New York Community Bancorp, Inc. Reports 4th Quarter 2008 Diluted GAAP EPS of $0.30, Diluted Operating EPS of $0.27,(1) and Diluted Cash EPS of $0.34 (2)

New York Community Bancorp, Inc. (NYSE: NYB):

• Significant Earnings Growth: Diluted GAAP EPS rose 42.9% year-over-year, to $0.30, while diluted operating EPS rose 28.6%, to $0.27 and diluted cash EPS rose 36.0% to $0.34. ^{(1) (2)}
• Solid Multi-Family Loan Growth: At $15.7 billion, multi-family loans were up 14.4%, annualized, on a linked-quarter basis and 11.9% year-over-year.
• Strong Loan Production at Substantial Spreads: Loan originations totaled $1.5 billion in the quarter and included $854.4 million of multi-family loans. The average yield on multi-family and commercial real estate loans originated during the quarter was 384 basis points higher than the average five-year Constant Maturity Treasury rate (the "five-year CMT”).
• Asset Quality: Net charge-offs equaled 0.016% of average loans in the quarter, in contrast to the SNL Bank & Thrift Index measure of 2.41%. Non-performing assets equaled 0.35% of total assets at the end of December, in contrast to the Index measure of 2.03%. ⁽³⁾
• Net Interest Margin Expansion: At 2.87%, the margin was up 51 basis points year-over-year and 19 basis points linked-quarter. ⁽⁴⁾
• Improved Operating Efficiency Ratio: The operating efficiency ratio improved to 35.94% from 38.01% in the trailing quarter and from 43.44% in the year-earlier three months. ⁽⁵⁾
• Continued Capital Strength: The ratio of adjusted tangible stockholders’ equity to adjusted tangible assets was 5.94% at the end of December, excluding the accumulated other comprehensive loss, net of tax (the "AOCL”). Including the AOCL, the ratio of tangible stockholders’ equity to tangible assets was 5.66%.⁽⁶⁾

Please Note: All footnotes to the text are located at the end of this release.

New York Community Bancorp, Inc. (NYSE: NYB) (the "Company”) today reported fourth quarter 2008 GAAP earnings of $102.2 million, representing a year-over-year increase of $34.9 million, or 51.7%. The Company’s GAAP earnings equaled $0.30 per diluted share in the current fourth quarter, signifying an increase of $0.09, or 42.9%. The Company also reported its highest operating earnings in 17 quarters, as fourth quarter 2008 operating earnings rose $24.9 million, or 36.9%, to $92.4 million, equivalent to a $0.06, or 28.6%, year-over-year increase in diluted operating earnings per share to $0.27. ⁽¹⁾

Included in the Company’s fourth quarter 2008 GAAP earnings was a non-taxable gain of $16.0 million, or $0.05 per diluted share, recorded in connection with the repurchase of $42.2 million of debt; and a non-cash after-tax other-than-temporary impairment ("OTTI”) charge of $6.2 million, or $0.02 per diluted share, on certain pooled trust preferred securities.

The Company also reported fourth quarter 2008 cash earnings of $115.6 million, up $35.8 million, or 44.8%, from the year-earlier amount. Similarly, the Company’s fourth quarter 2008 diluted cash earnings per share rose $0.09, or 36.0%, year-over-year to $0.34. ⁽²⁾

4Q 2008 Diluted Operating Earnings Are the Company’s Strongest Since 3Q 2004

Commenting on the Company’s fourth quarter 2008 performance, Chairman, President, and Chief Executive Officer Joseph R. Ficalora stated, "We are understandably pleased by our fourth quarter performance and the degree to which it verified a point we’ve made throughout our public life: that a decline in the credit cycle would provide us with an opportunity to increase our multi-family lending, to expand our net interest margin, and to generate a meaningful level of earnings growth.

"On an operating basis, our earnings rose to $92.4 million, the highest level recorded since the third quarter of 2004. Similarly, our operating earnings equaled $0.27 on a diluted per-share basis—the highest we’ve seen since the fourth quarter of 2005. The twelve-month figures were also gratifying, with 2008 operating earnings rising 17.1% year-over-year to $322.5 million, and diluted operating earnings per share rising 9.1% to $0.96 over the twelve-month period. ⁽¹⁾

"The growth of our earnings was driven, in part, by an increase in multi-family lending, which was facilitated by the exit of several key competitors over the course of the year. Of the $5.9 billion of loans we produced in 2008, $3.2 billion were secured by multi-family buildings, and the vast majority of those loans fell within our rent-regulated niche.

