Profits increase 20% at Astoria Financial
Astoria Financial Corp., one of Long Island's largest banking companies, Wednesday reported a 20 percent increase in third-quarter profits.
It cited cost-cutting measures, fewer nonperforming assets such as loans in default, and a higher proportion of higher-yield multifamily and commercial real estate loans.
The Lake Success-based parent of the 85-branch Astoria Federal Savings and Loan Association said its net income for the three months ended Sept. 30 was $13.4 million, or 14 cents a share, up 20 percent and 17 percent respectively, over the same period a year earlier.
The bank had reported a 28 percent year-over-year decline in per-share earnings for the second quarter, to 13 cents a share. At the time, it said that year-to-year comparisons were misleading because the bank was in the process of shifting its focus from residential lending to multifamily residential and commercial mortgages.
Monte N. Redman, president and chief executive, said in a statement Wednesday, "Our focus on controlling operating expenses has resulted in a positive contribution to earnings, while efforts to reposition both the asset and liability sides of our balance sheet continue to progress, and asset quality continues to improve."
Astoria said net interest income for the third quarter was down 5 percent from a year earlier, to $86 million. Net interest margin, the difference between the interest a bank earns on its assets such as loans and investments and the interest it pays out to depositors, was 2.09 percent for the quarter, down from 2.27 percent a year earlier. It cited the interest costs of "senior" debt for both declines.
The bank also said it reduced its provision for loan losses in the quarter to $9.5 million from $10 million a year earlier.
General and administrative expense for the quarter was $72.6 million, down from $78.6 million a year earlier "due primarily to reduced compensation and benefits expense as a result of the cost-control initiatives implemented in the 2012 first quarter," Astoria said.
Astoria's total assets of $17 billion at Sept. 30 were up $16.1 million from the end of last year.
Nonperforming loans totaled $322.2 million, or 1.89 percent of total assets at Sept. 30, 2012, down $21.1 million from the previous quarter.