Sterling Bancorp (STL) 8-K Other Events

Exhibit 99.1

Astoria Financial Corporation

Unaudited consolidated financial statements of Astoria as of and for the three and nine months ended September 30, 2017.

Consolidated Statements of Financial Condition at September 30, 2017 and December 31, 2016	1
Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016	2
Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2017 and 2016	3
Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2017 and 2016	4
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016	5
Notes to Consolidated Financial Statements	6

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition (Unaudited)

(In Thousands, Except Share Data)	At September 30, 2017			At December 31, 2016
Assets:
Cash and due from banks	$	275,409		$	129,944
Available-for-sale securities:
Encumbered		33,948			35,080
Unencumbered		209,069			244,965
Total available-for-sale securities		243,017			280,045
Held-to-maturity securities, fair value of $2,859,265 and $2,690,546, respectively:
Encumbered		1,148,801			1,194,685
Unencumbered		1,752,293			1,545,447
Total held-to-maturity securities		2,901,094			2,740,132
Federal Home Loan Bank of New York stock, at cost		95,693			124,807
Loans held-for-sale, net		497			11,584
Loans receivable		9,546,307			10,417,187
Allowance for loan losses		(79,293	)		(86,100	)
Loans receivable, net		9,467,014			10,331,087
Mortgage servicing rights, net		9,812			10,130
Accrued interest receivable		34,094			34,994
Premises and equipment, net		90,678			101,021
Goodwill		185,151			185,151
Bank owned life insurance		443,133			441,064
Real estate owned, net		17,705			15,144
Other assets		186,954			153,549
Total assets	$	13,950,251		$	14,558,652
Liabilities:
Deposits:
NOW and demand deposit	$	2,533,489		$	2,521,094
Money market		2,784,560			2,706,895
Savings		1,986,391			2,048,202
Certificates of deposit		1,724,863			1,600,864
Total deposits		9,029,303			8,877,055
Federal funds purchased		—			195,000
Securities sold under agreements to repurchase		1,100,000			1,100,000
Federal Home Loan Bank of New York advances		1,550,000			2,090,000
Other borrowings, net		198,044			249,752
Mortgage escrow funds		140,267			112,975
Accrued expenses and other liabilities		214,458			219,797
Total liabilities		12,232,072			12,844,579
Stockholders’ Equity:
Preferred stock, $1.00 par value; 5,000,000 shares authorized: Series C (150,000 shares authorized; and 135,000 shares issued and outstanding)		129,796			129,796
Common stock, $0.01 par value (200,000,000 shares authorized; 166,494,888 shares issued; and 101,719,533 and 101,210,478 shares outstanding, respectively)		1,665			1,665
Additional paid-in capital		826,779			830,417
Retained earnings		2,151,208			2,155,785
Treasury stock (64,775,355 and 65,284,410 shares, at cost, respectively)		(1,336,208	)		(1,346,709	)
Accumulated other comprehensive loss		(55,061	)		(56,881	)
Total stockholders’ equity		1,718,179			1,714,073
Total liabilities and stockholders’ equity	$	13,950,251		$	14,558,652

See accompanying Notes to Consolidated Financial Statements.

1

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations (Unaudited)

	For the  Three Months Ended   September 30,						For the  Nine Months Ended   September 30,
(In Thousands, Except Share Data)	2017			2016			2017			2016
Interest income:
Residential mortgage loans	$	41,399		$	44,582		$	128,019		$	137,640
Multi-family and commercial real estate mortgage loans		43,500			47,795			130,329			141,207
Consumer and other loans		2,519			2,456			7,193			7,263
Mortgage-backed and other securities		19,129			17,873			55,744			52,177
Interest-earning cash accounts		263			110			604			346
Federal Home Loan Bank of New York stock		1,428			1,526			4,662			4,434
Total interest income		108,238			114,342			326,551			343,067
Interest expense:
Deposits		6,882			6,463			19,858			20,482
Borrowings		22,570			24,238			69,255			72,606
Total interest expense		29,452			30,701			89,113			93,088
Net interest income		78,786			83,641			237,438			249,979
Provision for loan losses credited to operations		—			(995	)		(4,941	)		(7,128	)
Net interest income after provision for loan losses		78,786			84,636			242,379			257,107
Non-interest income:
Customer service fees		6,560			7,107			20,022			21,637
Other loan fees		468			566			1,560			1,667
Gain on sales of securities		—			—			—			86
Mortgage banking income, net		746			916			3,033			1,034
Income from bank owned life insurance		2,267			2,294			6,696			6,919
Other		766			1,883			3,212			4,740
Total non-interest income		10,807			12,766			34,523			36,083
Non-interest expense:
General and administrative:
Compensation and benefits		41,440			37,725			114,501			112,686
Occupancy, equipment and systems		19,244			19,713			59,072			57,944
Federal deposit insurance premium		1,978			3,151			5,651			9,712
Advertising		545			742			1,693			5,213
Other		68,997			7,377			87,986			22,724
Total non-interest expense		132,204			68,708			268,903			208,279
(Loss) income before income tax (benefit) expense		(42,611	)		28,694			7,999			84,911
Income tax (benefit) expense		(24,776	)		10,003			(6,556	)		29,319
Net (loss) income		(17,835	)		18,691			14,555			55,592
Preferred stock dividends		2,194			2,194			6,582			6,582
Net (loss) income available to common shareholders	$	(20,029	)	$	16,497		$	7,973		$	49,010
Basic (loss) earnings per common share	$	(0.20	)	$	0.16		$	0.08		$	0.48
Diluted (loss) earnings per common share	$	(0.20	)	$	0.16		$	0.08		$	0.48
Basic weighted average common shares outstanding		100,597,399			100,383,631			100,592,921			100,377,618
Diluted weighted average common shares outstanding		100,597,399			100,383,631			100,592,921			100,377,618

See accompanying Notes to Consolidated Financial Statements.

