ICBC Independence Community Bank (MM)

BROOKLYN, N.Y., Jan. 23 /PRNewswire-FirstCall/ -- Independence Community Bank Corp. (NASDAQ:ICBC) reported today that net income for the three months ended December 31, 2005 was $45.2 million and diluted earnings per share were $0.56, a decline of 14% and 11%, respectively, compared to the same period in 2004. During the fourth quarter of 2005, the Company incurred $4.3 million of merger-related fees associated with the pending acquisition of the Company by Sovereign Bancorp, Inc. Excluding such charges net income would have been $48.0 million and diluted earnings per share $0.60, a decline of 8% and 5%, respectively, compared to the fourth quarter of 2004. For the year ended December 31, 2005, net income increased slightly to $213.5 million as compared to the same period in 2004 although diluted earnings per share decreased by 8% to $2.62 as compared to the same period in 2004. The Company's results of operations for the 2004 periods reflect the inclusion of the operations of Staten Island Bancorp, Inc. ("SIB"), which merged with the Company on April 12, 2004 and the related issuance of 28.2 million shares of the Company's common stock in connection with the merger. On a linked quarter basis, net income declined $9.1 million to $45.2 million and diluted earnings per share declined $0.11 to $0.56 during the fourth quarter of 2005 compared to the third quarter of 2005. Excluding the $4.3 million of merger-related fees discussed above, net income declined $6.3 million, or 12%, during the fourth quarter of 2005 compared to the third quarter of 2005 and diluted earnings per share decreased from $0.67 for the third quarter to $0.60 for the fourth quarter. Highlights -- Net interest margin was 2.82% for the quarter ended December 31, 2005, a decline of 30 basis points, as compared to 3.12% for the quarter ended September 30, 2005. Twenty-six of the 30 basis point decline in net interest margin during the fourth quarter was related to the completion of the purchase accounting amortization at the beginning of the fourth quarter related to the SIB borrowing portfolio. The remaining 4 basis point decline was due to operations as the cost of funds continued to outpace the upward repricing of interest-earning assets due to the more rapid repricing of interest-bearing liabilities. -- The Company originated loans totaling $1.03 billion, excluding mortgage warehouse lines of credit, during the quarter ended December 31, 2005, of which $733.3 million were retained for portfolio with the remainder originated for sale in the secondary market. -- In this interest rate environment, the Company continues to focus on the quality and mix of its balance sheet and has shown modest growth, on average, in the fourth quarter. However, at the end of the year, the Company experienced a temporary build-up in liquidity which was used to repay borrowings in the beginning of 2006. -- Core deposits increased by $196.0 million to $7.23 billion at December 31, 2005 compared to December 31, 2004 through the combination of seven de novo branch openings, new business development and the introduction of the Independence RewardsPlus Checking(TM) product during 2005. -- As part of its long-term asset/liability management strategy, the Company selectively chose to utilize certain certificate of deposit promotions as a source of lower cost funding for its asset generation, reducing dependence on wholesale borrowings. Borrowings as a percentage of assets declined to 29.4% at December 31, 2005 compared to 33.3% at December 31, 2004. -- Non-interest income decreased by $0.7 million in the fourth quarter compared to the third quarter of 2005 primarily as a result of decreased income from mortgage-banking activities, lower revenue related to sales of securities and reduced banking service fees which were partially offset by an increase in income from the Company's minority equity investment in a mortgage brokerage company. -- The $1.6 million increase in non-interest expense from the prior quarter in 2005 was primarily due to approximately $4.3 million in merger-related costs associated with the pending acquisition of the Company which was