8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 28, 2009

ASTORIA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-11967	11-3170868
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)

ONE ASTORIA FEDERAL PLAZA, LAKE SUCCESS, NEW YORK 11042-1085

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (516) 327-3000

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEMS 1, 3 THROUGH 7  NOT APPLICABLE.

Item 2.02. Results of Operations and Financial Condition.

On January 28, 2009, Astoria Financial Corporation (the “Company”) issued a press release which, among other things, highlights the Company’s financial results for the fourth quarter and full year ended December 31, 2008.  A copy of the press release is furnished herewith as an exhibit to this report.

Item 8.01. Other Events

Astoria further announced in its press release dated January 28, 2009 that the Board of Directors, at their January 28, 2009 meeting, declared a quarterly cash dividend of $0.13 per share.  The cash dividend is payable on March 2, 2009 to shareholders of record as of February 17, 2009.  A copy of the press release is furnished herewith as an exhibit to this report.

The Company further announced in its press release that the Board of Directors established May 20, 2009 as the date for its Annual Meeting of Shareholders, with a voting record date of March 23, 2009.  A copy of the press release is furnished herewith as an exhibit to this report.

Additionally, the Company announced that Astoria Financial Corporation has elected not to participate in the U.S. Treasury’s Capital Purchase Program (“CPP”)after fully evaluating the related costs and benefits, as well as the potential impact on the long-term value of its shares.  The Company disclosed on December 8, 2008 that it had received preliminary approval to issue up to $375 million of preferred stock and related warrants to the U.S. Treasury under the CPP.  A copy of the press release is furnished herewith as an exhibit to this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1  Press release dated January 28, 2009.

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SIGNATURE

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 hereunto duly authorized.

ASTORIA FINANCIAL CORPORATION
By:	/s/ Peter J. Cunningham
	Peter J. Cunningham First Vice President and Director of Investor Relations

Dated:  January 28, 2009

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EXHIBIT INDEX
Exhibit Number	Description
99.1	Press release dated January 28, 2009.

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EX-99.1

FOR IMMEDIATE RELEASE

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

ASTORIA FINANCIAL CORPORATION ANNOUNCES FOURTH QUARTER EPS OF $0.33

Margin Increases 12 Basis Points from Third Quarter;

Quarterly Cash Dividend of $0.13 Per Share Declared

Company Declines to Participate in the U.S. Treasury’s Capital Purchase Program

Lake Success, New York, January 28, 2009-- Astoria Financial Corporation (NYSE: AF) (“Astoria,” the “Company”), the holding company for Astoria Federal Savings and Loan Association (“Astoria Federal”, the “Bank”), today reported net income of $29.4 million, or $0.33 diluted earnings per share (“EPS”), (operating income of $22.1 million, or $0.24 operating EPS), for the quarter ended December 31, 2008 compared to $19.7  million, or $0.22 EPS, (operating income of $33.0 million, or $0.36 operating EPS), for the 2007 fourth quarter.(a)

For the year ended December 31, 2008, net income totaled $75.3 million, or $0.83 EPS, (operating income of $125.8 million, or $1.39 operating EPS) compared to $124.8 million, or $1.36 EPS, (operating income of $138.1 million, or $1.50 operating EPS) for the year ended December 31, 2007.(b)

Operating income and operating EPS, representing net income and EPS determined in accordance with generally accepted accounting principles (“GAAP”) excluding the effects of the after-tax, non-cash OTTI charges, provide a meaningful comparison for effectively evaluating Astoria’s operating results.  For a reconciliation of operating income and operating EPS to GAAP net income and EPS, please refer to the tables on page 14.

______________________________

 

(a) Included in the 2008 fourth quarter is a tax benefit of $7.4 million, or $0.08 per diluted share, due to the recognition of the 2008 third quarter other-than-temporary impairment (“OTTI”) charge, relating to Freddie Mac preferred stock, as an ordinary loss for tax purposes, rather than a capital loss for tax purposes as recognized in the 2008 third quarter. Included in the 2007 fourth quarter is an OTTI, after-tax, non-cash charge totaling $13.3 million, or $0.15 per diluted share, relating to Freddie Mac preferred stock.

 

(b) Included in the year ended December 31, 2008, is an OTTI, after-tax, non-cash charge totaling $50.5 million, or $0.56 per diluted share, relating to Freddie Mac preferred stock.   Included in the year ended December 31, 2007 is an OTTI, after-tax, non-cash charge totaling $13.3 million, or $0.14 per diluted share, relating to Freddie Mac preferred stock.

