Astoria Financial Corporation Reports Second Quarter Earnings Per Share Of $0.13 Quarterly Cash Dividend of $0.04 Per Share Declared

LAKE SUCCESS, N.Y., July 18, 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 $12.8 million, or $0.13 diluted earnings per share ("diluted EPS"), for the quarter ended June 30, 2012, compared to net income of $16.8 million, or $0.18 diluted EPS, for the quarter ended June 30, 2011.  For the six months ended June 30, 2012, net income totaled $22.8 million, or $0.24 diluted EPS, compared to net income of $44.2 million, or $0.46 diluted EPS, for the comparable 2011 period.  Included in the 2012 six months results are net charges totaling $3.4 million ($2.2 million, or $0.02 per share, after-tax), reported in the 2012 first quarter, representing severance related expenses associated with cost control initiatives implemented in the 2012 first quarter. 

Second Quarter Financial Highlights

  • Low cost core deposits, consisting of savings, money market and checking accounts, increased $262.6 million, or 18% annualized, from March 31, 2012 to $6.2 billion, or 58% of total deposits, at June 30, 2012.
  • Combined multi-family/commercial real estate ("MF/CRE") loan portfolio increased $361.2 million, or 58% annualized, from March 31, 2012 to $2.8 billion at June 30, 2012. 
  • Total loan delinquencies (30 days or more past due) and real estate owned decreased $19.8 million, or   14% annualized, from March 31, 2012 to $539.1 million at June 30, 2012.
  • General and administrative ("G&A") expense for the quarter ended June 30, 2012 decreased $10.1 million, or 12%, from the quarter ended March 31, 2012, to $72.1 million.

Commenting on the second quarter results, Monte N. Redman, President and Chief Executive Officer of Astoria, stated,"I am pleased to report continued growth in both the loan portfolio and balance sheet this quarter, fueled by an increase in the multi-family loan portfolio.  In addition, the results of the cost control initiatives undertaken in the first quarter have produced a significant reduction in operating expenses this quarter.  I am also pleased with the positive progression in our asset/liability repositioning.  Multi-family/commercial real estate loans increased 21% from December 31, 2011, while residential loans remained relatively stable, and low-cost core deposits increased 8%, while high-cost CDs decreased 18%.  We expect that together, the growth and repositioning of the balance sheet coupled with improved operating efficiency should benefit the net interest margin and improve profitability throughout the remainder of the year."

Board Declares Quarterly Cash Dividend of $0.04 Per Share  

The Board of Directors of the Company, at its July 18, 2012 meeting, declared a quarterly cash dividend of $0.04 per common share.  The dividend is payable on September 1, 2012 to shareholders of record as of August 15, 2012.  This is the sixty-ninth consecutive quarterly cash dividend declared by the Company.

Sale of Senior Notes Completed

On June 19, 2012, the Company completed the sale of $250 million aggregate principal amount of 5.00% Senior Notes due 2017 ("5% Senior Notes").  The net proceeds from the sale will be used to repay its existing $250 million aggregate principal amount of 5.75% Senior Notes due October 2012 ("5.75% Senior Notes"), which will reduce the Company's annual interest expense by approximately $2.0 million.