partially offset by reductions in data processing fees and advertising expenses as the Company continued to focus on expense control. -- Asset quality continues to improve; the Company recorded a $0.2 million net charge-off for the quarter ended December 31, 2005 and a $0.1 million net recovery for the year ended December 31, 2005. -- Non-performing assets as a percentage of total assets were 0.20% at December 31, 2005 compared to 0.29% at December 31, 2004. The allowance for loan losses as a percentage of total loans was 0.82% at December 31, 2005 compared to 0.90% at December 31, 2004. The allowance for loan losses as a percentage of non-performing loans was 273.25% at December 31, 2005 compared to 205.84% at December 31, 2004. No provision for loan losses was required for the fourth quarter of 2005. -- In light of the pending merger transaction with Sovereign Bancorp, Inc. the Company has suspended its stock repurchase program. Prior to that suspension, the Company repurchased 4.3 million shares of common stock at an aggregate cost of $154.4 million during the year ended December 31, 2005. Sovereign Bancorp, Inc. Acquisition of Independence -- On October 24, 2005, the Company, Sovereign and Iceland Acquisition Corp. entered into the Merger Agreement. -- Upon effectiveness of the merger, each outstanding share of common stock of the Company other than shares owned by the Company (other than in a fiduciary capacity), Sovereign or their subsidiaries and other than dissenting shares will be converted into the right to receive $42 per share in cash. -- The transaction is subject to various customary conditions, including stockholder approval and receipt of certain regulatory approvals. The Company will hold a special meeting of stockholders on January 25, 2006 to consider approval of the merger. -- The merger is currently expected to close during the second quarter of 2006. Independence Community Bank Corp. is the holding company for Independence Community Bank. The Bank, originally chartered in 1850, currently operates 125 branches located in the greater New York City metropolitan area, which includes the five boroughs of New York City, Nassau and Suffolk Counties and New Jersey. At its banking offices located on Staten Island, the Bank conducts business as SI Bank & Trust, a division of Independence Community Bank. The Bank has three key business divisions, Commercial Real Estate Lending, Consumer Banking and Business Banking, and actively targets small and mid-size businesses. The Bank maintains its community orientation by offering its diverse communities a wide range of financial products and by emphasizing customer service, superior value and convenience. The Bank's Internet address is http://www.myindependence.com/. Note: This news release contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these non-GAAP measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of significant gains, losses or expenses that are unusual in nature or non-recurring. Because these items and their impact on the Company's performance are difficult to predict, management believes that presentations of financial measures excluding the impact of these items provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Statements contained in this release which are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from those currently anticipated due to a number of factors. Words such as "expect," "feel," "believe," "will," "may," "anticipate," "plan," "estimate," "intend," "should," and similar expressions are intended to identify forward- looking statements. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) the businesses of the Company and Sovereign may not be combined successfully, or such combination may take longer to accomplish than expected; (2) the growth opportunities and cost savings from the merger of the Company and Sovereign may not be fully realized or may take longer to realize than expected; (3) operating costs and business disruption following the completion of the merger, including adverse effects on relationships with employees, may be greater than expected; (4) stockholder and governmental approvals of the merger may not be obtained, or adverse regulatory conditions may be imposed in connection with governmental approvals of the merger; (5) diversion of management time on merger-related issues; (6) litigation or other adversarial proceedings relating to the merger or to Banco Santander's proposed investment in Sovereign; (7) competitive factors which could affect net interest income and non-interest income and/or general economic conditions which could affect the volume of loan originations, deposit flows and real estate values; and (8) the levels of non-interest income and the amount of loan losses as well as other factors discussed in the documents filed by the Company with the Securities and Exchange Commission (the "SEC") from time to time. The Company does not undertake any obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made. These materials may be deemed to be solicitation material in respect of the proposed merger transaction involving Independence Community Bank Corp., Sovereign and Iceland Acquisition Corp. In connection with the proposed transaction, Independence Community Bank Corp. has filed a definitive proxy statement with the Securities and Exchange Commission ("SEC"). STOCKHOLDERS OF INDEPENDENCE COMMUNITY BANK CORP. ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BECAUSE THEY CONTAIN IMPORTANT INFORMATION. The definitive proxy statement was fist mailed to Independence's stockholders on or about December 21, 2005. Stockholders can obtain free copies of the proxy statement and other documents by contacting Investor Relations at http://www.myindependence.com/ or by mail at Independence Community Bank Corp. Investor Relations, 195 Montague St., Brooklyn, NY 11201, or by telephone: 718-722-5400. In addition, investors and stockholders may obtain these documents free of charge at the SEC's web site at http://www.sec.gov/. Independence Community Bank Corp. and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Independence Community Bank Corp. in connection with the proposed transaction. Information regarding the special interests of these directors and executive officers in the proposed transaction is included in the proxy statement of Independence Community Bank Corp. described above which was filed with the SEC on December 20, 2005. Information regarding Independence Community Bank Corp.'s directors and executive officers is also available in its proxy statement for its 2005 Annual Meeting of Stockholders, which was filed with the SEC on April 18, 2005. This document is available free of charge at the SEC's web site at http://www.sec.gov/ and from Investor Relations at Independence Community Bank Corp. as described above. INDEPENDENCE COMMUNITY BANK CORP. Consolidated Statements of Financial Condition (Dollars in thousands) December 31, September 30, December 31, 2005 2005 2004 (Unaudited) (Unaudited) (Audited) ASSETS: Cash and due from banks $1,079,182 $456,071 $360,877 Securities available-for-sale: Investment securities 418,911 390,250 454,305 Mortgage-related securities 3,155,589 3,161,043 3,479,482 Total securities available- for-sale 3,574,500 3,551,293 3,933,787 Loans available-for-sale 22,072 105,429 96,671 Mortgage loans 10,352,297 10,278,333 9,315,090 Other loans 1,948,073 2,053,556 1,933,502 Total loans 12,300,370 12,331,889 11,248,592 Less: allowance for possible loan losses (101,467) (101,671) (101,435) Total loans, net 12,198,903 12,230,218 11,147,157 Premises, furniture and equipment, net 165,639 163,297 162,687 Accrued interest receivable 72,518 71,638 64,437 Goodwill 1,185,566 1,191,718 1,155,572 Intangible assets, net 67,676 70,438 79,056 Bank owned life insurance ("BOLI") 336,566 332,465 321,040 Other assets 380,498 328,210 432,195 Total assets $19,083,120 $18,500,777 $17,753,479 LIABILITIES AND STOCKHOLDERS' EQUITY: Deposits $10,945,283 $10,503,254 $9,305,064 Borrowings 4,956,729 4,756,893 5,511,972 Subordinated notes 397,260 397,017 396,332 Senior notes 247,986 248,098 -- Escrow and other deposits 116,529 179,930 104,304 Accrued expenses and other 133,553 160,544 131,764 Total liabilities 16,797,340 16,245,736 15,449,436 Stockholders' equity: Common stock ($.01 par value, 250,000,000 shares authorized at