"We also reduced our funding costs over the course of the quarter, as the FOMC lowered the fed funds rate to a range of zero to 25 basis points.

"The cumulative result of our loan growth and the reduction in higher-cost funding was significant margin expansion over the course of 2008. At 2.87%, our fourth quarter margin was up 19 basis points from the third-quarter measure and up 51 basis points year-over-year. That the increase in our margins was achieved despite a decline in prepayment penalty income--as refinancing activity diminished--only serves to underscore the validity of our business strategies. Prepayment penalty income fell $2.1 million year-over-year to $2.4 million in the fourth quarter, and declined from $57.6 million in 2007 to $24.9 million in 2008.

"While the deterioration of the economy has resulted in non-performing assets and net charge-offs rising beyond our traditional levels, as expected, our measures of asset quality continue to distinguish us from our industry as a whole. Net charge-offs totaled $3.4 million in the current fourth quarter, and represented a modest 0.016% of average loans. In addition, while non-performing assets rose to $114.8 million, the ratio of non-performing assets to total assets was a comparatively modest 0.35% at quarter-end.

"In contrast, the ratio of net charge-offs to average loans for the industry was 2.41%, based on the SNL Bank & Thrift Index, and the ratio of non-performing assets to total assets for the industry was 2.03%.” ⁽³⁾

Board of Directors Declares $0.25 per Share Dividend, Payable on February 17, 2009

"Reflecting our fourth quarter earnings growth, and our confidence in our ability to generate strong earnings going forward, the Board of Directors last night declared a $0.25 per share dividend, payable on February 17th to shareholders of record at February 6, 2009. Our ability to maintain our quarterly dividend at this level for 20 consecutive quarters also reflects our continued capital strength. Our cash earnings--which have historically been a meaningful measure of our ability to create capital—rose 44.8% year-over-year, to $115.6 million in the current fourth quarter, and on a diluted per-share basis rose 36.0% to $0.34. ⁽²⁾

"As we announced on January 13th, our decision to decline a capital infusion under the U.S. Treasury’s Troubled Asset Relief Program was based upon our solid capital position, as well as the consistent strength of our balance sheet. That decision was clearly appropriate, given the consistently solid regulatory capital measures recorded by our two subsidiary banks. With leverage capital ratios of 7.13% and 10.33% at the end of December, for example, the Community Bank and the Commercial Bank exceeded the requirements for well-capitalized classification by 213 and 533 basis points.”

Balance Sheet Summary at December 31, 2008

Assets totaled $32.5 billion at the close of the current fourth quarter, up $327.4 million from the trailing quarter-end balance and $1.9 billion, or 6.2%, from the balance recorded at December 31, 2007.

Loans

Loans represented $22.2 billion, or 68.4%, of total assets at the close of the current fourth quarter, and were up $680.4 million, or 12.7% annualized, on a linked-quarter basis and $1.8 billion, or 9.0%, year-over-year. The three- and twelve-month increases were driven by organic loan production. The Company originated $5.9 billion of loans in 2008, as compared to $4.9 billion in 2007, a year-over-year increase of 21.2%. Fourth quarter originations accounted for $1.5 billion of the volume in 2008.

Consistent with the Company’s emphasis on multi-family loan production, the multi-family loan portfolio represented $15.7 billion, or 70.9%, of total loans at the end of this December, up $546.0 million, or 14.4% annualized, from the September 30th balance and $1.7 billion, or 11.9%, from the balance recorded at December 31, 2007. At December 31, 2008, the average multi-family loan had a principal balance of $3.9 million. The multi-family loan portfolio had an average loan-to-value ratio ("LTV”) of 61.2% and an expected weighted average life of 3.8 years at that date.

The year-over-year increase in multi-family loans was fueled by twelve-month originations of $3.2 billion, which exceeded the prior year’s volume by 29.8%. Fourth quarter 2008 multi-family loan originations totaled $854.4 million, a 13.9% increase from the year-earlier amount.

The growth of the portfolio was attributable to a decline in competition as several lenders exited the market completely or reduced their focus on the Company’s multi-family niche. Competition began to ease in the second half of 2007, with the departure of the conduit lenders, and continued to ease with the exit of two other major lenders and the conservatorship of Fannie Mae and Freddie Mac in 2008. With fewer lenders vying for multi-family loans in its niche market, the Company experienced a marked increase in loan demand and production, with new originations featuring increasingly wider spreads.

