UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A
  
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

 

Filed by the Registrant

x

Filed by a Party other than the Registrant

o

Check the appropriate box:

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Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material under Rule 14a-12

Astoria Financial Corporation

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

x

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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Title of each class of securities to which transaction applies:

2)

Aggregate number of securities to which transaction applies:

3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

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Fee paid previously with preliminary materials.

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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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		One Astoria FederalBank Plaza Lake Success, NY 11042-1085 (516) 327-3000

April 11, 201417, 2015

Dear Fellow Shareholder:

      I am very pleased to invite you to Astoria Financial Corporation’s Annual Meeting of Shareholders to be held at The Inn at New Hyde Park, 214 Jericho Turnpike, New Hyde Park, New York 11040 on Wednesday, May 21, 2014,27, 2015, at 9:30 a.m., Eastern Time. At this meeting, you will be asked to consider and act upon the matters described in the enclosed Notice of Annual Meeting of Shareholders.

      This year, we are again using certain rules established by the Securities and Exchange Commission that allow us to furnish our proxy materials to shareholders over the Internet. As a result, certain shareholders who are eligible to vote at the Annual Meeting of Shareholders will receive only a notice containing instructions on how to access the proxy materials over the Internet and vote online. The notice explains how to arrange to have the printed materials sent to you by mail. The proxy materials available online include our 20142015 Proxy Statement and a copy of our 20132014 Annual Report and Form 10-K, which includes our annual financial statements for the fiscal year ending December 31, 2013.2014.

      Even if you plan to attend in person, you are encouraged to review the proxy materials and vote your shares in advance of the meeting. Your vote is extremely important. We appreciate your taking the time to vote promptly.

Sincerely

Monte N. Redman
President and Chief Executive Officer

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		One Astoria FederalBank Plaza Lake Success, NY 11042-1085 (516) 327-3000

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 21, 201427, 2015

The Annual Meeting of Shareholders of Astoria Financial Corporation will be held on Wednesday, May 21, 2014,27, 2015, at 9:30 a.m., Eastern Time, at The Inn at New Hyde Park, 214 Jericho Turnpike, New Hyde Park, New York 11040. The meeting will be held to consider and act upon the following matters:

1.

The election of twothree directors for terms of three years each;

2.

The approval of the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation;

3.

The approval of the Astoria Financial Corporation Executive Officer Annual Incentive Plan, as Amended March 19, 2014;

4.

The approval, on a non-binding basis, of the compensation of our named executive officers;

5.3.

The ratification of the appointment of our independent registered public accounting firm.

Shareholders may also be asked to vote upon such other business as may properly come before the Annual Meeting, and any adjournment or postponement thereof. Please note that we are not aware of any such other business.

Holders of record of Astoria Financial Corporation common stock as of the close of business on March 27, 201430, 2015 are entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. A list of shareholders entitled to vote at the Annual Meeting will be available at the meeting and at Astoria Financial Corporation, One Astoria FederalBank Plaza, Lake Success, New York 11042 for a period of ten days prior to the meeting.

For the convenience of our shareholders, proxies may be given either by telephone, electronically through the Internet, or by completing, signing, and returning the enclosed proxy card. In addition, shareholders may elect to receive future shareholder communications, including proxy materials, through the Internet. Instructions for each of these options can be found in the enclosed materials.

By order of the Board of Directors

Michele M. Weber
FirstSenior Vice President
Secretary and Senior CounselSecretary

April 11, 201417, 2015

General Information			1
Voting and Quorum Requirements			2
How to Vote			2
Revocation of Proxies			3
Interests of Certain Persons in Certain Proposals			3
Security Ownership of Certain Beneficial Owners			4
PROPOSAL NO. 1 — ELECTION OF DIRECTORS			6
Board Nominees, Directors and Executive Officers			6
Biographical Information			7
Directors and Board Nominees			7
Executive Officers Who Are Not Directors			10
Director Independence			12
Director Independence Standards			1311
Board Leadership Structure			1412
Oversight of Risk Management			1412
Identifying and Evaluating Nominees for Director			1513
Committees and Meetings of the Board			1613
Compensation Committee			1614
Nominating and Corporate Governance Committee			1816
Audit Committee			1917
Transactions with Certain Related Persons			1917
Security Ownership of Management			2220
Compensation Committee Interlocks and Insider Participation			2321
Director Compensation			2422
Directors’ and Other Fee Arrangements			2422
1999 Directors Option Plan			2422
2007 Director Stock Plan			2523
Directors’ Retirement Plan			2523
Directors’ Death Benefit			2724
Travel Expenses and Other Perquisites			2724
20132014 Director Compensation Table			2825
Executive Compensation			2926
Compensation Committee Report			2926
Compensation Discussion and Analysis (CD&A)			2926
Executive Compensation Philosophy			2926
Consideration of Prior Say-on-Pay Votes			3229
Base Salary			3229
Short-Term Non-Equity Incentive Plan Compensation			3430
Equity-Based Compensation			3632
Retirement Benefits			3733
Perquisites			3934
Other Banking Services			4035
Company-Provided Automobiles			4035
Use of Corporate Aircraft and Other Travel-Related Expenses			4035
Other Benefits			4035
Cash versus Non-cash and Current versus Future Compensation			4035

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Summary Compensation Table			4136
All Other Compensation Table			4237
20132014 Grants of Plan-Based Awards Table			4439
20132014 Outstanding Equity Awards At Fiscal Year-End Table			4641
20132014 Stock Vested			4742
Additional DB Plan Information			4743
20132014 Pension Benefits Table			4945
Other Potential Post-Employment Payments			5045
PROPOSAL NO. 2 — APPROVAL OF THE 2014 AMENDED AND RESTATED STOCK INCENTIVE PLAN FOR OFFICERS AND EMPLOYEES OF ASTORIA FINANCIAL CORPORATION			57
PROPOSAL NO. 3 — APPROVAL OF THE ASTORIA FINANCIAL COROPORATION EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN, AS AMENDED MARCH 19, 2014			64
PROPOSAL NO. 4 — NON-BINDING ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE NAMED EXECUTIVES			6851
PROPOSAL NO. 53 — RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			6952
KPMG LLP Fees Billed For The Fiscal Years Ended December 31, 20122013 and 20132014			6952
Audit Committee			7053
Report of the Audit Committee			7053
Additional Information			7154
Section 16(a) Beneficial Ownership Reporting Compliance			7154
Cost of Proxy Solicitation			7154
Shareholder Proposals			7154
Notice of Business to be Conducted at an Annual Meeting			7154
Shareholder Communications			7255
Director Attendance at Annual Meetings			7255
Householding			7255
Other Matters Which May Properly Come Before the Meeting			73
EXHIBIT A — THE 2014 AMENDED AND RESTATED STOCK INCENTIVE PLAN FOR OFFICERS AND EMPLOYEES OF ASTORIA FINANCIAL CORPORATION			74
EXHIBIT B — THE ASTORIA FINANCIAL CORPORATION EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN, AS AMENDED MARCH 19, 2014			9856

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ASTORIA FINANCIAL CORPORATION

One Astoria FederalBank Plaza
Lake Success, New York 11042-1085

 

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
May 21, 201427, 2015

 

General Information

This Proxy Statement and the accompanying proxy card are being furnished to holders of Astoria Financial Corporation, referred to as AFC, common stock in connection with the solicitation of proxies by the Board of Directors of AFC, referred to as the Board, for use at the AFC Annual Meeting of Shareholders to be held on May 21, 2014,27, 2015, and at any adjournments or postponements thereof, referred to as the Annual Meeting. AFC’s Annual Meeting will be held at 9:30 a.m., Eastern Time, at The Inn at New Hyde Park, 214 Jericho Turnpike, New Hyde Park, New York 11040. Only holders of record of AFC’s issued and outstanding common stock, par value $0.01 per share, referred to as AFC Common Stock, as of the close of business on March 27, 2014,30, 2015, referred to as the Record Date, are entitled to vote at the Annual Meeting. Holders of AFC’s depositary shares, each representing a  1/40^th interest in a share of AFC’s Series C Non-Cumulative Perpetual Preferred Stock, referred to as Depositary Shares, are not entitled to vote at the Annual Meeting. AFC’s 20132014 Annual Report and Form 10-K, which includes the consolidated financial statements of AFC for the fiscal year ended December 31, 2013,2014, referred to as the Consolidated Financial Statements, accompany this Proxy Statement and the proxy card which are first being mailed or given on or about April 11, 201417, 2015 to shareholders of record as of the Record Date. AFC is the parent company of Astoria Federal Savings and Loan Association,Bank, referred to as the Association.Bank.

Under rules and regulations of the Securities and Exchange Commission, referred to as the SEC, instead of mailing a printed copy of our proxy materials to each shareholder of record or beneficial owner of AFC Common Stock, we are furnishing proxy materials, which include our Proxy Statement and AFC’s 20132014 Annual Report and Form 10-K, which includes the Consolidated Financial Statements, to certain of our shareholders over the Internet and providing an Important Notice Regarding the Availability of Proxy Materials, referred to as the Notice, by mail. AFC is mailing the Notice to such shareholders on or about April 11, 2014.17, 2015. Those shareholders who receive the Notice by mail will not receive a printed copy of the proxy materials unless they request to receive these materials in hard copy by following the instructions provided in the Notice. The Notice also will instruct those shareholders as to how they may access and review all of the important information contained in the proxy materials, including how they may submit their proxy, all via the Internet.

If you received the Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice. If you intend to request such materials, we encourage you to do so promptly. In any case, you must request such materials no later than May 6, 2014,12, 2015, in order to allow timely delivery to you.

IMPORTANT INFORMATION REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 2014:

27, 2015:

THE PROXY STATEMENT AND ANNUAL REPORT TO SHAREHOLDERS ARE AVAILABLE AT
www.edocumentview.com/af

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Voting and Quorum Requirements

As of the Record Date, there were 99,408,856100,396,907 shares of AFC Common Stock issued and outstanding and entitled to vote at the Annual Meeting. Except as described below, each share of AFC Common Stock outstanding on the Record Date entitles the holder thereof to one vote on each matter to properly come before the Annual Meeting. The presence, either in person or by proxy, of the holders of a majority of all of the shares of AFC Common Stock entitled to vote at the Annual Meeting is necessary to constitute a quorum at the Annual Meeting.

The election of directors shall be by a plurality of votes cast by the holders of AFC Common Stock present at the Annual Meeting, in person or by proxy, and entitled to vote thereon. However, in uncontested elections under AFC’s Corporate Governance Guidelines, any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation from the Board following certification of the shareholder vote. The Nominating and Corporate Governance Committee shall consider the resignation offer and recommend to the Board whether to accept it. The Board will act on the Nominating and Corporate Governance Committee’s recommendation within 90 days following certification of the shareholder vote. Promptly thereafter, AFC will publicly disclose the Board’s decision whether to accept such director’s resignation or, if applicable, the reasons for rejecting the resignation offer. Holders of AFC Common Stock may not vote their shares cumulatively with respect to the election of directors.

The approval, of the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, referred to as the 2014 Stock Incentive Plan, the approval of the Astoria Financial Corporation Executive Officer Annual Incentive Plan, as Amended March 19, 2014, referred to as the Executive Incentive Plan, the approval, on a non-binding basis, of the compensation of our named executive officers and the ratification of the appointment of KPMG LLP as the independent registered public accounting firm for AFC each require the affirmative vote of a majority of the votes cast by the holders of AFC Common Stock present at the Annual Meeting, in person or by proxy, and entitled to vote thereon.

Shares of AFC Common Stock as to which the “ABSTAIN” box has been selected on the proxy card with respect to the approval of the 2014 Stock Incentive Plan, the approval of the Executive Incentive Plan, the approval, on a non-binding basis, of our named executive officer compensation or the ratification of the appointment of KPMG LLP as the independent registered public accounting firm for AFC will be counted as present, entitled to vote and cast and will have the effect of a vote against such approval or ratification, as the case may be. In contrast, shares of AFC Common Stock underlying broker non-votes and shares for which a proxy card is not returned will not be counted as present and entitled to vote and will have no effect on the vote on such proposals.

