Astoria Financial Corporation Announces Fourth Quarter EPS of $0.09

Quarterly Cash Dividend of $0.13 Per Share Declared

Jan 27, 2010, 17:14 ET from Astoria Financial Corporation

LAKE SUCCESS, N.Y., Jan. 27 /PRNewswire-FirstCall/ -- Astoria Financial Corporation (NYSE: AF) ("Astoria," the "Company"), the holding company for Astoria Federal Savings and Loan Association ("Astoria Federal", the "Bank"), today reported net income of $8.1 million, or $0.09 diluted earnings per share ("EPS") for the quarter ended December 31, 2009 compared to $29.4  million, or $0.32 EPS, (operating income of $22.1 million, or $0.24 operating EPS), for the 2008 fourth quarter.(a)  Operating income equaled net income for the 2009 fourth quarter.

For the year ended December 31, 2009, net income totaled $27.7 million, or $0.30 EPS, (operating income of $38.6 million, or $0.42 operating EPS) compared to $75.3 million, or $0.82 EPS, (operating income of $125.8 million, or $1.38 operating EPS) for the year ended December 31, 2008.(b)

Operating income and operating EPS, representing net income and EPS determined in accordance with generally accepted accounting principles ("GAAP") excluding the effects of certain items that are not routine to our core operations, provide a meaningful comparison for evaluating Astoria's operating results and are detailed in the footnotes below.   For a reconciliation of GAAP and non-GAAP measures, please refer to the "Reconciliation of GAAP and non-GAAP Measures" table included in this release.

Commenting on the quarter and full year results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted "While the decreases in the year-over-year fourth quarter and full year results reflect the effect of a prolonged and severe job loss recession that has resulted in increased loan delinquencies, higher credit costs and non-performing loans as compared to a year ago, the fundamental operating performance of the Company on a linked quarter basis is encouraging.  Specifically, the improvement in net interest income and the net interest margin coupled with the stabilizing trend in non-performing loans, will have a positive impact on earnings in future quarters."  

(a)  Included in the 2008 fourth quarter is a tax benefit of $7.4 million, or $0.08 per diluted share, due to a tax adjustment related to the recognition of the 2008 third quarter other-than-temporary impairment ("OTTI") charge relating to Freddie Mac preferred stock.

(b)  Included in the year ended December 31, 2009 are pre-tax charges totaling $16.7 million ($10.9 million, after-tax, or $0.12 per diluted share).  These included an FDIC deposit insurance special assessment totaling $9.9 million, a $1.6 million lower of cost or market write-down on a former mortgage origination building, both recorded in the 2009 second quarter, and an OTTI, non-cash charge of $5.3 million recorded in the 2009 first quarter related to Freddie Mac preferred stock.  Included in the year ended December 31, 2008, is an OTTI non-cash, pre-tax charge totaling $77.7 million ($50.5 million, after-tax, or $0.56 per diluted share) relating to Freddie Mac preferred stock.

Board Declares Quarterly Cash Dividend of $0.13 Per Share

The Board of Directors of the Company, at their January 27, 2010 meeting, declared a quarterly cash dividend of $0.13 per common share.  The dividend is payable on March 1, 2010 to shareholders of record as of February 16, 2010.  This is the fifty-ninth consecutive quarterly cash dividend declared by the Company.

Board Sets Annual Shareholders' Meeting Date

The Board of Directors of the Company, at their January 27, 2010 meeting, established May 19, 2010 as the date for the Annual Meeting of Shareholders, with a voting record date of March 24, 2010.

Fourth Quarter and Full Year Earnings Summary

Net interest income for the quarter ended December 31, 2009 totaled $105.0 million compared to $103.1 million for the 2009 third quarter and $114.9 million for the 2008 fourth quarter.   For the year ended December 31, 2009, net interest income increased $33.4 million, or 8.4%, from the year ended December 31, 2008, to $428.8 million.

Astoria's net interest margin for the quarter ended December 31, 2009 increased to 2.15%, 8 basis points above the 2009 third quarter and was just 3 basis points lower than the 2008 fourth quarter.  The linked quarter increase was due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets.  During the 2009 fourth quarter, $2.2 billion of CDs matured (excluding Liquid CDs), with a weighted average rate of 3.28% and an original weighted average maturity of 12 months, and $1.6 billion of CDs were issued or repriced, with a weighted average rate of 1.59% and a weighted average maturity of 18 months.

For the year ended December 31, 2009, the margin was 2.13%, 22 basis points higher than the margin for the year ended December 31, 2008.   The increase, like that of the linked quarter increase, was primarily due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets.  For the year ended December 31, 2009, $7.6 billion of CDs matured (excluding Liquid CDs), with a weighted average rate of 3.31% and an original weighted average maturity of 12 months, and $6.5 billion of CDs were issued or repriced, with a weighted average rate of 1.94% and a weighted average maturity of 14 months.  "We have been successful in reducing the cost of CDs while extending the maturity terms in an effort to improve interest rate risk sensitivity," Mr. Engelke noted.    During 2009, the one-year cumulative interest rate sensitivity gap was reduced to negative 6.77% at December 31, 2009 compared to negative 19.06% at December 31, 2008, primarily due to increased mortgage cash flow, as well as a significant increase in mortgage loans repricing into one-year ARMs, coupled with the aforementioned extension of CD maturities.  For additional detail regarding the yields on interest-earning assets and costs on interest-bearing liabilities please refer to the "Average Balance Sheets" tables included in this release.

For the quarter ended December 31, 2009, a $50.0 million provision for loan losses was recorded which was equal to the provision for the previous quarter and $5.0 million greater than the $45.0 million provision for the 2008 fourth quarter.  For the year ended December 31, 2009, provisions for loan losses totaled $200.0 million compared to $69.0 million for 2008.  Mr. Engelke noted, "The significant increase in the 2009 provisions recognizes the deterioration in the financial condition of many prime residential borrowers during the year, due to the severity of a prolonged job loss recession, weakness in the national housing market and a decline in real estate values, which resulted in higher loan delinquencies, credit costs and non-performing loans."

