New York Community Bancorp, Inc. Reports 4th Quarter 2007 Diluted Cash Earnings Per Share of $0.25 and Diluted GAAP and Operating Earnings Per Share of $0.21

Business Wire, Jan 29, 2008

As previously mentioned, the Company recorded two non-cash charges in the fourth quarter of 2007 which increased the Company's operating expenses and non-interest expense: the pre-tax merger-related charge of $2.2 million, recorded in compensation and benefits expense, and the pre-tax Visa litigation charge of $1.0 million recorded in general and administrative ("G&A") expense.

In the fourth quarter of 2006, the Company recorded a pre-tax non-cash merger-related charge of $5.7 million in connection with the acquisition of Atlantic Bank of New York ("Atlantic Bank"), and a pre-tax charge of $3.1 million related to the retirements of the Company's chairman and senior lending consultant.

Excluding these charges, the Company's operating expenses and non-interest expense amounted to $78.6 million and $84.7 million, respectively, in the fourth quarter of 2007, as compared to $64.7 million and $69.7 million, respectively, in the fourth quarter of 2006. Including the aforementioned charges, the Company recorded total operating expenses of $81.8 million and $73.5 million in the current and year-earlier fourth quarters, and total non-interest expense of $87.9 million and $78.5 million, respectively. In the third quarter of 2007, the Company recorded operating expenses of $72.8 million and non-interest expense of $78.7 million.

The higher level of operating expenses recorded in the current fourth quarter was largely acquisition-driven. The Company added 56 branches to its franchise in 2007, including 21 branches of Synergy Bank on October 1st. Primarily reflecting the Synergy transaction, compensation and benefits expense rose $890,000 on a linked-quarter basis to $41.5 million; year-over-year, compensation and benefits expense declined by $680,000. The year-over-year decline was attributable to a $3.5 million reduction in merger-related charges, which totaled $5.7 million in the fourth quarter of 2006, as indicated above.

The level of fourth quarter 2007 occupancy and equipment expense also reflects the impact of the Company's expansion. At $19.2 million, occupancy and equipment expense was up $2.5 million on a linked-quarter basis and $4.4 million year-over-year. G&A expense totaled $21.1 million in the current fourth quarter, rising $5.7 million and $4.6 million, respectively, from the earlier amounts. In addition to the aforementioned pre-tax Visa litigation charge of $1.0 million, the higher levels of G&A expense were primarily due to an increase in acquisition-driven marketing expenses, together with various other G&A costs.

The increase in fourth quarter 2007 non-interest expense also reflects a rise in the amortization of core deposit intangibles ("CDI") stemming from the transactions with Synergy, PennFed, and Doral. The Synergy transaction added CDI of $4.5 million, which will be amortized using an accelerated method over a period of ten years. In the second and third quarters of 2007, the PennFed and Doral transactions added CDI of $20.9 million and $2.1 million, respectively, which also are being amortized using an accelerated method over a ten-year period. Accordingly, the Company recorded CDI amortization of $6.1 million in the current fourth quarter, up $223,000 and $1.0 million, respectively, from the amounts recorded in the trailing and year-earlier three months.