Astoria Financial Corporation Reports 17% Increase In Third Quarter Earnings Per Share To $0.14 Quarterly Cash Dividend of $0.04 Per Share Declared

LAKE SUCCESS, N.Y., Oct. 17, 2012 /PRNewswire/ -- Astoria Financial Corporation (NYSE: AF) ("Astoria," the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal"), today reported net income of $13.4 million, or $0.14 diluted earnings per share ("diluted EPS"), for the quarter ended September 30, 2012, increases of 20% and 17%, respectively, compared to net income of $11.2 million, or $0.12 diluted EPS, for the quarter ended September 30, 2011. For the nine months ended September 30, 2012, net income totaled $36.2 million, or $0.38 diluted EPS, compared to net income of $55.4 million, or $0.58 diluted EPS, for the comparable 2011 period.

Third Quarter Highlights

  • Net income and diluted EPS up from both prior quarter and same period one year earlier
  • Cost control initiatives continue to benefit operating efficiency
  • Higher-yielding multi-family/commercial real estate loans continue to become a larger percentage of the loan portfolio
  • Core deposits continue to become a larger percentage of deposit liabilities
  • Non-performing assets continue to improve
  • $250 million aggregate principal amount of 5.75% senior notes redeemed on September 13, 2012

Commenting on the 2012 third quarter results, Monte N. Redman, President and Chief Executive Officer of Astoria, stated,"I am pleased to report improvement in quarterly earnings, both on a linked quarter basis and as compared to the prior year. Our focus on controlling operating expenses has resulted in a positive contribution to earnings, while efforts to reposition both the asset and liability sides of our balance sheet continue to progress, and asset quality continues to improve. It is important to note that the improvement in earnings was achieved even though we carried an additional $250 million of senior notes for much of the quarter. This additional carry reflected the timing gap between completion of our 5% senior note issuance in June and repayment of our previously outstanding senior notes in September. The additional carry had a negative impact on the 2012 third quarter net interest margin of approximately nine basis points. In addition, our operating expense level for the 2012 third quarter included $1.2 million in early extinguishment charges associated with the repayment of the 5.75% senior notes."

Board Declares Quarterly Cash Dividend of $0.04 Per Share
The Board of Directors of the Company, at its October 17, 2012 meeting, declared a quarterly cash dividend of $0.04 per common share. The dividend is payable on December 1, 2012 to shareholders of record as of November 15, 2012. This is the seventieth consecutive quarterly cash dividend declared by the Company.

Third Quarter and Nine Months Earnings Summary
Net interest income for the quarter ended September 30, 2012 totaled $86.0 million compared to $86.7 million for the previous quarter and $90.6 million for the 2011 third quarter. For the nine months ended September 30, 2012, net interest income totaled $260.9 million compared to $287.9 million for the comparable 2011 period. The net interest margin for the quarter ended September 30, 2012 was 2.09% compared to 2.14% for the previous quarter and 2.27% for the 2011 third quarter. The short-term interest carry associated with the $250 million aggregate principal amount of 5.00% Senior Notes due 2017 ("5% Senior Notes") issued in June 2012 for purposes of repaying the Company's previously outstanding $250 million aggregate principal amount of 5.75% Senior Notes due October 2012 ("5.75% Senior Notes") had the effect of reducing the 2012 third quarter net interest income by approximately $2.5 million, and had a negative impact on the net interest margin for the 2012 third quarter of approximately nine basis points. The 5.75% Senior Notes were repaid on September 13, 2012. For the nine months ended September 30, 2012, the net interest margin was 2.15% compared to 2.34% for the comparable 2011 period.

For the quarter ended September 30, 2012, a $9.5 million provision for loan losses was recorded, which compares to $10.0 million for both the previous quarter and the 2011 third quarter. For the nine months ended September 30, 2012, the provision for loan losses totaled $29.5 million compared to $27.0 million for the comparable 2011 period.

Non-interest income totaled $16.6 million for the quarter ended September 30, 2012, up $1.1 million from the previous quarter and essentially unchanged from the 2011 third quarter. For the nine months ended September 30, 2012, non-interest income totaled $51.6 million, essentially unchanged from the comparable 2011 period.