Second Quarter and Six Months Earnings Summary

Net interest income for the quarter ended June 30, 2012 totaled $86.7 million compared to $88.2 million for the previous quarter and $95.7 million for the 2011 second quarter.  The net interest margin for the quarter ended June 30, 2012 was 2.14% compared to 2.20% for the previous quarter and 2.34% for the 2011 second quarter.  For the six months ended June 30, 2012, net interest income totaled $174.9 million, compared to $197.3 million for the comparable 2011 period, and the net interest margin was 2.17% for the six months ended June 30, 2012 compared to 2.37% for the six months ended June 30, 2011.  The linked quarter and year over year decreases in net interest income and the net interest margin for the three and six months ended June 30, 2012 are due primarily to a more rapid decline in the yields on average interest-earning assets than the decline in the costs of average interest-bearing liabilities.  In addition, the short-term negative carry from the issuance of the Company's 5% Senior Notes reduced the margin two basis points in the 2012 second quarter.  Commenting on the margin, Mr. Redman noted, "The lower cost of deposits and borrowings at June 30, 2012 compared to the average costs for the 2012 second quarter coupled with the fact that more than half of the multi-family loan closings in the 2012 second quarter occurred in June is indicative of the future benefit that should accrue to the net interest margin.  These benefits will be partially offset in the 2012 third quarter by the carrying cost for the recently issued 5% Senior Notes, the proceeds of which will repay our existing 5.75% Senior Notes, due October 2012."

For the quarter ended June 30, 2012, a $10.0 million provision for loan losses was recorded compared to $10.0 million for both the previous quarter and the 2011 second quarter.  For the six months ended June 30, 2012, the provision for loan losses totaled $20.0 million compared to $17.0 million for the comparable 2011 period.   

Non-interest income for the quarter ended June 30, 2012 totaled $15.5 million compared to $17.0 million for the 2011 second quarter.  The decrease from the 2011 second quarter is due primarily to lower customer service fees, partially offset by an increase in mortgage banking income, net.  Non-interest income for the six months ended June 30, 2012 totaled $35.0 million compared to $35.1 million for the comparable 2011 period. 

G&A expense for the quarter ended June 30, 2012 declined $10.1 million, or 12%, from the previous quarter and $3.9 million, or 5%, from the 2011 second quarter, to $72.1 million, primarily due to reduced compensation and benefits expense.  For the six months ended June 30, 2012, G&A expense increased $8.7 million, or 6%, to $154.3 million from $145.6 million for the six months ended June 30, 2011.  The six month increase is primarily due to increased FDIC expense.  Commenting on the linked quarter improvement in expenses, Mr. Redman stated, "The significant decline in operating expenses this quarter is a direct result of the cost control initiatives implemented in the 2012 first quarter, which should continue to benefit operating efficiency and profitability in the future."

Balance Sheet Summary

Total assets increased $551.4 million from December 31, 2011 and totaled $17.6 billion at June 30, 2012.  Included in the increase is the proceeds from the 5% Senior Notes issued in June 2012.  The loan portfolio increased $446.5 million from December 31, 2011 and totaled $13.7 billion at June 30, 2012.  Commenting on the loan and balance sheet growth, Mr. Redman stated, "As anticipated, the balance sheet and loan portfolio continued to grow in the second quarter, fueled by strong MF/CRE loan production.  During the first six months of this year, we closed nearly $900 million of MF/CRE loans with loan to value ratios averaging 54% and average balances of $3.4 million.  With a MF/CRE loan pipeline of approximately $560 million at June 30, 2012, we are well on our way to meeting our goal of originating in excess of $1.5 billion of MF/CRE loans this year, which should continue to drive loan and balance sheet growth this year."   

The residential (one-to-four family) portfolio totaled $10.5 billion at June 30, 2012 compared to $10.6 billion at December 31, 2011.  For the quarter and six months ended June 30, 2012, residential loan originations for portfolio totaled $896.0 million and $1.8 billion, respectively, compared to $636.2 million and $1.3 billion, respectively, for the comparable 2011 periods.  The loan-to-value ratio of the residential loan production for portfolio for the 2012 second quarter and six months each averaged approximately 60% at origination and the loan amount averaged approximately $732,000 and $740,000, respectively.  Residential loan prepayments for the quarter and six months ended June 30, 2012 totaled $794.8 million and $1.6 billion, respectively, compared to $610.5 million and $1.4 billion, respectively, for the comparable 2011 periods.

