EX-99.1 2 v090572_ex99-1.htm Unassociated Document

FOR IMMEDIATE RELEASE

Contact:
  
Peter J. Cunningham
 
  
First Vice President, Investor Relations
 
  
(516) 327-7877
 
  
ir@astoriafederal.com

ASTORIA FINANCIAL CORPORATION ANNOUNCES THIRD QUARTER EPS OF $0.39
 
Quarterly Cash Dividend of $0.26 Per Common Share Declared

 Lake Success, New York, October 18, 2007 -- Astoria Financial Corporation (NYSE: AF) (“Astoria,” the “Company”), the holding company for Astoria Federal Savings and Loan Association (“Astoria Federal”), today reported net income of $35.3 million, or $0.39 diluted earnings per share (“EPS”), for the quarter ended September 30, 2007, compared to $41.1 million, or $0.43 EPS, for the 2006 third quarter. For the 2007 third quarter, annualized returns on average equity, average tangible equity and average assets were 11.82%, 13.99% and 0.66%, respectively, compared to 13.06%, 15.31% and 0.76%, respectively, for the comparable 2006 period.
For the nine months ended September 30, 2007, net income totaled $105.1 million, or $1.14 EPS, compared to $137.8 million, or $1.40 EPS, for the comparable 2006 period. For the nine months ended September 30, 2007, annualized returns on average equity, average tangible equity and average assets were 11.67%, 13.79% and 0.65%, respectively, compared to 14.27%, 16.67% and 0.84%, respectively, for the comparable 2006 period.
Commenting on the quarterly results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted, “The 2007 third quarter operating results were in line with our expectations and continued to reflect the impact of a prolonged flat-to-inverted yield curve. The recent decrease in interest rates by the Federal Reserve has produced a positively sloped yield curve and a more favorable operating environment for us going forward.”
Board Declares Quarterly Cash Dividend of $0.26 Per Share
 
1
 
The Board of Directors of the Company, at their October 17, 2007 meeting, declared a quarterly cash dividend of $0.26 per common share. The dividend is payable on December 3, 2007 to shareholders of record as of November 15, 2007. This is the fiftieth consecutive quarterly cash dividend declared by the Company.
Eleventh Stock Repurchase Program Completed; Twelfth Stock Repurchase Program Commenced
During the 2007 third quarter, Astoria completed its eleventh stock repurchase program and commenced its twelfth stock repurchase program, repurchasing 750,000 shares of its common stock at an average cost of $25.38 per share. During the nine month period ended September 30, 2007 Astoria repurchased a total of 2.5 million shares. Under the twelfth program, 9.4 million shares remain available for repurchase.
Third Quarter and Nine Month Earnings Summary
Net interest income for the quarter ended September 30, 2007 totaled $81.2 million compared to $82.9 million for the 2007 second quarter and $90.7 million for the third quarter a year ago. For the nine months ended September 30, 2007, net interest income totaled $251.6 million compared to $303.5 million for the comparable 2006 nine month period.
Astoria’s net interest margin for the quarter ended September 30, 2007 was 1.58% compared to 1.62% for the 2007 second quarter and 1.75% for the quarter ended September 30, 2006. For the nine months ended September 30, 2007, the net interest margin was 1.63% compared to 1.93% for the 2006 nine month period. The four basis point decrease, on a linked quarter basis, is due to one extra day of interest expense in the 2007 third quarter. The year over year quarter and nine month decreases are due to the cost of interest-bearing liabilities rising more rapidly than the yield on interest-earning assets.
Non-interest income for the quarter ended September 30, 2007 increased $1.9 million to $24.8 million from $22.9 million for the 2007 third quarter, due entirely to a gain on the sale of an equity security position.
For the nine months ended September 30, 2007, non-interest income totaled $73.7 million compared to $67.5 million for the comparable 2006 period. Non-interest income for the 2006 nine month period included a $5.5 million, pre-tax, charge related to the termination of interest rate swap agreements in the 2006 first quarter.
The components of mortgage banking income, net, which is included in non-interest income, are detailed below:

(Dollars in millions)
  
3Q07
  
3Q06
  
9 Mos. 07
  
9 Mos. 06
  
Loan servicing fees
  
$
1.0
  
$
1.1
  
$
3.0
  
$
3.4
  
Amortization of MSR*
    
(0.7
)
  
(0.9
)
  
(2.6
)
  
(2.8
)
MSR* valuation adjustments
    
(0.4
)
  
(0.5
)
  