Commercial real estate ("CRE”) loans represented $4.6 billion, or 20.5%, of total loans at the close of the current fourth quarter, and were up $292.6 million on a linked-quarter basis and $725.1 million year-over-year. At December 31, 2008, the average CRE loan had a principal balance of $2.5 million. The CRE loan portfolio had an average LTV of 55.2% and an expected weighted average life of 3.4 years at that date.

The growth of the CRE loan portfolio was fueled by organic loan production, with twelve-month originations rising $440.6 million year-over-year to $1.1 billion. The volume of CRE loans produced in 2008 included fourth quarter originations of $328.9 million.

In concert with its increased focus on multi-family and CRE lending, the Company steadily reduced its construction loan portfolio over the course of the year. Originations generally were limited to advances of funds that were committed prior to the weakening of the real estate market, and declined by $175.4 million, or 32.0%, from the volume recorded in 2007 to $373.0 million in 2008. Construction loans represented $776.6 million, or 3.5%, of total loans at the close of the current fourth quarter, a 31.7% decline from $1.1 billion, representing 5.6% of total loans, at the prior year-end.

Loan growth was also tempered by a $114.5 million decline in one- to four-family loans to $266.3 million, representing 1.2% of total loans at the close of the current fourth quarter, while other loans declined $91.8 million to $872.7 million, representing 3.9% of total loans. Commercial and industrial ("C&I”) loans represented 81.6% of other loans at quarter-end.

Due to the significant volume of loans produced in the fourth quarter of 2008---which included several loans that had been expected to close in the current first quarter--as well as the incomplete status of several loans that are being processed at this time, the Company’s pipeline is approximately $602 million at present and includes approximately $403 million of multi-family loans. Notwithstanding the decline in market conditions, the volume of loans to be produced in the current quarter is expected to exceed these amounts.

Asset Quality

Notwithstanding an increase in net charge-offs and non-performing assets, the Company’s asset quality measures continued to rank among the industry’s best in 2008. In the fourth quarter of the year, the Company recorded net charge-offs of $3.4 million, equivalent to 0.016% of average loans. For the SNL Bank & Thrift Index, the comparable fourth quarter 2008 measure was 2.41%. ⁽³⁾

Non-performing loans rose to $113.7 million at December 31, 2008 from $61.4 million and $22.2 million, respectively, at September 30, 2008 and December 31, 2007, and represented 0.51% of total loans at the current fourth quarter-end. Notwithstanding the three- and twelve-month increases, the ratio compared favorably with the SNL Bank & Thrift Index measure of 2.18%. ⁽³⁾

The balance of other real estate owned rose to $1.1 million at the close of the quarter, representing a three-month increase of $777,000 and a twelve-month increase of $449,000. As a result, non-performing assets represented $114.8 million, or 0.35%, of total assets at the end of this December, well below the current SNL Bank & Thrift Index measure of 2.03%. ⁽³⁾

While no loan loss provisions were set aside in the twelve months ended December 31, 2007, the Company set aside total provisions of $7.7 million in the twelve months ended December 31, 2008. Included in the twelve-month amount was a fourth quarter 2008 loan loss provision of $5.6 million. In the trailing quarter, the loan loss provision totaled $400,000. Reflecting the fourth quarter provision and the aforementioned net charge-offs, the allowance for loan losses rose to $94.4 million at the end of this December, an increase from $92.1 million and $92.8 million, respectively, at September 30, 2008 and December 31, 2007.

Securities

Securities accounted for $5.9 billion, or 18.2%, of total assets at the close of the current fourth quarter, down $185.6 million from the September 30th balance and up $157.6 million from the December 31, 2007 amount. The linked-quarter reduction was the result of a $102.7 million decline in available-for-sale securities to $1.0 billion and an $82.9 million decline in held-to-maturity securities to $4.9 billion. The year-over-year increase in securities was the net effect of a $528.3 million increase in securities held to maturity and a $370.8 million reduction in securities available for sale. In view of the volatility and weakness in the capital markets, the Company has been limiting its investments to government-sponsored enterprise ("GSE”) securities. At December 31, 2008, approximately 90% of the securities portfolio consisted of GSE securities.