1

Commenting on the quarter and full year results, George L. Engelke, Jr., Chairman and Chief Executive Officer of Astoria, noted “We are pleased with the fundamental operating performance of Astoria during the fourth quarter and the year, including an improvement in net interest income and the net interest margin.  Unfortunately, these improvements were achieved against a backdrop of a severely deteriorating economy including continued and growing weakness in the national housing market which negatively impacted our overall results. During the fourth quarter, job losses accelerated more rapidly than expected, resulting in higher loan delinquencies, foreclosures, credit costs and loan loss provisions.”

Board Declares Quarterly Cash Dividend of $0.13 Per Share

 Based on fourth quarter operating EPS and in light of continued economic uncertainty, the Board of Directors of the Company, at their January 28, 2009 meeting, declared a quarterly cash dividend of $0.13 per common share.  The dividend is payable on March 2, 2009 to shareholders of record as of February 17, 2009.  This represents the fifty-fifth consecutive quarterly cash dividend declared by the Company.  Commenting on the dividend action, Mr. Engelke stated, “The decision to reduce the quarterly cash dividend is based on, among other things, the dividend payout ratio coupled with our desire to retain capital during this challenging economic environment.”

Board Sets Annual Shareholders’ Meeting Date

The Board of Directors, at their January 28, 2009 meeting, established May 20, 2009 as the date for the Astoria Annual Meeting of Shareholders, with a voting record date of March 23, 2009.

Fourth Quarter and Full Year Earnings Summary

Net interest income for the quarter ended December 31, 2008 increased $7.9 million, or 7.4%, from the 2008 third quarter, and $33.0 million, or 40.3%, from the 2007 fourth quarter to $114.9 million.  For the year ended December 31, 2008, net interest income increased $61.9 million, or 18.5%, from December 31, 2007 to $395.4 million.

Astoria’s net interest margin for the quarter ended December 31, 2008 increased to 2.18%, 12 basis points above the 2008 third quarter and 61 basis points above the quarter ended December 31, 2007.   The interest rate spread for the 2008 fourth quarter increased to 2.08% from 1.96% for the 2008 third quarter and from 1.45% for the 2007 fourth quarter.  The increases were primarily due to decreases in the cost of interest bearing-liabilities.  During the 2008 fourth quarter, $1.8 billion of CDs (excluding Liquid CDs), with a weighted average rate of 4.07%, matured and $2.2 billion of CDs were issued or repriced with a weighted average rate of 3.59%.

For the year ended December 31, 2008, the net interest margin increased to 1.91% from 1.62% for the year ended December 31, 2007 due to the cost of interest-bearing liabilities declining more rapidly than the yield on interest-earning assets.

For the quarter ended December 31, 2008, a $45.0 million provision for loan losses was recorded compared to $13.0 million for the previous quarter and $2.0 million for the 2007 fourth quarter.  For the year ended December 31, 2008, the provisions for loan losses totaled $69.0 million compared to $2.5 million for 2007.  Commenting on the increased provision during 2008, Mr. Engelke noted, “The increase recognizes the rise in loan delinquencies, non-performing loans and charge-offs directly related to the continued deterioration in the housing market and increasing weakness in the overall economy, particularly, the accelerating pace of job losses.”

2

Non-interest income for the quarter ended December 31, 2008 totaled $19.2 million compared to $22.6 million, excluding a pre-tax OTTI non-cash charge of $20.5 million, for the comparable 2007 period.   For  the year ended December 31, 2008, non-interest income totaled $88.9 million, excluding a pre-tax OTTI non-cash charge of $77.7 million, compared to $96.3 million for the comparable 2007 period, excluding the aforementioned OTTI charge recorded in the 2007 fourth quarter.

General and administrative expense (“G&A”) for the quarter ended December 31, 2008 declined $2.6 million from the 2008 third quarter, and $2.7 million from the 2007 fourth quarter, to $56.2 million.  The linked quarter decrease is primarily due to decreased compensation and benefits expense and the year over year decrease is due to lower compensation and benefits expense, partially offset by increased advertising expense.   For the year ended December 31, 2008, G&A increased just $2.0 million from 2007, or less than 1%, to $233.3 million.

Balance Sheet Summary

For the 2008 fourth quarter, the loan portfolio remained essentially flat from the prior quarter and increased $557.4 million, or 3.5%, from December 31, 2007 and totaled $16.7 billion at December 31, 2008. Mortgage loan originations and purchases totaled $616.1 million for the quarter ended December 31, 2008 compared to $882.1 million for the 2007 fourth quarter.  For the year ended December 31, 2008, mortgage loan originations and purchases totaled $4.3 billion compared to $4.2 billion for 2007.

