EX-99.1 2 v120059_ex99-1.htm
 
 

FOR IMMEDIATE RELEASE

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

ASTORIA FINANCIAL CORPORATION ANNOUNCES SECOND QUARTER EPS OF $0.37

Margin Increases 24 Basis Points from First Quarter

Quarterly Cash Dividend of $0.26 Per Share Declared

Lake Success, New York, July 16, 2008 -- 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 $33.5 million, or $0.37 diluted earnings per share (“EPS”), for the quarter ended June 30, 2008, compared to $34.1 million, or $0.37 EPS, for the 2007 second quarter. For the six months ended June 30, 2008, net income totaled $62.4 million, or $0.69 EPS, compared to $69.8 million, or $0.75 EPS, for the comparable 2007 period.
 
Second Quarter 2008 Financial Highlights:
●
Diluted earnings per share of $0.37, up 16% from the 2008 first quarter
   
●
Margin increased 24 basis points from the linked quarter to 1.81%
   
●
Deposits increased $86 million, or 3% annualized
   
●
Loan portfolio increased $479 million, or 12% annualized
   
m
One-to-four family loan portfolio increased $550 million, or 20% annualized
     
●
Mortgage loan production increased $892 million from the 2008 first quarter and totaled $1.6 billion
     
m
One-to-four family loan production increased $833 million from the 2008 first quarter and totaled $1.5 billion
 
Commenting on the 2008 second quarter results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted, “We are pleased to report solid second quarter results which reflect double-digit increases in both earnings and earnings per share over the 2008 first quarter. As anticipated, these very positive results were achieved due to a significant improvement in the net interest margin, resulting primarily from lower liability costs, solid loan and deposit growth and lower premium amortization expense. We expect continued expansion in the net interest margin, as well as loan and deposit growth.”
 
1
 
Board Declares Quarterly Cash Dividend of $0.26 Per Share
The Board of Directors of the Company, at their July 16, 2008 meeting, declared a quarterly cash dividend of $0.26 per common share. The dividend is payable on September 2, 2008 to shareholders of record as of August 15, 2008. This is the fifty-third consecutive quarterly cash dividend declared by the Company.
 
Second Quarter and Six Month Earnings Summary
Net interest income for the quarter ended June 30, 2008 increased $11.8 million, or 15%, from the 2008 first quarter and $9.7 million, or 12%, from the 2007 second quarter to $92.6 million. For the six months ended June 30, 2008, net interest income increased $2.9 million, compared to the six months ended June 30, 2007, to $173.4 million.
 
Astoria’s net interest margin for the quarter ended June 30, 2008 increased 24 basis points from the 2008 first quarter and 19 basis points from the 2007 second quarter to 1.81%. The increases were primarily due to a decrease in the cost of interest bearing-liabilities. “We expect that the net interest margin will continue to expand this year, as we realize the repricing benefit of deposit and borrowing liabilities which have rates that are considerably above current market rates. Over the next six months, CDs (excluding Liquid CDs) totaling $3.7 billion, with a weighted average rate of 4.29%, and medium and long-term borrowings totaling $1.3 billion, with a weighted average rate of 4.95%, are scheduled to mature,” Mr. Engelke noted.
 
For the quarter ended June 30, 2008, a $7.0 million provision for loan losses was recorded compared to $4.0 million for the previous quarter. For the six months ended June 30, 2008, provision for loan losses totaled $11.0 million. No provision for loan losses was recorded in the comparable 2007 periods. Quarterly provisions for the remainder of 2008 are expected to remain at or increase somewhat from the second quarter level.
General and administrative expense (“G&A”) for the quarter ended June 30, 2008 increased $1.8 million, to $60.0 million, from the 2008 first quarter and $1.3 million from the 2007 second quarter. The linked quarter increase is primarily due to increases in advertising and goodwill litigation expense. The year over year increase is due primarily to increases in compensation and benefits and real estate owned (REO) expense, partially offset by lower goodwill litigation expense.
 
