10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

OR

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

For the transition period from                             to                                     

Commission file number 001-11967

ASTORIA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

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

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

(516) 327-3000

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all the reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES x NO ¨

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

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

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

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

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

Classes of Common Stock	Number of Shares Outstanding, July 28, 2011
$.01 Par Value	98,546,557

		Page
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Consolidated Statements of Financial Condition at June 30, 2011and December 31, 2010	2
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2011 and 2010	3
	Consolidated Statement of Changes in Stockholders' Equity for the Six Months Ended June 30, 2011	4
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	60
Item 4.	Controls and Procedures	63
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	(Removed and Reserved)	65
Item 5.	Other Information	65
Item 6.	Exhibits	65
Signatures		66

1

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

	(Unaudited)
(In Thousands, Except Share Data)	At June 30, 2011				At December 31, 2010
Assets:
Cash and due from banks		$	107,980			$	67,476
Repurchase agreements			-				51,540
Available-for-sale securities:
Encumbered			350,387				516,540
Unencumbered			98,153				45,413
Total available-for-sale securities			448,540				561,953
Held-to-maturity securities, fair value of $2,014,151 and $2,042,110, respectively:
Encumbered			1,748,892				1,817,431
Unencumbered			217,944				186,353
Total held-to-maturity securities			1,966,836				2,003,784
Federal Home Loan Bank of New York stock, at cost			129,025				149,174
Loans held-for-sale, net			15,393				44,870
Loans receivable			13,507,579				14,223,047
Allowance for loan losses			(182,717	)			(201,499	)
Loans receivable, net			13,324,862				14,021,548
Mortgage servicing rights, net			9,356				9,204
Accrued interest receivable			53,070				55,492
Premises and equipment, net			119,049				133,362
Goodwill			185,151				185,151
Bank owned life insurance			405,875				410,418
Real estate owned, net			59,323				63,782
Other assets			295,875				331,515
Total assets		$	17,120,335			$	18,089,269
Liabilities:
Deposits:
Savings		$	2,838,239			$	2,664,859
Money market			397,148				376,302
NOW and demand deposit			1,809,863				1,774,790
Liquid certificates of deposit			363,393				468,730
Certificates of deposit			5,801,977				6,314,319
Total deposits			11,210,620				11,599,000
Reverse repurchase agreements			1,900,000				2,100,000
Federal Home Loan Bank of New York advances			2,008,000				2,391,000
Other borrowings, net			378,389				378,204
Mortgage escrow funds			118,915				109,374
Accrued expenses and other liabilities			225,880				269,911
Total liabilities			15,841,804				16,847,489
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 98,488,313 and 97,877,469 shares outstanding, respectively)			1,665				1,665
Additional paid-in capital			864,948				864,744
Retained earnings			1,863,727				1,848,095
Treasury stock (68,006,575 and 68,617,419 shares, at cost, respectively)			(1,405,333	)			(1,417,956	)
Accumulated other comprehensive loss			(35,378	)			(42,161	)
Unallocated common stock held by ESOP (3,029,138 and 3,441,130 shares, respectively)			(11,098	)			(12,607	)
Total stockholders' equity			1,278,531				1,241,780
Total liabilities and stockholders' equity		$	17,120,335			$	18,089,269

See accompanying Notes to Consolidated Financial Statements.

2

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

	For the						For the
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In Thousands, Except Share Data)	2011			2010			2011			2010
Interest income:
One-to-four family mortgage loans		$	111,869		$	136,750		$	226,545		$	277,704
Multi-family, commercial real estate and construction mortgage loans			41,085			49,598			85,577			100,723
Consumer and other loans			2,509			2,668			5,016			5,319
Mortgage-backed and other securities			21,339			29,636			43,762			60,983
Repurchase agreements and interest-earning cash accounts			74			54			167			69
Federal Home Loan Bank of New York stock			1,637			1,921			3,954			4,417
Total interest income			178,513			220,627			365,021			449,215
Interest expense:
Deposits			35,638			49,496			72,670			103,038
Borrowings			47,153			59,182			95,100			119,876
Total interest expense			82,791			108,678			167,770			222,914
Net interest income			95,722			111,949			197,251			226,301
Provision for loan losses			10,000			35,000			17,000			80,000
Net interest income after provision for loan losses			85,722			76,949			180,251			146,301
Non-interest income:
Customer service fees			12,107			13,372			23,829			26,665
Other loan fees			805			866			1,737			1,572
Mortgage banking income, net			370			600			2,803			2,157
Income from bank owned life insurance			2,629			2,376			4,864			4,352
Other			1,129			5,958			1,850			7,118
Total non-interest income			17,040			23,172			35,083			41,864
Non-interest expense:
General and administrative:
Compensation and benefits			37,168			34,634			73,701			69,885
Occupancy, equipment and systems			15,923			16,637			32,489			33,086
Federal deposit insurance premiums			11,178			6,616			16,692			13,213
Advertising			2,049			994			3,733			2,814
Other			9,636			16,947			18,958			25,089
Total non-interest expense			75,954			75,828			145,573			144,087
Income before income tax expense			26,808			24,293			69,761			44,078
Income tax expense			9,963			8,747			25,532			15,606
Net income		$	16,845		$	15,546		$	44,229		$	28,472
Basic earnings per common share		$	0.18		$	0.17		$	0.46		$	0.30
Diluted earnings per common share		$	0.18		$	0.17		$	0.46		$	0.30
Basic weighted average common shares			92,949,206			91,621,997			92,842,398			91,541,675
Diluted weighted average common and common equivalent shares			92,949,206			91,621,997			92,842,398			91,541,742

See accompanying Notes to Consolidated Financial Statements.

3

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders' Equity (Unaudited)

For the Six Months Ended June 30, 2011

															Accumulated				Unallocated
						Additional									Other				Common
				Common		Paid-in			Retained			Treasury			Comprehensive				Stock Held
(In Thousands, Except Share Data)	Total			Stock		Capital			Earnings			Stock			Loss				by ESOP
Balance at December 31, 2010	$	1,241,780		$	1,665	$	864,744		$	1,848,095		$	(1,417,956	)		$	(42,161	)	$	(12,607	)
Comprehensive income:
Net income		44,229			-		-			44,229			-				-			-
Other comprehensive income, net of tax:
Net unrealized gain on securities		3,876			-		-			-			-				3,876			-
Reclassification of prior service cost		30			-		-			-			-				30			-
Reclassification of net actuarial loss		2,782			-		-			-			-				2,782			-
Reclassification of loss on cash flow hedge		95			-		-			-			-				95			-
Comprehensive income		51,012
Dividends on common stock ($0.26 per share)		(24,707	)		-		-			(24,707	)		-				-			-
Restricted stock grants (615,650 shares)		-			-		(8,796	)		(3,926	)		12,722				-			-
Forfeitures of restricted stock (4,806 shares)		-			-		65			34			(99	)			-			-
Stock-based compensation		4,541			-		4,539			2			-				-			-
Net tax benefit excess from stock-based compensation		67			-		67			-			-				-			-
Allocation of ESOP stock		5,838			-		4,329			-			-				-			1,509
Balance at June 30, 2011	$	1,278,531		$	1,665	$	864,948		$	1,863,727		$	(1,405,333	)		$	(35,378	)	$	(11,098	)

See accompanying Notes to Consolidated Financial Statements.

4

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

	For the Six Months Ended
	June 30,
(In Thousands)	2011				2010
Cash flows from operating activities:
Net income		$	44,229			$	28,472
Adjustments to reconcile net income to net cash provided by operating activities:
Net premium amortization on loans			13,217				16,207
Net amortization on securities and borrowings			3,070				870
Net provision for loan and real estate losses			18,626				80,829
Depreciation and amortization			5,795				5,593
Net gain on sales of loans			(1,814	)			(1,973	)
Net loss (gain) on dispositions of premises and equipment			270				(13	)
Other asset impairment charges			441				1,612
Originations of loans held-for-sale			(88,947	)			(115,237	)
Proceeds from sales and principal repayments of loans held-for-sale			119,055				123,299
Stock-based compensation and allocation of ESOP stock			10,379				9,385
Decrease in accrued interest receivable			2,422				468
Mortgage servicing rights amortization and valuation allowance adjustments, net			1,120				1,486
Bank owned life insurance income and insurance proceeds received, net			4,543				(4,352	)
Decrease (increase) in other assets			33,295				(25,711	)
(Decrease) increase in accrued expenses and other liabilities			(39,689	)			13,737
Net cash provided by operating activities			126,012				134,672
Cash flows from investing activities:
Originations of loans receivable			(966,649	)			(1,406,022	)
Loan purchases through third parties			(420,750	)			(245,332	)
Principal payments on loans receivable			1,991,150				1,901,613
Proceeds from sales of delinquent and non-performing loans			16,319				22,987
Purchases of securities held-to-maturity			(356,744	)			(390,890	)
Principal payments on securities held-to-maturity			390,802				699,839
Principal payments on securities available-for-sale			119,294				135,917
Net redemptions (purchases) of Federal Home Loan Bank of New York stock			20,149				(6,839	)
Proceeds from sales of real estate owned, net			47,612				44,428
Purchases of premises and equipment			(6,148	)			(4,678	)
Proceeds from sales of premises and equipment			14,396				-
Net cash provided by investing activities			849,431				751,023
Cash flows from financing activities:
Net decrease in deposits			(388,380	)			(563,797	)
Net increase (decrease) in borrowings with original terms of three months or less			58,000				(90,000	)
Proceeds from borrowings with original terms greater than three months			-				525,000
Repayments of borrowings with original terms greater than three months			(641,000	)			(500,000	)
Net increase in mortgage escrow funds			9,541				17,542
Cash dividends paid to stockholders			(24,707	)			(24,349	)
Cash received for options exercised			-				112
Net tax benefit excess from stock-based compensation			67				124
Net cash used in financing activities			(986,479	)			(635,368	)
Net (decrease) increase in cash and cash equivalents			(11,036	)			250,327
Cash and cash equivalents at beginning of period			119,016				111,570
Cash and cash equivalents at end of period		$	107,980			$	361,897
Supplemental disclosures:
Interest paid		$	169,147			$	223,801
Income taxes paid		$	34,920			$	37,605
Additions to real estate owned		$	44,779			$	46,565
Loans transferred to held-for-sale		$	17,397			$	34,528

See accompanying Notes to Consolidated Financial Statements.

5

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

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

In addition to Astoria Federal and AF Insurance Agency, Inc., we have another subsidiary, Astoria Capital Trust I, which is not consolidated with Astoria Financial Corporation for financial reporting purposes.  Astoria Capital Trust I was formed for the purpose of issuing $125.0 million aggregate liquidation amount of 9.75% Capital Securities due November 1, 2029, or Capital Securities, and $3.9 million of common securities which are owned by Astoria Financial Corporation, and using the proceeds to acquire Junior Subordinated Debentures issued by Astoria Financial Corporation.  The Junior Subordinated Debentures total $128.9 million, have an interest rate of 9.75%, mature on November 1, 2029 and are the sole assets of Astoria Capital Trust I.  The Junior Subordinated Debentures are prepayable, in whole or in part, at our option at declining premiums to November 1, 2019, after which the Junior Subordinated Debentures are prepayable at par value.  The Capital Securities have the same prepayment provisions as the Junior Subordinated Debentures.  Astoria Financial Corporation has fully and unconditionally guaranteed the Capital Securities along with all obligations of Astoria Capital Trust I under the trust agreement relating to the Capital Securities.  See Note 9 of Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of our 2010 Annual Report on Form 10-K for restrictions on our subsidiaries’ ability to pay dividends to us.

In our opinion, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial condition as of June 30, 2011 and December 31, 2010, our results of operations for the three and six months ended June 30, 2011 and 2010, changes in our stockholders’ equity for the six months ended June 30, 2011 and our cash flows for the six months ended June 30, 2011 and 2010.  In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities for the consolidated statements of financial condition as of June 30, 2011 and December 31, 2010, and amounts of revenues and expenses in the consolidated statements of income for the three and six months ended June 30, 2011 and 2010.  The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results of operations to be expected for the remainder of the year.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.  Past maturity certificates of deposit which do not have automatic renewal provisions and earn interest at the savings account rate upon maturity have been reclassified from certificate of deposit accounts to savings accounts.

6

These consolidated financial statements should be read in conjunction with our December 31, 2010 audited consolidated financial statements and related notes included in our 2010 Annual Report on Form 10-K.

2. Securities

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

	At June 30, 2011
(In Thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)		$	376,143		$	16,099		$	-			$	392,242
Non-GSE issuance REMICs and CMOs			18,611			1			(324	)			18,288
GSE pass-through certificates			26,231			1,024			(5	)			27,250
Total residential mortgage-backed securities			420,985			17,124			(329	)			437,780
Freddie Mac and Fannie Mae stock			15			10,760			(15	)			10,760
Total securities available-for-sale		$	421,000		$	27,884		$	(344	)		$	448,540
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	1,887,220		$	47,271		$	(392	)		$	1,934,099
Non-GSE issuance REMICs and CMOs			22,991			184			-				23,175
GSE pass-through certificates			611			43			-				654
Total residential mortgage-backed securities			1,910,822			47,498			(392	)			1,957,928
Obligations of GSEs			52,866			210			(68	)			53,008
Obligations of states and political subdivisions			3,148			67			-				3,215
Total securities held-to-maturity		$	1,966,836		$	47,775		$	(460	)		$	2,014,151

(1) Government-sponsored enterprise

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

	At December 31, 2010
(In Thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	490,302		$	18,931		$	-			$	509,233
Non-GSE issuance REMICs and CMOs			21,023			3			(362	)			20,664
GSE pass-through certificates			28,784			1,114			(2	)			29,896
Total residential mortgage-backed securities			540,109			20,048			(364	)			559,793
Freddie Mac and Fannie Mae stock			15			2,160			(15	)			2,160
Total securities available-for-sale		$	540,124		$	22,208		$	(379	)		$	561,953
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	1,933,650		$	47,191		$	(8,734	)		$	1,972,107
Non-GSE issuance REMICs and CMOs			40,363			352			(66	)			40,649
GSE pass-through certificates			772			51			-				823
Total residential mortgage-backed securities			1,974,785			47,594			(8,800	)			2,013,579
Obligations of GSEs			25,000			-			(468	)			24,532
Obligations of states and political subdivisions			3,999			-			-				3,999
Total securities held-to-maturity		$	2,003,784		$	47,594		$	(9,268	)		$	2,042,110

7

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

	At June 30, 2011
	Less Than Twelve Months							Twelve Months or Longer							Total
				Gross							Gross							Gross
	Estimated			Unrealized				Estimated			Unrealized				Estimated			Unrealized
(In Thousands)	Fair Value			Losses				Fair Value			Losses				Fair Value			Losses
Available-for-sale:
Non-GSE issuance REMICs and CMOs		$	534		$	(7	)		$	17,651		$	(317	)		$	18,185		$	(324	)
GSE pass-through certificates			824			(5	)			-			-				824			(5	)
Freddie Mac and Fannie Mae stock			-			-				-			(15	)			-			(15	)
Total temporarily impaired securities available-for-sale		$	1,358		$	(12	)		$	17,651		$	(332	)		$	19,009		$	(344	)
Held-to-maturity:
GSE issuance REMICs and CMOs		$	196,263		$	(392	)		$	-		$	-			$	196,263		$	(392	)
Obligations of GSEs			24,932			(68	)			-			-				24,932			(68	)
Total temporarily impaired securities held-to-maturity		$	221,195		$	(460	)		$	-		$	-			$	221,195		$	(460	)

	At December 31, 2010
	Less Than Twelve Months							Twelve Months or Longer							Total
				Gross							Gross							Gross
	Estimated			Unrealized				Estimated			Unrealized				Estimated			Unrealized
(In Thousands)	Fair Value			Losses				Fair Value			Losses				Fair Value			Losses
Available-for-sale:
Non-GSE issuance REMICs and CMOs		$	276		$	(2	)		$	19,991		$	(360	)		$	20,267		$	(362	)
GSE pass-through certificates			1,775			(2	)			-			-				1,775			(2	)
Freddie Mac and Fannie Mae stock			-			-				-			(15	)			-			(15	)
Total temporarily impaired securities available-for-sale		$	2,051		$	(4	)		$	19,991		$	(375	)		$	22,042		$	(379	)
Held-to-maturity:
GSE issuance REMICs and CMOs		$	484,366		$	(8,734	)		$	-		$	-			$	484,366		$	(8,734	)
Non-GSE issuance REMICs and CMOs			-			-				1,744			(66	)			1,744			(66	)
Obligations of GSEs			24,532			(468	)			-			-				24,532			(468	)
Total temporarily impaired securities held-to-maturity		$	508,898		$	(9,202	)		$	1,744		$	(66	)		$	510,642		$	(9,268	)

We held 41 securities which had an unrealized loss at June 30, 2011 and 59 at December 31, 2010.  At June 30, 2011 and December 31, 2010, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment is directly related to the change in interest rates.  In general, as interest rates rise, the fair value of fixed rate securities will decrease; as interest rates fall, the fair value of fixed rate securities will increase.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  None of the unrealized losses are related to credit losses.  Therefore, at June 30, 2011 and December 31, 2010, the impairments are deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expect to recover the entire amortized cost basis of the security.

Held-to-maturity debt securities, excluding mortgage-backed securities, had an amortized cost of $56.0 million and a fair value of $56.2 million at June 30, 2011.  These securities have

8

contractual maturities in 2017 and 2018.  Actual maturities will differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

The balance of accrued interest receivable for securities totaled $7.9 million at June 30, 2011 and $8.3 million at December 31, 2010.

At June 30, 2011, we held securities with an amortized cost of $52.9 million which are callable within one year and at various times thereafter.

3. Loans Held-for-Sale

Loans held-for-sale, net, includes fifteen and thirty year fixed rate one-to-four family mortgage loans that conform to GSE guidelines (conforming) originated for sale as well as certain non-performing loans.  Upon our decision to sell certain delinquent and non-performing mortgage loans held in portfolio, we reclassify them to held-for-sale at the lower of cost or fair value, less estimated selling costs.  Non-performing loans held-for-sale, included in loans held-for-sale, net, totaled $10.8 million, net of a valuation allowance of $64,000, at June 30, 2011, consisting of multi-family, one-to-four family and commercial real estate loans, and $10.9 million, net of a valuation allowance of $169,000, at December 31, 2010, consisting primarily of multi-family and commercial real estate loans.

We sold certain delinquent and non-performing mortgage loans totaling $16.4 million, net of charge-offs of $7.9 million, during the six months ended June 30, 2011, primarily multi-family mortgage loans, and $22.6 million, net of charge-offs of $12.3 million, during the six months ended June 30, 2010, primarily multi-family and commercial real estate loans.  Net gain on sales of non-performing loans totaled $48,000 for the three months ended June 30, 2011 and net loss on sales of non-performing loans totaled $52,000 for the six months ended June 30, 2011.  Net gain on sales of non-performing loans totaled $352,000 for the three months ended June 30, 2010 and $357,000 for the six months ended June 30, 2010.

We recorded a lower of cost or market recovery on non-performing loans held-for-sale of $82,000 for the three months ended June 30, 2011 and net lower of cost or market write-downs on non-performing loans held-for-sale of $441,000 for the six months ended June 30, 2011.  Net lower of cost or market write-downs on non-performing loans held-for-sale totaled $97,000 for the three and six months ended June 30, 2010.  Net lower of cost or market write-downs on non-performing loans held-for-sale and gains and losses recognized on sales of such loans are included in other non-interest income in the consolidated statements of income.

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4. Loans Receivable and Allowance for Loan Losses

The following table sets forth the composition of our loans receivable portfolio in dollar amounts and percentages of the portfolio at the dates indicated.

	At June 30, 2011						At December 31, 2010
				Percent						Percent
(Dollars in Thousands)	Amount			of Total			Amount			of Total
Mortgage loans (gross):
One-to-four family	$	10,550,997			78.57	%	$	10,855,061			76.77	%
Multi-family		1,846,053			13.75			2,187,869			15.47
Commercial real estate		723,547			5.39			771,654			5.46
Construction		14,003			0.10			15,145			0.11
Total mortgage loans		13,134,600			97.81			13,829,729			97.81
Consumer and other loans (gross):
Home equity		270,093			2.01			282,453			2.00
Other		24,078			0.18			26,887			0.19
Total consumer and other loans		294,171			2.19			309,340			2.19
Total loans		13,428,771			100.00	%		14,139,069			100.00	%
Net unamortized premiums and deferred loan origination costs		78,808						83,978
Loans receivable		13,507,579						14,223,047
Allowance for loan losses		(182,717	)					(201,499	)
Loans receivable, net	$	13,324,862					$	14,021,548

The following tables set forth an aging analysis of our loans receivable by segment and class at the dates indicated.

	At June 30, 2011
	30-59 Days		60-89 Days		90 Days or More Past Due					Total
(In Thousands)	Past Due		Past Due		Accruing			Non-Accrual		Past Due		Current		Total
Mortgage loans:
One-to-four family:
Full documentation:
Interest-only	$	41,244	$	12,431		$	-	$	109,683	$	163,358	$	3,165,167	$	3,328,525
Amortizing		26,353		6,846			-		37,590		70,789		5,494,044		5,564,833
Reduced documentation:
Interest-only		35,542		12,478			-		145,816		193,836		1,038,718		1,232,554
Amortizing		15,350		3,406			-		36,470		55,226		369,859		425,085
Multi-family		33,128		6,568			613		29,275		69,584		1,776,469		1,846,053
Commercial real estate		7,529		2,173			-		6,363		16,065		707,482		723,547
Construction		-		-			-		5,299		5,299		8,704		14,003
Consumer and other loans:
Home equity lines of credit		3,511		432			-		5,099		9,042		261,051		270,093
Other		136		57			-		132		325		23,753		24,078
Total loans	$	162,793	$	44,391		$	613	$	375,727	$	583,524	$	12,845,247	$	13,428,771

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	At December 31, 2010
	30-59 Days		60-89 Days		90 Days or More Past Due					Total
(In Thousands)	Past Due		Past Due		Accruing			Non-Accrual		Past Due		Current		Total
Mortgage loans:
One-to-four family:
Full documentation:
Interest-only	$	41,608	$	18,029		$	-	$	105,982	$	165,619	$	3,646,143	$	3,811,762
Amortizing		29,666		5,170			464		45,256		80,556		5,191,615		5,272,171
Reduced documentation:
Interest-only		38,864		20,493			-		157,464		216,821		1,114,473		1,331,294
Amortizing		14,965		4,170			-		33,149		52,284		387,550		439,834
Multi-family		33,627		6,056			381		29,814		69,878		2,117,991		2,187,869
Commercial real estate		2,925		-			-		6,529		9,454		762,200		771,654
Construction		-		-			-		6,097		6,097		9,048		15,145
Consumer and other loans:
Home equity lines of credit		3,991		351			-		5,464		9,806		272,647		282,453
Other		164		70			-		110		344		26,543		26,887
Total loans	$	165,810	$	54,339		$	845	$	389,865	$	610,859	$	13,528,210	$	14,139,069

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

	For the Three Months Ended June 30, 2011
	Mortgage Loans																Consumer and Other Loans				Total
(In Thousands)	One-to-Four Family				Multi- Family				Commercial Real Estate				Construction
Balance at April 1, 2011		$	117,722			$	49,396			$	14,782			$	3,502			$	4,084			$	189,486
Provision charged to operations			8,739				825				544				(245	)			137				10,000
Charge-offs			(15,768	)			(3,752	)			(756	)			(420	)			(212	)			(20,908	)
Recoveries			4,020				-				-				64				55				4,139
Balance at June 30, 2011		$	114,713			$	46,469			$	14,570			$	2,901			$	4,064			$	182,717

	For the Six Months Ended June 30, 2011
	Mortgage Loans																Consumer and Other Loans				Total
(In Thousands)	One-to-Four Family				Multi- Family				Commercial Real Estate				Construction
Balance at January 1, 2011		$	125,524			$	52,786			$	15,563			$	3,480			$	4,146			$	201,499
Provision charged to operations			16,283				373				(237	)			(223	)			804				17,000
Charge-offs			(33,479	)			(6,696	)			(756	)			(420	)			(967	)			(42,318	)
Recoveries			6,385				6				-				64				81				6,536
Balance at June 30, 2011		$	114,713			$	46,469			$	14,570			$	2,901			$	4,064			$	182,717

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The following tables set forth the balances of our loans receivable by segment and impairment evaluation and the allowance for loan losses associated with such loans at the dates indicated.

	At June 30, 2011
	Mortgage Loans												Consumer and Other Loans		Total
(In Thousands)	One-to-Four Family			Multi- Family			Commercial Real Estate			Construction
Loans:
Individually evaluated for impairment		$	321,084		$	951,483		$	358,819		$	6,445	$	3,301	$	1,641,132
Collectively evaluated for impairment			10,229,913			894,570			364,728			7,558		290,870		11,787,639
Total loans		$	10,550,997		$	1,846,053		$	723,547		$	14,003	$	294,171	$	13,428,771
Allowance for loan losses:
Individually evaluated for impairment		$	10,210		$	31,089		$	10,185		$	2,662	$	50	$	54,196
Collectively evaluated for impairment			104,503			15,380			4,385			239		4,014		128,521
Total allowance for loan losses		$	114,713		$	46,469		$	14,570		$	2,901	$	4,064	$	182,717

	At December 31, 2010
	Mortgage Loans												Consumer and Other Loans		Total
(In Thousands)	One-to-Four Family			Multi- Family			Commercial Real Estate			Construction
Loans:
Individually evaluated for impairment		$	315,994		$	1,144,633		$	385,904		$	7,872	$	3,414	$	1,857,817
Collectively evaluated for impairment			10,539,067			1,043,236			385,750			7,273		305,926		12,281,252
Total loans		$	10,855,061		$	2,187,869		$	771,654		$	15,145	$	309,340	$	14,139,069
Allowance for loan losses:
Individually evaluated for impairment		$	12,541		$	34,124		$	10,784		$	3,250	$	51	$	60,750
Collectively evaluated for impairment			112,983			18,662			4,779			230		4,095		140,749
Total allowance for loan losses		$	125,524		$	52,786		$	15,563		$	3,480	$	4,146	$	201,499

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The following table summarizes information related to our impaired loans by segment and class at the dates indicated.  Impaired one-to-four family mortgage loans consist primarily of loans where a portion of the outstanding principal has been charged off.

	At June 30, 2011									At December 31, 2010
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
With an allowance recorded:
One-to-four family:
Full documentation:
Interest-only	$	10,307	$	10,307	$	(1,238	)	$	9,069	$	11,033	$	11,033	$	(1,980	)	$	9,053
Amortizing		3,966		3,966		(467	)		3,499		7,340		7,340		(947	)		6,393
Reduced documentation:
Interest-only		11,508		11,508		(1,384	)		10,124		10,234		10,234		(2,500	)		7,734
Amortizing		1,066		1,066		(131	)		935		1,032		1,032		(239	)		793
Multi-family		53,844		53,134		(14,278	)		38,856		51,793		51,084		(14,349	)		36,735
Commercial real estate		21,604		20,500		(4,913	)		15,587		19,929		18,825		(5,496	)		13,329
Construction		5,916		5,806		(2,662	)		3,144		6,546		6,435		(2,851	)		3,584
Without an allowance recorded:
One-to-four family:
Full documentation:
Interest-only		92,071		66,285		-			66,285		87,110		64,185		-			64,185
Amortizing		18,102		13,904		-			13,904		15,363		11,883		-			11,883
Reduced documentation:
Interest-only		150,797		106,652		-			106,652		145,091		105,905		-			105,905
Amortizing		18,639		14,134		-			14,134		15,786		12,009		-			12,009
Construction		1,200		639		-			639		1,200		639		-			639
Total impaired loans	$	389,020	$	307,901	$	(25,073	)	$	282,828	$	372,457	$	300,604	$	(28,362	)	$	272,242

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

	For the Three Months Ended June 30, 2011						For the Six Months Ended June 30, 2011
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
One-to-four family:
Full documentation:
Interest-only	$	10,498	$	101	$	115	$	10,676	$	216	$	216
Amortizing		5,943		50		44		6,409		86		83
Reduced documentation:
Interest-only		11,268		105		117		10,923		257		270
Amortizing		1,186		11		11		1,135		24		23
Multi-family		54,409		542		626		53,301		1,280		1,310
Commercial real estate		19,896		334		318		19,539		665		651
Construction		6,121		25		28		6,225		56		59
Without an allowance recorded:
One-to-four family:
Full documentation:
Interest-only		65,421		258		322		65,009		459		590
Amortizing		12,882		14		22		12,549		18		36
Reduced documentation:
Interest-only		107,999		548		583		107,301		958		1,032
Amortizing		14,045		47		55		13,366		105		116
Construction		639		-		-		639		-		-
Total impaired loans	$	310,307	$	2,035	$	2,241	$	307,072	$	4,124	$	4,386

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

	At June 30, 2011
	One-to-Four Family Mortgage Loans												Consumer and Other Loans
	Full Documentation						Reduced Documentation						Home Equity Lines of Credit			Other
(In Thousands)	Interest-only			Amortizing			Interest-only			Amortizing
Performing		$	3,218,842		$	5,527,243		$	1,086,738		$	388,615		$	264,994		$	23,946
Non-performing			109,683			37,590			145,816			36,470			5,099			132
Total		$	3,328,525		$	5,564,833		$	1,232,554		$	425,085		$	270,093		$	24,078

	At December 31, 2010
	One-to-Four Family Mortgage Loans												Consumer and Other Loans
	Full Documentation						Reduced Documentation						Home Equity Lines of Credit			Other
(In Thousands)	Interest-only			Amortizing			Interest-only			Amortizing
Performing		$	3,705,780		$	5,226,451		$	1,173,830		$	406,685		$	276,989		$	26,777
Non-performing			105,982			45,720			157,464			33,149			5,464			110
Total		$	3,811,762		$	5,272,171		$	1,331,294		$	439,834		$	282,453		$	26,887

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

	At June 30, 2011									At December 31, 2010
(In Thousands)	Multi-Family Mortgage Loans			Commercial Real Estate Loans			Construction Loans			Multi-Family Mortgage Loans			Commercial Real Estate Loans			Construction Loans
Not classified		$	1,656,572		$	648,016		$	7,601		$	2,035,111		$	707,237		$	7,315
Classified			189,481			75,531			6,402			152,758			64,417			7,830
Total		$	1,846,053		$	723,547		$	14,003		$	2,187,869		$	771,654		$	15,145

For additional information regarding the composition of our loan portfolio, non-performing loans and our allowance for loan losses, see “Asset Quality” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or “MD&A.”

5.  Premises and Equipment

On April 26, 2011, we sold an office building with a net carrying value of $14.6 million.  The building is located in Lake Success, New York, and formerly housed our lending operations which were relocated in March 2008 to a leased facility in Mineola, New York.  The proceeds from the sale of the building totaled $14.4 million.  A loss of $253,000, included in other non-interest income in the consolidated statement of income, was recognized in the 2011 second quarter.

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6. Earnings Per Share

The following table is a reconciliation of basic and diluted earnings per share.

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
(In Thousands, Except Share Data)	2011			2010			2011			2010
Net income	$	16,845		$	15,546		$	44,229		$	28,472
Income allocated to participating securities (restricted stock)		(428	)		(379	)		(1,099	)		(688	)
Income attributable to common shareholders	$	16,417		$	15,167		$	43,130		$	27,784
Average number of common shares outstanding – basic		92,949,206			91,621,997			92,842,398			91,541,675
Dilutive effect of stock options (1)		-			-			-			67
Average number of common shares outstanding – diluted		92,949,206			91,621,997			92,842,398			91,541,742
Income per common share attributable to common shareholders:
Basic	$	0.18		$	0.17		$	0.46		$	0.30
Diluted	$	0.18		$	0.17		$	0.46		$	0.30

(1) Excludes options to purchase 6,889,199 shares of common stock which were outstanding during the three months ended June 30, 2011; options to purchase 7,999,253 shares of common stock which were outstanding during the three months ended June 30, 2010;  options to purchase 6,902,494 shares of common stock which were outstanding during the six months ended June 30, 2011; and options to purchase 8,016,292 shares of common stock which were outstanding during the six months ended June 30, 2010 because their inclusion would be anti-dilutive.

7. Pension Plans and Other Postretirement Benefits

The following tables set forth information regarding the components of net periodic cost for our defined benefit pension plans and other postretirement benefit plan.

								Other Postretirement
	Pension Benefits							Benefits
	For the Three Months Ended							For the Three Months Ended
	June 30,							June 30,
(In Thousands)		2011			2010			2011			2010
Service cost		$	1,176		$	934		$	126		$	90
Interest cost			3,048			2,897			345			283
Expected return on plan assets			(2,649	)		(2,356	)		-			-
Recognized net actuarial loss			2,148			1,603			45			-
Amortization of prior service cost (credit)			48			62			(25	)		(25	)
Settlement			(28	)		-			-			-
Net periodic cost		$	3,743		$	3,140		$	491		$	348

								Other Postretirement
	Pension Benefits							Benefits
	For the Six Months Ended							For the Six Months Ended
	June 30,							June 30,
(In Thousands)		2011			2010			2011			2010
Service cost		$	2,321		$	1,867		$	265		$	179
Interest cost			6,105			5,796			680			566
Expected return on plan assets			(5,324	)		(4,711	)		-			-
Recognized net actuarial loss			4,223			3,205			74			-
Amortization of prior service cost (credit)			96			124			(50	)		(50	)
Net periodic cost		$	7,421		$	6,281		$	969		$	695

8. Stock Incentive Plans

During the six months ended June 30, 2011, 593,530 shares of restricted stock were granted to select officers under the 2005 Re-designated, Amended and Restated Stock Incentive Plan for

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Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, and 22,120 shares of restricted stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, or the 2007 Director Stock Plan.  Of the restricted stock granted to select officers, 70,260 shares vest one-third per year and 508,270 shares vest one-fifth per year on or about December 14th, beginning December 14, 2011, and 15,000 shares vest on March 2, 2012.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2005 Employee Stock Plan, all restricted stock granted pursuant to such plan immediately vests.  The restricted stock granted in 2011 under the 2007 Director Stock Plan vests on January 31, 2014, although awards will immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

Restricted stock activity in our stock incentive plans for the six months ended June 30, 2011 is summarized as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011		1,852,550			$	15.96
Granted		615,650				14.29
Vested		(36,585	)			(24.92	)
Forfeited		(4,806	)			(13.65	)
Nonvested at June 30, 2011		2,426,809				15.41

Stock-based compensation expense is recognized on a straight-line basis over the vesting period  and totaled $1.5 million, net of taxes of $830,000, for the three months ended June 30, 2011 and totaled $2.9 million, net of taxes of $1.6 million, for the six months ended June 30, 2011.  Stock-based compensation expense totaled $1.4 million, net of taxes of $739,000, for the three months ended June 30, 2010 and totaled $2.5 million, net of taxes of $1.4 million, for the six months ended June 30, 2010.  At June 30, 2011, pre-tax compensation cost related to all nonvested awards of restricted stock not yet recognized totaled $22.3 million and will be recognized over a weighted average period of approximately 3.1 years.

9. Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  Our securities available-for-sale are recorded at fair value on a recurring basis.  Additionally, from time to time, we may be required to record at fair value other assets or liabilities on a non-recurring basis, such as mortgage servicing rights, or MSR, loans receivable, certain assets held-for-sale and real estate owned, or REO.  These non-recurring fair value adjustments involve the application of lower of cost or market accounting or impairment write-downs of individual assets.  Additionally, in connection with our mortgage banking activities we have commitments to fund loans held-for-sale and commitments to sell loans, which are considered free-standing derivative instruments, the fair values of which are not material to our financial condition or results of operations.

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

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

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

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

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

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

Securities available-for-sale

Our available-for-sale securities portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders' equity.

Residential mortgage-backed securities

Substantially all of our securities available-for-sale portfolio consists of residential mortgage-backed securities.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service uses various modeling techniques to determine pricing for our mortgage-backed securities, including option pricing and discounted cash flow models.  The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, monthly payment information and collateral performance.  At June 30, 2011, 96% of our available-for-sale residential mortgage-backed securities portfolio was comprised of GSE securities for which an active market exists for similar securities, making observable inputs readily available.

We analyze changes in the pricing service fair values from month to month taking into consideration changes in market conditions including changes in mortgage spreads, changes in treasury yields and changes in generic pricing on fifteen year and thirty year securities.  Each

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month we conduct a review of the estimated values of our fixed rate REMICs and CMOs available-for-sale which represent substantially all of these securities priced by our pricing service.  We generate prices based upon a “spread matrix” approach for estimating values.  Market spreads are obtained from independent third party firms who trade these types of securities.  Any notable differences between the pricing service prices and “spread matrix” prices on individual securities are analyzed further, including a review of prices provided by other independent parties, a yield analysis and review of average life changes using Bloomberg analytics and a review of historical pricing on the particular security.  Based upon our review of the prices provided by our pricing service, the fair values of securities incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Freddie Mac and Fannie Mae stock

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

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

	Carrying Value at June 30, 2011
(In Thousands)	Total			Level 1			Level 2			Level 3
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	392,242		$	-		$	392,242		$	-
Non-GSE issuance REMICs and CMOs			18,288			-			18,288			-
GSE pass-through certificates			27,250			-			27,250			-
Freddie Mac and Fannie Mae stock			10,760			10,760			-			-
Total securities available-for-sale		$	448,540		$	10,760		$	437,780		$	-

	Carrying Value at December 31, 2010
(In Thousands)	Total			Level 1			Level 2			Level 3
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	509,233		$	-		$	509,233		$	-
Non-GSE issuance REMICs and CMOs			20,664			-			20,664			-
GSE pass-through certificates			29,896			-			29,896			-
Freddie Mac and Fannie Mae stock			2,160			2,160			-			-
Total securities available-for-sale		$	561,953		$	2,160		$	559,793		$	-

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

Non-performing loans held-for-sale, net

Non-performing loans held-for-sale consisted of multi-family, one-to-four family and commercial real estate mortgage loans at June 30, 2011 and consisted primarily of multi-family and commercial real estate mortgage loans at December 31, 2010.  Fair values of non-performing loans held-for-sale are estimated through either bids received on the loans or a discounted cash

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flow analysis of the underlying collateral and adjusted as necessary, by management, to reflect current market conditions and, as such, are classified as Level 3.

Loans receivable, net (impaired loans)

Loans which meet certain criteria are evaluated individually for impairment.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Impaired loans were comprised primarily of one-to-four family mortgage loans at June 30, 2011 and December 31, 2010.  Our impaired loans are generally collateral dependent and, as such, are carried at the estimated fair value of the collateral less estimated selling costs.  Fair values are estimated through current appraisals, broker opinions or automated valuation models and adjusted as necessary, by management, to reflect current market conditions and, as such, are classified as Level 3.  Substantially all of the impaired loans at June 30, 2011 and December 31, 2010 for which a fair value adjustment was recognized were one-to-four family mortgage loans.

MSR, net

The right to service loans for others is generally obtained through the sale of one-to-four family mortgage loans with servicing retained.  MSR are carried at the lower of cost or estimated fair value.  The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.  At June 30, 2011, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.94%, a weighted average constant prepayment rate on mortgages of 18.42% and a weighted average life of 4.1 years.  At December 31, 2010, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.96%, a weighted average constant prepayment rate on mortgages of 19.94% and a weighted average life of 3.8 years.  Management reviews the assumptions used to estimate the fair value of MSR to ensure they reflect current and anticipated market conditions.

REO, net

REO represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure, primarily all of which were one-to-four family properties at June 30, 2011 and all of which were one-to-four family properties at December 31, 2010, and is carried, net of allowances for losses, at the lower of cost or fair value less estimated selling costs.  The fair value of REO is estimated through current appraisals, in conjunction with a drive-by inspection and comparison of the REO property with similar properties in the area by either a licensed appraiser or real estate broker.  As these properties are actively marketed, estimated fair values are periodically adjusted by management to reflect current market conditions and, as such, are classified as  Level 3.

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

		Carrying Value
(In Thousands)	At June 30, 2011			At December 31, 2010
Non-performing loans held-for-sale, net		$	10,832		$	10,895
Impaired loans			204,598			197,620
MSR, net			9,356			9,204
REO, net			48,906			53,990
Total		$	273,692		$	271,709

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

		For the Six Months Ended
		June 30,
(In Thousands)	2011			2010
Non-performing loans held-for-sale, net (1)		$	821		$	11,936
Impaired loans (2)			25,878			31,753
MSR, net (3)			-			-
REO, net (4)			6,694			11,065
Total		$	33,393		$	54,754

(1) Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale.  Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

(2) Losses are charged against the allowance for loan losses.

(3) Losses are charged to mortgage banking income, net.

(4) Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO.  Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

10. Fair Value of Financial Instruments

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

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The following table summarizes the carrying amounts and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value, in accordance with GAAP, and not measured or recorded at fair value on a recurring basis.

	At June 30, 2011				At December 31, 2010
	Carrying		Estimated		Carrying		Estimated
(In Thousands)	Amount		Fair Value		Amount		Fair Value
Financial Assets:
Repurchase agreements	$	-	$	-	$	51,540	$	51,540
Securities held-to-maturity		1,966,836		2,014,151		2,003,784		2,042,110
FHLB-NY stock		129,025		129,025		149,174		149,174
Loans held-for-sale, net (1)		15,393		15,536		44,870		45,713
Loans receivable, net (1)		13,324,862		13,700,880		14,021,548		14,480,713
MSR, net (1)		9,356		9,362		9,204		9,214
Financial Liabilities:
Deposits		11,210,620		11,393,588		11,599,000		11,784,632
Borrowings, net		4,286,389		4,838,940		4,869,204		5,320,510

(1)  Includes totals for assets measured at fair value on a non-recurring basis as disclosed in Note 9.