Non-interest income for the quarter ended December 31, 2009 totaled $23.3 million compared to $19.2 million for the comparable 2008 quarter.  The $4.1 million increase is primarily due to security gains of $1.5 million and net mortgage banking income of $805,000 compared to a $2.2 million net mortgage banking loss in the 2008 fourth quarter.   For the year ended December 31, 2009, non-interest income (excluding a $5.3 OTTI charge and a $1.6 million building write-down) totaled $86.7 million compared to $88.9 million (excluding a $77.7 million OTTI charge) for the comparable 2008 period.  The $2.2 million decrease is primarily due to a $7.8 million decrease in bank owned life insurance income, a $4.6 million decrease in customer service fees and $2.3 million, net, in lower of cost or market write-downs on non-performing loans held-for-sale during 2009, partially offset by $7.4 million in securities gains and a $6.0 million increase in mortgage banking income, net.

General and administrative expense ("G&A") for the quarter ended December 31, 2009 totaled $66.8 million compared to $63.2 million for the 2009 third quarter and $56.2 million for the 2008 fourth quarter.  The linked quarter increase was primarily due to a $1.8 million increase in ESOP expense, a $1.0 million increase in real estate owned related expense and a $702,000 increase in advertising expense.  The fourth quarter year over year increase was due primarily to a $6.0 million increase in FDIC deposit insurance premiums and a $5.2 million increase in compensation and benefits expense, primarily due to increased pension expense.

For the year ended December 31, 2009, G&A totaled $270.1 million compared to $233.3 million.  The $36.8 million increase was primarily due to an $8.5 million increase in compensation and benefits expense primarily due to increased pension expense partially offset by lower ESOP expense, a $22.1 million increase in regular FDIC deposit insurance premiums and a $9.9 million FDIC deposit insurance special assessment in the 2009 second quarter, partially offset by lower occupancy, equipment and systems expense and lower advertising expense.  

Balance Sheet Summary

Total assets decreased $421.1 million and $1.7 billion for the quarter and twelve months ended December 31, 2009, respectively, and totaled $20.3 billion.  The decrease for the fourth quarter was due to a $189.1 million decrease in the loan portfolio and $293.7 million decrease in the securities portfolio.  The full year decrease was due to decreases of $454.3 million in the one-to-four family loan portfolio, $426.9 million in the multi-family/commercial real estate ("CRE") mortgage loan portfolios and $858.7 million in the securities portfolio.  At December 31, 2009, the one-to-four family loan portfolio totaled $11.9 billion, the multi-family/CRE portfolio totaled $3.4 billion and the securities portfolio totaled $3.2 billion.

For the quarter and twelve months ended December 31, 2009, one-to-four family loan originations for portfolio totaled $916.4 million and $3.1 billion, respectively, compared to $422.7 million and $3.7 billion, respectively, for the comparable 2008 periods.  One-to-four family loan prepayments for the quarter and twelve months ended December 31, 2009 totaled $891.3 million and $3.1 billion, respectively, compared to $330.3 million and $2.6 billion, respectively, for the comparable 2008 periods.  The loan-to-value ratio of the one-to-four family loan production for portfolio for the 2009 fourth quarter and full year averaged 61% and 58%, respectively, at origination and the individual loan amount averaged $700,000 and $715,000, respectively.

Deposits for the quarter ended December 31, 2009 decreased $406.4 million from the previous quarter and $667.7 million from December 31, 2008, and totaled $12.8 billion at December 31, 2009.  The decreases were due primarily to decreases in CDs.   Commenting on deposit flows, Mr. Engelke noted, "During the fourth quarter and throughout the year, accelerated mortgage prepayment activity, which outpaced our loan production, influenced our decision to reduce higher cost CDs.   Important to note, low-cost savings, money market and checking deposits increased $426.3 million, or 11.9%, for the twelve months ended December 31, 2009.  Also important to note, total deposits are comprised of retail deposits and do not include any broker or municipal deposits."

Borrowings for the quarter ended December 31, 2009 increased $40.1 million from the previous quarter and decreased $1.1 billion from December 31, 2008 to $5.9 billion.  

Stockholders' equity totaled $1.2 billion, or 5.97% of total assets at December 31, 2009.  Astoria Federal continues to be designated as well-capitalized with core, tangible, risk-based and Tier 1 risk-based capital ratios of 6.89%, 6.89%, 12.99% and 11.72%, respectively, at December 31, 2009.

Asset Quality

Non-performing loans ("NPL"), including troubled debt restructurings ("TDR") of $57.2 million, totaled $408.6 million, or 2.02% of total assets, at December 31, 2009, essentially flat from the previous quarter.  During the 2009 fourth quarter, $13.1 million of non-performing loans were either sold or classified as held-for-sale.  At December 31, 2009, one-to-four family non-performing loans totaled $330.1 million and multi-family/CRE/construction non-performing loans totaled $73.7 million compared to $323.8 million and $80.8 million, respectively, at September 30, 2009.  Important to note, of the $330.1 million of non-performing one-to-four family loans, $228.5 million, or 69%, represent residential loans which, at 180 days delinquent and annually thereafter, were reviewed and adjusted, as needed, to the estimated fair value of the underlying collateral at such time, less estimated selling costs.  Commenting on asset quality, Mr. Engelke noted, "Although non-performing loans have increased from a year ago, they have stabilized on a linked quarter basis.  In addition, although early stage loan delinquencies have increased slightly from the previous quarter, they are down from a year ago."

The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:

    
    
                                     Combined            90 +
                 30-59      60-89     30-89     Linked   Past     Total
    (In          Days        Days     Days        Qtr     Due     30-90+
     millions)  Past Due   Past Due  Past Due   Change   (NPL)   Past Due
                --------   --------  --------   ------   -----   --------
    At Dec. 31, 
     2008        $229.8     $70.1    $299.9    +$74.2    $238.6    $538.5
    At March 31, 
     2009        $215.9    $105.7    $321.6    +$21.7    $336.6    $658.2
    At June 30, 
     2009        $210.5    $109.7    $320.2    $(1.4)    $360.0    $680.2
    At Sept. 30, 
     2009        $197.6     $75.9    $273.5   $(46.7)    $408.5    $682.0
    At Dec. 31, 
     2009        $212.9     $76.3    $289.2    +$15.7    $408.6    $697.8