0.3
    
1.5
  
Net gain on sale of loans
    
0.3
    
0.5
    
1.3
    
1.7
  
Mortgage banking income, net
  
$
0.2
  
$
0.2
  
$
2.0
  
$
3.8
  
* Mortgage servicing rights
 
2
 
General and administrative expense (“G&A”) for the quarter ended September 30, 2007 declined $2.2 million to $56.5 million from $58.7 million for the 2007 second quarter and increased $3.2 million from the 2006 third quarter. The linked quarter decrease is primarily due to lower goodwill litigation and advertising expense. The third quarter year over year increase is due primarily to an increase in compensation and benefits expense.
For the nine months ended September 30, 2007, G&A increased $7.6 million to $172.4 million from $164.8 million for the comparable 2006 period. The increase was primarily due to increases in compensation and benefits and goodwill litigation expense.
Income tax expense for the quarter ended September 30, 2007 decreased $2.8 million from the prior quarter to $13.6 million, for an effective tax rate of 27.9%, due to the release of accruals for previous tax positions that have statutorily expired. It is expected that the fourth quarter effective tax rate should return to a more normal level of approximately 30%.
Balance Sheet Summary
For the 2007 third quarter, the loan portfolio increased $371.0 million from the prior quarter, or 9.5% on an annualized basis, to $16.0 billion at September 30, 2007. Loan originations and purchases totaled $1.1 billion for the quarter ended September 30, 2007 compared to $868.6 million for the 2006 third quarter.
For the nine months ended September 30, 2007, the loan portfolio increased $981.6 million. Loan originations and purchases totaled $3.3 billion for the nine months ended September 30, 2007 compared to $2.4 billion for the comparable 2006 period. The loan pipeline at September 30, 2007 totaled $1.4 billion, an increase of $330.1 million over the pipeline at June 30, 2007.
For the 2007 third quarter, the one-to-four family mortgage loan portfolio increased $440.1 million from the prior quarter, or 16.1% annualized, to $11.3 billion at September 30, 2007. One-to-four family loan originations and purchases totaled $982.0 million for the 2007 third quarter compared to $706.6 million for the 2006 third quarter. Of the 2007 third quarter one-to-four family loan production, 74% consisted of 3/1 and 5/1 hybrid adjustable rate mortgage loans.
For the nine months ended September 30, 2007, the one-to-four family mortgage loan portfolio increased $1.1 billion. Loan originations and purchases totaled $3.0 billion for the 2007 nine month period compared to $1.8 billion for the 2006 nine month period. Of the 2007 nine month one-to-four family loan production, 75% consisted of 3/1 and 5/1 hybrid adjustable rate mortgage loans.
 
3
 
For the 2007 third quarter, the multi-family and commercial real estate (“CRE”) loan portfolio decreased $32.6 million from the prior quarter, primarily due to lower loan originations which totaled $90.5 million compared to loan originations of $158.2 million for the comparable 2006 period. At September 30, 2007, the combined multi-family and CRE loan portfolio totaled $4.0 billion, or 25% of total loans.
For the nine months ended September 30, 2007, the multi-family and CRE loan portfolio decreased $54.4 million primarily due to lower loan originations which totaled $344.4 million compared to $559.4 million for the 2006 nine month period. The average loan-to-value ratio of the combined multi-family and CRE loan portfolio continues to be less than 65%, based on current principal balance and original appraised value, and the average loan balance is less than $1 million.
For the quarter ended September 30, 2007, non-performing loans increased $18.3 million from the previous quarter to $82.3 million, or 0.38% of total assets, primarily due to an increase in one-to-four family non-performing loans.  As of September 30, 2007, one-to-four family non-performing loans totaled $68.2 million and multi-family and CRE non-performing loans totaled $9.4 million. The ratio of the allowance for loan losses to non-performing loans at September 30, 2007 was 95%.
Net loan charge-offs for the quarter ended September 30, 2007 totaled $1.6 million compared to net loan charge-offs of $1.1 million for the 2006 third quarter. The 2007 third quarter charge-offs include a $1.5 million charge-off on a non-performing construction loan which was sold. For the nine months ended September 30, 2007, net loan charge-offs totaled $2.2 million, or just two basis points, annualized, of average loans, compared to $1.2 million, or one basis point, annualized, of average loans, for the 2006 nine month period.
For the quarter ended September 30, 2007, Astoria recorded a $500,000 provision for loan losses, the first provision in a number of years. Mr. Engelke noted, “Our asset quality remains strong and net charge-offs remain very low. However, in recognition of, among other things, the recent increase in non-performing loans, an addition to our loan loss reserve was appropriate.”
For the quarter and nine months ended September 30, 2007, deposits decreased $181.9 million and increased $42.0 million, respectively, to $13.3 billion. “During the third quarter, retail deposit pricing remained very competitive even as short-term market interest rates declined. As a result of our efforts to maintain deposit pricing discipline, we have taken advantage of lower cost borrowings for funding some of our loan growth this quarter,” Mr. Engelke noted.
For the quarter and nine months ended September 30, 2007, securities decreased $219.1million and $771.1 million, respectively, to $4.6 billion, or 21% of total assets at September 30, 2007. For the quarter and nine months ended September 30, 2007, borrowings increased $231.2 million and $93.5 million, respectively, to $6.9 billion, or 32% of total assets at September 30, 2007. Total assets increased $96.2 million from the previous quarter and $191.6 million from December 31, 2006 and totaled $21.7 billion at September 30, 2007.
 
