WESTBURY, N.Y., Oct. 28, 2020 /PRNewswire/ --

New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company") today reported net income for the three months ended September 30, 2020 of $115.8 million, up 10% compared to the $105.3 million we reported for the three months ended June 30, 2020 and up 17% compared to the $99.0 million the Company reported in the year-ago quarter. For the nine months ended September 30, 2020, the Company reported net income of $321.4 million, up 9% compared to the $293.9 million of net income reported in the first nine months of 2019.

Net income available to common shareholders for the third quarter of 2020 totaled $107.6 million, up 11% compared to $97.1 million for the second quarter of 2020 and was up 18% compared to the $90.8 million reported for the third quarter of 2019. On a year-to-date basis, net income available to common shareholders totaled $296.8 million, up 10% compared to the $269.2 million reported for the first nine months of 2019.

On a per share basis, the Company reported diluted EPS of $0.23 for the third quarter of 2020, up 10% compared to the $0.21 reported for the second quarter of 2020, and up 21% compared to the $0.19 reported for the third quarter of 2019. For the first nine months of 2020, diluted EPS were $0.63, up 11% compared to diluted EPS of $0.57 for the first nine months of 2019.

Commenting on the Company's third quarter performance, President and Chief Executive Officer Joseph R. Ficalora stated: "We are very pleased with our strong third quarter results, especially given the uneven economic recovery and the lingering effects from the COVID-19 pandemic over the past quarter. We had solid net income and EPS growth during the current third quarter, driven by strong loan growth and double-digit net interest margin expansion resulting in continued net interest income growth. At the same time, operating expenses remained well-contained leading to higher levels of pre-provision net revenues.

"More importantly, our loan deferrals declined significantly. From June 30, 2020 to October 22nd, $3.1 billion of loan deferrals were eligible to come off of their deferral period. As of October 22nd, 95% of these deferrals returned to payment status. As of this date, deferrals represented 7.3% of total loans compared to 14.4% as of June 30, 2020. Going forward, an additional $3.1 billion of deferrals are scheduled to come off of their deferral period, the majority of which are eligible to do so during November. Given October's strong payment performance, we remain confident about deferral payment trends through the remainder of the year.

"Our asset quality metrics remain very strong and rank among the best in the industry. Our NPAs declined on a linked quarter basis and we recorded a net recovery during the quarter. As always, we will continue to closely monitor our entire loan portfolio for any signs of stress.

"Our net interest margin increased 11 basis points to 2.29% during the third quarter, compared to the second quarter level. Excluding the impact from prepayment income, the margin also increased 11 basis points to 2.20%. The continued improvement was the result of lower funding costs as our maturing certificates of deposits repriced significantly lower during the quarter, while the cost of our borrowings also declined. At the same time, loan yields were relatively stable, down only five basis points on a sequential basis.

"On the lending side, our loan portfolio grew, both on a year-to-date and sequential basis. Overall, loans grew 3% annualized on a year-to-date basis and 5% on an annualized basis compared to the prior quarter. The linked-quarter growth was driven by ongoing growth in our core multi-family portfolio and a rebound in our specialty finance portfolio. We ended the third quarter with a solid loan pipeline, which bodes positively for fourth quarter loan growth.

"Finally, reflecting our earnings growth, capital position, and strong asset quality metrics, yesterday our Board of Directors declared a quarterly cash dividend of $0.17 per common share."

DIVIDEND DECLARATION

The Board of Directors yesterday declared a quarterly cash dividend of $0.17 per share on the Company's common stock. Based on a closing price of $8.33 as of October 27, 2020, this represents an annualized dividend yield of 8.2%. The dividend is payable on November 17, 2020 to common shareholders of record as of November 7, 2020.

BALANCE SHEET SUMMARY

At September 30, 2020, assets totaled $54.9 billion, up $1.3 billion compared to December 31, 2019. This growth was primarily due to continued loan growth offset somewhat by a decline in the securities portfolio. This growth was funded mainly through wholesale borrowings while total deposits were relatively unchanged.

Total loans and leases held for investment increased to $42.8 billion, up $935 million or 3% annualized compared to December 31, 2019 and up $523 million or 5% annualized compared to June 30, 2020. Loan growth for both the year-to-date and quarter-to-date periods was driven by growth in our multi-family portfolio and in our specialty finance portfolio, offset by a decline in the commercial real estate ("CRE") portfolio.