The table below details, as of December 31, 2009, the ten largest concentrations by state of one-to-four family loans and the respective non-performing residential 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)   Total 1-4   % of Total  Total 1-4  NPLs as %
                      Family    1-4 Family   Family    of State
    State             Loans     Portfolio     NPLs      Total
    -----             -----     ---------     ----      -----
    New York         $3,079.6        25.8%    $41.4     1.34%
    Illinois         $1,435.7        12.1%    $41.5     2.89%
    Connecticut      $1,200.4        10.1%    $28.6     2.38%
    California       $1,077.7         9.1%    $52.2     4.84%
    New Jersey         $921.9         7.8%    $41.6     4.51%
    Massachusetts      $833.3         7.0%    $16.7     2.00%
    Virginia           $785.2         6.6%    $16.2     2.06%
    Maryland           $761.3         6.4%    $38.1     5.00%
    Washington         $354.7         3.0%     $2.9     0.82%
    Florida            $267.7         2.3%    $26.1     9.75%
                       ------                 -----
    Top 10
     States         $10,717.5        90.2%   $305.3     2.85%
    All other
     states (1)      $1,177.9         9.8%    $24.8     2.11%
                     --------                 -----
    Total 1-4
     Family
     Portfolio      $11,895.4         100%   $330.1     2.78%
                    =========         ===    ======
    
    (1)  Includes 29 states and Washington, D.C.

Net loan charge-offs for the quarter ended December 31, 2009 totaled $32.6 million (of which $22.8 million represented one-to-four family loans and $9.2 million represented multi-family/CRE loans) compared to $33.6 million (of which $22.1 million represented one-to-four family loans and $11.1 million represented multi-family/CRE and construction loans) for the 2009 third quarter.  Included in the $22.8 million of one-to-four family loan net charge-offs are $17.3 million of charge-offs on $68.5 million of non-performing loans which, at 180 days delinquent and annually thereafter, were reviewed and required an adjustment to reduce the carrying value to the estimated fair value of the underlying collateral less estimated selling costs.  

Selected Asset Quality Metrics (at or for the three and twelve months ended December 31, 2009)

    
    
    ($ in        1-4      Multi-                        Consumer      
     millions)  Family    Family     CRE  Construction  & Other     Total
                ------    ------     ---  ------------  -------     -----
    Loan 
     portfolio                                                   
     balance   $11,895.4  $2,559.1  $866.8    $23.6    $330.0(1) $15,780.7(2)
    Non-
     performing   
     loans        $330.1(3)  $59.5    $8.7     $5.5      $4.8      $ 408.6(3)
    NPLs/total 
     loans          2.09%     0.38%   0.06%    0.03%     0.03%        2.59%
    Net charge-
     offs 4Q09     $22.8      $8.3    $0.9     $0.0      $0.6        $32.6
    Net charge-
     offs YTD      $76.8     $33.3    $2.6    $10.3      $2.0       $125.0
    
    (1)  Includes home equity loans of $302.4 million
    (2)  Includes $105.9 million of net unamortized premiums and deferred loan
         costs
    (3)  Includes $228.5 million reviewed and adjusted, as needed, at 180 days
         delinquent and annually thereafter

Future Outlook

Commenting on the outlook for 2010, Mr. Engelke stated, "Despite high unemployment and a weak housing market, we continue to remain cautiously optimistic as the economy begins to show signs of improvement.  We are encouraged by the stabilizing trends we are seeing in non-performing loans, which if sustained, will have a positive impact on future credit costs and earnings.   In the near term, as a result of the U.S. government's efforts to keep residential mortgage rates artificially low coupled with elevated conforming loan limits in many of the markets we operate in, loan prepayments will remain high and restrain loan and balance sheet growth.  If and when these government programs subside, mortgage rates should return to normal market levels and we should resume loan and balance sheet growth at reasonable spreads.  With respect to the net interest margin, we expect modest increases in the first half of 2010 as we continue to realize the benefit from significant CD repricing opportunities."  

Astoria Financial Corporation, with assets of $20.3 billion, is the holding company for Astoria Federal Savings and Loan Association.  Established in 1888, Astoria Federal, with deposits in New York totaling $12.8 billion, is the largest thrift depository headquartered 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 sixteen states, primarily along the East Coast, and the District of Columbia, and through correspondent relationships covering seventeen states and the District of Columbia.

Earnings Conference Call January 28, 2010 at 10:00 a.m. (ET)

The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, January 28, 2010 at 10:00 a.m. (ET).  The toll-free dial-in number is (888) 562-3356, conference ID # 47721913.  A telephone replay will be available on January 28, 2010 from 1:00 p.m. (ET) through midnight Friday, February 5, 2010 (ET).  The replay number is (800) 642-1687, ID # 47721913.  The conference call will also be simultaneously webcast on the Company's website www.astoriafederal.com and archived for one year.

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," "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 of the 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 may adversely affect our business; applicable 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 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 assume 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
                                                   December 31,   December 31,
                                                       2009           2008
                                                       ----           ----
    ASSETS
    Cash and due from banks                          $71,540         $76,233
    Repurchase agreements                             40,030          24,060
    Securities available-for-sale                    860,694       1,390,440
    Securities held-to-maturity (fair value of
     $2,367,520 and $2,643,955, respectively)      2,317,885       2,646,862
    Federal Home Loan Bank of New York stock, 
     at cost                                         178,929         211,900
    Loans held-for-sale, net                          34,274           5,272
    Loans receivable:
      Mortgage loans, net                         15,447,115      16,372,383
      Consumer and other loans, net                  333,607         340,061
                                                     -------         -------
                                                  15,780,722      16,712,444
      Allowance for loan losses                     (194,049)       (119,029)
                                                    --------        --------
    Total loans receivable, net                   15,586,673      16,593,415
    Mortgage servicing rights, net                     8,850           8,216
    Accrued interest receivable                       66,121          79,589
    Premises and equipment, net                      136,195         139,828
    Goodwill                                         185,151         185,151
    Bank owned life insurance                        401,735         401,280
    Real estate owned, net                            46,220          25,481
    Other assets                                     317,882         194,384
                                                     -------         -------
    TOTAL ASSETS                                 $20,252,179     $21,982,111
                                                 ===========     ===========
    LIABILITIES
    Deposits                                     $12,812,238     $13,479,924
    Reverse repurchase agreements                  2,500,000       2,850,000
    Federal Home Loan Bank of New York advances    3,000,000       3,738,000
    Other borrowings, net                            377,834         377,274
    Mortgage escrow funds                            114,036         133,656
    Accrued expenses and other liabilities           239,457         221,488
                                                     -------         -------
    TOTAL LIABILITIES                             19,043,565      20,800,342
                                                  ----------      ----------
    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 97,083,607 and 95,881,132
     shares outstanding, respectively)                 1,665           1,665
    Additional paid-in capital                       857,662         856,021
    Retained earnings                              1,829,199       1,864,257
    Treasury stock (69,411,281 and
     70,613,756 shares, at cost, respectively)    (1,434,362)     (1,459,211)
    Accumulated other comprehensive loss             (29,779)        (61,865)
    Unallocated common stock held by ESOP
     (4,304,635 and 5,212,668 shares,
     respectively)                                   (15,771)        (19,098)
                                                     -------         -------
    TOTAL STOCKHOLDERS' EQUITY                     1,208,614       1,181,769
                                                   ---------       ---------
    TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY                                      $20,252,179     $21,982,111
                                                 ===========     ===========
    
