UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-11967

ASTORIA FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		11-3170868
(State or other jurisdiction of		(I.R.S. Employer Identification
incorporation or organization)		Number)

One Astoria Bank Plaza, Lake Success, New York		11042-1085
(Address of principal executive offices)		(Zip Code)

(516) 327-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨ Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES ¨ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



	Classes of Common Stock		Number of Shares Outstanding, July 28, 2017
	$0.01 Par Value		101,717,865

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		Page

PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):

	Consolidated Statements of Financial Condition at June 30, 2017 and December 31, 2016	2

	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016	3

	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016	4

	Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2017 and 2016	5

	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016	6

	Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	42

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	76

Item 4.	Controls and Procedures	79

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	79

Item 1A.	Risk Factors	81

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	81

Item 3.	Defaults Upon Senior Securities	81

Item 4.	Mine Safety Disclosures	82

Item 5.	Other Information	82

Item 6.	Exhibits	82

Signatures		82

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition



		(Unaudited)
(In Thousands, Except Share Data)	At June 30, 2017				At December 31, 2016
Assets:
Cash and due from banks		$	105,764			$	129,944
Available-for-sale securities:
Encumbered		34,169				35,080
Unencumbered		220,811				244,965
Total available-for-sale securities		254,980				280,045
Held-to-maturity securities, fair value of $2,874,880 and $2,690,546, respectively:
Encumbered		1,154,343				1,194,685
Unencumbered		1,761,122				1,545,447
Total held-to-maturity securities		2,915,465				2,740,132
Federal Home Loan Bank of New York stock, at cost		105,958				124,807
Loans held-for-sale, net		7,920				11,584
Loans receivable		9,899,632				10,417,187
Allowance for loan losses		(79,500		)		(86,100		)
Loans receivable, net		9,820,132				10,331,087
Mortgage servicing rights, net		10,168				10,130
Accrued interest receivable		34,017				34,994
Premises and equipment, net		96,005				101,021
Goodwill		185,151				185,151
Bank owned life insurance		442,388				441,064
Real estate owned, net		14,807				15,144
Other assets		155,585				153,549
Total assets		$	14,148,340			$	14,558,652
Liabilities:
Deposits:
NOW and demand deposit		$	2,549,323			$	2,521,094
Money market		2,776,313				2,706,895
Savings		2,026,585				2,048,202
Certificates of deposit		1,537,335				1,600,864
Total deposits		8,889,556				8,877,055
Federal funds purchased		170,000				195,000
Securities sold under agreements to repurchase		1,100,000				1,100,000
Federal Home Loan Bank of New York advances		1,710,000				2,090,000
Other borrowings, net		197,945				249,752
Mortgage escrow funds		124,708				112,975
Accrued expenses and other liabilities		217,095				219,797
Total liabilities		12,409,304				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 101,717,818 and 101,210,478 shares outstanding, respectively)		1,665				1,665
Additional paid-in capital		824,451				830,417
Retained earnings		2,175,308				2,155,785
Treasury stock (64,777,070 and 65,284,410 shares, at cost, respectively)		(1,336,244		)		(1,346,709		)
Accumulated other comprehensive loss		(55,940		)		(56,881		)
Total stockholders’ equity		1,739,036				1,714,073
Total liabilities and stockholders’ equity		$	14,148,340			$	14,558,652

See accompanying Notes to Consolidated Financial Statements.

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)