For the six months ended June 30, 2008, G&A expense increased $2.4 million, compared to the six months ended June 30, 2007, to $118.2 million. The increase was primarily due to an increase in compensation and benefits expense, partially offset by a decrease in advertising expense.
 
Balance Sheet Summary
For the quarter and six months ended June 30, 2008, the total loan portfolio increased $478.8 million and $25.4 million, respectively, to $16.2 billion. The loan growth was funded primarily with excess liquidity and, to a lesser extent, retail deposits and wholesale borrowings. Total loan production for the quarter and six months ended June 30, 2008 increased to $1.6 billion and $2.4 billion, respectively, from $1.4 billion and $2.3 billion, respectively, for the comparable 2007 periods.
 
2
 
For the quarter and six months ended June 30, 2008, the one-to-four family mortgage loan portfolio increased $550.4 million and $197.7 million, respectively, to $11.8 billion. One-to-four family loan originations and purchases for the quarter and six months ended June 30, 2008 increased to $1.5 billion and $2.2 billion, respectively, from $1.3 billion and $2.0 billion, respectively, for the comparable 2007 periods. One-to-four family loan prepayments for the quarter and six months ended June 30, 2008 totaled $821.3 million and $1.7 billion, respectively, compared to $583.1 million and $1.1 billion, respectively, for the comparable 2007 periods.
 
Indicative of Astoria’s conservative underwriting standards, the loan-to-value (“LTV”) ratio of the 2008 second quarter and six month one-to-four family loan production for portfolio averaged approximately 57% for each period and the loan amounts averaged approximately $690,000 and $675,000, respectively. “It is important to note that the double-digit linked quarter loan growth attained in the second quarter has been achieved without sacrificing asset quality, as reflected in the very low average LTV ratio on second quarter loan production,” Mr. Engelke noted.
 
For the quarter and six months ended June 30, 2008, the multi-family and commercial real estate (“CRE”) loan portfolio decreased $60.1 million and $132.0 million, respectively. Multi-family/CRE loan originations totaled $126.6 million and $193.8 million, for the respective three and six month periods ended June 30, 2008. At June 30, 2008, the combined multi-family and CRE loan portfolio totaled $3.8 billion, or 24% of total loans.  The loan-to-value ratio of the 2008 second quarter and six-month multi-family/CRE loan production averaged approximately 62% for each period and the loan amounts averaged approximately $2.0 million and $1.8 million, respectively.
 
Asset Quality
Asset quality continued to remain strong during the 2008 second quarter. Non-performing loans (“NPL”) totaled $128.6 million at June 30, 2008, an increase of $22.0 million from the previous quarter, and represent just 0.59% of total assets. At June 30, 2008, one-to-four family non-performing loans totaled $101.0 million and multi-family/CRE non-performing loans totaled $24.5 million, compared to $88.4 million and $14.9 million, respectively, at March 31, 2008.
 
The comparative table below illustrates loan migration from 30 days delinquent to 90+ days delinquent:
 
 
(In millions)
30-59 Days
Past Due
60-89 Days
Past Due
90 + Days
Past Due (NPL)
Total 30 + Days
Past Due
At December 31, 2007
$144.4
$39.1
$ 68.1
$251.6
At March 31, 2008
$136.3
$48.8
$106.6
$291.7
At June 30, 2008
$134.5
$51.0
$128.6
$314.1
 
 
3
 
The table below details, as of June 30, 2008, the states with a total of 1% or more of our one-to four-family loan portfolio and the respective non-performing loan totals in those states:
(In millions)
State
 
Total 1-4 Family Loans
% of 1-4 Family
Loan Portfolio
Total 1-4
Family NPLs
NPLs as %
of State Total
New York Metro*
$ 4,947.8
42%
$33.3
0.67%
California
$ 1,420.8
12%
$ 8.9
0.63%
Illinois
$ 1,248.2
11%
$10.3
0.83%
Virginia
$ 955.3
8%
$13.4
1.40%
Maryland
$ 859.4
7%
$13.2
1.54%
Massachusetts
$ 798.9
7%
$ 4.7
0.59%
Florida
$ 333.9
3%
$ 8.5
2.55%
Washington
$ 208.7
2%
$ 0.0
0.00%
Georgia
$ 170.1
1%
$ 0.6
0.35%
Washington D.C.
$ 129.4
1%
$ 2.5
1.93%
Pennsylvania
$ 129.3
1%
$ 1.5
1.16%
Total States 1% or More
$11,201.8
95%
$96.9
0.87%
Other States
624.2
5%
$ 4.1
0.66%
Total 1-4 Family Portfolio
$11,826.0
100%
$101.0
0.85%
* NY, NJ, CT
        
