Long Island’s Premier Community Bank
www.astoriafederal.com
Keefe, Bruyette & Woods
2009 Regional Bank Conference
March 4, 2009
1
Forward Looking Statement
This presentation may contain a number of forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are based on various assumptions and analyses made by us in light
of our management’s experience and perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate under the circumstances. These
statements are not guarantees of future performance and are subject to risks, uncertainties and other factors
(many of which are beyond our control) that could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. These factors include, without limitation, the
following: the timing and occurrence or non-occurrence of events may be subject to circumstances beyond
our control; there may be increases in competitive pressure among financial institutions or from non-financial
institutions; changes in the interest rate environment may reduce interest margins or affect the value of our
investments; changes in deposit flows, loan demand or real estate values may adversely affect our business;
changes in accounting principles, policies or guidelines may cause our financial condition to be perceived
differently; general economic conditions, either nationally or locally in some or all areas in which we do
business, or conditions in the real estate or securities markets or the banking industry may be less favorable
than we currently anticipate; legislative or regulatory changes may adversely affect our business; applicable
technological changes may be more difficult or expensive than we anticipate; success or consummation of
new business initiatives may be more difficult or expensive than we anticipate; or litigation or matters before
regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us
or may delay occurrence or non-occurrence of events longer than we anticipate. We assume no obligation to
update any forward-looking statements to reflect events or circumstances after the date of this document.
2
NYSE: AF
Corporate Profile
$22.0 billion in assets
$16.7 billion in loans
$13.5 billion in deposits
8.0% deposit market share in Long Island market
– Largest thrift depository
Insider & ESOP stock ownership: 22%
Well capitalized
– Bank regulatory capital target > 6%
Core and tangible capital: 6.39%
Risk-based capital: 12.02%
All figures in this presentation are as of December 31, 2008, except as noted.
3
1-4 Family loan portfolio increased $721.3 million, or 6.2%, from December 31,
2007, to $12.3 billion, with a weighted average rate of 5.65% at December 31,
2008
Deposits increased $430.5 million; weighted average rate of deposits declined 70
bp from December 31, 2007, to 2.78% at December 31, 2008
Net interest income increased $61.9 million, or 18.5%, from 2007, to $395.4 million
for 2008
Net interest margin increased 29 basis points from 2007 to 1.91% for 2008
4Q08 margin increased 61 basis points from 4Q07 to 2.18%
Provision for loan losses increased $66.5 million from 2007 to $69.0 million
for 2008
Operating income of $125.8 million compared to $138.1 million for 2007*
2008 Financial Highlights
* Included in the year ended December 31, 2008, is an OTTI, after-tax, non-cash charge totaling $50.5 million, or $0.56 per diluted share, relating to Freddie Mac preferred stock. Included in the year
ended December 31, 2007 is an OTTI, after-tax, non-cash charge totaling $13.3 million, or $0.14 per diluted share, relating to Freddie Mac preferred stock. For a reconciliation of operating income
and operating EPS to GAAP net income and EPS, please refer to the tables on page 35.
4
EFFICIENCY
MORTGAGE LENDING
• Portfolio lender,
• 1-4 Family, Multi-Family and CRE
expertise
• Solid asset quality
RETAIL BANKING
• Premier community bank on
Long Island
• Dominant deposit market share
• #1 thrift depository in core market
Same Simple Business Model
NOT A MTGE. BANKER
5
Total Assets: $22,696,536
At December 31, 1999
Assets
Assets
Liabilities & Shareholders’ Equity
Liabilities & Shareholders’ Equity
Total Assets: $21,982,111
At December 31, 2008
Improving Balance Sheet Quality
($ in thousands)
($ in thousands)
6
* Most recent data available for All US Thrifts and NY Thrifts is for the quarter ended September 30, 2008. AF data is for the twelve months
ended December 31, 2008.
Source: SNL Financial – Median Ratios
(1) G&A expense ratio represents general and administrative expense divided by average assets.