	For the Three Months Ended June 30,						For the Six Months Ended June 30,
(In Thousands, Except Share Data)	2017			2016			2017			2016
Interest income:
Residential mortgage loans	$	42,560		$	45,683		$	86,620		$	93,058
Multi-family and commercial real estate mortgage loans	43,423			46,607			86,829			93,412
Consumer and other loans	2,382			2,435			4,674			4,807
Mortgage-backed and other securities	18,615			17,400			36,615			34,304
Interest-earning cash accounts	180			116			341			236
Federal Home Loan Bank of New York stock	1,440			1,487			3,234			2,908
Total interest income	108,600			113,728			218,313			228,725
Interest expense:
Deposits	6,617			6,557			12,976			14,019
Borrowings	23,446			24,085			46,685			48,368
Total interest expense	30,063			30,642			59,661			62,387
Net interest income	78,537			83,086			158,652			166,338
Provision for loan losses credited to operations	(2,455		)	(3,006		)	(4,941		)	(6,133		)
Net interest income after provision for loan losses	80,992			86,092			163,593			172,471
Non-interest income:
Customer service fees	6,853			7,542			13,462			14,530
Other loan fees	497			567			1,092			1,101
Gain on sales of securities	—			—			—			86
Mortgage banking income, net	993			155			2,287			118
Income from bank owned life insurance	2,277			2,336			4,429			4,625
Other	1,222			1,316			2,446			2,857
Total non-interest income	11,842			11,916			23,716			23,317
Non-interest expense:
General and administrative:
Compensation and benefits	36,064			36,708			73,061			74,961
Occupancy, equipment and systems	19,616			18,840			39,828			38,231
Federal deposit insurance premium	1,375			3,031			3,673			6,561
Advertising	559			3,018			1,148			4,471
Other	7,121			8,452			18,989			15,347
Total non-interest expense	64,735			70,049			136,699			139,571
Income before income tax expense	28,099			27,959			50,610			56,217
Income tax expense	10,116			9,623			18,220			19,316
Net income	17,983			18,336			32,390			36,901
Preferred stock dividends	2,194			2,194			4,388			4,388
Net income available to common shareholders	$	15,789		$	16,142		$	28,002		$	32,513

Basic earnings per common share	$	0.16		$	0.16		$	0.28		$	0.32
Diluted earnings per common share	$	0.16		$	0.16		$	0.28		$	0.32

Basic weighted average common shares outstanding	100,595,630			100,380,937			100,590,645			100,374,934
Diluted weighted average common shares outstanding	100,595,630			100,380,937			100,590,645			100,374,934

See accompanying Notes to Consolidated Financial Statements.

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
(In Thousands)	2017		2016		2017		2016

Net income	$	17,983	$	18,336	$	32,390	$	36,901

Other comprehensive income, net of tax:
Net unrealized gain on securities available-for-sale:
Net unrealized holding gain on securities arising during the period	658		507		226		4,543
Reclassification adjustment for gain on sales of securities included in net income	—		—		—		(51		)
Net unrealized gain on securities available-for-sale	658		507		226		4,492

Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income	287		315		658		712

Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income	28		29		57		57

Total other comprehensive income, net of tax	973		851		941		5,261

Comprehensive income	$	18,956	$	19,187	$	33,331	$	42,162

See accompanying Notes to Consolidated Financial Statements.

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

For the Six Months Ended June 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	32,390			—		—		—			32,390			—				—
Other comprehensive income, net of tax	941			—		—		—			—			—				941
Dividends on preferred stock ($32.50 per share)	(4,388		)	—		—		—			(4,388		)	—				—
Dividends on common stock ($0.08 per share)	(8,118		)	—		—		—			(8,118		)	—				—
Sales of treasury stock (3,696 shares)	70			—		—		—			(6		)	76				—
Restricted stock grants (521,784 shares)	—			—		—		(10,329		)	(434		)	10,763				—
Forfeitures of restricted stock (18,140 shares)	—			—		—		298			76			(374		)		—
Stock-based compensation	4,068			—		—		4,065			3			—				—

Balance at June 30, 2017	$	1,739,036		$	129,796	$	1,665	$	824,451		$	2,175,308		$	(1,336,244	)		$	(55,940	)

Balance at December 31, 2015	$	1,663,448		$	129,796	$	1,665	$	902,349		$	2,045,391		$	(1,357,136	)		$	(58,617	)

Net income	36,901			—		—		—			36,901			—				—
Other comprehensive income, net of tax	5,261			—		—		—			—			—				5,261
Dividends on preferred stock ($32.50 per share)	(4,388		)	—		—		—			(4,388		)	—				—
Dividends on common stock ($0.08 per share)	(8,107		)	—		—		—			(8,107		)	—				—
Sales of treasury stock (5,519 shares)	83			—		—		—			(31		)	114				—
Restricted stock grants (685,872 shares)	—			—		—		(10,329		)	(3,823		)	14,152				—
Forfeitures of restricted stock (71,580 shares)	—			—		—		950			527			(1,477		)		—
Stock-based compensation	2,107			—		—		2,106			1			—				—
Net tax benefit excess from stock-based compensation	19			—		—		19			—			—				—

Balance at June 30, 2016	$	1,695,324		$	129,796	$	1,665	$	895,095		$	2,066,471		$	(1,344,347	)		$	(53,356	)

See accompanying Notes to Consolidated Financial Statements.

