________________________________________________________________________________
Astoria Financial
Merger With
Long Island Bancorp
A Strategic Alliance
Creating Long Island's Premier
Community Bank
[GRAPHIC OF LONG ISLAND]
April 3, 1998
________________________________________________________________________________
Astoria Financial Long Island
Corporation Bancorp
Forward-Looking Information
________________________________________________________________________________
This presentation contains estimates of future operating results for 1998, 1999
and 2000 for both Astoria and LISB on a stand-alone and pro forma combined
basis, as well as estimates of financial condition, operating efficiencies and
revenue creation on a combined basis. These estimates constitute forward-looking
statements (within the meaning of the Private Securities Litigation Reform Act
of 1995), which involve significant risks and uncertainties. Actual results may
differ materially from the results discussed in these forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, general economic conditions, changes in interest rates, deposit
flows, loan demand, real estate values, and competition; changes in accounting
principles, policies, or guidelines; changes in legislation or regulation; and
other economic, competitive, governmental, regulatory, and technological factors
affecting each Company's operations, pricing, products and services.
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 2 - Long Island
Corporation Bancorp
Transaction Highlights
________________________________________________________________________________
Enhances Astoria's franchise value
o Creates the #2 ranked deposit market share in Long Island (Nassau, Suffolk,
Queens and Brooklyn) after Chase Manhattan Bank
o Population of this market (6.9 million) exceeds the population of 39
individual U.S. States
Accretive to earnings per share
Pro forma market capitalization of approximately $3.25 billion(a) before
recognition of goodwill litigation value
Pro forma company to have one of the largest goodwill litigation claims
o Amount of goodwill written off by the combined companies in excess of $625
million
o Represents value implied by market trading instruments of approximately
$570 to $740 million
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 3 - Long Island
Corporation Bancorp
Transaction Terms
________________________________________________________________________________
Fixed Exchange Ratio 1.15 shares of Astoria for each Long
Island Bancorp share
Indicated Deal Value(a) $1.8 billion
Price Per LISB Share(b) $71.04
Accounting/Tax Treatment Pooling of interests/Tax-free exchange
Proceeds of Goodwill Lawsuits To be shared by pro forma company
Reciprocal Stock Purchase Options 19.9% of each company's shares
outstanding
Termination Fee $60 million
(a) Based on diluted shares (including ESOP shares)
(b) Based on Astoria's average closing stock price of $61.78 for the five
trading days ended 4/2/98
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 4 - Long Island
Corporation Bancorp
Experienced Management Team
________________________________________________________________________________
Xxxxxx X. Xxxxxxx, Xx. Chairman, President and CEO
Xxxx X. Xxxxxxx, Xx. Vice Chairman
Xxxxxx X. Xxxxxx Vice Chairman
Xxxxx X. Xxxxxx Chief Financial Officer
Board Composition: Five LISB Directors to
join Ten Astoria Directors
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 5 - Long Island
Corporation Bancorp
Transaction Pricing(a)
________________________________________________________________________________
LISB
Transaction
with
LISB Deployment of Recent Thrift Astoria
Transaction(b) Excess Capital(c) Transactions(d) Multiples
_____________ ________________ ______________ _________
Price/Book Value 3.06x -- 3.16x 1.91x
Price/Tangible Book Value 3.09 -- 3.53 2.74
Price/Calendarized Earnings
1998 Earnings(E)(e) 30.5 23.1 21.2 18.2
1999 Earnings(E)(e) 27.6 21.4 18.9 16.5
1999 Earnings with Synergies(f) 18.2 15.3 14.6 --
Core Deposit Premium 31% -- 30% --
(a) Excludes value of supervisory goodwill litigation
(b) Based on Astoria's average closing stock price of $61.78 for the five
trading days ended 4/2/98
(c) Represents 8.0% post-tax return on tangible equity in excess of 5.5%
(d) Median for all pooling thrift deals greater than $500 million since 6/30/97
(e) Based on First Call quarterly estimates as of 4/2/98 and growth rate of
10.3%
(f) Assuming fully phased-in cost savings of 50% of LISB's projected 1998
expenses; recent thrift transactions multiple represents deal price to
estimated earnings for calendar year following announcement of deal
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 6 - Long Island
Corporation Bancorp
Transaction Status
________________________________________________________________________________
o Definitive agreement signed
o Due diligence completed
o Subject to normal regulatory and
shareholder approvals
o Targeted to close end of third quarter 1998
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 7 - Long Island
Corporation Bancorp
Transaction Rationale
________________________________________________________________________________
o Strategically compelling market share gains
o #2 ranked player in large, diverse market
o Nassau/Suffolk is the third-ranked MSA in terms of median household
income in the entire U.S.