General and administrative ("G&A") expense for the quarter ended September 30, 2012 totaled $72.6 million compared to $72.1 million for the previous quarter and $78.6 million for the 2011 third quarter. Included in the 2012 third quarter is a $1.2 million expense related to the early extinguishment of debt. The year over year quarter decline is due primarily to reduced compensation and benefits expense as a result of the cost control initiatives implemented in the 2012 first quarter.

For the nine months ended September 30, 2012, G&A expense totaled $226.9 million compared to $224.2 million for the nine months ended September 30, 2011. The 2012 nine month period includes, in addition to the expense related to the early extinguishment of debt, net charges totaling $3.4 million representing severance related expenses associated with cost control initiatives implemented in the 2012 first quarter. As a part of those cost control initiatives, a non-recurring expense of approximately $2.0 million, related to the settlement of employment agreements associated with previously announced executive retirements, will be incurred in the 2012 fourth quarter.

Balance Sheet Summary
Total assets decreased $535.3 million from June 30, 2012 and increased $16.1 million from December 31, 2011 and totaled $17.0 billion at September 30, 2012. The linked quarter decline is due to the redemption of the Company's 5.75% Senior Notes in September 2012 and a decrease in both the loan and securities portfolios.

The residential (one-to-four family) loan portfolio decreased $292.7 million from June 30, 2012 to $10.2 billion at September 30, 2012. The decline was due to the pace of residential mortgage loan prepayments exceeding the pace of residential loan origination volume resulting from a further decline in the interest rate for 30-year fixed rate conforming loans during the quarter, thereby making the hybrid ARM product less attractive to borrowers. For the quarter and nine months ended September 30, 2012, residential loan originations for portfolio totaled $513.3 million and $2.3 billion, respectively, compared to $1.0 billion and $2.4 billion, respectively, for the comparable 2011 periods. The third quarter decline in residential loan originations reflects reduced demand for jumbo hybrid ARM loans. The loan-to-value ratio of the residential loan production for portfolio for the 2012 third quarter and nine months averaged approximately 61% and 60%, respectively, at origination and the loan amount averaged approximately $715,000 and $734,000, respectively. Residential loan prepayments for the quarter and nine months ended September 30, 2012 totaled $692.2 million and $2.3 billion, respectively, compared to $892.9 million and $2.3 billion, respectively, for the comparable 2011 periods. "We expect the level of residential loan prepayments to continue to remain elevated and residential ARM production to remain tepid as 30-year fixed rate mortgage interest rates are expected to remain at historic lows for some time," Mr. Redman noted.

The combined multi-family and commercial real estate ("MF/CRE") portfolios increased $132.9 million, or 5%, from June 30, 2012 and $623.6 million, or 26%, from December 31, 2011 to $3.0 billion at September 30, 2012, and represents 22% of the total loan portfolio. For the quarter and nine months ended September 30, 2012, MF/CRE loan originations totaled $333.9 million and $1.2 billion, respectively, compared to just $1.1 million for each of the comparable 2011 periods, reflecting the resumption of such lending in the 2011 third quarter. The $1.2 billion of MF/CRE loans originated during the first nine months of 2012 have loan to value ratios averaging 53% at origination and balances averaging $3.2 million with a weighted average coupon of 3.67%. Commenting on the loan volume, Mr. Redman noted, "As anticipated, MF/CRE loan origination volume was lower on a linked quarter basis due primarily to seasonality, as the second and fourth quarters traditionally reflect stronger MF/CRE loan origination volume. With a loan pipeline of approximately $500 million at September 30, 2012, we are well poised to exceed our goal of originating in excess of $1.5 billion of MF/CRE loans this year." MF/CRE loan prepayments for the quarter and nine months ended September 30, 2012 totaled $177.8 million and $544.2 million, respectively, compared to $176.1 million and $502.5 million for the comparable 2011 periods.

The securities portfolio declined $92.9 million, or 4%, from June 30, 2012 and $196.2 million, or 8% from December 31, 2011 and totaled $2.3 billion at September 30, 2012.