For the 2008 fourth quarter, the one-to-four family mortgage loan portfolio remained relatively flat from the prior quarter and increased $721.3 million, or 6.2%, from December 31, 2007 and totaled $12.3 billion at December 31, 2008.  One-to-four family loan originations and purchases totaled $449.9 million for the 2008 fourth quarter compared to $816.1 million for the 2007 fourth quarter.

One-to-four family loan originations and purchases totaled $3.8 billion for both of the years ended December 31, 2008 and 2007.  The loan-to-value ratio (“LTV”) of the 2008 one-to-four family loan production for portfolio averaged 57% at origination and the loan amount averaged approximately $675,000.

For the quarter ended December 31, 2008, the multi-family and commercial real estate (“CRE”) loan portfolio remained relatively flat from the prior quarter.  Loan originations totaled  $166.2 million compared to $66.0 million for the 2007 fourth quarter.

For the year ended December 31, 2008, multi-family and CRE loan originations totaled $514.2 million compared to $410.4 million for 2007.  At December 31, 2008, the combined multi-family and CRE loan portfolio totaled $3.9 billion, or 23% of total loans.   The loan-to-value ratio of the 2008 multi-family/CRE loan production averaged 56% at origination and the loan amount averaged approximately $2.0 million.

For the quarter and year ended December 31, 2008, deposits increased $370.7 million, or 11.3% annualized, and $430.5 million, or 3.3%, respectively, to $13.5 billion.  Total assets declined $191.3 million from the prior quarter and increased $262.7 million from December 31, 2007 and totaled $22.0 billion at December 31, 2008.

3

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		12/31/08		Cumulative % Change
Assets	$	22,700	$	22,672	$	22,462	$	22,380	$	21,719	$	21,982		( 3	%)
Loans	$	10,286	$	12,167	$	12,687	$	14,392	$	16,155	$	16,712		+ 62	%
Securities	$	10,763	$	8,013	$	8,448	$	6,572	$	4,371	$	4,037		(62	%)
Deposits	$	9,555	$	10,904	$	11,187	$	12,810	$	13,049	$	13,480		+ 41	%
Borrowings	$	11,528	$	9,826	$	9,632	$	7,938	$	7,185	$	6,965		(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		12/31/07		12/31/08		% Change			CAGR
Loans	$	66.28	$	89.36	$	107.51	$	137.11	$	168.76	$	174.30		163	%		11	%
Deposits	$	61.57	$	80.09	$	94.80	$	122.04	$	136.32	$	140.59		128	%		10	%

Stockholders’ equity was $1.2 billion, or 5.38% of total assets at December 31, 2008.  Astoria Federal continues to maintain capital ratios in excess of regulatory requirements with core, tangible and risk-based capital ratios of 6.39%, 6.39% and 12.02%, respectively, at December 31, 2008.

Asset Quality

Despite the increase in non-performing loans, overall asset quality remains strong.  Non-performing loans (“NPL”) totaled $238.6 million at December 31, 2008, an increase of $73.8 million from the previous quarter, and represent 1.09% of total assets.  At December 31, 2008, one-to-four family non-performing loans totaled $177.5 million and multi-family/CRE non-performing loans totaled $51.1 million, compared to $126.9 million and $33.6 million, respectively, at September 30, 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
At September 30, 2008	$	171.0	$	54.7	$	164.8	$	390.5
At December 31, 2008	$	229.8	$	70.1	$	238.6	$	538.5

4

The table below details, as of December 31, 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/DC	Total 1-4 Family Loans		% of 1-4 Family Loan Portfolio			Total 1-4  Family NPLs		NPLs as % of State/DC Total
New York Metro*	$	5,235.1		42	%	$	50.2		0.96	%
California	$	1,366.2		11	%	$	28.3		2.07	%
Illinois	$	1,305.7		11	%	$	21.8		1.67	%
Virginia	$	942.9		8	%	$	17.9		1.90	%
Maryland	$	879.1		7	%	$	21.2		2.41	%
Massachusetts	$	839.1		7	%	$	7.5		0.89	%
Florida	$	315.1		3	%	$	15.3		4.86	%
Washington	$	291.1		2	%	$	0.0		0.00	%
Georgia	$	162.0		1	%	$	2.5		1.54	%
Pennsylvania	$	131.4		1	%	$	1.7		1.29	%
Washington, D.C.	$	129.7		1	%	$	2.5		1.93	%
North Carolina	$	125.5		1	%	$	1.1		0.88	%
Total States 1% or More	$	11,722.9		95	%	$	170.0		1.45	%
Other States	$	626.7		5	%	$	7.5		1.20	%
Total 1-4 Family Portfolio	$	12,349.6		100	%	$	177.5		1.44	%
* NY, NJ, CT