o Accretive to EPS
o Identified cost savings in excess of $50 million annually
o Significant additional value elements
o Supervisory goodwill litigation
o Revenue enhancements potential
o Low risk in-market transaction
o Creates a highly efficient premier community bank
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 8 - Long Island
Corporation Bancorp
A Powerful Combination
________________________________________________________________________________
Long Island's Premier Community Bank
At December 31, 1997
($ in millions)
Astoria LISB Combined(a)
_______ ____ __________
Total Assets $10,528 $6,073 $16,601
Deposits $6,221 $3,742 $9,963
Core Deposit %(b) 43.5% 43.3%(c) 43.4%
# of Banking Offices 61 35 96
Average Deposits per Banking Office $102 $107 $104
Loans, Net $4,305 $3,487 $7,792
Loan Originations, Fiscal Year 1997 1,280 2,204 3,484
Loans Serviced for Others 142 4,500(c) 4,642
Supervisory Goodwill Amount(d) $135 $500 $635
(a) Before acquisition effects
(b) Core deposits include passbook, savings, checking and money market accounts
(c) As of 9/30/97
(d) Approximately, based on amount at time of FIRREA as per original
amortization schedule
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 9 - Long Island
Corporation Bancorp
Creating a Long Island Powerhouse
________________________________________________________________________________
Banking Offices and Deposit Share Ranking on
Long Island
[Triangle Graphic] Astoria Banking Offices
[Star Graphic] LISB Banking Offices
[MAP OF BROOKLYN, QUEENS, NASSAU, AND SUFFOLK COUNTIES DEPICTING
THE LOCATION OF ASTORIA BANKING OFFICES AND LISB BANKING OFFICES]
Queens (#2)
Brooklyn (#7)
Nassau (#2)
Suffolk (#3)(a)
Overall Ranking: #2
(a) #4 before adjustment to exclude $3.5 billion in non-branch deposits at
Fleet's Melville branch
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 10 - Long Island
Corporation Bancorp
Strong Position in Core Market
________________________________________________________________________________
Nassau, Suffolk, Queens and Brooklyn
o The combined population of these four counties exceeds the population of 39
individual U.S. states
Deposits Market
Institution (millions) Share Branches
1. Chase Manhattan $16,697 15.4% 186
Astoria - Pro Forma 9,466 8.7 88
2. GreenPoint Financial Corp. 8,824 8.1 61
3. Fleet Financial Group 8,222 7.6 122
4. Dime Bancorp 8,068 7.4 51
5. Citicorp 7,726 7.1 68
6. Republic New York Corporation 6,080 5.6 49
7. Astoria 5,727 5.3 53
8. North Fork Bancorp 5,159 4.8 94
9. ABN AMRO North America 4,856 4.5 71
10. LISB 3,739 3.4 35
Total - Core Market $108,647 1,358
Source: Company data, SNL Securities. Data as of 6/30/97 adjusted for pending
acquisitions
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 11 - Long Island
Corporation Bancorp
Well Positioned in Key Markets
________________________________________________________________________________
($ in millions)
Nassau Queens
Institution Total Share Branches Institution Total Share Branches