Methods and assumptions used to estimate fair values are as follows:

Repurchase agreements

The carrying amounts of repurchase agreements approximate fair values since all mature in one month or less.

Securities held-to-maturity

The fair values for substantially all of our securities held-to-maturity are obtained from an independent nationally recognized pricing service using similar methods and assumptions as used for our securities available-for-sale which are described further in Note 9.

Federal Home Loan Bank of New York, or FHLB-NY, stock

The carrying amount of FHLB-NY stock equals cost.  The fair value of FHLB-NY stock is based on redemption at par value.

Loans held-for-sale, net

The fair values of fifteen and thirty year conforming fixed rate one-to-four family mortgage loans originated for sale are estimated by reference to published pricing for similar loans sold in the secondary market.  The fair values of non-performing loans held-for-sale are estimated through either bids received on such loans or a discounted cash flow analysis adjusted to reflect current market conditions.

Loans receivable, net

Fair values of loans are estimated by reference to published pricing for similar loans sold in the secondary market.  Loans are grouped by similar characteristics.  The loans are first segregated by type, such as one-to-four family, multi-family, commercial real estate, construction and consumer and other, and then further segregated into fixed and adjustable rate categories.  Published pricing is based on new loans of similar type and purpose, adjusted, when necessary, for factors such as servicing cost, credit risk, interest rate and remaining term.

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

MSR, net

The fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements.

Deposits

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

Borrowings, net

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

Outstanding commitments

Outstanding commitments include (1) commitments to extend credit and unadvanced lines of credit for which fair values were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions and (2) commitments to sell residential mortgage loans for which fair values were estimated based on current secondary market prices for commitments with similar terms.  The fair values of these commitments are immaterial to our financial condition and are not presented in the table above.

11. Litigation

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

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010, the City of New York has notified us of an alleged tax deficiency in the amount of $5.2 million, including interest and penalties, related to our 2006 tax year.  The deficiency relates to our operation of two subsidiaries of Astoria Federal, Fidata Service Corp., or Fidata, and Astoria Federal Mortgage Corp., or AF

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Mortgage.  Fidata is a passive investment company which maintains offices in Connecticut.  AF Mortgage is an operating subsidiary through which, prior to 2011, Astoria Federal engaged in lending activities outside the State of New York.  We disagree with the assertion of the tax deficiency and we filed a Petition for Hearing with the City of New York on December 6, 2010 to oppose the Notice of Determination.  At this time, management believes it is more likely than not that we will succeed in refuting the City of New York’s position, although defense costs may be significant.  Accordingly, no liability or reserve has been recognized in our consolidated statement of financial condition at June 30, 2011 with respect to this matter.

No assurance can be given as to whether or to what extent we will be required to pay the amount of the tax deficiency asserted by the City of New York, whether additional tax will be assessed for years subsequent to 2006, that this matter will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Automated Transactions LLC Litigation

On November 20, 2009, an action entitled Automated Transactions LLC v. Astoria Financial Corporation and Astoria Federal Savings and Loan Association was commenced in the U.S. District Court for the Southern District of New York, or the Southern District Court, against us by Automated Transactions LLC, alleging patent infringement involving integrated banking and transaction machines, including automated teller machines, that we utilize.  We were served with the summons and complaint in such action on March 2, 2010.  The plaintiff also filed a similar suit on the same day against another financial institution and its holding company.  The plaintiff seeks unspecified monetary damages and an injunction preventing us from continuing to utilize the allegedly infringing machines.  We are vigorously defending this lawsuit, and filed an answer and counterclaims to the plaintiff’s complaint on March 23, 2010, to which the plaintiff filed a reply on April 12, 2010.

On May 18, 2010, the plaintiff filed an amended complaint at the direction of the Southern District Court, containing substantially the same allegations as the original complaint. On May 27, 2010, we moved to dismiss the amended complaint.  On March 10, 2011, the Southern District Court entered an order on the record that dismissed all claims against Astoria Financial Corporation but denied the motion to dismiss the claims against Astoria Federal for alleged direct patent infringement.  The order also dismissed in part the claims against Astoria Federal for alleged inducement of our customers to violate plaintiff’s patents and for Astoria Federal’s allegedly willful violation of the plaintiff’s patents, allowing claims to continue only for alleged inducement and willful infringement after our receiving notice of the pending suit from plaintiff’s counsel.  Based on the Southern District Court’s ruling, on March 31, 2011, we answered the amended complaint substantially denying the allegations of the amended complaint.

We have tendered requests for indemnification from the manufacturer and from the transaction processor utilized with respect to the integrated banking and transaction machines, and we served third party complaints against Metavante Corporation and Diebold, Inc. seeking to enforce our indemnification rights.

An adverse result in this lawsuit may include an award of monetary damages, on-going royalty obligations, and/or may result in a change in our business practice, which could result in a loss of

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revenue.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that the litigation against us will be resolved amicably, that if this litigation results in an adverse decision that we will be successful in seeking indemnification, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

12. Impact of Accounting Standards and Interpretations

In June 2011, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2011-05, “Comprehensive Income (Topic 220) Presentation of Comprehensive Income,” which eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity, which is one of three alternatives for presenting other comprehensive income and its components in financial statements under current GAAP.  ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income.  In addition, ASU 2011-05 requires that reclassification adjustments for items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements in the statement(s) where the components of net income and the components of other comprehensive income are presented.  The guidance in ASU 2011-05 does not change the items that must be reported in other comprehensive income, the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects or when an item of other comprehensive income must be reclassified to net income.  ASU 2011-05 does not affect how earnings per share is calculated or presented.  The guidance in ASU 2011-05 is effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively.  Early adoption is permitted.  Since the provisions of ASU 2011-05 are presentation related only, our adoption of ASU 2011-05 will not have an impact on our financial condition or results of operations.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  The amendments in ASU 2011-04 explain how to measure fair value, but do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting and result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards.  For many of the requirements of ASU 2011-04, the FASB does not intend for the ASU to result in a change in the application of the requirements in Topic 820.  Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  The amendments in ASU 2011-04 are to be applied prospectively and are effective, for public entities, during interim and annual periods beginning after December 15, 2011.  Early application by public entities is not permitted.  We do not expect our adoption of ASU 2011-04 to have a material impact on our financial condition or results of operations.

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In April 2011, the FASB issued ASU 2011-03, “Transfers and Servicing (Topic 860) Reconsideration of Effective Control for Repurchase Agreements,” which removes from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and the collateral maintenance implementation guidance related to that criterion when determining whether a repurchase agreement (reverse repurchase agreement) should be accounted for as a sale or as a secured borrowing.  The guidance in ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date.  Early adoption is not permitted.  We do not expect the application of this guidance to impact our accounting for repurchase and reverse repurchase agreements.  Therefore, our adoption of ASU 2011-03 is not expected to have an impact on our financial condition or results of operations.

In April 2011, the FASB issued ASU 2011-02, “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” which clarifies the guidance on a creditor’s evaluation of whether it has granted a concession in a debt restructuring and whether the debtor is experiencing financial difficulties in evaluating whether the debt restructuring constitutes a troubled debt restructuring.  The guidance in ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption.  As a result of applying this guidance, an entity may identify receivables that are newly considered impaired.  In measuring impairment of those receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011.  The total amount of receivables and the allowance for credit losses as of the end of the period of adoption related to those receivables that are newly considered impaired should be disclosed.  In addition, ASU 2011-02 requires the disclosure of the information required by ASU 2010-20, “Receivables (Topic 310) Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,” which we adopted effective December 31, 2010, relative to modifications of financing receivables for interim and annual periods beginning on or after June 15, 2011.  The effective date of such guidance was deferred by ASU 2011-01, “Receivables (Topic 310) Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20.”  Our adoption of ASU 2011-02 is not expected to have a material impact on our financial condition or results of operations.

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ITEM 2.  Management's Discussion and Analysis of Financial Condition and Results ofOperations

This Quarterly Report on Form 10-Q contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.  These statements may be identified by the use of the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar terms and phrases, including references to assumptions.

Forward-looking statements are based on various assumptions and analyses made by us in light of our management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances.  These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.  These factors include, without limitation, the following:

· the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control;

· there may be increases in competitive pressure among financial institutions or from non-financial institutions;

· changes in the interest rate environment may reduce interest margins or affect the value of our investments;

· changes in deposit flows, loan demand or real estate values may adversely affect our business;

· changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently;

· general economic conditions, either nationally or locally in some or all areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate;

· legislative or regulatory changes, including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Reform Act, may adversely affect our business;

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

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

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

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

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Executive Summary

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

Astoria Financial Corporation is a Delaware corporation organized as the unitary savings and loan association holding company of Astoria Federal.  Our primary business is the operation of Astoria Federal.  Astoria Federal's principal business is attracting retail deposits from the general public and investing those deposits, together with funds generated from operations, principal repayments on loans and securities and borrowings, primarily in one-to-four family mortgage loans, multi-family mortgage loans, commercial real estate loans and mortgage-backed securities.  Our results of operations are dependent primarily on our net interest income, which is the difference between the interest earned on our assets, primarily our loan and securities portfolios, and the interest paid on our deposits and borrowings.  Our earnings are also significantly affected by general economic and competitive conditions, particularly changes in market interest rates and U.S. Treasury yield curves, government policies and actions of regulatory authorities.

As the premier Long Island community bank, our goals are to enhance shareholder value while building a solid banking franchise.  We focus on growing our core businesses of mortgage portfolio lending and retail banking while maintaining strong asset quality and controlling operating expenses.  We also provide returns to shareholders through dividends.

During the three months ended June 30, 2011, the national economy weakened somewhat from March 31, 2011 as evidenced by, among other things, an increase in the unemployment rate to 9.2% for June 2011 from 8.8% for March 2011 although the unemployment rate was still down from December 2010.  Job growth during the 2011 second quarter was significantly lower than the moderate growth experienced in the 2011 first quarter.  Softness in the housing and real estate markets persist. The Reform Act, which was passed in July 2010, is intended to address perceived weaknesses in the U.S. financial regulatory system and prevent future economic and financial crises.  As described in more detail in Part II, Item 1A, “Risk Factors,” in our March 31, 2011 Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors,” in our 2010 Annual Report on Form 10-K, certain aspects of the Reform Act will have an impact on us, including the combination of our former primary regulator, the OTS, with the Office of the Comptroller of the Currency, or OCC, which occurred on July 21, 2011, the imposition of consolidated holding company capital requirements, changes to deposit insurance assessments and the roll back of federal preemption applicable to certain of our operations.

Total assets decreased during the six months ended June 30, 2011, primarily due to decreases in our loan and securities portfolios.  The decrease in our loan portfolio was due to decreases in our one-to-four family, multi-family and commercial real estate mortgage loan portfolios resulting from repayments which outpaced our origination and purchase volume.  One-to-four family mortgage loan repayments remained at elevated levels as interest rates on thirty year fixed rate conforming mortgages, which we do not retain for portfolio, remained at historic lows and as loans in our portfolio which qualified under the expanded conforming loan limits were refinanced into fixed rate conforming mortgages.  During the 2011 second quarter, we decided to be somewhat more competitive with the pricing of our one-to-four family hybrid adjustable rate mortgage, or ARM, and fifteen year jumbo mortgage rates which resulted in an increase in applications and a larger mortgage loan pipeline as of June 30, 2011 versus March 31, 2011.  The rise in interest rates on thirty year fixed rate mortgages at the end of the 2010 fourth quarter led

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to a decrease in loan repayments which resulted in a significantly slower pace of decline in our one-to-four family mortgage loan portfolio in the first and second quarters of 2011 compared to the fourth quarter of 2010.  The decrease in interest rates on thirty year fixed rate mortgages during the 2011 second quarter may lead to a slight increase in repayments during the 2011 third quarter.  However, we expect loan growth in the second half of 2011 based upon the increase in the one-to-four family mortgage loan pipeline as of June 30, 2011, the expectation that the conforming loan limits will be reduced starting October 1, 2011 and the fact that we expect to resume originations in the New York City mortgage market in the latter half of 2011 and have already resumed accepting multi-family and commercial real estate mortgage loan applications.  The securities portfolio decreased as a result of cash flows from repayments exceeding securities purchased due to the absence of purchase activity in the 2011 second quarter.  We expect to maintain our securities portfolio at June 30, 2011 levels, or slightly higher, throughout the remainder of 2011.

Total deposits decreased during the six months ended June 30, 2011, due to decreases in certificates of deposit and Liquid CDs, partially offset by increases in savings, NOW and demand deposit and money market accounts.  During the six months ended June 30, 2011, we continued to allow high cost certificates of deposit to run off as total assets declined.  The increases in low cost savings, NOW and demand deposit and money market accounts appear to reflect customer preference for the liquidity these types of deposits provide.  However, we have achieved some success in extending the terms of our retained certificates of deposit.  During the first half of 2011, we extended $538.2 million of certificates of deposit for terms of two years or more in an effort to help limit our exposure to future increases in interest rates.  Cash flows from mortgage loan and securities repayments in excess of mortgage loan originations and purchases, securities purchases and deposit outflows enabled us to repay a portion of our matured borrowings during the first half of 2011, which resulted in a decrease in our borrowings portfolio from December 31, 2010.

Net income increased for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010.  These increases were primarily due to decreases in provision for loan losses, partially offset by decreases in net interest income and non-interest income and, for the six months ended June 30, 2011, an increase in income tax expense.

Net interest income decreased for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, due to decreases in interest income, partially offset by decreases in interest expense.  Interest income for the three and six months ended June 30, 2011 decreased, compared to the three and six months ended June 30, 2010, primarily due to decreases in the average balances of mortgage loans and mortgage-backed and other securities, coupled with decreases in the average yields on one-to-four family mortgage loans and mortgage-backed and other securities.  Interest expense for the three and six months ended June 30, 2011 decreased, compared to the three and six months ended June 30, 2010, primarily due to decreases in the average balances of certificates of deposit and borrowings, coupled with decreases in the average costs of certificates of deposit.  The net interest rate spread and net interest margin were down slightly for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010.  The declines are primarily due to the significant decreases in the yields on average interest-earning assets, substantially offset by the declines in the costs of average interest-bearing liabilities for the three and six months ended June 30, 2011 compared to the same periods in 2010.

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The allowance for loan losses decreased from December 31, 2010 to June 30, 2011 as well as the provision for loan losses which decreased for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010.  These decreases reflect the stabilizing trend in overall asset quality experienced in 2010 and into 2011, coupled with the decline in the loan portfolio over the same period.  In the first half of 2011, we experienced improvements in both total delinquencies and non-performing loans, continuing the trend from 2010.  While the allowance for loan losses decreased from March 31, 2011, the provision for loan losses was higher in the 2011 second quarter compared to the 2011 first quarter in order to maintain our strong coverage ratios in the face of a somewhat weaker economy and slightly higher unemployment along with prolonged softness in housing values.The allowance for loan losses at June 30, 2011 reflects the levels and composition of our loan delinquencies, non-performing loans and net loan charge-offs, the size and composition of our loan portfolio and our evaluation of the housing and real estate markets and overall economy, including the unemployment rate.  Non-interest income decreased for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010, primarily as a result of a litigation settlement recognized in the 2010 second quarter.

Sustained U.S. economic growth has proven difficult as evidenced by the slower than expected growth and slightly higher unemployment in the 2011 second quarter.  Although the operating environment for residential mortgage portfolio lenders remains challenging, we are optimistic that the increase in our loan pipeline, coupled with the anticipated reduction in the expanded conforming loan limits in October 2011 and the resumption of multi-family and commercial real estate lending in the second half of 2011, should facilitate future loan and balance sheet growth in 2011 and strong growth starting in 2012.  With interest rates remaining lower than anticipated, and loan repayments and modifications higher than expected, we now project the 2011 margin to be slightly lower than the 2010 margin of 2.35%.  We expect capital levels to continue to increase which should support loan and balance sheet growth in the second half of 2011 and next year.

Available Information

Our internet website address is www.astoriafederal.com.  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports can be obtained free of charge from our investor relations website at http://ir.astoriafederal.com.  The above reports are available on our website immediately after they are electronically filed with or furnished to the SEC.  Such reports are also available on the SEC’s website at www.sec.gov/edgar/searchedgar/webusers.htm.

Critical Accounting Policies

Note 1 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” of our 2010 Annual Report on Form 10-K, as supplemented by our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and this report, contains a summary of our significant accounting policies.  Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.  Our policies with respect to the methodologies used to determine the allowance for loan losses, the valuation of MSR and judgments regarding goodwill and securities impairment are our most critical accounting policies because they are important to the presentation of our financial condition and results of operations, involve a higher degree of

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complexity and require management to make difficult and subjective judgments which often require assumptions or estimates about highly uncertain matters.  The use of different judgments, assumptions and estimates could result in material differences in our results of operations or financial condition.  These critical accounting policies are reviewed quarterly with the Audit Committee of our Board of Directors.  The following description of these policies should be read in conjunction with the corresponding section of our 2010 Annual Report on Form 10-K.

Allowance for Loan Losses

Our allowance for loan losses is established and maintained through a provision for loan losses based on our evaluation of the probable inherent losses in our loan portfolio.  We evaluate the adequacy of our allowance on a quarterly basis.  The allowance is comprised of both specific valuation allowances and general valuation allowances although the total allowance for loan losses is available for losses applicable to the entire portfolio.

Specific valuation allowances are established in connection with individual loan reviews and the asset classification process, including the procedures for impairment recognition under GAAP.  Such evaluation, which includes a review of loans on which full collectibility is not reasonably assured, considers the current estimated fair value of the underlying collateral, if any, current and anticipated economic and regulatory conditions, current and historical loss experience of similar loans and other factors that determine risk exposure to arrive at an adequate loan loss allowance.

Loan reviews are completed quarterly for all loans individually classified by our Asset Classification Committee.  Individual loan reviews are generally completed annually for multi-family, commercial real estate and construction mortgage loans with balances of $2.0 million or greater, commercial business loans with balances of $200,000 or greater and troubled debt restructurings.  In addition, we generally review annually borrowing relationships whose combined outstanding balance is $2.0 million or greater. Approximately fifty percent of the outstanding principal balance of these loans to a single borrowing entity will be reviewed annually.

The primary considerations in establishing specific valuation allowances are the current estimated value of a loan’s underlying collateral and the loan’s payment history.  We update our estimates of collateral value for non-performing multi-family, commercial real estate and construction mortgage loans with balances of $1.0 million or greater and one-to-four family mortgage loans which are 180 days or more delinquent, annually, and certain other loans when the Asset Classification Committee believes repayment of such loans may be dependent on the value of the underlying collateral.  For one-to-four family mortgage loans, updated estimates of collateral value are obtained primarily through automated valuation models.  For multi-family and commercial real estate properties, we estimate collateral value through appraisals or internal cash flow analyses, when current financial information is available, coupled with, in most cases, an inspection of the property.  Other current and anticipated economic conditions on which our specific valuation allowances rely are the impact that national and/or local economic and business conditions may have on borrowers, the impact that local real estate markets may have on collateral values, the level and direction of interest rates and their combined effect on real estate values and the ability of borrowers to service debt.  For multi-family and commercial real estate loans, additional factors specific to a borrower or the underlying collateral are considered.  These factors include, but are not limited to, the composition of tenancy, occupancy levels for the property, location of the property, cash flow estimates and, to a lesser degree, the existence of

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personal guarantees.  We also review all regulatory notices, bulletins and memoranda with the purpose of identifying upcoming changes in regulatory conditions which may impact our calculation of specific valuation allowances.  Our primary banking regulator periodically reviews our reserve methodology during regulatory examinations and any comments regarding changes to reserves or loan classifications are considered by management in determining valuation allowances.

Pursuant to our policy, loan losses are charged-off in the period the loans, or portions thereof, are deemed uncollectible, or, in the case of one-to-four family mortgage loans, at 180 days past due, and annually thereafter, for the portion of the recorded investment in the loan in excess of the estimated fair value of the underlying collateral less estimated selling costs.  The determination of the loans on which full collectibility is not reasonably assured, the estimates of the fair value of the underlying collateral and the assessment of economic and regulatory conditions are subject to assumptions and judgments by management.  Specific valuation allowances and charge-off amounts could differ materially as a result of changes in these assumptions and judgments.

General valuation allowances represent loss allowances that have been established to recognize the inherent risks associated with our lending activities which, unlike specific allowances, have not been allocated to particular loans.  The determination of the adequacy of the general valuation allowances takes into consideration a variety of factors.  We segment our one-to-four family mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and year of origination and analyze our historical loss experience and delinquency levels and trends of these segments.  The resulting range of allowance percentages is used as an integral part of our judgment in developing estimated loss percentages to apply to the portfolio segments.  We segment our consumer and other loan portfolio by home equity lines of credit, business loans, revolving credit lines and installment loans and perform similar historical loss analyses.  We monitor credit risk on interest-only hybrid ARM loans that were underwritten at the initial note rate, which may have been a discounted rate, in the same manner that we monitor credit risk on all interest-only hybrid ARM loans.  We monitor interest rate reset dates of our portfolio, in the aggregate, and the current interest rate environment and consider the impact, if any, on borrowers’ ability to continue to make timely principal and interest payments in determining our allowance for loan losses.  We also consider the size, composition, risk profile and delinquency levels of our portfolio, as well as our credit administration and asset management procedures.  We monitor property value trends in our market areas by reference to various industry and market reports, economic releases and surveys, and our general and specific knowledge of the real estate markets in which we lend, in order to determine what impact, if any, such trends may have on the level of our general valuation allowances.  In determining our allowance coverage percentages for non-performing loans, we consider our aggregate historical loss experience with respect to the ultimate disposition of the underlying collateral.  To further enhance our non-performing loan analysis, during the quarter ended June 30, 2011, we began segmenting our non-performing loans by state and analyzing our historical loss experience and cure rates by state.  In addition, we evaluate and consider the impact that current and anticipated economic and market conditions may have on the portfolio and known and inherent risks in the portfolio.

We use ratio analyses as a supplemental tool for evaluating the overall reasonableness of the allowance for loan losses.  As such, we evaluate and consider our asset quality ratios as well as the allowance ratios and coverage percentages set forth in both peer group and regulatory agency data.  We also consider any comments from our primary banking regulator resulting from their

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review of our general valuation allowance methodology during regulatory examinations.  We consider the observed trends in our asset quality ratios in combination with our primary focus on our historical loss experience and the impact of current economic conditions.  After evaluating these variables, we determine appropriate allowance coverage percentages for each of our portfolio segments and the appropriate level of our allowance for loan losses.  We do not determine the appropriate level of our allowance for loan losses based exclusively on a single factor or asset quality ratio.  Our evaluation of general valuation allowances is inherently subjective because, even though it is based on objective data, it is management’s interpretation of that data that determines the amount of the appropriate allowance.  Therefore, we periodically review the actual performance and charge-off history of our portfolio and compare that to our previously determined allowance coverage percentages and specific valuation allowances.  In doing so, we evaluate the impact the previously mentioned variables may have had on the portfolio to determine which changes, if any, should be made to our assumptions and analyses.

As a result of our updated charge-off and loss analyses, we modified certain allowance coverage percentages during the 2011 first and second quarters to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our general valuation allowances.  Based on our evaluation of the housing and real estate markets and overall economy, including the unemployment rate, the levels and composition of our loan delinquencies, non-performing loans and net loan charge-offs and the size and composition of our loan portfolio, we determined that an allowance for loan losses of $182.7 million was required at June 30, 2011, compared to $189.5 million at March 31, 2011 and $201.5 million at December 31, 2010, resulting in a provision for loan losses of $17.0 million for the six months ended June 30, 2011.  The balance of our allowance for loan losses represents management’s best estimate of the probable inherent losses in our loan portfolio at the reporting dates.

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

For additional information regarding our allowance for loan losses, see “Provision for Loan Losses” and “Asset Quality” in this document and Part II, Item 7, “MD&A,” in our 2010 Annual Report on Form 10-K.

Valuation of MSR

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

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At June 30, 2011, our MSR had an estimated fair value of $9.4 million and were valued based on expected future cash flows considering a weighted average discount rate of 10.94%, a weighted average constant prepayment rate on mortgages of 18.42% and a weighted average life of 4.1 years.  At December 31, 2010, our MSR had an estimated fair value of $9.2 million and were valued based on expected future cash flows considering a weighted average discount rate of 10.96%, a weighted average constant prepayment rate on mortgages of 19.94% and a weighted average life of 3.8 years.

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

Goodwill Impairment

Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level. Impairment exists when the carrying amount of goodwill exceeds its implied fair value.  For purposes of our goodwill impairment testing, we have identified a single reporting unit.  We consider the quoted market price of our common stock on our impairment testing date as an initial indicator of estimating the fair value of our reporting unit.  In addition, we consider our average stock price, both before and after our impairment test date, as well as market-based control premiums in determining the estimated fair value of our reporting unit.  If the estimated fair value of our reporting unit exceeds its carrying amount, further evaluation is not necessary.  However, if the fair value of our reporting unit is less than its carrying amount, further evaluation is required to compare the implied fair value of the reporting unit’s goodwill to its carrying amount to determine if a write-down of goodwill is required.

At June 30, 2011, the carrying amount of our goodwill totaled $185.2 million.  On September 30, 2010, we performed our annual goodwill impairment test and determined the estimated fair value of our reporting unit to be in excess of its carrying amount.  Accordingly, as of our annual impairment test date, there was no indication of goodwill impairment.  We would test our goodwill for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount.  No events have occurred and no circumstances have changed since our annual impairment test date that would more likely than not reduce the fair value of our reporting unit below its carrying amount.  The identification of additional reporting units or the use of other valuation techniques could result in materially different evaluations of impairment.

Securities Impairment

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

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Our investment portfolio is comprised primarily of fixed rate mortgage-backed securities guaranteed by a GSE as issuer.  GSE issuance mortgage-backed securities comprised 96% of our securities portfolio at June 30, 2011.  Non-GSE issuance mortgage-backed securities at June 30, 2011 comprised 2% of our securities portfolio and had an amortized cost of $41.6 million, 45% of which are classified as available-for-sale and 55% of which are classified as held-to-maturity.  Substantially all of our non-GSE issuance securities are investment grade securities and they have performed similarly to our GSE issuance securities.  Credit quality concerns have not significantly impacted the performance of our non-GSE securities or our ability to obtain reliable prices.

The fair value of our investment portfolio is primarily impacted by changes in interest rates.  In general, as interest rates rise, the fair value of fixed rate securities will decrease; as interest rates fall, the fair value of fixed rate securities will increase.  We conduct a periodic review and evaluation of the securities portfolio to determine if a decline in the fair value of any security below its cost basis is other-than-temporary.  Our evaluation of other-than-temporary impairment, or OTTI, considers the duration and severity of the impairment, our assessments of the reason for the decline in value, the likelihood of a near-term recovery and our intent and ability to not sell the securities.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  If such decline is deemed other-than-temporary, the security is written down to a new cost basis and the resulting loss is charged to earnings as a component of non-interest income, except for the amount of the total OTTI for a debt security that does not represent credit losses which is recognized in other comprehensive income/loss, net of applicable taxes.  At June 30, 2011, we had 41 securities with an estimated fair value totaling $240.2 million which had an unrealized loss totaling $804,000.  Of the securities in an unrealized loss position at June 30, 2011, $17.7 million, with an unrealized loss of $332,000, have been in a continuous unrealized loss position for more than twelve months.  At June 30, 2011, the impairments are deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expect to recover the entire amortized cost basis of the security.

Liquidity and Capital Resources

Our primary source of funds is cash provided by principal and interest payments on loans and securities.  The most significant liquidity challenge we face is the variability in cash flows as a result of changes in mortgage refinance activity.  Principal payments on loans and securities totaled $2.50 billion for the six months ended June 30, 2011, compared to $2.74 billion for the six months ended June 30, 2010.  The net decrease in loan and securities repayments for the six months ended June 30, 2011, compared to the six months ended June 30, 2010, was primarily due to a decrease in securities repayments, partially offset by an increase in loan repayments.  The increase in loan repayments primarily reflects an increase in multi-family and commercial real estate mortgage loan repayments.  One-to-four family mortgage loan repayments for the six months ended June 30, 2011 decreased compared to the six months ended June 30, 2010, but remained at elevated levels as interest rates on thirty year fixed rate conforming mortgages, which we do not retain for portfolio, remained at historic lows and as loans in our portfolio which qualified under the expanded conforming loan limits were refinanced into fixed rate

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conforming mortgages.  During the 2011 second quarter, we decided to be somewhat more competitive with the pricing of our one-to-four family hybrid ARM and fifteen year jumbo mortgage rates which resulted in an increase in applications and a larger mortgage loan pipeline as of June 30, 2011 versus March 31, 2011.  The rise in interest rates on thirty year fixed rate mortgages at the end of the 2010 fourth quarter led to a decrease in loan repayments for the 2011 first and second quarters compared to the 2010 fourth quarter.  The decrease in interest rates on thirty year fixed rate mortgages during the 2011 second quarter may lead to a slight increase in repayments during the 2011 third quarter.

In addition to cash provided by principal and interest payments on loans and securities, our other sources of funds include cash provided by operating activities, deposits and borrowings.  However, for the six months ended June 30, 2011 and 2010, net deposit and borrowing activity resulted in a use of funds.  Net cash provided by operating activities totaled $126.0 million for the six months ended June 30, 2011 and $134.7 million for the six months ended June 30, 2010.  Deposits decreased $388.4 million during the six months ended June 30, 2011 and decreased $563.8 million during the six months ended June 30, 2010.  The net decreases in deposits for the six months ended June 30, 2011 and 2010 were primarily due to decreases in certificates of deposit and Liquid CDs, partially offset by increases in savings, NOW and demand deposit and money market accounts.  During the six months ended June 30, 2011 and 2010, we continued to allow high cost certificates of deposit to run off as total assets declined.  The increases in low cost savings, NOW and demand deposit and money market accounts during the six months ended June 30, 2011 and 2010 appear to reflect customer preference for the liquidity these types of deposits provide.  However, we have achieved some success in extending the terms of our retained certificates of deposit during the first half of 2011.  During the first half of 2011, we extended $538.2 million of certificates of deposit for terms of two years or more in an effort to help limit our exposure to future increases in interest rates.
 

Net borrowings decreased $582.8 million during the six months ended June 30, 2011 and decreased $64.8 million during the six months ended June 30, 2010.  The decrease in net borrowings during the six months ended June 30, 2011 was primarily due to cash flows from mortgage loan repayments in excess of mortgage loan originations and purchases which enabled us to repay a portion of our matured borrowings.  During the latter half of the 2010 second quarter, we increased longer term borrowings to take advantage of the current rates on such borrowings in anticipation of borrowings scheduled to mature in the 2010 third quarter.

Our primary use of funds is for the origination and purchase of mortgage loans and, to a lesser degree, for the purchase of securities.  Gross mortgage loans originated and purchased for portfolio during the six months ended June 30, 2011 totaled $1.34 billion, of which $927.2 million were originations and $416.4 million were purchases.  This compares to gross mortgage loans originated and purchased for portfolio during the six months ended June 30, 2010 totaling $1.60 billion, of which $1.35 billion were originations and $243.4 million were purchases.  All of our mortgage loan originations and purchases during 2010 and the first half of 2011 were one-to-four family mortgage loans.  Overall one-to-four family mortgage loan origination and purchase volume for portfolio has been negatively affected by the historic low interest rates on thirty year fixed rate conforming mortgages, which we do not retain for portfolio, and the expanded conforming loan limits.  Purchases of securities totaled $356.7 million during the six months ended June 30, 2011 and $390.9 million during the six months ended June 30, 2010.

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

We maintain liquidity levels to meet our operational needs in the normal course of our business.  The levels of our liquid assets during any given period are dependent on our operating, investing and financing activities.  Cash and due from banks and repurchase agreements, our most liquid assets, totaled $108.0 million at June 30, 2011 and $119.0 million at December 31, 2010.  At June 30, 2011, we had $1.03 billion in borrowings with a weighted average rate of 4.00% maturing over the next twelve months.  We have the flexibility to either repay or rollover these borrowings as they mature.  Included in our borrowings are various obligations which, by their terms, may be called by the securities dealers and the FHLB-NY.  We believe the potential for these borrowings to be called does not present liquidity concerns as they have various call dates and coupons and we believe we can readily obtain replacement funding, albeit at higher rates.  We do not believe any of our borrowing counterparty concentrations represent a material risk to our liquidity.  In addition, we had $3.23 billion in certificates of deposit and Liquid CDs at June 30, 2011 with a weighted average rate of 1.43% maturing over the next twelve months.  We have the ability to retain or replace a significant portion of such deposits based on our pricing and historical experience.  However, should our balance sheet continue to contract, we may continue to see a reduction in borrowings and/or deposits.

The following table details our borrowing, certificate of deposit and Liquid CD maturities and their weighted average rates at June 30, 2011.

							Certificates of Deposit
	Borrowings						and Liquid CDs
				Weighted						Weighted
				Average						Average
(Dollars in Millions)	Amount			Rate			Amount			Rate
Contractual Maturity:
Twelve months or less	$	1,033			4.00	%	$	3,232	(1)		1.43	%
Thirteen to thirty-six months		1,175	(2)		3.54			1,780			2.43
Thirty-seven to sixty months		200	(3)		4.18			1,153			2.82
Over sixty months		1,879	(4)		4.72			-			-
Total	$	4,287			4.20	%	$	6,165			1.98	%

(1)	Includes $363.4 million of Liquid CDs with a weighted average rate of 0.25% and $2.87 billion of certificates of deposit with a weighted average rate of 1.58%.
(2)	Includes $400.0 million of borrowings, with a weighted average rate of 4.11%, which are callable by the counterparty within the next three months and at various times thereafter.
(3)	Callable by the counterparty within the next three months and at various times thereafter.
(4)	Includes $1.75 billion of borrowings, with a weighted average rate of 4.35%, which are callable by the counterparty within the next three months and at various times thereafter.

Additional sources of liquidity at the holding company level have included issuances of securities into the capital markets, including private issuances of trust preferred securities and senior debt.  Holding company debt obligations are included in other borrowings.  Our ability to

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continue to access the capital markets for additional financing at favorable terms may be limited by, among other things, market conditions, interest rates, our capital levels, Astoria Federal’s ability to pay dividends to Astoria Financial Corporation, our credit profile and ratings and our business model.

On May 19, 2010, we filed an automatic shelf registration statement on Form S-3 with the SEC, which was declared effective immediately upon filing.  This shelf registration statement allows us to periodically offer and sell, from time to time, in one or more offerings, individually or in any combination, common stock, preferred stock, debt securities, capital securities, guarantees, warrants to purchase common stock or preferred stock and units consisting of one or more of the foregoing.  The shelf registration statement provides us with greater capital management flexibility and enables us to more readily access the capital markets in order to pursue growth opportunities that may become available to us in the future or should there be any changes in the regulatory environment that call for increased capital requirements.  Although the shelf registration statement does not limit the amount of the foregoing items that we may offer and sell pursuant to the shelf registration statement, our ability and any decision to do so is subject to market conditions and our capital needs.  At this time, we do not have immediate plans or current commitments to sell securities under the shelf registration statement.
 

Astoria Financial Corporation’s primary uses of funds include payment of dividends, payment of interest on its debt obligations and repurchases of common stock.  During the six months ended June 30, 2011, Astoria Financial Corporation paid interest totaling $13.3 million and dividends totaling $24.7 million.  On July 20, 2011, we declared a quarterly cash dividend of $0.13 per share on shares of our common stock payable on  September 1, 2011 to stockholders of record as of the close of business on August 15, 2011.  Our twelfth stock repurchase plan, approved by our Board of Directors on April 18, 2007, authorized the purchase of 10,000,000 shares, or approximately 10% of our common stock then outstanding, in open-market or privately negotiated transactions.  At June 30, 2011, a maximum of 8,107,300 shares may yet be purchased under this plan, however, we are not currently repurchasing additional shares of our common stock and have not since the 2008 third quarter.

Our ability to pay dividends, service our debt obligations and repurchase common stock is dependent primarily upon receipt of capital distributions from Astoria Federal.  Since Astoria Federal is a federally chartered savings association, there are limits on its ability to make distributions to Astoria Financial Corporation.  During the six months ended June 30, 2011, Astoria Federal paid dividends to Astoria Financial Corporation totaling $26.0 million.  On July 18, 2011, Astoria Federal paid a dividend to Astoria Financial Corporation totaling $12.0 million.

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

At June 30, 2011, Astoria Federal’s capital levels exceeded all of its regulatory capital requirements with a tangible capital ratio of 8.61%, leverage capital ratio of 8.61% and total risk-based capital ratio of 15.78%.  The minimum regulatory requirements are a tangible capital ratio of 1.50%, leverage capital ratio of 4.00% and total risk-based capital ratio of 8.00%.  Astoria Federal’s Tier 1 risk-based capital ratio was 14.48% at June 30, 2011.  As of June 30, 2011, Astoria Federal continues to be a well capitalized institution for all bank regulatory purposes.

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Off-Balance Sheet Arrangements and Contractual Obligations

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

Lending commitments include commitments to originate and purchase loans and commitments to fund unused lines of credit.  Additionally, in connection with our mortgage banking activities, we have commitments to fund loans held-for-sale and commitments to sell loans which are considered derivative instruments.  Commitments to sell loans totaled $28.6 million at June 30, 2011.  The fair values of our mortgage banking derivative instruments are immaterial to our financial condition and results of operations.  We also have contractual obligations related to operating lease commitments which have not changed significantly from December 31, 2010.  Subsequent to June 30, 2011, we entered into a lease agreement for office space in Jericho, New York to house our new Multi-family and Commercial Real Estate Lending Department and other operations.

The following table details our contractual obligations at June 30, 2011.

	Payments due by period
			Less than		One to		Three to		More than
(In Thousands)	Total		One Year		Three Years		Five Years		Five Years
On-balance sheet contractual obligations:
Borrowings with original terms greater than three months	$	4,222,866	$	969,000	$	1,175,000	$	200,000	$	1,878,866
Off-balance sheet contractual obligations:
Commitments to originate and purchase loans (1)		381,671		381,671		-		-		-
Commitments to fund unused lines of credit (2)		258,761		258,761		-		-		-
Total	$	4,863,298	$	1,609,432	$	1,175,000	$	200,000	$	1,878,866

(1)  Commitments to originate and purchase loans include commitments to originate loans held-for-sale of $27.8 million.

(2)  Unused lines of credit relate primarily to home equity lines of credit.

In addition to the contractual obligations previously discussed, we have liabilities for gross unrecognized tax benefits and interest and penalties related to uncertain tax positions which have not changed significantly from December 31, 2010.  For further information regarding these liabilities, see Note 11 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” in our 2010 Annual Report on Form 10-K.  We also have contingent liabilities related to assets sold with recourse and standby letters of credit which have not changed significantly from December 31, 2010.

For further information regarding our off-balance sheet arrangements and contractual obligations, see Part II, Item 7, “MD&A,” in our 2010 Annual Report on Form 10-K.

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Comparison of Financial Condition as of June 30, 2011 and December 31, 2010 and  Operating Results for the Three and Six Months Ended June 30, 2011 and 2010

Financial Condition

Total assets decreased $968.9 million to $17.12 billion at June 30, 2011, from $18.09 billion at December 31, 2010.  The decrease in total assets was primarily due to a decrease in loans receivable and securities.

Loans receivable, net, decreased $696.7 million to $13.32 billion at June 30, 2011, from $14.02 billion at December 31, 2010.  This decrease was a result of repayments outpacing our mortgage  loan origination and purchase volume during the six months ended June 30, 2011.

Mortgage loans decreased $695.1 million to $13.13 billion at June 30, 2011, from $13.83 billion at December 31, 2010.  This decrease was primarily due to decreases in our multi-family, one-to-four family and commercial real estate mortgage loan portfolios.  Mortgage loan repayments increased to $1.94 billion for the six months ended June 30, 2011, from $1.85 billion for the six months ended June 30, 2010.  This increase was primarily due to an increase in multi-family and commercial real estate mortgage loan repayments, partially offset by a decrease in one-to-four family mortgage loan repayments.  Gross mortgage loans originated and purchased for portfolio during the six months ended June 30, 2011 totaled $1.34 billion, of which $927.2 million were originations and $416.4 million were purchases.  This compares to gross mortgage loans originated and purchased for portfolio totaling $1.60 billion during the six months ended June 30, 2010, of which $1.35 billion were originations and $243.4 million were purchases.  All of our mortgage loan originations and purchases during 2010 and the first six months of 2011 were one-to-four family mortgage loans.

Our mortgage loan portfolio continues to consist primarily of one-to-four family mortgage loans.  Our one-to-four family mortgage loan portfolio decreased $304.1 million to $10.55 billion at June 30, 2011, from $10.86 billion at December 31, 2010, and represented 78.6% of our total loan portfolio at June 30, 2011.  The decrease was primarily the result of the levels of repayments which outpaced our originations and purchases during the six months ended June 30, 2011.  One-to-four family mortgage loan repayments decreased during the six months ended June 30, 2011, compared to the six months ended June 30, 2010, but remain at elevated levels.  The rise in interest rates on thirty year fixed rate mortgages at the end of the 2010 fourth quarter led to a decrease in loan repayments which resulted in a significantly slower pace of decline in our one-to-four family mortgage loan portfolio in the 2011 first and second quarters, compared to the 2010 fourth quarter.  One-to-four family mortgage loan origination and purchase volume for portfolio has been negatively affected by the historic low interest rates for thirty year fixed rate conforming mortgages and the expanded conforming loan limits resulting in more borrowers opting for thirty year fixed rate conforming mortgages which we do not retain for portfolio.  During the six months ended June 30, 2011, the loan-to-value ratio of our one-to-four family mortgage loan originations and purchases for portfolio, at the time of origination or purchase, averaged approximately 61% and the loan amount averaged approximately $754,000.