The MF/CRE portfolios increased $490.7 million, or 21%, from December 31, 2011 to $2.8 billion at June 30, 2012, due to the significant volume of loan closings in the first half of 2012.  For the quarter and six months ended June 30, 2012, MF/CRE loan originations for portfolio totaled $549.3 million and $893.5 million, respectively.  No MF/CRE loans were originated in the first half of 2011.  MF/CRE loan prepayments for the quarter and six months ended June 30, 2012 totaled $174.0 million and $366.4 million, respectively, compared to $133.3 million and $326.4 million for the comparable 2011 periods. 

The securities portfolio declined $103.3 million, or 4%, from December 31, 2011 and totaled $2.4 billion at June 30, 2012.  The Company expects to maintain the securities portfolio at this approximate level throughout 2012.    

Deposits decreased $531.4 million from December 31, 2011 to $10.7 billion at June 30, 2012 due to a decrease of $970.2 million in high cost CDs, offset by an increase of $438.7 million, or 15% annualized, in low cost core deposits from December 31, 2011.  Core deposits totaled $6.2 billion, or 58% of total deposits, at June 30, 2012.  "The growth in core deposits is a result of our efforts to reposition our asset and liability mix.  The linked quarter increase in core deposits includes a $32.2 million, or 30% annualized, increase in business deposits.  Mr. Redman, commenting on business banking activity, stated, "During the 2012 first quarter, we initiated our business banking expansion to build business relationships and broaden our reach in the communities we serve by helping businesses improve cash flow.   This expansion is expected to generate new core relationships within the community and deepen our existing relationships.  The results of our efforts, though in the early stages, are beginning to materialize, as evidenced by the growth in business deposits."   Notwithstanding the decline in CDs during the first half of 2012, we extended $277.1 million of CDs for terms of two years or more in an effort to help limit our exposure to future increases in interest rates.  At June 30, 2012, our one-year interest rate sensitivity gap was positive 6.59%.

Borrowings totaled $5.2 billion at June 30, 2012, an increase of $1.1 billion from December 31, 2011, In addition to the issuance of the 5% Senior Notes in June 2012, the increase also included $600.0 million of fixed-rate FHLB term advances, of which $500.0 million occurred in the 2012 second quarter, with an average term of 3.6 years and an average cost of 1.05%.  Commenting on the borrowing activity, Mr. Redman stated, "During this period of historic low interest rates, we utilize low cost long-term borrowings to offset the decline in high cost CDs to help manage interest rate risk."

Stockholders' equity totaled $1.3 billion, or 7.32% of total assets at June 30, 2012.  Astoria Federal continues to be designated as well-capitalized with leverage, tangible, total risk-based and Tier 1 risk-based capital ratios of 8.60%, 8.60%, 15.69% and 14.41%, respectively, at June 30, 2012.

Asset Quality

Non-performing loans ("NPLs"), including troubled debt restructurings ("TDRs") of $45.0 million, totaled $343.3 million, or 1.95% of total assets, at June 30, 2012 compared to $355.6 million (including TDRs of $43.5 million), or 2.08% of total assets, at March 31, 2012.  Residential NPLs totaled $294.8 million, MF/CRE NPLs totaled $41.7 million and consumer and other NPLs totaled $6.9 million at June 30, 2012 compared to $312.2 million, $36.9 million and $6.4 million, respectively, at March 31, 2012.  Of the $294.8 million of residential NPLs, $256.5 million, or 87%, 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 June 30, 2010

$230.9

$  77.5

$308.4

$415.1

$723.5

At June 30, 2011

$162.8

$  44.4

$207.2

$376.3

$583.5

At June 30, 2012

$130.1

$  33.8

$163.9

$343.3

$507.2

The table below details, as of June 30, 2012, the ten largest concentrations by state of residential loans and the respective non-performing loan totals in those states.  More comprehensive state details are included in the "Residential Loan Portfolio-Geographic Analysis" table included in this release.  