4
 
Key balance sheet highlights, reflecting the improvement in the quality of the Company’s balance sheet since December 31, 1999, follow: 
         
($ in millions)
  
12/31/99
  
12/31/01
  
12/31/03
  
12/31/05
  
12/31/06
  
09/30/07
  
Cumulative
% Change
  
Assets
  
$
22,700
  
$
22,672
  
$
22,462
  
$
22,380
  
$
21,555
  
$
21,746
    
( 4
%)
Loans
  
$
10,286
  
$
12,167
  
$
12,687
  
$
14,392
  
$
14,972
  
$
15,953
    
+ 55
%
Securities
  
$
10,763
  
$
8,013
  
$
8,448
  
$
6,572
  
$
5,340
  
$
4,569
    
(58
%)
Deposits
  
$
9,555
  
$
10,904
  
$
11,187
  
$
12,810
  
$
13,224
  
$
13,266
    
+ 39
%
Borrowings
  
$
11,528
  
$
9,826
  
$
9,632
  
$
7,938
  
$
6,836
  
$
6,930
    
(40
%)

The following table illustrates this improvement on an outstanding per share basis:
 
Amount per share
  
12/31/99
  
12/31/01
  
12/31/03
  
12/31/05
  
12/31/06
  
09/30/07
  
% Change
  
CAGR
  
Loans
  
$
66.28
  
$
89.36
  
$
107.51
  
$
137.11
  
$
152.44
  
$
165.83
    
150
%
  
13
%
Deposits
  
$
61.57
  
$
80.09
  
$
94.80
  
$
122.04
  
$
134.65
  
$
137.90
    
124
%
  
11
%

Stockholders’ equity was $1.2 billion, or 5.54% of total assets at September 30, 2007. Astoria Federal continues to maintain capital ratios in excess of regulatory requirements with core, tangible and risk-based capital ratios of 6.60%, 6.60% and 12.08%, respectively, at September 30, 2007.

Future Outlook
Commenting on the outlook for the remainder of 2007 and 2008, Mr. Engelke stated, “The recent decrease in short-term interest rates by the Federal Reserve has produced a more positively sloped yield curve and a more favorable operating environment for us going forward. In addition, the recent dislocation in the secondary residential mortgage market has resulted in improved loan volumes and mortgage spreads for portfolio lenders such as Astoria. We anticipate the yield curve will remain positively sloped for the remainder of 2007 and 2008 which should result in earning asset growth and an expansion of our net interest margin in 2008. Our focus going forward will be to continue to capitalize on residential mortgage market dislocations, which we believe will produce robust quality loan growth. Deposit growth will remain a focus; however, in the near term, if competitive pricing continues, we may fund some of our loan growth with lower cost borrowings and normal cash flow from the securities portfolio. We expect to continue to maintain the Company’s tangible capital levels between 4.50% and 4.75%.”
 
5
 
Astoria Financial Corporation, the holding company for Astoria Federal Savings and Loan Association, with assets of $21.7 billion is the sixth largest thrift institution in the United States. Established in 1888, Astoria Federal is the largest thrift depository headquartered in New York with deposits of $13.3 billion and embraces its philosophy of “Putting people first” by providing the customers and local communities it serves with quality financial products and services through 86 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states. Astoria Federal originates mortgage loans through its banking offices and loan production offices in New York, an extensive broker network covering twenty-six states, primarily the East Coast, and the District of Columbia, and through correspondent relationships covering forty-three states and the District of Columbia.

Earnings Conference Call October 18, 2007 at 3:30 p.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday afternoon, October 18, 2007 at 3:30 p.m. (ET). The toll-free dial-in number is (888) 562-3356, conference ID #9240715. A telephone replay will be available on October 18, 2007 from 7:00 p.m. (ET) through Friday, October 26, 2007, 11:59 p.m. (ET). The replay number is (877) 519-4471, ID # 9240715. The conference call will also be simultaneously webcast on the Company’s website www.astoriafederal.com and archived for one year.
Forward Looking Statements
This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar terms and phrases, including references to assumptions.

6
 
Forward-looking statements are based on various assumptions and analyses made by us in light of our management’s experience and its perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These factors include, without limitation, the following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control; there may be increases in competitive pressure among financial institutions or from non-financial institutions; changes in the interest rate environment may reduce interest margins or affect the value of our investments; changes in deposit flows, loan demand or real estate values may adversely affect our business; changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently; general economic conditions, either nationally or locally in some or all of the areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable technological changes may be more difficult or expensive than we anticipate; success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.