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)



		For the Six Months Ended June 30,
(In Thousands)	2017				2016
Cash flows from operating activities:
Net income		$	32,390			$	36,901
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on loans		4,509				5,058
Net amortization on securities and borrowings		3,019				3,988
Net provision for loan and real estate losses credited to operations		(4,617		)		(5,545		)
Depreciation and amortization		6,094				7,299
Net gain on sales of loans and securities		(955		)		(1,091		)
Mortgage servicing rights amortization and valuation allowance adjustments, net		511				2,696
Stock-based compensation		4,068				2,107
Deferred income tax (benefit) expense		(1,507		)		1,206
Originations of loans held-for-sale		(52,483		)		(55,461		)
Proceeds from sales and principal repayments of loans held-for-sale		56,912				57,312
Decrease (increase) in accrued interest receivable		977				(569		)
Bank owned life insurance income and insurance proceeds received, net		(1,324		)		(2,625		)
Increase in other assets		(705		)		(1,498		)
Increase in accrued expenses and other liabilities		(1,959		)		(4,657		)
Net cash provided by operating activities		44,930				45,121
Cash flows from investing activities:
Originations of loans receivable		(436,784		)		(641,986		)
Loan purchases through third parties		(79,448		)		(101,252		)
Principal payments on loans receivable		1,016,421				1,042,436
Proceeds from sales of delinquent and non-performing loans		527				2,182
Purchases of securities held-to-maturity		(677,066		)		(822,576		)
Purchases of securities available-for-sale		—				(30,000		)
Principal payments on securities held-to-maturity		499,317				438,127
Principal payments on securities available-for-sale		24,885				74,610
Proceeds from sales of securities available-for-sale		—				23,065
Purchases of Federal Home Loan Bank of New York stock		(21,587		)		(61,460		)
Redemptions of Federal Home Loan Bank of New York stock		40,436				54,688
Proceeds from sales of real estate owned, net		10,112				10,527
Purchases of premises and equipment, net of proceeds from sales		(1,079		)		(4,142		)
Net cash provided by (used in) investing activities		375,734				(15,781		)
Cash flows from financing activities:
Net increase (decrease) in deposits		12,501				(154,897		)
Net increase (decrease) in borrowings with original terms of three months or less		145,000				(426,000		)
Proceeds from borrowings with terms greater than three months		950,000				1,375,000
Repayments of borrowings with original terms greater than three months		(1,550,000		)		(895,000		)
Cash payments for debt issuance costs		(1,642		)		—
Net increase in mortgage escrow funds		11,733				15,607
Proceeds from sales of treasury stock		70				83
Cash dividends paid to stockholders		(12,506		)		(12,495		)
Net tax benefit excess from stock-based compensation		—				19
Net cash used in financing activities		(444,844		)		(97,683		)
Net decrease in cash and cash equivalents		(24,180		)		(68,343		)
Cash and cash equivalents at beginning of period		129,944				200,538
Cash and cash equivalents at end of period		$	105,764			$	132,195

Supplemental disclosures:
Interest paid		$	59,881			$	61,544
Income taxes paid		$	18,947			$	13,595
Additions to real estate owned		$	10,099			$	6,257
Loans transferred to held-for-sale		$	886			$	1,562

See accompanying Notes to Consolidated Financial Statements.

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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.

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 June 30, 2017 and December 31, 2016, our results of operations and other comprehensive income for the three and six months ended June 30, 2017 and 2016, changes in our stockholders’ equity for the six months ended June 30, 2017 and 2016 and our cash flows for the six months ended June 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 June 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 six months ended June 30, 2017 and 2016. The results of operations and other comprehensive income for the three and six months ended June 30, 2017 are not necessarily indicative of the results of operations and other comprehensive income to be expected for the remainder of the year. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles, or GAAP, have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC.

