Free Motion in Limine - District Court of Federal Claims - federal

Case 1:95-cv-00468-TCW

Document 204-9

Filed 05/01/2007

Page 1 of 6

Lost Profits Damages Before Astoria Merger (Millions) July 1, 1989 to December 31, 1 994
Ending Balance Total Tangible Assets Actual Non-Breach (a) (b) (c) 1,846 1,850 1,844 1,844 1,820 1,881 1,847 1,919 1,814 1,957 1,996 1,825 1,830 2,036 1,835 2,077 1,846 2,119 1,856 2,161 2,204 1,854 1,857 2,248 1,867 2,293 1,861 2,339 1,862 2,386 1,853 2,433 2,482 1,835 1,858 2,532 1,954 2,582 2,007 2,634 2,062 2,687 1,983 2,608 1,983 2,608 1,917 2,542 Average Balance Forgone Assets (f) 31 67 107 157 189 224 257 289 327 370 409 452 501 552 614 660 651 628 626 625 625 625 Return on Forgone Assets Lost Profits on Forgone Assets

Forgone (d) (e)

Dec-88 Mar-89 Jun-89 Sep-89 Dec-89 Mar-90 Jun-90 Sep-90 Dec-90 Mar-91 Jun-91 Sep-91 Dec-91 Mar-92 Jun-92 Sep-92 Dec-92 Mar-93 Jun-93 Sep-93 Dec-93 Mar-94 Jun-94 Sep-94 Dec-94 Total

62 72 143 171 206 242 273 304 350 391 426 478 524 581 647 673 629 627 625 625 625 625

0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0:80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80%

-0.062 0.134 0.215 0.314 0.377 0.448 0.515 0.577 0.655 0.741 0.817 0.904 1.002 1.104 1.227 1.320 1.302 1.256 1.252 1.250 .1.250 1.250 $ 17.973

(a) From Thdft Financial Reports (b) Assumes 8% annual growth rate (2% per quarter) through March 1994, actual dollar change in assets thereafter (c) Column (b) minus (a). (d) Average balance of column (c) (e) Annual rate. (f) Columns (d) times (e) divided by four (quarterly). Source: Kaplan Report Exhibit 9 (Revised) (PX 1314)

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Case 1:95-cv-00468-TCW

Document 204-9

Filed 05/01/2007

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VII. Lost Profits Damages After 1994
Absent the breach, if Fidelity had not been acquired by Astoria, it would have continued to use its goodwill capital to support the incremental ARM MBS portfolio, which would decline steadily as the goodwill was amortized. o As of December 31, 1994, Fidelity would have had incremental assets of $625 million and remaining contractual goodwill of $98.7 million, a leverage percentage of 15.8%, i.e., $1 dollar of SGW would support $6.30 of assets. o Fidelity would have continued to earn a spread of at least 80 basis points to incremental assets. o The amount of that portfolio directly supported by the remaining contractual goodwill would diminish in size as the contractual goodwill was amortized. ¯ Absent the breach, if Astoria still purchased Fidelity: o Astoria would have acquired Fidelity's profitable $625 million wholesale asset portfolio, in addition to the Fidelity assets and liabilities it did acquire. o Astoria would have used its ample capital position to increase the size of the portfolio from $625 million to $963 million, based on its actual balance sheet leverage ratio. o Astoria would have earned at least the same 80 b.p. spread that Fidelity would have earned. o The amount of that portfolio directly supported by the remaining contractual goodwill would diminish in size as the contractual goodwill was amortized.
o

If Astoria chose to use the additional regulatory capital for other purposes, the economic conclusion would be that such purposes had a value equal to or greater than the forgone return of maintaining the wholesale portfolio. PDX 81

