Astoria Financial Corporation Reports Third Quarter and Nine Months Earnings Per Share of $0.12 and $0.58, Respectively Quarterly Cash Dividend of $0.13 Per Share Declared

LAKE SUCCESS, N.Y., Oct. 19, 2011 /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 $11.2 million, or $0.12 diluted earnings per share ("diluted EPS"), for the quarter ended September 30, 2011 compared to net income of $21.5 million, or $0.23 diluted EPS, for the quarter ended September 30, 2010.  For the nine months ended September 30, 2011, net income totaled $55.4 million, or $0.58 diluted EPS, increases of 11% and 9%, respectively, over net income of $49.9 million, or $0.53 diluted EPS, for the comparable 2010 period.  Included in the 2010 nine month period are net charges totaling $3.2 million ($2.1 million, or $0.02 per share, after-tax), which are not routine to our core operations.  For further details, please refer to the "Reconciliation of GAAP Measures to Non-GAAP Measures" table included in this release.

Commenting on the 2011 third quarter results, Monte N. Redman, President and Chief Executive Officer of Astoria, stated, "Our financial results for the quarter were negatively impacted by two events: the decrease in average interest-earning assets by almost $400 million from the 2011 second quarter, due in part to the flattening of the U.S. Treasury yield curve which kept residential mortgage prepayment activity at elevated levels, and a non-cash increase of over $3 million in ESOP expense, due to our lower stock price during the third quarter.  On a more positive note, the pace of the decline in the balance sheet and loan portfolio has slowed significantly in the third quarter and we expect to see modest growth in the 2011 fourth quarter, accelerating further in 2012."

Financial Highlights

  • Low cost savings, money market and checking accounts increased $389.6 million, or 31% annualized, to $5.4 billion, from June 30, 2011 and increased $987.7 million, or 22%, from September 30, 2010.
  • Early stage loan delinquencies (30-89 days past due) decreased $18.7 million, or 9%, to $188.5 million, from June 30, 2011 and $63.5 million, or 25%, from September 30, 2010.
  • Total past due loans and REO decreased $23.6 million, or 4%, to $619.2 million, from June 30, 2011 and $97.1 million, or 14%, from September 30, 2010.
  • The Company's tangible common equity ratio increased to 6.55%, up 9 basis points from June 30, 2011 and 92 basis points from September 30, 2010.
  • Astoria Federal's leverage and tangible capital ratios increased to 8.75%, up 14 basis points from June 30, 2011 and 116 basis points from September 30, 2010.  
  • Astoria Federal's Tier 1 risk-based capital ratio increased to 14.89%, up 41 basis points from June 30, 2011 and 202 basis points from September 30, 2010.  
  • The residential loan pipeline, excluding our own customer loan refinances, totaled $1.0 billion at September 30, 2011, 28% higher than June 30, 2011
  • The multi-family loan pipeline totaled $252.7 million at September 30, 2011 versus no pipeline at June 30, 2011

Board Declares Quarterly Cash Dividend of $0.13 Per Share

The Board of Directors of the Company, at their October 19, 2011 meeting, declared a quarterly cash dividend of $0.13 per common share.  The dividend is payable on December 1, 2011 to shareholders of record as of November 15, 2011.  This is the sixty-sixth consecutive quarterly cash dividend declared by the Company.

Third Quarter and Nine Months Earnings Summary

Net interest income for the quarter ended September 30, 2011 totaled $90.6 million compared to $95.7 million for the previous quarter and $106.0 million for the 2010 third quarter.  For the nine months ended September 30, 2011, net interest income totaled $287.9 million compared to $332.3 million for the comparable 2010 period.  The decreases in net interest income are due primarily to decreases in average interest-earning assets of $385.5 million on a linked quarter basis and $2.3 billion for both the year over year quarter and nine month periods and asset yields declining greater than the cost of funds, due to the prolonged low interest rate environment.  The net interest margin for the quarter ended September 30, 2011 was 2.27% compared to 2.34% for the previous quarter and 2.32% for the 2010 third quarter.  Approximately 2 basis points of the linked quarter decrease is due to one extra day of interest expense in the 2011 third quarter.  For the nine months ended September 30, 2011, the net interest margin was 2.34% compared to 2.36% for the comparable 2010 nine month period.