Our multi-family mortgage loan portfolio decreased $341.8 million to $1.85 billion at June 30, 2011, from $2.19 billion at December 31, 2010.  Our commercial real estate loan portfolio decreased $48.2 million to $723.5 million at June 30, 2011, from $771.7 million at December 31, 2010.  The decreases in these loan portfolios are attributable to repayments, the sale or transfer to

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held-for-sale of certain delinquent and non-performing loans and the absence of new multi-family and commercial real estate loan originations.  We expect to resume originations in the New York City mortgage market in the latter half of 2011 and have already resumed accepting multi-family and commercial real estate loan applications.

Securities decreased $150.4 million to $2.42 billion at June 30, 2011, from $2.57 billion at December 31, 2010.  This decrease was primarily the result of principal payments received of $510.1 million, partially offset by purchases of $356.7 million.  At June 30, 2011, our securities portfolio was comprised primarily of fixed rate REMIC and CMO securities which had an amortized cost of $2.30 billion, a weighted average current coupon of 3.74%, a weighted average collateral coupon of 5.19% and a weighted average life of 2.6 years.  For additional information regarding our securities portfolio, see Note 2 of Notes to Consolidated Financial Statements in Item 1, “Financial Statements (Unaudited).”

Deposits decreased $388.4 million to $11.21 billion at June 30, 2011, from $11.60 billion at December 31, 2010, due to decreases in certificates of deposit and Liquid CDs, partially offset by increases in savings, NOW and demand deposit and money market accounts.  Certificates of deposit decreased $512.3 million since December 31, 2010 to $5.80 billion at June 30, 2011.  Liquid CDs decreased $105.3 million since December 31, 2010 to $363.4 million at June 30, 2011.  Savings accounts increased $173.4 million since December 31, 2010 to $2.84 billion at June 30, 2011.  NOW and demand deposit accounts increased $35.1 million since December 31, 2010 to $1.81 billion at June 30, 2011.  Money market accounts increased $20.8 million since December 31, 2010 to $397.1 million at June 30, 2011.  During the first half of 2011, we continued to allow high cost certificates of deposit to run off as total assets declined.  The increases in low cost savings, NOW and demand deposit and money market accounts during the six months ended June 30, 2011 appear to reflect customer preference for the liquidity these types of deposits provide.
 

Total borrowings, net, decreased $582.8 million to $4.29 billion at June 30, 2011, from $4.87 billion at December 31, 2010.  The decrease in total borrowings was primarily the result of cash flows from mortgage loan and securities repayments exceeding mortgage loan originations and purchases, securities purchases and deposit outflows which enabled us to repay a portion of our matured borrowings.

Stockholders’ equity increased $36.8 million to $1.28 billion at June 30, 2011, from $1.24 billion at December 31, 2010.  The increase in stockholders’ equity was due to net income of $44.2 million, a decrease in accumulated other comprehensive loss of $6.8 million, the allocation of shares held by the employee stock ownership plan, or ESOP, of $5.8 million and stock-based compensation of $4.5 million.  These increases were partially offset by dividends declared of $24.7 million.

Results of Operations

General

Net income for the three months ended June 30, 2011 increased $1.3 million to $16.8 million, from $15.5 million for the three months ended June 30, 2010.  Diluted earnings per common share increased to $0.18 per share for the three months ended June 30, 2011, from $0.17 per share for the three months ended June 30, 2010.  Return on average assets increased to 0.39% for

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the three months ended June 30, 2011, from 0.31% for the three months ended June 30, 2010. Return on average stockholders’ equity increased to 5.31% for the three months ended June 30, 2011, from 5.09% for the three months ended June 30, 2010.  Return on average tangible stockholders’ equity, which represents average stockholders’ equity less average goodwill, increased to 6.21% for the three months ended June 30, 2011, from 6.01% for the three months ended June 30, 2010.

Net income for the six months ended June 30, 2011 increased $15.7 million to $44.2 million, from $28.5 million for the six months ended June 30, 2010.  Diluted earnings per common share increased to $0.46 per share for the six months ended June 30, 2011,  from $0.30 per share for the six months ended June 30, 2010.  Return on average assets increased to 0.50% for the six months ended June 30, 2011, from 0.28% for the six months ended June 30, 2010.  Return on average stockholders’ equity increased to 7.03% for the six months ended June 30, 2011, from 4.69% for the six months ended June 30, 2010.  Return on average tangible stockholders’ equity increased to 8.24% for the six months ended June 30, 2011, from 5.53% for the six months ended June 30, 2010.  The increases in the returns on average assets for the three and six months ended June 30, 2011, compared to the three and six months ended June 30, 2010, were due to the increases in net income and decreases in average assets.  The increases in the returns on average stockholders’ equity and average tangible stockholders’ equity for the three and six months ended June 30, 2011, compared to the three and six months ended June 30, 2010, were due to the increases in net income, partially offset by increases in average stockholders’ equity.

Our results of operations for the three and six months ended June 30, 2010 include $6.2 million ($4.0 million, after tax) of non-interest income related to a litigation settlement (Goodwill Litigation), $7.9 million ($5.1 million, after tax) of non-interest expense related to a litigation settlement (McAnaney Litigation), and a $1.5 million ($981,000, after tax) asset impairment charge against non-interest income related to an office building previously included in premises and equipment, net, which was sold in the 2011 second quarter.  For the three months ended June 30, 2010, these net charges reduced diluted earnings per common share by $0.02 per share, return on average assets by 4 basis points, return on average stockholders’ equity by 69 basis points and return on average tangible stockholders’ equity by 80 basis points.  For the six months ended June 30, 2010, these net charges reduced diluted earnings per common share by $0.02 per share, return on average assets by 2 basis points, return on average stockholders’ equity by 34 basis points and return on average tangible stockholders’ equity by 40 basis points.  For further discussion of the litigation settlements, see Note 10 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” in our 2010 Annual Report on Form 10-K.  For further discussion of the asset impairment charge recorded in the 2010 second quarter and the sale of the office building in the 2011 second quarter, see Note 1 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” in our 2010 Annual Report on Form 10-K andNote 5 of Notes to Consolidated Financial Statements in Item 1, “Financial Statements (Unaudited),” in this Quarterly Report on Form 10-Q.

Net Interest Income

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities.  Net interest income depends primarily upon the volume of interest-earning assets and interest-bearing liabilities and the corresponding interest rates earned or paid. Our net interest income is significantly impacted by changes in interest rates and

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market yield curves and their related impact on cash flows.  See Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” for further discussion of the potential impact of changes in interest rates on our results of operations.

For the three months ended June 30, 2011, net interest income decreased $16.2 million to $95.7 million, from $111.9 million for the three months ended June 30, 2010, and decreased $29.0 million to $197.3 million for the six months ended June 30, 2011, from $226.3 million for the six months ended June 30, 2010, due to decreases in interest income, partially offset by decreases in interest expense.  Interest income for the three and six months ended June 30, 2011 decreased, compared to the three and six months ended June 30, 2010, primarily due to decreases in the average balances of mortgage loans and mortgage-backed and other securities, coupled with decreases in the average yields on one-to-four family mortgage loans and mortgage-backed and other securities.  Interest expense for the three and six months ended June 30, 2011 decreased, compared to the three and six months ended June 30, 2010, primarily due to decreases in the average balances of certificates of deposit and borrowings, coupled with decreases in the average costs of certificates of deposit.  The net interest rate spread decreased to 2.26% for the three months ended June 30, 2011, from 2.30% for the three months ended June 30, 2010, and decreased to 2.30% for the six months ended June 30, 2011, from 2.31% for the six months ended June 30, 2010.  The net interest margin decreased to 2.34% for the three months ended June 30, 2011, from 2.37% for the three months ended June 30, 2010, and decreased to 2.37% for the six months ended June 30, 2011, from 2.38% for the six months ended June 30, 2010.  The slight decreases in the net interest rate spread and net interest margin reflect the significant decreases in the yields on average interest-earning assets, substantially offset by the declines in the costs of average interest-bearing liabilities, for the three and six months ended June 30, 2011 compared to the three and six months ended June 30, 2010.  The average balance of net interest-earning assets decreased $12.0 million to $591.6 million for the three months ended June 30, 2011, from $603.6 million for the three months ended June 30, 2010, and increased $10.7 million to $588.0 million for the six months ended June 30, 2011, from $577.3 million for the six months ended June 30, 2010.

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

Analysis of Net Interest Income

The following tables set forth certain information about the average balances of our assets and liabilities and their related yields and costs for the three and six months ended June 30, 2011 and 2010.  Average yields are derived by dividing income by the average balance of the related assets and average costs are derived by dividing expense by the average balance of the related liabilities, for the periods shown.  Average balances are derived from average daily balances.  The yields and costs include amortization of fees, costs, premiums and discounts which are considered adjustments to interest rates.

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	For the Three Months Ended June 30,
	2011								2010
(Dollars in Thousands)	Average Balance			Interest		Average Yield/ Cost			Average Balance			Interest		Average Yield/ Cost
						(Annualized)								(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family	$	10,675,616		$	111,869		4.19	%	$	11,891,353		$	136,750		4.60	%
Multi-family, commercial real estate and construction		2,685,694			41,085		6.12			3,332,007			49,598		5.95
Consumer and other loans (1)		300,441			2,509		3.34			328,613			2,668		3.25
Total loans		13,661,751			155,463		4.55			15,551,973			189,016		4.86
Mortgage-backed and other securities (2)		2,448,292			21,339		3.49			3,003,555			29,636		3.95
Repurchase agreements and interest-earning cash accounts		150,589			74		0.20			127,810			54		0.17
FHLB-NY stock		127,603			1,637		5.13			174,339			1,921		4.41
Total interest-earning assets		16,388,235			178,513		4.36			18,857,677			220,627		4.68
Goodwill		185,151								185,151
Other non-interest-earning assets		872,016								852,970
Total assets	$	17,445,402							$	19,895,798
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings	$	2,805,096			2,809		0.40		$	2,328,276			2,345		0.40
Money market		395,512			450		0.46			337,851			374		0.44
NOW and demand deposit		1,807,350			290		0.06			1,684,022			271		0.06
Liquid CDs		386,556			238		0.25			622,381			769		0.49
Total core deposits		5,394,514			3,787		0.28			4,972,530			3,759		0.30
Certificates of deposit		5,978,431			31,851		2.13			7,554,438			45,737		2.42
Total deposits		11,372,945			35,638		1.25			12,526,968			49,496		1.58
Borrowings		4,423,712			47,153		4.26			5,727,065			59,182		4.13
Total interest-bearing liabilities		15,796,657			82,791		2.10			18,254,033			108,678		2.38
Non-interest-bearing liabilities		379,064								421,163
Total liabilities		16,175,721								18,675,196
Stockholders’ equity		1,269,681								1,220,602
Total liabilities and stockholders’ equity	$	17,445,402							$	19,895,798
Net interest income/
net interest rate spread (3)				$	95,722		2.26	%				$	111,949		2.30	%
Net interest-earning assets/
net interest margin (4)	$	591,578					2.34	%	$	603,644					2.37	%
Ratio of interest-earning assets to
interest-bearing liabilities		1.04	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.

(3) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average interest-earning assets.

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	For the Six Months Ended June 30,
	2011								2010
(Dollars in Thousands)	Average Balance			Interest		Average Yield/ Cost			Average Balance			Interest		Average Yield/ Cost
						(Annualized)								(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
One-to-four family	$	10,750,140		$	226,545		4.21	%	$	11,947,176		$	277,704		4.65	%
Multi-family, commercial real estate and construction		2,784,778			85,577		6.15			3,379,096			100,723		5.96
Consumer and other loans (1)		304,194			5,016		3.30			330,474			5,319		3.22
Total loans		13,839,112			317,138		4.58			15,656,746			383,746		4.90
Mortgage-backed and other securities (2)		2,490,886			43,762		3.51			3,071,338			60,983		3.97
Repurchase agreements and interest-earning cash accounts		172,670			167		0.19			104,714			69		0.13
FHLB-NY stock		137,541			3,954		5.75			178,784			4,417		4.94
Total interest-earning assets		16,640,209			365,021		4.39			19,011,582			449,215		4.73
Goodwill		185,151								185,151
Other non-interest-earning assets		901,230								874,848
Total assets	$	17,726,590							$	20,071,581
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings	$	2,754,957			5,496		0.40		$	2,282,817			4,575		0.40
Money market		389,169			879		0.45			333,447			732		0.44
NOW and demand deposit		1,779,252			571		0.06			1,650,178			528		0.06
Liquid CDs		412,638			506		0.25			647,369			1,592		0.49
Total core deposits		5,336,016			7,452		0.28			4,913,811			7,427		0.30
Certificates of deposit		6,092,447			65,218		2.14			7,686,313			95,611		2.49
Total deposits		11,428,463			72,670		1.27			12,600,124			103,038		1.64
Borrowings		4,623,772			95,100		4.11			5,834,163			119,876		4.11
Total interest-bearing liabilities		16,052,235			167,770		2.09			18,434,287			222,914		2.42
Non-interest-bearing liabilities		415,250								421,905
Total liabilities		16,467,485								18,856,192
Stockholders’ equity		1,259,105								1,215,389
Total liabilities and stockholders’ equity	$	17,726,590							$	20,071,581
Net interest income/
net interest rate spread (3)				$	197,251		2.30	%				$	226,301		2.31	%
Net interest-earning assets/
net interest margin (4)	$	587,974					2.37	%	$	577,295					2.38	%
Ratio of interest-earning assets to
interest-bearing liabilities		1.04	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.

(3) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average interest-earning assets.

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Rate/Volume Analysis

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

	Three Months Ended June 30, 2011 Compared to Three Months Ended June 30, 2010									Six Months Ended June 30, 2011 Compared to Six Months Ended June 30, 2010
	Increase (Decrease)									Increase (Decrease)
(In Thousands)	Volume			Rate			Net			Volume			Rate			Net
Interest-earning assets:
Mortgage loans:
One-to-four family	$	(13,292	)	$	(11,589	)	$	(24,881	)	$	(26,311	)	$	(24,848	)	$	(51,159	)
Multi-family, commercial real estate and construction		(9,889	)		1,376			(8,513	)		(18,257	)		3,111			(15,146	)
Consumer and other loans		(232	)		73			(159	)		(432	)		129			(303	)
Mortgage-backed and other securities		(5,090	)		(3,207	)		(8,297	)		(10,676	)		(6,545	)		(17,221	)
Repurchase agreements and interest-earning cash accounts		10			10			20			57			41			98
FHLB-NY stock		(567	)		283			(284	)		(1,117	)		654			(463	)
Total		(29,060	)		(13,054	)		(42,114	)		(56,736	)		(27,458	)		(84,194	)
Interest-bearing liabilities:
Savings		464			-			464			921			-			921
Money market		60			16			76			129			18			147
NOW and demand deposit		19			-			19			43			-			43
Liquid CDs		(232	)		(299	)		(531	)		(462	)		(624	)		(1,086	)
Certificates of deposit		(8,820	)		(5,066	)		(13,886	)		(18,114	)		(12,279	)		(30,393	)
Borrowings		(13,837	)		1,808			(12,029	)		(24,776	)		-			(24,776	)
Total		(22,346	)		(3,541	)		(25,887	)		(42,259	)		(12,885	)		(55,144	)
Net change in net interest income	$	(6,714	)	$	(9,513	)	$	(16,227	)	$	(14,477	)	$	(14,573	)	$	(29,050	)

Interest Income

Interest income decreased $42.1 million to $178.5 million for the three months ended June 30, 2011, from $220.6 million for the three months ended June 30, 2010, due to a decrease of $2.47 billion in the average balance of interest-earning assets to $16.39 billion for the three months ended June 30, 2011, from $18.86 billion for the three months ended June 30, 2010, coupled with a decrease in the average yield on interest-earning assets to 4.36% for the three months ended June 30, 2011, from 4.68% for the three months ended June 30, 2010.  The decrease in the average balance of interest-earning assets was primarily due to decreases in the average balances of one-to-four family mortgage loans, multi-family, commercial real estate and construction loans and mortgage-backed and other securities.  The decrease in the average yield on interest-earning assets was primarily due to decreases in the average yields on one-to-four family mortgage loans and mortgage-backed and other securities, partially offset by an increase in the average yield on multi-family, commercial real estate and construction loans.

Interest income on one-to-four family mortgage loans decreased $24.9 million to $111.9 million for the three months ended June 30, 2011, from $136.8 million for the three months ended June 30, 2010, due to the combined effect of a decrease of $1.22 billion in the average balance of such

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loans and a decrease in the average yield to 4.19% for the three months ended June 30, 2011, from 4.60% for the three months ended June 30, 2010.  The decrease in the average balance of one-to-four family mortgage loans was primarily due to the levels of repayments over the past year which have outpaced the levels of originations and purchases.  The decrease in the average yield was primarily due to new originations at lower interest rates than the rates on loans repaid over the past year and the impact of the downward repricing of our ARM loans, partially offset by a decrease in net premium amortization.  The lower interest rates and decrease in the average balance are attributable to the U.S. government subsidizing the residential mortgage market with programs designed to keep the interest rate for thirty year fixed rate conforming mortgage loans at historic low levels, coupled with expanded conforming loan limits.  Net premium amortization on one-to-four family mortgage loans decreased $2.1 million to $5.5 million for the three months ended June 30, 2011, from $7.6 million for the three months ended June 30, 2010.  The decrease in net premium amortization reflects the lower average balance of one-to-four family mortgage loans and a decrease in prepayments during the three months ended June 30, 2011, compared to the three months ended June 30, 2010.

Interest income on multi-family, commercial real estate and construction loans decreased $8.5 million to $41.1 million for the three months ended June 30, 2011, from $49.6 million for the three months ended June 30, 2010, due to a decrease of $646.3 million in the average balance of such loans, partially offset by an increase in the average yield to 6.12% for the three months ended June 30, 2011, from 5.95% for the three months ended June 30, 2010.  The decrease in the average balance of multi-family, commercial real estate and construction loans is attributable to repayments, the sale or transfer to held-for-sale of certain delinquent and non-performing loans and the absence of new multi-family, commercial real estate and construction loan originations.  The increase in the average yield on multi-family, commercial real estate and construction loans is primarily due to an increase in prepayment penalties and also reflects a decrease in non-performing loans in 2011 compared to 2010, due primarily to the sale of certain delinquent and non-performing loans over the past year. Prepayment penalties increased $782,000 to $1.4 million for the three months ended June 30, 2011, from $660,000 for the three months ended June 30, 2010.

Interest income on mortgage-backed and other securities decreased $8.3 million to $21.3 million for the three months ended June 30, 2011, from $29.6 million for the three months ended June 30, 2010, due to a decrease of $555.3 million in the average balance of the portfolio, coupled with a decrease in the average yield to 3.49% for the three months ended June 30, 2011, from 3.95% for the three months ended June 30, 2010.  The decrease in the average balance of mortgage-backed and other securities was the result of repayments exceeding securities purchased over the past year.  The decrease in the average yield was primarily due to repayments on higher yielding securities and purchases of new securities with lower coupons, in the prevailing lower interest rate environment, than the weighted average coupon for the portfolio.

Interest income decreased $84.2 million to $365.0 million for the six months ended June 30, 2011, from $449.2 million for the six months ended June 30, 2010, due to a decrease of $2.37 billion in the average balance of interest-earning assets to $16.64 billion for the six months ended June 30, 2011, from $19.01 billion for the six months ended June 30, 2010, coupled with a decrease in the average yield on interest-earning assets to 4.39% for the six months ended June 30, 2011, from 4.73% for the six months ended June 30, 2010.

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Interest income on one-to-four family mortgage loans decreased $51.2 million to $226.5 million for the six months ended June 30, 2011, from $277.7 million for the six months ended June 30, 2010, due to the combined effect of a decrease of $1.20 billion in the average balance of such loans and a decrease in the average yield to 4.21% for the six months ended June 30, 2011, from 4.65% for the six months ended June 30, 2010.  Net premium amortization on one-to-four family mortgage loans decreased $3.0 million to $12.4 million for the six months ended June 30, 2011, from $15.4 million for the six months ended June 30, 2010.

Interest income on multi-family, commercial real estate and construction loans decreased $15.1 million to $85.6 million for the six months ended June 30, 2011, from $100.7 million for the six months ended June 30, 2010, due to a decrease of $594.3 million in the average balance of such loans, partially offset by an increase in the average yield to 6.15% for the six months ended June 30, 2011, from 5.96% for the six months ended June 30, 2010.  Prepayment penalties increased $1.9 million to $3.1 million for the six months ended June 30, 2011, from $1.2 million for the six months ended June 30, 2010.

Interest income on mortgage-backed and other securities decreased $17.2 million to $43.8 million for the six months ended June 30, 2011, from $61.0 million for the six months ended June 30, 2010.  This decrease was due to a decrease of $580.5 million in the average balance of the portfolio, coupled with a decrease in the average yield to 3.51% for the six months ended June 30, 2011, from 3.97% for the six months ended June 30, 2010.

The principal reasons for the changes in the average yields and average balances of the various assets noted above for the six months ended June 30, 2011 are consistent with the principal reasons for the changes noted for the three months ended June 30, 2011.

Interest Expense

Interest expense decreased $25.9 million to $82.8 million for the three months ended June 30, 2011, from $108.7 million for the three months ended June 30, 2010, due to a decrease of $2.45 billion in the average balance of interest-bearing liabilities to $15.80 billion for the three months ended June 30, 2011, from $18.25 billion for the three months ended June 30, 2010, coupled with a decrease in the average cost of interest-bearing liabilities to 2.10% for the three months ended June 30, 2011, from 2.38% for the three months ended June 30, 2010.  The decrease in the average balance of interest-bearing liabilities was primarily due to decreases in the average balances of certificates of deposit and borrowings.  The decrease in the average cost of interest-bearing liabilities was primarily due to a decrease in the average cost of certificates of deposit, partially offset by an increase in the average cost of borrowings.

Interest expense on total deposits decreased $13.9 million to $35.6 million for the three months ended June 30, 2011, from $49.5 million for the three months ended June 30, 2010, due to a decrease of $1.16 billion in the average balance of total deposits to $11.37 billion for the three months ended June 30, 2011, from $12.53 billion for the three months ended June 30, 2010, coupled with a decrease in the average cost to 1.25% for the three months ended June 30, 2011, from 1.58% for the three months ended June 30, 2010.  The decrease in the average balance of total deposits was primarily due to a decrease in the average balance of certificates of deposit.  The decrease in the average cost of total deposits was primarily due to the impact of the decline in interest rates over the past year on our certificates of deposit which matured and were replaced at lower interest rates.

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Interest expense on certificates of deposit decreased $13.8 million to $31.9 million for the three months ended June 30, 2011, from $45.7 million for the three months ended June 30, 2010, due to a decrease of $1.58 billion in the average balance, coupled with a decrease in the average cost to 2.13% for the three months ended June 30, 2011, from 2.42% for the three months ended June 30, 2010.  The decrease in the average balance of certificates of deposit was primarily the result of our reduced focus on certificates of deposit.  Throughout most of 2010 and into the first half of 2011, we continued to allow high cost certificates of deposit to run off as total assets declined.  The decrease in the average cost of certificates of deposit reflects the impact of certificates of deposit at higher rates maturing and being replaced at lower interest rates.  During the three months ended June 30, 2011, $1.02 billion of certificates of deposit matured, with a weighted average rate of 1.82% and a weighted average maturity at inception of nineteen months, and $669.3 million of certificates of deposit were issued or repriced, with a weighted average rate of 0.91% and a weighted average maturity at inception of twenty-one months.

Interest expense on borrowings decreased $12.0 million to $47.2 million for the three months ended June 30, 2011, from $59.2 million for the three months ended June 30, 2010, due to a decrease of $1.30 billion in the average balance, partially offset by an increase in the average cost to 4.26% for the three months ended June 30, 2011, from 4.13% for the three months ended June 30, 2010.  The decrease in the average balance of borrowings was the result of cash flows from mortgage loan and securities repayments exceeding mortgage loan originations and purchases, securities purchases and deposit outflows which enabled us to repay a portion of our matured borrowings.  The increase in the average cost of borrowings is a result of borrowings which matured over the past year which had interest rates below the weighted average rate for the borrowings portfolio.

Interest expense decreased $55.1 million to $167.8 million for the six months ended June 30, 2011, from $222.9 million for the six months ended June 30, 2010, due to a decrease of $2.38 billion in the average balance of interest-bearing liabilities to $16.05 billion for the six months ended June 30, 2011, from $18.43 billion for the six months ended June 30, 2010, coupled with a decrease in the average cost of interest-bearing liabilities to 2.09% for the six months ended June 30, 2011, from 2.42% for the six months ended June 30, 2010.  The decrease in the average cost of interest-bearing liabilities was primarily due to a decrease in the average cost of certificates of deposit.

Interest expense on total deposits decreased $30.3 million to $72.7 million for the six months ended June 30, 2011, from $103.0 million for the six months ended June 30, 2010, due to a decrease of $1.17 billion in the average balance of total deposits to $11.43 billion for the six months ended June 30, 2011, from $12.60 billion for the six months ended June 30, 2010, coupled with a decrease in the average cost to 1.27% for the six months ended June 30, 2011, from 1.64% for the six months ended June 30, 2010.

Interest expense on certificates of deposit decreased $30.4 million to $65.2 million for the six months ended June 30, 2011, from $95.6 million for the six months ended June 30, 2010, due to a decrease of $1.59 billion in the average balance, coupled with a decrease in the average cost to 2.14% for the six months ended June 30, 2011, from 2.49% for the six months ended June 30, 2010.  During the six months ended June 30, 2011, $2.09 billion of certificates of deposit matured, with a weighted average rate of 1.67% and a weighted average maturity at inception of seventeen months, and $1.51 billion of certificates of deposit were issued or repriced, with a

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weighted average rate of 1.04% and a weighted average maturity at inception of twenty-two months.

Interest expense on borrowings decreased $24.8 million to $95.1 million for the six months ended June 30, 2011, from $119.9 million for the six months ended June 30, 2010, due to a decrease of $1.21 billion in the average balance.

Except as otherwise noted, the principal reasons for the changes in the average costs and average balances of the various liabilities noted above for the six months ended June 30, 2011 are consistent with the principal reasons for the changes noted for the three months ended June 30, 2011.

Provision for Loan Losses

We review our allowance for loan losses on a quarterly basis.  Material factors considered during our quarterly review are our loss experience, the composition and direction of loan delinquencies, the size and composition of our loan portfolio and the impact of current economic conditions.  We continue to closely monitor the local and national real estate markets and other factors related to risks inherent in our loan portfolio.  As a geographically diversified residential lender, we have been affected by negative consequences arising from the economic recession that continued throughout most of 2009 and, in particular, a sharp downturn in the housing industry nationally, as well as economic and housing industry weaknesses in the New York metropolitan area.  We are particularly vulnerable to a job loss recession.  Although the national economy has continued to experience some recovery during the first half of 2011, it has weakened somewhat during the 2011 second quarter as evidenced by, among other things, an increase in the unemployment rate for June 2011 compared to March 2011 and significantly lower job growth during the 2011 second quarter than the moderate growth experienced in the 2011 first quarter.  Softness persists in the housing and real estate markets and unemployment levels remain elevated.

The allowance for loan losses decreased to $182.7 million at June 30, 2011, compared to $189.5 million at March 31, 2011 and $201.5 million at December 31, 2010.  The allowance for loan losses reflects the levels and composition of our loan delinquencies, non-performing loans and net loan charge-offs, the size and composition of our loan portfolio and our evaluation of the housing and real estate markets and overall economy, including the unemployment rate.  The provision for loan losses decreased $25.0 million to $10.0 million for the three months ended June 30, 2011, from $35.0 million for the three months ended June 30, 2010, and decreased $63.0 million to $17.0 million for the six months ended June 30, 2011, from $80.0 million for the six months ended June 30, 2010.  The decreases in the allowance for loan losses and the provision for loan losses reflect the stabilizing trend in overall asset quality experienced in 2010 and into 2011, coupled with the decline in the loan portfolio over the same period.  While the allowance for loan losses at June 30, 2011 decreased $6.8 million from March 31, 2011, the provision for loan losses was $3.0 million higher in the 2011 second quarter compared to the 2011 first quarter in order to maintain our strong coverage ratios in the face of a somewhat weaker economy and slightly higher unemployment along with prolonged softness in housing values.  The allowance for loan losses as a percentage of total loans was 1.35% at June 30, 2011, compared to 1.37% at March 31, 2011 and 1.42% at December 31, 2010.  The allowance for loan losses as a percentage of non-performing loans was 48.55% at June 30, 2011, compared to 50.70% at March 31, 2011 and 51.57% at December 31, 2010.  Non-performing loans totaled

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$376.3 million at June 30, 2011, an increase of $2.5 million compared to $373.8 million at March 31, 2011 and a decrease of $14.4 million compared to $390.7 million at December 31, 2010.  The changes in non-performing loans during any period are taken into account when determining the allowance for loan losses because the allowance coverage percentages we apply to our non-performing loans are higher than the allowance coverage percentages applied to our performing loans.  In determining our allowance coverage percentages for non-performing loans, we consider our aggregate historical loss experience with respect to the ultimate disposition of the underlying collateral.  To further enhance our non-performing loan analysis, during the quarter ended June 30, 2011, we began segmenting our non-performing loans by state and analyzing our historical loss experience and cure rates by state.

When analyzing our asset quality trends and coverage ratios, consideration is given to the accounting for non-performing loans, particularly when reviewing our allowance for loan losses to non-performing loans ratio.  Included in our non-performing loans are one-to-four family mortgage loans which are 180 days or more past due.  We update our collateral values on one-to-four family mortgage loans which are 180 days past due and annually thereafter.  If the estimated fair value of the loan collateral less estimated selling costs is less than the recorded investment in the loan, a charge-off of the difference is recorded to reduce the loan to its fair value less estimated selling costs.  Therefore certain losses inherent in our non-performing one-to-four family mortgage loans are being recognized at 180 days of delinquency and annually thereafter and accordingly are charged off.  The impact of updating these estimates of collateral value and recognizing any required charge-offs is to increase charge-offs and reduce the allowance for loan losses required on these loans.  In effect, these loans have been written down to their fair value less estimated selling costs and the inherent loss has been recognized.  Therefore, when reviewing the adequacy of the allowance for loan losses as a percentage of non-performing loans, the impact of these charge-offs is considered.  At June 30, 2011, non-performing loans included one-to-four family mortgage loans which were 180 days or more past due totaling $250.8 million, net of $69.1 million in charge-offs related to such loans, which had a related allowance for loan losses totaling $7.0 million.  Excluding these one-to-four family mortgage loans which were 180 days or more past due at June 30, 2011 and their related allowance, our ratio of the allowance for loan losses to non-performing loans would be approximately 140%, which is a non-GAAP financial measure, compared to the ratio of allowance for loan losses to non-performing loans of approximately 49%, as noted above.

While ratio analyses are used as a supplemental tool for evaluating the overall reasonableness of the allowance for loan losses, the adequacy of the allowance for loan losses is ultimately determined by the actual losses and charges recognized in the portfolio.  We update our loss analyses quarterly to ensure that our allowance coverage percentages are adequate and the overall allowance for loan losses is our best estimate of loss as of a particular point in time.  Our 2011 second quarter analysis of loss severity on one-to-four family mortgage loans, defined as the ratio of net write-downs taken through disposition of the asset (typically the sale of REO) to the loan’s original principal balance during the twelve months ended March 31, 2011, indicated an average loss severity of approximately 28% compared to an average loss severity of approximately 26% in our 2011 first quarter analysis.  Our analysis in the 2011 second quarter primarily reviewed one-to-four family REO sales which occurred during the twelve months ended March 31, 2011 and included both full documentation and reduced documentation loans in a variety of states with varying years of origination.  Our 2011 second quarter analysis of charge-offs on multi-family, commercial real estate and construction loans, primarily related to loan sales, during the twelve months ended March 31, 2011, indicated an average loss severity of

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approximately 31%.  This compares to an average loss severity of approximately 30% in our 2011 first quarter analysis.  We consider our average loss severity experience as a gauge in evaluating the overall adequacy of our allowance for loan losses.  However, the uniqueness of each multi-family, commercial real estate and construction loan, particularly multi-family loans within New York City, many of which are rent stabilized, is also factored into our analyses.  We also obtain updated estimates of collateral value on our non-performing multi-family, commercial real estate and construction loans with balances of $1.0 million or greater.  We believe that using the loss experience of the past year (twelve months prior to the quarterly analysis) is reflective of the current economic and real estate environment.  The ratio of the allowance for loan losses to non-performing loans was approximately 49% at June 30, 2011, which exceeds our average loss severity experience for our mortgage loan portfolios, supporting our determination that our allowance for loan losses is adequate to cover potential losses.

Net loan charge-offs totaled $16.8 million, or forty-nine basis points of average loans outstanding, annualized, for the three months ended June 30, 2011 and $35.8 million, or fifty-two basis points of average loans outstanding, annualized, for the six months ended June 30, 2011.  This compares to net loan charge-offs of $34.7 million, or eighty-nine basis points of average loans outstanding, annualized, for the three months ended June 30, 2010 and $63.1 million, or eighty-one basis points of average loans outstanding, annualized, for the six months ended June 30, 2010.  The decrease in net loan charge-offs for the three months ended June 30, 2011, compared to the three months ended June 30, 2010, was primarily due to decreases in one-to-four family and multi-family mortgage loan charge-offs.  The decrease in net loan charge-offs for the six months ended June 30, 2011, compared to the six months ended June 30, 2010, was primarily due to decreases in multi-family, one-to-four family and commercial real estate mortgage loan charge-offs.  Our non-performing loans, which are comprised primarily of mortgage loans, decreased $14.4 million to $376.3 million, or 2.79% of total loans, at June 30, 2011, from $390.7 million, or 2.75% of total loans, at December 31, 2010.  The decrease was primarily due to a decrease of $12.8 million in non-performing one-to-four family mortgage loans.  We proactively manage our non-performing assets, in part, through the sale of certain delinquent and non-performing loans.  If the sale and reclassification to held-for-sale of certain delinquent and non-performing loans, primarily multi-family and one-to-four family mortgage loans, during the six months ended June 30, 2011 had not occurred, our non-performing loans would have been $24.4 million higher, which amount is gross of $7.0 million in net charge-offs taken on such loans.

We obtain updated estimates of collateral value for non-performing multi-family, commercial real estate and construction loans with balances of $1.0 million or greater and one-to-four family mortgage loans which are 180 days or more delinquent, annually, and certain other loans when the Asset Classification Committee believes repayment of such loans may be dependent on the value of the underlying collateral.  We monitor property value trends in our market areas to determine what impact, if any, such trends may have on our loan-to-value ratios and the adequacy of the allowance for loan losses.

During the 2011 first quarter, total delinquencies decreased primarily due to a decrease in non-performing loans and early stage delinquencies, continuing the trend from 2010.  Net loan charge-offs decreased slightly for the 2011 first quarter compared to the 2010 fourth quarter.  The national unemployment rate decreased to 8.8% for March 2011 and there were modest job gains for the quarter totaling 478,000 at the time of our analysis.  We continued to update our charge-off and loss analysis during the 2011 first quarter and modified our allowance coverage

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percentages accordingly.  As a result of these factors, our allowance for loan losses decreased compared to December 31, 2010 and totaled $189.5 million at March 31, 2011 which resulted in a provision for loan losses of $7.0 million for the 2011 first quarter.  During the 2011 second quarter, total delinquencies decreased due to a decrease in loans 60-89 days past due, partially offset by an increase in loans 30-59 days past due and a slight increase in non-performing loans.  The unemployment rate increased to 9.2% for June 2011 and job gains decreased significantly from the first quarter and totaled 260,000 at the time of our analysis.  Net loan charge-offs decreased for the 2011 second quarter compared to the 2011 first quarter.  We continued to update our charge-off and loss analysis during the 2011 second quarter and modified our allowance coverage percentages accordingly.  As a result of these factors, our allowance for loan losses decreased compared to March 31, 2011 and totaled $182.7 million at June 30, 2011 which resulted in a provision for loan losses of $10.0 million for the three months ended June 30, 2011 and $17.0 million for the six months ended June 30, 2011.

There are no material assumptions relied on by management which have not been made apparent in our disclosures or reflected in our asset quality ratios and activity in the allowance for loan losses.  We believe our allowance for loan losses has been established and maintained at levels that reflect the risks inherent in our loan portfolio, giving consideration to the composition and size of our loan portfolio, delinquencies, charge-off experience, non-accrual and non-performing loans and the current economic environment.  The balance of our allowance for loan losses represents management’s best estimate of the probable inherent losses in our loan portfolio at June 30, 2011 and December 31, 2010.

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

Non-Interest Income

Non-interest income decreased $6.2 million to $17.0 million for the three months ended June 30, 2011, from $23.2 million for the three months ended June 30, 2010, and decreased $6.8 million to $35.1 million for the six months ended June 30, 2011, from $41.9 million for the six months ended June 30, 2010.  These decreases were primarily due to decreases in other operating income and customer service fees.

Other non-interest income decreased $4.9 million to $1.1 million for the three months ended June 30, 2011, from $6.0 million for the three months ended June 30, 2010, and decreased $5.2 million to $1.9 million for the six months ended June 30, 2011, from $7.1 million for the six months ended June 30, 2010.  These decreases were primarily due to a litigation settlement (Goodwill Litigation) of $6.2 million, partially offset by an asset impairment charge of $1.5 million, recorded in the 2010 second quarter.  For further discussion of the litigation settlement, see Note 10 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” in our 2010 Annual Report on Form 10-K.  The asset impairment charge was related to an office building previously included in premises and equipment, net, which was sold in the 2011 second quarter.  For further discussion of the asset impairment charge recorded in the 2010 second quarter and the sale of the building in the 2011 second quarter, see Note 1 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” in our 2010 Annual Report on Form 10-K and Note 5 of Notes to Consolidated Financial

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Statements in Item 1, “Financial Statements (Unaudited),” in this Quarterly Report on Form 10-Q.

Customer service fees decreased $1.3 million to $12.1 million for the three months ended June 30, 2011, from $13.4 million for the three months ended June 30, 2010, and decreased $2.9 million to $23.8 million for the six months ended June 30, 2011, from $26.7 million for the six months ended June 30, 2010.  These decreases were primarily due to decreases in overdraft fees related to transaction accounts.

Non-Interest Expense

Non-interest expense increased slightly to $76.0 million for the three months ended June 30, 2011, from $75.8 million for the three months ended June 30, 2010, and increased $1.5 million to $145.6 million for the six months ended June 30, 2011, from $144.1 million for the six months ended June 30, 2010.  These increases were primarily due to increases in Federal Deposit Insurance Corporation, or FDIC, insurance premium expense, compensation and benefits expense and advertising expense, partially offset by decreases in other non-interest expense. Our percentage of general and administrative expense to average assets, annualized, increased to 1.74% for the three months ended June 30, 2011, from 1.52% for the three months ended June 30, 2010, and increased to 1.64% for the six months ended June 30, 2011, from 1.44% for the six months ended June 30, 2010.  The increases in these ratios were primarily due to the decrease in average assets for the three and six months ended June 30, 2011, compared to the three and six months ended June 30, 2010.

FDIC insurance premium expense increased $4.6 million to $11.2 million for the three months ended June 30, 2011, from $6.6 million for the three months ended June 30, 2010, and increased $3.5 million to $16.7 million for the six months ended June 30, 2011, from $13.2 million for the six months ended June 30, 2010.  On February 7, 2011, the FDIC adopted a final rule that redefined the assessment base for deposit insurance assessments as average consolidated total assets minus average tangible equity, rather than on deposit bases, as required by the Reform Act, and revised the risk-based assessment system for all large insured depository institutions effective April 1, 2011 and results in significantly higher FDIC insurance premium expense.  For further discussion of the changes in FDIC insurance premiums, see “Federally Chartered Savings Association Regulation – Insurance of Deposit Accounts,” in Part I, Item 1, of our 2010 Annual Report on Form 10-K and Part II, Item 1A, “Risk Factors,” in our March 31, 2011 Quarterly Report on Form 10-Q.

Compensation and benefits expense increased $2.6 million to $37.2 million for the three months ended June 30, 2011, from $34.6 million for the three months ended June 30, 2010 and increased $3.8 million to $73.7 million for the six months ended June 30, 2011, from $69.9 million for the six months ended June 30, 2010.  These increases were primarily due to increases in pension and other postretirement benefits expense, salaries and stock-based compensation costs.

Advertising expense increased $1.0 million to $2.0 million for the three months ended June 30, 2011, from $1.0 million for the three months ended June 30, 2010 and increased $919,000 to $3.7 million for the six months ended June 30, 2011, from $2.8 million for the six months ended June 30, 2010 due to additional marketing campaigns.

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Other non-interest expense decreased $7.3 million to $9.6 million for the three months ended June 30, 2011, from $16.9 million for the three months ended June 30, 2010, and decreased $6.1 million to $19.0 million for the six months ended June 30, 2011, from $25.1 million for the six months ended June 30, 2010.  These decreases were primarily due to a litigation settlement (McAnaney Litigation) of $7.9 million recorded in the 2010 second quarter, partially offset by increases in REO related expense.  For further discussion of the litigation settlement, see Note 10 of Notes to Consolidated Financial Statements in Item 8, “Financial Statements and Supplementary Data,” in our 2010 Annual Report on Form 10-K.   REO related expenses increased $874,000 to $2.8 million for the three months ended June 30, 2011 and increased $2.2 million to $5.9 million for the six months ended June 30, 2011.

In connection with the implementation of the Reform Act and our transition to the OCC as our primary regulator and the resultant enhanced scrutiny of larger institutions, we have decided to enhance various systems and add staff to keep up with the operational and regulatory burden associated with an institution of our size.  This will result in additional investments in both technology and staffing that are likely to increase our non-interest expense.