December 31, 2005, September 30, 2005 and December 31, 2004, 104,243,820 shares issued at December 31 2005, September 30, 2005 and December 31, 2004; 82,332,449, 81,859,731 and 84,928,719 shares outstanding at December 31, 2005, September 30, 2005 and December 31, 2004, respectively) 1,042 1,042 1,042 Additional paid-in-capital 1,911,370 1,907,063 1,900,252 Treasury stock at cost; 21,911,371, 22,384,089 and 19,315,101 shares at December 31, 2005, September 30, 2005 and December 31, 2004, respectively (463,789) (473,707) (341,226) Unallocated common stock held by ESOP (59,323) (60,559) (64,267) Unvested restricted stock awards under stock benefit plans (9,104) (10,614) (9,701) Retained earnings, partially restricted 949,721 925,642 821,702 Accumulated other comprehensive loss: Net unrealized loss on securities available-for-sale, net of tax (44,137) (33,826) (3,759) Total stockholders' equity 2,285,780 2,255,041 2,304,043 Total liabilities and stockholders' equity $19,083,120 $18,500,777 $17,753,479 INDEPENDENCE COMMUNITY BANK CORP. Consolidated Statements of Income (In thousands, except per share data) (Unaudited) For the Three Months Ended For the Year Ended December September December December December 31, 2005 30, 2005 31, 2004 31, 2005 31, 2004(1) Interest income: Mortgage loans $141,391 $136,486 $122,150 $531,272 $426,942 Other loans 32,834 33,542 26,739 122,960 95,170 Loans available-for-sale 882 1,266 1,793 4,853 6,906 Investment securities 4,853 4,708 6,532 18,456 22,578 Mortgage-related securities 35,912 34,871 36,992 148,271 132,809 Other 3,894 2,892 1,641 11,767 5,003 Total interest income 219,766 213,765 195,847 837,579 689,408 Interest expense: Deposits 54,155 44,736 22,549 162,868 71,848 Borrowings 44,642 39,288 37,816 156,780 128,788 Subordinated notes 3,911 3,903 3,731 15,621 13,279 Senior notes 3,164 281 -- 3,445 -- Total interest expense 105,872 88,208 64,096 338,714 213,915 Net interest income 113,894 125,557 131,751 498,865 475,493 Provision for loan losses -- -- -- -- 2,000 Net interest income after provision for loan losses 113,894 125,557 131,751 498,865 473,493 Non-interest income: Net gain (loss) on securities 119 1,428 (10,347) 6,637 (8,816) Net (loss) gain on loans (18) 128 105 154 281 Mortgage-banking activities 4,847 6,597 5,560 20,106 29,613 Service fees 16,743 17,253 15,873 66,004 66,619 BOLI 4,105 3,959 4,402 15,856 14,616 Other 6,527 3,680 7,061 16,123 19,196 Total non-interest income 32,323 33,045 22,654 124,880 121,509 Non-interest expense: Compensation and employee benefits 38,858 38,096 36,611 149,122 134,924 Occupancy costs 13,988 13,126 12,858 52,287 43,679 Data processing fees 2,249 3,929 4,855 14,037 16,236 Advertising 1,368 2,389 2,464 8,170 9,140 Other 17,949 15,254 14,967 62,837 58,828 Total general and administrative expenses 74,412 72,794 71,755 286,453 262,807 Amortization of identifiable intangible assets 2,763 2,816 2,983 11,380 8,268 Total non-interest expense 77,175 75,610 74,738 297,833 271,075 Income before provision for income taxes 69,042 82,992 79,667 325,912 323,927 Provision for income taxes 23,820 28,632 27,300 112,440 111,755 Net income $45,222 $54,360 $52,367 $213,472 $212,172 Basic earnings per share $0.58 $0.69 $0.65 $2.70 $2.96 Diluted earnings per share $0.56 $0.67 $0.63 $2.62 $2.84 INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) At or For the Three Months At or For the Year Ended Ended December September December December December 31, 2005 30, 2005 31, 2004 31, 2005 31, 2004 (1) Performance Ratios: Return on average assets(2) 0.99% 1.19% 1.18% 1.18% 1.37% Return on average equity(2) 7.99% 9.49% 9.24% 9.31% 11.31% Return on average tangible assets(2) 1.06% 1.28% 1.27% 1.27% 1.46% Return on average tangible equity(2) 18.04% 21.16% 20.11% 20.63% 21.79% Non-interest expense to average assets 1.68% 1.66% 1.68% 1.65% 1.75% Efficiency ratio(3) 50.93% 46.35% 43.58% 46.43% 43.40% Average Balances: Average shares out- standing - basic 77,833,303 78,727,182 80,513,692 79,162,634 71,559,988 Average shares out- standing - diluted 80,068,543 80,812,827 83,410,532 81,550,364 74,617,220 December 31, September 30, December 31, 2005 2005 2004 Capital and Other Ratios: Book value