7

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)

 
  
At September 30,
 
At December 31,
  
 
  
2007
  
2006
  
ASSETS
          
Cash and due from banks
 
$
123,314
  
$
134,016
  
Repurchase agreements
   
34,143
   
71,694
  
Securities available-for-sale
   
1,358,362
   
1,560,325
  
Securities held-to-maturity (fair value of $3,140,725 and $3,681,514, respectively)
    
3,210,217
   
3,779,356
  
Federal Home Loan Bank of New York
              
stock, at cost
   
180,631
   
153,640
  
Loans held-for-sale, net
   
8,796
   
16,542
  
Loans receivable:
              
Mortgage loans, net
   
15,576,834
   
14,532,503
  
Consumer and other loans, net
   
376,445
   
439,188
  
 
    
15,953,279
   
14,971,691
  
Allowance for loan losses
   
(78,254
)
  
(79,942
)
Total loans receivable, net
   
15,875,025
   
14,891,749
  
Mortgage servicing rights, net
   
14,589
   
15,944
  
Accrued interest receivable
   
82,193
   
78,761
  
Premises and equipment, net
   
141,131
   
145,231
  
Goodwill
   
185,151
   
185,151
  
Bank owned life insurance
   
393,899
   
385,952
  
Other assets
   
138,651
   
136,158
  
 
              
TOTAL ASSETS
 
$
21,746,102
  
$
21,554,519
  
 
              
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Liabilities:
              
Deposits
 
$
13,265,995
  
$
13,224,024
  
Reverse repurchase agreements
   
3,980,000
   
4,480,000
  
Federal Home Loan Bank of New York
              
advances
   
2,553,000
   
1,940,000
  
Other borrowings, net
   
396,500
   
416,002
  
Mortgage escrow funds
   
167,431
   
132,080
  
Accrued expenses and other
              
liabilities
   
177,501
   
146,659
  
 
              
TOTAL LIABILITIES
   
20,540,427
   
20,338,765
  
 
              
Stockholders' equity:
              
Preferred stock, $1.00 par value; (5,000,000 shares authorized; none issued and outstanding) Common stock, $.01 par value; (200,000,000 shares authorized; 166,494,888 shares issued; and 96,203,234 and 98,211,827 shares outstanding, respectively)
    
1,665
   
1,665
  
Additional paid-in capital
   
842,339
   
828,940
  
Retained earnings
   
1,888,432
   
1,856,528
  
Treasury stock (70,291,654 and 68,283,061 shares, at cost, respectively)
    
(1,447,809
)
  
(1,390,495
)
Accumulated other comprehensive loss
   
(57,407
)
  
(58,330
)
Unallocated common stock held by ESOP (5,880,457 and 6,155,918 shares, respectively)
    
(21,545
)
  
(22,554
)
 
              
TOTAL STOCKHOLDERS' EQUITY
   
1,205,675
   
1,215,754
  
 
              
TOTAL LIABILITIES AND STOCKHOLDERS'
              
EQUITY
 
$
21,746,102
  
$
21,554,519
  


8

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)

 
  
For the Three
  
For the Nine
  
 
  
Months Ended
  
Months Ended
  
 
  
September 30,
  
September 30,
  
 
  
2007
  
2006
  
2007
  
2006
  
Interest income:
                  
Mortgage loans:
                  
One-to-four family
 
$
150,645
  
$
127,735
  
$
428,729
  
$
378,226
  
Multi-family, commercial real estate and construction
   
63,052
   
65,933
   
192,160
   
192,178
  
Consumer and other loans
   
7,472
   
9,099
   
23,478
   
26,918
  
Mortgage-backed and other securities
   
53,227
   
64,946
   
168,127
   
205,373
  
Federal funds sold and repurchase agreements
   
337
   
1,266
   
1,812
   
5,205
  
Federal Home Loan Bank of New York stock
   
2,899 
    
2,049
    
8,246
    
5,535
  
Total interest income
   
277,632
   
271,028
   
822,552
   
813,435
  
Interest expense:
                          
Deposits
   
116,950
   
102,103
   
341,404
   
275,357
  
Borrowings
   
79,505
   
78,258
   
229,553
   
234,549
  
Total interest expense
   
196,455
   
180,361
   
570,957
   
509,906
  
 
                          
Net interest income
   
81,177
   
90,667
   
251,595
   
303,529
  
Provision for loan losses
   
500
   
-
   
500
   
-
  
Net interest income after provision for loan losses
   
80,677
   
90,667
   
251,095
   
303,529
  
Non-interest income:
                          
Customer service fees
   
15,920
   
16,170
   
47,248
   
49,208
  
Other loan fees
   
1,153
   
983
   
3,481
   
2,755
  
Net gain on sales of securities
   
1,992
   
-
   
1,992
   
-
  
Mortgage banking income, net
   
155
   
181
   
1,995
   
3,810
  
Income from bank owned life insurance
   
4,238
   
3,957
   
12,728
   
12,063
  
Other
   
1,347
   
1,573
   
6,238
   
(348
)
Total non-interest income
   
24,805
   
22,864
   
73,682
   
67,488
  
Non-interest expense:
                          
General and administrative:
                          