Low Expense Ratio(1)
7
Fewer participants
Tighter underwriting standards
Wider spreads
More volume
1-4 Family Mortgage Lending:
Positive Environment for Quality Portfolio Growth
8
Primarily short-term, 5/1 jumbo prime hybrid ARMs for portfolio
No sub-prime, negative amortization or payment option ARM lending
Average loan amount for 2008 production = $675,000
Average LTV on 2008 production = 57% at origination
Average LTV on total 1-4 family loan portfolio < 63%*
Multiple delivery channels provide flexibility & efficiency
Retail
Commissioned brokers covering 19 states**
Third party originators – correspondents covering 20 states**
Secondary marketing capability
Sale of 15 year and 30 year fixed rate loans reduces interest rate risk
Geographically diversified portfolio
Reduces lending concentrations
1-4 Family Mortgage Lending
* Based on current principal balances and original appraised values.
** All loans underwritten to Astoria’s stringent standards. Includes Washington, D.C.
9
By Product Type
(In Billions)
$3.2 B
$3.3 B
$2.7 B
$3.8 B
1-4 Family Mortgage Loan Originations
10
$3.8 B
Net portfolio growth:
+$83.7 M
+$703.2 M
+$456.2 M
+$1.4 B
+$721.3 M
Weighted Avg. Portfolio
Coupon at Period End
5.05%
5.19%
5.48%
5.70%
5.65%
Solid Multi-family/CRE portfolio
$3.9 billion in portfolio
– Weighted Average Coupon at December 31, 2008: 5.98%
Conservative underwriting
– 2008 production – $514.2 million
Weighted average LTV = 56% at origination
Average loan amount = $2.0 million
– Total portfolio
Weighted average LTV < 62%*
Average loan < $1 million
Approximately 70% of multi-family portfolio is subject
to rent control or rent stabilization
Multi-family/Commercial Real Estate Lending
* Based on current principal balances and original appraised values.
11
• Limited credit risk
Conservative underwriting, top quality loans, low LTVs
No sub-prime, negative amortization or payment option ARM lending
Non-performing assets: $264 million or 1.20% of total assets
No geographic concentration of NPLs
Net charge-offs 18 basis points in 2008
• Top quality MBS portfolio
95% GSE/agency, balance ‘AAA’ rated
CMOs, seasoned collateral, well structured with minimal extension
risk
Average life 1.8 years
Asset Quality Focus
12
Asset Quality
13
(1)
Includes construction loans of $56.8 million, $7.8 million non-performing, consumer loans of $335.4 million, $2.2 million non-performing.
(2)
Includes $117.8 million of net unamortized premiums and deferred loan costs.
($ in millions)
At or For the Twelve Months Ended December 31, 2008
Multi-family/
CRE
Loan portfolio balance
$
12,349.6
$
3,852.8
$
392.2
(1)
$
16,712.4
(2)
Non-performing loans
$
177.5
$
51.1
$
10.0
$
238.6
% of total loans
1.06
%
0.31
%
0.06
%
1.43
%
Net charge-offs
$
17.1
$
9.4
$
2.4
$
28.9
Net charge-offs to avg. loans
11
bp
6
bp
1
bp
18
bp
Other
1-4
Family
Total
Source: MBA National Delinquency Survey.
1-4 Family Delinquency Ratios: AF vs. MBA
Outsourced
Mtge. Servicing
12/31/05
LI Savings Bank
Acquisition
09/30/98
14
Geographic Composition of 1- 4 Family NPLs
15
(1) Includes 27 states
At December 31, 2008
($ in millions)
Total
% of
Total
% of
1-4 Family
1-4 Family
Non-Performing
1-4 Family
1-4 Family
Non-Performing
Non-Performing
Loans as a %
State/DC
Loans
Loans
Loans
Loans
of State Totals
New York
$
2,893.5
23
%
$16.9
10
%
0.58
%
California
1,366.2
11
28.3
16
2.07
Illinois
1,305.7
11
21.8
12
1.67
Connecticut
1,303.7
11
12.6
7
0.97
New Jersey
1,037.9
8
20.7
12
1.99
Virginia
942.9
8
17.9
10
1.90
Maryland
879.1
7
21.2
12
2.41
Massachusetts
839.1
7
7.5
4
0.89
Florida
315.1
3
15.3
9
4.86
Washington
291.1
2
0.0
0
0.00
Georgia
162.0
1
2.5
1
1.54
Pennsylvania
131.4
1
1.7
1
1.29
Washington, D.C.
