10-Q

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 September 30, 2014

OR

¨ 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 or a smaller reporting company (as these items are defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer x Accelerated filer ¨    Non-accelerated filer ¨Smaller reporting company ¨

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, October 31, 2014
$0.01 Par Value	99,792,858

		Page
PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Consolidated Statements of Financial Condition at September 30, 2014 and December 31, 2013	2
	Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2014 and 2013	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2014 and 2013	4
	Consolidated Statement of Changes in Stockholders’ Equity for the Nine Months Ended September 30, 2014	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	73
Item 4.	Controls and Procedures	76
PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	76
Item 1A.	Risk Factors	77
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	77
Signatures		78

1

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Condition

		(Unaudited)
(In Thousands, Except Share Data)	At September 30, 2014				At December 31, 2013
Assets:
Cash and due from banks		$	148,427			$	121,950
Available-for-sale securities:
Encumbered		103,554				105,234
Unencumbered		262,472				296,456
Total available-for-sale securities		366,026				401,690
Held-to-maturity securities, fair value of $2,035,378 and $1,811,122, respectively:
Encumbered		1,139,036				1,150,315
Unencumbered		914,301				699,211
Total held-to-maturity securities		2,053,337				1,849,526
Federal Home Loan Bank of New York stock, at cost		133,398				152,207
Loans held-for-sale, net		7,629				7,375
Loans receivable		11,915,935				12,442,066
Allowance for loan losses		(113,600		)		(139,000		)
Loans receivable, net		11,802,335				12,303,066
Mortgage servicing rights, net		11,905				12,800
Accrued interest receivable		37,636				37,926
Premises and equipment, net		110,586				112,530
Goodwill		185,151				185,151
Bank owned life insurance		428,570				423,375
Real estate owned, net		42,458				42,636
Other assets		132,823				143,490
Total assets		$	15,460,281			$	15,793,722
Liabilities:
Deposits:
Savings		$	2,286,347			$	2,493,899
Money market		2,331,869				1,972,136
NOW and demand deposit		2,146,405				2,097,478
Certificates of deposit		2,848,140				3,291,797
Total deposits		9,612,761				9,855,310
Federal funds purchased		338,000				335,000
Reverse repurchase agreements		1,100,000				1,100,000
Federal Home Loan Bank of New York advances		2,225,000				2,454,000
Other borrowings, net		248,559				248,161
Mortgage escrow funds		138,343				109,458
Accrued expenses and other liabilities		203,612				172,280
Total liabilities		13,866,275				14,274,209
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 99,707,552 and 98,841,960 shares outstanding, respectively)		1,665				1,665
Additional paid-in capital		895,684				894,297
Retained earnings		1,977,529				1,930,026
Treasury stock (66,787,336 and 67,652,928 shares, at cost, respectively)		(1,380,134		)		(1,398,021		)
Accumulated other comprehensive loss		(30,534		)		(38,250		)
Total stockholders’ equity		1,594,006				1,519,513
Total liabilities and stockholders’ equity		$	15,460,281			$	15,793,722

See accompanying Notes to Consolidated Financial Statements.

2

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

	For the   Three Months Ended   September 30,					For the   Nine Months Ended   September 30,
(In Thousands, Except Share Data)	2014			2013		2014			2013
Interest income:
Residential mortgage loans	$	58,268		$	69,158	$	185,516		$	222,994
Multi-family and commercial real estate mortgage loans	45,693			41,450		132,430			120,463
Consumer and other loans	2,157			2,175		6,328			6,611
Mortgage-backed and other securities	14,528			13,247		42,321			36,003
Interest-earning cash accounts	83			67		232			192
Federal Home Loan Bank of New York stock	1,486			1,498		4,777			5,147
Total interest income	122,215			127,595		371,604			391,410
Interest expense:
Deposits	12,804			15,156		38,856			48,166
Borrowings	24,791			26,235		74,384			88,107
Total interest expense	37,595			41,391		113,240			136,273
Net interest income	84,620			86,204		258,364			255,137
Provision for loan losses (credited) charged to operations	(3,042		)	2,541		(7,153		)	16,193
Net interest income after provision for loan losses	87,662			83,663		265,517			238,944
Non-interest income:
Customer service fees	9,183			9,550		27,233			27,718
Other loan fees	591			598		1,846			1,588
Gain on sales of securities	141			—		141			2,057
Mortgage banking income, net	1,252			1,888		2,662			10,060
Income from bank owned life insurance	2,150			1,972		6,278			6,211
Other	436			1,301		3,107			4,535
Total non-interest income	13,753			15,309		41,267			52,169
Non-interest expense:
General and administrative:
Compensation and benefits	34,191			33,879		101,994			99,262
Occupancy, equipment and systems	18,048			17,022		54,015			53,669
Federal deposit insurance premium	6,558			9,166		22,404			28,359
Advertising	5,023			2,074		9,173			6,225
Extinguishment of debt	—			—		—			4,266
Other	8,531			10,393		26,581			26,701
Total non-interest expense	72,351			72,534		214,167			218,482
Income before income tax expense	29,064			26,438		92,617			72,631
Income tax expense	10,256			9,514		19,960			26,190
Net income	18,808			16,924		72,657			46,441
Preferred stock dividends	2,194			2,194		6,582			5,021
Net income available to common shareholders	$	16,614		$	14,730	$	66,075		$	41,420
Basic earnings per common share	$	0.17		$	0.15	$	0.66		$	0.42
Diluted earnings per common share	$	0.17		$	0.15	$	0.66		$	0.42
Basic weighted average common shares outstanding	98,453,265			97,199,329		98,279,671			96,967,052
Diluted weighted average common shares outstanding	98,453,265			97,199,329		98,279,671			96,967,052

See accompanying Notes to Consolidated Financial Statements.

3

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Unaudited)

	For the   Three Months Ended   September 30,						For the   Nine Months Ended   September 30,
(In Thousands)	2014			2013			2014			2013
Net income	$	18,808		$	16,924		$	72,657		$	46,441
Other comprehensive (loss) income, net of tax:
Net unrealized (loss) gain on securities available-for-sale:
Net unrealized holding (loss) gain on securities arising during the period	(420		)	(1,286		)	7,272			(7,889		)
Reclassification adjustment for gain on sales of securities included in net income	(91		)	—			(91		)	(1,332		)
Net unrealized (loss) gain on securities available-for-sale	(511		)	(1,286		)	7,181			(9,221		)
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income	147			585			443			1,754
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income	31			34			92			103
Total other comprehensive (loss) income, net of tax	(333		)	(667		)	7,716			(7,364		)
Comprehensive income	$	18,475		$	16,257		$	80,373		$	39,077

See accompanying Notes to Consolidated Financial Statements.

4

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity (Unaudited)

For the Nine Months Ended September 30, 2014

(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, 2013	$	1,519,513		$	129,796	$	1,665	$	894,297		$	1,930,026		$	(1,398,021	)	$	(38,250	)
Net income	72,657			—		—		—			72,657			—			—
Other comprehensive income, net of tax	7,716			—		—		—			—			—			7,716
Dividends on preferred stock ($48.75 per share)	(6,582		)	—		—		—			(6,582		)	—			—
Dividends on common stock ($0.12 per share)	(11,929		)	—		—		—			(11,929		)	—			—
Sales of treasury stock (459,836 shares)	6,092			—		—		—			(3,410		)	9,502			—
Restricted stock grants (429,346 shares)	—			—		—		(5,422		)	(3,450		)	8,872			—
Forfeitures of restricted stock (23,590 shares)	—			—		—		281			206			(487		)	—
Stock-based compensation	6,488			—		—		6,477			11			—			—
Net tax benefit excess from stock-based compensation	51			—		—		51			—			—			—
Balance at September 30, 2014	$	1,594,006		$	129,796	$	1,665	$	895,684		$	1,977,529		$	(1,380,134	)	$	(30,534	)

See accompanying Notes to Consolidated Financial Statements.

5

ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

	For the Nine Months Ended September 30,
(In Thousands)	2014				2013
Cash flows from operating activities:
Net income		$	72,657			$	46,441
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on loans		8,905				16,966
Net amortization on securities and borrowings		6,947				13,084
Net provision for loan and real estate losses (credited) charged to operations		(6,137		)		17,135
Depreciation and amortization		8,889				8,653
Net gain on sales of loans and securities		(528		)		(8,595		)
Mortgage servicing rights amortization and valuation allowance adjustments, net		1,681				(512		)
Stock-based compensation and allocation of ESOP stock		6,488				13,121
Originations of loans held-for-sale		(73,653		)		(229,041		)
Proceeds from sales and principal repayments of loans held-for-sale		73,289				295,076
Decrease in accrued interest receivable		290				2,038
Bank owned life insurance income and insurance proceeds received, net		(5,195		)		(3,027		)
Decrease in other assets		7,162				31,619
Increase (decrease) in accrued expenses and other liabilities		32,159				(13,902		)
Net cash provided by operating activities		132,954				189,056
Cash flows from investing activities:
Originations of loans receivable		(1,062,910		)		(1,782,858		)
Loan purchases through third parties		(141,033		)		(348,550		)
Principal payments on loans receivable		1,482,443				2,724,868
Proceeds from sales of delinquent and non-performing loans		178,470				18,501
Purchases of securities held-to-maturity		(459,943		)		(828,835		)
Purchases of securities available-for-sale		—				(221,080		)
Principal payments on securities held-to-maturity		250,468				602,321
Principal payments on securities available-for-sale		31,031				86,270
Proceeds from sales of securities available-for-sale		14,447				41,640
Net redemptions of Federal Home Loan Bank of New York stock		18,809				17,977
Redemption of Astoria Capital Trust I common securities		—				3,866
Proceeds from sales of real estate owned, net		40,718				29,560
Purchases of premises and equipment, net of proceeds from sales		(6,945		)		(6,092		)
Net cash provided by investing activities		345,555				337,588
Cash flows from financing activities:
Net decrease in deposits		(242,549		)		(383,584		)
Net (decrease) increase in borrowings with original terms of three months or less		(76,000		)		189,000
Repayments of borrowings with original terms greater than three months		(150,000		)		(453,866		)
Net increase in mortgage escrow funds		28,885				24,147
Proceeds from sales of treasury stock		6,092				—
Proceeds from issuance of preferred stock		—				135,000
Cash payments for preferred stock issuance costs		—				(5,204		)
Cash dividends paid to stockholders		(18,511		)		(14,577		)
Net tax benefit excess (shortfall) from stock-based compensation		51				(1,296		)
Net cash used in financing activities		(452,032		)		(510,380		)
Net increase in cash and cash equivalents		26,477				16,264
Cash and cash equivalents at beginning of period		121,950				121,473
Cash and cash equivalents at end of period		$	148,427			$	137,737
Supplemental disclosures:
Interest paid		$	110,171			$	137,551
Income taxes paid		$	10,665			$	13,455
Additions to real estate owned		$	41,556			$	36,962
Loans transferred to held-for-sale		$	187,769			$	15,642

See accompanying Notes to Consolidated Financial Statements.

6

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 (formerly known as Astoria Federal Savings and Loan Association) and its subsidiaries, referred to as Astoria Bank, and AF Insurance Agency, Inc.  As used in this quarterly report, “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 September 30, 2014 and December 31, 2013, our results of operations and other comprehensive income/loss for the three and nine months ended September 30, 2014 and 2013, changes in our stockholders’ equity for the nine months ended September 30, 2014 and our cash flows for the nine months ended September 30, 2014 and 2013.  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 September 30, 2014 and December 31, 2013, and amounts of revenues, expenses and other comprehensive income/loss in the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2014 and 2013.  The results of operations and other comprehensive income/loss for the three and nine months ended September 30, 2014 are not necessarily indicative of the results of operations and other comprehensive income/loss 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.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

These consolidated financial statements should be read in conjunction with our December 31, 2013 audited consolidated financial statements and related notes included in our 2013 Annual Report on Form 10-K.

Change in New York State Tax Legislation

New York State, or NYS, tax legislation was signed into law on March 31, 2014.  While the law generally becomes effective in 2015, the nature of the changes resulted in the recording of certain deferred tax assets in the first quarter of 2014.  In recent years, we have been subject to taxation in NYS under an alternative taxation method.  The new legislation, among other things, removes that alternative method.  Further, the new law (1) requires that we will be taxed in a manner that we believe may result in an increase in our tax expense beginning in 2015 and (2) caused us to recognize temporary differences and net operating loss carry-forward benefits in 2014 which we were unable to recognize previously.  The result of this legislative change as of March 31, 2014 was an increase in our net deferred tax asset with a corresponding reduction in income tax expense of $11.5 million in the 2014 first quarter.

7

2.  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 September 30, 2014
(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)	$	250,318		$	3,191		$	(2,763	)	$	250,746
Non-GSE issuance REMICs and CMOs	5,685			43			(1		)	5,727
GSE pass-through certificates	13,538			478			(5		)	14,011
Total residential mortgage-backed securities	269,541			3,712			(2,769		)	270,484
Obligations of GSEs	98,679			—			(3,140		)	95,539
Fannie Mae stock	15			—			(12		)	3
Total securities available-for-sale	$	368,235		$	3,712		$	(5,921	)	$	366,026
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,562,719		$	12,793		$	(23,830	)	$	1,551,682
Non-GSE issuance REMICs and CMOs	2,669			37			(7		)	2,699
GSE pass-through certificates	290,152			1,168			(5,360		)	285,960
Total residential mortgage-backed securities	1,855,540			13,998			(29,197		)	1,840,341
Multi-family mortgage-backed securities:
GSE issuance REMICs	106,326			260			(541		)	106,045
Obligations of GSEs	90,934			52			(2,531		)	88,455
Other	537			—			—			537
Total securities held-to-maturity	$	2,053,337		$	14,310		$	(32,269	)	$	2,035,378

(1) Government-sponsored enterprise

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

	At December 31, 2013
(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	$	292,131		$	1,077		$	(7,134	)	$	286,074
Non-GSE issuance REMICs and CMOs	7,516			57			(1		)	7,572
GSE pass-through certificates	16,120			770			(2		)	16,888
Total residential mortgage-backed securities	315,767			1,904			(7,137		)	310,534
Obligations of GSEs	98,675			—			(7,522		)	91,153
Fannie Mae stock	15			—			(12		)	3
Total securities available-for-sale	$	414,457		$	1,904		$	(14,671	)	$	401,690
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,474,506		$	12,877		$	(33,925	)	$	1,453,458
Non-GSE issuance REMICs and CMOs	3,833			61			(10		)	3,884
GSE pass-through certificates	282,473			85			(10,089		)	272,469
Total residential mortgage-backed securities	1,760,812			13,023			(44,024		)	1,729,811
Obligations of GSEs	88,128			—			(7,403		)	80,725
Other	586			—			—			586
Total securities held-to-maturity	$	1,849,526		$	13,023		$	(51,427	)	$	1,811,122

8

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 September 30, 2014
	Less Than Twelve Months						Twelve Months or Longer						Total
(In Thousands)	Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		GrossUnrealized Losses				Estimated Fair Value		GrossUnrealized Losses
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	22,413		$	(136	)	$	97,773		$	(2,627	)	$	120,186		$	(2,763	)
Non-GSE issuance REMICs and CMOs	—			—			102			(1		)	102			(1		)
GSE pass-through certificates	597			(4		)	78			(1		)	675			(5		)
Obligations of GSEs	—			—			95,539			(3,140		)	95,539			(3,140		)
Fannie Mae stock	—			—			3			(12		)	3			(12		)
Total temporarily impaired securities available-for-sale	$	23,010		$	(140	)	$	193,495		$	(5,781	)	$	216,505		$	(5,921	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	300,843		$	(3,374	)	$	483,810		$	(20,456	)	$	784,653		$	(23,830	)
Non-GSE issuance REMICs and CMOs	—			—			296			(7		)	296			(7		)
GSE pass-through certificates	—			—			168,261			(5,360		)	168,261			(5,360		)
Multi-family mortgage-backed securities:
GSE issuance REMICs	72,587			(541		)	—			—			72,587			(541		)
Obligations of GSEs	—			—			78,403			(2,531		)	78,403			(2,531		)
Total temporarily impaired securities held-to-maturity	$	373,430		$	(3,915	)	$	730,770		$	(28,354	)	$	1,104,200		$	(32,269	)

	At December 31, 2013
	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	$	243,149		$	(7,134	)	$	—		$	—		$	243,149		$	(7,134	)
Non-GSE issuance REMICs and CMOs	—			—			132			(1		)	132			(1		)
GSE pass-through certificates	172			(1		)	70			(1		)	242			(2		)
Obligations of GSEs	91,153			(7,522		)	—			—			91,153			(7,522		)
Fannie Mae stock	—			—			3			(12		)	3			(12		)
Total temporarily impaired securities available-for-sale	$	334,474		$	(14,657	)	$	205		$	(14	)	$	334,679		$	(14,671	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	719,715		$	(25,611	)	$	151,581		$	(8,314	)	$	871,296		$	(33,925	)
Non-GSE issuance REMICs and CMOs	392			(10		)	—			—			392			(10		)
GSE pass-through certificates	230,795			(10,088		)	28			(1		)	230,823			(10,089		)
Obligations of GSEs	80,725			(7,403		)	—			—			80,725			(7,403		)
Total temporarily impaired securities held-to-maturity	$	1,031,627		$	(43,112	)	$	151,609		$	(8,315	)	$	1,183,236		$	(51,427	)

9

We held 101 securities which had an unrealized loss at September 30, 2014 and 109 at December 31, 2013.  At September 30, 2014 and December 31, 2013, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment was directly related to changes in interest rates.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  None of the unrealized losses are related to credit losses.  Therefore, at September 30, 2014 and December 31, 2013, the impairments were deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we had no intention to sell these securities and it was not more likely than not that we would be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expected to recover the entire amortized cost basis of the security.

During the nine months ended September 30, 2014, proceeds from sales of securities from the available-for-sale portfolio totaled $14.4 million, resulting in gross realized gains totaling $141,000. During the nine months ended September 30, 2013, proceeds from sales of securities from the available-for-sale portfolio totaled $41.6 million, resulting in gross realized gains totaling $2.1 million.

At September 30, 2014, available-for-sale debt securities excluding mortgage-backed securities had an amortized cost of $98.7 million, a fair value of $95.5 million and contractual maturities in 2021 and 2022.  At September 30, 2014, held-to-maturity debt securities excluding mortgage-backed securities had an amortized cost of $91.5 million, a fair value of $89.0 million and contractual maturities primarily in 2023.  Actual maturities may differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

At September 30, 2014, we held securities with an amortized cost of $189.6 million which were callable within one year and at various times thereafter.

The balance of accrued interest receivable for securities totaled $6.3 million at September 30, 2014 and December 31, 2013.