 
Net loan charge-offs for the quarter and six months ended June 30, 2008 totaled $5.2 million and $8.1 million, respectively, compared to net loan charge-offs of $698,000 and $543,000, respectively, for the 2007 comparable periods. For the quarter and six months ended June 30, 2008, one-to-four family net loan charge-offs totaled $3.7 million and $4.9 million, respectively.
 
Commenting on asset quality, Mr. Engelke noted, “Although we have never actively participated in high-risk sub-prime residential lending, as a geographically diversified residential lender, we are not immune to the negative consequences arising from overall economic weakness and, in particular, a sharp downturn in the housing industry nationally. As expected, non-performing loans and charge-offs increased somewhat in the second quarter. However, the growth in non-performing loans has slowed from the previous quarter and importantly the trend in 30-59 day loan delinquencies has been relatively stable and down slightly over the past two quarters, as reflected in the delinquency chart on the previous page. Our overall asset quality remains strong, with non-performing loans representing just 59 basis points of total assets.”
 
Balance Sheet Summary (Continued)
Deposits increased $85.5 and $39.6 million for the quarter and six months ended June 30, 2008 and totaled $13.1 billion. Total assets increased $165.9 million from the previous quarter to $21.6 billion at June 30, 2008.
 
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
12/31/07
6/30/08
Cumulative
% Change
Assets
$22,700
$22,672
$22,462
$22,380
$21,719
$21,620
( 5%)
Loans
$10,286
$12,167
$12,687
$14,392
$16,155
$16,180
+ 57%
Securities
$10,763
$ 8,013
$ 8,448
$ 6,572
$ 4,371
$ 4,204
(61%)
Deposits
$ 9,555
$10,904
$11,187
$12,810
$13,049
$13,089
+ 37%
Borrowings
$11,528
$ 9,826
$ 9,632
$ 7,938
$ 7,185
$ 6,938
(40%)
 
The following table illustrates the above improvement on an outstanding per share basis:
 
Amount per share
12/31/99
12/31/01
12/31/03
12/31/05
12/31/07
6/30/08
% Change
CAGR
Loans
$ 66.28
$ 89.36
$107.51
$137.11
$168.76
$168.66
154%
12%
Deposits
$ 61.57
$ 80.09
$ 94.80
$122.04
$136.32
$136.44
122%
10%

Twelfth Stock Repurchase Program Continues
During the 2008 second quarter, Astoria repurchased 300,000 shares of its common stock at an average cost of $23.96 per share. During the six month period ended June 30, 2008, Astoria repurchased a total of 590,000 shares at an average cost of $24.74. Under the current stock repurchase program, 8.3 million shares remain available for repurchase as of June 30, 2008.
 
Stockholders’ equity was $1.2 billion, or 5.66% of total assets at June 30, 2008. Astoria Federal continues to maintain capital ratios in excess of regulatory requirements with core, tangible and risk-based capital ratios of 6.63%, 6.63% and 12.17%, respectively, at June 30, 2008.
 
Future Outlook
Commenting on the outlook for the remainder of 2008, Mr. Engelke stated, “We continue to anticipate a positively sloped yield curve throughout the year which will provide opportunities for significant earnings growth and the continued expansion of our net interest margin. In addition, we expect both loan and deposit growth will continue, particularly since we are experiencing more rational deposit pricing in our market. Although we expect our credit costs will continue to trend somewhat higher, such increases will be more than offset by margin expansion. The Company’s tangible capital ratio target remains between 4.50% and 4.75%.”
 