129.7
1
2.5
1
1.93
North Carolina
125.5
1
1.1
1
0.88
All other states
(1)
626.7
5
7.5
4
1.20
TOTAL
$
12,349.6
100
%
$177.5
100
%
1.44
%
Organic growth vs. de-novo branching
Differentiation from competition
– Maintain pricing discipline
– Pro-active sales culture – PEAK Process
– Focus on customer service – High customer satisfaction
– Community involvement – Support over 575 local
organizations and not-for-profit agencies in our markets
Astoria Federal is an integral part of the fabric of the communities we serve
Retail Banking Philosophy
16
• $13.5 billion in deposits, 85 banking office network
Serving the Long Island market since 1888
• Low cost/stable source of funds – average cost: 2.82%*
• $12.5 billion, or 93%, of total deposits emanate from within
5 miles of a branch
• Banking offices with high average deposits contribute to
efficiency
Long Island Offices (82) – Nassau (28), Queens (17), Suffolk (25),
Brooklyn (12) – Average Deposits of $157 Million
Westchester Offices (3) – Average Deposits of $194 Million
• Alternative delivery channels
ATM’s, telephone and Internet banking
* For the quarter ended December 31, 2008
Leading Retail Banking Franchise
17
TOTAL 4 COUNTY POPULATION: 7,661,593
Source: SNL Financial LC (as of June 30, 2008)
Kings County (Brooklyn)
Population: 2,548,982
Median household income: $43,514
Deposits: $1.6 billion
Branches: 12
Market share: 5%
Rank: #2 thrift, #6 all banks
Queens County
Population: 2,279,742
Median household income: $57,409
Deposits: $3.1 billion
Branches: 17
Market share: 8%
Rank: #1 thrift, #4 all banks
Nassau County
Population: 1,334,459
Median household income: $100,150
Deposits: $5.1 billion
Branches: 28
Market share: 10%
Rank: #1 thrift, #4 all banks
Suffolk County
Population: 1,498,410
Median household income: $86,495
Deposits: $3.1 billion
Branches: 25
Market share: 8%
Rank: #1 thrift, #3 all banks
Long Island Powerhouse
Well Positioned in Key Markets
Overall LI Deposit Share Ranking :
#1- all thrifts, #4- all banks
18
Brooklyn, Queens, Nassau and Suffolk
Market Share Trend 1999 - 2008
Note: Data adjusted to include the effect of merger and acquisition activity.
* Astoria’s deposits highlighted above are comprised of retail community deposits. Astoria does not solicit broker or municipal deposits. Reflects one branch closed in 3Q08
Source: FDIC Summary of Deposits. Data as of June 30, 2008. Top 8 represents institutions with deposits exceeding $5 Billion.
($ in millions)
June 08
June 99-08
June 99-08
June 2008
June 99-08
Market
Market Share
Change in #
Institution
Deposits
$
Growth
%
Share
Gain/(Loss)
of Branches
1
TD Bank
$
7,233
$
7,233
100.0
%
4.5
%
4.5
%
60
2
Citibank
19,818
5,977
43.2
12.4
(0.1)
(18)
3
ASTORIA*
12,802
3,608
39.2
8.0
(0.3)
(2)
4
NY Community
10,069
2,026
25.2
6.3
(0.9)
29
5
HSBC
10,461
1,930
22.6
6.5
(1.1)
(6)
6
Capital One
22,800
5,423
31.2
14.2
(1.4)
7
7
Chase
38,034
9,914
35.3
23.7
(1.5)
46
8
Bank of America
5,360
(2,578)
(32.5)
3.3
(3.8)
(2)
Total - Top 8
$
126,577
$
33,533
36.0
%
79.0
%
(4.6)
%
+ 114
Total - Core Market
$
160,225
$
48,882
43.9
%
100.0
%
+ 306
19
* Note: 59% of the households that have a retail CD or Liquid CD account also have a low
cost checking, savings or money market account relationship.
