Third-quarter profit at Astoria Financial improved as it continues to emphasize multifamily and commercial real estate loans, and cut costs.
Net income at the Lake Success, N.Y., company rose 19% to $13.3 million, or 14 cents per share, from a year earlier. Its loan-loss provision fell to $9.5 million from $10 million.
General expenses fell 7.6% to $72.6 million on lower compensation and benefit costs and the effects of job cuts made earlier in the year.
The holding company of Astoria Federal Savings and Loan Association has originated more multifamily and commercial real estate loans this year than in 2011, president and CEO Monte Redman said last month. The thrift had $555 million of multifamily and CRE loans in its pipeline as of June 30. Astoria has been gradually reducing its historic emphasis on residential mortgages.
Net interest margin at the $17-billion-asset company shrank 18 basis points to 2.09%. Astoria attributed half of the 18 point drop to its carrying an additional $250 million of senior debt during the quarter.
Still, many community banks have seen margins reduced to unprecedented lows, with margins hurt by artificially low interest rates and weak loan demand. Keefe, Bruyette Woods predicted that more than 80% of the banks it follows will report that its third-quarter margins shrank.
Astoria kept its quarterly dividend at four cents per share; it had reduced the dividend from 13 cents in April.