Astoria Financial Corporation, with assets of $21.6 billion, is the holding company for Astoria Federal Savings and Loan Association. Established in 1888, Astoria Federal, with deposits in New York totaling $13.1 billion, is the largest thrift depository headquartered in New York and embraces its philosophy of “Putting people first” by providing the customers and local communities it serves with quality financial products and services through 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 and loan production offices in New York, an extensive broker network covering twenty-two states, primarily the East Coast, and the District of Columbia, and through correspondent relationships covering twenty-nine states and the District of Columbia.
 
5
 
Earnings Conference Call July 17, 2008 at 10:00 a.m. (ET)
The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, July 17, 2008 at 10:00 a.m. (ET). The toll-free dial-in number is (888) 562-3356, conference ID # 50458495. A telephone replay will be available on July 17, 2008 from 1:00 p.m. (ET) through Friday, July 25, 2008, 11:59 p.m. (ET). The replay number is (800) 642-1687, ID # 50458495. The conference call will also be simultaneously webcast on the Company’s website www.astoriafederal.com and archived for one year.

Forward Looking Statements
This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements may be identified by the use of such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar terms and phrases, including references to assumptions.
 
Forward-looking statements are based on various assumptions and analyses made by us in light of our management’s experience and 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.


6
 

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
               
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
 
   
At
 
At
 
 
 
June 30,
 
December 31,
 
 
 
2008
 
2007
  
ASSETS
          
Cash and due from banks
  
$
82,224
  
$
93,972
  
Repurchase agreements
    
42,130
   
24,218
 
Securities available-for-sale
    
1,305,274
   
1,313,306
 
Securities held-to-maturity
              
(fair value of $2,861,882, and $3,013,014, respectively)
    
2,898,255
   
3,057,544
 
Federal Home Loan Bank of New York stock, at cost
    
200,260
   
201,490
 
Loans held-for-sale, net
    
10,465
   
6,306
 
Loans receivable:
              
Mortgage loans, net
    
15,840,358
   
15,791,962
 
Consumer and other loans, net
    
340,018
   
363,052
 
     
16,180,376
   
16,155,014
 
Allowance for loan losses
    
(81,843
)
  
(78,946
)
Total loans receivable, net
    
16,098,533
   
16,076,068
 
Mortgage servicing rights, net
    
12,816
   
12,910
 
Accrued interest receivable
    
78,651
   
79,132
 
Premises and equipment, net
    
140,161
   
139,563
 
Goodwill
    
185,151
   
185,151
 
Bank owned life insurance
    
397,170
   
398,280
 
Other assets
    
168,981
   
131,428
 
               
TOTAL ASSETS
  
$
21,620,071
  
$
21,719,368
  
           
LIABILITIES AND STOCKHOLDERS' EQUITY
              
Liabilities:
          
Deposits
  
$
13,089,046
  
$
13,049,438
  
Reverse repurchase agreements
    
3,450,000
   
3,730,000
 
Federal Home Loan Bank of New York advances
    
3,091,000
   
3,058,000
 
Other borrowings, net
    
396,975
   
396,658
 
Mortgage escrow funds
    
141,566
   
129,412
 
Accrued expenses and other liabilities
    
227,636
   
144,516
 
               
TOTAL LIABILITIES
    
20,396,223
   
20,508,024
 
               
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 95,935,535, and 95,728,562 shares 
              
outstanding, respectively) 
    
1,665
   
1,665
 
Additional paid-in capital
    
846,343
   
846,227
 
Retained earnings
   
1,898,799
   
1,883,902
 
Treasury stock (70,559,353 and 70,766,326 shares, at cost, respectively)
    
(1,458,008
)
  
(1,459,865
)
Accumulated other comprehensive loss
    
(44,683
)
  
(39,476
)
Unallocated common stock held by ESOP
             
(5,531,986 and 5,761,391 shares, respectively) 
    
(20,268
)
  
(21,109
)
               
TOTAL STOCKHOLDERS' EQUITY
    
1,223,848
   
1,211,344
 
               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
21,620,071
  
$
21,719,368
  
               
 