10

3. 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 September 30, 2014
	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	$	14,725	$	5,115	$	—	$	19,840	$	942,958	$	962,798
Full documentation amortizing	32,652		5,140		—		37,792		4,994,848		5,032,640
Reduced documentation interest-only	15,566		4,258		—		19,824		589,172		608,996
Reduced documentation amortizing	6,818		1,950		—		8,768		376,225		384,993
Total residential	69,761		16,463		—		86,224		6,903,203		6,989,427
Multi-family	4,351		506		152		5,009		3,644,376		3,649,385
Commercial real estate	2,199		495		—		2,694		871,670		874,364
Total mortgage loans	76,311		17,464		152		93,927		11,419,249		11,513,176
Consumer and other loans (gross):
Home equity lines of credit	1,656		159		—		1,815		173,747		175,562
Other	42		12		—		54		63,057		63,111
Total consumer and other loans	1,698		171		—		1,869		236,804		238,673
Total accruing loans	$	78,009	$	17,635	$	152	$	95,796	$	11,656,053	$	11,751,849
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,958	$	177	$	9,268	$	12,403	$	18,030	$	30,433
Full documentation amortizing	548		284		9,549		10,381		5,222		15,603
Reduced documentation interest-only	2,110		1,224		11,920		15,254		24,616		39,870
Reduced documentation amortizing	799		554		1,132		2,485		4,406		6,891
Total residential	6,415		2,239		31,869		40,523		52,274		92,797
Multi-family	429		—		6,489		6,918		2,933		9,851
Commercial real estate	2,357		—		—		2,357		3,587		5,944
Total mortgage loans	9,201		2,239		38,358		49,798		58,794		108,592
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,289		6,289		—		6,289
Other	—		—		34		34		—		34
Total consumer and other loans	—		—		6,323		6,323		—		6,323
Total non-accrual loans	$	9,201	$	2,239	$	44,681	$	56,121	$	58,794	$	114,915
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	17,683	$	5,292	$	9,268	$	32,243	$	960,988	$	993,231
Full documentation amortizing	33,200		5,424		9,549		48,173		5,000,070		5,048,243
Reduced documentation interest-only	17,676		5,482		11,920		35,078		613,788		648,866
Reduced documentation amortizing	7,617		2,504		1,132		11,253		380,631		391,884
Total residential	76,176		18,702		31,869		126,747		6,955,477		7,082,224
Multi-family	4,780		506		6,641		11,927		3,647,309		3,659,236
Commercial real estate	4,556		495		—		5,051		875,257		880,308
Total mortgage loans	85,512		19,703		38,510		143,725		11,478,043		11,621,768
Consumer and other loans (gross):
Home equity lines of credit	1,656		159		6,289		8,104		173,747		181,851
Other	42		12		34		88		63,057		63,145
Total consumer and other loans	1,698		171		6,323		8,192		236,804		244,996
Total loans	$	87,210	$	19,874	$	44,833	$	151,917	$	11,714,847	$	11,866,764
Net unamortized premiums and deferred loan origination costs											49,171
Loans receivable											11,915,935
Allowance for loan losses											(113,600		)
Loans receivable, net											$	11,802,335

11

	At December 31, 2013
	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	$	27,291	$	5,220	$	—	$	32,511	$	1,249,462	$	1,281,973
Full documentation amortizing	31,189		7,415		151		38,755		5,325,944		5,364,699
Reduced documentation interest-only	22,635		5,208		—		27,843		693,660		721,503
Reduced documentation amortizing	8,993		2,311		—		11,304		352,322		363,626
Total residential	90,108		20,154		151		110,413		7,621,388		7,731,801
Multi-family	12,740		970		—		13,710		3,270,206		3,283,916
Commercial real estate	1,729		1,690		233		3,652		801,690		805,342
Total mortgage loans	104,577		22,814		384		127,775		11,693,284		11,821,059
Consumer and other loans (gross):
Home equity lines of credit	3,000		1,321		—		4,321		189,540		193,861
Other	177		19		—		196		39,644		39,840
Total consumer and other loans	3,177		1,340		—		4,517		229,184		233,701
Total accruing loans	$	107,754	$	24,154	$	384	$	132,292	$	11,922,468	$	12,054,760
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,185	$	582	$	78,271	$	81,038	$	19,190	$	100,228
Full documentation amortizing	1,327		653		41,934		43,914		10,844		54,758
Reduced documentation interest-only	2,065		579		87,910		90,554		27,604		118,158
Reduced documentation amortizing	617		425		26,112		27,154		5,177		32,331
Total residential	6,194		2,239		234,227		242,660		62,815		305,475
Multi-family	1,104		357		9,054		10,515		2,024		12,539
Commercial real estate	930		—		921		1,851		5,773		7,624
Total mortgage loans	8,228		2,596		244,202		255,026		70,612		325,638
Consumer and other loans (gross):
Home equity lines of credit	—		—		5,916		5,916		32		5,948
Other	—		—		32		32		—		32
Total consumer and other loans	—		—		5,948		5,948		32		5,980
Total non-accrual loans	$	8,228	$	2,596	$	250,150	$	260,974	$	70,644	$	331,618
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	29,476	$	5,802	$	78,271	$	113,549	$	1,268,652	$	1,382,201
Full documentation amortizing	32,516		8,068		42,085		82,669		5,336,788		5,419,457
Reduced documentation interest-only	24,700		5,787		87,910		118,397		721,264		839,661
Reduced documentation amortizing	9,610		2,736		26,112		38,458		357,499		395,957
Total residential	96,302		22,393		234,378		353,073		7,684,203		8,037,276
Multi-family	13,844		1,327		9,054		24,225		3,272,230		3,296,455
Commercial real estate	2,659		1,690		1,154		5,503		807,463		812,966
Total mortgage loans	112,805		25,410		244,586		382,801		11,763,896		12,146,697
Consumer and other loans (gross):
Home equity lines of credit	3,000		1,321		5,916		10,237		189,572		199,809
Other	177		19		32		228		39,644		39,872
Total consumer and other loans	3,177		1,340		5,948		10,465		229,216		239,681
Total loans	$	115,982	$	26,750	$	250,534	$	393,266	$	11,993,112	$	12,386,378
Net unamortized premiums and deferred loan origination costs											55,688
Loans receivable											12,442,066
Allowance for loan losses											(139,000		)
Loans receivable, net											$	12,303,066

12

At June 30, 2014, we designated a pool of non-performing one-to-four family, or residential, mortgage loans, substantially all of which were 90 days or more past due, as held-for-sale. In connection with the designation of the pool of loans as held-for-sale, we recorded a loan charge-off of $8.7 million against the allowance for loan losses during the 2014 second quarter to write down the pool of loans from its immediately previous aggregate recorded investment of $195.0 million to its estimated fair value at that time of $186.3 million. As a result of our quarterly review of the adequacy of the allowance for loan losses as of June 30, 2014, $5.7 million of reserves previously attributable to this pool of loans was deemed no longer required and was credited to the provision for loan losses as a reserve release in the 2014 second quarter. On July 31, 2014, we completed a bulk sale transaction of substantially all of the non-performing residential mortgage loans held-for-sale at terms approximating their carrying value at June 30, 2014. Total loans sold in that transaction had a carrying value of $173.7 million, reflecting the previous write down to the estimated fair value through June 30, 2014. The majority of the remaining loans from the pool designated as held-for-sale as of June 30, 2014 were either foreclosed upon and transferred to real estate owned, or REO, or were satisfied via short sales or payoffs during the 2014 third quarter with no material impact on our financial condition or results of operations. On September 12, 2014, we completed a second sale transaction, with the same counterparty as the bulk sale transaction, in which we sold all of the remaining non-performing residential mortgage loans held-for-sale with a carrying value of $4.0 million, reflecting the previous write down to the estimated fair value through June 30, 2014, and recorded a loss on the sale of such loans in the 2014 third quarter of $920,000, included in other non-interest income.

We segment our residential mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and origination time periods and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate mortgage loans by portfolio, geographic location and origination time periods.  We analyze our consumer and other loan portfolio by home equity lines of credit, commercial loans, revolving credit lines and installment loans and perform similar historical loss analyses.

We analyze our historical loss experience over twelve, fifteen, eighteen and twenty-four month periods.  The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type.  Also, for a particular loan type we may not have sufficient loss history to develop a reasonable estimate of loss and consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs).  Our evaluation of loss experience factors considers trends in such factors over the prior two years for substantially all of the loan portfolio, with the exception of multi-family and commercial real estate loans originated after 2010, for which our evaluation includes detailed modeling techniques.  We update our historical loss analyses quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses.  We also consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by portfolio.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our allowance for loan losses.  The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

13

The following tables set forth the changes in our allowance for loan losses by loan receivable segment for the periods indicated.

		For the Three Months Ended September 30, 2014
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at July 1, 2014		$	56,552		$	37,075			$	15,433			$	9,540		$	118,600
Provision (credited) charged to operations		(7,617		)	3,183				1,245				147			(3,042		)
Charge-offs		(2,134		)	(2,275		)		(143		)		(352		)	(4,904		)
Recoveries		2,531			324				—				91			2,946
Balance at September 30, 2014		$	49,332		$	38,307			$	16,535			$	9,426		$	113,600
		For the Nine Months Ended September 30, 2014
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at January 1, 2014		$	80,337		$	36,703			$	13,136			$	8,824		$	139,000
Provision (credited) charged to operations		(20,225		)	4,457				6,518				2,097			(7,153		)
Charge-offs		(19,061		)	(3,414		)		(3,119		)		(1,776		)	(27,370		)
Recoveries		8,281			561				—				281			9,123
Balance at September 30, 2014		$	49,332		$	38,307			$	16,535			$	9,426		$	113,600
		For the Three Months Ended September 30, 2013
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at July 1, 2013		$	78,788		$	40,865			$	16,642			$	7,605		$	143,900
Provision charged (credited) to operations		7,659			(2,521		)		(2,592		)		(5		)	2,541
Charge-offs		(5,560		)	(99		)		(293		)		(544		)	(6,496		)
Recoveries		2,537			—				247				271			3,055
Balance at September 30, 2013		$	83,424		$	38,245			$	14,004			$	7,327		$	143,000
		For the Nine Months Ended September 30, 2013
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at January 1, 2013		$	89,267		$	35,514			$	14,404			$	6,316		$	145,501
Provision charged to operations		7,488			5,131				1,378				2,196			16,193
Charge-offs		(20,332		)	(3,637		)		(2,313		)		(1,672		)	(27,954		)
Recoveries		7,001			1,237				535				487			9,260
Balance at September 30, 2013		$	83,424		$	38,245			$	14,004			$	7,327		$	143,000

14

The following table sets forth the balances of our residential interest-only mortgage loans at September 30, 2014 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin in:
Twelve months or less	$	494,856
Thirteen to twenty-four months	544,435
Twenty-five to thirty-six months	443,464
Over thirty-six months	159,342
Total	$	1,642,097

The following tables set forth the balances of our residential mortgage and consumer and other loan receivable segments by class and credit quality indicator at the dates indicated.

		At September 30, 2014
		Residential Mortgage Loans									Consumer and Other Loans
		Full Documentation					Reduced Documentation				Home Equity Lines of Credit
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing					Other
Performing		$	962,798	$	5,032,640		$	608,996	$	384,993		$	175,562	$	63,111
Non-performing:
Current or past due less than 90 days		21,165		6,054			27,950		5,759			—		—
Past due 90 days or more		9,268		9,549			11,920		1,132			6,289		34
Total		$	993,231	$	5,048,243		$	648,866	$	391,884		$	181,851	$	63,145
		At December 31, 2013
		Residential Mortgage Loans									Consumer and Other Loans
		Full Documentation					Reduced Documentation				Home Equity Lines of Credit
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing					Other
Performing		$	1,281,973	$	5,364,548		$	721,503	$	363,626		$	193,861	$	39,840
Non-performing:
Current or past due less than 90 days		21,957		12,824			30,248		6,219			32		—
Past due 90 days or more		78,271		42,085			87,910		26,112			5,916		32
Total		$	1,382,201	$	5,419,457		$	839,661	$	395,957		$	199,809	$	39,872

The following table sets forth the balances of our multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator at the dates indicated.

		At September 30, 2014						At December 31, 2013
				Commercial Real Estate						Commercial Real Estate
(In Thousands)	Multi-Family						Multi-Family
Not criticized		$	3,604,937		$	825,089		$	3,209,786		$	759,114
Criticized:
Special mention		22,390			16,578			14,063			9,760
Substandard		31,157			38,641			72,606			44,092
Doubtful		752			—			—			—
Total		$	3,659,236		$	880,308		$	3,296,455		$	812,966

15

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.

	At September 30, 2014
	Mortgage Loans							Consumer and Other Loans
			Multi-Family		Commercial Real Estate
(In Thousands)	Residential									Total
Loans:
Individually evaluated for impairment	$	181,486	$	44,312		$	19,183	$	5,768	$	250,749
Collectively evaluated for impairment	6,900,738		3,614,924			861,125		239,228		11,616,015
Total loans	$	7,082,224	$	3,659,236		$	880,308	$	244,996	$	11,866,764
Allowance for loan losses:
Individually evaluated for impairment	$	9,789	$	3,448		$	2,308	$	4,340	$	19,885
Collectively evaluated for impairment	39,543		34,859			14,227		5,086		93,715
Total allowance for loan losses	$	49,332	$	38,307		$	16,535	$	9,426	$	113,600

	At December 31, 2013
	Mortgage Loans							Consumer and Other Loans
			Multi-Family		Commercial Real Estate
(In Thousands)	Residential									Total
Loans:
Individually evaluated for impairment	$	311,930	$	52,538		$	20,054	$	—	$	384,522
Collectively evaluated for impairment	7,725,346		3,243,917			792,912		239,681		12,001,856
Total loans	$	8,037,276	$	3,296,455		$	812,966	$	239,681	$	12,386,378
Allowance for loan losses:
Individually evaluated for impairment	$	18,352	$	2,877		$	302	$	—	$	21,531
Collectively evaluated for impairment	61,985		33,826			12,834		8,824		117,469
Total allowance for loan losses	$	80,337	$	36,703		$	13,136	$	8,824	$	139,000

The following table summarizes information related to our impaired loans by segment and class at the dates indicated.

	At September 30, 2014									At December 31, 2013
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	62,496	$	53,319	$	(3,052	)	$	50,267	$	142,659	$	109,877	$	(6,019	)	$	103,858
Full documentation amortizing	35,521		33,189		(1,043		)	32,146		41,136		36,091		(2,458		)	33,633
Reduced documentation interest-only	91,461		77,977		(4,836		)	73,141		183,280		140,357		(7,673		)	132,684
Reduced documentation amortizing	18,298		17,001		(858		)	16,143		30,660		25,605		(2,202		)	23,403
Multi-family	36,424		29,043		(3,448		)	25,595		19,748		19,748		(2,877		)	16,871
Commercial real estate	26,130		19,183		(2,308		)	16,875		5,790		5,790		(302		)	5,488
Consumer and other loans:
Home equity lines of credit	6,051		5,768		(4,340		)	1,428		—		—		—			—
Without an allowance recorded:
Mortgage loans:
Multi-family	16,670		15,269		—			15,269		39,871		32,790		—			32,790
Commercial real estate	—		—		—			—		19,988		14,264		—			14,264
Total impaired loans	$	293,051	$	250,749	$	(19,885	)	$	230,864	$	483,132	$	384,522	$	(21,531	)	$	362,991

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The following tables set forth the average recorded investment, interest income recognized and cash basis interest income related to our impaired loans by segment and class for the periods indicated.

	For the Three Months Ended September 30,
	2014						2013
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	78,799	$	440	$	461	$	107,893	$	762	$	763
Full documentation amortizing	38,051		289		283		31,128		218		220
Reduced documentation interest-only	104,522		782		814		144,468		1,171		1,174
Reduced documentation amortizing	20,781		141		147		24,452		158		152
Multi-family	33,013		329		328		19,557		34		169
Commercial real estate	19,673		289		261		7,604		56		66
Consumer and other loans:
Home equity lines of credit	5,546		5		13		—		—		—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	—		—		—		9,075		—		—
Full documentation amortizing	314		—		—		2,968		—		—
Multi-family	13,419		175		175		31,464		401		416
Commercial real estate	—		—		—		11,252		112		131
Total impaired loans	$	314,118	$	2,450	$	2,482	$	389,861	$	2,912	$	3,091
	For the Nine Months Ended September 30,
	2014						2013
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	93,748	$	1,644	$	1,695	$	105,931	$	2,114	$	2,229
Full documentation amortizing	37,926		993		992		29,465		623		639
Reduced documentation interest-only	120,976		2,922		2,939		146,773		3,053		3,205
Reduced documentation amortizing	23,142		478		482		25,424		464		493
Multi-family	30,836		952		970		18,975		659		722
Commercial real estate	16,859		748		813		8,692		253		285
Consumer and other loans:
Home equity lines of credit	5,215		37		51		—		—		—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	—		—		—		14,433		—		—
Full documentation amortizing	457		—		—		4,396		—		—
Reduced documentation interest-only	—		—		—		2,086		—		—
Multi-family	17,906		529		530		33,294		1,165		1,229
Commercial real estate	3,566		—		—		10,118		286		319
Total impaired loans	$	350,631	$	8,303	$	8,472	$	399,587	$	8,617	$	9,121

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The following tables set forth information about our mortgage loans receivable by segment and class at September 30, 2014 and 2013 which were modified in a troubled debt restructuring, or TDR, during the periods indicated.

	Modifications During the Three Months Ended September 30,
	2014								2013
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2013
Residential:
Full documentation interest-only		3		$	1,447		$	1,447		7		$	2,128		$	2,127
Full documentation amortizing		—		—			—			1		161			161
Reduced documentation interest-only		9		3,585			3,581			10		3,107			3,096
Reduced documentation amortizing		1		282			281			2		387			386
Multi-family		2		1,441			1,055			5		3,967			3,774
Commercial real estate		1		1,569			1,569			4		6,488			5,458
Total		16		$	8,324		$	7,933		29		$	16,238		$	15,002

	Modifications During the Nine Months Ended September 30,
	2014								2013
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2013
Residential:
Full documentation interest-only		21		$	9,244		$	8,776		18		$	4,579		$	4,577
Full documentation amortizing		3		519			485			6		1,662			1,682
Reduced documentation interest-only		17		5,885			5,860			28		8,957			8,921
Reduced documentation amortizing		3		599			541			8		2,470			2,408
Multi-family		4		2,501			1,994			8		6,751			6,228
Commercial real estate		3		2,482			2,453			7		10,443			9,125
Total		51		$	21,230		$	20,109		75		$	34,862		$	32,941

The following tables set forth information about our mortgage loans receivable by segment and class at September 30, 2014 and 2013 which were modified in a TDR during the twelve month periods ended September 30, 2014 and 2013 and had a payment default subsequent to the modification during the periods indicated.

	For the Three Months Ended September 30,
	2014					2013
(Dollars In Thousands)	Numberof Loans		RecordedInvestment at September 30, 2014			Numberof Loans		RecordedInvestment at September 30, 2013
Residential:
Full documentation interest-only		2		$	714		14		$	3,365
Full documentation amortizing		3		852			8		2,159
Reduced documentation interest-only		2		910			20		5,729
Reduced documentation amortizing		—		—			2		303
Multi-family		—		—			1		671
Total		7		$	2,476		45		$	12,227

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	For the Nine Months Ended September 30,
	2014					2013
(Dollars In Thousands)	Numberof Loans		RecordedInvestment at September 30, 2014			Numberof Loans		RecordedInvestment at September 30, 2013
Residential:
Full documentation interest-only		3		$	854		22		$	5,343
Full documentation amortizing		4		1,057			10		2,589
Reduced documentation interest-only		4		1,799			24		6,707
Reduced documentation amortizing		1		92			5		880
Multi-family		—		—			1		671
Total		12		$	3,802		62		$	16,190

Included in loans receivable at September 30, 2014 are loans in the process of foreclosure collateralized by residential real estate property with a recorded investment of $18.7 million.