 ($ in millions)
State

Residential
Loans

% of Total
Residential Loan
Portfolio

Total
Residential
NPLs

NPLs as %
of State Total

New York

$3,011.7

28.6%

$42.4

1.41%

Illinois

$1,178.9

11.1%

$43.6

3.70%

Connecticut

$1,143.9

10.9%

$28.3

2.47%

Massachusetts

$  843.1

8.0%

$ 8.8

1.04%

New Jersey

$  753.0

7.1%

$56.5

7.50%

California

$  632.1

6.0%

$29.7

4.70%

Virginia

$  627.3

6.0%

$11.3

1.80%

Maryland

$  606.7

5.8%

$35.3

5.82%

Washington

$  298.8

2.8%

$ 2.5

0.84%

Texas

$  272.5

2.6%

$ 0.0

0.0%

Top 10 States

$ 9,368.0

88.9%

$258.4

2.76%

All other states (1,2)

$ 1,164.1

11.1%

$  36.4

3.13%

Total  Portfolio

$10,532.1

100%

$294.8

2.80%






(1)  Includes 25 states and Washington, D.C.  

(2)  Includes Florida with $183.7 million total loans, of which $20.7 million are non-performing loans.  

 

Selected Asset Quality Metrics  

(at or for the three months ended June 30, 2012, except as noted) 


($ in millions)

 

Residential

Multi-
family

CRE

Consumer
& Other

Total

Loan portfolio balance

$10,532.1

$ 2,197.9

$ 646.5

$  269.2(1)

      $  13,721.1(2)  

Non-performing loans

$  294.8(3)

$   36.0(4)

$  5.7(5)

$          6.9

$         343.3(6)

NPLs/total loans

2.15%

0.26%

0.04%

0.05%

         2.50%

Net charge-offs  2Q12

$         9.7

$        1.5

$     0.0

$          0.6

$             11.8

Net charge-offs YTD

$       25.8

$        1.8

$     0.3

$          1.1

$          29.1(6)


(1)  Includes home equity loans of $244.9 million

(2)  Includes $75.5 million of net unamortized premiums and deferred loan costs

(3)  Includes $256.5 million of NPLs reviewed, and charged-off as needed, at 180 days delinquent and annually thereafter

(4)  Includes TDRs of $25.7 million

(5)  Includes TDRs of $4.2 million

(6)  Does not foot due to rounding

Included in $9.7 million of residential net loan charge-offs in the 2012 second quarter are $9.3 million of charge-offs on $62.2 million of NPLs which, at 180 days delinquent and annually thereafter, were reviewed in the 2012 second quarter and charged-off, as needed, to the estimated fair value of the underlying collateral less estimated selling costs.  "While we expect NPL levels will remain 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, 87% of the residential NPLs to their adjusted fair value less estimated selling costs," Mr. Redman noted.

Future Outlook 

Commenting on the future outlook, Mr. Redman stated, "As we continue to grow the loan portfolio and balance sheet, we expect to continue our focus on repositioning the asset/liability mix, concentrating more on higher yielding multi-family loans than on lower yielding residential loans, and reducing high cost CDs and increasing low cost core deposits. We also anticipate that interest-earning assets will continue to increase throughout the year which will help fuel earnings growth.  With respect to the net interest margin, due to the impact of extending $500 million of borrowings in the 2012 second quarter and the additional short-term cost to carry the 5% Senior Notes until we extinguish our existing 5.75% Senior Notes, we now anticipate the net interest margin for the 2012 full year to be slightly lower than the 2011 fourth quarter margin of 2.20%.  

As I previously stated, 2012 continues to be the transitional year for us with continued quarterly earnings and balance sheet growth."  