For the quarter ended September 30, 2011, a $10.0 million provision for loan losses was recorded, which was equal to the provision for the previous quarter and 50% lower than the $20.0 million provision recorded for the 2010 third quarter.  For the nine months ended September 30, 2011, the provision for loan losses totaled $27.0 million compared to $100.0 million for the comparable 2010 period.   Mr. Redman noted, "Despite the improved credit metrics of the loan portfolio, including the noted decline in total loan delinquencies, we felt it prudent, at this time, to maintain our strong allowance for loan losses coverage ratio, which was 1.34% of total loans at September 30, 2011."

Non-interest income for the quarter ended September 30, 2011 totaled $16.5 million compared to $17.0 million for the previous quarter and $18.6 million for the 2010 third quarter.  Non-interest income for the nine months ended September 30, 2011 totaled $51.6 million compared to $60.5 million for the comparable 2010 period.  The decrease for the nine months ended September 30, 2011 is due to a $6.2 million gain relating to a litigation settlement recorded in 2010, partially offset by a $1.5 million impairment write-down of premises and equipment recorded in 2010, coupled with a decrease of $3.4 million in customer service fees.  

General and administrative ("G&A") expense for the quarter ended September 30, 2011 totaled $78.6 million compared to $76.0 million for the previous quarter and $70.9 million for the 2010 third quarter. The linked quarter increase is primarily due to an increase in compensation and benefits expense, primarily a non-cash increase in ESOP expense of over $3 million, due to the lower stock price in the 2011 third quarter, partially offset by lower incentive bonus expense.  The quarterly year over year increase is due to a $4.3 million increase in FDIC deposit insurance expense and a $3.5 million increase in compensation and benefits expense, primarily ESOP expense.  Mr. Redman stated, "Excluding the increase in the non-cash ESOP expense, G&A expenses remained essentially flat on a linked quarter basis."

For the nine months ended September 30, 2011, G&A expense totaled $224.2 million compared to $215.0 million for the nine months ended September 30, 2010.  The increase is due to a $7.8 million increase in FDIC deposit insurance expense, a $7.3 million increase in compensation and benefits expense, primarily ESOP and pension expense, and a $1.8 million increase in advertising expense, partially offset by a $7.9 million litigation settlement expense recorded in 2010.

Balance Sheet Summary

Total assets decreased $143.7 million from June 30, 2011 and $1.1 billion from December 31, 2010 and totaled $17.0 billion at September 30, 2011.  The decline is primarily due to a decrease in the loan portfolio.  "We believe the decline in the balance sheet has reached an inflection point in the third quarter, evidenced by the smallest quarterly decline in the balance sheet in two years.  As previously stated, our expectation for modest loan and balance sheet growth in the 2011 fourth quarter and more significant growth in 2012 is predicated on two factors.  The one-to-four family loan pipeline at September 30, 2011, excluding our own customer loan refinances, was $1.0 billion, or 28%, higher than it was at June 30, 2011, which should mitigate the effect of elevated prepayment activity, and the multi-family loan pipeline at September 30, 2011 was $252.7 million and growing, due to the resumption of lending in the 2011 third quarter," Mr. Redman noted.

The one-to-four family portfolio increased $11.4 million from June 30, 2011 to $10.6 billion at September 30, 2011, the first increase in the portfolio in more than two years.  For the quarter and nine months ended September 30, 2011, one-to-four family loan originations for portfolio totaled $1.0 billion and $2.4 billion, respectively, compared to $646.7 million and $2.2 billion, respectively, for the comparable 2010 periods.  The loan-to-value ratio of the one-to-four family loan production for portfolio for the 2011 third quarter and nine months each averaged approximately 60% at origination and the loan amount averaged approximately $782,000 and $766,000, respectively.  One-to-four family loan prepayments for the quarter and nine months ended September 30, 2011 totaled $892.9 million and $2.3 billion, respectively, compared to $848.3 million and $2.3 billion, respectively, for the comparable 2010 periods.