2

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

	For the  Three Months Ended   September 30,						For the  Nine Months Ended   September 30,
(In Thousands)	2017			2016			2017		2016
Net (loss) income	$	(17,835	)	$	18,691		$	14,555	$	55,592
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on securities available-for-sale:
Net unrealized holding gain (loss) on securities arising during the period		522			(955	)		748		3,588
Reclassification adjustment for gain on sales of securities included in net income		—			—			—		(51	)
Net unrealized gain (loss) on securities available-for-sale		522			(955	)		748		3,537
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income		329			356			987		1,068
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income		28			28			85		85
Total other comprehensive income (loss), net of tax		879			(571	)		1,820		4,690
Comprehensive (loss) income	$	(16,956	)	$	18,120		$	16,375	$	60,282

See accompanying Notes to Consolidated Financial Statements.

3

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

For the Nine Months Ended September 30, 2017 and 2016

(In Thousands, Except Share Data)	Total			Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss
Balance at December 31, 2016	$	1,714,073		$	129,796	$	1,665	$	830,417		$	2,155,785		$	(1,346,709	)	$	(56,881	)
Net income		14,555			—		—		—			14,555			—			—
Other comprehensive income, net of tax		1,820			—		—		—			—			—			1,820
Dividends on preferred stock ($48.75 per share)		(6,582	)		—		—		—			(6,582	)		—			—
Dividends on common stock ($0.12 per share)		(12,186	)		—		—		—			(12,186	)		—			—
Sales of treasury stock (5,411 shares)		103			—		—		—			(9	)		112			—
Restricted stock grants (521,784 shares)		—			—		—		(10,329	)		(434	)		10,763			—
Forfeitures of restricted stock (18,140 shares)		—			—		—		298			76			(374	)		—
Stock-based compensation		6,396			—		—		6,393			3			—			—
Balance at September 30, 2017	$	1,718,179		$	129,796	$	1,665	$	826,779		$	2,151,208		$	(1,336,208	)	$	(55,061	)
Balance at December 31, 2015	$	1,663,448		$	129,796	$	1,665	$	902,349		$	2,045,391		$	(1,357,136	)	$	(58,617	)
Net income		55,592			—		—		—			55,592			—			—
Other comprehensive income, net of tax		4,690			—		—		—			—			—			4,690
Dividends on preferred stock ($48.75 per share)		(6,582	)		—		—		—			(6,582	)		—			—
Dividends on common stock ($0.12 per share)		(12,161	)		—		—		—			(12,161	)		—			—
Sales of treasury stock (8,140 shares)		122			—		—		—			(46	)		168			—
Restricted stock grants (685,872 shares)		—			—		—		(10,329	)		(3,823	)		14,152			—
Forfeitures of restricted stock (86,630 shares)		—			—		—		1,171			616			(1,787	)		—
Stock-based compensation		2,518			—		—		2,515			3			—			—
Net tax benefit excess from stock-based compensation		35			—		—		35			—			—			—
Balance at September 30, 2016	$	1,707,662		$	129,796	$	1,665	$	895,741		$	2,078,990		$	(1,344,603	)	$	(53,927	)

See accompanying Notes to Consolidated Financial Statements.