Income Tax Expense

For the three months ended June 30, 2011, income tax expense totaled $10.0 million, representing an effective tax rate of 37.2%, compared to $8.7 million for the three months ended June 30, 2010, representing an effective tax rate of 36.0%.  For the six months ended June 30, 2011, income tax expense totaled $25.5 million, representing an effective tax rate of 36.6%, compared to $15.6 million for the six months ended June 30, 2010, representing an effective tax rate of 35.4%.  The increases in the effective tax rates for the three and six months ended June 30, 2011, compared to the three and six months ended June 30, 2010, reflect an increase in pre-tax book income with increases in net nonfavorable permanent differences.

Asset Quality

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

The composition of our loan portfolio, by property type, has remained relatively consistent over the last several years.  At June 30, 2011, our loan portfolio was comprised of 79% one-to-four family mortgage loans, 14% multi-family mortgage loans, 5% commercial real estate loans and 2% other loan categories.  This compares to 77% one-to-four family mortgage loans, 16% multi-family mortgage loans, 5% commercial real estate loans and 2% other loan categories at December 31, 2010.  At June 30, 2011 and December 31, 2010, full documentation loans comprised 84% of our one-to-four family mortgage loan portfolio and 87% of our total mortgage loan portfolio.

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The following table provides further details on the composition of our one-to-four family mortgage loan portfolio in dollar amounts and percentages of the portfolio at the dates indicated.

	At June 30, 2011					At December 31, 2010
			Percent					Percent
(Dollars in Thousands)	Amount		of Total			Amount		of Total
One-to-four family:
Full documentation interest-only (1)	$	3,328,525		31.55	%	$	3,811,762		35.12	%
Full documentation amortizing		5,564,833		52.74			5,272,171		48.57
Reduced documentation interest-only (1)(2)		1,232,554		11.68			1,331,294		12.26
Reduced documentation amortizing (2)		425,085		4.03			439,834		4.05
Total one-to-four family	$	10,550,997		100.00	%	$	10,855,061		100.00	%

 (1)  Interest-only loans require the borrower to pay interest only during the first ten years of the loan term.  After the tenth anniversary of the loan, principal and interest payments are required to amortize the loan over the remaining loan term.  Includes interest-only hybrid ARM loans which were underwritten at the initial note rate, which may have been a discounted rate, totaling $2.70 billion at June 30, 2011 and $2.91 billion at December 31, 2010.

(2) Includes SISA loans totaling $256.7 million at June 30, 2011 and $272.7 million at December 31, 2010.

We continue to adhere to prudent underwriting standards.  We underwrite our one-to-four family mortgage loans primarily based upon our evaluation of the borrower’s ability to pay.  We do not originate negative amortization loans, payment option loans or other loans with short-term interest-only periods.  Additionally, we do not originate one-year ARM loans.  The ARM loans in our portfolio which currently reprice annually represent hybrid ARM loans (interest-only and amortizing) which have passed their initial fixed rate period.  In 2006, we began underwriting our one-to-four family interest-only hybrid ARM loans based on a fully amortizing loan (in effect, underwriting interest-only hybrid ARM loans as if they were amortizing hybrid ARM loans).  Prior to 2007, we would underwrite our one-to-four family interest-only hybrid ARM loans using the initial note rate, which may have been a discounted rate.  In 2007, we began underwriting our one-to-four family interest-only hybrid ARM loans at the higher of the fully indexed rate or the initial note rate.  In 2009, we began underwriting our one-to-four family interest-only and amortizing hybrid ARM loans at the higher of the fully indexed rate, the initial note rate or 6.00%.  During the 2010 second quarter, we reduced the underwriting interest rate floor from 6.00% to 5.00% to reflect the current interest rate environment.  During the 2010 third quarter, we stopped offering interest-only loans.  Our reduced documentation loans are comprised primarily of SIFA (stated income, full asset) loans.  To a lesser extent, reduced documentation loans in our portfolio also include SISA (stated income, stated asset) loans.  SIFA and SISA loans required a prospective borrower to complete a standard mortgage loan application.  During the 2007 fourth quarter, we stopped offering reduced documentation loans.

The market does not apply a uniform definition of what constitutes “subprime” lending.  Our reference to subprime lending relies upon the “Statement on Subprime Mortgage Lending” issued by the federal bank regulatory agencies, or the Agencies, on June 29, 2007, which further references the “Expanded Guidance for Subprime Lending Programs,” or the Expanded Guidance, issued by the Agencies by press release dated January 31, 2001.  In the Expanded Guidance, the Agencies indicated that subprime lending does not refer to individual subprime loans originated and managed, in the ordinary course of business, as exceptions to prime risk selection standards.  The Agencies recognize that many prime loan portfolios will contain such accounts.  The Agencies also excluded prime loans that develop credit problems after acquisition and community development loans from the subprime arena.  According to the Expanded Guidance, subprime loans are other loans to borrowers which display one or more characteristics

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of reduced payment capacity.  Five specific criteria, which are not intended to be exhaustive and are not meant to define specific parameters for all subprime borrowers and may not match all markets or institutions’ specific subprime definitions, are set forth, including having a credit (FICO) score of 660 or below.  However, we do not associate a particular FICO score with our definition of subprime loans.  Consistent with the guidance provided by federal bank regulatory agencies, we consider subprime loans to be loans to borrowers with a credit history containing one or more of the following at the time of origination: (1) bankruptcy within the last four years; (2) foreclosure within the last two years; or (3) two 30 day mortgage delinquencies in the last twelve months.  In addition, subprime loans generally display the risk layering of the following features: high debt-to-income ratio; low or no cash reserves; loan-to-value ratios over 90%; short-term interest-only periods or negative amortization loan products; or reduced or no documentation loans.  Our current underwriting standards would generally preclude us from originating loans to borrowers with a credit history containing a bankruptcy or a foreclosure within the last five years or two 30 day mortgage delinquencies in the last twelve months.  Based upon the definition and exclusions described above, we are a prime lender.  Within our portfolio of one-to-four family mortgage loans, we have loans to borrowers who had FICO scores of 660 or below at the time of origination. However, as a portfolio lender we underwrite our loans considering all credit criteria, as well as collateral value, and do not base our underwriting decisions solely on FICO scores.  Based on our underwriting criteria, particularly the average loan-to-value ratios at origination, we consider our loans to borrowers with FICO scores of 660 or below at origination to be prime loans.

Although FICO scores are considered as part of our underwriting process, they have not always been recorded on our mortgage loan system and are not available for all of the one-to-four family mortgage loans on our mortgage loan system.  However, substantially all of our one-to-four family mortgage loans originated since March 2005 have credit scores available on our mortgage loan system.  At June 30, 2011, one-to-four family mortgage loans which had FICO scores available on our mortgage loan system totaled $9.19 billion, or 87% of our total one-to-four family mortgage loan portfolio, of which $452.0 million, or 5%, had FICO scores of 660 or below at the date of origination.  At December 31, 2010, one-to-four family mortgage loans which had FICO scores available on our mortgage loan system totaled $9.39 billion, or 86% of our total one-to-four family mortgage loan portfolio, of which $473.3 million, or 5%, had FICO scores of 660 or below at the date of origination.Of our one-to-four family mortgage loans to borrowers with known FICO scores of 660 or below, 72% are interest-only hybrid ARM loans, 26% are amortizing hybrid ARM loans and 2% are amortizing fixed rate loans at June 30, 2011 and 73% are interest-only hybrid ARM loans, 26% are amortizing hybrid ARM loans and 1% are amortizing fixed rate loans at December 31, 2010.  In addition, 67% of our loans to borrowers with known FICO scores of 660 or below were full documentation loans and 33% were reduced documentation loans at June 30, 2011 and at December 31, 2010.  We believe the aforementioned loans, when originated, were amply collateralized and otherwise conformed to our prime lending standards and do not present a greater risk of loss or other asset quality risk relative to comparable loans in our portfolio to other borrowers with higher credit scores.  We do not have FICO scores recorded on our mortgage loan system for 13% of our one-to-four family mortgage loans at June 30, 2011 and 14% of our one-to-four family mortgage loans at December 31, 2010. Of our one-to-four family mortgage loans without a FICO score available on our mortgage loan system at June 30, 2011, 67% are amortizing hybrid ARM loans, 26% are interest-only hybrid ARM loans and 7% are amortizing fixed rate loans, and at December 31, 2010, 66% are amortizing hybrid ARM loans, 26% are interest-only hybrid ARM loans and 8% are amortizing fixed rate loans.

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Non-Performing Assets

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

(Dollars in Thousands)	At June 30, 2011			At December 31, 2010
Non-accrual delinquent mortgage loans	$	370,496		$	384,291
Non-accrual delinquent consumer and other loans		5,231			5,574
Mortgage loans delinquent 90 days or more and still accruing interest (1)		613			845
Total non-performing loans (2)		376,340			390,710
REO, net (3)		59,323			63,782
Total non-performing assets	$	435,663		$	454,492
Non-performing loans to total loans		2.79	%		2.75	%
Non-performing loans to total assets		2.20			2.16
Non-performing assets to total assets		2.54			2.51
Allowance for loan losses to non-performing loans		48.55			51.57
Allowance for loan losses to total loans		1.35			1.42

(1)  Mortgage loans delinquent 90 days or more and still accruing interest consist primarily of loans delinquent 90 days or more as to their maturity date but not their interest due.

(2)  Non-performing loans exclude loans which have been restructured and are accruing and performing in accordance with the restructured terms for a satisfactory period of time, generally six months.  Restructured accruing loans totaled $64.6 million at June 30, 2011 and $49.2 million at December 31, 2010.  Restructured loans included in non-performing loans totaled $45.6 million at June 30, 2011 and $47.5 million at December 31, 2010.

(3)  REO, primarily all of which are one-to-four family properties, is net of allowance for losses totaling $1.7 million at June 30, 2011 and $1.5 million at December 31, 2010.

Total non-performing assets decreased $18.8 million to $435.7 million at June 30, 2011, from $454.5 million at December 31, 2010.  This decrease was primarily due to a decrease in non-performing loans, coupled with a decrease in REO, net.  Non-performing loans, the most significant component of non-performing assets, decreased $14.4 million to $376.3 million at June 30, 2011, from $390.7 million at December 31, 2010, primarily due to a decrease of $12.8 million in non-performing one-to-four family mortgage loans.  Non-performing one-to-four family mortgage loans reflect a greater concentration in non-performing reduced documentation loans.  Reduced documentation loans represent only 16% of the one-to-four family mortgage loan portfolio, yet represent 55% of non-performing one-to-four family mortgage loans at June 30, 2011.  The ratio of non-performing loans to total loans increased to 2.79% at June 30, 2011, from 2.75% at December 31, 2010.  The ratio of non-performing assets to total assets increased to 2.54% at June 30, 2011, from 2.51% at December 31, 2010.  The increases in these ratios are attributable to the decreases in total loans and total assets.

We proactively manage our non-performing assets, in part, through the sale of certain delinquent and non-performing loans.  During the six months ended June 30, 2011, we sold $16.4 million, net of charge-offs of $7.9 million, of delinquent and non-performing mortgage loans, primarily multi-family mortgage loans.  In addition, included in loans held-for-sale, net, are delinquent and non-performing loans, consisting of multi-family, one-to-four family and commercial real estate loans, totaling $10.8 million, net of charge-offs of $4.1 million and a $64,000 lower of cost or market valuation allowance, at June 30, 2011 and $10.9 million, net of charge-offs of $5.2 million and a $169,000 lower of cost or market valuation allowance, at December 31, 2010, consisting primarily of multi-family and commercial real estate loans.  Such loans are excluded from non-performing loans, non-performing assets and related ratios.  Assuming we did not sell or reclassify to held-for-sale any delinquent and non-performing loans during 2011, at June 30,

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2011 our non-performing loans and non-performing assets would have been $24.4 million higher and our allowance for loan losses would have been $7.0 million higher.  Additionally, the ratio of non-performing loans to total loans would have been 18 basis points higher, the ratio of non-performing assets to total assets would have been 15 basis points higher and the ratio of the allowance for loan losses to non-performing loans would have been 121 basis points lower.

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

	At June 30, 2011					At December 31, 2010
			Percent					Percent
(Dollars in Thousands)	Amount		of Total			Amount		of Total
Non-performing one-to-four family:
Full documentation interest-only	$	109,683		33.28	%	$	105,982		30.96	%
Full documentation amortizing		37,590		11.41			45,720		13.36
Reduced documentation interest-only		145,816		44.24			157,464		46.00
Reduced documentation amortizing		36,470		11.07			33,149		9.68
Total non-performing one-to-four family	$	329,559		100.00	%	$	342,315		100.00	%

The following table provides details on the geographic composition of both our total and non-performing one-to-four family mortgage loans as of June 30, 2011.

	One-to-Four Family Mortgage Loans
	At June 30, 2011
(Dollars in Millions)	Total Loans		Percent of Total Loans			Total Non-Performing Loans		Percent of Total Non-Performing Loans			Non-Performing Loans as Percent of State Totals
State:
New York	$	2,995.8		28.4	%	$	40.7		12.3	%		1.36	%
Illinois		1,309.3		12.4			47.8		14.5			3.65
Connecticut		971.2		9.2			32.8		10.0			3.38
New Jersey		776.2		7.4			58.0		17.6			7.47
California		760.5		7.2			38.0		11.5			5.00
Massachusetts		732.8		6.9			10.7		3.2			1.46
Virginia		648.6		6.1			15.8		4.8			2.44
Maryland		631.5		6.0			41.9		12.7			6.63
Washington		310.1		2.9			1.3		0.4			0.42
Texas		217.2		2.1			-		-			-
All other states (1) (2)		1,197.8		11.4			42.6		13.0			3.56
Total	$	10,551.0		100.0	%	$	329.6		100.0	%		3.12	%

(1)  Includes 27 states and Washington, D.C.

(2)  Includes Florida with $211.1 million total loans, of which $22.8 million are non-performing loans.

At June 30, 2011, the geographic composition of our multi-family and commercial real estate mortgage loan portfolio was 93% in the New York metropolitan area, 3% in Florida, 2% in Pennsylvania and 2% in various other states and all of the non-performing multi-family and commercial real estate mortgage loans were in the New York metropolitan area.

We discontinue accruing interest on loans when they become 90 days delinquent as to their payment due date.  In addition, we reverse all previously accrued and uncollected interest through a charge to interest income.  While loans are in non-accrual status, interest due is monitored and income is recognized only to the extent cash is received until a return to accrual

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status is warranted.  If all non-accrual loans at June 30, 2011 and 2010 had been performing in accordance with their original terms, we would have recorded interest income, with respect to such loans, of $10.9 million for the six months ended June 30, 2011 and $12.8 million for the six months ended June 30, 2010.  This compares to actual payments recorded as interest income, with respect to such loans, of $2.9 million for the six months ended June 30, 2011 and $3.3 million for the six months ended June 30, 2010.

We may agree to modify the contractual terms of a borrower’s loan.  In cases where such modifications represent a concession to a borrower experiencing financial difficulty, the modification is considered a troubled debt restructuring.  Loans modified in a troubled debt restructuring are placed on non-accrual status until we determine that future collection of principal and interest is reasonably assured, which requires that the borrower demonstrate performance according to the restructured terms generally for a period of six months.  Loans modified in a troubled debt restructuring which are included in non-accrual loans totaled $45.6 million at June 30, 2011 and $47.5 million at December 31, 2010.  Excluded from non-performing assets are restructured loans that have complied with the terms of their restructure agreement for a satisfactory period of time and have, therefore, been returned to accrual status.  Restructured accruing loans totaled $64.6 million at June 30, 2011 and $49.2 million at December 31, 2010.

In addition to non-performing loans, we had $185.2 million of potential problem loans at June 30, 2011, compared to $170.5 million at December 31, 2010.  Such loans include loans which are 60-89 days delinquent as shown in the following table and certain other internally classified loans.

Delinquent Loans

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

	30-59 Days Past Due					60-89 Days Past Due					90 Days or More Past Due
	Number					Number					Number
	of					of					of
(Dollars in Thousands)	Loans		Amount			Loans		Amount			Loans		Amount
At June 30, 2011:
Mortgage loans:
One-to-four family		374	$	118,489			108	$	35,161			1,027	$	329,559
Multi-family		36		33,128			8		6,568			27		29,888
Commercial real estate		7		7,529			4		2,173			4		6,363
Construction		-		-			-		-			2		5,299
Consumer and other loans		78		3,647			24		489			65		5,231
Total delinquent loans		495	$	162,793			144	$	44,391			1,125	$	376,340
Delinquent loans to total loans				1.21	%				0.33	%				2.79	%
At December 31, 2010:
Mortgage loans:
One-to-four family		396	$	125,103			135	$	47,862			1,040	$	342,315
Multi-family		40		33,627			7		6,056			30		30,195
Commercial real estate		8		2,925			-		-			3		6,529
Construction		-		-			-		-			3		6,097
Consumer and other loans		100		4,155			22		421			58		5,574
Total delinquent loans		544	$	165,810			164	$	54,339			1,134	$	390,710
Delinquent loans to total loans				1.17	%				0.38	%				2.75	%

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Allowance for Loan Losses

Activity in the allowance for loan losses is summarized as follows:

(In Thousands)	For the Six Months Ended June 30, 2011
Balance at January 1, 2011	$	201,499
Provision charged to operations		17,000
Charge-offs:
One-to-four family		(33,479	)
Multi-family		(6,696	)
Commercial real estate		(756	)
Construction		(420	)
Consumer and other loans		(967	)
Total charge-offs		(42,318	)
Recoveries:
One-to-four family		6,385
Multi-family		6
Construction		64
Consumer and other loans		81
Total recoveries		6,536
Net charge-offs (1)		(35,782	)
Balance at June 30, 2011	$	182,717

(1) Includes $15.7 million of net charge-offs related to one-to-four family reduced documentation mortgage loans and $7.0 million of net charge-offs related to certain delinquent and non-performing loans transferred to held-for-sale.

ITEM 3.    Quantitative and Qualitative Disclosures about Market Risk

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

Gap Analysis

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

The following table, referred to as the Gap Table, sets forth the amount of interest-earning assets and interest-bearing liabilities outstanding at June 30, 2011 that we anticipate will reprice or mature in each of the future time periods shown using certain assumptions based on our

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historical experience and other market-based data available to us.  The Gap Table includes $2.35 billion of callable borrowings classified according to their maturity dates, primarily in the more than one year to three years and more than five years categories, which are callable within one year and at various times thereafter.  In addition, the Gap Table includes callable securities with an amortized cost of $52.9 million classified according to their maturity dates, in the more than five years category, which are callable within one year and at various times thereafter.  The classification of callable borrowings and securities according to their maturity dates is based on our experience with, and expectations of, these types of instruments and the current interest rate environment.  As indicated in the Gap Table, our one-year cumulative gap at June 30, 2011 was positive 1.38% compared to positive 5.18% at December 31, 2010.  The change in our one-year cumulative gap is primarily due to a decrease in projected mortgage loan and securities repayments within one year at June 30, 2011, compared to December 31, 2010.

	At June 30, 2011
				More than			More than
				One Year			Three Years
	One Year			to			to			More than
(Dollars in Thousands)	or Less			Three Years			Five Years			Five Years			Total
Interest-earning assets:
Mortgage loans (1)	$	4,421,893		$	4,169,789		$	3,092,378		$	1,094,824		$	12,778,884
Consumer and other loans (1)		285,502			3,335			12			91			288,940
Interest-earning cash accounts		29,889			-			-			-			29,889
Securities available-for-sale		132,387			155,500			92,313			41,471			421,671
Securities held-to-maturity		517,773			533,761			462,789			433,490			1,947,813
FHLB-NY stock		-			-			-			129,025			129,025
Total interest-earning assets		5,387,444			4,862,385			3,647,492			1,698,901			15,596,222
Net unamortized purchase premiums and deferred costs (2)		33,425			30,505			22,948			10,282			97,160
Net interest-earning assets (3)		5,420,869			4,892,890			3,670,440			1,709,183			15,693,382
Interest-bearing liabilities:
Savings		555,146			521,190			521,190			1,240,713			2,838,239
Money market		209,309			81,258			81,258			25,323			397,148
NOW and demand deposit		155,203			310,418			310,418			1,033,824			1,809,863
Liquid CDs		363,393			-			-			-			363,393
Certificates of deposit		2,869,170			1,779,895			1,152,912			-			5,801,977
Borrowings, net		1,032,628			1,174,895			200,000			1,878,866			4,286,389
Total interest-bearing liabilities		5,184,849			3,867,656			2,265,778			4,178,726			15,497,009
Interest sensitivity gap		236,020			1,025,234			1,404,662			(2,469,543	)	$	196,373
Cumulative interest sensitivity gap	$	236,020		$	1,261,254		$	2,665,916		$	196,373
Cumulative interest sensitivity gap as a percentage of total assets		1.38	%		7.37	%		15.57	%		1.15	%
Cumulative net interest-earning assets as a percentage of interest-bearing liabilities		104.55	%		113.93	%		123.55	%		101.27	%

(1)  Mortgage loans and consumer and other loans include loans held-for-sale and exclude non-performing loans and the allowance for loan losses.

(2)  Net unamortized purchase premiums and deferred costs are prorated.

(3)  Includes securities available-for-sale at amortized cost.

Net Interest Income Sensitivity Analysis

In managing interest rate risk, we also use an internal income simulation model for our net interest income sensitivity analyses.  These analyses measure changes in projected net interest

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income over various time periods resulting from hypothetical changes in interest rates.  The interest rate scenarios most commonly analyzed reflect gradual and reasonable changes over a specified time period, which is typically one year.  The base net interest income projection utilizes similar assumptions as those reflected in the Gap Table, assumes that cash flows are reinvested in similar assets and liabilities and that interest rates as of the reporting date remain constant over the projection period.  For each alternative interest rate scenario, corresponding changes in the cash flow and repricing assumptions of each financial instrument are made to determine the impact on net interest income.

We perform analyses of interest rate increases and decreases of up to 300 basis points although changes in interest rates of 200 basis points is a more common and reasonable scenario for analytical purposes.  Assuming the entire yield curve was to increase 200 basis points, through quarterly parallel increments of 50 basis points, our projected net interest income for the twelve month period beginning July 1, 2011 would increase by approximately 2.97% from the base projection. At December 31, 2010, in the up 200 basis point scenario, our projected net interest income for the twelve month period beginning January 1, 2011 would have increased by approximately 5.04% from the base projection.  The current low interest rate environment prevents us from performing an income simulation for a decline in interest rates of the same magnitude and timing as our rising interest rate simulation, since certain asset yields, liability costs and related indices are below 2.00%.  However, assuming the entire yield curve was to decrease 100 basis points, through quarterly parallel decrements of 25 basis points, our projected net interest income for the twelve month period beginning July 1, 2011 would decrease by approximately 3.12% from the base projection.  At December 31, 2010, in the down 100 basis point scenario, our projected net interest income for the twelve month period beginning January 1, 2011 would have decreased by approximately 5.24% from the base projection.  The down 100 basis point scenarios include some limitations as well since certain indices, yields and costs are already below 1.00%.

Various shortcomings are inherent in both gap analyses and net interest income sensitivity analyses.  Certain assumptions may not reflect the manner in which actual yields and costs respond to market changes.  Similarly, prepayment estimates and similar assumptions are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in interest rates may also affect our operating environment and operating strategies as well as those of our competitors.  In addition, certain adjustable rate assets have limitations on the magnitude of rate changes over specified periods of time.  Accordingly, although our net interest income sensitivity analyses may provide an indication of our interest rate risk exposure, such analyses are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and our actual results will differ.  Additionally, certain assets, liabilities and items of income and expense which may be affected by changes in interest rates, albeit to a much lesser degree, and which do not affect net interest income, are excluded from this analysis.  These include income from bank owned life insurance and changes in the fair value of MSR.  With respect to these items alone, and assuming the entire yield curve was to increase 200 basis points, through quarterly parallel increments of 50 basis points, our projected net income for the twelve month period beginning July 1, 2011 would increase by approximately $4.2 million.  Conversely, assuming the entire yield curve was to decrease 100 basis points, through quarterly parallel decrements of 25 basis points, our projected net income for the twelve month period beginning July 1, 2011 would decrease by approximately $2.5 million with respect to these items alone.

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For further information regarding our market risk and the limitations of our gap analysis and net interest income sensitivity analysis, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” included in our 2010 Annual Report on Form 10-K.

ITEM 4.  Controls and Procedures

Monte N. Redman, our President and Chief Executive Officer, and Frank E. Fusco, our Executive Vice President, Treasurer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2011.  Based upon their evaluation, they each found that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and that such information is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal controls over financial reporting that occurred during the three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

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

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010, the City of New York has notified us of an alleged tax deficiency in the amount of $5.2 million, including interest and penalties, related to our 2006 tax year.  The deficiency relates to our operation of two subsidiaries of Astoria Federal, Fidata and AF Mortgage.  Fidata is a passive investment company which maintains offices in Connecticut.  AF Mortgage is an operating subsidiary through which, prior to 2011, Astoria Federal engaged in lending activities outside the State of New York.  We disagree with the assertion of the tax deficiency and we filed a Petition for Hearing with the City of New York on December 6, 2010 to oppose the Notice of Determination.  At this time, management believes it is more likely than not that we will succeed in refuting the City of New York’s position, although defense costs may be significant.  Accordingly, no liability or reserve has been recognized in our consolidated statement of financial condition at June 30, 2011 with respect to this matter.

No assurance can be given as to whether or to what extent we will be required to pay the amount of the tax deficiency asserted by the City of New York, whether additional tax will be assessed for years subsequent to 2006, that this matter will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

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Automated Transactions LLC Litigation

On November 20, 2009, an action entitled Automated Transactions LLC v. Astoria Financial Corporation and Astoria Federal Savings and Loan Association was commenced in the Southern District Court against us by Automated Transactions LLC, alleging patent infringement involving integrated banking and transaction machines, including automated teller machines, that we utilize.  We were served with the summons and complaint in such action on March 2, 2010.  The plaintiff also filed a similar suit on the same day against another financial institution and its holding company.  The plaintiff seeks unspecified monetary damages and an injunction preventing us from continuing to utilize the allegedly infringing machines.  We are vigorously defending this lawsuit, and filed an answer and counterclaims to the plaintiff’s complaint on March 23, 2010, to which the plaintiff filed a reply on April 12, 2010.

On May 18, 2010, the plaintiff filed an amended complaint at the direction of the Southern District Court, containing substantially the same allegations as the original complaint. On May 27, 2010, we moved to dismiss the amended complaint.  On March 10, 2011, the Southern District Court entered an order on the record that dismissed all claims against Astoria Financial Corporation but denied the motion to dismiss the claims against Astoria Federal for alleged direct patent infringement.  The order also dismissed in part the claims against Astoria Federal for alleged inducement of our customers to violate plaintiff’s patents and for Astoria Federal’s allegedly willful violation of the plaintiff’s patents, allowing claims to continue only for alleged inducement and willful infringement after our receiving notice of the pending suit from plaintiff’s counsel.  Based on the Southern District Court’s ruling, on March 31, 2011, we answered the amended complaint substantially denying the allegations of the amended complaint.

We have tendered requests for indemnification from the manufacturer and from the transaction processor utilized with respect to the integrated banking and transaction machines, and we served third party complaints against Metavante Corporation and Diebold, Inc. seeking to enforce our indemnification rights.

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

ITEM 1A.     Risk Factors

For a summary of risk factors relevant to our operations, see Part I, Item 1A, “Risk Factors,” in our 2010 Annual Report on Form 10-K and Part II, Item 1A. “Risk Factors,” in our March 31, 2011 Quarterly Report on Form 10-Q.  There are no other material changes in risk factors relevant to our operations since March 31, 2011 except as discussed below.

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Our transition to the OCC as Astoria Federal’s primary banking regulator and the Board of Governors of the Federal Reserve System, or FRB, as our holding company regulator may increase our compliance costs.

On July 21, 2011, the OTS was eliminated and the OCC took over the regulation of all federal savings associations, including Astoria Federal.  The FRB also acquired the OTS’s authority over all savings and loan holding companies, including Astoria Financial Corporation, and became the supervisor of all subsidiaries of savings and loan holding companies other than depository institutions.  Consequently, we are now subject to regulation, supervision and examination by the OCC and the FRB, rather than the OTS.  Additionally, we have been advised by the Consumer Financial Protection Bureau that it will be supervising our compliance with consumer protection laws.  As a result of becoming subject to regulation by these three entities and in light of the overall enhanced regulatory scrutiny in our industry, we have decided to enhance various systems and add staff to keep up with the operational and regulatory burden associated with an institution of our size.  This will result in additional investments in both technology and staffing that are likely to increase our non-interest expense.  Moreover, as our new regulators adopt implementing regulations and guidance with respect to their supervision of federal savings banks, we may need to evaluate and modify various policies and procedures, further enhance our technology and add more staff to ensure continued compliance with this regulatory burden.

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

During the six months ended June 30, 2011, there were no repurchases of our common stock.  Our twelfth stock repurchase plan, approved by our Board of Directors on April 18, 2007, authorized the purchase of 10,000,000 shares, or approximately 10% of our common stock then outstanding, in open-market or privately negotiated transactions.  At June 30, 2011, a maximum of 8,107,300 shares may yet be purchased under this plan, however, we are not currently repurchasing additional shares of our common stock and have not since the 2008 third quarter.

ITEM 3.   Defaults Upon Senior Securities

Not applicable.

ITEM 4.   (Removed and Reserved)

ITEM 5.   Other Information

Not applicable.

ITEM 6.   Exhibits

See Index of Exhibits on page 67.

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SIGNATURES

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

			Astoria Financial Corporation
Dated:	August 5, 2011	By:	/s/   Monte N. Redman
			Monte N. Redman
			President and Chief Executive Officer
Dated:	August 5, 2011	By:	/s/   Frank E. Fusco
			Frank E. Fusco
			Executive Vice President,
			Treasurer and Chief Financial Officer
			(Principal Accounting Officer)

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX OF EXHIBITS

Exhibit No.		Identification of Exhibit
	4.1	Bylaws of Astoria Federal Savings and Loan Association, as amended effective July 1, 2011.
	10.1	Form of Performance-Based Restricted Stock Award Notice and General Terms and Conditions by and between Astoria Financial Corporation and Award Recipients utilized in connection with the award to Monte N. Redman dated July 1, 2011 pursuant to the Astoria Financial Corporation 2005 Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees, as amended.
	10.2	Change of Control Severance Agreement, entered into as of April 18, 2011, by and among Astoria Federal Savings and Loan Association, Astoria Financial Corporation and Stephen Sipola.
	31.1	Certifications of Chief Executive Officer.
	31.2	Certifications of Chief Financial Officer.
	32.1	Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section.
	101.INS	XBRL Instance Document (1)
	101.SCH	XBRL Taxonomy Extension Schema Document (1)
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (1)
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document (1)
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (1)
	101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document (1)

(1) Pursuant to SEC rules, these interactive data file exhibits shall not be deemed filed for purposes of Section 11 or 12 of the Securities Act or Section 18 of the Exchange Act or otherwise subject to the liability of those sections.

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EX-4.1

Exhibit 4.1

BYLAWS

OF

ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION

Amended and Restated Effective as of January 31, 1995

As Amended Effective July 17, 1996

As Amended Effective September 30, 1997

As Amended Effective September 30, 1998

As Amended Effective July 21, 1999

As Amended Effective April 24, 2000

As Amended Effective November 17, 2004

As Amended Effective May 18, 2005

As Amended Effective April 19, 2006

As Amended Effective May 20, 2009

As Amended Effective August 19, 2009

As Amended Effective June 16, 2010

As Amended Effective July 1, 2011

BYLAWS OF

ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION

ARTICLE I. HOME OFFICE

The home office of Astoria Federal Savings and Loan ("ASSOCIATION") is 37-16 30th Avenue, Long Island City, New York 11103.

ARTICLE II. SHAREHOLDERS

Section 1. Place of Meetings. All annual and special meetings of shareholders shall be held at the administrative office of the ASSOCIATION located at One Astoria Federal Plaza, Lake Success, New York or at such other place in the State in which the principal place of business of the ASSOCIATION is located as the board of directors may determine.

Section 2. Annual Meeting. A meeting of the shareholders of the ASSOCIATION for the election of directors and for the transaction of any other business of the ASSOCIATION shall be held annually within 120 days after the end of the ASSOCIATION's fiscal year.

Section 3. Special Meetings. For a period of five years from the date of the completion of the conversion of the ASSOCIATION from mutual to stock form, special meetings of the shareholders relating to a change in control of the ASSOCIATION or to an amendment of the Charter of the ASSOCIATION may be called only by the board of directors. Thereafter, special meetings of the shareholders for any purpose or purposes, unless otherwise prescribed by the regulations of the Office of Thrift Supervision ("OTS"), may be called at any time by the chairman of the board, the president, or a majority of the board of directors, and shall be called by the chairman of the board, the president or the secretary upon the written request of the holders of not less than one-tenth of all the outstanding capital stock of the ASSOCIATION entitled to vote at the meeting. Such written request shall state the purpose or purposes of the meeting and shall be delivered at the home office of the ASSOCIATION addressed to the chairman of the board, the president or the secretary.

Section 4. Conduct of Meetings. Annual and special meetings shall be conducted in accordance with the most current edition of Robert's Rules of Order unless otherwise prescribed by regulations of the OTS or these bylaws. The board of directors shall designate, when present, either the chairman of the board or president to preside at such meetings.

Section 5. Notice of Meetings. Written notice stating the place, day and hour of the meeting and the purpose(s) for which the meeting is called shall be delivered not fewer than 20 nor more than 50 days before the date of the meeting, either personally or by mail, by or at the direction of the chairman of the board, the president, the secretary, or the directors calling the meeting, to each

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shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the mail, addressed to the shareholder at the address as it appears on the stock transfer books or records of the ASSOCIATION as of the record date prescribed in Section 6 of this Article II, with postage prepaid. When any shareholders' meeting, either annual or special, is adjourned for 30 days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. It shall not be necessary to give any notice of the time and place of any meeting adjourned for less than 30 days or of the business to be transacted at the meeting, other than an announcement at the meeting at which such adjournment is taken.

Section 6. Fixing of Record Date. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors shall fix in advance a date as the record date for any such determination of shareholders. Such date in any case shall be not more than 60 days and, in case of a meeting of shareholders, not fewer than 10 days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment.

Section 7. Voting Lists. At least 20 days before each meeting of the shareholders, the officer or agent having charge of the stock transfer books for shares of the ASSOCIATION shall make a complete list of the shareholders entitled to vote at such meeting, or any adjournment, arranged in alphabetical order, with the address and the number of shares held by each. This list of shareholders shall be kept on file at the home office of the ASSOCIATION and shall be subject to inspection by any shareholder at any time during usual business hours, for a period of 20 days prior to such meeting. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection by any shareholder during the entire time of the meeting. The original stock transfer book shall constitute prima facie evidence of the shareholders entitled to examine such list or transfer books or to vote at any meeting of shareholders.

In lieu of making the shareholder list available for inspection by shareholders as provided in the preceding paragraph, the board of directors may elect to follow the procedures prescribed in §552.6(d) of the OTS's Regulations as now or hereafter in effect.

Section 8. Quorum. A majority of the outstanding shares of the ASSOCIATION entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares is represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to constitute less than a quorum.

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Section 9. Proxies. At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his duly authorized attorney in fact. Proxies solicited on behalf of the management shall be voted as directed by the shareholder or, in the absence of such direction, as determined by a majority of the board of directors. No proxy shall be valid more than eleven months from the date of its execution except for a proxy coupled with an interest.

Section 10. Voting of Shares in the Name of Two or More Persons. When ownership stands in the name of two or more persons, in the absence of written directions to the ASSOCIATION to the contrary, at any meeting of the shareholders of the ASSOCIATION any one or more of such shareholders may cast, in person or by proxy, all votes to which such ownership is entitled. In the event an attempt is made to cast conflicting votes, in person or by proxy, by the several persons in whose names shares of stock stand, the vote or votes to which those persons are entitled shall be cast as directed by a majority of those holding such and present in person or by proxy at such meeting, but no votes shall be cast for such stock if a majority cannot agree.

Section 11. Voting of Shares by Certain Holders. Shares standing in the name of another corporation may be voted by any officer, agent or proxy as the bylaws of such corporation may prescribe, or, in the absence of such provision, as the board of directors of such corporation may determine. Shares held by an administrator, executor, guardian or conservator may be voted by him, either in person or by proxy, without a transfer of such shares into his name. Shares standing in the name of a trustee may be voted by him, either in person or by proxy, but no trustee shall be entitled to vote shares held by him without a transfer of such shares into his name. Shares standing in the name of a receiver may be voted by such receiver, and shares held by or under the control of a receiver may be voted by such receiver without the transfer into his name if authority to do so is contained in an appropriate order of the court or other public authority by which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee and thereafter the pledgee, shall be entitled to vote the shares so transferred.

Neither treasury shares of its own stock held by the ASSOCIATION, nor shares held by another corporation, if a majority of the shares entitled to vote for the election of directors of such other corporation are held by the ASSOCIATION, shall be voted at any meeting or counted in determining the total number of outstanding shares at any given time for purposes of any meeting.

Section 12. Cumulative Voting. Shareholders shall not be entitled to cumulate their votes for election of directors.

Section 13. Inspectors of Election. In advance of any meeting of shareholders, the board of directors may appoint any persons other than nominees for office as inspectors of election to act at such meeting or any adjournment. The number of inspectors shall be either one or three. Any such appointment shall not be altered at the meeting. If inspectors of election are not so appointed, the

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chairman of the board or the president may, or on the request of not fewer than 10 percent of the votes represented at the meeting shall, make such appointment at the meeting. If appointed at the meeting, the majority of the votes present shall determine whether one or three inspectors are to be appointed. In case any person appointed as inspector fails to appear or fails or refuses to act, the vacancy may be filled by appointment by the board of directors in advance of the meeting, or at the meeting by the chairman of the board or the president.

Unless otherwise prescribed by regulations of the OTS, the duties of such inspectors shall include: determining the number of shares and the voting power of each share, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies; receiving votes, ballots, or consents; hearing and determining all challenges and questions in any way arising in connection with the rights to vote; counting and tabulating all votes or consents; determining the result; and such acts as may be proper to conduct the election or vote with fairness to all shareholders.

Section 14. Nominating Committee. The board of directors shall act as a nominating committee for selecting the nominees for election as directors. Except in the case of a nominee substituted as a result of the death or other incapacity of a nominee, the nominating committee shall deliver written nominations to the secretary at least 20 days prior to the date of the annual meeting. Upon delivery, such nominations shall be posted in a conspicuous place in each office of the ASSOCIATION. No nominations for directors except those made by the nominating committee shall be voted upon at the annual meeting unless other nominations by shareholders are made in writing and delivered to the secretary of the ASSOCIATION at least five days prior to the date of the annual meeting. Upon delivery, such nominations shall be posted in a conspicuous place in each office of the ASSOCIATION. Ballots bearing the names of all persons nominated by the nominating committee and by shareholders shall be provided for use at the annual meeting. However, if the nominating committee shall fail or refuse to act at least 20 days prior to the annual meeting, nominations for directors may be made at the annual meeting by any shareholder entitled to vote and shall be voted upon.

Section 15. New Business. Any new business to be taken up at the annual meeting shall be stated in writing and filed with the secretary of the ASSOCIATION at least five days before the date of the annual meeting, and all business so stated, proposed, and filed shall be considered at the annual meeting, but no other proposal shall be acted upon at the annual meeting. Any shareholder may make any other proposal at the annual meeting and the same may be discussed and considered, but unless stated in writing and filed with the secretary at least five days before the meeting, such proposal shall be laid over for action at an adjourned, special, or annual meeting of the shareholders taking place 30 days or more thereafter. This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, directors and committees; but in connection with such reports no new business shall be acted upon at such annual meeting unless stated and filed as herein provided.

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Section 16. Informal Action by Shareholders. Any action required to be taken at a meeting of shareholders, or any other action which may be taken at a meeting of the shareholders, may be taken without a meeting if consent in writing, setting forth the action so taken, shall be given by all of the shareholders entitled to vote with respect to the subject matter.

ARTICLE III. BOARD OF DIRECTORS

Section 1. General Powers.  The business and affairs of the ASSOCIATION shall be under the direction of its board of directors. The board of directors shall annually elect a chairman of the board and a president from among its members and shall designate, when present, either the chairman of the board or the president to preside at its meetings.

Section 2. Number and Term. The board of directors shall consist of ten members and shall be divided into three classes as nearly equal in number as possible. The members of each class shall be elected for a term of three years and until their successors are elected and qualified. One class shall be elected by ballot annually.

Section 3. Regular Meetings. A regular meeting of the board of directors shall be held without other notice than this bylaw immediately after, and at the same place as, the annual meeting of shareholders. The board of directors may provide, by resolution, the time and place, within the ASSOCIATION's normal lending territory, for the holding of additional regular meetings without other notice than such resolution.

Section 4. Qualification. Each director shall at all times be the beneficial owner of not less than 100 shares of capital stock of the ASSOCIATION unless the ASSOCIATION is a wholly owned subsidiary of a holding company.

Section 5. Special Meetings. Special meetings of the board of directors may be called by or at the request of the chairman of the board, the president or one-third of the directors. The persons authorized to call special meetings of the board of directors may fix any place, within the ASSOCIATION's normal lending territory, as the place for holding any special meeting of the board of directors called by such persons.

Members of the board of directors may participate in special meetings by means of conference telephone, or by means of similar communications equipment by which all persons participating in the meeting can hear each other. Such participation shall constitute presence in person but shall not constitute attendance for the purpose of compensation pursuant to Section 12 of this Article.