Because the vote on the non-binding proposal to approve the named executive officer compensation is advisory, it will not be binding on the Board. However, the Board will consider the outcome of the vote when considering future executive compensation arrangements.

How to Vote

You may vote your shares:

(1)By Internet.  Vote at the Internet address shown on your proxy card or voting instruction form.card. The Internet voting system is available 24 hours a day until 11:59 p.m., Eastern Time, on Tuesday, May 20, 2014.26, 2015. Once you are in the Internet voting system, you can record and confirm or change your voting instructions.

(2)By mail.  If you received the Proxy Statement by mail, you may mark and sign the enclosed proxy card or voting instruction form and return it in the enclosed postage-paid envelope.

(3)By telephone.  Vote by telephone using the instructions on the enclosed proxy card or voting instruction form.card.

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Every properly executed proxy card that is received by AFC prior to the closing of the polls at the Annual Meeting will be voted in accordance with the instructions contained therein unless otherwise revoked. Properly executed but unmarked proxy cards received by AFC prior to the closing of the polls at the Annual Meeting, unless otherwise revoked, will be voted FOR the election of the Board’s nominees as directors, FOR the approval of the 2014 Stock Incentive Plan, FOR the approval of the Executive Incentive Plan, FOR the approval, on an advisory basis, of the compensation of our named executive officers, and FOR the ratification of the appointment of our independent registered public accounting firm.

Alternatively, you may attend the Annual Meeting and vote in person. Voting over the Internet, by telephone or by mailing a proxy card will not limit your right to vote in person or attend the Annual Meeting. Shareholders who desire to attend the Annual Meeting may obtain driving directions by calling The Inn at New Hyde Park at (516) 354-7797 or AFC’s Investor Relations Department at (516) 327-7869.

If you are a shareholder whose shares are not registered in your name, you will need an assignment of voting rights from the shareholder of record to vote personally at the Annual Meeting.

Pursuant to the Certificate of Incorporation of AFC, no record shareholder of AFC Common Stock who, as of the Record Date, beneficially owns, directly or indirectly, more than ten percent (10%) of AFC Common Stock outstanding on such date will be entitled or permitted to vote any shares of AFC Common Stock in excess of ten percent (10%) of AFC Common Stock outstanding as of the Record Date. For purposes of this limitation, neither the ESOP, nor the trustee of such plan, is considered the beneficial owner of the AFC Common Stock held by the ESOP as of the Record Date.

Participants in the Astoria Federal Savings and Loan Association Employee Stock OwnershipBank 401(k) Plan, referred to as the ESOP, and the Astoria Federal Savings and Loan Association Incentive Savings401(k) Plan, referred to as the Incentive Savings Plan, in each case as of the Record Date, have the right to participate in directing the voting of AFC Common Stock held in their plan accounts as of that date, but do not have the right to vote those shares personally at the Annual Meeting. Such participants should refer to the voting instructions provided by the plan fiduciaries for information on how to direct the voting of such shares.

Revocation of Proxies

Any shareholder who executes a proxy (including a proxy given over the Internet or by telephone) has the right to revoke it at any time before it is voted at the Annual Meeting. A proxy may be revoked by delivering to the Secretary of AFC, at its principal office or at the Annual Meeting prior to the closing of the polls at the Annual Meeting, either a written revocation or a proxy (including a proxy given over the Internet or by telephone), duly executed, bearing a later date, or by attending the Annual Meeting and voting in person.

Interests of Certain Persons in Certain Proposals

AFC’s executive officers, including the two executive officers who are members of the Board, have an interest in threeone of the proposals that will be acted upon at the Annual Meeting that areis different from the interestsinterest of AFC’s shareholders generally. At the Annual Meeting, shareholders will be asked to vote on Proposal No. 2 to approve the 2014 Stock Incentive Plan. If the proposal is adopted, each of AFC’s executive officers will continue to be eligible to receive a portion of their compensation for services, as an executive officer, in the form of stock option grants, grants of stock appreciation rights and awards of restricted stock and restricted stock units. Shareholders will also be asked to vote on Proposal No. 3 to approve the Executive Incentive Plan, under which executive officers may earn performance-based incentive awards upon attainment of performance goals. Shareholders will also be asked to cast a non-binding advisory vote on Proposal No. 42 regarding the compensation of our named executive officers, and the resultsresult of such advisory vote may influence future compensation decisions. The Board was aware of these intereststhis interest and took themit into account in recommending that shareholders vote in favor of Proposal No. 2, Proposal No. 3 and Proposal No. 4.2.

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Security Ownership of Certain Beneficial Owners

The following table sets forth information, as of the Record Date, with respect to the beneficial ownership of AFC Common Stock by each person or group of persons, as defined by Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, referred to as the Exchange Act, known to AFC to be the beneficial owner of more than five percent (5%) of AFC voting stock. For purposes of the Annual Meeting, AFC Common Stock is the only AFC voting stock outstanding.

Name & Address of Beneficial Owner		Amount and Nature of Beneficial Ownership				Percent of Class				Amount and Nature of Beneficial Ownership				Percent of Class(1)
Committee under the ESOP, Committee appointed as Plan Administrator of the Incentive Savings Plan, and Trustee of the Association Employees’ Pension Plan c/o Astoria Federal Savings and Loan Association One Astoria Federal Plaza Lake Success, New York 11042			9,872,566	(1)			9.93
FMR LLC 245 Summer Street Boston, Massachusetts 02210			9,274,999	(2)			9.33				9,274,999	(2)			9.24
Wellington Management Company, LLP 280 Congress Street Boston, Massachusetts 02210			8,836,800	(3)			8.89
Black Rock, Inc. 40 East 52nd Street New York, New York 10022			7,194,987	(4)			7.24
Committee appointed as Plan Administrator of the 401(k) Plan, and Trustee of the Bank Employees’ Pension Plan c/o Astoria Bank One Astoria Bank Plaza Lake Success, New York 11042											8,352,060	(3)			8.32
Dimensional Fund Advisors LP Palisades West, Building One 6300 Bee Cave Road Austin, Texas 78746			6,215,892	(5)			6.25				7,314,934	(4)			7.29
BlackRock, Inc. 55 East 52nd Street New York, New York 10022											7,153,776	(5)			7.13
Wellington Management Group LLP c/o Wellington Management Company LLP 280 Congress Street Boston, Massachusetts 02210											6,159,137	(6)			6.13
The Vanguard Group 100 Vanguard Boulevard Malvern, Pennsylvania 19355											5,367,622	(7)			5.35
Citadel Advisors LLC Citadel Advisors Holdings II LP Citadel GP LLC and Kenneth Griffin c/o Citadel LLC 131 S. Dearborn Street, 32nd Floor Chicago, Illinois 60603											5,036,235	(8)			5.02

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS

The Board consists of eight (8)seven (7) directors divided into three classes: two classes of three directors each and one class of two directors.one director. Upon election by the shareholders, the directors of each class generally serve for a term of three years, with the directors of one class elected each year. From time to time, nominees may be recommended for shorter terms to either reclassify the directors, so as to maintain the classes as equal in number as possible, or to provide earlier shareholder input in filling recent vacancies.

In order to accommodate the addition of Patricia M. Nazemetz to the Board, the size of the Board was increased to nine (9) directors in January, 2013. In February, 2013, John J. Conefry, Jr. retired. Effective upon his retirement, the Board eliminated his seat and reduced the size of the Board to eight (8) directors. The size of the Board was again increased to nine (9) directors in connection with Jane D. Carlin’s election in January, 2014 and was again decreased to eight (8) directors, effective upon the mandatory retirement of Peter C. Haeffner, Jr., in February, 2014.

In all cases, directors serve until their respective successors are duly elected and qualified. Pursuant to the Bylaws of AFC, no person is eligible for election or appointment as a director who is seventy-five (75) years of age or older, and no person shall continue to serve as a director after the regular Board meeting immediately preceding such director’s seventy-fifth (75^th) birthday, referred to as mandatory retirement.

On February 10, 2015, Jane D. Carlin resigned from the Board. Ms. Carlin’s resignation was not the result of any disagreements with AFC or the Bank known by any executive officer. On February 25, 2015, the Board reduced the size of the Board to seven (7) directors.

The directors whose terms expire at the Annual Meeting are Ralph F. PalleschiMonte N. Redman, Gerard C. Keegan and Jane D. Carlin.Patricia M. Nazemetz. Each of the directors whose terms expire at the Annual Meeting, referred to individually as a Board Nominee and collectively as the Board Nominees, has been nominated by the Board, based on the recommendation of the Nominating and Corporate Governance Committee, to stand for re-election, and, if elected, to serve for a term expiring at the annual meeting of shareholders of AFC to be held in 2017.2018. Each Board Nominee has consented to being named in this Proxy Statement and to serve as a director of AFC if elected.

If any Board Nominee should refuse or be unable to serve, the proxies will be voted for such person as shall be designated by the Board, based upon the recommendation of the Nominating and Corporate Governance Committee, to replace such nominee. The Board presently has no knowledge that any of the Board Nominees will refuse or be unable to serve.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS AVOTE FOR THE BOARD NOMINEES FOR ELECTION AS DIRECTORS OF AFC FOR TERMS OF THREE YEARS EACH.

Board Nominees, Directors and Executive Officers

The following table sets forth information regarding the Board Nominees and other members of the Board.

Name		Age(1)		Positions Held with AFC(2)		Director Since		Term Expires		Age(1)		Positions Held with AFC(2)		Director Since		Term Expires
Ralph F. Palleschi		67		Director, Chairman of the Board and Board Nominee		1996		2014		68		Director and Chairman of the Board		1996		2017
Monte N. Redman		63		Director, President and Chief Executive Officer		2011		2015		64		Director, President, Chief Executive Officer and   Board Nominee		2011		2015
Gerard C. Keegan		67		Director, Vice Chairman, Senior Executive   Vice President and Chief Operating Officer		1997		2015		68		Director, Vice Chairman, Senior Executive   Vice President, Chief Operating Officer and   Board Nominee		1997		2015
Jane D. Carlin		58		Director and Board Nominee		2014		2014
John R. Chrin		50		Director		2009		2016		51		Director		2009		2016
John J. Corrado		52		Director		2012		2016		53		Director		2012		2016
Brian M. Leeney		64		Director		2009		2016		65		Director		2009		2016
Patricia M. Nazemetz		64		Director		2013		2015		65		Director and Board Nominee		2013		2015

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The following table sets forth information regarding the non-director executive officers of AFC.

Name		Age(1)		Positions Held With AFC(1)
Hugh J. Donlon		51		Senior Executive Vice President and Chief Lending Officer
Alan P. Eggleston		6061		Senior Executive Vice President and Chief Risk Officer
Frank E. Fusco		5051		Senior Executive Vice President and Chief Financial Officer
Josie Callari		6162		Executive Vice President
Robert J. DeStefano		5556		Executive Vice President
Brian T. Edwards		53		Executive Vice President
Matthew J. Gutauskas		4154		Executive Vice President
Stephen J. Sipola		5657		Executive Vice President

All executive officers of AFC are elected annually and serve until their respective successors have been chosen, subject to their removal as officers at any time by the affirmative vote of a majority of the authorized number of directors then constituting the Board. For additional information, see Compensation Discussion and Analysis, referred to as the CD&A, commencing on page 2926.

Biographical Information

The following is a brief description of the business experience of the directors, Board Nominees and executive officers for at least the past five years and their respective directorships, if any, with other public companies that are subject to the reporting requirements of the Exchange Act. Also set forth below for each director and Board Nominee is a description of the specific experience, qualifications, attributes or skills that led the Nominating and Corporate Governance Committee and the Board to the conclusion that such person should serve as a director of AFC. In addition, each Board Nominee has been reviewed by the Nominating and Corporate Governance Committee of the Board based upon AFC’s Nominee Qualification Guidelines. For further information regarding AFC’s Nominee Qualification Guidelines, see page 1813.

