10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from         to        

Commission file number 001-11967

ASTORIA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	11-3170868
(State or other jurisdiction of	(I.R.S. Employer Identification
incorporation or organization)	Number)

One Astoria Federal Plaza, Lake Success, New York	11042-1085
(Address of principal executive offices)	(Zip Code)

(516) 327-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all the reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  x  NO  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES  x  NO  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as these items are defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  o  NO  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Classes of Common Stock	Number of Shares Outstanding, April 30, 2013
$0.01 Par Value	98,883,526

		Page
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Consolidated Statements of Financial Condition at March 31, 2013 and December 31, 2012	2
	Consolidated Statements of Income for the Three Months Ended March 31, 2013 and 2012	3
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2013 and 2012	4
	Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2013	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	67
Item 4.	Controls and Procedures	70
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	72
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
Item 3.	Defaults Upon Senior Securities	72
Item 4.	Mine Safety Disclosures	72
Item 5.	Other Information	72
Item 6.	Exhibits	72
Signatures		73

1

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

	(Unaudited)
(In Thousands, Except Share Data)	At March 31, 2013			At December 31, 2012
Assets:
Cash and due from banks	$	127,829		$	121,473
Available-for-sale securities:
Encumbered	68,313			79,851
Unencumbered	360,061			256,449
Total available-for-sale securities	428,374			336,300
Held-to-maturity securities, fair value of $1,732,726 and $1,725,090, respectively:
Encumbered	1,133,462			1,133,193
Unencumbered	575,965			566,948
Total held-to-maturity securities	1,709,427			1,700,141
Federal Home Loan Bank of New York stock, at cost	145,502			171,194
Loans held-for-sale, net	31,548			76,306
Loans receivable	12,911,783			13,223,972
Allowance for loan losses	(144,250		)	(145,501		)
Loans receivable, net	12,767,533			13,078,471
Mortgage servicing rights, net	8,465			6,947
Accrued interest receivable	42,497			41,688
Premises and equipment, net	114,531			115,632
Goodwill	185,151			185,151
Bank owned life insurance	417,863			418,155
Real estate owned, net	23,487			28,523
Other assets	208,317			216,661
Total assets	$	16,210,524		$	16,496,642
Liabilities:
Deposits:
Savings	$	2,752,009		$	2,802,298
Money market	1,786,472			1,586,556
NOW and demand deposit	2,137,817			2,094,733
Certificates of deposit	3,769,035			3,960,371
Total deposits	10,445,333			10,443,958
Federal funds purchased	125,000			—
Reverse repurchase agreements	1,100,000			1,100,000
Federal Home Loan Bank of New York advances	2,307,000			2,897,000
Other borrowings, net	376,629			376,496
Mortgage escrow funds	151,017			113,101
Accrued expenses and other liabilities	268,053			272,098
Total liabilities	14,773,032			15,202,653
Stockholders’ Equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized:
Series C (150,000 shares authorized; and 135,000 and -0- shares issued and outstanding, respectively)	129,796			—
Common stock, $.01 par value (200,000,000 shares authorized; 166,494,888 shares issued; and 98,911,526 and 98,419,318 shares outstanding, respectively)	1,665			1,665
Additional paid-in capital	881,966			884,689
Retained earnings	1,895,521			1,891,022
Treasury stock (67,583,362 and 68,075,570 shares, at cost, respectively)	(1,396,584		)	(1,406,755		)
Accumulated other comprehensive loss	(72,299		)	(73,090		)
Unallocated common stock held by ESOP (702,449 and 967,013 shares, respectively)	(2,573		)	(3,542		)
Total stockholders’ equity	1,437,492			1,293,989
Total liabilities and stockholders’ equity	$	16,210,524		$	16,496,642

See accompanying Notes to Consolidated Financial Statements.

2

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

	For the Three Months Ended
	March 31,
(In Thousands, Except Share Data)	2013		2012
Interest income:
Residential mortgage loans	$	80,207	$	99,292
Multi-family and commercial real estate mortgage loans	38,623		36,470
Consumer and other loans	2,228		2,341
Mortgage-backed and other securities	10,899		18,021
Interest-earning cash accounts	55		53
Federal Home Loan Bank of New York stock	2,029		1,602
Total interest income	134,041		157,779
Interest expense:
Deposits	17,321		29,427
Borrowings	32,688		40,156
Total interest expense	50,009		69,583
Net interest income	84,032		88,196
Provision for loan losses	9,126		10,000
Net interest income after provision for loan losses	74,906		78,196
Non-interest income:
Customer service fees	9,046		10,482
Other loan fees	522		887
Gain on sales of securities	—		2,477
Mortgage banking income, net	4,776		1,355
Income from bank owned life insurance	2,136		2,423
Other	1,798		1,943
Total non-interest income	18,278		19,567
Non-interest expense:
General and administrative:
Compensation and benefits	31,998		42,160
Occupancy, equipment and systems	19,785		16,724
Federal deposit insurance premiums	10,184		11,203
Advertising	1,340		1,834
Other	8,244		10,280
Total non-interest expense	71,551		82,201
Income before income tax expense	21,633		15,562
Income tax expense	7,781		5,566
Net income	$	13,852	$	9,996
Basic earnings per common share	$	0.14	$	0.11
Diluted earnings per common share	$	0.14	$	0.11
Basic weighted average common shares	96,674,729		95,018,867
Diluted weighted average common and common equivalent shares	96,674,729		95,018,867

See accompanying Notes to Consolidated Financial Statements.

3

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

	For the Three Months Ended
	March 31,
(In Thousands)	2013		2012
Net income	$	13,852	$	9,996
Other comprehensive income, net of tax:
Net unrealized gain (loss) on securities available-for-sale:
Net unrealized holding gain (loss) on securities arising during the period	130		(814		)
Reclassification adjustment for gain included in net income	—		(1,604		)
Net unrealized gain (loss) on securities available-for-sale	130		(2,418		)
Net actuarial loss adjustment on pension plans and other postretirement benefits:
Net actuarial loss adjustment arising during the period	—		24,286
Reclassification adjustment for net actuarial loss included in net income	627		2,201
Net actuarial loss adjustment on pension plans and other postretirement benefits	627		26,487
Prior service cost adjustment on pension plans and other postretirement benefits:
Prior service cost adjustment arising during the period	—		(3,537		)
Reclassification adjustment for prior service cost included in net income	34		2
Prior service cost adjustment on pension plans and other postretirement benefits	34		(3,535		)
Reclassification adjustment for loss on cash flow hedge included in net income	—		48
Total other comprehensive income, net of tax	791		20,582
Comprehensive income	$	14,643	$	30,578

See accompanying Notes to Consolidated Financial Statements.

4

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

For the Three Months Ended March 31, 2013

												Accumulated	Unallocated
						Additional						Other	Common
			Preferred		Common	Paid-in		Retained		Treasury		Comprehensive	Stock Held
(In Thousands, Except Share Data)	Total		Stock		Stock	Capital		Earnings		Stock		Loss	by ESOP
Balance at December 31, 2012	$ 1,293,989		$	—	$  1,665	$  884,689		$ 1,891,022		$ (1,406,755	)	$  (73,090)	$  (3,542)
Net income	13,852		—		—	—		13,852		—		—	—
Other comprehensive income, net of tax	791		—		—	—		—		—		791	—
Issuance of Preferred Stock, Series C (135,000 shares)	129,796		129,796		—	—		—		—		—	—
Dividends on common stock ($0.04 per share)	(3,918	)	—		—	—		(3,918	)	—		—	—
Restricted stock grants (531,110 shares)	—		—		—	(5,152	)	(5,823	)	10,975		—	—
Forfeitures of restricted stock (38,902 shares)	—		—		—	446		358		(804	)	—	—
Stock-based compensation	1,727		—		—	1,697		30		—		—	—
Net tax benefit shortfall from stock-based compensation	(1,345	)	—		—	(1,345	)	—		—		—	—
Allocation of ESOP stock	2,600		—		—	1,631		—		—		—	969
Balance at March 31, 2013	$ 1,437,492		$	129,796	$  1,665	$  881,966		$ 1,895,521		$ (1,396,584	)	$  (72,299)	$  (2,573)

See accompanying Notes to Consolidated Financial Statements.

5

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

	For the Three Months Ended
	March 31,
(In Thousands)	2013			2012
Cash flows from operating activities:
Net income	$	13,852		$	9,996
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on loans	5,769			6,746
Net amortization on securities and borrowings	4,959			3,406
Net provision for loan and real estate losses	9,784			11,391
Depreciation and amortization	2,971			2,969
Net gain on sales of loans and securities	(4,081		)	(4,688		)
Net (gain) loss on dispositions of premises and equipment	(6		)	52
Other asset impairment charges	33			54
Originations of loans held-for-sale	(97,910		)	(77,283		)
Proceeds from sales and principal repayments of loans held-for-sale	149,240			72,471
Stock-based compensation and allocation of ESOP stock	4,327			3,022
(Increase) decrease in accrued interest receivable	(809		)	805
Mortgage servicing rights amortization and valuation allowance adjustments, net	197			911
Bank owned life insurance income and insurance proceeds received, net	292			(1,501		)
Decrease in other assets	8,092			38,366
Decrease in accrued expenses and other liabilities	(3,762		)	(4,542		)
Net cash provided by operating activities	92,948			62,175
Cash flows from investing activities:
Originations of loans receivable	(530,857		)	(925,868		)
Loan purchases through third parties	(72,939		)	(321,174		)
Principal payments on loans receivable	881,198			1,103,257
Proceeds from sales of delinquent and non-performing loans	5,153			15,587
Purchases of securities held-to-maturity	(256,657		)	(308,420		)
Purchases of securities available-for-sale	(126,975		)	(66,350		)
Principal payments on securities held-to-maturity	243,048			230,086
Principal payments on securities available-for-sale	34,728			46,118
Proceeds from sales of securities available-for-sale	—			54,318
Net redemptions (purchases) of Federal Home Loan Bank of New York stock	25,692			(14,931		)
Proceeds from sales of real estate owned, net	13,320			19,724
Purchases of premises and equipment	(1,864		)	(1,463		)
Net cash provided by (used in) investing activities	213,847			(169,116		)
Cash flows from financing activities:
Net increase (decrease) in deposits	1,375			(132,966		)
Net (decrease) increase in borrowings with original terms of three months or less	(365,000		)	331,000
Proceeds from borrowings with original terms greater than three months	—			100,000
Repayments of borrowings with original terms greater than three months	(100,000		)	(219,000		)
Net increase in mortgage escrow funds	37,916			31,313
Proceeds from issuance of preferred stock	135,000			—
Cash payments for preferred stock issuance costs	(4,467		)	—
Cash dividends paid to stockholders	(3,918		)	(12,545		)
Net tax benefit shortfall from stock-based compensation	(1,345		)	(1,912		)
Net cash (used in) provided by financing activities	(300,439		)	95,890
Net increase (decrease) in cash and cash equivalents	6,356			(11,051		)
Cash and cash equivalents at beginning of period	121,473			132,704
Cash and cash equivalents at end of period	$	127,829		$	121,653
Supplemental disclosures:
Interest paid	$	44,603		$	64,389
Income taxes paid	$	184		$	1,022
Additions to real estate owned	$	8,942		$	12,987
Loans transferred to held-for-sale	$	9,392		$	—

See accompanying Notes to Consolidated Financial Statements.

6

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1.Basis of Presentation

The accompanying consolidated financial statements include the accounts of Astoria Financial Corporation and its wholly-owned subsidiaries: Astoria Federal Savings and Loan Association and its subsidiaries, referred to as Astoria Federal, and AF Insurance Agency, Inc.  As used in this quarterly report, “we,” “us” and “our” refer to Astoria Financial Corporation and its consolidated subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.

In addition to Astoria Federal and AF Insurance Agency, Inc., we have another subsidiary, Astoria Capital Trust I, which is not consolidated with Astoria Financial Corporation for financial reporting purposes.  Astoria Capital Trust I was formed for the purpose of issuing $125.0 million aggregate liquidation amount of 9.75% Capital Securities due November 1, 2029, or Capital Securities, and $3.9 million of common securities, which are owned by Astoria Financial Corporation, and used the proceeds to acquire Junior Subordinated Debentures issued by Astoria Financial Corporation.  The Junior Subordinated Debentures total $128.9 million, have an interest rate of 9.75%, mature on November 1, 2029 and are the sole assets of Astoria Capital Trust I.  The Junior Subordinated Debentures are prepayable, in whole or in part, at our option at declining premiums to November 1, 2019, after which the Junior Subordinated Debentures are prepayable at par value.  The Capital Securities have the same prepayment provisions as the Junior Subordinated Debentures.  Astoria Financial Corporation has fully and unconditionally guaranteed the Capital Securities along with all obligations of Astoria Capital Trust I under the trust agreement relating to the Capital Securities.  See Note 12 for information regarding the prepayment in whole of our Junior Subordinated Debentures, scheduled to occur on May 10, 2013, which will result in the concurrent redemption in whole of the Capital Securities.  See Note 9 of Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of our 2012 Annual Report on Form 10-K for restrictions on our subsidiaries’ ability to pay dividends to us.

In our opinion, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial condition as of March 31, 2013 and December 31, 2012, our results of operations and other comprehensive income for the three months ended March 31, 2013 and 2012, changes in our stockholders’ equity for the three months ended March 31, 2013 and our cash flows for the three months ended March 31, 2013 and 2012.  In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities for the consolidated statements of financial condition as of March 31, 2013 and December 31, 2012, and amounts of revenues, expenses and other comprehensive income/loss in the consolidated statements of income and comprehensive income for the three months ended March 31, 2013 and 2012.  The results of operations and other comprehensive income/loss for the three months ended March 31, 2013 are not necessarily indicative of the results of operations and other comprehensive income/loss to be expected for the remainder of the year.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange

7

Commission, or SEC.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

These consolidated financial statements should be read in conjunction with our December 31, 2012 audited consolidated financial statements and related notes included in our 2012 Annual Report on Form 10-K.

2.Securities

The following tables set forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at the dates indicated.

	At March 31, 2013
(In Thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFairValue
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)	$	293,952	$	5,698	$	(447)	$	299,203
Non-GSE issuance REMICs and CMOs	10,118		7		(41)		10,084
GSE pass-through certificates	19,468		1,025		(2)		20,491
Total residential mortgage-backed securities	323,538		6,730		(490)		329,778
Obligations of GSEs	98,672		85		(162)		98,595
Fannie Mae stock	15		—		(14)		1
Total securities available-for-sale	$	422,225	$	6,815	$	(666)	$	428,374
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,622,615	$	26,039	$	(2,913)	$	1,645,741
Non-GSE issuance REMICs and CMOs	5,041		97		—		5,138
GSE pass-through certificates	209		5		(1)		213
Total residential mortgage-backed securities	1,627,865		26,141		(2,914)		1,651,092
Obligations of GSEs	80,923		134		(62)		80,995
Other	639		—		—		639
Total securities held-to-maturity	$	1,709,427	$	26,275	$	(2,976)	$	1,732,726

(1)Government-sponsored enterprise

(2)Real estate mortgage investment conduits and collateralized mortgage obligations

8

	At December 31, 2012
(In Thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFairValue
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	200,152	$	5,258	$	(583)	$	204,827
Non-GSE issuance REMICs and CMOs	11,296		9		(86)		11,219
GSE pass-through certificates	20,348		1,029		(2)		21,375
Total residential mortgage-backed securities	231,796		6,296		(671)		237,421
Obligations of GSEs	98,670		214		(5)		98,879
Fannie Mae stock	15		—		(15)		—
Total securities available-for-sale	$	330,481	$	6,510	$	(691)	$	336,300
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,693,437	$	27,787	$	(2,955)	$	1,718,269
Non-GSE issuance REMICs and CMOs	5,791		112		—		5,903
GSE pass-through certificates	257		6		(1)		262
Total residential mortgage-backed securities	1,699,485		27,905		(2,956)		1,724,434
Other	656		—		—		656
Total securities held-to-maturity	$	1,700,141	$	27,905	$	(2,956)	$	1,725,090

The following tables set forth the estimated fair values of securities with gross unrealized losses at the dates indicated, segregated between securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer at the dates indicated.

	At March 31, 2013
	Less Than Twelve Months				Twelve Months or Longer				Total
(In Thousands)	EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses
Available-for-sale:
GSE issuance REMICs and CMOs	$	23,645	$	(447)	$	—	$	—	$	23,645	$	(447)
Non-GSE issuance REMICs and CMOs	—		—		9,626		(41)		9,626		(41)
GSE pass-through certificates	55		(1)		45		(1)		100		(2)
Obligations of GSEs	64,827		(162)		—		—		64,827		(162)
Fannie Mae stock	—		—		1		(14)		1		(14)
Total temporarily impaired securities available-for-sale	$	88,527	$	(610)	$	9,672	$	(56)	$	98,199	$	(666)
Held-to-maturity:
GSE issuance REMICs and CMOs	$	430,788	$	(2,845)	$	9,212	$	(68)	$	440,000	$	(2,913)
GSE pass-through certificates	43		(1)		—		—		43		(1)
Obligations of GSEs	29,908		(62)		—		—		29,908		(62)
Total temporarily impaired securities held-to-maturity	$	460,739	$	(2,908)	$	9,212	$	(68)	$	469,951	$	(2,976)

9

	At December 31, 2012
	Less Than Twelve Months				Twelve Months or Longer				Total
(In Thousands)	EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses
Available-for-sale:
GSE issuance REMICs and CMOs	$	67,841	$	(583)	$	—	$	—	$	67,841	$	(583)
Non-GSE issuance REMICs and CMOs	—		—		10,709		(86)		10,709		(86)
GSE pass-through certificates	57		(1)		47		(1)		104		(2)
Obligations of GSEs	24,995		(5)		—		—		24,995		(5)
Fannie Mae stock	—		—		—		(15)		—		(15)
Total temporarily impaired securities available-for-sale	$	92,893	$	(589)	$	10,756	$	(102)	$	103,649	$	(691)
Held-to-maturity:
GSE issuance REMICs and CMOs	$	413,651	$	(2,759)	$	12,259	$	(196)	$	425,910	$	(2,955)
GSE pass-through certificates	48		(1)		—		—		48		(1)
Total temporarily impaired securities held-to-maturity	$	413,699	$	(2,760)	$	12,259	$	(196)	$	425,958	$	(2,956)

We held 42 securities which had an unrealized loss at March 31, 2013 and 41 at December 31, 2012.  At March 31, 2013 and December 31, 2012, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment is directly related to the change in interest rates.  In general, as interest rates rise, the fair value of fixed rate securities will decrease; as interest rates fall, the fair value of fixed rate securities will increase. During this period of historic low interest rates, securities backed by fixed rate residential mortgage loans have experienced accelerated rates of prepayments as interest rates have declined which has resulted in a decline in the estimated life of these securities and a decline in fair value.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  None of the unrealized losses are related to credit losses.  Therefore, at March 31, 2013 and December 31, 2012, the impairments are deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expect to recover the entire amortized cost basis of the security.

There were no sales of securities from the available-for-sale portfolio during the three months ended March 31, 2013.  During the three months ended March 31, 2012, proceeds from sales of securities from the available-for-sale portfolio totaled $54.3 million, resulting in gross realized gains totaling $2.5 million.

At March 31, 2013, available-for-sale debt securities excluding mortgage-backed securities had an amortized cost of $98.7 million, a fair value of $98.6 million and contractual maturities between 2021 and 2022.  At March 31, 2013, held-to-maturity debt securities excluding mortgage-backed securities had an amortized cost and a fair value of $81.6 million and contractual maturities between 2020 and 2023.  Actual maturities may differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

The balance of accrued interest receivable for securities totaled $6.1 million at March 31, 2013 and $5.7 million at December 31, 2012.

10

At March 31, 2013, we held securities with an amortized cost of $179.6 million which are callable within one year and at various times thereafter.

3.Loans Held-for-Sale

Loans held-for-sale, net, includes fifteen and thirty year fixed rate one-to-four family, or residential, mortgage loans originated for sale that conform to GSE guidelines (conforming loans), as well as certain delinquent and non-performing loans.  Upon our decision to sell certain delinquent and non-performing loans held in portfolio, we reclassify them to held-for-sale at the lower of cost or fair value, less estimated selling costs.  Non-performing loans held-for-sale, included in loans held-for-sale, net, totaled $8.2 million, net of a valuation allowance of $97,000, at March 31, 2013 and $3.9 million, net of a valuation allowance of $64,000, at December 31, 2012.  Substantially all of the non-performing loans held-for-sale were multi-family mortgage loans at March 31, 2013 and December 31, 2012.

We sold certain delinquent and non-performing mortgage loans totaling $5.0 million, net of charge-offs of $1.3 million, during the three months ended March 31, 2013, primarily multi-family and commercial real estate loans, and $14.6 million, net of charge-offs of $8.1 million, during the three months ended March 31, 2012, primarily multi-family loans.  Net gain on sales of non-performing loans totaled $138,000 for the three months ended March 31, 2013 and $950,000 for the three months ended March 31, 2012.

We recorded lower of cost or market write-downs on non-performing loans held-for-sale totaling $33,000 for the three months ended March 31, 2013 and $54,000 for the three months ended March 31, 2012.  Lower of cost or market write-downs and recoveries on non-performing loans held-for-sale and gains and losses recognized on sales of such loans are included in other non-interest income in the consolidated statements of income.

11

4.     Loans Receivable and Allowance for Loan Losses

The following tables set forth the composition of our loans receivable portfolio and an aging analysis by accruing and non-accrual loans and by segment and class at the dates indicated.

	At March 31, 2013
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	31,298	$	8,343	$	—	$	39,641	$	1,732,224	$	1,771,865
Full documentation amortizing	39,310		5,624		—		44,934		5,839,072		5,884,006
Reduced documentation interest-only	30,428		7,587		—		38,015		809,738		847,753
Reduced documentation amortizing	9,557		1,950		—		11,507		338,706		350,213
Total residential	110,593		23,504		—		134,097		8,719,740		8,853,837
Multi-family	17,450		5,731		—		23,181		2,545,582		2,568,763
Commercial real estate	2,887		6,588		609		10,084		796,666		806,750
Total mortgage loans	130,930		35,823		609		167,362		12,061,988		12,229,350
Consumer and other loans (gross):
Home equity lines of credit	2,828		1,350		—		4,178		212,953		217,131
Other	68		177		—		245		35,131		35,376
Total consumer and other loans	2,896		1,527		—		4,423		248,084		252,507
Total accruing loans	$	133,826	$	37,350	$	609	$	171,785	$	12,310,072	$	12,481,857
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	1,634	$	851	$	92,128	$	94,613	$	23,005	$	117,618
Full documentation amortizing	539		408		43,320		44,267		8,706		52,973
Reduced documentation interest-only	4,156		1,467		105,326		110,949		25,068		136,017
Reduced documentation amortizing	2,166		69		30,369		32,604		4,264		36,868
Total residential	8,495		2,795		271,143		282,433		61,043		343,476
Multi-family	—		—		3,706		3,706		3,849		7,555
Commercial real estate	1,363		—		5,606		6,969		1,350		8,319
Total mortgage loans	9,858		2,795		280,455		293,108		66,242		359,350
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,178		6,178		252		6,430
Other	—		—		68		68		—		68
Total consumer and other loans	—		—		6,246		6,246		252		6,498
Total non-accrual loans	$	9,858	$	2,795	$	286,701	$	299,354	$	66,494	$	365,848
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	32,932	$	9,194	$	92,128	$	134,254	$	1,755,229	$	1,889,483
Full documentation amortizing	39,849		6,032		43,320		89,201		5,847,778		5,936,979
Reduced documentation interest-only	34,584		9,054		105,326		148,964		834,806		983,770
Reduced documentation amortizing	11,723		2,019		30,369		44,111		342,970		387,081
Total residential	119,088		26,299		271,143		416,530		8,780,783		9,197,313
Multi-family	17,450		5,731		3,706		26,887		2,549,431		2,576,318
Commercial real estate	4,250		6,588		6,215		17,053		798,016		815,069
Total mortgage loans	140,788		38,618		281,064		460,470		12,128,230		12,588,700
Consumer and other loans (gross):
Home equity lines of credit	2,828		1,350		6,178		10,356		213,205		223,561
Other	68		177		68		313		35,131		35,444
Total consumer and other loans	2,896		1,527		6,246		10,669		248,336		259,005
Total loans	$	143,684	$	40,145	$	287,310	$	471,139	$	12,376,566	$	12,847,705
Net unamortized premiums and deferred loan origination costs											64,078
Loans receivable											12,911,783
Allowance for loan losses											(144,250		)
Loans receivable, net											$	12,767,533

12

	At December 31, 2012
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	30,520	$	8,973	$	—	$	39,493	$	1,862,382	$	1,901,875
Full documentation amortizing	35,918		6,564		—		42,482		6,218,064		6,260,546
Reduced documentation interest-only	28,212		7,694		—		35,906		855,907		891,813
Reduced documentation amortizing	11,780		3,893		—		15,673		350,268		365,941
Total residential	106,430		27,124		—		133,554		9,286,621		9,420,175
Multi-family	21,743		5,382		—		27,125		2,368,895		2,396,020
Commercial real estate	13,536		3,126		328		16,990		750,385		767,375
Total mortgage loans	141,709		35,632		328		177,669		12,405,901		12,583,570
Consumer and other loans (gross):
Home equity lines of credit	3,103		1,092		—		4,195		221,266		225,461
Other	120		223		—		343		31,782		32,125
Total consumer and other loans	3,223		1,315		—		4,538		253,048		257,586
Total accruing loans	$	144,932	$	36,947	$	328	$	182,207	$	12,658,949	$	12,841,156
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	677	$	97,907	$	98,584	$	937	$	99,521
Full documentation amortizing	363		—		43,014		43,377		949		44,326
Reduced documentation interest-only	1,042		—		107,254		108,296		5,186		113,482
Reduced documentation amortizing	445		13		32,496		32,954		768		33,722
Total residential	1,850		690		280,671		283,211		7,840		291,051
Multi-family	—		—		7,359		7,359		3,299		10,658
Commercial real estate	—		—		6,541		6,541		—		6,541
Total mortgage loans	1,850		690		294,571		297,111		11,139		308,250
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,459		6,459		—		6,459
Other	—		—		49		49		—		49
Total consumer and other loans	—		—		6,508		6,508		—		6,508
Total non-accrual loans	$	1,850	$	690	$	301,079	$	303,619	$	11,139	$	314,758
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	30,520	$	9,650	$	97,907	$	138,077	$	1,863,319	$	2,001,396
Full documentation amortizing	36,281		6,564		43,014		85,859		6,219,013		6,304,872
Reduced documentation interest-only	29,254		7,694		107,254		144,202		861,093		1,005,295
Reduced documentation amortizing	12,225		3,906		32,496		48,627		351,036		399,663
Total residential	108,280		27,814		280,671		416,765		9,294,461		9,711,226
Multi-family	21,743		5,382		7,359		34,484		2,372,194		2,406,678
Commercial real estate	13,536		3,126		6,869		23,531		750,385		773,916
Total mortgage loans	143,559		36,322		294,899		474,780		12,417,040		12,891,820
Consumer and other loans (gross):
Home equity lines of credit	3,103		1,092		6,459		10,654		221,266		231,920
Other	120		223		49		392		31,782		32,174
Total consumer and other loans	3,223		1,315		6,508		11,046		253,048		264,094
Total loans	$	146,782	$	37,637	$	301,407	$	485,826	$	12,670,088	$	13,155,914
Net unamortized premiums and deferred loan origination costs											68,058
Loans receivable											13,223,972
Allowance for loan losses											(145,501		)
Loans receivable, net											$	13,078,471

13

We segment our residential mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and year of origination and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate loans by portfolio, geographic location and year of origination.  We analyze our consumer and other loan portfolio by home equity lines of credit, commercial loans, revolving credit lines and installment loans and perform similar historical loss analyses.

In the 2013 first quarter, in addition to residential loans discharged in a Chapter 7 bankruptcy filing, or bankruptcy loans, placed on non-accrual status and reported as non-performing loans as of December 31, 2012, we also included bankruptcy loans discharged prior to 2012 regardless of the delinquency status of the loans.  As a result, non-performing loans at March 31, 2013 increased $51.4 million as compared to December 31, 2012.  Non-performing loans at March 31, 2013 include $66.5 million of bankruptcy loans which are less than 90 days past due, including $54.3 million which were discharged prior to 2012.  Of the bankruptcy loans which are less than 90 days past due at March 31, 2013, $58.2 million are current, $6.5 million are 30-59 days past due and $1.8 million are 60-89 days past due.  Such loans continue to generate interest income on a cash basis as payments are received.  Pursuant to regulatory guidance issued in 2012, bankruptcy loans, in addition to being placed on non-accrual status and reported as non-performing loans, are also reported as loans modified in a troubled debt restructuring, or TDR, and as impaired loans and totaled $94.0 million at March 31, 2013, including bankruptcy loans discharged prior to 2012 of $73.8 million.

We analyze our historical loss experience over twelve, fifteen, eighteen and twenty-four month periods.  The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type.  Also, for a particular loan type we may not have sufficient loss history to develop a reasonable estimate of loss and consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs).  We update our historical loss analyses quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses.  We also consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by portfolio.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our allowance for loan losses.  During the 2013 first quarter, the allowance for loan losses allocated to residential mortgage loans over 180 days delinquent with a charge-off, previously determined within our qualitative analysis, has been presented as attributable to these loans individually evaluated for impairment.  The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

14

The following tables set forth the changes in our allowance for loan losses by loan receivable segment for the periods indicated.

	For the Three Months Ended March 31, 2013
	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at January 1, 2013	$	89,267		$	35,514		$	14,404		$	6,316		$	145,501
Provision charged (credited) to operations	8,906			191			(815		)	844			9,126
Charge-offs	(8,313		)	(2,941		)	(1,194		)	(906		)	(13,354		)
Recoveries	1,686			1,188			—			103			2,977
Balance at March 31, 2013	$	91,546		$	33,952		$	12,395		$	6,357		$	144,250

	For the Three Months Ended March 31, 2012
	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at January 1, 2012	$	105,991		$	35,422		$	11,972		$	3,800		$	157,185
Provision charged (credited) to operations	988			9,860			(1,232		)	384			10,000
Charge-offs	(17,704		)	(432		)	(339		)	(600		)	(19,075		)
Recoveries	1,623			77			1			88			1,789
Balance at March 31, 2012	$	90,898		$	44,927		$	10,402		$	3,672		$	149,899

The following table sets forth the balances of our residential interest-only mortgage loans at March 31, 2013 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin:
Within one year	$    205,246
More than one year to three years	1,388,990
More than three years to five years	1,084,140
Over five years	194,877
Total	$ 2,873,253

The following tables set forth the balances of our residential mortgage and consumer and other loan receivable segments by class and credit quality indicator at the dates indicated.

	At March 31, 2013
	Residential Mortgage Loans				Consumer and Other Loans
	Full Documentation		Reduced Documentation		Home Equity
(In Thousands)	Interest-only	Amortizing	Interest-only	Amortizing	Lines of Credit	Other
Performing	$ 1,771,865	$ 5,884,006	$   847,753	$ 350,213	$ 217,131	$ 35,376
Non-performing:
Current or past due less than 90 days	25,490	9,653	30,691	6,499	252	—
Past due 90 days or more	92,128	43,320	105,326	30,369	6,178	68
Total	$ 1,889,483	$ 5,936,979	$   983,770	$ 387,081	$ 223,561	$ 35,444

	At December 31, 2012
	Residential Mortgage Loans				Consumer and Other Loans
	Full Documentation		Reduced Documentation		Home Equity
(In Thousands)	Interest-only	Amortizing	Interest-only	Amortizing	Lines of Credit	Other
Performing	$ 1,901,875	$ 6,260,546	$   891,813	$ 365,941	$ 225,461	$ 32,125
Non-performing:
Current or past due less than 90 days	1,614	1,312	6,228	1,226	—	—
Past due 90 days or more	97,907	43,014	107,254	32,496	6,459	49
Total	$ 2,001,396	$ 6,304,872	$1,005,295	$ 399,663	$ 231,920	$ 32,174

15

The following table sets forth the balances of our multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator at the dates indicated.

	At March 31, 2013		At December 31, 2012
(In Thousands)	Multi-Family	Commercial Real Estate	Multi-Family	Commercial Real Estate
Not criticized	$2,456,069	$ 754,204	$ 2,271,006	$ 706,334
Criticized:
Special mention	51,843	21,378	54,956	28,210
Substandard	68,406	39,487	80,716	39,372
Doubtful	—	—	—	—
Total	$2,576,318	$ 815,069	$ 2,406,678	$ 773,916

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.

	At March 31, 2013
	Mortgage Loans
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		Consumer and Other Loans		Total
Loans:
Individually evaluated for impairment	$	336,427	$	50,917	$	18,888	$	—	$	406,232
Collectively evaluated for impairment	8,860,886		2,525,401		796,181		259,005		12,441,473
Total loans	$	9,197,313	$	2,576,318	$	815,069	$	259,005	$	12,847,705
Allowance for loan losses:
Individually evaluated for impairment	$	24,484	$	1,157	$	300	$	—	$	25,941
Collectively evaluated for impairment	67,062		32,795		12,095		6,357		118,309
Total allowance for loan losses	$	91,546	$	33,952	$	12,395	$	6,357	$	144,250

	At December 31, 2012
	Mortgage Loans						Consumer
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		and Other Loans		Total
Loans:
Individually evaluated for impairment	$	272,146	$	56,116	$	18,644	$	—	$	346,906
Collectively evaluated for impairment	9,439,080		2,350,562		755,272		264,094		12,809,008
Total loans	$	9,711,226	$	2,406,678	$	773,916	$	264,094	$	13,155,914
Allowance for loan losses:
Individually evaluated for impairment	$	1,001	$	2,576	$	1,469	$	—	$	5,046
Collectively evaluated for impairment	88,266		32,938		12,935		6,316		140,455
Total allowance for loan losses	$	89,267	$	35,514	$	14,404	$	6,316	$	145,501

16

The following table summarizes information related to our impaired mortgage loans by segment and class at the dates indicated.

	At March 31, 2013					At December 31, 2012
(In Thousands)	Unpaid Principal Balance	Recorded Investment	Related Allowance		Net Investment	Unpaid Principal Balance	Recorded Investment	Related Allowance		Net Investment
With an allowance recorded:
Residential:
Full documentation interest-only	$ 134,138	$ 105,291	$   (8,196	)	$   97,095	$   10,740	$   10,740	$    (241	)	$   10,499
Full documentation amortizing	31,131	27,390	(2,205	)	25,185	6,122	6,122	(347	)	5,775
Reduced documentation interest-only	201,169	151,621	(10,270	)	141,351	12,893	12,893	(277	)	12,616
Reduced documentation amortizing	31,670	25,667	(3,813	)	21,854	3,889	3,889	(136	)	3,753
Multi-family	17,083	17,083	(1,157	)	15,926	19,704	19,704	(2,576	)	17,128
Commercial real estate	8,727	8,727	(300	)	8,427	10,835	10,835	(1,469	)	9,366
Without an allowance recorded:
Residential:
Full documentation interest-only	28,717	20,088	—		20,088	122,275	86,607	—		86,607
Full documentation amortizing	8,825	6,370	—		6,370	23,489	17,962	—		17,962
Reduced documentation interest-only	—	—	—		—	166,477	116,514	—		116,514
Reduced documentation amortizing	—	—	—		—	23,419	17,419	—		17,419
Multi-family	40,467	33,834	—		33,834	44,341	36,412	—		36,412
Commercial real estate	16,551	10,161	—		10,161	13,256	7,809	—		7,809
Total impaired loans	$ 518,478	$ 406,232	$ (25,941	)	$ 380,291	$ 457,440	$ 346,906	$ (5,046	)	$ 341,860

The following table sets forth the average recorded investment, interest income recognized and cash basis interest income related to our impaired mortgage loans by segment and class for the periods indicated.

	For the Three Months Ended March 31,
	2013						2012
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Residential:
Full documentation interest-only	$	91,571	$	573	$	644	$	10,466	$	91	$	93
Full documentation amortizing	23,099		115		128		3,933		40		40
Reduced documentation interest-only	136,342		901		1,002		11,464		117		121
Reduced documentation amortizing	23,487		90		110		1,896		23		22
Multi-family	18,394		173		174		50,079		554		802
Commercial real estate	9,781		82		102		14,554		159		169
Without an allowance recorded:
Residential:
Full documentation interest-only	19,792		82		80		79,553		345		341
Full documentation amortizing	5,824		50		50		18,294		52		56
Reduced documentation interest-only	4,172		—		—		112,704		522		536
Reduced documentation amortizing	—		—		—		15,893		124		123
Multi-family	35,122		407		441		5,820		174		174
Commercial real estate	8,985		132		122		3,001		139		131
Total impaired loans	$	376,569	$	2,605	$	2,853	$	327,657	$	2,340	$	2,608

17

The following table sets forth information about our mortgage loans receivable by segment and class at March 31, 2013 and 2012 which were modified in a TDR during the periods indicated.

	Modifications During the Three Months Ended March 31,
	2013			2012
(Dollars In Thousands)	Number of Loans	Pre- Modification Recorded Investment	Recorded Investment at March 31, 2013	Number of Loans	Pre- Modification Recorded Investment	Recorded Investment at March 31, 2012
Residential:
Full documentation interest-only	6	$   1,504	$   1,461	—	$       —	$        —
Full documentation amortizing	2	781	781	—	—	—
Reduced documentation interest-only	11	3,433	3,349	3	914	914
Reduced documentation amortizing	3	742	730	4	1,549	1,473
Multi-family	3	2,784	2,476	6	26,037	25,233
Commercial real estate	1	1,539	1,350	1	999	941
Total	26	$ 10,783	$ 10,147	14	$29,499	$ 28,561

The following table sets forth information about our mortgage loans receivable by segment and class at March 31, 2013 and 2012 which were modified in a TDR during the twelve months ended March 31, 2013 and 2012 and had a payment default subsequent to the modification during the periods indicated.

	For the Three Months Ended March 31,
	2013		2012
(Dollars In Thousands)	Numberof Loans	RecordedInvestment at March 31, 2013	Numberof Loans	RecordedInvestment at March 31, 2012
Residential:
Full documentation interest-only	19	$    5,265	2	$     524
Full documentation amortizing	7	1,176	1	81
Reduced documentation interest-only	21	7,986	7	3,493
Reduced documentation amortizing	5	991	6	1,780
Multi-family	—	—	1	1,785
Commercial real estate	1	1,363	—	—
Total	53	$  16,781	17	$  7,663

For additional information regarding our loans receivable and allowance for loan losses, see “Asset Quality” and “Critical Accounting Policies” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or “MD&A.”

5.     Preferred Stock

On March 19, 2013, in a public offering, we sold 5,400,000 depositary shares, each representing a 1/40th interest in a share of our 6.50% Non-Cumulative Perpetual Preferred Stock, Series C, $1.00 par value per share, $1,000 liquidation preference per share (equivalent to $25.00 per depositary share), or Series C Preferred Stock.  We issued 135,000 shares of the Series C Preferred Stock in connection with the sale of the depositary shares.  The aggregate proceeds from the offering, net of underwriting discounts and other issuance costs, were approximately $129.8 million.

The Series C Preferred Stock, and corresponding depositary shares, may be redeemed at our option, in whole or in part, on April 15, 2018, or on any dividend payment date occurring thereafter, at a redemption price of $1,000 per share (equivalent to $25.00 per depositary share),

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plus any declared and unpaid dividends (without accumulation of any undeclared dividends). The Series C Preferred Stock may also be redeemed in whole, but not in part, at any time upon the occurrence of a “regulatory capital treatment event,” as defined in the certificate of designations included in the registration statement on Form 8-A filed with the SEC on March 19, 2013.  The holders of the Series C Preferred Stock, and the corresponding depositary shares, do not have the right to require the redemption or repurchase of the Series C Preferred Stock.

Dividends will be payable on the Series C Preferred Stock when, as and if declared by our board of directors, on a non-cumulative basis quarterly in arrears on January 15, April 15, July 15 and October 15 of each year at an annual rate of 6.50% on the liquidation preference of $1,000 per share, beginning on July 15, 2013.  No dividend shall be declared, paid, or set aside for payment on our common stock unless the full dividends for the most recently completed dividend period have been declared and paid on our Series C Preferred Stock.

6.     Earnings Per Common Share

The following table is a reconciliation of basic and diluted earnings per common share, or EPS.

	For the Three Months Ended March 31,
(In Thousands, Except Share Data)	2013		2012
Net income	$  13,852		$  9,996
Income allocated to participating securities	(158	)	—
Income attributable to common shareholders	$ 13,694		$ 9,996
Average number of common shares outstanding — basic	96,674,729		95,018,867
Dilutive effect of stock options (1)	—		—
Average number of common shares outstanding — diluted	96,674,729		95,018,867
Income per common share attributable to common shareholders:
Basic	$ 0.14		$ 0.11
Diluted	$ 0.14		$ 0.11

(1) Excludes options to purchase 2,825,855 shares of common stock which were outstanding during the three months ended March 31, 2013 and options to purchase 5,822,224 shares of common stock which were outstanding during the three months ended March 31, 2012 because their inclusion would be anti-dilutive.

For EPS computations, unvested shares of restricted common stock represent participating securities, whereas unvested restricted stock units are treated as potential common shares with the dilutive effect calculated using the treasury stock method.  However, the units are excluded from the denominator for both the basic and diluted EPS computations until the performance conditions are satisfied.  As a result, unvested restricted stock units were excluded from the EPS computation for the three months ended March 31, 2013.  There were no unvested restricted stock units outstanding during the three months ended March 31, 2012.  See Note 9 for additional information about the restricted stock units granted in 2013.

7.     Other Comprehensive Income/Loss

The following disclosures reflect our adoption, effective January 1, 2013, of the guidance in Accounting Standards Update, or ASU, 2013-02, “Comprehensive Income (Topic 220) Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The guidance in ASU 2013-02 is effective prospectively for reporting periods beginning after

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December 15, 2012 and is presentation related only.  Our adoption of ASU 2013-02 did not have an impact on our financial condition or results of operations.

The following table sets forth the components of accumulated other comprehensive loss at March 31, 2013 and December 31, 2012 and the changes during the three months ended March 31, 2013.

(In Thousands)	At December 31, 2012	Other Comprehensive Income	At March 31, 2013
Net unrealized gain on securities available-for-sale	$   7,451	$ 130	$   7,581
Net actuarial loss on pension plans and other postretirement benefits	(77,115)	627	(76,488)
Prior service cost on pension plans and other postretirement benefits	(3,426)	34	(3,392)
Accumulated other comprehensive loss	$(73,090)	$ 791	$(72,299)

The following table sets forth the components of other comprehensive income for the three months ended March 31, 2013.

(In Thousands)	Before Tax Amount	Tax Expense	After Tax Amount
Net unrealized holding gain on securities available-for-sale arising during the period	$    200	$   (70)	$  130
Reclassification adjustment for net actuarial loss included in net income	967	(340)	627
Reclassification adjustment for prior service cost included in net income	53	(19)	34
Other comprehensive income	$ 1,220	$ (429)	$  791

The following table sets forth information about amounts reclassified from accumulated other comprehensive loss to the consolidated statement of income and the affected line item in the statement where net income is presented.

(In Thousands)	For the Three Months Ended March 31, 2013
Net actuarial loss and prior service cost on pension plans and other postretirement benefits (1):
Income statement line item:
Compensation and benefits:
Recognized net actuarial loss	$      967
Amortization of prior service cost	53
Compensation and benefits	1,020
Income tax benefit	(359)
Net of tax	$      661

(1) These accumulated other comprehensive loss components are included in the computations of net periodic cost for our defined benefit pension plans and other postretirement benefit plan. See Note 8 for additional details.

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8.     Pension Plans and Other Postretirement Benefits

The following table sets forth information regarding the components of net periodic cost for our defined benefit pension plans and other postretirement benefit plan for the periods indicated.

	Pension Benefits				Other Postretirement Benefits
	For the Three Months Ended March 31,				For the Three Months Ended March 31,
(In Thousands)	2013		2012		2013	2012
Service cost	$     —		$  1,514		$   318	$   195
Interest cost	2,410		3,002		351	363
Expected return on plan assets	(3,188	)	(2,618	)	—	—
Recognized net actuarial loss	779		3,238		188	162
Amortization of prior service cost (credit)	53		11		—	(7	)
Settlement	—		7		—	—
Net periodic cost	$    54		$  5,154		$   857	$   713

Effective April 30, 2012, the Astoria Federal Savings and Loan Association Employees’ Pension Plan, the Astoria Federal Savings and Loan Association Excess Benefit Plan, the Astoria Federal Savings and Loan Association Supplemental Benefit Plan and the Astoria Federal Savings and Loan Association Directors’ Retirement Plan were amended to, among other things, change the manner in which benefits were computed for service through April 30, 2012 and to suspend accrual of additional benefits for all of the aforementioned plans effective April 30, 2012.  These amendments resulted in a significant reduction in net periodic cost for our defined benefit pension plans for periods subsequent to April 30, 2012.