Section 6. Notice. Written notice of any special meeting shall be given to each director at least two days prior thereto when delivered personally or by telegram, or at least five days prior thereto when delivered by mail at the address at which the director is most likely to be reached. Such notice shall be deemed to be delivered when deposited in the mail so addressed, with postage

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prepaid if mailed, or when delivered to the telegraph company if sent by telegram. Any director may waive notice of any meeting by a writing filed with the secretary. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the board of directors need be specified in the notice or waiver of notice of such meeting.

Section 7. Quorum. A majority of the number of directors fixed by Section 2 of this Article III shall constitute a quorum for the transaction of business at any meeting of the board of directors, but if less than such majority is present at a meeting, a majority of the directors present may adjourn the meeting from time to time. Notice of any adjourned meeting shall be given in the same manner as prescribed by Section 6 of this Article III.

Section 8. Manner of Acting. The act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors, unless a greater number is prescribed by regulation of the OTS or by these bylaws.

Section 9. Action Without a Meeting. Any action required or permitted to be taken by the board of directors at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors.

Section 10. Resignation. Any director may resign at any time by sending a written notice of such resignation to the home office of the ASSOCIATION addressed to the chairman of the board or president. Unless otherwise specified such resignation shall take effect upon receipt by the chairman of the board or president. More than three consecutive absences from regular meetings of the board of directors, unless excused by resolution of the board of directors, shall automatically constitute a resignation, effective when such resignation is accepted by the board of directors.

Section 11. Vacancies. Any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors, although less than a quorum of the board of directors. A director elected to fill a vacancy shall be elected to serve until the next election of directors by the shareholders.  Any directorship to be filled by reason of an increase in the number of directors may be filled by election by the board of directors for a term of office continuing only until the next election of directors by the shareholders.

Section 12. Compensation. Directors, as such, may receive a stated salary for their services. By resolution of the board of directors, a reasonable fixed sum, and reasonable expenses of attendance, if any, may be allowed for actual attendance at each regular or special meeting of the board of directors. Members of either standing or special committees may be allowed such compensation for actual attendance at committee meetings as the board of directors may determine.

Section 13. Presumption of Assent. A director of the ASSOCIATION who is present at a meeting of the board of directors at which action on any ASSOCIATION matter is taken shall be presumed to have assented to the action taken unless his dissent or abstention shall be entered in the

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minutes of the meeting or unless he shall file a written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the secretary of the ASSOCIATION within five days after the date a copy of the minutes of the meeting is received. Such right to dissent shall not apply to a director who voted in favor of such action.

Section 14. Removal of Directors. At a meeting of shareholders called expressly for that purpose, any director may be removed for cause by a vote of the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of the shares of any class are entitled to elect one or more directors by the provisions of the Charter or supplemental sections thereto, the provisions of this section shall apply, in respect to the removal of a director or directors so elected, to the vote of the holders of the outstanding shares of that class and not to the vote of the outstanding shares as a whole.

Section 15. Age Limitation of Directors. No person 75 or above years of age shall be eligible for election, reelection, appointment, or reappointment to the board of directors of the ASSOCIATION. No director shall serve as such beyond the regular meeting of the ASSOCIATION which immediately precedes the director becoming 75 years of age. This age limitation does not apply to an advisory director.

ARTICLE IV. EXECUTIVE AND OTHER COMMITTEES

Section 1. Appointment. The board of directors, by resolution adopted by a majority of the full board, may designate the chief executive officer and two or more of the other directors to constitute an executive committee. The designation of any committee pursuant to this Article IV and the delegation of authority shall not operate to relieve the board of directors, or any director, of any responsibility imposed by law or regulation.

Section 2. Authority. The executive committee, when the board of directors is not in session, shall have and may exercise all of the authority of the board of directors except to the extent, if any, that such authority shall be limited by the resolution appointing the executive committee; and except also that the executive committee shall not have the authority of the board of directors with reference to: the declaration of dividends; the amendment of the Charter or bylaws of the ASSOCIATION, or recommending to the shareholders a plan of merger, consolidation, or conversion; the sale, lease or other disposition of all or substantially all of the property and assets of the ASSOCIATION otherwise than in the usual and regular course of its business; a voluntary dissolution of the ASSOCIATION; a revocation of any of the foregoing; or the approval of a transaction in which any member of the executive committee, directly or indirectly, has any material beneficial interest.

Section 3. Tenure. Subject to the provisions of Section 8 of this Article IV, each member of the executive committee shall hold office until the next regular annual meeting of the board of directors following his or her designation and until a successor is designated as a member of the executive committee.

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Section 4. Meetings. Regular meetings of the executive committee may be held without notice at such times and places as the executive committee may fix from time to time by resolution. Special meetings of the executive committee may be called by any member thereof upon not less than one day's notice stating the place, date and hour of the meeting, which notice may be written or oral. Any member of the executive committee may waive notice of any meeting and no notice of any meeting need be given to any member thereof who attends in person. The notice of a meeting of the executive committee need not state the business proposed to be transacted at the meeting.

Section 5. Quorum. A majority of the members of the executive committee shall constitute a quorum for the transaction of business at any meeting thereof, and action of the executive committee must be authorized by the affirmative vote of a majority of the members present at a meeting at which a quorum is present.

Section 6. Action Without a Meeting. Any action required or permitted to be taken by the executive committee at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the members of the executive committee.

Section 7. Vacancies. Any vacancy in the executive committee may be filled by a resolution adopted by a majority of the full board of directors.

Section 8. Resignations and Removal. Any member of the executive committee may be removed at any time with or without cause by resolution adopted by a majority of the full board of directors. Any member of the executive committee may resign from the executive committee at any time by giving written notice to the president or secretary of the ASSOCIATION. Unless otherwise specified, such resignation shall take effect upon its receipt; the acceptance of such resignation shall not be necessary to make it effective.

Section 9. Procedure. The executive committee shall elect a presiding officer from its members and may fix its own rules of procedure which shall not be inconsistent with these bylaws. It shall keep regular minutes of its proceedings and report the same to the board of directors for its information at the meeting held next after the proceedings shall have occurred.

Section 10. Other Committees. The board of directors may by resolution establish an audit, loan, or other committees composed of directors as they may determine to be necessary or appropriate for the conduct of the business of the ASSOCIATION and may prescribe the duties, constitution and procedures thereof.

ARTICLE V. OFFICERS

Section 1. Positions. The officers of the ASSOCIATION shall be a president, one or more vice presidents, a secretary and a treasurer, each of whom shall be elected by the board of directors. The board of directors may also designate the chairman of the board as an officer. The president

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shall be the chief executive officer, unless the board of directors designates the chairman of the board as chief executive officer. The president shall be a director of the ASSOCIATION. The offices of the secretary and treasurer may be held by the same person and a vice president may also be either the secretary or the treasurer. The board of directors may designate one or more vice presidents as executive vice president or senior vice president. The board of directors may also elect or authorize the appointment of such other officers as the business of the ASSOCIATION may require. The officers shall have such authority and perform such duties as the board of directors may from time to time authorize or determine. In the absence of action by the board of directors, the officers shall have such powers and duties as generally pertain to their respective offices.

Section 2. Election and Term of Office. The officers of the ASSOCIATION shall be elected annually at the first meeting of the board of directors held after each annual meeting of the shareholders. If the election of officers is not held at such meeting, such election shall be held as soon thereafter as possible. Each officer shall hold office until a successor has been duly elected and qualified or until the officer's death, resignation or removal in the manner hereinafter provided. Election or appointment of an officer, employee or agent shall not of itself create contractual rights. The board of directors may authorize the ASSOCIATION to enter into an employment contract with any officer in accordance with regulations of the OTS; but no such contract shall impair the right of the board of directors to remove any officer at any time in accordance with Section 3 of this Article V.

Section 3. Removal. Any officer may be removed by the board of directors whenever in its judgment the best interests of the ASSOCIATION will be served thereby, but such removal, other than for cause, shall be without prejudice to the contractual rights, if any, of the person so removed.

Section 4. Vacancies. A vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors for the unexpired portion of the term.

Section 5. Remuneration. The remuneration of the officers shall be fixed from time to time by the board of directors.

ARTICLE VI. CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 1. Contracts. To the extent permitted by regulations of the OTS, and except as otherwise prescribed by these bylaws with respect to certificates for shares, the board of directors may authorize any officer, employee, or agent of the ASSOCIATION to enter into any contract or execute and deliver any instrument in the name of and on behalf of the ASSOCIATION. Such authority may be general or confined to specific instances.

Section 2. Loans. No loans shall be contracted on behalf of the ASSOCIATION and no evidence of indebtedness shall be issued in its name unless authorized by the board of directors. Such authority may be general or confined to specific instances.

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Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the ASSOCIATION shall be signed by one or more officers, employees or agents of the ASSOCIATION in such manner as shall from time to time be determined by the board of directors.

Section 4. Deposits. All funds of the ASSOCIATION not otherwise employed shall be deposited from time to time to the credit of the ASSOCIATION in any duly authorized depositories as the board of directors may select.

ARTICLE VII. CERTIFICATES FOR SHARES

AND THEIR TRANSFER

Section 1. Certificates for Shares. Certificates representing shares of capital stock of the ASSOCIATION shall be in such form as shall be determined by the board of directors and approved by the OTS. Such certificates shall be signed by the chief executive officer or by any other officer of the ASSOCIATION authorized by the board of directors, attested by the secretary or an assistant secretary, and sealed with the corporate seal or a facsimile thereof. The signatures of such officers upon a certificate may be facsimiles if the certificate is manually signed on behalf of a transfer agent or a registrar, other than the ASSOCIATION itself or one of its employees. Each certificate for shares of capital stock shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the ASSOCIATION. All certificates surrendered to the ASSOCIATION for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares has been surrendered and cancelled, except that in case of a lost or destroyed certificate, a new certificate may be issued upon such terms and indemnity to the ASSOCIATION as the board of directors may prescribe.

Section 2. Transfer of Shares. Transfer of shares of capital stock of the ASSOCIATION shall be made only on its stock transfer books. Authority for such transfer shall be given only by the holder of record or by his legal representative, who shall furnish proper evidence of such authority, or by his attorney authorized by a duly executed power of attorney and filed with the ASSOCIATION. Such transfer shall be made only on surrender for cancellation of the certificate for such shares. The person in whose name shares of capital stock stand on the books of the ASSOCIATION shall be deemed by the ASSOCIATION to be the owner for all purposes.

ARTICLE VIII. FISCAL YEAR; ANNUAL AUDIT

The fiscal year of the ASSOCIATION shall end on December 31 of each year. The ASSOCIATION shall be subject to an annual audit as of the end of its fiscal year by independent public accountants appointed by and responsible to the board of directors. The appointment of such accountants shall be subject to annual ratification by the shareholders.

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ARTICLE IX. DIVIDENDS

Subject to the terms of the ASSOCIATION's Charter and the regulations and orders of the OTS, the board of directors may, from time to time, declare, and the ASSOCIATION may pay, dividends on its outstanding shares of capital stock.

ARTICLE X. CORPORATE SEAL

The board of directors shall provide an ASSOCIATION seal, which shall be two concentric circles between which shall be the name of the ASSOCIATION. The year of incorporation or an emblem may appear in the center.

ARTICLE XI. AMENDMENTS

These bylaws may be amended in a manner consistent with regulations of the OTS at any time by a majority vote of the full board of directors, or by a majority vote of the votes cast by the shareholders of the ASSOCIATION at any legal meeting.

EX-10.1

Exhibit 10.1

Astoria Financial Corporation

2005 Re-designated, Amended and Restated Stock Incentive Plan For Officers and Employees

Restricted Stock Award Notice

Name of Award Recipient
Street Address
	NY
City	State	Zip Code

This Restricted Stock Award Notice (“Award Notice”) is intended to set forth the terms and conditions on which a Restricted Stock Award has been granted under the 2005 Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees for Astoria Financial Corporation (“the Plan”). Set forth below are the specific terms and conditions applicable to this Restricted Stock Award. Attached as Exhibit A are its general terms and conditions.

Restricted Stock Award	(A)	(B)	(C)	(D)	(E)
Grant Date
Class of Shares*	Common	Common	Common	Common	Common
No. of Awarded Shares*
Type of Award (Escrow or Legended Certificate)	Legended Certificate	Legended Certificate	Legended Certificate	Legended Certificate	Legended Certificate
Service-based Vesting Date*
Performance Vesting Conditions*	See Appendix B to Exhibit A	See Appendix B to Exhibit A	See Appendix B to Exhibit A	See Appendix B to Exhibit A	See Appendix B to Exhibit A
Accelerated Vesting (Yes/No) Death Disability Change in Control	No No Yes	No No Yes	No No Yes	No No Yes	No No Yes
Dividend Rights (Yes/No) Before Service-Based Vesting Date Before Satisfaction of Performance Vesting Conditions  (See Appendix B to Exhibit A for application of Service-Based and Performance - Based Vesting Conditions)	Yes Yes	Yes Yes	Yes Yes	Yes Yes	Yes Yes

*Subject to adjustment as provided in the Plan and the General Terms and Conditions.

By signing where indicated below, Astoria Financial Corporation (the “Company”) grants this Restricted Stock Award upon the specified terms and conditions, and the Restricted Stock Award Recipient acknowledges receipt of this Restricted Stock Award Notice, including Exhibit A, and agrees to observe and be bound by the terms and conditions set forth herein.

Astoria Financial Corporation		Award Recipient
By:
	Name:	Print Name:
	Title:

Instructions: This page should be completed by or on behalf of the Executive Compensation Committee. Any blank space intentionally left blank should be crossed out. A Restricted Stock Award consists of shares granted with uniform terms and conditions. Where shares granted under a Restricted Stock Award are awarded on the same date with varying terms and conditions (for example, varying vesting dates), the awards should be recorded as a series of grants each with its own uniform terms and conditions.

EXHIBIT A

Astoria Financial Corporation

 2005 Re-designated, Amended and Restated Stock Incentive Plan For Officers and Employees

Restricted Stock Award Notice

General Terms and Conditions

Section 1.  General Terms.

(a)           Size and Type of Award. The shares of Common Stock of Astoria Financial Corporation (“Shares”) covered by this Award (“Awarded Shares”) are listed on the Restricted Stock Award Notice (“Award Notice”). The Award Notice designates the Awarded Shares as a “Legended Certificate”.

(b)          Legended Certificate. A “Legended Certificate” is a stock certificate evidencing the Awarded Shares that will be issued in your name that is either delivered to you or held in escrow by the Committee or its designee (“Plan Trustee”). The stock certificate will bear a legend indicating that it is or shall be held in escrow subject to all of the terms and conditions of this Award Notice and the Astoria Financial Corporation’s 2005 Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees (“Plan”). Your prior services for the Company and Astoria Federal Savings and Loan Association constitute adequate consideration for the issuance of the Awarded Shares to you having a value at least equal to the par value of the Awarded Shares, but the vesting conditions described below will nevertheless determine your right to acquire unrestricted ownership of the Awarded Shares.

Section 2. Vesting.

(a)           Vesting Dates. The Service-based Vesting Dates for your Awarded Shares are specified on the Award Notice. On each Service-based Vesting Date and upon fulfillment of the vesting conditions, you will obtain unrestricted ownership of the Awarded Shares that vest on that Service-based Vesting Date. A stock certificate evidencing unrestricted ownership will be transferred to you. In the event that there is no date specified in this Award Notice, the Service-based Vesting Date shall be the ninth day of January coincident with or following the third (3rd) anniversary of the Grant Date.

(b)           Vesting Conditions. There are conditions you must satisfy before your Restricted Stock Award will vest, as follows:

(i) Unless otherwise provided in the Award Notice, you must remain in the continuous service of the Company and/or Astoria Federal Savings and Loan Association through the Service-Based Vesting Date shown in this Award Notice (“Service Conditions”).

(ii) Unless otherwise provided in the Award Notice, any Performance Vesting Condition(s) specified in this Award Notice must be met as of the end of their respective Performance Measurement Period(s) as determined by the Committee (“Performance Conditions”).

(c)           Forfeitures. Unless otherwise provided in the Award Notice, if you terminate service with the Company for any reason, including death or Disability or Retirement, prior to a Service-based Vesting Date or before the date when any Performance Condition is satisfied, you will forfeit any Awarded Shares that are scheduled to vest on that date. In addition, if your service continues through a Service-based Vesting Date but an applicable Performance Condition is not achieved as of the end of its Performance Measurement Period, you will forfeit the Awarded Shares. When you forfeit Awarded Shares, all of your interest in the Awarded Shares will be canceled and any stock certificate or other evidence of ownership must be returned to the Company. You agree to take any action and execute and deliver any document that the Company requests to effect the return of your unvested Awarded Shares. In the event you do not cooperate with the Company in this regard, you hereby appoint and designate the Company as your attorney-in-fact for the purpose of taking any action and signing any document, in your name, which the Company determines is necessary to enforce the forfeiture.

(d)           Accelerated Vesting. Unless otherwise provided in the Award Notice, in the event a Change of Control (as defined in the Plan) occurs before you terminate service with the Company, then any Awarded Shares not theretofore forfeited shall become immediately vested on the date of the Change of Control as if all Service Conditions and Performance Conditions were satisfied on such date. You may designate a Beneficiary to receive any Awarded Shares that vest upon your death using the Beneficiary Designation attached as Appendix A. To the extent provided in the Award Notice, in the event of your death or Disability (as defined in the Plan)while you are in the service of the Company or Astoria Federal Savings and Loan Association, a pro-rated portion of any Awarded Shares that have not previously been forfeited or become vested will vest as if the Service-based Vesting Date were the day before your death or Disability and all Performance Conditions were satisfied (or, if applicable, satisfied at target levels of performance) as of the day before your death or Disability; in this event, the pro-ration shall be effected (a) by multiplying the applicable number of Awarded Shares by a fraction, the numerator of which is the number of calendar months (rounded to the nearest whole month) during the period beginning on the Grant Date and ending on the date of your death or Disability and the denominator of which is the number of calendar months during the period beginning on the Grant Date and ending on the Service-based Vesting Date or (b) in such other manner as the Committee determines to be appropriate to reflect the extent to which the expense of the Awarded Shares has been previously accrued on the Company’s books. .

(e)           Definition of Service. For purposes of determining the vesting of your Awarded Shares, you will be deemed to be in the service of the Company for so long as you serve in any capacity as an employee, officer, non-employee director or consultant of the Company or the Association.

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(f)           Application of Clawback Policy. Notwithstanding anything in the Award Notice to the contrary, the Awarded Shares and any related dividends shall be subject to adjustment and/or recovery, in whole or in part, following the date on which they become vested and payable if and to the extent (i) required by any applicable law, rule or regulation or (ii) provided under the terms of any clawback policy or other policy of similar import adopted by the Company and in effect on the date the Awarded Shares or dividends, as applicable, become vested and payable.

Section 3.             Dividends. Unless otherwise provided on the Award Notice, any dividends declared by the Company with a record date that is after the Grant Date but prior to the Service-based Vesting Date specified in the Award Notice or the date on which any applicable Performance Condition is satisfied will be paid in the same manner as for other shareholders.

Section 4.              Voting Rights. You will have the right to direct the voting rights appurtenant to the Awarded Shares.

Section 5.             Taxes. Where any person is entitled to receive Shares pursuant to the Restricted Stock Award granted hereunder, the Company shall have the right to require such person to pay to the Company the amount of any tax which the Company is required to withhold with respect to such Shares, or, in lieu thereof, to retain, or to sell without notice, a sufficient number of Shares to cover the amount required to be withheld.

Section 6.             Notices. Any communication required or permitted to be given under the Plan, including any notice, direction, designation, comment, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below, or at such other address as one such party may by written notice specify to the other party:

(a)           If the Company:

Astoria Financial Corporation

One Astoria Federal Plaza

Lake Success, New York 11042

Attention: Corporate Secretary

(b)           If to the Recipient, to the Recipient's address as shown in the Company's records.

Section 7.             Restrictions on Transfer. The Restricted Stock Award granted hereunder shall not be subject in any manner to anticipation, alienation or assignment, nor shall such option be liable for or subject to debts, contracts, liabilities, engagements or torts, nor shall it be transferable by the Recipient other than by will or by the laws of descent and distribution or as otherwise permitted by

Page 3 of 4

the Plan. To name a Beneficiary, complete the attached Appendix A and file it with the Corporate Secretary of Astoria Financial Corporation

Section 8.              Successors and Assigns. This Award Notice shall inure to the benefit of and shall be binding upon the Company and the Recipient and their respective heirs, successors and assigns.

Section 9.             Construction of Language. Whenever appropriate in the Award Notice, words used in the singular may be read in the plural, words used in the plural may be read in the singular, and words importing the masculine gender may be read as referring equally to the feminine or the neuter. Any reference to a section shall be a reference to a section of this Award Notice, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings assigned to them under the Plan.

Section 10.           Governing Law. This Award Notice shall be construed, administered and enforced according to the laws of the State of New York without giving effect to the conflict of laws principles thereof, except to the extent that such laws are preempted by the federal law. The federal and state courts having jurisdiction in the Counties of Nassau, New York or Suffolk, New York shall have exclusive jurisdiction over any claim, action, complaint or lawsuit brought under the terms of the Plan. By accepting any Award granted under this Award Notice, the Recipient, and any other person claiming any rights under the Award Notice, agrees to submit himself, and any such legal action as he shall bring under the Plan, to the sole jurisdiction of such courts for the adjudication and resolution of any such disputes.

Section 11.           Amendment. This Award Notice may be amended, in whole or in part and in any manner not inconsistent with the provisions of the Plan, at any time and from time to time, by written Award Notice between the Company and the Recipient.

Section 12.           Plan Provisions Control. This Award Notice and the rights and obligations created hereunder shall be subject to all of the terms and conditions of the Plan. In the event of any conflict between the mandatory provisions of the Plan and the provisions of this Award Notice, the terms of the Plan, which are incorporated herein by reference, shall control. In the event of any conflict between a provision of the Plan which permits the Committee to deviate from its terms and a provision of this Award Notice, the provision of this Award shall control. By signing this Award Notice, the Recipient acknowledges receipt of a copy of the Plan. The Recipient acknowledges that he or she may not and will not rely on any statement of account or other communication or document issued in connection with the Plan other than the Plan, this Award Notice, and any document signed by an authorized representative of the Company that is designated as an amendment of the Plan or this Award Notice.

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Appendix A to Restricted Stock Award Notice

Astoria Financial Corporation

2005 Re-designated, Amended and Restated Stock Incentive Plan For Officers and Employees

Beneficiary Designation Form - Restricted Stock

GENERAL INFORMATION	Use this form to designate the Beneficiary(ies) who may receive Restricted Stock Awards that become vested at your death.
Name of Person Making Designation
BENEFICIARY DESIGNATION	Complete sections A and B. If no percentage shares are specified, each Beneficiary in the same class (primary or contingent) shall have an equal share. If any designated Beneficiary predeceases you, the shares of each remaining Beneficiary in the same class (primary or contingent) shall be increased proportionately.
A. PRIMARY BENEFICIARY(IES). I hereby designate the following person as my primary Beneficiary under the Plan, reserving the right to change or revoke this designation at any time prior to my death:

Name	Address	Relationship	Birthdate	Share
					%
					%
					%
				Total = 100	%
B. CONTINGENT BENEFICIARY(IES). I hereby designate the following person(s) as my contingent Beneficiary(ies) under the Plan to receive benefits only if all of my primary Beneficiaries should predecease me, reserving the right to change or revoke this designation at any time prior to my death:
Name	Address	Relationship	Birthdate	Share
					%
					%
					%
				Total = 100	%

S I G N	H E R E	I understand that this Beneficiary Designation shall be effective only if properly completed and received by the Corporate Secretary of Astoria Financial Corporation prior to my death, and that it is subject to all of the terms and conditions of the Plan. I also understand that an effective Beneficiary designation revokes my prior designation(s) with respect to all outstanding Restricted Stock Awards.
		Your Signature	Date

Internal Use Only

This Beneficiary Designation was received by the Corporate Secretary of Astoria Financial Corporation on the date indicated.			Comments
By
	Authorized Signature	Date

Appendix B to Restricted Stock Award Notice

Astoria Financial Corporation

2005 Re-designated, Amended and Restated Stock Incentive Plan For Officers and Employees

Performance Vesting Conditions

The Performance Measurement Period is the period beginning _______________ and ending ________________.

The Performance Vesting Condition is: _____________________________________________________________

NOTES:

EX-10.2

Exhibit 10.2

CHANGE OF CONTROL SEVERANCE AGREEMENT

This AMENDED AND RESTATED CHANGE OF CONTROL SEVERANCE AGREEMENT (the "Agreement") is made and entered into as of April 18, 2011 (the “Initial Effective Date”) by and among ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION, a savings and loan association organized and existing under the laws of the United States of America and having an office at One Astoria Federal Plaza, Lake Success, New York 11042 (the "Association"), ASTORIA FINANCIAL CORPORATION, a business corporation organized and existing under the laws of the State of Delaware and having an office at One Astoria Federal Plaza, Lake Success, New York 11042 (the "Company") and Stephen Sipola, an individual residing at 1 Anna Court, West Islip, New York 11795 (the "Officer").

INTRODUCTORY STATEMENT

WHEREAS, the Officer is a key officer of the Association;

WHEREAS, should the possibility of a Pending Change of Control or Change of Control of the Association or the Company arise, the Boards of Directors of the Association and the Company believe it is imperative that the Association, the Company and the Boards of Directors of the Association and the Company should be able to rely upon the Officer to continue in his or her position, and that the Association and the Company should be able to receive and rely upon the Officer's advice, if requested, as to the best interests of the Association and the Company and their respective shareholders without concern that the Officer might be distracted by the personal uncertainties and risks created by the possibility of a Pending Change of Control or Change of Control;

WHEREAS, should the possibility of a Pending Change of Control or Change of Control arise, in addition to his or her regular duties, the Officer may be called upon to assist in the assessment of such possible Pending Change of Control or Change of Control, advise management and the Board as to whether such Pending Change of Control or Change of Control would be in the best interests of the Association, the Company and their respective shareholders, and to take such other actions as the Boards of Directors of the Association and the Company might determine to be appropriate;

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

AGREEMENT

Section 1. Effective Date; Term; Pending Change of Control and Change of Control Defined.

(a)          This Agreement shall remain in effect during the period (the "Term") beginning on the Initial Effective Date and ending on the earlier of:

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(i)           the date, prior to the occurrence of a Pending Change of Control or a Change of Control, as defined below, respectively, on which the Officer's employment by the Association terminates whether by discharge, resignation, death, disability or retirement, or

(ii)          the later of:

(A)          the first anniversary of the date on which the Association notifies the Officer of its intent to discontinue the Agreement (the "Initial Expiration Date") or,

(B)           the second anniversary of the latest Change of Control, as defined below, that occurs after the Initial Effective Date and before the Initial Expiration Date.

(b)           For purposes of this Agreement, a "Change of Control" shall be deemed to have occurred upon the happening of any of the following events:

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

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

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

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

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

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

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

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

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

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

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

(v)         any event which would be described in section 1(b)(i), (ii), (iii) or (iv) if the term "Association" were substituted for the term "Company" therein.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Association, or an affiliate or subsidiary of either of them, by any employee benefit plan maintained by any of them. For purposes of this section 1(b), the term "person" shall have the meaning assigned to it under sections 13(d)(3) or 14(d)(2) of the Exchange Act.

(c)           For purposes of this Agreement, a "Pending Change of Control" shall mean:

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(i)           the approval by the shareholders of the Association or the Company of a definitive agreement for a transaction which, if consummated, would result in a Change of Control; or

(ii)          the approval by the shareholders of the Association or the Company of a transaction which, if consummated, would result in a Change of Control.

Section 2.  Discharge Prior to a Pending Change of Control.

The Association may discharge the Officer at any time prior to the occurrence of a Pending Change of Control or, if no Pending Change of Control has occurred, a Change of Control, for any reason or for no reason. In such event:

(a)           The Association shall pay to the Officer or the Officer's estate his or her earned but unpaid compensation, including, without limitation, salary and all other items which constitute wages under applicable law, as of the date of the Officer's termination of employment. This payment shall be made at the time and in the manner prescribed by law applicable to the payment of wages but in no event later than 30 days after the date of the Officer's termination of employment.

(b)           The Association shall provide the benefits due, if any, to the Officer or the Officer's estate, surviving dependents or designated beneficiaries, as applicable, under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the officers and employees of the Association, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan. The time and manner of payment or other delivery of these benefits and the recipients of such benefits shall be determined according to the terms and conditions of the applicable plans and programs.

The payments and benefits described in sections 2(a) and (b) shall be referred to in this Agreement as the "Standard Termination Entitlements."

Section 3. Termination of Employment Due to Death.

The Officer's employment with the Association shall terminate automatically, and without any further action on the part of any party to this Agreement, on the date of the Officer's death. In such event, the Association shall pay and deliver to the Officer's estate and surviving dependents and designated beneficiaries, as applicable, the Standard Termination Entitlements.

Section 4. Termination Due to Disability after a Pending Change of Control or a Change of Control.

The Association may terminate the Officer's employment during the Term and after the occurrence of a Pending Change of Control or a Change of Control upon a

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

(a)           The Association shall pay and deliver the Standard Termination Entitlements to the Officer or, in the event of the Officer's death following such termination but before payment, to the Officer's estate, surviving dependents or designated beneficiaries, as applicable.

(b)           In addition to the Standard Termination Entitlements, the Association shall continue to pay the Officer his or her base salary, at the annual rate in effect for the Officer immediately prior to the termination of the Officer's employment, during a period ending on the earliest of: (i) the expiration of one hundred and eighty (180) days after the date of termination of the Officer's employment; (ii) the date on which long-term disability insurance benefits are first payable to the Officer under any long-term disability insurance plan covering employees of the Association; or (iii) the date of the Officer's death.

A termination of employment due to disability under this section 4 shall be effected by a notice of termination given to the Officer by the Association and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Officer.

Section 5. Discharge with Cause after a Pending Change of Control or Change of Control.

(a)          The Association may terminate the Officer's employment with "Cause" during the Term and after the occurrence of a Pending Change of Control or a Change of Control, but a termination shall be deemed to have occurred with "Cause" only if:

(i)           (A)           the Board of Directors of the Association, by the affirmative vote of 75% of its entire membership, determines that the Officer is guilty of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of this Agreement, in each case measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(B)         prior to the vote contemplated by section 5(a)(i)(A), the Board of Directors of the Association shall provide the Officer with notice of the Association's intent to discharge the Officer for Cause, detailing with particularity

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the facts and circumstances which are alleged to constitute Cause (the "Notice of Intent to Discharge"); and

(C)         after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by section 5(a)(i)(A), the Officer, together with the Officer's legal counsel, if he so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board of Directors of the Association for the purpose of refuting the alleged grounds for Cause for the Officer's discharge; and

(D)         after the vote contemplated by section 5(a)(i)(A), the Association has furnished to the Officer a notice of termination which shall specify the effective date of the Officer's termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board of Directors of the Association, certified by its corporate secretary, authorizing the termination of the Officer's employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Officer's discharge (the "Final Discharge Notice"); or

(ii)          the Officer, during the 90 day period commencing on the delivery to the Officer by the Association of the Notice of Intent to Discharge specified in section 5(a)(i)(B), resigns his or her employment with the Association prior to the delivery to the Officer by the Association of the Final Discharge Notice specified in section 5(a)(i)(D).  For purposes of this section 5, no act or failure to act, on the part of the Officer, shall be considered "willful" unless it is done, or omitted to be done, by the Officer in bad faith or without reasonable belief that the Officer's action or omission was in the best interests of the Association or the Company, respectively. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Association or the Company or based upon the written advice of counsel for the Association or the Company shall be conclusively presumed to be done or omitted to be done by the Officer in good faith and in the best interests of the Association or the Company, respectively.

(b)           If the Officer is discharged with Cause during the Term and after a Pending Change of Control or a Change of Control, the Association shall pay and provide to him or, in the event of the Officer's death following such discharge but prior to payment and providing, to the Officer's estate, surviving dependents or designated beneficiaries, as applicable, the Standard Termination Entitlements only.

(c)           Following the giving of a Notice of Intent to Discharge, the Association may temporarily suspend the Officer's duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Officer's participation in retirement, insurance and other employee benefit plans. If the Officer is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld

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during the period of suspension shall be promptly restored. If the Officer is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Officer during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Officer's discharge with Cause shall be retained by the Officer and shall not be applied to offset the Standard Termination Entitlements. If the Association does not give a Final Discharge Notice to the Officer within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Officer with Cause shall require the giving of a new Notice of Intent to Discharge. If the Officer resigns pursuant to section 5(a)(ii), the Officer shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Officer's resignation or notice of resignation, whichever is earlier.

Section 6. Discharge Without Cause after a Pending Change of Control or Change of Control.

The Association may discharge the Officer without Cause at any time after the occurrence of a Pending Change of Control or a Change of Control, and in such event:

(a)           The Association shall pay and deliver the Standard Termination Entitlements to the Officer or, in the event of the Officer's death following the Officer's discharge but before payment, to the Officer's estate, surviving dependents or designated beneficiaries, as applicable.

(b)           In addition to the Standard Termination Entitlements:

(i)           the Association shall provide for a period of two years following the date of the Officer's discharge or, if less, the period from date of the Officer's discharge to the Initial Expiration Date provided, however, that the Association has previously notified the Officer pursuant to Section 1(a)(ii)(A) (the "Assurance Period") for the benefit of the Officer and the Officer's spouse and dependents continued group life, health (including hospitalization, medical and major medical), dental, accident and long-term disability insurance benefits on substantially the same terms and conditions (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Association) in effect for them immediately prior to the Officer's discharge. The coverage provided under this section 6(b)(i) may, at the election of the Association, be secondary to the coverage provided as part of the Standard Termination Entitlements and to any employer-paid coverage provided by a subsequent employer or through Medicare, with the result that benefits under the other coverages will offset the coverage required by this section 6(b)(i), provided, however, that for purposes of this section 6(b)(i) benefits provided at the cost of the Officer or the Officer's spouse

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or dependants pursuant to the Comprehensive Omnibus Budget Reconciliation Act, as amended, shall not be considered Standard Termination Entitlements.

(ii)           The Association shall make a lump sum payment to the Officer or, in the event of the Officer's death following the Officer's discharge but before payment, to the Officer's estate in an amount equal to the salary that the Officer would have earned if he had continued working for the Association during the Assurance Period at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the "Salary Severance Payment"). The Salary Severance Payment shall be computed using the following formula:

SSP   =   BS x NY

where:

"SSP" is the amount of the Salary Severance Payment, before the deduction of applicable federal, state and local withholding taxes;

"BS" is the highest annual rate of salary achieved by the Officer during the period of three (3) years ending immediately prior to the date of termination; and

"NY" is the Assurance Period expressed as a number of years and fractions of years.

The Salary Severance Payment shall be made sixty (60) days after the Officer's termination of employment and shall be in lieu of any claim to a continuation of base salary which the Officer might otherwise have and in lieu of cash severance benefits under any severance benefits program which may be in effect for officers or employees of the Association.

(iii)         The Association shall make a lump sum payment to the Officer or, in the event of the Officer's death following the Officer's discharge but before payment, to the Officer's estate in an amount equal to the potential annual bonuses that the Officer would have earned if the Officer had continued working for the Association during the period of the same length as the Assurance Period, beginning on the date after the end of the current performance period under the Association’s Annual Incentive Plan for Select Executives at the highest annual rate of salary achieved during the period of three (3) years ending immediately prior to the date of termination (the "Bonus Severance Payment"). The Bonus Severance Payment shall be computed using the following formula:

BSP   =   ((BS x TIO x IP) + ( BS x TIO x FP)) x NY

where:

"BSP" is the amount of the Bonus Severance Payment, before the deduction of applicable federal, state and local withholding taxes;

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"BS" is the highest annual rate of salary achieved by the Officer during the period of three (3) years ending immediately prior to the date of termination;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board of Directors of the Association for the Officer pursuant to the Association’s Annual Incentive Plan for Select Executives for the year in which the employment of the Officer by the Association terminates or, if no target incentive opportunity is established by the Compensation Committee of the Board of Directors of the Association for such year with respect to the Officer, then the highest of the target incentive opportunity established by the Compensation Committee of the Board of Directors of the Association for the Officer pursuant to the Annual Incentive Plan for Select Executives during the period of three (3) years ending immediately prior to the date of termination;

"IP" is either (i) the percentage of the TIO which is to be determined by the individual performance of the Officer as established by the Compensation Committee of the Board of Directors of the Association pursuant to the Association's Annual Incentive Plan for Select Executives for the year in which the employment of the Officer by the Association terminates or, (ii) if no target incentive opportunity has been established with respect to the Officer by the Compensation Committee of the Board of Directors of the Association for the year in which the employment of the Officer by the Association terminates, then the lowest percentage of the target incentive opportunity to be determined by the individual performance of the Officer established by the Compensation Committee of the Board of Directors of the Association for the Officer pursuant to the Annual Incentive Plan for Select Executives during the period of three (3) years ending immediately prior to the date of termination;

"FP" is either (i) the percentage of the TIO with respect to the Officer which is to be determined by the financial performance of the Company as established by the Compensation Committee of the Board of Directors of the Association pursuant to the Association's Annual Incentive Plan for Select Executives for the year in which the employment of the Officer by the Association terminates or, (ii) if no target incentive opportunity has been established with respect to the Officer by the Compensation Committee of the Board of Directors of the Association for the year in which the employment of the Officer by the Association terminates, then a percentage equal to 100% minus the IP;

"NY" is the Assurance Period expressed as a number of years and fractions of years.

The Bonus Severance Payment shall be made on the date sixty (60) days after the Officer's termination of employment and shall be in lieu of any claim to a continuation of participation in any cash-based annual bonus or performance-based compensation plans of the Association which the Officer might otherwise have, other than any claim based on rights the Officer may have with regard to

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any performance period under any such plan that begins before the effective date of the Officer's termination of employment.

The payments and benefits described in section 6(b) are referred to in this Agreement as the "Additional Termination Entitlements". The payments described in section 6(b)(ii) and (iii) shall be computed at the expense of the Company by an attorney of the firm of Arnold & Porter, 399 Park Avenue, New York, NY 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Officer and reasonably satisfactory to the Company (the "Computation Advisor"). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

Section 7.  Tax Indemnification.

(a)           If the Officer's employment terminates under circumstances entitling the Officer or, in the event of the Officer's death following such termination but before payment, his or her estate to the Additional Termination Entitlements, the Company shall pay to the Officer or, in the event of the Officer's death, his or her estate an additional amount (the “Tax Indemnity Payment”) intended to indemnify the Officer against the financial effects of the excise tax imposed on excess parachute payments under section 280G of the Internal Revenue Code of 1986, as amended (the "Code"). The Tax Indemnity Payment shall be determined under the following formula:

TIP   =	E x P
	1 - (( FI x ( 1 - SLI )) + SLI + E + M )

where:

"TIP" is the Tax Indemnity Payment, before the deduction of applicable federal, state and local withholding taxes;

"E" is the percentage rate at which an excise tax is assessed under section 4999 of the Code;

"P" is the amount with respect to which such excise tax is assessed, determined without regard to this section 16;

"FI" is the highest marginal rate of income tax applicable to the Officer under the Code for the taxable year in question;

"SLI" is the sum of the highest marginal rates of income tax applicable to the Officer under all applicable state and local laws for the taxable year in question; and

"M" is the highest marginal rate of Medicare tax applicable to the Officer under the Code for the taxable year in question.

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Such computation shall be made at the expense of the Company by the Computation Advisor and shall be based on the following assumptions:

(i)           that a change in ownership, a change in effective ownership or control or a change in the ownership of a substantial portion of the assets of the Association or the Company has occurred within the meaning of section 280G of the Code (a "280G Change of Control");

(ii)          that all direct or indirect payments made to or benefits conferred upon the Officer on account of the Officer's termination of employment are "parachute payments" within the meaning of section 280G of the Code; and

(iii)         that no portion of such payments is reasonable compensation for services rendered prior to the Officer's termination of employment.

(b)          With respect to any payment that is presumed to be a parachute payment for purposes of section 280G of the Code, the Tax Indemnity Payment shall be made to the Officer on the earlier of the date the Company, the Association or any direct or indirect subsidiary or affiliate of the Company or the Association is required to withhold such tax or the date the tax is required to be paid by the Officer, unless, prior to such date, the Company delivers to the Officer the written opinion (the "Opinion Letter"), in form and substance reasonably satisfactory to the Officer, of the Computation Advisor or, if the Computation Advisor is unable to provide such opinion, of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Officer, to the effect that the Officer has a reasonable basis on which to conclude that:

(i)          no 280G Change in Control has occurred, or

(ii)         all or part of the payment or benefit in question is not a parachute payment for purposes of section 280G of the Code, or

(iii)         all or a part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or

(iv)         for some other reason which shall be set forth in detail in such letter, no excise tax is due under section 4999 of the Code with respect to such payment or benefit.

If the Company delivers an Opinion Letter, the Computation Advisor shall re-compute, and the Company shall make, the Tax Indemnity Payment in reliance on the information contained in the Opinion Letter.

(c)           In the event that the Officer's liability for the excise tax under section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Officer or the Company, as the case

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may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made pursuant to sections 7(a) or 7(b), when increased by the amount of the payment made to the Officer pursuant to this section 7(c), or when reduced by the amount of the payment made to the Company pursuant to this section 7(c), equals the amount that should have properly been paid to the Officer under section 7(a). The interest paid to the Company under this section 7(c) shall be determined at the rate provided under section 1274(b)(2)(B) of the Code. The payment made to the Officer shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Officer under this section 7, the Officer shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or proceeding to which the Officer is a party as a result of positions taken on the Officer's federal income tax return with respect to the Officer's liability for excise taxes under section 4999 of the Code.  Any payment pursuant to this section 7(c) shall be made promptly following the relevant subsequent determination, and shall in any case be made no later than the last day of the calendar year following the calendar year in which any additional taxes for which the Tax Indemnity Payment is to be made are remitted to the Internal Revenue Service.