7

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
                     
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
                     
 
        
For the Three Months Ended
  
For the Six Months Ended
  
        
June 30,
  
June 30,
  
        
2008
  
2007
  
2008
  
2007
  
Interest income:
                       
Mortgage loans: 
                    
One-to-four family
        
$
152,247
 
$
141,568
 
$
305,845
 
$
278,084
 
Multi-family, commercial real estate and construction
          
58,686
   
64,438
   
119,001
   
129,108
 
Consumer and other loans 
          
4,177
   
7,812
   
9,609
   
16,006
 
Mortgage-backed and other securities 
          
46,708
   
55,885
   
94,601
   
114,900
 
Federal funds sold and repurchase agreements 
          
1,018
   
499
   
1,654
   
1,475
 
Federal Home Loan Bank of New York stock 
          
3,803
   
2,749
   
8,025
   
5,347
 
Total interest income
          
266,639
   
272,951
   
538,735
   
544,920
 
Interest expense:
                                
Deposits 
          
97,851
   
114,096
   
208,054
   
224,454
 
Borrowings 
          
76,208
   
75,964
   
157,315
   
150,048
 
Total interest expense
          
174,059
   
190,060
   
365,369
   
374,502
 
                                 
Net interest income
          
92,580
   
82,891
   
173,366
   
170,418
 
Provision for loan losses
          
7,000
   
-
   
11,000
   
-
 
Net interest income after provision for loan losses
          
85,580
   
82,891
   
162,366
   
170,418
 
Non-interest income:
                                
Customer service fees 
          
16,775
   
16,159
   
31,909
   
31,328
 
Other loan fees 
          
1,090
   
1,110
   
2,129
   
2,328
 
Mortgage banking income, net 
          
1,575
   
1,224
   
2,025
   
1,840
 
Income from bank owned life insurance 
          
4,008
   
4,287
   
8,397
   
8,490
 
Other 
          
1,385
   
3,500
   
2,810
   
4,891
 
Total non-interest income
          
24,833
   
26,280
   
47,270
   
48,877
 
Non-interest expense:
                                
General and administrative: 
                                
Compensation and benefits
          
32,375
   
30,046
   
64,366
   
61,170
 
Occupancy, equipment and systems
          
16,847
   
16,494
   
33,751
   
33,015
 
Federal deposit insurance premiums
          
548
   
407
   
1,119
   
814
 
Advertising
          
1,550
   
1,977
   
2,623
   
3,892
 
Other
          
8,662
   
9,783
   
16,352
   
16,936
 
Total non-interest expense
          
59,982
   
58,707
   
118,211
   
115,827
 
                                 
Income before income tax expense
         
50,431
   
50,464
   
91,425
   
103,468
 
Income tax expense
          
16,981
   
16,400
   
29,072
   
33,627
 
                                 
Net income
       
$
33,450
 
$
34,064
 
$
62,353
 
$
69,841
 
                                 
                                 
Basic earnings per common share
        
$
0.37
 
$
0.38
 
$
0.70
 
$
0.77
 
                                 
                                 
Diluted earnings per common share
        
$
0.37
 
$
0.37
 
$
0.69
 
$
0.75
 
                                 
Basic weighted average common shares
          
89,550,934
   
90,704,749
   
89,511,918
   
91,062,161
 
 
                                
Diluted weighted average common and common equivalent shares  
          
90,859,457
   
92,166,978
   
90,914,571
   
92,864,131
 
 
 
8

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
 
SELECTED FINANCIAL RATIOS AND OTHER DATA
 
   
For the
  
 At or For the
  
   
Three Months Ended
  
 Six Months Ended
  
   
June 30,
 
 June 30,
 
   
2008
  
2007
  
 2008
  
2007
  
                 
Selected Returns and Financial Ratios (annualized)
                    
Return on average stockholders' equity
   
10.96
%
  
11.35
%
  
10.22
%
  
11.59
%
Return on average tangible stockholders' equity (1)
    