The after-tax net unrealized loss on available-for-sale securities rose to $32.5 million at December 31, 2008 from $13.6 million at the end of the trailing quarter and from $7.6 million at December 31, 2007. The increase reflects the higher spreads in the fixed income market, which are a function of the continued weakness in the economy.

Funding Sources

In addition to the cash flows generated through loan and securities repayments, the Company’s funding primarily stems from deposits and borrowed funds. Depending on the availability and attractiveness of wholesale funding sources, the Company has typically refrained from pricing its retail deposits at the higher end of the market in order to contain its funding costs, as it did in the last three months. Thus, while the Company has the capacity to increase deposits through its extensive branch network, it opted to utilize wholesale funds, including brokered deposits, to enhance its liquidity during a quarter when such funding was more attractively priced.

At December 31, 2008, deposits totaled $14.3 billion, representing a $105.9 million increase from the September 30th balance and a $1.1 billion, or 8.6%, increase from the balance recorded at December 31, 2007. NOW and money market accounts totaled $3.8 billion at the end of the current fourth quarter, signifying a three-month increase of $480.6 million and a twelve-month increase of $1.4 billion. The year-over-year increase in deposits was also due to a $115.0 million rise in savings accounts to $2.6 billion; however, the year-end 2008 balance of savings accounts was down $61.9 million from the balance recorded at September 30, 2008.

The increase in NOW and money market accounts was partly offset by reductions in certificates of deposit ("CDs”) and non-interest-bearing accounts at December 31, 2008. CDs accounted for $6.8 billion, or 47.6%, of total deposits at the close of the current fourth quarter, and were down $220.5 million and $116.1 million, respectively, over the three- and twelve-month periods. Non-interest-bearing accounts totaled $1.0 billion at the close of the current fourth quarter, and were down $92.4 million and $226.0 million, respectively, over the three- and twelve-month periods.

Borrowed funds totaled $13.5 billion at December 31, 2008 and were up $177.2 million and $581.0 million, respectively, from the balances recorded at September 30, 2008 and December 31, 2007. Wholesale borrowings represented $12.3 billion of the year-end 2008 total, signifying a linked-quarter reduction of $307.1 million and a year-over-year increase of $149.5 million. Wholesale borrowings represented 38.0% of total assets at the close of the current fourth quarter, down from 39.4% and 39.9%, respectively, at the earlier dates.

Other borrowings totaled $669.4 million at the close of the current fourth quarter, and were up $484.4 million on a linked-quarter basis and $432.2 million year-over-year. The year-end 2008 balance reflects the issuance of $602.0 million of fixed rate senior notes under the FDIC’s Temporary Liquidity Guarantee Program in December 2008.

Stockholders’ Equity

The Company recorded stockholders’ equity of $4.2 billion at the close of the current fourth quarter, representing a three-month reduction of $44.0 million and a year-over-year increase of $36.9 million. The December 31, 2008 balance was equivalent to 13.00% of total assets and a book value of $12.25 per share. The Company calculates book value per share by excluding the number of unallocated Employee Stock Ownership Plan ("ESOP”) shares from the number of shares outstanding. At December 31, 2008, book value per share was calculated based on 344,353,808 shares.

Tangible stockholders’ equity totaled $1.7 billion at December 31, 2008, down $38.6 million from the September 30th balance but up $61.3 million from the balance recorded at December 31, 2007. The linked-quarter decline reflects an increase in the accumulated other comprehensive loss, net of tax (the "AOCL”) to $87.3 million, which included an $18.0 million rise in after-tax net unrealized securities losses to $37.2 million; and a $43.8 million rise in the non-cash unrecognized loss related to the Company’s pension and post-retirement plan obligations to $50.1 million, as the value of the assets in those plans declined. The year-over-year increase in tangible stockholders’ equity largely reflects the benefit of the Company’s common stock offering in May 2008. The issuance of 17.9 million shares generated net proceeds of $339.2 million; of this amount, $199.2 million served to mitigate the impact of a debt repositioning charge recorded in the second quarter of the year.⁽⁶⁾

Excluding the AOCL, adjusted tangible stockholders’ equity represented 5.94% of adjusted tangible assets at the close of the current fourth quarter; including the AOCL, the Company’s tangible stockholders’ equity represented 5.66% of tangible assets at the same date.⁽⁵⁾

The Company’s subsidiary banks also reported solid levels of capital at the close of the current fourth quarter, and continued to exceed the requirements for classification as "well capitalized” institutions under the FDIC Improvement Act. At December 31, 2008, New York Community Bank had a leverage capital ratio of 7.13%, which was 213 basis points above the minimum required for "well-capitalized” classification, and New York Commercial Bank had a leverage capital ratio of 10.33%, exceeding the minimum required for such classification by 533 basis points.