Earnings Conference Call July 19, 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, July 19, 2012 at 10:00 a.m. (ET).   The toll-free dial-in number is (877) 709-8150.  A telephone replay will be available on July 19, 2012 from 1:00 p.m. (ET) through midnight Saturday, July 28, 2012 (ET).   The replay number is (877) 660-6853, account #399, ID# 397133.  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 $17.6 billion, is the holding company for Astoria Federal Savings and Loan Association.  Established in 1888, Astoria Federal, with deposits in New York totaling $10.7 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 mortgage loans through its banking and loan production offices in New York, an extensive broker network covering fourteen states, primarily along the East Coast, and the District of Columbia, and through correspondent relationships covering fifteen states and the District of Columbia.

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; 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



June 30,


December 31,



2012


2011

ASSETS





Cash and due from banks

$

379,122

$

132,704

Securities available-for-sale


365,561


344,187

Securities held-to-maturity






(fair value of $2,043,488 and $2,176,925, respectively)


2,006,123


2,130,804

Federal Home Loan Bank of New York stock, at cost


181,476


131,667

Loans held-for-sale, net


20,660


32,394

Loans receivable:






Mortgage loans, net


13,450,784


12,990,600


Consumer and other loans, net


270,341


284,004




13,721,125


13,274,604


Allowance for loan losses


(148,102)


(157,185)

Total loans receivable, net


13,573,023


13,117,419

Mortgage servicing rights, net


7,592


8,136

Accrued interest receivable


44,973


46,528

Premises and equipment, net


118,254


119,946

Goodwill


185,151


185,151

Bank owned life insurance


413,342


409,637

Real estate owned, net


31,803


48,059

Other assets


246,332


315,423






TOTAL ASSETS

$

17,573,412

$

17,022,055






LIABILITIES





Deposits

$

10,714,179

$

11,245,614

Reverse repurchase agreements


1,400,000


1,700,000

Federal Home Loan Bank of New York advances


3,147,000


2,043,000

Other borrowings, net


626,305


378,573

Mortgage escrow funds


128,717


110,841

Accrued expenses and other liabilities


271,600


292,829







TOTAL LIABILITIES


16,287,801


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 98,280,939 and 98,537,715 shares






outstanding, respectively)


1,665


1,665

Additional paid-in capital


882,168


875,395

Retained earnings


1,869,967


1,861,592

Treasury stock (68,213,949 and 67,957,173 shares, at cost, respectively)


(1,409,615)


(1,404,311)

Accumulated other comprehensive loss


(53,155)


(75,661)

Unallocated common stock held by ESOP






(1,479,271 and 2,042,367 shares, respectively)




(5,419)


(7,482)









TOTAL STOCKHOLDERS' EQUITY


1,285,611


1,251,198






TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

17,573,412

$

17,022,055

 

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

















CONSOLIDATED STATEMENTS OF INCOME







(In Thousands, Except Share Data)
























For the Three Months Ended


For the Six Months Ended





June 30,


June 30,





2012


2011


2012


2011

Interest income:










One-to-four family mortgage loans

$

95,454

$

111,869

$

194,746

$

226,545


Multi-family and commercial real estate mortgage loans


36,491


41,085


72,961


85,577


Consumer and other loans


2,294


2,509


4,635


5,016


Mortgage-backed and other securities


16,971


21,339


34,992


43,762


Repurchase agreements and interest-earning cash accounts


47


74


100


167


Federal Home Loan Bank of New York stock


1,553


1,637


3,155


3,954

Total interest income


152,810


178,513


310,589


365,021

Interest expense:










Deposits


26,933


35,638


56,360


72,670


Borrowings


39,208


47,153


79,364


95,100

Total interest expense


66,141


82,791


135,724


167,770












Net interest income


86,669


95,722


174,865


197,251

Provision for loan losses


10,000


10,000


20,000


17,000

Net interest income after provision for loan losses


76,669


85,722


154,865


180,251

Non-interest income:










Customer service fees


9,511


12,107


19,993


23,829


Other loan fees


505


805


1,392


1,737


Gain on sales of securities 


-


-


2,477


-


Mortgage banking income, net


1,777


370


3,132


2,803


Income from bank owned life insurance


2,204


2,629


4,627


4,864


Other


1,454


1,129


3,397


1,850

Total non-interest income


15,451


17,040


35,018


35,083

Non-interest expense:










General and administrative:











Compensation and benefits


32,142


37,168


74,302


73,701



Occupancy, equipment and systems


16,510


15,923


33,234


32,489



Federal deposit insurance premiums


11,864


11,178


23,067


16,692



Advertising


1,979


2,049


3,813


3,733



Other


9,604


9,636


19,884


18,958

Total non-interest expense


72,099


75,954


154,300


145,573












Income before income tax expense


20,021


26,808


35,583


69,761

Income tax expense


7,197


9,963


12,763


25,532












Net income 

$

12,824

$

16,845

$

22,820

$

44,229























Basic earnings per common share

$

0.13

$

0.18

$

0.24

$

0.46























Diluted earnings per common share

$

0.13

$

0.18

$

0.24

$

0.46












Basic weighted average common shares

95,332,904

92,949,206

95,175,886

92,842,398

Diluted weighted average common and common equivalent shares


95,332,904


92,949,206


95,175,886


92,842,398













































ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
































AVERAGE BALANCE SHEETS













(Dollars in Thousands)

























































For the Three Months Ended June 30,









2012







2011














Average







Average








Average




Yield/



Average




Yield/








Balance


Interest


Cost



Balance


Interest


Cost












(Annualized)







(Annualized)



Assets:


















Interest-earning assets:

















Mortgage loans (1):



















One-to-four family

$

10,627,083

$

95,454


3.59

%

$

10,675,616

$

111,869


4.19

%





Multi-family and commercial real estate


2,582,913


36,491


5.65



2,685,694


41,085


6.12





Consumer and other loans (1)


274,986


2,294


3.34



300,441


2,509


3.34





Total loans


13,484,982


134,239


3.98



13,661,751


155,463


4.55





Mortgage-backed and other securities (2)


2,410,175


16,971


2.82



2,448,292


21,339


3.49





Repurchase agreements and


















interest-earning cash accounts


114,198


47


0.16



150,589


74


0.20





Federal Home Loan Bank stock


158,471


1,553


3.92



127,603


1,637


5.13




Total interest-earning assets


16,167,826


152,810


3.78



16,388,235


178,513


4.36




Goodwill



185,151







185,151








Other non-interest-earning assets


796,142







872,016







Total assets


$

17,149,119






$

17,445,402

























Liabilities and stockholders' equity:

















Interest-bearing liabilities:


















Savings

$

2,844,593


1,612


0.23


$

2,805,096


2,809


0.40





Money market


1,237,914


2,155


0.70



395,512


450


0.46





NOW and demand deposit


1,934,810


296


0.06



1,807,350


290


0.06





Total savings, money market and


















NOW and demand deposit


6,017,317


4,063


0.27



5,007,958


3,549


0.28





Certificates of deposit


4,911,975


22,870


1.86



6,364,987


32,089


2.02





Total deposits


10,929,292


26,933


0.99



11,372,945


35,638


1.25





Borrowings


4,542,173


39,208


3.45



4,423,712


47,153


4.26




Total interest-bearing liabilities


15,471,465


66,141


1.71



15,796,657


82,791


2.10




Non-interest-bearing liabilities


401,166







379,064







Total liabilities


15,872,631







16,175,721







Stockholders' equity


1,276,488







1,269,681







Total liabilities and stockholders' equity

$

17,149,119






$

17,445,402























Net interest income/

















net interest rate spread (3)



$

86,669


2.07

%



$

95,722


2.26

%


Net interest-earning assets/

















net interest margin (4)

$

696,361




2.14

%

$

591,578




2.34

%


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 Six Months Ended June 30,









2012







2011














Average







Average








Average 




Yield/



Average 




Yield/








Balance


Interest


Cost



Balance


Interest


Cost












(Annualized)