There is no family relationship between any director, Board Nominee or executive officer of AFC. There are no proceedings to which AFC or any of its subsidiaries is a party or of which any of their property is the subject to which any director, officer or affiliate of AFC, any owner of record or beneficially of more than five percent (5%) of any class of AFC voting stock, or any associate of any such director, officer, affiliate or security holder, is a party adverse to AFC or any of its subsidiaries or has a material interest adverse to AFC or its subsidiaries.

Directors and Board Nominees

Monte N. Redman has served as President, Chief Executive Officer and a director of AFC and the AssociationBank since July 2011. He served as President and Chief Operating Officer of AFC and the AssociationBank from August 2007 to June 2011. He served as Executive Vice President and Chief Financial Officer of AFC from December 1997 to August 2007. He served as Senior Vice President, Treasurer and Chief Financial Officer of AFC from its formation in 1993 to 1997. He joined the AssociationBank in 1977. In 1979, he was named Assistant Controller, and, in 1982, Assistant Vice President. Mr. Redman became Vice President and Investment Officer in 1985, was appointed Senior Vice President, Treasurer and Chief Financial Officer in 1989 and was appointed Executive Vice President and Chief Financial Officer in 1997. He is a member of the board of directors of the Federal Home Loan Bank of New York. He serves on the Boardboard of Directorsdirectors of the New York Banker’s Association and is the past Chairman and current member of the Boardboard of Directorsdirectors of the national Tourette Syndrome Association.

Mr. Redman brings to his position over thirty-sixthirty-seven years of experience with the Association,Bank, with over twenty-five of them as an executive officer, of which for eighteen years he was Chief Financial Officer. As such, he is familiar with all material aspects of the business of AFC and the Association,Bank, their culture and markets. Mr. Redman has been a primary spokesman for AFC with the investing public since AFC’s initial public offering in 1993. He is well versed in the regulatory and other issues facing AFC and its industry.

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Mr. Redman has a background in accounting and finance. He has extensive experience managing the AssociationBank through a wide range of interest rate and economic cycles. His executive management experience

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Brian M. Leeneyhas been a director of AFC and the AssociationBank since August 2009. He serves as Chairman of the Enterprise Risk Management Committee of the Board. From 1968 to 2003, Mr. Leeney served in a variety of capacities for Allied Irish Banks and its subsidiary companies. From 2002 to 2003 and from 1996 to 2001, he served as Executive Vice President and Director of Mergers and Acquisitions and as Executive Vice President and General Manager, respectively, of Allied Irish Banks USA. From 2001 to 2002, he served as Chairman and Chief Executive Officer of CCS, Inc., a philanthropic fund raising consulting firm. From 1994 to 1995, he served as Executive Vice President and Head of the Commercial Real Estate Division of First Maryland Bancorp. From 1991 to 1994, he served as Senior Vice President and General Manager of Allied Irish Banks New York and, from 1968 to 1990, he held a variety of positions with Allied Irish Banks in Dublin, Ireland.

Mr. Leeney brings extensive experience in commercial banking, commercial and industrial lending and real estate lending. He has extensive experience in management, strategic planning and operating a large financial institution. He has experience in mergers and acquisitions and in credit, risk management, bank marketing, sales and community outreach efforts.

Patricia M. Nazemetzhas been a director of AFC and the AssociationBank since January 2013. She serves as ChairwomanChair of the Compensation Committee of the Board. Since 2011, she has served as principal of NAZ DEC LLC, a human resources consulting company specializing in executive succession and transition. From 1999 to 2011, she served as Corporate Vice President and Chief Human Resources Officer of Xerox Corporation, overseeing all human resources programs, policies and practices, and providing regular advice and counsel to the CEO and the senior management team. From 1979 to 1999, she worked within the Human Resources Department of Xerox Corporation and was responsible for executive compensation, employee benefits, global pay strategy, workplace diversity and information systems. Ms. Nazemetz served on the board of directors of WMS Industries Inc., a NYSE-listed company, as well as such board’s Compensation Committee and Nominating and Corporate Governance Committee until its acquisition by Scientific Games Corporation in October 2013. She servesserved on the board of directors of the Catholic Health Services of Long Island, where she chairschaired the Personnel and Benefits Committee and servesserved as a member of the Compensation and Audit Committees. She is a member of the board of trustees of Fordham University and also serves on the board of the Muscular Dystrophy Association. Since March 2015, she has served as a member of the board of directors of YRC Worldwide Inc., a public company, and served as a member of the board of directors of Energy East Corp., a public company, from 2007 to 2008.

Ms. Nazemetz brings extensive experience to all aspects of human resources management, including executive compensation, succession planning, employee benefits, health care and corporate ethics. Ms. Nazemetz has extensive experience as an independent director on the boards of other mid-sized to large public companies.

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Executive Officers Who Are Not Directors

Hugh J. Donlon has served as Senior Executive Vice President and Chief Lending Officer of AFC and the Bank since October 2014. He is responsible for the overall management and growth of the Bank’s loan portfolio and lending activities including residential mortgage lending, multi-family/commercial real estate lending and business banking. Prior to joining the Bank, he served as President of the Eastern Region of KeyBank from 2008 to 2014. At KeyBank, he was responsible for eight district teams and 1,800 employees across New York including the metro New York City area, Vermont, Maine and Florida. His responsibilities included KeyBank’s 340 branch retail franchise, business banking, commercial banking, which covered middle market companies with annual revenues up to $500 million, and private banking, which provided investment management, trust and advisory services to high net worth individuals. Prior to joining KeyBank, Mr. Donlon spent 23 years at Citibank in a variety of sales and leadership roles of increasing responsibility in retail, business and commercial banking. These included Sales Director of Citibank F.S.B New Jersey, Executive Vice President of the Commercial Markets Group responsible for Manhattan Commercial Banking and Managing Director of U.S. Business Banking for Citibank North America. He serves on the board of directors of the New York Business Development Corporation and is a member of its Executive Committee.

Alan P. Eggleston, an attorney, has served as Senior Executive Vice President and Chief Risk Officer of AFC and the AssociationBank since January 2012 and Assistant Secretary of AFC and the Bank since January 2014. He served as Secretary of AFC and the AssociationBank from March 2001 to December 2013. He is responsible for the legal, regulatory affairs, enterprise risk management, credit, asset review and compliance areas of AFC and the Association.Bank. He served as Executive Vice President and General Counsel of AFC and the AssociationBank from December 1997 to December 2011. He served as Senior Vice President and General Counsel of AFC from 1996 to 1997. He joined the AssociationBank in 1993 as Vice President and General Counsel. In 1994, he was named Vice President and General Counsel of AFC. In 1995, he became First Vice President and General Counsel of AFC and the Association.Bank. Prior to joining the Association,Bank, he served as an executive officer and counsel to several thrift institutions.

Frank E. Fusco,a certified public accountant, has served as Senior Executive Vice President since January 2012 and as Chief Financial Officer of AFC and the AssociationBank since August 2007. He served as Treasurer of AFC and the AssociationBank from 2007 to 2012. He is responsible for the treasury operations, investments, accounting operations, investor relations, financial, management and tax reporting areas, the financial planning area and the information services area of the AssociationBank and AFC. He joined the AssociationBank in 1989. He served as Assistant Vice President from 1990 to 1992, as Vice President from 1992 to 1994, as First Vice President from 1994 to 1997, as Senior Vice President and Treasurer from 1997 to 2007, as Executive Vice President, Treasurer and Chief Financial Officer from 2007 to 2011. He served in the same positions with AFC commencing in 1993. Prior to joining the Association,Bank, Mr. Fusco was employed as an auditor by Peat, Marwick, Mitchell & Co., predecessor to KPMG LLP, and as an officer of another thrift institution.

Josie Callari has served as Executive Vice President and Chief Support Services Officer of AFC and the AssociationBank since January 2012. She is responsible for the human resources, general services, facilities and security areas of AFC and the Association.Bank. She served as Senior Vice President and Director of Banking Operations of the AssociationBank from December 1997 to December 2011. Ms. Callari joined the AssociationBank in December 1975 and held various positions in the retail branch network until 1987. From December 1987 to 1989 she served as Assistant Vice President, Operations and Product Development. She served as First Assistant Vice President, Retail Operations and Support from 1989 to 1993, and as Vice President, Retail Operations and Support from December 1993 to December 1997. Ms. Callari serves on the corporate committees of the Association for the Help of Retarded Children the Education Assistance Corporation and the School for Language and Communication Development.

Robert J. DeStefanohas served as Executive Vice President and Chief Information Officer of AFC and the AssociationBank since January 2012. He served as Senior Vice President and Chief Information Officer of the AssociationBank from December 1997 to January 2012. He is responsible for the implementation of information technology strategies throughout the organization. He joined the AssociationBank in 1986. From 1986 to 1992 he

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Association. He has held past positions as Vice President and a member of the Board of Governors of the Long Island Chapter of the Institute of Internal Auditors, member of Verizon’s Customer Advisory Board, member of the International Information Security Consortium, and member of the Boardboard of Directorsdirectors of Mercy Haven, Inc. Prior to joining the Association,Bank, Mr. DeStefano held positions with several financial institutions.

Brian T. Edwardshas served as Executive Vice President of AFC and the Association,Bank, and Managing Director of the Retail Banking Group of the Association,Bank, since January 2012. He is responsible for the retail banking, marketing, public relations, product management, banking operations and corporate education areas of the Association.Bank. Mr. Edwards served as Senior Vice President and Director of Marketing and Public Relations of the AssociationBank from December 2000 to December 2011. He joined the AssociationBank in 1998 as First Vice President. Prior to joining the Association,Bank, Mr. Edwards was employed as a senior officer at two commercial banks, and held marketing and sales management positions with the New York Islanders and in the consumer packaged goods industry. He serves as a memberVice Chairman of the Boardboard of Directorsdirectors of SCO Family of Services in New York and is a member of the Education Assistance Corporation of Long Island board of directors, and is the past Chairman and President and a current board member of the Advancement for Commerce, Industry and Technology of Long Island.

Matthew J. Gutauskashas served as Executive Vice President of AFC and the Association, and Managing Director of the Multi-Family/Commercial Real Estate Services Group, referred to as the MF/CRE Group, of the Association, since January 2014. He served as Senior Vice President and Director of Origination and Production of the MF/CRE Group, of the Association from 2013 through 2014 and as First Vice President and Director of Origination and Production of the MF/CRE Group of the Association from 2012 through 2013. He joined the Association in February 2011 as Vice President and Director of Origination and Production of the MF/CRE Group. Mr. Gutauskas is responsible for the MF/CRE Group’s new business development, loan underwriting, loan closing, lending operations and oversight and compliance functions. Prior to joining the Association in 2011, Mr. Gutauskas was, from 2009 through 2011, a Principal and Director of Operations of JTC Roadhouse, LLC, the principal line of business being the development and management of an online distressed residential property disposition solution. During this time he also served as the Managing Principal of ICM Capital Advisors, a commercial real estate consulting firm which provided commercial real estate and analytical and default resolution services. From 2002 through 2009, Mr. Gutauskas served in various capacities within the National Commercial Real Estate Lending Division of Sovereign Bank and its predecessor Independence Community Bank, culminating in his serving as Executive Vice President in charge of loan originations. Prior to his employment with Sovereign Bank, Mr. Gutauskas served in various capacities within the commercial real estate lending divisions of M&T Bank and People’s Bank (now People’s United Bank).