Deposits decreased $175.3 million from June 30, 2012 and $706.7 million from December 31, 2011, due to decreases of $224.5 million and $1.2 billion, respectively, in high cost CDs, offset by an increase of $49.2 million and $488.0 million, respectively, in low cost core deposits, to $10.5 billion at September 30, 2012. Core deposits totaled $6.2 billion, or 59% of total deposits, at September 30, 2012. The growth in core deposits is a result of our efforts to reposition the mix of both assets and liabilities. Business deposits for the first nine months of 2012 increased 13% and totaled $497.2 million at September 30, 2012. Mr. Redman, commenting on the growth in business banking, stated, "Our business banking expansion initiatives are generating new core relationships within the community and deepening our existing relationships while helping to facilitate the growth in low cost core deposits."

Borrowings decreased $363.9 million from June 30, 2012 and increased $687.8 million from December 31, 2011 to $4.8 billion at September 30, 2012. Excluding the newly-issued 5.00% Senior Notes, during the first nine months of 2012, we extended $700.0 million of borrowings with a weighted average rate of 1.05% and a weighted average term of 46 months. In addition, notwithstanding the decline in CDs, during the first nine months of 2012, we extended $581.6 million of CDs for terms of two years or more. These transactions were initiated in an effort to help limit our exposure to future increases in interest rates.

Stockholders' equity totaled $1.3 billion, or 7.60% of total assets, at September 30, 2012. Astoria Federal continues to be designated as well-capitalized with leverage, tangible, risk-based and Tier 1 risk-based capital ratios of 8.86%, 8.86%, 15.90% and 14.64%, respectively, at September 30, 2012.

Asset Quality
Non-performing loans ("NPLs"), including troubled debt restructurings of $28.6 million, totaled $322.2 million, or 1.89% of total assets, at September 30, 2012, a decrease of $21.1 million from the previous quarter. Residential NPLs totaled $294.7 million, multi-family/CRE/construction NPLs totaled $21.4 million and consumer and other NPLs totaled $6.1 million, compared to $294.8 million, $41.7 million and $6.9 million, respectively, at June 30, 2012. Of the $294.7 million of residential NPLs, $244.5 million, or 83%, represent residential loans which, at 180 days delinquent and annually thereafter, were reviewed and charged-off, as needed, to the estimated fair value of the underlying collateral at such time, less estimated selling costs.

The following table illustrates a two-year migration trend for loan delinquencies:

($ in millions)

30-59 Days

Past Due

60-89 Days

Past Due

Combined

30-89 Days

Past Due

90 + Days

Past Due

(NPLs)

Total 30-90+

Days Past Due

At Sept. 30, 2010

$181.6

$ 70.4

$252.0

$399.6

$651.6

At Sept. 30, 2011

$143.8

$ 44.7

$188.5

$380.0

$568.5

At Sept. 30, 2012

$149.1

$ 37.2

$186.3

$322.2

$508.5

The table below details, as of September 30, 2012, the ten largest concentrations by state of residential loans and the respective non-performing loan totals in those states.

($ in millions)

State


Residential

Loans


% of Total

Residential Loan

Portfolio


Total

Residential

NPLs


NPLs as %

of State Total

New York


$2,932.7


28.6%


$42.4


1.45%

Illinois


$1,134.5


11.1%


$43.4


3.83%

Connecticut


$1,089.4


10.6%


$30.6


2.81%

Massachusetts


$ 832.4


8.1%


$ 8.2


0.99%

New Jersey


$ 742.1


7.3%


$58.1


7.83%

Virginia


$ 609.4


6.0%


$11.1


1.82%

California


$ 608.7


6.0%


$29.1


4.78%

Maryland


$ 593.8


5.8%


$34.0


5.73%

Washington


$ 288.0


2.8%


$ 3.0


1.04%

Texas


$ 269.1


2.6%


$ 0.0


0.0%

Top 10 States


$ 9,100.1


88.9%


$259.9


2.86%

All other states (1,2)


$ 1,139.3


11.1%


$ 34.8


3.05%

Total Portfolio


$10,239.4


100%


$294.7


2.88%

(1) Includes 25 states and Washington, D.C.
(2) Includes Florida with $180.2 million total loans, of which $19.9 million are non-performing loans.