Compensation and benefits
   
30,587
   
27,584
   
91,757
   
86,423
  
Occupancy, equipment and systems
    
16,159
   
16,104
   
49,174
   
49,209
  
Federal deposit insurance premiums
   
388
   
414
   
1,202
   
1,263
  
Advertising
   
1,390
   
1,839
   
5,282
   
5,668
  
Other
   
8,020
   
7,374
   
24,956
   
22,280
  
Total non-interest expense
   
56,544
   
53,315
   
172,371
   
164,843
  
 
                          
Income before income tax expense
   
48,938
   
60,216
   
152,406
   
206,174
  
Income tax expense
   
13,630
   
19,122
   
47,257
   
68,383
  
 
                          
Net income
 
$
35,308
  
$
41,094
  
$
105,149
  
$
137,791
  
 
                          
 
                          
Basic earnings per common share
 
$
0.39
  
$
0.44
  
$
1.16
  
$
1.44
  
 
                          
Diluted earnings per common share
 
$
0.39
  
$
0.43
  
$
1.14
  
$
1.40
  
 
                          
Basic weighted average common shares
   
90,174,456
    
93,944,367
    
90,763,008
    
95,563,670
  
Diluted weighted average common and common equivalent shares
   
91,543,600
    
96,489,271
    
92,420,702
    
98,137,080
  


9

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

SELECTED FINANCIAL RATIOS AND OTHER DATA

 
 
For the
 
At or For the
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
September 30,
 
September 30,
 
 
 
2007
 
2006
 
2007
 
2006
 
 
 
 
 
 
 
 
 
 
 
Selected Returns and Financial Ratios (annualized)                            
Return on average stockholders' equity
 
 
11.82
%
 
13.06
%
 
11.67
%
 
14.27
%
Return on average tangible stockholders' equity (1)
 
 
13.99
 
 
15.31
 
 
13.79
 
 
16.67
 
Return on average assets
 
 
0.66
 
 
0.76
 
 
0.65
 
 
0.84
 
General and administrative expense to average assets
 
 
1.05
 
 
0.98
 
 
1.07
 
 
1.00
 
Efficiency ratio (2) 
 
 
53.35
 
 
46.96
 
 
52.99
 
 
44.43
 
Net interest rate spread(3)
 
 
1.46
 
 
1.64
 
 
1.52
 
 
1.83
 
Net interest margin (4)
 
 
1.58
 
 
1.75
 
 
1.63
 
 
1.93
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Non-GAAP Returns and Financial Ratios (annualized) (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP return on average stockholders' equity
 
 
        
 
 
11.67
%
 
14.65
%
Non-GAAP return on average tangible stockholders' equity (1)
 
 
        
 
 
13.79
 
 
17.11
 
Non-GAAP return on average assets
 
 
        
 
 
0.65
 
 
0.86
 
Non-GAAP efficiency ratio (2)
 
 
        
 
 
52.99
 
 
43.79
 
 
 
 
        
 
 
 
 
 
 
 
Asset Quality Data (dollars in thousands)
 
 
        
 
 
 
 
 
 
 
Non-performing loans/total loans
 
 
        
 
 
0.52
%
 
0.37
%
Non-performing loans/total assets
 
 
        
 
 
0.38
 
 
0.25
 
Non-performing assets/total assets
 
 
        
 
 
0.40
 
 
0.26
 
Allowance for loan losses/non-performing loans
 
 
        
 
 
95.06
 
 
145.16
 
Allowance for loan losses/non-accrual loans
 
 
        
 
 
98.79
 
 
146.50
 
Allowance for loan losses/total loans
 
 
        
 
 
0.49
 
 
0.54
 
Net charge-offs to average loans outstanding (annualized)
    
0.04 %
    
0.03%
    
0.02
    
0.01
  
                           
Non-performing assets
 
 
        
 
$
86,653
 
$
55,488
 
Non-performing loans
 
 
        
 
 
82,317
 
 
55,063
 
Loans 90 days past maturity but still accruing interest
 
 
        
 
 
3,103
 
 
502
 
Non-accrual loans (6)
 
 
        
 
 
79,214
 
 
54,561
 
Net charge-offs
 
$
1,645
 
$
1,133
 
 
2,188
 
 
1,229
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios (Astoria Federal)                          
Tangible
 
 
        
 
 
6.60
%
 
6.84
%
Core
 
 
        
 
 
6.60
 
 
6.84
 
Risk-based
 
 
        
 
 
12.08
 
 
12.66
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Data
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends paid per common share
 
$
0.26
 
$
0.24
 
$
0.78
 
$
0.72
 
Dividend payout ratio
 
 
66.67
%
 
55.81
%
 
68.42
%
 
51.43
%
Book value per share (7)
 
 
        
 
$
13.35
 
$
13.55
 
Tangible book value per share (8)
 
 
        
 
$
11.30
 
$
11.56
 
Tangible stockholders' equity/tangible assets (1) (9)
 