9.     Stock Incentive Plans

During the three months ended March 31, 2013, 489,420 shares of restricted common stock were granted to select officers under the 2005 Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, of which 475,140 shares vest one-third per year on or about December 16, beginning December 16, 2013, 6,000 shares vest one-third per year on or about January 7, beginning January 7, 2014, and 8,280 were forfeited as of March 31, 2013.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2005 Employee Stock Plan, all restricted common stock granted pursuant to such plan immediately vests.

During the three months ended March 31, 2013, 41,690 shares of restricted common stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, of which 36,020 remain outstanding at March 31, 2013 and vest 100% in January 2016, although awards immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

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The following table summarizes restricted common stock activity in our stock incentive plans for the three months ended March 31, 2013.

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013		1,146,657		$    14.87
Granted		531,110		9.70
Vested		(275,905	)	(23.75	)
Forfeited		(38,902	)	(11.46	)
Nonvested at March 31, 2013		1,362,960		11.16

In addition to the activity described above, during the three months ended March 31, 2013, 432,300 performance-based restricted stock units were granted to select officers under the 2005 Employee Stock Plan, with a grant date fair value of $9.22 per unit, of which 424,000 units remain outstanding at March 31, 2013.  Each restricted stock unit granted represents a right, under the 2005 Employee Stock Plan, to receive one share of our common stock in the future, subject to meeting certain criteria.  The restricted stock units have specified performance objectives within a specified performance measurement period and no voting or dividend rights prior to vesting and delivery of shares.  The performance measurement period for these restricted stock units is the fiscal year ending December 31, 2015 and the vest date is February 1, 2016.  Shares will be issued on the vest date at either 100%, 75%, 50% or 0% of units granted based on actual performance during the performance measurement period.  Absent a change of control, if a grantee’s employment terminates prior to December 31, 2015 all restricted stock units will be forfeited.  In the event the grantee terminates his/her employment during the period between December 31, 2015 and February 1, 2016 due to death, disability, retirement or a change of control, the grantee will remain entitled to the shares otherwise earned.

Stock-based compensation expense is recognized on a straight-line basis over the vesting period and totaled $1.1 million, net of taxes of $609,000, for the three months ended March 31, 2013 and $336,000, net of taxes of $184,000, for the three months ended March 31, 2012.  At March 31, 2013, pre-tax compensation cost related to all nonvested awards of restricted common stock and restricted stock units not yet recognized totaled $15.6 million and will be recognized over a weighted average period of approximately 2.4 years, which excludes $1.8 million of pre-tax compensation cost related to 65,000 shares of performance-based restricted common stock granted in 2011 and 106,000 performance-based restricted stock units granted in 2013 for which compensation cost will begin to be recognized when the achievement of the performance conditions becomes probable.

As a result of the resignation and retirement of several executive officers during the 2012 first quarter, the level of forfeitures in 2012 significantly exceeded our original estimate of restricted common stock forfeitures based on our prior experience.  As a result, we reversed stock-based compensation expense during the 2012 first quarter totaling $569,000, net of taxes of $310,000, representing stock-based compensation expense previously recognized on unvested shares of restricted common stock which will not vest as a result of forfeitures.

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10.    Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  We group our assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.  These levels are:

·Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

·Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

·Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market.  These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability.  Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques.  The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

We base our fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, with additional considerations when the volume and level of activity for an asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly.  We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recurring Fair Value Measurements

Our securities available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity.  Additionally, in connection with our mortgage banking activities we have commitments to fund loans held-for-sale and commitments to sell loans, which are considered free-standing derivative instruments, the fair values of which are not material to our financial condition or results of operations.

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The following tables set forth the carrying values of our assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	Carrying Value at March 31, 2013
(In Thousands)	Total	Level 1	Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$  299,203	$       —	$  299,203
Non-GSE issuance REMICs and CMOs	10,084	—	10,084
GSE pass-through certificates	20,491	—	20,491
Obligations of GSEs	98,595	—	98,595
Fannie Mae stock	1	1	—
Total securities available-for-sale	$  428,374	$         1	$  428,373

	Carrying Value at December 31, 2012
(In Thousands)	Total	Level 1	Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$  204,827	$       —	$  204,827
Non-GSE issuance REMICs and CMOs	11,219	—	11,219
GSE pass-through certificates	21,375	—	21,375
Obligations of GSEs	98,879	—	98,879
Fannie Mae stock	—	—	—
Total securities available-for-sale	$  336,300	$       —	$  336,300

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

Residential mortgage-backed securities

Residential mortgage-backed securities comprised 77% of our securities available-for-sale portfolio at March 31, 2013 and 71% at December 31, 2012.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service uses various modeling techniques to determine pricing for our mortgage-backed securities, including option pricing and discounted cash flow models.  The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, monthly payment information and collateral performance.  GSE securities, for which an active market exists for similar securities making observable inputs readily available, comprised 97% of our available-for-sale residential mortgage-backed securities portfolio at March 31, 2013 and 95% at December 31, 2012.

We analyze changes in the pricing service fair values from month to month taking into consideration changes in market conditions including changes in mortgage spreads, changes in treasury yields and changes in generic pricing on fifteen and thirty year securities.  Each month we conduct a review of the estimated fair values of our fixed rate REMICs and CMOs available-for-sale which represented 93% of our residential mortgage-backed securities available-for-sale at March 31, 2013 and 90% at December 31, 2012.  We generate prices based upon a “spread matrix” approach for estimating values.  Market spreads are obtained from independent third party firms who trade these types of securities.  Any notable differences between the pricing service prices and “spread matrix” prices on individual securities are analyzed further, including a review of prices provided by other independent parties, a yield analysis and review of average life changes using Bloomberg analytics and a review of historical pricing on the particular

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security.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Obligations of GSEs

Obligations of GSEs comprised 23% of our securities available-for-sale portfolio at March 31, 2013 and 29% at December 31, 2012 and consisted of debt securities issued by GSEs.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service gathers information from market sources and integrates relative credit information, observed market movements and sector news into their pricing applications and models.  Spread scales, representing credit risk, are created and are based on the new issue market, secondary trading and dealer quotes.  Option adjusted spread models are incorporated to adjust spreads of issues that have early redemption features.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Fannie Mae stock

The fair value of the Fannie Mae stock in our available-for-sale securities portfolio is obtained from quoted market prices for identical instruments in active markets and, as such, is classified as Level 1.

Non-Recurring Fair Value Measurements

From time to time, we may be required to record at fair value assets or liabilities on a non-recurring basis, such as mortgage servicing rights, or MSR, loans receivable, certain assets held-for-sale and real estate owned, or REO.  These non-recurring fair value adjustments involve the application of lower of cost or market accounting or impairment write-downs of individual assets.

The following table sets forth the carrying values of those of our assets which were measured at fair value on a non-recurring basis at the dates indicated.  The fair value measurements for all of these assets fall within Level 3 of the fair value hierarchy.

	Carrying Value
(In Thousands)	At March 31, 2013		At December 31, 2012
Non-performing loans held-for-sale, net	$	8,225	$	3,881
Impaired loans		285,723	282,723
MSR, net		8,465	6,947
REO, net		16,111	20,796
Total	$	318,524	$	314,347

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The following table provides information regarding the losses recognized on our assets measured at fair value on a non-recurring basis for the periods indicated.

	For the Three  Months Ended  March 31,
(In Thousands)	2013	2012
Non-performing loans held-for-sale, net (1)	$   2,604	$         54
Impaired loans (2)	8,378	15,875
REO, net (3)	1,137	2,534
Total	$  12,119	$  18,463

(1)	Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.
(2)	Losses are charged against the allowance for loan losses.
(3)	Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Loans-held-for-sale, net (non-performing loans held-for-sale)

Fair values of non-performing loans held-for-sale are estimated through either preliminary bids from potential purchasers of the loans or the estimated fair value of the underlying collateral discounted for factors necessary to solicit acceptable bids, and adjusted as necessary based on management’s experience with sales of similar types of loans and, as such, are classified as Level 3.  Substantially all of the non-performing loans held-for-sale at March 31, 2013 and December 31, 2012 were multi-family mortgage loans.

Loans receivable, net (impaired loans)

Loans which meet certain criteria are evaluated individually for impairment.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Impaired loans were comprised of 83% residential mortgage loans and 17% multi-family and commercial real estate mortgage loans at March 31, 2013 and 78% residential mortgage loans and 22% multi-family and commercial real estate mortgage loans at December 31, 2012.  Impaired loans for which a fair value adjustment was recognized were comprised of 85% residential mortgage loans and 15% multi-family and commercial real estate mortgage loans at March 31, 2013 and 84% residential mortgage loans and 16% multi-family and commercial real estate mortgage loans at December 31, 2012.  Our impaired loans are generally collateral dependent and, as such, are generally carried at the estimated fair value of the collateral less estimated selling costs.

We obtain updated estimates of collateral values on residential mortgage loans at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral value on residential loans are obtained primarily through automated valuation models.  Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete.  We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate

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loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.  The fair values of impaired loans cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the loan and, as such, are classified as Level 3.

MSR, net

The right to service loans for others is generally obtained through the sale of residential mortgage loans with servicing retained.  MSR are carried at the lower of cost or estimated fair value.  The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.  At March 31, 2013, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.93%, a weighted average constant prepayment rate on mortgages of 18.40% and a weighted average life of 4.3 years.  At December 31, 2012, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.95%, a weighted average constant prepayment rate on mortgages of 23.12% and a weighted average life of 3.4 years.  Management reviews the assumptions used to estimate the fair value of MSR to ensure they reflect current and anticipated market conditions.

REO, net

REO represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure, all of which were residential properties at March 31, 2013 and December 31, 2012, and is carried, net of allowances for losses, at the lower of cost or fair value less estimated selling costs.  The fair value of REO is estimated through current appraisals, in conjunction with a drive-by inspection and comparison of the REO property with similar properties in the area by either a licensed appraiser or real estate broker.  As these properties are actively marketed, estimated fair values are periodically adjusted by management to reflect current market conditions and, as such, are classified as Level 3.

Fair Value of Financial Instruments

Quoted market prices available in formal trading marketplaces are typically the best evidence of the fair value of financial instruments.  In many cases, financial instruments we hold are not bought or sold in formal trading marketplaces.  Accordingly, fair values are derived or estimated based on a variety of valuation techniques in the absence of quoted market prices.  Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument.  These estimates do not reflect any possible tax ramifications, estimated transaction costs, or any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument.  Because no market exists for a certain portion of our financial instruments, fair value estimates are based on judgments regarding future loss experience, current economic conditions, risk characteristics and other such factors.  These estimates are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.  For these reasons and others, the estimated fair value disclosures presented herein do not represent our entire underlying value.  As such, readers are cautioned in using this information for purposes of

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evaluating our financial condition and/or value either alone or in comparison with any other company.

The following tables set forth the carrying values and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value in accordance with GAAP, and are not measured or recorded at fair value on a recurring basis, and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	At March 31, 2013
	Carrying	Estimated Fair Value
(In Thousands)	Value	Total	Level 2	Level 3
Financial Assets:
Securities held-to-maturity	$   1,709,427	$    1,732,726	$    1,732,726	$                —
FHLB-NY stock	145,502	145,502	145,502	—
Loans held-for-sale, net (1)	31,548	32,154	—	32,154
Loans receivable, net (1)	12,767,533	12,909,105	—	12,909,105
MSR, net (1)	8,465	8,466	—	8,466
Financial Liabilities:
Deposits	10,445,333	10,567,986	10,567,986	—
Borrowings, net	3,908,629	4,356,982	4,356,982	—

(1) Includes assets measured at fair value on a non-recurring basis.

	At December 31, 2012
	Carrying	Estimated Fair Value
(In Thousands)	Value	Total	Level 2	Level 3
Financial Assets:
Securities held-to-maturity	$   1,700,141	$   1,725,090	$   1,725,090	$                —
FHLB-NY stock	171,194	171,194	171,194	—
Loans held-for-sale, net (1)	76,306	78,486	—	78,486
Loans receivable, net (1)	13,078,471	13,311,997	—	13,311,997
MSR, net (1)	6,947	6,948	—	6,948
Financial Liabilities:
Deposits	10,443,958	10,588,073	10,588,073	—
Borrowings, net	4,373,496	4,857,989	4,857,989	—

(1)Includes assets measured at fair value on a non-recurring basis.

The following is a description of the methods and assumptions used to estimate fair values of our financial instruments which are not measured or recorded at fair value on a recurring or non-recurring basis.

Securities held-to-maturity

The fair values for substantially all of our securities held-to-maturity are obtained from an independent nationally recognized pricing service using similar methods and assumptions as used for our securities available-for-sale which are measured at fair value on a recurring basis.

Federal Home Loan Bank, or FHLB-NY, stock

The fair value of FHLB-NY stock is based on redemption at par value.

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Loans held-for-sale, net

The fair values of fifteen and thirty year conforming fixed rate residential mortgage loans originated for sale are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the options embedded in loans such as prepayments.  This methodology involves generating simulated interest rates, calculating the option adjusted spread, or OAS, of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing on an instrument level for similar mortgage instruments whose prices are not known.

Loans receivable, net

Fair values of loans are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the optionality and structural features embedded in loans such as prepayments and interest rate caps and floors.  This pricing methodology involves generating simulated interest rates, calculating the OAS of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing on an instrument level for similar mortgage instruments whose prices are not known.

This technique of estimating fair value is extremely sensitive to the assumptions and estimates used.  While we have attempted to use assumptions and estimates which are the most reflective of the loan portfolio and the current market, a greater degree of subjectivity is inherent in determining these fair values than for fair values obtained from formal trading marketplaces.  In addition, our valuation method for loans, which is consistent with accounting guidance, does not fully incorporate an exit price approach to fair value.

Deposits

The fair values of deposits with no stated maturity, such as savings, money market and NOW and demand deposit accounts, are equal to the amount payable on demand.  The fair values of certificates of deposit are based on discounted contractual cash flows using the weighted average remaining life of the portfolio discounted by the corresponding LIBOR Swap Curve.

Borrowings, net

The fair values of callable borrowings are based upon third party dealers’ estimated market values.  The fair values of non-callable borrowings are based on discounted cash flows using the weighted average remaining life of the portfolio discounted by the corresponding FHLB-NY nominal funding rate.

Outstanding commitments

Outstanding commitments include commitments to extend credit and unadvanced lines of credit for which fair values were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions.  The fair values of these commitments are immaterial to our financial condition.

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11.    Litigation

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010 and August 26, 2011, the City of New York has notified us of alleged tax deficiencies in the amount of $13.3 million, including interest and penalties, related to our 2006 through 2008 tax years.  The deficiencies relate to our operation of two subsidiaries of Astoria Federal, Fidata Service Corp., or Fidata, and Astoria Federal Mortgage Corp., or AF Mortgage.  We disagree with the assertion of the tax deficiencies.  Hearings in this matter were held before the New York City Tax Appeals Tribunal, or the NYC Tax Appeals Tribunal, in March and April 2013.  The NYC Tax Appeals Tribunal is not expected to render a decision in this matter until the 2014 second quarter.  At this time, management believes it is more likely than not that we will succeed in refuting the City of New York’s position, although defense costs may be significant.  Accordingly, no liability or reserve has been recognized in our consolidated statement of financial condition at March 31, 2013 with respect to this matter.

No assurance can be given as to whether or to what extent we will be required to pay the amount of the tax deficiencies asserted by the City of New York, whether additional tax will be assessed for years subsequent to 2008, that this matter will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Automated Transactions LLC Litigation

In November 2009, an action entitled Automated Transactions LLC v. Astoria Financial Corporation and Astoria Federal Savings and Loan Association was commenced in the U.S. District Court for the Southern District of New York, or the Southern District Court, against us by Automated Transactions LLC, alleging patent infringement involving integrated banking and transaction machines, including automated teller machines, or ATMs, that we utilize.  We were served with the summons and complaint in such action in March 2010.  The plaintiff seeks unspecified monetary damages and an injunction preventing us from continuing to utilize the allegedly infringing machines.  We filed an answer and counterclaims to the plaintiff’s complaint in March 2010.

In May 2010, the plaintiff filed an amended complaint at the direction of the Southern District Court containing substantially the same allegations as the original complaint.  We subsequently moved to dismiss the amended complaint.  In March 2011, the Southern District Court entered an order on the record that dismissed all claims against Astoria Financial Corporation but denied the motion to dismiss the claims against Astoria Federal for alleged direct patent infringement.  The order also dismissed in part the claims against Astoria Federal for alleged inducement of our customers to violate plaintiff’s patents and for Astoria Federal’s allegedly willful violation of the plaintiff’s patents, allowing claims to continue only for alleged inducement and willful infringement after our receiving notice of the pending suit from plaintiff’s counsel.  In March 2011, we answered the amended complaint substantially denying the allegations.

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In July 2012, we filed a motion for summary judgment for non-infringement, which remains pending before the Southern District Court, based on a recent ruling by the U.S. Court of Appeals for the Federal District affirming the U.S. District Court for the District of Delaware, or the Delaware District Court, decision to grant summary judgment in favor of a defendant in an action involving the same plaintiff making substantially similar allegations with respect to identical and substantially similar patents as those involved in the action against us.

By Order dated April 1, 2013 the U.S. Judicial Panel on Multidistrict Litigation transferred this action to the Delaware District Court to be centralized with other cases involving the same plaintiff and common questions of fact.

We have tendered requests for indemnification from the manufacturer and from the transaction processor utilized with respect to the integrated banking and transaction machines, and we served third party complaints against Metavante Corporation and Diebold, Inc. seeking to enforce our indemnification rights.  These complaints are being defended by Metavante Corporation and Diebold, Inc. and we intend to pursue these complaints vigorously.

We intend to continue to vigorously defend this lawsuit.  An adverse result in this lawsuit may include an award of monetary damages, on-going royalty obligations, and/or may result in a change in our business practice, which could result in a loss of revenue.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that this litigation against us will be resolved amicably, that if this litigation results in an adverse decision that we will be successful in seeking indemnification, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Lefkowitz Litigation

In February 2012, we were served with a summons and complaint in a putative class action entitled Ellen Lefkowitz, individually and on behalf of all Persons similarly situated v. Astoria Federal Savings and Loan Association which was commenced in the Supreme Court of the State of New York, County of Queens, or the Queens County Supreme Court, against us alleging that during the proposed class period, we improperly charged overdraft fees to customer accounts when accounts were not overdrawn, improperly reordered electronic debit transactions from the highest to the lowest dollar amount and processed debits before credits to deplete accounts and maximize overdraft fee income.  The complaint contains the further assertion that we did not adequately inform our customers that they had the option to “opt-out” of overdraft services.  In May 2012, we moved to dismiss the complaint.  In July 2012, the Queens County Supreme Court issued an order dismissing the complaint in its entirety.  In September 2012, the plaintiff filed a notice of appeal with the Supreme Court of the State of New York, Appellate Division, Second Judicial Department, or the New York Supreme Court.  The plaintiff failed to perfect the appeal by the March 7, 2013 deadline.  Unless the New York Supreme Court were to permit a request from the plaintiff to perfect the appeal after the deadline, the causes of action asserted in the complaint will be barred under applicable law.

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To the extent the plaintiff continues to pursue this claim, we will continue to vigorously defend this lawsuit.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that the plaintiff will not continue to pursue this litigation against us, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

12.Subsequent Event

On April 10, 2013, we called our Junior Subordinated Debentures for prepayment in whole pursuant to the optional prepayment provisions of the indenture for the Junior Subordinated Debentures.  The prepayment is scheduled to occur on May 10, 2013.  The prepayment price for the Junior Subordinated Debentures will be 103.413% of the $128.9 million aggregate principal amount of the Junior Subordinated Debentures outstanding, plus accrued and unpaid interest to, but not including, the date of repayment.

As a result of the prepayment in whole of the Junior Subordinated Debentures, Astoria Capital Trust I will simultaneously apply the proceeds of such prepayment to redeem its $125.0 million aggregate liquidation amount of Capital Securities, as well as the $3.9 million of common securities owned by Astoria Financial Corporation.  The prepayment of the Junior Subordinated Debentures on May 10, 2013 will result in a net prepayment penalty of $4.3 million in the 2013 second quarter.  See Note 1 for additional information on Astoria Capital Trust I, the Capital Securities and our Junior Subordinated Debentures.

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ITEM 2.        Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q 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, or the Exchange Act.  These statements may be identified by the use of the words “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, or the Reform Act, and any actions regarding foreclosures, may adversely affect our business;

· enhanced supervision and examination by the Office of the Comptroller of the Currency, or OCC, the Board of Governors of the Federal Reserve System, or the FRB, and the Consumer Financial Protection Bureau, or CFPB;

· effects of changes in existing U.S. government or government-sponsored mortgage programs;

· technological changes may be more difficult or expensive than we anticipate;

· success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or

· litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate.

We have no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.

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Executive Summary

The following overview should be read in conjunction with our MD&A in its entirety.

Astoria Financial Corporation is a Delaware corporation organized as the unitary savings and loan association holding company of Astoria Federal.  As the premier Long Island community bank, our goals are to enhance shareholder value while continuing to build a solid banking franchise.  We focus on growing our core businesses of mortgage portfolio lending and retail banking while maintaining strong asset quality and controlling operating expenses.  We have been developing strategies to grow other loan categories to diversify earning assets and to increase low cost core deposits.  These strategies include a greater level of participation in the multi-family and commercial real estate mortgage lending markets and, over time, expanding our array of business banking products and services, focusing on small and mid-sized businesses with an emphasis on attracting clients from larger competitors.  We are also considering expanding our branch network into Manhattan and additional locations on Long Island.

We are impacted by both national and regional economic factors with residential mortgage loans from various regions of the country held in our portfolio and our multi-family and commercial real estate mortgage loan portfolio concentrated in the New York metropolitan area.  Although the U.S. economy has begun showing signs of improvement, the operating environment continues to remain challenging. Interest rates are expected to remain at historic lows for the near term.  The national unemployment rate, while still at a high level, declined to 7.6% for March 2013, compared to a peak of 10.0% for October 2009, and new job growth, while remaining slow, continued during the 2013 first quarter.  Softness persists in the housing and real estate markets, although the extent of such softness varies from region to region.  With respect to our multi-family mortgage loan origination activities, primarily focused in New York, we continue to observe favorable market conditions.

In addition to the challenging economic environment in which we compete, the regulation and oversight of our business has changed significantly in recent years.  As described in more detail in Part I, Item 1A, “Risk Factors,” in our 2012 Annual Report on Form 10-K, certain aspects of the Reform Act continue to have a significant impact on us, including the expanded regulatory burden resulting from oversight of Astoria Federal by the OCC and the CFPB and oversight of Astoria Financial Corporation by the FRB, as well as changes to, and significant increases in, federal deposit insurance premiums, the imposition of consolidated holding company capital requirements and the roll back of federal preemption applicable to certain of our operations.  The FRB issued notices of proposed rulemaking during 2012 that would subject all savings and loan holding companies, including Astoria Financial Corporation, to consolidated capital requirements.  Although implementation of the rules has been delayed, we are continuing to review and prepare for the impact that the Reform Act, Basel III capital standards and related proposed rulemaking will have on our business, financial condition and results of operations.

Net income for the three months ended March 31, 2013 increased compared to the three months ended March 31, 2012, reflecting a reduction of non-interest expense which more than offset lower net interest income and non-interest income.

Net interest income for the three months ended March 31, 2013 was lower compared to the three months ended March 31, 2012, as a decrease in interest income exceeded a decline in interest

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expense.  The net interest rate spread and the net interest margin each declined just one basis point for the 2013 first quarter compared to the 2012 first quarter.  These changes reflect a more rapid decline in the yields on average interest-earning assets than the decline in the costs of average interest-bearing liabilities.  The lower level of interest income for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, primarily reflects the decline in the average yield on interest-earning assets.  In addition, decreases in the average balances of residential mortgage loans and mortgage-backed and other securities resulted in a reduction in interest income which was substantially offset by the additional interest income resulting from an increase in the average balance of our multi-family and commercial real estate mortgage loan portfolio.  The decline in interest expense for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, is primarily due to the decrease in the average cost of interest-bearing liabilities, coupled with a decline in the average balance of certificates of deposit.

The provision for loan losses for the 2013 first quarter totaled $9.1 million, compared to $10.0 million for the 2012 first quarter.  The allowance for loan losses totaled $144.3 million at March 31, 2013, compared to $145.5 million at December 31, 2012.  The slight decline in the allowance for loan losses reflects the general stabilizing trend in overall asset quality we have experienced since 2010 as total delinquencies have continued to decline.  While the level of loans past due 90 days or more has continued its downward trend in the 2013 first quarter, we expect the levels will remain somewhat elevated for some time, especially in certain states where judicial foreclosure proceedings are required.  Notwithstanding the decline in total delinquencies, our non-performing loans increased as of March 31, 2013 as compared to December 31, 2012.  This increase is primarily attributable to the addition of bankruptcy loans discharged prior to 2012 which are current or less than 90 days past due totaling $54.3 million.  In the 2013 first quarter, in addition to bankruptcy loans placed on non-accrual status and reported as non-performing loans as of December 31, 2012, we also included bankruptcy loans discharged prior to 2012 regardless of the delinquency status of the loans.  Such loans continue to generate interest income on a cash basis as payments are received.  The allowance for loan losses at March 31, 2013 reflects the composition and size of our loan portfolio, the levels and composition of loan delinquencies and non-performing loans, our loss history and our evaluation of the housing and real estate markets and the current economic environment.

Non-interest income decreased for the three months ended March 31, 2013 compared to the three months ended March 31, 2012.  This decline is primarily due to gain on sales of securities in the 2012 first quarter and lower customer service fees in the 2013 first quarter compared to 2012, partially offset by an increase in mortgage banking income, net.

Non-interest expense decreased for the three months ended March 31, 2013 compared to the three months ended March 31, 2012.  This decline largely relates to the impact of our cost control initiatives implemented in 2012 resulting in lower compensation and benefits expense, coupled with lower other non-interest expense and federal deposit insurance premium expense.  Non-interest expense for the three months ended March 31, 2013 also includes a reduction in compensation and benefits expense related to changes in certain compensation policies which became effective January 1, 2013, and an increase in occupancy, equipment and systems expense resulting from a one-time charge to conform to a straight-line basis the rental expense on operating leases for certain branch locations.

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Total assets declined during the three months ended March 31, 2013, reflecting a decrease in our residential mortgage loan portfolio which was partially offset by increases in our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio.  At March 31, 2013, our multi-family and commercial real estate mortgage loan portfolio represented 26% of our total loan portfolio, up from 24% at December 31, 2012.  This reflects our focus on repositioning the asset mix of our balance sheet, concentrating more on multi-family loans than on residential loans.  The decrease in our residential mortgage loan portfolio is the result of continued elevated levels of mortgage loan repayments which exceeded our origination and purchase volume in the 2013 first quarter.  Historic low interest rates for thirty year fixed rate conforming mortgage loans continue, thereby making the hybrid ARM loan product less attractive to borrowers.  Our residential mortgage loan origination and purchase volume continues to be negatively affected by this interest rate environment.

Total liabilities declined during the three months ended March 31, 2013, primarily due to a decrease in our borrowings portfolio.  Total deposits increased slightly during the three months ended March 31, 2013 as a result of a net increase in core deposits, consisting of low cost savings, money market and NOW and demand deposit accounts, more than offsetting a decline in certificates of deposit.  At March 31, 2013, total deposits include $563.1 million of business deposits, an increase of 15% since December 31, 2012, reflecting the expansion of our business banking initiatives which continue to facilitate growth in our core deposits by generating new core relationships within the community and deepening our existing relationships.  At March 31, 2013, low cost core deposits represented 64% of total deposits, up from 62% at December 31, 2012, and total deposits increased to 73% of total interest-bearing liabilities at March 31, 2013, up from 70% at December 31, 2012.

Stockholders’ equity increased as of March 31, 2013 compared to December 31, 2012.  The increase was primarily attributed to the issuance of preferred stock in the 2013 first quarter, the net proceeds from which will be used toward the prepayment, scheduled to occur on May 10, 2013, of our 9.75% Junior Subordinated Debentures.  See Note 5 of Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements (Unaudited)” for additional information on the issuance of the preferred stock and see Note 12 for additional information on the scheduled prepayment of the 9.75% Junior Subordinated Debentures.

We continue to operate in a challenging economic and regulatory environment.  We will continue to concentrate on growing the multi-family and commercial real estate mortgage loan portfolio and increasing low cost core deposits.  We are encouraged by the success we have achieved on both sides of the balance sheet, which is reflected in the levels of our multi-family and commercial real estate mortgage loan originations during the 2013 first quarter and the significant increase in the pipeline for such loans as of March 31, 2013, compared to December 31, 2012, as well as the growth in retail and business core deposits during the 2013 first quarter.  We look forward to this growth continuing in the future which should help in our efforts to maintain the net interest margin for 2013 slightly higher than the margin for the year ended December 31, 2012.

Available Information

Our internet website address is www.astoriafederal.com.  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports can be obtained free of charge from our investor relations website at

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http://ir.astoriafederal.com.  The above reports are available on our website as soon as reasonably practicable after we file such material with, or furnish such material to, the SEC.  Such reports are also available on the SEC’s website at www.sec.gov/edgar/searchedgar/webusers.htm.

Critical Accounting Policies

Note 1 of Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of our 2012 Annual Report on Form 10-K, as supplemented by this report, contains a summary of our significant accounting policies.  Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.  Our policies with respect to the methodologies used to determine the allowance for loan losses, the valuation of MSR, judgments regarding goodwill and securities impairment and the estimates related to our pension plans and other postretirement benefits are our most critical accounting policies because they are important to the presentation of our financial condition and results of operations, involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions and estimates about highly uncertain matters.  Actual results may differ from our assumptions, estimates and judgments.  The use of different judgments, assumptions and estimates could result in material differences in our results of operations or financial condition.  These critical accounting policies are reviewed quarterly with the Audit Committee of our Board of Directors.  The following description of these policies should be read in conjunction with the corresponding section of our 2012 Annual Report on Form 10-K.

Allowance for Loan Losses

We establish and maintain, through provisions for loan losses, an allowance for loan losses based on our evaluation of the probable inherent losses in our loan portfolio.  We evaluate the adequacy of our allowance on a quarterly basis.  The allowance is comprised of both valuation allowances related to individual loans and general valuation allowances, although the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

In estimating specific allocations, we review loans deemed to be impaired and measure impairment losses based on either the fair value of collateral, the present value of expected future cash flows, or the loan’s observable market price.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include the financial condition of the borrower, payment history, delinquency status, collateral value and the probability of collecting principal and interest payments when due. When an impairment analysis indicates the need for a specific allocation on an individual loan, the amount must be sufficient to cover probable incurred losses at the evaluation date based on the facts and circumstances of the loan.  When available information confirms that specific loans, or portions thereof, are uncollectible, these amounts are promptly charged-off against the allowance for loan losses.

Loan reviews are performed by our Asset Review Department quarterly for all loans individually classified by our Asset Classification Committee and are performed annually for multi-family and commercial real estate loans modified in a TDR, residential loans with balances of $1.0 million or greater, multi-family and commercial real estate mortgage loans with balances of $5.0 million or greater and commercial loans with balances of $500,000 or greater.  Further, multi-

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family and commercial real estate portfolio management personnel also perform annual reviews for certain multi-family and commercial real estate mortgage loans with balances under $5.0 million and recommend further review by the Asset Review Department as appropriate.  In addition, our Asset Review Department will review annually borrowing relationships whose combined outstanding balance is $5.0 million or greater, with such reviews covering approximately fifty percent of the outstanding principal balance of the loans to such relationships.

We obtain updated estimates of collateral values on, and individually evaluate for impairment, residential mortgage loans at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral values on residential loans are obtained primarily through automated valuation models. Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete. We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate mortgage loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  We also obtain updated estimates of collateral value for certain other loans when the Asset Classification Committee believes repayment of such loans may be dependent on the value of the underlying collateral. Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.

Other current and anticipated economic conditions on which our individual valuation allowances rely are the impact that national and/or local economic and business conditions may have on borrowers, the impact that local real estate markets may have on collateral values, the level and direction of interest rates and their combined effect on real estate values and the ability of borrowers to service debt.  For multi-family and commercial real estate loans, additional factors specific to a borrower or the underlying collateral are considered.  These factors include, but are not limited to, the composition of tenancy, occupancy levels for the property, location of the property, cash flow estimates and, to a lesser degree, the existence of personal guarantees.  We also review all regulatory notices, bulletins and memoranda with the purpose of identifying upcoming changes in regulatory conditions which may impact our calculation of individual valuation allowances.  Our primary banking regulator periodically reviews our reserve methodology during regulatory examinations and any comments regarding changes to reserves or loan classifications are considered by management in determining valuation allowances.

Pursuant to our policy, loan losses are charged-off in the period the loans, or portions thereof, are deemed uncollectible for the portion of the recorded investment in the loan in excess of the estimated fair value of the underlying collateral less estimated selling costs or in excess of the present value of expected future cash flows.  Such charge-offs are taken primarily for residential mortgage loans at 180 days past due and annually thereafter.  These partial charge-offs on residential loans impact our credit quality metrics and trends.  The impact of updating the estimates of collateral value and recognizing any required charge-offs is to increase charge-offs and reduce the allowance for loan losses required on these loans.  We also evaluate, for potential charge-offs, loans modified in a TDR at the time of the modification and impaired multi-family and commercial real estate mortgage loans when the loans are identified as impaired.

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The determination of the loans on which full collectibility is not reasonably assured, the estimates of the fair value of the underlying collateral and the assessment of economic and regulatory conditions are subject to assumptions and judgments by management.  Individual valuation allowances and charge-off amounts could differ materially as a result of changes in these assumptions and judgments.

Estimated losses for loans that are not individually deemed to be impaired are determined on a loan pool basis using our historical loss experience and various other qualitative factors and comprise our general valuation allowances.  General valuation allowances represent loss allowances that have been established to recognize the inherent risks associated with our lending activities which, unlike individual valuation allowances, have not been allocated to particular loans.  The determination of the adequacy of the general valuation allowances takes into consideration a variety of factors.  We segment our residential mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and year of origination and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate loans by portfolio, geographic location and year of origination.  We analyze our consumer and other loan portfolio by home equity lines of credit, commercial loans, revolving credit lines and installment loans and perform similar historical loss analyses.  In our analysis of non-performing loans, we consider our aggregate historical loss experience with respect to the ultimate disposition of the underlying collateral along with the migration of delinquent loans based on the portfolio segments noted above.  These analyses and the resulting loss rates are used as an integral part of our judgment in developing estimated loss percentages to apply to the loan portfolio segments. We monitor credit risk on interest-only hybrid adjustable rate mortgage, or ARM, loans that were underwritten at the initial note rate, which may have been a discounted rate, in the same manner that we monitor credit risk on all interest-only hybrid ARM loans.  We monitor interest rate reset dates of our loan portfolio, in the aggregate, and the current interest rate environment and consider the impact, if any, on borrowers’ ability to continue to make timely principal and interest payments in determining our allowance for loan losses.  We also consider the size, composition, risk profile and delinquency levels of our loan portfolio, as well as our credit administration and asset management procedures.  We monitor property value trends in our market areas by reference to various industry and market reports, economic releases and surveys, and our general and specific knowledge of the real estate markets in which we lend, in order to determine what impact, if any, such trends may have on the level of our general valuation allowances.  In addition, we evaluate and consider the impact that current and anticipated economic and market conditions may have on the loan portfolio and known and inherent risks in the portfolio.  We update our analyses quarterly and continually refine our evaluations as experience provides clearer guidance, our product offerings change and as economic conditions evolve.

We analyze our historical loss experience over twelve, fifteen, eighteen and twenty-four month periods. The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type.  Also, for a particular loan type we may not have sufficient loss history to develop a reasonable estimate of loss and consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs).  We update our historical loss analyses quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses.

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We consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by portfolio.  The qualitative factors we consider generally include, but are not limited to, changes in (1) lending policies and procedures, (2) economic and business conditions and developments that affect collectibility of our loan portfolio, (3) the nature and volume of our loan portfolio and in the terms of loans, (4) the experience, ability and depth of lending management and other staff, (5) the volume and severity of past due, non-accrual and adversely classified loans, (6) the quality of the loan review system, (7) the value of underlying collateral, (8) the existence or effect of any credit concentrations and (9) external factors such as competition and legal or regulatory requirements.  In addition to the nine qualitative factors noted, we also review certain analytical information such as our coverage ratios and peer analysis.

We use ratio analyses as a supplemental tool for evaluating the overall reasonableness of the allowance for loan losses.  As such, we consider our asset quality ratios as well as the allowance ratios and coverage percentages set forth in both peer group and regulatory agency data.  We also consider any comments from our primary banking regulator resulting from their review of our general valuation allowance methodology during regulatory examinations.  We consider the observed trends in our asset quality ratios in combination with our primary focus on our historical loss experience and the impact of current economic conditions.  After evaluating these variables, we determine appropriate allowance coverage percentages for each of our portfolio segments and the appropriate level of our allowance for loan losses.  We do not determine the appropriate level of our allowance for loan losses based exclusively on a single factor or asset quality ratio.  We periodically review the actual performance and charge-off history of our loan portfolio and compare that to our previously determined allowance coverage percentages and individual valuation allowances.  In doing so, we evaluate the impact the previously mentioned variables may have had on the loan portfolio to determine which changes, if any, should be made to our assumptions and analyses.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our allowance for loan losses.  Allocations of the allowance to each loan category are adjusted quarterly to reflect probable inherent losses using the same quantitative and qualitative analyses used in connection with the overall allowance adequacy calculations.  During the 2013 first quarter, the allowance for loan losses allocated to residential mortgage loans over 180 days delinquent with a charge-off, previously determined within our qualitative analysis, has been presented as attributable to these loans individually evaluated for impairment.  The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

As a result of our updated charge-off and loss analyses, we modified certain allowance coverage percentages during the 2013 first quarter to reflect our current estimates of the amount of probable inherent losses in our loan portfolio in determining our general valuation allowances. Based on our evaluation of the composition and size of our loan portfolio, the levels and composition of our loan delinquencies and non-performing loans, our loss history, the housing and real estate markets and the current economic environment, we determined that an allowance for loan losses of $144.3 million was appropriate at March 31, 2013, compared to $145.5 million

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at December 31, 2012.  The provision for loan losses totaled $9.1 million for the three months ended March 31, 2013.

The balance of our allowance for loan losses represents management’s best estimate of the probable inherent losses in our loan portfolio at the reporting dates.  Actual results could differ from our estimates as a result of changes in economic or market conditions.  Changes in estimates could result in a material change in the allowance for loan losses.  While we believe that the allowance for loan losses has been established and maintained at levels that reflect the risks inherent in our loan portfolio, future adjustments may be necessary if portfolio performance or economic or market conditions differ substantially from the conditions that existed at the time of the initial determinations.

For additional information regarding our allowance for loan losses, see “Provision for Loan Losses” and “Asset Quality” in this document and Part II, Item 7, “MD&A,” in our 2012 Annual Report on Form 10-K.

Valuation of MSR

The initial asset recognized for originated MSR is measured at fair value.  The fair value of MSR is estimated by reference to current market values of similar loans sold servicing released.  MSR are amortized in proportion to and over the period of estimated net servicing income.  We apply the amortization method for measurement of our MSR.  MSR are assessed for impairment based on fair value at each reporting date.  Impairment exists if the carrying value of MSR exceeds the estimated fair value. The estimated fair value of MSR is obtained through independent third party valuations.  MSR impairment, if any, is recognized in a valuation allowance through charges to earnings.  Increases in the fair value of impaired MSR are recognized only up to the amount of the previously recognized valuation allowance.

At March 31, 2013, our MSR had an estimated fair value of $8.5 million and were valued based on expected future cash flows considering a weighted average discount rate of 10.93%, a weighted average constant prepayment rate on mortgages of 18.40% and a weighted average life of 4.3 years.  At December 31, 2012, our MSR had an estimated fair value of $6.9 million and were valued based on expected future cash flows considering a weighted average discount rate of 10.95%, a weighted average constant prepayment rate on mortgages of 23.12% and a weighted average life of 3.4 years.

The fair value of MSR is highly sensitive to changes in assumptions.  Changes in prepayment speed assumptions generally have the most significant impact on the fair value of our MSR.  Generally, as interest rates decline, mortgage loan prepayments accelerate due to increased refinance activity, which results in a decrease in the fair value of MSR.  As interest rates rise, mortgage loan prepayments slow down, which results in an increase in the fair value of MSR.  Thus, any measurement of the fair value of our MSR is limited by the conditions existing and the assumptions utilized as of a particular point in time, and those assumptions may not be appropriate if they are applied at a different point in time.

Goodwill Impairment

Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level.  If the estimated fair value of the reporting unit exceeds its

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carrying amount, further evaluation is not necessary.  However, if the fair value of the reporting unit is less than its carrying amount, further evaluation is required to compare the implied fair value of the reporting unit’s goodwill to its carrying amount to determine if a write-down of goodwill is required.  Impairment exists when the carrying amount of goodwill exceeds its implied fair value.

For purposes of our goodwill impairment testing, we have identified a single reporting unit.  We consider the quoted market price of our common stock on our impairment testing date as an initial indicator of estimating the fair value of our reporting unit.  We also consider our average stock price, both before and after our impairment test date, as well as market-based control premiums in determining the estimated fair value of our reporting unit.  In addition to our internal goodwill impairment analysis, we periodically obtain a goodwill impairment analysis from an independent third party valuation firm.  The independent third party utilizes multiple valuation approaches including comparable transactions, control premium, public market peers and discounted cash flow.  Management reviews the assumptions and inputs used in the third party analysis for reasonableness.

At March 31, 2013, the carrying amount of our goodwill totaled $185.2 million.  As of September 30, 2012, we performed our annual goodwill impairment test internally and obtained an independent third party analysis and concluded there was no goodwill impairment.  We would test our goodwill for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount.  No events have occurred and no circumstances have changed since our annual impairment test date that would more likely than not reduce the fair value of our reporting unit below its carrying amount.  The identification of additional reporting units, the use of other valuation techniques or changes to the input assumptions used in our analysis or the analysis by our third party valuation firm could result in materially different evaluations of impairment.

Securities Impairment

Our available-for-sale securities portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity.  Debt securities which we have the positive intent and ability to hold to maturity are classified as held-to-maturity and are carried at amortized cost.  The fair values for our securities are obtained from an independent nationally recognized pricing service.

Our securities portfolio is comprised primarily of fixed rate mortgage-backed securities guaranteed by a GSE as issuer.  GSE issuance mortgage-backed securities comprised 91% of our securities portfolio at March 31, 2013.  Non-GSE issuance mortgage-backed securities at March 31, 2013 comprised 1% of our securities portfolio and had an amortized cost of $15.2 million, with 67% classified as available-for-sale and 33% classified as held-to-maturity.  Substantially all of our non-GSE issuance securities are investment grade securities and they have performed similarly to our GSE issuance securities.  Credit quality concerns have not significantly impacted the performance of our non-GSE securities or our ability to obtain reliable prices.  The balance of our securities portfolio is primarily comprised of debt securities issued by GSEs.

The fair value of our securities portfolio is primarily impacted by changes in interest rates.  In general, as interest rates rise, the fair value of fixed rate securities will decrease; as interest rates fall, the fair value of fixed rate securities will increase.  During this period of historic low interest

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rates, securities backed by fixed rate residential mortgage loans have experienced accelerated rates of prepayments as interest rates have declined which has resulted in a decline in the estimated life of these securities and a decline in fair value.  We conduct a periodic review and evaluation of the securities portfolio to determine if a decline in the fair value of any security below its cost basis is other-than-temporary.  Our evaluation of other-than-temporary impairment, or OTTI, considers the duration and severity of the impairment, our assessments of the reason for the decline in value, the likelihood of a near-term recovery and our intent and ability to not sell the securities.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  If such decline is deemed other-than-temporary, the security is written down to a new cost basis and the resulting loss is charged to earnings as a component of non-interest income, except for the amount of the total OTTI for a debt security that does not represent credit losses which is recognized in other comprehensive income/loss, net of applicable taxes.  At March 31, 2013, we held 42 securities with an estimated fair value totaling $568.2 million which had an unrealized loss totaling $3.6 million.  Of the securities in an unrealized loss position at March 31, 2013, $18.9 million, with an unrealized loss of $124,000, have been in a continuous unrealized loss position for more than twelve months.  At March 31, 2013, the impairments are deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expect to recover the entire amortized cost basis of the security.

