51,574 49,007 154,121 141,910 Amortization of Identifiable Intangibles 8,859 9,133 26,578 27,400 Other Operating Expenses 54,814 59,560 166,839 170,454 Merger Related Charges - Capital One 13,668 - 18,900 - Debt Restructuring Costs 5,356 - 5,356 - Settlement Recovery (2) - - (16,031) - --------- --------- ----------- ----------- Total Non-Interest Expense 283,101 254,000 791,153 750,448 --------- --------- ----------- ----------- Income Before Income Taxes 303,146 362,284 951,098 1,133,245 Provision for Income Taxes 100,038 124,988 317,046 394,848 --------- --------- ----------- ----------- Net Income $203,108 $237,296 $634,052 $738,397 ========= ========= =========== =========== Earnings Per Share: Basic $0.45 $0.50 $1.39 $1.58 Diluted $0.44 $0.50 $1.38 $1.55 *T See accompanying notes appended to the financial data and summaries. -0- *T North Fork Bancorporation, Inc. Consolidated Balance Sheets (Unaudited) September 30, June 30, (in thousands, except per share amounts) 2006 2006 ------------- ------------ Assets: Cash & Due from Banks $961,425 $1,000,195 Money Market Investments 114,832 22,295 Securities: Available-for-Sale 9,500,424 9,867,618 Held-to-Maturity 93,265 97,344 ------------- ------------ Total Securities 9,593,689 9,964,962 ------------- ------------ Loans: Loans Held-for-Sale 4,672,939 5,406,341 Loans Held-for-Investment 36,258,634 35,551,560 Less: Allowance for Loan Losses 228,544 224,571 ------------- ------------ Net Loans Held-for- Investment 36,030,090 35,326,989 ------------- ------------ Goodwill 5,918,116 5,918,116 Identifiable Intangibles 87,513 96,373 Premises & Equipment 448,762 447,633 Mortgage Servicing Rights 258,190 272,543 Accrued Income Receivable 218,934 213,492 Other Assets 584,823 712,896 ------------- ------------ Total Assets $58,889,313 $59,381,835 ============= ============ Liabilities and Stockholders' Equity: Deposits: Demand $7,300,158 $7,561,888 Savings, NOW & Money Market 21,129,366 21,377,573 Time 8,118,045 7,875,144 ------------- ------------ Total Deposits 36,547,569 36,814,605 ------------- ------------ Federal Funds Purchased & Collateralized Borrowings 10,732,348 11,249,615 Other Borrowings 1,469,761 1,463,066 ------------- ------------ Total Borrowings 12,202,109 12,712,681 ------------- ------------ Accrued Interest Payable 133,893 135,351 Dividends Payable 116,530 116,437 Accrued Expenses & Other Liabilities 631,105 540,184 ------------- ------------ Total Liabilities $49,631,206 $50,319,258 ------------- ------------ Stockholders' Equity: Common Stock, par value $0.01; authorized 1,000,000,000 shares; issued 480,682,118 shares at September 30, 2006 $4,807 $4,807 Additional Paid in Capital 6,881,364 6,875,810 Retained Earnings 2,866,058 2,779,501 Accumulated Other Comprehensive Loss (114,346) (207,161) Deferred Compensation - - Treasury Stock at Cost, 14,562,066 shares at September 30, 2006 (379,776) (390,380) ------------- ------------ Total Stockholders' Equity 9,258,107 9,062,577 ------------- ------------ Total Liabilities and Stockholders' Equity $58,889,313 $59,381,835 ============= ============ December 31, September 30, (in thousands, except per share amounts) 2005 2005 ------------ ------------- Assets: Cash & Due from Banks $1,037,406 $740,251 Money Market Investments 24,843 17,808 Securities: Available-for-Sale 11,295,977 11,989,260 Held-to-Maturity 104,210 114,505 ------------ ------------- Total Securities 11,400,187 12,103,765 ------------ ------------- Loans: Loans Held-for-Sale 4,359,267 4,701,550 Loans Held-for-Investment 33,232,236 32,672,962 Less: Allowance for Loan Losses 217,939 220,347 ------------ ------------- Net Loans Held-for- Investment 33,014,297 32,452,615 ------------ ------------- Goodwill 5,918,116 5,914,562 Identifiable Intangibles 114,091 123,334 Premises & Equipment 438,040 433,775 Mortgage Servicing Rights 267,424 267,347 Accrued Income Receivable 205,892 198,909 Other Assets 837,308 946,477 ------------ ------------- Total Assets $57,616,871 $57,900,393 ============ ============= Liabilities and Stockholders' Equity: Deposits: Demand $7,639,231 $7,478,359 Savings, NOW & Money Market 20,910,161 21,115,093 Time 8,067,181 8,218,634 ------------ ------------- Total Deposits 36,616,573 36,812,086 ------------ ------------- Federal Funds Purchased & Collateralized Borrowings 9,700,621 9,572,995 Other Borrowings 1,477,364 1,485,392 ------------ ------------- Total Borrowings 11,177,985 11,058,387 ------------ ------------- Accrued Interest Payable 102,229 91,376 Dividends Payable 116,754 105,153 Accrued Expenses & Other Liabilities 601,089 568,846 ------------ ------------- Total Liabilities $48,614,630 $48,635,848 ------------ ------------- Stockholders' Equity: Common Stock, par value $0.01; authorized 1,000,000,000 shares; issued 480,682,118 shares at September 30, 2006 $4,806 $4,799 Additional Paid in Capital 7,035,314 7,020,325 Retained Earnings 2,581,047 2,486,847 Accumulated Other Comprehensive Loss (108,898) (89,052) Deferred Compensation (154,772) (109,111) Treasury Stock at Cost, 14,562,066 shares at September 30, 2006 (355,256) (49,263) ------------ ------------- Total Stockholders' Equity 9,002,241 9,264,545 ------------ ------------- Total Liabilities and Stockholders' Equity $57,616,871 $57,900,393 ============ ============= *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) Three Months Nine Months Ended September Ended September 30, 30, ----------------- ----------------- SELECTED FINANCIAL DATA: 2006 2005 2006 2005 -------- -------- -------- -------- (in thousands, except ratios and per share amounts) Per Share: Net Income - Basic $0.45 $0.50 $1.39 $1.58 Net Income - Diluted $0.44 $0.50 $1.38 $1.55 Average Shares Outstanding - Basic 456,100 470,004 455,107 468,644 Average Shares Outstanding - Diluted 460,872 475,627 460,083 474,957 Cash Dividends $0.25 $0.22 $0.75 $0.66 Dividend Payout Ratio 57% 44% 55% 43% Tangible Book Value $6.98 $6.75 $6.98 $6.75 Selected Financial Data: Return on Average Total Assets 1.36% 1.60% 1.45% 1.64% Return on Average Tangible Assets (3) 1.56% 1.83% 1.67% 1.87% Return on Average Equity 8.77% 10.13% 9.35% 10.78% Return on Average Tangible Equity (3) 26.12% 29.43% 28.59% 32.21% Tangible Equity to Tangible Assets 6.15% 6.22% 6.15% 6.22% Efficiency Ratio (4) 42.13% 39.15% 42.03% 37.14% Yield on Interest Earning Assets 6.03% 5.47% 5.96% 5.48% Cost of Funds 3.38% 2.39% 3.06% 2.22% Net Interest Margin 3.26% 3.52% 3.45% 3.63% September June December September 30, 30, 31, 30, 2006 2006 2005 2005 --------- ------ -------- --------- Risk Based Capital: Tier 1 10.60% 10.26% 10.26% 11.00% Total 12.98% 12.61% 12.73% 13.57% Leverage Ratio 7.14% 7.04% 6.70% 7.09% September 30, June 30, 2006 2006 ------------- ------------ Quarterly Average Balance Sheet: Total Assets $59,193,751 $58,400,693 Securities 10,066,545 10,718,973 Loans Held-for-Sale 5,329,621 4,978,945 Loans Held-for-Investment 35,788,526 34,654,439 Goodwill & Identifiable Intangibles 6,011,167 6,019,964 Demand Deposits 7,315,287 7,414,598 Interest Bearing Deposits 29,229,550 29,907,110 Federal Funds Purchased & Collateralized Borrowings 11,299,427 9,845,733 Other Borrowings 1,461,561 1,454,216 Stockholders' Equity 9,186,913 9,044,461 Tangible Stockholders' Equity 3,175,746 3,024,497 December 31, September 30, 2005 2005 ------------ ------------- Quarterly Average Balance Sheet: Total Assets $58,232,383 $58,731,915 Securities 11,786,052 12,531,822 Loans Held-for-Sale 5,221,652 5,401,495 Loans Held-for-Investment 32,846,757 32,361,793 Goodwill & Identifiable Intangibles 6,034,399 6,014,839 Demand Deposits 7,771,142 7,547,759 Interest Bearing Deposits 29,368,629 29,642,762 Federal Funds Purchased & Collateralized Borrowings 9,740,160 10,057,604 Other Borrowings 1,484,866 1,505,651 Stockholders' Equity 9,157,876 9,293,861 Tangible Stockholders' Equity 3,123,477 3,279,022 *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 presents the composition of the securities portfolio for the periods ended: (in thousands) September 30, June 30, Securities - Available-for-Sale: 2006 2006 ------------- ----------- Collateralized Mortgage Obligations $6,032,854 $6,215,558 Agency Pass-Through Certificates 1,638,178 1,685,025 State & Municipal Obligations 669,488 663,997 Equity Securities 618,751 724,836 U.S. Treasury & Government Agencies 211,113 184,003 Other Securities 330,040 394,199 ------------- ----------- Total