The combined multi-family/commercial real estate ("CRE") portfolio totaled $2.4 billion at September 30, 2011 compared to $2.6 billion at June 30, 2011 and $3.0 billion at December 31, 2010.  Multi-family/CRE loan prepayments for the quarter and nine months ended September 30, 2011 totaled $176.1 million and $502.5 million, respectively, compared to $70.1 million and $186.4 million for the comparable 2010 periods.  

The securities portfolio increased $61.7 million from June 30, 2011 and totaled $2.5 billion at September 30, 2011.  We expect to maintain the securities portfolio at, or slightly higher than, current levels throughout the remainder of the year.

Deposits increased $56.5 million from June 30, 2011 and decreased $331.9 million from December 31, 2010 to $11.3 billion at September 30, 2011.  Importantly, low-cost savings, money market and checking account deposits increased $389.6 million, or 31% annualized, from June 30, 2011 and $618.9 million, or 17% annualized, from December 31, 2010.  Certificate of deposit ("CD") accounts (including Liquid CDs) decreased $333.1 million from the previous quarter and $950.7 million from December 31, 2010.  Notwithstanding the decline in CDs, during the nine months ended September 30, 2011, we extended $606.5 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 September 30, 2011, our one-year interest rate sensitivity gap was positive 3.22%.

Borrowings decreased $263.9 million from June 30, 2011 and $846.7 million from December 31, 2010 to $4.0 billion at September 30, 2011.

Stockholders' equity totaled $1.3 billion, or 7.57% of total assets, at September 30, 2011.  Astoria Federal continues to be designated as well-capitalized with leverage, tangible, risk-based and Tier 1 risk-based capital ratios of 8.75%, 8.75%, 16.18% and 14.89%, respectively, at September 30, 2011.

Asset Quality

Non-performing loans ("NPLs"), including troubled debt restructurings of $36.8 million, totaled $380.0 million, or 2.24% of total assets, at September 30, 2011, an increase of $3.7 million from the previous quarter.  One-to-four family NPLs totaled $324.9 million, multi-family/CRE/construction NPLs totaled $49.6 million and consumer and other NPLs totaled $5.5 million, compared to $329.6 million, $41.6 million and $5.2 million, respectively, at June 30, 2011.  Of the $324.9 million of one-to-four family NPLs, $258.7 million, or 80%, 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 loan migration trends from 30 days delinquent to 90+ days delinquent:


($ in millions)

30-59 Days
Past Due

60-89 Days
Past Due

Combined
30-89 Days
Past Due

Change from
Previous
Quarter

90 + Days
Past Due
(NPLs)

Total 30-90+
Days Past Due

At Sept. 30, 2010

$181.6

$  70.4

$252.0

$(56.4)

$399.6

$651.6

At Dec. 31, 2010

$165.8

$  54.3

$220.1

$(31.9)

$390.7

$610.8

At March 31, 2011

$155.0

$  62.2

$217.2

$  (2.9)

$373.8

$591.0

At June 30, 2011

$162.8

$  44.4

$207.2

$ (10.0)

$376.3

$583.5

At Sept. 30, 2011

$143.8

$  44.7

$188.5

$ (18.7)

$380.0

$568.5




The table below details, as of September 30, 2011, the ten largest concentrations by state of one-to-four family loans and the respective non-performing loan totals in those states.  More comprehensive state details are included in the "One-to-Four Family Residential Loan Portfolio-Geographic Analysis" table included in this release.  


($ in millions)

State

Total 1-4
Family Loans

% of Total 1-4
Family Loan
Portfolio

Total 1-4
Family
NPLs

NPLs as %
of State
Total

New York

$2,994.0

28.3%

$40.6

1.36%

Illinois

$1,286.4

12.2%

$49.5

3.85%

Connecticut

$1,041.1

9.9%

$32.1

3.08%

New Jersey

$  763.8

7.2%

$56.6

7.41%

Massachusetts

$  753.6

7.1%

$11.2

1.49%

California

$  721.9

6.8%

$35.0

4.85%

Virginia

$  636.9

6.0%

$12.4

1.95%

Maryland

$  622.2

5.9%

$39.9

6.41%

Washington

$  309.1

2.9%

$ 2.7

0.87%

Texas

$  246.4

2.3%

$ 0.0

0.0%

Top 10 States

$ 9,375.4

88.6%

$280.0

2.99%

All other states (1,2)

$ 1,187.0

11.4%

$  44.9

3.78%

Total 1-4 Family Portfolio

$10,562.4

100%

$324.9

3.08%


(1)  Includes 27 states and Washington, D.C.