Pension Benefits and Other Postretirement Benefit Plans

Astoria Federal has a qualified, non-contributory defined benefit pension plan covering employees meeting specified eligibility criteria.  Astoria Federal’s policy is to fund pension costs in accordance with the minimum funding requirement.  In addition, Astoria Federal has non-qualified and unfunded supplemental retirement plans covering certain officers and directors.  Effective April 30, 2012, the Astoria Federal Savings and Loan Association Employees’ Pension Plan, the Astoria Federal Savings and Loan Association Excess Benefit Plan, the Astoria Federal Savings and Loan Association Supplemental Benefit Plan and the Astoria Federal Savings and Loan Association Directors’ Retirement Plan were amended to, among other things, change the manner in which benefits were computed for service through April 30, 2012 and to suspend accrual of additional benefits for all of the aforementioned plans effective April 30, 2012.  We also sponsor a health care plan that provides for postretirement medical and dental coverage to select individuals.

We recognize the overfunded or underfunded status of our defined benefit pension plans and other postretirement benefit plan, which is measured as the difference between plan assets at fair value and the benefit obligation at the measurement date, in other assets or other liabilities in our consolidated statements of financial condition.  Changes in the funded status are recognized through other comprehensive income/loss in the period in which the changes occur.

There are several key assumptions which we provide our actuary which have a significant impact on the pension benefits and other postretirement benefit obligations as well as benefits expense.  These include the discount rate and the expected return on plan assets.  We continually review and evaluate all actuarial assumptions affecting the pension benefits and other postretirement

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benefit plans.  We monitor these rates in relation to the current market interest rate environment and update our actuarial analysis accordingly.

The discount rate is used to calculate the present value of the benefit obligations at the measurement date and the expense to be recorded in the following period.  A lower discount rate will result in a higher benefit obligation and expense, while a higher discount rate will result in a lower benefit obligation and expense.  Discount rate assumptions are determined by reference to the Citigroup Pension Discount Curve, adjusted for Astoria Federal benefit plan specific cash flows.  We compare these rates to other yield curves and market indices, such as the Mercer Mature Plan Index and Bloomberg AA Discount Curve, for reasonableness and make adjustments, as necessary, so the discount rates used reflect current market data and trends.

To determine the expected return on plan assets, we consider the long-term historical return information on plan assets, the mix of investments that comprise plan assets and the historical returns on indices comparable to the fund classes in which the plan invests.

For further information on the actuarial assumptions used for our pension benefits and other postretirement benefit plans and the impact of the 2012 plan amendments, see Note 14 of Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in our 2012 Annual Report on Form 10-K.

Liquidity and Capital Resources

Our primary source of funds is cash provided by principal and interest payments on loans and securities.  The most significant liquidity challenge we face is the variability in cash flows as a result of changes in mortgage refinance activity.  Principal payments on loans and securities totaled $1.16 billion for the three months ended March 31, 2013, compared to $1.38 billion for the three months ended March 31, 2012.  The net decrease in loan and securities repayments for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, was primarily due to a decrease in loan repayments.  While mortgage loan repayments declined in the 2013 first quarter compared to the 2012 first quarter, they remain at elevated levels due to historic low interest rates for thirty year fixed rate conforming loans, thereby making the hybrid ARM product less attractive to borrowers.

In addition to cash provided by principal and interest payments on loans and securities, our other sources of funds include cash provided by operating activities, deposits and borrowings.  Net cash provided by operating activities totaled $92.9 million for the three months ended March 31, 2013 and $62.2 million for the three months ended March 31, 2012.  Deposits increased slightly during the three months ended March 31, 2013 and decreased $133.0 million during the three months ended March 31, 2012.  The slight increase in deposits for the three months ended March 31, 2013 was due to an increase in core deposits which surpassed a decrease in certificates of deposit.  At March 31, 2013, total deposits include business deposits of $563.1 million, an increase of 15% since December 31, 2012, reflecting the expansion of our business banking initiatives which continue to facilitate growth in our core deposits by generating new core relationships within the community and deepening our existing relationships.  The net decrease in deposits for the three months ended March 31, 2012 was due to a decrease in certificates of deposit, offset by an increase in core deposits.  During the three months ended March 31, 2013 and 2012, we continued to allow high cost certificates of deposit to run off, while the increases in low cost core deposits appear to reflect customer preference for the liquidity these types of

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deposits provide.  Net borrowings decreased $464.9 million during the three months ended March 31, 2013 and increased $212.1 million during the three months ended March 31, 2012.  The decrease in net borrowings during the three months ended March 31, 2013 was primarily due to a decrease in FHLB-NY advances as a reduction in assets and the proceeds from the issuance of the Series C Preferred Stock during the 2013 first quarter provided additional liquidity to reduce our borrowings position.  The increase in net borrowings during the three months ended March 31, 2012 was primarily due to an increase in short-term FHLB-NY advances, partially offset by a decrease in reverse repurchase agreements, as we utilized low cost short-term FHLB-NY advances as a funding source, in part, to fund asset growth.  The growth in core deposits and the declines in certificates of deposit and borrowings during the three months ended March 31, 2013 reflect our efforts to reposition the liability mix of our balance sheet.  At March 31, 2013, low cost core deposits represented 64% of total deposits, up from 62% at December 31, 2012, and total deposits increased to 73% of total interest-bearing liabilities at March 31, 2013, up from 70% at December 31, 2012.

Our primary use of funds is for the origination and purchase of mortgage loans and, to a lesser degree, for the purchase of securities.  Gross mortgage loans originated and purchased for portfolio during the three months ended March 31, 2013 totaled $579.1 million, of which $345.6 million were multi-family and commercial real estate loan originations, $161.5 million were residential loan originations and $72.0 million were purchases of individual residential mortgage loans through our third party loan origination program.  This compares to gross mortgage loans originated and purchased for portfolio during the three months ended March 31, 2012 totaling $1.22 billion, of which $344.3 million were multi-family loan originations, $562.9 million were residential loan originations and $317.5 million were residential loan purchases.  Residential mortgage loan origination and purchase volume for portfolio has been negatively affected for an extended period of time by the historic low interest rates for thirty year fixed rate conforming mortgage loans and the expanded conforming loan limits resulting in more borrowers opting for thirty year fixed rate conforming mortgage loans which we do not retain for portfolio and a reduced demand for jumbo hybrid ARM loans.  Multi-family and commercial real estate loan originations increased slightly during the three months ended March 31, 2013, compared to the three months ended March 31, 2012, reflecting continued strong loan production as we concentrate on growing these portfolios.  Purchases of securities totaled $383.6 million during the three months ended March 31, 2013 and $374.8 million during the three months ended March 31, 2012.

Our policies and procedures with respect to managing funding and liquidity risk are established to ensure our safe and sound operation in compliance with applicable bank regulatory requirements.  Our liquidity management process is sufficient to meet our daily funding needs and cover both expected and unexpected deviations from normal daily operations.  Processes are in place to appropriately identify, measure, monitor and control liquidity and funding risk.  The primary tools we use for measuring and managing liquidity risk include cash flow projections, diversified funding sources, stress testing, a cushion of liquid assets and contingency funding plans.

We maintain liquidity levels to meet our operational needs in the normal course of our business.  The levels of our liquid assets during any given period are dependent on our operating, investing and financing activities.  Cash and due from banks totaled $127.8 million at March 31, 2013 and $121.5 million at December 31, 2012.  At March 31, 2013, we had $682.0 million in borrowings with a weighted average rate of 1.41% maturing over the next twelve months.  We have the

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flexibility to either repay or rollover these borrowings as they mature.  Included in our borrowings are various obligations which, by their terms, may be called by the counterparty.  At March 31, 2013, we had $1.95 billion of callable borrowings, all of which are contractually callable within three months and on a quarterly basis thereafter.  We believe the potential for these borrowings to be called does not present a liquidity concern as they have above current market coupons and, as such, are not likely to be called absent a significant increase in market interest rates.  In addition, we believe we can readily obtain replacement funding, although such funding may be at higher rates.  At March 31, 2013, FHLB-NY advances totaled $2.31 billion, or 59% of total borrowings.  We do not believe any of our borrowing counterparty concentrations represent a material risk to our liquidity.  In addition, we had $1.57 billion of certificates of deposit at March 31, 2013 with a weighted average rate of 0.93% maturing over the next twelve months.  We have the ability to retain or replace a significant portion of such deposits based on our pricing and historical experience.

The following table details our borrowing and certificate of deposit maturities and their weighted average rates at March 31, 2013.

	Borrowings					Certificates of Deposit
				Weighted			Weighted
				Average			Average
(Dollars in Millions)	Amount			Rate		Amount	Rate
Contractual Maturity:
Twelve months or less	$	682		1.41	%	$ 1,573	0.93	%
Thirteen to twenty-four months	150		(1)	3.16		1,004	1.85
Twenty-five to thirty-six months	625		(2)	1.58		819	2.36
Thirty-seven to forty-eight months	1,125		(3)	3.44		236	1.81
Forty-nine to sixty months	1,200		(4)	4.48		137	1.17
Over sixty months	129		(5)	9.75		—	—
Total	$	3,911		3.31	%	$ 3,769	1.55	%

(1)	Includes $100.0 million of callable borrowings with a rate of 4.16%.
(2)	Includes $100.0 million of callable borrowings with a rate of 4.19%.
(3)	Includes $800.0 million of callable borrowings with a weighted average rate of 4.37%.
(4)	Includes $950.0 million of callable borrowings with a weighted average rate of 4.34%.
(5)	Represents our Junior Subordinated Debentures which mature on November 1, 2029 and are scheduled for prepayment on May 10, 2013.

Additional sources of liquidity at the holding company level have included issuances of securities into the capital markets, including private issuances of trust preferred securities and senior debt.  Holding company debt obligations are included in other borrowings.  Our ability to continue to access the capital markets for additional financing at favorable terms may be limited by, among other things, market conditions, interest rates, our capital levels, Astoria Federal’s ability to pay dividends to Astoria Financial Corporation, our credit profile and ratings and our business model.

We have filed automatic shelf registration statements on Form S-3 with the SEC, which allow us to periodically offer and sell, from time to time, in one or more offerings, individually or in any combination, common stock, preferred stock, debt securities, capital securities, guarantees, warrants to purchase common stock or preferred stock and units consisting of one or more of the

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foregoing.  These shelf registration statements provide us with greater capital management flexibility and enable us to more readily access the capital markets in order to pursue growth opportunities that may become available to us in the future or should there be any changes in the regulatory environment that call for increased capital requirements.  Although the shelf registration statements do not limit the amount of the foregoing items that we may offer and sell, our ability and any decision to do so is subject to market conditions and our capital needs.

On March 19, 2013, in a public offering, we sold 5,400,000 depositary shares, each representing a 1/40th interest in a share of our 6.50% Non-Cumulative Perpetual Preferred Stock, Series C, $1.00 par value per share, $1,000 liquidation preference per share (equivalent to $25.00 per depositary share).  We issued 135,000 shares of the Series C Preferred Stock in connection with the sale of the depositary shares.  The aggregate proceeds from the offering, net of underwriting discounts and other issuance costs, were approximately $129.8 million.

The Series C Preferred Stock, and corresponding depositary shares, may be redeemed at our option, in whole or in part, on April 15, 2018, or on any dividend payment date occurring thereafter, at a redemption price of $1,000 per share (equivalent to $25.00 per depositary share), plus any declared and unpaid dividends (without accumulation of any undeclared dividends). The Series C Preferred Stock may also be redeemed in whole, but not in part, at any time upon the occurrence of a “regulatory capital treatment event,” as defined in the certificate of designations included in the registration statement on Form 8-A filed with the SEC on March 19, 2013.  The holders of the Series C Preferred Stock, and the corresponding depositary shares, do not have the right to require the redemption or repurchase of the Series C Preferred Stock.

Dividends will be payable on the Series C Preferred Stock when, as and if declared by our board of directors, on a non-cumulative basis quarterly in arrears on January 15, April 15, July 15 and October 15 of each year at an annual rate of 6.50% on the liquidation preference of $1,000 per share, beginning on July 15, 2013.  No dividend shall be declared, paid, or set aside for payment on our common stock unless the full dividends for the most recently completed dividend period have been declared and paid on our Series C Preferred Stock.

On April 10, 2013, we called our Junior Subordinated Debentures for prepayment in whole pursuant to the optional prepayment provisions of the indenture for the Junior Subordinated Debentures.  The prepayment is scheduled to occur on May 10, 2013.  The prepayment price for the Junior Subordinated Debentures will be 103.413% of the $128.9 million aggregate principal amount of the Junior Subordinated Debentures outstanding, plus accrued and unpaid interest to, but not including, the date of repayment.

As a result of the prepayment in whole of the Junior Subordinated Debentures, Astoria Capital Trust I will simultaneously apply the proceeds of such prepayment to redeem its $125.0 million aggregate liquidation amount of Capital Securities, as well as the $3.9 million of common securities owned by Astoria Financial Corporation.  The prepayment of the Junior Subordinated Debentures on May 10, 2013 will result in a net prepayment penalty of $4.3 million in the 2013 second quarter.  See Note 1 and Note 12 of Notes to Consolidated Financial Statements, in Part I, Item 1, “Financial Statements (Unaudited),” for additional information regarding Astoria Capital Trust I, the Capital Securities and our Junior Subordinated Debentures.

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Astoria Financial Corporation’s primary uses of funds include payment of dividends, payment of interest on its debt obligations and repurchases of common stock.  On March 1, 2013, we paid a quarterly cash dividend of $0.04 per share on shares of our common stock outstanding as of the close of business on February 15, 2013 totaling $3.9 million.  On April 17, 2013, we declared a quarterly cash dividend of $0.04 per share on shares of our common stock payable on June 1, 2013 to stockholders of record as of the close of business on May 15, 2013.  Our twelfth stock repurchase plan, approved by our Board of Directors on April 18, 2007, authorized the purchase of 10,000,000 shares, or approximately 10% of our common stock then outstanding, in open-market or privately negotiated transactions.  At March 31, 2013, a maximum of 8,107,300 shares may yet be purchased under this plan.  However, we are not currently repurchasing additional shares of our common stock and have not since the 2008 third quarter.

Our ability to pay dividends, service our debt obligations and repurchase common stock is dependent primarily upon receipt of capital distributions from Astoria Federal.  Since Astoria Federal is a federally chartered savings association, there are regulatory limits on its ability to make distributions to Astoria Financial Corporation. See Part I, Item 1, “Regulation and Supervision,” in our 2012 Annual Report on Form 10-K for further discussion of these regulatory limits.  Astoria Federal paid a dividend to Astoria Financial Corporation in the amount of $4.0 million during the three months ended March 31, 2013.  On April 22, 2013, Astoria Federal paid a dividend in the amount of $21.0 million to Astoria Financial Corporation.

See “Financial Condition” for further discussion of the changes in stockholders’ equity.

At March 31, 2013, our tangible common equity ratio, which represents common stockholders’ equity less goodwill divided by total assets less goodwill, was 7.00%.  At March 31, 2013, Astoria Federal’s capital levels exceeded all of its regulatory capital requirements with a Tangible capital ratio of 9.42%, Tier 1 leverage capital ratio of 9.42%, Total risk-based capital ratio of 16.74% and Tier 1 risk-based capital ratio of 15.48%.  As of March 31, 2013, Astoria Federal continues to be a well capitalized institution for all bank regulatory purposes.

Pursuant to the Reform Act, we will be subject to new minimum capital requirements to be set by the FRB. The FRB issued notices of proposed rulemaking in 2012 that would subject all savings and loan holding companies, including Astoria Financial Corporation, to consolidated capital requirements. These proposed rules would also revise the quantity and quality of required minimum risk-based and leverage capital requirements, consistent with the Reform Act and the Basel III capital standards, and propose an additional common equity tier 1 capital conservation buffer, or Conservation Buffer, of 2.50% of risk-weighted assets, to be applied to the common equity tier 1 capital ratio, the tier 1 capital ratio and the total capital ratio, with restrictions on capital distributions and certain discretionary cash bonus payments if the minimum Conservation Buffer is not met. The proposed rules would also revise the FRB rules for calculating risk-weighted assets to enhance their risk sensitivity, which, among other things, would generally exclude trust preferred securities as a component of tier 1 capital.  The new minimum regulatory capital ratios and changes to the calculation of risk-weighted assets would be phased in, to provide time for banking organizations to meet the new capital standards.  We are continuing to review and prepare for the impact that the Reform Act, Basel III capital standards and related proposed rulemaking will have on our business, financial condition and results of operations.  Proposed regulations implementing these requirements have not yet been finalized.

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Off-Balance Sheet Arrangements and Contractual Obligations

We are a party to financial instruments with off-balance sheet risk in the normal course of our business in order to meet the financing needs of our customers and in connection with our overall interest rate risk management strategy.  These instruments involve, to varying degrees, elements of credit, interest rate and liquidity risk.  In accordance with GAAP, these instruments are either not recorded in the consolidated financial statements or are recorded in amounts that differ from the notional amounts.  Such instruments primarily include lending commitments and lease commitments.

Lending commitments include commitments to originate and purchase loans and commitments to fund unused lines of credit.  Additionally, in connection with our mortgage banking activities, we have commitments to fund loans held-for-sale and commitments to sell loans which are considered financial derivative instruments.  Commitments to sell loans totaled $58.3 million at March 31, 2013.  The fair values of our mortgage banking derivative instruments are immaterial to our financial condition and results of operations.  We also have contractual obligations related to operating lease commitments which have not changed significantly from December 31, 2012.

The following table details our contractual obligations at March 31, 2013.

	Payments due by period
		Less than		One to	Three to	More than
(In Thousands)	Total	One Year		Three Years	Five Years	Five Years
On-balance sheet contractual obligations:
Borrowings with original terms greater than three months	$ 3,653,866	$	425,000	$ 775,000	$ 2,325,000	$ 128,866
Off-balance sheet contractual obligations:
Commitments to originate and purchase loans (1)	531,536	531,536		—	—	—
Commitments to fund unused lines of credit (2)	190,607	190,607		—	—	—
Total	$ 4,376,009	$	1,147,143	$ 775,000	$ 2,325,000	$ 128,866

(1)Includes commitments to originate loans held-for-sale of $35.6 million.

(2)Includes commitments to fund unused home equity lines of credit of $129.9 million.

In addition to the contractual obligations previously discussed, we have liabilities for gross unrecognized tax benefits and interest and penalties related to uncertain tax positions which have not changed significantly from December 31, 2012.  For further information regarding these liabilities, see Note 11 of Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” in our 2012 Annual Report on Form 10-K.  We also have contingent liabilities related to assets sold with recourse and standby letters of credit which have not changed significantly from December 31, 2012.

For further information regarding our off-balance sheet arrangements and contractual obligations, see Part II, Item 7, “MD&A,” in our 2012 Annual Report on Form 10-K.

Comparison of Financial Condition as of March 31, 2013 and December 31, 2012 and Operating Results for the Three Months Ended March 31, 2013 and 2012

Financial Condition

Total assets declined $286.1 million to $16.21 billion at March 31, 2013, from $16.50 billion at December 31, 2012, reflecting a decrease in our residential mortgage loan portfolio which was partially offset by increases in our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio.

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Loans receivable, net, decreased $310.9 million to $12.77 billion at March 31, 2013, from $13.08 billion at December 31, 2012, and represented 79% of total assets at March 31, 2013.  The growth in our multi-family and commercial real estate mortgage loan portfolios was more than offset by the decline in our residential mortgage loan portfolio resulting in a net decline of $303.1 million in our total mortgage loan portfolio to $12.59 billion at March 31, 2013, compared to $12.89 billion at December 31, 2012.  While our mortgage loan portfolio continues to consist primarily of residential mortgage loans, at March 31, 2013 our combined multi-family and commercial real estate mortgage loan portfolio represented 26% of our total loan portfolio, up from 24% at December 31, 2012.  This reflects our focus on repositioning the asset mix of our balance sheet, concentrating more on multi-family loans than on residential loans.  Gross mortgage loans originated and purchased for portfolio during the three months ended March 31, 2013 totaled $579.1 million, of which $345.6 million were multi-family and commercial real estate loan originations, $161.5 million were residential loan originations and $72.0 million were residential loan purchases.  This compares to gross mortgage loans originated and purchased for portfolio during the three months ended March 31, 2012 totaling $1.22 billion, of which $344.3 million were multi-family loan originations, $562.9 million were residential loan originations and $317.5 million were residential loan purchases.  Mortgage loan repayments decreased to $854.3 million for the three months ended March 31, 2013, compared to $1.08 billion for the three months ended March 31, 2012, due to decreases in both residential and multi-family and commercial real estate loan repayments.

Our residential mortgage loan portfolio decreased $513.9 million to $9.20 billion at March 31, 2013, from $9.71 billion at December 31, 2012, and represented 72% of our total loan portfolio at March 31, 2013.  Residential mortgage loan repayments declined for the 2013 first quarter, compared to the 2012 first quarter, but remain at elevated levels and outpaced our origination and purchase volume during the three months ended March 31, 2013 resulting in a decline in the portfolio.  During the three months ended March 31, 2013, the loan-to-value ratio of our residential mortgage loan originations and purchases for portfolio, at the time of origination or purchase, averaged approximately 61% and the loan amount averaged approximately $756,000.

Our multi-family mortgage loan portfolio increased $169.6 million to $2.58 billion at March 31, 2013, from $2.41 billion at December 31, 2012 and represented 20% of our total loan portfolio at March 31, 2013.  Our commercial real estate loan portfolio increased $41.2 million to $815.1 million at March 31, 2013, from $773.9 million at December 31, 2012 and represented 6% of our total loan portfolio at March 31, 2013.  The slight increase in multi-family and commercial real estate loan originations for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, reflects the continued strong loan production as we concentrate on growing this portfolio.  During the three months ended March 31, 2013, our multi-family and commercial real estate mortgage loan originations reflected loan balances averaging approximately $2.8 million with a weighted average loan-to-value ratio, at the time of origination, of approximately 52% and a weighted average debt service coverage ratio of approximately 1.82%.

Securities purchased totaling $383.6 million were in excess of securities repayments of $277.8 million during the three months ended March 31, 2013 and resulted in an increase of $101.4 million in the securities portfolio to $2.14 billion, or 13% of total assets, at March 31, 2013, compared to $2.04 billion at December 31, 2012.  At March 31, 2013, our securities portfolio was comprised primarily of fixed rate REMIC and CMO securities which had an amortized cost

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of $1.93 billion, a weighted average current coupon of 3.17%, a weighted average collateral coupon of 4.62% and a weighted average life of 2.7 years.  For additional information regarding our securities portfolio, see Note 2 of Notes to Consolidated Financial Statements, in Part I, Item 1, “Financial Statements (Unaudited).”

Total liabilities decreased $429.6 million to $14.77 billion at March 31, 2013, from $15.20 billion at December 31, 2012, primarily due to a decrease of $464.9 million in total borrowings, net, to $3.91 billion at March 31, 2013, from $4.37 billion at December 31, 2012.  Deposits increased slightly to $10.45 billion at March 31, 2013, from $10.44 billion at December 31, 2012, due to a net increase of $192.7 million in core deposits to $6.68 billion at March 31, 2013, which exceeded the decrease in certificates of deposit.  At March 31, 2013, low cost core deposits represented 64% of total deposits, up from 62% at December 31, 2012.  This reflects our efforts to reposition the liability mix of our balance sheet, reducing high cost certificates of deposit, which decreased $191.3 million since December 31, 2012 to $3.77 billion at March 31, 2013, and increasing low cost core deposits.  Money market accounts increased $199.9 million since December 31, 2012 to $1.79 billion at March 31, 2013.  NOW and demand deposit accounts increased $43.1 million since December 31, 2012 to $2.14 billion at March 31, 2013.  Savings accounts decreased $50.3 million since December 31, 2012 to $2.75 billion at March 31, 2013.  The net increase in low cost core deposits during the three months ended March 31, 2013 appear to reflect customer preference for the liquidity these types of deposits provide and also reflect benefits from our efforts to expand our business banking customer base.  At March 31, 2013, total deposits include $563.1 million of business deposits, an increase of 15% since December 31, 2012.

Stockholders’ equity increased $143.5 million to $1.44 billion at March 31, 2013, from $1.29 billion at December 31, 2012.  The increase in stockholders’ equity was primarily due to the net proceeds of $129.8 million from the issuance of the Series C Preferred Stock on March 19, 2013 and net income of $13.9 million.  For further information on the issuance of the Series C Preferred Stock, see Note 5 of Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements (Unaudited).”

Results of Operations

General

Net income for the three months ended March 31, 2013 increased $3.9 million to $13.9 million, from $10.0 million for the three months ended March 31, 2012, reflecting a reduction of non-interest expense which more than offset lower net interest income and non-interest income.  Diluted earnings per common share increased to $0.14 per share for the three months ended March 31, 2013, compared to $0.11 per share for the three months ended March 31, 2012.  Return on average assets increased to 0.34% for the three months ended March 31, 2013, compared to 0.23% for the three months ended March 31, 2012.  Return on average common stockholders’ equity increased to 4.27% for the three months ended March 31, 2013, compared to 3.19% for the three months ended March 31, 2012. Return on average tangible common stockholders’ equity, which represents average common stockholders’ equity less average goodwill, increased to 4.97% for the three months ended March 31, 2013, compared to 3.75% for the three months ended March 31, 2012.  The increases in these returns for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, were primarily due to the increase in net income.

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Net Interest Income

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.  Net interest income depends primarily upon the volume of interest-earning assets and interest-bearing liabilities and the corresponding interest rates earned or paid. Our net interest income is significantly impacted by changes in interest rates and market yield curves and their related impact on cash flows.  See Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” for further discussion of the potential impact of changes in interest rates on our results of operations.

Net interest income decreased $4.2 million to $84.0 million for the three months ended March 31, 2013, from $88.2 million for the three months ended March 31, 2012, as a decrease in interest income exceeded a decline in interest expense.  The net interest rate spread decreased one basis point to 2.12% for the three months ended March 31, 2013, compared to 2.13% for the three months ended March 31, 2012.  The net interest margin also decreased one basis point to 2.19% for the three months ended March 31, 2013, compared to 2.20% for the three months ended March 31, 2012.  These changes reflect a more rapid decline in the yields on average interest-earning assets than the decline in the costs of average interest-bearing liabilities.  The average balance of net interest-earning assets increased $131.2 million to $778.0 million for the three months ended March 31, 2013, from $646.8 million for the three months ended March 31, 2012.

The lower level of interest income for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, primarily reflects the decline in the average yield on interest-earning assets.  In addition, decreases in the average balances of residential mortgage loans and mortgage-backed and other securities resulted in a reduction in interest income which was substantially offset by the additional interest income resulting from an increase in the average balance of our multi-family and commercial real estate mortgage loan portfolio.  The decline in interest expense for the three months ended March 31, 2013, compared to the three months ended March 31, 2012, is primarily due to the decrease in the average cost of interest-bearing liabilities, coupled with a decline in the average balance of certificates of deposit.

The changes in average interest-earning assets and interest-bearing liabilities and their related yields and costs are discussed in greater detail under “Interest Income” and “Interest Expense.”

Analysis of Net Interest Income

The following table sets forth certain information about the average balances of our assets and liabilities and their related yields and costs for the periods indicated.  Average yields are derived by dividing income by the average balance of the related assets and average costs are derived by dividing expense by the average balance of the related liabilities, for the periods shown.  Average balances are derived from average daily balances.  The yields and costs include amortization of fees, costs, premiums and discounts which are considered adjustments to interest rates.

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	For the Three Months Ended March 31,
	2013							2012
(Dollars in Thousands)	Average Balance			Interest		Average Yield/ Cost		Average Balance			Interest		Average Yield/ Cost
						(Annualized)							(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
Residential	$	9,551,733		$	80,207	3.36	%	$	10,646,065		$	99,292	3.73	%
Multi-family and commercial real estate	3,296,907			38,623		4.69		2,400,624			36,470		6.08
Consumer and other loans (1)	263,978			2,228		3.38		281,317			2,341		3.33
Total loans	13,112,618			121,058		3.69		13,328,006			138,103		4.14
Mortgage-backed and other securities (2)	2,011,325			10,899		2.17		2,444,341			18,021		2.95
Interest-earning cash accounts	91,926			55		0.24		88,254			53		0.24
FHLB-NY stock	164,248			2,029		4.94		138,819			1,602		4.62
Total interest-earning assets	15,380,117			134,041		3.49		15,999,420			157,779		3.94
Goodwill	185,151							185,151
Other non-interest-earning assets	824,578							932,078
Total assets	$	16,389,846						$	17,116,649
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings	$	2,771,082		342		0.05		$	2,786,380		1,762		0.25
Money market	1,692,150			2,093		0.49		1,130,700			1,853		0.66
NOW and demand deposit	2,060,170			167		0.03		1,843,246			290		0.06
Total core deposits	6,523,402			2,602		0.16		5,760,326			3,905		0.27
Certificates of deposit	3,859,606			14,719		1.53		5,353,472			25,522		1.91
Total deposits	10,383,008			17,321		0.67		11,113,798			29,427		1.06
Borrowings	4,219,118			32,688		3.10		4,238,790			40,156		3.79
Total interest-bearing liabilities	14,602,126			50,009		1.37		15,352,588			69,583		1.81
Non-interest-bearing liabilities	456,240							512,158
Total liabilities	15,058,366							15,864,746
Stockholders’ equity	1,331,480							1,251,903
Total liabilities and stockholders’ equity	$	16,389,846						$	17,116,649
Net interest income/ net interest rate spread (3)				$	84,032	2.12	%				$	88,196	2.13	%
Net interest-earning assets/ net interest margin (4)	$	777,991				2.19	%	$	646,832				2.20	%
Ratio of interest-earning assets to interest-bearing liabilities	1.05		x					1.04		x

(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.

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Rate/Volume Analysis

The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense during the periods indicated.  Information is provided in each category with respect to (1) the changes attributable to changes in volume (changes in volume multiplied by prior rate), (2) the changes attributable to changes in rate (changes in rate multiplied by prior volume), and (3) the net change.  The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

	Increase (Decrease) for the Three Months Ended March 31, 2013 Compared to the Three Months Ended March 31, 2012
(In Thousands)	Volume			Rate			Net
Interest-earning assets:
Mortgage loans:
Residential	$	(9,712	)	$	(9,373	)	$	(19,085	)
Multi-family and commercial real estate	11,683			(9,530		)	2,153
Consumer and other loans	(147		)	34			(113		)
Mortgage-backed and other securities	(2,857		)	(4,265		)	(7,122		)
Interest-earning cash accounts	2			—			2
FHLB-NY stock	310			117			427
Total	(721		)	(23,017		)	(23,738		)
Interest-bearing liabilities:
Savings	(10		)	(1,410		)	(1,420		)
Money market	791			(551		)	240
NOW and demand deposit	30			(153		)	(123		)
Certificates of deposit	(6,306		)	(4,497		)	(10,803		)
Borrowings	(185		)	(7,283		)	(7,468		)
Total	(5,680		)	(13,894		)	(19,574		)
Net change in net interest income	$	4,959		$	(9,123	)	$	(4,164	)

Interest Income

Interest income decreased $23.8 million to $134.0 million for the three months ended March 31, 2013, from $157.8 million for the three months ended March 31, 2012, primarily due to a decrease in the average yield on interest-earning assets to 3.49% for the three months ended March 31, 2013, from 3.94% for the three months ended March 31, 2012.  The decrease in the average yield on interest-earning assets was primarily due to lower average yields on mortgage loans and mortgage-backed and other securities.  The average balance of interest-earning assets decreased $619.3 million to $15.38 billion for the three months ended March 31, 2013, from $16.00 billion for the three months ended March 31, 2012, primarily due to decreases in the average balances of residential mortgage loans and mortgage-backed and other securities, partially offset by an increase in the average balance of multi-family and commercial real estate mortgage loans.

Interest income on residential mortgage loans decreased $19.1 million to $80.2 million for the three months ended March 31, 2013, from $99.3 million for the three months ended March 31, 2012, due to a decrease in both the average balance and the average yield on such loans.  The average balance of residential mortgage loans decreased $1.10 billion to $9.55 billion for the

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three months ended March 31, 2013, from $10.65 billion for the three months ended March 31, 2012.  The decrease in the average balance of residential mortgage loans reflects the continued elevated levels of repayments on such loans which have outpaced our originations over the past year.  The average yield decreased to 3.36% for the three months ended March 31, 2013, from 3.73% for the three months ended March 31, 2012.  The decrease in the average yield was primarily due to new originations at lower interest rates than the rates on loans repaid over the past year and the impact of the downward repricing of our ARM loans. The lower interest rates and decrease in the average balance are attributable to the negative impact of the U.S. government programs that impede our ability to grow residential mortgage loans profitably.  Net premium and deferred loan origination cost amortization on residential mortgage loans decreased $780,000 to $5.5 million for the three months ended March 31, 2013, from $6.3 million for the three months ended March 31, 2012.

Interest income on multi-family and commercial real estate mortgage loans increased $2.1 million to $38.6 million for the three months ended March 31, 2013, from $36.5 million for the three months ended March 31, 2012, due to an increase of $896.3 million in the average balance, offset by a decrease in the average yield to 4.69% for the three months ended March 31, 2013, from 6.08% for the three months ended March 31, 2012.  The increase in the average balance of multi-family and commercial real estate loans is attributable to strong levels of originations of such loans which have exceeded repayments over the past year.  The decrease in the average yield was due, in part, to new originations at interest rates below the weighted average rates of the portfolios, coupled with a decrease in prepayment penalties.  Prepayment penalties decreased $1.1 million to $1.4 million for the three months ended March 31, 2013, from $2.5 million for the three months ended March 31, 2012.

Interest income on mortgage-backed and other securities decreased $7.1 million to $10.9 million for the three months ended March 31, 2013, from $18.0 million for the three months ended March 31, 2012, due to a decrease in the average yield to 2.17% for the three months ended March 31, 2013, from 2.95% for the three months ended March 31, 2012, coupled with a decrease in the average balance of the portfolio.  The decrease in the average yield on mortgage-backed and other securities was primarily due to repayments on higher yielding securities and purchases of new securities with lower coupons than the weighted average coupon for the portfolio and an increase in net premium amortization.  Net premium amortization increased $1.6 million to $4.8 million for the three months ended March 31, 2013, from $3.2 million for the three months ended March 31, 2012.  The average balance of mortgage-backed and other securities decreased $433.0 million to $2.01 billion for the three months ended March 31, 2013, reflecting securities repayments and sales over the past year in excess of purchases.

Interest Expense

Interest expense decreased $19.6 million to $50.0 million for the three months ended March 31, 2013, from $69.6 million for the three months ended March 31, 2012, due to a decrease in the average cost of interest-bearing liabilities to 1.37% for the three months ended March 31, 2013, from 1.81% for the three months ended March 31, 2012, coupled with a decrease of $750.5 million in the average balance of interest-bearing liabilities to $14.60 billion for the three months ended March 31, 2013, from $15.35 billion for the three months ended March 31, 2012.  The decrease in the average cost of interest-bearing liabilities was primarily due to decreases in the average costs of borrowings, certificates of deposit and savings accounts.  The decrease in the

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average balance of interest-bearing liabilities primarily reflects a decrease in the average balance of certificates of deposit, partially offset by an increase in the average balance of core deposits.

Interest expense on total deposits decreased $12.1 million to $17.3 million for the three months ended March 31, 2013, from $29.4 million for the three months ended March 31, 2012, due to a decrease in the average cost to 0.67% for the three months ended March 31, 2013, from 1.06% for the three months ended March 31, 2012, coupled with a decrease of $730.8 million in the average balance of total deposits to $10.38 billion for the three months ended March 31, 2013, from $11.11 billion for the three months ended March 31, 2012.  The decrease in the average cost of total deposits was primarily due to decreases in the average costs of our certificates of deposit and savings accounts.  The decrease in the average balance of total deposits was primarily due to a decrease in the average balance of certificates of deposit, partially offset by increases in the average balances of money market and NOW and demand deposit accounts.

Interest expense on certificates of deposit decreased $10.8 million to $14.7 million for the three months ended March 31, 2013, from $25.5 million for the three months ended March 31, 2012, due to a decrease of $1.49 billion in the average balance, coupled with a decrease in the average cost to 1.53% for the three months ended March 31, 2013, from 1.91% for the three months ended March 31, 2012.  The decrease in the average balance of certificates of deposit was primarily the result of our reduced focus on certificates of deposit, reflecting our efforts to reposition the liability mix of our balance sheet to increase our low cost core deposits and reduce high cost certificates of deposit.  The decrease in the average cost of certificates of deposit reflects the impact of certificates of deposit at higher rates maturing and being replaced at lower interest rates.  During the three months ended March 31, 2013, $652.9 million of certificates of deposit with a weighted average rate of 0.50% and a weighted average maturity at inception of thirteen months, matured and $446.8 million of certificates of deposit were issued or repriced, with a weighted average rate of 0.10% and a weighted average maturity at inception of eight months.  Interest expense on savings accounts decreased $1.4 million to $342,000 for the three months ended March 31, 2013, from $1.8 million for the three months ended March 31, 2012.  The decrease was primarily due to a decrease in the average cost to 0.05% for the three months ended March 31, 2013, compared to 0.25% for the three months ended March 31, 2012.

Interest expense on borrowings decreased $7.5 million to $32.7 million for the three months ended March 31, 2013, from $40.2 million for the three months ended March 31, 2012, primarily due to a decrease in the average cost to 3.10% for the three months ended March 31, 2013, from 3.79% for the three months ended March 31, 2012.  The decrease in the average cost of borrowings was a result of the repayment of borrowings that matured over the past year which had a higher weighted average rate than the weighted average rate of the portfolio and increased utilization of low cost FHLB-NY advances during the three months ended March 31, 2013.

Provision for Loan Losses

We review our allowance for loan losses on a quarterly basis.  Material factors considered during our quarterly review are the composition and size of our loan portfolio, the levels and composition of loan delinquencies and non-performing loans, our loss history and our evaluation of the housing and real estate markets and the current economic environment.  We continue to closely monitor the local and national real estate markets and other factors related to risks inherent in our loan portfolio.  We are impacted by both national and regional economic factors with residential mortgage loans from various regions of the country held in our portfolio and our

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multi-family and commercial real estate mortgage loan portfolio concentrated in the New York metropolitan area, which includes New York, New Jersey and Connecticut.  Although the U.S. economy has begun showing signs of improvement, the operating environment continues to remain challenging. Interest rates are expected to remain at historic lows for the near term.  The national unemployment rate, while still at a high level, declined to 7.6% for March 2013, compared to a peak of 10.0% for October 2009, and new job growth, while remaining slow, continued during the 2013 first quarter.  Softness persists in the housing and real estate markets, although the extent of such softness varies from region to region.  With respect to our multi-family mortgage loan origination activities, primarily focused in New York, we continue to observe favorable market conditions.

The provision for loan losses totaled $9.1 million for the three months ended March 31, 2013, compared to $10.0 million for the three months ended March 31, 2012.  The allowance for loan losses totaled $144.3 million at March 31, 2013, compared to $145.5 million at December 31, 2012.  Delinquent and non-performing loans increased $40.6 million to $537.6 million at March 31, 2013, compared to $497.0 million at December 31, 2012, primarily due to an increase in non-performing loans as loans past due 30-89 days and accruing interest declined.  Non-performing loans, which are comprised primarily of mortgage loans, totaled $366.5 million, or 2.84% of total loans, at March 31, 2013, compared to $315.1 million, or 2.38% of total loans, at December 31, 2012.  In the 2013 first quarter, in addition to bankruptcy loans placed on non-accrual status and reported as non-performing loans as of December 31, 2012, we also included loans discharged prior to 2012 regardless of the delinquency status of the loans.  As a result, non-performing loans at March 31, 2013 increased $51.4 million as compared to December 31, 2012, even as loans 90 days or more past due continued to decline.  Non-performing loans at March 31, 2013 include $66.5 million of bankruptcy loans which are less than 90 days past due, including $54.3 million which were discharged prior to 2012.  Total delinquencies decreased $14.7 million to $471.1 million at March 31, 2013, from $485.8 million at December 31, 2012, primarily due to a decrease of $14.1 million in loans past due 90 days or more.  Net loan charge-offs totaled $10.4 million, or thirty-two basis points of average loans outstanding, annualized, for the three months ended March 31, 2013.  This compares to net loan charge-offs of $17.3 million, or fifty-two basis points of average loans outstanding, annualized, for the three months ended March 31, 2012.  The decrease in net loan charge-offs is primarily due to a decline in net charge-offs on residential mortgage loans, partially offset by an increase in net charge-offs on multi-family and commercial real estate mortgage loans.  The allowance for loan losses as a percentage of total loans was 1.12% at March 31, 2013, compared to 1.10% at December 31, 2012.  The allowance for loan losses as a percentage of non-performing loans decreased to 39.36% at March 31, 2013, compared to 46.18% at December 31, 2012, primarily due to the increase in non-performing loans.  The changes in non-performing loans during any period are taken into account when determining the allowance for loan losses because the allowance coverage percentages we apply to our non-performing loans are higher than the allowance coverage percentages applied to our performing loans.  In evaluating our allowance coverage percentages for non-performing loans, we consider our aggregate historical loss experience with respect to the ultimate disposition of the underlying collateral.

When analyzing our asset quality trends and coverage ratios, consideration is given to the accounting for non-performing loans, particularly when reviewing our allowance for loan losses to non-performing loans ratio.  Included in our non-performing loans are residential mortgage loans which are 180 days or more past due for which we update our estimates of collateral values annually.  If the estimated fair value of the loan collateral less estimated selling costs is less than

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the recorded investment in the loan, a charge-off of the difference is recorded to reduce the loan to its estimated fair value less estimated selling costs.  Therefore certain losses inherent in our non-performing residential mortgage loans are being recognized through a charge-off at 180 days of delinquency and annually thereafter.  The impact of updating these estimates of collateral value and recognizing any required charge-offs is to increase charge-offs and reduce the allowance for loan losses required on these loans.  Therefore, when reviewing the adequacy of the allowance for loan losses as a percentage of non-performing loans, the impact of these charge-offs is considered.  Non-performing loans included residential mortgage loans which were 180 days or more past due totaling $238.5 million, net of $79.8 million in charge-offs related to such loans, at March 31, 2013 and $242.0 million, net of $79.4 million in charge-offs related to such loans, at December 31, 2012.

While ratio analyses are used as a supplemental tool for evaluating the overall reasonableness of the allowance for loan losses, the adequacy of the allowance for loan losses is ultimately determined by the actual losses and charges recognized in the portfolio.  We update our loss analyses quarterly to ensure that our allowance coverage percentages are adequate and the overall allowance for loan losses is our best estimate of loss as of a particular point in time.  Our 2013 first quarter analysis of loss severity on residential mortgage loans, defined as the ratio of net write-downs taken through disposition of the asset (typically the sale of REO) to the loan’s original principal balance, for the twelve months ended December 31, 2012 indicated an average loss severity of approximately 33%, unchanged from our 2012 fourth quarter analysis.  Our analysis in the 2013 first quarter primarily reviewed residential REO sales which occurred during the twelve months ended December 31, 2012 and included both full documentation and reduced documentation loans in a variety of states with varying years of origination.  Our 2013 first quarter analysis of charge-offs on multi-family and commercial real estate mortgage loans, primarily related to loan sales, during the twelve months ended December 31, 2012 indicated an average loss severity of approximately 22%, compared to approximately 31% in our 2012 fourth quarter analysis.  We consider our average loss severity experience as a gauge in evaluating the overall adequacy of our allowance for loan losses.  However, the uniqueness of each multi-family and commercial real estate loan, particularly multi-family loans within New York City, many of which are rent stabilized, is also factored into our analyses.  We believe that using the loss experience of the past year (twelve months prior to the quarterly analysis) is reflective of the current economic and real estate environment.  The ratio of the allowance for loan losses to non-performing loans was approximately 39% at March 31, 2013, which exceeds our average loss severity experience for our mortgage loan portfolios, supporting our determination that our allowance for loan losses is adequate to cover potential losses.

We obtain updated estimates of collateral values on residential mortgage loans at 180 days past due and earlier in certain instances and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral values on residential loans are obtained primarily through automated valuation models. Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete. We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate mortgage loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  We also obtain updated estimates of collateral value for certain other loans when the Asset Classification Committee

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believes repayment of such loans may be dependent on the value of the underlying collateral. Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.

During the 2013 first quarter, total delinquencies decreased since December 31, 2012 and net loan charge-offs decreased compared to the 2012 fourth quarter.  The national unemployment rate was 7.6% for March 2013 and there were job gains for the quarter totaling 504,000 at the time of our analysis.  We continued to update our charge-off and loss analysis during the 2013 first quarter and modified our allowance coverage percentages accordingly.  As a result of these factors, our allowance for loan losses decreased slightly compared to December 31, 2012 and totaled $144.3 million at March 31, 2013 which resulted in a provision for loan losses of $9.1 million for the 2013 first quarter.