Total securities, consisting mainly of available-for-sale securities, declined $621 million compared to December 31, 2019 but increased modestly compared to June 30, 2020. The Company has refrained from meaningfully growing the securities portfolio, given the currently low interest rate environment, which is expected to persist in the foreseeable future.

On the liability side, total deposits of $31.7 billion were relatively unchanged compared to both the previous quarter and compared to the levels at December 31, 2019. However, the deposit mix is trending toward lower cost deposit account categories. Borrowed funds rose $1.1 billion compared to December 31, 2019 and $675 million compared to June 30, 2020.

Loans

Total multi-family loans rose $942 million or 4% annualized to $32.1 billion compared to the balance at December 31, 2019. On a linked-quarter basis, total multi-family loans increased $504 million or 6% annualized compared to June 30, 2020. The continued growth in our multi-family portfolio is the result of three factors: increased refinancing activity as many loans are nearing their contractual maturity or option repricing dates; higher retention rates; and market share gains as some bank and thrift competitors have either retrenched from this market or are no longer focused on this type of lending.

The specialty finance portfolio rebounded during the third quarter. Specialty finance loans and leases increased $138 million to $3.1 billion or 19% annualized compared to the second quarter of this year. On a year-to-date basis, specialty finance loans and leases grew $439 million or 22% annualized compared to December 31, 2019. During second-quarter 2020, the COVID-19 pandemic had a temporary negative impact on this category, especially in the dealer financing segment. This segment returned to form during the third quarter while other borrowers have drawn on their lines during the current quarter as their businesses have improved.

The CRE loan portfolio declined $197 million or 4% annualized compared to the balance at December 31, 2019, and declined $45 million or 3% annualized compared to the balance at June 30, 2020.

Additionally, as of September 30, 2020, the Company had $117.3 million of loans held for sale, up $14 million compared to June 30, 2020. All of these loans are part of the Paycheck Protection Program (the "PPP"). At December 31, 2019, the Company did not have any loans held for sale.

During the third quarter, the average loan size for our multi-family loans was $6.6 million and for our CRE loans, it was $6.7 million. Both metrics were relatively unchanged compared to the average loan size in the previous quarter.

The weighted average life of the multi-family portfolio for the third quarter of the year was 2.0 years compared to 1.9 years for the second quarter of the year, and for the CRE portfolio, it was 2.3 years, unchanged compared to the prior quarter.

Originations

For the three months ended September 30, 2020, loans and leases originated for investment, excluding PPP loan originations, totaled $3.0 billion, down 9% compared to June 30, 2020 and exceeded that quarter's pipeline by $800 million. Originations rose 31% compared to the $2.3 billion we originated during the third quarter of last year. For the nine months ended September 30, 2020, originations totaled $9.0 billion, up 23% compared to $7.3 billion for the nine months ended September 30, 2019.

Pipeline

The current loan pipeline stands at $1.8 billion. Of this amount, approximately 61% is new money, slightly better than the previous quarter. The current pipeline composition includes $1.4 billion in multi-family loans, $141 million in specialty finance loans and leases, and $199 million in CRE loans.

Funding

Deposits

In line with the Company's strategy to substantially reduce its cost of funds given the significant drop in market interest rates and the correct expectation that market rates will remain low for an extended period of time, CDs declined $1.1 billion during the third quarter and $3.2 billion on a year-to-date basis to $11.0 billion.

Some of the drop in CDs was offset by growth in other deposit categories, which have lower rates. Interest-bearing checking and money market accounts rose $553 million, while they increased $1.5 billion on a year-to-date basis, to $11.7 billion. Savings accounts increased $340 million to $6.0 billion compared to the second quarter and they rose $1.2 billion compared to year end 2019. Also, non-interest-bearing checking accounts grew $135 million on a linked-quarter basis and $624 million on a year-to-date basis to $3.1 billion.

Looking ahead, the Company has $5.8 billion in CDs which are scheduled to mature during the fourth quarter of this year. These CDs carry a weighted average interest rate of 1.46%. Over the next four quarters (fourth quarter 2020 through third quarter 2021), the Company has $11.6 billion of CDs with a weighted average interest rate of 1.21% which are scheduled to mature.