Selected Asset Quality Metrics
(at or for the three months ended September 30, 2012, except as noted)

($ in millions)

Residential

Multi-

family

CRE

Consumer

& Other

Total

Loan portfolio balance

$ 10,239.4

$ 2,262.3

$ 714.9

$ 269.8(1)

$13,559.1 (2)

Non-performing loans

$ 294.7 (3)

$ 16.2(4)

$ 5.2 (5)

$ 6.1

$ 322.2

NPLs/total loans

2.17%

0.12%

0.04%

0.05%

2.38%

Net charge-offs 3Q12

$ 5.8

$ 1.1

$ 1.4

$ 0.8

$ 9.1

Net charge-offs YTD

$ 31.6

$ 2.9

$ 1.7

$ 1.9

$ 38.2 (6)

(1) Includes home equity loans of $237.8 million
(2) Includes $72.7 million of net unamortized premiums and deferred loan costs
(3) Includes $244.5 million of NPLs reviewed, and charged-off as needed, at 180 days delinquent and annually thereafter
(4) Includes TDRs of $9.4 million
(5) Includes TDRs of $1.9 million
(6) Does not foot due to rounding

Included in the 2012 third quarter residential net loan charge-offs are $4.9 million of charge-offs on $27.5 million of NPLs which, at 180 days delinquent and annually thereafter, were reviewed in the 2012 third quarter and charged-off, as needed, to the estimated fair value of the underlying collateral less estimated selling costs. "While the trend of lower NPLs is continuing, we expect NPL levels will remain somewhat elevated for some time, especially in those states requiring judicial foreclosure. It is important to note that the loss potential remaining has been greatly reduced as a result of our having already reviewed, marked down, and charged-off as necessary, 83% of the residential NPLs to their adjusted fair value less estimated selling costs," Mr. Redman noted.

Future Outlook
Commenting on the outlook for the fourth quarter and 2013, Mr. Redman stated, "With the yield curve flattening further due to the Federal Reserve's extension of "Operation Twist" and the outlook for rates to remain at historic lows for the next several years, we continue to face headwinds. This notwithstanding, we are confident that our strong multi-family loan origination platform coupled with our focus on repositioning our assets and liabilities, from lower yielding residential loans to higher yielding MF/CRE loans and from higher cost CDs to lower cost core deposits, will benefit the net interest margin and enhance future earnings. MF/CRE loans now represent 22% of the overall loan portfolio, up from 18% at year-end 2011 and core deposits now represent 59% of total deposits, up from 51% at year-end 2011."

Earnings Conference Call October 18, 2012 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Monte N. Redman, President & CEO will host an earnings conference call Thursday morning, October 18, 2012 at 10:00 a.m. (ET). The toll-free dial-in number is (877) 709-8150. A telephone replay will be available on October 18, 2012 from 1:00 p.m. (ET) through Saturday, October 27, 2012 at 11:59 p.m.(ET). The replay number is (877) 660-6853, ID# 400756. The conference call will also be simultaneously webcast on the Company's website www.astoriafederal.com and archived for one year.

Astoria Financial Corporation, with assets of $17.0 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $10.5 billion, is the largest thrift depository in New York and embraces its philosophy of "Putting people first" by providing the customers and local communities it serves with quality financial products and services through 85 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states. Astoria Federal originates residential mortgage loans through its banking and loan production offices in New York, a broker network in four states, primarily along the East Coast, and through correspondent relationships covering nine states and the District of Columbia. Astoria Federal also originates multi-family and commercial real estate loans, primarily on rent controlled and rent stabilized apartment buildings, located in New York City and the metropolitan area.

Forward Looking Statements
This document contains a number of forward-looking statements 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. These statements may be identified by the use of such words as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "outlook," "plan," "potential," "predict," "project," "should," "will," "would," and similar terms and phrases, including references to assumptions.

Forward-looking statements are based on various assumptions and analyses made by us in light of our management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes, including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and any actions regarding foreclosures may adversely affect our business; transition of our regulatory supervisor from the Office of Thrift Supervision to the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve Board, or the FRB; effects of changes in existing U.S. government or government-sponsored mortgage programs; technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate. We have no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.