Earnings Summary for the Three Months Ended December 31, 2008

In the fourth quarter of 2008, the Company recorded a non-taxable gain of $16.0 million in connection with the repurchase of certain debt, as well as a non-cash after-tax charge of $6.2 million for the OTTI of certain pooled trust preferred securities. The net effect was a $9.8 million, or $0.03 per diluted share, increase in the Company’s fourth quarter 2008 GAAP earnings to $102.2 million, or $0.30 per diluted share. Excluding the gain on debt repurchase and the OTTI charge, the Company generated fourth quarter 2008 operating earnings of $92.4 million, or $0.27 per diluted share. ⁽¹⁾

The Company’s fourth quarter 2008 earnings were primarily driven by higher net interest income and the expansion of its net interest margin, which more than offset the impact of an increase in the provision for loan losses. Operating expenses fell year-over-year, supporting the rise in fourth quarter 2008 earnings, but were up modestly from the level recorded in the trailing three-month period.

In the third quarter of 2008, the Company recorded a non-cash pre-tax charge of $44.2 million for the OTTI of its investments in Lehman Brothers Holdings, Inc. and Freddie Mac perpetual preferred stock, as well as certain pooled trust preferred and other equity securities. The charge was equivalent to $26.7 million, or $0.08 per diluted share, on an after-tax basis, and reduced the Company’s GAAP earnings for the quarter to $58.1 million, or $0.17 per diluted share. Excluding this charge, the Company generated third quarter 2008 operating earnings of $84.8 million, or $0.25 per diluted share. ⁽¹⁾

In the fourth quarter of 2007, the Company recorded a $2.2 million pre-tax charge for the allocation of ESOP shares in connection with its 2007 merger transactions (the "merger-related charge”) and a $1.0 million pre-tax charge stemming from its membership interest in Visa U.S.A., a Visa Inc. subsidiary (the "Visa litigation charge”). The $2.8 million after-tax impact of the combined charges was largely offset by a $2.6 million benefit stemming from certain tax audit developments. Reflecting these items, the Company recorded GAAP earnings of $67.4 million, or $0.21 per diluted share, in the fourth quarter of 2007. Excluding these items, the Company recorded fourth quarter 2007 operating earnings of $67.5 million, or $0.21 per diluted share. ⁽¹⁾

Net Interest Income

Year-over-year Comparison

Net interest income rose to $201.6 million in the current fourth quarter from $154.4 million in the year-earlier three months. The $47.2 million, or 30.6%, increase was fueled by a $12.0 million increase in interest income to $411.1 million coupled with a $35.2 million reduction in interest expense to $209.5 million.

The year-over-year increase in interest income was driven by a $1.8 billion rise in average interest-earning assets to $28.2 billion, as the average balance of loans rose $1.8 billion, or 9.3%, to $21.6 billion and the average balance of securities rose $86.6 million to $6.5 billion.

The interest income produced by loans rose $17.4 million year-over-year to $320.1 million, as the higher average balance more than offset the impact of a 20-basis point decline in the average yield to 5.92%. The reduction in the average yield was partly due to a $2.1 million decline in prepayment penalty income to $2.4 million, as refinancing activity decreased in the face of growing economic uncertainty. In addition, while the average yield on the Company’s multi-family and CRE loans exceeded the average five-year CMT by 384 and 228 basis points, respectively, in the current and year-earlier fourth quarters, the average five-year CMT declined to 2.17% from 3.80% during the respective periods. Furthermore, declines in the prime rate of interest and other indices resulted in the yields on construction and other loans declining over the course of the year.

While the average balance of securities rose year-over-year, as mentioned, the interest income produced by such assets declined by $2.8 million to $90.9 million in the fourth quarter of 2008. The decline was a function of a 25-basis point reduction in the average yield on such assets to 5.55%.