4

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

	For the Nine Months Ended September 30,
(In Thousands)	2017			2016
Cash flows from operating activities:
Net income	$	14,555		$	55,592
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on loans		6,502			8,021
Net amortization on securities and borrowings		4,738			6,260
Net provision for loan and real estate losses credited to operations		(3,977	)		(6,226	)
Depreciation, write-downs and amortization		11,576			10,392
Net gain on sales of loans and securities		(1,407	)		(1,690	)
Mortgage servicing rights amortization and valuation allowance adjustments, net		1,128			3,321
Stock-based compensation		6,396			2,518
Deferred income tax expense		2,588			2,753
Originations of loans held-for-sale		(71,250	)		(84,425	)
Proceeds from sales and principal repayments of loans held-for-sale		83,293			87,879
Decrease in accrued interest receivable		900			162
Bank owned life insurance income and insurance proceeds received, net		(2,069	)		(2,582	)
(Increase) decrease in other assets		(34,048	)		7,544
Decrease in accrued expenses and other liabilities		(6,066	)		(4,422	)
Net cash provided by operating activities		12,859			85,097
Cash flows from investing activities:
Originations of loans receivable		(601,354	)		(1,003,596	)
Loan purchases through third parties		(79,448	)		(247,680	)
Principal payments on loans receivable		1,525,794			1,750,607
Proceeds from sales of delinquent and non-performing loans		1,528			2,457
Purchases of securities held-to-maturity		(837,060	)		(1,155,291	)
Purchases of securities available-for-sale		—			(30,000	)
Principal payments on securities held-to-maturity		672,306			695,738
Principal payments on securities available-for-sale		37,405			120,895
Proceeds from sales of securities available-for-sale		—			23,065
Purchases of Federal Home Loan Bank of New York stock		(28,847	)		(85,363	)
Redemptions of Federal Home Loan Bank of New York stock		57,961			85,680
Proceeds from sales of real estate owned, net		11,883			14,278
Purchases of premises and equipment, net of proceeds from sales		(1,554	)		(4,605	)
Proceeds from dispositions of premises and equipment		301			—
Net cash provided by (used in) investing activities		758,915			166,185
Cash flows from financing activities:
Net increase (decrease) in deposits		152,248			(178,383	)
Net decrease in borrowings with original terms of three months or less		(135,000	)		(455,000	)
Proceeds from borrowings with terms greater than three months		1,350,000			2,075,000
Repayments of borrowings with original terms greater than three months		(2,000,000	)		(1,770,000	)
Cash payments for debt issuance costs		(2,184	)		—
Net increase in mortgage escrow funds		27,292			27,948
Proceeds from sales of treasury stock		103			122
Cash dividends paid to stockholders		(18,768	)		(18,743	)
Net tax benefit excess from stock-based compensation		—			35
Net cash used in financing activities		(626,309	)		(319,021	)
Net decrease in cash and cash equivalents		145,465			(67,739	)
Cash and cash equivalents at beginning of period		129,944			200,538
Cash and cash equivalents at end of period	$	275,409		$	132,799
Supplemental disclosures:
Interest paid	$	87,118		$	88,581
Income taxes paid	$	26,671		$	18,253
Additions to real estate owned	$	15,408		$	9,974
Loans transferred to held-for-sale	$	1,887		$	1,872

See accompanying Notes to Consolidated Financial Statements.

5

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The accompanying consolidated financial statements include the accounts of Astoria Financial Corporation and its wholly-owned subsidiaries: Astoria Bank and its subsidiaries, referred to as Astoria Bank, and AF Insurance Agency, Inc.  As used in this quarterly report, “Astoria,” “we,” “us” and “our” refer to Astoria Financial Corporation and its consolidated subsidiaries.  All significant inter-company accounts and transactions have been eliminated in consolidation.

These consolidated financial statements do not include all of the information and footnotes required by U.S. generally accepted accounting principles, or GAAP, for a full year presentation and certain disclosures have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”).

In our opinion, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of our financial condition as of September 30, 2017 and December 31, 2016, our results of operations and other comprehensive income for the three and nine months ended September 30, 2017 and 2016, changes in our stockholders’ equity for the nine months ended September 30, 2017 and 2016 and our cash flows for the nine months ended September 30, 2017 and 2016.  In preparing the consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities for the consolidated statements of financial condition as of September 30, 2017 and December 31, 2016, and amounts of revenues, expenses and other comprehensive income in the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2017 and 2016.

These consolidated financial statements should be read in conjunction with our December 31, 2016 audited consolidated financial statements and related notes included in our 2016 Annual Report on Form 10-K.

2. Merger with Sterling Bancorp

On October 2, 2017, Sterling Bancorp, or Sterling, acquired all of the outstanding common stock of Astoria for total consideration of approximately $2.2 billion and thereby acquired Astoria Bank’s 88 financial center locations across Long Island and the Greater New York metropolitan area (the “Sterling Merger”). Astoria Bank merged with and into Sterling National Bank, with Sterling National Bank as the surviving entity.

Each outstanding share of common stock was exchanged for 0.875 shares of common stock of Sterling. Also in the Sterling Merger, each share of Astoria 6.50% Non-Cumulative Perpetual Preferred Stock, Series C, par value $1.00 per share, with a liquidation preference of $1,000 per share, issued and outstanding immediately prior to the merger was automatically converted into the right to receive one share of Sterling 6.50% Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share, with a liquidation preference of $1,000 per share.

Direct costs related to the Sterling Merger were expensed as incurred and amounted to $60.2 million and $61.6 million in the three and nine months ended September 30, 2017.

6

3. Securities

The following tables set forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at the dates indicated.

	At September 30, 2017
(In Thousands)	Amortized Cost		Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)	$	206,480	$	205,587
Non-GSE issuance REMICs and CMOs		600		598
GSE pass-through certificates		7,230		7,502
Total residential mortgage-backed securities		214,310		213,687
Obligations of GSEs		30,000		29,327
Fannie Mae stock		15		3
Total securities available-for-sale	$	244,325	$	243,017
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,355,628	$	1,349,127
Non-GSE issuance REMICs and CMOs		188		183
GSE pass-through certificates		213,000		212,125
Total residential mortgage-backed securities		1,568,816		1,561,435
Multi-family mortgage-backed securities:
GSE issuance REMICs		882,671		864,964
Obligations of GSEs		369,333		356,426
Corporate Debt securities		80,000		76,166
Other		274		274
Total securities held-to-maturity	$	2,901,094	$	2,859,265

(1) Government-sponsored enterprise

(2) Real estate mortgage investment conduits and collateralized mortgage obligations

7

	At December 31, 2016
(In Thousands)	Amortized Cost		Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	242,172	$	240,793
Non-GSE issuance REMICs and CMOs		1,442		1,443
GSE pass-through certificates		8,571		8,930
Total residential mortgage-backed securities		252,185		251,166
Obligations of GSEs		30,000		28,875
Fannie Mae stock		15		4
Total securities available-for-sale	$	282,200	$	280,045
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,119,175	$	1,112,114
Non-GSE issuance REMICs and CMOs		193		186
GSE pass-through certificates		228,976		226,359
Total residential mortgage-backed securities		1,348,344		1,338,659
Multi-family mortgage-backed securities:
GSE issuance REMICs		927,119		908,192
Obligations of GSEs		384,325		367,869
Corporate debt securities		80,000		75,482
Other		344		344
Total securities held-to-maturity	$	2,740,132	$	2,690,546

8

4. Loans Receivable and Allowance for Loan Losses

The following tables set forth the composition of our loans receivable portfolio, and an aging analysis by accruing and non-accrual loans, by segment and class at the dates indicated.

