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Astoria Says CRE Business Continued to Grow in 2Q13

JUL 18, 2013 12:42pm ET
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Astoria Financial Corp. reported net income of $12.8 million in 2Q13, similar to its earnings for the same period in 2012, but included in the most recent quarter results is a $4.3 million pretax prepayment charge for the early extinguishment of debt.

During the quarter, Astoria had $529 million of multifamily and commercial real estate loan originations. In the first six months of the year, these loans have grown to 30% of the institution’s total loan portfolio, from 24% as of Dec. 31, 2012.

There are now $3.7 billion MF/CRE loans in Astoria’s portfolio, an increase of 17% from the start of the year.

Monte Redman, president and CEO, said in the company’s press release, “The loan pipeline at the end of the second quarter remains strong, which continues to position us as a leading originator of MF/CRE loans in the New York metropolitan area.” As of June 30, there was nearly $471 million of loans in the pipeline.

Gary Honstedt, who headed up the revived MF/CRE business at Astoria, retired at the end of 2Q13, although he remains a consultant to the company.

Astoria’s residential mortgage portfolio was $8.6 billion at the end of 2Q13, down from $9.7 billion at the end of last year. Astoria is a portfolio hybrid adjustable-rate mortgage lender and low interest rates make that product less attractive to consumers.

During the quarter it originated $234.3 million of those loans, compared with $896 million in 2Q12.

Prepayments totaled $705 million in 2Q13, compared with $795 million one year prior. Redman commented that with rates trending up in recent weeks, Astoria hopes to see a slowdown in prepayments and the stabilization of the residential portfolio.

Meanwhile BB&T Corp. reported its 2Q13 mortgage banking income declined by $12 million to $168 million from $180 million in the first quarter (and $182 million in 2Q12) as tighter margins offset record loan originations.

Net income for residential mortgage banking was $78 million, down by $25 million from 1Q13.

BB&T’s 2Q13 net income was $547 million, which is a record for the company, and nearly 7% higher versus the same period in 2012.

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