Securities Available-for-Sale $9,500,424 $9,867,618 Total Securities Held-to-Maturity 93,265 97,344 ------------- ----------- Total Securities $9,593,689 $9,964,962 ============= =========== (in thousands) December 31, September 30, Securities - Available-for-Sale: 2005 2005 ------------ ------------- Collateralized Mortgage Obligations $6,921,074 $7,391,107 Agency Pass-Through Certificates 1,956,487 2,138,524 State & Municipal Obligations 881,238 844,866 Equity Securities 675,525 669,072 U.S. Treasury & Government Agencies 231,152 272,247 Other Securities 630,501 673,444 ------------ ------------- Total Securities Available-for-Sale $11,295,977 $11,989,260 Total Securities Held-to-Maturity 104,210 114,505 ------------ ------------- Total Securities $11,400,187 $12,103,765 ============ ============= The following table presents the components of the held-for-sale and held-for-investment loan portfolios for the periods ended: (in thousands) September 30, June 30, Loans Held-For-Sale: 2006 2006 ------------- ------------ Residential Mortgages $4,228,290 $4,319,709 Home Equity 399,629 1,035,928 ------------- ------------ Total 4,627,919 5,355,637 Deferred Origination Costs 45,020 50,704 ------------- ------------ Total Loans Held-For-Sale $4,672,939 $5,406,341 ============= ============ (in thousands) September 30, June 30, Loans Held-For-Investment: 2006 2006 ------------- ------------ Commercial Mortgages $7,465,052 $7,079,501 Commercial & Industrial 6,073,098 5,806,928 ------------- ------------ Total Commercial 13,538,150 12,886,429 Residential Mortgages 14,237,428 14,519,282 Multi-Family Mortgages 5,272,860 5,134,232 Consumer 1,894,712 1,749,383 Construction and Land 1,272,784 1,222,981 ------------- ------------ Total $36,215,934 $35,512,307 Deferred Origination Costs, net 42,700 39,253 ------------- ------------ Total Loans Held-For-Investment $36,258,634 $35,551,560 ============= ============ (in thousands) December 31, September 30, Loans Held-For-Sale: 2005 2005 ------------ ------------- Residential Mortgages $3,824,547 $4,225,128 Home Equity 496,656 434,824 ------------ ------------- Total 4,321,203 4,659,952 Deferred Origination Costs 38,064 41,598 ------------ ------------- Total Loans Held-For-Sale $4,359,267 $4,701,550 ============ ============= (in thousands) December 31, September 30, Loans Held-For-Investment: 2005 2005 ------------ ------------- Commercial Mortgages $6,206,416 $5,896,835 Commercial & Industrial 4,709,440 4,324,758 ------------ ------------- Total Commercial 10,915,856 10,221,593 Residential Mortgages 15,068,443 15,508,008 Multi-Family Mortgages 4,821,642 4,626,777 Consumer 1,558,782 1,569,386 Construction and Land 829,273 716,049 ------------ ------------- Total $33,193,996 $32,641,813 Deferred Origination Costs, net 38,240 31,149 ------------ ------------- Total Loans Held-For-Investment $33,232,236 $32,672,962 ============ ============= *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) The following tables presents the components of non-performing assets for the periods ended: September December September 30, June 30, 31, 30, (in thousands) 2006 2006 2005 2005 --------- -------- -------- --------- Non-Performing Assets: Commercial Mortgages $2,119 $1,833 $498 $5,451 Commercial & Industrial 7,338 9,384 7,970 8,137 --------- -------- -------- --------- Total Commercial 9,457 11,217 8,468 13,588 Residential Mortgages 11,478 14,219 19,315 48,257 Multi-Family Mortgages - - 550 335 Consumer 2,743 1,837 2,684 2,399 Construction and Land - - - 600 --------- -------- -------- --------- Non-Performing Loans Held-For- Investment $23,678 $27,273 $31,017 $65,179 Non-Performing Loans Held-For- Sale 34,753 27,148 13,931 33,137 Other Real Estate 4,098 3,255 4,101 7,149 --------- -------- -------- --------- Total Non-Performing Assets $62,529 $57,676 $49,049 $105,465 ========= ======== ======== ========= Ratios: Allowance for Loan Losses to Non-Performing Loans Held-for- Investment 965% 823% 703% 338% Allowance for Loan Losses to Total Loans Held-for-Investment 0.63% 0.63% 0.66% 0.67% Non-Performing Loans to Total Loans Held-for-Investment 0.07% 0.08% 0.09% 0.20% Non-Performing Assets to Total Assets 0.11% 