For additional information regarding our loans receivable and allowance for loan losses, see “Asset Quality” and “Critical Accounting Policies” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or “MD&A.”

4.  Earnings Per Common Share

The following table is a reconciliation of basic and diluted earnings per common share, or EPS.

	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
(In Thousands, Except Share Data)		2014						2013						2014						2013
Net income		$	18,808					$	16,924					$	72,657					$	46,441
Preferred stock dividends		(2,194				)		(2,194				)		(6,582				)		(5,021				)
Net income available to common shareholders		16,614						14,730						66,075						41,420
Income allocated to participating securities		(187				)		(195				)		(742				)		(508				)
Net income allocated to common shareholders		$	16,427					$	14,535					$	65,333					$	40,912
Basic weighted average common shares outstanding	98,453,265						97,199,329						98,279,671						96,967,052
Dilutive effect of stock options and restricted stock units (1) (2)	—						—						—						—
Diluted weighted average common shares outstanding	98,453,265						97,199,329						98,279,671						96,967,052
Basic EPS				$	0.17					$	0.15					$	0.66					$	0.42
Diluted EPS				$	0.17					$	0.15					$	0.66					$	0.42

(1) Excludes options to purchase 988,050 shares of common stock which were outstanding during the three months ended September 30, 2014; options to purchase 1,871,935 shares of common stock which were outstanding during the three months ended September 30, 2013; options to purchase 1,016,451 shares of common stock which were outstanding during the nine months ended September 30, 2014; and options to purchase 2,215,820 shares of common stock which were outstanding during the nine months ended September 30, 2013 because their inclusion would be anti-dilutive.

(2) Excludes 788,874 unvested restricted stock units which were outstanding during the three months ended September 30, 2014; 415,900 unvested restricted stock units which were outstanding during the three months ended September 30, 2013; 751,149 unvested restricted stock units which were outstanding during the nine months ended September 30, 2014; and 379,602 unvested restricted stock units which were outstanding during the nine months ended September 30, 2013 because the performance conditions have not been satisfied.

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5.  Other Comprehensive Income/Loss

The following tables set forth the components of accumulated other comprehensive loss, net of related tax effects, at the dates indicated and the changes during the three and nine months ended September 30, 2014 and 2013.

(In Thousands)	At    June 30, 2014				Other Comprehensive (Loss) Income				At   September 30, 2014
Net unrealized gain on securities available-for-sale		$	3,326			$	(511	)		$	2,815
Net actuarial loss on pension plans and other postretirement benefits		(30,304		)		147				(30,157		)
Prior service cost on pension plans and other postretirement benefits		(3,223		)		31				(3,192		)
Accumulated other comprehensive loss		$	(30,201	)		$	(333	)		$	(30,534	)
(In Thousands)	At   December 31, 2013				Other Comprehensive Income				At   September 30, 2014
Net unrealized (loss) gain on securities available-for-sale		$	(4,366	)		$	7,181			$	2,815
Net actuarial loss on pension plans and other postretirement benefits		(30,600		)		443				(30,157		)
Prior service cost on pension plans and other postretirement benefits		(3,284		)		92				(3,192		)
Accumulated other comprehensive loss		$	(38,250	)		$	7,716			$	(30,534	)
(In Thousands)	At   June 30, 2013				Other Comprehensive (Loss) Income				At   September 30, 2013
Net unrealized loss on securities available-for-sale		$	(484	)		$	(1,286	)		$	(1,770	)
Net actuarial loss on pension plans and other postretirement benefits		(75,946		)		585				(75,361		)
Prior service cost on pension plans and other postretirement benefits		(3,357		)		34				(3,323		)
Accumulated other comprehensive loss		$	(79,787	)		$	(667	)		$	(80,454	)

(In Thousands)	At   December 31, 2012				Other Comprehensive (Loss) Income				At   September 30, 2013
Net unrealized gain (loss) on securities available-for-sale		$	7,451			$	(9,221	)		$	(1,770	)
Net actuarial loss on pension plans and other postretirement benefits		(77,115		)		1,754				(75,361		)
Prior service cost on pension plans and other postretirement benefits		(3,426		)		103				(3,323		)
Accumulated other comprehensive loss		$	(73,090	)		$	(7,364	)		$	(80,454	)

The following tables set forth the components of other comprehensive income/loss for the periods indicated.

		For the Three Months Ended   September 30, 2014
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized loss on securities available-for-sale:
Net unrealized holding loss on securities arising during the period		$	(649	)		$	229			$	(420	)
Reclassification adjustment for gain on sales of securities included in net income		(141		)		50				(91		)
Net unrealized loss on securities available-for-sale		(790		)		279				(511		)
Reclassification adjustment for net actuarial loss included in net income		228				(81		)		147
Reclassification adjustment for prior service cost included in net income		47				(16		)		31
Other comprehensive loss		$	(515	)		$	182			$	(333	)

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		For the Nine Months Ended   September 30, 2014
(In Thousands)	Before Tax Amount				Tax(Expense) Benefit				After Tax Amount
Net unrealized gain on securities available-for-sale:
Net unrealized holding gain on securities arising during the period		$	11,242			$	(3,970	)		$	7,272
Reclassification adjustment for gain on sales of securities included in net income		(141		)		50				(91		)
Net unrealized gain on securities available-for-sale		11,101				(3,920		)		7,181
Reclassification adjustment for net actuarial loss included in net income		685				(242		)		443
Reclassification adjustment for prior service cost included in net income		142				(50		)		92
Other comprehensive income		$	11,928			$	(4,212	)		$	7,716

		For the Three Months Ended   September 30, 2013
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized holding loss on securities available-for-sale arising during the period		$	(1,984	)		$	698			$	(1,286	)
Reclassification adjustment for net actuarial loss included in net income		903				(318		)		585
Reclassification adjustment for prior service cost included in net income		53				(19		)		34
Other comprehensive loss		$	(1,028	)		$	361			$	(667	)

		For the Nine Months Ended   September 30, 2013
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized loss on securities available-for-sale:
Net unrealized holding loss on securities arising during the period		$	(12,180	)		$	4,291			$	(7,889	)
Reclassification adjustment for gain on sales of securities included in net income		(2,057		)		725				(1,332		)
Net unrealized loss on securities available-for-sale		(14,237		)		5,016				(9,221		)
Reclassification adjustment for net actuarial loss included in net income		2,708				(954		)		1,754
Reclassification adjustment for prior service cost included in net income		159				(56		)		103
Other comprehensive loss		$	(11,370	)		$	4,006			$	(7,364	)

The following tables set forth information about amounts reclassified from accumulated other comprehensive loss to, and the affected line items in, the consolidated statements of income for the periods indicated.

(In Thousands)	For the   Three Months Ended   September 30, 2014				For the   Three Months Ended   September 30, 2013				Income Statement Line Item
Reclassification adjustment for gain on sales of securities		$	141			$	—		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(228		)		(903		)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(47		)		(53		)	Compensation and benefits
Total reclassifications, before tax		(134		)		(956		)
Income tax effect		47				337			Income tax expense
Total reclassifications, net of tax		$	(87	)		$	(619	)	Net income

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(In Thousands)	For the   Nine Months Ended   September 30, 2014				For the   Nine Months Ended   September 30, 2013				Income Statement Line Item
Reclassification adjustment for gain on sales of securities		$	141			$	2,057		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(685		)		(2,708		)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(142		)		(159		)	Compensation and benefits
Total reclassifications, before tax		(686		)		(810		)
Income tax effect		242				285			Income tax expense
Total reclassifications, net of tax		$	(444	)		$	(525	)	Net income

(1) These other comprehensive income/loss components are included in the computations of net periodic (benefit) cost for our defined benefit pension plans and other postretirement benefit plan. See Note 6 for additional details.

6.  Pension Plans and Other Postretirement Benefits

The following tables set forth information regarding the components of net periodic (benefit) cost for our defined benefit pension plans and other postretirement benefit plan for the periods indicated.

		Pension Benefits							Other Postretirement Benefits
	For the Three Months Ended September 30,							For the Three Months Ended September 30,
(In Thousands)		2014			2013				2014			2013
Service cost		$	—		$	—			$	309		$	396
Interest cost		2,613			2,387				233			319
Expected return on plan assets		(3,710		)	(3,188		)		—			—
Recognized net actuarial loss (gain)		350			785				(122		)	118
Amortization of prior service cost		47			53				—			—
Net periodic (benefit) cost		$	(700	)	$	37			$	420		$	833
		Pension Benefits							Other Postretirement Benefits
	For the Nine Months Ended September 30,							For the Nine Months Ended September 30,
(In Thousands)		2014			2013				2014			2013
Service cost		$	—		$	—			$	930		$	1,185
Interest cost		7,838			7,162				698			959
Expected return on plan assets		(11,132		)	(9,565		)		—			—
Recognized net actuarial loss (gain)		1,051			2,354				(366		)	354
Amortization of prior service cost		142			159				—			—
Net periodic (benefit) cost		$	(2,101	)	$	110			$	1,262		$	2,498

7.  Stock Incentive Plans

On May 21, 2014, our shareholders approved the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2014 Plan, which amended and restated the Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, as of that date, or the Effective Date.  The 2014 Plan authorized 3,250,000 shares of common stock for future grants to officers and employees on and after the Effective Date.  In addition, immediately prior to the approval of the 2014 Plan, there remained 507,925 shares available for future grants under the 2005 Employee Stock Plan which were carried over to the 2014 Plan.  There were

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no grants under the 2014 Plan during the 2014 third quarter. Accordingly, at September 30, 2014, 3,757,925 shares of common stock remain available for future grants under the 2014 Plan and no further grants may be made under the 2005 Employee Stock Plan.

During the six months ended June 30, 2014, 396,840 shares of restricted common stock were granted to select officers under the 2005 Employee Stock Plan, of which 128,340 shares vest on December 15, 2014, 128,940 shares vest on December 14, 2015, 130,140 shares vest on December 14, 2016 and 9,420 shares were forfeited as of September 30, 2014.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2005 Employee Stock Plan, all restricted common stock granted pursuant to such plan immediately vests.  Also, during the six months ended June 30, 2014, 395,900 performance-based restricted stock units were granted to select officers under the 2005 Employee Stock Plan, of which 386,300 units remain outstanding at September 30, 2014.  Each restricted stock unit granted represents a right, under the 2005 Employee Stock Plan, to receive one share of our common stock in the future, subject to meeting certain criteria.  The restricted stock units have specified performance objectives within a specified performance measurement period and no voting or dividend rights prior to vesting and delivery of shares.  The performance measurement period for these restricted stock units is the fiscal year ending December 31, 2016 and the vest date is February 1, 2017.  Shares will be issued on the vest date at either 125%, 100%, 75%, 50% or 0% of units granted based on actual performance during the performance measurement period.  However, in the event of a change in control during the performance measurement period, the restricted stock units will vest on the change in control date and shares will be issued at 100% of units granted.  Absent a change in control, if a grantee’s employment terminates prior to December 31, 2016 all restricted stock units will be forfeited.  In the event a grantee’s employment terminates during the period on or after December 31, 2016 through February 1, 2017 due to death, disability, retirement or a change in control, the grantee will remain entitled to the shares otherwise earned. 

During the nine months ended September 30, 2014, 32,506 shares of restricted common stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, of which 28,148 remain outstanding at September 30, 2014 and vest 100% in February 2017, although awards immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

The following table summarizes restricted common stock and performance-based restricted stock unit activity in our stock incentive plans for the nine months ended September 30, 2014.

	Restricted Common Stock						Restricted Stock Units
	Number of Units		Weighted Average Grant Date Fair Value				Number of Units			Weighted Average Grant Date Fair Value
Unvested at January 1, 2014	781,644			$	11.46			409,100			$	9.22
Granted	429,346			12.63				395,900			12.14
Vested	(55,168	)		(11.04		)		—			—
Forfeited	(23,590	)		(11.93		)		(20,600	)		(10.58		)
Unvested at September 30, 2014	1,132,232			11.91				784,400			10.66

Stock-based compensation expense is recognized on a straight-line basis over the vesting period and totaled $1.4 million, net of taxes of $789,000, for the three months ended September 30, 2014 and $4.2 million, net of taxes of $2.3 million, for the nine months ended September 30, 2014.  Stock-based compensation expense totaled $1.2 million, net of taxes of $636,000, for the three months ended September 30, 2013 and $3.4 million, net of taxes of $1.9 million, for the nine months ended September 30, 2013.  At September 30, 2014,

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pre-tax compensation cost related to all nonvested awards of restricted common stock and restricted stock units not yet recognized totaled $12.4 million and will be recognized over a weighted average period of approximately 1.9 years, which excludes $1.8 million of pre-tax compensation cost related to 65,000 shares of performance-based restricted common stock and 99,525 performance-based restricted stock units, for which compensation cost will begin to be recognized when the achievement of the performance conditions becomes probable.

8.  Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  We group our assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.  These levels are:

• Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

• Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

We base our fair values on the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, with additional considerations when the volume and level of activity for an asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly.  We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recurring Fair Value Measurements

Our securities available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity.  Additionally, in connection with our mortgage banking activities we have commitments to fund loans held-for-sale and commitments to sell loans, which are considered free-standing derivative financial instruments, the fair values of which are not material to our financial condition or results of operations.

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The following tables set forth the carrying values of our assets measured at estimated fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	Carrying Value at September 30, 2014
(In Thousands)	Total		Level 1		Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	250,746	$	—	$	250,746
Non-GSE issuance REMICs and CMOs	5,727		—		5,727
GSE pass-through certificates	14,011		—		14,011
Obligations of GSEs	95,539		—		95,539
Fannie Mae stock	3		3		—
Total securities available-for-sale	$	366,026	$	3	$	366,023
	Carrying Value at December 31, 2013
(In Thousands)	Total		Level 1		Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	286,074	$	—	$	286,074
Non-GSE issuance REMICs and CMOs	7,572		—		7,572
GSE pass-through certificates	16,888		—		16,888
Obligations of GSEs	91,153		—		91,153
Fannie Mae stock	3		3		—
Total securities available-for-sale	$	401,690	$	3	$	401,687

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

Residential mortgage-backed securities

Residential mortgage-backed securities comprised 74% of our securities available-for-sale portfolio at September 30, 2014 and 77% at December 31, 2013.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service uses various modeling techniques to determine pricing for our mortgage-backed securities, including option pricing and discounted cash flow models.  The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, monthly payment information and collateral performance.  GSE securities, for which an active market exists for similar securities making observable inputs readily available, comprised 98% of our available-for-sale residential mortgage-backed securities portfolio at September 30, 2014 and December 31, 2013.

We review changes in the pricing service fair values from month to month taking into consideration changes in market conditions including changes in mortgage spreads, changes in treasury yields and changes in generic pricing on fifteen and thirty year securities.  Significant month over month price changes are analyzed further using discounted cash flow models and, on occasion, third party quotes.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

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Obligations of GSEs

Obligations of GSEs comprised 26% of our securities available-for-sale portfolio at September 30, 2014 and 23% at December 31, 2013 and consisted of debt securities issued by GSEs.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service gathers information from market sources and integrates relative credit information, observed market movements and sector news into their pricing applications and models.  Spread scales, representing credit risk, are created and are based on the new issue market, secondary trading and dealer quotes.  Option adjusted spread, or OAS, models are incorporated to adjust spreads of issues that have early redemption features.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Fannie Mae stock

The fair value of the Fannie Mae stock in our available-for-sale securities portfolio is obtained from quoted market prices for identical instruments in active markets and, as such, is classified as Level 1.

Non-Recurring Fair Value Measurements

From time to time, we may be required to record at fair value assets or liabilities on a non-recurring basis, such as mortgage servicing rights, or MSR, loans receivable, certain assets held-for-sale and REO.  These non-recurring fair value adjustments involve the application of lower of cost or market accounting or impairment write-downs of individual assets.

The following table sets forth the carrying values of those of our assets which were measured at fair value on a non-recurring basis at the dates indicated.  The fair value measurements for all of these assets fall within Level 3 of the fair value hierarchy.

		Carrying Value
(In Thousands)	At September 30, 2014			At December 31, 2013
Non-performing loans held-for-sale, net		$	154		$	791
Impaired loans		144,258			271,408
MSR, net		11,905			12,800
REO, net		19,971			27,101
Total		$	176,288		$	312,100

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The following table provides information regarding the losses recognized on our assets measured at fair value on a non-recurring basis for the periods indicated.

	For the Nine Months Ended September 30,
(In Thousands)		2014		2013
Non-performing loans held-for-sale, net (1)		$	—	$	567
Impaired loans (2)		5,187		16,698
MSR, net (3)		—		—
REO, net (4)		1,811		2,630
Total		$	6,998	$	19,895

(1) Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

(2) Losses are charged against the allowance for loan losses.

(3) Losses are charged to mortgage banking income, net.

(4) Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Loans held-for-sale, net (non-performing loans held-for-sale)

Included in loans held-for-sale, net, are non-performing loans held-for-sale for which fair values are estimated through either preliminary bids from potential purchasers of the loans or the estimated fair value of the underlying collateral discounted for factors necessary to solicit acceptable bids, and adjusted as necessary based on management’s experience with sales of similar types of loans and, as such, are classified as Level 3.  All of the non-performing loans held-for-sale included in loans held-for-sale, net, at September 30, 2014, and substantially all at December 31, 2013, were multi-family mortgage loans.

Loans receivable, net (impaired loans)

Loans which meet certain criteria are evaluated individually for impairment.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Impaired loans were comprised of 73% residential mortgage loans, 25% multi-family and commercial real estate mortgage loans and 2% home equity lines of credit at September 30, 2014 and 81% residential mortgage loans and 19% multi-family and commercial real estate mortgage loans at December 31, 2013.  Impaired loans for which a fair value adjustment was recognized were comprised of 66% residential mortgage loans, 33% multi-family and commercial real estate mortgage loans and 1% home equity lines of credit at September 30, 2014 and 83% residential mortgage loans and 17% multi-family and commercial real estate mortgage loans at December 31, 2013.  Our impaired loans are generally collateral dependent and, as such, are generally carried at the estimated fair value of the underlying collateral less estimated selling costs.

We obtain updated estimates of collateral values on residential mortgage loans at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral value on residential loans are obtained primarily through automated valuation models. Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete.  We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate mortgage loans

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when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.  The fair values of impaired loans cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the loan and, as such, are classified as Level 3.

MSR, net

The right to service loans for others is generally obtained through the sale of residential mortgage loans with servicing retained.  MSR are carried at the lower of cost or estimated fair value.  The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.  At September 30, 2014, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 9.48%, a weighted average constant prepayment rate on mortgages of 11.77% and a weighted average life of 5.9 years.  At December 31, 2013, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 9.45%, a weighted average constant prepayment rate on mortgages of 10.52% and a weighted average life of 6.3 years.  Management reviews the assumptions used to estimate the fair value of MSR to ensure they reflect current and anticipated market conditions.