    
    
    ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
    
    
    CONSOLIDATED STATEMENTS OF INCOME
    (In Thousands, Except Share Data)
    
                                 For the Three             For the Twelve 
                                 Months Ended               Months Ended
                                  December 31,              December 31,
                                -----------------         -----------------
                                2009         2008         2009         2008
                                ----         ----         ----         ----
    Interest income:
      Mortgage loans:
        One-to-four family    $144,472     $168,298     $609,724     $637,297
        Multi-family, 
         commercial real
         estate and 
         construction           51,941       57,939      217,480      234,922
      Consumer and 
       other loans               2,787        3,613       10,882       17,325
      Mortgage-backed 
       and other securities     33,348       45,218      149,655      185,160
      Federal funds sold, 
       repurchase agreements 
       and interest-earning 
       cash accounts                54           71          448        1,939
      Federal Home Loan 
       Bank of New York stock    2,502        1,895        9,352       13,068
                                 -----        -----        -----       ------
    Total interest income      235,104      277,034      997,541    1,089,711
                               -------      -------      -------    ---------
    Interest expense:
      Deposits                  67,302       92,876      315,371      393,897
      Borrowings                62,847       69,213      253,401      300,430
                                ------       ------      -------      -------
    Total interest expense     130,149      162,089      568,772      694,327
                               -------      -------      -------      -------
    
    Net interest income        104,955      114,945      428,769      395,384
    Provision for loan losses   50,000       45,000      200,000       69,000
                                ------       ------      -------       ------
    Net interest income 
     after provision for 
     loan losses                54,955       69,945      228,769      326,384
                                ------       ------      -------      -------
    Non-interest income:
      Customer service fees     14,622       14,828       57,887       62,489
      Other loan fees            1,081          929        3,918        3,985
      Gain on sales of 
       securities                1,494            -        7,426            -
      Other-than-temporary 
       impairment write-down 
       of securities                 -            -       (5,300)     (77,696)
      Mortgage banking 
       income (loss), net          805       (2,199)       5,567         (413)
      Income from bank 
       owned life insurance      2,372        4,063        8,950       16,733
      Other                      2,975        1,587        1,353        6,082
                                 -----        -----        -----        -----
    Total non-interest income   23,349       19,208       79,801       11,180
                                ------       ------       ------       ------
    Non-interest expense:
      General and administrative:
        Compensation 
         and benefits           34,105       28,886      133,318      124,846
        Occupancy, equipment 
         and systems            16,320       16,342       64,685       66,553
        Federal deposit 
         insurance premiums      6,568          545       24,300        2,213
        Federal deposit 
         insurance special 
         assessment                  -            -        9,851           -
        Advertising              1,663        2,147        5,404       7,116
        Other                    8,179        8,325       32,498      32,532
                                 -----        -----       ------      ------
    Total non-interest expense  66,835       56,245      270,056     233,260
                                ------       ------      -------     -------
    Income before income 
     tax expense                11,469       32,908       38,514     104,304
    Income tax expense           3,329        3,460       10,830      28,962
                                 -----        -----       ------      ------
    Net income                  $8,140      $29,448      $27,684     $75,342
                                ======      =======      =======     =======
    
    Basic earnings per 
     common share                $0.09        $0.33        $0.30       $0.83
                                 =====        =====        =====       =====
    
    Diluted earnings per 
     common share                $0.09        $0.32        $0.30       $0.82
                                 =====        =====        =====       =====
    
    Basic weighted average 
     common shares          90,927,734   89,749,299   90,593,060  89,580,322
    
    Diluted weighted average 
     common and common      
     equivalent shares      90,958,013   89,966,383   90,602,189  90,406,527
    
    
    
    ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
    
    
    AVERAGE BALANCE SHEETS
    ----------------------
    (Dollars in Thousands)
    
                                     For the Three Months Ended December 31,
                                     ---------------------------------------
                                                       2009
                                          ------------------------------
                                                                 Average
                                          Average                 Yield/
                                          Balance     Interest     Cost
                                          -------     --------     ----
                                                               (Annualized)
     Assets:
       Interest-earning assets:
         Mortgage loans (1):
           One-to-four family         $12,082,069   $144,472         4.78%
           Multi-family, commercial
            real estate and 
            construction                3,507,603     51,941         5.92
         Consumer and other loans (1)     334,514      2,787         3.33
                                          -------      -----
         Total loans                   15,924,186    199,200         5.00
         Mortgage-backed and other
          securities (2)                3,261,507     33,348         4.09
         Repurchase agreements and
          interest-earning cash
          accounts                        140,917         54         0.15
         Federal Home Loan Bank stock     176,841      2,502         5.66
                                          -------      -----
       Total interest-earning
        assets                         19,503,451    235,104         4.82
                                                     -------
       Goodwill                           185,151
       Other non-interest-earning
        assets                            778,275
                                          -------
     Total assets                     $20,466,877
                                      ===========
    