(2)  Includes Florida with $203.3 million total loans, of which $23.2 million are non-performing loans.



Net loan charge-offs for the quarter and nine months ended September 30, 2011 totaled $14.4 million and $50.1 million, respectively, down from $24.8 million and $87.8 million, respectively, for the comparable 2010 periods.  Included in the 2011 third quarter one-to-four family net loan charge-offs are $13.9 million of charge-offs on $59.7 million of NPLs which, at 180 days delinquent and annually thereafter, were reviewed in the 2011 third 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, 80% of the residential NPLs to their adjusted fair value less estimated selling costs," Mr. Redman noted.

Selected Asset Quality Metrics

(at or for the three months ended September 30, 2011, except as noted)

($ in millions)

1-4
Family

Multi-
family

CRE

Construction

Consumer
& Other

Total

Loan portfolio balance

$10,562.4

$ 1,685.2

$ 692.8

$   12.9

$  288.6(1)

$13,319.6 (2)

Non-performing loans

$     324.9 (3)

$     34.0

$   10.9

$     4.7

$     5.5

$     380.0

NPLs/total loans

2.44%

0.26%

0.08%

0.03%

0.04%

2.85%

Net charge-offs  3Q11

$      14.7

$      0.0

$  0.0

$   (0.4)

$     0.1

$       14.4

Net charge-offs YTD

$      41.8

$      6.7

$  0.8

$   (0.1)

$     1.0

$       50.1 (4)



(1)  Includes home equity loans of $265.3 million

(2)  Includes $77.8 million of net unamortized premiums and deferred loan costs

(3)  Includes $258.7 million, or 80%, of NPLs reviewed and charged-off, as needed, at 180 days delinquent and annually thereafter

(4)  Does not foot due to rounding



Future Outlook  

Commenting on the outlook for the fourth quarter and 2012, Mr. Redman stated, "We continue to operate in a challenging environment; economic growth remains weak, unemployment stubbornly remains elevated and home values continue to remain soft.  In addition, the implementation of Operation Twist by the Federal Reserve has contributed to a flattening of the U.S. Treasury yield curve, putting further downward pressure on long term interest rates and current mortgage product offerings, as well as increasing mortgage loan prepayments. However, we are optimistic that the increase in our loan pipeline, coupled with the reduction in the expanded conforming loan limits that commenced October 1, 2011 and the resumption of multi-family/commercial real estate lending, should facilitate modest loan and balance sheet growth in the fourth quarter and more robust growth in 2012.  With respect to the net interest margin, we expect that, in the current low interest rate environment, with increased loan prepayment activity, the margin for the 2011 fourth quarter will be down slightly from the third quarter and for 2012 may be somewhat lower than the margin for 2011."

Earnings Conference Call October 20, 2011 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 20, 2011 at 10:00 a.m. (ET).  The toll-free dial-in number is (888) 562-3356, ID# 12289136.  A telephone replay will be available on October 20, 2011 from 1:00 p.m. (ET) through midnight October 29, 2011 (ET).  The replay number is (800) 585-8367, ID# 12289136.  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 $11.3 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, may adversely affect our business; 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,





2011


2010

ASSETS






Cash and due from banks

$

110,886

$

67,476

Repurchase agreements


-


51,540

Securities available-for-sale


402,023


561,953

Securities held-to-maturity





   (fair value of $2,135,140 and $2,042,110, respectively)


2,075,029


2,003,784

Federal Home Loan Bank of New York stock, at cost


126,759


149,174

Loans held-for-sale, net


13,957


44,870

Loans receivable:





     Mortgage loans, net


13,029,240


13,911,200

     Consumer and other loans, net


290,337


311,847





13,319,577


14,223,047

     Allowance for loan losses


(178,351)


(201,499)