REO, net

REO represents real estate acquired through foreclosure or by deed in lieu of foreclosure. At September 30, 2014, REO totaled $42.5 million, including residential properties with a carrying value of $40.4 million. At December 31, 2013, REO totaled $42.6 million, all of which were residential properties. REO is carried, net of allowances for losses, at the lower of cost or fair value less estimated selling costs.  The fair value of REO is estimated through current appraisals, in conjunction with a drive-by inspection and comparison of the REO property with similar properties in the area by either a licensed appraiser or real estate broker.  As these properties are actively marketed, estimated fair values are periodically adjusted by management to reflect current market conditions and, as such, are classified as Level 3.

Fair Value of Financial Instruments

Quoted market prices available in formal trading marketplaces are typically the best evidence of the fair value of financial instruments.  In many cases, financial instruments we hold are not bought or sold in formal trading marketplaces.  Accordingly, fair values are derived or estimated based on a variety of valuation techniques in the absence of quoted market prices.  Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument.  These estimates do not reflect any possible tax ramifications, estimated transaction costs, or any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument.  Because no market exists for a certain portion of our financial instruments, fair value estimates are based on judgments regarding future loss experience, current economic conditions, risk characteristics and other such factors.  These estimates are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.  For these reasons and others, the estimated fair value disclosures presented herein do not represent our entire underlying value.  As such, readers are cautioned in using this information for purposes of evaluating our financial condition and/or value either alone or in comparison with any other company.

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The following tables set forth the carrying values and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value in accordance with GAAP, and are not measured or recorded at fair value on a recurring basis, and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	At September 30, 2014
	Carrying		Estimated Fair Value
(In Thousands)	Value		Total		Level 2		Level 3
Financial Assets:
Securities held-to-maturity	$	2,053,337	$	2,035,378	$	2,035,378	$	—
FHLB-NY stock	133,398		133,398		133,398		—
Loans held-for-sale, net (1)	7,629		7,849		—		7,849
Loans receivable, net (1)	11,802,335		11,906,833		—		11,906,833
MSR, net (1)	11,905		11,909		—		11,909
Financial Liabilities:
Deposits	9,612,761		9,648,916		9,648,916		—
Borrowings, net	3,911,559		4,115,223		4,115,223		—

	At December 31, 2013
	Carrying		Estimated Fair Value
(In Thousands)	Value		Total		Level 2		Level 3
Financial Assets:
Securities held-to-maturity	$	1,849,526	$	1,811,122	$	1,811,122	$	—
FHLB-NY stock	152,207		152,207		152,207		—
Loans held-for-sale, net (1)	7,375		7,436		—		7,436
Loans receivable, net (1)	12,303,066		12,480,533		—		12,480,533
MSR, net (1)	12,800		12,804		—		12,804
Financial Liabilities:
Deposits	9,855,310		9,922,631		9,922,631		—
Borrowings, net	4,137,161		4,376,336		4,376,336		—

(1) Includes assets measured at fair value on a non-recurring basis.

The following is a description of the methods and assumptions used to estimate fair values of our financial instruments which are not measured or recorded at fair value on a recurring or non-recurring basis.

Securities held-to-maturity

The fair values for substantially all of our securities held-to-maturity are obtained from an independent nationally recognized pricing service using similar methods and assumptions as used for our securities available-for-sale which are measured at fair value on a recurring basis.

Federal Home Loan Bank of New York, or FHLB-NY, stock

The fair value of FHLB-NY stock is based on redemption at par value.

Loans held-for-sale, net

Included in loans held-for-sale, net, are 15 and 30 year fixed rate residential mortgage loans originated for sale that conform to GSE guidelines (conforming loans) for which fair values are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect

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on the value of the options and structural features embedded in loans.  This methodology involves generating simulated interest rates, calculating the OAS of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing for similar mortgage instruments whose prices are not known.

Loans receivable, net

Fair values of loans are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the options and structural features embedded in loans.  This pricing methodology involves generating simulated interest rates, calculating the OAS of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing for similar mortgage instruments whose prices are not known.

This technique of estimating fair value is extremely sensitive to the assumptions and estimates used.  While we have attempted to use assumptions and estimates which are the most reflective of the loan portfolio and the current market, a greater degree of subjectivity is inherent in determining these fair values than for fair values obtained from formal trading marketplaces.  In addition, our valuation method for loans, which is consistent with accounting guidance, does not fully incorporate an exit price approach to fair value.

Deposits

The fair values of deposits with no stated maturity, such as savings, money market and NOW and demand deposit accounts, are equal to the amount payable on demand.  The fair values of certificates of deposit are based on discounted contractual cash flows using the weighted average remaining life of the portfolio discounted by the corresponding LIBOR Swap Curve.

Borrowings, net

The fair values of borrowings are based upon third party dealers’ estimated market values which are reviewed by management quarterly using an OAS model.

Outstanding commitments

Outstanding commitments include commitments to extend credit and unadvanced lines of credit for which fair values were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions.  The fair values of these commitments are immaterial to our financial condition.

9.  Litigation

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010 and August 26, 2011, the City of New York notified us of alleged tax deficiencies in the amount of $13.3 million, including interest and penalties, related to our 2006 through 2008 tax years.  The deficiencies related to our operation of two subsidiaries of Astoria Bank, Fidata Service Corp., or Fidata, and Astoria Federal Mortgage Corp., or AF Mortgage.  We disagree with the assertion of the tax deficiencies.  Hearings in this matter were held before the New York City Tax Appeals Tribunal, or the NYC Tax Appeals Tribunal, in March and April 2013.  On October 29, 2014, the NYC Tax Appeals Tribunal issued a decision favorable to us canceling the 2010 and 2011 Notices of Determination.

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No assurance can be given that the City of New York will not appeal the decision of the NYC Tax Appeals Tribunal, that such an appeal will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

10.  Impact of Accounting Standards and Interpretations

In January 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-04, “Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” and in August 2014 the FASB issued ASU 2014-14, “Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) - Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.” ASU 2014-04 applies to all creditors who obtain physical possession of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable. The amendments in ASU 2014-04 clarify when an in substance repossession or foreclosure occurs and requires disclosure of both (1) the amount of foreclosed residential real estate property held by a creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU 2014-14 applies to creditors that hold government-guaranteed mortgage loans. The amendments in ASU 2014-14 require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Effective July 1, 2014 we adopted the guidance in ASU 2014-04 and effective October 1, 2014 we adopted the guidance in ASU 2014-14 using the prospective transition method. Our adoption of the guidance in ASU 2014-04 and ASU 2014-14 did not have a material impact on our financial condition or results of operations.

In January 2014, the FASB issued ASU 2014-01, “Investments — Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Qualified Affordable Housing Projects,” which applies to all reporting entities that invest in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Currently under GAAP, a reporting entity that invests in a qualified affordable housing project may elect to account for that investment using the effective yield method if all of the conditions are met. For those investments that are not accounted for using the effective yield method, GAAP requires that they be accounted for under either the equity method or the cost method. Certain of the conditions required to be met to use the effective yield method were restrictive and thus prevented many such investments from qualifying for the use of the effective yield method. The amendments in this update modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to use the proportional amortization method to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The amendments in ASU 2014-01 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is permitted. This guidance will not have an impact on our financial condition or results of operations.

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In June 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860) — Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures” which applies to all entities that enter into repurchase-to-maturity transactions or repurchase financings (reverse repurchase agreements or securities sold under agreements to repurchase).  The amendments in this update change the accounting for repurchase-to-maturity transactions and linked repurchase financings (a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty) to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements.  In addition, the amendments in this update require an entity to disclose information on transfers accounted for as sales in transactions that are economically similar to repurchase agreements and provide disclosures to increase transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.  The amendments in ASU 2014-11 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014.  Early application for a public business entity is prohibited.  All of our repurchase agreements (reverse repurchase agreements) are accounted for as secured borrowings.  Therefore, this guidance will not have an impact on our financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718) — Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which applies to all entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period.  The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  As such, the performance target should not be reflected in estimating the grant date fair value of the award.  The amendments in ASU 2014-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and may be applied either prospectively to all awards granted or modified after the effective date, or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.  Early adoption is permitted. The terms of our share-based payment awards currently do not provide that a performance target that affects vesting could be achieved after the requisite service period. Therefore, this guidance is not expected to have an impact on our financial condition or results of operations.

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

This Quarterly Report on Form 10-Q contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.  These statements may be identified by the use of the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar terms and phrases, including references to assumptions.

Forward-looking statements are based on various assumptions and analyses made by us in light of our management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances.  These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors (many of which are beyond our control) that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements.  These factors include, without limitation, the following:

• the timing and occurrence or non-occurrence of events may be subject to circumstances beyond our control;

• there may be increases in competitive pressure among financial institutions or from non-financial institutions;

• changes in the interest rate environment may reduce interest margins or affect the value of our investments;

• changes in deposit flows, loan demand or real estate values may adversely affect our business;

• changes in accounting principles, policies or guidelines may cause our financial condition to be perceived differently;

• general economic conditions, either nationally or locally in some or all areas in which we do business, or conditions in the real estate or securities markets or the banking industry may be less favorable than we currently anticipate;

• legislative or regulatory changes, including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Reform Act, and any actions regarding foreclosures, may adversely affect our business;

• enhanced supervision and examination by the Office of the Comptroller of the Currency, or OCC, the Board of Governors of the Federal Reserve System, or the FRB, and the Consumer Financial Protection Bureau;

• effects of changes in existing U.S. government or government-sponsored mortgage programs;

• technological changes may be more difficult or expensive than we anticipate;

• success or consummation of new business initiatives may be more difficult or expensive than we anticipate; or

• litigation or other matters before regulatory agencies, whether currently existing or commencing in the future, may be determined adverse to us or may delay the occurrence or non-occurrence of events longer than we anticipate.

We have no obligation to update any forward-looking statements to reflect events or circumstances after the date of this document.

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Executive Summary

The following overview should be read in conjunction with our MD&A in its entirety.

Astoria Financial Corporation is a Delaware corporation organized as the unitary savings and loan holding company of Astoria Bank.  On June 1, 2014, we officially changed the name of our wholly-owned subsidiary, formerly known as Astoria Federal Savings and Loan Association, to Astoria Bank to better reflect who we are and what we do today as we have adapted and evolved to meet the needs of our expanding customer base.  As the premier Long Island community bank, Astoria Bank offers a complete range of financial services and solutions designed to meet customers’ personal, family and business banking needs.  Our goals are to enhance shareholder value while continuing to strengthen and expand our position as a more fully diversified, full service community bank.   We focus on growing our core businesses of mortgage portfolio lending and deposit gathering while maintaining strong asset quality and controlling operating expenses.  We continue to implement our strategies to diversify earning assets and to increase low cost core deposits.  These strategies include a greater level of participation in the local multi-family and commercial real estate mortgage lending markets and expanding our array of business banking products and services, focusing on small and middle market businesses with an emphasis on attracting clients from larger competitors.  We continue to explore opportunities to selectively expand our physical presence, consisting presently of our branch network of 86 locations, including a full service branch in Manhattan which opened on March 31, 2014, plus our dedicated business banking office in midtown Manhattan, into other prime locations in Manhattan and on Long Island from which to better serve and build our business banking relationships. As part of these ongoing expansion efforts, we expect to open our 87^th branch in Melville, New York, in the 2014 fourth quarter.

We are impacted by both national and regional economic factors, with residential mortgage loans from various regions of the country held in our portfolio and our multi-family and commercial real estate mortgage loan portfolio concentrated in the New York metropolitan area. Although the U.S. economy has shown signs of modest improvement, the operating environment continues to remain challenging. Interest rates have been at or near historical lows and we expect them to remain low for the near term. Long-term interest rates moved higher during the latter half of 2013 but declined somewhat during the nine months ended September 30, 2014, with the ten-year U.S. Treasury rate decreasing from 3.03% at the end of December 2013 to 2.49% at the end of September 2014. The national unemployment rate was 5.9% for September 2014, compared to 6.7% for December 2013, and new job growth in 2014 has continued its slow pace. Softness persists in the housing and real estate markets, although the extent of such softness varies from region to region. We believe market conditions remain favorable in the New York metropolitan area with respect to our multi-family mortgage loan origination activities, though increasing competition in this area has resulted in some competitor institutions offering rates and/or product terms at levels which we have chosen not to offer and which we believe do not fit our current risk tolerance.

In addition to the challenging economic environment in which we compete, the regulation and oversight of our business has changed significantly in recent years.  As described in more detail in Part I, Item 1A, “Risk Factors,” in our 2013 Annual Report on Form 10-K, certain aspects of the Reform Act continue to have a significant impact on us.  Final capital rules approved by the federal bank regulatory agencies in 2013 subject many savings and loan holding companies, including Astoria Financial Corporation, to consolidated capital requirements which will be phased in with the initial provisions effective for us on January 1, 2015.  The rules also revise the quantity and quality of minimum risk-based and leverage capital requirements applicable to Astoria Bank and Astoria Financial Corporation and revise the calculation of risk-weighted assets to enhance their risk sensitivity. We continue to prepare for the impacts that the Reform Act, the Third Basel Accord adopted by the Basel Committee on Banking Supervision, or Basel III capital standards, and related rulemaking will have on our business, financial condition and results of operations.

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Net income available to common shareholders for the three and nine months ended September 30, 2014 increased compared to the three and nine months ended September 30, 2013. For the 2014 third quarter, the increase primarily resulted from a provision for loan losses credited to operations for 2014 compared to a provision for loan losses charged to operations for 2013, partially offset by lower net interest income and non-interest income for the 2014 third quarter as compared with the same period one year earlier. The increase in net income available to common shareholders for the 2014 nine month period was largely due to a provision for loan losses credited to operations for 2014 compared to a provision for loan losses charged to operations for 2013, coupled with the impact of the NYS tax legislation signed into law on March 31, 2014 which reduced income tax expense. Contributing to the increase in net income available to common shareholders for the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013, was a decline in non-interest expense and an increase in net interest income. Lower non-interest income and higher preferred stock dividends in 2014 partially offset these increases.

As more fully discussed in our June 30, 2014 Quarterly Report on Form 10-Q, we designated a pool of non-performing residential mortgage loans as held-for-sale as of June 30, 2014. During the 2014 third quarter, we completed a bulk sale of substantially all of these loans at terms approximating their carrying value at June 30, 2014. The majority of the remaining loans from the pool designated as held-for-sale as of June 30, 2014 were either foreclosed upon and transferred to REO or were satisfied via short sales or payoffs during the 2014 third quarter with no material impact on our financial condition or results of operations. All of the remaining non-performing residential mortgage loans held-for-sale were sold in a second transaction, with the same counterparty as the bulk sale transaction, at a loss of $920,000, which is included in other non-interest income in our consolidated statements of income for the three and nine months ended September 30, 2014.

The provision for loan losses credited to operations for the 2014third quarter totaled $3.0 million, resulting in a provision for loan losses credited to operations of $7.2 million for the nine months ended September 30, 2014. This compares to a provision for loan losses charged to operations of $2.5 million for the 2013third quarter and $16.2 million for the nine months ended September 30, 2013. The allowance for loan losses totaled $113.6 million at September 30, 2014, compared to $139.0 million at December 31, 2013. The reduction in the allowance for loan losses at September 30, 2014 compared to December 31, 2013, and the provision credited to operations for the nine months ended September 30, 2014, reflects the results of our quarterly reviews of the adequacy of the allowance for loan losses and includes the release of $5.7 million of reserves as of June 30, 2014 which were previously attributable to the pool of loans designated as held-for-sale discussed above. We continue to maintain our allowance for loan losses at a level which we believe is appropriate given the significant reduction in non-performing loans and continued improvement in our loan loss experience, as well as the high quality of our loan originations and the contraction of the overall loan portfolio.

Net interest income decreased for the three months ended September 30, 2014, compared to the three months ended September 30, 2013. This decline was primarily due to a decrease in interest earned on our residential mortgage loan portfolio which exceeded increases in interest earned on our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio and declines in interest expense on certificates of deposit and borrowings. For the nine months ended September 30, 2014, we continued to see the benefit of the restructuring of borrowings which occurred primarily in the 2013 second quarter and the prepayment of our junior subordinated debentures in the 2013 second quarter, resulting in a significant reduction in interest expense on borrowings compared to the nine months ended September 30, 2013. This reduction in interest expense on borrowings, coupled with increases in interest earned on our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio and a decline in interest expense on certificates

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of deposit, outpaced the decline in interest earned on our residential mortgage loan portfolio, resulting in an increase in net interest income for the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013. The continued low interest rate environment, coupled with the changing mix of our interest-earning assets and interest-bearing liabilities and the 2013 restructuring of borrowings and prepayment of the junior subordinated debentures, has resulted in the average cost of interest-bearing liabilities declining more than the average yield on interest-earning assets for the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013, resulting in improvements in 2014 in both our net interest rate spread and our net interest margin.

Non-interest income decreased for the three and nine months ended September 30, 2014 compared to the three and nine months ended September 30, 2013. These declines primarily reflected declines in mortgage banking income, net, and other non-interest income, as well as a decline in gain on sales of securities for the 2014 nine month period, compared to the same period a year ago. Non-interest expense was essentially unchanged for the 2014 third quarter compared to the 2013 third quarter as decreases in federal deposit insurance premium expense and other non-interest expense, primarily foreclosure and REO related expenses, were substantially offset by increases in advertising expense and occupancy, equipment and systems expense. For the nine months ended September 30, 2014, non-interest expense decreased compared to the nine months ended September 30, 2013, primarily due to a reduction in federal deposit insurance premium expense and the extinguishment of debt charge recognized in the 2013 nine month period, partially offset by increases in advertising expense and compensation and benefits expense. We believe that as we progress through the remainder of 2014 and into 2015 our non-interest expense will increase reflecting the expenses associated with branch openings, our rebranding efforts and our continued focus on growing business banking, and will be offset in part by reduced federal deposit insurance premium expense and foreclosure related expenses.

Total assets declined during the nine months ended September 30, 2014 due primarily to a decrease in residential mortgage loans, partially offset by growth in our multi-family and commercial real estate mortgage loan portfolio as well as our securities portfolio. At September 30, 2014, our multi-family and commercial real estate mortgage loan portfolio represented 38% of our total loan portfolio, up from 33% at December 31, 2013, reflecting our continued focus on the strategic shift in our balance sheet. The decline in our residential mortgage loan portfolio reflects an excess of mortgage loan repayments over originations and purchases in the first nine months of 2014, as well as the sale of a significant portion of our non-performing residential mortgage loans discussed above.

Total deposits declined during the nine months ended September 30, 2014 as a result of a decline in certificates of deposit which more than offset a net increase in core deposits. At September 30, 2014, core deposits represented 70% of total deposits, up from 67% at December 31, 2013. Total deposits included $915.5 million of business deposits at September 30, 2014, an increase of 41% since December 31, 2013, reflecting the expansion of our business banking operations, a component of the strategic shift in our balance sheet. We expect that the continued growth of our business banking operations should allow us to continue to grow our low cost core deposits and move closer to our goal that they represent 80% of total deposits by the end of 2015. Total borrowings also declined during the nine months ended September 30, 2014, funded primarily by the proceeds from the sale of the non-performing residential mortgage loans in the 2014 third quarter.

Stockholders’ equity increased as of September 30, 2014 compared to December 31, 2013. The increase was primarily the result of earnings in excess of dividends on our common and preferred stock during the first nine months of 2014. Also contributing to the increase was an unrealized gain on our available-for-sale securities portfolio, stock-based compensation recognized and capital raised through our dividend reinvestment and stock purchase plan during the first nine months of 2014.