     Liabilities and stockholders'
      equity:
       Interest-bearing liabilities:
         Savings                       $1,986,183      2,025         0.41
         Money market                     327,318        362         0.44
         NOW and demand deposit         1,569,940        259         0.07
         Liquid certificates of
          deposit                         756,872      1,018         0.54
                                          -------      -----
         Total core deposits            4,640,313      3,664         0.32
         Certificates of deposit        8,361,153     63,638         3.04
                                        ---------     ------
         Total deposits                13,001,466     67,302         2.07
         Borrowings                     5,830,420     62,847         4.31
                                        ---------     ------
       Total interest-bearing
        liabilities                    18,831,886    130,149         2.76
                                                     -------
       Non-interest-bearing
        liabilities                       431,510
                                          -------
     Total liabilities                 19,263,396
     Stockholders' equity               1,203,481
                                        ---------
     Total liabilities and
      stockholders' equity            $20,466,877
                                      ===========
    
     Net interest income/net
      interest rate spread (3)                      $104,955         2.06%
                                                    ========         ====
     Net interest-earning assets/
      net interest margin (4)            $671,565                    2.15%
                                         ========                    ====
     Ratio of interest-earning
      assets to interest-bearing
      liabilities                           1.04x
                                            =====
    
    
                                    For the Three Months Ended December 31,
                                    ---------------------------------------
                                                          2008
                                          ------------------------------
                                                                 Average
                                          Average                 Yield/
                                          Balance     Interest     Cost
                                          -------     --------     ----
                                                               (Annualized)
     Assets:
       Interest-earning assets:
         Mortgage loans (1):
           One-to-four family         $12,500,269   $168,298         5.39%
           Multi-family, commercial
            real estate and 
            construction                3,927,039     57,939         5.90
         Consumer and other loans (1)     339,951      3,613         4.25
                                          -------      -----
         Total loans                   16,767,259    229,850         5.48
         Mortgage-backed and other
          securities (2)                4,101,024     45,218         4.41
         Repurchase agreements and
          interest-earning cash
          accounts                         37,974         71         0.75
         Federal Home Loan Bank stock     223,571      1,895         3.39
                                          -------      -----
       Total interest-earning
        assets                         21,129,828    277,034         5.24
                                                     -------
       Goodwill                           185,151
       Other non-interest-earning
        assets                            774,382
                                          -------
     Total assets                     $22,089,361
                                      ===========
    
     Liabilities and stockholders'
      equity:
       Interest-bearing liabilities:
         Savings                       $1,830,246      1,866         0.41
         Money market                     294,471        775         1.05
         NOW and demand deposit         1,449,421        323         0.09
         Liquid certificates of
          deposit                       1,019,222      6,210         2.44
                                        ---------      -----
         Total core deposits            4,593,360      9,174         0.80
         Certificates of deposit        8,602,462     83,702         3.89
                                        ---------     ------
         Total deposits                13,195,822     92,876         2.82
         Borrowings                     7,312,640     69,213         3.79
                                        ---------     ------
       Total interest-bearing
        liabilities                    20,508,462    162,089         3.16
                                                     -------
       Non-interest-bearing
        liabilities                       390,758
                                          -------
     Total liabilities                 20,899,220
     Stockholders' equity               1,190,141
                                        ---------
     Total liabilities and
      stockholders' equity            $22,089,361
                                      ===========
    
     Net interest income/net
      interest rate spread (3)                      $114,945         2.08%
                                                    ========         ====
     Net interest-earning assets/
      net interest margin (4)            $621,366                    2.18%
                                         ========                    ====
     Ratio of interest-earning
      assets to interest-bearing
      liabilities                           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 Twelve Months Ended December 31,
                                     ----------------------------------------
                                                         2009
                                             ----------------------------
                                                                  Average
                                             Average               Yield/
                                             Balance    Interest    Cost
                                             -------    --------    ----
     Assets:
       Interest-earning assets:
         Mortgage loans (1):
           One-to-four family            $12,166,413   $609,724     5.01%
           Multi-family, commercial real
            estate and construction        3,680,486    217,480     5.91
         Consumer and other loans (1)        336,545     10,882     3.23
                                             -------     ------
         Total loans                      16,183,444    838,086     5.18
         Mortgage-backed and other
          securities (2)                   3,494,966    149,655     4.28
         Federal funds sold, repurchase
          agreements and interest-earning 
          cash accounts                      226,689        448     0.20
         Federal Home Loan Bank stock        181,472      9,352     5.15
                                             -------      -----
       Total interest-earning assets      20,086,571    997,541     4.97
                                                        -------
       Goodwill                              185,151
       Other non-interest-earning
        assets                               822,036
                                             -------
     Total assets                        $21,093,758
                                         ===========
    
     Liabilities and stockholders'
      equity:
       Interest-bearing liabilities:
         Savings                          $1,928,842      7,806     0.40
         Money market                        317,168      2,095     0.66
         NOW and demand deposit            1,534,131      1,064     0.07
         Liquid certificates of deposit      884,436     10,659     1.21
                                             -------     ------
         Total core deposits               4,664,577     21,624     0.46
         Certificates of deposit           8,728,580    293,747     3.37
                                           ---------    -------
         Total deposits                   13,393,157    315,371     2.35
         Borrowings                        6,051,655    253,401     4.19
                                           ---------    -------
       Total interest-bearing
        liabilities                       19,444,812    568,772     2.93
                                                        -------
       Non-interest-bearing
        liabilities                          451,677
                                             -------
     Total liabilities                    19,896,489
     Stockholders' equity                  1,197,269
                                           ---------
     Total liabilities and
      stockholders' equity               $21,093,758
                                         ===========
    
     Net interest income/net
      interest rate spread (3)                         $428,769     2.04%
                                                       ========     ====
     Net interest-earning assets/
      net interest margin (4)               $641,759                2.13%
                                            ========                ====
     Ratio of interest-earning
      assets to interest-bearing
      liabilities                              1.03x
                                               =====
    
