Astoria Financial Corp., the Lake Success-based parent of Astoria Federal...

Astoria Financial Corp., the Lake Success-based parent of Astoria Federal Savings, says its fourth-quarter net income rose by 19 percent. Astoria is one of the largest banks based on Long Island. Above is a local branch in Port Washington. Credit: Ian J. Stark

Astoria Financial Corp., the Lake Success-based parent of Astoria Federal Savings and Loan, said fourth-quarter net income rose by 19 percent, helped by a reduced provision for loan losses and lower operating expenses.

Astoria, one of the largest banks based on Long Island, said it earned $20.1 million or 18 cents a share in the three months ended Dec. 31 compared with $16.9 million or 17 cents a share a year earlier. Total assets fell by 4.3 percent from a year earlier to $15.8 billion, mostly due to decreases in the residential mortgage loan portfolio.

Net interest income, the difference between the revenue generated from a bank's assets and the expenses associated with liabilities, fell by less than 1 percent to $86.8 million, but Astoria's provision for loan losses fell 69 percent from the quarter a year earlier, to $3.4 million. Noninterest income fell by 19.6 percent to $17.4 million without last year's $6 million gain on the sale of securities, and despite an almost doubling of mortgage banking income.

Net interest margin, a measure of the difference between the interest a bank earns on its assets such as loans and the interest it pays out to depositors, increased to 2.31 percent from 2.21 percent for the 2012 fourth quarter.

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