Businessweek

Astoria Financial Corporation operates as the holding company of Astoria Federal Savings and Loan Association (Astoria Federal), which provides various banking services. The company operates 85 full-service banking offices, of which 50 are owned and 35 are leased. The company's primary business is attracting retail deposits from the general public and investing those deposits, together with funds generated from operations, principal repayments on loans and securities and borrowings, in one-to-four family mortgage loans, multi-family mortgage loans, commercial real estate loans, and consumer and other loans. The company also invests in mortgage-backed securities, U.S. government, government agency and government-sponsored enterprise (GSE) securities, and other investments permitted by federal banking laws and regulations. Lending Activities The company’s loan portfolio comprises primarily mortgage loans. The remainder of the loan portfolio consists of consumer and other loans. The company originates mortgage loans either directly through its banking and loan production offices in New York or indirectly through brokers and its third party loan origination program. One-to-Four Family Mortgage Lending: The company’s primary lending emphasis is on the origination and purchase of first mortgage loans secured by one-to-four family properties that serve as the primary residence of the owner. It has also made loans secured by non-owner occupied one-to-four family properties acquired as an investment by the borrower. The company also originates second home mortgage loans. It offers amortizing hybrid adjustable rate mortgage (ARM) loans with terms up to 40 years which initially have a fixed rate for 3, 5, 7, or 10 years and convert into 1 year ARM loans at the end of the initial fixed rate period. Multi-Family and Commercial Real Estate Lending: The company is primarily a one-to-four family mortgage lender. It also originates multi-family and commercial real estate loans. Included in its multi-family and commercial real estate loan portfolios are mixed use loans secured by properties, which are intended for both residential and business use and are classified as multi-family or commercial real estate. The multi-family and commercial real estate loans in its portfolio consist of both fixed rate and adjustable rate loans. Multi-family and commercial real estate loans are generally 5 to 15 year term balloon loans amortized over 15 to 30 years. Consumer and Other Loans: The company's consumer and other loans primarily include home equity lines of credit. Home equity lines of credit are adjustable rate loans which are indexed to the prime rate and generally reset monthly. Such lines of credit were underwritten based on its evaluation of the borrower’s ability to repay the debt. The company also offers overdraft protection, lines of credit, commercial loans, and passbook loans. Consumer and other loans, with the exception of home equity and commercial lines of credit, are offered primarily on a fixed rate, short-term basis. Deposits The company offers various deposit accounts with a range of interest rates and terms. It offers passbook and statement savings accounts, money market accounts, NOW and demand deposit accounts, liquid certificates of deposit, and certificates of deposit. Subsidiaries In addition to Astoria Federal, the company has two other subsidiaries, AF Insurance Agency, Inc. and Astoria Capital Trust I. AF Insurance Agency, Inc. is a licensed life insurance agency. Through contractual agreements with various third parties, AF Insurance Agency, Inc. makes insurance products available primarily to the customers of Astoria Federal. As of December 31, 2011, the following were wholly-owned subsidiaries of Astoria Federal: AF Agency, Inc., which makes various annuity products available to the customers of Astoria Federal through an unaffiliated third party vendor; Astoria Federal Mortgage Corp., an operating subsidiary through which Astoria Federal engages in lending activities outside the state of New York through its third party loan origination program; Fidata Service Corp., a Connecticut pass