1. Chase Manhattan $4,248 13.2% 44 1. Chase Manhattan $4,330 15.2% 53
Astoria - Pro Forma 3,068 9.6 31 Astoria - Pro Forma 3,021 10.6 20
2. ABN AMRO 2,917 9.1 38 2. Citicorp 2,961 10.4 23
3. GreenPoint Financial 2,791 8.7 21 3. GreenPoint Financial 2,310 8.1 15
4. Fleet Financial 2,582 8.1 58 4. Astoria 2,031 7.2 14
5. Dime Bancorp 2,286 7.1 15 5. North Fork 1,564 5.5 19
Total $32,091 420 Total $28,416 321
Suffolk Brooklyn
Institution Total Share Branches Institution Total Share Branches
1. Fleet Financial $4,764 20.5% 39 1. Chase Manhattan $4,211 16.9% 46
2. Chase Manhattan 3,908 16.8 43 2. Dime Bancorp 4,105 16.5 21
3. North Fork 2,241 9.6 47 3. Republic New York 3,670 14.8 25
Astoria - Pro Forma 2,040 8.8 26 4. GreenPoint Financial 2,903 11.7 16
4. LISB 1,564 6.7 20 5. Citicorp 2,118 8.5 18
5. Bank of New York 1,402 6.0 49 Astoria - Pro Forma 1,337 5.4 11
Total $23,276 381 Total $24,863 236
Source: Company data, SNL Securities. Data as of 6/30/97 adjusted for pending
acquisitions
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 12 - Long Island
Corporation Bancorp
WELL-BALANCED ORIGINATION SOURCES
________________________________________________________________________________
LOAN ORIGINATIONS BY DELIVERY CHANNEL
($ in billions)
Retail Wholesale Total
------ --------- -----
Fiscal 1997:
Astoria $0.3 $1.0 $1.3
LISB 1.5 0.7 2.2
---- ---- ----
Combined 1.8 1.7 3.5
==== ==== ====
Projected Fiscal 1998:
Astoria 0.3 1.1 1.4
LISB 1.8 0.8 2.6
---- ---- ----
Combined 2.1 1.9 4.0
==== ==== ====
Projected Fiscal 1999:
Astoria 0.4 1.1 1.5
LISB 2.6 0.8 3.4
---- ---- ----
Combined 3.0 1.9 4.9
==== ==== ====
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 13 - Long Island
Corporation Bancorp
Attractive Financial Results
________________________________________________________________________________
o 3.6% and 6.7% accretive to GAAP EPS in 1999 and 2000, respectively
o Annual expense savings in excess of $50 million pre-tax
o Represents 50% of LISB's projected 1998 general and administrative
expense base
o At least 75% of all cost saves to be realized within 3 months of closing
o Efficient deployment of excess capital/incremental cash
o No revenue enhancements assumed
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 14 - Long Island
Corporation Bancorp
Attractive EPS Accretion(a)
________________________________________________________________________________
($ in millions, except per share data)
1998P 1999P 2000P
Astoria Estimated Net Income to Common(b) $87.7 $93.8 $101.7
LISB Estimated Net Income to Common(b) 53.4 57.4 61.7
Total Estimated Net Income to Common 141.1 151.2 163.3
After-Tax Cost Savings 1.9 27.7 32.1
After-Tax Earnings on Incremental Cash/Capital(c) 7.8 28.0 44.2
Pro Forma Net Income to Common $150.7 $206.9 $239.6
Stand Alone EPS(b) $3.40 $3.75 $4.19
Pro Forma EPS(d) $3.89 $4.48
% Accretion/(Dilution) to First Call 3.6% 6.7%
% EPS Growth 14% 15%
(a) Excludes anticipated transaction-related charge
(b) Based on First Call estimates for 1998 and 199 (calendarized for LISB).