    
                                     For the Twelve Months Ended December 31,
                                     ----------------------------------------
                                                        2008
                                          -----------------------------
                                                                Average
                                          Average                Yield/
                                          Balance     Interest    Cost
                                          -------     --------    ----
     Assets:
       Interest-earning assets:
         Mortgage loans (1):
           One-to-four family         $11,962,010    $637,297     5.33%
           Multi-family, commercial
            real estate and 
            construction                3,947,413     234,922     5.95
         Consumer and other loans (1)     345,019      17,325     5.02
                                          -------      ------
         Total loans                   16,254,442     889,544     5.47
         Mortgage-backed and other
          securities (2)                4,194,320     185,160     4.41
         Federal funds sold,
          repurchase agreements and
          interest-earning cash
          accounts                         88,650       1,939     2.19
         Federal Home Loan Bank stock     207,535      13,068     6.30
                                          -------      ------
       Total interest-earning
        assets                         20,744,947   1,089,711     5.25
                                                    ---------
       Goodwill                           185,151
       Other non-interest-earning
        assets                            820,216
                                          -------
     Total assets                     $21,750,314
                                      ===========
    
     Liabilities and stockholders'
      equity:
       Interest-bearing liabilities:
         Savings                       $1,863,622       7,551     0.41
         Money market                     311,910       3,189     1.02
         NOW and demand deposit         1,470,402       1,290     0.09
         Liquid certificates of
          deposit                       1,225,153      36,792     3.00
                                        ---------      ------
         Total core deposits            4,871,087      48,822     1.00
         Certificates of deposit        8,192,114     345,075     4.21
                                        ---------     -------
         Total deposits                13,063,201     393,897     3.02
         Borrowings                     7,069,155     300,430     4.25
                                        ---------     -------
       Total interest-bearing
        liabilities                    20,132,356     694,327     3.45
                                                      -------
       Non-interest-bearing
        liabilities                       410,082
                                          -------
     Total liabilities                 20,542,438
     Stockholders' equity               1,207,876
                                        ---------
     Total liabilities and
      stockholders' equity            $21,750,314
                                      ===========
    
     Net interest income/net
      interest rate spread (3)                       $395,384     1.80%
                                                     ========     ====
     Net interest-earning assets/
      net interest margin (4)            $612,591                 1.91%
                                         ========                 ====
     Ratio of interest-earning
      assets to interest-bearing
      liabilities                           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 Twelve Months Ended  
                                        December 31,      December 31,  
                                        -----------       ------------       
                                     2009       2008     2009      2008
                                     ----       ----     ----      ---- 
                                       (Annualized)          
    Selected Returns and Financial
     Ratios
    ------------------------------    
      Return on average 
       stockholders' equity          2.71 %     9.90 %   2.31 %     6.24 %
      Return on average tangible 
       stockholders' equity (1)      3.20      11.72     2.74       7.37  
      Return on average assets       0.16       0.53     0.13       0.35  
      General and administrative
       expense to average assets     1.31       1.02     1.28       1.07  
      Efficiency ratio (2)          52.09      41.93    53.10      57.37 
      Net interest rate spread       2.06       2.08     2.04       1.80  
      Net interest margin            2.15       2.18     2.13       1.91  
                                             
    Selected Non-GAAP Returns
     and Financial Ratios (3)
    -------------------------
      Non-GAAP return on average  
       stockholders' equity          2.71 %     7.42 %   3.22 %    10.42%
      Non-GAAP return on average 
       tangible stockholders' 
       equity (1)                    3.20       8.78     3.81      12.30 
      Non-GAAP return on average
       assets                        0.16       0.40     0.18       0.58  
      Non-GAAP general and 
       administrative expense to
       average assets                1.31       1.02     1.23       1.07  
      Non-GAAP efficiency ratio (2) 52.09      41.93    50.48      48.17 
                                             
    Asset Quality Data (dollars 
     in thousands)
    ---------------------------         
      Non-performing assets (4)                      $454,792   $264,101     
      Non-performing loans (4)                        408,572    238,620     
        Loans delinquent 90 days or 
         more and still accruing 
         interest                                         600         33    
         Non-accrual loans                            407,972    238,587     
      Loans 60-89 days delinquent                      76,314     70,062     
      Loans 30-59 days delinquent                     212,894    229,834     
      Net charge-offs             $32,589    $12,289  124,980     28,917     
                                             
      Non-performing loans/total 
       loans                                             2.59 %     1.43 %
      Non-performing loans/total
       assets                                            2.02       1.09     
      Non-performing assets/total 
       assets                                            2.25       1.20     
      Allowance for loan losses/
       non-performing loans                             47.49      49.88     
      Allowance for loan losses/
       non-accrual loans                                47.56      49.89     
      Allowance for loan losses/
       total loans                                       1.23       0.71     
      Net charge-offs to average 
       loans outstanding             0.82 %     0.29 %   0.77       0.18
                                             
    Capital Ratios (Astoria Federal)
    --------------------------------        
      Tangible                                           6.89 %     6.39 %
      Core                                               6.89       6.39     
      Risk-based                                        12.99      12.02     
      Tier 1 risk-based                                 11.72      11.07     
                                             
    Other Data  
    ----------                            
      Cash dividends paid per common
       share                        $0.13      $0.26    $0.52      $1.04 
      Book value per share (5)                          13.03      13.03     
      Tangible book value per 
       share (6)                                        11.03      10.99     
      Tangible stockholders' equity/
       tangible assets (1) (7)                           5.10 %     4.57 %
      Mortgage loans serviced for
       others (in thousands)                       $1,379,259 $1,225,656   
      Full time equivalent employees                    1,592      1,575   
                                             
                                             
                                             
    (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 page 14 for a reconciliation of GAAP measures to non-GAAP measures
        for the three and twelve months ended December 31, 2009 and 2008.
    (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 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 December 31, 2009    At September 30, 2009 
                              --------------------    ---------------------
                                         Weighted                   Weighted
                                         Average                    Average
                             Balance      Rate (1)      Balance     Rate (1)
                             -------      -------       -------     -------
    Selected interest-
     earning assets:
    ------------------
      Mortgage loans,
       gross (2):
      ---------------
        One-to-
         four family        $11,565,280    5.22%     $11,681,844     5.36%  
        ------------        -----------    ----      -----------     ----   
        Multi-family,
         commercial
         real estate and
         construction         3,375,795     6.03        3,442,046      6.03 
         -------------        ---------     ----        ---------      ---- 
      Mortgage-backed
       and other
       securities (3)        3,178,579     4.04        3,472,308      4.08  
      ---------------        ---------     ----        ---------      ----  
    