There are no material assumptions relied on by management which have not been made apparent in our disclosures or reflected in our asset quality ratios and activity in the allowance for loan losses.  We believe our allowance for loan losses has been established and maintained at levels that reflect the risks inherent in our loan portfolio, giving consideration to the composition and size of our loan portfolio, the levels and composition of loan delinquencies and non-performing loans, our loss history and our evaluation of the housing and real estate markets and the current economic environment.  The balance of our allowance for loan losses represents management’s best estimate of the probable inherent losses in our loan portfolio at March 31, 2013 and December 31, 2012.

For further discussion of the methodology used to determine the allowance for loan losses, see “Critical Accounting Policies-Allowance for Loan Losses” and for further discussion of our loan portfolio composition and non-performing loans, see “Asset Quality” and Note 4 of Notes to Consolidated Financial Statements in Part I, Item 1, “Financial Statements (Unaudited).”

Non-Interest Income

Non-interest income decreased $1.3 million to $18.3 million for the three months ended March 31, 2013, from $19.6 million for the three months ended March 31, 2012.  This decline is primarily due to gain on sales of securities in the 2012 first quarter and lower customer service fees in the 2013 first quarter compared to 2012, partially offset by an increase in mortgage banking income, net.

There were no sales of securities from the available-for-sale portfolio during the three months ended March 31, 2013.  During the three months ended March 31, 2012, we sold mortgage-backed securities from the available-for-sale portfolio with an amortized cost of $51.8 million, resulting in gross realized gains totaling $2.5 million.

Customer service fees decreased $1.5 million to $9.0 million for the three months ended March 31, 2013, from $10.5 million for the three months ended March 31, 2012.  This decrease was primarily due to decreases in ATM fees, overdraft fees related to transaction accounts and commissions on sales of annuities, partially offset by an increase in other checking account charges.

Mortgage banking income, net, which includes loan servicing fees, net gain on sales of loans, amortization of MSR and valuation allowance adjustments for the impairment of MSR, increased

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$3.4 million to $4.8 million for the three months ended March 31, 2013, compared to $1.4 million for the three months ended March 31, 2012.  This increase was primarily due to an increase in net gain on sales of loans resulting from an increase in the volume of loans sold.  During the 2012 fourth quarter, as the New York metropolitan area recovered from Hurricane Sandy, there were delays in loan sale closings.  The increased volume of loans sold in the 2013 first quarter resulted from the elimination of the backlog of loan sale closings that existed at December 31, 2012.

Non-Interest Expense

Non-interest expense decreased $10.6 million to $71.6 million for the three months ended March 31, 2013, from $82.2 million for the three months ended March 31, 2012, primarily due to decreases in compensation and benefits expense, other non-interest expense and federal deposit insurance premium expense, partially offset by an increase in occupancy, equipment and systems expense.  Our percentage of general and administrative expense to average assets, annualized, decreased to 1.75% for the three months ended March 31, 2013, from 1.92% for the three months ended March 31, 2012, primarily due to the decrease in general and administrative expense.

Compensation and benefits expense decreased $10.2 million to $32.0 million for the three months ended March 31, 2013, from $42.2 million for the three months ended March 31, 2012.  This decrease largely relates to the impact of the cost control initiatives implemented in the 2012 first quarter, particularly pension related costs.  Compensation and benefits expense for the 2012 first quarter includes one-time net charges totaling $3.4 million associated with these initiatives.  The net periodic cost for our defined benefit pension plans decreased to $54,000 for the three months ended March 31, 2013, compared to $5.2 million for the three months ended March 31, 2012, as a result of plan amendments which were approved by our Board of Directors in the 2012 first quarter in conjunction with our overall cost control initiatives.  In addition, the 2013 first quarter included a $3.1 million reduction in compensation and benefits expense resulting from a revision in the accrual for compensated absences related to changes in certain compensation policies which became effective January 1, 2013.

Occupancy, equipment and systems expense increased $3.1 million to $19.8 million for the three months ended March 31, 2013, compared to $16.7 million for the three months ended March 31, 2012.  This increase is primarily due to a one-time charge of $2.5 million to conform to a straight-line basis the rental expense on operating leases for certain branch locations.  Federal deposit insurance premium expense decreased $1.0 million to $10.2 million for the three months ended March 31, 2013, compared to $11.2 million for the three months ended March 31, 2012, reflecting a reduction in both our assessment base and assessment rate.  Other non-interest expense decreased $2.1 million to $8.2 million for the three months ended March 31, 2013, compared to $10.3 million for the three months ended March 31, 2012, primarily due to a reduction in REO related expenses.

Income Tax Expense

For the three months ended March 31, 2013, income tax expense totaled $7.8 million, representing an effective tax rate of 36.0%, compared to $5.6 million for the three months ended March 31, 2012, representing an effective tax rate of 35.8%.

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Asset Quality

One of our key operating objectives has been and continues to be to maintain a high level of asset quality.  We continue to employ sound underwriting standards for new loan originations.  Through a variety of strategies, including, but not limited to, collection efforts and the marketing of delinquent and non-performing loans and foreclosed properties, we have been proactive in addressing problem and non-performing assets which, in turn, has helped to maintain the strength of our financial condition.

The composition of our loan portfolio by property type has remained relatively consistent over the last several years.  However, as a result of our continuing efforts to reposition the asset mix of our balance sheet, concentrating more on multi-family mortgage loans than on residential mortgage loans, our multi-family mortgage loans increased to represent 20% of our total loan portfolio at March 31, 2013, compared to 18% at December 31, 2012, and our residential mortgage loan portfolio decreased to represent 72% of our total loan portfolio at March 31, 2013, compared to 74% at December 31, 2012.  At March 31, 2013 and December 31, 2012, our total loan portfolio also included 6% commercial real estate mortgage loans and 2% consumer and other loans.  Full documentation loans comprised 85% of our residential mortgage loan portfolio at March 31, 2013, compared to 86% at December 31, 2012, and comprised 89% of our total mortgage loan portfolio at March 31, 2013 and December 31, 2012.

The following table provides further details on the composition of our residential mortgage loan portfolio in dollar amounts and percentages of the portfolio at the dates indicated.

	At March 31, 2013				At December 31, 2012
(Dollars in Thousands)	Amount		Percentof Total		Amount		Percentof Total
Residential mortgage loans:
Full documentation interest-only (1)	$	1,889,483	20.54	%	$	2,001,396	20.61	%
Full documentation amortizing	5,936,979		64.55		6,304,872		64.92
Reduced documentation interest-only (1)(2)	983,770		10.70		1,005,295		10.35
Reduced documentation amortizing (2)	387,081		4.21		399,663		4.12
Total residential mortgage loans	$	9,197,313	100.00	%	$	9,711,226	100.00	%

(1)

Interest-only loans require the borrower to pay interest only during the first ten years of the loan term.  After the tenth anniversary of the loan, principal and interest payments are required to amortize the loan over the remaining loan term.  Includes interest-only hybrid ARM loans originated prior to 2007 which were underwritten at the initial note rate, which may have been a discounted rate, totaling $2.10 billion at March 31, 2013 and $2.18 billion at December 31, 2012.

(2)

Includes SISA (stated income, stated asset) loans totaling $214.4 million at March 31, 2013 and $222.7 million at December 31, 2012.

We continue to adhere to prudent underwriting standards.  We underwrite our residential mortgage loans primarily based upon our evaluation of the borrower’s ability to pay.  We do not originate negative amortization loans, payment option loans or other loans with short-term interest-only periods.  Additionally, we do not originate one-year ARM loans.  The ARM loans in our portfolio which currently reprice annually represent hybrid ARM loans (interest-only and amortizing) which have passed their initial fixed rate period.  In 2006, we began underwriting our residential interest-only hybrid ARM loans based on a fully amortizing loan (in effect, underwriting interest-only hybrid ARM loans as if they were amortizing hybrid ARM loans).  Prior to 2007, we would underwrite our residential interest-only hybrid ARM loans using the initial note rate, which may have been a discounted rate.  In 2007, we began underwriting our

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residential interest-only hybrid ARM loans at the higher of the fully indexed rate or the initial note rate.  In 2009, we began underwriting our residential interest-only and amortizing hybrid ARM loans at the higher of the fully indexed rate, the initial note rate or 6.00%.  During the 2010 second quarter, we reduced the underwriting interest rate floor from 6.00% to 5.00% to reflect the current interest rate environment.  During the 2010 third quarter, we stopped offering interest-only loans.  Our reduced documentation loans are comprised primarily of SIFA (stated income, full asset) loans.  To a lesser extent, reduced documentation loans in our portfolio also include SISA loans.  SIFA and SISA loans required a prospective borrower to complete a standard mortgage loan application.  During the 2007 fourth quarter, we stopped offering reduced documentation loans.

The market does not apply a uniform definition of what constitutes “subprime” lending.  Our reference to subprime lending relies upon the “Statement on Subprime Mortgage Lending” issued by the federal bank regulatory agencies, or the Agencies, on  June 29, 2007, which further references the “Expanded Guidance for Subprime Lending Programs,” or the Expanded Guidance, issued by the Agencies by press release dated January 31, 2001.  In the Expanded Guidance, the Agencies indicated that subprime lending does not refer to individual subprime loans originated and managed, in the ordinary course of business, as exceptions to prime risk selection standards.  The Agencies recognize that many prime loan portfolios will contain such accounts.  The Agencies also excluded prime loans that develop credit problems after acquisition and community development loans from the subprime arena.  According to the Expanded Guidance, subprime loans are other loans to borrowers which display one or more characteristics of reduced payment capacity.  Five specific criteria, which are not intended to be exhaustive and are not meant to define specific parameters for all subprime borrowers and may not match all markets or institutions’ specific subprime definitions, are set forth, including having a credit (FICO) score of 660 or below.  However, we do not associate a particular FICO score with our definition of subprime loans.  Consistent with the guidance provided by the Agencies, we consider subprime loans to be loans to borrowers with a credit history containing one or more of the following at the time of origination: (1) bankruptcy within the last four years; (2) foreclosure within the last two years; or (3) two 30 day mortgage delinquencies in the last twelve months.  In addition, subprime loans generally display the risk layering of the following features: high debt-to-income ratio; low or no cash reserves; loan-to-value ratios over 90%; short-term interest-only periods or negative amortization loan products; or reduced or no documentation loans.  Our current underwriting standards would generally preclude us from originating loans to borrowers with a credit history containing a bankruptcy or a foreclosure within the last five years or two 30 day mortgage delinquencies in the last twelve months.  Based upon the definition and exclusions described above, we are a prime lender.  Within our portfolio of residential mortgage loans, we have loans to borrowers who had FICO scores of 660 or below at the time of origination. However, as a portfolio lender we underwrite our loans considering all credit criteria, as well as collateral value, and do not base our underwriting decisions solely on FICO scores.  Based on our underwriting criteria, particularly the average loan-to-value ratios at origination, we consider our loans to borrowers with FICO scores of 660 or below at origination to be prime loans.

Although FICO scores are considered as part of our underwriting process, FICO scores as of the loan origination date have not always been recorded on our mortgage loan system and original FICO scores are not available for all of the residential mortgage loans on our mortgage loan system.  We  have enhanced the FICO score data on our mortgage loan system to record, when available, current FICO scores on our borrowers.  At March 31, 2013, residential mortgage loans which had current FICO scores available on our mortgage loan system totaled $8.87 billion, or

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96% of our total residential mortgage loan portfolio, of which $818.2 million, or 9%, had current FICO scores of 660 or below. At December 31, 2012, residential mortgage loans which had current FICO scores available on our mortgage loan system totaled $9.37 billion, or 96% of our total residential mortgage loan portfolio, of which $831.4 million, or 9%, had current FICO scores of 660 or below.  Of our residential mortgage loans to borrowers with known current FICO scores of 660 or below, 64% are interest-only loans and 36% are amortizing loans at March 31, 2013 and December 31, 2012.  In addition, 61% of our loans to borrowers with known current FICO scores of 660 or below were full documentation loans and 39% were reduced documentation loans at March 31, 2013 and December 31, 2012.  We believe the aforementioned loans, when originated, were amply collateralized and otherwise conformed to our prime lending standards and do not present a greater risk of loss or other asset quality risk relative to comparable loans in our portfolio to other borrowers with higher credit scores.

Non-Performing Assets

The following table sets forth information regarding non-performing assets at the dates indicated.

(Dollars in Thousands)	At March 31, 2013		At December 31, 2012
Non-performing loans (1):
Mortgage loans:
Residential	$  343,476		$  291,051
Multi-family	7,555		10,658
Commercial real estate (2)	8,928		6,869
Consumer and other loans	6,498		6,508
Total non-performing loans	366,457		315,086
REO, net (3)	23,487		28,523
Total non-performing assets	$  389,944		$  343,609
Non-performing loans to total loans	2.84	%	2.38	%
Non-performing loans to total assets	2.26		1.91
Non-performing assets to total assets	2.41		2.08
Allowance for loan losses to non-performing loans	39.36		46.18
Allowance for loan losses to total loans	1.12		1.10

(1)	Non-performing loans are comprised primarily of non-accrual loans. Non-performing loans at March 31, 2013 include loans modified in a TDR totaling $115.2 million, of which $79.2 million are less than 90 days past due including $66.5 million which are current. At December 31, 2012, non-performing loans include loans modified in a TDR totaling $32.8 million, of which $13.7 million are less than 90 days past due including $11.1 million which are current. Non-performing loans exclude loans which have been modified in a TDR and are accruing and performing in accordance with the restructured terms for a satisfactory period of time, generally six months. Restructured accruing loans totaled $94.7 million at March 31, 2013 and $98.7 million at December 31, 2012.
(2)	Includes mortgage loans delinquent 90 days or more as to their maturity date but not their interest due and still accruing interest totaling $609,000 at March 31, 2013 and $328,000 at December 31, 2012.
(3)	REO, all of which are residential properties, is net of a valuation allowance totaling $1.1 million at March 31, 2013 and $1.6 million at December 31, 2012.

Total non-performing assets increased $46.3 million to $389.9 million at March 31, 2013, from $343.6 million at December 31, 2012, primarily due to an increase in non-performing loans, whereas REO, net, decreased to $23.5 million at March 31, 2013 compared to $28.5 million at December 31, 2012.  Non-performing loans, the most significant component of non-performing assets totaled $366.5 million at March 31, 2013 and $315.1 million at December 31, 2012.  In the 2013 first quarter, in addition to bankruptcy loans placed on non-accrual status and reported as non-performing loans as of December 31, 2012, we also included loans discharged prior to 2012 regardless of the delinquency status of the loans based upon regulatory guidance issued in 2012

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and our evaluation of data gathered in the 2013 first quarter.  As a result, non-performing loans at March 31, 2013 increased $51.4 million as compared to December 31, 2012, even as loans 90 days or more past due continued to decline.  Non-performing loans at March 31, 2013 include $66.5 million of bankruptcy loans which are less than 90 days past due, including $54.3 million which were discharged prior to 2012.  Of the bankruptcy loans which are less than 90 days past due at March 31, 2013, $58.2 million are current, $6.5 million are 30-59 days past due and $1.8 million are 60-89 days past due.  Such loans continue to generate interest income on a cash basis as payments are received.  Non-performing residential mortgage loans continue to reflect a greater concentration of reduced documentation loans.  Reduced documentation loans represented only 15% of the residential mortgage loan portfolio, yet represented 50% of non-performing residential mortgage loans at March 31, 2013.  The ratio of non-performing loans to total loans was 2.84% at March 31, 2013 compared to 2.38% at December 31, 2012.  The ratio of non-performing assets to total assets was 2.41% at March 31, 2013 compared to 2.08% at December 31, 2012.  The increases in these ratios primarily reflect the increases in non-performing loans and non-performing assets at March 31, 2013 compared to December 31, 2012.

We proactively manage our non-performing assets, in part, through the sale of certain delinquent and non-performing loans.  Included in loans held-for-sale, net, are delinquent and non-performing mortgage loans totaling $8.2 million at March 31, 2013 and $3.9 million at December 31, 2012, substantially all of which are multi-family loans.  Such loans are excluded from non-performing loans, non-performing assets and related ratios.

The following table provides further details on the composition of our non-performing residential mortgage loans in dollar amounts and percentages of the portfolio, at the dates indicated.

	At March 31, 2013				At December 31, 2012
(Dollars in Thousands)	Amount		Percentof Total		Amount		Percentof Total
Non-performing residential mortgage loans:
Full documentation interest-only	$	117,618	34.24	%	$	99,521	34.19	%
Full documentation amortizing	52,973		15.42		44,326		15.23
Reduced documentation interest-only	136,017		39.61		113,482		38.99
Reduced documentation amortizing	36,868		10.73		33,722		11.59
Total non-performing residential mortgage loans (1)	$	343,476	100.00	%	$	291,051	100.00	%

(1)Includes $72.4 million of loans less than 90 days past due at March 31, 2013, of which $61.0 million are current, and includes $10.4 million of loans less than 90 days past due at December 31, 2012, of which $7.8 million are current.

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The following table provides details on the geographic composition of both our total and non-performing residential mortgage loans at March 31, 2013.

	Residential Mortgage Loans
	At March 31, 2013
(Dollars in Millions)	Total Loans		Percent ofTotal Loans		TotalNon-PerformingLoans		Percent ofTotalNon-PerformingLoans		Non-PerformingLoansas Percent ofState Totals
State:
New York	$	2,675.2	29.1	%	$	53.6	15.7	%	2.00	%
Connecticut	979.6		10.7		31.7		9.2		3.24
Illinois	941.3		10.2		44.3		12.9		4.71
Massachusetts	748.0		8.1		12.6		3.7		1.68
New Jersey	685.9		7.5		64.7		18.8		9.43
Virginia	570.2		6.2		17.1		5.0		3.00
California	558.6		6.1		30.9		9.0		5.53
Maryland	545.4		5.9		41.9		12.2		7.68
Washington	249.8		2.7		3.5		1.0		1.40
Texas	232.8		2.5		0.1		—		0.04
All other states (1) (2)	1,010.5		11.0		43.1		12.5		4.27
Total (3)	$	9,197.3	100.0	%	$	343.5	100.0	%	3.73	%

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

(2)     Includes Florida with $168.6 million total loans, of which $18.9 million are non-performing loans.

(3)     Total non-performing residential mortgage loans include loans which are less than 90 days past due totaling $72.4 million.

At March 31, 2013, the geographic composition of our multi-family and commercial real estate mortgage loan portfolio was 98% in the New York metropolitan area and 2% in various other states and the geographic composition of non-performing multi-family and commercial real estate mortgage loans was 91% in the New York metropolitan area and 9% in Florida.

We discontinue accruing interest on loans when they become 90 days delinquent as to their payment due date or at the time of restructure if the loan is deemed a TDR.  In addition, we reverse all previously accrued and uncollected interest through a charge to interest income.  While loans are in non-accrual status, interest due is monitored and income is recognized only to the extent cash is received until a return to accrual status is warranted.  If all non-accrual loans at March 31, 2013 and 2012 had been performing in accordance with their original terms, we would have recorded interest income, with respect to such loans, of $4.6 million for the three months ended March 31, 2013 and $4.8 million for the three months ended March 31, 2012.  This compares to actual payments recorded as interest income, with respect to such loans, of $1.3 million for the three months ended March 31, 2013 and $835,000 for the three months ended March 31, 2012.

We may agree to modify the contractual terms of a borrower’s loan.  In cases where such modifications represent a concession to a borrower experiencing financial difficulty, the modification is considered a TDR.  Bankruptcy loans are also reported as loans modified in a TDR as relief granted by a court is also viewed as a concession to the borrower in the loan agreement.  Loans modified in a TDR are initially placed on non-accrual status, regardless of their delinquency status.  Loans modified in a TDR which are included in non-accrual loans totaled $115.2 million at March 31, 2013 and $32.8 million at December 31, 2012, of which $79.2 million at March 31, 2013 and $13.7 million at December 31, 2012 were less than 90 days past due.  The increase in restructured non-accrual loans is primarily related to bankruptcy loans

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which totaled $94.0 million at March 31, 2013 and $12.5 million at December 31, 2012.  In the 2013 first quarter, in addition to bankruptcy loans placed on non-accrual status and reported as loans modified in a TDR as of December 31, 2012, we also included bankruptcy loans discharged prior to 2012 regardless of the delinquency status of the loans.  Of the total bankruptcy loans reported as loans modified in a TDR, $66.5 million at March 31, 2013 and $5.7 million at December 31, 2012 were less than 90 days past due.  Loans modified in a TDR, other than bankruptcy loans, remain in non-accrual status until we determine that future collection of principal and interest is reasonably assured, which requires that the borrower demonstrate performance according to the restructured terms generally for a period of six months.  Loans modified in a TDR, other than bankruptcy loans, which have complied with the terms of their restructure agreement for a satisfactory period of time are excluded from non-performing assets.  Restructured accruing loans totaled $94.7 million at March 31, 2013 and $98.7 million at December 31, 2012.  The decline in restructured accruing loans is primarily the result of loans which were repaid and loans that were transferred to held-for-sale and sold during the 2013 first quarter.

In addition to non-performing loans, we had $175.9 million of potential problem loans at March 31, 2013, compared to $191.5 million at December 31, 2012.  Such loans include accruing loans which are 60-89 days delinquent and certain other internally adversely classified loans.

Delinquent Loans

The following table shows a comparison of delinquent loans at the dates indicated.  Delinquent loans are reported based on the number of days the loan payments are past due.

	30-59 DaysPast Due				60-89 Days Past Due				90 Days or More Past Due
(Dollars in Thousands)	NumberofLoans	Amount			NumberofLoans	Amount			NumberofLoans	Amount
At March 31, 2013:
Mortgage loans:
Residential	358	$	119,088		84	$	26,299		927	$	271,143
Multi-family	31	17,450			12	5,731			9	3,706
Commercial real estate	4	4,250			6	6,588			10	6,215
Consumer and other loans	59	2,896			24	1,527			68	6,246
Total delinquent loans	452	$	143,684		126	$	40,145		1,014	$	287,310
Delinquent loans to total loans		1.11		%		0.31		%		2.23		%
At December 31, 2012:
Mortgage loans:
Residential	352	$	108,280		101	$	27,814		946	$	280,671
Multi-family	39	21,743			14	5,382			13	7,359
Commercial real estate	10	13,536			6	3,126			6	6,869
Consumer and other loans	82	3,223			33	1,315			56	6,508
Total delinquent loans	483	$	146,782		154	$	37,637		1,021	$	301,407
Delinquent loans to total loans		1.11		%		0.28		%		2.28		%

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Allowance for Loan Losses

The following table summarizes activity in the allowance for loan losses.

(In Thousands)	For the Three Months Ended March 31, 2013
Balance at January 1, 2013	$ 145,501
Provision charged to operations	9,126
Charge-offs:
Residential	(8,313	)
Multi-family	(2,941	)
Commercial real estate	(1,194	)
Consumer and other loans	(906	)
Total charge-offs	(13,354	)
Recoveries:
Residential	1,686
Multi-family	1,188
Consumer and other loans	103
Total recoveries	2,977
Net charge-offs (1)	(10,377	)
Balance at March 31, 2013	$ 144,250

(1)Includes net charge-offs of $2.0 million related to reduced documentation residential mortgage loans and $3.0 million related to certain delinquent and non-performing loans transferred to held-for-sale.

ITEM 3.Quantitative and Qualitative Disclosures about Market Risk

As a financial institution, the primary component of our market risk is interest rate risk.  The objective of our interest rate risk management policy is to maintain an appropriate mix and level of assets, liabilities and off-balance sheet items to enable us to meet our earnings and/or growth objectives, while maintaining specified minimum capital levels as required by our primary banking regulator, in the case of Astoria Federal, and as established by our Board of Directors.  We use a variety of analyses to monitor, control and adjust our asset and liability positions, primarily interest rate sensitivity gap analysis, or gap analysis, and net interest income sensitivity analysis.  Additional interest rate risk modeling is done by Astoria Federal in conformity with regulatory requirements.

Gap Analysis

Gap analysis measures the difference between the amount of interest-earning assets anticipated to mature or reprice within specific time periods and the amount of interest-bearing liabilities anticipated to mature or reprice within the same time periods.  Gap analysis does not indicate the impact of general interest rate movements on our net interest income because the actual repricing dates of various assets and liabilities will differ from our estimates and it does not give consideration to the yields and costs of the assets and liabilities or the projected yields and costs to replace or retain those assets and liabilities.  Callable features of certain assets and liabilities, in addition to the foregoing, may also cause actual experience to vary from the analysis.

The following table, referred to as the Gap Table, sets forth the amount of interest-earning assets and interest-bearing liabilities outstanding at March 31, 2013 that we anticipate will reprice or mature in each of the future time periods shown using certain assumptions based on our historical experience and other market-based data available to us.  The Gap Table includes $1.95

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billion of callable borrowings classified according to their maturity dates, primarily in the more than three years to five years category, which are callable within one year and at various times thereafter.  In addition, the Gap Table includes callable securities with an amortized cost of $179.6 million classified according to their maturity dates, in the more than five years category, which are callable within one year and at various times thereafter.  The classification of callable borrowings and securities according to their maturity dates is based on our experience with, and expectations of, the behavior of these types of instruments in the current interest rate environment.  As indicated in the Gap Table, our one-year cumulative gap at March 31, 2013 was positive 12.81% compared to positive 13.23% at December 31, 2012.

	At March 31, 2013
(Dollars in Thousands)	One Yearor Less			More thanOne YeartoThree Years			More thanThree YearstoFive Years			More thanFive Years			Total
Interest-earning assets:
Mortgage loans (1)	$	4,762,024		$	3,334,667		$	3,659,357		$	576,575		$	12,332,623
Consumer and other loans (1)	242,585			9,898			—			24			252,507
Interest-earning cash accounts	102,328			—			—			—			102,328
Securities available-for-sale	136,292			108,806			87,944			83,624			416,666
Securities held-to-maturity	611,344			510,611			354,192			206,035			1,682,182
FHLB-NY stock	—			—			—			145,502			145,502
Total interest-earning assets	5,854,573			3,963,982			4,101,493			1,011,760			14,931,808
Net unamortized purchase premiums and deferred costs (2)	37,166			26,710			25,542			7,464			96,882
Net interest-earning assets (3)	5,891,739			3,990,692			4,127,035			1,019,224			15,028,690
Interest-bearing liabilities:
Savings	396,978			426,398			426,398			1,502,235			2,752,009
Money market	1,054,382			355,127			355,127			21,836			1,786,472
NOW and demand deposit	109,302			218,650			218,650			1,591,215			2,137,817
Certificates of deposit	1,573,220			1,823,286			372,529			—			3,769,035
Borrowings, net	681,472			773,944			2,324,347			128,866			3,908,629
Total interest-bearing liabilities	3,815,354			3,597,405			3,697,051			3,244,152			14,353,962
Interest sensitivity gap	2,076,385			393,287			429,984			(2,224,928		)	$	674,728
Cumulative interest sensitivity gap	$	2,076,385		$	2,469,672		$	2,899,656		$	674,728
Cumulative interest sensitivity gap as a percentage of total assets	12.81		%	15.23		%	17.89		%	4.16		%
Cumulative net interest-earning assets as a percentage of interest- bearing liabilities	154.42		%	133.32		%	126.10		%	104.70		%

(1)	Mortgage loans and consumer and other loans include loans held-for-sale and exclude non-performing loans, except non-performing residential loans which are current or less than 90 days past due, and the allowance for loan losses.
(2)	Net unamortized purchase premiums and deferred costs are prorated.
(3)	Includes securities available-for-sale at amortized cost.

Net Interest Income Sensitivity Analysis

In managing interest rate risk, we also use an internal income simulation model for our net interest income sensitivity analyses.  These analyses measure changes in projected net interest income over various time periods resulting from hypothetical changes in interest rates.  The interest rate scenarios most commonly analyzed reflect gradual and reasonable changes over a specified time period, which is typically one year.  The base net interest income projection utilizes similar assumptions as those reflected in the Gap Table, assumes that cash flows are

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reinvested in similar assets and liabilities and that interest rates as of the reporting date remain constant over the projection period.  For each alternative interest rate scenario, corresponding changes in the cash flow and repricing assumptions of each financial instrument are made to determine the impact on net interest income.

We perform analyses of interest rate increases and decreases of up to 400 basis points (when reasonably practical) over various time horizons although changes in interest rates of 200 basis points over a one year horizon is a more common and reasonable scenario for analytical purposes.  Assuming the entire yield curve was to increase 200 basis points, through quarterly parallel increments of 50 basis points, our projected net interest income for the twelve month period beginning April 1, 2013 would increase by approximately 5.09% from the base projection.  At December 31, 2012, in the up 200 basis point scenario, our projected net interest income for the twelve month period beginning January 1, 2013 would have increased by approximately 6.16% from the base projection.  The current low interest rate environment prevents us from performing an income simulation for a decline in interest rates of the same magnitude and timing as our rising interest rate simulation, since certain asset yields, liability costs and related indices are below 2.00%.  However, assuming the entire yield curve was to decrease 100 basis points, through quarterly parallel decrements of 25 basis points, our projected net interest income for the twelve month period beginning April 1, 2013 would decrease by approximately 5.73% from the base projection.  At December 31, 2012, in the down 100 basis point scenario, our projected net interest income for the twelve month period beginning January 1, 2013 would have decreased by approximately 5.27% from the base projection.  The down 100 basis point scenarios include some limitations as well since certain indices, yields and costs are already below 1.00%.

Various shortcomings are inherent in both gap analyses and net interest income sensitivity analyses.  Certain assumptions may not reflect the manner in which actual yields and costs respond to market changes.  Similarly, prepayment estimates and similar assumptions are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in interest rates may also affect our operating environment and operating strategies as well as those of our competitors.  In addition, certain adjustable rate assets have limitations on the magnitude of rate changes over specified periods of time.  Accordingly, although our net interest income sensitivity analyses may provide an indication of our interest rate risk exposure, such analyses are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and our actual results will differ.  Additionally, certain assets, liabilities and items of income and expense which may be affected by changes in interest rates, albeit to a much lesser degree, and which do not affect net interest income, are excluded from this analysis.  These include income from bank owned life insurance and changes in the fair value of MSR.  With respect to these items alone, and assuming the entire yield curve was to increase 200 basis points, through quarterly parallel increments of 50 basis points, our projected net income for the twelve month period beginning April 1, 2013 would increase by approximately $5.5 million.  Conversely, assuming the entire yield curve was to decrease 100 basis points, through quarterly parallel decrements of 25 basis points, our projected net income for the twelve month period beginning April 1, 2013 would decrease by approximately $2.4 million with respect to these items alone.

For further information regarding our market risk and the limitations of our gap analysis and net interest income sensitivity analysis, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” included in our 2012 Annual Report on Form 10-K.

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ITEM 4.Controls and Procedures

Monte N. Redman, our President and Chief Executive Officer, and Frank E. Fusco, our Senior Executive Vice President and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of March 31, 2013.  Based upon their evaluation, they each found that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and that such information is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal controls over financial reporting that occurred during the three months ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010 and August 26, 2011, the City of New York has notified us of alleged tax deficiencies in the amount of $13.3 million, including interest and penalties, related to our 2006 through 2008 tax years.  The deficiencies relate to our operation of two subsidiaries of Astoria Federal, Fidata and AF Mortgage.  We disagree with the assertion of the tax deficiencies.  Hearings in this matter were held before the NYC Tax Appeals Tribunal in March and April 2013.  The NYC Tax Appeals Tribunal is not expected to render a decision in this matter until the 2014 second quarter.  At this time, management believes it is more likely than not that we will succeed in refuting the City of New York’s position, although defense costs may be significant.  Accordingly, no liability or reserve has been recognized in our consolidated statement of financial condition at March 31, 2013 with respect to this matter.

No assurance can be given as to whether or to what extent we will be required to pay the amount of the tax deficiencies asserted by the City of New York, whether additional tax will be assessed for years subsequent to 2008, that this matter will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Automated Transactions LLC Litigation

In November 2009, an action entitled Automated Transactions LLC v. Astoria Financial Corporation and Astoria Federal Savings and Loan Association was commenced in the Southern District Court against us by Automated Transactions LLC, alleging patent infringement involving integrated banking and transaction machines, including ATMs that we utilize.  We

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were served with the summons and complaint in such action in March 2010.  The plaintiff seeks unspecified monetary damages and an injunction preventing us from continuing to utilize the allegedly infringing machines.  We filed an answer and counterclaims to the plaintiff’s complaint in March 2010.

In May 2010, the plaintiff filed an amended complaint at the direction of the Southern District Court containing substantially the same allegations as the original complaint.  We subsequently moved to dismiss the amended complaint.  In March 2011, the Southern District Court entered an order on the record that dismissed all claims against Astoria Financial Corporation but denied the motion to dismiss the claims against Astoria Federal for alleged direct patent infringement.  The order also dismissed in part the claims against Astoria Federal for alleged inducement of our customers to violate plaintiff’s patents and for Astoria Federal’s allegedly willful violation of the plaintiff’s patents, allowing claims to continue only for alleged inducement and willful infringement after our receiving notice of the pending suit from plaintiff’s counsel.  In March 2011, we answered the amended complaint substantially denying the allegations.

In July 2012, we filed a motion for summary judgment for non-infringement, which remains pending before the Southern District Court, based on a recent ruling by the U.S. Court of Appeals for the Federal District affirming the Delaware District Court decision to grant summary judgment in favor of a defendant in an action involving the same plaintiff making substantially similar allegations with respect to identical and substantially similar patents as those involved in the action against us.

By Order dated April 1, 2013 the U.S. Judicial Panel on Multidistrict Litigation transferred this action to the Delaware District Court to be centralized with other cases involving the same plaintiff and common questions of fact.

We have tendered requests for indemnification from the manufacturer and from the transaction processor utilized with respect to the integrated banking and transaction machines, and we served third party complaints against Metavante Corporation and Diebold, Inc. seeking to enforce our indemnification rights.  These complaints are being defended by Metavante Corporation and Diebold, Inc. and we intend to pursue these complaints vigorously.

We intend to continue to vigorously defend this lawsuit.  An adverse result in this lawsuit may include an award of monetary damages, on-going royalty obligations, and/or may result in a change in our business practice, which could result in a loss of revenue.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that this litigation against us will be resolved amicably, that if this litigation results in an adverse decision that we will be successful in seeking indemnification, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Lefkowitz Litigation

In February 2012, we were served with a summons and complaint in a putative class action entitled Ellen Lefkowitz, individually and on behalf of all Persons similarly situated v. Astoria Federal Savings and Loan Association which was commenced in the Queens County Supreme Court against us alleging that during the proposed class period, we improperly charged overdraft fees to customer accounts when accounts were not overdrawn, improperly reordered electronic debit transactions from the highest to the lowest dollar amount and processed debits before

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credits to deplete accounts and maximize overdraft fee income.  The complaint contains the further assertion that we did not adequately inform our customers that they had the option to “opt-out” of overdraft services.  In May 2012, we moved to dismiss the complaint.  In July 2012, the Queens County Supreme Court issued an order dismissing the complaint in its entirety.  In September 2012, the plaintiff filed a notice of appeal with the New York Supreme Court.  The plaintiff failed to perfect the appeal by the March 7, 2013 deadline.  Unless the New York Supreme Court were to permit a request from the plaintiff to perfect the appeal after the deadline, the causes of action asserted in the complaint will be barred under applicable law.

To the extent the plaintiff continues to pursue this claim, we will continue to vigorously defend this lawsuit.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that the plaintiff will not continue to pursue this litigation against us, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

ITEM 1A.Risk Factors

For a summary of risk factors relevant to our operations, see Part I, Item 1A, “Risk Factors,” in our 2012 Annual Report on Form 10-K.  There were no material changes in risk factors relevant to our operations since December 31, 2012.

ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2013, there were no repurchases of our common stock.  Our twelfth stock repurchase plan, approved by our Board of Directors on April 18, 2007, authorized the purchase of 10,000,000 shares, or approximately 10% of our common stock then outstanding, in open-market or privately negotiated transactions.  At March 31, 2013, a maximum of 8,107,300 shares may yet be purchased under this plan.  However, we are not currently repurchasing additional shares of our common stock and have not since the 2008 third quarter.

ITEM 3.Defaults Upon Senior Securities

Not applicable.

ITEM 4.Mine Safety Disclosures

Not applicable.

ITEM 5.Other Information

Not applicable.

ITEM 6.Exhibits

See Index of Exhibits on page 74.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			Astoria Financial Corporation
Dated:	May 8, 2013	By:	/s/	Monte N. Redman
				Monte N. Redman
				President and Chief Executive Officer
Dated:	May 8, 2013	By:	/s/	Frank E. Fusco
				Frank E. Fusco
				Senior Executive Vice President and
				Chief Financial Officer
				(Principal Accounting Officer)
Dated:	May 8, 2013	By:	/s/	John F. Kennedy
				John F. Kennedy
				Senior Vice President and
				Chief Accounting Officer

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX OF EXHIBITS

Exhibit No.	Identification of Exhibit
3.1	Certificate of Designations of 6.50% Non-Cumulative Perpetual Preferred Stock, Series C of Astoria Financial Corporation. (1)
4.1	Deposit Agreement, dated as of March 19, 2013, by and among Astoria Financial Corporation, Computershare Shareholder Services, LLC, as depositary, and the holders from time to time of the depositary receipts described therein. (1)
4.2	Form of depositary receipt representing the depositary shares of 6.50% Non-Cumulative Perpetual Preferred Stock, Series C of Astoria Financial Corporation. (1)
4.3	Form of Certificate representing the 6.50% Non-Cumulative Perpetual Preferred Stock, Series C of Astoria Financial Corporation. (1)
10.1	Astoria Financial Corporation Employment Agreement with Stephen J. Sipola, entered into as of January 1, 2013. (*)
10.2	Confirmation and acknowledgement of Bonus Schedule by Astoria Financial Corporation and Stephen J. Sipola as of March 5, 2013. (*) (2)
10.3	Astoria Federal Savings and Loan Association Employment Agreement with Stephen J. Sipola, entered into as of January 1, 2013. (*)
10.4	Confirmation and acknowledgement of Bonus Schedule by Astoria Federal Savings and Loan Association and Stephen J. Sipola as of March 5, 2013. (*) (2)
31.1	Certifications of Chief Executive Officer. (*)
31.2	Certifications of Chief Financial Officer. (*)
32.1	Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. (*)
101.INS	XBRL Instance Document (**)
101.SCH	XBRL Taxonomy Extension Schema Document (**)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (**)
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document (**)

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101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (**)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (**)

(*)Filed herewith.

(**)Filed herewith electronically.

(1)Incorporated by reference to Astoria Financial Corporation’s Registration Statement on Form 8-A dated and filed with the Securities and Exchange Commission on March 19, 2013 (File Number 001-11967).

(2)Portions of these exhibits have been omitted pursuant to a request for confidential treatment.

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EX-10.1

EXHIBIT 10.1

ASTORIA FINANCIAL CORPORATIONEMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of January 1, 2013 (the “Effective Date”) by and between ASTORIA FINANCIAL CORPORATION, a business corporation organized and operating under the laws of the State of Delaware and having an office at One Astoria Federal Plaza, Lake Success, New York 11042-1085 (the “Company”), and STEPHEN J. SIPOLA, an individual (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Company in an executive capacity and serves as an executive of its wholly owned subsidiary, ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION (the “Association”); and

WHEREAS, the Company desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Company on the terms and conditions hereinafter set forth; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company and the Executive hereby agree as follows:

Section 1.Employment.

The Company shall employ the Executive, and the Executive hereby accepts such employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.Employment Period; Remaining Unexpired Employment Period.

(a)The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of two (2) years beginning on the Effective Date and ending on the day before the second anniversary date of the Effective Date, plus such extensions, if any, as are provided pursuant to Section 2(b).

(b)On the first anniversary of the Effective Date and on each subsequent anniversary date (each, an “Anniversary Date”), the Employment Period shall automatically be extended for an additional year (or if less, through the mandatory retirement date applicable to the Executive under any mandatory retirement policy (the “Mandatory Retirement Date”)) unless either the Company or the Executive has elected not to extend the Agreement further by giving written notice to the other party.  If such a notice is given, the Employment Period shall end on the day before the second Anniversary Date after the notice is given (or, if earlier, the Mandatory Retirement Date).  Upon termination of the Executive’s employment with the Company for any reason whatsoever, any extensions provided pursuant to this Section 2(b), if not previously discontinued, shall automatically cease.

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(c)For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the date the Employment Period is then scheduled to expire, assuming no further extensions occur; provided, however, that the “Remaining Unexpired Employment Period” as of any date upon or following a Change in Control shall mean the period beginning on such date and ending on the day before the second anniversary of such date.

(d)Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Company and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.Duties.

The Executive shall serve the Company in an executive capacity, having such title, power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Company, as are customarily associated with such position and as may be assigned by or under the authority of the Board of Directors (the “Board”). The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Company, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Company.  In the course of his employment, the Executive shall comply with all laws, rules, regulations and judicial and administrative orders applicable to the Company and its business, comply with all written internal policies and procedures contained in any policy, procedures or human resources manual or otherwise furnished to him or her and follow all directions or instructions given by or under the authority of the Board.

Section 4.Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him or her a salary at an initial annual rate of FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($ 400,000.00), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary, bonus incentive based upon goals established under the Company’s 2013-2015 Strategic Plan or stock awards under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement (except to the same extent that stock awards are lowered pursuant to an across the board cut).  In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5.Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified or non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company, in accordance with the

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terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices.

Section 6.Indemnification and Insurance.

(a)During the Employment Period and for a period of six (6) years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

(b)To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Company shall indemnify the Executive against, and hold him or her harmless from, any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company.  No provision in this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.Other Activities.

(a)The Executive may serve as a member of the boards of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

(b)The Executive may also serve as an officer or director of the Association on such terms and conditions as the Company and the Association may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Association, he or she shall (subject to the Company’s powers of termination hereunder) continue to perform services for the Company in accordance with this Agreement but shall not directly or indirectly provide services to or participate in the affairs of the Association in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Section 8.Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Company’s executive offices at the address first above written, or at such other location at which the Company shall maintain its principal executive offices, or at such other location as the Company may reasonably determine. The Company shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Company and

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necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Company shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Company and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence. The Company shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for such other expenses as the Executive and the Company shall mutually agree are necessary and appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred.  The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Company and on account of any other benefit provided herein.

Section 9.Termination of Employment with Severance Benefits.

(a)The Executive shall be entitled to the severance benefits described herein in the event that his or her employment with the Company terminates during the Employment Period under any of the following circumstances:

(i)the Executive’s voluntary resignation from employment with the Company within six (6) months following:

(A)the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office or title to which he or she had been elected or appointed (or a more senior office or title);

(B)if the Executive is or becomes a member of the Board, the failure of the stockholders of the Company to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material failure, whether by amendment of the Company’s Certificate of Incorporation or By-laws, action of the Board or the Company’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect

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on the aggregate value of his or her total compensation package, other than an across-the-board change that is generally applicable to all similarly situated employees), unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)the relocation of the Executive’s principal place of employment, without his or her written consent, to a location that increases his or her one-way commuting distance by more than fifty (50) miles;

(ii)the termination of the Executive’s employment with the Company for any other reason not described in Section 10(a).

In such event, the Company shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)Upon the termination of the Executive’s employment with the Company under circumstances described in Section 9(a) of this Agreement, the Company shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)the following payments and benefits (together, the “Standard Termination Entitlements”):

(A)his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Company, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment; and

(B)the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan; and

(ii)the following additional payments and benefits (the “Additional Termination Entitlements”):

(A)(1)if Executive’s employment terminates before or in the absence of a Change of Control, payment of (or reimbursement to the Executive for) the same portion of premium due for group health plan continuation coverage required to be provided under applicable federal, state or local law that the Company pays for similarly situated active employees for the lesser of the Remaining Unexpired Employment Period or the period for which such continuation coverage is required by law;

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(2)if Executive’s employment terminates upon or after a Change of Control, continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(i)(B), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles) equivalent to, and subject to substantially the same the premium sharing arrangements as, the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

(B)continued payment of the Executive’s base salary, at the annual rate in effective immediately prior to termination of employment, for the Remaining Unexpired Employment Period, in ratable installments during such period, no less frequently than monthly;

(C)a lump sum payment in an amount equal to double the annual cash incentive payment, computed at the target level of performance (which is based on 100% of goal achievement), which the Executive is eligible to receive for the year in which termination occurs;

(D)at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of all options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Company, a lump sum payment (the “Option Surrender Payment”) calculated as follows:

OSP =  (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided, however, that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

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“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which vested options or vested appreciation rights are being surrendered.

The amount and duration of the Additional Termination Entitlements shall be determined by or under the direction of the Company’s Chief Financial Officer and such determination shall be conclusive and binding on all parties in the absence of manifest error.

The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the Effective Date and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may elect to condition the payment of any or all of the Additional Termination Entitlements on the receipt of:  (x) the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Company, the Association or any subsidiary or affiliate of either of them; and/or (y) the Executive’s effective release of the Company, the Association and each subsidiary or affiliate of either of them, and the officers, directors, shareholders, and agents thereof, in form and substance satisfactory to the Company, of any liability to the Executive, whether for compensation or damages, in connection with his employment therewith and the termination of such employment except for the Standard Termination Entitlements and the Additional Termination Entitlements; provided, however, that each such election will only be effective if the Company notifies the Executive of such election in writing within five (5) days of the Executive’s termination of employment.

