Astoria Financial Profits Up 14%

Interest income from home loans grows 12%.
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Astoria Financial

(AF)

said fourth-quarter profit rose 14% from a year ago, with interest income from home loans growing 12%.

The bank earned $57.7 million, or 57 cents a share, in the quarter, compared with $50.5 million, or 48 cents a share, a year ago, in line with analysts' estimates.

The bank generated net interest income before taxes of $113.7 million for the quarter, a decrease of 6% over the same period in 2004. Fourth-quarter 2005 net interest margin was 2.12%, lower by 6 basis points over a year ago due to the company's core interest rate spread declining 18 basis points. A writedown of $16.5 million for impairment in fourth quarter 2004 had depressed income in that quarter.

Non-interest income was $26.6 million compared to $22.6 million, excluding the $16.5 million impairment charge in the year ago period.

The return on shareholders' equity in the last quarter of 2005 was 16.97% while the return on assets was 1.03%.

At Dec. 31, 2005, nonperforming assets increased to $65.0 million, or 29 basis points of total assets, from $37.9 million, or 17 basis points of total assets, on Sept. 30, 2005.

The company declared a quarterly cash dividend of 24 cents a share, an increase of 20%.

"Astoria will continue the strategy of shrinking the balance sheet through a reduction in the securities portfolio and borrowings, and emphasize deposit and loan growth, all of which will continue to improve both the quality of the balance sheet and earnings," the company said.

For the year ended Dec. 31, 2005, total securities fell to $2.1 billion, or 25%, and borrowings decreased $1.5 billion, or 16%.

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