Stephen J. Sipolahas served as Executive Vice President of AFC and the Association,Bank, and Managing Director of the Association’sBank’s Business Banking Group, since January 2013. He served as Senior Vice President and Director of Business Banking of the AssociationBank from April 2011 to December 2012. Mr. Sipola is responsible for the Business Banking Group’s new business development, loan underwriting, loan operations and treasury management products and services. Prior to joining the AssociationBank in 2011, Mr. Sipola was employed as a Senior Vice President at North Fork Bank and its successor, Capital One Bank from March 2003 to April 2011 with responsibilities that included sourcing and underwriting loans for middle market companies in the New York metropolitan area. At Capital One Bank, he supervised a portfolio of middle market customers with loan commitments in excess of $1 billion. He served as a Vice President at The Bank of New York from March 1993 to March 2003, with responsibilities in the Small Business, Middle Market and Marine Transportation Divisions. Prior to 1993, he held several positions in the Business Banking Division of Manufacturer’s Hanover Trust Company. Mr. Sipola serves as a trustee of The Long Island Home, a not-for-profit health care organization. He is also a Council Member of the Tilles Center and a member of

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or any member of his or her immediate family and AFC and its subsidiaries, affiliates and equity investors, including those reported under Transactions with Certain Related Persons commencing on page 1917. The Board also examined transactions and relationships between directors or their affiliates and members of executive management or their affiliates. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent.

Specifically, with respect to the directors determined to be independent, the Nominating and Corporate Governance Committee and the Board considered the following transactions and relationships:

In addition, the Nominating and Corporate Governance Committee and the Board annually review the charitable contributions made by the AssociationBank and determined that no contributions were made of sufficient size to impair the independence of any director who may be affiliated with such charities.

Board Leadership Structure

The position of Chairman of the Board is held by Mr. Palleschi, an independent director. As the Chairman of the Board, Mr. Palleschi provides leadership to the Board and works with the Board and executive management to define the Board’s structure and coordinate its activities in the fulfillment of its responsibilities. In addition, he presides over periodic executive sessions of the independent directors of the Board, coordinates the agenda for meetings of the independent directors, serves as a liaison between the independent directors and management and outside advisors, and makes periodic reports to the Board regarding the actions and recommendations of the independent directors.

Mr. Redman serves as President and Chief Executive Officer. As such, he has general charge, supervision and management of the business affairs of AFC, and is responsible for assuring that policy decisions of the Board are implemented as adopted. He, in conjunction with the Board, is responsible for the development and implementation of AFC’s strategic plan and in exploring other growth opportunities.

The independent directors periodically review AFC’s leadership structure and believe, as a general matter, that the current Board leadership structure is appropriate for AFC. While the Corporate Governance Guidelines permit the positions of Chairman and Chief Executive Officer to be combined, the Board believes that continuing the separation of the Chairman and Chief Executive Officer functions will allow Mr. Redman to focus his attention on guiding AFC and the AssociationBank through the current difficult regulatoryoperating environment and economic environment,enhancing their performance, while a separate Chairman can devote full attention to Board leadership functions.

Oversight of Risk Management

In 2011, the Board established a dedicated Enterprise Risk Management Committee. The Enterprise Risk Management Committee consists of all independent directors, with Mr. Leeney serving as Chairman. In December 2011, the Board established a dedicated Chief Risk Officer position and appointed Mr. Eggleston, a senior executive officer, to fill this role. In addition to overseeing the enterprise risk management function, the Chief Risk Officer oversees AFC’s other significant risk control areas, including the Compliance, Credit, Asset Review, Regulatory Affairs and Legal Departments.

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Identifying and Evaluating Nominees for Director

The Board has adopted, and at least annually reviews and approves, Nominee Qualification Guidelines, for use by the Nominating and Corporate Governance Committee in evaluating all potential nominees, and Corporate Governance Guidelines, which set forth, among other matters, Board composition and director qualification standards. Although the Board does not have a separate diversity policy, among the matters reviewed are the candidate’s integrity, maturity and judgment, experience, collegiality, expertise, diversity, commitment and independence. With respect to the review of a candidate’s diversity, the Nominee Qualification Guidelines state that candidates should be sufficiently diverse to provide a range of perspectives representative of the interests of the constituencies served or to be considered from time to time by the Board, including, but not limited to, our shareholders, the communities and customers we serve and our employees. The Nominating and Corporate Governance Committee considers diversity inclusive of, but not limited to, race, gender, ancestry and thought, which is an important ingredient in the maintenance of an appropriate range of perspectives. Copies of the Nominee Qualification Guidelines and the Corporate Governance Guidelines are available on AFC’s Investor Relations website athttp://ir.astoriafederal.comir.astoriabank.com under the heading “Corporate Governance.” Printed copies may also be requested by contacting AFC’s Investor Relations Department by calling (516) 327-7869 or in writing at the address set forth on page 1 of this Proxy Statement.

The Board has also implemented a procedure for evaluating the performance of the Board, each of its committees and each of its directors. The evaluation of directors is considered and reviewed by the Nominating and Corporate Governance Committee in considering the nomination of existing directors.

If a shareholder presents a potential nominee, the shareholder will be encouraged to provide information that is responsive to the Nominee Qualification Guidelines to assist the Nominating and Corporate Governance Committee in evaluating proposed nominees, including the specific experience, qualifications, attributes or skills that led the shareholder to conclude that the potential nominee should serve as a director. Such nominations and related information will be considered and reviewed by the Nominating and Corporate Governance Committee. All nominees, including incumbent directors, Board nominees and shareholder nominees, will be evaluated in the same manner by the Nominating and Corporate Governance Committee.

The Charter of the Nominating and Corporate Governance Committee authorizes the Committee to utilize the services of search firms at the Nominating and Corporate Governance Committee’s discretion.

In June 2012, the Nominating and Corporate Governance Committee, in anticipation of several vacancies on the Board and the Board of Directors of the Association retained the services of Heidrick & Struggles, a firm specializing in identifying potential candidates to serve on corporate boards of directors. Heidrick & Struggles assisted AFC in identifying Patricia M. Nazemetz as a potential Board candidate in 2012 and in identifying Jane D. Carlin as a potential Board candidate in 2013.

Pursuant to the Corporate Governance Guidelines adopted by the Board, all newly elected Board members are required, at the time of their initial election to the Board, to have an investment in AFC Common Stock. Prior to 2013, directors were expected to maintain beneficial ownership in non-derivative shares of AFC Common Stock equal to at least 3,000 shares, with a three year phase-in period for new directors. Beginning in 2013, directors are expected to maintain beneficial ownership in non-derivative shares of AFC Common Stock equal in value to two times the combined annual cash retainer of AFC and the AssociationBank or 15,000 shares, whichever is greater. There is a three year phase-in period for new directors and

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In addition, the independent directors of AFC met four (4) times during 2013.2014. Such meetings are presided over by Mr. Palleschi.

The Board has established four (4) standing committees: the Compensation Committee, the Nominating and Corporate Governance Committee, the Audit Committee, which is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act, and the Enterprise Risk Management Committee. Copies of the Compensation Committee’s Charter, the Nominating and Corporate Governance Committee’s Charter, the Audit Committee’s Charter and the Enterprise Risk Management Committee’s Charter, as well as AFC’s Bylaws, are posted on AFC’s Investor Relations website at http://ir.astoriafederal.comir.astoriabank.com under the heading “Corporate Governance.” Shareholders may request a printed copy of each such document by contacting AFC’s Investor Relations Department by calling (516) 327-7869 or writing to AFC’s address specified on page 1 of this Proxy Statement.

Compensation Committee

The Compensation Committee consists of Ms. Nazemetz, as Chairwoman,Chair, Mr. Chrin, Mr. Leeney and Mr. Palleschi. The function of the Compensation Committee is to carry out the duties and responsibilities set forth in the Charter of the Compensation Committee, including but not limited to, (i) discharging the responsibilities of the Board relating to AFC’s compensation and benefit plans and practices, including its executive compensation plans and its incentive compensation and equity-based plans; (ii) preparing an annual Compensation Committee Report as required by the SEC, to be included in AFC’s annual proxy statements (see page 2926); and (iii) otherwise assisting the Board in its oversight responsibilities with respect to the human resources, compensation and benefits activities of AFC and its subsidiaries. The Compensation Committee administers the 2014 Astoria Financial Corporation Executive Officer Annual Incentive Plan, referred to as the Executive Incentive Plan, establishes target incentives and goals, and reviews performance relative to such goals pursuant to the Executive Incentive Plan. The Compensation Committee also administers the 1999 Stock Option Plan for Officers and Employees of Astoria Financial Corporation, referred to as the 1999 Officer Option Plan, the 2003 Stock Option Plan for Officers and Employees of Astoria Financial Corporation, referred to as the 2003 Stock Option Plan, and the 2005 Re-designated,2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation,AFC, referred to as the 2014 Stock Incentive Plan, which amended and restated the 2005 Re-Designated, Amended and Restated Stock Incentive Plan for Officers and Employees of AFC, referred to as the 2005 Stock Incentive Plan, including the granting of various forms of equity compensation pursuant to the 2005 Stock Incentive Plan and the 2014 Stock Incentive Plan. The Committee also administers the 1999 Stock Option Plan for Outside Directors of Astoria Financial Corporation, referred to as the 1999 Directors Option Plan, and the Astoria Financial Corporation 2007 Non-Employee Director Stock Plan, referred to as the 2007 Director Stock Plan. The Compensation Committee meets as needed and met six (6)nine (9) times during 2013.2014.

The Compensation Committee has the authority to establish compensation levels, performance goals and other significant terms of employment for the executive officers and it annually reviews director compensation. As a matter of practice, the actions of the Compensation Committee with respect to executive officer compensation and recommendations the Compensation Committee may make with respect to director compensation are reviewed by the Board at the next regular Board meeting for ratification and approval. The Compensation Committee may not delegate its authority except to a subcommittee of the Compensation Committee. The Compensation Committee is responsible for reviewing the results of each non-binding

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During 2013,2014, Mr. Redman, Mr. Eggleston and Ms. Callari, attended meetings of the Compensation Committee and assisted the Compensation Committee in the performance of its responsibilities relative to director and executive compensation. The significant matters discussed with the Compensation Committee by management were the following:

Officers attend Compensation Committee meetings only at the invitation of the Compensation Committee. It is generally the practice of the Compensation Committee to meet in executive session following management participation in meetings to allow time for discussion without management present.

In addition, members of the Compensation Committee are provided unrestricted access to all officers of AFC and the AssociationBank throughout the year. AFC and its executive management do not monitor or maintain records regarding the frequency or subject matter of such contacts.

The Compensation Committee, from time to time, retains a compensation consultant to review executive officer and director compensation.

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presented to the Compensation Committee. Pearl Meyer concluded that the short term incentive plan is generally consistent with AFC’s peer group in that, with certain exceptions based upon departmental job responsibilities, payouts are tied to the financial performance of AFC. With respect to the long term incentive plan, Pearl Meyer recommended that consideration be given to adding a performance based component to the program along with the then current time based component. That recommendation was implemented forin 2013. The peer groupsgroup utilized for the short term and long term incentive plan studies included Flushing Financial Corporation, First Niagara Financial Group, Inc., Huntington Bancshares Incorporated, Hudson City Bancorp, Inc., Provident Financial Services, Inc., Signature Bank, TCF Financial Corporation, Valley National Bancorp, Washington Federal, Inc., Webster Financial Corporation and Zion Bancorporation. See the discussion under Equity-basedEquity-Based Compensation commencing on page 3632 regarding the implementation of this recommendation in 2013. Pearl Meyer concluded with respect to executive compensation that overall, the compensation of the executive officers is consistent with market practice. The peer groupsgroup utilized in connection with the review of executive compensation included the following entities, in addition to those included in the peer groupsgroup utilized in connection with the short term and long term incentive plan studies: New York Community Bancorp, Inc. and People’s United Financial, Inc. See the discussion under Base Salary commencing on page 3229 for additional information regarding the base salaries of the Named Executives.

The Compensation Committee did not retain any consultants during 2013 to review matters pertaining to compensation.