	At September 30, 2017
	Past Due
(In Thousands)	30-59 Days		60-89 Days			90 Days or More		Total Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	268		$	—	$	268	$	65,288	$	65,556
Full documentation amortizing		40,025		6,593			—		46,618		3,962,010		4,008,628
Reduced documentation interest-only		282		—			—		282		2,954		3,236
Reduced documentation amortizing		27,954		6,371			—		34,325		519,519		553,844
Total residential		68,261		13,232			—		81,493		4,549,771		4,631,264
Multi-family		2,856		22			—		2,878		3,892,027		3,894,905
Commercial real estate		2,081		—	��		1,595		3,676		627,089		630,765
Total mortgage loans		73,198		13,254			1,595		88,047		9,068,887		9,156,934
Consumer and other loans (gross):
Home equity and other consumer		1,222		527			—		1,749		119,026		120,775
Commercial and industrial		128		—			—		128		98,549		98,677
Total consumer and other loans		1,350		527			—		1,877		217,575		219,452
Total accruing loans	$	74,548	$	13,781		$	1,595	$	89,924	$	9,286,462	$	9,376,386
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	—		$	8,290	$	8,290	$	—	$	8,290
Full documentation amortizing		2,751		—			48,245		50,996		8,385		59,381
Reduced documentation interest-only		—		—			6,032		6,032		—		6,032
Reduced documentation amortizing		880		805			37,283		38,968		12,339		51,307
Total residential		3,631		805			99,850		104,286		20,724		125,010
Multi-family		273		—			1,152		1,425		2,068		3,493
Commercial real estate		828		—			619		1,447		3,460		4,907
Total mortgage loans		4,732		805			101,621		107,158		26,252		133,410
Consumer and other loans (gross):
Home equity and other consumer		—		—			4,318		4,318		—		4,318
Commercial and industrial		—		—			19		19		—		19
Total consumer and other loans		—		—			4,337		4,337		—		4,337
Total non-accrual loans	$	4,732	$	805		$	105,958	$	111,495	$	26,252	$	137,747
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	268		$	8,290	$	8,558	$	65,288	$	73,846
Full documentation amortizing		42,776		6,593			48,245		97,614		3,970,395		4,068,009
Reduced documentation interest-only		282		—			6,032		6,314		2,954		9,268
Reduced documentation amortizing		28,834		7,176			37,283		73,293		531,858		605,151
Total residential		71,892		14,037			99,850		185,779		4,570,495		4,756,274
Multi-family		3,129		22			1,152		4,303		3,894,095		3,898,398
Commercial real estate		2,909		—			2,214		5,123		630,549		635,672
Total mortgage loans		77,930		14,059			103,216		195,205		9,095,139		9,290,344
Consumer and other loans (gross):
Home equity and other consumer		1,222		527			4,318		6,067		119,026		125,093
Commercial and industrial		128		—			19		147		98,549		98,696
Total consumer and other loans		1,350		527			4,337		6,214		217,575		223,789
Total loans	$	79,280	$	14,586		$	107,553	$	201,419	$	9,312,714	$	9,514,133
Net unamortized premiums and deferred loan origination costs													32,174
Loans receivable													9,546,307
Allowance for loan losses													(79,293	)
Loans receivable, net												$	9,467,014