Total loans receivable, net



13,141,226


14,021,548

Mortgage servicing rights, net


8,254


9,204

Accrued interest receivable


48,227


55,492

Premises and equipment, net


120,373


133,362

Goodwill



185,151


185,151

Bank owned life insurance


408,614


410,418

Real estate owned, net


50,762


63,782

Other assets


285,387


331,515








TOTAL ASSETS

$

16,976,648

$

18,089,269








LIABILITIES





Deposits


$

11,267,147

$

11,599,000

Reverse repurchase agreements



1,700,000


2,100,000

Federal Home Loan Bank of New York advances



1,944,000


2,391,000

Other borrowings, net



378,481


378,204

Mortgage escrow funds



132,622


109,374

Accrued expenses and other liabilities



269,853


269,911








TOTAL LIABILITIES


15,692,103


16,847,489








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 98,537,391 and 97,877,469
   shares outstanding, respectively)



1,665


1,665

Additional paid-in capital



871,153


864,744

Retained earnings



1,862,215


1,848,095

Treasury stock (67,957,497 and 68,617,419 shares, at cost,
   respectively)



(1,404,318)


(1,417,956)

Accumulated other comprehensive loss



(36,990)


(42,161)

Unallocated common stock held by ESOP






   (2,505,716 and 3,441,130 shares, respectively)



(9,180)


(12,607)








TOTAL STOCKHOLDERS' EQUITY


1,284,545


1,241,780








TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

16,976,648

$

18,089,269



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,





2011


2010


2011


2010

Interest income:









     One-to-four family mortgage loans

$

105,769

$

130,936

$

332,314

$

408,640

     Multi-family, commercial real estate and
         construction mortgage loans


39,338


48,446


124,915


149,169

     Consumer and other loans


2,461


2,656


7,477


7,975

     Mortgage-backed and other securities


19,670


25,336


63,432


86,319

     Repurchase agreements and interest-earning
         cash accounts


54


188


221


257

     Federal Home Loan Bank of New York stock


1,432


1,999


5,386


6,416

Total interest income


168,724


209,561


533,745


658,776

Interest expense:









     Deposits


33,486


46,144


106,156


149,182

     Borrowings


44,594


57,392


139,694


177,268

Total interest expense


78,080


103,536


245,850


326,450












Net interest income


90,644


106,025


287,895


332,326

Provision for loan losses


10,000


20,000


27,000


100,000

Net interest income after provision for loan losses


80,644


86,025


260,895


232,326

Non-interest income:









     Customer service fees


11,867


12,463


35,696


39,128

     Other loan fees


637


974


2,374


2,546

     Mortgage banking income, net


40


631


2,843


2,788

     Income from bank owned life insurance


2,738


2,383


7,602


6,735

     Other


1,260


2,161


3,110


9,279

Total non-interest income


16,542


18,612


51,625


60,476

Non-interest expense:









 General and administrative:









     Compensation and benefits


39,496


35,999


113,197


105,884

     Occupancy, equipment and systems


16,178


16,506


48,667


49,592

     Federal deposit insurance premiums


10,837


6,509


27,529


19,722

     Advertising


2,623


1,743


6,356


4,557

     Other


9,462


10,147


28,420


35,236












Total non-interest expense


78,596


70,904


224,169


214,991












Income before income tax expense


18,590


33,733


88,351


77,811

Income tax expense


7,374


12,282


32,906


27,888












Net income

$

11,216

$

21,451

$

55,445

$

49,923























Basic earnings per common share

$

0.12

$

0.23

$

0.58

$

0.53























Diluted earnings per common share

$

0.12

$

0.23

$

0.58

$

0.53












Basic weighted average common shares

93,338,310

91,863,115

93,009,518

91,650,000

Diluted weighted average common and common









   equivalent shares

93,338,310

91,863,115

93,009,518

91,650,045



ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES








AVERAGE BALANCE SHEETS


(Dollars in Thousands)









































For the Three Months Ended September 30,









2011







2010














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

$

10,604,853

$

105,769


3.99

%

$

11,678,392

$

130,936


4.48

%





Multi-family, commercial real



















  estate and construction


2,515,957


39,338


6.25



3,201,711


48,446


6.05





Consumer and other loans (1)


293,238


2,461


3.36



323,916


2,656


3.28





Total loans


13,414,048


147,568


4.40



15,204,019


182,038


4.79





Mortgage-backed and other securities (2)