Tables Follow

 



















ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES











CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



(In Thousands, Except Share Data)













At


At







September 30,


December 31,







2012


2011


ASSETS








Cash and due from banks



$

113,573

$

132,704


Securities available-for-sale




325,858


344,187


Securities held-to-maturity









(fair value of $1,982,663 and $2,176,925, respectively)




1,952,938


2,130,804


Federal Home Loan Bank of New York stock, at cost




181,832


131,667


Loans held-for-sale, net




20,877


32,394


Loans receivable:









Mortgage loans, net




13,288,256


12,990,600



Consumer and other loans, net




270,831


284,004







13,559,087


13,274,604



Allowance for loan losses




(148,472)


(157,185)


Total loans receivable, net




13,410,615


13,117,419


Mortgage servicing rights, net




7,147


8,136


Accrued interest receivable




46,348


46,528


Premises and equipment, net




116,877


119,946


Goodwill




185,151


185,151


Bank owned life insurance




415,789


409,637


Real estate owned, net




30,825


48,059


Other assets




230,276


315,423











TOTAL ASSETS



$

17,038,106

$

17,022,055











LIABILITIES








Deposits



$

10,538,882

$

11,245,614


Reverse repurchase agreements




1,300,000


1,700,000


Federal Home Loan Bank of New York advances




3,133,000


2,043,000


Other borrowings, net




376,366


378,573


Mortgage escrow funds




132,077


110,841


Accrued expenses and other liabilities




262,707


292,829











TOTAL LIABILITIES




15,743,032


15,770,857











STOCKHOLDERS' EQUITY








Preferred stock, $1.00 par value; (5,000,000 shares authorized;

none issued and outstanding)




-


-


Common stock, $.01 par value;  (200,000,000  shares authorized; 166,494,888 shares issued; and 98,417,939 and 98,537,715 shares

outstanding, respectively)




1,665


1,665


Additional paid-in capital




883,354


875,395


Retained earnings 




1,877,998


1,861,592


Treasury stock (68,076,949 and 67,957,173 shares, at cost, respectively)




(1,406,784)


(1,404,311)


Accumulated other comprehensive loss




(56,415)


(75,661)


Unallocated common stock held by ESOP 









(1,295,073 and 2,042,367 shares, respectively)




(4,744)


(7,482)











TOTAL STOCKHOLDERS' EQUITY




1,295,074


1,251,198











TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY



$

17,038,106

$

17,022,055











  

























ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES


















CONSOLIDATED STATEMENTS OF INCOME






(In Thousands, Except Share Data)























For the Three Months Ended


For the Nine Months Ended






September 30,


September 30,






2012


2011


2012


2011


Interest income:











Residential mortgage loans

$

91,490

$

105,769

$

286,236

$

332,314



Multi-family and commercial real estate mortgage loans


38,127


39,338


111,088


124,915



Consumer and other loans


2,309


2,461


6,944


7,477



Mortgage-backed and other securities


14,453


19,670


49,445


63,432



Repurchase agreements and interest-earning cash accounts


182


54


282


221



Federal Home Loan Bank of New York stock


1,773


1,432


4,928


5,386


Total interest income


148,334


168,724


458,923


533,745


Interest expense:











Deposits


22,119


33,486


78,479


106,156



Borrowings


40,217


44,594


119,581


139,694


Total interest expense


62,336


78,080


198,060


245,850














Net interest income


85,998


90,644


260,863


287,895


Provision for loan losses


9,500


10,000


29,500


27,000


Net interest income after provision for loan losses


76,498


80,644


231,363


260,895


Non-interest income:











Customer service fees


10,487


11,867


30,480


35,696



Other loan fees


545


637


1,937


2,374



Gain on sales of securities 


-


-


2,477


-



Mortgage banking income, net


2,015


40


5,147


2,843



Income from bank owned life insurance


2,446


2,738


7,073


7,602



Other


1,081


1,260


4,478


3,110


Total non-interest income


16,574


16,542


51,592


51,625


Non-interest expense:











General and administrative:












Compensation and benefits


30,758


39,496


105,060


113,197




Occupancy, equipment and systems


16,758


16,178


49,992


48,667




Federal deposit insurance premiums


12,533


10,837


35,600


27,529




Advertising


1,811


2,623


5,624


6,356




Other


10,783


9,462


30,667


28,420


Total non-interest expense


72,643


78,596


226,943


224,169














Income before income tax expense


20,429


18,590


56,012


88,351


Income tax expense


7,074


7,374


19,837


32,906














Net income 

$

13,355

$

11,216

$

36,175

$

55,445


























Basic earnings per common share

$

0.14

$

0.12

$

0.38

$

0.58


























Diluted earnings per common share

$

0.14

$

0.12

$

0.38

$

0.58














Basic weighted average common shares

95,555,816

93,338,310

95,303,453

93,009,518


Diluted weighted average common and common equivalent shares

95,555,816

93,338,310

95,303,453

93,009,518














 