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We look forward to further strengthening and expanding our position as a more fully diversified, full service community bank as our strategy continues to gain momentum. The recent addition of a new Chief Lending Officer to our team will strengthen the coordination between our three lending areas and should provide us with additional momentum towards our stated goals as we move forward.

Available Information

Our internet website address is www.astoriabank.com.  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports can be obtained free of charge from our investor relations website at http://ir.astoriabank.com.  The above reports are available on our website as soon as reasonably practicable after we file such material with, or furnish such material to, the SEC.  Such reports are also available on the SEC’s website at www.sec.gov/edgar/searchedgar/webusers.htm.

Critical Accounting Policies

Note 1 of Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” of our 2013 Annual Report on Form 10-K, as supplemented by our March 31, 2014 and June 30,2014 Quarterly Reports on Form 10-Q and this report, contains a summary of our significant accounting policies.  Various elements of our accounting policies, by their nature, are inherently subject to estimation techniques, valuation assumptions and other subjective assessments.  Our policies with respect to the methodologies used to determine the allowance for loan losses, the valuation of MSR, judgments regarding goodwill and securities impairment and the estimates related to our pension plans and other postretirement benefits are our most critical accounting policies because they are important to the presentation of our financial condition and results of operations, involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions and estimates about highly uncertain matters.  Actual results may differ from our assumptions, estimates and judgments.  The use of different assumptions, estimates and judgments could result in material differences in our results of operations or financial condition.  These critical accounting policies are reviewed quarterly with the Audit Committee of our Board of Directors.  The following description of these policies should be read in conjunction with the corresponding section of our 2013 Annual Report on Form 10-K.

Allowance for Loan Losses

We establish and maintain an allowance for loan losses based on our evaluation of the probable inherent losses in our loan portfolio.  Loan charge-offs in the period the loans, or portions thereof, are deemed uncollectible reduce the allowance for loan losses.  Recoveries of amounts previously charged-off increase the allowance for loan losses in the period they are received.

The allowance is adjusted to an appropriate level through provisions for loan losses charged to operations, to increase the allowance, or credited to operations, to decrease the allowance, based on a comprehensive analysis of our loan portfolio.  We evaluate the adequacy of the allowance on a quarterly basis.  The allowance is comprised of both valuation allowances related to individual loans and general valuation allowances, although the total allowance for loan losses is available for losses applicable to the entire loan portfolio.  In estimating specific allocations of the allowance, we review loans deemed to be impaired and measure impairment losses based on either the fair value of the collateral, the present value of expected future cash flows, or the observable market price of the loan.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement. Factors considered by management

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in determining impairment include the financial condition of the borrower, payment history, delinquency status, collateral value, our lien position and the probability of collecting principal and interest payments when due. When an impairment analysis indicates the need for a specific allocation of the allowance on an individual loan, such allocation would be established sufficient to cover probable incurred losses at the evaluation date based on the facts and circumstances of the loan.  For loans individually classified as impaired, the portion of the recorded investment in the loan in excess of the present value of the discounted cash flows of a modified loan or, for collateral dependent loans, the portion of the recorded investment in the loan in excess of the estimated fair value of the underlying collateral less estimated selling costs, is charged-off.  When available information confirms that specific loans, or portions thereof, are uncollectible, these amounts are charged-off against the allowance for loan losses.

Loan reviews are performed by our Asset Review Department quarterly for all loans individually classified by our Asset Classification Committee and are performed annually for multi-family and commercial real estate mortgage loans modified in a TDR, multi-family and commercial real estate mortgage loans with balances of $5.0 million or greater and commercial loans with balances of $500,000 or greater.  Further, multi-family and commercial real estate portfolio management personnel also perform annual reviews for certain multi-family and commercial real estate mortgage loans with balances under $5.0 million and recommend further review by our Credit and Asset Review Departments as appropriate.  In addition, our Asset Review Department will review annually borrowing relationships whose combined outstanding balance is $5.0 million or greater, with such reviews covering approximately fifty percent of the outstanding principal balance of the loans to such relationships.

Our residential mortgage loans are individually evaluated for impairment at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral values on residential loans are obtained primarily through automated valuation models. Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete. We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate mortgage loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  We analyze our home equity lines of credit when such loans become 90 days past due and consider our lien position, the estimated fair value of the underlying collateral value and the results of recent property inspections in determining the need for an individual valuation allowance.  We also obtain updated estimates of collateral value for certain other loans when the Asset Classification Committee believes repayment of such loans may be dependent on the value of the underlying collateral. Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.

Other current and anticipated economic conditions on which our individual valuation allowances rely are the impact that national and/or local economic and business conditions may have on borrowers, the impact that local real estate markets may have on collateral values, the level and direction of interest rates and their combined effect on real estate values and the ability of borrowers to service debt.  For multi-family and commercial real estate loans, additional factors specific to a borrower or the underlying collateral are considered.  These factors include, but are not limited to, the composition of tenancy, occupancy levels for the property, location of the property, cash flow estimates and, to a lesser degree, the existence of personal guarantees.  We also review all regulatory notices, bulletins and memoranda with the purpose of identifying upcoming changes in regulatory conditions which may impact our calculation of individual valuation allowances.  Our primary banking regulator periodically reviews our reserve methodology during regulatory

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examinations and any comments regarding changes to reserves or loan classifications are considered by management in determining valuation allowances.

The determination of the loans on which full collectibility is not reasonably assured, the estimates of the fair value of the underlying collateral and the assessment of economic and regulatory conditions are subject to assumptions and judgments by management.  Individual valuation allowances and charge-off amounts could differ materially as a result of changes in these assumptions and judgments.

Estimated losses for loans that are not individually deemed to be impaired are determined on a loan pool basis using our historical loss experience and various other qualitative factors and comprise our general valuation allowances.  General valuation allowances represent loss allowances that have been established to recognize the inherent risks associated with our lending activities which, unlike individual valuation allowances, have not been allocated to particular loans.  The determination of the adequacy of the general valuation allowances takes into consideration a variety of factors.

We segment our residential mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and origination time periods and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate mortgage loans by portfolio, geographic location and origination time periods.  We analyze our consumer and other loan portfolio by home equity lines of credit, commercial loans, revolving credit lines and installment loans and perform similar historical loss analyses.  In our analysis of non-performing loans, we consider our aggregate historical loss experience with respect to the ultimate disposition of the underlying collateral along with the migration of delinquent loans based on the portfolio segments noted above.  These analyses and the resulting loss rates are used as an integral part of our judgment in developing estimated loss percentages to apply to the loan portfolio segments. We monitor credit risk on interest-only hybrid adjustable rate mortgage, or ARM, loans that were underwritten at the initial note rate, which may have been a discounted rate, in the same manner that we monitor credit risk on all interest-only hybrid ARM loans.  We monitor interest rate reset dates of our loan portfolio, in the aggregate, and the current interest rate environment and consider the impact, if any, on borrowers’ ability to continue to make timely principal and interest payments in determining our allowance for loan losses.  We also consider the size, composition, risk profile and delinquency levels of our loan portfolio, as well as our credit administration and asset management procedures.  We monitor property value trends in our market areas by reference to various industry and market reports, economic releases and surveys, and our general and specific knowledge of the real estate markets in which we lend, in order to determine what impact, if any, such trends may have on the level of our general valuation allowances.  In addition, we evaluate and consider the impact that current and anticipated economic and market conditions may have on the loan portfolio and known and inherent risks in the portfolio.  We update our analyses quarterly and refine our evaluations as experience provides clearer guidance, our product offerings change and as economic conditions evolve.

We analyze our historical loss experience over twelve, fifteen, eighteen and twenty-four month periods. The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type.  Also, for a particular loan type we may not have sufficient loss history to develop a reasonable estimate of loss and consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs).  Our evaluation of loss experience factors considers trends in such factors over the prior two years for substantially all of the loan portfolio, with the exception of multi-family and commercial real estate mortgage loans originated after 2010, for which our evaluation includes detailed modeling techniques.  We update our historical loss analyses

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quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses.

We consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by portfolio.  The qualitative factors we consider generally include, but are not limited to, changes in (1) lending policies and procedures, (2) economic and business conditions and developments that affect collectibility of our loan portfolio, (3) the nature and volume of our loan portfolio and in the terms of loans, (4) the experience, ability and depth of lending management and other staff, (5) the volume and severity of past due, non-accrual and adversely classified loans, (6) the quality of the loan review system, (7) the value of underlying collateral, (8) the existence or effect of any credit concentrations and (9) external factors such as competition and legal or regulatory requirements.  In addition to the nine qualitative factors noted, we also review certain analytical information such as our coverage ratios and peer analysis.

We use ratio analyses as a supplemental tool for evaluating the overall reasonableness of the allowance for loan losses.  As such, we consider our asset quality ratios as well as the allowance ratios and coverage percentages set forth in both peer group and regulatory agency data.  We also consider any comments from our primary banking regulator resulting from their review of our general valuation allowance methodology during regulatory examinations.  We consider the observed trends in our asset quality ratios in combination with our primary focus on our historical loss experience and the impact of current economic conditions.  After evaluating these variables, we determine appropriate allowance coverage percentages for each of our portfolio segments and the appropriate level of our allowance for loan losses.  We do not determine the appropriate level of our allowance for loan losses based exclusively on a single factor or asset quality ratio.  We periodically review the actual performance and charge-off history of our loan portfolio and compare that to our previously determined allowance coverage percentages and individual valuation allowances.  In doing so, we evaluate the impact the previously mentioned variables may have had on the loan portfolio to determine which changes, if any, should be made to our assumptions and analyses.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our allowance for loan losses.  Allocations of the allowance to each loan category are adjusted quarterly to reflect probable inherent losses using the same quantitative and qualitative analyses used in connection with the overall allowance adequacy calculations.  The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

As a result of our updated charge-off and loss analyses, we updated certain allowance coverage percentages during the 2014 third quarter to reflect our current estimates of the amount of probable inherent losses in our loan portfolio in determining our general valuation allowances. Based on our evaluation of the composition and size of our loan portfolio, the levels and composition of loan delinquencies and non-performing loans, our loss history, the housing and real estate markets and the current economic environment, we determined that an allowance for loan losses of $113.6 million was appropriate at September 30, 2014, compared to $118.6 million at June 30,2014 and $139.0 million at December 31, 2013. The provision for loan losses credited to operations totaled $7.2 million for the nine months ended September 30, 2014.

The balance of our allowance for loan losses represents management’s best estimate of the probable inherent losses in our loan portfolio at the reporting dates.  Actual results could differ from our estimates as a result of changes in economic or market conditions.  Changes in estimates could result in a material change in the allowance for loan losses.  While we believe that the allowance for loan losses has been established and

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maintained at levels that reflect the risks inherent in our loan portfolio, future adjustments may be necessary if portfolio performance or economic or market conditions differ substantially from the conditions that existed at the time of the initial determinations.

For additional information regarding our allowance for loan losses, see “Provision for Loan Losses (Credited) Charged to Operations” and “Asset Quality” in this document and Part II, Item 7, “MD&A,” in our 2013 Annual Report on Form 10-K.

Valuation of MSR

The initial asset recognized for originated MSR is measured at fair value.  The fair value of MSR is estimated by reference to current market values of similar loans sold servicing released.  MSR are amortized in proportion to and over the period of estimated net servicing income.  We apply the amortization method for measurement of our MSR.  MSR are assessed for impairment based on fair value at each reporting date.  Impairment exists if the carrying value of MSR exceeds the estimated fair value. The estimated fair value of MSR is obtained through independent third party valuations.  MSR impairment, if any, is recognized in a valuation allowance with a corresponding charge to earnings.  Increases in the fair value of impaired MSR are recognized only up to the amount of the previously recognized valuation allowance.

At September 30, 2014, our MSR had an estimated fair value of $11.9 million and were valued based on expected future cash flows considering a weighted average discount rate of 9.48%, a weighted average constant prepayment rate on mortgages of 11.77% and a weighted average life of 5.9 years. At December 31, 2013, our MSR had an estimated fair value of $12.8 million and were valued based on expected future cash flows considering a weighted average discount rate of 9.45%, a weighted average constant prepayment rate on mortgages of 10.52% and a weighted average life of 6.3 years.

The fair value of MSR is highly sensitive to changes in assumptions.  Changes in prepayment speed assumptions generally have the most significant impact on the fair value of our MSR.  Generally, as interest rates decline, mortgage loan prepayments accelerate due to increased refinance activity, which results in a decrease in the fair value of MSR.  As interest rates rise, mortgage loan prepayments slow down, which results in an increase in the fair value of MSR.  Thus, any measurement of the fair value of our MSR is limited by the conditions existing and the assumptions utilized as of a particular point in time, and those assumptions may not be appropriate if they are applied at a different point in time.

Goodwill Impairment

Goodwill is presumed to have an indefinite useful life and is tested, at least annually, for impairment at the reporting unit level.  If the estimated fair value of the reporting unit exceeds its carrying amount, further evaluation is not necessary.  However, if the fair value of the reporting unit is less than its carrying amount, further evaluation is required to compare the implied fair value of the reporting unit’s goodwill to its carrying amount to determine if a write down of goodwill is required.  Impairment exists when the carrying amount of goodwill exceeds its implied fair value.

For purposes of our goodwill impairment testing, we have identified a single reporting unit.  We consider the quoted market price of our common stock on our impairment testing date as an initial indicator of estimating the fair value of our reporting unit.  We also consider the average price of our common stock, both before and after our impairment test date, as well as market-based control premiums in determining the estimated fair value of our reporting unit.  In addition to our internal goodwill impairment analysis, we periodically obtain a goodwill impairment analysis from an independent third party valuation firm.  The

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independent third party utilizes multiple valuation approaches including comparable transactions, control premium, public market peers and discounted cash flow.  Management reviews the assumptions and inputs used in the third party analysis for reasonableness.

At September 30, 2014, the carrying amount of our goodwill totaled $185.2 million. As of September 30, 2014, we performed our annual goodwill impairment test internally and obtained an independent third party analysis and concluded there was no goodwill impairment. We would test our goodwill for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of our reporting unit below its carrying amount. The identification of additional reporting units, the use of other valuation techniques or changes to the input assumptions used in our analysis or the analysis by our third party valuation firm could result in materially different evaluations of impairment.

Securities Impairment

Our available-for-sale securities portfolio is carried at estimated fair value with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity.  Debt securities which we have the positive intent and ability to hold to maturity are classified as held-to-maturity and are carried at amortized cost.  The fair values for our securities are obtained from an independent nationally recognized pricing service.

Our securities portfolio is comprised primarily of fixed rate mortgage-backed securities guaranteed by a GSE as issuer. GSE issuance mortgage-backed securities comprised 92% of our securities portfolio at September 30, 2014. Non-GSE issuance mortgage-backed securities at September 30, 2014 comprised less than 1% of our securities portfolio and had an amortized cost of $8.4 million, with 68% classified as available-for-sale and 32% classified as held-to-maturity. Substantially all of our non-GSE issuance securities are investment grade securities and have performed similarly to our GSE issuance securities. Credit quality concerns have not significantly impacted the performance of our non-GSE securities or our ability to obtain reliable prices. The balance of our securities portfolio is primarily comprised of debt securities issued by GSEs.

The fair value of our securities portfolio is primarily impacted by changes in interest rates. We conduct a periodic review and evaluation of the securities portfolio to determine if a decline in the fair value of any security below its cost basis is other-than-temporary. Our evaluation of other-than-temporary impairment, or OTTI, considers the duration and severity of the impairment, our assessments of the reason for the decline in value, the likelihood of a near-term recovery and our intent and ability to not sell the securities. We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience. If such decline is deemed other-than-temporary, the security is written down to a new cost basis and the resulting loss is charged to earnings as a component of non-interest income, except for the amount of the total OTTI for a debt security that does not represent credit losses which is recognized in other comprehensive income/loss, net of applicable taxes. At September 30, 2014, we held 101 securities with an estimated fair value totaling $1.32 billion which had an unrealized loss totaling $38.2 million. Of the securities in an unrealized loss position at September 30, 2014, $924.3 million, with an unrealized loss of $34.1 million, had been in a continuous unrealized loss position for twelve months or longer. At September 30, 2014, the impairments were deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we had no intention to sell these securities and it was not more likely than not that we would be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expected to recover the entire amortized cost basis of the security.

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Pension Benefits and Other Postretirement Benefit Plans

Astoria Bank has a qualified, non-contributory defined benefit pension plan covering employees meeting specified eligibility criteria.  Astoria Bank’s policy is to fund pension costs in accordance with the minimum funding requirement.  In addition, Astoria Bank has non-qualified and unfunded supplemental retirement plans covering certain officers and directors.  Effective April 30, 2012, the Astoria Federal Savings and Loan Association Employees’ Pension Plan, the Astoria Federal Savings and Loan Association Excess Benefit Plan, the Astoria Federal Savings and Loan Association Supplemental Benefit Plan and the Astoria Federal Savings and Loan Association Directors’ Retirement Plan were amended to, among other things, change the manner in which benefits were computed for service through April 30, 2012 and to suspend accrual of additional benefits for all of the aforementioned plans effective April 30, 2012.  We also sponsor a health care plan that provides for postretirement medical and dental coverage to select individuals.

We recognize the overfunded or underfunded status of our defined benefit pension plans and other postretirement benefit plan, which is measured as the difference between plan assets at fair value and the benefit obligation at the measurement date, in other assets or other liabilities in our consolidated statements of financial condition.  Changes in the funded status are recognized through other comprehensive income/loss in the period in which the changes occur.

There are several key assumptions which we provide our actuary which have a significant impact on the pension benefits and other postretirement benefit obligations as well as benefits expense.  These include the discount rate and the expected return on plan assets.  We continually review and evaluate all actuarial assumptions affecting the pension benefits and other postretirement benefit plans.  We monitor these rates in relation to the current market interest rate environment and update our actuarial analysis accordingly.

The discount rate is used to calculate the present value of the benefit obligations at the measurement date and the expense to be recorded in the following period.  A lower discount rate will result in a higher benefit obligation and expense, while a higher discount rate will result in a lower benefit obligation and expense.  Discount rate assumptions are determined by reference to the Citigroup Pension Discount Curve, adjusted for Astoria Bank benefit plan specific cash flows.  We compare these rates to other yield curves and market indices, such as the Mercer Mature Plan Index and Bloomberg AA Discount Curve, for reasonableness and make adjustments, as necessary, so the discount rates used reflect current market data and trends.

To determine the expected return on plan assets, we consider the long-term historical return information on plan assets, the mix of investments that comprise plan assets and the historical returns on indices comparable to the fund classes in which the plan invests.

For further information on the actuarial assumptions used for our pension benefits and other postretirement benefit plans, see Note 14 of Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data” in our 2013 Annual Report on Form 10-K.

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Liquidity and Capital Resources

Our primary source of funds is cash provided by principal and interest payments on loans and securities. The most significant liquidity challenge we face is the variability in cash flows as a result of changes in mortgage refinance activity. Principal payments on loans and securities decreased to $1.76 billion for the nine months ended September 30, 2014, compared to $3.41 billion for the nine months ended September 30, 2013, primarily due to decreases in residential mortgage loan and securities repayments. As longer-term interest rates moved higher in 2013, and as the balance of our residential mortgage loan portfolio continued to decline, we began to experience a reduction in the levels of residential mortgage loan prepayments near the end of the 2013 third quarter which continued into 2014. While still well below the levels in 2013, residential mortgage loan prepayments increased somewhat in the 2014 second and third quarters compared to the 2014 first quarter.