During the current third quarter, our deposit costs dropped 31 basis points to 0.85% compared to the second quarter of 2020 and 104 basis points compared to the year-ago quarter. For the nine months ended September 30, 2020, our deposit costs declined 65 basis points to 1.21% compared to the nine months ended September 30, 2019.

Borrowings

During the third quarter of 2020, the Company continued to take advantage of the low interest rate environment and favorable capital market conditions to lock in intermediate-to-long-term funding at attractive rates. Wholesale borrowings, consisting primarily of advances from the Federal Home Loan Bank of New York (the "FHLB-NY") increased $675 million to $15.0 billion compared to the previous quarter and rose $1.1 billion compared to the level at year-end 2019.

The FHLB-NY advances that the Company added during the current quarter had a blended rate of 0.45% and an average term of 2.0 years. This compared to an overall average cost of 1.97% during the current quarter. The Company has an additional $725 million of FHLB-NY advances maturing in the fourth quarter of 2020 with an average weighted cost of 1.18%. Over the next four quarters (fourth quarter 2020 through third quarter 2021), we have $1.4 billion of maturing FHLB-NY advances with a weighted average cost of 1.44%.

Liquidity

Our liquidity position remained robust during the current third quarter. In addition to the ample liquidity provided to us from our deposits, other sources of available liquidity stems from our balance of cash and cash equivalents and the unencumbered portion of our securities portfolio. Additional significant sources of liquidity available to the Company include approved lines of credit with various counterparties, including borrowing facilities with the FHLB-NY and with the Federal Reserve Bank of New York (the "FRB-NY").

As of September 30, 2020, our available funding with the FHLB-NY was $7.3 billion and with the FRB-NY, it was $1.1 billion. Additionally, the unencumbered portion of the securities portfolio totaled $3.9 billion.

Asset Quality

Loan Deferral Update

During the second quarter of 2020, the Company implemented various loan modification programs with some of its borrowers, in accordance with the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). These modifications were primarily full-payment deferrals for an initial six-month period, with the ability to extend again at the end of the deferral period, at the Bank's discretion.

From June 30, 2020 to October 22, 2020, we had $3.1 billion of loan deferrals that were eligible to come off of their deferral period. As of October 22nd, approximately $3.0 billion or 95% of these deferrals returned to payment status, while the remaining 5% or $157 million have come off deferral but are still due for their first payment. We continue to work with these borrowers on a case by case basis to provide additional assistance, if needed, in line with regulatory guidance and the CARES Act.

Going forward, we have an additional $3.1 billion of loan deferrals eligible to come off of their deferral periods, $2.9 billion of which, are scheduled to do so during November.

Non-Performing Assets

Our asset quality metrics improved this quarter and continue to reflect the underlying strength of our loan portfolio. Non-performing assets ("NPAs") at September 30, 2020 were $54.9 million compared to $63.2 million at June 30, 2020, down 13%. This reflects 10 basis points of total assets compared to 12 basis points in the previous quarter. Total non-accrual mortgage loans were $18.4 million compared to $24.2 million at June 30, 2020, down 24%. Other non-accrual loans were $26.9 million compared to $29.5 million in the previous quarter, down 9%.

Total repossessed assets were $9.5 million at September 30, 2020, unchanged from the previous quarter. Of this amount, $7.6 million were taxi medallion-related, also unchanged from the previous quarter.

As in previous quarters, the majority of our non-performing assets were comprised of non-performing taxi medallion-related loans and repossessed taxi medallion-related assets. Excluding the impact from non-performing taxi medallion-related assets, our third quarter 2020 NPAs would have been $22.9 million or four basis points of total assets compared to $29.6 million or five basis points at June 30, 2020.

Allowance for Loan and Lease Losses

At September 30, 2020, the allowance for loan and lease losses ("ALLL") was $188.3 million, up $40.7 million from December 31, 2019 and up $14.0 million from June 30, 2020. At September 30, 2020, the ALLL represented 415.22% of non-performing loans and 0.44% of total loans. Both the year-to-date and quarter-to-date increases reflect the Company's adoption of the Current Expected Credit Losses ("CECL") methodology on January 1, 2020 and also reflects deterioration in forecasted economic conditions since the beginning of the year arising from the COVID-19 pandemic, primarily the result of estimated decreases in property values.

CAPITAL POSITION

The Company's capital position remains strong at both the holding company level and at the Bank level, as all of our regulatory capital ratios continue to exceed regulatory minimums to be classified as "Well Capitalized," the highest regulatory classification.