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 Agreement with Sterling Bancorp

On March 6, 2017, Astoria entered into an Agreement and Plan of Merger, or the Sterling Merger Agreement, with Sterling Bancorp, a Delaware corporation, or Sterling. The Sterling Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Astoria will merge with and into Sterling, with Sterling as the surviving corporation, such merger referred to as the Sterling Merger. Immediately following the consummation of the Sterling Merger, Astoria’s wholly owned subsidiary, Astoria Bank, will merge with and into Sterling’s wholly owned subsidiary, Sterling National Bank, such merger referred to as the Sterling Bank Merger. Sterling National Bank will be the surviving entity in the Sterling Bank Merger. The Sterling Merger Agreement was unanimously approved and adopted by the Board of Directors of each of Astoria and Sterling.

Subject to the terms and conditions of the Sterling Merger Agreement, at the effective time of the Sterling Merger, or the Effective Time, Astoria stockholders will have the right to receive 0.875 shares of common stock, par value $0.01 per share, of Sterling, or Sterling Common Stock, for each share of common stock, par value $0.01 per share, of Astoria Financial Corporation, or Astoria Common Stock. 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

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Effective Time will be 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.

The Sterling Merger Agreement contains customary representations and warranties from both Astoria and Sterling, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of Astoria’s and Sterling’s businesses during the interim period between the execution of the Sterling Merger Agreement and the Effective Time, (2) the obligation of Sterling to call a meeting of its stockholders to adopt the Sterling Merger Agreement and approve an amendment to its charter to increase the authorized shares of Sterling Common Stock from 190 million to 310 million, and, subject to certain exceptions, to recommend that its stockholders adopt the Sterling Merger Agreement and the transactions contemplated thereby, (3) the obligation of Astoria to call a meeting of its stockholders to adopt the Sterling Merger Agreement, and, subject to certain exceptions, to recommend that its stockholders adopt the Sterling Merger Agreement, and (4) Astoria’s non-solicitation obligations relating to alternative acquisition proposals. Astoria and Sterling have agreed to use their reasonable best efforts to prepare and file all applications, notices, and other documents to obtain all necessary consents and approvals for consummation of the transactions contemplated by the Sterling Merger Agreement.

The completion of the Sterling Merger is subject to customary conditions, including (1) adoption of the Sterling Merger Agreement by Astoria’s stockholders, (2) adoption of the Sterling Merger Agreement and approval of the Sterling charter amendment by Sterling’s stockholders, (3) authorization for listing on the New York Stock Exchange of the shares of Sterling Common Stock to be issued in the Sterling Merger, (4) the receipt of required regulatory approvals, including the approval of the Board of Governors of the Federal Reserve System, or FRB, and the Office of the Comptroller of the Currency, or OCC, (5) effectiveness of the registration statement on Form S-4 for the Sterling Common Stock to be issued in the Sterling Merger, and (6) the absence of any order, injunction or other legal restraint preventing the completion of the Sterling Merger or making the completion of the Sterling Merger illegal. The registration statement on Form S-4 for the Sterling Common Stock to be issued in the Sterling Merger was filed on April 5, 2017 and was declared effective by the SEC on April 28, 2017. Special meetings of Astoria’s and Sterling’s respective stockholders were held on June 13, 2017, at which Astoria’s stockholders adopted the Sterling Merger Agreement and Sterling’s stockholders adopted the Sterling Merger Agreement and approved the Sterling charter amendment. In addition, all applications and notices necessary to obtain the required regulatory approvals to complete the Sterling Merger have been submitted or sent by Astoria or Sterling.

Each party’s obligation to complete the Sterling Merger is also subject to certain additional customary conditions, including (1) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (2) performance in all material respect by the other party of its obligations under the Sterling Merger Agreement, and (3) receipt by such party of an opinion from its counsel to the effect that the Sterling Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

The Sterling Merger Agreement also provides certain termination rights for both Astoria and Sterling and further provides that a termination fee of $75.7 million will be payable by either Astoria or Sterling, as applicable, upon termination of the Sterling Merger Agreement under certain circumstances.