(Annualized)



Assets:

















Interest-earning assets:


















Mortgage loans (1):



















One-to-four family

$

10,636,574

$

194,746


3.66

%

$

10,750,140

$

226,545


4.21

%





Multi-family and commercial real estate 


2,491,768


72,961


5.86



2,784,778


85,577


6.15





Consumer and other loans (1)


278,152


4,635


3.33



304,194


5,016


3.30





Total loans


13,406,494


272,342


4.06



13,839,112


317,138


4.58





Mortgage-backed and other securities (2)


2,427,258


34,992


2.88



2,490,886


43,762


3.51





Repurchase agreements and


















       interest-earning cash accounts


101,104


100


0.20



172,670


167


0.19





Federal Home Loan Bank stock 


148,645


3,155


4.25



137,541


3,954


5.75




Total interest-earning assets


16,083,501


310,589


3.86



16,640,209


365,021


4.39




Goodwill


185,151







185,151








Other non-interest-earning assets


863,739







901,230







Total assets

$

17,132,391






$

17,726,590


























Liabilities and stockholders' equity:

















Interest-bearing liabilities:


















Savings

$

2,815,486


3,374


0.24


$

2,754,957


5,496


0.40





Money market


1,184,307


4,008


0.68



389,169


879


0.45





NOW and demand deposit


1,889,028


586


0.06



1,779,252


571


0.06





Total savings, money market and 


















       NOW and demand deposit


5,888,821


7,968


0.27



4,923,378


6,946


0.28





Certificates of deposit


5,132,724


48,392


1.89



6,505,085


65,724


2.02





Total deposits


11,021,545


56,360


1.02



11,428,463


72,670


1.27





Borrowings


4,390,482


79,364


3.62



4,623,772


95,100


4.11




Total interest-bearing liabilities


15,412,027


135,724


1.76



16,052,235


167,770


2.09




Non-interest-bearing liabilities


457,047







415,250







Total liabilities 


15,869,074







16,467,485







Stockholders' equity


1,263,317







1,259,105







Total liabilities and stockholders' equity

$

17,132,391






$

17,726,590


























Net interest income/

















net interest rate spread (3)



$

174,865


2.10

%



$

197,251


2.30

%


Net interest-earning assets/

















net interest margin (4)

$

671,474




2.17

%

$

587,974




2.37

%


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



Six Months Ended






June 30,



June 30,






2012



2011



2012


2011














Selected Returns and Financial Ratios (annualized)













Return on average stockholders' equity


4.02

%


5.31

%


3.61

%


7.03

%


Return on average tangible stockholders' equity (1)


4.70



6.21



4.23



8.24



Return on average assets


0.30



0.39



0.27



0.50



General and administrative expense to average assets


1.68



1.74



1.80



1.64



Efficiency ratio (2)


70.60



67.36



73.52



62.66



Net interest rate spread


2.07



2.26



2.10



2.30



Net interest margin


2.14



2.34



2.17



2.37


















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













Non-GAAP return on average stockholders' equity


4.02

%


5.31

%


3.96

%


7.03

%


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


4.70



6.21



4.64



8.24



Non-GAAP return on average assets


0.30



0.39



0.29



0.50



Non-GAAP general and administrative expense to average assets


1.68



1.74



1.76



1.64



Non-GAAP efficiency ratio (2)


70.60



67.36



71.89



62.66


















Asset Quality Data (dollars in thousands)













Non-performing assets (4)







$

375,134


$

435,663



Non-performing loans (4)








343,331



376,340



Loans 60-89 days delinquent








33,823



44,391



Loans 30-59 days delinquent








130,098



162,793



Net charge-offs

$

11,797


$

16,769



29,083



35,782



















Non-performing loans/total loans








2.50

%


2.79

%


Non-performing loans/total assets








1.95



2.20



Non-performing assets/total assets








2.13



2.54



Allowance for loan losses/non-performing loans








43.14



48.55



Allowance for loan losses/total loans








1.08



1.35



Net charge-offs to average loans outstanding (annualized)