2000 estimate based on earnings growth rates of 11.9% and 10.3% for Astoria
and LISB, respectively
(c) See page 17
(d) Based on 53.0 million pro forma shares outstanding in 1998, 53.2 million in
1999 and 53.5 million in 2000
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 15 - Long Island
Corporation Bancorp
Estimated Expense Reductions
________________________________________________________________________________
o 50% of LISB's projected 1998 expense base
($ in millions) Total
Corporate Operations $19
Administration/Finance 8
Lending 12
Retail Banking 13
Pre-Tax Cost Savings $52
After-Tax Cost Savings $29
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 16 - Long Island
Corporation Bancorp
One-Time Transaction-Related Charges
________________________________________________________________________________
($ in millions) Total
Severance and Management Payments $26
Advisory and Professional Fees 22
Facilities, Equipment and Contracts 43
Conversions 6
Other 7
Pre-Tax Charge $104
After-Tax Charge $75
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 17 - Long Island
Corporation Bancorp
Earnings on Incremental Cash/Capital
________________________________________________________________________________
($ in millions)
1998E 1999E 2000E
Average Incremental Capital resulting from:
LISB Excess Equity(a) $54.7 $218.6 $218.6
Suspension of Buyback Programs(b) 45.2 140.6 246.9
Pro Forma Cost Savings 0.2 15.7 45.6
Transaction Charge (18.8) (75.0) (75.0)
----- ----- -----
Total Incremental Capital 81.3 300.0 436.1
Average Incremental Cash Resulting from:
Suspension of Buyback Programs(b) 45.2 140.6 246.9
Pro Forma Cost Savings 0.2 14.2 41.1
Transaction Charge (14.0) (55.9) (55.9)
----- ----- -----
Total Incremental Cash 31.4 98.9 232.1
After-Tax Earnings on:
Deployment of Incremental Capital(c) 6.5 24.0 34.9
Reinvestment of Incremental Cash(d) 1.3 4.0 9.3
---- ----- -----
Total Earnings on Incremental Cash/Capital $7.8 $28.0 $44.7
==== ===== =====
(a) LISB tangible equity in excess of a tangible capital ratio of 5.5%
(b) Based on analyst estimates of buyback programs
(c) Deployed at 8.0% after-tax return
(d) Reinvested at 4.0% after-tax
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 18 - Long Island
Corporation Bancorp
Additional Value Elements
________________________________________________________________________________
Shareholders of Combined Company Stand to Realize
Substantial Upside from Combined Goodwill Litigation Claims
($ in millions) Approximate Supervisory Goodwill in Late 1989
$135 $500 $635
Astoria LISB Combined Amount
[BAR GRAPH DEPICTING ADDITIONAL VALUE ELEMENTS]
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 19 - Long Island
Corporation Bancorp
Additional Value Elements
________________________________________________________________________________
Goodwill Litigation Upside May Be Even Greater
Based on Current Market Indicators
($ in millions) Total Value Implied by Market
Estimated After-tax
Supervisory Value Implied
Goodwill by Market
in Late 1989 Instrument
CALG2(a) $485 $435
CCPR2(a) $299 $348
Astoria/LISB
Pro Forma Based on CALG2 $635 $569
Astoria/LISB
Pro Forma Based on CCPR2 $635 $739
(a) Based on closing prices for CALG2 and CCPR2 market instruments as of
4/2/98
[BAR GRAPH DEPICTING ADDITIONAL VALUE ELEMENTS]
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 20 - Long Island
Corporation Bancorp
Value Created Based on Market Indicators
________________________________________________________________________________
$69.78 $72.28 $80.24 $83.29
Approximate Additional
Value for LISB
Supervisory Goodwill -- $8.00 $10.50 $9.20 $12.28
Astoria Stock Price $61.78 $61.78 $61.78 $71.04 $71.04
Astoria Astoria Astoria LISB LISB
Stock Value Value Deal Deal
Price(a) Based on Based on Value Value
CALG2(b) CCPR2(b) Based on Based on
XXXX0 XXXX0
(a) Based on Astoria's average closing stock price of $61.78 for the five
trading days ended 4/2/98
(b) Based on closing prices for CALG2 and CCPR2 market instruments as of 4/2/98
[BAR GRAPH DEPICTING VALUE CREATED BASED ON MARKET INDICATORS]
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 21 - Long Island
Corporation Bancorp
Low Risk In-Market Transaction
________________________________________________________________________________
o 50% estimated cost savings
o Key areas identified as part of due diligence
o In-market transaction
o Currently 6 branch closures anticipated
o Astoria has a proven consolidation track record
o Both companies have assets with strong credit quality
o Year 2000 systems compliance well underway
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 22 - Long Island
Corporation Bancorp
Proven Successful Consolidation History
________________________________________________________________________________
Recent Astoria Acquisitions
($ in millions)
Greater New York (1997) Fidelity New York (1995)
Cost Savings Promised: 45%/$24 Cost Savings Promised: 30%/$7
Cost Savings Achieved: 45%/$24 Cost Savings Achieved: 30%/$7
Deposits Acquired: $1,601 Deposits Acquired: $1,053
Branches Acquired: 14 Branches Acquired: 18
Date Acquisition Date Acquisition
Closed: 9/30/97 Closed: 1/31/95
Date of Systems Date of Systems
Conversion: 10/13/97 Conversion: 2/21/95
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 23 - Long Island
Corporation Bancorp
Value Proposition
________________________________________________________________________________
Strong Stock Price Performance Driven by Superior
Operating Fundamentals and Successful Acquisitions
[LINE GRAPH DEPICTING VALUE PROPOSITION]
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 24 - Long Island
Corporation Bancorp
Value Proposition(a)
________________________________________________________________________________
($ in millions)
Tang. Estimated
Common Supervisory
Market Total Equity/ 1998 Goodwill
Cap.(b) Assets Deposits Tang. Assets(c) P/E(b) Amount
Astoria - Pro Forma(d) $3,247 $16,601 $9,963 7.0% 17.7x $635
North Fork 3,756 10,094 6,320 7.5 19.4 -
Dime 3,505 21,848 13,847 5.0 17.8 515
GreenPoint 3,148 13,084 10,973 5.5 17.7 -
Sovereign 3,008 17,744 9,568 4.0 14.8 N.A.