0.10% 0.09% 0.18% Quarterly Net Charge-offs to Average Loans Held-for- Investment 0.06% 0.07% 0.14% 0.08% *T -0- *T The following table presents the impact of allocating the allowance for loan losses as of September 30, 2006 into our two primary portfolio segments: September 30, 2006 -------------------------------------- Residential Commercial & & Multi- All Other (dollars in thousands) Total Family Loans ------------ ------------ ------------ Loans Held-for-Investment $36,258,634 $19,552,988 $16,705,646 Allowance for Loan Losses 228,544 60,526 168,018 Non-Performing Loans Held-for- Investment 23,678 11,478 12,200 Allowance for Loan Losses to Loans-Held-for-Investment 0.63% 0.31% 1.01% ============ ============ ============ Allowance for Loan Losses to Non-Performing Loans Held-for-Investment 965% 527% 1377% ============ ============ ============ *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: September 30, 2006 ------------------------------ Average Average (dollars in thousands ) Balance Interest Rate ------------ --------- ------- Interest Earning Assets: Loans Held-for-Investment $35,788,526 $563,239 6.24% Loans Held-for-Sale 5,329,621 86,885 6.47% Securities 10,066,545 127,599 5.03% Money Market Investments 68,730 1,054 6.08% ------------ --------- Total Interest Earning Assets 51,253,422 778,777 6.03% ------------ --------- Non-Interest Earning Assets: Cash and Due from Banks $980,630 Other Assets 6,959,699 ------------ Total Assets $59,193,751 ============ Interest Bearing Liabilities: Savings, NOW & Money Market Deposits $21,117,805 $144,400 2.71% Time Deposits 8,111,745 78,378 3.83% ------------ --------- Total Savings and Time Deposits 29,229,550 222,778 3.02% Fed. Funds Purchased & Collateralized Borrowings 11,299,427 114,591 4.02% Other Borrowings 1,461,561 20,482 5.56% ------------ --------- Total Borrowings 12,760,988 135,073 4.20% ------------ --------- Total Interest Bearing Liabilities 41,990,538 357,851 3.38% ------------ --------- Interest Rate Spread 2.65% Non-Interest Bearing Liabilities: Demand Deposits $7,315,287 Other Liabilities 701,013 ------------ Total Liabilities 50,006,838 Stockholders' Equity 9,186,913 ------------ Total Liabilities and Stockholders' Equity $59,193,751 ============ Net Interest Income and Net Interest Margin $420,926 3.26% Less: Tax Equivalent Adjustment (14,022) --------- Net Interest Income $406,904 ========= 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 ========= *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Mortgage Banking - Quarterly Highlights (Unaudited) The following table presents the components of the mortgage origination and sales volume for the periods indicated: Quarterly Highlights ---------------------------------------- (Dollars in thousands) September 30, June 30, March 31, Comparative Mortgage Loan Volumes 2006 2006 2006 ------------- ------------ ------------- Total Applications Received $17,732,328 $18,409,983 $15,278,074 ============= ============ ============= Loans Originated: Specialty Products (a) $4,717,198 $4,861,775 $4,034,289 Home Equity 1,219,465 1,281,321 1,002,615 Jumbo/Agency 3,524,084 3,746,581 2,734,867 ------------- ------------ ------------- Total Loans Originated $9,460,747 $9,889,677 $7,771,771 ============= ============ ============= Pipeline (b) $5,887,000 $6,246,558 $5,722,902 Interest Rate Lock Commitments (c) 2,560,499 2,670,377 2,498,841 Loans Held-for-Sale 4,672,939 5,406,341 4,190,165 Loan Sales (3): Specialty Products $4,224,073 $4,162,568 $4,032,031 Home Equity 1,664,800 755,613 916,017 Jumbo/Agency 3,449,499 2,925,437 2,188,749 ------------- ------------ ------------- Total Loan Sales $9,338,372 $7,843,618 $7,136,797 ============= ============ ============= Average Margin on Loan Sales: Specialty Products 1.76% 1.64% 1.23% Home Equity 1.23% 1.25% 1.69% Jumbo/Agency 0.83% 0.84% 0.77% ------------- ------------ ------------- Average Margin on Loan Sales 1.32% 1.30% 1.15% ============= ============ ============= Gain on Sale of Loans: (3) Specialty Products $74,477 $68,419 $49,426 Home Equity 20,399 9,413 15,499 Jumbo/Agency 28,748 24,484 16,824 ------------- ------------ ------------- Total Gain on Sale of Loans $123,624 $102,316 $81,749 ============= ============ ============= Quarterly Highlights ---------------------------- (Dollars in thousands) December 31, September 30, Comparative Mortgage Loan Volumes 2005 2005 ------------ ------------- Total Applications Received $15,613,973 $17,254,701 ============ ============= Loans Originated: Specialty Products (a) $4,787,403 $4,827,831 Home Equity 1,114,617 1,280,684 Jumbo/Agency 3,488,135 4,302,550 ------------ ------------- Total Loans Originated $9,390,155 $10,411,065 ============ ============= Pipeline (b) $5,325,629 $6,376,081 Interest Rate Lock Commitments (c) 2,386,809 2,349,097 Loans Held-for-Sale 4,359,267 4,701,550 Loan Sales (3): Specialty Products $4,570,651 $5,061,097 Home Equity 865,665 1,500,767 Jumbo/Agency 3,277,851 4,381,960 ------------ ------------- Total Loan Sales $8,714,167 $10,943,824 ============ ============= Average Margin on Loan Sales: Specialty Products 1.18% 1.13% Home Equity 1.49% 1.88% Jumbo/Agency 0.76% 0.65% ------------ ------------- Average Margin on Loan Sales 1.05% 1.04% ============ ============= Gain on Sale of Loans: (3) Specialty Products $53,867 $56,956 Home Equity 12,929 28,172 Jumbo/Agency 24,819 28,459 ------------ ------------- Total Gain on Sale of Loans $91,615 $113,587 ============ ============= (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. *T See accompanying notes appended to the financial data and summaries -0- *T North Fork Bancorporation, Inc. Notes to the Financial Data and Summaries The table below presents the components of mortgage banking income for the periods indicated: Three Months Nine Months Ended September 30, Ended September 30, ------------------- ------------------- (in thousands) 2006 2005 2006 2005 --------- --------- --------- --------- Gain on Sale of Loans Held- for-Sale (a) $123,624 $113,587 $307,688 $339,531 Mortgage Banking Fees, net 20,526 26,471 65,122 77,853 Amortization of Mortgage Servicing Rights (21,526) (23,183) (66,939) (63,763) Temporary (Impairment Charge)/Recovery - Mortgage Servicing Rights (10,634) 9,540 7,960 (25,431) --------- --------- --------- --------- Total Mortgage Banking Income $111,990 $126,415 $313,831 $328,190 ========= ========= ========= ========= (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 *T (1) We have reviewed our accounting treatment for all derivative transactions and determined that certain transactions did not meet the 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 and subsequent fluctuations of market value has been recorded as trading gains/(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. -0- *T Three Months Nine Months Ended September 30, Ended September 30, ------------------------- ------------------------- (dollars in thousands) 2006 2005 2006 2005 ------------ ------------ ------------ ------------ Net Income, as Reported $203,108 $237,296 $634,052 $738,397 Add: Amortization of Identifiable Intangible Assets, Net of Taxes 5,936 5,982 17,720 17,854 ------------ ------------ ------------ ------------ Net Income, as Adjusted $209,044 $243,278 $651,772 $756,251 ============ ============ ============ ============ Average Total Assets $59,193,751 $58,731,915 $58,329,760 $60,134,351 Less: Average Goodwill 5,918,111 5,885,957 5,918,115 5,884,029 Less: Average Identifiable Intangible Assets 93,056 128,882 101,818 138,103 ------------ ------------ ------------ ------------ Average Total Tangible Assets $53,182,584 $52,717,076 $52,309,827 $54,112,219 ============ ============ ============ ============ Average Stockholders' Equity $9,186,913 $9,293,861 $9,068,415 $9,161,643 Less: Average Goodwill 5,918,111 5,885,957 5,918,115 5,884,029 Less: Average Identifiable Intangible Assets 93,056 128,882 101,818 138,103 ------------ ------------ ------------ ------------ Average Total Tangible Stockholders' Equity $3,175,746 $3,279,022 $3,048,482 $3,139,511 ============ ============ ============ ============ Return on Average Tangible Assets 1.56% 1.83% 1.67% 1.87% Return on Average Tangible Stockholders' Equity 26.12% 29.43% 28.59% 32.21% *T (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, debt restructuring costs 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.