9

	At December 31, 2016
	Past Due
(In Thousands)	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current		Total
Accruing loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	1,476	$	3,104	$	—	$	4,580	$	212,316	$	216,896
Full documentation amortizing		36,563		8,217		—		44,780		4,300,620		4,345,400
Reduced documentation interest-only		2,974		779		—		3,753		80,416		84,169
Reduced documentation amortizing		27,449		5,222		—		32,671		552,233		584,904
Total residential		68,462		17,322		—		85,784		5,145,585		5,231,369
Multi-family		1,060		795		—		1,855		4,040,386		4,042,241
Commercial real estate		2,043		1,298		—		3,341		720,582		723,923
Total mortgage loans		71,565		19,415		—		90,980		9,906,553		9,997,533
Consumer and other loans (gross):
Home equity and other consumer		1,281		550		—		1,831		133,024		134,855
Commercial and industrial		—		647		—		647		99,087		99,734
Total consumer and other loans		1,281		1,197		—		2,478		232,111		234,589
Total accruing loans	$	72,846	$	20,612	$	—	$	93,458	$	10,138,664	$	10,232,122
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	437	$	—	$	11,605	$	12,042	$	2,048	$	14,090
Full documentation amortizing		2,469		—		42,983		45,452		11,753		57,205
Reduced documentation interest-only		—		—		11,624		11,624		3,768		15,392
Reduced documentation amortizing		1,077		992		35,351		37,420		9,887		47,307
Total residential		3,983		992		101,563		106,538		27,456		133,994
Multi-family		428		611		1,244		2,283		2,098		4,381
Commercial real estate		219		—		—		219		5,117		5,336
Total mortgage loans		4,630		1,603		102,807		109,040		34,671		143,711
Consumer and other loans (gross):
Home equity and other consumer		—		—		4,483		4,483		—		4,483
Commercial and industrial		—		—		42		42		—		42
Total consumer and other loans		—		—		4,525		4,525		—		4,525
Total non-accrual loans	$	4,630	$	1,603	$	107,332	$	113,565	$	34,671	$	148,236
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	1,913	$	3,104	$	11,605	$	16,622	$	214,364	$	230,986
Full documentation amortizing		39,032		8,217		42,983		90,232		4,312,373		4,402,605
Reduced documentation interest-only		2,974		779		11,624		15,377		84,184		99,561
Reduced documentation amortizing		28,526		6,214		35,351		70,091		562,120		632,211
Total residential		72,445		18,314		101,563		192,322		5,173,041		5,365,363
Multi-family		1,488		1,406		1,244		4,138		4,042,484		4,046,622
Commercial real estate		2,262		1,298		—		3,560		725,699		729,259
Total mortgage loans		76,195		21,018		102,807		200,020		9,941,224		10,141,244
Consumer and other loans (gross):
Home equity and other consumer		1,281		550		4,483		6,314		133,024		139,338
Commercial and industrial		—		647		42		689		99,087		99,776
Total consumer and other loans		1,281		1,197		4,525		7,003		232,111		239,114
Total loans	$	77,476	$	22,215	$	107,332	$	207,023	$	10,173,335	$	10,380,358
Net unamortized premiums and deferred loan origination costs												36,829
Loans receivable												10,417,187
Allowance for loan losses												(86,100	)
Loans receivable, net											$	10,331,087

10

We segment our one-to-four family, or residential, mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans, and origination time periods, and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate mortgage loans by portfolio using predictive modeling techniques for loans originated after 2010 and by geographic location for loans originated prior to 2011. We analyze our consumer and other loan portfolio by home equity lines of credit, commercial and industrial loans and other consumer loans and perform similar historical loss analyses.

Our evaluation of loss experience factors considers trends in such factors over the prior three years, as well as an estimate of the average amount of time from an event signaling the potential inability of a borrower to continue to pay as agreed to the point at which a loss is confirmed, for substantially all of the loan portfolio, with the exception of multi-family and commercial real estate mortgage loans originated after 2010, for which our evaluation includes predictive modeling techniques. We also analyze our historical loss experience over 12, 15, 18 and 24 month periods.  The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type. Also, for a particular loan type, we may not have sufficient loss history to develop a reasonable estimate of loss and in these instances we may consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs). Modeling techniques utilize data inputs for each loan in the portfolio, including credit facility terms and performance to date, property details and borrower financial performance data. The model also incorporates real estate market data from an established real estate market database company to forecast future performance of the properties, and includes a loan loss predictive model based on studies of defaulted commercial real estate loans. The model then generates a probability of default, loss given default and ultimately an estimated loss for each loan quarterly over the remaining life of the loan. The appropriate timeframe from which to assign an estimated loss percentage to the pool of loans is assessed by management. We update our historical loss analyses, as well as our predictive model, quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses. We also consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by loan category.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio. The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

11

The following tables set forth the changes in our allowance for loan losses by loan receivable segment for the periods indicated.

	For the Three Months Ended September 30, 2017
	Mortgage Loans									Consumer
				Multi-			Commercial			and Other
(In Thousands)	Residential			Family			Real Estate			Loans			Total
Balance at July 1, 2017	$	31,427		$	34,087		$	8,944		$	5,042		$	79,500
Provision charged (credited) to operations		617			142			(701	)		(58	)		—
Charge-offs		(2,591	)		(11	)		—			(475	)		(3,077	)
Recoveries		1,762			—			852			256			2,870
Balance at September 30, 2017	$	31,215		$	34,218		$	9,095		$	4,765		$	79,293

	For the Nine Months Ended September 30, 2017
	Mortgage Loans									Consumer
				Multi-			Commercial			and Other
(In Thousands)	Residential			Family			Real Estate			Loans			Total
Balance at January 1, 2017	$	36,439		$	34,901		$	9,299		$	5,461		$	86,100
Provision credited to operations		(2,482	)		(574	)		(1,549	)		(336	)		(4,941	)
Charge-offs		(6,272	)		(148	)		—			(740	)		(7,160	)
Recoveries		3,530			39			1,345			380			5,294
Balance at September 30, 2017	$	31,215		$	34,218		$	9,095		$	4,765		$	79,293

	For the Three Months Ended September 30, 2016
	Mortgage Loans								Consumer
				Multi-		Commercial			and Other
(In Thousands)	Residential			Family		Real Estate			Loans			Total
Balance at July 1, 2016	$	41,220		$	32,131	$	9,709		$	6,940		$	90,000
Provision (credited) charged to operations		(505	)		1,831		(887	)		(1,434	)		(995	)
Charge-offs		(2,822	)		—		(378	)		(378	)		(3,578	)
Recoveries		469			443		981			380			2,273
Balance at September 30, 2016	$	38,362		$	34,405	$	9,425		$	5,508		$	87,700