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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 June 30, 2017
(In Thousands)	Amortized Cost		Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE (1) issuance REMICs and CMOs (2)	$	218,429		$	1,113		$	(2,624	)	$	216,918
Non-GSE issuance REMICs and CMOs	854			—			(3		)	851
GSE pass-through certificates	7,706			302			(1		)	8,007
Total residential mortgage-backed securities	226,989			1,415			(2,628		)	225,776
Obligations of GSEs	30,000			—			(798		)	29,202
Fannie Mae stock	15			—			(13		)	2
Total securities available-for-sale	$	257,004		$	1,415		$	(3,439	)	$	254,980
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,323,264		$	5,438		$	(10,269	)	$	1,318,433
Non-GSE issuance REMICs and CMOs	189			—			(6		)	183
GSE pass-through certificates	221,541			1,008			(2,340		)	220,209
Total residential mortgage-backed securities	1,544,994			6,446			(12,615		)	1,538,825
Multi-family mortgage-backed securities:
GSE issuance REMICs	895,870			273			(16,971		)	879,172
Obligations of GSEs	394,303			17			(13,609		)	380,711
Corporate Debt securities	80,000			—			(4,126		)	75,874
Other	298			—			—			298
Total securities held-to-maturity	$	2,915,465		$	6,736		$	(47,321	)	$	2,874,880


(1)	Government-sponsored enterprise


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

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	At December 31, 2016
(In Thousands)	Amortized Cost		Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	242,172		$	1,327		$	(2,706	)	$	240,793
Non-GSE issuance REMICs and CMOs	1,442			2			(1		)	1,443
GSE pass-through certificates	8,571			361			(2		)	8,930
Total residential mortgage-backed securities	252,185			1,690			(2,709		)	251,166
Obligations of GSEs	30,000			—			(1,125		)	28,875
Fannie Mae stock	15			—			(11		)	4
Total securities available-for-sale	$	282,200		$	1,690		$	(3,845	)	$	280,045
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,119,175		$	4,896		$	(11,957	)	$	1,112,114
Non-GSE issuance REMICs and CMOs	193			—			(7		)	186
GSE pass-through certificates	228,976			665			(3,282		)	226,359
Total residential mortgage-backed securities	1,348,344			5,561			(15,246		)	1,338,659
Multi-family mortgage-backed securities:
GSE issuance REMICs	927,119			363			(19,290		)	908,192
Obligations of GSEs	384,325			54			(16,510		)	367,869
Corporate debt securities	80,000			—			(4,518		)	75,482
Other	344			—			—			344
Total securities held-to-maturity	$	2,740,132		$	5,978		$	(55,564	)	$	2,690,546

The following contractual maturity table sets forth certain information regarding the amortized costs and estimated fair values of our securities available-for-sale and securities held-to-maturity at June 30, 2017 and does not reflect the effect of prepayments or scheduled principal amortization on our REMICs, CMOs and pass-through certificates or the effect of callable features on our obligations of GSEs (all of which are callable in 2017 and at various times thereafter).



	June 30, 2017
	Available-for-Sale						Held-to-Maturity
(Dollars in Thousands)	Amortized Cost			Estimated Fair Value			Amortized Cost		Estimated Fair Value
Securities remaining period to contractual maturity:
Within one year		$	842		$	840	$	49,964	$	49,964
Over one to five years		275			275		17,272		17,287
Over five to ten years		36,072			35,449		434,341		419,787
Over ten years		219,815			218,416		2,413,888		2,387,842
Total securities		$	257,004		$	254,980	$	2,915,465	$	2,874,880

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The following tables set forth the estimated fair values of securities with gross unrealized losses at the dates indicated, segregated between securities that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer at the dates indicated.