Net loan charge-offs for the quarter and year ended December 31, 2008 totaled $12.3 million and $28.9 million, respectively, compared to $1.3 million and $3.5 million, respectively, for the comparable 2007 periods.  For the quarter and year ended December 31, 2008, one-to-four family net loan charge-offs totaled $6.8 million and $17.1 million, respectively, compared to $1.1 million and $1.3 million, respectively, for the comparable 2007 periods.  Commenting on asset quality, Mr. Engelke noted, “As a residential lender, we are vulnerable to the impact of a severe job loss recession.  The significant increase in job losses and unemployment in the 2008 fourth quarter had a negative impact on the financial condition of prime residential borrowers and their ability to remain current on their mortgage loans.”

Company Declines to Participate in the U.S. Treasury’s Capital Purchase Program

           Astoria Financial Corporation has elected not to participate in the U.S. Treasury’s Capital Purchase Program (“CPP”)after fully evaluating the related costs and benefits, as well as the potential impact on the long-term value of its shares.  The Company disclosed on December 8, 2008 that it had received preliminary approval to issue up to $375 million of preferred stock and related warrants to the U.S. Treasury under the CPP.  Commenting on the Company’s decision, Mr. Engelke stated, “Based on the well-capitalized position of the Bank, with core, tangible and risk-based capital ratios of 6.39%, 6.39%, and 12.02%, respectively, the Board determined that the CPP would provide no material benefit to our shareholders and therefore, it would be in our shareholders’ best interests to decline the opportunity to participate.”

5

Future Outlook

Commenting on the outlook for 2009, Mr. Engelke stated, “The year ahead presents us with both opportunities and challenges.  With respect to our fundamental operating performance, we expect that loan growth will continue in 2009 as the opportunity for portfolio lending remains strong.  Tighter underwriting standards coupled with wider spreads present us with an opportunity to increase the loan portfolio with top quality loans.   We expect deposit growth in 2009 will continue, particularly as the intense competition for core community deposits in 2008 has recently abated.

Industry-wide increases in pension costs and FDIC insurance premiums coupled with potentially reduced dividends on Federal Home Loan Bank of New York stock will reduce 2009 earnings.  Additionally, continued weakness in the real estate market exacerbated by a severe downturn in the economy presents challenges for all financial institutions in the year ahead.  Although our mortgage loan delinquencies and foreclosures have increased, the portfolio remains strong, with non-performing loans representing just 109 basis points of total assets.  However, continued job losses coupled with declining real estate values will put increased pressure on the loan portfolio which, more than likely, will result in higher delinquencies and non-performing loans in 2009.

The Company expects to maintain its tangible capital ratio target at between 4.50% and 4.75% and the Bank’s core and tangible ratios in excess of 6%.  In addition, as a part of its capital management, the Company expects to consider alternatives, such as the offer and sale of equity or debt securities, subject to market conditions and the Company’s capital needs.”

 Astoria Financial Corporation, with assets of $22.0 billion, is the holding company for Astoria Federal Savings and Loan Association.  Established in 1888, Astoria Federal, with deposits in New York totaling $13.5 billion, is the largest thrift depository headquartered in New York and embraces its philosophy of “Putting people first” by providing the customers and local communities it serves with quality financial products and services through 85 convenient banking office locations and multiple delivery channels, including its enhanced website, www.astoriafederal.com. Astoria Federal commands the fourth largest deposit market share in the attractive Long Island market, which includes Brooklyn, Queens, Nassau, and Suffolk counties with a population exceeding that of 38 individual states.  Astoria Federal originates mortgage loans through its banking and loan production offices in New York, an extensive broker network covering eighteen states, primarily the East Coast, and the District of Columbia, and through correspondent relationships covering nineteen states and the District of Columbia.