2,344,816


19,670


3.36



2,555,951


25,336


3.97





Repurchase agreements and


















      interest-earning cash accounts


115,228


54


0.19



332,171


188


0.23





Federal Home Loan Bank stock


128,664


1,432


4.45



174,220


1,999


4.59




Total interest-earning assets


16,002,756


168,724


4.22



18,266,361


209,561


4.59




Goodwill


185,151







185,151








Other non-interest-earning assets


925,222







888,925







Total assets

$

17,113,129






$

19,340,437


























Liabilities and stockholders' equity:

















Interest-bearing liabilities:


















Savings

$

2,799,738


2,316


0.33


$

2,407,180


2,448


0.41





Money market


646,966


1,491


0.92



342,453


385


0.45





NOW and demand deposit


1,804,760


301


0.07



1,686,109


279


0.07





Liquid certificates of deposit


328,426


193


0.24



585,814


689


0.47





Total core deposits


5,579,890


4,301


0.31



5,021,556


3,801


0.30





Certificates of deposit


5,623,449


29,185


2.08



7,155,096


42,343


2.37





Total deposits


11,203,339


33,486


1.20



12,176,652


46,144


1.52





Borrowings


4,210,625


44,594


4.24



5,527,188


57,392


4.15




Total interest-bearing liabilities


15,413,964


78,080


2.03



17,703,840


103,536


2.34




Non-interest-bearing liabilities


421,604







405,907







Total liabilities


15,835,568







18,109,747







Stockholders' equity


1,277,561







1,230,690







Total liabilities and stockholders' equity

$

17,113,129






$

19,340,437


























Net interest income/net interest

















rate spread (3)



$

90,644


2.19

%



$

106,025


2.25

%


Net interest-earning assets/net

















interest margin (4)

$

588,792




2.27

%

$

562,521




2.32

%


Ratio of interest-earning assets

















to interest-bearing liabilities


1.04x







1.03x































































(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,









2011







2010














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

$

10,701,179

$

332,314


4.14

%

$

11,856,597

$

408,640


4.60

%





Multi-family, commercial real



















  estate and construction


2,694,186


124,915


6.18



3,319,318


149,169


5.99





Consumer and other loans (1)


300,502


7,477


3.32



328,264


7,975


3.24





Total loans


13,695,867


464,706


4.52



15,504,179


565,784


4.87





Mortgage-backed and other securities (2)


2,441,661


63,432


3.46



2,897,654


86,319


3.97





Repurchase agreements and


















      interest-earning cash accounts


153,312


221


0.19



181,366


257


0.19





Federal Home Loan Bank stock


134,549


5,386


5.34



177,246


6,416


4.83




Total interest-earning assets


16,425,389


533,745


4.33



18,760,445


658,776


4.68




Goodwill


185,151







185,151








Other non-interest-earning assets


908,537







879,392







Total assets

$

17,519,077






$

19,824,988


























Liabilities and stockholders' equity:

















Interest-bearing liabilities:


















Savings

$

2,770,622


7,812


0.38


$

2,324,727


7,023


0.40





Money market


476,046


2,370


0.66



336,482


1,117


0.44





NOW and demand deposit


1,787,848


872


0.07



1,662,287


807


0.06





Liquid certificates of deposit


384,259


699


0.24



626,625


2,281


0.49





Total core deposits


5,418,775


11,753


0.29



4,950,121


11,228


0.30





Certificates of deposit


5,933,823


94,403


2.12



7,507,295


137,954


2.45





Total deposits


11,352,598


106,156


1.25



12,457,416


149,182


1.60





Borrowings


4,484,543


139,694


4.15



5,730,714


177,268


4.12




Total interest-bearing liabilities


15,837,141


245,850


2.07



18,188,130


326,450


2.39




Non-interest-bearing liabilities


417,391







416,514







Total liabilities


16,254,532







18,604,644







Stockholders' equity


1,264,545







1,220,344







Total liabilities and stockholders' equity

$

17,519,077






$

19,824,988


























Net interest income/net interest

















rate spread (3)