People's Bank (CT) 2,519 8,883 6,405 8.6 23.2 -
People's Heritage 2,168 9,669 6,745 5.3 16.9 -
Xxxxxxx 1,334 9,177 5,736 4.8 16.0 -
Xxxxxx 1,058 3,601 1,942 17.4 21.5 -
(a) Pro Forma for all material pending acquisitions
(b) Based on prices as of 4/2/98; P/E multiples based on First Call estimates as
of 4/2/98
(c) As of 12/31/97; for comparable companies not adjusted for pending
acquisitions; for Astoria, ratio reflects stand-alone EPS estimate
(d) Before acquisition adjustments
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 25 - Long Island
Corporation Bancorp
Value Proposition - Cash Items
________________________________________________________________________________
Income Statement for the Quarter Ended
December 31, 1997
($ in millions) Astoria LISB Pro Forma(a)
Net Income $20,931 $13,182 $41,238
Amortization of Intangibles 4,934 108 5,042
ESOP and RRP Expense (incl. tax
benefit 4,909 1,248 6,157
------- ------- -------
Total Non-Cash Items 9,843 1,356 11,199
Cash Net Income $30,774 $14,538 $52,437
ROAA 0.81% 0.87% 1.00%
ROAE 9.3 9.6 11.4
Cash ROAA 1.19 0.96 1.28
Cash ROAE 13.7 10.6 14.5
Cash Return on Avg. Tangible Equity 19.3 10.7 17.8
Cash Efficiency Ratio 39.4 53.0 32.7
(a) Adjusted for fully phased-in cost savings
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 26 - Long Island
Corporation Bancorp
________________________________________________________________________________
Appendix
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 27 - Long Island
Corporation Bancorp
Pro Forma Balance Sheet Data
________________________________________________________________________________
At December 31, 1997
($ in millions)
Astoria LISB Pro Forma
Loans, Net $4,305 $3,487 $7,792
MBS 4,062 1,711 5,773
Intangibles 258 5 263
Total Assets 10,528 6,073 16,601
Deposits 6,221 3,742 9,963
Borrowings 3,273 1,614 4,887
Common Equity 849 557 1,406
Preferred Equity 50 - 50
Book Value/Share $32.42 $23.19 $26.13
Tangible Book Value/Share $22.57 $22.98 $21.24
(a) Before acquisition adjustments
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 28 - Long Island
Corporation Bancorp
Pro Forma Asset Quality Data
________________________________________________________________________________
At December 31, 1997
($ in millions)
Astoria LISB Pro Forma
Non-Performing Loans (NPLs) $42.8 $45.9 $88.7
REO 16.3 7.9 24.2
Non-Performing Assets (NPAs) 59.1 53.8 112.9
Loan Loss Reserve 40.0 33.7 73.7
NPAs/Assets 0.56% 0.89% 0.68%
Reserves/Loans 0.93 0.91 0.92
Reserves/NPLs 93.46 73.42 83.09
[LOGO] [LOGO]
--------------------------------------------------------------------------------
Astoria Financial - 29 - Long Island
Corporation Bancorp