At December 31, 2008
Total - $13.5 Billion
*Retail CDs: $8.9B
Rate: 3.83%
Money Market: $0.3B
Rate: 1.03%
Savings: $1.8B
Rate: 0.40%
*Liquid CDs: $1.0B
Rate: 2.32%
Now/Demand: $1.5B
Rate: 0.06%
Core Community Deposits
20
• Loan and deposit growth
• Modest margin expansion
• Increased FDIC premium and pension expense
• Reduced FHLB dividends
• Internal tangible capital generation
• Maintain bank regulatory capital > 6% well-capitalized
Core and tangible capital: 6.39% at December 31, 2008
Risk-based capital: 12.02% at December 31, 2008
Outlook for 2009
21
www.astoriafederal.com
Addendum
Long Island’s Premier Community Bank
22
At December 31, 2008
Shares Outstanding: 95,881,132
Ownership Profile
23
37
68
Support Services
Arnold K. Greenberg
Executive Vice President
29
55
Legal
Alan P. Eggleston
EVP, Secretary & General Counsel
32
55
Mortgage Lending
Gary T. McCann
Executive Vice President
38
62
Retail Banking
Gerard C. Keegan
Vice Chairman & CAO
19
45
Chief Financial Officer
Frank E. Fusco
EVP, Treasurer & CFO
34
58
Chief Operating Officer
Monte N. Redman
President & COO
37
70
Chief Executive Officer
George L. Engelke, Jr.
Chairman & CEO
Yrs. in
Banking
Age
Responsibility
Solid and Seasoned Management Team
24
6.39%
6.39%
Bank Regulatory Capital*
12.02%
* Astoria Federal Savings
25
Total 1-4 Family Loan Originations
$3.8 Billion
Average LTV: 57%
Geographic Composition of 1-4 Family Originations
For the twelve months ended December 31, 2008
For the quarter ended December 31, 2008
Total 1-4 Family Loan Originations
$449.9 Million
Average LTV: 57%
26
By Delivery Channel
(In Billions)
$3.2B
$3.3B
$2.7B
1-4 Family Mortgage Loan Originations
$3.8B
$3.8B
27
Geographic Composition of 1-4 Family Loan Portfolio
At December 31, 2008
Total 1-4 Family Loan Portfolio
$12.3 Billion
28
At December 31, 2008
Total Multifamily/CRE Portfolio
$3.9 Billion
New York,
New Jersey,
Connecticut
93%
Geographic Composition of Multi-family/CRE Portfolio Loans
29
Net Loan Charge-Offs by State
30
For the Year Ended December 31, 2008
($ in millions)
State/DC
1-4 Family
Multi-family/CRE
Other
Total
Virginia
$
5.2
$
0.0
$
0.0
$
5.2
California
4.6
0.0
0.0
4.6
Florida
1.7
1.4
1.3
4.4
New York
0.3
1.8
1.1
3.2
Tennessee
0.0
2.4
0.0
2.4
New Jersey
0.5
1.8
0.0
2.3
Connecticut
0.7
1.3
0.0
2.0
Maryland
1.5
0.0
0.0
1.5
Illinois
0.5
0.7
0.0
1.2
Massachusetts
0.8
0.0
0.0
0.8
Georgia
0.5
0.0
0.0
0.5
Michigan
0.3
0.0
0.0
0.3
Washington, D.C.
0.3
0.0
0.0
0.3
Other
0.2
0.0
0.0
0.2
TOTAL
$
17.1
$
9.4
$
2.4
$
28.9
(1) Branches sold in 1999
(2) One satellite office closed in 1997
$11,590
86
TOTAL
6,600
35
Long Island Bancorp, Inc.