 
        
 
 
4.73
%
 
5.02
%
Mortgage loans serviced for others (in thousands)
 
 
        
 
$
1,286,661
 
$
1,394,240
 
Full time equivalent employees
 
 
        
 
 
1,629
 
 
1,597
 
 
(1)    
Tangible stockholders' equity represents stockholders' equity less goodwill.
(2)    
The efficiency ratio represents general and administrative expense divided by the sum of net interest income plus non-interest income.
(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.
(5)    
The information presented for the nine months ended September 30, 2006 represents pro forma calculations which are not in conformity with U.S. generally accepted accounting principles, or GAAP. The 2006 information excludes the $3.6 million, after tax, ($5.5 million, before tax) charge for the termination of our interest rate swap agreements recorded in the 2006 first quarter. See page 12 for a reconciliation of GAAP net income to non-GAAP earnings for the nine months ended September 30, 2006.
(6)    
Non-accrual loans include $24.1 million at September 30, 2007 and $19.8 million at September 30, 2006 of loans which have only missed two payments.
(7)    
Book value per share represents stockholders' equity divided by outstanding shares, excluding unallocated Employee Stock Ownership Plan, or ESOP, shares.
(8)    
Tangible book value per share represents stockholders' equity less goodwill divided by outstanding shares, excluding unallocated ESOP shares.
(9)    
Tangible assets represent assets less goodwill.

10

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS
(Dollars in Thousands)

   
For the Three Months Ended September 30, 2007
  
   
Average
Balance
 
Interest
 
Average
Yield/Cost
(Annualized)
  
               
               
Assets:
              
Interest-earning assets:
              
Mortgage loans (1):
              
One-to-four family
  
$
11,171,094
  
$
150,645
    
5.39
%
Multi-family, commercial
                    
real estate and construction
    
4,154,097
    
63,052
    
6.07
  
Consumer and other loans (1)
    
384,019
    
7,472
    
7.78
  
Total loans
    
15,709,210
    
221,169
    
5.63
  
Mortgage-backed and other
                    
securities (2)
    
4,711,162
    
53,227
    
4.52
  
Repurchase agreements
    
25,631
    
337
    
5.26
  
Federal Home Loan Bank stock
    
166,938
    
2,899
    
6.95
  
Total interest-earning assets
    
20,612,941
    
277,632
    
5.39
  
Goodwill
    
185,151
              
Other non-interest-earning assets
    
749,522
              
Total assets
  
$
21,547,614
              
Liabilities and stockholders' equity:
                    
Interest-bearing liabilities:
                    
Savings
  
$
1,983,161
    
2,016
    
0.41
  
Money market
    
365,919
    
926
    
1.01
  
NOW and demand deposit
    
1,453,669
    
214
    
0.06
  
Liquid certificates of deposit
    
1,570,599
    
18,501
    
4.71
  
Total core deposits
    
5,373,348
    
21,657
    
1.61
  
Certificates of deposit
    
7,946,982
    
95,293
    
4.80
  
Total deposits
    
13,320,330
    
116,950
    
3.51
  
Borrowings
    
6,687,400
    
79,505
    
4.76
  
Total interest-bearing liabilities
    
20,007,730
    
196,455
    
3.93
  
Non-interest-bearing liabilities
    
345,377
              
Total liabilities
    
20,353,107
              
Stockholders' equity
    
1,194,507
              
Total liabilities and stockholders'
                    
equity
  
$
21,547,614
              
Net interest income/net interest
                    
rate spread
        
$
81,177
    
1.46
%
Net interest-earning assets/net
                    
interest margin
  
$
605,211
          
1.58
%
Ratio of interest-earning assets
                    
to interest-bearing
                    
liabilities
    
1.03x
              
 
11
 

   
For the Three Months Ended September 30, 2006
  
   
Average
Balance
  
Interest
  
Average
Yield/Cost
(Annualized)
  
Assets:
              
Interest-earning assets:
              
Mortgage loans (1):
              
One-to-four family
 
$
9,952,037
  
$
127,735
    
5.13
%
Multi-family, commercial
                    
real estate and construction
   
4,268,318
   
65,933
   
6.18
  
Consumer and other loans (1)
   
468,436
   
9,099
   
7.77
  
Total loans
   
14,688,791
   
202,767
   
5.52
  
Mortgage-backed and other
                    
securities (2)
   
5,774,554
   
64,946
   
4.50
  
Repurchase agreements
   
95,969
   
1,266
   
5.28
  
Federal Home Loan Bank stock
   
142,998
   
2,049
   
5.73
  
Total interest-earning assets
   
20,702,312
   
271,028
   
5.24
  
Goodwill
   
185,151
              
Other non-interest-earning assets
   
778,978
              
Total assets
 
$
21,666,441
              
                     
Liabilities and stockholders' equity:
                    
Interest-bearing liabilities:
                    