Section 8.  Indemnification upon and following a Change of Control.

(a)           To the maximum extent permitted under applicable law, from and after the effective date of a Change of Control, the Association and the Company agree to indemnify and hold harmless the Officer, against any costs or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages or liabilities (collectively, "Costs") incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, for acts or omissions in connection with service as an officer of the Association or service in other capacities at the request of the Association or the Company at or prior to the time the Change of Control became effective, whether asserted or claimed prior to, at or after the effective date of the Change of Control, and to advance any such Costs to the Officer as they are from time to time incurred, in each case to the fullest extent the Officer would have been indemnified as a director or officer of the Association or the Company, as applicable, and as then permitted under applicable law. No provision in this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company or the Charter and or a bylaw of the Association by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

(b)           The Officer, seeking to claim indemnification under section 8(a) of this Agreement and upon learning of any such claim, action, suit, proceeding or investigation, shall promptly notify the Association thereof, but the failure to so notify shall not relieve the Association or the Company of any liability it may have pursuant to this Agreement to the

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Officer if such failure does not materially and substantially prejudice the Association or the Company. In the event of any such claim, action, suit, proceeding or investigation,

(i)           the Association and the Company shall have the right to assume the defense thereof with counsel reasonably acceptable to the Officer, and the Association and the Company shall not be liable to the Officer for any legal expenses of other counsel subsequently incurred by the Officer in connection with the defense thereof, except that if the Association and the Company do not elect to assume such defense within a reasonable time or counsel for the Officer at any time advises that there are issues which raise conflicts of interest between the Association or the Company and the Officer (and counsel for the Association or the Company does not disagree), the Officer may retain counsel satisfactory to the Officer, and the Association and the Company shall remain responsible for the reasonable fees and expenses of such counsel as set forth above, to be paid promptly as statements therefor are received; provided, however, that the Association and the Company shall be obligated pursuant to this paragraph (b)(i) to pay for only one firm of counsel for all indemnified parties in any one jurisdiction with respect to any given claim, action, suit, proceeding or investigation unless the use of one counsel for such indemnified parties, including the Officer, would present such counsel with a conflict of interest;

(ii)          the Officer will reasonably cooperate in the defense of any such matter; and

(iii)         the Association and the Company shall not be liable for any settlement effected by the Officer without their prior written consent, which shall not be unreasonably withheld.

Section 9. Resignation.

(a)           The Officer may resign from the Officer's employment with the Association at any time. A resignation under this section 9 shall be effected by notice of resignation given by the Officer to the Association and shall take effect on the later of the effective date of termination specified in such notice or the date on which the notice of termination is deemed given by the Officer. For purposes of this Agreement, retirement of the Officer from the employment of the Association or the Company under circumstances defined as "normal retirement" or "early retirement" pursuant to any qualified defined benefit or qualified defined contribution pension plan maintained by the Association shall be deemed a resignation by the Officer of the Officer's employment with the Association. A resignation by the Officer as described in section 5(a)(ii) of this Agreement, for purposes of this Agreement shall be deemed to be termination with "Cause". The Officer's resignation of any of the positions within the Association or the Company to which he has been assigned shall be deemed a resignation from all such positions.

(b)           The Officer's resignation shall be deemed to be for "Good Reason" if the effective date of resignation occurs during the Term, but on or after the effective date of a Pending Change of Control or Change of Control, and is on account of:

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(i)           the failure of the Association (whether by act or omission of the Board of Directors, or otherwise) to appoint, re-appoint, elect or re-elect the Officer to the office and position with the Association that he held immediately prior to the Change of Control or Pending Change of Control (the "Assigned Office") or to a more senior office and position;

(ii)          if the Officer is or becomes a member of the Board of Directors of the Association, the failure of the shareholders of the Association (whether in an election in which the Officer stands as a nominee or in an election where the Officer is not a nominee), to elect or re-elect the Officer to such directorship at the expiration of the Officer's term as a director, unless such failure is a result of the Officer's refusal to stand for election;

(iii)         a material failure by the Association, whether by amendment of the charter or organization, by-laws, action of the Board of Directors of the Association or otherwise, to vest in the Officer the functions, duties, or responsibilities customarily associated with the Assigned Office; provided that the Officer shall have given notice of such failure to the Association, and the Association has not fully cured such failure within thirty (30) days after such notice is deemed given;

(iv)         any reduction of the Officer's rate of base salary in effect from time to time, whether or not material, or any failure, other than due to reasonable administrative error that is fully cured within 5 days after notice of such administrative error is deemed given, to pay any portion of the Officer's compensation as and when due;

(v)          any change in the terms and conditions of any compensation or benefit program in which the Officer participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of the Officer's total compensation package; provided that the Officer shall have given notice of such material adverse effect to the Association, and the Association has not fully cured such failure within thirty (30) days after such notice is deemed given;

(vi)        any material breach by the Company or the Association of any material term, condition or covenant contained in this Agreement; provided that the Officer shall have given notice to the Company and the Association of such material adverse effect, and the Company or the Association have not fully cured such failure within thirty (30) days after such notice is deemed given; or

(vii)       a change in the Officer's principal place of employment to a location that is outside of Nassau County or Queens County, New York.

In all other cases, a resignation by the Officer shall be deemed to be without Good Reason. In the event of resignation, the Officer shall state in the Officer's notice of resignation whether the Officer considers his or her resignation to be a resignation with Good Reason, and if he does, he

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shall state in such notice the grounds which constitute Good Reason. The Officer's determination of the existence of Good Reason shall be conclusive in the absence of fraud, bad faith or manifest error.

(c)           In the event of the Officer's resignation for any reason, the Association shall pay and deliver the Standard Termination Entitlements. In the event of the Officer's resignation with Good Reason and such resignation is effective within six (6) months of the effective date of the Change of Control (the "Resignation Window Period"), the Association shall also pay and deliver the Additional Termination Entitlements.  In the event the Officer's resignation with Good Reason is based upon section 9(b)(iii),(iv),(v) or (vi) and the notice required by such provision has been given within six months of the effective date of the Change of Control but the applicable cure period will not expire until on or after the date which is six months following the effective date of the Change of Control, the Resignation Window Period shall be extended so as expire 30 days following the expiration of the applicable cure period.

Section 10.  Terms and Conditions of the Additional Termination Entitlements.

The Association and the Officer hereby stipulate that the damages which may be incurred by the Officer following any termination of employment are not capable of accurate measurement as of the date first above written and that the Additional Termination Entitlements constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Officer's efforts, if any, to mitigate damages.  The Association and the Officer further agree that the Association may elect to condition the payment and delivery of the Additional Termination Entitlements on the receipt and effectiveness of:

(a)           the Officer's resignation from any and all positions which he holds as an officer, director or committee member with respect to the Association or any subsidiary or affiliate of the Association; and

(b)           a release of the Association and the Company and their officers, directors, shareholders, subsidiaries and affiliates, in form and substance satisfactory to the Association, of any liability to the Officer, whether for compensation or damages, in connection with the Officer's employment with the Association and the termination of such employment, except for the Standard Termination Entitlements, the Additional Termination Entitlements, the Tax Indemnity Payment and indemnification payments due the Officer pursuant to section 6 or section 7 of this Agreement;

provided, however, that any such election by the Association will only be effective if the Association notifies the Officer of its election in writing within five (5) days of the Officer's termination of employment.

To the extent the Association timely elects to condition the payment and delivery of the Additional Termination Entitlements or any other amount due under this Agreement upon the receipt and effectiveness of the Officer's resignation or release provided in section 10(b) of this Agreement, neither the Additional Termination Entitlements nor any other amount due so conditioned shall be paid to the Officer if any resignation or release so required is not both

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received by the Association and effective before the first date upon which such payments are to be paid under this Agreement.

Section 11. Confidentiality.

Unless the Officer obtains the prior written consent of the Association or the Company, the Officer shall keep confidential and shall refrain from using for the benefit of himself or herself, or any person or entity other than the Company or any entity which is a subsidiary of the Company or of which the Company is a subsidiary, any material document or information obtained from the Company, or from its parent or subsidiaries, in the course of the Officer's employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of the Officer) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this section 11 shall prevent the Officer, with or without the Company's consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

Section 12.  No Effect on Employee Benefit Plans or Programs.

Except to the extent specifically provided herein, the termination of the Officer's employment during the Term or thereafter, whether by the Association or by the Officer, shall have no effect on the rights and obligations of the parties hereto under the Association's qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Association from time to time; provided, however, that nothing in this Agreement shall be deemed to duplicate any compensation or benefits provided under any severance agreement, plan or program covering the Officer to which the Association or Company is a party and any duplicative amount payable under any such agreement, plan or program shall be applied as an offset to reduce the amounts otherwise payable hereunder. The Additional Termination Entitlements provided hereunder, when due and payable or provided to the Officer, or in the case of the Officer's death, to his or her estate, surviving dependants or designated beneficiaries, as applicable, are acknowledged to be in lieu of any benefits that would otherwise be provided under such circumstances pursuant to the Association's Severance Pay Plan, as amended, or Severance Compensation Plan, as amended.

Section 13. Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Officer, the Officer's legal representatives and testate or intestate distributees, and the Company and the Association and their respective successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company or the Association may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written

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assumption of the Company's or Association's obligations hereunder at least 60 days in advance of the scheduled effective date of any such succession shall, if such succession constitutes a Change of Control, constitute Good Reason for the Officer's resignation on or at any time during the Term following the occurrence of such succession.

Section 14. No Attachment.

Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 15. Notices.

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

If to the Officer:

Stephen Sipola

1 Anna Court

West Islip, New York 11795

If to the Company or the Association:

Astoria Financial Corporation

One Astoria Federal Plaza

Lake Success, New York 11042

Attention:  Executive Vice President, Secretary and General Counsel

with a copy to:

Arnold & Porter

399 Park Avenue

New York, NY 10022

Attention:  W. Edward Bright, Esq.

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Section 16.  Indemnification for Attorneys' Fees.

(a)           The Association shall indemnify, hold harmless and defend the Officer against reasonable costs, including legal fees, incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved, as a result of the Officer's efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that the Officer shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Association's obligations under this Agreement shall be conclusive evidence of the Officer's entitlement to indemnification under this Agreement, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise.

(b)           The Association's or the Company's obligation to make the payments provided for in this Agreement and otherwise to perform their respective obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Association or the Company may have against the Officer or others. In no event shall the Officer be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Officer under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Officer obtains other employment. Unless it is determined that the Officer has acted frivolously or in bad faith, the Association shall pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Officer may reasonably incur as a result of or in connection with the Officer's consultation with legal counsel or arising out of any action, suit, proceeding, tax controversy, appeal or contest (regardless of the outcome thereof) by the Association, the Company, the Officer or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Officer about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code.

(c)           Any payment or reimbursement by the Association or the Company pursuant to this section 16 shall be made no later than the last day of the calendar year following (i) the calendar year in which the Officer incurs the expense, or (ii) if later, in the case of fees or expenses incurred due to a tax audit or litigation addressing the existence or amount of a tax liability regarding any excise tax that is subject to indemnification by the Officer under section 7 of this Agreement, (A) the calendar year in which such tax liability is paid, or (B), if no tax liability is to be paid as a result of such tax audit or litigation, the calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation, or (iii), if later, within sixty (60) days after the settlement or resolution that gives rise to the Officer's right to reimbursement; provided, however, that the Officer shall have submitted to the Association or the Company documentation supporting such expenses at such time and in such manner as the Association or the Company may reasonably require.

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Section  17.  Employment Rights and Funding Obligations.

(a)           Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Association, the Company or the Officer to have the Officer continue as an officer of the Association or the Company or to remain in the employment of the Association, the Company.

(b)           Nothing expressed or implied in this Agreement shall create any right or duty on the part of the Association, the Company or the Officer to create a trust of any kind to fund any benefits which may be payable pursuant to this Agreement, and to the extent that the Officer acquires a right to receive benefits from the Association or the Company pursuant to this Agreement, such right shall be no greater than the right of any unsecured general creditor of the Association or the Company, respectively.

Section 18. Withholding.

The Association or the Company, as applicable, shall have the right to deduct and withhold from any amounts paid in cash pursuant to this Agreement by the Association or the Company, respectively, any taxes or other amounts required by law to be withheld with respect to such payment.

Section 19. Compliance with Section 409A of the Code.

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

(a)           the payment described in section 2(a) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(b)           the benefits and payments described in section 2(b) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(c)           the payments on a disability described in section 4(b) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5);

(d)           the welfare benefits provided in kind under section 6(b)(i) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation section 1.409A-1(a)(5) and/or as benefits not includible in gross income;

(e)           the Tax Indemnity Payment provided under section 7 is intended to satisfy the requirements for a “tax gross-up payment” described in Treasury Regulation section 1.409A-3(i)(1)(v);

Page 19 of 23

(f)            the indemnification provided in section 8(a) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as indemnification against claims based on acts or omissions as a service provider;

(g)           the general indemnification and reimbursements described in section 16 are intended to satisfy the requirements for a "reimbursement plan" described in Treasury Regulation section 1.409A-3(i)(1)(iv) and shall be administered to satisfy such requirements; and

(h)           the reimbursements of expenses incurred due to a tax audit or litigation addressing a tax liability in section 16 are intended to satisfy the requirements for reimbursement of expenses incurred under such audits or litigation described in Treasury Regulation section 1.409A-3(i)(1)(v).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Officer’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Officer’s earliest separation from service (within the meaning of Treasury Regulation section 1.409A-1(h)) and, if the Officer is a specified employee (within the meaning of Treasury Regulation section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Officer’s separation from service.  Each amount payable under this plan that is required to be deferred beyond the Officer’s separation from service, shall be deposited on the date on which, but for such deferral, the Association or the Company would have paid such amount to the Officer, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Association or the Company with the approval of the Officer (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Officer (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities.  Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

Section 20. Severability.

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

Section 21. Survival.

The rights and obligations of the Association, the Company and the Officer under this Agreement, unless otherwise expressly provided in this Agreement, shall survive the expiration of the term or other termination of this Agreement.

Page 20 of 23

Section 22. Waiver.

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

Section 23. Counterparts.

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

Section 24. Governing Law.

Except to the extent preempted by federal law, this Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 25. Headings and Construction.

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

Section 26. Entire Agreement; Modifications.

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

Section 27. Required Regulatory Provisions.

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

(a)           Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Officer on account of the Officer's termination of employment exceed three times the Officer's average annual total compensation for the last five consecutive calendar years to end prior to the Officer's termination of

Page 21 of 23

employment with the Association (or for the Officer's entire period of employment with the Association if less than five calendar years).

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

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

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

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

(f)            Notwithstanding anything herein contained to the contrary, all prospective obligations of the Association hereunder shall be terminated, except to the extent that a continuation of this Agreement is necessary for the continued operation of the Association: (i) by the Director of the Office of Thrift Supervision ("OTS") or his designee or the Federal Deposit Insurance Corporation ("FDIC"), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Association under the authority contained in section 13(c) of the FDI Act, 12 U.S.C. Section 1823(c); (ii) by the Director of the OTS or his designee at the time such Director or designee approves a supervisory merger to resolve problems related to the operation of the Association or when the Association is determined by such Director to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as though eliminated by formal amendment of this Agreement. None of the foregoing provisions, other than section 27(b) shall limit any obligations of the Company under this Agreement.

Page 22 of 23

Section 28. Guaranty.

The Company hereby irrevocably and unconditionally guarantees to the Officer the payment of all amounts, and the performance of all other obligations, due from the Association in accordance with the terms of this Agreement as and when due without any requirement of presentment, demand of payment, protest or notice of dishonor or nonpayment. Solely for purposes of determining the extent of the Company's guarantee, the obligations of the Association under this Agreement shall be determined as though section 27(a), (c), (d), (e) and (f) did not apply to the Association.

IN WITNESS WHEREOF, the Association and the Company have caused this Agreement to be executed and the Officer has hereunto set the Officer's hand, all as of the day and year first above written.

/S/ Stephen Sipola

Stephen Sipola

Attest:			ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
By:	/S/ Alan P. Eggleston	By:	/S/ Gerard C. Keegan
Name:	Alan P. Eggleston	Name:	Gerard C. Keegan
Title:	Executive Vice President, Secretary and General Counsel	Title:	Vice Chairman and Chief Administrative Officer

Attest:			ASTORIA FINANCIAL CORPORATION
By:	/S/ Alan P. Eggleston	By:	/S/ Gerard C. Keegan
Name:	Alan P. Eggleston	Name:	Gerard C. Keegan
Title:	Executive Vice President, Secretary and General Counsel	Title:	Vice Chairman and Chief Administrative Officer

Page 23 of 23

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Monte N. Redman, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: August 5, 2011

/s/    Monte N. Redman

Monte N. Redman

President and Chief Executive Officer

Astoria Financial Corporation

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Frank E. Fusco, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: August 5, 2011

/s/    Frank E. Fusco

Frank E. Fusco

Executive Vice President, Treasurer and Chief Financial Officer

Astoria Financial Corporation

 

EX-32.1

 

Exhibit 32.1
 

STATEMENT FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This statement is being furnished in connection with the filing by Astoria Financial Corporation (the “Company”) of the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2011 (the “Report”).

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

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

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

August 5, 2011	/s/	Monte N. Redman
Dated		Monte N. Redman
		President and Chief Executive Officer
August 5, 2011	/s/	Frank E. Fusco
Dated		Frank E. Fusco
		Executive Vice President,
		Treasurer and Chief Financial Officer

 

XML



Carrying Amounts and Fair Values of Financial Instruments (Detail) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010
Financial Assets:
Repurchase agreements			$ 51,540
Securities held-to-maturity	1,966,836		2,003,784
FHLB-NY stock	129,025		149,174
Loans held-for-sale, net	15,393		44,870
Loans receivable, net	13,324,862		14,021,548
MSR, net	9,356		9,204
Financial Liabilities:
Deposits	11,210,620		11,599,000
Carrying Amount
Financial Assets:
Repurchase agreements			51,540
Securities held-to-maturity	1,966,836		2,003,784
FHLB-NY stock	129,025		149,174
Loans held-for-sale, net	15,393	[1]	44,870	[1]
Loans receivable, net	13,324,862	[1]	14,021,548	[1]
MSR, net	9,356	[1]	9,204	[1]
Financial Liabilities:
Deposits	11,210,620		11,599,000
Borrowings, net	4,286,389		4,869,204
Estimated Fair Value
Financial Assets:
Repurchase agreements			51,540
Securities held-to-maturity	2,014,151		2,042,110
FHLB-NY stock	129,025		149,174
Loans held-for-sale, net	15,536	[1]	45,713	[1]
Loans receivable, net	13,700,880	[1]	14,480,713	[1]
MSR, net	9,362	[1]	9,214	[1]
Financial Liabilities:
Deposits	11,393,588		11,784,632
Borrowings, net	$ 4,838,940		$ 5,320,510

[1] Includes totals for assets measured at fair value on a non-recurring basis as disclosed in Note 9.

XML



Consolidated Statements of Financial Condition (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Held-to-maturity securities, fair value	$ 2,014,151	$ 2,042,110
Preferred stock, par value	$ 1.00	$ 1.00
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	166,494,888	166,494,888
Common stock, shares outstanding	98,488,313	97,877,469
Treasury stock, shares	68,006,575	68,617,419
Unallocated common stock held by ESOP, shares	3,029,138	3,441,130

XML



Consolidated Statements of Income (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Interest income:
One-to-four family mortgage loans	$ 111,869	$ 136,750	$ 226,545	$ 277,704
Multi-family, commercial real estate and construction mortgage loans	41,085	49,598	85,577	100,723
Consumer and other loans	2,509	2,668	5,016	5,319
Mortgage-backed and other securities	21,339	29,636	43,762	60,983
Repurchase agreements and interest-earning cash accounts	74	54	167	69
Federal Home Loan Bank of New York stock	1,637	1,921	3,954	4,417
Total interest income	178,513	220,627	365,021	449,215
Interest expense:
Deposits	35,638	49,496	72,670	103,038
Borrowings	47,153	59,182	95,100	119,876
Total interest expense	82,791	108,678	167,770	222,914
Net interest income	95,722	111,949	197,251	226,301
Provision for loan losses	10,000	35,000	17,000	80,000
Net interest income after provision for loan losses	85,722	76,949	180,251	146,301
Non-interest income:
Customer service fees	12,107	13,372	23,829	26,665
Other loan fees	805	866	1,737	1,572
Mortgage banking income, net	370	600	2,803	2,157
Income from bank owned life insurance	2,629	2,376	4,864	4,352
Other	1,129	5,958	1,850	7,118
Total non-interest income	17,040	23,172	35,083	41,864
General and administrative:
Compensation and benefits	37,168	34,634	73,701	69,885
Occupancy, equipment and systems	15,923	16,637	32,489	33,086
Federal deposit insurance premiums	11,178	6,616	16,692	13,213
Advertising	2,049	994	3,733	2,814
Other	9,636	16,947	18,958	25,089
Total non-interest expense	75,954	75,828	145,573	144,087
Income before income tax expense	26,808	24,293	69,761	44,078
Income tax expense	9,963	8,747	25,532	15,606
Net income	$ 16,845	$ 15,546	$ 44,229	$ 28,472
Basic earnings per common share	$ 0.18	$ 0.17	$ 0.46	$ 0.30
Diluted earnings per common share	$ 0.18	$ 0.17	$ 0.46	$ 0.30
Basic weighted average common shares	92,949,206	91,621,997	92,842,398	91,541,675
Diluted weighted average common and common equivalent shares	92,949,206	91,621,997	92,842,398	91,541,742

XML



Pension Plans and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2011

Components of Net Periodic Cost for Defined Benefit Pension Plans and Other Postretirement Benefit Plan

The following tables set forth information regarding the components of net periodic cost for our defined benefit pension plans and other postretirement benefit plan.

								Other Postretirement
	Pension Benefits							Benefits
	For the Three Months Ended							For the Three Months Ended
	June 30,							June 30,
(In Thousands)		2011			2010			2011			2010
Service cost		$	1,176		$	934		$	126		$	90
Interest cost			3,048			2,897			345			283
Expected return on plan assets			(2,649	)		(2,356	)		-			-
Recognized net actuarial loss			2,148			1,603			45			-
Amortization of prior service cost (credit)			48			62			(25	)		(25	)
Settlement			(28	)		-			-			-
Net periodic cost		$	3,743		$	3,140		$	491		$	348

								Other Postretirement
	Pension Benefits							Benefits
	For the Six Months Ended							For the Six Months Ended
	June 30,							June 30,
(In Thousands)		2011			2010			2011			2010
Service cost		$	2,321		$	1,867		$	265		$	179
Interest cost			6,105			5,796			680			566
Expected return on plan assets			(5,324	)		(4,711	)		-			-
Recognized net actuarial loss			4,223			3,205			74			-
Amortization of prior service cost (credit)			96			124			(50	)		(50	)
Net periodic cost		$	7,421		$	6,281		$	969		$	695

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 28, 2011
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Trading Symbol	AF
Entity Registrant Name	ASTORIA FINANCIAL CORP
Entity Central Index Key	0000910322
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		98,546,557

XML



Carrying Value of Assets Measured at Fair Value on Non-Recurring Basis and the Level within Fair Value Hierarchy (Detail) (Level 3, USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Measured at Fair Value on Non-Recurring Basis	$ 273,692	$ 271,709
Non Performing Loans Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Measured at Fair Value on Non-Recurring Basis	10,832	10,895
Impaired Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Measured at Fair Value on Non-Recurring Basis	204,598	197,620
MSR, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Measured at Fair Value on Non-Recurring Basis	9,356	9,204
REO, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Measured at Fair Value on Non-Recurring Basis	$ 48,906	$ 53,990

XML



Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Carrying Amounts and Fair Values of Financial Instruments

The following table summarizes the carrying amounts and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value, in accordance with GAAP, and not measured or recorded at fair value on a recurring basis.

	At June 30, 2011				At December 31, 2010
	Carrying		Estimated		Carrying		Estimated
(In Thousands)	Amount		Fair Value		Amount		Fair Value
Financial Assets:
Repurchase agreements	$	-	$	-	$	51,540	$	51,540
Securities held-to-maturity		1,966,836		2,014,151		2,003,784		2,042,110
FHLB-NY stock		129,025		129,025		149,174		149,174
Loans held-for-sale, net (1)		15,393		15,536		44,870		45,713
Loans receivable, net (1)		13,324,862		13,700,880		14,021,548		14,480,713
MSR, net (1)		9,356		9,362		9,204		9,214
Financial Liabilities:
Deposits		11,210,620		11,393,588		11,599,000		11,784,632
Borrowings, net		4,286,389		4,838,940		4,869,204		5,320,510

(1)  Includes totals for assets measured at fair value on a non-recurring basis as disclosed in Note 9.

XML



Carrying Value of Assets Measured at Fair Value on a Recurring Basis and the Level within Fair Value Hierarchy (Detail) (Available-for-sale Securities, USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	$ 448,540	$ 561,953
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	10,760	2,160
Level 1 | Freddie Mac and Fannie Mae stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	10,760	2,160
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	437,780	559,793
Level 2 | Residential mortgage-backed securities | GSE issuance REMICs and CMOs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	392,242	509,233
Level 2 | Residential mortgage-backed securities | Non-GSE issuance REMICs and CMOs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	18,288	20,664
Level 2 | Residential mortgage-backed securities | GSE pass-through certificates
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	27,250	29,896
Residential mortgage-backed securities | GSE issuance REMICs and CMOs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	392,242	509,233
Residential mortgage-backed securities | Non-GSE issuance REMICs and CMOs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	18,288	20,664
Residential mortgage-backed securities | GSE pass-through certificates
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	27,250	29,896
Freddie Mac and Fannie Mae stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on a recurring basis	$ 10,760	$ 2,160

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Premises and Equipment

6 Months Ended

Jun. 30, 2011

Premises and Equipment

5.  Premises and Equipment

On April 26, 2011, we sold an office building with a net carrying value of $14.6 million.  The building is located in Lake Success, New York, and formerly housed our lending operations which were relocated in March 2008 to a leased facility in Mineola, New York.  The proceeds from the sale of the building totaled $14.4 million.  A loss of $253,000, included in other non-interest income in the consolidated statement of income, was recognized in the 2011 second quarter.

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Basis of Presentation - Additional Information (Detail) (USD $)			6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2011 Junior Subordinated Debt	Jun. 30, 2011 Astoria Capital Trust
Variable Interest Entity [Line Items]
Capital Securities issued				$ 125,000,000
Other borrowings, net	378,389,000	378,204,000	128,900,000
Debt instrument, percentage rate			9.75%	9.75%
Debt instrument, maturity date			Nov. 01, 2029	Nov. 01, 2029
Common Stock				$ 3,900,000

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Components of Net Periodic Cost for Defined Benefit Pension Plans and Other Postretirement Benefit Plan (Detail) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 1,176	$ 934	$ 2,321	$ 1,867
Interest cost	3,048	2,897	6,105	5,796
Expected return on plan assets	(2,649)	(2,356)	(5,324)	(4,711)
Recognized net actuarial loss	2,148	1,603	4,223	3,205
Amortization of prior service cost (credit)	48	62	96	124
Settlement	(28)
Net periodic cost	3,743	3,140	7,421	6,281
Other Postretirement Benefit
Defined Benefit Plan Disclosure [Line Items]
Service cost	126	90	265	179
Interest cost	345	283	680	566
Recognized net actuarial loss	45		74
Amortization of prior service cost (credit)	(25)	(25)	(50)	(50)
Net periodic cost	$ 491	$ 348	$ 969	$ 695

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Balances of One-to-Four Family Mortgage and Consumer and Other Loan Receivable Segments by Class and Credit Quality Indicator (Detail) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 13,428,771	$ 14,139,069
Mortgage loans (gross) | One to Four Family | Full Documentation Interest Only Loans | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,218,842	3,705,780
Mortgage loans (gross) | One to Four Family | Full Documentation Amortizing Loans | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	5,527,243	5,226,451
Mortgage loans (gross) | One to Four Family | Reduced Documentation Interest Only Loans | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,086,738	1,173,830
Mortgage loans (gross) | One to Four Family | Reduced Documentation Amortizing Loans | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	388,615	406,685
Consumer and Other Loans | Home Equity | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	264,994	276,989
Consumer and Other Loans | Other loans | Performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	23,946	26,777
Mortgage loans (gross) | One to Four Family | Full Documentation Interest Only Loans | Non-performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	109,683	105,982
Mortgage loans (gross) | One to Four Family | Full Documentation Amortizing Loans | Non-performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	37,590	45,720
Mortgage loans (gross) | One to Four Family | Reduced Documentation Interest Only Loans | Non-performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	145,816	157,464
Mortgage loans (gross) | One to Four Family | Reduced Documentation Amortizing Loans | Non-performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	36,470	33,149
Consumer and Other Loans | Home Equity | Non-performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	5,099	5,464
Consumer and Other Loans | Other loans | Non-performing
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	132	110
Mortgage loans (gross)
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	13,134,600	13,829,729
Mortgage loans (gross) | One to Four Family
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	10,550,997	10,855,061
Mortgage loans (gross) | One to Four Family | Full Documentation Interest Only Loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	3,328,525	3,811,762
Mortgage loans (gross) | One to Four Family | Full Documentation Amortizing Loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	5,564,833	5,272,171
Mortgage loans (gross) | One to Four Family | Reduced Documentation Interest Only Loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,232,554	1,331,294
Mortgage loans (gross) | One to Four Family | Reduced Documentation Amortizing Loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	425,085	439,834
Consumer and Other Loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	294,171	309,340
Consumer and Other Loans | Home Equity
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	270,093	282,453
Consumer and Other Loans | Other loans
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 24,078	$ 26,887

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Carrying Value of Assets Measured at Fair Value on a Recurring Basis and the Level within Fair Value Hierarchy

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

	Carrying Value at June 30, 2011
(In Thousands)	Total			Level 1			Level 2			Level 3
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	392,242		$	-		$	392,242		$	-
Non-GSE issuance REMICs and CMOs			18,288			-			18,288			-
GSE pass-through certificates			27,250			-			27,250			-
Freddie Mac and Fannie Mae stock			10,760			10,760			-			-
Total securities available-for-sale		$	448,540		$	10,760		$	437,780		$	-

	Carrying Value at December 31, 2010
(In Thousands)	Total			Level 1			Level 2			Level 3
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	509,233		$	-		$	509,233		$	-
Non-GSE issuance REMICs and CMOs			20,664			-			20,664			-
GSE pass-through certificates			29,896			-			29,896			-
Freddie Mac and Fannie Mae stock			2,160			2,160			-			-
Total securities available-for-sale		$	561,953		$	2,160		$	559,793		$	-

Carrying Value of Assets Measured at Fair Value on Non-Recurring Basis

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

		Carrying Value
(In Thousands)	At June 30, 2011			At December 31, 2010
Non-performing loans held-for-sale, net		$	10,832		$	10,895
Impaired loans			204,598			197,620
MSR, net			9,356			9,204
REO, net			48,906			53,990
Total		$	273,692		$	271,709

Losses Recognized on Assets Measured at Fair Value on A Non-Recurring Basis

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

		For the Six Months Ended
		June 30,
(In Thousands)	2011			2010
Non-performing loans held-for-sale, net (1)		$	821		$	11,936
Impaired loans (2)			25,878			31,753
MSR, net (3)			-			-
REO, net (4)			6,694			11,065
Total		$	33,393		$	54,754

(1) Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale.  Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

(2) Losses are charged against the allowance for loan losses.

(3) Losses are charged to mortgage banking income, net.

(4) Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO.  Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments

10. Fair Value of Financial Instruments

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

The following table summarizes the carrying amounts and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value, in accordance with GAAP, and not measured or recorded at fair value on a recurring basis.

	At June 30, 2011				At December 31, 2010
	Carrying		Estimated		Carrying		Estimated
(In Thousands)	Amount		Fair Value		Amount		Fair Value
Financial Assets:
Repurchase agreements	$	-	$	-	$	51,540	$	51,540
Securities held-to-maturity		1,966,836		2,014,151		2,003,784		2,042,110
FHLB-NY stock		129,025		129,025		149,174		149,174
Loans held-for-sale, net (1)		15,393		15,536		44,870		45,713
Loans receivable, net (1)		13,324,862		13,700,880		14,021,548		14,480,713
MSR, net (1)		9,356		9,362		9,204		9,214
Financial Liabilities:
Deposits		11,210,620		11,393,588		11,599,000		11,784,632
Borrowings, net		4,286,389		4,838,940		4,869,204		5,320,510

(1)  Includes totals for assets measured at fair value on a non-recurring basis as disclosed in Note 9.

Methods and assumptions used to estimate fair values are as follows:

Repurchase agreements

The carrying amounts of repurchase agreements approximate fair values since all mature in one month or less.

Securities held-to-maturity

The fair values for substantially all of our securities held-to-maturity are obtained from an independent nationally recognized pricing service using similar methods and assumptions as used for our securities available-for-sale which are described further in Note 9.

Federal Home Loan Bank of New York, or FHLB-NY, stock

The carrying amount of FHLB-NY stock equals cost.  The fair value of FHLB-NY stock is based on redemption at par value.

Loans held-for-sale, net

The fair values of fifteen and thirty year conforming fixed rate one-to-four family mortgage loans originated for sale are estimated by reference to published pricing for similar loans sold in the secondary market.  The fair values of non-performing loans held-for-sale are estimated through either bids received on such loans or a discounted cash flow analysis adjusted to reflect current market conditions.

Loans receivable, net

Fair values of loans are estimated by reference to published pricing for similar loans sold in the secondary market.  Loans are grouped by similar characteristics.  The loans are first segregated by type, such as one-to-four family, multi-family, commercial real estate, construction and consumer and other, and then further segregated into fixed and adjustable rate categories.  Published pricing is based on new loans of similar type and purpose, adjusted, when necessary, for factors such as servicing cost, credit risk, interest rate and remaining term.

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

MSR, net

The fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements.

Deposits

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

Borrowings, net

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

Outstanding commitments

Outstanding commitments include (1) commitments to extend credit and unadvanced lines of credit for which fair values were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions and (2) commitments to sell residential mortgage loans for which fair values were estimated based on current secondary market prices for commitments with similar terms.  The fair values of these commitments are immaterial to our financial condition and are not presented in the table above.

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation

1. Basis of Presentation

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

In addition to Astoria Federal and AF Insurance Agency, Inc., we have another subsidiary, Astoria Capital Trust I, which is not consolidated with Astoria Financial Corporation for financial reporting purposes.  Astoria Capital Trust I was formed for the purpose of issuing $125.0 million aggregate liquidation amount of 9.75% Capital Securities due November 1, 2029, or Capital Securities, and $3.9 million of common securities which are owned by Astoria Financial Corporation, and using the proceeds to acquire Junior Subordinated Debentures issued by Astoria Financial Corporation.  The Junior Subordinated Debentures total $128.9 million, have an interest rate of 9.75%, mature on November 1, 2029 and are the sole assets of Astoria Capital Trust I.  The Junior Subordinated Debentures are prepayable, in whole or in part, at our option at declining premiums to November 1, 2019, after which the Junior Subordinated Debentures are prepayable at par value.  The Capital Securities have the same prepayment provisions as the Junior Subordinated Debentures.  Astoria Financial Corporation has fully and unconditionally guaranteed the Capital Securities along with all obligations of Astoria Capital Trust I under the trust agreement relating to the Capital Securities.  See Note 9 of Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data” of our 2010 Annual Report on Form 10-K for restrictions on our subsidiaries’ ability to pay dividends to us.

In our opinion, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial condition as of June 30, 2011 and December 31, 2010, our results of operations for the three and six months ended June 30, 2011 and 2010, changes in our stockholders’ equity for the six months ended June 30, 2011 and our cash flows for the six months ended June 30, 2011 and 2010.  In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities for the consolidated statements of financial condition as of June 30, 2011 and December 31, 2010, and amounts of revenues and expenses in the consolidated statements of income for the three and six months ended June 30, 2011 and 2010.  The results of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results of operations to be expected for the remainder of the year.  Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.  Past maturity certificates of deposit which do not have automatic renewal provisions and earn interest at the savings account rate upon maturity have been reclassified from certificate of deposit accounts to savings accounts.

These consolidated financial statements should be read in conjunction with our December 31, 2010 audited consolidated financial statements and related notes included in our 2010 Annual Report on Form 10-K.

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Balances of Loans Receivable by Segment and Impairment Evaluation and Allowance for Loan Losses Associated with such Loans (Detail) (USD $) In Thousands	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Individually evaluated for impairment	$ 1,641,132		$ 1,857,817
Loans Collectively evaluated for impairment	11,787,639		12,281,252
Loans (gross) amount	13,428,771		14,139,069
Loans Individually evaluated for impairment, Allowance for loan losses	54,196		60,750
Loans Collectively evaluated for impairment, Allowance for loan losses	128,521		140,749
Total allowance for loan losses	182,717	189,486	201,499
Mortgage loans (gross)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	13,134,600		13,829,729
Mortgage loans (gross) | One to Four Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Individually evaluated for impairment	321,084		315,994
Loans Collectively evaluated for impairment	10,229,913		10,539,067
Loans (gross) amount	10,550,997		10,855,061
Loans Individually evaluated for impairment, Allowance for loan losses	10,210		12,541
Loans Collectively evaluated for impairment, Allowance for loan losses	104,503		112,983
Total allowance for loan losses	114,713	117,722	125,524
Mortgage loans (gross) | Multi Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Individually evaluated for impairment	951,483		1,144,633
Loans Collectively evaluated for impairment	894,570		1,043,236
Loans (gross) amount	1,846,053		2,187,869
Loans Individually evaluated for impairment, Allowance for loan losses	31,089		34,124
Loans Collectively evaluated for impairment, Allowance for loan losses	15,380		18,662
Total allowance for loan losses	46,469	49,396	52,786
Mortgage loans (gross) | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Individually evaluated for impairment	358,819		385,904
Loans Collectively evaluated for impairment	364,728		385,750
Loans (gross) amount	723,547		771,654
Loans Individually evaluated for impairment, Allowance for loan losses	10,185		10,784
Loans Collectively evaluated for impairment, Allowance for loan losses	4,385		4,779
Total allowance for loan losses	14,570	14,782	15,563
Mortgage loans (gross) | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Individually evaluated for impairment	6,445		7,872
Loans Collectively evaluated for impairment	7,558		7,273
Loans (gross) amount	14,003		15,145
Loans Individually evaluated for impairment, Allowance for loan losses	2,662		3,250
Loans Collectively evaluated for impairment, Allowance for loan losses	239		230
Total allowance for loan losses	2,901	3,502	3,480
Consumer and Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans Individually evaluated for impairment	3,301		3,414
Loans Collectively evaluated for impairment	290,870		305,926
Loans (gross) amount	294,171		309,340
Loans Individually evaluated for impairment, Allowance for loan losses	50		51
Loans Collectively evaluated for impairment, Allowance for loan losses	4,014		4,095
Total allowance for loan losses	$ 4,064	$ 4,084	$ 4,146

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Pension Plans and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2011

Pension Plans and Other Postretirement Benefits

7. Pension Plans and Other Postretirement Benefits

The following tables set forth information regarding the components of net periodic cost for our defined benefit pension plans and other postretirement benefit plan.

								Other Postretirement
	Pension Benefits							Benefits
	For the Three Months Ended							For the Three Months Ended
	June 30,							June 30,
(In Thousands)		2011			2010			2011			2010
Service cost		$	1,176		$	934		$	126		$	90
Interest cost			3,048			2,897			345			283
Expected return on plan assets			(2,649	)		(2,356	)		-			-
Recognized net actuarial loss			2,148			1,603			45			-
Amortization of prior service cost (credit)			48			62			(25	)		(25	)
Settlement			(28	)		-			-			-
Net periodic cost		$	3,743		$	3,140		$	491		$	348

								Other Postretirement
	Pension Benefits							Benefits
	For the Six Months Ended							For the Six Months Ended
	June 30,							June 30,
(In Thousands)		2011			2010			2011			2010
Service cost		$	2,321		$	1,867		$	265		$	179
Interest cost			6,105			5,796			680			566
Expected return on plan assets			(5,324	)		(4,711	)		-			-
Recognized net actuarial loss			4,223			3,205			74			-
Amortization of prior service cost (credit)			96			124			(50	)		(50	)
Net periodic cost		$	7,421		$	6,281		$	969		$	695

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Impact of Accounting Standards and Interpretations

6 Months Ended

Jun. 30, 2011

Impact of Accounting Standards and Interpretations

12. Impact of Accounting Standards and Interpretations

In June 2011, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2011-05, “Comprehensive Income (Topic 220) Presentation of Comprehensive Income,” which eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity, which is one of three alternatives for presenting other comprehensive income and its components in financial statements under current GAAP.  ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements.  In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income and the total of comprehensive income.  In addition, ASU 2011-05 requires that reclassification adjustments for items that are reclassified from other comprehensive income to net income must be presented on the face of the financial statements in the statement(s) where the components of net income and the components of other comprehensive income are presented.  The guidance in ASU 2011-05 does not change the items that must be reported in other comprehensive income, the option for an entity to present components of other comprehensive income either net of related tax effects or before related tax effects or when an item of other comprehensive income must be reclassified to net income.  ASU 2011-05 does not affect how earnings per share is calculated or presented.  The guidance in ASU 2011-05 is effective for public companies for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should be applied retrospectively.  Early adoption is permitted.  Since the provisions of ASU 2011-05 are presentation related only, our adoption of ASU 2011-05 will not have an impact on our financial condition or results of operations.