12.92
   
13.42
   
12.05
   
13.70
 
Return on average assets
   
0.62
   
0.63
   
0.58
   
0.65
 
General and administrative expense to average assets
    
1.12
   
1.09
   
1.10
   
1.08
 
Efficiency ratio (2)
    
51.09
   
53.78
   
53.58
   
52.82
 
Net interest rate spread (3)
    
1.70
   
1.50
   
1.58
   
1.55
 
Net interest margin (4)
    
1.81
   
1.62
   
1.69
   
1.66
 
                           
Asset Quality Data (dollars in thousands) (5)
                          
Non-performing assets
              
$
146,852
 
$
51,178
 
Non-performing loans
                
128,603
   
49,253
 
Loans delinquent 90 days or more and still accruing interest
                
122
   
625
 
Non-accrual loans
                
128,481
   
48,628
 
Loans 60-89 days delinquent
                
51,035
   
15,669
 
Loans 30-59 days delinquent
                
134,493
   
109,395
 
Net charge-offs
 
$
5,240
  
$
698
   
8,103
   
543
 
                           
Non-performing loans/total loans
                
0.79
%
  
0.32
%
Non-performing loans/total assets
                
0.59
   
0.23
 
Non-performing assets/total assets
                
0.68
   
0.24
 
Allowance for loan losses/non-performing loans
                
63.64
   
161.21
 
Allowance for loan losses/non-accrual loans
                
63.70
   
163.28
 
Allowance for loan losses/total loans
                
0.51
   
0.51
 
Net charge-offs to average loans outstanding (annualized)
    
0.13
%
  
0.02
%
  
0.10
   
0.01
 
                           
                           
Capital Ratios (Astoria Federal)
                         
Tangible
                
6.63
%
  
6.65
%
Core
                
6.63
   
6.65
 
Risk-based
                
12.17
   
12.19
 
                           
Other Data
                         
Cash dividends paid per common share
  
$
0.26
  
$
0.26
 
$
0.52
 
$
0.52
 
Dividend payout ratio
    
70.27
%
  
70.27
%
  
75.36
%
  
69.33
%
Book value per share (6)
              
$
13.54
 
$
13.15
 
Tangible book value per share (7)
              
$
11.49
 
$
11.11
 
Tangible stockholders' equity/tangible assets (1) (8)
                
4.85
%
  
4.70
%
Mortgage loans serviced for others (in thousands)
              
$
1,239,745
 
$
1,305,916
 
Full time equivalent employees
                
1,643
   
1,628
 
                           
 
 
(1)
Tangible stockholders' equity represents stockholders' equity less goodwill.
 
(2)
Efficiency ratio represents general and administrative expense divided by the sum of net interest income plus non-interest income.
 
(3)
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)
Loans totaling $14.7 million have been reclassified from non-accrual to 60-89 days delinquent as of June 30, 2007 to conform the June 30, 2007 information to the current year presentation. The related June 30, 2007 asset quality ratios have been revised as necessary.
 
(6)
Book value per share represents stockholders' equity divided by outstanding shares, excluding unallocated Employee Stock Ownership Plan, or ESOP, shares.
 
(7)
Tangible book value per share represents stockholders' equity less goodwill divided by outstanding shares, excluding unallocated ESOP shares.
 
(8)
Tangible assets represent assets less goodwill.
 
 
9

 
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
 
AVERAGE BALANCE SHEETS
(Dollars in Thousands)
 
     
For the Three Months Ended June 30,
  
     
2008
    
2007
  
                 
Average
                
Average
  
     
Average
          
Yield/
    
Average
         
Yield/
  
     
Balance
    
Interest
    
Cost
    
Balance
    
Interest 
    
Cost
  
                 
(Annualized)
                
(Annualized) 
  
                                       
Assets:
                                      
Interest-earning assets:
                                      
Mortgage loans (1):
                                      
One-to-four family
  
$
11,558,547
  
$
152,247
    
5.27
%
$
10,749,335
  
$
141,568
    
5.27
%
Multi-family, commercial real estate and construction
    
3,941,587
    
58,686
    
5.96
    
4,200,044
    
64,438
    
6.14
  
Consumer and other loans (1)
    