The table below depicts the Company's and the Bank's regulatory capital ratios at those respective periods.

EARNINGS SUMMARY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

Net Interest Income

Net interest income for the three months ended September 30, 2020 totaled $281.9 million, up $16.0 million or 6% compared to the three months ended June 30, 2020 and up $46.0 million or 19% compared to the three months ended September 30, 2019. Both the quarter-over-quarter and year-over-year increases in our net interest income were driven by significantly lower levels of interest expense. Interest expense for the three months ended September 30, 2020 declined $21.0 million or 13% to $136.2 million, on a quarter-over-quarter basis, while on a year-over-year basis it decreased $82.5 million or 38%. These decreases were largely driven by lower deposit costs, driven primarily by lower CD rates.

Prepayment income for the three months ended September 30, 2020 was $11.6 million, up 2% compared to the previous quarter, but down 18% compared to the year-ago quarter. Excluding the impact from prepayment income, net interest income on a non-GAAP basis would have been $270.3 million, up $15.8 million or 6% on a linked-quarter basis and up $48.5 million or 22% on a year-over-year basis.

For the nine months ended September 30, 2020, net interest income increased $77.3 million or 11% to $792.2 million compared to $714.9 million for the nine months ended September 30, 2019. The year-to-date improvement was also due to significantly lower levels of interest expense due mainly to a substantial decline in the Company's cost of deposits. Interest expense for the nine months ended September 30, 2020 dropped $149.6 million or 23% to $489.9 million compared to $639.5 million for the nine months ended September 30, 2019.

For the nine months ended September 30, 2020, prepayment income was $33.6 million, down 8% or $2.8 million compared to the nine months ended September 30, 2019. Excluding the impact from prepayment income, net interest income on a non-GAAP basis would have been $758.6 million, up 12% or $80.0 million compared to the nine months ended September 30, 2020.

Net Interest Margin

The Company's net interest margin ("NIM") continued to expand at a double-digit pace during the current third quarter. The NIM for the three months ended September 30, 2020 was 2.29%, up 11 basis points compared to the prior quarter and up 30 basis points compared to the third quarter of last year.

Both the quarter-over-quarter and year-over-year improvements were driven by significantly lower funding costs. The overall cost of funds declined 22 basis points to 1.24% compared to the previous quarter and 80 basis points compared to the year-ago quarter.

This improvement was the result of a substantial decline in both the average cost of deposits and in the average cost of borrowed funds. The average cost of deposits declined to 0.85% during the current third quarter, down 31 basis points compared to the previous quarter and down 104 basis points compared to the year-ago third quarter. Our average cost of CDs during the third quarter was 1.52%, down 48 basis points compared to the second quarter and down 93 basis points compared to the third quarter of last year. At the same time, the average cost of borrowings declined nine basis points to 1.97% compared to the previous quarter and 41 basis points compared to the year-ago quarter.

Prepayment income contributed nine basis points to the current quarter's NIM, unchanged compared to the contribution in the previous quarter and 11 basis points compared to the year-ago quarter.

Excluding the impact from prepayment income, the third quarter NIM, on a non-GAAP basis would have been 2.20%, up 11 basis points compared to the previous quarter and up 32 basis points compared to the year-ago quarter.

For the nine months ended September 30, 2020, our NIM was 2.16%, up 15 basis points compared to the nine months ended September 30, 2019. Prepayment income contributed seven and 10 basis points, respectively, to the NIM. Excluding the impact from prepayment income, the year-to-date NIM on a non-GAAP basis would have been 2.09% compared to 1.91%, up 18 basis points.

Provision for Credit Losses

During the current third quarter, the provision for credit losses was $13.0 million compared to $17.6 million in the previous quarter and $4.8 million in the year-ago third quarter. The third quarter provision for credit losses exceeded net charge-offs by $13.9 million.

For the three months ended September 30, 2020, the Company reported a net recovery of $901,000 compared to net charge-offs of $3.8 million or 0.01% of average loans in the previous quarter and $6.5 million or 0.02% of average loans in the year-ago quarter.

For the nine months ended September 30, 2020, net charge-offs totaled $13.1 million or 0.03% of average loans compared to $15.8 million or 0.04% of average loans for the nine months ended September 30, 2019.