Section 10.Termination without Additional Company Liability.

(a)In the event that the Executive’s employment with the Company shall terminate during the Employment Period on account of:

(i)the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean:

(A)the Executive intentionally engages in dishonest conduct in connection with the Executive’s performance of services for the Company resulting in the Executive’s conviction of a felony;

(B)the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(C)the Executive’s material intentional failure to perform the Executive’s duties under this Agreement which is not substantially cured within sixty (60) days after written notice thereof is received by the Executive from the Company;

(D)the Executive breaches the Executive’s fiduciary duties to the Company for personal profit;

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(E)the Executive’s willful breach or violation of any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with the Executive’s performance of services for the Company; or

(F)the Executive’s willful material breach of any material provision of this Agreement which is not substantially cured within sixty (60) days after written notice of such breach is received by the Executive from the Company.

(ii)the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

(iii)the Executive’s death;

(iv)a determination that the Executive is Disabled;

then the Company, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the Standard Termination Entitlements.

(b)For purposes of Section 10(a)(i), no act or failure to act, on the part of the Executive, shall be considered “intentional” or “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Except as specifically provided below, the cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above, measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Company’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)after the vote contemplated by Section 10(b)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the

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facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Company to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Company prior to the delivery to the Executive by the Company of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)The Company may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a medical professional acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

(i)The Company shall pay and provide the Standard Termination Entitlements to the Executive;

(ii)In addition to the Standard Termination Entitlements, the Company shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(A)the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

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(B)the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(C)the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.Termination Upon or Following a Change of Control.

(a)A Change of Control of the Company (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)the consummation of a transaction that results in the reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

(A)at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(B)at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Company;

(ii)the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)a complete liquidation or dissolution of the Company, or approval by the stockholders of the Company of a plan for such liquidation or dissolution;

(iv)the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)individuals who were members of the Board on the Initial Effective Date; or

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(B)individuals who first became members of the Board after the Initial Effective Date either:

(I)upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)upon election by the stockholders of the Company to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Association” were substituted for the term “Company” therein or the term “Board of Directors of the Association” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Association, or an affiliate or subsidiary of either of them, by the Company, the Association, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11(a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

(b)In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Company under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the

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Executive is already covered by a substantially similar plan of the Company which is at least as favorable to him or her; or

(iv)resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Internal Revenue Code Section 280G.

Notwithstanding anything to the contrary in this Agreement, if any payment of compensation to or for the benefit of the Executive, whether or not made under the terms of this Agreement, either alone or together with other payments and benefits which the Executive has received or has a right to receive, would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986 (the “Code”), such payments and/or benefits shall be reduced by the amount, if any, which is the minimum necessary to result in no portion of such payments or benefits being subject to the excise tax imposed under Section 4999 of the Code. The amount of any required reduction shall be determined and applied in a manner calculated to maximize the after-tax value of the remaining payments and benefits.  All calculations required to be made in order to determine whether payments would be subject to the excise tax imposed under Section 4999 of the Code, including the assumptions to be utilized in arriving at such determination, the and amount and application of any required reduction shall be made by independent counsel retained by the Company for this purpose prior to the event or the closing of the transaction which results in the application of Section 4999 of the Code or such other independent counsel or independent firm of certified public accountants as the Company may designate with the consent of the Executive (which consent may be given or withheld in the Executive’s sole and absolute discretion)  (the “Tax Advisor”), which shall provide detailed supporting calculations both to the Company and the Executive within fifteen (15) business days of the receipt of demand from the Executive, or such earlier time as is requested by the Company.  All fees and expenses of the Tax Advisor shall be borne solely by the Company.  Any determination by the Tax Advisor shall be binding upon the Company and the Executive and all other interested parties in the absence of manifest error.

Section 13.Restrictive Covenants.

(a)Competition.  The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Company prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Company (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Company, become affiliated with or provide services in any capacity (whether or not as an employee or for remuneration) to any Competitor.  For purposes of this Agreement, “Competitor means any commercial bank, savings bank, savings and loan association or credit union, whether federally or state chartered, or any affiliate thereof, that offers a product or service in direct or indirect competition:

(i)with a product or service which, at the time of termination of employment, is offered by the Company or any subsidiary of the Company, or the Executive knows or reasonably should know the Company, or any subsidiary of the Company is contemplating offering (the “Company Product”); and

(ii)in a geographic market in which, at the time of termination of employment, the Company, or any subsidiary of the Company, offers such Company Product or the Executive knows or reasonably should know that the Company, or any subsidiary of the Company, is contemplating offering such Company Product;

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provided, however, that this Section 13(a) shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a).  Further, this Section 13(a) shall not apply if (1) Executive is not being paid Additional Termination Benefits for the entire restriction period, the restriction period will terminate upon the cessation of Additional Termination Benefits, or (2) the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13(a) shall not prevent the Executive from accepting any position or performing any services if:

(i)he or she first offers, by written notice, to accept a similar position with or perform similar services for the Company on substantially the same terms and conditions and

(ii)the Company declines to accept such offer within ten (10) days after such notice is given.

(b)Confidential Information.  Unless the Executive obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Company, any entity which is a subsidiary of the Company or any entity which the Company is a subsidiary of, any material document or information obtained from the Company, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this Section 13(b) shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

(c)Solicitation of Employees and Customers.  The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Company, he or she shall not, without the written consent of the Company, either directly or indirectly:

(i)solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Association or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any Competitor;

(ii)provide any information, advice or recommendation with respect to any such officer or employee to any Competitor that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Association, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any Competitor; or

(iii)solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company, the Association, or any affiliate or subsidiary of either of them, or any person or entity which the Executive knows or reasonably should know is, at the time of termination of employment, being solicited as a customer, to terminate an existing or fail to establish a solicited business or

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commercial relationship with the Company, the Association, or any affiliate or subsidiary of either of them.

It shall not be a breach of this subsection for Executive to engage in general marketing efforts not directed at the Association’s employees.

(d)Remedies.  If Executive violates any of the provision of this Section 13, then in addition to any other remedies that may be available to the Company under this Agreement or applicable law:  (i) the executive shall forfeit his or her right to any Additional Termination Entitlements that are unpaid; (ii) the Executive shall repay, on demand, any Additional Termination Entitlements already paid; and (iii) the Executive shall forfeit any outstanding, unexercised options or appreciation rights with respect to the Company’s stock, whether or not vested, and any outstanding, unvested shares of restricted stock of the Company.

(e)Reasonableness of Covenants. The Executive acknowledges that: (i) the Company has a legitimate business interest in preserving its investment in its confidential and proprietary information, the Company’s employees and the Company’s customers; (ii) the restrictions set forth in this Section 13 constitute reasonable restrictions to protect the Company’s legitimate business interests; (iii) such restrictions are reasonable in duration, geographic scope and scope of business protected; (iv) observing such restrictions will not unreasonably impair the Executive’s ability to seek or secure employment following termination of employment with the Company; and (v) employment by the Company and Additional Entitlement Benefits constitute adequate consideration for his adherence to such restrictions. The Executive hereby waives his right, in any action or proceeding relating to the reasonableness of the provisions of this Section 13, to make any argument or assertion to the contrary.

(f)Reasonableness of Damages. The Executive hereby acknowledges that the remedies provided in Section 13(d) constitute reasonable but non-exclusive damages and waives his or her right, in any action or proceeding relating to the reasonableness of the provisions of this Section 13, to make any argument or assertion to the contrary

(g)Specific Performance. The Executive acknowledges that money damages will not be an adequate remedy for his or her failure to observe or perform any of the covenants set forth in this Section 13. Therefore, the Company shall have the right to apply to any court of competent jurisdiction for equitable relief, including but not limited to a temporary restraining order or injunction ordering specific performance.

(h)Notification to Subsequent Employers and Potential Employers. For one year prior to accepting employment with any person or entity other than the Company or a subsidiary of the Company, the Executive shall disclose to such person or entity the existence of this Agreement and furnish such person or entity with a copy hereof. The Company reserves the right, and the Executive hereby authorizes the Company:  (i) to notify any person or entity making a pre-hire or post-hire inquiry of the Company concerning the Executive of the existence of this Agreement and to furnish to such person or entity a copy hereof and (ii) to notify any Competitor by whom the Executive is subsequently employed, or with whom the Executive is subsequently affiliated as an owner, investor, financier, director, officer, employee, independent contractor, vendor or service provider, whether for or without compensation, of the existence of this Agreement and to furnish to such person or entity a copy hereof.

(i)Reformation or Modification. In the event that this Section 13 or any portion hereof shall be found by an arbitrator or court of competent jurisdiction to be unenforceable as

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written, such court or arbitrator shall, and is hereby authorized to, modify this Section 13 or any portion hereof in such manner as he, she or it determines to be necessary to render this Section 13 enforceable to the maximum possible extent and to enforce this Section 13 as so modified.

Section 14.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time.

Section 15.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 16.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Stephen J. Sipola

1 Anna Court

West Islip, New York 11795

If to the Company:

Astoria Financial Corporation
One Astoria Federal Plaza
Lake Success, New York 11042-1085
Attention: Chief Executive Officer

with a copy to:

Astoria Financial Corporation
One Astoria Federal Plaza

Lake Success, New York 11042-1085
Attention: General Counsel

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Section 17.Indemnification for Attorneys’ Fees.

The Company shall indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Company’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise.  Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 18.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 19.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 20.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 21.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 22.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

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Section 23.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Company shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 24.Guarantee.

The Company hereby agrees to guarantee the payment by the Association of any benefits and compensation to which the Executive is or may be entitled to under the terms and conditions of the Employment Agreement entered into as of the Effective Date between the Association and the Executive.

Section 25.Non-duplication.

In the event that the Executive shall perform services for the Association or any other affiliate or subsidiary of the Company, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company and all of its affiliates and subsidiaries.

Section 26.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 24, 25, 27, 28 and 29) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 27.Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a) or 13 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 28.Required Regulatory Provisions.

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

Section 29.No Offset or Recoupment; No Attachment

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim,

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recoupment, defense or other claim, right or action which the Company or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 30.Compliance with Section 409A of the Code.

The Executive and the Company acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance.  To that end, the Executive and the Company agree that

(a)the insurance benefits provided in section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)the expense reimbursements described in Section 8, group health plan premium reimbursements described in Section 9(b)(ii)(A) and legal fee reimbursements described in Section 17 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)the payment described in Section 9(b)(i)(A) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)the benefits and payments described in Section 9(b)(i)(B) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)any welfare benefits provided in kind under section 9(b)(ii)(A) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

(f)the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5)

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation

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Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service.  Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:			ASTORIA FINANCIAL CORPORATION
By:	/s/ Thomas E. Lavery		By:	/s/ Gerard C. Keegan
	Name:	THOMAS E. LAVERY		Name:	GERARD C. KEEGAN
	Title:	Senior Vice President, General		Title:	Vice Chairman, Senior
		Counsel and Assistant Secretary			Executive Vice President and
					Chief Operating Officer
				/s/ Stephen J. Sipola
				STEPHEN J. SIPOLA

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STATE OF NEW YORK	)
	)  ss.:
COUNTY OF NASSAU	)

On this 5th day of March, 2013, before me, the undersigned, personally appeared GERARD C. KEEGAN, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Constance L. Amin

CONSTANCE L. AMIN

Notary Public State of New York

Qualified in Suffolk County

No.01AM6070976

STATE OF NEW YORK	)
	)  ss.:
COUNTY OF NASSAU	)

On this 5th day of March, 2013, before me, the undersigned, personally appeared STEPHEN J. SIPOLA, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Constance L. Amin

CONSTANCE L. AMIN

Notary Public State of New York

Qualified in Suffolk County

No. 01AM6070976

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EX-10.2

Exhibit 10.2

Bonus Schedule For Stephen J. Sipola

As referenced in Section 4 of the Employment Agreement dated as of January 1, 2013 between Astoria Financial Corporation (“AFC”) and Stephen J. Sipola (the “Executive”), and subject to Section 25 thereof, this will confirm that the board of directors of AFC has approved the following bonuses for the Executive:

Guaranteed Bonuses for 2012, 2013, 2014 and 2015:  (1)  $250,000 payable on April 19, 2013, (2)  $105,627, payable on December 31, 2013, assuming the Executive is then employed with AFSLA, which represents the amount of $150,000 prorated from April 19, 2013 to December 31, 2013, (3) $150,000 payable on December 31, 2014, assuming the Executive is then employed by AFC and (4) $150,000 on December 31, 2015, assuming the Executive is then employed by AFC.

Performance Bonus for 2013, 2014 and 2015: to be calculated based upon the Business Banking Department’s percentage achievement of its Business Banking Goals for 2013, 2014 and 2015 as set forth on the attached schedule.  The Total Goal Achievement percentage will be calculated by adding the individual performance percentages for the Business DDA, Business Money Market and Business Loans categories, and dividing this total by three.

Total Goal Achievement	Bonus
70%	$	250,000
75%	290,000
80%	330,000
85%	370,000
90%	410,000
95%	450,000
100% and above	500,000

ASTORIA FINANCIAL CORPORATION		Acknowledged:
By:	/s/ Gerard C. Keegan
		/s/ Stephen J. Sipola
Date:	March 5, 2013	STEPHEN J. SIPOLA
		Date:	March 5, 2013

* CONFIDENTIAL TREATMENT REQUEST:  The schedule with Business Banking Goals for 2013, 2014 and 2015 has been omitted and filed separately with the Commission.

EX-10.3

EXHIBIT 10.3

ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of January 1, 2013 (the “Effective Date”) by and between ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, a savings association organized and operating under the laws of the federal laws of the United States and having an office at One Astoria Federal Plaza, Lake Success, New York 11042-1085 (the “Association”), and STEPHEN J. SIPOLA, an individual (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Association in an executive capacity and serves as an executive of its savings and loan holding company, ASTORIA FINANCIAL CORPORATION,  a publicly held business corporation organized and operating pursuant to the laws of the State of Delaware (the “Company”); and

WHEREAS, the Association desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Association on the terms and conditions hereinafter set forth; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Association and the Executive hereby agree as follows:

Section 1.          Employment.

The Association shall employ the Executive, and the Executive hereby accepts such employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.          Employment Period; Remaining Unexpired Employment Period.

(a)           The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of two (2) years beginning on the Effective Date and ending on the day before the second anniversary date of the Effective Date, plus such extensions, if any, as are provided pursuant to Section 2(b).

(b)           Prior to the first anniversary of the Effective Date and on each subsequent anniversary date (each, an “Anniversary Date”), the Board of Directors of the Association (the “Board”) shall review the terms of this Agreement and the Executive’s performance hereunder and may, in the absence of objection from the Executive, approve an extension of the Agreement.  In such event, the Employment Period shall be extended for an additional year (or if less, through the mandatory retirement date applicable to the Executive under any mandatory retirement policy (the “Mandatory Retirement Date”)).  If the Board does not approve an extension of the Agreement for a given year, or if the Executive objects to such an extension, the Employment Period will end automatically, without the requirement of any

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notice or other action, on the day before the second Anniversary Date after the determination not to approve the extension (or, if earlier, the Mandatory Retirement Date).

(c)           For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the date the Employment Period is then scheduled to expire, assuming no further extensions occur; provided, however, that the “Remaining Unexpired Employment Period” as of any date upon or following a Change in Control shall mean the period beginning on such date and ending on the day before the second anniversary of such date.

(d)           Nothing in this Agreement shall be deemed to prohibit the Association from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Association and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.          Duties.

The Executive shall serve the Association in an executive capacity, having such title, power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Association, as are customarily associated with such position and as may be assigned by or under the authority of the Board. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Association, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Association.  In the course of his employment, the Executive shall comply with all laws, rules, regulations and judicial and administrative orders applicable to the Association and its business, comply with all written internal policies and procedures contained in any policy, procedures or human resources manual or otherwise furnished to him or her and follow all directions or instructions given by or under the authority of the Board.

Section 4.          Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Association shall pay to him or her a salary at an initial annual rate of FOUR HUNDRED THOUSAND AND NO/100 DOLLARS ($400,000.00), payable in approximately equal installments in accordance with the Association’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary, bonus incentive based upon goals established under the Company’s 2013-2015 Strategic Plan or stock awards under this Agreement (except to the same extent that stock awards lowered pursuant to an across the board cut) in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Association for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5.          Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Association and shall be entitled to participate in and receive benefits under any and all qualified or non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive

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compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Association, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Association’s customary practices.

Section 6.          Indemnification and Insurance.

(a)           During the Employment Period and for a period of six (6) years thereafter, the Association shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Association or service in other capacities at the request of the Association. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Association.

(b)           To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Association shall indemnify the Executive against, and hold him or her harmless from, any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Association or service in other capacities at the request of the Association.  No provision in this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Association by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.          Other Activities.

(a)           The Executive may serve as a member of the boards of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Association and generally applicable to all similarly situated executives.

(b)           The Executive may also serve as an officer or director of the Company on such terms and conditions as the Association and the Company may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement.

Section 8.          Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Association’s executive offices at the address first above written, or at such other location at which the Association shall maintain its principal executive offices, or at such other location as the Association may reasonably determine. The Association shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Association and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Association shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Association and appropriate to his or her position, to be used in the

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performance of his or her duties hereunder, including commuting to and from his or her personal residence. The Association shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for such other expenses as the Executive and the Association shall mutually agree are necessary and appropriate for business purposes, in each case upon presentation to the Association of an itemized account of such expenses in such form as the Association may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred.  The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Association and on account of any other benefit provided herein.

Section 9.          Termination of Employment with Severance Benefits.

(a)           The Executive shall be entitled to the severance benefits described herein in the event that his or her employment with the Association terminates during the Employment Period under any of the following circumstances:

(i)            the Executive’s voluntary resignation from employment with the Association within six (6) months following:

(A)          the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office or title to which he or she had been elected or appointed (or a more senior office or title);

(B)          if the Executive is or becomes a member of the Board, the failure of the stockholders of the Association to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)          the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Association of its material failure, whether by amendment of the Association’s Certificate of Incorporation or By-laws, action of the Board or the Association’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Association cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)          the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Association of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package, other than an across-the-board change that is generally applicable to all similarly situated employees), unless, during such thirty (30) day period, the Association cures

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such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)           the relocation of the Executive’s principal place of employment, without his or her written consent, to a location that increases his or her one-way commuting distance by more than fifty (50) miles;

(ii)           the termination of the Executive’s employment with the Association for any other reason not described in Section 10(a).

In such event, the Association shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)           Upon the termination of the Executive’s employment with the Association under circumstances described in Section 9(a) of this Agreement, the Association shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)            the following payments and benefits (together, the “Standard Termination Entitlements”):

(A)          his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Association, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment; and

(B)          the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Association’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan; and

(ii)           the following additional payments and benefits (the “Additional Termination Entitlements”):

(A)          (1)           if Executive’s employment terminates before or in the absence of a Change of Control, payment of (or reimbursement to the Executive for) the same portion of premium due for group health plan continuation coverage required to be provided under applicable federal, state or local law that the Association pays for similarly situated active employees for the lesser of the Remaining Unexpired Employment Period or the period for which such continuation coverage is required by law;

(2)           if Executive’s employment terminates upon or after a Change of Control, continued group life, health (including hospitalization, medical and

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major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(i)(B), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles) equivalent to, and subject to substantially the same the premium sharing arrangements as, the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or,  on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Association during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Association;

(B)          continued payment of the Executive’s base salary, at the annual rate in effective immediately prior to termination of employment, for the Remaining Unexpired Employment Period, in ratable installments during such period, no less frequently than monthly;

(C)          a lump sum payment in an amount equal to double the annual cash incentive payment, computed at the target level of performance (which is based on 100% of goal achievement), which the Executive is eligible to receive for the year in which termination occurs ;

(D)          at the election of the Association made within thirty (30) days following the Executive’s termination of employment with the Association, upon the surrender of all options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Association, a lump sum payment (the “Option Surrender Payment”) calculated as follows:

OSP =  (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided, however, that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

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“N” is the number of shares with respect to which vested options or vested appreciation rights are being surrendered.

The amount and duration of the Additional Termination Entitlements shall be determined by or under the direction of the Association’s Chief Financial Officer and such determination shall be conclusive and binding on all parties in the absence of manifest error.

The Association and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the Effective Date and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Association and the Executive further agree that the Association may elect to condition the payment of any or all of the Additional Termination Entitlements on the receipt of:  (x) the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Association, the Company or any subsidiary or affiliate of either of them; and/or (y) the Executive’s effective release of the Association, the Company and each subsidiary or affiliate of either of them, and the officers, directors, shareholders, and agents thereof, in form and substance satisfactory to the Association, of any liability to the Executive, whether for compensation or damages, in connection with his employment therewith and the termination of such employment except for the Standard Termination Entitlements and the Additional Termination Entitlements; provided, however, that each such election will only be effective if the Association notifies the Executive of such election in writing within five (5) days of the Executive’s termination of employment.

Section 10.        Termination without Additional Association Liability.

(a)           In the event that the Executive’s employment with the Association shall terminate during the Employment Period on account of:

(i)            the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, failure or refusal to satisfactorily perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, any other act or omission which the Board determines has had or is reasonably likely to have a material adverse effect on the Association or its business, assets, operations or reputation, or any material breach of this Agreement, in each case measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)          the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

(iii)          the Executive’s death;

(iv)          a determination that the Executive is Disabled;

then the Association, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the Standard Termination Entitlements.

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(b)           The cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)            the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above, measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)           prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Association’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)          after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)          after the vote contemplated by Section 10(b)(i), the Association has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Association to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Association prior to the delivery to the Executive by the Association of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Association may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Association does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended

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amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)           The Association may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a medical professional acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

(i)            The Association shall pay and provide the Standard Termination Entitlements to the Executive;

(ii)           In addition to the Standard Termination Entitlements, the Association shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(A)          the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(B)          the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(C)          the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Association and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.        Termination Upon or Following a Change of Control.

(a)           A Change of Control of the Association (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)            the consummation of a transaction that results in the reorganization, merger or consolidation of the Association with one or more other persons, other than a transaction following which:

(A)          at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the

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meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Association; and

(B)          at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Association;

(ii)           the acquisition of all or substantially all of the assets of the Association or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Association entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)          a complete liquidation or dissolution of the Association, or approval by the stockholders of the Association of a plan for such liquidation or dissolution;

(iv)          the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)          individuals who were members of the Board on the Initial Effective Date; or

(B)          individuals who first became members of the Board after the Initial Effective Date either:

(I)            upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)          upon election by the stockholders of the Association to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)           any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Association” therein or the term “Board of Directors of the Company” were substituted for the term “Board”.

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In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Association, the Company or an affiliate or subsidiary of either of them, by the Association, the Company or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11(a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

(b)           In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Association under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)            resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)           resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)          resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Association which is at least as favorable to him or her; or

(iv)          resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Internal Revenue Code Section 280G.

Notwithstanding anything to the contrary in this Agreement, if any payment of compensation to or for the benefit of the Executive, whether or not made under the terms of this Agreement, either alone or together with other payments and benefits which the Executive has received or has a right to receive, would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986 (the “Code”), such payments and/or benefits shall be reduced by the amount, if any, which is the minimum necessary to result in no portion of such payments or benefits being subject to the excise tax imposed under Section 4999 of the Code. The amount of any required reduction shall be determined and applied in a manner calculated to maximize the after-tax value of the remaining payments and benefits.  All calculations required to be made in order to determine whether payments would be subject to the excise tax imposed under Section 4999 of the Code, including the assumptions to be utilized in arriving at such determination, the and amount and application of any required reduction shall be made by independent counsel retained by the Association for this purpose prior to the event or the closing of the transaction which results in the application of Section 4999 of the Code or such other independent counsel or independent firm of certified public accountants as the Association may designate with the consent of the Executive (which consent may be given or withheld in the Executive’s sole and absolute discretion)  (the “Tax Advisor”), which shall provide detailed supporting calculations both to the Association and the

11

Executive within fifteen (15) business days of the receipt of demand from the Executive, or such earlier time as is requested by the Association.  All fees and expenses of the Tax Advisor shall be borne solely by the Association.  Any determination by the Tax Advisor shall be binding upon the Association and the Executive and all other interested parties in the absence of manifest error.

Section 13.Restrictive Covenants.

(a)           Competition.  The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Association prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Association (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Association, become affiliated with or provide services in any capacity (whether or not as an employee or for remuneration) to any Competitor.  For purposes of this Agreement, “Competitor means any commercial bank, savings bank, savings and loan association or credit union, whether federally or state chartered, or any affiliate thereof, that offers a product or service in direct or indirect competition:

(i)            with a product or service which, at the time of termination of employment, is offered by the Association, the Company or any subsidiary of either of them, or the Executive knows or reasonably should know the Association, the Company or any subsidiary of either of them is contemplating offering (the “Association Product”); and

(ii)           in a geographic market in which, at the time of termination of employment,  the Association, the Company, or any subsidiary of either of them, offers such Association Product or the Executive knows or reasonably should know that the Association, the Company, or any subsidiary of either of them, is contemplating offering such Association Product;

provided, however, that this Section 13(a) shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a).  Further, this Section 13(a) shall not apply if  (1) Executive is not being paid Additional Termination Benefits for the entire restriction period, the restriction period shall terminate upon cessation of Additional Termination Benefits, or (2)  the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13(a) shall not prevent the Executive from accepting any position or performing any services if:

(i)            he or she first offers, by written notice, to accept a similar position with or perform similar services for the Association on substantially the same terms and conditions and

(ii)           the Association declines to accept such offer within ten (10) days after such notice is given.

(b)           Confidential Information.  Unless the Executive obtains the prior written consent of the Association, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Association, any entity which is a subsidiary of the Association or any entity which the Association is a subsidiary of, any material document or information obtained from the Association, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be

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material (or becomes so ascertainable or available); provided, however, that nothing in this Section 13(b) shall prevent the Executive, with or without the Association’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

(c)           Solicitation of Employees and Customers.  The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Association, he or she shall not, without the written consent of the Association, either directly or indirectly:

(i)            solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Association, the Company, the or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any Competitor;

(ii)           provide any information, advice or recommendation with respect to any such officer or employee to any Competitor that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Association, the Company or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any Competitor; or

(iii)          solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Association, the Company or any affiliate or subsidiary of either of them, or any person or entity which the Executive knows or reasonably should know is, at the time of termination of employment, being solicited as a customer,  to terminate an existing or fail to establish a solicited business or commercial relationship with the Association, the Company, or any affiliate or subsidiary of either of them.

It shall not be a breach of this subsection for Executive to engage in general marketing efforts not directed at the Association’s employees.

(d)           Remedies.  If Executive violates any of the provision of this Section 13, then in addition to any other remedies that may be available to the Association under this Agreement or applicable law:  (i) the executive shall forfeit his or her right to any Additional Termination Entitlements that are unpaid; (ii) the Executive shall repay, on demand, any Additional Termination Entitlements already paid; and (iii) the Executive shall forfeit any outstanding, unexercised options or appreciation rights with respect to the Company’s stock, whether or not vested, and any outstanding, unvested shares of restricted stock of the Company.

(e)           Reasonableness of Covenants. The Executive acknowledges that: (i) the Association has a legitimate business interest in preserving its investment in its confidential and proprietary information, the Association’s employees and the Association’s customers; (ii) the restrictions set forth in this Section 13 constitute reasonable restrictions to protect the Association’s legitimate business interests; (iii) such restrictions are reasonable in duration, geographic scope and scope of business protected; (iv) observing such restrictions will not unreasonably impair the Executive’s ability to seek or secure employment following termination

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of employment with the Association; and (v) employment by the Association and Additional Termination Benefits constitute adequate consideration for his adherence to such restrictions. The Executive hereby waives his right, in any action or proceeding relating to the enforcement or enforceability of the provisions of this Section 13, to make any argument or assertion to the contrary.

(f)            Reasonableness of Damages. The Executive hereby acknowledges that the remedies provided in Section 13(d) constitute reasonable but non-exclusive damages and waives his or her right, in any action or proceeding relating to the reasonableness of the provisions of this Section 13, to make any argument or assertion to the contrary

(g)           Specific Performance. The Executive acknowledges that money damages will not be an adequate remedy for his or her failure to observe or perform any of the covenants set forth in this Section 13. Therefore, the Association shall have the right to apply to any court of competent jurisdiction for equitable relief, including but not limited to a temporary restraining order or injunction ordering specific performance.

(h)           Notification to Subsequent Employers and Potential Employers. For one year prior to accepting employment with any person or entity other than the Association, the Company or an affiliate or subsidiary of either of them, the Executive shall disclose to such person or entity the existence of this Agreement and furnish such person or entity with a copy hereof. The Association reserves the right, and the Executive hereby authorizes the Association:  (i) to notify any person or entity making a pre-hire or post-hire inquiry of the Association concerning the Executive of the existence of this Agreement and to furnish to such person or entity a copy hereof and (ii) to notify any Competitor by whom the Executive is subsequently employed, or with whom the Executive is subsequently affiliated as an owner, investor, financier, director, officer, employee, independent contractor, vendor or service provider, whether for or without compensation, of the existence of this Agreement and to furnish to such person or entity a copy hereof.

(i)            Reformation or Modification. In the event that this Section 13 or any portion hereof shall be found by an arbitrator or court of competent jurisdiction to be unenforceable as written, such court or arbitrator shall, and is hereby authorized to, modify this Section 13 or any portion hereof in such manner as he, she or it determines to be necessary to render this Section 13 enforceable to the maximum possible extent and to enforce this Section 13 as so modified.

Section 14.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Association or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Association’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Association from time to time.

Section 15.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Association and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or

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corporation to which all or substantially all of the assets and business of the Association may be sold or otherwise transferred. Failure of the Association to obtain from any successor its express written assumption of the Association’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 16.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Stephen J. Sipola

1 Anna Court

West Islip, New York 11795

If to the Association:

Astoria Federal Savings and Loan Association
One Astoria Federal Plaza
Lake Success, New York 11042
Attention: Chief Executive Officer

with a copy to:

Astoria Federal Savings and Loan Association
One Jericho Plaza, Suite 304
Jericho, New York 11753
Attention: General Counsel

Section 17.Indemnification for Attorneys’ Fees.

The Association shall indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Association’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise.  Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Association documentation supporting such expenses at such time and in such manner as the Association may reasonably require.

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Section 18.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 19.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 20.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 21.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 22.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

Section 23.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Association shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 24.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 19, 25, 26, 27, 29 and 30) shall survive the expiration of the Employment Period or termination of this Agreement.

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Section 25.Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a) or 13 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 26.Required Regulatory Provisions.

The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Association:

(a)           Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive pursuant to Section 9(b) of this Agreement (exclusive of amounts described in Section 9(b)(i) or (ii)(C)) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to the Executive’s termination of employment with the Association (or for the Executive’s entire period of employment with the Association if less than five calendar years).

(b)           Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Association, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDI Act”) 12 U.S.C. § 1828(k), and any regulations promulgated thereunder.

(c)           Notwithstanding anything herein contained to the contrary, if the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Association pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. § 1818(e)(3) or 1818(g)(1), the Association’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings.  If the charges in such notice are dismissed, the Association, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Association’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

(d)           Notwithstanding anything herein contained to the contrary, if the Executive is removed and/ or permanently prohibited from participating in the conduct of the Association’s affairs by an order issued under Section 8(e)(4) or 8(g)1 of the FEI Act, 12 U.S.C. § 1818(e)(4) or (g)(1), all prospective obligations of the Association under this Agreement shall terminate as of the effective date of the order, but vested rights and obligations of the Association and the Executive shall not be affected.

(e)           Notwithstanding anything herein contained to the contrary, if the Association is in default (within the meaning of Section 3(x)1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the Association under this Agreement shall terminate as of the date of default, but vested rights and obligations of the Association and the Executive shall not be affected.

(f)            Notwithstanding anything herein contained to the contrary, all prospective obligations of the Association hereunder shall be terminated, except to the extent that a continuation of this Agreement is necessary for the continued operation of the Association: (i) by the Comptroller of the Currency or his or  her designee or the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Association under the authority contained in Section 13(c) of the FDI Act, 12 U.S.C § 1823(c); (ii) by the Comptroller of the Currency or his or her designee at the time such Comptroller or designee approves a supervisory merger to resolve

17

problems related to the operation of the Association or when the Association is determined by such Comptroller to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.  If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as through eliminated by formal amendment of this Agreement.

Section 27.            No Offset or Recoupment; No Attachment

The Association’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Association or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 28.Compliance with Section 409A of the Code.

The Executive and the Association acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance.  To that end, the Executive and the Association agree that

(a)     the insurance benefits provided in section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)     the expense reimbursements described in Section 8, group health plan premium reimbursements described in Section 9(b)(ii)(A) and legal fee reimbursements described in Section 17 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)     the payment described in Section 9(b)(i)(A) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Association’s customary payment timing arrangement;

(d)     the benefits and payments described in Section 9(b)(i)(B) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)     any welfare benefits provided in kind under section 9(b)(ii)(A) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

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(f)      the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5)

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service.  Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

IN WITNESS WHEREOF, the Association has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:			ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
By:	/s/ Thomas E. Lavery		By:	/s/ Gerard C. Keegan
	Name:	THOMAS E. LAVERY		Name:	GERARD C. KEEGAN
	Title:	Senior Vice President, General			Title:	Vice Chairman, Senior
		Counsel and Assistant Secretary				Executive Vice President
						and Chief Operating Officer
				/s/ Stephen J. Sipola
				STEPHEN J. SIPOLA

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STATE OF NEW YORK	)
	)  ss.:
COUNTY OF NASSAU	)

On this 5TH day of March, 2013, before me, the undersigned, personally appeared GERARD C. KEEGAN, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Constance L. Amin

CONSTANCE L. AMIN

Notary Public State of New York

Qualified in Suffolk County

No. 01AM6070976

STATE OF NEW YORK	)
	)  ss.:
COUNTY OF NASSAU	)

On this 5TH day of March, 2013, before me, the undersigned, personally appeared STEPHEN J. SIPOLA, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Constance L. Amin

CONSTANCE L. AMIN

Notary Public State of New York

Qualified in Suffolk County

No. 01AM6070976

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EX-10.4

Exhibit 10.4

Bonus Schedule For Stephen J. Sipola

                As referenced in Section 4 of the Employment Agreement dated as of January 1, 2013 between Astoria Federal Savings and Loan Association (“AFSLA”) and Stephen J. Sipola (the “Executive”), this will confirm that the board of directors of AFSLA has approved the following bonuses for the Executive:

Guaranteed Bonuses for 2012, 2013, 2014 and 2015:  (1)  $250,000 payable on April 19, 2013,  (2) $105,627, payable on December 31, 2013, assuming the Executive is then employed with AFSLA, which represents the amount of $150,000 prorated from April 19, 2013 to December 31, 2013, (3) $150,000 payable on December 31, 2014, assuming the Executive is then employed by AFSLA and (4) $150,000 on December 31, 2015, assuming the Executive is then employed by AFSLA.

Performance Bonus for 2013, 2014 and 2015: to be calculated based upon the Business Banking Department’s percentage achievement of its Business Banking Goals for 2013, 2014 and 2015 as set forth on the attached schedule.  The Total Goal Achievement percentage will be calculated by adding the individual performance percentages for the Business DDA, Business Money Market and Business Loans categories, and dividing this total by three.

Total Goal Achievement	Bonus
70%	$	250,000
75%	290,000
80%	330,000
85%	370,000
90%	410,000
95%	450,000
100% and above	500,000

ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION		Acknowledged:
By:	/s/ Gerard C. Keegan
		/s/ Stephen J. Sipola
Date:	March 5, 2013	STEPHEN J. SIPOLA
		Date:	March 5, 2013

* CONFIDENTIAL TREATMENT REQUEST:  The schedule with Business Banking Goals for 2013, 2014 and 2015 has been omitted and filed separately with the Commission.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Monte N. Redman, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Astoria Financial Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:      May 8, 2013

/s/  Monte N. Redman

Monte N. Redman

President and Chief Executive Officer

Astoria Financial Corporation

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Frank E. Fusco, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Astoria Financial Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:      May 8, 2013

/s/   Frank E. Fusco

Frank E. Fusco

Senior Executive Vice President and Chief Financial Officer

Astoria Financial Corporation

EX-32.1

Exhibit 32.1

STATEMENT FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This statement is being furnished in connection with the filing by Astoria Financial Corporation (the “Company”) of the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2013 (the “Report”).

By execution of this statement, the undersigned, Monte N. Redman, as President and Chief Executive Officer of the Company, and Frank E. Fusco, as Senior Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(A)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and

(B)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

May 8, 2013	/s/	Monte N. Redman
Dated		Monte N. Redman
		President and Chief Executive Officer
May 8, 2013	/s/	Frank E. Fusco
Dated		Frank E. Fusco
		Senior Executive Vice President and
		Chief Financial Officer

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Loans Receivable and Allowance for Loan Losses (Details 7) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	$ 12,847,705	$ 13,155,914
Mortgage Loans (Gross)
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	12,588,700	12,891,820
Mortgage Loans (Gross) | Multi-Family
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	2,576,318	2,406,678
Mortgage Loans (Gross) | Multi-Family | Not criticized
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	2,456,069	2,271,006
Mortgage Loans (Gross) | Multi-Family | Special mention
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	51,843	54,956
Mortgage Loans (Gross) | Multi-Family | Substandard
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	68,406	80,716
Mortgage Loans (Gross) | Commercial Real Estate
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	815,069	773,916
Mortgage Loans (Gross) | Commercial Real Estate | Not criticized
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	754,204	706,334
Mortgage Loans (Gross) | Commercial Real Estate | Special mention
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	21,378	28,210
Mortgage Loans (Gross) | Commercial Real Estate | Substandard
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	$ 39,487	$ 39,372

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Carrying value of assets
Impaired loans	$ 380,291	$ 341,860
MSR, net	8,465	6,947
REO, net	23,487	28,523
Carrying Value
Carrying value of assets
Loans held-for-sale, net	31,548	76,306
MSR, net	8,465	6,947
Level 3
Carrying value of assets
Loans held-for-sale, net	32,154	78,486
MSR, net	8,466	6,948
Measured on a non-recurring basis | Level 3 | Carrying Value
Carrying value of assets
Impaired loans	285,723	282,723
MSR, net	8,465	6,947
REO, net	16,111	20,796
Total	318,524	314,347
Measured on a non-recurring basis | Level 3 | Carrying Value | Non-performing loans held-for-sale, net
Carrying value of assets
Loans held-for-sale, net	$ 8,225	$ 3,881

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Other Comprehensive Income/Loss (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Other Comprehensive Income/Loss
Net unrealized holding gain on securities available-for-sale arising during the period, Before Tax Amount	$ 200
Net unrealized holding gain on securities available-for-sale arising during the period, Tax Expense	(70)
Net unrealized holding gain on securities available-for-sale arising during the period, After Tax Amount	130	(814)
Reclassification adjustment for net actuarial loss included in net income, Before Tax Amount	967
Reclassification adjustment for net actuarial loss included in net income, Tax Expense	(340)
Reclassification adjustment for net actuarial loss included in net income, After Tax Amount	627	2,201
Reclassification adjustment for prior service cost included in net income, Before Tax Amount	53
Reclassification adjustment for prior service cost included in net income, Tax Expense	(19)
Reclassification adjustment for prior service cost included in net income, After Tax Amount	34	2
Other Comprehensive income, Before Tax Amount	1,220
Other Comprehensive income, Tax Expense	(429)
Total other comprehensive income, net of tax	$ 791	$ 20,582

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Fair Value Measurements (Details 3) (Measured on a non-recurring basis, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	$ 12,119	$ 18,463
Non-performing loans held-for-sale, net
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	2,604	54
Impaired loans
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	8,378	15,875
REO, net
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	$ 1,137	$ 2,534

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Earnings Per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Common Share
Net income	$ 13,852	$ 9,996
Income allocated to participating securities	(158)
Income attributable to common shareholders	$ 13,694	$ 9,996
Average number of common shares outstanding - basic	96,674,729	95,018,867
Average number of common shares outstanding - diluted	96,674,729	95,018,867
Income per common share attributable to common shareholders:
Basic (in dollars per share)	$ 0.14	$ 0.11
Diluted (in dollars per share)	$ 0.14	$ 0.11
Stock options excluded from computation of earnings per share (in shares)	2,825,855	5,822,224