per share $27.76 $27.55 $27.13 Tangible book value per share $12.54 $12.13 $12.59 Average equity to average assets 12.35% 12.57% 12.77% Tangible equity to tangible assets 5.79% 5.76% 6.47% Leverage ratio (Bank only) 6.98% 6.68% 5.51% Tier 1 risk-based (Bank only) 8.82% 8.44% 7.36% Total risk-based capital (Bank only) 12.59% 12.22% 11.47% Deposits: Core deposits: Savings $2,143,172 $2,280,861 $2,630,416 Money market 871,916 986,166 1,701,287 Interest-bearing demand 2,622,115 2,365,618 1,214,190 Non-interest-bearing demand 1,592,486 1,561,529 1,487,756 Total core deposits 7,229,689 7,194,174 7,033,649 Certificates of deposit 3,715,594 3,309,080 2,271,415 Total deposits $10,945,283 $10,503,254 $9,305,064 INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) December 31, September 30, December 31, 2005 2005 2004 Loan Portfolio Composition: Mortgage loans on real estate: Single-family residential and cooperative apartment loans $1,932,516 $2,131,544 $2,490,062 Multi-family residential 4,743,308 4,634,533 3,800,649 Commercial real estate 3,687,226 3,522,846 3,034,254 Total principal balance - mortgage loans 10,363,050 10,288,923 9,324,965 Less net deferred fees 10,753 10,590 9,875 Total mortgage loans on real estate 10,352,297 10,278,333 9,315,090 Commercial business loans, net of deferred fees 977,022 914,479 809,392 Other loans: Mortgage warehouse lines of credit 453,541 624,081 659,942 Home equity loans and lines of credit 481,597 477,725 416,351 Consumer and other loans 35,913 37,271 47,817 Total principal balance - other loans 971,051 1,139,077 1,124,110 Less net deferred fees -- -- -- Total principal balance - other loans 971,051 1,139,077 1,124,110 Total loans receivable 12,300,370 12,331,889 11,248,592 Less allowance for loan losses 101,467 101,671 101,435 Loans receivable, net $12,198,903 $12,230,218 $11,147,157 Loans Available-for-Sale Composition: Single-family residential $4,172 $4,723 $74,121 Multi-family residential 17,900 100,706 22,550 Total loans available-for-sale $22,072 $105,429 $96,671 December 31, September 30, December 31, 2005 2005 2004 Asset Quality: Non-performing loans: Non-accrual loans $28,325 $33,821 $43,644 Loans past due 90 days or more as to: Interest and accruing 86 18 117 Principal and accruing (4) 8,722 7,808 5,517 Total non-performing loans 37,133 41,647 49,278 Other real estate owned 1,279 1,591 2,512 Total non-performing assets $38,412 $43,238 $51,790 Non-performing assets to total assets 0.20% 0.23% 0.29% Allowance for loan losses to non-performing loans 273.25% 244.13% 205.84% Allowance for loan losses to total loans 0.82% 0.82% 0.90% Net charge offs to average loans - quarter ended 0.002% 0.004% 0.031% Net charge offs to average loans - year-to-date N/A N/A 0.043% INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) For the Three Months Ended December 31, September 30, December 31, 2005 2005 2004 Average Average Average Balance Rate(2) Balance Rate(2) Balance Rate(2) Net Interest Margin: Interest-earning assets: Loans receivable: Mortgage loans $10,357,966 5.49% $10,153,025 5.43% $9,396,521 5.28% Commercial business loans 921,401 6.87 854,375 6.87 815,403 6.13 Mortgage warehouse lines of credit 506,516 6.99 696,917 6.40 638,123 4.87 Consumer and other loans 517,400 6.00 508,322 5.74 458,899 5.41 Total loans 12,303,283 5.68 12,212,639 5.60 11,308,946 5.32 Mortgage-related securities 3,203,610 4.48 3,220,819 4.33 3,389,042 4.37 Investment securities 407,450 4.76 402,649 4.68 572,367 4.56 Other interest- earning assets 312,641 4.94 287,118 4.00 323,793 2.02 Total interest-earning assets 16,226,984 5.41 16,123,225 5.29 15,594,148 5.02 Non-interest-earning assets 2,105,866 2,110,158 2,153,659 Total assets $18,332,850 $18,233,383 $17,747,807 Interest-bearing liabilities: Deposits: Savings deposits 2,206,680 0.34 2,327,875 0.34 2,655,796 0.37 Interest-bearing demand and money market deposits 3,671,673 2.40 3,465,224 2.09 3,137,328 1.35 Certificates of deposit 3,447,168 3.46 3,030,820 3.21 2,257,677 1.66 Total interest- bearing deposits 9,325,521 2.30 8,823,919 2.01 8,050,801 1.11 Non-interest- bearing demand deposits 1,558,225 -- 1,537,621 -- 1,509,413 -- Total deposits 10,883,746 1.97 10,361,540 