In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820) Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.”  The amendments in ASU 2011-04 explain how to measure fair value, but do not require additional fair value measurements and are not intended to establish valuation standards or affect valuation practices outside of financial reporting and result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards.  For many of the requirements of ASU 2011-04, the FASB does not intend for the ASU to result in a change in the application of the requirements in Topic 820.  Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  The amendments in ASU 2011-04 are to be applied prospectively and are effective, for public entities, during interim and annual periods beginning after December 15, 2011.  Early application by public entities is not permitted.  We do not expect our adoption of ASU 2011-04 to have a material impact on our financial condition or results of operations.

In April 2011, the FASB issued ASU 2011-03, “Transfers and Servicing (Topic 860) Reconsideration of Effective Control for Repurchase Agreements,” which removes from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets on substantially the agreed terms, even in the event of default by the transferee, and the collateral maintenance implementation guidance related to that criterion when determining whether a repurchase agreement (reverse repurchase agreement) should be accounted for as a sale or as a secured borrowing.  The guidance in ASU 2011-03 is effective for the first interim or annual period beginning on or after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date.  Early adoption is not permitted.  We do not expect the application of this guidance to impact our accounting for repurchase and reverse repurchase agreements.  Therefore, our adoption of ASU 2011-03 is not expected to have an impact on our financial condition or results of operations.

In April 2011, the FASB issued ASU 2011-02, “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” which clarifies the guidance on a creditor’s evaluation of whether it has granted a concession in a debt restructuring and whether the debtor is experiencing financial difficulties in evaluating whether the debt restructuring constitutes a troubled debt restructuring.  The guidance in ASU 2011-02 is effective for the first interim or annual period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual period of adoption.  As a result of applying this guidance, an entity may identify receivables that are newly considered impaired.  In measuring impairment of those receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011.  The total amount of receivables and the allowance for credit losses as of the end of the period of adoption related to those receivables that are newly considered impaired should be disclosed.  In addition, ASU 2011-02 requires the disclosure of the information required by ASU 2010-20, “Receivables (Topic 310) Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,” which we adopted effective December 31, 2010, relative to modifications of financing receivables for interim and annual periods beginning on or after June 15, 2011.  The effective date of such guidance was deferred by ASU 2011-01, “Receivables (Topic 310) Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20.”  Our adoption of ASU 2011-02 is not expected to have a material impact on our financial condition or results of operations.

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Stock Incentive Plans

6 Months Ended

Jun. 30, 2011

Stock Incentive Plans

8. Stock Incentive Plans

During the six months ended June 30, 2011, 593,530 shares of restricted stock were granted to select officers under the 2005 Re-designated, Amended and Restated Stock Incentive Plan for

Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, and 22,120 shares of restricted stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, or the 2007 Director Stock Plan.  Of the restricted stock granted to select officers, 70,260 shares vest one-third per year and 508,270 shares vest one-fifth per year on or about December 14th, beginning December 14, 2011, and 15,000 shares vest on March 2, 2012.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2005 Employee Stock Plan, all restricted stock granted pursuant to such plan immediately vests.  The restricted stock granted in 2011 under the 2007 Director Stock Plan vests on January 31, 2014, although awards will immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

Restricted stock activity in our stock incentive plans for the six months ended June 30, 2011 is summarized as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011		1,852,550			$	15.96
Granted		615,650				14.29
Vested		(36,585	)			(24.92	)
Forfeited		(4,806	)			(13.65	)
Nonvested at June 30, 2011		2,426,809				15.41

Stock-based compensation expense is recognized on a straight-line basis over the vesting period  and totaled $1.5 million, net of taxes of $830,000, for the three months ended June 30, 2011 and totaled $2.9 million, net of taxes of $1.6 million, for the six months ended June 30, 2011.  Stock-based compensation expense totaled $1.4 million, net of taxes of $739,000, for the three months ended June 30, 2010 and totaled $2.5 million, net of taxes of $1.4 million, for the six months ended June 30, 2010.  At June 30, 2011, pre-tax compensation cost related to all nonvested awards of restricted stock not yet recognized totaled $22.3 million and will be recognized over a weighted average period of approximately 3.1 years.

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Composition of Loans Receivable Portfolio (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	$ 13,428,771		$ 14,139,069
Net unamortized premiums and deferred loan origination costs	78,808		83,978
Loans receivable	13,507,579		14,223,047
Allowance for loan losses	(182,717)	(189,486)	(201,499)
Loans receivable, net	13,324,862		14,021,548
Loans (gross), Percent of Total	100.00%		100.00%
Mortgage loans (gross)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	13,134,600		13,829,729
Loans (gross), Percent of Total	97.81%		97.81%
Mortgage loans (gross) | One to Four Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	10,550,997		10,855,061
Allowance for loan losses	(114,713)	(117,722)	(125,524)
Loans (gross), Percent of Total	78.57%		76.77%
Mortgage loans (gross) | Multi Family
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	1,846,053		2,187,869
Allowance for loan losses	(46,469)	(49,396)	(52,786)
Loans (gross), Percent of Total	13.75%		15.47%
Mortgage loans (gross) | Commercial Real Estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	723,547		771,654
Allowance for loan losses	(14,570)	(14,782)	(15,563)
Loans (gross), Percent of Total	5.39%		5.46%
Mortgage loans (gross) | Construction
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	14,003		15,145
Allowance for loan losses	(2,901)	(3,502)	(3,480)
Loans (gross), Percent of Total	0.10%		0.11%
Consumer and Other Loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	294,171		309,340
Allowance for loan losses	(4,064)	(4,084)	(4,146)
Loans (gross), Percent of Total	2.19%		2.19%
Consumer and Other Loans | Home Equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	270,093		282,453
Loans (gross), Percent of Total	2.01%		2.00%
Consumer and Other Loans | Other loans
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans (gross) amount	$ 24,078		$ 26,887
Loans (gross), Percent of Total	0.18%		0.19%

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Earnings Per Share

6 Months Ended

Jun. 30, 2011

Earnings Per Share

6. Earnings Per Share

The following table is a reconciliation of basic and diluted earnings per share.

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
(In Thousands, Except Share Data)	2011			2010			2011			2010
Net income	$	16,845		$	15,546		$	44,229		$	28,472
Income allocated to participating securities (restricted stock)		(428	)		(379	)		(1,099	)		(688	)
Income attributable to common shareholders	$	16,417		$	15,167		$	43,130		$	27,784
Average number of common shares outstanding – basic		92,949,206			91,621,997			92,842,398			91,541,675
Dilutive effect of stock options (1)		-			-			-			67
Average number of common shares outstanding – diluted		92,949,206			91,621,997			92,842,398			91,541,742
Income per common share attributable to common shareholders:
Basic	$	0.18		$	0.17		$	0.46		$	0.30
Diluted	$	0.18		$	0.17		$	0.46		$	0.30

(1) Excludes options to purchase 6,889,199 shares of common stock which were outstanding during the three months ended June 30, 2011; options to purchase 7,999,253 shares of common stock which were outstanding during the three months ended June 30, 2010;  options to purchase 6,902,494 shares of common stock which were outstanding during the six months ended June 30, 2011; and options to purchase 8,016,292 shares of common stock which were outstanding during the six months ended June 30, 2010 because their inclusion would be anti-dilutive.

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Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) (USD $)	6 Months Ended
	Jun. 30, 2011
Dividends on common stock, per share	$ 0.26
Restricted stock grants, shares	615,650
Forfeitures of restricted stock, shares	4,806

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Securities

6 Months Ended

Jun. 30, 2011

Securities

2. Securities

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

	At June 30, 2011
(In Thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)		$	376,143		$	16,099		$	-			$	392,242
Non-GSE issuance REMICs and CMOs			18,611			1			(324	)			18,288
GSE pass-through certificates			26,231			1,024			(5	)			27,250
Total residential mortgage-backed securities			420,985			17,124			(329	)			437,780
Freddie Mac and Fannie Mae stock			15			10,760			(15	)			10,760
Total securities available-for-sale		$	421,000		$	27,884		$	(344	)		$	448,540
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	1,887,220		$	47,271		$	(392	)		$	1,934,099
Non-GSE issuance REMICs and CMOs			22,991			184			-				23,175
GSE pass-through certificates			611			43			-				654
Total residential mortgage-backed securities			1,910,822			47,498			(392	)			1,957,928
Obligations of GSEs			52,866			210			(68	)			53,008
Obligations of states and political subdivisions			3,148			67			-				3,215
Total securities held-to-maturity		$	1,966,836		$	47,775		$	(460	)		$	2,014,151

(1) Government-sponsored enterprise

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

	At December 31, 2010
(In Thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	490,302		$	18,931		$	-			$	509,233
Non-GSE issuance REMICs and CMOs			21,023			3			(362	)			20,664
GSE pass-through certificates			28,784			1,114			(2	)			29,896
Total residential mortgage-backed securities			540,109			20,048			(364	)			559,793
Freddie Mac and Fannie Mae stock			15			2,160			(15	)			2,160
Total securities available-for-sale		$	540,124		$	22,208		$	(379	)		$	561,953
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	1,933,650		$	47,191		$	(8,734	)		$	1,972,107
Non-GSE issuance REMICs and CMOs			40,363			352			(66	)			40,649
GSE pass-through certificates			772			51			-				823
Total residential mortgage-backed securities			1,974,785			47,594			(8,800	)			2,013,579
Obligations of GSEs			25,000			-			(468	)			24,532
Obligations of states and political subdivisions			3,999			-			-				3,999
Total securities held-to-maturity		$	2,003,784		$	47,594		$	(9,268	)		$	2,042,110

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

	At June 30, 2011
	Less Than Twelve Months							Twelve Months or Longer							Total
				Gross							Gross							Gross
	Estimated			Unrealized				Estimated			Unrealized				Estimated			Unrealized
(In Thousands)	Fair Value			Losses				Fair Value			Losses				Fair Value			Losses
Available-for-sale:
Non-GSE issuance REMICs and CMOs		$	534		$	(7	)		$	17,651		$	(317	)		$	18,185		$	(324	)
GSE pass-through certificates			824			(5	)			-			-				824			(5	)
Freddie Mac and Fannie Mae stock			-			-				-			(15	)			-			(15	)
Total temporarily impaired securities available-for-sale		$	1,358		$	(12	)		$	17,651		$	(332	)		$	19,009		$	(344	)
Held-to-maturity:
GSE issuance REMICs and CMOs		$	196,263		$	(392	)		$	-		$	-			$	196,263		$	(392	)
Obligations of GSEs			24,932			(68	)			-			-				24,932			(68	)
Total temporarily impaired securities held-to-maturity		$	221,195		$	(460	)		$	-		$	-			$	221,195		$	(460	)

	At December 31, 2010
	Less Than Twelve Months							Twelve Months or Longer							Total
				Gross							Gross							Gross
	Estimated			Unrealized				Estimated			Unrealized				Estimated			Unrealized
(In Thousands)	Fair Value			Losses				Fair Value			Losses				Fair Value			Losses
Available-for-sale:
Non-GSE issuance REMICs and CMOs		$	276		$	(2	)		$	19,991		$	(360	)		$	20,267		$	(362	)
GSE pass-through certificates			1,775			(2	)			-			-				1,775			(2	)
Freddie Mac and Fannie Mae stock			-			-				-			(15	)			-			(15	)
Total temporarily impaired securities available-for-sale		$	2,051		$	(4	)		$	19,991		$	(375	)		$	22,042		$	(379	)
Held-to-maturity:
GSE issuance REMICs and CMOs		$	484,366		$	(8,734	)		$	-		$	-			$	484,366		$	(8,734	)
Non-GSE issuance REMICs and CMOs			-			-				1,744			(66	)			1,744			(66	)
Obligations of GSEs			24,532			(468	)			-			-				24,532			(468	)
Total temporarily impaired securities held-to-maturity		$	508,898		$	(9,202	)		$	1,744		$	(66	)		$	510,642		$	(9,268	)

We held 41 securities which had an unrealized loss at June 30, 2011 and 59 at December 31, 2010.  At June 30, 2011 and December 31, 2010, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment is directly related to the change in interest rates.  In general, as interest rates rise, the fair value of fixed rate securities will decrease; as interest rates fall, the fair value of fixed rate securities will increase.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  None of the unrealized losses are related to credit losses.  Therefore, at June 30, 2011 and December 31, 2010, the impairments are deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expect to recover the entire amortized cost basis of the security.

Held-to-maturity debt securities, excluding mortgage-backed securities, had an amortized cost of $56.0 million and a fair value of $56.2 million at June 30, 2011.  These securities have

contractual maturities in 2017 and 2018.  Actual maturities will differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

The balance of accrued interest receivable for securities totaled $7.9 million at June 30, 2011 and $8.3 million at December 31, 2010.

At June 30, 2011, we held securities with an amortized cost of $52.9 million which are callable within one year and at various times thereafter.

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Premises and Equipment - Additional Information (Detail) (USD $)	6 Months Ended			6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010	Jun. 30, 2011 Office Building Sold	Apr. 26, 2011 Office Building Sold
Property, Plant and Equipment [Line Items]
Premises and equipment, net	$ 119,049,000		$ 133,362,000		$ 14,600,000
Proceeds from sales of premises and equipment	14,396,000			14,400,000
Net loss (gain) on dispositions of premises and equipment	$ (270,000)	$ 13,000		$ (253,000)

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Loans Held-for-Sale, net - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Non Performing Loans Held For Sale [Line Items]
Loans held for sale, net	$ 15,393,000		$ 15,393,000		$ 44,870,000
Net gain on sales of loans			1,814,000	1,973,000
Other asset impairment charges			441,000	1,612,000
Non Performing Loans Held for Sale
Non Performing Loans Held For Sale [Line Items]
Loans held for sale, net	10,800,000		10,800,000		10,900,000
Loans held for sale, valuation allowance	64,000		64,000		169,000
Sale of delinquent and non-performing mortgage loans, net of charge-offs, amount			16,400,000	22,600,000
Charge-offs on delinquent and non-performing mortgage loans sold			7,900,000	12,300,000
Net gain on sales of loans	48,000	352,000	(52,000)	357,000
Other asset impairment charges	$ (82,000)	$ 97,000	$ 441,000	$ 97,000

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Litigation - Additional Information (Detail) (USD $) In Millions	Jun. 30, 2011
Commitments and Contingencies Disclosure [Line Items]
Alleged tax deficiency including interest and penalties, related to 2006 tax year	$ 5.2

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Loans Held-for-Sale

6 Months Ended

Jun. 30, 2011

Loans Held-for-Sale

3. Loans Held-for-Sale

Loans held-for-sale, net, includes fifteen and thirty year fixed rate one-to-four family mortgage loans that conform to GSE guidelines (conforming) originated for sale as well as certain non-performing loans.  Upon our decision to sell certain delinquent and non-performing mortgage loans held in portfolio, we reclassify them to held-for-sale at the lower of cost or fair value, less estimated selling costs.  Non-performing loans held-for-sale, included in loans held-for-sale, net, totaled $10.8 million, net of a valuation allowance of $64,000, at June 30, 2011, consisting of multi-family, one-to-four family and commercial real estate loans, and $10.9 million, net of a valuation allowance of $169,000, at December 31, 2010, consisting primarily of multi-family and commercial real estate loans.

We sold certain delinquent and non-performing mortgage loans totaling $16.4 million, net of charge-offs of $7.9 million, during the six months ended June 30, 2011, primarily multi-family mortgage loans, and $22.6 million, net of charge-offs of $12.3 million, during the six months ended June 30, 2010, primarily multi-family and commercial real estate loans.  Net gain on sales of non-performing loans totaled $48,000 for the three months ended June 30, 2011 and net loss on sales of non-performing loans totaled $52,000 for the six months ended June 30, 2011.  Net gain on sales of non-performing loans totaled $352,000 for the three months ended June 30, 2010 and $357,000 for the six months ended June 30, 2010.

We recorded a lower of cost or market recovery on non-performing loans held-for-sale of $82,000 for the three months ended June 30, 2011 and net lower of cost or market write-downs on non-performing loans held-for-sale of $441,000 for the six months ended June 30, 2011.  Net lower of cost or market write-downs on non-performing loans held-for-sale totaled $97,000 for the three and six months ended June 30, 2010.  Net lower of cost or market write-downs on non-performing loans held-for-sale and gains and losses recognized on sales of such loans are included in other non-interest income in the consolidated statements of income.

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Reconciliation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Earnings Per Share Disclosure [Line Items]
Stock options excluded from computation of earnings per share	6,889,199	7,999,253	6,902,494	8,016,292

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Amortized Cost and Estimated Fair Value of Securities Available-for-Sale and Held-to-Maturity (Detail) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010
Schedule of Investments [Line Items]
Available-for-Sale, Amortized Cost	$ 421,000		$ 540,124
Available-for-Sale, Gross Unrealized Gains	27,884		22,208
Available-for-Sale, Gross Unrealized Losses	(344)		(379)
Available-for-Sale, Estimated Fair Value	448,540		561,953
Held-to-Maturity, Amortized Cost	1,966,836		2,003,784
Held-to-Maturity, Gross Unrealized Gains	47,775		47,594
Held-to-Maturity, Gross Unrealized Losses	(460)		(9,268)
Held-to-Maturity, Estimated Fair Value	2,014,151		2,042,110
Residential mortgage-backed securities
Schedule of Investments [Line Items]
Available-for-Sale, Amortized Cost	420,985		540,109
Available-for-Sale, Gross Unrealized Gains	17,124		20,048
Available-for-Sale, Gross Unrealized Losses	(329)		(364)
Available-for-Sale, Estimated Fair Value	437,780		559,793
Held-to-Maturity, Amortized Cost	1,910,822		1,974,785
Held-to-Maturity, Gross Unrealized Gains	47,498		47,594
Held-to-Maturity, Gross Unrealized Losses	(392)		(8,800)
Held-to-Maturity, Estimated Fair Value	1,957,928		2,013,579
Residential mortgage-backed securities | GSE issuance REMICs and CMOs
Schedule of Investments [Line Items]
Available-for-Sale, Amortized Cost	376,143	[1],[2]	490,302
Available-for-Sale, Gross Unrealized Gains	16,099	[1],[2]	18,931
Available-for-Sale, Estimated Fair Value	392,242	[1],[2]	509,233
Held-to-Maturity, Amortized Cost	1,887,220		1,933,650
Held-to-Maturity, Gross Unrealized Gains	47,271		47,191
Held-to-Maturity, Gross Unrealized Losses	(392)		(8,734)
Held-to-Maturity, Estimated Fair Value	1,934,099		1,972,107
Residential mortgage-backed securities | Non-GSE issuance REMICs and CMOs
Schedule of Investments [Line Items]
Available-for-Sale, Amortized Cost	18,611		21,023
Available-for-Sale, Gross Unrealized Gains	1		3
Available-for-Sale, Gross Unrealized Losses	(324)		(362)
Available-for-Sale, Estimated Fair Value	18,288		20,664
Held-to-Maturity, Amortized Cost	22,991		40,363
Held-to-Maturity, Gross Unrealized Gains	184		352
Held-to-Maturity, Gross Unrealized Losses			(66)
Held-to-Maturity, Estimated Fair Value	23,175		40,649
Residential mortgage-backed securities | GSE pass-through certificates
Schedule of Investments [Line Items]
Available-for-Sale, Amortized Cost	26,231		28,784
Available-for-Sale, Gross Unrealized Gains	1,024		1,114
Available-for-Sale, Gross Unrealized Losses	(5)		(2)
Available-for-Sale, Estimated Fair Value	27,250		29,896
Held-to-Maturity, Amortized Cost	611		772
Held-to-Maturity, Gross Unrealized Gains	43		51
Held-to-Maturity, Estimated Fair Value	654		823
Freddie Mac and Fannie Mae stock
Schedule of Investments [Line Items]
Available-for-Sale, Amortized Cost	15		15
Available-for-Sale, Gross Unrealized Gains	10,760		2,160
Available-for-Sale, Gross Unrealized Losses	(15)		(15)
Available-for-Sale, Estimated Fair Value	10,760		2,160
Obligations of GSEs
Schedule of Investments [Line Items]
Held-to-Maturity, Amortized Cost	52,866		25,000
Held-to-Maturity, Gross Unrealized Gains	210
Held-to-Maturity, Gross Unrealized Losses	(68)		(468)
Held-to-Maturity, Estimated Fair Value	53,008		24,532
Obligations of states and political subdivisions
Schedule of Investments [Line Items]
Held-to-Maturity, Amortized Cost	3,148		3,999
Held-to-Maturity, Gross Unrealized Gains	67
Held-to-Maturity, Estimated Fair Value	$ 3,215		$ 3,999

[1] Government-sponsored enterprise

[2] Real estate mortgage investment conduits and collateralized mortgage obligations

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Aging Analysis of Loans Receivable by Segment and Class (Detail) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	$ 162,793	$ 165,810
60-89 Days Past Due	44,391	54,339
90 Days or More Past Due Accruing	613	845
90 Days or More Past Non-Accrual	375,727	389,865
Total Past Due	583,524	610,859
Current	12,845,247	13,528,210
Loans (gross) amount	13,428,771	14,139,069
Mortgage loans (gross)
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans (gross) amount	13,134,600	13,829,729
Mortgage loans (gross) | One to Four Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans (gross) amount	10,550,997	10,855,061
Mortgage loans (gross) | One to Four Family | Full Documentation Interest Only Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	41,244	41,608
60-89 Days Past Due	12,431	18,029
90 Days or More Past Non-Accrual	109,683	105,982
Total Past Due	163,358	165,619
Current	3,165,167	3,646,143
Loans (gross) amount	3,328,525	3,811,762
Mortgage loans (gross) | One to Four Family | Full Documentation Amortizing Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	26,353	29,666
60-89 Days Past Due	6,846	5,170
90 Days or More Past Due Accruing		464
90 Days or More Past Non-Accrual	37,590	45,256
Total Past Due	70,789	80,556
Current	5,494,044	5,191,615
Loans (gross) amount	5,564,833	5,272,171
Mortgage loans (gross) | One to Four Family | Reduced Documentation Interest Only Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	35,542	38,864
60-89 Days Past Due	12,478	20,493
90 Days or More Past Non-Accrual	145,816	157,464
Total Past Due	193,836	216,821
Current	1,038,718	1,114,473
Loans (gross) amount	1,232,554	1,331,294
Mortgage loans (gross) | One to Four Family | Reduced Documentation Amortizing Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	15,350	14,965
60-89 Days Past Due	3,406	4,170
90 Days or More Past Non-Accrual	36,470	33,149
Total Past Due	55,226	52,284
Current	369,859	387,550
Loans (gross) amount	425,085	439,834
Mortgage loans (gross) | Multi Family
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	33,128	33,627
60-89 Days Past Due	6,568	6,056
90 Days or More Past Due Accruing	613	381
90 Days or More Past Non-Accrual	29,275	29,814
Total Past Due	69,584	69,878
Current	1,776,469	2,117,991
Loans (gross) amount	1,846,053	2,187,869
Mortgage loans (gross) | Commercial Real Estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	7,529	2,925
60-89 Days Past Due	2,173
90 Days or More Past Non-Accrual	6,363	6,529
Total Past Due	16,065	9,454
Current	707,482	762,200
Loans (gross) amount	723,547	771,654
Mortgage loans (gross) | Construction
Financing Receivable, Recorded Investment, Past Due [Line Items]
90 Days or More Past Non-Accrual	5,299	6,097
Total Past Due	5,299	6,097
Current	8,704	9,048
Loans (gross) amount	14,003	15,145
Consumer and Other Loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
Loans (gross) amount	294,171	309,340
Consumer and Other Loans | Home Equity
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	3,511	3,991
60-89 Days Past Due	432	351
90 Days or More Past Non-Accrual	5,099	5,464
Total Past Due	9,042	9,806
Current	261,051	272,647
Loans (gross) amount	270,093	282,453
Consumer and Other Loans | Other loans
Financing Receivable, Recorded Investment, Past Due [Line Items]
30-59 Days Past Due	136	164
60-89 Days Past Due	57	70
90 Days or More Past Non-Accrual	132	110
Total Past Due	325	344
Current	23,753	26,543
Loans (gross) amount	$ 24,078	$ 26,887

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Reconciliation of Basic and Diluted Earnings Per Share (Detail) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Earnings Per Share Disclosure [Line Items]
Net income	$ 16,845	$ 15,546	$ 44,229	$ 28,472
Income allocated to participating securities (restricted stock)	(428)	(379)	(1,099)	(688)
Income attributable to common shareholders	$ 16,417	$ 15,167	$ 43,130	$ 27,784
Average number of common shares outstanding - basic	92,949,206	91,621,997	92,842,398	91,541,675
Dilutive effect of stock options				67	[1]
Average number of common shares outstanding - diluted	92,949,206	91,621,997	92,842,398	91,541,742
Income per common share attributable to common shareholders:
Basic	$ 0.18	$ 0.17	$ 0.46	$ 0.30
Diluted	$ 0.18	$ 0.17	$ 0.46	$ 0.30

[1] Excludes options to purchase 6,889,199 shares of common stock which were outstanding during the three months ended June 30, 2011; options to purchase 7,999,253 shares of common stock which were outstanding during the three months ended June 30, 2010; options to purchase 6,902,494 shares of common stock which were outstanding during the six months ended June 30, 2011; and options to purchase 8,016,292 shares of common stock which were outstanding during the six months ended June 30, 2010 because their inclusion would be anti-dilutive.

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Securities - Additional Information (Detail) (USD $)					6 Months Ended
	Jun. 30, 2011 Investment	Dec. 31, 2010 Investment	Jun. 30, 2011 Securities Investment	Dec. 31, 2010 Securities Investment	Jun. 30, 2011 Held to Maturity Debt Securities Excluding Mortgaged Backed Securities
Schedule of Investments [Line Items]
Number of securities held with unrealized loss	41	59
Held-to-Maturity, Amortized Cost	$ 1,966,836,000	$ 2,003,784,000			$ 56,000,000
Held-to-Maturity, Estimated Fair Value	2,014,151,000	2,042,110,000			56,200,000
Maturity of Held-to-maturity Securities, Lower Limit					2017
Maturity of Held-to-maturity Securities, Upper Limit					2018
Accrued interest receivable	53,070,000	55,492,000	7,900,000	8,300,000
Callable Securities Amortized Cost	$ 52,900,000

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Litigation

6 Months Ended

Jun. 30, 2011

Litigation

11. Litigation

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

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010, the City of New York has notified us of an alleged tax deficiency in the amount of $5.2 million, including interest and penalties, related to our 2006 tax year.  The deficiency relates to our operation of two subsidiaries of Astoria Federal, Fidata Service Corp., or Fidata, and Astoria Federal Mortgage Corp., or AF

Mortgage.  Fidata is a passive investment company which maintains offices in Connecticut.  AF Mortgage is an operating subsidiary through which, prior to 2011, Astoria Federal engaged in lending activities outside the State of New York.  We disagree with the assertion of the tax deficiency and we filed a Petition for Hearing with the City of New York on December 6, 2010 to oppose the Notice of Determination.  At this time, management believes it is more likely than not that we will succeed in refuting the City of New York’s position, although defense costs may be significant.  Accordingly, no liability or reserve has been recognized in our consolidated statement of financial condition at June 30, 2011 with respect to this matter.

No assurance can be given as to whether or to what extent we will be required to pay the amount of the tax deficiency asserted by the City of New York, whether additional tax will be assessed for years subsequent to 2006, that this matter will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

Automated Transactions LLC Litigation

On November 20, 2009, an action entitled Automated Transactions LLC v. Astoria Financial Corporation and Astoria Federal Savings and Loan Association was commenced in the U.S. District Court for the Southern District of New York, or the Southern District Court, against us by Automated Transactions LLC, alleging patent infringement involving integrated banking and transaction machines, including automated teller machines, that we utilize.  We were served with the summons and complaint in such action on March 2, 2010.  The plaintiff also filed a similar suit on the same day against another financial institution and its holding company.  The plaintiff seeks unspecified monetary damages and an injunction preventing us from continuing to utilize the allegedly infringing machines.  We are vigorously defending this lawsuit, and filed an answer and counterclaims to the plaintiff’s complaint on March 23, 2010, to which the plaintiff filed a reply on April 12, 2010.

On May 18, 2010, the plaintiff filed an amended complaint at the direction of the Southern District Court, containing substantially the same allegations as the original complaint. On May 27, 2010, we moved to dismiss the amended complaint.  On March 10, 2011, the Southern District Court entered an order on the record that dismissed all claims against Astoria Financial Corporation but denied the motion to dismiss the claims against Astoria Federal for alleged direct patent infringement.  The order also dismissed in part the claims against Astoria Federal for alleged inducement of our customers to violate plaintiff’s patents and for Astoria Federal’s allegedly willful violation of the plaintiff’s patents, allowing claims to continue only for alleged inducement and willful infringement after our receiving notice of the pending suit from plaintiff’s counsel.  Based on the Southern District Court’s ruling, on March 31, 2011, we answered the amended complaint substantially denying the allegations of the amended complaint.

We have tendered requests for indemnification from the manufacturer and from the transaction processor utilized with respect to the integrated banking and transaction machines, and we served third party complaints against Metavante Corporation and Diebold, Inc. seeking to enforce our indemnification rights.

An adverse result in this lawsuit may include an award of monetary damages, on-going royalty obligations, and/or may result in a change in our business practice, which could result in a loss of

revenue.  We cannot at this time estimate the possible loss or range of loss, if any.  No assurance can be given at this time that the litigation against us will be resolved amicably, that if this litigation results in an adverse decision that we will be successful in seeking indemnification, that this litigation will not be costly to defend, that this litigation will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

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Loans Receivable and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2011

Loans Receivable and Allowance for Loan Losses

4. Loans Receivable and Allowance for Loan Losses

The following table sets forth the composition of our loans receivable portfolio in dollar amounts and percentages of the portfolio at the dates indicated.

	At June 30, 2011						At December 31, 2010
				Percent						Percent
(Dollars in Thousands)	Amount			of Total			Amount			of Total
Mortgage loans (gross):
One-to-four family	$	10,550,997			78.57	%	$	10,855,061			76.77	%
Multi-family		1,846,053			13.75			2,187,869			15.47
Commercial real estate		723,547			5.39			771,654			5.46
Construction		14,003			0.10			15,145			0.11
Total mortgage loans		13,134,600			97.81			13,829,729			97.81
Consumer and other loans (gross):
Home equity		270,093			2.01			282,453			2.00
Other		24,078			0.18			26,887			0.19
Total consumer and other loans		294,171			2.19			309,340			2.19
Total loans		13,428,771			100.00	%		14,139,069			100.00	%
Net unamortized premiums and deferred loan origination costs		78,808						83,978
Loans receivable		13,507,579						14,223,047
Allowance for loan losses		(182,717	)					(201,499	)
Loans receivable, net	$	13,324,862					$	14,021,548

The following tables set forth an aging analysis of our loans receivable by segment and class at the dates indicated.

	At June 30, 2011
	30-59 Days		60-89 Days		90 Days or More Past Due					Total
(In Thousands)	Past Due		Past Due		Accruing			Non-Accrual		Past Due		Current		Total
Mortgage loans:
One-to-four family:
Full documentation:
Interest-only	$	41,244	$	12,431		$	-	$	109,683	$	163,358	$	3,165,167	$	3,328,525
Amortizing		26,353		6,846			-		37,590		70,789		5,494,044		5,564,833
Reduced documentation:
Interest-only		35,542		12,478			-		145,816		193,836		1,038,718		1,232,554
Amortizing		15,350		3,406			-		36,470		55,226		369,859		425,085
Multi-family		33,128		6,568			613		29,275		69,584		1,776,469		1,846,053
Commercial real estate		7,529		2,173			-		6,363		16,065		707,482		723,547
Construction		-		-			-		5,299		5,299		8,704		14,003
Consumer and other loans:
Home equity lines of credit		3,511		432			-		5,099		9,042		261,051		270,093
Other		136		57			-		132		325		23,753		24,078
Total loans	$	162,793	$	44,391		$	613	$	375,727	$	583,524	$	12,845,247	$	13,428,771

	At December 31, 2010
	30-59 Days		60-89 Days		90 Days or More Past Due					Total
(In Thousands)	Past Due		Past Due		Accruing			Non-Accrual		Past Due		Current		Total
Mortgage loans:
One-to-four family:
Full documentation:
Interest-only	$	41,608	$	18,029		$	-	$	105,982	$	165,619	$	3,646,143	$	3,811,762
Amortizing		29,666		5,170			464		45,256		80,556		5,191,615		5,272,171
Reduced documentation:
Interest-only		38,864		20,493			-		157,464		216,821		1,114,473		1,331,294
Amortizing		14,965		4,170			-		33,149		52,284		387,550		439,834
Multi-family		33,627		6,056			381		29,814		69,878		2,117,991		2,187,869
Commercial real estate		2,925		-			-		6,529		9,454		762,200		771,654
Construction		-		-			-		6,097		6,097		9,048		15,145
Consumer and other loans:
Home equity lines of credit		3,991		351			-		5,464		9,806		272,647		282,453
Other		164		70			-		110		344		26,543		26,887
Total loans	$	165,810	$	54,339		$	845	$	389,865	$	610,859	$	13,528,210	$	14,139,069

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

	For the Three Months Ended June 30, 2011
	Mortgage Loans																Consumer and Other Loans				Total
(In Thousands)	One-to-Four Family				Multi- Family				Commercial Real Estate				Construction
Balance at April 1, 2011		$	117,722			$	49,396			$	14,782			$	3,502			$	4,084			$	189,486
Provision charged to operations			8,739				825				544				(245	)			137				10,000
Charge-offs			(15,768	)			(3,752	)			(756	)			(420	)			(212	)			(20,908	)
Recoveries			4,020				-				-				64				55				4,139
Balance at June 30, 2011		$	114,713			$	46,469			$	14,570			$	2,901			$	4,064			$	182,717

	For the Six Months Ended June 30, 2011
	Mortgage Loans																Consumer and Other Loans				Total
(In Thousands)	One-to-Four Family				Multi- Family				Commercial Real Estate				Construction
Balance at January 1, 2011		$	125,524			$	52,786			$	15,563			$	3,480			$	4,146			$	201,499
Provision charged to operations			16,283				373				(237	)			(223	)			804				17,000
Charge-offs			(33,479	)			(6,696	)			(756	)			(420	)			(967	)			(42,318	)
Recoveries			6,385				6				-				64				81				6,536
Balance at June 30, 2011		$	114,713			$	46,469			$	14,570			$	2,901			$	4,064			$	182,717

The following tables set forth the balances of our loans receivable by segment and impairment evaluation and the allowance for loan losses associated with such loans at the dates indicated.

	At June 30, 2011
	Mortgage Loans												Consumer and Other Loans		Total
(In Thousands)	One-to-Four Family			Multi- Family			Commercial Real Estate			Construction
Loans:
Individually evaluated for impairment		$	321,084		$	951,483		$	358,819		$	6,445	$	3,301	$	1,641,132
Collectively evaluated for impairment			10,229,913			894,570			364,728			7,558		290,870		11,787,639
Total loans		$	10,550,997		$	1,846,053		$	723,547		$	14,003	$	294,171	$	13,428,771
Allowance for loan losses:
Individually evaluated for impairment		$	10,210		$	31,089		$	10,185		$	2,662	$	50	$	54,196
Collectively evaluated for impairment			104,503			15,380			4,385			239		4,014		128,521
Total allowance for loan losses		$	114,713		$	46,469		$	14,570		$	2,901	$	4,064	$	182,717

	At December 31, 2010
	Mortgage Loans												Consumer and Other Loans		Total
(In Thousands)	One-to-Four Family			Multi- Family			Commercial Real Estate			Construction
Loans:
Individually evaluated for impairment		$	315,994		$	1,144,633		$	385,904		$	7,872	$	3,414	$	1,857,817
Collectively evaluated for impairment			10,539,067			1,043,236			385,750			7,273		305,926		12,281,252
Total loans		$	10,855,061		$	2,187,869		$	771,654		$	15,145	$	309,340	$	14,139,069
Allowance for loan losses:
Individually evaluated for impairment		$	12,541		$	34,124		$	10,784		$	3,250	$	51	$	60,750
Collectively evaluated for impairment			112,983			18,662			4,779			230		4,095		140,749
Total allowance for loan losses		$	125,524		$	52,786		$	15,563		$	3,480	$	4,146	$	201,499

The following table summarizes information related to our impaired loans by segment and class at the dates indicated.  Impaired one-to-four family mortgage loans consist primarily of loans where a portion of the outstanding principal has been charged off.

	At June 30, 2011									At December 31, 2010
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
With an allowance recorded:
One-to-four family:
Full documentation:
Interest-only	$	10,307	$	10,307	$	(1,238	)	$	9,069	$	11,033	$	11,033	$	(1,980	)	$	9,053
Amortizing		3,966		3,966		(467	)		3,499		7,340		7,340		(947	)		6,393
Reduced documentation:
Interest-only		11,508		11,508		(1,384	)		10,124		10,234		10,234		(2,500	)		7,734
Amortizing		1,066		1,066		(131	)		935		1,032		1,032		(239	)		793
Multi-family		53,844		53,134		(14,278	)		38,856		51,793		51,084		(14,349	)		36,735
Commercial real estate		21,604		20,500		(4,913	)		15,587		19,929		18,825		(5,496	)		13,329
Construction		5,916		5,806		(2,662	)		3,144		6,546		6,435		(2,851	)		3,584
Without an allowance recorded:
One-to-four family:
Full documentation:
Interest-only		92,071		66,285		-			66,285		87,110		64,185		-			64,185
Amortizing		18,102		13,904		-			13,904		15,363		11,883		-			11,883
Reduced documentation:
Interest-only		150,797		106,652		-			106,652		145,091		105,905		-			105,905
Amortizing		18,639		14,134		-			14,134		15,786		12,009		-			12,009
Construction		1,200		639		-			639		1,200		639		-			639
Total impaired loans	$	389,020	$	307,901	$	(25,073	)	$	282,828	$	372,457	$	300,604	$	(28,362	)	$	272,242

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

	For the Three Months Ended June 30, 2011						For the Six Months Ended June 30, 2011
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
One-to-four family:
Full documentation:
Interest-only	$	10,498	$	101	$	115	$	10,676	$	216	$	216
Amortizing		5,943		50		44		6,409		86		83
Reduced documentation:
Interest-only		11,268		105		117		10,923		257		270
Amortizing		1,186		11		11		1,135		24		23
Multi-family		54,409		542		626		53,301		1,280		1,310
Commercial real estate		19,896		334		318		19,539		665		651
Construction		6,121		25		28		6,225		56		59
Without an allowance recorded:
One-to-four family:
Full documentation:
Interest-only		65,421		258		322		65,009		459		590
Amortizing		12,882		14		22		12,549		18		36
Reduced documentation:
Interest-only		107,999		548		583		107,301		958		1,032
Amortizing		14,045		47		55		13,366		105		116
Construction		639		-		-		639		-		-
Total impaired loans	$	310,307	$	2,035	$	2,241	$	307,072	$	4,124	$	4,386

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

	At June 30, 2011
	One-to-Four Family Mortgage Loans												Consumer and Other Loans
	Full Documentation						Reduced Documentation						Home Equity Lines of Credit			Other
(In Thousands)	Interest-only			Amortizing			Interest-only			Amortizing
Performing		$	3,218,842		$	5,527,243		$	1,086,738		$	388,615		$	264,994		$	23,946
Non-performing			109,683			37,590			145,816			36,470			5,099			132
Total		$	3,328,525		$	5,564,833		$	1,232,554		$	425,085		$	270,093		$	24,078

	At December 31, 2010
	One-to-Four Family Mortgage Loans												Consumer and Other Loans
	Full Documentation						Reduced Documentation						Home Equity Lines of Credit			Other
(In Thousands)	Interest-only			Amortizing			Interest-only			Amortizing
Performing		$	3,705,780		$	5,226,451		$	1,173,830		$	406,685		$	276,989		$	26,777
Non-performing			105,982			45,720			157,464			33,149			5,464			110
Total		$	3,811,762		$	5,272,171		$	1,331,294		$	439,834		$	282,453		$	26,887

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

	At June 30, 2011									At December 31, 2010
(In Thousands)	Multi-Family Mortgage Loans			Commercial Real Estate Loans			Construction Loans			Multi-Family Mortgage Loans			Commercial Real Estate Loans			Construction Loans
Not classified		$	1,656,572		$	648,016		$	7,601		$	2,035,111		$	707,237		$	7,315
Classified			189,481			75,531			6,402			152,758			64,417			7,830
Total		$	1,846,053		$	723,547		$	14,003		$	2,187,869		$	771,654		$	15,145

For additional information regarding the composition of our loan portfolio, non-performing loans and our allowance for loan losses, see “Asset Quality” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or “MD&A.

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Loans Receivable and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2011

Composition of Loans Receivable Portfolio in Dollar Amounts and Percentages

The following table sets forth the composition of our loans receivable portfolio in dollar amounts and percentages of the portfolio at the dates indicated.

	At June 30, 2011						At December 31, 2010
				Percent						Percent
(Dollars in Thousands)	Amount			of Total			Amount			of Total
Mortgage loans (gross):
One-to-four family	$	10,550,997			78.57	%	$	10,855,061			76.77	%
Multi-family		1,846,053			13.75			2,187,869			15.47
Commercial real estate		723,547			5.39			771,654			5.46
Construction		14,003			0.10			15,145			0.11
Total mortgage loans		13,134,600			97.81			13,829,729			97.81
Consumer and other loans (gross):
Home equity		270,093			2.01			282,453			2.00
Other		24,078			0.18			26,887			0.19
Total consumer and other loans		294,171			2.19			309,340			2.19
Total loans		13,428,771			100.00	%		14,139,069			100.00	%
Net unamortized premiums and deferred loan origination costs		78,808						83,978
Loans receivable		13,507,579						14,223,047
Allowance for loan losses		(182,717	)					(201,499	)
Loans receivable, net	$	13,324,862					$	14,021,548

Aging Analysis of Loans Receivable by Segment and Class

The following tables set forth an aging analysis of our loans receivable by segment and class at the dates indicated.

