New York Community Bancorp, Inc. Reports 1st Quarter 2008 Diluted Cash Earnings Per Share of $0.25 and Diluted GAAP and Operating Earnings Per Share of $0.22

Business Wire, April 23, 2008

While the average yield on interest-earning assets remained constant over the course of the quarter, the Company's average cost of funds declined by eight basis points to 3.85% during this time. The linked-quarter reduction was primarily due to a 20-basis point drop in the average cost of interest-bearing deposits, which more than offset the impact of a $104.2 million increase in the average balance of such funding, as well as the impact of a four-basis point rise in the average cost of borrowed funds. The lower cost of deposits largely reflects the FOMC's reduction of the fed funds rate by 200 basis points over the course of the quarter to its current level of 2.25%.

Reflecting the same factors that contributed to the linked-quarter growth of its net interest income, the Company's net interest margin rose five basis points to 2.41% and its interest rate spread rose eight basis points to 2.19% in the first quarter of 2008.

Year-over-Year Comparison

The year-over-year rise in net interest income reflects a combination of factors, including the growth of the Company's interest-earning assets through organic loan production and its 2007 business combinations, together with an increase in the average yield on such assets and a reduction in its average cost of funds. The average balance of interest-earning assets rose $1.8 billion year-over-year, reflecting growth in loans, securities, and money market investments, while the average yield on interest-earning assets rose eight basis points. During this time, the average cost of deposits declined 31 basis points, contributing to a four-basis point reduction in the average cost of funds.

The year-over-year growth in net interest income was paralleled by the expansion of the Company's spread and margin, which rose 12 basis points and nine basis points, respectively, in the current first quarter from the measures recorded in the first quarter of the prior year.

While the linked-quarter increase in net interest income was largely attributable to an increase in prepayment penalty income, the level of such income declined by $3.4 million year-over-year. Prepayment penalty income added 29 and 22 basis points, respectively, to the average yields on loans and assets in the first quarter of 2007, and 22 basis points to its net interest margin.

Prepayment penalty income may fluctuate significantly from quarter to quarter, depending on various factors, including the perceived direction of market interest rates, the volume of multi-family and commercial real estate loans refinancing, and the volume of multi-family and commercial real estate properties being sold during that time.

Non-interest Income

Non-interest income totaled $28.5 million in the current first quarter, as compared to $26.5 million and $24.1 million in the trailing and year-earlier three months. Included in the first quarter 2008 amount were the aforementioned $926,000 gain on the repurchase of certain REIT-preferred securities and the aforementioned $1.6 million gain that stemmed from the mandatory redemption of shares received in connection with Visa Inc.'s initial public offering. Of the $1.6 million, which was recorded in first quarter 2008 "other income," $500,000 served to reverse a portion of the $1.0 million Visa litigation charge that was recorded in operating expenses in the fourth quarter of last year.