345,242
    
4,177
    
4.84
    
406,437
    
7,812
    
7.69
  
Total loans
    
15,845,376
    
215,110
    
5.43
    
15,355,816
    
213,818
    
5.57
  
Mortgage-backed and other securities (2)
    
4,234,398
    
46,708
    
4.41
    
4,964,564
    
55,885
    
4.50
  
Federal funds sold and repurchase agreements
    
183,413
    
1,018
    
2.22
    
37,742
    
499
    
5.29
  
Federal Home Loan Bank stock
   
194,783
    
3,803
    
7.81
    
155,056
    
2,749
    
7.09
  
Total interest-earning assets
    
20,457,970
    
266,639
    
5.21
    
20,513,178
    
272,951
    
5.32
  
Goodwill
    
185,151
                
185,151
              
Other non-interest-earning assets
    
844,802
            
763,554
          
Total assets
  
$
21,487,923
            
$
21,461,883
            
                                       
Liabilities and stockholders' equity:
                                  
Interest-bearing liabilities:
                                      
Savings
  
$
1,884,583
    
1,899
    
0.40
  
$
2,061,648
    
2,074
    
0.40
  
Money market
    
317,185
    
799
    
1.01
    
391,139
    
970
    
0.99
  
NOW and demand deposit
    
1,508,664
    
319
    
0.08
    
1,495,582
    
214
    
0.06
  
Liquid certificates of deposit
    
1,302,494
    
8,894
    
2.73
    
1,659,796
    
20,241
    
4.88
  
Total core deposits
    
5,012,926
    
11,911
    
0.95
    
5,608,165
    
23,499
    
1.68
  
Certificates of deposit
    
8,008,650
    
85,940
    
4.29
    
7,724,775
    
90,597
    
4.69
  
Total deposits
    
13,021,576
    
97,851
    
3.01
    
13,332,940
    
114,096
    
3.42
  
Borrowings
    
6,802,152
    
76,208
    
4.48
    
6,562,399
    
75,964
    
4.63
  
Total interest-bearing liabilities
    
19,823,728
    
174,059
    
3.51
    
19,895,339
    
190,060
    
3.82
  
Non-interest-bearing liabilities
    
443,235
                
365,877
              
Total liabilities
   
20,266,963
              
20,261,216
            
Stockholders' equity
    
1,220,960
              
1,200,667
            
Total liabilities and stockholders' equity
  
$
21,487,923
              
$
21,461,883
              
                                       
Net interest income/net interest
                                  
rate spread
        
$
92,580
    
1.70
%
      
$
82,891
    
1.50
%
Net interest-earning assets/net
                                      
interest margin$
    
634,242
          
1.81
%
$
617,839
          
1.62
%
                                       
Ratio of interest-earning assets to interest-bearing liabilities
    
1.03x
                
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.

10
 
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS
(Dollars in Thousands)

   
For the Six Months Ended June 30,
  
   
2008
  
2007
  
           
Average
          
Average
  
   
Average
      
Yield/
  
Average
      
Yield/
  
   
Balance
  
Interest
  
Cost
  
Balance
  
Interest
  
Cost
  
           
(Annualized)
          
(Annualized)
  
Assets:
                                      
Interest-earning assets:
                                      
Mortgage loans (1):
                                      
One-to-four family
  
$
11,590,151
  
$
305,845
    
5.28
%  
$
10,568,690
  
$
278,084
    
5.26
%
Multi-family, commercial real estate and construction
    
3,973,630
    
119,001
    
5.99
    
4,214,404
    
129,108
    
6.13
  
Consumer and other loans (1)
    
350,650
    
9,609
    
5.48
    
418,631
    
16,006
    
7.65
  
Total loans
    
15,914,431
    
434,455
    
5.46
    
15,201,725
    
423,198
    
5.57
  
Mortgage-backed and other securities (2)
    