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Loans Receivable and Allowance for Loan Losses (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Loans receivable and allowance for loan losses
30-59 Days Past Due	$ 143,684	$ 146,782
60-89 Days Past Due	40,145	37,637
90 Days or More	287,310	301,407
Total Past Due	471,139	485,826
Current	12,376,566	12,670,088
Total loans	12,847,705	13,155,914
Net unamortized premiums and deferred loan origination costs	64,078	68,058
Loans receivable	12,911,783	13,223,972
Allowance for loan losses	(144,250)	(145,501)	(149,899)	(157,185)
Loans receivable, net	12,767,533	13,078,471
Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	133,826	144,932
60-89 Days Past Due	37,350	36,947
90 Days or More	609	328
Total Past Due	171,785	182,207
Current	12,310,072	12,658,949
Total loans	12,481,857	12,841,156
Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	9,858	1,850
60-89 Days Past Due	2,795	690
90 Days or More	286,701	301,079
Total Past Due	299,354	303,619
Current	66,494	11,139
Total loans	365,848	314,758
Consumer and Other Loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	2,896	3,223
60-89 Days Past Due	1,527	1,315
90 Days or More	6,246	6,508
Total Past Due	10,669	11,046
Current	248,336	253,048
Total loans	259,005	264,094
Allowance for loan losses	(6,357)	(6,316)	(3,672)	(3,800)
Consumer and Other Loans | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	2,896	3,223
60-89 Days Past Due	1,527	1,315
Total Past Due	4,423	4,538
Current	248,084	253,048
Total loans	252,507	257,586
Consumer and Other Loans | Non-accrual loans
Loans receivable and allowance for loan losses
90 Days or More	6,246	6,508
Total Past Due	6,246	6,508
Current	252
Total loans	6,498	6,508
Consumer and Other Loans | Home equity lines of credit
Loans receivable and allowance for loan losses
30-59 Days Past Due	2,828	3,103
60-89 Days Past Due	1,350	1,092
90 Days or More	6,178	6,459
Total Past Due	10,356	10,654
Current	213,205	221,266
Total loans	223,561	231,920
Consumer and Other Loans | Home equity lines of credit | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	2,828	3,103
60-89 Days Past Due	1,350	1,092
Total Past Due	4,178	4,195
Current	212,953	221,266
Total loans	217,131	225,461
Consumer and Other Loans | Home equity lines of credit | Non-accrual loans
Loans receivable and allowance for loan losses
90 Days or More	6,178	6,459
Total Past Due	6,178	6,459
Current	252
Total loans	6,430	6,459
Consumer and Other Loans | Other Loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	68	120
60-89 Days Past Due	177	223
90 Days or More	68	49
Total Past Due	313	392
Current	35,131	31,782
Total loans	35,444	32,174
Consumer and Other Loans | Other Loans | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	68	120
60-89 Days Past Due	177	223
Total Past Due	245	343
Current	35,131	31,782
Total loans	35,376	32,125
Consumer and Other Loans | Other Loans | Non-accrual loans
Loans receivable and allowance for loan losses
90 Days or More	68	49
Total Past Due	68	49
Total loans	68	49
Mortgage Loans (Gross)
Loans receivable and allowance for loan losses
30-59 Days Past Due	140,788	143,559
60-89 Days Past Due	38,618	36,322
90 Days or More	281,064	294,899
Total Past Due	460,470	474,780
Current	12,128,230	12,417,040
Total loans	12,588,700	12,891,820
Mortgage Loans (Gross) | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	130,930	141,709
60-89 Days Past Due	35,823	35,632
90 Days or More	609	328
Total Past Due	167,362	177,669
Current	12,061,988	12,405,901
Total loans	12,229,350	12,583,570
Mortgage Loans (Gross) | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	9,858	1,850
60-89 Days Past Due	2,795	690
90 Days or More	280,455	294,571
Total Past Due	293,108	297,111
Current	66,242	11,139
Total loans	359,350	308,250
Mortgage Loans (Gross) | Residential
Loans receivable and allowance for loan losses
30-59 Days Past Due	119,088	108,280
60-89 Days Past Due	26,299	27,814
90 Days or More	271,143	280,671
Total Past Due	416,530	416,765
Current	8,780,783	9,294,461
Total loans	9,197,313	9,711,226
Allowance for loan losses	(91,546)	(89,267)	(90,898)	(105,991)
Mortgage Loans (Gross) | Residential | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	110,593	106,430
60-89 Days Past Due	23,504	27,124
Total Past Due	134,097	133,554
Current	8,719,740	9,286,621
Total loans	8,853,837	9,420,175
Mortgage Loans (Gross) | Residential | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	8,495	1,850
60-89 Days Past Due	2,795	690
90 Days or More	271,143	280,671
Total Past Due	282,433	283,211
Current	61,043	7,840
Total loans	343,476	291,051
Mortgage Loans (Gross) | Residential | Full documentation interest-only loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	32,932	30,520
60-89 Days Past Due	9,194	9,650
90 Days or More	92,128	97,907
Total Past Due	134,254	138,077
Current	1,755,229	1,863,319
Total loans	1,889,483	2,001,396
Mortgage Loans (Gross) | Residential | Full documentation interest-only loans | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	31,298	30,520
60-89 Days Past Due	8,343	8,973
Total Past Due	39,641	39,493
Current	1,732,224	1,862,382
Total loans	1,771,865	1,901,875
Mortgage Loans (Gross) | Residential | Full documentation interest-only loans | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	1,634
60-89 Days Past Due	851	677
90 Days or More	92,128	97,907
Total Past Due	94,613	98,584
Current	23,005	937
Total loans	117,618	99,521
Mortgage Loans (Gross) | Residential | Full documentation amortizing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	39,849	36,281
60-89 Days Past Due	6,032	6,564
90 Days or More	43,320	43,014
Total Past Due	89,201	85,859
Current	5,847,778	6,219,013
Total loans	5,936,979	6,304,872
Mortgage Loans (Gross) | Residential | Full documentation amortizing loans | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	39,310	35,918
60-89 Days Past Due	5,624	6,564
Total Past Due	44,934	42,482
Current	5,839,072	6,218,064
Total loans	5,884,006	6,260,546
Mortgage Loans (Gross) | Residential | Full documentation amortizing loans | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	539	363
60-89 Days Past Due	408
90 Days or More	43,320	43,014
Total Past Due	44,267	43,377
Current	8,706	949
Total loans	52,973	44,326
Mortgage Loans (Gross) | Residential | Reduced documentation interest-only loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	34,584	29,254
60-89 Days Past Due	9,054	7,694
90 Days or More	105,326	107,254
Total Past Due	148,964	144,202
Current	834,806	861,093
Total loans	983,770	1,005,295
Mortgage Loans (Gross) | Residential | Reduced documentation interest-only loans | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	30,428	28,212
60-89 Days Past Due	7,587	7,694
Total Past Due	38,015	35,906
Current	809,738	855,907
Total loans	847,753	891,813
Mortgage Loans (Gross) | Residential | Reduced documentation interest-only loans | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	4,156	1,042
60-89 Days Past Due	1,467
90 Days or More	105,326	107,254
Total Past Due	110,949	108,296
Current	25,068	5,186
Total loans	136,017	113,482
Mortgage Loans (Gross) | Residential | Reduced documentation amortizing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	11,723	12,225
60-89 Days Past Due	2,019	3,906
90 Days or More	30,369	32,496
Total Past Due	44,111	48,627
Current	342,970	351,036
Total loans	387,081	399,663
Mortgage Loans (Gross) | Residential | Reduced documentation amortizing loans | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	9,557	11,780
60-89 Days Past Due	1,950	3,893
Total Past Due	11,507	15,673
Current	338,706	350,268
Total loans	350,213	365,941
Mortgage Loans (Gross) | Residential | Reduced documentation amortizing loans | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	2,166	445
60-89 Days Past Due	69	13
90 Days or More	30,369	32,496
Total Past Due	32,604	32,954
Current	4,264	768
Total loans	36,868	33,722
Mortgage Loans (Gross) | Multi-Family
Loans receivable and allowance for loan losses
30-59 Days Past Due	17,450	21,743
60-89 Days Past Due	5,731	5,382
90 Days or More	3,706	7,359
Total Past Due	26,887	34,484
Current	2,549,431	2,372,194
Total loans	2,576,318	2,406,678
Allowance for loan losses	(33,952)	(35,514)	(44,927)	(35,422)
Mortgage Loans (Gross) | Multi-Family | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	17,450	21,743
60-89 Days Past Due	5,731	5,382
Total Past Due	23,181	27,125
Current	2,545,582	2,368,895
Total loans	2,568,763	2,396,020
Mortgage Loans (Gross) | Multi-Family | Non-accrual loans
Loans receivable and allowance for loan losses
90 Days or More	3,706	7,359
Total Past Due	3,706	7,359
Current	3,849	3,299
Total loans	7,555	10,658
Mortgage Loans (Gross) | Commercial Real Estate
Loans receivable and allowance for loan losses
30-59 Days Past Due	4,250	13,536
60-89 Days Past Due	6,588	3,126
90 Days or More	6,215	6,869
Total Past Due	17,053	23,531
Current	798,016	750,385
Total loans	815,069	773,916
Allowance for loan losses	(12,395)	(14,404)	(10,402)	(11,972)
Mortgage Loans (Gross) | Commercial Real Estate | Accruing loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	2,887	13,536
60-89 Days Past Due	6,588	3,126
90 Days or More	609	328
Total Past Due	10,084	16,990
Current	796,666	750,385
Total loans	806,750	767,375
Mortgage Loans (Gross) | Commercial Real Estate | Non-accrual loans
Loans receivable and allowance for loan losses
30-59 Days Past Due	1,363
90 Days or More	5,606	6,541
Total Past Due	6,969	6,541
Current	1,350
Total loans	$ 8,319	$ 6,541

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Fair Value Measurements (Details 5) (USD $) In Thousands, unless otherwise specified			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Mortgage loans held-for-sale Minimum	Mar. 31, 2013 Mortgage loans held-for-sale Maximum	Mar. 31, 2013 Total Fair Value	Dec. 31, 2012 Total Fair Value	Mar. 31, 2013 Level 2 Fair Value	Dec. 31, 2012 Level 2 Fair Value	Mar. 31, 2013 Level 3 Fair Value	Dec. 31, 2012 Level 3 Fair Value	Mar. 31, 2013 Carrying Value	Dec. 31, 2012 Carrying Value
Financial Assets:
Securities held-to-maturity	$ 1,709,427	$ 1,700,141			$ 1,732,726	$ 1,725,090	$ 1,732,726	$ 1,725,090			$ 1,709,427	$ 1,700,141
FHLB-NY stock	145,502	171,194			145,502	171,194	145,502	171,194			145,502	171,194
Loans held-for-sale, net					32,154	78,486			32,154	78,486	31,548	76,306
Loans receivable, net					12,909,105	13,311,997			12,909,105	13,311,997	12,767,533	13,078,471
MSR, net	8,465	6,947			8,466	6,948			8,466	6,948	8,465	6,947
Mortgage loan, original term			15 years	30 years
Financial Liabilities:
Deposits					10,567,986	10,588,073	10,567,986	10,588,073			10,445,333	10,443,958
Borrowings, net					$ 4,356,982	$ 4,857,989	$ 4,356,982	$ 4,857,989			$ 3,908,629	$ 4,373,496

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Pension Plans and Other Postretirement Benefits (Tables)

3 Months Ended

Mar. 31, 2013

Pension Plans and Other Postretirement Benefits

Schedule of net periodic cost for defined benefit pension plans and other postretirement benefit plan

	Pension Benefits				Other Postretirement Benefits
	For the Three Months Ended March 31,				For the Three Months Ended March 31,
(In Thousands)	2013		2012		2013	2012
Service cost	$     —		$  1,514		$   318	$   195
Interest cost	2,410		3,002		351	363
Expected return on plan assets	(3,188	)	(2,618	)	—	—
Recognized net actuarial loss	779		3,238		188	162
Amortization of prior service cost (credit)	53		11		—	(7	)
Settlement	—		7		—	—
Net periodic cost	$    54		$  5,154		$   857	$   713

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Pension Plans and Other Postretirement Benefits (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Pension Benefits
Pension plans and other postretirement benefits
Service cost		$ 1,514
Interest cost	2,410	3,002
Expected return on plan assets	(3,188)	(2,618)
Recognized net actuarial loss	779	3,238
Amortization of prior service cost (credit)	53	11
Settlement		7
Net periodic cost	54	5,154
Other Postretirement Benefits
Pension plans and other postretirement benefits
Service cost	318	195
Interest cost	351	363
Recognized net actuarial loss	188	162
Amortization of prior service cost (credit)		(7)
Net periodic cost	$ 857	$ 713

XML

Loans Receivable and Allowance for Loan Losses (Details 10) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment	$ 376,569	$ 327,657
Interest Income Recognized	2,605	2,340
Cash Basis Interest Income	2,853	2,608
Residential | Full documentation interest-only loans
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment, Loans with an allowance recorded	91,571	10,466
Average Recorded Investment, Loans without an allowance recorded	19,792	79,553
Interest Income Recognized, Loans with an allowance recorded	573	91
Interest Income Recognized, Loans without an allowance recorded	82	345
Cash Basis Interest Income, Loans with an allowance recorded	644	93
Cash Basis Interest Income, Loans without an allowance recorded	80	341
Residential | Full documentation amortizing loans
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment, Loans with an allowance recorded	23,099	3,933
Average Recorded Investment, Loans without an allowance recorded	5,824	18,294
Interest Income Recognized, Loans with an allowance recorded	115	40
Interest Income Recognized, Loans without an allowance recorded	50	52
Cash Basis Interest Income, Loans with an allowance recorded	128	40
Cash Basis Interest Income, Loans without an allowance recorded	50	56
Residential | Reduced documentation interest-only loans
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment, Loans with an allowance recorded	136,342	11,464
Average Recorded Investment, Loans without an allowance recorded	4,172	112,704
Interest Income Recognized, Loans with an allowance recorded	901	117
Interest Income Recognized, Loans without an allowance recorded		522
Cash Basis Interest Income, Loans with an allowance recorded	1,002	121
Cash Basis Interest Income, Loans without an allowance recorded		536
Residential | Reduced documentation amortizing loans
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment, Loans with an allowance recorded	23,487	1,896
Average Recorded Investment, Loans without an allowance recorded		15,893
Interest Income Recognized, Loans with an allowance recorded	90	23
Interest Income Recognized, Loans without an allowance recorded		124
Cash Basis Interest Income, Loans with an allowance recorded	110	22
Cash Basis Interest Income, Loans without an allowance recorded		123
Multi-Family
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment, Loans with an allowance recorded	18,394	50,079
Average Recorded Investment, Loans without an allowance recorded	35,122	5,820
Interest Income Recognized, Loans with an allowance recorded	173	554
Interest Income Recognized, Loans without an allowance recorded	407	174
Cash Basis Interest Income, Loans with an allowance recorded	174	802
Cash Basis Interest Income, Loans without an allowance recorded	441	174
Commercial Real Estate
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average Recorded Investment, Loans with an allowance recorded	9,781	14,554
Average Recorded Investment, Loans without an allowance recorded	8,985	3,001
Interest Income Recognized, Loans with an allowance recorded	82	159
Interest Income Recognized, Loans without an allowance recorded	132	139
Cash Basis Interest Income, Loans with an allowance recorded	102	169
Cash Basis Interest Income, Loans without an allowance recorded	$ 122	$ 131

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Loans Receivable and Allowance for Loan Losses (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Recorded Investment
Total	$ 12,847,705	$ 13,155,914
Residential Mortgage Loans | Interest-only loans
Recorded Investment
Total	2,873,253
Residential Mortgage Loans | Interest-only loans | Within one year
Recorded Investment
Total	205,246
Residential Mortgage Loans | Interest-only loans | More than one year to three years
Recorded Investment
Total	1,388,990
Residential Mortgage Loans | Interest-only loans | More than three years to five years
Recorded Investment
Total	1,084,140
Residential Mortgage Loans | Interest-only loans | Over five years
Recorded Investment
Total	$ 194,877

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Stock Incentive Plans (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2013
Number of Shares
Nonvested at the beginning of the period (in shares)	1,146,657
Granted (in shares)	531,110
Vested (in shares)	(275,905)
Forfeited (in shares)	(38,902)
Nonvested at the end of the period (in shares)	1,362,960
Weighted-Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 14.87
Granted (in dollars per share)	$ 9.70
Vested (in dollars per share)	$ (23.75)
Forfeited (in dollars per share)	$ (11.46)
Nonvested at the end of the period (in dollars per share)	$ 11.16

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Other Comprehensive Income/Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	$ (73,090)
Other comprehensive income, net of tax	791	20,582
Balance at the end of the period	(72,299)
Net unrealized gain on securities available-for-sale
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	7,451
Other comprehensive income, net of tax	130
Balance at the end of the period	7,581
Net actuarial loss on pension plans and other postretirement benefits
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	(77,115)
Other comprehensive income, net of tax	627
Balance at the end of the period	(76,488)
Prior service cost on pension plans and other postretirement benefits
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	(3,426)
Other comprehensive income, net of tax	34
Balance at the end of the period	$ (3,392)

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Basis of Presentation

3 Months Ended

Mar. 31, 2013

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

The accompanying consolidated financial statements include the accounts of Astoria Financial Corporation and its wholly-owned subsidiaries: Astoria Federal Savings and Loan Association and its subsidiaries, referred to as Astoria Federal, and AF Insurance Agency, Inc.  As used in this quarterly report, “we,” “us” and “our” refer to Astoria Financial Corporation and its consolidated subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.

In addition to Astoria Federal and AF Insurance Agency, Inc., we have another subsidiary, Astoria Capital Trust I, which is not consolidated with Astoria Financial Corporation for financial reporting purposes.  Astoria Capital Trust I was formed for the purpose of issuing $125.0 million aggregate liquidation amount of 9.75% Capital Securities due November 1, 2029, or Capital Securities, and $3.9 million of common securities, which are owned by Astoria Financial Corporation, and used the proceeds to acquire Junior Subordinated Debentures issued by Astoria Financial Corporation.  The Junior Subordinated Debentures total $128.9 million, have an interest rate of 9.75%, mature on November 1, 2029 and are the sole assets of Astoria Capital Trust I.  The Junior Subordinated Debentures are prepayable, in whole or in part, at our option at declining premiums to November 1, 2019, after which the Junior Subordinated Debentures are prepayable at par value.  The Capital Securities have the same prepayment provisions as the Junior Subordinated Debentures.  Astoria Financial Corporation has fully and unconditionally guaranteed the Capital Securities along with all obligations of Astoria Capital Trust I under the trust agreement relating to the Capital Securities.  See Note 12 for information regarding the prepayment in whole of our Junior Subordinated Debentures, scheduled to occur on May 10, 2013, which will result in the concurrent redemption in whole of the Capital Securities.  See Note 9 of Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of our 2012 Annual Report on Form 10-K for restrictions on our subsidiaries’ ability to pay dividends to us.

In our opinion, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial condition as of March 31, 2013 and December 31, 2012, our results of operations and other comprehensive income for the three months ended March 31, 2013 and 2012, changes in our stockholders’ equity for the three months ended March 31, 2013 and our cash flows for the three months ended March 31, 2013 and 2012.  In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities for the consolidated statements of financial condition as of March 31, 2013 and December 31, 2012, and amounts of revenues, expenses and other comprehensive income/loss in the consolidated statements of income and comprehensive income for the three months ended March 31, 2013 and 2012.  The results of operations and other comprehensive income/loss for the three months ended March 31, 2013 are not necessarily indicative of the results of operations and other comprehensive income/loss to be expected for the remainder of the year.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

These consolidated financial statements should be read in conjunction with our December 31, 2012 audited consolidated financial statements and related notes included in our 2012 Annual Report on Form 10-K.

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Loans Receivable and Allowance for Loan Losses (Details 11) (Mortgage Loans (Gross), USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 item	Mar. 31, 2012 item
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	26	14
Pre-Modification Recorded Investment	$ 10,783	$ 29,499
Recorded Investment	10,147	28,561
Residential Mortgage Loans | Full documentation interest-only loans
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	6
Pre-Modification Recorded Investment	1,504
Recorded Investment	1,461
Residential Mortgage Loans | Full documentation amortizing loans
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	2
Pre-Modification Recorded Investment	781
Recorded Investment	781
Residential Mortgage Loans | Reduced documentation interest-only loans
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	11	3
Pre-Modification Recorded Investment	3,433	914
Recorded Investment	3,349	914
Residential Mortgage Loans | Reduced documentation amortizing loans
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	3	4
Pre-Modification Recorded Investment	742	1,549
Recorded Investment	730	1,473
Multi-Family
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	3	6
Pre-Modification Recorded Investment	2,784	26,037
Recorded Investment	2,476	25,233
Commercial Real Estate
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	1	1
Pre-Modification Recorded Investment	1,539	999
Recorded Investment	$ 1,350	$ 941

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Securities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Securities
Available-for-sale, amortized cost	$ 422,225	$ 330,481
Available-for-sale, Gross Unrealized Gains	6,815	6,510
Available-for-sale, Gross Unrealized Losses	(666)	(691)
Total available-for-sale securities	428,374	336,300
Held-to-maturity, amortized cost	1,709,427	1,700,141
Held-to-maturity, Gross Unrealized Gains	26,275	27,905
Held-to-maturity, Gross Unrealized Losses	(2,976)	(2,956)
Held-to-maturity, estimated fair value	1,732,726	1,725,090
Residential mortgage-backed securities
Securities
Available-for-sale, amortized cost	323,538	231,796
Available-for-sale, Gross Unrealized Gains	6,730	6,296
Available-for-sale, Gross Unrealized Losses	(490)	(671)
Total available-for-sale securities	329,778	237,421
Held-to-maturity, amortized cost	1,627,865	1,699,485
Held-to-maturity, Gross Unrealized Gains	26,141	27,905
Held-to-maturity, Gross Unrealized Losses	(2,914)	(2,956)
Held-to-maturity, estimated fair value	1,651,092	1,724,434
GSE issuance REMICs and CMOs
Securities
Available-for-sale, amortized cost	293,952	200,152
Available-for-sale, Gross Unrealized Gains	5,698	5,258
Available-for-sale, Gross Unrealized Losses	(447)	(583)
Total available-for-sale securities	299,203	204,827
Held-to-maturity, amortized cost	1,622,615	1,693,437
Held-to-maturity, Gross Unrealized Gains	26,039	27,787
Held-to-maturity, Gross Unrealized Losses	(2,913)	(2,955)
Held-to-maturity, estimated fair value	1,645,741	1,718,269
Non-GSE issuance REMICs and CMOs
Securities
Available-for-sale, amortized cost	10,118	11,296
Available-for-sale, Gross Unrealized Gains	7	9
Available-for-sale, Gross Unrealized Losses	(41)	(86)
Total available-for-sale securities	10,084	11,219
Held-to-maturity, amortized cost	5,041	5,791
Held-to-maturity, Gross Unrealized Gains	97	112
Held-to-maturity, estimated fair value	5,138	5,903
GSE pass-through certificates
Securities
Available-for-sale, amortized cost	19,468	20,348
Available-for-sale, Gross Unrealized Gains	1,025	1,029
Available-for-sale, Gross Unrealized Losses	(2)	(2)
Total available-for-sale securities	20,491	21,375
Held-to-maturity, amortized cost	209	257
Held-to-maturity, Gross Unrealized Gains	5	6
Held-to-maturity, Gross Unrealized Losses	(1)	(1)
Held-to-maturity, estimated fair value	213	262
Obligations of GSEs
Securities
Available-for-sale, amortized cost	98,672	98,670
Available-for-sale, Gross Unrealized Gains	85	214
Available-for-sale, Gross Unrealized Losses	(162)	(5)
Total available-for-sale securities	98,595	98,879
Held-to-maturity, amortized cost	80,923
Held-to-maturity, Gross Unrealized Gains	134
Held-to-maturity, Gross Unrealized Losses	(62)
Held-to-maturity, estimated fair value	80,995
Freddie Mac and Fannie Mae stock
Securities
Available-for-sale, amortized cost	15	15
Available-for-sale, Gross Unrealized Losses	(14)	(15)
Total available-for-sale securities	1
Other
Securities
Held-to-maturity, amortized cost	639	656
Held-to-maturity, estimated fair value	$ 639	$ 656

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013
Junior Subordinated Debentures
Organization disclosures
Debt instrument, interest rate (as a percent)	9.75%
Aggregate principal amount	$ 128.9
Astoria Capital Trust I
Organization disclosures
Capital Securities, aggregate liquidation amount	125.0
Debt instrument, interest rate (as a percent)	9.75%
Common securities	$ 3.9

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Fair Value Measurements (Details 4)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Valuation methodologies used for assets measured at fair value
Impaired loans comprising residential mortgage loans (as a percent)	83.00%	78.00%
Impaired loans comprising multi-family and commercial real estate loans (as a percent)	17.00%	22.00%
Impaired loans for which fair value adjustment is recognized comprising residential mortgage loans (as a percent)	85.00%	84.00%
Impaired loans for which fair value adjustment is recognized comprising multi-family and commercial real estate loans (as a percent)	15.00%	16.00%
Weighted average
Valuation methodologies used for assets measured at fair value
Assumption to estimate fair value of servicing asset, weighted average discount rate (as a percent)	10.93%	10.95%
Assumption to estimate fair value of servicing asset, weighted average constant prepayment rate (as a percent)	18.40%	23.12%
Assumption to estimate fair value of servicing asset, weighted average life	4 years 3 months 18 days	3 years 4 months 24 days
Residential
Valuation methodologies used for assets measured at fair value
Period past due when loan servicer performs property inspections	45 days
Period after which loans are individually evaluated for impairment	180 days

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Loans Receivable and Allowance for Loan Losses (Details 12) (Mortgage Loans (Gross), USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 item	Mar. 31, 2012 item
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	53	17
Recorded Investment	$ 16,781	$ 7,663
Residential Mortgage Loans | Full documentation interest-only loans
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	19	2
Recorded Investment	5,265	524
Residential Mortgage Loans | Full documentation amortizing loans
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	7	1
Recorded Investment	1,176	81
Residential Mortgage Loans | Reduced documentation interest-only loans
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	21	7
Recorded Investment	7,986	3,493
Residential Mortgage Loans | Reduced documentation amortizing loans
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	5	6
Recorded Investment	991	1,780
Multi-Family
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans		1
Recorded Investment		1,785
Commercial Real Estate
Information about loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	1
Recorded Investment	$ 1,363

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Securities (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Securities
Available-for-sale, Less Than Twelve Months, Estimated Fair Value	$ 88,527	$ 92,893
Available-for-sale, Less Than Twelve Months, Gross Unrealized Losses	(610)	(589)
Available-for-sale, Twelve Months or Longer, Estimated Fair Value	9,672	10,756
Available-for-sale, Twelve Months or Longer, Gross Unrealized Losses	(56)	(102)
Available-for-sale, Total, Estimated Fair Value	98,199	103,649
Available-for-sale, Total, Gross Unrealized Losses	(666)	(691)
Held-to-maturity, Less Than Twelve Months, Estimated Fair Value	460,739	413,699
Held-to-maturity, Less Than Twelve Months, Gross Unrealized Losses	(2,908)	(2,760)
Held-to-maturity, Twelve Months or Longer, Estimated Fair Value	9,212	12,259
Held-to-maturity, Twelve Months or Longer, Gross Unrealized Losses	(68)	(196)
Held-to-maturity, Total, Estimated Fair Value	469,951	425,958
Held-to-maturity, Total, Gross Unrealized Losses	(2,976)	(2,956)
GSE issuance REMICs and CMOs
Securities
Available-for-sale, Less Than Twelve Months, Estimated Fair Value	23,645	67,841
Available-for-sale, Less Than Twelve Months, Gross Unrealized Losses	(447)	(583)
Available-for-sale, Total, Estimated Fair Value	23,645	67,841
Available-for-sale, Total, Gross Unrealized Losses	(447)	(583)
Held-to-maturity, Less Than Twelve Months, Estimated Fair Value	430,788	413,651
Held-to-maturity, Less Than Twelve Months, Gross Unrealized Losses	(2,845)	(2,759)
Held-to-maturity, Twelve Months or Longer, Estimated Fair Value	9,212	12,259
Held-to-maturity, Twelve Months or Longer, Gross Unrealized Losses	(68)	(196)
Held-to-maturity, Total, Estimated Fair Value	440,000	425,910
Held-to-maturity, Total, Gross Unrealized Losses	(2,913)	(2,955)
Non-GSE issuance REMICs and CMOs
Securities
Available-for-sale, Twelve Months or Longer, Estimated Fair Value	9,626	10,709
Available-for-sale, Twelve Months or Longer, Gross Unrealized Losses	(41)	(86)
Available-for-sale, Total, Estimated Fair Value	9,626	10,709
Available-for-sale, Total, Gross Unrealized Losses	(41)	(86)
GSE pass-through certificates
Securities
Available-for-sale, Less Than Twelve Months, Estimated Fair Value	55	57
Available-for-sale, Less Than Twelve Months, Gross Unrealized Losses	(1)	(1)
Available-for-sale, Twelve Months or Longer, Estimated Fair Value	45	47
Available-for-sale, Twelve Months or Longer, Gross Unrealized Losses	(1)	(1)
Available-for-sale, Total, Estimated Fair Value	100	104
Available-for-sale, Total, Gross Unrealized Losses	(2)	(2)
Held-to-maturity, Less Than Twelve Months, Estimated Fair Value	43	48
Held-to-maturity, Less Than Twelve Months, Gross Unrealized Losses	(1)	(1)
Held-to-maturity, Total, Estimated Fair Value	43	48
Held-to-maturity, Total, Gross Unrealized Losses	(1)	(1)
Obligations of GSEs
Securities
Available-for-sale, Less Than Twelve Months, Estimated Fair Value	64,827	24,995
Available-for-sale, Less Than Twelve Months, Gross Unrealized Losses	(162)	(5)
Available-for-sale, Total, Estimated Fair Value	64,827	24,995
Available-for-sale, Total, Gross Unrealized Losses	(162)	(5)
Held-to-maturity, Less Than Twelve Months, Estimated Fair Value	29,908
Held-to-maturity, Less Than Twelve Months, Gross Unrealized Losses	(62)
Held-to-maturity, Total, Estimated Fair Value	29,908
Held-to-maturity, Total, Gross Unrealized Losses	(62)
Freddie Mac and Fannie Mae stock
Securities
Available-for-sale, Twelve Months or Longer, Estimated Fair Value	1
Available-for-sale, Twelve Months or Longer, Gross Unrealized Losses	(14)	(15)
Available-for-sale, Total, Estimated Fair Value	1
Available-for-sale, Total, Gross Unrealized Losses	$ (14)	$ (15)

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Securities (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2013 item	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2012 item
Securities
Number of securities held with unrealized loss	42			41
Proceeds from sales of securities available-for-sale	$ 0	$ 54,318,000	$ 0
Gross realized gains from sale of available for sale securities		2,477,000
Total available-for-sale securities	428,374,000			336,300,000
Held-to-maturity, amortized cost	1,709,427,000			1,700,141,000
Held-to-maturity, Estimated fair value	1,732,726,000			1,725,090,000
Accrued interest receivable for securities	6,100,000			5,700,000
Callable securities, amortized cost	179,600,000
Held-to-maturity debt securities, excluding mortgage-backed securities
Securities
Held-to-maturity, amortized cost	81,600,000
Held-to-maturity, Estimated fair value	81,600,000
Available-for-sale debt securities, excluding mortgage-backed securities
Securities
Available-for-sale debt securities, amortized cost	98,700,000
Total available-for-sale securities	$ 98,600,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 13,852	$ 9,996
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on loans	5,769	6,746
Net amortization on securities and borrowings	4,959	3,406
Net provision for loan and real estate losses	9,784	11,391
Depreciation and amortization	2,971	2,969
Net gain on sales of loans and securities	(4,081)	(4,688)
Net (gain) loss on dispositions of premises and equipment	(6)	52
Other asset impairment charges	33	54
Originations of loans held-for-sale	(97,910)	(77,283)
Proceeds from sales and principal repayments of loans held-for-sale	149,240	72,471
Stock-based compensation and allocation of ESOP stock	4,327	3,022
(Increase) decrease in accrued interest receivable	(809)	805
Mortgage servicing rights amortization and valuation allowance adjustments, net	197	911
Bank owned life insurance income and insurance proceeds received, net	292	(1,501)
Decrease in other assets	8,092	38,366
Decrease in accrued expenses and other liabilities	(3,762)	(4,542)
Net cash provided by operating activities	92,948	62,175
Cash flows from investing activities:
Originations of loans receivable	(530,857)	(925,868)
Loan purchases through third parties	(72,939)	(321,174)
Principal payments on loans receivable	881,198	1,103,257
Proceeds from sales of delinquent and non-performing loans	5,153	15,587
Purchases of securities held-to-maturity	(256,657)	(308,420)
Purchases of securities available-for-sale	(126,975)	(66,350)
Principal payments on securities held-to-maturity	243,048	230,086
Principal payments on securities available-for-sale	34,728	46,118
Proceeds from sales of securities available-for-sale	0	54,318
Net redemptions (purchases) of Federal Home Loan Bank of New York stock	25,692	(14,931)
Proceeds from sales of real estate owned, net	13,320	19,724
Purchases of premises and equipment	(1,864)	(1,463)
Net cash provided by (used in) investing activities	213,847	(169,116)
Cash flows from financing activities:
Net increase (decrease) in deposits	1,375	(132,966)
Net (decrease) increase in borrowings with original terms of three months or less	(365,000)	331,000
Proceeds from borrowings with original terms greater than three months		100,000
Repayments of borrowings with original terms greater than three months	(100,000)	(219,000)
Net increase in mortgage escrow funds	37,916	31,313
Proceeds from issuance of preferred stock	135,000
Cash payments for preferred stock issuance costs	(4,467)
Cash dividends paid to stockholders	(3,918)	(12,545)
Net tax benefit shortfall from stock-based compensation	(1,345)	(1,912)
Net cash (used in) provided by financing activities	(300,439)	95,890
Net increase (decrease) in cash and cash equivalents	6,356	(11,051)
Cash and cash equivalents at beginning of period	121,473	132,704
Cash and cash equivalents at end of period	127,829	121,653
Supplemental disclosures:
Interest paid	44,603	64,389
Income taxes paid	184	1,022
Additions to real estate owned	8,942	12,987
Loans transferred to held-for-sale	$ 9,392

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Loans Held-for-Sale (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Loans held-for-sale
Loans held-for-sale, net	$ 31,548,000		$ 76,306,000
Other asset impairment charges	33,000	54,000
Mortgage loans held-for-sale | Low end of the range
Loans held-for-sale
Mortgage loan, original term	15 years
Mortgage loans held-for-sale | High end of the range
Loans held-for-sale
Mortgage loan, original term	30 years
Non-performing loans held-for-sale, net
Loans held-for-sale
Loans held-for-sale, net	8,200,000		3,900,000
Loans held-for-sale, valuation allowance	97,000		64,000
Sale of delinquent and non-performing mortgage loans, net of charge-offs, amount	5,000,000	14,600,000
Charge-offs on delinquent and non-performing mortgage loans sold	1,300,000	8,100,000
Net gain (loss) on sales of loans	138,000	950,000
Other asset impairment charges	$ 33,000	$ 54,000

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Loans Receivable and Allowance for Loan Losses (Details 8) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	$ 406,232	$ 346,906
Loans collectively evaluated for impairment	12,441,473	12,809,008
Total loans	12,847,705	13,155,914
Loans individually evaluated for impairment, allowance for loan losses	25,941	5,046
Loans collectively evaluated for impairment, allowance for loan losses	118,309	140,455
Total allowance for loan losses	144,250	145,501	149,899	157,185
Consumer and Other Loans
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans collectively evaluated for impairment	259,005	264,094
Total loans	259,005	264,094
Loans collectively evaluated for impairment, allowance for loan losses	6,357	6,316
Total allowance for loan losses	6,357	6,316	3,672	3,800
Mortgage Loans (Gross)
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Total loans	12,588,700	12,891,820
Mortgage Loans (Gross) | Residential
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	336,427	272,146
Loans collectively evaluated for impairment	8,860,886	9,439,080
Total loans	9,197,313	9,711,226
Loans individually evaluated for impairment, allowance for loan losses	24,484	1,001
Loans collectively evaluated for impairment, allowance for loan losses	67,062	88,266
Total allowance for loan losses	91,546	89,267	90,898	105,991
Mortgage Loans (Gross) | Multi-Family
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	50,917	56,116
Loans collectively evaluated for impairment	2,525,401	2,350,562
Total loans	2,576,318	2,406,678
Loans individually evaluated for impairment, allowance for loan losses	1,157	2,576
Loans collectively evaluated for impairment, allowance for loan losses	32,795	32,938
Total allowance for loan losses	33,952	35,514	44,927	35,422
Mortgage Loans (Gross) | Commercial Real Estate
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	18,888	18,644
Loans collectively evaluated for impairment	796,181	755,272
Total loans	815,069	773,916
Loans individually evaluated for impairment, allowance for loan losses	300	1,469
Loans collectively evaluated for impairment, allowance for loan losses	12,095	12,935
Total allowance for loan losses	$ 12,395	$ 14,404	$ 10,402	$ 11,972

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Fair Value Measurements (Details) (Recurring basis, USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value of Financial Instruments
Total securities available-for-sale	$ 428,374	$ 336,300
Residential mortgage-backed securities
Fair Value of Financial Instruments
Percentage of debt securities comprising available-for-sale portfolio	77.00%	71.00%
Available-for-sale residential mortgage-backed securities portfolio which are GSE securities (as a percent)	97.00%	95.00%
GSE issuance REMICs and CMOs
Fair Value of Financial Instruments
Total securities available-for-sale	299,203	204,827
Residential mortgage-backed securities portfolio which are Fixed-rate REMICs and CMOs	93.00%	90.00%
Non-GSE issuance REMICs and CMOs
Fair Value of Financial Instruments
Total securities available-for-sale	10,084	11,219
GSE pass-through certificates
Fair Value of Financial Instruments
Total securities available-for-sale	20,491	21,375
Obligations of GSEs
Fair Value of Financial Instruments
Total securities available-for-sale	98,595	98,879
Percentage of debt securities comprising available-for-sale portfolio	23.00%	29.00%
Fannie Mae stock
Fair Value of Financial Instruments
Total securities available-for-sale	1
Level 2
Fair Value of Financial Instruments
Total securities available-for-sale	428,373	336,300
Level 2 | GSE issuance REMICs and CMOs
Fair Value of Financial Instruments
Total securities available-for-sale	299,203	204,827
Level 2 | Non-GSE issuance REMICs and CMOs
Fair Value of Financial Instruments
Total securities available-for-sale	10,084	11,219
Level 2 | GSE pass-through certificates
Fair Value of Financial Instruments
Total securities available-for-sale	20,491	21,375
Level 2 | Obligations of GSEs
Fair Value of Financial Instruments
Total securities available-for-sale	98,595	98,879
Level 1
Fair Value of Financial Instruments
Total securities available-for-sale	(1)
Level 1 | Fannie Mae stock
Fair Value of Financial Instruments
Total securities available-for-sale	$ (1)

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Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Assets:
Cash and due from banks	$ 127,829	$ 121,473
Available-for-sale securities:
Encumbered	68,313	79,851
Unencumbered	360,061	256,449
Total available-for-sale securities	428,374	336,300
Held-to-maturity securities, fair value of $1,732,726 and $1,725,090, respectively:
Encumbered	1,133,462	1,133,193
Unencumbered	575,965	566,948
Total held-to-maturity securities	1,709,427	1,700,141
Federal Home Loan Bank of New York stock, at cost	145,502	171,194
Loans held-for-sale, net	31,548	76,306
Loans receivable	12,911,783	13,223,972
Allowance for loan losses	(144,250)	(145,501)
Loans receivable, net	12,767,533	13,078,471
Mortgage servicing rights, net	8,465	6,947
Accrued interest receivable	42,497	41,688
Premises and equipment, net	114,531	115,632
Goodwill	185,151	185,151
Bank owned life insurance	417,863	418,155
Real estate owned, net	23,487	28,523
Other assets	208,317	216,661
Total assets	16,210,524	16,496,642
Deposits:
Savings	2,752,009	2,802,298
Money market	1,786,472	1,586,556
NOW and demand deposit	2,137,817	2,094,733
Certificates of deposit	3,769,035	3,960,371
Total deposits	10,445,333	10,443,958
Federal funds purchased	125,000
Reverse repurchase agreements	1,100,000	1,100,000
Federal Home Loan Bank of New York advances	2,307,000	2,897,000
Other borrowings, net	376,629	376,496
Mortgage escrow funds	151,017	113,101
Accrued expenses and other liabilities	268,053	272,098
Total liabilities	14,773,032	15,202,653
Stockholders' Equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized: Series C (150,000 shares authorized; and 135,000 and -0- shares issued and outstanding, respectively)	129,796
Common stock, $.01 par value (200,000,000 shares authorized; 166,494,888 shares issued; and 98,911,526 and 98,419,318 shares outstanding, respectively)	1,665	1,665
Additional paid-in capital	881,966	884,689
Retained earnings	1,895,521	1,891,022
Treasury stock (67,583,362 and 68,075,570 shares, at cost, respectively)	(1,396,584)	(1,406,755)
Accumulated other comprehensive loss	(72,299)	(73,090)
Unallocated common stock held by ESOP (702,449 and 967,013 shares, respectively)	(2,573)	(3,542)
Total stockholders' equity	1,437,492	1,293,989
Total liabilities and stockholders' equity	$ 16,210,524	$ 16,496,642

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Preferred Stock (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		0 Months Ended	3 Months Ended	0 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 19, 2013 Series C Preferred Stock	Mar. 31, 2013 Series C Preferred Stock	Mar. 19, 2013 Depositary share
Preferred Stock
Shares issued (in shares)			135,000	135,000	5,400,000
Per share interest in Non-Cumulative Perpetual Preferred Stock, Series C					0.025
Dividend rate (as a percent)				6.50%
Par value (in dollars per share)	$ 1.00	$ 1.00
Liquidation preference (in dollars per share)			$ 1,000.00		$ 25.00
Aggregate proceeds from the offering, net of underwriting discounts and other issuance costs	$ 129,796		$ 129,800
Redemption price (in dollars per share)			$ 1,000.00		$ 25.00

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Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss	Unallocated Common Stock Held by ESOP
Balance at Dec. 31, 2012	$ 1,293,989		$ 1,665	$ 884,689	$ 1,891,022	$ (1,406,755)	$ (73,090)	$ (3,542)
Increase (Decrease) in Stockholders' Equity
Net income	13,852				13,852
Other comprehensive income, net of tax	791						791
Issuance of Preferred Stock, Series C (135,000 shares)	129,796	129,796
Dividends on common stock ($0.04 per share)	(3,918)				(3,918)
Restricted stock grants (531,110 shares)				(5,152)	(5,823)	10,975
Forfeitures of restricted stock (38,902 shares)				446	358	(804)
Stock-based compensation	1,727			1,697	30
Net tax benefit shortfall from stock-based compensation	(1,345)			(1,345)
Allocation of ESOP stock	2,600			1,631				969
Balance at Mar. 31, 2013	$ 1,437,492	$ 129,796	$ 1,665	$ 881,966	$ 1,895,521	$ (1,396,584)	$ (72,299)	$ (2,573)

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Subsequent Event (Details) (Subsequent event, Forecast, USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended
	May 10, 2013	Jun. 30, 2013
Junior Subordinated Debentures
Subsequent Event
Prepayment price for Junior Subordinated Debentures as a percentage of outstanding liquidation amount	103.413%
Debt prepayment, aggregate principal amount	$ 128.9
Prepayment penalty		4.3
Astoria Capital Trust I
Subsequent Event
Capital securities redeemed, aggregate liquidation amount	125.0
Common securities redeemed, aggregate liquidation amount	$ 3.9

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Loans Receivable and Allowance for Loan Losses (Details 3)	3 Months Ended
	Mar. 31, 2013
Twelve months
Loans receivable and allowance for loan losses
Historical loss experience analysis, period of time	12 months
Fifteen months
Loans receivable and allowance for loan losses
Historical loss experience analysis, period of time	15 months
Eighteen months
Loans receivable and allowance for loan losses
Historical loss experience analysis, period of time	18 months
Twenty-four months
Loans receivable and allowance for loan losses
Historical loss experience analysis, period of time	24 months
More than Two Years
Loans receivable and allowance for loan losses
Historical loss experience analysis, period of time	2 years
Residential
Loans receivable and allowance for loan losses
Period after which loans are individually evaluated for impairment	180 days

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Loans Receivable and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2013

Loans Receivable and Allowance for Loan Losses

Schedule of composition of loans receivable portfolio and an aging analysis by accruing and non-accrual loans and by segment and class

	At March 31, 2013
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	31,298	$	8,343	$	—	$	39,641	$	1,732,224	$	1,771,865
Full documentation amortizing	39,310		5,624		—		44,934		5,839,072		5,884,006
Reduced documentation interest-only	30,428		7,587		—		38,015		809,738		847,753
Reduced documentation amortizing	9,557		1,950		—		11,507		338,706		350,213
Total residential	110,593		23,504		—		134,097		8,719,740		8,853,837
Multi-family	17,450		5,731		—		23,181		2,545,582		2,568,763
Commercial real estate	2,887		6,588		609		10,084		796,666		806,750
Total mortgage loans	130,930		35,823		609		167,362		12,061,988		12,229,350
Consumer and other loans (gross):
Home equity lines of credit	2,828		1,350		—		4,178		212,953		217,131
Other	68		177		—		245		35,131		35,376
Total consumer and other loans	2,896		1,527		—		4,423		248,084		252,507
Total accruing loans	$	133,826	$	37,350	$	609	$	171,785	$	12,310,072	$	12,481,857
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	1,634	$	851	$	92,128	$	94,613	$	23,005	$	117,618
Full documentation amortizing	539		408		43,320		44,267		8,706		52,973
Reduced documentation interest-only	4,156		1,467		105,326		110,949		25,068		136,017
Reduced documentation amortizing	2,166		69		30,369		32,604		4,264		36,868
Total residential	8,495		2,795		271,143		282,433		61,043		343,476
Multi-family	—		—		3,706		3,706		3,849		7,555
Commercial real estate	1,363		—		5,606		6,969		1,350		8,319
Total mortgage loans	9,858		2,795		280,455		293,108		66,242		359,350
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,178		6,178		252		6,430
Other	—		—		68		68		—		68
Total consumer and other loans	—		—		6,246		6,246		252		6,498
Total non-accrual loans	$	9,858	$	2,795	$	286,701	$	299,354	$	66,494	$	365,848
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	32,932	$	9,194	$	92,128	$	134,254	$	1,755,229	$	1,889,483
Full documentation amortizing	39,849		6,032		43,320		89,201		5,847,778		5,936,979
Reduced documentation interest-only	34,584		9,054		105,326		148,964		834,806		983,770
Reduced documentation amortizing	11,723		2,019		30,369		44,111		342,970		387,081
Total residential	119,088		26,299		271,143		416,530		8,780,783		9,197,313
Multi-family	17,450		5,731		3,706		26,887		2,549,431		2,576,318
Commercial real estate	4,250		6,588		6,215		17,053		798,016		815,069
Total mortgage loans	140,788		38,618		281,064		460,470		12,128,230		12,588,700
Consumer and other loans (gross):
Home equity lines of credit	2,828		1,350		6,178		10,356		213,205		223,561
Other	68		177		68		313		35,131		35,444
Total consumer and other loans	2,896		1,527		6,246		10,669		248,336		259,005
Total loans	$	143,684	$	40,145	$	287,310	$	471,139	$	12,376,566	$	12,847,705
Net unamortized premiums and deferred loan origination costs											64,078
Loans receivable											12,911,783
Allowance for loan losses											(144,250		)
Loans receivable, net											$	12,767,533