    
    Interest-bearing
     liabilities:
    -------------
      Savings               2,041,701      0.40        1,959,171      0.40  
      -------               ---------      ----        ---------      ----   
      Money market            326,842      0.44          330,299      0.44  
      ------------            -------      ----          -------      ----   
      NOW and demand
       deposit              1,646,633      0.06        1,522,017      0.06   
      --------------        ---------      ----        ---------      ----  
      Liquid
       certificates
       of deposit             711,509       0.50         812,141      0.64    
      -------------           -------       ----         -------      ----    
      Total core
       deposits             4,726,685       0.30       4,623,628      0.33   
      ----------            ---------       ----       ---------      ----   
      Certificates of
       deposit              8,085,553       2.79       8,594,991      3.15   
      ---------------       ---------       ----       ---------      ----   
      Total deposits      12,812,238        1.87      13,218,619      2.16  
      --------------      ----------        ----      ----------      ----  
      Borrowings, net      5,877,834        4.17       5,837,723      4.24  
      ---------------      ---------        ----       ---------      ----  
    
    
    
    ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
    
    END OF PERIOD BALANCES AND RATES
    (Dollars in Thousands)
    
    
                               At December 31, 2008
                               --------------------    
                                            Weighted       
                                            Average          
                              Balance        Rate (1)
                              -------        -------     
    Selected interest-
     earning assets:
     --------------
      Mortgage loans,
       gross (2):
      ---------------
        One-to-four
         family              12,172,075         5.64%
        -----------          ----------         ----
        Multi-family,
         commercial
         real estate
        and construction      3,850,762         5.98
        ----------------      ---------         ----
      Mortgage-backed and
       other securities (3)   4,037,302         4.34
      ---------------------   ---------         ----
    
    
    Interest-bearing
     liabilities:
    -------------
      Savings                 1,832,790         0.40
      -------                 ---------         ----
      Money market              289,135         1.03
      ------------              -------         ----
      NOW and demand
       deposit                1,466,916         0.06
      --------------          ---------         ----
      Liquid
       certificates
       of deposit               981,733         2.32
      -------------             -------         ----
      Total core
       deposits               4,570,574         0.74
      ----------              ---------         ----
      Certificates of
       deposit                8,909,350         3.83
      ---------------         ---------         ----
      Total deposits         13,479,924         2.78
      --------------         ----------         ----
      Borrowings, net         6,965,274         3.72
      ---------------         ---------         ----
    
    (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 charges and
    related tax effects detailed in the following tables (non-GAAP
    measures) provide a meaningful comparison for effectively evaluating
    Astoria's operating results.
    
    
    
                                    For the Three Months Ended
                                    --------------------------
                                         December 31, 2009
                                         -----------------
                                 GAAP         Adjustments       Non-GAAP
                                 ---          -----------       --------
    
    
    Net interest income        $104,955             $-           $104,955
    -------------------         --------           ---           --------
    Provision for loan losses    50,000              -             50,000
    -------------------------    ------            ---             ------
    
    Net interest income after 
     provision for loan losses   54,955              -             54,955
    --------------------------   ------            ---             ------
    Non-interest income          23,349              -             23,349
    -------------------          ------            ---             ------
    Non-interest expense 
     (general and administrative
     expense)                    66,835              -             66,835
                                 ------            ---             ------
    
    Income before income tax 
     expense                     11,469              -             11,469
    ------------------------     ------            ---             ------
    Income tax expense            3,329              -              3,329
    ------------------            -----            ---              -----
    
    
    Net income (2)               $8,140             $-             $8,140
    --------------               ------            ---             ------
    
    Basic earnings per common 
     share (2)                    $0.09             $-              $0.09
    -------------------------     -----            ---              -----
    
    Diluted earnings per common 
     share (2)                    $0.09             $-              $0.09
    ---------------------------   -----            ---              -----
    
    
    
                                    For the Three Months Ended
                                    --------------------------
                                        December 31, 2008
                                        -----------------
                                                      
                                           GAAP    Adjustments (1)   Non-GAAP
                                           ----    ---------------   --------
    
    
    Net interest income                  $114,945           $-      $114,945
    -------------------                  --------          ---      --------
    Provision for loan losses              45,000            -        45,000
    -------------------------              ------          ---        ------
    
    Net interest income after 
     provision for loan losses
    --------------------------             69,945            -        69,945 
                                           ------          ---        ------
    Non-interest income                    19,208            -        19,208
    -------------------                    ------          ---        ------
    Non-interest expense 
     (general and administrative 
     expense)                              56,245            -       56,245
                                           ------          ---       ------ 
    
    Income before income tax expense       32,908            -        32,908
    --------------------------------       ------          ---        ------
    Income tax expense                      3,460        7,378        10,838
    ------------------                      -----        -----        ------
    
    
    Net income (2)                        $29,448      $(7,378)      $22,070
    --------------                        -------       -------      -------
    
    Basic earnings per common 
     share (2)                              $0.33       $(0.08)       $0.24(3)
    -------------------------               -----       ------        -------
    
    Diluted earnings per common
     share (2)                              $0.32       $(0.08)        $0.24
    ---------------------------             -----       ------         -----
    
    
    
                                   For the Twelve Months Ended
                                   --------------------------
                                       December 31, 2009
                                       -----------------
                                             
                              GAAP       Adjustments (4)    Non-GAAP
                              ----       --------------     --------
    
    Net interest income     $428,769             $-         $428,769
    -------------------     --------            ---         --------
    Provision for loan
     losses                  200,000              -          200,000
    ------------------       -------            ---          -------
    Net interest income 
     after provision for 
     loan losses             228,769              -          228,769 
    -------------------      -------            ---          -------
    Non-interest income       79,801          6,888           86,689
    -------------------       ------          -----           ------
    Non-interest expense 
     (general and 
     administrative 
     expense)                270,056         (9,851)         260,205 
                             -------         -------         ------- 
    
    
    Income before income
     tax expense              38,514         16,739           55,253
    --------------------      ------         ------           ------
    Income tax expense        10,830          5,859           16,689
    ------------------        ------          -----           ------
    
    
    Net income (2)           $27,684        $10,880          $38,564
    --------------           -------        -------          -------
    
    
    Basic earnings per
     common share (2)          $0.30          $0.12            $0.42
    ------------------         -----          -----            -----
    
    
    Diluted earnings per
     common share (2)          $0.30          $0.12            $0.42
    --------------------       -----          -----            -----
    