4,265,655
    
94,601
    
4.44
    
5,096,922
    
114,900
    
4.51
  
Federal funds sold and repurchase agreements
    
138,790
    
1,654
    
2.38
    
56,009
    
1,475
    
5.27
  
Federal Home Loan Bank stock
   
195,449
    
8,025
    
8.21
    
151,880
    
5,347
    
7.04
  
Total interest-earning assets
    
20,514,325
    
538,735
    
5.25
    
20,506,536
    
544,920
    
5.31
  
Goodwill
    
185,151
                
185,151
              
Other non-interest-earning assets
    
813,624
    
   
   
760,102
    
   
 
Total assets
  
$
21,513,100
          
 
$
21,451,789
          
 
                                       
Liabilities and stockholders' equity:
                
               
 
Interest-bearing liabilities:
                                      
Savings
  
$
1,879,370
    
3,787
    
0.40
  
$
2,080,553
    
4,161
    
0.40
  
Money market
    
320,568
    
1,603
    
1.00
    
406,441
    
2,007
    
0.99
  
NOW and demand deposit
    
1,477,578
    
631
    
0.09
    
1,480,253
    
425
    
0.06
  
Liquid certificates of deposit
    
1,363,500
    
23,387
    
3.43
    
1,592,477
    
38,777
    
4.87
  
Total core deposits
    
5,041,016
    
29,408
    
1.17
    
5,559,724
    
45,370
    
1.63
  
Certificates of deposit
    
7,950,661
    
178,646
    
4.49
    
7,712,371
    
179,084
    
4.64
  
Total deposits
    
12,991,677
    
208,054
    
3.20
    
13,272,095
    
224,454
    
3.38
  
Borrowings
    
6,904,989
    
157,315
    
4.56
    
6,623,738
    
150,048
    
4.53
  
Total interest-bearing liabilities
    
19,896,666
    
365,369
    
3.67
    
19,895,833
    
374,502
    
3.76
  
Non-interest-bearing liabilities
    
395,973
                
351,122
              
Total liabilities
   
20,292,639
          
   
20,246,955
          
 
Stockholders' equity
    
1,220,461
          
   
1,204,834
          
 
Total liabilities and stockholders' equity
  
$
21,513,100
              
$
21,451,789
              
                                       
Net interest income/net interest rate spread
        
$
173,366
    
1.58
%
      
$
170,418
    
1.55
%
Net interest-earning assets/net interest margin
  
$
617,659
          
1.69
%
$
610,703
          
1.66
%
Ratio of interest-earning assets to interest-bearing liabilities
    
1.03x
                
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.

11

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)

   
At June 30, 2008
  
At March 31, 2008
  
At June 30, 2007
  
       
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
  
$
11,825,962
    
5.64
%  
$
11,275,550
    
5.69
%  
$
10,909,568
    
5.58
%
                                       
Multi-family, commercial real estate and construction
    
3,905,610
    
5.90
    
3,973,315
    
5.89
    
4,179,772
    
5.94
  
Mortgage-backed and other securities (3)
    
4,203,529
    
4.32
    
4,256,230
    
4.32
    
4,787,635
    
4.34
  
                                       
Interest-bearing liabilities:
                                      
Savings
    
1,886,470
    
0.40
    
1,878,444
    
0.40
    
2,025,132
    
0.40
  
Money market
    
316,607
    
1.02
    
321,039
    
1.00
    
377,455
    
1.00
  
NOW and demand deposit
    
1,506,549
    
0.06
    
1,495,023
    
0.06
    
1,489,624
    
0.06
  
Liquid certificates of deposit
    
1,246,359
    
2.47
    
1,390,368
    
3.42
    
1,664,176
    
4.83
  
Total core deposits
    
4,955,985
    
0.86
    
5,084,874
    
1.16
    
5,556,387
    
1.68
  
Certificates of deposit
    
8,133,061
    
4.10
    
7,918,668
    
4.58
    
7,891,469
    
4.76
  
Total deposits
    
13,089,046
    
2.87
    
13,003,542
    
3.24
    
13,447,856
    
3.49
  
Borrowings, net
   
6,937,975
    
4.28
    
6,851,816
    
4.55
    
6,698,342
    
4.62
  

(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.

12