	At December 31, 2012
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	30,520	$	8,973	$	—	$	39,493	$	1,862,382	$	1,901,875
Full documentation amortizing	35,918		6,564		—		42,482		6,218,064		6,260,546
Reduced documentation interest-only	28,212		7,694		—		35,906		855,907		891,813
Reduced documentation amortizing	11,780		3,893		—		15,673		350,268		365,941
Total residential	106,430		27,124		—		133,554		9,286,621		9,420,175
Multi-family	21,743		5,382		—		27,125		2,368,895		2,396,020
Commercial real estate	13,536		3,126		328		16,990		750,385		767,375
Total mortgage loans	141,709		35,632		328		177,669		12,405,901		12,583,570
Consumer and other loans (gross):
Home equity lines of credit	3,103		1,092		—		4,195		221,266		225,461
Other	120		223		—		343		31,782		32,125
Total consumer and other loans	3,223		1,315		—		4,538		253,048		257,586
Total accruing loans	$	144,932	$	36,947	$	328	$	182,207	$	12,658,949	$	12,841,156
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	677	$	97,907	$	98,584	$	937	$	99,521
Full documentation amortizing	363		—		43,014		43,377		949		44,326
Reduced documentation interest-only	1,042		—		107,254		108,296		5,186		113,482
Reduced documentation amortizing	445		13		32,496		32,954		768		33,722
Total residential	1,850		690		280,671		283,211		7,840		291,051
Multi-family	—		—		7,359		7,359		3,299		10,658
Commercial real estate	—		—		6,541		6,541		—		6,541
Total mortgage loans	1,850		690		294,571		297,111		11,139		308,250
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,459		6,459		—		6,459
Other	—		—		49		49		—		49
Total consumer and other loans	—		—		6,508		6,508		—		6,508
Total non-accrual loans	$	1,850	$	690	$	301,079	$	303,619	$	11,139	$	314,758
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	30,520	$	9,650	$	97,907	$	138,077	$	1,863,319	$	2,001,396
Full documentation amortizing	36,281		6,564		43,014		85,859		6,219,013		6,304,872
Reduced documentation interest-only	29,254		7,694		107,254		144,202		861,093		1,005,295
Reduced documentation amortizing	12,225		3,906		32,496		48,627		351,036		399,663
Total residential	108,280		27,814		280,671		416,765		9,294,461		9,711,226
Multi-family	21,743		5,382		7,359		34,484		2,372,194		2,406,678
Commercial real estate	13,536		3,126		6,869		23,531		750,385		773,916
Total mortgage loans	143,559		36,322		294,899		474,780		12,417,040		12,891,820
Consumer and other loans (gross):
Home equity lines of credit	3,103		1,092		6,459		10,654		221,266		231,920
Other	120		223		49		392		31,782		32,174
Total consumer and other loans	3,223		1,315		6,508		11,046		253,048		264,094
Total loans	$	146,782	$	37,637	$	301,407	$	485,826	$	12,670,088	$	13,155,914
Net unamortized premiums and deferred loan origination costs											68,058
Loans receivable											13,223,972
Allowance for loan losses											(145,501		)
Loans receivable, net											$	13,078,471

Schedule of changes in allowance for loan losses by loan receivable segment

	For the Three Months Ended March 31, 2013
	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at January 1, 2013	$	89,267		$	35,514		$	14,404		$	6,316		$	145,501
Provision charged (credited) to operations	8,906			191			(815		)	844			9,126
Charge-offs	(8,313		)	(2,941		)	(1,194		)	(906		)	(13,354		)
Recoveries	1,686			1,188			—			103			2,977
Balance at March 31, 2013	$	91,546		$	33,952		$	12,395		$	6,357		$	144,250

	For the Three Months Ended March 31, 2012
	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at January 1, 2012	$	105,991		$	35,422		$	11,972		$	3,800		$	157,185
Provision charged (credited) to operations	988			9,860			(1,232		)	384			10,000
Charge-offs	(17,704		)	(432		)	(339		)	(600		)	(19,075		)
Recoveries	1,623			77			1			88			1,789
Balance at March 31, 2012	$	90,898		$	44,927		$	10,402		$	3,672		$	149,899

Schedule of balances of residential interest-only mortgage loans by scheduled amortization period

(In Thousands)	Recorded Investment
Amortization scheduled to begin:
Within one year	$    205,246
More than one year to three years	1,388,990
More than three years to five years	1,084,140
Over five years	194,877
Total	$ 2,873,253

Schedule of balances of loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed

	At March 31, 2013
	Mortgage Loans
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		Consumer and Other Loans		Total
Loans:
Individually evaluated for impairment	$	336,427	$	50,917	$	18,888	$	—	$	406,232
Collectively evaluated for impairment	8,860,886		2,525,401		796,181		259,005		12,441,473
Total loans	$	9,197,313	$	2,576,318	$	815,069	$	259,005	$	12,847,705
Allowance for loan losses:
Individually evaluated for impairment	$	24,484	$	1,157	$	300	$	—	$	25,941
Collectively evaluated for impairment	67,062		32,795		12,095		6,357		118,309
Total allowance for loan losses	$	91,546	$	33,952	$	12,395	$	6,357	$	144,250

	At December 31, 2012
	Mortgage Loans						Consumer
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		and Other Loans		Total
Loans:
Individually evaluated for impairment	$	272,146	$	56,116	$	18,644	$	—	$	346,906
Collectively evaluated for impairment	9,439,080		2,350,562		755,272		264,094		12,809,008
Total loans	$	9,711,226	$	2,406,678	$	773,916	$	264,094	$	13,155,914
Allowance for loan losses:
Individually evaluated for impairment	$	1,001	$	2,576	$	1,469	$	—	$	5,046
Collectively evaluated for impairment	88,266		32,938		12,935		6,316		140,455
Total allowance for loan losses	$	89,267	$	35,514	$	14,404	$	6,316	$	145,501

Summary of information related to impaired mortgage loans by segment and class

	At March 31, 2013					At December 31, 2012
(In Thousands)	Unpaid Principal Balance	Recorded Investment	Related Allowance		Net Investment	Unpaid Principal Balance	Recorded Investment	Related Allowance		Net Investment
With an allowance recorded:
Residential:
Full documentation interest-only	$ 134,138	$ 105,291	$   (8,196	)	$   97,095	$   10,740	$   10,740	$    (241	)	$   10,499
Full documentation amortizing	31,131	27,390	(2,205	)	25,185	6,122	6,122	(347	)	5,775
Reduced documentation interest-only	201,169	151,621	(10,270	)	141,351	12,893	12,893	(277	)	12,616
Reduced documentation amortizing	31,670	25,667	(3,813	)	21,854	3,889	3,889	(136	)	3,753
Multi-family	17,083	17,083	(1,157	)	15,926	19,704	19,704	(2,576	)	17,128
Commercial real estate	8,727	8,727	(300	)	8,427	10,835	10,835	(1,469	)	9,366
Without an allowance recorded:
Residential:
Full documentation interest-only	28,717	20,088	—		20,088	122,275	86,607	—		86,607
Full documentation amortizing	8,825	6,370	—		6,370	23,489	17,962	—		17,962
Reduced documentation interest-only	—	—	—		—	166,477	116,514	—		116,514
Reduced documentation amortizing	—	—	—		—	23,419	17,419	—		17,419
Multi-family	40,467	33,834	—		33,834	44,341	36,412	—		36,412
Commercial real estate	16,551	10,161	—		10,161	13,256	7,809	—		7,809
Total impaired loans	$ 518,478	$ 406,232	$ (25,941	)	$ 380,291	$ 457,440	$ 346,906	$ (5,046	)	$ 341,860

Schedule of information related to average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans

	For the Three Months Ended March 31,
	2013						2012
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Residential:
Full documentation interest-only	$	91,571	$	573	$	644	$	10,466	$	91	$	93
Full documentation amortizing	23,099		115		128		3,933		40		40
Reduced documentation interest-only	136,342		901		1,002		11,464		117		121
Reduced documentation amortizing	23,487		90		110		1,896		23		22
Multi-family	18,394		173		174		50,079		554		802
Commercial real estate	9,781		82		102		14,554		159		169
Without an allowance recorded:
Residential:
Full documentation interest-only	19,792		82		80		79,553		345		341
Full documentation amortizing	5,824		50		50		18,294		52		56
Reduced documentation interest-only	4,172		—		—		112,704		522		536
Reduced documentation amortizing	—		—		—		15,893		124		123
Multi-family	35,122		407		441		5,820		174		174
Commercial real estate	8,985		132		122		3,001		139		131
Total impaired loans	$	376,569	$	2,605	$	2,853	$	327,657	$	2,340	$	2,608

Restructured Loans

Loans receivable and allowance for loan losses disclosures

Schedule of information about mortgage loans receivable by segment and class modified in TDR

	Modifications During the Three Months Ended March 31,
	2013			2012
(Dollars In Thousands)	Number of Loans	Pre- Modification Recorded Investment	Recorded Investment at March 31, 2013	Number of Loans	Pre- Modification Recorded Investment	Recorded Investment at March 31, 2012
Residential:
Full documentation interest-only	6	$   1,504	$   1,461	—	$       —	$        —
Full documentation amortizing	2	781	781	—	—	—
Reduced documentation interest-only	11	3,433	3,349	3	914	914
Reduced documentation amortizing	3	742	730	4	1,549	1,473
Multi-family	3	2,784	2,476	6	26,037	25,233
Commercial real estate	1	1,539	1,350	1	999	941
Total	26	$ 10,783	$ 10,147	14	$29,499	$ 28,561

Defaulted Loans

Loans receivable and allowance for loan losses disclosures

Schedule of information about mortgage loans receivable by segment and class modified in TDR

	For the Three Months Ended March 31,
	2013		2012
(Dollars In Thousands)	Numberof Loans	RecordedInvestment at March 31, 2013	Numberof Loans	RecordedInvestment at March 31, 2012
Residential:
Full documentation interest-only	19	$    5,265	2	$     524
Full documentation amortizing	7	1,176	1	81
Reduced documentation interest-only	21	7,986	7	3,493
Reduced documentation amortizing	5	991	6	1,780
Multi-family	—	—	1	1,785
Commercial real estate	1	1,363	—	—
Total	53	$  16,781	17	$  7,663

Performing, non-performing credit quality indicator

Loans receivable and allowance for loan losses disclosures

Schedule of loan receivable segments by class and credit quality indicator

	At March 31, 2013
	Residential Mortgage Loans				Consumer and Other Loans
	Full Documentation		Reduced Documentation		Home Equity
(In Thousands)	Interest-only	Amortizing	Interest-only	Amortizing	Lines of Credit	Other
Performing	$ 1,771,865	$ 5,884,006	$   847,753	$ 350,213	$ 217,131	$ 35,376
Non-performing:
Current or past due less than 90 days	25,490	9,653	30,691	6,499	252	—
Past due 90 days or more	92,128	43,320	105,326	30,369	6,178	68
Total	$ 1,889,483	$ 5,936,979	$   983,770	$ 387,081	$ 223,561	$ 35,444

	At December 31, 2012
	Residential Mortgage Loans				Consumer and Other Loans
	Full Documentation		Reduced Documentation		Home Equity
(In Thousands)	Interest-only	Amortizing	Interest-only	Amortizing	Lines of Credit	Other
Performing	$ 1,901,875	$ 6,260,546	$   891,813	$ 365,941	$ 225,461	$ 32,125
Non-performing:
Current or past due less than 90 days	1,614	1,312	6,228	1,226	—	—
Past due 90 days or more	97,907	43,014	107,254	32,496	6,459	49
Total	$ 2,001,396	$ 6,304,872	$1,005,295	$ 399,663	$ 231,920	$ 32,174

Criticized, Not Criticized

Loans receivable and allowance for loan losses disclosures

Schedule of loan receivable segments by class and credit quality indicator

	At March 31, 2013		At December 31, 2012
(In Thousands)	Multi-Family	Commercial Real Estate	Multi-Family	Commercial Real Estate
Not criticized	$2,456,069	$ 754,204	$ 2,271,006	$ 706,334
Criticized:
Special mention	51,843	21,378	54,956	28,210
Substandard	68,406	39,487	80,716	39,372
Doubtful	—	—	—	—
Total	$2,576,318	$ 815,069	$ 2,406,678	$ 773,916

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Loans Receivable and Allowance for Loan Losses (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Loans receivable and allowance for loan losses
Balance at the beginning of the period	$ 145,501	$ 157,185
Provision charged (creditied) to operations	9,126	10,000
Charge-offs	(13,354)	(19,075)
Recoveries	2,977	1,789
Balance at the end of the period	144,250	149,899
Consumer and Other Loans
Loans receivable and allowance for loan losses
Balance at the beginning of the period	6,316	3,800
Provision charged (creditied) to operations	844	384
Charge-offs	(906)	(600)
Recoveries	103	88
Balance at the end of the period	6,357	3,672
Mortgage Loans (Gross) | Residential
Loans receivable and allowance for loan losses
Balance at the beginning of the period	89,267	105,991
Provision charged (creditied) to operations	8,906	988
Charge-offs	(8,313)	(17,704)
Recoveries	1,686	1,623
Balance at the end of the period	91,546	90,898
Mortgage Loans (Gross) | Multi-Family
Loans receivable and allowance for loan losses
Balance at the beginning of the period	35,514	35,422
Provision charged (creditied) to operations	191	9,860
Charge-offs	(2,941)	(432)
Recoveries	1,188	77
Balance at the end of the period	33,952	44,927
Mortgage Loans (Gross) | Commercial Real Estate
Loans receivable and allowance for loan losses
Balance at the beginning of the period	14,404	11,972
Provision charged (creditied) to operations	(815)	(1,232)
Charge-offs	(1,194)	(339)
Recoveries		1
Balance at the end of the period	$ 12,395	$ 10,402

XML

Other Comprehensive Income/Loss (Tables)

3 Months Ended

Mar. 31, 2013

Other Comprehensive Income/Loss

Components of and Changes in Accumulated Other Comprehensive Loss

(In Thousands)	At December 31, 2012	Other Comprehensive Income	At March 31, 2013
Net unrealized gain on securities available-for-sale	$   7,451	$ 130	$   7,581
Net actuarial loss on pension plans and other postretirement benefits	(77,115)	627	(76,488)
Prior service cost on pension plans and other postretirement benefits	(3,426)	34	(3,392)
Accumulated other comprehensive loss	$(73,090)	$ 791	$(72,299)

Schedule of components of other comprehensive income

The following table sets forth the components of other comprehensive income for the three months ended March 31, 2013.

(In Thousands)	Before Tax Amount	Tax Expense	After Tax Amount
Net unrealized holding gain on securities available-for-sale arising during the period	$    200	$   (70)	$  130
Reclassification adjustment for net actuarial loss included in net income	967	(340)	627
Reclassification adjustment for prior service cost included in net income	53	(19)	34
Other comprehensive income	$ 1,220	$ (429)	$  791

Information about amounts reclassified from accumulated other comprehensive income to the consolidated statements of income

(In Thousands)	For the Three Months Ended March 31, 2013
Net actuarial loss and prior service cost on pension plans and other postretirement benefits (1):
Income statement line item:
Compensation and benefits:
Recognized net actuarial loss	$      967
Amortization of prior service cost	53
Compensation and benefits	1,020
Income tax benefit	(359)
Net of tax	$      661

(1) These accumulated other comprehensive loss components are included in the computations of net periodic cost for our defined benefit pension plans and other postretirement benefit plan. See Note 8 for additional details.

XML

Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2013
Dividends on common stock (in dollars per share)	$ 0.04
Restricted stock grants, shares	531,110
Forfeitures of restricted stock, shares	38,902
Preferred Stock
Issuance of Preferred Stock, Series C, shares	135,000

XML

Consolidated Statements of Financial Condition (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Held-to-maturity securities, fair value (in dollars)	$ 1,732,726	$ 1,725,090
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	166,494,888	166,494,888
Common stock, shares outstanding	98,911,526	98,419,318
Treasury stock, shares	67,583,362	68,075,570
Unallocated common stock held by ESOP, shares	702,449	967,013
Series C Preferred Stock
Preferred stock, shares authorized	150,000
Preferred stock, shares issued	135,000	0
Preferred stock, shares outstanding	135,000	0

XML

Stock Incentive Plans

3 Months Ended

Mar. 31, 2013

Stock Incentive Plans

Stock Incentive Plans

9.     Stock Incentive Plans

During the three months ended March 31, 2013, 489,420 shares of restricted common stock were granted to select officers under the 2005 Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, of which 475,140 shares vest one-third per year on or about December 16, beginning December 16, 2013, 6,000 shares vest one-third per year on or about January 7, beginning January 7, 2014, and 8,280 were forfeited as of March 31, 2013.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2005 Employee Stock Plan, all restricted common stock granted pursuant to such plan immediately vests.

During the three months ended March 31, 2013, 41,690 shares of restricted common stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, of which 36,020 remain outstanding at March 31, 2013 and vest 100% in January 2016, although awards immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

The following table summarizes restricted common stock activity in our stock incentive plans for the three months ended March 31, 2013.

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013		1,146,657		$    14.87
Granted		531,110		9.70
Vested		(275,905	)	(23.75	)
Forfeited		(38,902	)	(11.46	)
Nonvested at March 31, 2013		1,362,960		11.16

In addition to the activity described above, during the three months ended March 31, 2013, 432,300 performance-based restricted stock units were granted to select officers under the 2005 Employee Stock Plan, with a grant date fair value of $9.22 per unit, of which 424,000 units remain outstanding at March 31, 2013.  Each restricted stock unit granted represents a right, under the 2005 Employee Stock Plan, to receive one share of our common stock in the future, subject to meeting certain criteria.  The restricted stock units have specified performance objectives within a specified performance measurement period and no voting or dividend rights prior to vesting and delivery of shares.  The performance measurement period for these restricted stock units is the fiscal year ending December 31, 2015 and the vest date is February 1, 2016.  Shares will be issued on the vest date at either 100%, 75%, 50% or 0% of units granted based on actual performance during the performance measurement period.  Absent a change of control, if a grantee’s employment terminates prior to December 31, 2015 all restricted stock units will be forfeited.  In the event the grantee terminates his/her employment during the period between December 31, 2015 and February 1, 2016 due to death, disability, retirement or a change of control, the grantee will remain entitled to the shares otherwise earned.

Stock-based compensation expense is recognized on a straight-line basis over the vesting period and totaled $1.1 million, net of taxes of $609,000, for the three months ended March 31, 2013 and $336,000, net of taxes of $184,000, for the three months ended March 31, 2012.  At March 31, 2013, pre-tax compensation cost related to all nonvested awards of restricted common stock and restricted stock units not yet recognized totaled $15.6 million and will be recognized over a weighted average period of approximately 2.4 years, which excludes $1.8 million of pre-tax compensation cost related to 65,000 shares of performance-based restricted common stock granted in 2011 and 106,000 performance-based restricted stock units granted in 2013 for which compensation cost will begin to be recognized when the achievement of the performance conditions becomes probable.

As a result of the resignation and retirement of several executive officers during the 2012 first quarter, the level of forfeitures in 2012 significantly exceeded our original estimate of restricted common stock forfeitures based on our prior experience.  As a result, we reversed stock-based compensation expense during the 2012 first quarter totaling $569,000, net of taxes of $310,000, representing stock-based compensation expense previously recognized on unvested shares of restricted common stock which will not vest as a result of forfeitures.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document and Entity Information
Entity Registrant Name	ASTORIA FINANCIAL CORP
Entity Central Index Key	0000910322
Trading Symbol	AF
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		98,883,526
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Fair Value Measurements

10.    Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  We group our assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.  These levels are:

· Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

· Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

· Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market.  These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability.  Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques.  The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

We base our fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, with additional considerations when the volume and level of activity for an asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly.  We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recurring Fair Value Measurements

Our securities available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity.  Additionally, in connection with our mortgage banking activities we have commitments to fund loans held-for-sale and commitments to sell loans, which are considered free-standing derivative instruments, the fair values of which are not material to our financial condition or results of operations.

The following tables set forth the carrying values of our assets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	Carrying Value at March 31, 2013
(In Thousands)	Total	Level 1	Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$  299,203	$       —	$  299,203
Non-GSE issuance REMICs and CMOs	10,084	—	10,084
GSE pass-through certificates	20,491	—	20,491
Obligations of GSEs	98,595	—	98,595
Fannie Mae stock	1	1	—
Total securities available-for-sale	$  428,374	$         1	$  428,373

	Carrying Value at December 31, 2012
(In Thousands)	Total	Level 1	Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$  204,827	$       —	$  204,827
Non-GSE issuance REMICs and CMOs	11,219	—	11,219
GSE pass-through certificates	21,375	—	21,375
Obligations of GSEs	98,879	—	98,879
Fannie Mae stock	—	—	—
Total securities available-for-sale	$  336,300	$       —	$  336,300

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

Residential mortgage-backed securities

Residential mortgage-backed securities comprised 77% of our securities available-for-sale portfolio at March 31, 2013 and 71% at December 31, 2012.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service uses various modeling techniques to determine pricing for our mortgage-backed securities, including option pricing and discounted cash flow models.  The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, monthly payment information and collateral performance.  GSE securities, for which an active market exists for similar securities making observable inputs readily available, comprised 97% of our available-for-sale residential mortgage-backed securities portfolio at March 31, 2013 and 95% at December 31, 2012.

We analyze changes in the pricing service fair values from month to month taking into consideration changes in market conditions including changes in mortgage spreads, changes in treasury yields and changes in generic pricing on fifteen and thirty year securities.  Each month we conduct a review of the estimated fair values of our fixed rate REMICs and CMOs available-for-sale which represented 93% of our residential mortgage-backed securities available-for-sale at March 31, 2013 and 90% at December 31, 2012.  We generate prices based upon a “spread matrix” approach for estimating values.  Market spreads are obtained from independent third party firms who trade these types of securities.  Any notable differences between the pricing service prices and “spread matrix” prices on individual securities are analyzed further, including a review of prices provided by other independent parties, a yield analysis and review of average life changes using Bloomberg analytics and a review of historical pricing on the particular security.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Obligations of GSEs

Obligations of GSEs comprised 23% of our securities available-for-sale portfolio at March 31, 2013 and 29% at December 31, 2012 and consisted of debt securities issued by GSEs.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service gathers information from market sources and integrates relative credit information, observed market movements and sector news into their pricing applications and models.  Spread scales, representing credit risk, are created and are based on the new issue market, secondary trading and dealer quotes.  Option adjusted spread models are incorporated to adjust spreads of issues that have early redemption features.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Fannie Mae stock

The fair value of the Fannie Mae stock in our available-for-sale securities portfolio is obtained from quoted market prices for identical instruments in active markets and, as such, is classified as Level 1.

Non-Recurring Fair Value Measurements

From time to time, we may be required to record at fair value assets or liabilities on a non-recurring basis, such as mortgage servicing rights, or MSR, loans receivable, certain assets held-for-sale and real estate owned, or REO.  These non-recurring fair value adjustments involve the application of lower of cost or market accounting or impairment write-downs of individual assets.

The following table sets forth the carrying values of those of our assets which were measured at fair value on a non-recurring basis at the dates indicated.  The fair value measurements for all of these assets fall within Level 3 of the fair value hierarchy.

	Carrying Value
(In Thousands)	At March 31, 2013		At December 31, 2012
Non-performing loans held-for-sale, net	$	8,225	$	3,881
Impaired loans		285,723	282,723
MSR, net		8,465	6,947
REO, net		16,111	20,796
Total	$	318,524	$	314,347

The following table provides information regarding the losses recognized on our assets measured at fair value on a non-recurring basis for the periods indicated.

	For the Three  Months Ended  March 31,
(In Thousands)	2013	2012
Non-performing loans held-for-sale, net (1)	$   2,604	$         54
Impaired loans (2)	8,378	15,875
REO, net (3)	1,137	2,534
Total	$  12,119	$  18,463

(1)	Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.
(2)	Losses are charged against the allowance for loan losses.
(3)	Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Loans-held-for-sale, net (non-performing loans held-for-sale)

Fair values of non-performing loans held-for-sale are estimated through either preliminary bids from potential purchasers of the loans or the estimated fair value of the underlying collateral discounted for factors necessary to solicit acceptable bids, and adjusted as necessary based on management’s experience with sales of similar types of loans and, as such, are classified as Level 3.  Substantially all of the non-performing loans held-for-sale at March 31, 2013 and December 31, 2012 were multi-family mortgage loans.

Loans receivable, net (impaired loans)

Loans which meet certain criteria are evaluated individually for impairment.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Impaired loans were comprised of 83% residential mortgage loans and 17% multi-family and commercial real estate mortgage loans at March 31, 2013 and 78% residential mortgage loans and 22% multi-family and commercial real estate mortgage loans at December 31, 2012.  Impaired loans for which a fair value adjustment was recognized were comprised of 85% residential mortgage loans and 15% multi-family and commercial real estate mortgage loans at March 31, 2013 and 84% residential mortgage loans and 16% multi-family and commercial real estate mortgage loans at December 31, 2012.  Our impaired loans are generally collateral dependent and, as such, are generally carried at the estimated fair value of the collateral less estimated selling costs.

We obtain updated estimates of collateral values on residential mortgage loans at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral value on residential loans are obtained primarily through automated valuation models.  Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete.  We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.  The fair values of impaired loans cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the loan and, as such, are classified as Level 3.

MSR, net

The right to service loans for others is generally obtained through the sale of residential mortgage loans with servicing retained.  MSR are carried at the lower of cost or estimated fair value.  The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.  At March 31, 2013, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.93%, a weighted average constant prepayment rate on mortgages of 18.40% and a weighted average life of 4.3 years.  At December 31, 2012, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.95%, a weighted average constant prepayment rate on mortgages of 23.12% and a weighted average life of 3.4 years.  Management reviews the assumptions used to estimate the fair value of MSR to ensure they reflect current and anticipated market conditions.

REO, net

REO represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure, all of which were residential properties at March 31, 2013 and December 31, 2012, and is carried, net of allowances for losses, at the lower of cost or fair value less estimated selling costs.  The fair value of REO is estimated through current appraisals, in conjunction with a drive-by inspection and comparison of the REO property with similar properties in the area by either a licensed appraiser or real estate broker.  As these properties are actively marketed, estimated fair values are periodically adjusted by management to reflect current market conditions and, as such, are classified as Level 3.

Fair Value of Financial Instruments

Quoted market prices available in formal trading marketplaces are typically the best evidence of the fair value of financial instruments.  In many cases, financial instruments we hold are not bought or sold in formal trading marketplaces.  Accordingly, fair values are derived or estimated based on a variety of valuation techniques in the absence of quoted market prices.  Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument.  These estimates do not reflect any possible tax ramifications, estimated transaction costs, or any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument.  Because no market exists for a certain portion of our financial instruments, fair value estimates are based on judgments regarding future loss experience, current economic conditions, risk characteristics and other such factors.  These estimates are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.  For these reasons and others, the estimated fair value disclosures presented herein do not represent our entire underlying value.  As such, readers are cautioned in using this information for purposes of evaluating our financial condition and/or value either alone or in comparison with any other company.

The following tables set forth the carrying values and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value in accordance with GAAP, and are not measured or recorded at fair value on a recurring basis, and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	At March 31, 2013
	Carrying	Estimated Fair Value
(In Thousands)	Value	Total	Level 2	Level 3
Financial Assets:
Securities held-to-maturity	$   1,709,427	$    1,732,726	$    1,732,726	$                —
FHLB-NY stock	145,502	145,502	145,502	—
Loans held-for-sale, net (1)	31,548	32,154	—	32,154
Loans receivable, net (1)	12,767,533	12,909,105	—	12,909,105
MSR, net (1)	8,465	8,466	—	8,466
Financial Liabilities:
Deposits	10,445,333	10,567,986	10,567,986	—
Borrowings, net	3,908,629	4,356,982	4,356,982	—

(1) Includes assets measured at fair value on a non-recurring basis.

	At December 31, 2012
	Carrying	Estimated Fair Value
(In Thousands)	Value	Total	Level 2	Level 3
Financial Assets:
Securities held-to-maturity	$   1,700,141	$   1,725,090	$   1,725,090	$                —
FHLB-NY stock	171,194	171,194	171,194	—
Loans held-for-sale, net (1)	76,306	78,486	—	78,486
Loans receivable, net (1)	13,078,471	13,311,997	—	13,311,997
MSR, net (1)	6,947	6,948	—	6,948
Financial Liabilities:
Deposits	10,443,958	10,588,073	10,588,073	—
Borrowings, net	4,373,496	4,857,989	4,857,989	—

(1) Includes assets measured at fair value on a non-recurring basis.

The following is a description of the methods and assumptions used to estimate fair values of our financial instruments which are not measured or recorded at fair value on a recurring or non-recurring basis.

Securities held-to-maturity

The fair values for substantially all of our securities held-to-maturity are obtained from an independent nationally recognized pricing service using similar methods and assumptions as used for our securities available-for-sale which are measured at fair value on a recurring basis.

Federal Home Loan Bank, or FHLB-NY, stock

The fair value of FHLB-NY stock is based on redemption at par value.

Loans held-for-sale, net

The fair values of fifteen and thirty year conforming fixed rate residential mortgage loans originated for sale are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the options embedded in loans such as prepayments.  This methodology involves generating simulated interest rates, calculating the option adjusted spread, or OAS, of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing on an instrument level for similar mortgage instruments whose prices are not known.

Loans receivable, net

Fair values of loans are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the optionality and structural features embedded in loans such as prepayments and interest rate caps and floors.  This pricing methodology involves generating simulated interest rates, calculating the OAS of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing on an instrument level for similar mortgage instruments whose prices are not known.

This technique of estimating fair value is extremely sensitive to the assumptions and estimates used.  While we have attempted to use assumptions and estimates which are the most reflective of the loan portfolio and the current market, a greater degree of subjectivity is inherent in determining these fair values than for fair values obtained from formal trading marketplaces.  In addition, our valuation method for loans, which is consistent with accounting guidance, does not fully incorporate an exit price approach to fair value.

Deposits

The fair values of deposits with no stated maturity, such as savings, money market and NOW and demand deposit accounts, are equal to the amount payable on demand.  The fair values of certificates of deposit are based on discounted contractual cash flows using the weighted average remaining life of the portfolio discounted by the corresponding LIBOR Swap Curve.

Borrowings, net

The fair values of callable borrowings are based upon third party dealers’ estimated market values.  The fair values of non-callable borrowings are based on discounted cash flows using the weighted average remaining life of the portfolio discounted by the corresponding FHLB-NY nominal funding rate.

Outstanding commitments

Outstanding commitments include commitments to extend credit and unadvanced lines of credit for which fair values were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions.  The fair values of these commitments are immaterial to our financial condition.

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Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Interest income:
Residential mortgage loans	$ 80,207	$ 99,292
Multi-family and commercial real estate mortgage loans	38,623	36,470
Consumer and other loans	2,228	2,341
Mortgage-backed and other securities	10,899	18,021
Interest-earning cash accounts	55	53
Federal Home Loan Bank of New York stock	2,029	1,602
Total interest income	134,041	157,779
Interest expense:
Deposits	17,321	29,427
Borrowings	32,688	40,156
Total interest expense	50,009	69,583
Net interest income	84,032	88,196
Provision for loan losses	9,126	10,000
Net interest income after provision for loan losses	74,906	78,196
Non-interest income:
Customer service fees	9,046	10,482
Other loan fees	522	887
Gain on sales of securities		2,477
Mortgage banking income, net	4,776	1,355
Income from bank owned life insurance	2,136	2,423
Other	1,798	1,943
Total non-interest income	18,278	19,567
General and administrative:
Compensation and benefits	31,998	42,160
Occupancy, equipment and systems	19,785	16,724
Federal deposit insurance premiums	10,184	11,203
Advertising	1,340	1,834
Other	8,244	10,280
Total non-interest expense	71,551	82,201
Income before income tax expense	21,633	15,562
Income tax expense	7,781	5,566
Net income	$ 13,852	$ 9,996
Basic earnings per common share (in dollars per share)	$ 0.14	$ 0.11
Diluted earnings per common share (in dollars per share)	$ 0.14	$ 0.11
Basic weighted average common shares (in shares)	96,674,729	95,018,867
Diluted weighted average common and common equivalent shares (in shares)	96,674,729	95,018,867

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Loans Receivable and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2013

Loans Receivable and Allowance for Loan Losses

Loans Receivable and Allowance for Loan Losses

4.     Loans Receivable and Allowance for Loan Losses

The following tables set forth the composition of our loans receivable portfolio and an aging analysis by accruing and non-accrual loans and by segment and class at the dates indicated.

	At March 31, 2013
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	31,298	$	8,343	$	—	$	39,641	$	1,732,224	$	1,771,865
Full documentation amortizing	39,310		5,624		—		44,934		5,839,072		5,884,006
Reduced documentation interest-only	30,428		7,587		—		38,015		809,738		847,753
Reduced documentation amortizing	9,557		1,950		—		11,507		338,706		350,213
Total residential	110,593		23,504		—		134,097		8,719,740		8,853,837
Multi-family	17,450		5,731		—		23,181		2,545,582		2,568,763
Commercial real estate	2,887		6,588		609		10,084		796,666		806,750
Total mortgage loans	130,930		35,823		609		167,362		12,061,988		12,229,350
Consumer and other loans (gross):
Home equity lines of credit	2,828		1,350		—		4,178		212,953		217,131
Other	68		177		—		245		35,131		35,376
Total consumer and other loans	2,896		1,527		—		4,423		248,084		252,507
Total accruing loans	$	133,826	$	37,350	$	609	$	171,785	$	12,310,072	$	12,481,857
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	1,634	$	851	$	92,128	$	94,613	$	23,005	$	117,618
Full documentation amortizing	539		408		43,320		44,267		8,706		52,973
Reduced documentation interest-only	4,156		1,467		105,326		110,949		25,068		136,017
Reduced documentation amortizing	2,166		69		30,369		32,604		4,264		36,868
Total residential	8,495		2,795		271,143		282,433		61,043		343,476
Multi-family	—		—		3,706		3,706		3,849		7,555
Commercial real estate	1,363		—		5,606		6,969		1,350		8,319
Total mortgage loans	9,858		2,795		280,455		293,108		66,242		359,350
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,178		6,178		252		6,430
Other	—		—		68		68		—		68
Total consumer and other loans	—		—		6,246		6,246		252		6,498
Total non-accrual loans	$	9,858	$	2,795	$	286,701	$	299,354	$	66,494	$	365,848
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	32,932	$	9,194	$	92,128	$	134,254	$	1,755,229	$	1,889,483
Full documentation amortizing	39,849		6,032		43,320		89,201		5,847,778		5,936,979
Reduced documentation interest-only	34,584		9,054		105,326		148,964		834,806		983,770
Reduced documentation amortizing	11,723		2,019		30,369		44,111		342,970		387,081
Total residential	119,088		26,299		271,143		416,530		8,780,783		9,197,313
Multi-family	17,450		5,731		3,706		26,887		2,549,431		2,576,318
Commercial real estate	4,250		6,588		6,215		17,053		798,016		815,069
Total mortgage loans	140,788		38,618		281,064		460,470		12,128,230		12,588,700
Consumer and other loans (gross):
Home equity lines of credit	2,828		1,350		6,178		10,356		213,205		223,561
Other	68		177		68		313		35,131		35,444
Total consumer and other loans	2,896		1,527		6,246		10,669		248,336		259,005
Total loans	$	143,684	$	40,145	$	287,310	$	471,139	$	12,376,566	$	12,847,705
Net unamortized premiums and deferred loan origination costs											64,078
Loans receivable											12,911,783
Allowance for loan losses											(144,250		)
Loans receivable, net											$	12,767,533

	At December 31, 2012
	Past Due
	30-59		60-89		90 Days		Total
(In Thousands)	Days		Days		or More		Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	30,520	$	8,973	$	—	$	39,493	$	1,862,382	$	1,901,875
Full documentation amortizing	35,918		6,564		—		42,482		6,218,064		6,260,546
Reduced documentation interest-only	28,212		7,694		—		35,906		855,907		891,813
Reduced documentation amortizing	11,780		3,893		—		15,673		350,268		365,941
Total residential	106,430		27,124		—		133,554		9,286,621		9,420,175
Multi-family	21,743		5,382		—		27,125		2,368,895		2,396,020
Commercial real estate	13,536		3,126		328		16,990		750,385		767,375
Total mortgage loans	141,709		35,632		328		177,669		12,405,901		12,583,570
Consumer and other loans (gross):
Home equity lines of credit	3,103		1,092		—		4,195		221,266		225,461
Other	120		223		—		343		31,782		32,125
Total consumer and other loans	3,223		1,315		—		4,538		253,048		257,586
Total accruing loans	$	144,932	$	36,947	$	328	$	182,207	$	12,658,949	$	12,841,156
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	677	$	97,907	$	98,584	$	937	$	99,521
Full documentation amortizing	363		—		43,014		43,377		949		44,326
Reduced documentation interest-only	1,042		—		107,254		108,296		5,186		113,482
Reduced documentation amortizing	445		13		32,496		32,954		768		33,722
Total residential	1,850		690		280,671		283,211		7,840		291,051
Multi-family	—		—		7,359		7,359		3,299		10,658
Commercial real estate	—		—		6,541		6,541		—		6,541
Total mortgage loans	1,850		690		294,571		297,111		11,139		308,250
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,459		6,459		—		6,459
Other	—		—		49		49		—		49
Total consumer and other loans	—		—		6,508		6,508		—		6,508
Total non-accrual loans	$	1,850	$	690	$	301,079	$	303,619	$	11,139	$	314,758
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	30,520	$	9,650	$	97,907	$	138,077	$	1,863,319	$	2,001,396
Full documentation amortizing	36,281		6,564		43,014		85,859		6,219,013		6,304,872
Reduced documentation interest-only	29,254		7,694		107,254		144,202		861,093		1,005,295
Reduced documentation amortizing	12,225		3,906		32,496		48,627		351,036		399,663
Total residential	108,280		27,814		280,671		416,765		9,294,461		9,711,226
Multi-family	21,743		5,382		7,359		34,484		2,372,194		2,406,678
Commercial real estate	13,536		3,126		6,869		23,531		750,385		773,916
Total mortgage loans	143,559		36,322		294,899		474,780		12,417,040		12,891,820
Consumer and other loans (gross):
Home equity lines of credit	3,103		1,092		6,459		10,654		221,266		231,920
Other	120		223		49		392		31,782		32,174
Total consumer and other loans	3,223		1,315		6,508		11,046		253,048		264,094
Total loans	$	146,782	$	37,637	$	301,407	$	485,826	$	12,670,088	$	13,155,914
Net unamortized premiums and deferred loan origination costs											68,058
Loans receivable											13,223,972
Allowance for loan losses											(145,501		)
Loans receivable, net											$	13,078,471

We segment our residential mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and year of origination and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate loans by portfolio, geographic location and year of origination.  We analyze our consumer and other loan portfolio by home equity lines of credit, commercial loans, revolving credit lines and installment loans and perform similar historical loss analyses.

In the 2013 first quarter, in addition to residential loans discharged in a Chapter 7 bankruptcy filing, or bankruptcy loans, placed on non-accrual status and reported as non-performing loans as of December 31, 2012, we also included bankruptcy loans discharged prior to 2012 regardless of the delinquency status of the loans.  As a result, non-performing loans at March 31, 2013 increased $51.4 million as compared to December 31, 2012.  Non-performing loans at March 31, 2013 include $66.5 million of bankruptcy loans which are less than 90 days past due, including $54.3 million which were discharged prior to 2012.  Of the bankruptcy loans which are less than 90 days past due at March 31, 2013, $58.2 million are current, $6.5 million are 30-59 days past due and $1.8 million are 60-89 days past due.  Such loans continue to generate interest income on a cash basis as payments are received.  Pursuant to regulatory guidance issued in 2012, bankruptcy loans, in addition to being placed on non-accrual status and reported as non-performing loans, are also reported as loans modified in a troubled debt restructuring, or TDR, and as impaired loans and totaled $94.0 million at March 31, 2013, including bankruptcy loans discharged prior to 2012 of $73.8 million.

We analyze our historical loss experience over twelve, fifteen, eighteen and twenty-four month periods.  The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type.  Also, for a particular loan type we may not have sufficient loss history to develop a reasonable estimate of loss and consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs).  We update our historical loss analyses quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses.  We also consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by portfolio.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our allowance for loan losses.  During the 2013 first quarter, the allowance for loan losses allocated to residential mortgage loans over 180 days delinquent with a charge-off, previously determined within our qualitative analysis, has been presented as attributable to these loans individually evaluated for impairment.  The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

The following tables set forth the changes in our allowance for loan losses by loan receivable segment for the periods indicated.

	For the Three Months Ended March 31, 2013
	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at January 1, 2013	$	89,267		$	35,514		$	14,404		$	6,316		$	145,501
Provision charged (credited) to operations	8,906			191			(815		)	844			9,126
Charge-offs	(8,313		)	(2,941		)	(1,194		)	(906		)	(13,354		)
Recoveries	1,686			1,188			—			103			2,977
Balance at March 31, 2013	$	91,546		$	33,952		$	12,395		$	6,357		$	144,250

	For the Three Months Ended March 31, 2012
	Mortgage Loans									Consumer
(In Thousands)	Residential			Multi- Family			Commercial Real Estate			and Other Loans			Total
Balance at January 1, 2012	$	105,991		$	35,422		$	11,972		$	3,800		$	157,185
Provision charged (credited) to operations	988			9,860			(1,232		)	384			10,000
Charge-offs	(17,704		)	(432		)	(339		)	(600		)	(19,075		)
Recoveries	1,623			77			1			88			1,789
Balance at March 31, 2012	$	90,898		$	44,927		$	10,402		$	3,672		$	149,899

The following table sets forth the balances of our residential interest-only mortgage loans at March 31, 2013 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin:
Within one year	$    205,246
More than one year to three years	1,388,990
More than three years to five years	1,084,140
Over five years	194,877
Total	$ 2,873,253

The following tables set forth the balances of our residential mortgage and consumer and other loan receivable segments by class and credit quality indicator at the dates indicated.

	At March 31, 2013
	Residential Mortgage Loans				Consumer and Other Loans
	Full Documentation		Reduced Documentation		Home Equity
(In Thousands)	Interest-only	Amortizing	Interest-only	Amortizing	Lines of Credit	Other
Performing	$ 1,771,865	$ 5,884,006	$   847,753	$ 350,213	$ 217,131	$ 35,376
Non-performing:
Current or past due less than 90 days	25,490	9,653	30,691	6,499	252	—
Past due 90 days or more	92,128	43,320	105,326	30,369	6,178	68
Total	$ 1,889,483	$ 5,936,979	$   983,770	$ 387,081	$ 223,561	$ 35,444

	At December 31, 2012
	Residential Mortgage Loans				Consumer and Other Loans
	Full Documentation		Reduced Documentation		Home Equity
(In Thousands)	Interest-only	Amortizing	Interest-only	Amortizing	Lines of Credit	Other
Performing	$ 1,901,875	$ 6,260,546	$   891,813	$ 365,941	$ 225,461	$ 32,125
Non-performing:
Current or past due less than 90 days	1,614	1,312	6,228	1,226	—	—
Past due 90 days or more	97,907	43,014	107,254	32,496	6,459	49
Total	$ 2,001,396	$ 6,304,872	$1,005,295	$ 399,663	$ 231,920	$ 32,174

The following table sets forth the balances of our multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator at the dates indicated.

	At March 31, 2013		At December 31, 2012
(In Thousands)	Multi-Family	Commercial Real Estate	Multi-Family	Commercial Real Estate
Not criticized	$2,456,069	$ 754,204	$ 2,271,006	$ 706,334
Criticized:
Special mention	51,843	21,378	54,956	28,210
Substandard	68,406	39,487	80,716	39,372
Doubtful	—	—	—	—
Total	$2,576,318	$ 815,069	$ 2,406,678	$ 773,916

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.

	At March 31, 2013
	Mortgage Loans
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		Consumer and Other Loans		Total
Loans:
Individually evaluated for impairment	$	336,427	$	50,917	$	18,888	$	—	$	406,232
Collectively evaluated for impairment	8,860,886		2,525,401		796,181		259,005		12,441,473
Total loans	$	9,197,313	$	2,576,318	$	815,069	$	259,005	$	12,847,705
Allowance for loan losses:
Individually evaluated for impairment	$	24,484	$	1,157	$	300	$	—	$	25,941
Collectively evaluated for impairment	67,062		32,795		12,095		6,357		118,309
Total allowance for loan losses	$	91,546	$	33,952	$	12,395	$	6,357	$	144,250

	At December 31, 2012
	Mortgage Loans						Consumer
(In Thousands)	Residential		Multi- Family		Commercial Real Estate		and Other Loans		Total
Loans:
Individually evaluated for impairment	$	272,146	$	56,116	$	18,644	$	—	$	346,906
Collectively evaluated for impairment	9,439,080		2,350,562		755,272		264,094		12,809,008
Total loans	$	9,711,226	$	2,406,678	$	773,916	$	264,094	$	13,155,914
Allowance for loan losses:
Individually evaluated for impairment	$	1,001	$	2,576	$	1,469	$	—	$	5,046
Collectively evaluated for impairment	88,266		32,938		12,935		6,316		140,455
Total allowance for loan losses	$	89,267	$	35,514	$	14,404	$	6,316	$	145,501

The following table summarizes information related to our impaired mortgage loans by segment and class at the dates indicated.

	At March 31, 2013					At December 31, 2012
(In Thousands)	Unpaid Principal Balance	Recorded Investment	Related Allowance		Net Investment	Unpaid Principal Balance	Recorded Investment	Related Allowance		Net Investment
With an allowance recorded:
Residential:
Full documentation interest-only	$ 134,138	$ 105,291	$   (8,196	)	$   97,095	$   10,740	$   10,740	$    (241	)	$   10,499
Full documentation amortizing	31,131	27,390	(2,205	)	25,185	6,122	6,122	(347	)	5,775
Reduced documentation interest-only	201,169	151,621	(10,270	)	141,351	12,893	12,893	(277	)	12,616
Reduced documentation amortizing	31,670	25,667	(3,813	)	21,854	3,889	3,889	(136	)	3,753
Multi-family	17,083	17,083	(1,157	)	15,926	19,704	19,704	(2,576	)	17,128
Commercial real estate	8,727	8,727	(300	)	8,427	10,835	10,835	(1,469	)	9,366
Without an allowance recorded:
Residential:
Full documentation interest-only	28,717	20,088	—		20,088	122,275	86,607	—		86,607
Full documentation amortizing	8,825	6,370	—		6,370	23,489	17,962	—		17,962
Reduced documentation interest-only	—	—	—		—	166,477	116,514	—		116,514
Reduced documentation amortizing	—	—	—		—	23,419	17,419	—		17,419
Multi-family	40,467	33,834	—		33,834	44,341	36,412	—		36,412
Commercial real estate	16,551	10,161	—		10,161	13,256	7,809	—		7,809
Total impaired loans	$ 518,478	$ 406,232	$ (25,941	)	$ 380,291	$ 457,440	$ 346,906	$ (5,046	)	$ 341,860

The following table sets forth the average recorded investment, interest income recognized and cash basis interest income related to our impaired mortgage loans by segment and class for the periods indicated.