In addition to cash provided by principal and interest payments on loans and securities, our other sources of funds include cash provided by operating activities, deposits and borrowings. Net cash provided by operating activities totaled $133.0 million for the nine months ended September 30, 2014 and $189.1 million for the nine months ended September 30, 2013. Deposits decreased $242.5 million during the nine months ended September 30, 2014 and $383.6 million during the nine months ended September 30, 2013, due to decreases in certificates of deposit, partially offset by increases in core deposits. During the nine months ended September 30, 2014 and 2013, we continued to allow high cost certificates of deposit to run off. Total deposits included business deposits of $915.5 million at September 30, 2014, an increase of 41% since December 31, 2013, reflecting the expansion of our business banking operations, a component of the strategic shift in our balance sheet. At September 30, 2014, core deposits represented 70% of total deposits, up from 67% at December 31, 2013. This reflects our efforts to reposition the liability mix of our balance sheet, reducing certificates of deposit and increasing core deposits. Net borrowings decreased $225.6 million during the nine months ended September 30, 2014 and decreased $264.5 million during the nine months ended September 30, 2013. The decrease in net borrowings during the nine months ended September 30, 2014 was funded primarily by the proceeds from the sale of non-performing residential mortgage loans in the 2014 third quarter. The decrease in net borrowings during the nine months ended September 30, 2013 was primarily due to a decrease in FHLB-NY advances and the prepayment of our junior subordinated debentures, partially offset by our use of short-term federal funds purchased in 2013.

Our primary use of funds is for the origination and purchase of mortgage loans and, to a lesser degree, for the purchase of securities. Gross mortgage loans originated and purchased for portfolio during the nine months ended September 30, 2014 declined to $1.13 billion, compared to $2.07 billion during the nine months ended September 30, 2013, reflecting declines in both residential and multi-family and commercial real estate mortgage loan production. Residential mortgage loan originations and purchases for portfolio totaled $326.8 million during the nine months ended September 30, 2014, of which $187.2 million were originations and $139.6 million were purchases of individual residential mortgage loans through our third party loan origination program, compared to $837.8 million during the nine months ended September 30, 2013, of which $492.7 million were originations and $345.1 million were purchases. Residential mortgage loan origination and purchase volume for portfolio has been negatively affected for an extended period of time by the historical low interest rates for thirty year fixed rate conforming mortgage loans and the expanded conforming loan limits established by the GSEs resulting in more borrowers opting for thirty year fixed rate conforming mortgage loans, which we generally do not retain for our portfolio, and a reduced demand for the hybrid ARM loan product that we retain for our portfolio. Multi-family and commercial real estate loan originations totaled $798.5 million during the nine months ended September 30, 2014, compared to $1.23 billion during the nine months ended September 30, 2013. An increase in interest rates during the latter half of 2013 somewhat tempered multi-family and commercial real estate lending demand. Increasing competition

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in this area has resulted in some competitor institutions offering rates and/or product terms at levels which we have chosen not to offer and which we believe do not fit our current risk tolerance. Purchases of securities totaled $459.9 million during the nine months ended September 30, 2014 and $1.05 billion during the nine months ended September 30, 2013.

Our policies and procedures with respect to managing funding and liquidity risk are established to ensure our safe and sound operation in compliance with applicable bank regulatory requirements. Our liquidity management process is sufficient to meet our daily funding needs and cover both expected and unexpected deviations from normal daily operations. Processes are in place to appropriately identify, measure, monitor and control liquidity and funding risk. The primary tools we use for measuring and managing liquidity risk include cash flow projections, diversified funding sources, stress testing, a cushion of liquid assets and contingency funding plans.

We maintain liquidity levels to meet our operational needs in the normal course of our business. The levels of our liquid assets during any given period are dependent on our operating, investing and financing activities. Cash and due from banks totaled $148.4 million at September 30, 2014 and $122.0 million at December 31, 2013. At September 30, 2014, we had $963.0 million of borrowings with a weighted average rate of 0.44% maturing over the next twelve months. We have the flexibility to either repay or rollover these borrowings as they mature. Included in our borrowings are various obligations which, by their terms, may be called by the counterparty. At September 30, 2014, we had $1.95 billion of callable borrowings, of which $900.0 million were contractually callable by the counterparty within twelve months and on a quarterly basis thereafter. We believe the potential for these borrowings to be called does not present a liquidity concern as they have above current market coupons and, as such, are not likely to be called absent a significant increase in market interest rates. In addition, to the extent such borrowings were to be called, we believe we can readily obtain replacement funding, although such funding may be at higher rates. At September 30, 2014, FHLB-NY advances totaled $2.23 billion, or 57% of total borrowings. We do not believe any of our borrowing counterparty concentrations represent a material risk to our liquidity. In addition, we had $1.77 billion of certificates of deposit at September 30, 2014 with a weighted average rate of 1.46% maturing over the next twelve months. We have the ability to retain or replace a significant portion of such deposits based on our pricing and historical experience.

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The following table details our borrowing and certificate of deposit maturities and their weighted average rates at September 30, 2014.

	Borrowings					Certificates of Deposit
				Weighted Average Rate				Weighted Average Rate
(Dollars in Millions)	Amount					Amount
Contractual Maturity:
Twelve months or less	$	963		0.44	%	$	1,767	1.46	%
Thirteen to thirty-six months	1,400		(1)	2.69		814		1.66
Thirty-seven to sixty months	400		(2)	3.31		266		1.28
Over sixty months	1,150		(3)	3.54		1		1.70
Total	$	3,913		2.45	%	$	2,848	1.50	%

(1) Includes $400.0 million of borrowings, with a weighted average rate of 4.27%, which are callable by the counterparty within the next twelve months and on a quarterly basis thereafter.

(2) Callable by the counterparty within the next twelve months and on a quarterly basis thereafter.

(3) Includes $100.0 million of borrowings, with a rate of 4.05%, which are callable by the counterparty within the next twelve months and on a quarterly basis thereafter, $100.0 million of borrowings, with a rate of 3.66%, which are callable by the counterparty in 2016 and $950.0 million of borrowings, with a weighted average rate of 3.47%, which are callable by the counterparty in 2017.

Additional sources of liquidity at the holding company level have included public and private issuances of debt and equity securities into the capital markets.  Holding company debt obligations are included in other borrowings.  We have filed automatic shelf registration statements on Form S-3 with the SEC, which allow us to periodically offer and sell, from time to time, in one or more offerings, individually or in any combination, common stock, preferred stock, debt securities, capital securities, guarantees, warrants to purchase common stock or preferred stock and units consisting of one or more of the foregoing.  These shelf registration statements provide us with greater capital management flexibility and enable us to more readily access the capital markets in order to pursue growth opportunities that may become available to us in the future or should there be any changes in the regulatory environment that call for increased capital requirements.  Although the shelf registration statements do not limit the amount of the foregoing items that we may offer and sell, our ability and any decision to do so is subject to market conditions and our capital needs.  Our ability to continue to access the capital markets for additional financing at favorable terms may be limited by, among other things, market conditions, interest rates, our capital levels, Astoria Bank’s ability to pay dividends to Astoria Financial Corporation, our credit profile and ratings and our business model.

On January 7, 2014, we adopted the Astoria Financial Corporation Dividend Reinvestment and Stock Purchase Plan, or the Stock Purchase Plan, and terminated the previously existing plan. The Stock Purchase Plan allows our shareholders to automatically reinvest the cash dividend paid on all or a portion of their shares of our common stock into additional shares of our common stock and make optional cash purchases, up to $10,000 per month, of additional shares of our common stock, unless we grant a waiver permitting a higher amount. Shares of common stock may be purchased either directly from us from authorized but unissued shares or from treasury shares, or on the open market. We have registered 1,500,000 shares of our common stock under the Securities Act for offer and sale from time to time pursuant to the Stock Purchase Plan. During the nine months ended September 30, 2014, 459,836 shares of our common stock were purchased pursuant to the Stock Purchase Plan directly from us from treasury shares for net proceeds totaling $6.1 million.

Astoria Financial Corporation’s primary uses of funds include payment of dividends on common and preferred stock and payment of interest on its debt obligations. During the nine months ended September 30, 2014,

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Astoria Financial Corporation paid dividends on common and preferred stock totaling $18.5 million and interest on its debt obligations totaling $6.3 million. On September 17, 2014, our Board of Directors declared a quarterly cash dividend on the Series C Preferred Stock aggregating $2.2 million, or $16.25 per share, for the quarterly period from July 15, 2014 through and including October 14, 2014, which was paid on October 15, 2014 to stockholders of record as of September 30, 2014. On October 15, 2014, our Board of Directors declared a quarterly cash dividend of $0.04 per share on shares of our common stock payable on December 1, 2014 to stockholders of record as of November 17, 2014.

Our ability to pay dividends, service our debt obligations and repurchase common stock is dependent primarily upon receipt of capital distributions from Astoria Bank. Astoria Bank paid dividends to Astoria Financial Corporation totaling $39.4 million during the nine months ended September 30, 2014. Since Astoria Bank is a federally chartered savings association, there are regulatory limits on its ability to make distributions to Astoria Financial Corporation. During the nine months ended September 30, 2014, Astoria Bank was required to, and did, notify the OCC of its intent to pay dividends, to which the OCC did not object. Astoria Bank must also provide notice to the FRB at least 30 days prior to declaring a dividend. See Part I, Item 1, “Business - Regulation and Supervision - Limitations on Capital Distributions,” in our 2013 Annual Report on Form 10-K for further discussion of limitations on capital distributions from Astoria Bank.

See “Financial Condition” for further discussion of the changes in stockholders’ equity.

At September 30, 2014, our tangible common equity ratio, which represents common stockholders’ equity less goodwill divided by total assets less goodwill, was 8.37%. At September 30, 2014, Astoria Bank’s capital levels exceeded all of its regulatory capital requirements with a Tangible capital ratio of 10.56%, Tier 1 leverage capital ratio of 10.56%, Total risk-based capital ratio of 19.20% and Tier 1 risk-based capital ratio of 17.94%. As of September 30, 2014, Astoria Bank’s capital ratios continue to be above the minimum levels required to be considered well capitalized for bank regulatory purposes.

In July 2013, pursuant to the Reform Act, the federal bank regulatory agencies issued final capital rules that subject many savings and loan holding companies, including Astoria Financial Corporation, to consolidated capital requirements effective January 1, 2015. The rules also revise the quantity and quality of minimum risk-based and leverage capital requirements, consistent with the Reform Act and the Basel III capital standards. For a more detailed description of these rules, see Part I, Item 1, “Business - Regulation and Supervision - Capital Requirements,” in our 2013 Annual Report on Form 10-K. We continue to prepare for the impacts that the Reform Act, Basel III capital standards and related rulemaking will have on our business, financial condition and results of operations. For additional information, see also Part I, Item 1A, “Risk Factors,” in our 2013 Annual Report on Form 10-K.

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Off-Balance Sheet Arrangements and Contractual Obligations

We are a party to financial instruments with off-balance sheet risk in the normal course of our business in order to meet the financing needs of our customers and in connection with our overall interest rate risk management strategy.  These instruments involve, to varying degrees, elements of credit, interest rate and liquidity risk.  In accordance with GAAP, these instruments are either not recorded in the consolidated financial statements or are recorded in amounts that differ from the notional amounts.  Such instruments primarily include lending commitments and lease commitments.

Lending commitments include commitments to originate and purchase loans and commitments to fund unused lines of credit.  We also have commitments to fund loans held-for-sale and commitments to sell loans in connection with our mortgage banking activities which are considered derivative financial instruments.  Commitments to sell loans totaled $24.5 million at September 30, 2014.  The fair values of our mortgage banking derivative financial instruments are immaterial to our financial condition and results of operations.  We also have contractual obligations related to operating lease commitments which have not changed significantly from December 31, 2013.

The following table details our contractual obligations at September 30, 2014.

	Payments due by period
(In Thousands)	Total		Less than One Year		One to Three Years		Three to Five Years		More than Five Years
On-balance sheet contractual obligations:
Borrowings with original terms greater than three months	$	3,050,000	$	100,000	$	1,400,000	$	400,000	$	1,150,000
Off-balance sheet contractual obligations:
Commitments to originate and purchase loans (1)	460,497		460,497		—		—		—
Commitments to fund unused lines of credit (2)	173,915		173,915		—		—		—
Total	$	3,684,412	$	734,412	$	1,400,000	$	400,000	$	1,150,000

(1)   Includes commitments to originate loans held-for-sale of $17.5 million.

(2)   Includes commitments to fund unused home equity lines of credit of $75.3 million and commercial lines of credit of $63.4 million.

In addition to the contractual obligations previously discussed, we have liabilities for gross unrecognized tax benefits and interest and penalties related to uncertain tax positions which have not changed significantly from December 31, 2013.  For further information regarding these liabilities, see Note 11 of Notes to Consolidated Financial Statements in Part II, Item 8, “Financial Statements and Supplementary Data,” in our 2013 Annual Report on Form 10-K.  We also have contingent liabilities related to assets sold with recourse and standby letters of credit which have not changed significantly from December 31, 2013.

For further information regarding our off-balance sheet arrangements and contractual obligations, see Part II, Item 7, “MD&A,” in our 2013 Annual Report on Form 10-K.

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Comparison of Financial Condition as of September 30, 2014 and December 31, 2013 and Operating Results for the Three and Nine Months Ended September 30, 2014 and 2013

Financial Condition

Total assets declined $333.4 million to $15.46 billion at September 30, 2014, from $15.79 billion at December 31, 2013, primarily reflecting a decrease in residential mortgage loans which was partially offset by increases in our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio.

Loans receivable decreased $526.1 million to $11.92 billion at September 30, 2014, from $12.44 billion at December 31, 2013, and represented 77% of total assets at September 30, 2014. The growth in our multi-family and commercial real estate mortgage loan portfolio was more than offset by the decline in our residential mortgage loan portfolio resulting in a net decline of $524.9 million in our total mortgage loan portfolio to $11.62 billion at September 30, 2014, compared to $12.15 billion at December 31, 2013. At September 30, 2014, our residential mortgage loan portfolio represented 60% of our total loan portfolio, down from 65% at December 31, 2013, and our combined multi-family and commercial real estate mortgage loan portfolio represented 38% of our total loan portfolio, up from 33% at December 31, 2013. This reflects our continued focus on repositioning the asset mix of our balance sheet. Gross mortgage loans originated and purchased for portfolio during the nine months ended September 30, 2014 were $1.13 billion, compared to $2.07 billion during the nine months ended September 30, 2013, reflecting declines in both residential and multi-family and commercial real estate mortgage loan production. Mortgage loan repayments decreased to $1.41 billion for the nine months ended September 30, 2014, compared to $2.65 billion for the nine months ended September 30, 2013, primarily due to a decline in residential mortgage loan prepayments.

Our residential mortgage loan portfolio decreased $955.1 million to $7.08 billion at September 30, 2014, from $8.04 billion at December 31, 2013. Residential mortgage loan repayments declined for the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013, but continued to outpace our origination and purchase volume during the nine months ended September 30, 2014. Residential mortgage loan originations and purchases totaled $326.8 million during the nine months ended September 30, 2014, of which $187.2 million were originations and $139.6 million were purchases, compared to $837.8 million for the nine months ended September 30, 2013, of which $492.7 million were originations and $345.1 million were purchases. During the nine months ended September 30, 2014, the loan-to-value ratio of our residential mortgage loan originations and purchases for portfolio, at the time of origination or purchase, averaged approximately 71% and the loan amount averaged approximately $578,000. Contributing to the decline in our residential mortgage loan portfolio during the nine months ended September 30, 2014 was the sale of loans, representing a significant portion of our non-performing residential mortgage loans, completed in the 2014 third quarter.

Our multi-family mortgage loan portfolio increased $362.8 million to $3.66 billion at September 30, 2014, from $3.30 billion at December 31, 2013, and represented 31% of our total loan portfolio at September 30, 2014. Our commercial real estate mortgage loan portfolio increased $67.3 million to $880.3 million at September 30, 2014, from $813.0 million at December 31, 2013, and represented 7% of our total loan portfolio at September 30, 2014. These increases reflect our continued commitment to grow these portfolios while operating in a very competitive lending environment. Multi-family and commercial real estate loan originations totaled $798.5 million during the nine months ended September 30, 2014, compared to $1.23 billion during the nine months ended September 30, 2013. During the nine months ended September 30, 2014, our multi-family and commercial real estate mortgage loan originations reflected loan balances

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averaging approximately $2.5 million with a weighted average loan-to-value ratio, at the time of origination, of approximately 52% and a weighted average debt service coverage ratio of approximately 1.62.

Our securities portfolio increased $168.1 million to $2.42 billion at September 30, 2014, from $2.25 billion at December 31, 2013, and represented 16% of total assets at September 30, 2014. This increase reflects purchases totaling $459.9 million which were in excess of repayments of $281.5 million and sales of $14.3 million during the nine months ended September 30, 2014. At September 30, 2014, our securities portfolio was comprised primarily of fixed rate REMIC and CMO securities which had an amortized cost of $1.93 billion, a weighted average current coupon of 2.92%, a weighted average collateral coupon of 4.22% and a weighted average life of 4.1 years.

Total liabilities declined $407.9 million to $13.87 billion at September 30, 2014, from $14.27 billion at December 31, 2013, primarily due to declines in certificates of deposit and FHLB-NY advances, partially offset by an increase in core deposits. Deposits totaled $9.61 billion at September 30, 2014, or 69% of total liabilities, a decline of $242.5 million compared to $9.86 billion at December 31, 2013. The decrease in deposits was due to a decrease of $443.6 million in certificates of deposit, partially offset by a net increase of $201.1 million in core deposits. At September 30, 2014, core deposits totaled $6.76 billion and represented 70% of total deposits, up from 67% at December 31, 2013. This reflects our efforts to reposition the liability mix of our balance sheet. The net increase in core deposits at September 30, 2014, compared to December 31, 2013, reflected increases in money market and NOW and demand deposit accounts, partially offset by a decline in savings accounts. Money market accounts increased $359.7 million since December 31, 2013 to $2.33 billion at September 30, 2014. NOW and demand deposit accounts increased $48.9 million since December 31, 2013 to $2.15 billion at September 30, 2014. Savings accounts decreased $207.5 million since December 31, 2013 to $2.28 billion at September 30, 2014. The net increase in core deposits during the nine months ended September 30, 2014 appears to reflect customer preference for the liquidity these types of deposits provide, as well as our efforts to expand our business banking customer base. At September 30, 2014, total deposits included $915.5 million of business deposits, an increase of 41% since December 31, 2013.

Total borrowings, net, decreased $225.6 million to $3.91 billion at September 30, 2014, from $4.14 billion at December 31, 2013. The decrease in borrowings was primarily due to a decrease of $229.0 million in FHLB-NY advances, funded primarily by the proceeds from the sale of non-performing residential mortgage loans in the 2014 third quarter.

Stockholders' equity increased $74.5 million to $1.59 billion at September 30, 2014, from $1.52 billion at December 31, 2013.The increase in stockholders’ equity was primarily due to net income of $72.7 million, an unrealized gain on our available-for-sale securities portfolio, net of tax, of $7.2 million, stock-based compensation of $6.5 million and capital raised through our Stock Purchase Plan of $6.1 million, partially offset by dividends on common and preferred stock totaling $18.5 million.