1.71 9,560,214 0.94 Senior notes 248,047 5.10 21,573 5.21 -- -- Subordinated notes 397,139 3.91 396,912 3.90 396,239 3.75 Borrowings 4,403,026 4.02 5,038,947 3.09 5,373,759 2.80 Total interest-bearing liabilities 15,931,958 2.64 15,818,972 2.21 15,330,212 1.66 Non-interest-bearing liabilities 137,308 123,301 151,482 Total liabilities 16,069,266 15,942,273 15,481,694 Total stockholders' equity 2,263,584 2,291,110 2,266,113 Total liabilities and stockholders' equity $18,332,850 $18,233,383 $17,747,807 Net interest- earning assets $295,026 $304,253 $263,936 Interest rate spread(2) 2.77% 3.08% 3.36% Net interest margin(2) 2.82% 3.12% 3.38% Average interest- earning assets to average interest- bearing liabilities 101.85% 101.92% 101.72% INDEPENDENCE COMMUNITY BANK CORP. Selected Financial Ratios and Other Data (In thousands, except ratios and per share amounts) (Unaudited) For the Year Ended December 31, 2005 December 31, 2004 Average Average Net Interest Margin: Balance Rate Balance Rate Interest-earning assets: Loans receivable: Mortgage loans $9,942,883 5.39% $8,007,134 5.42% Commercial business loans 855,474 6.81 768,246 6.10 Mortgage warehouse lines of credit 573,767 6.22 583,696 4.47 Consumer and other loans 496,498 5.75 407,147 5.34 Total loans 11,868,622 5.55 9,766,223 5.41 Mortgage-related securities 3,368,272 4.40 3,124,201 4.25 Investment securities 400,906 4.60 537,362 4.20 Other interest-earning assets 290,293 4.05 294,974 1.70 Total interest-earning assets 15,928,093 5.26 13,722,760 5.02 Non-interest-earning assets 2,131,721 1,753,873 Total assets $18,059,814 $15,476,633 Interest-bearing liabilities: Deposits: Savings deposits 2,394,722 0.35 2,423,565 0.35 Interest-bearing demand and money market deposits 3,462,910 1.98 2,654,703 1.19 Certificates of deposit 2,930,696 2.94 2,005,120 1.58 Total interest-bearing deposits 8,788,328 1.85 7,083,388 1.01 Non-interest-bearing demand deposits 1,500,135 -- 1,281,445 -- Total deposits 10,288,463 1.58 8,364,833 0.86 Senior notes 67,959 5.07 -- -- Subordinated notes 396,797 3.94 341,230 3.89 Borrowings 4,858,563 3.23 4,725,871 2.73 Total interest-bearing liabilities 15,611,782 2.17 13,431,934 1.59 Non-interest-bearing liabilities 156,105 169,204 Total liabilities 15,767,887 13,601,138 Total stockholders' equity 2,291,927 1,875,495 Total liabilities and stockholders' equity $18,059,814 $15,476,633 Net interest-earning assets $316,311 $290,826 Interest rate spread 3.09% 3.43% Net interest margin 3.13% 3.46% Average interest-earning assets to average interest-bearing liabilities 102.03% 102.17% (1) The merger with Staten Island Bancorp, Inc. ("SIB") was completed on April 12, 2004. As a result, SIB's assets and liabilities and results of operations were included in the Consolidated Statement of Financial Condition and Consolidated Statement of Income effective as of such date. (2) Presented on an annualized basis. (3) Reflects in each period presented adjusted operating expense (net of amortization of identifiable intangible assets) as a percentage of the aggregate of net interest income and adjusted non-interest income (excluding gains and losses on loans and securities). Amortization of identifiable intangible assets is excluded from the calculation since it is a non-cash expense. Gains and losses on loans and securities are also excluded since they are generally considered by the Company's management to be non-recurring in nature. The operating efficiency ratio is not a financial measurement required by generally accepted accounting principles in the United States of America. However, the Company believes such information is useful to investors in evaluating the Company's operations. (4) Reflects loans that are 90 days or more past maturity which continue to make payments on a basis consistent with the original repayment schedule. DATASOURCE: Independence Community Bank Corp. CONTACT: Kathleen A. Hanrahan, First Vice President, Investor Relations +1-718-722-5400, or Frank W. Baier, Executive Vice President, Chief Financial Officer, +1-718-923-3506, both of Independence Community Bank Corp. Web site: http://www.myindependence.com/

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