Astoria Financial Corp., Lake Success, N.Y., is predicting its balance sheet will grow during the second-half as residential conforming loan limits are reduced – which helps its retained portfolio – and it reenters the multifamily space.
As part of its earnings release, the thrift said loans in progress – excluding its own refinancings -- were $300 million higher at June 30, than at the start of the second quarter.
In 2Q Astoria earned $17 million, an 8% improvement over the same period a year earlier, but CEO and president Monte Redman called the results “disappointing,” pointing to a $587 million reduction in the company’s balance sheet during the period.
Astoria originated $636 million of residential mortgages for its own portfolio during the quarter, compared to $759 million in the second quarter of 2010. New originations outweighed the $611 million of prepayments in 2Q, leaving the company with a $10.6 billion portfolio.
At June 30 Astoria held $330 million of non-performing residential loans. Redman said NPLs would remain elevated for some time, especially in states that require judicial foreclosure. However, Astoria has already marked down and charged off 76% of its NPLs to their adjusted fair value (minus the estimated selling costs.)
As for its commercial lending business, Astoria suffered from $133 million of prepayments during the quarter, reducing that portfolio to $2.6 billion. Astoria stopped originating multifamily loans after the first quarter 2009 but in February made several new hires aimed at restarting the business.