In October 2014, the Compensation Committee again retained the services of Pearl Meyer, who had also been retained by the management of AFC and the Bank, to provide annual incentive performance metrics used by peers in connection with the compensation of executive officers and to conduct a market assessment of the non-employee director compensation program. The Compensation Committee again considered whether any conflict would result from Pearl Meyer’s retention by management and concluded that none existed. Pearl Meyer concluded that the incentive metrics utilized by the Bank have been historically similar to those used by the Bank’s peers, however they further noted that during the past year several higher growth banks, similar in size to the Bank, commenced utilizing growth related metrics, including but not limited to return on equity, return on assets and growth relative to peers. Pearl Meyer provided three basic designs relating to changes they recommended the Bank make to its incentive metrics and/or targets. Their recommendations are being considered for 2015. With respect to the non-employee director compensation program, Pearl Meyer concluded that the structure of the non-employee director compensation program, noting the split between equity and cash AFC provides to each non-employee director, is generally consistent with AFC’s peer group and that, overall, the compensation of non-employee directors is consistent with market practice. No changes to the non-employee director compensation program were made since the compensation was determined to be competitive to the Bank’s peers. See the discussion under Director Compensation commencing on page 22 for additional information regarding director compensation. The peer group utilized for these studies consisted of 13 companies with median assets and revenues of $18.5 billion and $734 million, respectively, including BankUnited, Inc., First Niagara Financial Group, Inc., Fulton Financial Corporation, Investors Bancorp Inc., New York Community Bancorp Inc., National Penn Bancshares Inc., People’s United Financial Inc., Signature Bank, TCF Financial Corporation, Valley National Bancorp., Webster Financial Corporation and UMB Financial Corp. For further information regarding the role of the executive officers in determining or recommending the amount and form of executive officer and director compensation and the role and identity of compensation consultants utilized and the nature of the assignments undertaken, see Compensation Committee Interlocks and Insider Participation commencing on page 1621, Director Compensation commencing on page 2422 and the CD&A commencing on page 2926.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee consists of Mr. Palleschi, as Chairman, Ms. Carlin, Mr. Leeney and Ms. Nazemetz. The function of the Nominating and Corporate Governance Committee is to carry out the duties and responsibilities set forth in the Charter of the Nominating and Corporate Governance Committee, including but not limited to, (i) assisting the Board in identifying individuals qualified to become Board members; (ii) recommending to the Board nominees for election to the Board; (iii) reviewing nominations for election to the Board made by shareholders of AFC pursuant to Article I, Section 6(c) of AFC’s Bylaws; (iv) assisting the Board in developing and implementing a process to assess the effectiveness

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of individual Board members and of the Board and its committees collectively; (v) advising the Board with respect to Board and committee composition and procedures; (vi) developing, recommending to the Board and annually reviewing AFC’s Corporate Governance Guidelines; and (vii) otherwise carrying out the duties, goals and responsibilities assigned to the Nominating and Corporate Governance Committee pursuant to AFC’s Bylaws, the Corporate Governance Guidelines and the Nominating and Corporate Governance Committee’s Charter. The Nominating and Corporate Governance Committee meets as needed and met two (2) times during 2013.2014. All members of the Nominating and Corporate Governance Committee

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AFC does not engage in loan transactions with its directors or executive officers or members of their families. With the exception of the ESOP loans which were paid in full on December 20, 2013, AFC does not engagefamilies or in loan or other transactions with holders of five percent (5%) or more of the shares of any class of its common stock.stock, other than through the Bank as described below.

The Association maintained, until April 1, 2014, the ESOP, which was a defined contribution pension plan, for the benefit of its eligible employees. To fund the purchase of the AFC Common Stock held by the

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The following directors and executive officers have received the benefit of interest rate or other discounts during 20132014 as specified in the Association’sBank’s Employee & Director Mortgage Loan Policy:

Name		Interest Rate Payable on Indebtedness (%)(1)				Highest Aggregate Amount of Indebtedness Outstanding since January 1, 2013 ($)				Principal Balance outstanding as of the Record Date ($)				Amount of Principal Paid on Indebtedness during 2013 ($)				Amount of Interest Paid On Such Indebtedness during 2013 ($)				Interest Rate Payable on Indebtedness (%)(1)				Highest Aggregate Amount of Indebtedness Outstanding since January 1, 2014 ($)				Principal Balance Outstanding as of the Record Date ($)				Amount of Principal Paid on Indebtedness during 2014 ($)				Amount of Interest Paid on Such Indebtedness during 2014 ($)
Josie Callari			3.875				20,360				0				20,360				333
Robert J. DeStefano			2.500				352,210				326,080				20,838				8,568				2.500				331,372				0				331,372				8,423
Brian T. Edwards			3.250	(2)			320,559				312,887				4,776				11,094				3.000	(2)			315,783				0				11,857				9,769
Alan P. Eggleston			3.500				174,104				158,525				12,408				5,896				3.500				161,695				145,562				12,850				5,454
Frank E. Fusco			2.375				184,429				173,828				8,455				4,289				2.375				175,974				165,118				8,658				4,086
Gerard C. Keegan			3.125				419,575				406,234				10,631				12,960				3.125				408,944				0				408,944				11,296
Monte M. Redman			3.500				397,376				364,445				26,229				13,490
Monte N. Redman																							3.500				371,147				337,046				27,162				12,557

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Security Ownership of Management

The following table sets forth information concerning the interests in equity securities of AFC as of the Record Date of each director and Board Nominee of AFC, each executive officer named in the Summary Compensation Table, referred to as Named Executives, and all directors and executive officers of AFC as a group. For purposes of the Annual Meeting, AFC Common Stock is the only AFC voting stock outstanding. Holders of AFC’s Depositary Shares are not entitled to vote at the Annual Meeting.

Name of Beneficial Owner		Class of Securities				Amount and Nature of Beneficial Ownership(1)(2)				Percent of Class(3)				Class of Securities				Amount and Nature of Beneficial Ownership(1)				Percent of Class(2)
Monte N. Redman			Common Stock				1,105,814	(4)(5)			1.11				Common Stock				894,018	(3)(4)
Gerard C. Keegan			Common Stock				523,280	(4)(6)							Common Stock				360,168	(3)(5)
Jane D. Carlin			Common Stock				6,358	(7)
John R. Chrin			Common Stock				105,152	(8)							Common Stock				109,524	(6)
			Depositary Shares				4,658	(8)							Depositary Shares				4,658	(6)
John J. Corrado			Common Stock				56,728	(9)							Common Stock				61,100	(7)
Brian M. Leeney			Common Stock				24,649	(10)							Common Stock				29,021	(8)
Patricia M. Nazemetz			Common Stock				12,028	(11)							Common Stock				16,400	(9)
Ralph F. Palleschi			Common Stock				92,948	(12)							Common Stock				91,320	(10)
Alan P. Eggleston			Common Stock				513,802	(4)(13)							Common Stock				381,507	(3)(11)
Frank E. Fusco			Common Stock				460,793	(4)(14)							Common Stock				400,853	(3)(12)
Stephen J. Sipola			Common Stock				46,224	(15)
All directors, Board Nominees and executive officers as a group (15 persons)			Common Stock				13,465,833	(4)(16)			13.55
All directors, Board Nominees and executive officers as a group (15 persons)			Depositary Shares				4,658
Hugh J. Donlon															Common Stock				85,161	(13)
All directors, Board Nominees and executive officers as a group (14 persons)															Common Stock				10,777,763	(3)(14)			10.74
All directors, Board Nominees and executive officers as a group (14 persons)															Depositary Shares				4,658

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Compensation Committee Interlocks and Insider Participation

The Compensation Committee consists of Ms. Nazemetz, as Chairwoman,Chair, Mr. Chrin, Mr. Leeney and Mr. Palleschi. Other than Mr. Leeney, who joined the Compensation Committee in March, 2014, allAll such members of the Compensation Committee served throughout 2013.2014. No individual who served on the Compensation Committee in 20132014 is a current or former officer or employee of AFC or the Association.

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Director Compensation

The following section sets forth information regarding director compensation.

Directors’ and Other Fee Arrangements

All non-employee directors of AFC except Mr. Palleschi receive an annual retainer of $22,000. No additional fees for attendance at Board meetings are paid. All members of the Board also serve as directors of the Association.Bank. All non-employee directors of the AssociationBank, except Mr. Palleschi, receive an annual retainer of $44,000. No additional fees for attendance at AssociationBank Board of Directors meetings are paid. Mr. Palleschi, who became Chairman of the Board and Chairman of the Board of Directors of the AssociationBank effective June 20, 2012, receives a total annual retainer of $250,000 for service as Chairman of the Board and Chairman of the Board of Directors of the Association.Bank. He does not receive any other per meeting fees, retainers or fees for serving on any of the committees of either the Board or the Board of Directors of the Association.Bank. The Chairman of the Audit Committee of AFC and the AssociationBank receives an additional annual retainer of $15,000 in the aggregate and all members of the Audit Committee, with the exception of Mr. Palleschi, receive a $1,000 fee per Audit Committee meeting attended. As Chairman of the Nominating and Corporate Governance Committee of AFC and the Association,Bank, Mr. Palleschi does not receive any additional annual retainer or per meeting fees. All other members of the Nominating and Corporate Governance Committee receive a $1,000 fee per Nominating and Corporate Governance Committee meeting attended. The ChairwomanChair of the Compensation Committee of AFC and the AssociationBank receives an additional annual retainer of $15,000 in the aggregate and all members of the Compensation Committee, with the exception of Mr. Palleschi, receive a $1,000 fee per Compensation Committee meeting attended. The Chairman of the Enterprise Risk Management Committee of AFC and the AssociationBank receives an additional annual retainer of $15,000 in the aggregate and all members of the Enterprise Risk Management Committee, with the exception of Mr. Palleschi, receive a $1,000 fee per Enterprise Risk Management Committee meeting attended. The Chairman of the Loan Committee of the AssociationBank receives an additional annual retainer of $15,000 in the aggregate and all members of the Loan Committee, with the exception of Mr. Palleschi, receive a $1,000 fee per Loan Committee Meeting attended. Each non-employee director who serves on the Association’sBank’s Community Reinvestment Act Committee, referred to as the CRA Committee, receives a $1,000 fee per CRA Committee Meeting attended. Typically, committee meetings of AFC and the AssociationBank are held as joint meetings and in such cases only a single meeting attendance fee is paid.

The aggregate of fees paid to each director for his or her service as a director of both AFC and the AssociationBank is reflected in the Fees Earned or Paid in Cash column of the 20132014 Director Compensation Table on page 2825.

1999 Directors Option Plan

AFC maintains the 1999 Directors Option Plan pursuant to which non-employee directors of AFC and the AssociationBank have been granted options on terms previously approved by the shareholders of AFC.

The purpose of the 1999 Directors Option Plan was to promote the growth and profitability of AFC, to provide directors of AFC and its affiliates with an incentive to achieve corporate objectives, to attract and retain key directors of outstanding competence and to provide such directors with an equity interest in AFC.

Pursuant to the 1999 Directors Option Plan, each person who first became a non-employee director of AFC or the AssociationBank after May 19, 1999 was granted, on the 15^th day of the month following the month in which he or she became a non-employee director, an option to purchase 12,000 shares of AFC Common Stock at an exercise price per share equal to the fair market value of AFC Common Stock, as defined in the 1999 DirectorDirectors Option Plan, on the date of grant. In addition, on January 15^th of each succeeding year, or the following business day if January 15^th was not a business day, each person who was then a non-employee

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In May 2007, the shareholders of AFC approved the 2007 Director Stock Plan. As a result, the 1999 DirectorDirectors Option Plan was frozen such that no further options will be granted under the 1999 DirectorDirectors Option Plan.

2007 Director Stock Plan

The shareholders of AFC approved the 2007 Director Stock Plan in May 2007 and approved an amendment to said plan in May 2010. This plan provides for an annual grant to each non-employee director of restricted stock having a fair market value, as defined in the plan, equal to $45,000 at the time of the grant. Such grants commenced in 2008 and are made annually on the third business day following AFC’s release of its prior year annual financial results. The plan also provides for discretionary grants. During 2013,2014, each non-employee director received a discretionary grant of shares, valued at $10,000. In addition, Ms. NazemetzCarlin was granted 2,000 shares of restricted stock upon joining the Board and the Board of Directors of the Association in January 2013 and Ms. Carlin, as a new director was granted 2,000 shares of restricted stock in February 2014.2014 which were forfeited upon her resignation from the Board.