	For the Nine Months Ended September 30, 2016
	Mortgage Loans									Consumer
				Multi-			Commercial			and Other
(In Thousands)	Residential			Family			Real Estate			Loans			Total
Balance at January 1, 2016	$	44,951		$	35,544		$	11,217		$	6,288		$	98,000
Provision credited to operations		(2,025	)		(2,696	)		(2,332	)		(75	)		(7,128	)
Charge-offs		(6,313	)		(409	)		(441	)		(1,238	)		(8,401	)
Recoveries		1,749			1,966			981			533			5,229
Balance at September 30, 2016	$	38,362		$	34,405		$	9,425		$	5,508		$	87,700

12

The following table sets forth the balances of our residential interest-only mortgage loans at September 30, 2017 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin in:
12 months or less (1)	$	63,287
13 to 24 months		10,066
25 to 36 months		8,261
Over 36 months		1,500
Total	$	83,114

(1) Includes $14 million of past due loans that were scheduled to enter amortization prior to September 30, 2017.

Pursuant to federal regulations and our policy, loans considered to be of lesser quality are rated as special mention, substandard, doubtful or loss. A loan rated as special mention has potential weaknesses, which, if uncorrected, may result in the deterioration of the repayment prospects or in our credit position at some future date. A loan rated as substandard is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard loans include those characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. Loans rated as doubtful have all of the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses present make collection or liquidation in full satisfaction of the loan amount, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans rated as loss are those considered uncollectable and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Those assets classified as substandard, doubtful or loss are considered adversely classified.

The following tables set forth the balances of our loan portfolio segments by credit quality indicator at the dates indicated.

	At September 30, 2017
	Mortgage Loans						Consumer and Other Loans
(In Thousands)	Residential		Multi-Family		Commercial Real Estate		Home Equity and Other Consumer		Commercial and Industrial		Total
Not criticized	$	4,570,911	$	3,858,906	$	620,411	$	120,248	$	97,164	$	9,267,640
Criticized:
Special mention		10,774		27,710		5,458		527		1,502		45,971
Substandard		174,589		11,782		9,803		4,318		30		200,522
Doubtful		—		—		—		—		—		—
Total	$	4,756,274	$	3,898,398	$	635,672	$	125,093	$	98,696	$	9,514,133

13

	At December 31, 2016
	Mortgage Loans						Consumer and Other Loans
(In Thousands)	Residential		Multi-Family		Commercial Real Estate		Home Equity and Other Consumer		Commercial and Industrial		Total
Not criticized	$	5,158,878	$	4,005,703	$	702,697	$	134,305	$	99,087	$	10,100,670
Criticized:
Special mention		14,922		24,804		9,235		550		647		50,158
Substandard		191,563		16,115		17,327		4,483		42		229,530
Doubtful		—		—		—		—		—		—
Total	$	5,365,363	$	4,046,622	$	729,259	$	139,338	$	99,776	$	10,380,358

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.

	At September 30, 2017
	Mortgage Loans						Consumer
			Multi-		Commercial		and Other
(In Thousands)	Residential		Family		Real Estate		Loans		Total
Loans:
Individually evaluated for impairment	$	178,928	$	5,778	$	4,609	$	3,614	$	192,929
Collectively evaluated for impairment		4,577,346		3,892,620		631,063		220,175		9,321,204
Total loans	$	4,756,274	$	3,898,398	$	635,672	$	223,789	$	9,514,133
Allowance for loan losses:
Individually evaluated for impairment	$	6,457	$	174	$	132	$	276	$	7,039
Collectively evaluated for impairment		24,758		34,044		8,963		4,489		72,254
Total allowance for loan losses	$	31,215	$	34,218	$	9,095	$	4,765	$	79,293

	At December 31, 2016
	Mortgage Loans						Consumer
			Multi-		Commercial		and Other
(In Thousands)	Residential		Family		Real Estate		Loans		Total
Loans:
Individually evaluated for impairment	$	192,427	$	7,112	$	10,033	$	4,091	$	213,663
Collectively evaluated for impairment		5,172,936		4,039,510		719,226		235,023		10,166,695
Total loans	$	5,365,363	$	4,046,622	$	729,259	$	239,114	$	10,380,358
Allowance for loan losses:
Individually evaluated for impairment	$	9,044	$	24	$	—	$	310	$	9,378
Collectively evaluated for impairment		27,395		34,877		9,299		5,151		76,722
Total allowance for loan losses	$	36,439	$	34,901	$	9,299	$	5,461	$	86,100

14

5. Securities Sold Under Agreements to Repurchase

The following table details the remaining contractual maturities of our agreements to repurchase, or repo agreements, at September 30, 2017.

Year	Amount
	(In Thousands)
2018	$	200,000
2019		600,000
2020		300,000
Total	$	1,100,000	(1)

(1) Callable within the next three months and on a quarterly basis thereafter.

The outstanding repo agreements at September 30, 2017 were fixed rate and collateralized by GSE securities. Securities collateralizing these agreements are classified as encumbered securities in the consolidated statements of financial condition. The amount of excess collateral required is governed by each individual contract. The primary risk associated with these secured borrowings is the requirement to pledge a market value based balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, additional collateral may need to be pledged. In accordance with our policies, criteria for eligible counterparties has been established and excess collateral pledged is monitored to minimize our exposure.