1998
2,400
14
The Greater NY Savings Bank
1997
1,800
18
Fidelity New York (2)
1995
280
4
Whitestone Savings (RTC)
1990
205
4
Oneonta Federal (1)
1987
25
1
Chenango Federal (1)
1984
100
3
Hastings-on-Hudson Federal
1982
130
5
Citizens Savings (FSLIC)
1979
$ 50
2
Metropolitan Federal
1973
Assets
# Branches
Thrift
Year
(in millions)
Acquisition History
31
Performance based on Enthusiasm, A ctions and Knowledge
“Sales Oriented and Service Obsessed”
A “needs” based approach to sales rather than “product”
based approach
Highly interactive program – daily and weekly meetings
create a focus that is shared throughout the branch network
Incentives for strong performance, both individual and team
Sales – PEAK Process
32
Key Findings : Favorably Positioned Against Competitors
• 74% of Astoria customers are highly satisfied
• 72% of Astoria customers are highly likely to recommend
Astoria to friend/family member
• Astoria customers are 22% more likely to net increase their
deposit relationship than are competitor customers
• Satisfaction with the branch is by far the strongest driver of
overall satisfaction – 87% of Astoria customers are highly
satisfied with quality of branch service
Customer Satisfaction
33
• Education First
Supports lifelong learning, promotes savings and provides meaningful
financial solutions to improve the way our customers live
• Neighborhood Outreach
Supports local organizations that enrich the communities within our market
area
Over 575 community-based organizations and not-for-profit agencies
supported in our markets
• Results/Recognition
Six consecutive “Outstanding” Community Reinvestment Act ratings by OTS
Astoria Federal is an integral part of the fabric of the communities we serve
Community Involvement
Key Initiatives
34
Reconciliation of GAAP Net Income to Non-GAAP Net Income(1)
35
(In Thousands, Except Per Share Data)
(3) Adjustments relate to the other-than-temporary write-down of securities charge and the related tax effects recorded in the 2007 fourth quarter.
adjustment recorded in the 2008 fourth quarter as a result of tax changes due to the enactment of the Emergency Economic Stabilization Act in October 2008.
(2) Adjustments relate to the other-than-temporary impairment write-down of securities charge and the related tax effects recorded in the 2008 third quarter and subsequent tax
(1) Non-GAAP net income is also referred to as operating income and operating EPS throughout this presentation.
GAAP
GAAP
Net interest income
$395,384
$ -
$395,384
$333,528
$ -
$333,528
Provision for loan losses
69,000
-
69,000
2,500
-
2,500
Net interest income after provision for loan losses
326,384
-
326,384
331,028
-
331,028
Non-interest income
11,180
77,696
88,876
75,790
20,484
96,274
Non-interest expense
233,260
-
233,260
231,273
-
231,273
Income before income tax expense
104,304
77,696
182,000
175,545
20,484
196,029
Income tax expense
28,962
27,194
56,156
50,723
7,169
57,892
Net income
$ 75,342
$50,502
$125,844
$124,822
$13,315
$138,137
Basic earnings per common share
$0.84
$0.56
$1.40
$1.38
$0.15
$1.53
Diluted earnings per common share
$0.83
$0.56
$1.39
$1.36
$0.14
$1.50
Non-GAAP (1)
Non-GAAP
net
income,
non-GAAP
earnings
per
share
and
non-GAAP
returns,
representing
net
income
and
earnings
per
share
determined
in
accordance
with
GAAP
excluding
the
effects
of
the
after-tax
charges
noted
below,
provide
a
meaningful
comparison
for
effectively
evaluating
Astoria's operating results.
Non-GAAP (1)
Adjustments (2)
For the Year Ended
For the Year Ended
December 31, 2008
December 31, 2007
Adjustments (3)
Mortgage Bankers Association
-
MBA
Mortgage-Backed Securities
-
MBS
Office of Thrift Supervision
-
OTS
Earnings Per Share
-
EPS
Federal Home Loan Bank
-
FHLB
Non-Performing Loan
-
NPL
Loan-To-Value Ratio
-
LTV
Other Than Temporary Impairment
-
OTTI
Government Sponsored Enterprise
-
GSE
Generally Accepted Accounting Principles
-
GAAP
Collateralized Mortgage Obligation
-
CMO
Employee Stock Ownership Plan
-
ESOP
Commercial Real Estate
-
CRE
Adjustable Rate Mortgage
-
ARM
Glossary
36
Long Island’s Premier Community Bank
www.astoriafederal.com
37