Savings
 
$
2,277,608
    
2,309
   
0.41
  
Money market
   
506,959
   
1,281
   
1.01
  
NOW and demand deposit
   
1,482,642
   
218
   
0.06
  
Liquid certificates of deposit
   
1,243,914
   
15,184
   
4.88
  
Total core deposits
   
5,511,123
   
18,992
   
1.38
  
Certificates of deposit
   
7,505,903
   
83,111
   
4.43
  
Total deposits
   
13,017,026
   
102,103
   
3.14
  
Borrowings
   
7,045,962
   
78,258
   
4.44
  
Total interest-bearing liabilities
   
20,062,988
   
180,361
   
3.60
  
Non-interest-bearing liabilities
   
344,467
              
Total liabilities
   
20,407,455
              
Stockholders' equity
   
1,258,986
              
Total liabilities and stockholders'
                    
equity
 
$
21,666,441
              
                     
Net interest income/net interest
                    
rate spread
       
$
90,667
    
1.64
%
Net interest-earning assets/net
                    
interest margin
 
$
639,324
          
1.75
%
Ratio of interest-earning assets
                    
to interest-bearing
                    
liabilities
   
1.03x
              

(1)    
Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses.
(2)    
Securities available-for-sale are included at average amortized cost.

12

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS
(Dollars in Thousands)

   
For the Nine Months Ended September 30, 2007
  
   
Average
Balance
  
Interest
  
Average
Yield/Cost
(Annualized)
  
Assets:
              
Interest-earning assets:
              
Mortgage loans (1):
              
One-to-four family
 
$
10,771,698
  
$
428,729
    
5.31
%
Multi-family, commercial
                    
real estate and construction
    
4,194,081
    
192,160
   
6.11
  
Consumer and other loans (1)
   
406,967
   
23,478
   
7.69
  
Total loans
   
15,372,746
   
644,367
   
5.59
  
Mortgage-backed and other
                    
securities (2)
   
4,966,923
   
168,127
   
4.51
  
Federal funds sold and
                    
repurchase agreements
   
45,772
   
1,812
   
5.28
  
Federal Home Loan Bank stock
   
156,955
   
8,246
   
7.00
  
Total interest-earning assets
   
20,542,396
   
822,552
   
5.34
  
Goodwill
   
185,151
              
Other non-interest-earning assets
   
756,862
              
Total assets
 
$
21,484,409
              
                     
Liabilities and stockholders' equity:
                    
Interest-bearing liabilities:
                    
Savings
 
$
2,047,732
    
6,177
   
0.40
  
Money market
   
392,785
   
2,933
   
1.00
  
NOW and demand deposit
   
1,471,293
   
639
   
0.06
  
Liquid certificates of deposit
   
1,585,104
   
57,278
   
4.82
  
Total core deposits
   
5,496,914
   
67,027
   
1.63
  
Certificates of deposit
   
7,791,434
   
274,377
   
4.70
  
Total deposits
   
13,288,348
   
341,404
   
3.43
  
Borrowings
   
6,645,192
   
229,553
   
4.61
  
Total interest-bearing
                    
liabilities
   
19,933,540
   
570,957
   
3.82
  
Non-interest-bearing liabilities
   
349,186
              
Total liabilities
   
20,282,726
              
Stockholders' equity
   
1,201,683
              
Total liabilities and stockholders'
                    
equity
 
$
21,484,409
              
                     
Net interest income/net interest
                    
rate spread
       
$
251,595
    
1.52
%
Net interest-earning assets/net
                    
interest margin
 
$
608,856
          
1.63
%
Ratio of interest-earning assets
                    
to interest-bearing
                    
liabilities
   
1.03x
              
 
13

   
For the Nine Months Ended September 30, 2006
  
   
Average
Balance
  
Interest
  
Average
Yield/Cost
(Annualized)
  
Assets:
              
Interest-earning assets:
              
Mortgage loans (1):
              
One-to-four family
 
$
9,921,036
  
$
378,226
    
5.08
%
Multi-family, commercial
                    
real estate and construction
   
4,192,095
    
192,178
   
6.11
  
Consumer and other loans (1)
   
488,223
   
26,918
   
7.35
  
Total loans
   
14,601,354
   
597,322
   
5.45
  
Mortgage-backed and other
                    
securities (2)
   
6,098,527
   
205,373
   
4.49
  
Federal funds sold and
                    
repurchase agreements
   
145,121
   
5,205
   
4.78
  
Federal Home Loan Bank stock
   
141,577
   
5,535
   
5.21
  
Total interest-earning assets
   
20,986,579
   
813,435
   
5.17
  
Goodwill
   
185,151
              
Other non-interest-earning assets
   
788,337
              
Total assets
 
$
21,960,067
              
                     
Liabilities and stockholders' equity:
                    
Interest-bearing liabilities:
                    