	At June 30, 2011
	30-59 Days		60-89 Days		90 Days or More Past Due					Total
(In Thousands)	Past Due		Past Due		Accruing			Non-Accrual		Past Due		Current		Total
Mortgage loans:
One-to-four family:
Full documentation:
Interest-only	$	41,244	$	12,431		$	-	$	109,683	$	163,358	$	3,165,167	$	3,328,525
Amortizing		26,353		6,846			-		37,590		70,789		5,494,044		5,564,833
Reduced documentation:
Interest-only		35,542		12,478			-		145,816		193,836		1,038,718		1,232,554
Amortizing		15,350		3,406			-		36,470		55,226		369,859		425,085
Multi-family		33,128		6,568			613		29,275		69,584		1,776,469		1,846,053
Commercial real estate		7,529		2,173			-		6,363		16,065		707,482		723,547
Construction		-		-			-		5,299		5,299		8,704		14,003
Consumer and other loans:
Home equity lines of credit		3,511		432			-		5,099		9,042		261,051		270,093
Other		136		57			-		132		325		23,753		24,078
Total loans	$	162,793	$	44,391		$	613	$	375,727	$	583,524	$	12,845,247	$	13,428,771

	At December 31, 2010
	30-59 Days		60-89 Days		90 Days or More Past Due					Total
(In Thousands)	Past Due		Past Due		Accruing			Non-Accrual		Past Due		Current		Total
Mortgage loans:
One-to-four family:
Full documentation:
Interest-only	$	41,608	$	18,029		$	-	$	105,982	$	165,619	$	3,646,143	$	3,811,762
Amortizing		29,666		5,170			464		45,256		80,556		5,191,615		5,272,171
Reduced documentation:
Interest-only		38,864		20,493			-		157,464		216,821		1,114,473		1,331,294
Amortizing		14,965		4,170			-		33,149		52,284		387,550		439,834
Multi-family		33,627		6,056			381		29,814		69,878		2,117,991		2,187,869
Commercial real estate		2,925		-			-		6,529		9,454		762,200		771,654
Construction		-		-			-		6,097		6,097		9,048		15,145
Consumer and other loans:
Home equity lines of credit		3,991		351			-		5,464		9,806		272,647		282,453
Other		164		70			-		110		344		26,543		26,887
Total loans	$	165,810	$	54,339		$	845	$	389,865	$	610,859	$	13,528,210	$	14,139,069

Changes in Allowance for Loan Losses by Loan Receivable Segment

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

	For the Three Months Ended June 30, 2011
	Mortgage Loans																Consumer and Other Loans				Total
(In Thousands)	One-to-Four Family				Multi- Family				Commercial Real Estate				Construction
Balance at April 1, 2011		$	117,722			$	49,396			$	14,782			$	3,502			$	4,084			$	189,486
Provision charged to operations			8,739				825				544				(245	)			137				10,000
Charge-offs			(15,768	)			(3,752	)			(756	)			(420	)			(212	)			(20,908	)
Recoveries			4,020				-				-				64				55				4,139
Balance at June 30, 2011		$	114,713			$	46,469			$	14,570			$	2,901			$	4,064			$	182,717

	For the Six Months Ended June 30, 2011
	Mortgage Loans																Consumer and Other Loans				Total
(In Thousands)	One-to-Four Family				Multi- Family				Commercial Real Estate				Construction
Balance at January 1, 2011		$	125,524			$	52,786			$	15,563			$	3,480			$	4,146			$	201,499
Provision charged to operations			16,283				373				(237	)			(223	)			804				17,000
Charge-offs			(33,479	)			(6,696	)			(756	)			(420	)			(967	)			(42,318	)
Recoveries			6,385				6				-				64				81				6,536
Balance at June 30, 2011		$	114,713			$	46,469			$	14,570			$	2,901			$	4,064			$	182,717

Balances of Loans Receivable by Segment and Impairment Evaluation and Allowance for Loan Losses Associated with such Loans

The following tables set forth the balances of our loans receivable by segment and impairment evaluation and the allowance for loan losses associated with such loans at the dates indicated.

	At June 30, 2011
	Mortgage Loans												Consumer and Other Loans		Total
(In Thousands)	One-to-Four Family			Multi- Family			Commercial Real Estate			Construction
Loans:
Individually evaluated for impairment		$	321,084		$	951,483		$	358,819		$	6,445	$	3,301	$	1,641,132
Collectively evaluated for impairment			10,229,913			894,570			364,728			7,558		290,870		11,787,639
Total loans		$	10,550,997		$	1,846,053		$	723,547		$	14,003	$	294,171	$	13,428,771
Allowance for loan losses:
Individually evaluated for impairment		$	10,210		$	31,089		$	10,185		$	2,662	$	50	$	54,196
Collectively evaluated for impairment			104,503			15,380			4,385			239		4,014		128,521
Total allowance for loan losses		$	114,713		$	46,469		$	14,570		$	2,901	$	4,064	$	182,717

	At December 31, 2010
	Mortgage Loans												Consumer and Other Loans		Total
(In Thousands)	One-to-Four Family			Multi- Family			Commercial Real Estate			Construction
Loans:
Individually evaluated for impairment		$	315,994		$	1,144,633		$	385,904		$	7,872	$	3,414	$	1,857,817
Collectively evaluated for impairment			10,539,067			1,043,236			385,750			7,273		305,926		12,281,252
Total loans		$	10,855,061		$	2,187,869		$	771,654		$	15,145	$	309,340	$	14,139,069
Allowance for loan losses:
Individually evaluated for impairment		$	12,541		$	34,124		$	10,784		$	3,250	$	51	$	60,750
Collectively evaluated for impairment			112,983			18,662			4,779			230		4,095		140,749
Total allowance for loan losses		$	125,524		$	52,786		$	15,563		$	3,480	$	4,146	$	201,499

Impaired Loans Net Investment

Information Related to Impaired Loans by Segment and Class

The following table summarizes information related to our impaired loans by segment and class at the dates indicated.  Impaired one-to-four family mortgage loans consist primarily of loans where a portion of the outstanding principal has been charged off.

	At June 30, 2011									At December 31, 2010
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
With an allowance recorded:
One-to-four family:
Full documentation:
Interest-only	$	10,307	$	10,307	$	(1,238	)	$	9,069	$	11,033	$	11,033	$	(1,980	)	$	9,053
Amortizing		3,966		3,966		(467	)		3,499		7,340		7,340		(947	)		6,393
Reduced documentation:
Interest-only		11,508		11,508		(1,384	)		10,124		10,234		10,234		(2,500	)		7,734
Amortizing		1,066		1,066		(131	)		935		1,032		1,032		(239	)		793
Multi-family		53,844		53,134		(14,278	)		38,856		51,793		51,084		(14,349	)		36,735
Commercial real estate		21,604		20,500		(4,913	)		15,587		19,929		18,825		(5,496	)		13,329
Construction		5,916		5,806		(2,662	)		3,144		6,546		6,435		(2,851	)		3,584
Without an allowance recorded:
One-to-four family:
Full documentation:
Interest-only		92,071		66,285		-			66,285		87,110		64,185		-			64,185
Amortizing		18,102		13,904		-			13,904		15,363		11,883		-			11,883
Reduced documentation:
Interest-only		150,797		106,652		-			106,652		145,091		105,905		-			105,905
Amortizing		18,639		14,134		-			14,134		15,786		12,009		-			12,009
Construction		1,200		639		-			639		1,200		639		-			639
Total impaired loans	$	389,020	$	307,901	$	(25,073	)	$	282,828	$	372,457	$	300,604	$	(28,362	)	$	272,242

Impaired Loans Average Investment

Information Related to Impaired Loans by Segment and Class

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

	For the Three Months Ended June 30, 2011						For the Six Months Ended June 30, 2011
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
One-to-four family:
Full documentation:
Interest-only	$	10,498	$	101	$	115	$	10,676	$	216	$	216
Amortizing		5,943		50		44		6,409		86		83
Reduced documentation:
Interest-only		11,268		105		117		10,923		257		270
Amortizing		1,186		11		11		1,135		24		23
Multi-family		54,409		542		626		53,301		1,280		1,310
Commercial real estate		19,896		334		318		19,539		665		651
Construction		6,121		25		28		6,225		56		59
Without an allowance recorded:
One-to-four family:
Full documentation:
Interest-only		65,421		258		322		65,009		459		590
Amortizing		12,882		14		22		12,549		18		36
Reduced documentation:
Interest-only		107,999		548		583		107,301		958		1,032
Amortizing		14,045		47		55		13,366		105		116
Construction		639		-		-		639		-		-
Total impaired loans	$	310,307	$	2,035	$	2,241	$	307,072	$	4,124	$	4,386

Performing Non performing

Loan Receivable Segments by Credit Quality Indicator

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

	At June 30, 2011
	One-to-Four Family Mortgage Loans												Consumer and Other Loans
	Full Documentation						Reduced Documentation						Home Equity Lines of Credit			Other
(In Thousands)	Interest-only			Amortizing			Interest-only			Amortizing
Performing		$	3,218,842		$	5,527,243		$	1,086,738		$	388,615		$	264,994		$	23,946
Non-performing			109,683			37,590			145,816			36,470			5,099			132
Total		$	3,328,525		$	5,564,833		$	1,232,554		$	425,085		$	270,093		$	24,078

	At December 31, 2010
	One-to-Four Family Mortgage Loans												Consumer and Other Loans
	Full Documentation						Reduced Documentation						Home Equity Lines of Credit			Other
(In Thousands)	Interest-only			Amortizing			Interest-only			Amortizing
Performing		$	3,705,780		$	5,226,451		$	1,173,830		$	406,685		$	276,989		$	26,777
Non-performing			105,982			45,720			157,464			33,149			5,464			110
Total		$	3,811,762		$	5,272,171		$	1,331,294		$	439,834		$	282,453		$	26,887

Classified Not Classified

Loan Receivable Segments by Credit Quality Indicator

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

	At June 30, 2011									At December 31, 2010
(In Thousands)	Multi-Family Mortgage Loans			Commercial Real Estate Loans			Construction Loans			Multi-Family Mortgage Loans			Commercial Real Estate Loans			Construction Loans
Not classified		$	1,656,572		$	648,016		$	7,601		$	2,035,111		$	707,237		$	7,315
Classified			189,481			75,531			6,402			152,758			64,417			7,830
Total		$	1,846,053		$	723,547		$	14,003		$	2,187,869		$	771,654		$	15,145

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Balances of Multi-Family Mortgage, Commercial Real Estate and Construction Loan Receivable Segments by Credit Quality Indicator (Detail) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 13,428,771	$ 14,139,069
Mortgage loans (gross)
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	13,134,600	13,829,729
Mortgage loans (gross) | Multi Family
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,846,053	2,187,869
Mortgage loans (gross) | Multi Family | NotClassified
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	1,656,572	2,035,111
Mortgage loans (gross) | Multi Family | Classified
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	189,481	152,758
Mortgage loans (gross) | Commercial Real Estate
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	723,547	771,654
Mortgage loans (gross) | Commercial Real Estate | NotClassified
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	648,016	707,237
Mortgage loans (gross) | Commercial Real Estate | Classified
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	75,531	64,417
Mortgage loans (gross) | Construction
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	14,003	15,145
Mortgage loans (gross) | Construction | NotClassified
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	7,601	7,315
Mortgage loans (gross) | Construction | Classified
Financing Receivable, Recorded Investment [Line Items]
Loans receivable	$ 6,402	$ 7,830

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Estimated Fair Values of Securities with Gross Unrealized Losses in a Continuous Unrealized Loss Position for Less Than Twelve Months and for Twelve Months or Longer (Detail) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Investments, Unrealized Loss Position [Line Items]
Available-for-Sale, Less Than Twelve Months Estimated Fair Value	$ 1,358	$ 2,051
Available-for-Sale,Less Than Twelve Months Gross Unrealized Losses	(12)	(4)
Available-for-Sale, Twelve Months or Longer Estimated Fair Value	17,651	19,991
Available-for-Sale, Twelve Months or Longer Gross Unrealized Losses	(332)	(375)
Available-for-Sale, Total Estimated Fair Value	19,009	22,042
Available-for-Sale, Total Gross Unrealized Losses	(344)	(379)
Held-to-Maturity, Less Than Twelve Months Estimated Fair Value	221,195	508,898
Held-to-Maturity, Less Than Twelve Months Gross Unrealized Losses	(460)	(9,202)
Held-to-Maturity, Twelve Months or Longer Estimated Fair Value		1,744
Held-to-Maturity-Twelve Months or Longer Gross Unrealized Losses		(66)
Held-to-Maturity, Total Estimated Fair Value	221,195	510,642
Held-to-Maturity, Total Gross Unrealized Losses	(460)	(9,268)
Non-GSE issuance REMICs and CMOs
Investments, Unrealized Loss Position [Line Items]
Available-for-Sale, Less Than Twelve Months Estimated Fair Value	534	276
Available-for-Sale,Less Than Twelve Months Gross Unrealized Losses	(7)	(2)
Available-for-Sale, Twelve Months or Longer Estimated Fair Value	17,651	19,991
Available-for-Sale, Twelve Months or Longer Gross Unrealized Losses	(317)	(360)
Available-for-Sale, Total Estimated Fair Value	18,185	20,267
Available-for-Sale, Total Gross Unrealized Losses	(324)	(362)
Held-to-Maturity, Twelve Months or Longer Estimated Fair Value		1,744
Held-to-Maturity-Twelve Months or Longer Gross Unrealized Losses		(66)
Held-to-Maturity, Total Estimated Fair Value		1,744
Held-to-Maturity, Total Gross Unrealized Losses		(66)
GSE pass-through certificates
Investments, Unrealized Loss Position [Line Items]
Available-for-Sale, Less Than Twelve Months Estimated Fair Value	824	1,775
Available-for-Sale,Less Than Twelve Months Gross Unrealized Losses	(5)	(2)
Available-for-Sale, Total Estimated Fair Value	824	1,775
Available-for-Sale, Total Gross Unrealized Losses	(5)	(2)
Freddie Mac and Fannie Mae stock
Investments, Unrealized Loss Position [Line Items]
Available-for-Sale, Twelve Months or Longer Gross Unrealized Losses	(15)	(15)
Available-for-Sale, Total Gross Unrealized Losses	(15)	(15)
GSE issuance REMICs and CMOs
Investments, Unrealized Loss Position [Line Items]
Held-to-Maturity, Less Than Twelve Months Estimated Fair Value	196,263	484,366
Held-to-Maturity, Less Than Twelve Months Gross Unrealized Losses	(392)	(8,734)
Held-to-Maturity, Total Estimated Fair Value	196,263	484,366
Held-to-Maturity, Total Gross Unrealized Losses	(392)	(8,734)
Obligations of GSEs
Investments, Unrealized Loss Position [Line Items]
Held-to-Maturity, Less Than Twelve Months Estimated Fair Value	24,932	24,532
Held-to-Maturity, Less Than Twelve Months Gross Unrealized Losses	(68)	(468)
Held-to-Maturity, Total Estimated Fair Value	24,932	24,532
Held-to-Maturity, Total Gross Unrealized Losses	$ (68)	$ (468)

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Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss	Unallocated Common Stock Held by ESOP
Beginning Balance at Dec. 31, 2010	$ 1,241,780	$ 1,665	$ 864,744	$ 1,848,095	$ (1,417,956)	$ (42,161)	$ (12,607)
Comprehensive income:
Net income	44,229			44,229
Other comprehensive income, net of tax:
Net unrealized gain on securities	3,876					3,876
Reclassification of prior service cost	30					30
Reclassification of net actuarial loss	2,782					2,782
Reclassification of loss on cash flow hedge	95					95
Comprehensive income	51,012
Dividends on common stock ($0.26 per share)	(24,707)			(24,707)
Restricted stock grants (615,650 shares)			(8,796)	(3,926)	12,722
Forfeitures of restricted stock (4,806 shares)			65	34	(99)
Stock-based compensation	4,541		4,539	2
Net tax benefit excess from stock-based compensation	67		67
Allocation of ESOP stock	5,838		4,329				1,509
Ending Balance at Jun. 30, 2011	$ 1,278,531	$ 1,665	$ 864,948	$ 1,863,727	$ (1,405,333)	$ (35,378)	$ (11,098)

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Reconciliation of Basic and Diluted Earnings Per Share

The following table is a reconciliation of basic and diluted earnings per share.

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
(In Thousands, Except Share Data)	2011			2010			2011			2010
Net income	$	16,845		$	15,546		$	44,229		$	28,472
Income allocated to participating securities (restricted stock)		(428	)		(379	)		(1,099	)		(688	)
Income attributable to common shareholders	$	16,417		$	15,167		$	43,130		$	27,784
Average number of common shares outstanding – basic		92,949,206			91,621,997			92,842,398			91,541,675
Dilutive effect of stock options (1)		-			-			-			67
Average number of common shares outstanding – diluted		92,949,206			91,621,997			92,842,398			91,541,742
Income per common share attributable to common shareholders:
Basic	$	0.18		$	0.17		$	0.46		$	0.30
Diluted	$	0.18		$	0.17		$	0.46		$	0.30

(1) Excludes options to purchase 6,889,199 shares of common stock which were outstanding during the three months ended June 30, 2011; options to purchase 7,999,253 shares of common stock which were outstanding during the three months ended June 30, 2010;  options to purchase 6,902,494 shares of common stock which were outstanding during the six months ended June 30, 2011; and options to purchase 8,016,292 shares of common stock which were outstanding during the six months ended June 30, 2010 because their inclusion would be anti-dilutive.

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Stock Incentive Plans - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011 Year Investment	Jun. 30, 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			615,650
Stock-based compensation expense, net of taxes	$ 1,500,000	$ 1,400,000	$ 2,900,000	$ 2,500,000
Stock-based compensation expense, taxes	830,000	739,000	1,600,000	1,400,000
Pre-tax compensation cost related to all nonvested awards of restricted stock not yet recognized	$ 22,300,000		$ 22,300,000
Pre-tax compensation cost related to all nonvested awards of restricted stock not yet recognized, weighted Average Period			3.1
Employee Stock Plan, 2005 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			593,530
Beginning date for vesting of the restricted stock granted			2011-12-14
Employee Stock Plan, 2005 Plan | Vested One Third per Year
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			70,260
Employee Stock Plan, 2005 Plan | Vested One Fifth per Year
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			508,270
Employee Stock Plan, 2005 Plan | Vest onn March 2, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			15,000
Directors Stock Plan, 2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock granted			22,120
Beginning date for vesting of the restricted stock granted			2014-01-31

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Stock Incentive Plans (Tables)

6 Months Ended

Jun. 30, 2011

Restricted Stock Activity in Stock Incentive Plans

Restricted stock activity in our stock incentive plans for the six months ended June 30, 2011 is summarized as follows:

	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested at January 1, 2011		1,852,550			$	15.96
Granted		615,650				14.29
Vested		(36,585	)			(24.92	)
Forfeited		(4,806	)			(13.65	)
Nonvested at June 30, 2011		2,426,809				15.41

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Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities:
Net income	$ 44,229	$ 28,472
Adjustments to reconcile net income to net cash provided by operating activities:
Net premium amortization on loans	13,217	16,207
Net amortization on securities and borrowings	3,070	870
Net provision for loan and real estate losses	18,626	80,829
Depreciation and amortization	5,795	5,593
Net gain on sales of loans	(1,814)	(1,973)
Net loss (gain) on dispositions of premises and equipment	270	(13)
Other asset impairment charges	441	1,612
Originations of loans held-for-sale	(88,947)	(115,237)
Proceeds from sales and principal repayments of loans held-for-sale	119,055	123,299
Stock-based compensation and allocation of ESOP stock	10,379	9,385
Decrease in accrued interest receivable	2,422	468
Mortgage servicing rights amortization and valuation allowance adjustments, net	1,120	1,486
Bank owned life insurance income and insurance proceeds received, net	4,543	(4,352)
Decrease (increase) in other assets	33,295	(25,711)
(Decrease) increase in accrued expenses and other liabilities	(39,689)	13,737
Net cash provided by operating activities	126,012	134,672
Cash flows from investing activities:
Originations of loans receivable	(966,649)	(1,406,022)
Loan purchases through third parties	(420,750)	(245,332)
Principal payments on loans receivable	1,991,150	1,901,613
Proceeds from sales of delinquent and non-performing loans	16,319	22,987
Purchases of securities held-to-maturity	(356,744)	(390,890)
Principal payments on securities held-to-maturity	390,802	699,839
Principal payments on securities available-for-sale	119,294	135,917
Net redemptions (purchases) of Federal Home Loan Bank of New York stock	20,149	(6,839)
Proceeds from sales of real estate owned, net	47,612	44,428
Purchases of premises and equipment	(6,148)	(4,678)
Proceeds from sales of premises and equipment	14,396
Net cash provided by investing activities	849,431	751,023
Cash flows from financing activities:
Net decrease in deposits	(388,380)	(563,797)
Net increase (decrease) in borrowings with original terms of three months or less	58,000	(90,000)
Proceeds from borrowings with original terms greater than three months		525,000
Repayments of borrowings with original terms greater than three months	(641,000)	(500,000)
Net increase in mortgage escrow funds	9,541	17,542
Cash dividends paid to stockholders	(24,707)	(24,349)
Cash received for options exercised		112
Net tax benefit excess from stock-based compensation	67	124
Net cash used in financing activities	(986,479)	(635,368)
Net (decrease) increase in cash and cash equivalents	(11,036)	250,327
Cash and cash equivalents at beginning of period	119,016	111,570
Cash and cash equivalents at end of period	107,980	361,897
Supplemental disclosures:
Interest paid	169,147	223,801
Income taxes paid	34,920	37,605
Additions to real estate owned	44,779	46,565
Loans transferred to held-for-sale	$ 17,397	$ 34,528

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Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

9. Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  Our securities available-for-sale are recorded at fair value on a recurring basis.  Additionally, from time to time, we may be required to record at fair value other assets or liabilities on a non-recurring basis, such as mortgage servicing rights, or MSR, loans receivable, certain assets held-for-sale and real estate owned, or REO.  These non-recurring fair value adjustments involve the application of lower of cost or market accounting or impairment write-downs of individual assets.  Additionally, in connection with our mortgage banking activities we have commitments to fund loans held-for-sale and commitments to sell loans, which are considered free-standing derivative instruments, the fair values of which are not material to our financial condition or results of operations.

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

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

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

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

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

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

Securities available-for-sale

Our available-for-sale securities portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders' equity.

Residential mortgage-backed securities

Substantially all of our securities available-for-sale portfolio consists of residential mortgage-backed securities.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service uses various modeling techniques to determine pricing for our mortgage-backed securities, including option pricing and discounted cash flow models.  The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, monthly payment information and collateral performance.  At June 30, 2011, 96% of our available-for-sale residential mortgage-backed securities portfolio was comprised of GSE securities for which an active market exists for similar securities, making observable inputs readily available.

We analyze changes in the pricing service fair values from month to month taking into consideration changes in market conditions including changes in mortgage spreads, changes in treasury yields and changes in generic pricing on fifteen year and thirty year securities.  Each

month we conduct a review of the estimated values of our fixed rate REMICs and CMOs available-for-sale which represent substantially all of these securities priced by our pricing service.  We generate prices based upon a “spread matrix” approach for estimating values.  Market spreads are obtained from independent third party firms who trade these types of securities.  Any notable differences between the pricing service prices and “spread matrix” prices on individual securities are analyzed further, including a review of prices provided by other independent parties, a yield analysis and review of average life changes using Bloomberg analytics and a review of historical pricing on the particular security.  Based upon our review of the prices provided by our pricing service, the fair values of securities incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Freddie Mac and Fannie Mae stock

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

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

	Carrying Value at June 30, 2011
(In Thousands)	Total			Level 1			Level 2			Level 3
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	392,242		$	-		$	392,242		$	-
Non-GSE issuance REMICs and CMOs			18,288			-			18,288			-
GSE pass-through certificates			27,250			-			27,250			-
Freddie Mac and Fannie Mae stock			10,760			10,760			-			-
Total securities available-for-sale		$	448,540		$	10,760		$	437,780		$	-

	Carrying Value at December 31, 2010
(In Thousands)	Total			Level 1			Level 2			Level 3
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	509,233		$	-		$	509,233		$	-
Non-GSE issuance REMICs and CMOs			20,664			-			20,664			-
GSE pass-through certificates			29,896			-			29,896			-
Freddie Mac and Fannie Mae stock			2,160			2,160			-			-
Total securities available-for-sale		$	561,953		$	2,160		$	559,793		$	-

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

Non-performing loans held-for-sale, net

Non-performing loans held-for-sale consisted of multi-family, one-to-four family and commercial real estate mortgage loans at June 30, 2011 and consisted primarily of multi-family and commercial real estate mortgage loans at December 31, 2010.  Fair values of non-performing loans held-for-sale are estimated through either bids received on the loans or a discounted cash

flow analysis of the underlying collateral and adjusted as necessary, by management, to reflect current market conditions and, as such, are classified as Level 3.

Loans receivable, net (impaired loans)

Loans which meet certain criteria are evaluated individually for impairment.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Impaired loans were comprised primarily of one-to-four family mortgage loans at June 30, 2011 and December 31, 2010.  Our impaired loans are generally collateral dependent and, as such, are carried at the estimated fair value of the collateral less estimated selling costs.  Fair values are estimated through current appraisals, broker opinions or automated valuation models and adjusted as necessary, by management, to reflect current market conditions and, as such, are classified as Level 3.  Substantially all of the impaired loans at June 30, 2011 and December 31, 2010 for which a fair value adjustment was recognized were one-to-four family mortgage loans.

MSR, net

The right to service loans for others is generally obtained through the sale of one-to-four family mortgage loans with servicing retained.  MSR are carried at the lower of cost or estimated fair value.  The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.  At June 30, 2011, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.94%, a weighted average constant prepayment rate on mortgages of 18.42% and a weighted average life of 4.1 years.  At December 31, 2010, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 10.96%, a weighted average constant prepayment rate on mortgages of 19.94% and a weighted average life of 3.8 years.  Management reviews the assumptions used to estimate the fair value of MSR to ensure they reflect current and anticipated market conditions.

REO, net

REO represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure, primarily all of which were one-to-four family properties at June 30, 2011 and all of which were one-to-four family properties at December 31, 2010, and is carried, net of allowances for losses, at the lower of cost or fair value less estimated selling costs.  The fair value of REO is estimated through current appraisals, in conjunction with a drive-by inspection and comparison of the REO property with similar properties in the area by either a licensed appraiser or real estate broker.  As these properties are actively marketed, estimated fair values are periodically adjusted by management to reflect current market conditions and, as such, are classified as  Level 3.

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

		Carrying Value
(In Thousands)	At June 30, 2011			At December 31, 2010
Non-performing loans held-for-sale, net		$	10,832		$	10,895
Impaired loans			204,598			197,620
MSR, net			9,356			9,204
REO, net			48,906			53,990
Total		$	273,692		$	271,709

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

		For the Six Months Ended
		June 30,
(In Thousands)	2011			2010
Non-performing loans held-for-sale, net (1)		$	821		$	11,936
Impaired loans (2)			25,878			31,753
MSR, net (3)			-			-
REO, net (4)			6,694			11,065
Total		$	33,393		$	54,754

(1) Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale.  Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

(2) Losses are charged against the allowance for loan losses.

(3) Losses are charged to mortgage banking income, net.

(4) Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO.  Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

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Changes in Allowance for Loan Losses by Loan Receivable Segment (Detail) (USD $) In Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance	$ 189,486	$ 201,499
Provision charged to operations	10,000	17,000
Charge-offs	(20,908)	(42,318)
Recoveries	4,139	6,536
Allowance for loan losses, Ending Balance	182,717	182,717
Mortgage loans (gross) | One to Four Family
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance	117,722	125,524
Provision charged to operations	8,739	16,283
Charge-offs	(15,768)	(33,479)
Recoveries	4,020	6,385
Allowance for loan losses, Ending Balance	114,713	114,713
Mortgage loans (gross) | Multi Family
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance	49,396	52,786
Provision charged to operations	825	373
Charge-offs	(3,752)	(6,696)
Recoveries		6
Allowance for loan losses, Ending Balance	46,469	46,469
Mortgage loans (gross) | Commercial Real Estate
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance	14,782	15,563
Provision charged to operations	544	(237)
Charge-offs	(756)	(756)
Allowance for loan losses, Ending Balance	14,570	14,570
Mortgage loans (gross) | Construction
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance	3,502	3,480
Provision charged to operations	(245)	(223)
Charge-offs	(420)	(420)
Recoveries	64	64
Allowance for loan losses, Ending Balance	2,901	2,901
Consumer and Other Loans
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for loan losses, Beginning Balance	4,084	4,146
Provision charged to operations	137	804
Charge-offs	(212)	(967)
Recoveries	55	81
Allowance for loan losses, Ending Balance	$ 4,064	$ 4,064

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Securities (Tables)

6 Months Ended

Jun. 30, 2011

Amortized Cost and Estimated Fair Value of Securities Available-for-Sale and Held-to-Maturity

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

	At June 30, 2011
(In Thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)		$	376,143		$	16,099		$	-			$	392,242
Non-GSE issuance REMICs and CMOs			18,611			1			(324	)			18,288
GSE pass-through certificates			26,231			1,024			(5	)			27,250
Total residential mortgage-backed securities			420,985			17,124			(329	)			437,780
Freddie Mac and Fannie Mae stock			15			10,760			(15	)			10,760
Total securities available-for-sale		$	421,000		$	27,884		$	(344	)		$	448,540
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	1,887,220		$	47,271		$	(392	)		$	1,934,099
Non-GSE issuance REMICs and CMOs			22,991			184			-				23,175
GSE pass-through certificates			611			43			-				654
Total residential mortgage-backed securities			1,910,822			47,498			(392	)			1,957,928
Obligations of GSEs			52,866			210			(68	)			53,008
Obligations of states and political subdivisions			3,148			67			-				3,215
Total securities held-to-maturity		$	1,966,836		$	47,775		$	(460	)		$	2,014,151

(1) Government-sponsored enterprise

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

	At December 31, 2010
(In Thousands)	Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	490,302		$	18,931		$	-			$	509,233
Non-GSE issuance REMICs and CMOs			21,023			3			(362	)			20,664
GSE pass-through certificates			28,784			1,114			(2	)			29,896
Total residential mortgage-backed securities			540,109			20,048			(364	)			559,793
Freddie Mac and Fannie Mae stock			15			2,160			(15	)			2,160
Total securities available-for-sale		$	540,124		$	22,208		$	(379	)		$	561,953
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs		$	1,933,650		$	47,191		$	(8,734	)		$	1,972,107
Non-GSE issuance REMICs and CMOs			40,363			352			(66	)			40,649
GSE pass-through certificates			772			51			-				823
Total residential mortgage-backed securities			1,974,785			47,594			(8,800	)			2,013,579
Obligations of GSEs			25,000			-			(468	)			24,532
Obligations of states and political subdivisions			3,999			-			-				3,999
Total securities held-to-maturity		$	2,003,784		$	47,594		$	(9,268	)		$	2,042,110

Estimated Fair Values of Securities with Gross Unrealized Losses in a Continuous Unrealized Loss Position for Less Than Twelve Months and for Twelve Months or Longer

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

	At June 30, 2011
	Less Than Twelve Months							Twelve Months or Longer							Total
				Gross							Gross							Gross
	Estimated			Unrealized				Estimated			Unrealized				Estimated			Unrealized
(In Thousands)	Fair Value			Losses				Fair Value			Losses				Fair Value			Losses
Available-for-sale:
Non-GSE issuance REMICs and CMOs		$	534		$	(7	)		$	17,651		$	(317	)		$	18,185		$	(324	)
GSE pass-through certificates			824			(5	)			-			-				824			(5	)
Freddie Mac and Fannie Mae stock			-			-				-			(15	)			-			(15	)
Total temporarily impaired securities available-for-sale		$	1,358		$	(12	)		$	17,651		$	(332	)		$	19,009		$	(344	)
Held-to-maturity:
GSE issuance REMICs and CMOs		$	196,263		$	(392	)		$	-		$	-			$	196,263		$	(392	)
Obligations of GSEs			24,932			(68	)			-			-				24,932			(68	)
Total temporarily impaired securities held-to-maturity		$	221,195		$	(460	)		$	-		$	-			$	221,195		$	(460	)

	At December 31, 2010
	Less Than Twelve Months							Twelve Months or Longer							Total
				Gross							Gross							Gross
	Estimated			Unrealized				Estimated			Unrealized				Estimated			Unrealized
(In Thousands)	Fair Value			Losses				Fair Value			Losses				Fair Value			Losses
Available-for-sale:
Non-GSE issuance REMICs and CMOs		$	276		$	(2	)		$	19,991		$	(360	)		$	20,267		$	(362	)
GSE pass-through certificates			1,775			(2	)			-			-				1,775			(2	)
Freddie Mac and Fannie Mae stock			-			-				-			(15	)			-			(15	)
Total temporarily impaired securities available-for-sale		$	2,051		$	(4	)		$	19,991		$	(375	)		$	22,042		$	(379	)
Held-to-maturity:
GSE issuance REMICs and CMOs		$	484,366		$	(8,734	)		$	-		$	-			$	484,366		$	(8,734	)
Non-GSE issuance REMICs and CMOs			-			-				1,744			(66	)			1,744			(66	)
Obligations of GSEs			24,532			(468	)			-			-				24,532			(468	)
Total temporarily impaired securities held-to-maturity		$	508,898		$	(9,202	)		$	1,744		$	(66	)		$	510,642		$	(9,268	)

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Consolidated Statements of Financial Condition (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Assets:
Cash and due from banks	$ 107,980	$ 67,476
Repurchase agreements		51,540
Available-for-sale securities:
Encumbered	350,387	516,540
Unencumbered	98,153	45,413
Total available-for-sale securities	448,540	561,953
Held-to-maturity securities, fair value of $2,014,151 and $2,042,110, respectively:
Encumbered	1,748,892	1,817,431
Unencumbered	217,944	186,353
Total held-to-maturity securities	1,966,836	2,003,784
Federal Home Loan Bank of New York stock, at cost	129,025	149,174
Loans held-for-sale, net	15,393	44,870
Loans receivable	13,507,579	14,223,047
Allowance for loan losses	(182,717)	(201,499)
Loans receivable, net	13,324,862	14,021,548
Mortgage servicing rights, net	9,356	9,204
Accrued interest receivable	53,070	55,492
Premises and equipment, net	119,049	133,362
Goodwill	185,151	185,151
Bank owned life insurance	405,875	410,418
Real estate owned, net	59,323	63,782
Other assets	295,875	331,515
Total assets	17,120,335	18,089,269
Deposits:
Savings	2,838,239	2,664,859
Money market	397,148	376,302
NOW and demand deposit	1,809,863	1,774,790
Liquid certificates of deposit	363,393	468,730
Certificates of deposit	5,801,977	6,314,319
Total deposits	11,210,620	11,599,000
Reverse repurchase agreements	1,900,000	2,100,000
Federal Home Loan Bank of New York advances	2,008,000	2,391,000
Other borrowings, net	378,389	378,204
Mortgage escrow funds	118,915	109,374
Accrued expenses and other liabilities	225,880	269,911
Total liabilities	15,841,804	16,847,489
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 98,488,313 and 97,877,469 shares outstanding, respectively)	1,665	1,665
Additional paid-in capital	864,948	864,744
Retained earnings	1,863,727	1,848,095
Treasury stock (68,006,575 and 68,617,419 shares, at cost, respectively)	(1,405,333)	(1,417,956)
Accumulated other comprehensive loss	(35,378)	(42,161)
Unallocated common stock held by ESOP (3,029,138 and 3,441,130 shares, respectively)	(11,098)	(12,607)
Total stockholders' equity	1,278,531	1,241,780
Total liabilities and stockholders' equity	$ 17,120,335	$ 18,089,269

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Information Related to Impaired Loans by Segment and Class (Detail) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	$ 389,020	$ 372,457
Recorded Investment	307,901	300,604
Related Allowance	(25,073)	(28,362)
Net Investment	282,828	272,242
One to Four Family | Full Documentation Interest Only Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	10,307	11,033
Recorded Investment	10,307	11,033
Related Allowance	(1,238)	(1,980)
Net Investment	9,069	9,053
One to Four Family | Full Documentation Amortizing Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	3,966	7,340
Recorded Investment	3,966	7,340
Related Allowance	(467)	(947)
Net Investment	3,499	6,393
One to Four Family | Reduced Documentation Interest Only Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	11,508	10,234
Recorded Investment	11,508	10,234
Related Allowance	(1,384)	(2,500)
Net Investment	10,124	7,734
One to Four Family | Reduced Documentation Amortizing Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,066	1,032
Recorded Investment	1,066	1,032
Related Allowance	(131)	(239)
Net Investment	935	793
Multi Family | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	53,844	51,793
Recorded Investment	53,134	51,084
Related Allowance	(14,278)	(14,349)
Net Investment	38,856	36,735
Commercial Real Estate | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	21,604	19,929
Recorded Investment	20,500	18,825
Related Allowance	(4,913)	(5,496)
Net Investment	15,587	13,329
Construction | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	5,916	6,546
Recorded Investment	5,806	6,435
Related Allowance	(2,662)	(2,851)
Net Investment	3,144	3,584
One to Four Family | Full Documentation Interest Only Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	92,071	87,110
Recorded Investment	66,285	64,185
Net Investment	66,285	64,185
One to Four Family | Full Documentation Amortizing Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	18,102	15,363
Recorded Investment	13,904	11,883
Net Investment	13,904	11,883
One to Four Family | Reduced Documentation Interest Only Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	150,797	145,091
Recorded Investment	106,652	105,905
Net Investment	106,652	105,905
One to Four Family | Reduced Documentation Amortizing Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	18,639	15,786
Recorded Investment	14,134	12,009
Net Investment	14,134	12,009
Construction | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Unpaid Principal Balance	1,200	1,200
Recorded Investment	639	639
Net Investment	$ 639	$ 639

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Losses Recognized on Assets Measured at Fair Value on A Non-Recurring Basis (Detail) (Level 3, USD $) In Thousands	6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Losses Recognized on Assets Measured at Fair Value on a Non-Recurring Basis	$ 33,393		$ 54,754
Non Performing Loans Held for Sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Losses Recognized on Assets Measured at Fair Value on a Non-Recurring Basis	821	[1]	11,936	[1]
Impaired Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Losses Recognized on Assets Measured at Fair Value on a Non-Recurring Basis	25,878	[2]	31,753	[2]
REO, net
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Losses Recognized on Assets Measured at Fair Value on a Non-Recurring Basis	$ 6,694	[3]	$ 11,065	[3]

[1] Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

[2] Losses are charged against the allowance for loan losses.

[3] Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

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Restricted Stock Activity in Stock Incentive Plans (Detail) (USD $)	6 Months Ended
	Jun. 30, 2011
Number of Shares
Beginning Balance	1,852,550
Granted	615,650
Vested	(36,585)
Forfeited	(4,806)
Ending Balance	2,426,809
Weighted-Average Grant Date Fair Value
Beginning Balance	$ 15.96
Granted	$ 14.29
Vested	$ (24.92)
Forfeited	$ (13.65)
Ending Balance	$ 15.41

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Fair Value Measurements - Additional Information (Detail)	6 Months Ended	12 Months Ended
	Jun. 30, 2011 Year Investment	Dec. 31, 2010 Year
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-For-Sale Residential Mortgage-backed Securities portfolio which are GSE securities	96.00%
MSR based on expected future cash flows, weighted average discount rate	10.94%	10.96%
MSR based on expected future cash flows, weighted average constant prepayment rate	18.42%	19.94%
MSR based on expected future cash flows, weighted average life	4.1	3.8

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Average Recorded Investment, Interest Income Recognized and Cash Basis Interest Income Related to Impaired Loans by Segment and Class (Detail) (USD $) In Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 310,307	$ 307,072
Interest Income Recognized	2,035	4,124
Cash Basis Interest Income	2,241	4,386
One to Four Family | Full Documentation Interest Only Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	10,498	10,676
Interest Income Recognized	101	216
Cash Basis Interest Income	115	216
One to Four Family | Full Documentation Amortizing Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	5,943	6,409
Interest Income Recognized	50	86
Cash Basis Interest Income	44	83
One to Four Family | Reduced Documentation Interest Only Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	11,268	10,923
Interest Income Recognized	105	257
Cash Basis Interest Income	117	270
One to Four Family | Reduced Documentation Amortizing Loans | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	1,186	1,135
Interest Income Recognized	11	24
Cash Basis Interest Income	11	23
Multi Family | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	54,409	53,301
Interest Income Recognized	542	1,280
Cash Basis Interest Income	626	1,310
Commercial Real Estate | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	19,896	19,539
Interest Income Recognized	334	665
Cash Basis Interest Income	318	651
Construction | With an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	6,121	6,225
Interest Income Recognized	25	56
Cash Basis Interest Income	28	59
One to Four Family | Full Documentation Interest Only Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	65,421	65,009
Interest Income Recognized	258	459
Cash Basis Interest Income	322	590
One to Four Family | Full Documentation Amortizing Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	12,882	12,549
Interest Income Recognized	14	18
Cash Basis Interest Income	22	36
One to Four Family | Reduced Documentation Interest Only Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	107,999	107,301
Interest Income Recognized	548	958
Cash Basis Interest Income	583	1,032
One to Four Family | Reduced Documentation Amortizing Loans | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	14,045	13,366
Interest Income Recognized	47	105
Cash Basis Interest Income	55	116
Construction | Without an allowance recorded
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 639	$ 639