The reduction in interest expense was primarily due to a decline in funding costs as the FOMC reduced the federal funds rate, enabling the Company to substantially reduce its average cost of interest-bearing deposits, as well as its average cost of borrowed funds. In addition, in the second quarter of the year, the Company replaced $4.0 billion of higher-cost borrowed funds with $3.8 billion of lower-cost wholesale borrowings.

As a result, the average cost of interest-bearing deposits declined 101 basis points to 2.37% from the year-earlier average, and the average cost of borrowed funds fell 55 basis points, to 3.90%. The benefit of these reductions more than offset the impact of a $1.4 billion rise in the average balance of interest-bearing deposits to $13.5 billion and a $526.0 million rise in the average balance of borrowed funds to $13.2 billion, respectively. The net effect was a $22.8 million decline in the interest expense produced by interest-bearing deposits to $80.4 million, and a $12.4 million decline in the interest expense produced by borrowed funds to $129.1 million. As a result, the interest expense produced by interest-bearing liabilities in the current fourth quarter was $35.2 million lower than the year-earlier level, the net effect of a $1.9 billion increase in the average balance to $26.7 billion and an 80-basis point reduction in the average cost of funds to 3.13%.

Linked-quarter Comparison

Net interest income rose $19.7 million, or 10.8%, in the current fourth quarter from the level recorded in the third quarter of 2008. The increase was attributable to a $12.7 million rise in interest income coupled with a $7.0 million decline in interest expense.

The linked-quarter increase in interest income was primarily fueled by loan production, which boosted the average balance of loans by $576.0 million over the three-month period. While the average yield on loans fell 10 basis points, partly reflecting a $1.5 million decline in prepayment penalty income, the interest income produced by loans rose $3.3 million during the three months ended December 31, 2008.

The increase in interest income was also fueled by a $9.5 million increase in the interest income produced by securities, as a $381.2 million rise in the average balance was accompanied by a 27-basis point rise in the average yield. The higher yield reflects the acceleration of cash flows on certain securities.

The linked-quarter reduction in interest expense was the net effect of a $1.0 billion increase in the average balance of interest-bearing liabilities and a 23-basis point decline in the average cost of funds. Reflecting the decline in short-term interest rates over the course of the quarter, the cost of interest-bearing deposits declined 29 basis points from the trailing quarter level, and the cost of borrowed funds declined by 17 basis points.

The interest expense produced by interest-bearing deposits declined by $6.0 million, as the reduction in the average cost exceeded the impact of a $577.3 million rise in the average balance of such funds. Similarly, the interest expense produced by borrowed funds declined by $987,000 linked quarter, as the impact of a $440.2 million rise in the average balance was exceeded by the lower average cost.

Net Interest Margin

The substantial reduction in funding costs combined with the growth in interest-earning assets to produce significant margin expansion in the fourth quarter of 2008. At 2.87%, the margin was up 19 basis points from the trailing-quarter measure and 51 basis points year-over-year. The three- and twelve-month increases were somewhat tempered by the aforementioned decline in prepayment penalty income, which added three basis points to the Company’s current fourth quarter margin, as compared to five basis points in the trailing quarter and seven basis points in the fourth quarter of 2007.

Provision for Loan Losses

The Company recorded loan loss provisions of $5.6 million in the current fourth quarter and $400,000 in the three months ended September 30, 2008. The increase was based on management’s assessment of the adequacy of the loan loss allowance at year-end, which considered, among other factors, the level of non-performing loans recorded during the fourth quarter and the current economic environment. The Company did not record a loan loss provision in the fourth quarter of 2007.

Non-interest Income (Loss)

The Company recorded non-interest income of $29.0 million in the current fourth quarter, as compared to $26.5 million in the year-earlier three months. The year-over-year increase was primarily due to the $16.0 million gain on debt repurchase, which more than offset the $10.6 million OTTI charge. In addition, BOLI income rose $966,000 year-over-year to $7.7 million in the fourth quarter of 2008. These increases were partly offset by a $1.1 million reduction in fee income to $10.0 million and by a $2.9 million decline in other income to $5.8 million. The latter decline primarily reflects a $1.3 million reduction in the revenues produced by Peter B. Cannell & Co., Inc. ("PBC”) in the wake of the broad decline in the capital markets.