0.35

%


0.49

%


0.43



0.52


















Capital Ratios (Astoria Federal)













Tangible








8.60

%


8.61

%


Leverage








8.60



8.61



Risk-based








15.69



15.78



Tier 1 risk-based








14.41



14.48


















Other Data














Cash dividends paid per common share

$

0.04


$

0.13


$

0.17


$

0.26



Book value per share (5)









13.28



13.39



Tangible book value per share (6)








11.37



11.45



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








6.33

%


6.46

%


Mortgage loans serviced for others (in thousands)







$

1,467,028


$

1,461,143



Full time equivalent employees








1,525



1,589



































(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 six months ended June 30, 2012.


(4) Non-performing assets and non-performing loans include, but are not limited to, one-to-four family 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 June 30, 2012



At March 31, 2012



At June 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):
















One-to-four family

$

10,237,331


3.89

%

$

10,233,159


4.03

%

$

10,221,438


4.50

%

Multi-family and commercial real estate


2,802,664


5.14



2,446,240


5.56



2,542,053


6.06


Mortgage-backed and other securities (3)


2,371,684


3.42



2,514,502


3.48



2,415,376


3.73


















Interest-bearing liabilities:
















Savings


2,862,175


0.15



2,811,218


0.25



2,838,239


0.40


Money market


1,340,616


0.70



1,166,443


0.69



397,148


0.46


NOW and demand deposit


1,962,537


0.06



1,925,073


0.06



1,809,863


0.06


Total savings, money market and
















     NOW and demand deposit


6,165,328


0.24



5,902,734


0.27



5,045,250


0.28


Certificates of deposit


4,548,851


1.81



5,209,914


1.91



6,165,370


1.98


Total deposits


10,714,179


0.91



11,112,648


1.04



11,210,620


1.22


Borrowings, net


5,173,305


3.16



4,333,666


3.61



4,286,389


4.20


















































(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 table (non-GAAP measures) provide a meaningful comparison for effectively evaluating Astoria's operating results.
























For the Six Months Ended





June 30, 2012






GAAP

Adjustments (1)

Non-GAAP












Net interest income



$174,865


$ -


$174,865


Provision for loan losses



20,000


-


20,000












Net interest income after provision for loan losses



154,865


-


154,865


Non-interest income



35,018


-


35,018


Non-interest expense (general and administrative expense)



154,300


(3,425)


150,875












Income before income tax expense



35,583


3,425


39,008


Income tax expense



12,763


1,208


13,971












Net income



$ 22,820


$ 2,217


$ 25,037












Basic earnings per common share



$0.24


$0.02


$0.26












Diluted earnings per common share



$0.24


$0.02


$0.26






















Non-GAAP returns are calculated substituting non-GAAP net income for net income in the corresponding ratio calculation, while the non-GAAP general and administrative expense to average assets ratio substitutes non-GAAP general and administrative expense (non-GAAP non-interest expense) for general and administrative expense (non-interest expense) in the corresponding ratio calculation. Similarly, the non-GAAP efficiency ratio substitutes non-GAAP non-interest income and non-GAAP general and administrative expense for non-interest income and general and administrative expense in the corresponding ratio calculation.



(1) Adjustments relate to expenses associated with cost control initiatives implemented in the 2012 first quarter.









ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES














Residential Loan Portfolio - Geographic Analysis






(Dollars in millions)











At June 30, 2012










State


Total loans



Non-performing

loans



Non-performing loans

 as % of total loans

New York










   Full Income


$2,760.5



$21.4



0.78%


   Alt A < 70% LTV


$198.6



$11.6



5.84%


   Alt A  70%-80% LTV


$52.6



$9.4



17.87%