Earnings Conference Call January 29, 2009 at 10:00 a.m. (ET)

The Company, as previously announced, indicated that Mr. Engelke will host an earnings conference call Thursday morning, January 29, 2009 at 10:00 a.m. (ET).  The toll-free dial-in number is (888) 562-3356, conference ID # 78667060.  A telephone replay will be available on January 29, 2009 from 1:00 p.m. (ET) through Friday, February 6, 2009, 11:59 p.m. (ET).  The replay number is (800) 642-1687, ID #78667060.  The conference call will also be simultaneously webcast on the Company’s website www.astoriafederal.com and archived for one year.

6

Forward Looking Statements

This document contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements may be identified by the use of such words as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” and similar terms and phrases, including references to assumptions.

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

Tables Follow

7

				Page 8
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In Thousands, Except Share Data)
	At			At
	December 31,			December 31,
	2008			2007
ASSETS
Cash and due from banks	$	76,233		$	93,972
Repurchase agreements		24,060			24,218
Securities available-for-sale		1,390,440			1,313,306
Securities held-to-maturity
(fair value of $2,643,955 and $3,013,014, respectively)		2,646,862			3,057,544
Federal Home Loan Bank of New York stock, at cost		211,900			201,490
Loans held-for-sale, net		5,272			6,306
Loans receivable:
Mortgage loans, net		16,372,383			15,791,962
Consumer and other loans, net		340,061			363,052
		16,712,444			16,155,014
Allowance for loan losses		(119,029	)		(78,946	)
Total loans receivable, net		16,593,415			16,076,068
Mortgage servicing rights, net		8,216			12,910
Accrued interest receivable		79,589			79,132
Premises and equipment, net		139,828			139,563
Goodwill		185,151			185,151
Bank owned life insurance		401,280			398,280
Other assets		219,865			131,428
TOTAL ASSETS	$	21,982,111		$	21,719,368
LIABILITIES
Deposits	$	13,479,924		$	13,049,438
Reverse repurchase agreements		2,850,000			3,730,000
Federal Home Loan Bank of New York advances		3,738,000			3,058,000
Other borrowings, net		377,274			396,658
Mortgage escrow funds		133,656			129,412
Accrued expenses and other liabilities		221,488			144,516
TOTAL LIABILITIES		20,800,342			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 95,881,132 and 95,728,562 shares
outstanding, respectively)		1,665			1,665
Additional paid-in capital		856,021			846,227
Retained earnings		1,864,257			1,883,902
Treasury stock (70,613,756 and 70,766,326 shares, at cost, respectively)		(1,459,211	)		(1,459,865	)
Accumulated other comprehensive loss		(61,865	)		(39,476	)
Unallocated common stock held by ESOP
(5,212,668 and 5,761,391 shares, respectively)		(19,098	)		(21,109	)
TOTAL STOCKHOLDERS' EQUITY		1,181,769			1,211,344
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	21,982,111		$	21,719,368

										Page 9
ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Share Data)
	For the Three Months Ended						For the Twelve Months Ended
	December 31,						December 31,
	2008			2007			2008			2007
Interest income:
Mortgage loans:
One-to-four family	$	168,298		$	159,134		$	637,297		$	587,863
Multi-family, commercial real estate
and construction		57,939			62,376			234,922			254,536
Consumer and other loans		3,613			6,700			17,325			30,178
Mortgage-backed and other securities		45,218			50,913			185,160			219,040
Federal funds sold and repurchase agreements		71			259			1,939			2,071
Federal Home Loan Bank of New York stock		1,895			3,388			13,068			11,634
Total interest income		277,034			282,770			1,089,711			1,105,322
Interest expense:
Deposits		92,876			114,635			393,897			456,039
Borrowings		69,213			86,202			300,430			315,755
Total interest expense		162,089			200,837			694,327			771,794
Net interest income		114,945			81,933			395,384			333,528
Provision for loan losses		45,000			2,000			69,000			2,500
Net interest income after provision for loan losses		69,945			79,933			326,384			331,028
Non-interest income:
Customer service fees		14,828			15,713			62,489			62,961
Other loan fees		929			1,258			3,985			4,739
Gain on sales of securities		-			216			-			2,208
Other-than-temporary impairment write-down of securities		-			(20,484	)		(77,696	)		(20,484	)
Mortgage banking (loss) income, net		(2,201	)		(661	)		(457	)		1,334
Income from bank owned life insurance		4,063			4,381			16,733			17,109
Other		1,589			1,685			6,126			7,923
Total non-interest income		19,208			2,108			11,180			75,790
Non-interest expense:
General and administrative:
Compensation and benefits		28,886			32,279			124,846			124,036
Occupancy, equipment and systems		16,342			16,580			66,553			65,754
Federal deposit insurance premiums		545			393			2,213			1,595
Advertising		2,147			1,281			7,116			6,563
Other		8,325			8,369			32,532			33,325
Total non-interest expense		56,245			58,902			233,260			231,273
Income before income tax expense		32,908			23,139			104,304			175,545
Income tax expense		3,460			3,466			28,962			50,723
Net income	$	29,448		$	19,673		$	75,342		$	124,822
Basic earnings per common share	$	0.33		$	0.22		$	0.84		$	1.38
Diluted earnings per common share	$	0.33		$	0.22		$	0.83		$	1.36
Basic weighted average common shares		89,749,299			89,680,349			89,580,322			90,490,118
Diluted weighted average common and common
equivalent shares		90,306,377			91,117,693			90,687,902			92,092,725