15

6. Earnings Per Common Share

The following table is a reconciliation of basic and diluted earnings per common share, or EPS.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(In Thousands, Except Share Data)	2017			2016			2017			2016
Net (loss) income	$	(17,835	)	$	18,691		$	14,555		$	55,592
Preferred stock dividends		(2,194	)		(2,194	)		(6,582	)		(6,582	)
Net (loss) income available to common shareholders		(20,029	)		16,497			7,973			49,010
Income allocated to participating securities		(45	)		(153	)		(112	)		(448	)
Net (loss) income allocated to common shareholders	$	(20,074	)	$	16,344		$	7,861		$	48,562
Basic weighted average common shares outstanding		100,597,399			100,383,631			100,592,921			100,377,618
Dilutive effect of stock options and restricted stock units (1) (2)		—			—			—			—
Diluted weighted average common shares outstanding		100,597,399			100,383,631			100,592,921			100,377,618
Basic (loss) earnings per common share	$	(0.20	)	$	0.16		$	0.08		$	0.48
Diluted (loss) earnings per common share	$	(0.20	)	$	0.16		$	0.08		$	0.48

(1) Excludes options to purchase 6,000 shares of common stock which were outstanding during the three months ended September 30, 2016; options to purchase 311 shares of common stock which were outstanding during the nine months ended September 30, 2017; and options to purchase 6,330 shares of common stock which were outstanding during the nine months ended September 30, 2016 because their inclusion would be anti-dilutive. There were no options to purchase shares of common stock outstanding during the three months ended September 30, 2017.

(2) Excludes 367,800 unvested restricted stock units which were outstanding during the three months ended September 30, 2017;737,315 unvested restricted stock units which were outstanding during the three months ended September 30, 2016; 398,762 unvested restricted stock units which were outstanding during the nine months ended September 30, 2017; and 743,102 unvested restricted stock units which were outstanding during the nine months ended September 30, 2016 because the performance conditions have not been satisfied.

16

7. Other Comprehensive Income/Loss

The following tables set forth the components of accumulated other comprehensive loss, net of related tax effects, at the dates indicated and the changes during the three and nine months ended September 30, 2017 and 2016.

(In Thousands)	At  June 30, 2017			Other Comprehensive Income		At  September 30, 2017
Net unrealized gain on securities available-for-sale	$	2,487		$	522	$	3,009
Net actuarial loss on pension plans and other postretirement benefits		(55,549	)		329		(55,220	)
Prior service cost on pension plans and other postretirement benefits		(2,878	)		28		(2,850	)
Accumulated other comprehensive loss	$	(55,940	)	$	879	$	(55,061	)

(In Thousands)	At  December 31, 2016			Other Comprehensive Income		At  September 30, 2017
Net unrealized gain on securities available-for-sale	$	2,261		$	748	$	3,009
Net actuarial loss on pension plans and other postretirement benefits		(56,207	)		987		(55,220	)
Prior service cost on pension plans and other postretirement benefits		(2,935	)		85		(2,850	)
Accumulated other comprehensive loss	$	(56,881	)	$	1,820	$	(55,061	)

(In Thousands)	At  June 30, 2016			Other Comprehensive (Loss) Income			At  September 30, 2016
Net unrealized gain on securities available-for-sale	$	7,319		$	(955	)	$	6,364
Net actuarial loss on pension plans and other postretirement benefits		(57,684	)		356			(57,328	)
Prior service cost on pension plans and other postretirement benefits		(2,991	)		28			(2,963	)
Accumulated other comprehensive loss	$	(53,356	)	$	(571	)	$	(53,927	)

(In Thousands)	At  December 31, 2015			Other Comprehensive Income		At  September 30, 2016
Net unrealized gain on securities available-for-sale	$	2,827		$	3,537	$	6,364
Net actuarial loss on pension plans and other postretirement benefits		(58,396	)		1,068		(57,328	)
Prior service cost on pension plans and other postretirement benefits		(3,048	)		85		(2,963	)
Accumulated other comprehensive loss	$	(58,617	)	$	4,690	$	(53,927	)

17

The following tables set forth the components of other comprehensive income/loss for the periods indicated.

	For the Three Months Ended  September 30, 2017
(In Thousands)	Before Tax Amount		Income Tax Expense			After Tax Amount
Net unrealized holding gain on securities available-for-sale arising during the period	$	875	$	(353	)	$	522
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income		552		(223	)		329
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income		47		(19	)		28
Other comprehensive income	$	1,474	$	(595	)	$	879

	For the Nine Months Ended  September 30, 2017
(In Thousands)	Before Tax Amount		Income Tax Expense			After Tax Amount
Net unrealized holding gain on securities available-for-sale arising during the period	$	1,255	$	(507	)	$	748
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income		1,657		(670	)		987
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income		142		(57	)		85
Other comprehensive income	$	3,054	$	(1,234	)	$	1,820

	For the Three Months Ended  September 30, 2016
(In Thousands)	Before Tax Amount			Income Tax Benefit (Expense)			After Tax Amount
Net unrealized holding loss on securities available-for-sale arising during the period	$	(1,603	)	$	648		$	(955	)
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income		598			(242	)		356
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income		48			(20	)		28
Other comprehensive loss	$	(957	)	$	386		$	(571	)