Importantly, we have not experienced any charge-offs on either a quarter-to-date or year-to-date basis in our multi-family, CRE, or specialty finance portfolios.

Pre-Provision Net Revenue ("PPNR")

The tables below details the Company's PPNR for the periods noted.

For the three months ended September 30, 2020, PPNR totaled $167.1 million, up $9.5 million or 6% compared to the three months ended June 30, 2020 and up $30.1 million or 22% compared to the three months ended September 30, 2019.

For the nine months ended September 30, 2020, PPNR totaled $460.7 million, up $64.1 million or 16% compared to the nine months ended September 30, 2019.

Non-Interest Income

For the three months ended September 30, 2020, total non-interest income was $13.8 million, down 10% and 44% compared to the prior and year-ago quarters. Third quarter 2020 results reflect a rebound in retail banking fee income, offset by lower bank-owned life insurance ("BOLI") income. Additionally, the current third quarter included a net loss on securities of $284,000 compared to gains in the previous and year-ago quarters. Results for the third quarter of 2019 included a $7.9 million gain on sale of a branch property in Florida.

For the nine months ended September 30, 2020, total non-interest income declined 31% to $46.0 million compared to $66.8 million for the nine months ended September 30, 2019. The decline is attributable to the previously mentioned factors, including the waiver of certain retail banking fees due to COVID-19, lower net gains on securities, and the gain on sale of a branch property in Florida during the third quarter of last year. This was partially offset by an increase in BOLI income.

Non-Interest Expense

For the three months ended September 30, 2020, non-interest expenses totaled $128.5 million, up $4.9 million or 4% compared to the previous quarter and up $5.2 million, also 4%, compared to the year-ago quarter. Most of this increase was in the general and administrative expense category and largely relate to systems conversion-related expenses during the quarter. As previously disclosed, the Company undertook an enterprise-wide system conversion, which occurred at the end of August. The occupancy and equipment category increased $2.8 million, primarily due to COVID-19-related costs as many of our branches reopened during the third quarter and 25% of our back-office personnel returned to their offices. This was partially offset by a quarter-over-quarter and year-over-year decline in compensation and benefits expense.

The efficiency ratio for the third quarter of 2020 was 43.47%, down slightly compared to the previous quarter and compared to 47.37% compared to the year-ago third quarter.

For the nine months ended September 30, 2020, total non-interest expenses were $377.6 million, down $7.5 million or 2% compared to the nine months ended September 30, 2019. Included in the year-to-date results for 2020 was a $4.4 million lease termination benefit, while the year-to-date 2019 results included certain items related to severance and branch rationalization totaling $10.4 million.

Income Taxes

Income tax expense for the three months ended September 30, 2020 totaled $38.4 million, up $3.6 million or 10% compared to the prior quarter and $5.2 million or 16% compared to the year-ago quarter. The effective tax rate for the current third quarter was 24.89% compared to 24.80% in the previous quarter and 25.09% in the year-ago quarter. The increase during the current quarter is due to a higher level of pre-tax income compared to previous periods.

For the nine months ended September 30, 2020, income tax expense was $88.0 million and reflected an effective tax rate of 21.50% compared to $97.3 million and an effective tax rate of 24.88% for the nine months ended September 30, 2019. The year-to-date 2020 income tax expense includes a $13.1 million tax benefit recorded in the first quarter of 2020, related to the Company's tax loss carryback as provided by certain tax provisions for corporations included in the CARES Act, as enacted on March 27, 2020.

About New York Community Bancorp, Inc.

Based in Westbury, NY, New York Community Bancorp, Inc. is a leading producer of multi-family loans on non-luxury, rent-regulated apartment buildings in New York City, and the parent of New York Community Bank. At September 30, 2020, the Company reported assets of $54.9 billion, loans of $42.9 billion, deposits of $31.7 billion, and stockholders' equity of $6.7 billion.

Reflecting our growth through a series of acquisitions, the Company operates 236 branches through eight local divisions, each with a history of service and strength: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt Savings Bank, and Atlantic Bank in New York; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona.