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Results of Operations

General

Net income available to common shareholders for the three months ended September 30, 2014 increased $1.9 million to $16.6 million, compared to $14.7 million for the three months ended September 30, 2013. This increase primarily reflected a provision for loan losses credited to operations of $3.0 million in the 2014 third quarter, compared to a provision for loan losses charged to operations of $2.5 million in the 2013 third quarter, partially offset by lower net interest income and non-interest income for the 2014 third quarter compared to the 2013 third quarter. Diluted EPS increased to $0.17 per common share for the three months ended September 30, 2014, compared to $0.15 per common share for the three months ended September 30, 2013.

For the nine months ended September 30, 2014, net income available to common shareholders increased $24.7 million to $66.1 million, compared to $41.4 million for the nine months ended September 30, 2013. This increase was largely due to a provision for loan losses credited to operations of $7.2 million for 2014 compared to a provision for loan losses charged to operations of $16.2 million for 2013, coupled with the impact of the NYS tax legislation signed into law on March 31, 2014 which resulted in a reduction in income tax expense of $11.5 million. Contributing to the increase in net income available to common shareholders for the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013, was a decline in non-interest expense and an increase in net interest income. Lower non-interest income and higher preferred stock dividends in 2014 partially offset these increases. Diluted EPS increased to $0.66 per common share for the nine months ended September 30, 2014, compared to $0.42 per common share for the nine months ended September 30, 2013.

Return on average common stockholders’ equity increased to 4.57% for the three months ended September 30, 2014, compared to 4.47% for the three months ended September 30, 2013, and increased to 6.16% for the nine months ended September 30, 2014, compared to 4.22% for the nine months ended September 30, 2013. Return on average tangible common stockholders’ equity, which represents average common stockholders’ equity less average goodwill, increased to 5.23% for the three months ended September 30, 2014, compared to 5.20% for the three months ended September 30, 2013, and increased to 7.08% for the nine months ended September 30, 2014, compared to 4.91% for the nine months ended September 30, 2013. The increases in the returns on average common stockholders’ equity and average tangible common stockholders’ equity were due to increases in net income available to common shareholders, partially offset by increases in average common stockholders’ equity, for the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013.

Return on average assets increased to 0.48% for the three months ended September 30, 2014, compared to 0.42% for the three months ended September 30, 2013, and increased to 0.62% for the nine months ended September 30, 2014, compared to 0.38% for the nine months ended September 30, 2013. The increases in the returns on average assets were due to increases in net income, coupled with reductions in average assets, for the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013.

As indicated above, our results of operations for the nine months ended September 30, 2014 include a reduction in income tax expense of $11.5 million related to the NYS tax legislation. For the nine months ended September 30, 2014, this reduction in income tax expense increased diluted EPS by $0.11 per common share, return on average common stockholders’ equity by 107 basis points, return on average tangible common

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stockholders’ equity by 123 basis points and return on average assets by 10 basis points. See “Income Tax Expense” below for further discussion of the impact of the NYS tax legislation.

Income and expense and related financial ratios adjusted to exclude the effect of the aforementioned change in tax legislation represent non-GAAP financial measures which we believe provide investors with a meaningful comparison for effectively evaluating our operating results. Non-GAAP returns and EPS are calculated by substituting non-GAAP net income and non-GAAP net income available to common shareholders for net income and net income available to common shareholders in the corresponding calculation.

The following table provides a reconciliation between the non-GAAP financial measures to the comparable GAAP measures as reported in our consolidated statement of income for the nine months ended September 30, 2014 and related annualized returns.

(In Thousands, Except Per Share Data)	As Reported				Effect of Change in Tax Legislation				Non-GAAP
Income before income tax expense		$	92,617			$	—			$	92,617
Income tax expense		19,960				11,487				31,447
Net income		72,657				(11,487		)		61,170
Preferred stock dividends		6,582				—				6,582
Net income available to common shareholders		$	66,075			$	(11,487	)		$	54,588
Basic earnings per common share		$	0.66			$	(0.11	)		$	0.55
Diluted earnings per common share		$	0.66			$	(0.11	)		$	0.55
Return on average:
Common stockholders’ equity		6.16		%		(1.07		)%		5.09		%
Tangible common stockholders’ equity		7.08				(1.23		)		5.85
Assets		0.62				(0.10		)		0.52

Net Interest Income

Net interest income represents the difference between income on interest-earning assets and expense on interest-bearing liabilities. Net interest income depends primarily upon the volume of interest-earning assets and interest-bearing liabilities and the corresponding interest rates earned or paid. Our net interest income is significantly impacted by changes in interest rates and market yield curves and their related impact on cash flows. See Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” for further discussion of the potential impact of changes in interest rates on our results of operations.

Net interest income decreased $1.6 million to $84.6 million for the three months ended September 30, 2014, compared to $86.2 million for the three months ended September 30, 2013. This decline was primarily due to a decrease in interest earned on our residential mortgage loan portfolio which exceeded increases in interest earned on our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio and declines in interest expense on certificates of deposit and borrowings. For the nine months ended September 30, 2014, we continued to see the benefit of the restructuring of borrowings which occurred primarily in the 2013 second quarter and the prepayment of our junior subordinated debentures in the 2013 second quarter, resulting in a significant reduction in interest expense on borrowings compared to the nine months ended September 30, 2013. This reduction in interest expense on borrowings, coupled with increases in interest earned on our multi-family and commercial real estate mortgage loan portfolio and our securities portfolio and a decline in interest expense on certificates of deposit, outpaced the decline in interest earned

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on our residential mortgage loan portfolio, resulting in an increase of $3.3 million in net interest income to $258.4 million for the nine months ended September 30, 2014, compared to $255.1 million for the nine months ended September 30, 2013.

The continued low interest rate environment, coupled with the changing mix of our interest-earning assets and interest-bearing liabilities and the 2013 restructuring of borrowings and prepayment of the junior subordinated debentures, has resulted in the average cost of interest-bearing liabilities declining more than the average yield on interest-earning assets for the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013, resulting in improvements in 2014 in both our net interest rate spread and our net interest margin. The net interest rate spread increased three basis points to 2.23% for the three months ended September 30, 2014, from 2.20% for the three months ended September 30, 2013, and increased nine basis points to 2.25% for the nine months ended September 30, 2014, from 2.16% for the nine months ended September 30, 2013. The net interest margin increased three basis points to 2.31% for the three months ended September 30, 2014, from 2.28% for the three months ended September 30, 2013, and increased ten basis points to 2.33% for the nine months ended September 30, 2014, from 2.23% for the nine months ended September 30, 2013. The average balance of net interest-earning assets increased $95.2 million to $1.03 billion for the three months ended September 30, 2014, from $934.3 million for the three months ended September 30, 2013, and increased $143.2 million to $1.03 billion for the nine months ended September 30, 2014, from $884.1 million for the nine months ended September 30, 2013.

The changes in average interest-earning assets and interest-bearing liabilities and their related yields and costs are discussed in greater detail under “Interest Income” and “Interest Expense.”

Analysis of Net Interest Income

The following tables set forth certain information about the average balances of our assets and liabilities and their related yields and costs for the periods indicated. Average yields are derived by dividing income by the average balance of the related assets and average costs are derived by dividing expense by the average balance of the related liabilities, for the periods shown. Average balances are derived from average daily balances. The yields and costs include amortization of fees, costs, premiums and discounts which are considered adjustments to interest rates.

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	For the Three Months Ended September 30,
	2014							2013
(Dollars in Thousands)	Average Balance		Interest		Average Yield/ Cost			Average Balance		Interest		Average Yield/ Cost
					(Annualized)							(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
Residential	$	7,308,943	$	58,268		3.19	%	$	8,499,231	$	69,158		3.25	%
Multi-family and commercial real estate	4,493,537		45,693			4.07		3,829,065		41,450			4.33
Consumer and other loans (1)	241,107		2,157			3.58		248,529		2,175			3.50
Total loans	12,043,587		106,118			3.52		12,576,825		112,783			3.59
Mortgage-backed and other securities (2)	2,380,251		14,528			2.44		2,320,896		13,247			2.28
Interest-earning cash accounts	109,766		83			0.30		87,258		67			0.31
FHLB-NY stock	141,265		1,486			4.21		150,504		1,498			3.98
Total interest-earning assets	14,674,869		122,215			3.33		15,135,483		127,595			3.37
Goodwill	185,151							185,151
Other non-interest-earning assets	707,949							738,821
Total assets	$	15,567,969						$	16,059,455
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings	$	2,327,037	293			0.05		$	2,619,798	330			0.05
Money market	2,268,405		1,475			0.26		1,864,235		1,179			0.25
NOW and demand deposit	2,145,803		182			0.03		2,103,436		172			0.03
Total core deposits	6,741,245		1,950			0.12		6,587,469		1,681			0.10
Certificates of deposit	2,892,094		10,854			1.50		3,513,212		13,475			1.53
Total deposits	9,633,339		12,804			0.53		10,100,681		15,156			0.60
Borrowings	4,012,018		24,791			2.47		4,100,528		26,235			2.56
Total interest-bearing liabilities	13,645,357		37,595			1.10		14,201,209		41,391			1.17
Non-interest-bearing liabilities	337,887							409,510
Total liabilities	13,983,244							14,610,719
Stockholders’ equity	1,584,725							1,448,736
Total liabilities and stockholders’ equity	$	15,567,969						$	16,059,455
Net interest income/ net interest rate spread (3)			$	84,620		2.23	%			$	86,204		2.20	%
Net interest-earning assets/ net interest margin (4)	$	1,029,512				2.31	%	$	934,274				2.28	%
Ratio of interest-earning assets to interest-bearing liabilities	1.08 x							1.07 x

__________________________________

(1) Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses.

(2) Securities available-for-sale are included at average amortized cost.

(3) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average interest-earning assets.

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	For the Nine Months Ended September 30,
	2014							2013
(Dollars in Thousands)	Average Balance		Interest		Average Yield/ Cost			Average Balance		Interest		Average Yield/ Cost
					(Annualized)							(Annualized)
Assets:
Interest-earning assets:
Mortgage loans (1):
Residential	$	7,672,504	$	185,516		3.22	%	$	9,007,869	$	222,994		3.30	%
Multi-family and commercial real estate	4,315,675		132,430			4.09		3,558,759		120,463			4.51
Consumer and other loans (1)	239,419		6,328			3.52		256,866		6,611			3.43
Total loans	12,227,598		324,274			3.54		12,823,494		350,068			3.64
Mortgage-backed and other securities (2)	2,323,096		42,321			2.43		2,190,480		36,003			2.19
Interest-earning cash accounts	103,489		232			0.30		93,327		192			0.27
FHLB-NY stock	146,659		4,777			4.34		154,942		5,147			4.43
Total interest-earning assets	14,800,842		371,604			3.35		15,262,243		391,410			3.42
Goodwill	185,151							185,151
Other non-interest-earning assets	679,814							767,235
Total assets	$	15,665,807						$	16,214,629
Liabilities and stockholders’ equity:
Interest-bearing liabilities:
Savings	$	2,402,031	898			0.05		$	2,705,411	1,011			0.05
Money market	2,134,118		3,895			0.24		1,786,764		4,409			0.33
NOW and demand deposit	2,121,511		522			0.03		2,095,285		518			0.03
Total core deposits	6,657,660		5,315			0.11		6,587,460		5,938			0.12
Certificates of deposit	3,019,343		33,541			1.48		3,677,032		42,228			1.53
Total deposits	9,677,003		38,856			0.54		10,264,492		48,166			0.63
Borrowings	4,096,522		74,384			2.42		4,113,661		88,107			2.86
Total interest-bearing liabilities	13,773,525		113,240			1.10		14,378,153		136,273			1.26
Non-interest-bearing liabilities	332,878							436,554
Total liabilities	14,106,403							14,814,707
Stockholders’ equity	1,559,404							1,399,922
Total liabilities and stockholders’ equity	$	15,665,807						$	16,214,629
Net interest income/  net interest rate spread (3)			$	258,364		2.25	%			$	255,137		2.16	%
Net interest-earning assets/  net interest margin (4)	$	1,027,317				2.33	%	$	884,090				2.23	%
Ratio of interest-earning assets to interest-bearing liabilities	1.07 x							1.06 x

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(1) Mortgage loans and consumer and other loans include loans held-for-sale and non-performing loans and exclude the allowance for loan losses.

(2) Securities available-for-sale are included at average amortized cost.

(3) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average interest-earning assets.

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Rate/Volume Analysis

The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities have affected our interest income and interest expense during the periods indicated.  Information is provided in each category with respect to (1) the changes attributable to changes in volume (changes in volume multiplied by prior rate), (2) the changes attributable to changes in rate (changes in rate multiplied by prior volume), and (3) the net change.  The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

	Increase (Decrease) for the Three Months ended September 30, 2014 Compared to the Three Months ended September 30, 2013												Increase (Decrease) for the Nine Months ended September 30, 2014 Compared to the Nine Months ended September 30, 2013
(In Thousands)	Volume				Rate				Net				Volume				Rate				Net
Interest-earning assets:
Mortgage loans:
Residential		$	(9,622	)		$	(1,268	)		$	(10,890	)		$	(32,210	)		$	(5,268	)		$	(37,478	)
Multi-family and commercial real estate		6,851				(2,608		)		4,243				23,916				(11,949		)		11,967
Consumer and other loans		(67		)		49				(18		)		(454		)		171				(283		)
Mortgage-backed and other securities		342				939				1,281				2,248				4,070				6,318
Interest-earning cash accounts		18				(2		)		16				20				20				40
FHLB-NY stock		(96		)		84				(12		)		(268		)		(102		)		(370		)
Total		(2,574		)		(2,806		)		(5,380		)		(6,748		)		(13,058		)		(19,806		)
Interest-bearing liabilities:
Savings		(37		)		—				(37		)		(113		)		—				(113		)
Money market		250				46				296				790				(1,304		)		(514		)
NOW and demand deposit		10				—				10				4				—				4
Certificates of deposit		(2,360		)		(261		)		(2,621		)		(7,345		)		(1,342		)		(8,687		)
Borrowings		(549		)		(895		)		(1,444		)		(362		)		(13,361		)		(13,723		)
Total		(2,686		)		(1,110		)		(3,796		)		(7,026		)		(16,007		)		(23,033		)
Net change in net interest income		$	112			$	(1,696	)		$	(1,584	)		$	278			$	2,949			$	3,227

Interest Income

Interest income decreased $5.4 million to $122.2 million for the three months ended September 30, 2014, from $127.6 million for the three months ended September 30, 2013, due to decreases in both the average yield and average balance of interest-earning assets. The average yield on interest-earning assets decreased to 3.33% for the three months ended September 30, 2014, from 3.37% for the three months ended September 30, 2013, primarily due to a lower average yield on mortgage loans, partially offset by an increase in the average yield on mortgage-backed and other securities. The average balance of interest-earning assets decreased $460.6 million to $14.67 billion for the three months ended September 30, 2014, from $15.14 billion for the three months ended September 30, 2013, primarily due to a decrease in the average balance of residential mortgage loans, partially offset by an increase in the average balance of multi-family and commercial real estate mortgage loans.

Interest income on residential mortgage loans decreased $10.9 million to $58.3 million for the three months ended September 30, 2014, from $69.2 million for the three months ended September 30, 2013, due to a decrease of $1.19 billion in the average balance to $7.31 billion for the three months ended September 30, 2014, from $8.50 billion for the three months ended September 30, 2013, coupled with a decrease in the average yield to 3.19% for the three months ended September 30, 2014, from 3.25% for the three months

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ended September 30, 2013. The decrease in the average balance of residential mortgage loans reflected the continued decline of this portfolio as repayments outpaced our originations over the past year, and, to a lesser extent, the sale of non-performing residential mortgage loans in the 2014 third quarter. The decrease in the average yield was primarily due to new originations at lower interest rates than the interest rates on loans repaid over the past year and the impact of the downward repricing of our ARM loans, partially offset by a decline in amortization of net premium and deferred loan origination cost. Net premium and deferred loan origination cost amortization decreased $2.0 million to $3.0 million for the three months ended September 30, 2014, from $5.0 million for the three months ended September 30, 2013, reflecting the decline in residential mortgage loan prepayments for the 2014third quarter compared to the 2013third quarter.

Interest income on multi-family and commercial real estate mortgage loans increased $4.2 million to $45.7 million for the three months ended September 30, 2014, from $41.5 million for the three months ended September 30, 2013, due to an increase of $664.5 million in the average balance to $4.49 billion for the three months ended September 30, 2014, from $3.83 billion for the three months ended September 30, 2013, partially offset by a decrease in the average yield to 4.07% for the three months ended September 30, 2014, from 4.33% for the three months ended September 30, 2013. The increase in the average balance of multi-family and commercial real estate loans was attributable to strong levels of originations of such loans which exceeded repayments over the past year. The decrease in the average yield was due, in part, to new originations at interest rates below the weighted average interest rate of the portfolio as well as the interest rates on loans repaid, coupled with the impact of the downward repricing of our ARM loans. Prepayment penalties totaled $1.6 million for the three months ended September 30, 2014 and $1.5 million for the three months ended September 30, 2013.

Interest income on mortgage-backed and other securities increased $1.3 million to $14.5 million for the three months ended September 30, 2014, from $13.2 million for the three months ended September 30, 2013, due to an increase in the average yield to 2.44% for the three months ended September 30, 2014, from 2.28% for the three months ended September 30, 2013, coupled with an increase of $59.4 million in the average balance of the portfolio. The increase in the average yield on mortgage-backed and other securities was primarily due to a decrease in net premium amortization. Net premium amortization decreased $1.2 million to $2.1 million for the three months ended September 30, 2014, from $3.3 million for the three months ended September 30, 2013. The increase in the average balance of mortgage-backed and other securities reflects securities purchases over the past year in excess of repayments and sales.

Interest income decreased $19.8 million to $371.6 million for the nine months ended September 30, 2014, from $391.4 million for the nine months ended September 30, 2013, due to a decrease in the average yield on interest-earning assets to 3.35% for the nine months ended September 30, 2014, from 3.42% for the nine months ended September 30, 2013, coupled with a decrease of $461.4 million in the average balance of interest-earning assets to $14.80 billion for the nine months ended September 30, 2014, from $15.26 billion for the nine months ended September 30, 2013.

Interest income on residential mortgage loans decreased $37.5 million to $185.5 million for the nine months ended September 30, 2014, from $223.0 million for the nine months ended September 30, 2013, due to a decrease of $1.34 billion in the average balance to $7.67 billion for the nine months ended September 30, 2014, from $9.01 billion for the nine months ended September 30, 2013, coupled with a decrease in the average yield to 3.22% for the nine months ended September 30, 2014, from 3.30% for the nine months ended September 30, 2013. Net premium and deferred loan origination cost amortization on residential mortgage loans decreased $7.9 million to $8.3 million for the nine months ended September 30, 2014, from $16.2 million for the nine months ended September 30, 2013.