The shares awarded pursuant to the 2007 Director Stock Plan vest three years after the date of the award, unless otherwise specified at the time of the award, or, if earlier, upon the director’s death, mandatory retirement, in the event of a change of control or in the event a director incurs an involuntary termination from the Board, each as defined in the plan.

Upon award, shares granted pursuant to the 2007 Director Stock Plan have both voting rights and the right to receive dividends.

The 2007 Director Stock Plan, as amended, authorizes the issuance of 150,000 shares of AFC Common Stock to be utilized for restricted stock awards following May 19, 2010. As of the Record Date, there were 67,13551,633 shares of AFC Common Stock available for future awards pursuant to the plan.

Directors’ Retirement Plan

The Directors’ Retirement Plan providesprovided retirement benefits for directors of AFC or the AssociationBank with at least 10 years of service who are not and have nothad never been employees of AFC, the AssociationBank or any of their predecessors in interest. This excludes Mr. Redman and Mr. Keegan from participation in the plan. In 1999, participation in theThe Directors’ Retirement Plan was frozen to provideas of April 30, 2012, such that any director who joins the Board of Directors of AFCeligible participating directors will receive no further service credit or the Associationother accrued benefit increases after Marchsuch date. Final benefit calculations will be based upon retainers and fees earned between May 1, 1999 will not be eligible to participate in the Directors’ Retirement Plan. This excludes Ms. Carlin, Mr. Chrin, Mr. Leeney, Mr. Corrado2011 and Ms. Nazemetz from participation in the plan. As noted below, benefit and service accruals pursuant to the Directors’ Retirement Plan were frozen, effective April 30, 2012. The only current director eligible to receive benefits pursuant to the plan is Mr. Palleschi.

Benefits under the Directors’ Retirement Plan vested atPalleschi who has a 50% level once an eligible director completed 10 yearsvesting percentage of service. Vesting increased by 5% each additional year of service thereafter with 100% vesting after 20 years of service. Service on the Board of Directors of companies merged into AFC or the Association was counted as eligible service under the Directors’ Retirement Plan. Any benefit which a director received pursuant to a retirement plan for service on the Board of Directors of a company merged into AFC or the Association acts as an offset against the benefit due the director pursuant to the Directors’ Retirement Plan.80%.

The basic benefit payable under the Directors’ Retirement Plan is a monthly benefit for the life of the director, (or an alternative form of benefit described below in the case of the director’s death), commencing on the earlier of (a) retirement from the Boards of Directors of AFC and the AssociationBank or age 65, whichever is later, (b) the date the director ceases to serve on the Boards of Directors due to disability, as defined in the

In the event of a change of control, as defined in the Directors’ Retirement Plan, eligible directors would have received service credit through the balance of their then current term as a director. On or before December 31, 2008, eligible directors were required to make a one-time election whether, in the event of a change of control, their benefits due pursuant to the Directors’ Retirement Plan would be paid to the director in a lump sum or transferred into a rabbi trust to be established at the time of the change of control and paid pursuant to the original alternate form benefit election.

Mr. Palleschi, the only current director who is eligible to participate in the Directors’ Retirement Plan, at this time, has a vesting percentage of 80% and is not eligible for additional service credit.TABLE OF CONTENTS

Included in the 20132014 Director Compensation Table, set forth on page 2825, under the Change in Pension Value and Nonqualified Deferred Compensation Earnings column is the change in the actuarial value during 20132014 attributable to each of the directors who participates in the Directors’ Retirement Plan based upon the same assumptions utilized for financial statement reporting in the Consolidated Financial Statements. Also included in the 20132014 Director Compensation Table, under the Change in Pension Value and Nonqualified Deferred Compensation Earnings column, is the change in the actuarial value during 20132014 attributable to Mr. Haeffner’s participation in The Greater Director Retirement Plan. For further information regarding the assumptions utilized and changes in such assumptions from time to time see Note 1413 of the Notes to the Consolidated Financial Statements. Pursuant to SEC regulations, AFC is not allowed to disclose in the Director Compensation Table a change in pension value that is less than zero even though for financial statement purposes AFC may accrue the actual change.

The Directors’ Retirement Plan was frozen as of April 30, 2012, such that eligible participating directors will receive no further service credit or other accrued benefit increases after such date. Final benefit calculations will be based upon retainers and fees earned between May 1, 2011 and April 30, 2012.

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The following table sets forth details regarding compensation provided to the directors of AFC for the fiscal year ended December 31, 2013.2014.

20132014 Director Compensation Table

Name		Fees Earned Or Paid in Cash ($)(1)				Stock Awards ($)(2)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)				All Other Compensation ($)(4)				Total ($)				Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)(2)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)				All Other Compensation ($)(4)				Total ($)
Jane D. Carlin(5)																							85,500				80,238				0				1,017				166,755
John R. Chrin			108,000				54,999				0				5,218				168,217				121,000				54,998				0				4,330				180,328
John J. Conefry, Jr.(5)			13,000				54,999				0				4,275				72,274
John J. Corrado			87,000				54,999				0				5,850				147,849				111,500				54,998				0				1,924				168,422
Peter C. Haeffner, Jr.(6)			124,000				54,999				156,574				79,047				414,620				22,500				54,998				165,139				36,798				279,435
Brian M. Leeney			114,000				54,999				0				8,064				177,063				116,000				54,998				0				3,027				174,025
Patricia M. Nazemetz			82,000				74,879				0				4,739				161,618				99,500				54,998				0				2,167				156,665
Ralph F. Palleschi			250,000				54,999				73,808				4,961				383,768				250,000				54,998				217,839				3,419				526,256

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Executive Compensation

The information set forth in the Compensation Committee Report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, referred to as the Securities Act, or the Exchange Act, except to the extent that AFC specifically incorporates this information by reference, and otherwise shall not be deemed “soliciting materials” or to be “filed” with the SEC or subject to Regulations 14A or 14C of the SEC or subject to the liabilities of Section 18 of the Exchange Act.

Compensation Committee Report

Compensation Committee of AFC

Patricia M. Nazemetz — ChairwomanChair
John R. Chrin
Brian M. Leeney
Ralph F. Palleschi

Compensation Discussion and Analysis (CD&A)

Under rules established by the SEC, AFC is required to provide certain data and information regarding the compensation and benefits provided to AFC’s Chief Executive Officer, Chief Financial Officer and certain other executives of AFC. The disclosure requirements for the Chief Executive Officer and such other executives include the use of tables and the CD&A. The CD&A is intended to review the compensation awarded to, earned by or paid to the Named Executives. This review explains material elements of AFC’s compensation of the Named Executives and describes the objectives of AFC’s compensation programs, what the program is designed to reward, each element of compensation, why AFC chooses to pay each element, how AFC determines the amount, and, where applicable, the formula for each element, and how each element and AFC’s decisions regarding that element fit into AFC’s overall compensation objectives and affect decisions regarding other elements. The Named Executives include the Chief Executive Officer, the Chief Financial Officer and AFC’s three most highly compensated executive officers other than the Chief Executive Officer and the Chief Financial Officer of AFC as of December 31, 2013.2014. For 2013,2014, the Named Executives of AFC are Monte N. Redman, Frank E. Fusco, Gerard C. Keegan, Alan P. Eggleston and StephenHugh J. Sipola.Donlon.

Executive Compensation Philosophy

The primary objective of the executive compensation program of AFC and the AssociationBank is to attract and retain highly skilled and motivated executive officers to manage AFC in a manner to promote prudent growth and profitability and advance the interests of its shareholders.

The compensation program is designed to provide levels of compensation which comply with regulatory requirements and are competitive and reflective of the organization’s performance in achieving its goals and objectives, both financial and non-financial, as determined in its business and strategic plans. The program aligns the interests of the executives with those of the shareholders of AFC by providing a proprietary interest in AFC, the value of which can be significantly enhanced by the appreciation of AFC Common Stock. The program also seeks to provide a mechanism to adequately provide for the needs of the executives upon retirement, based upon their compensation levels, length of service provided to AFC and the AssociationBank and the appreciation of AFC Common Stock.

The Named Executives are highly skilled and experienced in the management of banking institutions. Each of Mr. Redman, Mr. Keegan and Mr. Eggleston has more than thirty (30) years of experience in the banking industry and more than twenty-five (25) years of experience as an executive officer responsible for

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managing AFC, the AssociationBank and/or other banking institutions. Mr. Fusco has more than twenty-five (25) years of banking experience and more than fifteen (15) years of management experience as a senior officer of AFC or the Association.Bank. Mr. SipolaDonlon has more than ten (10)twenty-five (25) years of management experience as a senior officer of AFC, the Association and other financial institutions.level banking experience. Each of Mr. Redman, Mr. Fusco, Mr. Keegan and Mr. Eggleston has extensive experience in the management of public companies, and all Named Executives have a commitment to excellence, prudent operations and promoting the interests of shareholders.

Given the experience of the executives, their proven track record of performance at AFC and the investment AFC and the AssociationBank have made in these individuals, their retention is important. AFC has taken a number of steps to further this goal, such as entering into employment contracts with each of the Named Executives, providing vesting over time with multi-year performance measurement periods for equity grants and awards and providing retirement and change of control packages that provide meaningful incentives for the Named Executives to remain employed by AFC.

To a significant degree, the compensation program for the executive officers mirrors that utilized throughout most of AFC’s operations. The overall compensation of the Named Executives is tied directly to their obtaining clearly defined results in a prudent manner. Since their responsibility is to manage AFC, their performance objectives are related directly to AFC’s performance. This is accomplished through the Executive Incentive Plan and the equity-based compensation program and, to a lesser degree, the retirement program.

AFC believes that an effective way to ensure that the Named Executives advance the interests of the shareholders is to ensure that each of the executive officers is a significant shareholder. The Compensation Committee has established share ownership requirements applicable to its executives as a multiple of their base salaries. For example, the Chief Executive Officer is required to hold direct or indirect non-derivative shares of AFC Common Stock having a value, based upon the prior year’s average price per share of AFC Common Stock, equal to five (5) times his annual salary. Each of the other senior executive officers is required to hold direct or indirect non-derivative shares of AFC Common Stock having a value, based upon the prior year’s average price per share of AFC Common Stock, equal to three (3) times their respective annual salaries. Each of the remaining executive officers is to hold direct or indirect non-derivative shares of AFC Common Stock having a value, based upon the prior year’s average price per share of AFC Common Stock, equal to two (2) times their respective annual salaries. Excluded from the ownership requirements are outstanding AFC stock options so as to ensure that the executives have more than a hypothetical stake in AFC’s performance. The policy contains a phase-in period to accommodate promotions or newly hired executives. The Chief Executive Officer and each of the senior executive officers, with the exception of Mr. Donlon, meet such requirements without regard to the phase in period. While Mr. Sipola does not yet meet the stock ownership requirements for an executive officer, heDonlon is still in the phase-in period applicable to those promoted to the executive officer level.newly hired executives. See the section entitled Security Ownership of Management commencing on page 2220 for additional information regarding the investment of the Named Executives in AFC Common Stock. Through AFC’s equity-based incentive and retirement programs,program, the Named Executives also receive a substantial portion of their compensation in AFC Common Stock. The better AFC Common Stock performs for AFC’s shareholders, the higher the total compensation that is earned by the Named Executives.

The executive compensation program of AFC consists of four (4) primary elements: Base Salary, Short-Term Non-Equity Incentive Plan Compensation, Equity-Based Compensation, and Retirement Benefits. In addition, the AssociationBank provides medical benefits, life insurance and disability and other benefits common to all its full time employees. AFC and the AssociationBank also provide certain other benefits, or Perquisites, to the Named Executives. The Perquisites are considered an immaterial component of the overall program and are generally associated with furthering the business interests of AFC. AFC and the AssociationBank have each entered into employment agreements with each of the Named Executives. These agreements, which are discussed more fully below, impose certain obligations on and provide certain benefits to the Named Executives which extend beyond the terms of their employment.