Page 10

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

SELECTED FINANCIAL RATIOS AND OTHER DATA

	For the Three Months Ended December 31,						At or For the Twelve Months Ended December 31,
	2008			2007			2008			2007
	(Annualized)
Selected Returns and Financial Ratios
Return on average stockholders' equity		9.90	%		6.55	%		6.24	%		10.39	%
Return on average tangible stockholders' equity (1)		11.72			7.74			7.37			12.28
Return on average assets		0.53			0.36			0.35			0.58
General and administrative expense to average assets		1.02			1.08			1.07			1.07
Efficiency ratio (2)		41.93			70.09			57.37			56.50
Net interest rate spread (3)		2.08			1.45			1.80			1.50
Net interest margin (4)		2.18			1.57			1.91			1.62
Selected Non-GAAP Returns and Financial Ratios (5)
Non-GAAP return on average stockholders' equity		7.42	%		10.98	%		10.42	%		11.50	%
Non-GAAP return on average tangible stockholders' equity (1)		8.78			12.98			12.30			13.59
Non-GAAP return on average assets		0.40			0.61			0.58			0.64
Non-GAAP efficiency ratio (2)		41.93			56.35			48.17			53.81
Dividend payout ratio		108.33			72.22			74.82			69.33
Asset Quality Data (dollars in thousands) (6)
Non-performing assets							$	264,101		$	77,191
Non-performing loans								238,620			68,076
Loans delinquent 90 days or more and still accruing interest								33			474
Non-accrual loans								238,587			67,602
Loans 60-89 days delinquent								70,062			39,081
Loans 30-59 days delinquent								229,834			144,425
Net charge-offs	$	12,289		$	1,308			28,917			3,496
Non-performing loans/total loans								1.43	%		0.42	%
Non-performing loans/total assets								1.09			0.31
Non-performing assets/total assets								1.20			0.36
Allowance for loan losses/non-performing loans								49.88			115.97
Allowance for loan losses/non-accrual loans								49.89			116.78
Allowance for loan losses/total loans								0.71			0.49
Net charge-offs to average loans outstanding		0.29	%		0.03	%		0.18			0.02
Capital Ratios (AstoriaFederal)
Tangible								6.39	%		6.58	%
Core								6.39			6.58
Risk-based								12.02			12.04
Other Data
Cash dividends paid per common share	$	0.26		$	0.26		$	1.04		$	1.04
Book value per share (7)								13.03			13.46
Tangible book value per share (8)								10.99			11.41
Tangible stockholders' equity/tangible assets (1) (9)								4.57	%		4.77	%
Mortgage loans serviced for others (in thousands)							$	1,225,656		$	1,272,220
Full time equivalent employees								1,575			1,615

(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) The information presented for the three and twelve months ended December 31, 2008 and 2007 represents pro forma calculations which are not in conformity with U.S. generally accepted accounting principles, or GAAP.  The information excludes the other-than-temporary impairment write-down of securities charges and related tax effects recorded in 2008  and 2007.  See page 14 for a reconciliation of GAAP net income to non-GAAP net income for the three and twelve months ended December 31, 2008 and 2007.

(6) Loans totaling $38.3 million have been reclassified from non-accrual to 60-89 days delinquent as of December 31, 2007 to conform the December 31, 2007 information to the current year presentation.  The related December 31, 2007 asset quality ratios have been revised as necessary.

(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.