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES





























AVERAGE BALANCE SHEETS














(Dollars in Thousands)


























































For the Three Months Ended September 30,









2012







2011














Average







Average








Average 




Yield/



Average 




Yield/








Balance


Interest


Cost



Balance


Interest


Cost












(Annualized)







(Annualized)



Assets:


















Interest-earning assets:


















Mortgage loans (1):



















Residential

$

10,495,563

$

91,490


3.49

%

$

10,604,853

$

105,769


3.99

%





Multi-family and commercial real estate 


2,908,993


38,127


5.24



2,515,957


39,338


6.25





Consumer and other loans (1)


271,309


2,309


3.40



293,238


2,461


3.36





Total loans


13,675,865


131,926


3.86



13,414,048


147,568


4.40





Mortgage-backed and other securities (2)


2,290,702


14,453


2.52



2,344,816


19,670


3.36





Repurchase agreements and


















interest-earning cash accounts


277,319


182


0.26



115,228


54


0.19





Federal Home Loan Bank stock 


181,792


1,773


3.90



128,664


1,432


4.45




Total interest-earning assets


16,425,678


148,334


3.61



16,002,756


168,724


4.22




Goodwill


185,151







185,151








Other non-interest-earning assets


806,010







925,222







Total assets

$

17,416,839






$

17,113,129


























Liabilities and stockholders' equity:

















Interest-bearing liabilities:


















Savings

$

2,843,856


710


0.10


$

2,799,738


2,316


0.33





Money market


1,406,949


2,234


0.64



646,966


1,491


0.92





NOW and demand deposit


1,943,448


228


0.05



1,804,760


301


0.07





Total savings, money market and 


















       NOW and demand deposit


6,194,253


3,172


0.20



5,251,464


4,108


0.31





Certificates of deposit


4,428,338


18,947


1.71



5,951,875


29,378


1.97





Total deposits


10,622,591


22,119


0.83



11,203,339


33,486


1.20





Borrowings


5,090,960


40,217


3.16



4,210,625


44,594


4.24




Total interest-bearing liabilities


15,713,551


62,336


1.59



15,413,964


78,080


2.03




Non-interest-bearing liabilities


413,756







421,604







Total liabilities 


16,127,307







15,835,568







Stockholders' equity


1,289,532







1,277,561







Total liabilities and stockholders' equity

$

17,416,839






$

17,113,129


























Net interest income/

















net interest rate spread (3)



$

85,998


2.02

%



$

90,644


2.19

%


Net interest-earning assets/

















net interest margin (4)

$

712,127




2.09

%

$

588,792




2.27

%


Ratio of interest-earning assets to

















interest-bearing liabilities


1.05x







1.04x































































(1)  Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses.

(2)  Securities available-for-sale are included at average amortized cost.

(3)  Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.

(4)  Net interest margin represents net interest income divided by average interest-earning assets.

 

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
































AVERAGE BALANCE SHEETS














(Dollars in Thousands)



























































For the Nine Months Ended September 30,









2012







2011














Average







Average








Average




Yield/



Average




Yield/








Balance


Interest


Cost



Balance


Interest


Cost












(Annualized)







(Annualized)



Assets:


















Interest-earning assets:


















Mortgage loans (1):



















Residential

$

10,589,227

$

286,236


3.60

%

$

10,701,179

$

332,314


4.14

%





Multi-family and commercial real estate


2,631,859


111,088


5.63



2,694,186


124,915


6.18





Consumer and other loans (1)


275,854


6,944


3.36



300,502


7,477


3.32





Total loans


13,496,940


404,268


3.99



13,695,867


464,706


4.52





Mortgage-backed and other securities (2)


2,381,407


49,445


2.77



2,441,661


63,432


3.46





Repurchase agreements and


















interest-earning cash accounts


160,272


282


0.23



153,312


221


0.19





Federal Home Loan Bank stock


159,774


4,928


4.11



134,549


5,386


5.34




Total interest-earning assets


16,198,393


458,923


3.78



16,425,389


533,745


4.33




Goodwill


185,151







185,151








Other non-interest-earning assets


843,811







908,537







Total assets

$

17,227,355






$

17,519,077


























Liabilities and stockholders' equity:

