	For the Nine Months Ended  September 30, 2016
(In Thousands)	Before Tax Amount			Income Tax (Expense) Benefit			After Tax Amount
Net unrealized gain on securities available-for-sale:
Net unrealized holding gain on securities arising during the period	$	6,023		$	(2,435	)	$	3,588
Reclassification adjustment for gain on sales of securities included in net income		(86	)		35			(51	)
Net unrealized gain on securities available-for-sale		5,937			(2,400	)		3,537
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income		1,793			(725	)		1,068
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income		143			(58	)		85
Other comprehensive income	$	7,873		$	(3,183	)	$	4,690

18

The following tables set forth information about amounts reclassified from accumulated other comprehensive loss to, and the affected line items in, the consolidated statements of income for the periods indicated.

	For the Three Months Ended September 30,						Income Statement
(In Thousands)	2017			2016			Line Item
Reclassification adjustment for net actuarial loss (1)	$	(552	)	$	(598	)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(47	)		(48	)	Compensation and benefits
Total reclassifications, before tax		(599	)		(646	)
Income tax effect		242			262		Income tax expense
Total reclassifications, net of tax	$	(357	)	$	(384	)	Net income

	For the Nine Months Ended September 30,						Income Statement
(In Thousands)	2017			2016			Line Item
Reclassification adjustment for gain on sales of securities	$	—		$	86		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(1,657	)		(1,793	)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(142	)		(143	)	Compensation and benefits
Total reclassifications, before tax		(1,799	)		(1,850	)
Income tax effect		727			748		Income tax expense
Total reclassifications, net of tax	$	(1,072	)	$	(1,102	)	Net income

(1) These other comprehensive income/loss components are included in the computations of net periodic cost/benefit for our defined benefit pension plans and other postretirement benefit plan. See Note 8 for additional details.

19

8. Pension Plans and Other Postretirement Benefits

The following tables set forth information regarding the components of net periodic cost for our defined benefit pension plans and other postretirement benefit plan for the periods indicated.

	Pension Benefits						Other Postretirement Benefits
	For the Three Months Ended September 30,						For the Three Months Ended September 30,
	2017			2016			2017			2016
Service cost	$	—		$	—		$	398		$	465
Interest cost		2,385			2,510			245			249
Expected return on plan assets		(3,100	)		(3,058	)		—			—
Recognized net actuarial loss (gain)		689			703			(137	)		(105	)
Amortization of prior service cost		47			48			—			—
Settlement		43			—			—			—
Net periodic cost	$	64		$	203		$	506		$	609

	Pension Benefits						Other Postretirement Benefits
	For the Nine Months Ended September 30,						For the Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Service cost	$	—		$	—		$	1,193		$	1,397
Interest cost		7,153			7,531			736			746
Expected return on plan assets		(9,300	)		(9,174	)		—			—
Recognized net actuarial loss (gain)		2,067			2,110			(410	)		(317	)
Amortization of prior service cost		142			143			—			—
Settlement		129			—			—			—
Net periodic cost	$	191		$	610		$	1,519		$	1,826

9. Stock Incentive Plans

During the nine months ended September 30, 2017, 504,252 shares of restricted common stock were granted to select officers under the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2014 Employee Stock Plan, of which 497,712 shares remain outstanding at September 30, 2017 and all of which vest one-third per year beginning in December 2017.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2014 Employee Stock Plan, all restricted common stock granted pursuant to such plan immediately vests.

During the nine months ended September 30, 2017, 17,532 shares of restricted common stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, all of which remain outstanding at September 30, 2017 and vest 100% in January 2020, although awards immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

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The following table summarizes restricted common stock and performance-based restricted stock unit activity in our stock incentive plans for the nine months ended September 30, 2017.

	Restricted Common Stock						Restricted Stock Units
	Number of Shares			Weighted Average Grant Date Fair Value			Number of Units			Weighted Average Grant Date Fair Value
Unvested at January 1, 2017		639,329		$	14.40			705,600		$	12.41
Granted		521,784			19.80			—			—
Vested		(21,790	)		(12.62	)		—			—
Forfeited		(18,140	)		(16.43	)		(10,000	)		(12.64	)
Expired		—			—			(327,800	)(1)		(12.14	)
Unvested at September 30, 2017		1,121,183			16.91			367,800			12.64

(1) Expired on February 1, 2017. Performance-based conditions were not achieved.

Stock-based compensation expense is recognized on a straight-line basis over the vesting period and totaled $2.4 million, net of taxes of $1.6 million, for the three months ended September 30, 2017 and $245,000, net of taxes of $166,000, for the three months ended September 30, 2016.Stock-based compensation expense totaled $2.4 million,net of taxes of $1.6 million, for the nine months ended September 30, 2017 and $1.5 million, net of taxes of $1.0 million, for the nine months ended September 30, 2016. At September 30, 2017, pre-tax compensation cost related to all unvested awards of restricted common stock and restricted stock units not yet recognized totaled $12.4 million and will be recognized over a weighted average period of approximately 1.8 years, which excludes $2.3 million of pre-tax compensation cost related to 183,900 performance-based restricted stock units granted in 2015, for which compensation cost will begin to be recognized when the achievement of the performance conditions becomes probable.

10. Litigation

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

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