NYCB 2017 Annual Report

Dear Fellow Shareholders: The past year did not turn out to be the year we envisioned it to be. While our financial results were certainly respectable, the termination of the Astoria Financial Corporation merger continued to negatively impact the value of our shares. As shareholders ourselves, everyone at the Company from senior management to the Board of Directors shares your frustra- tion with the share price performance. Our 2017 results would have been substantially better had the plan to merge with Astoria been consummated. Financially and strategically, the merger was a well-conceived transaction, which was overwhelmingly approved by both sets of shareholders. In addition, the proposed transaction would have significantly transformed our organization. Not only would it have catapulted us to $65 billion in total assets, but the proposed transaction would have been accretive to both our earnings per share and tangible book value per share, made the combined company the second largest regional bank within the New York City metropolitan marketplace, improved our funding mix, and we would have been able to resume our balance sheet growth strategy much sooner. While the termination of the Astoria transaction left the Company facing several challenges, historically, we have always risen to whatever challenges we are presented with, and this time is no different. We remain optimistic about our growth prospects given the consistent strength of our business model, our historical capacity for value creation, and our anticipa- tion for regulatory change. Setting the Stage for Growth During the first half of 2017, we executed three strategies designed to better position the Company for growth in the second half of the year and beyond. First, on March 17, 2017, we issued 515,000 shares of preferred stock. The offering generated capital of $502.8 million. It immediately improved our regulatory capital ratios even further, reduced our CRE concentration, and supports our plans for future growth. Second, on June 27, 2017, the Company announced that it had entered into an agreement to sell its mortgage banking business, which was acquired as part of its 2009 FDIC-assisted acquisition of AmTrust Bank, to Freedom Mortgage Cor­ poration. This sale included both our origination and servicing platforms, as well as our mortgage servicing rights portfolio. $ 28.1B MULT I - FAMI LY LOANS With a portfolio of $28.1 billion at the end of December, we are a leading producer of multi-family loans in New York City. Poised for Growth | 1