Interest-bearing liabilities:


















Savings

$

2,825,012


4,084


0.19


$

2,770,622


7,812


0.38





Money market


1,259,063


6,242


0.66



476,046


2,370


0.66





NOW and demand deposit


1,907,300


814


0.06



1,787,848


872


0.07





Total savings, money market and


















NOW and demand deposit


5,991,375


11,140


0.25



5,034,516


11,054


0.29





Certificates of deposit


4,896,215


67,339


1.83



6,318,082


95,102


2.01





Total deposits


10,887,590


78,479


0.96



11,352,598


106,156


1.25





Borrowings


4,625,679


119,581


3.45



4,484,543


139,694


4.15




Total interest-bearing liabilities


15,513,269


198,060


1.70



15,837,141


245,850


2.07




Non-interest-bearing liabilities


442,512







417,391







Total liabilities


15,955,781







16,254,532







Stockholders' equity


1,271,574







1,264,545







Total liabilities and stockholders' equity

$

17,227,355






$

17,519,077


























Net interest income/

















net interest rate spread (3)



$

260,863


2.08

%



$

287,895


2.26

%


Net interest-earning assets/

















net interest margin (4)

$

685,124




2.15

%

$

588,248




2.34

%


Ratio of interest-earning assets to

















interest-bearing liabilities


1.04x







1.04x































































(1) Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses.

(2) Securities available-for-sale are included at average amortized cost.

(3) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average

interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average interest-earning assets.

    

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES





















SELECTED FINANCIAL RATIOS AND OTHER DATA




























For the



At or For the






Three Months Ended



Nine Months Ended






September 30, 



September 30, 






2012



2011



2012


2011














Selected Returns and Financial Ratios (annualized)













Return on average stockholders' equity 

4.14

%


3.51

%


3.79

%


5.85

%


Return on average tangible stockholders' equity (1)

4.84



4.11



4.44



6.85



Return on average assets 

0.31



0.26



0.28



0.42



General and administrative expense to average assets

1.67



1.84



1.76



1.71



Efficiency ratio (2)

70.82



73.33



72.63



66.03



Net interest rate spread

2.02



2.19



2.08



2.26



Net interest margin

2.09



2.27



2.15



2.34


















Selected Non-GAAP Returns and Financial Ratios (annualized) (3) 













Non-GAAP return on average stockholders' equity 

4.39

%


3.51

%


4.11

%


5.85

%


Non-GAAP return on average tangible stockholders' equity (1)

5.12



4.11



4.81



6.85



Non-GAAP return on average assets

0.32



0.26



0.30



0.42



Non-GAAP general and administrative expense to average assets

1.64



1.84



1.72



1.71



Non-GAAP efficiency ratio (2)

69.64



73.33



71.15



66.03


















Asset Quality Data (dollars in thousands)













Non-performing assets (4)






$

353,042


$

430,745



Non-performing loans (4)







322,217



379,983



Loans 60-89 days delinquent







37,225



44,723



Loans 30-59 days delinquent







149,101



143,776



Net charge-offs 

$

9,130


$

14,366



38,213



50,148



















Non-performing loans/total loans







2.38

%


2.85

%


Non-performing loans/total assets







1.89



2.24



Non-performing assets/total assets







2.07



2.54



Allowance for loan losses/non-performing loans







46.08



46.94



Allowance for loan losses/total loans







1.09



1.34



Net charge-offs to average loans outstanding (annualized)

0.27

%


0.43

%


0.38



0.49


















Capital Ratios (Astoria Federal) 













Tangible







8.86

%


8.75

%


Leverage







8.86



8.75



Risk-based







15.90



16.18



Tier 1 risk-based







14.64



14.89


















Other Data 














Cash dividends paid per common share

$

0.04


$

0.13


$

0.21


$

0.39



Book value per share (5)







13.33



13.38



Tangible book value per share (6)







11.43



11.45



Tangible common stockholders' equity/tangible assets (1) (7)







6.59

%


6.55

%


Mortgage loans serviced for others (in thousands)






$

1,472,253


$

1,449,781



Full time equivalent employees







1,530



1,604



































(1)

Tangible stockholders' equity represents stockholders' equity less goodwill. 