Page 11

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS

(Dollars in Thousands)

	For the Three Months Ended December 31,
	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	$	12,500,269		$	168,298		5.39	%	$	11,660,354		$	159,134		5.46	%
Multi-family, commercial real
estate and construction		3,927,039			57,939		5.90			4,106,141			62,376		6.08
Consumer and other loans (1)		339,951			3,613		4.25			369,314			6,700		7.26
Total loans		16,767,259			229,850		5.48			16,135,809			228,210		5.66
Mortgage-backed and other securities (2)		4,101,024			45,218		4.41			4,506,034			50,913		4.52
Repurchase agreements		37,974			71		0.75			22,229			259		4.66
Federal Home Loan Bank stock		223,571			1,895		3.39			199,389			3,388		6.80
Total interest-earning assets		21,129,828			277,034		5.24			20,863,461			282,770		5.42
Goodwill		185,151								185,151
Other non-interest-earning assets		774,382								744,171
Total assets	$	22,089,361							$	21,792,783
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings	$	1,830,246			1,866		0.41		$	1,914,907			1,949		0.41
Money market		294,471			775		1.05			340,611			847		0.99
NOW and demand deposit		1,449,421			323		0.09			1,448,161			312		0.09
Liquid certificates of deposit		1,019,222			6,210		2.44			1,444,935			16,074		4.45
Total core deposits		4,593,360			9,174		0.80			5,148,614			19,182		1.49
Certificates of deposit		8,602,462			83,702		3.89			7,919,713			95,453		4.82
Total deposits		13,195,822			92,876		2.82			13,068,327			114,635		3.51
Borrowings		7,312,640			69,213		3.79			7,165,719			86,202		4.81
Total interest-bearing liabilities		20,508,462			162,089		3.16			20,234,046			200,837		3.97
Non-interest-bearing liabilities		390,758								356,703
Total liabilities		20,899,220								20,590,749
Stockholders' equity		1,190,141								1,202,034
Total liabilities and stockholders' equity	$	22,089,361							$	21,792,783
Net interest income/net interest
rate spread				$	114,945		2.08	%				$	81,933		1.45	%
Net interest-earning assets/net
interest margin	$	621,366					2.18	%	$	629,415					1.57	%
Ratio of interest-earning assets
to interest-bearing liabilities		1.03	x							1.03	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.

Page 12

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

AVERAGE BALANCE SHEETS

(Dollars in Thousands)

	For the Twelve Months Ended December 31,
	2008								2007
						Average								Average
	Average					Yield/			Average					Yield/
	Balance			Interest		Cost			Balance			Interest		Cost
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family	$	11,962,010		$	637,297		5.33	%	$	10,995,688		$	587,863		5.35	%
Multi-family, commercial real
estate and construction		3,947,413			234,922		5.95			4,171,915			254,536		6.10
Consumer and other loans (1)		345,019			17,325		5.02			397,476			30,178		7.59
Total loans		16,254,442			889,544		5.47			15,565,079			872,577		5.61
Mortgage-backed and other securities (2)		4,194,320			185,160		4.41			4,850,753			219,040		4.52
Federal funds sold and repurchase agreements		88,650			1,939		2.19			39,838			2,071		5.20
Federal Home Loan Bank stock		207,535			13,068		6.30			167,651			11,634		6.94
Total interest-earning assets		20,744,947			1,089,711		5.25			20,623,321			1,105,322		5.36
Goodwill		185,151								185,151
Other non-interest-earning assets		820,216								753,377
Total assets	$	21,750,314							$	21,561,849
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Savings	$	1,863,622			7,551		0.41		$	2,014,253			8,126		0.40
Money market		311,910			3,189		1.02			379,634			3,780		1.00
NOW and demand deposit		1,470,402			1,290		0.09			1,465,463			951		0.06
Liquid certificates of deposit		1,225,153			36,792		3.00			1,549,774			73,352		4.73
Total core deposits		4,871,087			48,822		1.00			5,409,124			86,209		1.59
Certificates of deposit		8,192,114			345,075		4.21			7,823,767			369,830		4.73
Total deposits		13,063,201			393,897		3.02			13,232,891			456,039		3.45
Borrowings		7,069,155			300,430		4.25			6,776,394			315,755		4.66
Total interest-bearing liabilities		20,132,356			694,327		3.45			20,009,285			771,794		3.86
Non-interest-bearing liabilities		410,082								351,080
Total liabilities		20,542,438								20,360,365
Stockholders' equity		1,207,876								1,201,484
Total liabilities and stockholders' equity	$	21,750,314							$	21,561,849
Net interest income/net interest
rate spread				$	395,384		1.80	%				$	333,528		1.50	%
Net interest-earning assets/net
interest margin	$	612,591					1.91	%	$	614,036					1.62	%
Ratio of interest-earning assets
to interest-bearing liabilities		1.03	x							1.03	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.