By comparison, the Company recorded a non-interest loss of $19.3 million in the trailing quarter, reflecting an OTTI charge of $44.2 million, which exceeded the sum of the fee income, BOLI income, and other income produced during that time. On a linked-quarter basis, the fee income generated in the fourth quarter of 2008 was $407,000 less than the trailing-quarter level. In addition, the other income produced in the current fourth quarter declined $1.6 million over the three-month period. The linked-quarter decline in other income was attributable to a $1.0 million reduction in the revenues produced through the sale of third-party investment products and to an $800,000 reduction in revenues produced by PBC. These reductions were tempered by a linked-quarter increase of $723,000 in BOLI income.

Please see the reconciliations of the Company’s GAAP and operating earnings for the three months ended December 31, 2008, September 30, 2008, and December 31, 2007 that appear later in this release for a further discussion of the impact of the aforementioned gains and losses on the Company’s financial performance in the respective periods.

Non-interest Expense

The Company recorded non-interest expense of $86.7 million in the current fourth quarter, signifying a linked-quarter increase of $2.3 million and a $1.3 million reduction year-over-year. The linked-quarter increase was due to a $2.3 million rise in operating expenses to $80.9 million, as a $2.0 million reduction in compensation and benefits expense to $40.8 million was exceeded by a $562,000 increase in occupancy and equipment expense to $18.1 million, and by a $3.8 million increase in general and administrative ("G&A”) expense to $22.0 million. The reduction in compensation and benefits expense primarily reflects a decline in post-retirement benefits plan-related expenses, while the increase in G&A expense was primarily due to an increase in FDIC insurance premiums, together with higher advertising costs and professional fees.

The year-over-year reduction in operating expenses reflects a $1.1 million decline in occupancy and equipment expense, partly reflecting the closure of three branches, together with a $694,000 reduction in compensation and benefits expense. The benefit of these declines was only partly offset by an $844,000 increase in G&A expense.

Also included in fourth quarter 2008 non-interest expense was core deposit intangible ("CDI”) amortization of $5.7 million, down $24,000 and $345,000, respectively, over the three- and twelve-month periods.

Reflecting the increase in revenues and the level of operating expenses recorded, the Company’s GAAP efficiency ratio improved to 35.09% in the current fourth quarter from 48.34% and 45.24%, respectively, in the trailing and year-earlier three months. On an operating basis, the Company’s efficiency ratio improved to 35.94% in the current fourth quarter from 38.01% and 43.44%, respectively, in the earlier periods. ⁽⁵⁾

Income Tax Expense

The Company recorded pre-tax income of $138.4 million and income tax expense of $36.1 million in the current fourth quarter, as compared to pre-tax income of $93.0 million and income tax expense of $25.6 million in the fourth quarter of 2007. The $10.6 million OTTI charge and the $16.0 million non-taxable gain on debt repurchase contributed to the Company’s recording an effective tax rate of 26.12% in the current fourth quarter, as compared to 27.54% in the year-earlier three months.

In the third quarter of 2008, the Company recorded income tax expense of $19.7 million, as the $44.2 million OTTI charge reduced the Company’s pre-tax income to $77.8 million, contributing to the Company’s recording an effective tax rate of 25.38%.

Company Profile

New York Community Bancorp, Inc. is the holding company for New York Community Bank, with 178 locations in Metro New York and New Jersey, and New York Commercial Bank, with 38 locations in Manhattan, Queens, Brooklyn, Westchester County, and Long Island, in New York. At December 31, 2008, the Company ranked 25th among U.S. banks and thrifts, with total assets of $32.5 billion, and 20th among publicly traded banks and thrifts, with a $4.1 billion market cap. In addition, the Company is a leading producer of multi-family loans in New York City with an emphasis on loans secured by rent-regulated properties.

Reflecting its growth through a series of accretive mergers and acquisitions, the Community Bank currently operates through six local divisions: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt Savings Bank, Synergy Bank, and Garden State Community Bank. Similarly, the Commercial Bank operates 19 of its branches under the name Atlantic Bank. Additional information about New York Community Bancorp, Inc. and its bank subsidiaries is available at www.myNYCB.com and www.NewYorkCommercialBank.com.

Post-Earnings Conference Call

As previously announced, the Company will host a conference call on January 27, 2009 at 9:30 a.m. (ET) to discuss its fourth quarter and full-year 2008 performance and strategies. The conference call may be accessed by dialing 877-741-4239 (for domestic calls) or 719-325-4792 (for international calls) and providing the following access code: 6864921. A replay will be available approximately two hours following completion of the call through midnight on February 1st, and may be accessed by calling 888-203-1112 (domestic) or 719-457-0820 (international) and providing the same access code. The conference call will also be webcast, and may be accessed by visiting the Company’s web site, www.myNYCB.com, clicking on "Investor Relations,” and following the prompts. The webcast will be archived through 5:00 p.m. on February 27, 2009.