(2)

Efficiency ratio represents general and administrative expense divided by the sum of net interest income plus non-interest income.


(3)

See the "Reconciliation of GAAP Measures to Non-GAAP Measures" table included in this release for a reconciliation of GAAP measures to non-GAAP measures for the three and nine months ended September 30, 2012.


(4)

Non-performing assets and non-performing loans include, but are not limited to, residential mortgage loans which at 180 days past due and annually thereafter we obtained an estimate of collateral value and charged-off any portion of the loan in excess of the estimated collateral value less estimated selling costs.


(5)

Book value per share represents stockholders' equity divided by outstanding shares, excluding unallocated Employee Stock Ownership Plan, or ESOP, shares.


(6)

Tangible book value per share represents stockholders' equity less goodwill divided by outstanding shares, excluding unallocated ESOP shares.


(7)

Tangible assets represent assets less goodwill.

 

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

























END OF PERIOD BALANCES AND RATES












(Dollars in Thousands)















































At September 30, 2012


At June 30, 2012


At September 30, 2011





Weighted




Weighted




Weighted





Average




Average




Average



  Balance


Rate (1)


  Balance


Rate (1)


  Balance


Rate (1)

Selected interest-earning assets:
















Mortgage loans, gross (2):
















Residential

$

9,944,659


3.80

%

$

10,237,331


3.89

%

$

10,237,483


4.34

%

Multi-family and commercial real estate


2,955,786


4.90



2,802,664


5.14



2,341,280


6.05


Mortgage-backed and other securities (3)


2,278,796


3.33



2,371,684


3.42



2,477,052


3.65


















Interest-bearing liabilities:
















Savings


2,811,647


0.05



2,862,175


0.15



2,760,922


0.25


Money market


1,438,287


0.53



1,340,616


0.70



864,253


0.94


NOW and demand deposit


1,964,636


0.03



1,962,537


0.06



1,809,662


0.06


Total savings, money market and
















       NOW and demand deposit


6,214,570


0.15



6,165,328


0.24



5,434,837


0.30


Certificates of deposit


4,324,312


1.66



4,548,851


1.81



5,832,310


1.95


Total deposits


10,538,882


0.77



10,714,179


0.91



11,267,147


1.15


Borrowings, net 


4,809,366


2.94



5,173,305


3.16



4,022,481


4.14


















































(1)     Weighted average rates represent stated or coupon interest rates excluding the effect of yield adjustments for premiums, discounts and deferred loan origination fees and costs and the impact of prepayment penalties. 


(2)     Mortgage loans exclude loans held-for-sale and non-performing loans.

(3)     Securities available-for-sale are reported at fair value and securities held-to-maturity are reported at amortized cost.


 

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES




RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES




(In Thousands, Except Per Share Data)


















Income and expense and related financial ratios determined in accordance with GAAP (GAAP measures) excluding the adjustments detailed in the following tables (non-GAAP measures) provide a meaningful comparison for effectively evaluating Astoria's operating results.















For the Three Months Ended






September 30, 2012







GAAP

Adjustments (1)

Non-GAAP














Net interest income


$85,998


$ -


$85,998



Provision for loan losses


9,500


-


9,500














Net interest income after provision for loan losses


76,498


-


76,498



Non-interest income


16,574


-


16,574



Non-interest expense (general and administrative expense)


72,643


(1,212)


71,431














Income before income tax expense


20,429


1,212


21,641



Income tax expense


7,074


427


7,501














Net income


$13,355


$785


$14,140














Basic earnings per common share


$0.14


$0.01


$0.15














Diluted earnings per common share


$0.14


$0.01


$0.15




























For the Nine Months Ended






September 30, 2012







GAAP

Adjustments (1)

Non-GAAP














Net interest income


$260,863


$ -


$260,863



Provision for loan losses


29,500


-


29,500














Net interest income after provision for loan losses


231,363


-


231,363



Non-interest income


51,592


-


51,592



Non-interest expense (general and administrative expense)


226,943


(4,637)


222,306














Income before income tax expense


56,012


4,637


60,649



Income tax expense