Page 13

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES
END OF PERIOD BALANCES AND RATES
(Dollars in Thousands)
	At December 31, 2008					At September 30, 2008					At December 31, 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	$	12,349,617		5.65	%	$	12,359,266		5.65	%	$	11,628,270		5.70	%
Multi-family, commercial real estate
and construction		3,909,619		5.98			3,913,075		5.92			4,055,081		5.92
Mortgage-backed and other securities (3)		4,037,302		4.34			4,159,133		4.35			4,370,850		4.33
Interest-bearing liabilities:
Savings		1,832,790		0.40			1,842,781		0.40			1,891,618		0.40
Money market		289,135		1.03			302,760		1.06			333,914		0.98
NOW and demand deposit		1,466,916		0.06			1,440,230		0.06			1,478,362		0.06
Liquid certificates of deposit		981,733		2.32			1,075,485		2.47			1,447,341		4.40
Total core deposits		4,570,574		0.74			4,661,256		0.82			5,151,235		1.46
Certificates of deposit		8,909,350		3.83			8,447,927		3.92			7,898,203		4.79
Total deposits		13,479,924		2.78			13,109,183		2.82			13,049,438		3.48
Borrowings, net		6,965,274		3.72			7,500,224		3.86			7,184,658		4.66

(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.

Page 14

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (1)

 (In Thousands, Except Per Share Data)

Non-GAAP net income, non-GAAP earnings per share and non-GAAP returns, representing net income and earnings per share determined in accordance with GAAP excluding the effects of the after-tax charges noted below, provide a meaningful comparison for effectively evaluating Astoria's operating results.

		For the Three Months Ended							For the Twelve Months Ended
		December 31, 2008							December 31, 2008
		GAAP		Adjustments (2)	Non-GAAP (1)				GAAP		Adjustments (2)	Non-GAAP (1)
Net interest income	$	114,945	$	-	$	114,945		$	395,384	$	-	$	395,384
Provision for loan losses		45,000		-		45,000			69,000		-		69,000
Net interest income after provision for loan losses		69,945		-		69,945			326,384		-		326,384
Non-interest income		19,208		-		19,208			11,180		77,696		88,876
Non-interest expense		56,245		-		56,245			233,260		-		233,260
Income before income tax expense		32,908		-		32,908			104,304		77,696		182,000
Income tax expense		3,460		7,378		10,838			28,962		27,194		56,156
Net income	$	29,448	$	(7,378)	$	22,070		$	75,342	$	50,502	$	125,844
Basic earnings per common share	$	0.33	$	(0.08)	$	0.25		$	0.84	$	0.56	$	1.40
Diluted earnings per common share	$	0.33	$	(0.08)	$	0.24	(3)	$	$0.83	$	0.56	$	1.39

		For the Three Months Ended							For the Twelve Months Ended
		December 31, 2007							December 31, 2007
		GAAP		Adjustments (4)	Non-GAAP (1)				GAAP		Adjustments (4)	Non-GAAP (1)
Net interest income	$	81,933	$	$         -	$	81,933		$	333,528	$	$         -	$	333,528
Provision for loan losses		2,000		-		2,000			2,500		-		2,500
Net interest income after provision for loan losses		79,933		-		79,933			331,028		-		331,028
Non-interest income		2,108		20,484		22,592			75,790		20,484		96,274
Non-interest expense		58,902		-		58,902			231,273		-		231,273
Income before income tax expense		23,139		20,484		43,623			175,545		20,484		196,029
Income tax expense		3,466		7,169		10,635			50,723		7,169		57,892
Net income	$	$19,673	$	$13,315	$	32,988			124,822	$	$13,315	$	138,137
Basic earnings per common share	$	$0.22	$	0.15	$	0.37		$	1.38	$	0.15	$	1.53
Diluted earnings per common share	$	$0.22	$	0.15	$	0.36	(3)	$	1.36	$	0.14	$	1.50

(1)  Non-GAAP net income is also referred to as operating income and operating EPS throughout this release.

(2)  Adjustments relate to the other-than-temporary impairment write-down of securities charge and the related tax effects recorded in the 2008 third quarter and subsequent tax adjustment recorded in the 2008 fourth quarter as a result of tax changes due to the enactment of the Emergency Economic Stabilization Act in October 2008.

(3)  Figures do not cross foot due to rounding.

(4)  Adjustments relate to the other-than-temporary impairment write-down of securities charge and the related tax effects recorded in the 2007 fourth quarter.