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Astoria Financial Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 4, 2011 03:46PM

Astoria Financial Corp. (AF) filed Quarterly Report for the period ended 2011-09-30. Astoria Financial Corp. has a market cap of $801.1 million; its shares were traded at around $8.13 with a P/E ratio of 9.7 and P/S ratio of 0.8. The dividend yield of Astoria Financial Corp. stocks is 6.4%.



Highlight of Business Operations:

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 nine months ended September 30, 2011 decreased, compared to the three and nine months ended September 30, 2010, primarily due to decreases in the average balances of borrowings and certificates of deposit, 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 nine months ended September 30, 2011 compared to the three and nine months ended September 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 nine months ended September 30, 2011 compared to the same periods in 2010.

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 September 30, 2011, we had 38 securities with an estimated fair value totaling $46.1 million which had an unrealized loss totaling $585,000. Of the securities in an unrealized loss position at September 30, 2011, $16.5 million, with an unrealized loss of $321,000, have been in a continuous unrealized loss position for more than twelve months. At September 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.

Net income for the three months ended September 30, 2011 decreased $10.3 million to $11.2 million, from $21.5 million for the three months ended September 30, 2010. Diluted earnings per common share decreased to $0.12 per share for the three months ended September 30, 2011, from $0.23 per share for the three months ended September 30, 2010. Return on average assets decreased to 0.26% for the three months ended September 30, 2011, from 0.44% for the three months ended September 30, 2010, due to the decrease in net income, partially offset by a decrease in average assets. Return on average stockholders equity decreased to 3.51% for the three months ended September 30, 2011, from 6.97% for the three months ended September 30, 2010. Return on average tangible stockholders equity, which represents average stockholders equity less average goodwill, decreased to 4.11% for the three months ended September 30, 2011, from 8.21% for the three months ended September 30, 2010. The decreases in the returns on average stockholders equity and average tangible stockholders equity for the three months ended September 30, 2011, compared to the three months ended September 30, 2010, were primarily due to the decrease in net income.

Net income for the nine months ended September 30, 2011 increased $5.5 million to $55.4 million, from $49.9 million for the nine months ended September 30, 2010. Diluted earnings per common share increased to $0.58 per share for the nine months ended September 30, 2011, from $0.53 per share for the nine months ended September 30, 2010. Return on average assets increased to 0.42% for the nine months ended September 30, 2011, from 0.34% for the nine months ended September 30, 2010, due to the increase in net income and a decrease in average assets. Return on average stockholders equity increased to 5.85% for the nine months ended September 30, 2011, from 5.45% for the nine months ended September 30, 2010. Return on average tangible stockholders equity increased to 6.85% for the nine months ended September 30, 2011, from 6.43% for the nine months ended September 30, 2010. The increases in the returns on average stockholders equity and average tangible stockholders equity for the nine months ended September 30, 2011, compared to the nine months ended September 30, 2010, were due to the increase in net income, partially offset by an increase in average stockholders equity.

Our results of operations for the nine months ended September 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 nine months ended September 30, 2010, these net charges reduced diluted earnings per common share by $0.02 per share, return on average assets by 1 basis point, return on average stockholders equity by 23 basis points and return on average tangible stockholders equity by 27 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 and Note 5 of Notes to Consolidated Financial Statements in Item 1, “Financial Statements (Unaudited),” in this Quarterly Report on Form 10-Q.

Read the The complete Report



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