	At June 30, 2017
	Less Than Twelve Months						Twelve Months or Longer						Total
(In Thousands)	Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		Gross Unrealized Losses
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	104,918		$	(1,943	)	$	19,459		$	(681	)	$	124,377		$	(2,624	)
Non-GSE issuance REMICs and CMOs	756			(2		)	67			(1		)	823			(3		)
GSE pass-through certificates	—			—			53			(1		)	53			(1		)
Obligations of GSEs	29,202			(798		)	—			—			29,202			(798		)
Fannie Mae stock	—			—			2			(13		)	2			(13		)
Total temporarily impaired securities available-for-sale	$	134,876		$	(2,743	)	$	19,581		$	(696	)	$	154,457		$	(3,439	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	705,134		$	(6,681	)	$	119,515		$	(3,588	)	$	824,649		$	(10,269	)
Non-GSE issuance REMICs and CMOs	—			—			183			(6		)	183			(6		)
GSE pass-through certificates	79,567			(1,103		)	58,804			(1,237		)	138,371			(2,340		)
Multi-family mortgage-backed securities:
GSE issuance REMICs	773,614			(15,565		)	43,062			(1,406		)	816,676			(16,971		)
Obligations of GSEs	344,300			(13,609		)	—			—			344,300			(13,609		)
Corporate debt securities	9,200			(800		)	66,674			(3,326		)	75,874			(4,126		)
Total temporarily impaired securities held-to-maturity	$	1,911,815		$	(37,758	)	$	288,238		$	(9,563	)	$	2,200,053		$	(47,321	)



	At December 31, 2016
	Less Than Twelve Months						Twelve Months or Longer						Total
(In Thousands)	Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		Gross Unrealized Losses
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	140,638		$	(1,886	)	$	20,026		$	(820	)	$	160,664		$	(2,706	)
Non-GSE issuance REMICs and CMOs	—			—			92			(1		)	92			(1		)
GSE pass-through certificates	71			(1		)	90			(1		)	161			(2		)
Obligations of GSEs	28,875			(1,125		)	—			—			28,875			(1,125		)
Fannie Mae stock	—			—			4			(11		)	4			(11		)
Total temporarily impaired securities available-for-sale	$	169,584		$	(3,012	)	$	20,212		$	(833	)	$	189,796		$	(3,845	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	515,537		$	(7,457	)	$	131,629		$	(4,500	)	$	647,166		$	(11,957	)
Non-GSE issuance REMICs and CMOs	—			—			186			(7		)	186			(7		)
GSE pass-through certificates	104,538			(1,775		)	61,872			(1,507		)	166,410			(3,282		)
Multi-family mortgage-backed securities:
GSE issuance REMICs	871,436			(19,290		)	—			—			871,436			(19,290		)
Obligations of GSEs	296,427			(16,510		)	—			—			296,427			(16,510		)
Corporate debt securities	37,785			(2,216		)	37,698			(2,302		)	75,483			(4,518		)
Total temporarily impaired securities held-to-maturity	$	1,825,723		$	(47,248	)	$	231,385		$	(8,316	)	$	2,057,108		$	(55,564	)

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We held 208 securities which had an unrealized loss at June 30, 2017 and 188 securities which had an unrealized loss at December 31, 2016. Securities in unrealized loss positions are analyzed as part of our ongoing assessment of other-than-temporary impairment. Our assertion regarding our intent not to sell, or that it is not more likely than not that we will be required to sell a security before its anticipated recovery, is based on a number of factors, including a quantitative estimate of the expected recovery period (which may extend to maturity), and our intended strategy with respect to the identified security or portfolio. If we do have the intent to sell, or believe it is more likely than not that we will be required to sell the security before its anticipated recovery, the unrealized loss is charged directly to earnings in the Consolidated Statements of Income and Comprehensive Income. Other factors considered in determining whether or not an impairment is temporary include the severity of the impairment; the duration of the impairment; the cause of the impairment; the near-term prospects of the issuer; and the estimated recovery period. The unrealized losses on our residential and multi-family mortgage-backed securities and GSE obligations at June 30, 2017 were primarily caused by movements in market interest rates subsequent to the purchase of such securities or obligations. The unrealized losses on our corporate debt obligations were primarily due to the observed credit spread widening that occurred during the six months ended June 30, 2017, which we attribute to the contemporaneous broad-based equity market volatility. We do not consider these unrealized losses to be other than temporary impairment.