	For the Three Months Ended March 31,
	2013						2012
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Residential:
Full documentation interest-only	$	91,571	$	573	$	644	$	10,466	$	91	$	93
Full documentation amortizing	23,099		115		128		3,933		40		40
Reduced documentation interest-only	136,342		901		1,002		11,464		117		121
Reduced documentation amortizing	23,487		90		110		1,896		23		22
Multi-family	18,394		173		174		50,079		554		802
Commercial real estate	9,781		82		102		14,554		159		169
Without an allowance recorded:
Residential:
Full documentation interest-only	19,792		82		80		79,553		345		341
Full documentation amortizing	5,824		50		50		18,294		52		56
Reduced documentation interest-only	4,172		—		—		112,704		522		536
Reduced documentation amortizing	—		—		—		15,893		124		123
Multi-family	35,122		407		441		5,820		174		174
Commercial real estate	8,985		132		122		3,001		139		131
Total impaired loans	$	376,569	$	2,605	$	2,853	$	327,657	$	2,340	$	2,608

The following table sets forth information about our mortgage loans receivable by segment and class at March 31, 2013 and 2012 which were modified in a TDR during the periods indicated.

	Modifications During the Three Months Ended March 31,
	2013			2012
(Dollars In Thousands)	Number of Loans	Pre- Modification Recorded Investment	Recorded Investment at March 31, 2013	Number of Loans	Pre- Modification Recorded Investment	Recorded Investment at March 31, 2012
Residential:
Full documentation interest-only	6	$   1,504	$   1,461	—	$       —	$        —
Full documentation amortizing	2	781	781	—	—	—
Reduced documentation interest-only	11	3,433	3,349	3	914	914
Reduced documentation amortizing	3	742	730	4	1,549	1,473
Multi-family	3	2,784	2,476	6	26,037	25,233
Commercial real estate	1	1,539	1,350	1	999	941
Total	26	$ 10,783	$ 10,147	14	$29,499	$ 28,561

The following table sets forth information about our mortgage loans receivable by segment and class at March 31, 2013 and 2012 which were modified in a TDR during the twelve months ended March 31, 2013 and 2012 and had a payment default subsequent to the modification during the periods indicated.

	For the Three Months Ended March 31,
	2013		2012
(Dollars In Thousands)	Numberof Loans	RecordedInvestment at March 31, 2013	Numberof Loans	RecordedInvestment at March 31, 2012
Residential:
Full documentation interest-only	19	$    5,265	2	$     524
Full documentation amortizing	7	1,176	1	81
Reduced documentation interest-only	21	7,986	7	3,493
Reduced documentation amortizing	5	991	6	1,780
Multi-family	—	—	1	1,785
Commercial real estate	1	1,363	—	—
Total	53	$  16,781	17	$  7,663

For additional information regarding our loans receivable and allowance for loan losses, see “Asset Quality” and “Critical Accounting Policies” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or “MD&A.”

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Loans Held-for-Sale

3 Months Ended

Mar. 31, 2013

Loans Held-for-Sale

Loans Held-for-Sale

3. Loans Held-for-Sale

Loans held-for-sale, net, includes fifteen and thirty year fixed rate one-to-four family, or residential, mortgage loans originated for sale that conform to GSE guidelines (conforming loans), as well as certain delinquent and non-performing loans.  Upon our decision to sell certain delinquent and non-performing loans held in portfolio, we reclassify them to held-for-sale at the lower of cost or fair value, less estimated selling costs.  Non-performing loans held-for-sale, included in loans held-for-sale, net, totaled $8.2 million, net of a valuation allowance of $97,000, at March 31, 2013 and $3.9 million, net of a valuation allowance of $64,000, at December 31, 2012.  Substantially all of the non-performing loans held-for-sale were multi-family mortgage loans at March 31, 2013 and December 31, 2012.

We sold certain delinquent and non-performing mortgage loans totaling $5.0 million, net of charge-offs of $1.3 million, during the three months ended March 31, 2013, primarily multi-family and commercial real estate loans, and $14.6 million, net of charge-offs of $8.1 million, during the three months ended March 31, 2012, primarily multi-family loans.  Net gain on sales of non-performing loans totaled $138,000 for the three months ended March 31, 2013 and $950,000 for the three months ended March 31, 2012.

We recorded lower of cost or market write-downs on non-performing loans held-for-sale totaling $33,000 for the three months ended March 31, 2013 and $54,000 for the three months ended March 31, 2012.  Lower of cost or market write-downs and recoveries on non-performing loans held-for-sale and gains and losses recognized on sales of such loans are included in other non-interest income in the consolidated statements of income.

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Common Share

Reconciliation of basic and diluted earnings per common share

	For the Three Months Ended March 31,
(In Thousands, Except Share Data)	2013		2012
Net income	$  13,852		$  9,996
Income allocated to participating securities	(158	)	—
Income attributable to common shareholders	$ 13,694		$ 9,996
Average number of common shares outstanding — basic	96,674,729		95,018,867
Dilutive effect of stock options (1)	—		—
Average number of common shares outstanding — diluted	96,674,729		95,018,867
Income per common share attributable to common shareholders:
Basic	$ 0.14		$ 0.11
Diluted	$ 0.14		$ 0.11

(1) Excludes options to purchase 2,825,855 shares of common stock which were outstanding during the three months ended March 31, 2013 and options to purchase 5,822,224 shares of common stock which were outstanding during the three months ended March 31, 2012 because their inclusion would be anti-dilutive.

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Litigation

3 Months Ended

Mar. 31, 2013

Litigation

Litigation

11.    Litigation

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010 and August 26, 2011, the City of New York has notified us of alleged tax deficiencies in the amount of $13.3 million, including interest and penalties, related to our 2006 through 2008 tax years.  The deficiencies relate to our operation of two subsidiaries of Astoria Federal, Fidata Service Corp., or Fidata, and Astoria Federal Mortgage Corp., or AF Mortgage.  We disagree with the assertion of the tax deficiencies.  Hearings in this matter were held before the New York City Tax Appeals Tribunal, or the NYC Tax Appeals Tribunal, in March and April 2013.  The NYC Tax Appeals Tribunal is not expected to render a decision in this matter until the 2014 second quarter.  At this time, management believes it is more likely than not that we will succeed in refuting the City of New York’s position, although defense costs may be significant.  Accordingly, no liability or reserve has been recognized in our consolidated statement of financial condition at March 31, 2013 with respect to this matter.

No assurance can be given as to whether or to what extent we will be required to pay the amount of the tax deficiencies asserted by the City of New York, whether additional tax will be assessed for years subsequent to 2008, that this matter will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Automated Transactions LLC Litigation

In November 2009, an action entitled Automated Transactions LLC v. Astoria Financial Corporation and Astoria Federal Savings and Loan Association was commenced in the U.S. District Court for the Southern District of New York, or the Southern District Court, against us by Automated Transactions LLC, alleging patent infringement involving integrated banking and transaction machines, including automated teller machines, or ATMs, that we utilize.  We were served with the summons and complaint in such action in March 2010.  The plaintiff seeks unspecified monetary damages and an injunction preventing us from continuing to utilize the allegedly infringing machines.  We filed an answer and counterclaims to the plaintiff’s complaint in March 2010.

In May 2010, the plaintiff filed an amended complaint at the direction of the Southern District Court containing substantially the same allegations as the original complaint.  We subsequently moved to dismiss the amended complaint.  In March 2011, the Southern District Court entered an order on the record that dismissed all claims against Astoria Financial Corporation but denied the motion to dismiss the claims against Astoria Federal for alleged direct patent infringement.  The order also dismissed in part the claims against Astoria Federal for alleged inducement of our customers to violate plaintiff’s patents and for Astoria Federal’s allegedly willful violation of the plaintiff’s patents, allowing claims to continue only for alleged inducement and willful infringement after our receiving notice of the pending suit from plaintiff’s counsel.  In March 2011, we answered the amended complaint substantially denying the allegations.

In July 2012, we filed a motion for summary judgment for non-infringement, which remains pending before the Southern District Court, based on a recent ruling by the U.S. Court of Appeals for the Federal District affirming the U.S. District Court for the District of Delaware, or the Delaware District Court, decision to grant summary judgment in favor of a defendant in an action involving the same plaintiff making substantially similar allegations with respect to identical and substantially similar patents as those involved in the action against us.

By Order dated April 1, 2013 the U.S. Judicial Panel on Multidistrict Litigation transferred this action to the Delaware District Court to be centralized with other cases involving the same plaintiff and common questions of fact.

We have tendered requests for indemnification from the manufacturer and from the transaction processor utilized with respect to the integrated banking and transaction machines, and we served third party complaints against Metavante Corporation and Diebold, Inc. seeking to enforce our indemnification rights.  These complaints are being defended by Metavante Corporation and Diebold, Inc. and we intend to pursue these complaints vigorously.

We intend to continue to vigorously defend this lawsuit.  An adverse result in this lawsuit may include an award of monetary damages, on-going royalty obligations, and/or may result in a change in our business practice, which could result in a loss of revenue.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that this litigation against us will be resolved amicably, that if this litigation results in an adverse decision that we will be successful in seeking indemnification, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Lefkowitz Litigation

In February 2012, we were served with a summons and complaint in a putative class action entitled Ellen Lefkowitz, individually and on behalf of all Persons similarly situated v. Astoria Federal Savings and Loan Association which was commenced in the Supreme Court of the State of New York, County of Queens, or the Queens County Supreme Court, against us alleging that during the proposed class period, we improperly charged overdraft fees to customer accounts when accounts were not overdrawn, improperly reordered electronic debit transactions from the highest to the lowest dollar amount and processed debits before credits to deplete accounts and maximize overdraft fee income.  The complaint contains the further assertion that we did not adequately inform our customers that they had the option to “opt-out” of overdraft services.  In May 2012, we moved to dismiss the complaint.  In July 2012, the Queens County Supreme Court issued an order dismissing the complaint in its entirety.  In September 2012, the plaintiff filed a notice of appeal with the Supreme Court of the State of New York, Appellate Division, Second Judicial Department, or the New York Supreme Court.  The plaintiff failed to perfect the appeal by the March 7, 2013 deadline.  Unless the New York Supreme Court were to permit a request from the plaintiff to perfect the appeal after the deadline, the causes of action asserted in the complaint will be barred under applicable law.

To the extent the plaintiff continues to pursue this claim, we will continue to vigorously defend this lawsuit.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that the plaintiff will not continue to pursue this litigation against us, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

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Other Comprehensive Income/Loss

3 Months Ended

Mar. 31, 2013

Other Comprehensive Income/Loss

Other Comprehensive Income/Loss

7.     Other Comprehensive Income/Loss

The following disclosures reflect our adoption, effective January 1, 2013, of the guidance in Accounting Standards Update, or ASU, 2013-02, “Comprehensive Income (Topic 220) Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” The guidance in ASU 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012 and is presentation related only.  Our adoption of ASU 2013-02 did not have an impact on our financial condition or results of operations.

The following table sets forth the components of accumulated other comprehensive loss at March 31, 2013 and December 31, 2012 and the changes during the three months ended March 31, 2013.

(In Thousands)	At December 31, 2012	Other Comprehensive Income	At March 31, 2013
Net unrealized gain on securities available-for-sale	$   7,451	$ 130	$   7,581
Net actuarial loss on pension plans and other postretirement benefits	(77,115)	627	(76,488)
Prior service cost on pension plans and other postretirement benefits	(3,426)	34	(3,392)
Accumulated other comprehensive loss	$(73,090)	$ 791	$(72,299)

The following table sets forth the components of other comprehensive income for the three months ended March 31, 2013.

(In Thousands)	Before Tax Amount	Tax Expense	After Tax Amount
Net unrealized holding gain on securities available-for-sale arising during the period	$    200	$   (70)	$  130
Reclassification adjustment for net actuarial loss included in net income	967	(340)	627
Reclassification adjustment for prior service cost included in net income	53	(19)	34
Other comprehensive income	$ 1,220	$ (429)	$  791

The following table sets forth information about amounts reclassified from accumulated other comprehensive loss to the consolidated statement of income and the affected line item in the statement where net income is presented.

(In Thousands)	For the Three Months Ended March 31, 2013
Net actuarial loss and prior service cost on pension plans and other postretirement benefits (1):
Income statement line item:
Compensation and benefits:
Recognized net actuarial loss	$      967
Amortization of prior service cost	53
Compensation and benefits	1,020
Income tax benefit	(359)
Net of tax	$      661

(1) These accumulated other comprehensive loss components are included in the computations of net periodic cost for our defined benefit pension plans and other postretirement benefit plan. See Note 8 for additional details.

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Preferred Stock

3 Months Ended

Mar. 31, 2013

Preferred Stock

Preferred Stock

5.     Preferred Stock

On March 19, 2013, in a public offering, we sold 5,400,000 depositary shares, each representing a 1/40th interest in a share of our 6.50% Non-Cumulative Perpetual Preferred Stock, Series C, $1.00 par value per share, $1,000 liquidation preference per share (equivalent to $25.00 per depositary share), or Series C Preferred Stock.  We issued 135,000 shares of the Series C Preferred Stock in connection with the sale of the depositary shares.  The aggregate proceeds from the offering, net of underwriting discounts and other issuance costs, were approximately $129.8 million.

The Series C Preferred Stock, and corresponding depositary shares, may be redeemed at our option, in whole or in part, on April 15, 2018, or on any dividend payment date occurring thereafter, at a redemption price of $1,000 per share (equivalent to $25.00 per depositary share), plus any declared and unpaid dividends (without accumulation of any undeclared dividends). The Series C Preferred Stock may also be redeemed in whole, but not in part, at any time upon the occurrence of a “regulatory capital treatment event,” as defined in the certificate of designations included in the registration statement on Form 8-A filed with the SEC on March 19, 2013.  The holders of the Series C Preferred Stock, and the corresponding depositary shares, do not have the right to require the redemption or repurchase of the Series C Preferred Stock.

Dividends will be payable on the Series C Preferred Stock when, as and if declared by our board of directors, on a non-cumulative basis quarterly in arrears on January 15, April 15, July 15 and October 15 of each year at an annual rate of 6.50% on the liquidation preference of $1,000 per share, beginning on July 15, 2013.  No dividend shall be declared, paid, or set aside for payment on our common stock unless the full dividends for the most recently completed dividend period have been declared and paid on our Series C Preferred Stock.

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2013

Earnings Per Common Share

Earnings Per Common Share

6.     Earnings Per Common Share

The following table is a reconciliation of basic and diluted earnings per common share, or EPS.

	For the Three Months Ended March 31,
(In Thousands, Except Share Data)	2013		2012
Net income	$  13,852		$  9,996
Income allocated to participating securities	(158	)	—
Income attributable to common shareholders	$ 13,694		$ 9,996
Average number of common shares outstanding — basic	96,674,729		95,018,867
Dilutive effect of stock options (1)	—		—
Average number of common shares outstanding — diluted	96,674,729		95,018,867
Income per common share attributable to common shareholders:
Basic	$ 0.14		$ 0.11
Diluted	$ 0.14		$ 0.11

(1) Excludes options to purchase 2,825,855 shares of common stock which were outstanding during the three months ended March 31, 2013 and options to purchase 5,822,224 shares of common stock which were outstanding during the three months ended March 31, 2012 because their inclusion would be anti-dilutive.

For EPS computations, unvested shares of restricted common stock represent participating securities, whereas unvested restricted stock units are treated as potential common shares with the dilutive effect calculated using the treasury stock method.  However, the units are excluded from the denominator for both the basic and diluted EPS computations until the performance conditions are satisfied.  As a result, unvested restricted stock units were excluded from the EPS computation for the three months ended March 31, 2013.  There were no unvested restricted stock units outstanding during the three months ended March 31, 2012.  See Note 9 for additional information about the restricted stock units granted in 2013.

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Pension Plans and Other Postretirement Benefits

3 Months Ended

Mar. 31, 2013

Pension Plans and Other Postretirement Benefits

Pension Plans and Other Postretirement Benefits

8.     Pension Plans and Other Postretirement Benefits

The following table sets forth information regarding the components of net periodic cost for our defined benefit pension plans and other postretirement benefit plan for the periods indicated.

	Pension Benefits				Other Postretirement Benefits
	For the Three Months Ended March 31,				For the Three Months Ended March 31,
(In Thousands)	2013		2012		2013	2012
Service cost	$     —		$  1,514		$   318	$   195
Interest cost	2,410		3,002		351	363
Expected return on plan assets	(3,188	)	(2,618	)	—	—
Recognized net actuarial loss	779		3,238		188	162
Amortization of prior service cost (credit)	53		11		—	(7	)
Settlement	—		7		—	—
Net periodic cost	$    54		$  5,154		$   857	$   713

Effective April 30, 2012, the Astoria Federal Savings and Loan Association Employees’ Pension Plan, the Astoria Federal Savings and Loan Association Excess Benefit Plan, the Astoria Federal Savings and Loan Association Supplemental Benefit Plan and the Astoria Federal Savings and Loan Association Directors’ Retirement Plan were amended to, among other things, change the manner in which benefits were computed for service through April 30, 2012 and to suspend accrual of additional benefits for all of the aforementioned plans effective April 30, 2012.  These amendments resulted in a significant reduction in net periodic cost for our defined benefit pension plans for periods subsequent to April 30, 2012.

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Loans Receivable and Allowance for Loan Losses (Details 2) (USD $)			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Non-performing	Mar. 31, 2013 Bankruptcy loans Non-performing
Loans receivable and allowance for loan losses disclosures
30-59 Days Past Due	$ 143,684,000	$ 146,782,000		$ 6,500,000
60-89 Days Past Due	40,145,000	37,637,000		1,800,000
Current	12,376,566,000	12,670,088,000		58,200,000
Increase in Non-performing loans			51,400,000
Loans which are less than 90 days past due				66,500,000
Loans discharged prior to 2012 included in loans which are less than 90 days past due				54,300,000
Impaired loans	406,232,000	346,906,000		94,000,000
Loans discharged prior to 2012 included in impaired loans				$ 73,800,000

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Stock Incentive Plans (Details) (USD $)	3 Months Ended		3 Months Ended										12 Months Ended	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Restricted common stock	Mar. 31, 2012 Restricted common stock	Mar. 31, 2013 Performance-based restricted stock awards or units Officers Vest on February 1, 2016, performance level one	Mar. 31, 2013 Performance-based restricted stock awards or units Officers Vest on February 1, 2016, performance level two	Mar. 31, 2013 Performance-based restricted stock awards or units Officers Vest on February 1, 2016, performance level three	Mar. 31, 2013 Performance-based restricted stock awards or units Officers Vest on February 1, 2016, performance level four	Mar. 31, 2013 Employee Stock Plan, 2005 Plan Restricted common stock	Mar. 31, 2013 Employee Stock Plan, 2005 Plan Restricted common stock Shares vesting one-third per year beginning in December 2013	Mar. 31, 2013 Employee Stock Plan, 2005 Plan Restricted common stock Shares vesting one-third per year beginning in January 2014	Mar. 31, 2013 Employee Stock Plan, 2005 Plan Performance-based restricted stock awards or units	Dec. 31, 2011 Employee Stock Plan, 2005 Plan Performance-based restricted stock awards or units	Mar. 31, 2013 Employee Stock Plan, 2005 Plan Performance-based restricted stock awards or units Officers	Mar. 31, 2013 Directors Stock Plan, 2007 Plan Restricted common stock	Mar. 31, 2013 Directors Stock Plan, 2007 Plan Restricted common stock Vesting in January 2016
Stock Incentive Plans
Restricted common stock granted (in shares)	531,110								489,420	475,140	6,000	106,000	65,000	432,300	41,690
Vesting percentage										33.00%	33.00%					100.00%
Stock-based compensation expense, net of taxes			$ 1,100,000	$ 336,000
Stock-based compensation expense, taxes			609,000	184,000
Pre-tax compensation cost related to non-vested restricted stock awards not yet recognized			15,600,000
Pre-tax compensation cost related to non-vested performance-based stock awards and units			1,800,000
Pre-tax compensation cost related to restricted stock awards, weighted average recognition period			2 years 4 months 24 days
Restricted stock, shares forfeited	38,902								8,280
Awards outstanding (in shares)	1,362,960	1,146,657												424,000	36,020
Granted (in dollars per share)	$ 9.70													$ 9.22
Share of common stock to be paid for each restricted stock unit														1
Shares to be issued on vest date as percentage of units granted based on actual performance					100.00%	75.00%	50.00%	0.00%
Stock-based compensation expense reversed				569,000
Stock-based compensation expense, taxes reversed				$ 310,000

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Securities (Tables)

3 Months Ended

Mar. 31, 2013

Securities

Schedule of amortized cost and estimated fair value of securities available-for-sale and held-to-maturity

	At March 31, 2013
(In Thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFairValue
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)	$	293,952	$	5,698	$	(447)	$	299,203
Non-GSE issuance REMICs and CMOs	10,118		7		(41)		10,084
GSE pass-through certificates	19,468		1,025		(2)		20,491
Total residential mortgage-backed securities	323,538		6,730		(490)		329,778
Obligations of GSEs	98,672		85		(162)		98,595
Fannie Mae stock	15		—		(14)		1
Total securities available-for-sale	$	422,225	$	6,815	$	(666)	$	428,374
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,622,615	$	26,039	$	(2,913)	$	1,645,741
Non-GSE issuance REMICs and CMOs	5,041		97		—		5,138
GSE pass-through certificates	209		5		(1)		213
Total residential mortgage-backed securities	1,627,865		26,141		(2,914)		1,651,092
Obligations of GSEs	80,923		134		(62)		80,995
Other	639		—		—		639
Total securities held-to-maturity	$	1,709,427	$	26,275	$	(2,976)	$	1,732,726

(1) Government-sponsored enterprise

(2) Real estate mortgage investment conduits and collateralized mortgage obligations

	At December 31, 2012
(In Thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFairValue
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	200,152	$	5,258	$	(583)	$	204,827
Non-GSE issuance REMICs and CMOs	11,296		9		(86)		11,219
GSE pass-through certificates	20,348		1,029		(2)		21,375
Total residential mortgage-backed securities	231,796		6,296		(671)		237,421
Obligations of GSEs	98,670		214		(5)		98,879
Fannie Mae stock	15		—		(15)		—
Total securities available-for-sale	$	330,481	$	6,510	$	(691)	$	336,300
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,693,437	$	27,787	$	(2,955)	$	1,718,269
Non-GSE issuance REMICs and CMOs	5,791		112		—		5,903
GSE pass-through certificates	257		6		(1)		262
Total residential mortgage-backed securities	1,699,485		27,905		(2,956)		1,724,434
Other	656		—		—		656
Total securities held-to-maturity	$	1,700,141	$	27,905	$	(2,956)	$	1,725,090

Schedule of estimated fair values of securities with gross unrealized losses in continuous unrealized loss position for less than twelve months and for twelve months or longer

	At March 31, 2013
	Less Than Twelve Months				Twelve Months or Longer				Total
(In Thousands)	EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses
Available-for-sale:
GSE issuance REMICs and CMOs	$	23,645	$	(447)	$	—	$	—	$	23,645	$	(447)
Non-GSE issuance REMICs and CMOs	—		—		9,626		(41)		9,626		(41)
GSE pass-through certificates	55		(1)		45		(1)		100		(2)
Obligations of GSEs	64,827		(162)		—		—		64,827		(162)
Fannie Mae stock	—		—		1		(14)		1		(14)
Total temporarily impaired securities available-for-sale	$	88,527	$	(610)	$	9,672	$	(56)	$	98,199	$	(666)
Held-to-maturity:
GSE issuance REMICs and CMOs	$	430,788	$	(2,845)	$	9,212	$	(68)	$	440,000	$	(2,913)
GSE pass-through certificates	43		(1)		—		—		43		(1)
Obligations of GSEs	29,908		(62)		—		—		29,908		(62)
Total temporarily impaired securities held-to-maturity	$	460,739	$	(2,908)	$	9,212	$	(68)	$	469,951	$	(2,976)

	At December 31, 2012
	Less Than Twelve Months				Twelve Months or Longer				Total
(In Thousands)	EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses
Available-for-sale:
GSE issuance REMICs and CMOs	$	67,841	$	(583)	$	—	$	—	$	67,841	$	(583)
Non-GSE issuance REMICs and CMOs	—		—		10,709		(86)		10,709		(86)
GSE pass-through certificates	57		(1)		47		(1)		104		(2)
Obligations of GSEs	24,995		(5)		—		—		24,995		(5)
Fannie Mae stock	—		—		—		(15)		—		(15)
Total temporarily impaired securities available-for-sale	$	92,893	$	(589)	$	10,756	$	(102)	$	103,649	$	(691)
Held-to-maturity:
GSE issuance REMICs and CMOs	$	413,651	$	(2,759)	$	12,259	$	(196)	$	425,910	$	(2,955)
GSE pass-through certificates	48		(1)		—		—		48		(1)
Total temporarily impaired securities held-to-maturity	$	413,699	$	(2,760)	$	12,259	$	(196)	$	425,958	$	(2,956)

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Stock Incentive Plans (Tables)

3 Months Ended

Mar. 31, 2013

Stock Incentive Plans

Restricted Common Stock Activity in Stock Incentive Plans

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2013		1,146,657		$    14.87
Granted		531,110		9.70
Vested		(275,905	)	(23.75	)
Forfeited		(38,902	)	(11.46	)
Nonvested at March 31, 2013		1,362,960		11.16

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Other Comprehensive Income/Loss (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
Compensation and benefits	$ 31,998	$ 42,160
Income tax benefit	7,781	5,566
Net of tax	(13,852)	(9,996)
Net actuarial loss and prior service cost adjustments on pension plans and other postretirement benefits | Amount Reclassified from Accumulated Other Comprehensive Income
Amounts reclassified from accumulated other comprehensive income to the consolidated statements of income
Net actuarial loss	967
Prior service cost	53
Compensation and benefits	1,020
Income tax benefit	(359)
Net of tax	$ 661

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Loans Receivable and Allowance for Loan Losses (Details 9) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Financing Receivable, Impaired
Unpaid Principal Balance	$ 518,478	$ 457,440
Recorded Investment	406,232	346,906
Related Allowance	(25,941)	(5,046)
Net Investment	380,291	341,860
Residential | Full documentation interest-only loans
Financing Receivable, Impaired
Unpaid Principal Balance, Loans with an allowance recorded	134,138	10,740
Unpaid Principal Balance, Loans without an allowance recorded	28,717	122,275
Recorded Investment, Loans with an allowance recorded	105,291	10,740
Recorded Investment, Loans without an allowance recorded	20,088	86,607
Related Allowance	(8,196)	(241)
Net Investment, Loans with an allowance recorded	97,095	10,499
Net Investment, Loans without an allowance recorded	20,088	86,607
Residential | Full documentation amortizing loans
Financing Receivable, Impaired
Unpaid Principal Balance, Loans with an allowance recorded	31,131	6,122
Unpaid Principal Balance, Loans without an allowance recorded	8,825	23,489
Recorded Investment, Loans with an allowance recorded	27,390	6,122
Recorded Investment, Loans without an allowance recorded	6,370	17,962
Related Allowance	(2,205)	(347)
Net Investment, Loans with an allowance recorded	25,185	5,775
Net Investment, Loans without an allowance recorded	6,370	17,962
Residential | Reduced documentation interest-only loans
Financing Receivable, Impaired
Unpaid Principal Balance, Loans with an allowance recorded	201,169	12,893
Unpaid Principal Balance, Loans without an allowance recorded		166,477
Recorded Investment, Loans with an allowance recorded	151,621	12,893
Recorded Investment, Loans without an allowance recorded		116,514
Related Allowance	(10,270)	(277)
Net Investment, Loans with an allowance recorded	141,351	12,616
Net Investment, Loans without an allowance recorded		116,514
Residential | Reduced documentation amortizing loans
Financing Receivable, Impaired
Unpaid Principal Balance, Loans with an allowance recorded	31,670	3,889
Unpaid Principal Balance, Loans without an allowance recorded		23,419
Recorded Investment, Loans with an allowance recorded	25,667	3,889
Recorded Investment, Loans without an allowance recorded		17,419
Related Allowance	(3,813)	(136)
Net Investment, Loans with an allowance recorded	21,854	3,753
Net Investment, Loans without an allowance recorded		17,419
Multi-Family
Financing Receivable, Impaired
Unpaid Principal Balance, Loans with an allowance recorded	17,083	19,704
Unpaid Principal Balance, Loans without an allowance recorded	40,467	44,341
Recorded Investment, Loans with an allowance recorded	17,083	19,704
Recorded Investment, Loans without an allowance recorded	33,834	36,412
Related Allowance	(1,157)	(2,576)
Net Investment, Loans with an allowance recorded	15,926	17,128
Net Investment, Loans without an allowance recorded	33,834	36,412
Commercial Real Estate
Financing Receivable, Impaired
Unpaid Principal Balance, Loans with an allowance recorded	8,727	10,835
Unpaid Principal Balance, Loans without an allowance recorded	16,551	13,256
Recorded Investment, Loans with an allowance recorded	8,727	10,835
Recorded Investment, Loans without an allowance recorded	10,161	7,809
Related Allowance	(300)	(1,469)
Net Investment, Loans with an allowance recorded	8,427	9,366
Net Investment, Loans without an allowance recorded	$ 10,161	$ 7,809

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Consolidated Statements of Comprehensive Income
Net income	$ 13,852	$ 9,996
Net unrealized gain (loss) on securities available-for-sale:
Net unrealized holding gain (loss) on securities arising during the period	130	(814)
Reclassification adjustment for gain included in net income		(1,604)
Net unrealized gain (loss) on securities available-for-sale	130	(2,418)
Net actuarial loss adjustment on pension plans and other postretirement benefits:
Net actuarial loss adjustment arising during the period		24,286
Reclassification adjustment for net actuarial loss included in net income	627	2,201
Net actuarial loss adjustment on pension plans and other postretirement benefits	627	26,487
Prior service cost adjustment on pension plans and other postretirement benefits:
Prior service cost adjustment arising during the period		(3,537)
Reclassification adjustment for prior service cost included in net income	34	2
Prior service cost adjustment on pension plans and other postretirement benefits	34	(3,535)
Reclassification adjustment for loss on cash flow hedge included in net income		48
Total other comprehensive income, net of tax	791	20,582
Comprehensive income	$ 14,643	$ 30,578

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Securities

3 Months Ended

Mar. 31, 2013

Securities

Securities

2. Securities

The following tables set forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at the dates indicated.

	At March 31, 2013
(In Thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFairValue
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)	$	293,952	$	5,698	$	(447)	$	299,203
Non-GSE issuance REMICs and CMOs	10,118		7		(41)		10,084
GSE pass-through certificates	19,468		1,025		(2)		20,491
Total residential mortgage-backed securities	323,538		6,730		(490)		329,778
Obligations of GSEs	98,672		85		(162)		98,595
Fannie Mae stock	15		—		(14)		1
Total securities available-for-sale	$	422,225	$	6,815	$	(666)	$	428,374
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,622,615	$	26,039	$	(2,913)	$	1,645,741
Non-GSE issuance REMICs and CMOs	5,041		97		—		5,138
GSE pass-through certificates	209		5		(1)		213
Total residential mortgage-backed securities	1,627,865		26,141		(2,914)		1,651,092
Obligations of GSEs	80,923		134		(62)		80,995
Other	639		—		—		639
Total securities held-to-maturity	$	1,709,427	$	26,275	$	(2,976)	$	1,732,726

(1) Government-sponsored enterprise

(2) Real estate mortgage investment conduits and collateralized mortgage obligations

	At December 31, 2012
(In Thousands)	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFairValue
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	200,152	$	5,258	$	(583)	$	204,827
Non-GSE issuance REMICs and CMOs	11,296		9		(86)		11,219
GSE pass-through certificates	20,348		1,029		(2)		21,375
Total residential mortgage-backed securities	231,796		6,296		(671)		237,421
Obligations of GSEs	98,670		214		(5)		98,879
Fannie Mae stock	15		—		(15)		—
Total securities available-for-sale	$	330,481	$	6,510	$	(691)	$	336,300
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,693,437	$	27,787	$	(2,955)	$	1,718,269
Non-GSE issuance REMICs and CMOs	5,791		112		—		5,903
GSE pass-through certificates	257		6		(1)		262
Total residential mortgage-backed securities	1,699,485		27,905		(2,956)		1,724,434
Other	656		—		—		656
Total securities held-to-maturity	$	1,700,141	$	27,905	$	(2,956)	$	1,725,090

The following tables set forth the estimated fair values of securities with gross unrealized losses at the dates indicated, segregated between securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer at the dates indicated.

	At March 31, 2013
	Less Than Twelve Months				Twelve Months or Longer				Total
(In Thousands)	EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses
Available-for-sale:
GSE issuance REMICs and CMOs	$	23,645	$	(447)	$	—	$	—	$	23,645	$	(447)
Non-GSE issuance REMICs and CMOs	—		—		9,626		(41)		9,626		(41)
GSE pass-through certificates	55		(1)		45		(1)		100		(2)
Obligations of GSEs	64,827		(162)		—		—		64,827		(162)
Fannie Mae stock	—		—		1		(14)		1		(14)
Total temporarily impaired securities available-for-sale	$	88,527	$	(610)	$	9,672	$	(56)	$	98,199	$	(666)
Held-to-maturity:
GSE issuance REMICs and CMOs	$	430,788	$	(2,845)	$	9,212	$	(68)	$	440,000	$	(2,913)
GSE pass-through certificates	43		(1)		—		—		43		(1)
Obligations of GSEs	29,908		(62)		—		—		29,908		(62)
Total temporarily impaired securities held-to-maturity	$	460,739	$	(2,908)	$	9,212	$	(68)	$	469,951	$	(2,976)

	At December 31, 2012
	Less Than Twelve Months				Twelve Months or Longer				Total
(In Thousands)	EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses		EstimatedFair Value		GrossUnrealizedLosses
Available-for-sale:
GSE issuance REMICs and CMOs	$	67,841	$	(583)	$	—	$	—	$	67,841	$	(583)
Non-GSE issuance REMICs and CMOs	—		—		10,709		(86)		10,709		(86)
GSE pass-through certificates	57		(1)		47		(1)		104		(2)
Obligations of GSEs	24,995		(5)		—		—		24,995		(5)
Fannie Mae stock	—		—		—		(15)		—		(15)
Total temporarily impaired securities available-for-sale	$	92,893	$	(589)	$	10,756	$	(102)	$	103,649	$	(691)
Held-to-maturity:
GSE issuance REMICs and CMOs	$	413,651	$	(2,759)	$	12,259	$	(196)	$	425,910	$	(2,955)
GSE pass-through certificates	48		(1)		—		—		48		(1)
Total temporarily impaired securities held-to-maturity	$	413,699	$	(2,760)	$	12,259	$	(196)	$	425,958	$	(2,956)

We held 42 securities which had an unrealized loss at March 31, 2013 and 41 at December 31, 2012.  At March 31, 2013 and December 31, 2012, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment is directly related to the change in interest rates.  In general, as interest rates rise, the fair value of fixed rate securities will decrease; as interest rates fall, the fair value of fixed rate securities will increase. During this period of historic low interest rates, securities backed by fixed rate residential mortgage loans have experienced accelerated rates of prepayments as interest rates have declined which has resulted in a decline in the estimated life of these securities and a decline in fair value.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  None of the unrealized losses are related to credit losses.  Therefore, at March 31, 2013 and December 31, 2012, the impairments are deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expect to recover the entire amortized cost basis of the security.

There were no sales of securities from the available-for-sale portfolio during the three months ended March 31, 2013.  During the three months ended March 31, 2012, proceeds from sales of securities from the available-for-sale portfolio totaled $54.3 million, resulting in gross realized gains totaling $2.5 million.

At March 31, 2013, available-for-sale debt securities excluding mortgage-backed securities had an amortized cost of $98.7 million, a fair value of $98.6 million and contractual maturities between 2021 and 2022.  At March 31, 2013, held-to-maturity debt securities excluding mortgage-backed securities had an amortized cost and a fair value of $81.6 million and contractual maturities between 2020 and 2023.  Actual maturities may differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

The balance of accrued interest receivable for securities totaled $6.1 million at March 31, 2013 and $5.7 million at December 31, 2012.

At March 31, 2013, we held securities with an amortized cost of $179.6 million which are callable within one year and at various times thereafter.

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Litigation (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013 item
Litigation
Alleged tax deficiency including interest and penalties related to 2006 through 2008 tax years	$ 13.3
Liability or reserve recorded related to alleged tax deficiencies	$ 0
Number of subsidiaries to which alleged tax deficiencies are related	2

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements

Schedule of carrying values of assets measured at fair value on recurring basis and level within the fair value hierarchy

	Carrying Value at March 31, 2013
(In Thousands)	Total	Level 1	Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$  299,203	$       —	$  299,203
Non-GSE issuance REMICs and CMOs	10,084	—	10,084
GSE pass-through certificates	20,491	—	20,491
Obligations of GSEs	98,595	—	98,595
Fannie Mae stock	1	1	—
Total securities available-for-sale	$  428,374	$         1	$  428,373

	Carrying Value at December 31, 2012
(In Thousands)	Total	Level 1	Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$  204,827	$       —	$  204,827
Non-GSE issuance REMICs and CMOs	11,219	—	11,219
GSE pass-through certificates	21,375	—	21,375
Obligations of GSEs	98,879	—	98,879
Fannie Mae stock	—	—	—
Total securities available-for-sale	$  336,300	$       —	$  336,300

Schedule of carrying values of assets measured at fair value on non-recurring basis which fall within Level 3 of the fair value hierarchy

	Carrying Value
(In Thousands)	At March 31, 2013		At December 31, 2012
Non-performing loans held-for-sale, net	$	8,225	$	3,881
Impaired loans		285,723	282,723
MSR, net		8,465	6,947
REO, net		16,111	20,796
Total	$	318,524	$	314,347

Schedule of losses recognized on assets measured at fair value on non-recurring basis

	For the Three  Months Ended  March 31,
(In Thousands)	2013	2012
Non-performing loans held-for-sale, net (1)	$   2,604	$         54
Impaired loans (2)	8,378	15,875
REO, net (3)	1,137	2,534
Total	$  12,119	$  18,463

(1)	Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.
(2)	Losses are charged against the allowance for loan losses.
(3)	Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

Schedule of carrying values and estimated fair values of financial instruments

	At March 31, 2013
	Carrying	Estimated Fair Value
(In Thousands)	Value	Total	Level 2	Level 3
Financial Assets:
Securities held-to-maturity	$   1,709,427	$    1,732,726	$    1,732,726	$                —
FHLB-NY stock	145,502	145,502	145,502	—
Loans held-for-sale, net (1)	31,548	32,154	—	32,154
Loans receivable, net (1)	12,767,533	12,909,105	—	12,909,105
MSR, net (1)	8,465	8,466	—	8,466
Financial Liabilities:
Deposits	10,445,333	10,567,986	10,567,986	—
Borrowings, net	3,908,629	4,356,982	4,356,982	—

(1) Includes assets measured at fair value on a non-recurring basis.

	At December 31, 2012
	Carrying	Estimated Fair Value
(In Thousands)	Value	Total	Level 2	Level 3
Financial Assets:
Securities held-to-maturity	$   1,700,141	$   1,725,090	$   1,725,090	$                —
FHLB-NY stock	171,194	171,194	171,194	—
Loans held-for-sale, net (1)	76,306	78,486	—	78,486
Loans receivable, net (1)	13,078,471	13,311,997	—	13,311,997
MSR, net (1)	6,947	6,948	—	6,948
Financial Liabilities:
Deposits	10,443,958	10,588,073	10,588,073	—
Borrowings, net	4,373,496	4,857,989	4,857,989	—

(1) Includes assets measured at fair value on a non-recurring basis.

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Loans Receivable and Allowance for Loan Losses (Details 6) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Recorded Investment
Total	$ 12,847,705	$ 13,155,914
Past due 90 days or more	287,310	301,407
Consumer and Other Loans
Recorded Investment
Total	259,005	264,094
Past due 90 days or more	6,246	6,508
Consumer and Other Loans | Home equity lines of credit
Recorded Investment
Total	223,561	231,920
Past due 90 days or more	6,178	6,459
Consumer and Other Loans | Other Loans
Recorded Investment
Total	35,444	32,174
Past due 90 days or more	68	49
Mortgage Loans (Gross)
Recorded Investment
Total	12,588,700	12,891,820
Past due 90 days or more	281,064	294,899
Mortgage Loans (Gross) | Residential Mortgage Loans
Recorded Investment
Total	9,197,313	9,711,226
Past due 90 days or more	271,143	280,671
Mortgage Loans (Gross) | Residential Mortgage Loans | Full Documentation Interest-only Loans
Recorded Investment
Total	1,889,483	2,001,396
Past due 90 days or more	92,128	97,907
Mortgage Loans (Gross) | Residential Mortgage Loans | Full Documentation Amortizing Loans
Recorded Investment
Total	5,936,979	6,304,872
Past due 90 days or more	43,320	43,014
Mortgage Loans (Gross) | Residential Mortgage Loans | Reduced Documentation Interest-only Loans
Recorded Investment
Total	983,770	1,005,295
Past due 90 days or more	105,326	107,254
Mortgage Loans (Gross) | Residential Mortgage Loans | Reduced Documentation Amortizing Loans
Recorded Investment
Total	387,081	399,663
Past due 90 days or more	30,369	32,496
Performing | Consumer and Other Loans | Home equity lines of credit
Recorded Investment
Total	217,131	225,461
Performing | Consumer and Other Loans | Other Loans
Recorded Investment
Total	35,376	32,125
Performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Full Documentation Interest-only Loans
Recorded Investment
Total	1,771,865	1,901,875
Performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Full Documentation Amortizing Loans
Recorded Investment
Total	5,884,006	6,260,546
Performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Reduced Documentation Interest-only Loans
Recorded Investment
Total	847,753	891,813
Performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Reduced Documentation Amortizing Loans
Recorded Investment
Total	350,213	365,941
Non-performing | Consumer and Other Loans | Home equity lines of credit
Recorded Investment
Current or past due less than 90 days	252
Past due 90 days or more	6,178	6,459
Non-performing | Consumer and Other Loans | Other Loans
Recorded Investment
Past due 90 days or more	68	49
Non-performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Full Documentation Interest-only Loans
Recorded Investment
Current or past due less than 90 days	25,490	1,614
Past due 90 days or more	92,128	97,907
Non-performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Full Documentation Amortizing Loans
Recorded Investment
Current or past due less than 90 days	9,653	1,312
Past due 90 days or more	43,320	43,014
Non-performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Reduced Documentation Interest-only Loans
Recorded Investment
Current or past due less than 90 days	30,691	6,228
Past due 90 days or more	105,326	107,254
Non-performing | Mortgage Loans (Gross) | Residential Mortgage Loans | Reduced Documentation Amortizing Loans
Recorded Investment
Current or past due less than 90 days	6,499	1,226
Past due 90 days or more	$ 30,369	$ 32,496

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Subsequent Event

3 Months Ended

Mar. 31, 2013

Subsequent Event

Subsequent Event

12. Subsequent Event

On April 10, 2013, we called our Junior Subordinated Debentures for prepayment in whole pursuant to the optional prepayment provisions of the indenture for the Junior Subordinated Debentures.  The prepayment is scheduled to occur on May 10, 2013.  The prepayment price for the Junior Subordinated Debentures will be 103.413% of the $128.9 million aggregate principal amount of the Junior Subordinated Debentures outstanding, plus accrued and unpaid interest to, but not including, the date of repayment.

As a result of the prepayment in whole of the Junior Subordinated Debentures, Astoria Capital Trust I will simultaneously apply the proceeds of such prepayment to redeem its $125.0 million aggregate liquidation amount of Capital Securities, as well as the $3.9 million of common securities owned by Astoria Financial Corporation.  The prepayment of the Junior Subordinated Debentures on May 10, 2013 will result in a net prepayment penalty of $4.3 million in the 2013 second quarter.  See Note 1 for additional information on Astoria Capital Trust I, the Capital Securities and our Junior Subordinated Debentures.