$

287,895


2.26

%



$

332,326


2.29

%


Net interest-earning assets/net

















interest margin (4)

$

588,248




2.34

%

$

572,315




2.36

%


Ratio of interest-earning assets

















to interest-bearing liabilities


1.04x







1.03x































































(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,







2011



2010



2011



2010














Selected Returns and Financial Ratios (annualized)













Return on average stockholders' equity




3.51

%


6.97

%


5.85

%


5.45

%


Return on average tangible stockholders' equity (1)




4.11


8.21



6.85


6.43



Return on average assets




0.26


0.44



0.42


0.34



General and administrative expense to average assets




1.84



1.47



1.71



1.45



Efficiency ratio (2)




73.33



56.89



66.03



54.73



Net interest rate spread




2.19



2.25



2.26



2.29



Net interest margin




2.27



2.32



2.34



2.36


















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
















Non-GAAP return on average stockholders' equity










5.85

%


5.68

%


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










6.85



6.70



Non-GAAP return on average assets










0.42



0.35



Non-GAAP general and administrative expense to average assets










1.71



1.39



Non-GAAP efficiency ratio (2)










66.03



53.36


















Asset Quality Data (dollars in thousands)
















Non-performing assets (4)









$

430,745


$

464,383



Non-performing loans (4)










379,983



399,620



      Loans delinquent 90 days or more and still accruing interest










1,006



619



      Non-accrual loans










378,977



399,001



Loans 60-89 days delinquent










44,723



70,359



Loans 30-59 days delinquent










143,776



181,631



Net charge-offs



$

14,366


$

24,768



50,148



87,818



















Non-performing loans/total loans










2.85

%


2.68

%


Non-performing loans/total assets










2.24



2.11



Non-performing assets/total assets










2.54



2.45



Allowance for loan losses/non-performing loans










46.94



51.61



Allowance for loan losses/non-accrual loans










47.06



51.69



Allowance for loan losses/total loans










1.34



1.38



Net charge-offs to average loans outstanding (annualized)




0.43

%


0.65

%


0.49



0.76


















Capital Ratios (Astoria Federal)
















Tangible










8.75

%


7.59

%


Leverage










8.75



7.59



Risk-based










16.18



14.13



Tier 1 risk-based










14.89



12.87


















Other Data
















Cash dividends paid per common share



$

0.13


$

0.13


$

0.39


$

0.39



Book value per share (5)










13.38



13.18



Tangible book value per share (6)










11.45



11.22



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










6.55

%


5.63

%


Mortgage loans serviced for others (in thousands)









$

1,449,781


$

1,421,223



Full time equivalent employees








1,604



1,573


































 (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 nine months ended September 30, 2010.  

 (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 September 30, 2011



At June 30, 2011



At September 30, 2010







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

$

10,237,483


4.34

%

$

10,221,438


4.50

%

$

11,023,120


4.87

%


Multi-family, commercial real estate

















and construction


2,341,280


6.05



2,542,053


6.06



3,069,335


6.04



Mortgage-backed and other securities (3)


2,477,052


3.65



2,415,376


3.73



2,591,203


4.00




















Interest-bearing liabilities:

















Savings


2,760,922


0.25



2,838,239


0.40



2,435,287


0.40



Money market


864,253


0.94



397,148


0.46



349,883


0.45



NOW and demand deposit


1,809,662


0.06



1,809,863


0.06



1,662,000


0.06



Liquid certificates of deposit


301,221


0.19



363,393


0.25



546,626


0.38



Total core deposits


5,736,058


0.29



5,408,643


0.28



4,993,796


0.29



Certificates of deposit


5,531,089


2.05



5,801,977


2.09



7,113,490


2.33



Total deposits


11,267,147


1.15



11,210,620


1.22



12,107,286


1.49



Borrowings, net


4,022,481


4.14



4,286,389


4.20



5,213,111


4.12





















































 (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 Nine Months Ended





September 30, 2010





  GAAP

Adjustments (1)

Non-GAAP










Net interest income



$332,326


$         -


$332,326

Provision for loan losses



100,000


-


100,000

Net interest income after provision for loan losses



232,326


-


232,326

Non-interest income



60,476


(4,635)


55,841

Non-interest expense (general and administrative expense)



214,991


(7,850)


207,141

Income before income tax expense



77,811


3,215


81,026

Income tax expense



27,888


1,133


29,021

Net income



$ 49,923


$   2,082


$  52,005

Basic earnings per common share



$0.53


$0.02


$0.55

Diluted earnings per common share



$0.53


$0.02


$0.55



















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) Non-interest income adjustment relates to the $6.2 million goodwill litigation settlement, partially offset by the $1.5 million impairment write-down of premises and equipment, recorded in the 2010 second quarter.  Non-interest expense adjustment relates to the McAnaney litigation settlement recorded in the 2010 second quarter.



ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES







One-to-Four Family Residential Loan Portfolio - Geographic Analysis

(Dollars in millions)







At September 30, 2011






Non-performing loans

State

Total loans


Non-performing loans


as % of total loans

New York






  Full Income

$2,722.0


$18.7


0.69%

  Alt A < 70% LTV

$211.7


$12.1


5.72%

  Alt A  70%-80% LTV

$60.3


$9.8


16.25%

State Total

$2,994.0


$40.6


1.36%







Illinois






  Full Income

$1,073.0


$20.0


1.86%

  Alt A < 70% LTV

$109.4


$12.5


11.43%

  Alt A  70%-80% LTV

$104.0


$17.0


16.35%

State Total

$1,286.4


$49.5


3.85%







Connecticut






  Full Income

$892.2


$14.0


1.57%

  Alt A < 70% LTV

$102.9


$12.0


11.66%

  Alt A  70%-80% LTV

$46.0


$6.1


13.26%

State Total

$1,041.1


$32.1


3.08%







New Jersey






  Full Income

$604.9


$26.7


4.41%

  Alt A < 70% LTV

$80.2


$9.9


12.34%

  Alt A  70%-80% LTV

$78.7


$20.0


25.41%

State Total

$763.8


$56.6


7.41%







Massachusetts






  Full Income

$666.2


$5.8


0.87%

  Alt A < 70% LTV

$61.6


$2.8


4.55%

  Alt A  70%-80% LTV

$25.8


$2.6


10.08%

State Total

$753.6


$11.2


1.49%







California






  Full Income

$463.3


$14.5


3.13%

  Alt A < 70% LTV

$137.7


$9.4


6.83%

  Alt A  70%-80% LTV

$120.9


$11.1


9.18%

State Total

$721.9


$35.0


4.85%







Virginia






  Full Income

$491.8


$5.9


1.20%

  Alt A < 70% LTV

$65.1


$0.7


1.08%

  Alt A  70%-80% LTV

$80.0


$5.8


7.25%

State Total

$636.9


$12.4


1.95%







Maryland






  Full Income

$483.6


$18.3


3.78%

  Alt A < 70% LTV

$66.0


$6.5


9.85%

  Alt A  70%-80% LTV

$72.6


$15.1


20.80%

State Total

$622.2


$39.9


6.41%







Washington






  Full Income

$304.0


$2.3


0.76%

  Alt A < 70% LTV

$3.4


$0.0


0.00%

  Alt A  70%-80% LTV

$1.7


$0.4


23.53%

State Total

$309.1


$2.7


0.87%







Texas






  Full Income

$246.3


$0.0


0.00%

  Alt A < 70% LTV

$0.1


$0.0


0.00%

  Alt A  70%-80% LTV

$0.0


$0.0


0.00%

State Total

$246.4


$0.0


0.00%







Other States*






  Full Income

$1,015.3


$24.6


2.42%

  Alt A < 70% LTV

$103.8


$10.2


9.83%

  Alt A  70%-80% LTV

$67.9


$10.1


14.87%

Other States Total

$1,187.0


$44.9


3.78%







Total all states






  Full Income

$8,962.6


$150.8


1.68%

  Alt A < 70% LTV

$941.9


$76.1


8.08%

  Alt A  70%-80% LTV

$657.9


$98.0


14.90%

Grand total

$10,562.4


$324.9


3.08%







* Includes Florida with $203.3 million total loans, of which $23.2 million are non-performing loans.

Note:  LTVs are based on current principal balances and original appraised values



SOURCE Astoria Financial Corporation



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