The Board has adopted a Strategic Plan for AFC which provides for AFC and the Bank to transition into a more fully diversified, full service community bank. In order to achieve that goal, the Strategic Plan set forth several strategic objectives, including but not limited to diversifying earning assets, increasing low cost core deposits, increasing participation in the local multi-family and commercial real estate mortgage lending markets and expanding business banking products and services, focusing on small and middle market businesses with an emphasis on attracting clients from larger competitors. The strategies established recognize the challenges presented by the federal government’s effective nationalization of the residential mortgage market and the need to reposition the liability structure of the Bank’s balance sheet during the current low interest rate environment to position AFC for future improved performance.

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On June 1, 2014, the name of the Bank was changed to Astoria Bank to better reflect who it is and what it does today as it has adapted and evolved to meet the needs of its expanding customer base. During 2014, AFC and the Bank continued to diversify the balance sheet while remaining focused on growing the core businesses of mortgage portfolio lending and deposit gathering, maintaining strong asset quality and controlling operating expenses. The multi-family/commercial real estate lending line of business continued to become a larger percentage of the loan portfolio, increasing to 40% of the Bank’s total loan portfolio at year end. The Bank’s expansion into business banking has enabled it to increase low cost core deposits, with business deposits growing 43% from year end 2013 to December 31, 2014, which was a contributing factor in the expansion of the net interest margin in 2014. The establishment of a New York City business banking office in September 2013 and the opening of the Bank’s first branch office in Manhattan, strategically located near Pennsylvania Station, in March 2014, was followed by the opening of a branch in Melville, New York on December 1, 2014. The Bank continues to explore opportunities to selectively expand into other prime locations from which to better serve and build its business banking relationships.

During 2014, the Bank continued to see the benefits from the restructuring of borrowings which occurred primarily in the 2013 second quarter and the prepayment of junior subordinated debentures in the 2013 second quarter, resulting in a significant reduction in interest expense on borrowings for 2014 compared to 2013. This reduction in interest expense on borrowings, coupled with increases in interest earned on the Bank’s multi-family and commercial real estate mortgage loan portfolio and the Bank’s securities portfolio and a decline in interest expense on certificates of deposit, outpaced the decline in interest earned on the Bank’s residential mortgage loan portfolio, resulting in a slight increase in net interest income for 2014, compared to 2013.

On July 31, 2014, the Bank completed a bulk sale transaction of certain non-performing residential mortgage loans that had a carrying value of $173.7 million. On September 12, 2014, the Bank completed a second sale transaction, with the same counterparty as the bulk sale transaction, in which the Bank sold additional non-performing residential mortgage loans with a carrying value of $4.0 million. The changing mix of the Bank’s interest-earning assets and interest-bearing liabilities in the continuing low interest rate environment combined with the 2013 restructuring and prepayment of borrowings, has resulted in improvements in both the Bank’s net interest rate spread and net interest margin. Despite the current low interest rate environment, 2014 represented the second consecutive year that the Bank’s net interest margin increased.

The efforts of AFC and the Bank to successfully execute the Strategic Plan have been undertaken in the challenging economic environment in which they compete, and the regulation and oversight of their business has changed significantly over time. AFC and the Bank are affected by both national and regional economic factors. Although the U.S. economy has shown signs of improvement, the operating environment continues to remain challenging. Interest rates have remained at or near historical lows.

The continued implementation of the Strategic Plan’s goal for AFC and the Bank to expand their position as a more fully diversified, full service community bank is a transformative and ongoing process which has necessitated certain expenses, the returns for which are not expected to be immediately recognized. The retention of key employees, necessary to carry out the objectives of the Strategic Plan, is imperative. As a result, after a period of five years during which salaries were increased only on a case-by-case basis, in recognition of promotions or increased responsibilities, the salary levels of our key employees, including Messrs. Redman, Fusco, Keegan and Eggleston, were adjusted in 2013 in order to compensate such individuals for the broad increases in responsibilities assumed in connection with implementing the long term goals of the Strategic Plan. Appropriate adjustments were again made in 2014. See Base Salary below for a discussion regarding salary increases relating to 2014.

In addition, the financial performance goals under the Executive Incentive Plan for 2014 were designed to be challenging yet, reasonably attainable within the context of the Strategic Plan and the objectives set forth therein. In January 2015, after reviewing AFC’s financial performance compared to the performance goals established for 2014, the Compensation Committee determined to award incentive payments for 2014 under the Executive Incentive Plan. See Short-Term Non-Equity Incentive Plan Compensation below for a discussion of incentive payments related to 2014.

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In structuring its executive compensation program, AFC considers the before and after tax financial impact the elements of the program will have on AFC and the Association.Bank. Section 162(m) of the Internal Revenue Code of 1986, as amended, referred to as the Code, places a limitation of $1,000,000 on the

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of sources.sources, including peer data and national and regional compensation surveys. These sources, taken together, are utilized ultimately to confirm that the level and structure of executive compensation, and that of other officers, are fair, competitive and reasonable. For example, the Compensation Committee receives information and, from time to time, recommendations from management and has direct access to publications reflecting industry practices. In addition, from time to time, when the Compensation Committee deems necessary, the Compensation Committee retains the services of compensation consultants who report directly to the Compensation Committee. Although management necessarily assists the Compensation Committee and its consultants during this process, controls are implemented to ensure that the consultants’ opinions and recommendations are reported directly to the Compensation Committee, independent of management.

In reviewing information on compensation practices with regard to executive officers within the banking industry, the primary factors which influence salary and short-term non-equity incentive plan compensation levels are the size and complexity of the institution or business unit being managed, the marketplace in which the institution is located, the position held by the executive and the performance of the institution versus peers.institution.

Generally, the Compensation Committee reviews Named Executives’ total cash compensation for the ensuing year in December of each year at the same time as such matters are considered for all other officers of AFC and the Association.Bank. In conducting such review, the Compensation Committee considers the performance of AFC, the performance of each of the executive officers (based both on the directors’ own insights and discussions with Mr. Redman), the salary and compensation history of the Named Executives and both the proposed short-term non-equity incentive plan compensation targets for the coming year and proposed equity compensation grants.

In developing AFC’s Business Plan for 2012 during the fall of 2011, in light of continued weak economic performance, a challenging regulatory environment, continued difficulty in resolving non-performing loans in states involving judicial foreclosure, the interest rate forecasts and the impact the projected yield curve would have upon the performance of AFC and the Association, executive management determined and communicated to the Board and Compensation Committee that 2012 was expected to continue to be extremely challenging. As a result, no across-the-board salary increases, with the exception of those described above, were given, for 2012, to those identified as named executives in the 2013 annual proxy. In addition, the incentive targets for use with the Executive Incentive Plan were established such that 2012 Business Plan performance would and did result in a 0% of target incentive payout for such named executives, consistent with actions taken dating back to 2008.

On an organization-wide basis, a base salary increase target of 2.5%3% was established for 20132014 based in part upon survey data indicating projected base salary increases of between 2.8% and 3.0% nationally. Among

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of targets established under the Executive Incentive Plan should be both challenging, yet prudently attainable, so as not to encourage either imprudent risk taking or the sacrifice of long-term performance for short term gains.

The Compensation Committee determined that payment of non-equity incentive awards was not appropriate during 2011 and 2012. As a result, no short-term non-equity incentive payments were made to any of the executive officers for those years.

The Compensation Committee has received comments from the compensation consultants retained in previous years regarding the operation of the Executive Incentive Plan and has generally considered those comments in structuring performance targets pursuant to such plan. The review performed by Pearl Meyer commencing in September 2012 of the long term and short term incentive plans, included a review of the Executive Incentive Plan. Among the comments received from Pearl Meyer were comments regarding the levels of the target opportunities set for the Named Executives as compared to those prevailing in the market and a change in the weightings assigned to the performance metrics utilized. The Compensation Committee, in establishing the performance targets, utilizes its discretion based upon all the information available to it. The Compensation Committee does not generally review specific peer data concerning the targets utilized by the Compensation Committee nor does it index the targets to peer performance. Members of the Compensation Committee are generally aware of the financial and total return performance of a number of peer and other banking related institutions at the time the performance targets are established, as this data is reported monthly by management at meetings of the Board. Among the institutions considered peers of AFC and monitored, arein 2012, were New York Community Bancorp, People’s United Financial, Inc., Washington Federal, Inc., First Niagara Financial Group, Inc., Provident Financial Services, Inc., Flushing Financial Corp., Signature Bank, Hudson City Bancorp, Inc., TCF Financial Corporation, Zions Bancorporation, Huntington Bancshares

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The ultimatespecific adjustments made to AFC’s GAAP net earnings and average tangible common equity for 20132014 to arrive at adjusted ROA and adjusted ROATCE for purposes of determining the performance under the Executive Incentive Plan were as follows:

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In January, 2013,February 2014, the Compensation Committee approved equity grants, 483,420390,840 shares of which consisted of RSAs and 432,300395,900 shares of which consisted of RSUs to all officers holding the title of Vice President or higher, with 457,250350,230 awarded to the nineeight executive officers, of which 178,950133,860 RSAs and 179,200134,100 RSUs were granted to the Named Executives. The aggregate value of these awards, based on the closing price fair market value of AFC Common Stock on the NYSE as of the date of grant totaled $2,215,965$2,207,617 for RSAs and $2,109,536, respectively$2,128,142 for RSUs, with respect to grants made to the executive officers and $1,735,815$1,689,313 for RSAs and $1,652,224, respectively$1,627,974 for RSUs, with respect to grants made to the Named Executives. In all cases, the value ascribed to awards of RSAs has been the closing price of AFC Common Stock on the NYSE on the date of the grant or award, and the value ascribed to RSUs has been the closing price of AFC Common Stock on the date of the grant or award, reduced by the present value of the expected dividend stream during the vesting period for the RSUs using a risk-free interest rate.

On occasion, grants or awards may also be made at or near the time a new officer is hired, or at the time an officer is promoted to a position involving an enhanced degree of responsibility. In 2013, 11,0002014, 91,161 shares of AFC Common Stock were awardedgranted to such officers.officers, of which 85,161 shares of AFC Common Stock were granted to Mr. Donlon as part of his new hire package.

When awarded, the level of restricted stock granted to each officer, including the executive officers, is established at the discretion of the Compensation Committee. Among the specific factors considered in determining the level of grant for any particular officer was the overall cost and value of the awards and the officer’s rank, responsibilities and ability to impact the overall financial performance of AFC, the officer’s salary and the officer’s individual performance. Among the elements of individual performance and contribution considered by the Compensation Committee for each Named Executive were the extent to which such officer demonstrated leadership and motivational qualities, the effectiveness of such officer in managing operations within his areas of responsibility, such officer’s effectiveness in adapting to unforeseen circumstances, the extent to which such officer’s individual performance contributed to AFC meeting its corporate and strategic goals for the year as compared to other executive officers, and how such officer’s individual performance measured up to the individual goals and objectives set at the beginning of the fiscal year. In the case of the Chief Executive Officer, the Compensation Committee also takes into account the extent to which he succeeded in implementing AFC’s Strategic Plan, as well as how effectively he guided executive management in connection with AFC’s corporate performance goals.

See Security Ownership of Management commencing on page 2220, the Summary Compensation Table commencing on page 4136 and the 20132014 Outstanding Equity Awards at Fiscal Year End Table on page 4641 for further information regarding certain options and restricted stock outstanding with respect to the Named Executives.

See Proposal No. 2, beginning on page 57, regarding a proposal to approve the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation.

Retirement Benefits

Retirement benefits are designed to provide for an adequate level of income to each participating employee following his or her retirement from AFC and the AssociationBank based upon compensation level and length of service and more recently their own participation in contributing toward their retirement. These benefits are also designed to support the goals and objectives of the remainder of the compensation program.