Post-Earnings Release Conference Call

The Company will host a conference call on Wednesday, October 28, 2020, at 8:30 a.m. (Eastern Time) to discuss its third quarter 2020 performance. The conference call may be accessed by dialing (877) 407-8293 (for domestic calls) or (201) 689-8349 (for international calls) and asking for "New York Community Bancorp" or "NYCB." A replay will be available approximately three hours following completion of the call through 11:59 p.m. on November 1, 2020 and may be accessed by calling (877) 660-6853 (domestic) or (201) 612-7415 (international) and providing the following conference ID: 13710795. In addition, the conference call will be webcast at ir.myNYCB.com, and archived through 5:00 p.m. on November 25, 2020.

Cautionary Statements Regarding Forward-Looking Information

This earnings release and the associated conference call may include forward–looking statements by the Company and our authorized officers pertaining to such matters as our goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of probable losses on loans; our assessments of interest rate and other market risks; and our ability to achieve our financial and other strategic goals.

Forward–looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "should," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward–looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward–looking statements. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.

Our forward–looking statements are subject to the following principal risks and uncertainties: the effect of the COVID-19 pandemic, including the length of time that the pandemic continues, the potential imposition of future shelter in place orders or additional restrictions on travel in the future, the effect of the pandemic on the general economy and on the businesses of our borrowers and their ability to make payments on their obligation, the remedial actions and stimulus measures adopted by federal, state, and local governments; the inability of employees to work due to illness, quarantine, or government mandates; general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios; changes in competitive pressures among financial institutions or from non–financial institutions; our ability to obtain the necessary shareholder and regulatory approvals of any acquisitions we may propose; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations, and our ability to realize related revenue synergies and cost savings within expected time frames; changes in legislation, regulations, and policies; the impact of recently adopted accounting pronouncements; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control.

More information regarding some of these factors is provided in the Risk Factors section of our Form 10–K for the year ended December 31, 2019 and in other SEC reports we file. Our forward–looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC's website, www.sec.gov.

- Financial Statements and Highlights Follow

NEW YORK COMMUNITY BANCORP, INC. RECONCILIATIONS OF CERTAIN GAAP AND NON-GAAP FINANCIAL MEASURES(unaudited)

While stockholders' equity, total assets, and book value per share are financial measures that are recorded in accordance with U.S. generally accepted accounting principles ("GAAP"), tangible stockholders' equity, tangible assets, and tangible book value per share are not. Nevertheless, it is management's belief that these non-GAAP measures should be disclosed in our earnings releases and other investor communications for the following reasons:

1. Tangible stockholders' equity is an important indication of the Company's ability to grow organically and through business combinations, as well as its ability to pay dividends and to engage in various capital management strategies.
2. Returns on average tangible assets and average tangible stockholders' equity are among the profitability measures considered by current and prospective investors, both independent of, and in comparison with, the Company's peers.
3. Tangible book value per share and the ratio of tangible stockholders' equity to tangible assets are among the capital measures considered by current and prospective investors, both independent of, and in comparison with, its peers.

Tangible stockholders' equity, tangible assets, and the related non-GAAP profitability and capital measures should not be considered in isolation or as a substitute for stockholders' equity, total assets, or any other profitability or capital measure calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP measures may differ from that of other companies reporting non-GAAP measures with similar names.

The following table presents reconciliations of our common stockholders' equity and tangible common stockholders' equity, our total assets and tangible assets, and the related GAAP and non-GAAP profitability and capital measures at or for the periods indicated:

NEW YORK COMMUNITY BANCORP, INC. SUPPLEMENTAL FINANCIAL INFORMATION (continued)

The following tables summarize the contribution of loan and securities prepayment income on the Company's interest income and net interest margin for the periods indicated.

While our net interest margin, including the contribution of prepayment income is recorded in accordance with GAAP, adjusted net interest margin, which excludes the contribution of prepayment income is not. Nevertheless, management uses this non-GAAP measure in its analysis of our performance, and believes that this non-GAAP measure should be disclosed in our earnings releases and other investor communications for the following reasons:

1. Adjusted net interest margin gives investors a better understanding of the effect of prepayment income and other items on our net interest margin. Prepayment income in any given period depends on the volume of loans that refinance or prepay, or securities that prepay, during that period. Such activity is largely dependent on external factors such as current market conditions, including real estate values, and the perceived or actual direction of market interest rates.
2. Adjusted net interest margin is among the measures considered by current and prospective investors, both independent of, and in comparison with, our peers.

Investor/Media Contact: Salvatore J. DiMartino (516) 683-4286

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