    
    For the Twelve Months Ended
                                    --------------------------
                                        December 31, 2008
                                        -----------------
                                                    
                                 GAAP      Adjustments (1)     Non-GAAP
                                 ----      --------------      --------
    
    
    Net interest income          $395,384           $-        $395,384
    -------------------          --------          ---        --------
    Provision for loan losses      69,000            -          69,000
    -------------------------      ------          ---          ------
    
    Net interest income 
     after provision for 
     loan losses                  326,384            -         326,384
    --------------------          -------          ---         -------
    Non-interest income            11,180       77,696          88,876
    -------------------            ------       ------          ------
    Non-interest expense 
     (general and 
     administrative 
     expense)                     233,260            -         233,260
    --------------------          -------          ---         ------- 
    
    
    Income before income tax
     expense                      104,304       77,696         182,000
    ------------------------      -------       ------         -------
    Income tax expense             28,962       27,194          56,156
    ------------------             ------       ------          ------
    
    
    Net income (2)                $75,342      $50,502        $125,844
    --------------                -------       -------       --------
    
    
    Basic earnings per common 
     share (2)                     $0.83         $0.56           $1.39
    -------------------------      -----         -----           -----
    
    
    Diluted earnings per common 
     Share (2)                     $0.82         $0.56           $1.38
    ---------------------------    -----         -----           ----- 
    
    
    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 the other-than-temporary impairment write-
         down of securities charge recorded in the 2008 third quarter and
         subsequent tax adjustment recorded in the 2008 fourth quarter as a
         result of tax changes due to the enactment of the Emergency Economic
         Stabilization Act in October 2008.
    (2)  Non-GAAP net income and non-GAAP EPS are also referred to as
         operating income and operating EPS throughout this release.
    (3)  Figures do not cross foot due to rounding.
    (4)  Non-interest income adjustment relates to the $1.6 million lower of
         cost or market write-down of premises and equipment held-for-sale
         recorded in the 2009 second quarter and the $5.3 million other-
         than-temporary impairment write-down of securities charge recorded
         in the 2009 first quarter and non-interest expense adjustment
         relates to the federal deposit insurance special assessment recorded
         in the 2009 second quarter.
    
    
    ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
    
    
    One-to-Four Family Residential Loan Portfolio - Geographic Analysis
    (Dollars in millions)
    
                                   At December 31, 2009
                            ---------------------------------------
                                                      Non-performing
                                                           loans
                            Total     Non-performing  as % of total
    State                   loans          loans          loans
    -----                   -----     --------------  -------------
    New York
       Full Income         $2,736.7           $22.9           0.84%
       Alt A < 70% LTV       $261.0            $9.1           3.49%
       Alt A  70%-80% LTV     $81.9            $9.4          11.48%
                              -----            ----          
    State Total            $3,079.6           $41.4           1.34%
    
    Illinois
       Full Income         $1,170.0           $14.0           1.20%
       Alt A < 70% LTV       $128.1            $9.9           7.73%
       Alt A  70%-80% LTV    $137.6           $17.6          12.79%
                             ------           -----          
    State Total            $1,435.7           $41.5           2.89%
    
    Connecticut
       Full Income         $1,009.0            $8.5           0.84%
       Alt A < 70% LTV       $126.5            $8.6           6.80%
       Alt A  70%-80% LTV     $64.9           $11.5          17.72%
                              -----           -----          
    State Total            $1,200.4           $28.6           2.38%
    
    California
       Full Income           $731.6           $22.0           3.01%
       Alt A < 70% LTV       $175.3           $10.5           5.99%
       Alt A  70%-80% LTV    $170.8           $19.7          11.53%
                             ------           -----          
    State Total            $1,077.7           $52.2           4.84%
    
    New Jersey
       Full Income           $732.3           $22.0           3.00%
       Alt A < 70% LTV        $96.4            $7.2           7.47%
       Alt A  70%-80% LTV     $93.2           $12.4          13.30%
                              -----           -----          
    State Total              $921.9           $41.6           4.51%
    
    Massachusetts
       Full Income           $716.6            $6.7           0.93%
       Alt A < 70% LTV        $77.1            $3.9           5.06%
       Alt A  70%-80% LTV     $39.6            $6.1          15.40%
                              -----            ----          
    State Total              $833.3           $16.7           2.00%
    
    Virginia
       Full Income           $600.8            $8.9           1.48%
       Alt A < 70% LTV        $76.1            $0.9           1.18%
       Alt A  70%-80% LTV    $108.3            $6.4           5.91%
                             ------            ----            
    State Total              $785.2           $16.2           2.06%
    
    Maryland
       Full Income           $587.6           $12.9           2.20%
       Alt A < 70% LTV        $80.1            $5.8           7.24%
       Alt A  70%-80% LTV     $93.6           $19.4          20.73%
                              -----           -----          
    State Total              $761.3           $38.1           5.00%
    
    Washington
       Full Income           $343.9            $1.4           0.41%
       Alt A < 70% LTV         $7.6            $1.5          19.74%
       Alt A  70%-80% LTV      $3.2            $0.0           0.00%
                               ----            ----           
    State Total              $354.7            $2.9           0.82%
    
    Florida
       Full Income           $178.6           $13.8           7.73%
       Alt A < 70% LTV        $51.9            $4.9           9.44%
       Alt A  70%-80% LTV     $37.2            $7.4          19.89%
                              -----            ----          
    State Total              $267.7           $26.1           9.75%
    
    Other States
       Full Income         $1,033.8           $14.2           1.37%
       Alt A < 70% LTV        $80.6            $3.9           4.84%
       Alt A  70%-80% LTV     $63.5            $6.7          10.55%
                              -----            ----          
    State Total            $1,177.9           $24.8           2.11%
    
    Total all states
       Full Income         $9,840.9          $147.3           1.50%
       Alt A < 70% LTV     $1,160.7           $66.2           5.70%
       Alt A  70%-80% LTV    $893.8          $116.6          13.05%
                             ------          ------          
    Grand total           $11,895.4          $330.1           2.78%
    
    Note:  LTVs are based on current principal balances and original
           appraised values

SOURCE Astoria Financial Corporation



RELATED LINKS

http://www.astoriafederal.com