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prior to retirement age. The Incentive Savings401(k) Plan continues to be maintained and employees can continue to make voluntary contributions into the Incentive Savings401(k) Plan. From 1993 through 2012, the AssociationBank and AFC made no contributions to the Incentive Savings401(k) Plan. In January, 2013, the AssociationBank resumed making matching contributions equal to 50% of an employee’s contribution, up to a maximum of 3.0% of such employee’s eligible compensation in anticipation of the elimination of benefits under the Astoria Federal Savings and Loan Association Employee Stock Ownership Plan, or ESOP, benefit.which was frozen as of December 31, 2013 and merged with and into the 401(k) Plan effective April 1, 2014.

The Employees Pension Plan is a qualified defined benefit plan. This plan, historically, was the primary retirement vehicle for the Association,Bank, which, when the plan was originally adopted in 1949 and until 1993, was a relatively small mutual thrift institution. The benefit formula under the Employees Pension Plan, which has evolved over time based primarily upon Code requirements, is based upon length of service and, prior to April 30, 2012, the average compensation level for the five years preceding retirement. TheAs described in more detail below, the Employees Pension Plan was amended effective April 30, 2012, to utilizefreeze benefit accruals. In connection with this change, the plan was amended to base benefits on the higher of the average of the five highest years of salary of a participant during the ten years immediately preceding retirement on or before April 30, 2012, or the annual rate of the participant’s salary as of April 30, 2012, whichever was greater.

As a tax qualified plan, the compensation level which can be considered in the benefit formula is capped in accordance with applicable provisions of the Internal Revenue Code. As a result, the Employees Pension Plan, over time, has failed to capture significant amounts of compensation in the benefit formula, at the higher salary and compensation levels within the Association.Bank.

In 1983, the Excess Plan, a non-qualified defined benefit plan, was instituted. This plan applies the Employees Pension Plan benefit formula to salary-based compensation above the Internal Revenue Service, or IRS, compensation limits.

In 1991, the AssociationBank instituted the Supplemental Plan, also a non-qualified defined benefit plan, to maintain the then current benefit formula for a group of officers impacted by a reduction in the benefits formula under the qualified plan and, indirectly, the Excess Plan due to changes mandated under the Code. Mr. Redman is the only Named Executive who is currently a participant in the Supplemental Plan. Until frozen,See the discussion commencing on page 43 under the heading Additional DB Plan Information regarding the benefit formulas applicable to the DB Plans wereand the primary retirement vehicles utilized byeffect of the Association that were not materially and directly tied to the performance of AFC Common Stock.

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Other Banking Services

The AssociationBank provides to its employees, officers and directors routine retail banking services, including primarily checking, savings and certificate of deposit accounts. The AssociationBank from time to time waives, for such individuals, certainde minimis fees associated with such accounts. As these amounts are waived on a non-discriminatory basis to the Association’sBank’s employees generally, under SEC regulations, they are not included in the Compensation Tables for the directors or the Named Executives and are not considered to be related-party transactions.

Company-Provided Automobiles

All executive officers are provided with a company owned or leased automobile for their business and personal use. The AssociationBank pays the maintenance, insurance and licensing-related costs of the automobile, but not fuel costs. The value of this benefit, net of direct business usage, for which other employees are reimbursed, is included in the Summary Compensation Table commencing on page 4136 under the All Other Compensation column.

Use of Corporate Aircraft and Other Travel-Related Expenses

During 2013,Until April 27, 2014, AFC maintained a fractional ownership interest in a corporate aircraft for use by its executives for business purposes only. Since September 2014, AFC has maintained a fractional leasehold interest in a corporate aircraft for use by its executives for business purposes only. Personal use of the aircraft is not permitted. The use of this aircraft by the executives is viewed by AFC as integrally and directly related to their job performance. As a result, this use is not viewed as a perquisite as defined by SEC regulations.

AFC has a policy when Named Executives travel on business to allow the executives to be accompanied by their spouses. This benefit is utilized sparingly by the executives and is considered a perquisite. The estimated incremental cost of the spouse’s attendance is included in the Summary Compensation Table commencing on page 4136 under the All Other Compensation column where such amount can be determined. In all cases, such benefit is immaterial to the compensation of the Named Executives. If a Named Executive is traveling on business utilizing the corporate aircraft and there is otherwise room available on the aircraft for the executive’s spouse to accompany the executive, the spouse may do so. As there is no incremental cost to AFC for the spouse accompanying the executive on such flight, no amount has been included in the Summary Compensation Table with respect to such usage. To the extent a commercial flight was utilized and AFC bore the cost of the spouse’s air travel, the cost of such air travel is included in the Summary Compensation Table commencing on page 4136 under the All Other Compensation column.

Other Benefits

All senior officers, including the Named Executives, are offered the opportunity to have an annual physical examination at the Association’sBank’s expense. In the alternative, senior officers may consult their own physicians and submit the cost of such physical through the officer’s medical insurance coverage which is available to all full time employees. The AssociationBank will reimburse senior officers who consult their own physician the amount in excess of any medical insurance reimbursement less the amount the employee may receive pursuant to the employee’s medical flexible spending account, if any.

Cash versus Non-cash and Current versus Future Compensation

The Compensation Committee does not maintain a stated policy which dictates cash versus non-cash compensation or current versus future compensation. However, the allocation of cash and non-cash compensation for each of the Named Executives is reviewed by the Compensation Committee annually and reflects its best efforts to balance the short and long-term objectives of AFC.

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Summary Compensation Table

Name and Principal Position(1)		Year				Salary ($)(3)				Bonus ($)(4)				Stock Awards ($)(5)				Non-Equity Incentive Plan Compensation ($)(6)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(7)				All Other Compensation ($)(8)				Total ($)
Monte N. Redman President and Chief Executive Officer			2013				930,000				0				1,225,434				558,000				0				97,260				2,810,694
			2012				900,000				0				0				0				1,311,957				121,220				2,333,177
			2011				862,789				0				2,261,736				0				1,097,934				271,739				4,494,198
Frank E. Fusco Senior Executive Vice President and Chief Financial Officer			2013				515,000				0				578,370				251,063				0				83,580				1,428,013
			2012				500,000				0				0				0				395,574				86,967				982,541
			2011				465,000				0				716,130				0				317,889				170,348				1,669,367
Gerard C. Keegan Vice Chairman, Senior Executive Vice President and Chief Operating Officer			2013				600,000				0				673,358				292,500				0				84,844				1,650,702
			2012				575,000				0				0				0				276,903				88,778				940,681
			2011				544,000				0				837,882				0				349,568				189,765				1,921,215
Alan P. Eggleston Senior Executive Vice President, Secretary and Chief Risk Officer			2013				515,000				251,063				578,370				0				0				81,993				1,426,426
			2012				500,000				0				0				0				295,353				90,630				885,983
			2011				500,000				0				770,099				0				304,336				183,185				1,757,620
Stephen J. Sipola Executive Vice President and Managing Director of Business Banking Group(2)			2013				400,000				150,000				332,507				0				0				53,808				936,315

Name and Principal Position(1)		Year				Salary ($)(3)				Bonus ($)(4)				Stock Awards ($)(5)				Non-Equity Incentive Plan Compensation ($)(6)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(7)				All Other Compensation ($)(8)				Total ($)
Monte N. Redman President and Chief Executive Officer			2014				960,000				0				1,319,077				460,800				1,227,292				45,741				4,012,910
			2013				930,000				0				1,225,434				558,000				0				97,260				2,810,694
			2012				900,000				0				0				0				1,311,957				121,220				2,333,177
Frank E. Fusco Senior Executive Vice President and Chief Financial Officer			2014				535,000				0				630,623				208,650				425,399				41,038				1,840,710
			2013				515,000				0				578,370				251,063				0				83,580				1,428,013
			2012				500,000				0				0				0				395,574				86,967				982,541
Gerard C. Keegan Vice Chairman, Senior Executive Vice President and Chief Operating Officer			2014				625,000				0				736,965				243,750				421,976				37,160				2,064,851
			2013				600,000				0				673,358				292,500				0				84,844				1,650,702
			2012				575,000				0				0				0				276,903				88,778				940,681
Alan P. Eggleston Senior Executive Vice President and Chief Risk Officer			2014				535,000				0				630,623				208,650				364,968				38,939				1,778,180
			2013				515,000				251,063				578,370				0				0				81,993				1,426,426
			2012				500,000				0				0				0				295,353				90,630				885,983
Hugh J. Donlon Senior Executive Vice President and Chief Lending Officer(2)			2014				95,192				325,000				1,050,035				0				0				3,925				1,474,152

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Mr. Redman’s salary and incentive award payment for 2013 is2014 represent approximately 53.0%35% of his total compensation. Mr. Fusco,Fusco’s salary and incentive award payment for 2014 represent approximately 40% of his total compensation. Mr. Keegan and Mr. Eggleston’s salaries and incentive award payments for 2013 are2014 each represent approximately 54.0%42% of their respective total compensation. Mr. Sipola’sDonlon’s pro-rated salary and guaranteedsign-on bonus for 2013 is2014 represent approximately 59.0%29% of his total compensation.

The following table sets forth information regarding bonus awards and equity grants pursuant to the Executive Incentive Plan and the 2005 Stock Incentive Plan, respectively, made to the Named Executives during 2013.2014, and in the case of Mr. Donlon equity grants made pursuant to the 2014 Stock Incentive Plan. Pursuant to the terms of the Executive Incentive Plan, the Compensation Committee annually establishes an annual incentive for the executive officers of AFC. For a discussion of the goals and targets applicable for 2013,2014, see Short-Term Non-Equity Incentive Plan Compensation commencing on page 3430. Equity grants are made at the discretion of the Compensation Committee. For a discussion of the 2005 Stock Incentive Plan and the 2014 Stock Incentive Plan, see Equity Based Compensation commencing on page 3632.

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20132014 Grants of Plan-Based Awards Table

Name		Grant Date(1)				Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2)												Estimated Future Buyouts Under Equity Incentive Plan Awards(3)												All Other Stock Awards: Numbers of Shares of Stock or Units (#)				Grant Date Fair Value of Stock Awards ($)(4)				Grant Date(1)				Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2)												Estimated Future Payouts Under Equity Incentive Plan Awards(3)												All Other Stock Awards: Numbers of Shares of Stock or Units (#)				Grant Date Fair Value of Stock Awards ($)(4)
						Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)																Threshold ($)				Target ($)				Maximum ($)				Threshold (#)				Target (#)				Maximum (#)
Monte N. Redman			1/28/2013				186,000				744,000				1,488,000																								2/3/2014				153,000				768,000				1,536,000
			1/28/2013																32,400				64,800				64,800								597,456				2/3/2014																26,650				53,300				66,625								647,062
			1/28/2013																												64,740				627,978				2/3/2014																												53,250				672,015
Frank E. Fusco			1/28/2013				83,688				334,750				669,500																								2/3/2014				69,550				347,750				695,500
			1/28/2013																15,300				30,600				30,600								282,132				2/3/2014																12,750				25,500				31,875								309,570
			1/28/2013																												30,540				296,238				2/3/2014																												25,440				321,053
Gerard C. Keegan			1/28/2013				97,500				390,000				780,000																								2/3/2014				81,250				406,250				812,500
			1/28/2013																17,800				35,600				35,600								328,232				2/3/2014																14,900				29,800				37,250								361,772
			1/28/2013																												35,580				345,126				2/3/2014																												29,730				375,193
Alan P. Eggleston							—				—				—																								2/3/2014				69,550				347,750				695,500
			1/28/2013																15,300				30,600				30,600								282,132				2/3/2014																12,750				25,500				31,875								309,570
			1/28/2013																												30,540				296,238				2/3/2014																												25,440				321,053
Stephen J. Sipola			1/01/2013				250,000				370,000				500,000
			1/28/2013																8,800				17,600				17,600								162,272
			1/28/2013																												17,550				170,235
Hugh J. Donlon																																							10/15/2014																												85,161				1,050,035