There were no sales of securities from the available-for-sale portfolio during the six months ended June 30, 2017. During the six months ended June 30, 2016, proceeds from sales of securities from the available-for-sale portfolio totaled $23.1 million, resulting in gross realized gains of $86,000.

At June 30, 2017, available-for-sale debt securities, excluding mortgage-backed securities, had an amortized cost of $30.0 million, an estimated fair value of $29.2 million and contractual maturities in 2025 and 2026. At June 30, 2017, held-to-maturity debt securities, excluding mortgage-backed securities, had an amortized cost of $474.6 million, an estimated fair value of $456.9 million and contractual maturities primarily in 2017 through 2027. Actual maturities may differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

At June 30, 2017, the amortized cost of callable securities in our portfolio totaled $374.3 million, which are callable in 2017 and at various times thereafter. The balance of accrued interest receivable for securities totaled $8.5 million at June 30, 2017 and $8.1 million at December 31, 2016.

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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 June 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	$	820	$	754	$	—	$	1,574	$	103,118	$	104,692
Full documentation amortizing	27,058		7,706		—		34,764		4,121,737		4,156,501
Reduced documentation interest-only	302		—		—		302		19,069		19,371
Reduced documentation amortizing	22,994		5,130		—		28,124		547,775		575,899
Total residential	51,174		13,590		—		64,764		4,791,699		4,856,463
Multi-family	3,498		153		663		4,314		3,978,312		3,982,626
Commercial real estate	1,869		1,099		895		3,863		660,813		664,676
Total mortgage loans	56,541		14,842		1,558		72,941		9,430,824		9,503,765
Consumer and other loans (gross):
Home equity and other consumer	1,088		80		—		1,168		124,506		125,674
Commercial and industrial	44		—		—		44		97,820		97,864
Total consumer and other loans	1,132		80		—		1,212		222,326		223,538
Total accruing loans	$	57,673	$	14,922	$	1,558	$	74,153	$	9,653,150	$	9,727,303
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	—	$	—	$	8,345	$	8,345	$	311	$	8,656
Full documentation amortizing	1,168		1,392		44,804		47,364		9,711		57,075
Reduced documentation interest-only	783		—		8,813		9,596		329		9,925
Reduced documentation amortizing	1,889		804		39,630		42,323		9,982		52,305
Total residential	3,840		2,196		101,592		107,628		20,333		127,961
Multi-family	389		—		306		695		1,307		2,002
Commercial real estate	675		—		—		675		3,376		4,051
Total mortgage loans	4,904		2,196		101,898		108,998		25,016		134,014
Consumer and other loans (gross):
Home equity and other consumer	—		—		4,383		4,383		—		4,383
Commercial and industrial	—		—		24		24		—		24
Total consumer and other loans	—		—		4,407		4,407		—		4,407
Total non-accrual loans	$	4,904	$	2,196	$	106,305	$	113,405	$	25,016	$	138,421
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	820	$	754	$	8,345	$	9,919	$	103,429	$	113,348
Full documentation amortizing	28,226		9,098		44,804		82,128		4,131,448		4,213,576
Reduced documentation interest-only	1,085		—		8,813		9,898		19,398		29,296
Reduced documentation amortizing	24,883		5,934		39,630		70,447		557,757		628,204
Total residential	55,014		15,786		101,592		172,392		4,812,032		4,984,424
Multi-family	3,887		153		969		5,009		3,979,619		3,984,628
Commercial real estate	2,544		1,099		895		4,538		664,189		668,727
Total mortgage loans	61,445		17,038		103,456		181,939		9,455,840		9,637,779
Consumer and other loans (gross):
Home equity and other consumer	1,088		80		4,383		5,551		124,506		130,057
Commercial and industrial	44		—		24		68		97,820		97,888
Total consumer and other loans	1,132		80		4,407		5,619		222,326		227,945
Total loans	$	62,577	$	17,118	$	107,863	$	187,558	$	9,678,166	$	9,865,724
Net unamortized premiums and deferred loan origination costs											33,908
Loans receivable											9,899,632
Allowance for loan losses											(79,500		)
Loans receivable, net											$	9,820,132

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	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):

ASTORIA FINANCIAL CORP 10-Q