Forward-looking Statements and Associated Risk Factors

This release, like many written and oral communications presented by New York Community Bancorp, Inc. and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions.

Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words "anticipate,” "believe,” "estimate,” "expect,” "intend,” "plan,” "project,” "seek,” "strive,” "try,” or future or conditional verbs such as "will,” "would,” "should,” "could,” "may,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

There are a number of factors, many of which are beyond our control, that could cause actual conditions, events, or results to differ significantly from those described in our forward-looking statements. These factors include, but are not limited to: general economic conditions and trends, either nationally or in some or all of the areas in which we and our customers conduct our respective businesses; conditions in the securities markets or the banking industry; changes in interest rates, which may affect our net income, prepayment penalties, and other future cash flows, or the market value of our assets; changes in deposit flows and wholesale borrowing facilities; changes in the demand for deposit, loan, and investment products and other financial services in the markets we serve; changes in our credit ratings; changes in the financial or operating performance of our customers’ businesses; changes in real estate values, which could impact the quality of the assets securing the loans in our portfolio; changes in the quality or composition of our loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; changes in our customer base; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations, and our ability to realize the related cost savings within the expected time frames; potential exposure to unknown or contingent liabilities of companies we target for acquisition; our ability to retain key members of management; our timely development of new lines of business and competitive products or services in a changing environment, and the acceptance of such products or services by our customers; any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan, or other systems; any interruption in customer service due to circumstances beyond our control; the outcome of pending or threatened litigation, or of other matters before regulatory agencies, or of matters resulting from regulatory exams, whether currently existing or commencing in the future; environmental conditions that exist or may exist on properties owned by, leased by, or mortgaged to the Company; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; changes in legislation, regulation, and policies, including, but not limited to, those pertaining to banking, securities, tax, environmental protection, and insurance, and the ability to comply with such changes in a timely manner; changes in accounting principles, policies, practices, or guidelines; operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which we are highly dependent; the ability to keep pace with, and implement on a timely basis, technological changes; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; war or terrorist activities; and other economic, competitive, governmental, regulatory, and geopolitical factors affecting our operations, pricing, and services.

Furthermore, the timing and occurrence or non-occurrence of events may be subject to circumstances beyond the Company’s control.

In addition, it should be noted that the Company routinely evaluates opportunities to expand through acquisition and frequently conducts due diligence activities in connection with such opportunities. As a result, acquisition discussions and, in some cases, negotiations, may take place at any time, and acquisitions involving cash, debt, or equity securities may occur.

For a discussion of these and other risks that may cause actual results to differ from expectations, please refer to our Annual Report on Form 10-K for the year ended December 31, 2007, including the section entitled "Risk Factors,” and our Quarterly Reports on Form 10-Q for the quarters ended September 30, 2008, June 30, 2008, and March 31, 2008, on file with the U.S. Securities and Exchange Commission (the "SEC”).

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

Footnotes to the Text

(1) Please see the reconciliations of the Company’s GAAP and operating earnings for the three months ended December 31, 2008, September 30, 2008, and December 31, 2007, and for the twelve months ended December 31, 2008 and 2007 elsewhere in this release.

(2) Please see the reconciliation of the Company’s GAAP and cash earnings for the three months ended December 31, 2008 elsewhere in this release.

(3) The SNL Bank & Thrift Index data referenced in this release are a weighted average of the fourth quarter 2008 and/or December 31, 2008 asset quality measures reported by 128 publicly traded American banks and thrifts as of January 23, 2009.

(4) Please see the discussion and analysis of the Company’s net interest income and adjusted net interest income for the twelve months ended December 31, 2008 elsewhere in this release.

(5) The Company calculates its GAAP and operating efficiency ratios by dividing the respective operating expenses by the respective sums of net interest income and non-interest income. Please see the reconciliations of GAAP and operating earnings elsewhere in this release.

(6) Please see the reconciliations of the Company’s stockholders’ equity and tangible stockholders’ equity, its total assets and tangible assets, and the related capital measures elsewhere in this release.