Savings
 
$
2,380,057
    
7,164
   
0.40
  
Money market
   
563,485
   
4,135
    
0.98
  
NOW and demand deposit
   
1,512,951
   
662
   
0.06
  
Liquid certificates of deposit
   
981,897
   
32,636
   
4.43
  
Total core deposits
   
5,438,390
   
44,597
   
1.09
  
Certificates of deposit
   
7,513,758
   
230,760
   
4.09
  
Total deposits
   
12,952,148
   
275,357
   
2.83
  
Borrowings
   
7,375,315
   
234,549
   
4.24
  
Total interest-bearing
                    
liabilities
   
20,327,463
   
509,906
   
3.34
  
Non-interest-bearing liabilities
   
345,408
              
Total liabilities
   
20,672,871
              
Stockholders' equity
   
1,287,196
              
Total liabilities and stockholders'
                    
equity
 
$
21,960,067
              
                     
Net interest income/net interest
                    
rate spread
       
$
303,529
    
1.83
%
Net interest-earning assets/net
                    
interest margin
 
$
659,116
          
1.93
%
Ratio of interest-earning assets
                    
to interest-bearing
                    
liabilities
   
1.03x
              
 
(1)    
Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses.
(2)    
Securities available-for-sale are included at average amortized cost.

14

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)

   
At September 30, 2007
  
At June 30, 2007
  
At September 30, 2006
  
       
Weighted
  
 
  
Weighted
      
Weighted
  
       
Average
  
 
  
Average
      
Average
  
   
Balance
  
Rate(1)
  
Balance
  
Rate(1)
  
Balance
  
Rate(1)
  
                           
Selected interest-earning assets:
                          
Mortgage loans, gross (2):
                          
One-to-four family
  
$
11,349,658
    
5.65
%
$
10,909,568
    
5.58
%
$
9,931,184
    
5.40
%
Multi-family, commercial real estate and construction
    
4,122,709
   
5.93
   
4,179,772
   
5.94
   
4,268,679
   
5.96
  
Mortgage-backed and other securities (3)
    
4,568,579
   
4.33
   
4,787,635
   
4.34
   
5,598,523
   
4.34
  
                                       
Interest-bearing liabilities:                                        
Savings
   
1,940,322
   
0.40
   
2,025,132
   
0.40
   
2,209,535
   
0.40
  
Money market
   
352,858
   
1.01
   
377,455
   
1.00
   
478,932
   
1.00
  
NOW and demand deposit
    
1,442,840
   
0.06
   
1,489,624
   
0.06
   
1,466,725
   
0.06
  
Liquid certificates of deposit
    
1,463,845
   
4.46
   
1,664,176
   
4.83
   
1,402,562
   
5.05
  
Total core deposits
   
5,199,865
   
1.49
   
5,556,387
   
1.68
   
5,557,754
   
1.54
  
Certificates of deposit
    
8,066,130
   
4.80
   
7,891,469
   
4.76
   
7,619,252
   
4.54
  
Total deposits
   
13,265,995
   
3.50
   
13,447,856
    
3.49
   
13,177,006
   
3.27
  
Borrowings, net
   
6,929,500
   
4.68
   
6,698,342
    
4.62
   
6,824,359
   
4.38
  
 
(1)    
Weighted average rates represent stated or coupon interest rates excluding the effect of yield adjustments for premiums, discounts and deferred loan origination fees and costs and the impact of prepayment penalties.
(2)    
Mortgage loans exclude loans held-for-sale and include non-performing loans.
(3)    
Securities available-for-sale are reported at fair value and securities held-to-maturity are reported at amortized cost.

15

RECONCILIATION OF 2006 GAAP NET INCOME TO NON-GAAP EARNINGS
(In Thousands, Except Per Share Data)

   
For the Nine Months Ended September 30, 2006
  
   
GAAP
  
Adjustments(4)
  
Non-GAAP
  
Net interest income after provision for loan losses
  
$
303,529
  
$
-
  
$
303,529
  
Non-interest income
   
67,488
   
5,456
   
72,944
  
Non-interest expense
   
164,843
   
-
   
164,843
  
Income before income tax
   
206,174
   
5,456
   
211,630
  
Income tax expense
   
68,383
   
1,810
   
70,193
  
Net income
 
$
137,791
  
$
3,646
  
$
141,437
  
                     
Basic earnings per common share
 
$
1.44
  
$
0.04
  
$
1.48
  
Diluted earnings per common share
 
$
1.40
  
$
0.04
  
$
1.44
  
 
(4)    
Adjustments relate to the $5.5 million charge for the termination of our interest rate swap agreements and the related tax effects.

SOURCE Astoria Financial Corporation
-0- 10/18/2007
/CONTACT: Peter J. Cunningham, First Vice President, Investor Relations, of Astoria Financial Corporation, +1-516-327-7877, ir@astoriafederal.com/
/Company News On-Call: http://www.prnewswire.com/comp/104529.html /
/Web site: http://www.astoriafederal.com
 http://ir.astoriafederal.com /
(AF)
 
16