Case 1:95-cv-00468-TCW

Document 204-9

Filed 05/01/2007

Page 3 of 6

Lost Profits Damages- Independent Fidelity, No Merger 1995 to 2014 (Dollars in Millions)
Contractual Goodwill And Capital Credit Calendar Ending Average Year Balance Balance (a) (b) 1994 98.783 1995 93.802 96.293 1996 88.821 91.312 1997 83.840 86.331 78.859 81.350 1998 ~999 73.878 76.369 2000 68.897 71.388 2001 63.916 66.407 2002 58.935 61.426 2003 53.954 56.445 2004 48.973 51.464 2005 43.992 46.483 2006 39.011 41,502 2007 34.030 36.521 Total,Through 2007 2008 2009 2010 2011 2012 2013 2014 29.049 24.068 19,087 14.106 9.125 4.144 Total After 2007 Grand Total 31.540 26.559 21.578 16.597 11.616 6.635 2,072 . Leverage Ratio (c) t5.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% 15.8% ,15.8% Forgone Earning A.ssets (d) 513 487 460 434 407 380 354 327 301 274 248 221 195 168 142 115 88 62 35 11 Return on Forgone Assets (e) 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0,80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% 0.80% Lost Profits on Forgone Assets (f) 4.105 3.893 3.681 3,468 3,256 3,043 2.831 2.619 2.406 2.194 1.982 1.769 1.557 36.804 1.345 1,132 0,920 0.708 0,495 0.283 0,088 4.971 Present Value of Lost Profits 10.50% (g) 4.105 3.893 3.681 3.468 3.256 3.043 2.831 2.619 2,406 2.194 1.982 1.769 1.557 36,804 1,217 0.927 0.682 0,475 0.301 0.155 0,044 3.800 $ 40.604

(a) See Exhibit 15 (b) Average balance of column (a) (c) Equals Fidelity's remaining contractual goodwill of $98.783 million divided by forgone assets of $625 million (December 31, 1994) from Exhibits 9R & 15 (d) Column (b) divided by (c) minus (b) (goodwill is a nonbearing asset). (f) ROAA times column (d) (g) Column (f) discounted at 10.5% for the period after the year 2007. Source: Kaplan Report Exhibit 16B (PX 1314)

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Case 1:95-cv-00468-TCW

Document 204-9

Filed 05/01/2007

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Summary of Lost Earnings (Millions)
Independent Fidelity No Merger Lost Earnings: Lost Profits on Forgone Assets 1989-1994 Lost Profits on Forgone Assets 1995-2014 Total $ 17.973 40.604

With Astoria Merger

$ 17.973 97.162 $ 115.135

$ 58.577

Source: Kaplan Report Exhibit 17 (revised) (PX 1314)

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Case 1:95-cv-00468-TCW

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Filed 05/01/2007

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Total Lost Profits Damages (Dollars.in Millions)
Independent Fidelity No Merger Lost Earnings (1989-1994) (Exhibit 9-Revised) Lost Earnings (1995-2014) (Exhibits 16, 16-B) Total Lost Earnings Wounded Bank Damages (Exhibits 10 & 11) Loss from Premature FHLMC Stock Sale (Exhibit 12) Total Total Lost Profits $ 17.973 40.604 58.577 1.432 10.863 12.295 $ 70.872

Assuming Astoria Merger $ 17.973 97.162 115.135
1.432 10.863 12.295 $ 127.430

Source: Kaplan Report Exhibit 17 (Revised) (PX 1314)

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Case 1:95-cv-00468-TCW

Document 204-9

Filed 05/01/2007

Page 6 of 6

Summary of Damages (Millions)
Independent Fidelity No Merger
Lost Profits: Lost Profits on Forgone Assets 1989-1994 Lost Profits on Forgone Assets 1995-2014 Loss from Premature Sale of FHLMC Stock Wounded Bank Costs Total 17.973 40.604 10.863 1.432 $ 70.872

With Astoria Merger
17.973 97.t62 10.863 1.432 $ 127.430

Restitution: Avoided Liquidation Costs (Net) Wounded Bank Costs Total Reliance: Investment in Suburbia (Net) Wounded Bank Costs Total

$128.259 1.432
$129.691

$140.416 1.432 $141.848

Source: Kaplan Report Exhibits 17 (revised), 18, 22 (PX 1314)

PDX 107