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Interest income on multi-family and commercial real estate loans increased $11.9 million to $132.4 million for the nine months ended September 30, 2014, from $120.5 million for the nine months ended September 30, 2013, due to an increase of $756.9 million in the average balance to $4.32 billion for the nine months ended September 30, 2014, from $3.56 billion for the nine months ended September 30, 2013, partially offset by a decrease in the average yield to 4.09% for the nine months ended September 30, 2014, from 4.51% for the nine months ended September 30, 2013. Prepayment penalties totaled $5.1 million for the nine months ended September 30, 2014 and $4.8 million for the nine months ended September 30, 2013.

Interest income on mortgage-backed and other securities increased $6.3 million to $42.3 million for the nine months ended September 30, 2014, from $36.0 million for the nine months ended September 30, 2013, due to an increase in the average yield to 2.43% for the nine months ended September 30, 2014, from 2.19% for the nine months ended September 30, 2013, coupled with an increase of $132.6 million in the average balance of the portfolio. Net premium amortization on mortgage-backed and other securities decreased $6.1 million to $6.6 million for the nine months ended September 30, 2014, from $12.7 million for the nine months ended September 30, 2013.

The principal reasons for the changes in the average yields and average balances of the various assets noted above for the nine months ended September 30, 2014 are consistent with the principal reasons for the changes noted for the three months ended September 30, 2014.

Interest Expense

Interest expense decreased $3.8 million to $37.6 million for the three months ended September 30, 2014, from $41.4 million for the three months ended September 30, 2013, due to a decrease of $555.9 million in the average balance of interest-bearing liabilities to $13.65 billion for the three months ended September 30, 2014, from $14.20 billion for the three months ended September 30, 2013, coupled with a decrease in the average cost of interest-bearing liabilities to 1.10% for the three months ended September 30, 2014, from 1.17% for the three months ended September 30, 2013. The decrease in the average balance of interest-bearing liabilities primarily reflected a decrease in the average balance of certificates of deposit. The decrease in the average cost of interest-bearing liabilities was primarily due to a decrease in the average cost of borrowings.

Interest expense on total deposits decreased $2.4 million to $12.8 million for the three months ended September 30, 2014, from $15.2 million for the three months ended September 30, 2013, due to a decrease of $467.3 million in the average balance of total deposits to $9.63 billion for the three months ended September 30, 2014, from $10.10 billion for the three months ended September 30, 2013, coupled with a decrease in the average cost to 0.53% for the three months ended September 30, 2014, from 0.60% for the three months ended September 30, 2013. The decrease in the average balance of total deposits was primarily due to decreases in the average balances of certificates of deposit and savings accounts, partially offset by increases in money market and NOW and demand deposit accounts. The decrease in the average cost of total deposits was primarily due to a decrease in the average cost of our certificates of deposit accounts.

Interest expense on certificates of deposit decreased $2.6 million to $10.9 million for the three months ended September 30, 2014, from $13.5 million for the three months ended September 30, 2013, due to a decrease of $621.1 million in the average balance, coupled with a decrease in the average cost to 1.50% for the three months ended September 30, 2014, from 1.53% for the three months ended September 30, 2013. The decrease in the average balance of certificates of deposit was primarily the result of our reduced focus on certificates of deposit, reflecting our efforts to reposition the liability mix of our balance sheet to increase our core deposits and reduce certificates of deposit. The decrease in the average cost of certificates of deposit reflects

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the impact of certificates of deposit at higher rates maturing and being replaced at lower interest rates. During the three months ended September 30, 2014, $407.0 million of certificates of deposit, with a weighted average rate of 0.62% and a weighted average maturity at inception of seventeen months, matured and $281.1 million of certificates of deposit were issued or repriced, with a weighted average rate of 0.27% and a weighted average maturity at inception of twelve months.

Interest expense on borrowings decreased $1.4 million to $24.8 million for the three months ended September 30, 2014, from $26.2 million for the three months ended September 30, 2013, due to a decrease in the average cost to 2.47% for the three months ended September 30, 2014, from 2.56% for the three months ended September 30, 2013, coupled with a decrease of $88.5 million in the average balance of borrowings to $4.01 billion for the three months ended September 30, 2014, from $4.10 billion for the three months ended September 30, 2013.

Interest expense decreased $23.1 million to $113.2 million for the nine months ended September 30, 2014, from $136.3 million for the nine months ended September 30, 2013, due to a decrease in the average cost of interest-bearing liabilities to 1.10% for the nine months ended September 30, 2014, from 1.26% for the nine months ended September 30, 2013, coupled with a decrease of $604.6 million in the average balance of interest-bearing liabilities to $13.77 billion for the nine months ended September 30, 2014, from $14.38 billion for the nine months ended September 30, 2013. The decrease in the average cost of interest-bearing liabilities was primarily due to decreases in the average costs of borrowings, certificates of deposit and money market accounts.

Interest expense on total deposits decreased $9.3 million to $38.9 million for the nine months ended September 30, 2014, from $48.2 million for the nine months ended September 30, 2013, due to a decrease of $587.5 million in the average balance of total deposits to $9.68 billion for the nine months ended September 30, 2014, from $10.26 billion for the nine months ended September 30, 2013, coupled with a decrease in the average cost to 0.54% for the nine months ended September 30, 2014, from 0.63% for the nine months ended September 30, 2013.

Interest expense on certificates of deposit decreased $8.7 million to $33.5 million for the nine months ended September 30, 2014, from $42.2 million for the nine months ended September 30, 2013, due to a decrease of $657.7 million in the average balance, coupled with a decrease in the average cost to 1.48% for the nine months ended September 30, 2014, from 1.53% for the nine months ended September 30, 2013. During the nine months ended September 30, 2014, $1.49 billion of certificates of deposit with a weighted average rate of 0.68% and a weighted average maturity at inception of seventeen months matured and $1.02 billion of certificates of deposit were issued or repriced, with a weighted average rate of 0.30% and a weighted average maturity at inception of thirteen months.

Interest expense on borrowings decreased $13.7 million to $74.4 million for the nine months ended September 30, 2014, from $88.1 million for the nine months ended September 30, 2013, primarily due to a decrease in the average cost to 2.42% for the nine months ended September 30, 2014, from 2.86% for the nine months ended September 30, 2013. The decrease in the average cost of borrowings reflects the restructuring of $1.35 billion of borrowings and the prepayment of our junior subordinated debentures in 2013 and increased utilization of short-term federal funds purchased and FHLB-NY advances during the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013.

Except as noted above, the principal reasons for the changes in the average costs and average balances of the various liabilities noted above for the nine months ended September 30, 2014 are consistent with the principal reasons for the changes noted for the three months ended September 30, 2014.

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Provision for Loan Losses (Credited) Charged to Operations

We review our allowance for loan losses on a quarterly basis. Material factors considered during our quarterly review are the composition and size of our loan portfolio, the levels and composition of loan delinquencies and non-performing loans, our loss history and our evaluation of the housing and real estate markets and the current economic environment. We continue to closely monitor the local and national real estate markets and other factors related to risks inherent in our loan portfolio. We are impacted by both national and regional economic factors, with residential mortgage loans from various regions of the country held in our portfolio and our multi-family and commercial real estate mortgage loan portfolio concentrated in the New York metropolitan area, which includes New York, New Jersey and Connecticut. Although the U.S. economy has shown signs of modest improvement, the operating environment continues to remain challenging. Interest rates have been at or near historical lows and we expect them to remain low for the near term. Long-term interest rates moved higher during the latter half of 2013 but declined somewhat during the nine months ended September 30, 2014, with the ten-year U.S. Treasury rate decreasing from 3.03% at December 31, 2013 to 2.49% at the end of September 2014. The national unemployment rate was 5.9% for September 2014, compared to 6.7% for December 2013, and new job growth in 2014 has continued its slow pace. Softness persists in the housing and real estate markets, although the extent of such softness varies from region to region. We believe market conditions remain favorable in the New York metropolitan area with respect to our multi-family mortgage loan origination activities, though increasing competition in this area has resulted in some competitor institutions offering rates and/or product terms at levels which we have chosen not to offer and which we believe do not fit our current risk tolerance.

We recorded a provision for loan losses credited to operations of $3.0 million for the three months ended September 30, 2014 and $7.2 million for the nine months ended September 30, 2014. This compares to a provision for loan losses charged to operations of $2.5 million for the three months ended September 30, 2013 and $16.2 million for the nine months ended September 30, 2013. The allowance for loan losses declined to $113.6 million at September 30, 2014, compared to $118.6 million at June 30,2014 and $139.0 million at December 31, 2013. The allowance for loan losses as a percentage of total loans was 0.95% at September 30, 2014, compared to 0.98% at June 30,2014 and 1.12% at December 31, 2013. The reduction in the allowance for loan losses at September 30, 2014 compared to December 31, 2013, and the provision credited to operations for the nine months ended September 30, 2014, reflects the results of our quarterly reviews of the adequacy of the allowance for loan losses and includes the release of $5.7 million of reserves as of June 30, 2014 which were previously attributable to the pool of loans designated as held-for-sale discussed below. We continue to maintain our allowance for loan losses at a level which we believe is appropriate given the significant reduction in non-performing loans and continued improvement in our loan loss experience, as well as the high quality of our loan originations and the contraction of the overall loan portfolio.

As more fully discussed in our June 30, 2014 Quarterly Report on Form 10-Q, we designated a pool of non-performing residential mortgage loans as held-for-sale as of June 30, 2014. In connection with the designation of the pool of loans as held-for-sale, we recorded a loan charge-off of $8.7 million against the allowance for loan losses during the 2014 second quarter to write down the pool of loans from its immediately previous aggregate recorded investment of $195.0 million to its estimated fair value at that time of $186.3 million. As a result of our quarterly review of the adequacy of the allowance for loan losses as of June 30, 2014, $5.7 million of reserves previously attributable to this pool of loans was deemed no longer required and was credited to the provision for loan losses as a reserve release in the 2014 second quarter. During the 2014 third quarter we completed a bulk sale transaction of substantially all of the non-performing residential mortgage loans held-for-sale. The majority of the remaining loans from the pool designated as held-for-sale

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as of June 30, 2014 were either foreclosed upon and transferred to REO or were satisfied via short sales or payoffs during the 2014 third quarter with the balance of the loans held-for-sale sold in a second sale transaction, with the same counterparty as the bulk sale transaction, in September 2014. For additional information on the 2014 third quarter dispositions of the non-performing residential mortgage loans held-for-sale as of June 30, 2014, see "Asset Quality."

Non-performing loans, which are comprised primarily of mortgage loans and exclude loans held-for-sale, totaled $115.1 million, or 0.97% of total loans, at September 30, 2014, up $5.4 million compared to $109.7 million, or 0.91% of total loans, at June 30, 2014 and down $216.9 million compared to $332.0 million, or 2.67% of total loans, at December 31, 2013. The allowance for loan losses as a percentage of non-performing loans was 98.73% at September 30, 2014, compared to 108.09% at June 30,2014 and 41.87% at December 31, 2013. The increase in non-performing loans at September 30, 2014 compared to June 30, 2014 is primarily attributable to an increase in non-performing residential mortgage loans, partially offset by declines in non-performing multi-family and commercial real estate mortgage loans. Notwithstanding this increase in non-performing loans, total delinquent loans declined $8.5 million at September 30, 2014 compared to June 30, 2014 reflecting a decline in loans 30-89 days past due and accruing interest. The decline in non-performing loans and the change in the related ratio at September 30, 2014, compared to December 31, 2013, reflects, in large part, the sale of the non-performing residential mortgage loans during the 2014 third quarter discussed above. The changes in non-performing loans during any period are taken into account when determining the allowance for loan losses because the allowance coverage percentages related to our non-performing loans are generally higher than the allowance coverage percentages related to our performing loans. In evaluating our allowance coverage percentages for non-performing loans, we consider our aggregate historical loss experience with respect to the ultimate disposition of the underlying collateral.

Net loan charge-offs totaled $2.0 million, or seven basis points of average loans outstanding, annualized, for the three months ended September 30, 2014, and $18.2 million, or 20 basis points of average loans outstanding, annualized, for the nine months ended September 30, 2014. Net loan charge-offs for the nine months ended September 30, 2014 include the aforementioned $8.7 million charge-off related to the designation of the pool of loans as held-for-sale as of June 30, 2014. This compares to net loan charge-offs of $3.4 million, or 11 basis points of average loans outstanding, annualized, for the three months ended September 30, 2013 and $18.7 million, or 19 basis points of average loans outstanding, annualized, for the nine months ended September 30, 2013.

When analyzing our asset quality trends and coverage ratios, consideration is given to the accounting for non-performing loans, particularly when reviewing our allowance for loan losses to non-performing loans ratio. Included in our non-performing loans are residential mortgage loans which are 180 days or more past due for which we update our estimates of collateral values annually. We record a charge-off for the portion of the recorded investment in these loans in excess of the estimated fair value of the underlying collateral less estimated selling costs. Therefore, certain losses inherent in our non-performing residential mortgage loans are being recognized through a charge-off at 180 days past due and annually thereafter. The impact of updating these estimates of collateral value and recognizing any required charge-offs is to increase charge-offs and reduce the allowance for loan losses required on these loans. Therefore, when reviewing the adequacy of the allowance for loan losses as a percentage of non-performing loans, the impact of these charge-offs is considered. Non-performing residential mortgage loans which were 180 days or more past due at September 30, 2014 totaled $13.1 million, net of $1.6 million in charge-offs related to such loans, compared to $7.8 million, net of $2.2 million in charge-offs related to such loans, at June 30, 2014 and $202.7 million, net of $60.6 million in charge-offs related to such loans, at December 31, 2013. The decline since December 31, 2013 was primarily attributable to the aforementioned sale of non-performing residential mortgage loans during the 2014 third quarter.

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While ratio analyses are used as a supplemental tool for evaluating the overall reasonableness of the allowance for loan losses, the adequacy of the allowance for loan losses is ultimately determined by the actual losses and charges recognized in the portfolio. We update our loss analyses quarterly to ensure that our allowance coverage percentages are adequate and the overall allowance for loan losses is our best estimate of loss as of a particular point in time. Our 2014third quarter analysis of loss severity on residential mortgage loans, defined as the ratio of net write downs taken through disposition of the asset (typically the sale of REO or a short sale) to the loan’s original principal balance, indicated an average loss severity of approximately 26%, compared to approximately 27% in our 2014 second quarter analysis, approximately 26% in our 2014 first quarter analysis and approximately 30% in our 2013 fourth quarter analysis. Our analysis in the 2014third quarter involved a review of residential REO sales and short sales which occurred during the twelve months ended June 30,2014 and included both full documentation and reduced documentation loans in a variety of states with varying years of origination. Our 2014third quarter analysis of charge-offs on multi-family and commercial real estate mortgage loans during the twelve months ended June 30,2014, which generally related to certain delinquent and non-performing loans transferred to held-for-sale, loans modified in a TDR or loans foreclosed upon and transferred to REO, indicated an average loss severity of approximately 27%, compared to approximately 29% in our 2014 second quarter analysis, approximately 23% in our 2014 first quarter analysis and approximately 19% in our 2013 fourth quarter analysis. We consider our average loss severity experience as a gauge in evaluating the overall adequacy of our allowance for loan losses. However, the uniqueness of each multi-family and commercial real estate loan, particularly multi-family loans within New York City, many of which are rent stabilized, is also factored into our analyses. The ratio of the allowance for loan losses to non-performing loans was approximately 99% at September 30, 2014, which exceeds our average loss severity experience for our mortgage loan portfolios, supporting our determination that our allowance for loan losses is adequate to cover potential losses.

We obtain updated estimates of collateral values on residential mortgage loans at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter. Updated estimates of collateral values on residential loans are obtained primarily through automated valuation models. Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete. We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate mortgage loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate mortgage loans modified in a TDR at the time of the modification and annually thereafter. Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers. We also obtain updated estimates of collateral value for certain other loans when the Asset Classification Committee believes repayment of such loans may be dependent on the value of the underlying collateral. Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.

During the 2014 first quarter, total delinquent loans decreased $31.3 million since December 31, 2013 and net loan charge-offs decreased compared to the 2013 fourth quarter. The national unemployment rate was 6.7% for March 2014, unchanged compared to December 2013, and there were job gains for the quarter totaling 533,000 at the time of our analysis. We continued to update our charge-off and loss analysis during the 2014 first quarter and updated our allowance coverage percentages accordingly. As a result of these factors, our allowance for loan losses decreased compared to December 31, 2013 and totaled $134.0 million at March 31, 2014 which resulted in a provision for loan losses charged to operations of $1.6 million for the 2014 first quarter. As of June 30, 2014, we designated a pool of non-performing residential mortgage loans as held-for-sale, substantially all of which were 90 days or more past due, which resulted in a significant

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decline in total delinquent loans remaining in our loan portfolio at June 30,2014 compared to March 31, 2014. Net loan charge-offs were higher in the 2014 second quarter compared to the 2014 first quarter, primarily due to the loan charge-off recorded in the second quarter in connection with designating the aforementioned pool of loans as held-for-sale. The national unemployment rate decreased to 6.1% for June 2014 and job gains in the 2014 second quarter totaled 816,000 at the time of our analysis. We continued to update our charge-off and loss analysis during the 2014 second quarter and updated our allowance coverage percentages accordingly. As a result of these factors, our allowance for loan losses decreased compared to March 31, 2014 and totaled $118.6 million at June 30,2014 which resulted in a provision for loan losses credited to operations of $5.7 million for the 2014 second quarter and $4.1 million for the six months ended June 30,2014. During the 2014 third quarter, total delinquent loans decreased $8.5 million since June 30,2014. The national unemployment rate decreased to 5.9% for September 2014 and there were job gains for the quarter totaling 671,000 at the time of our analysis. Net loan charge-offs decreased for the 2014third quarter compared to the 2014 second quarter, which had included the loan charge-off discussed above related to the designation of loans as held-for-sale. We continued to update our charge-off and loss analysis during the 2014third quarter and modified our allowance coverage percentages accordingly. As a result of these factors, our allowance for loan losses decreased compared to June 30,2014 and totaled $113.6 million at September 30, 2014 which resulted in a provision for loan losses credited to operations of $3.0 million for the three months ended September 30, 2014 and $7.2 million for the nine months ended September 30, 2014.

There are no material assumptions relied on by management which have not been made apparent in our disclosures or reflected in our asset quality ratios and activity in the allowance for loan losses. We believe our allowance for loan losses has been established and maintained at levels that reflect the risks inherent in our loan portfolio, giving consideration to the composition and size of our loan portfolio, the levels and composition of loan delinquencies and non-performing loans, our loss history and our evaluation of the housing and real estate markets and the current economic environment. The balance of our allowance for loan losses represents management’s best estimate of the probable inherent losses in our loan portfolio at September 30, 2014 and December 31, 2013.

For further discussion of the methodology used to determine the allowance for loan losses, see “Critical Accounting Policies-Allowance for Loan Losses” and for further discussion of our loan portfolio composition and non-performing loans, see “Asset Quality” and Note 3 of Notes to Consolidated Financial Statements (Unaudited) in Part I, Item 1, “Financial Statements (Unaudited).”

Non-Interest Income

Non-interest income decreased $1.5 million to $13.8 million for the three months ended September 30, 2014, from $15.3 million for the three months ended September 30, 2013, primarily due to decreases in other non-interest income and mortgage banking income, net. For the nine months ended September 30, 2014, non-interest income decreased $10.9 million to $41.3 million, from $52.2 million for the nine months ended September 30, 2013, primarily due to decreases in mortgage banking income, net, gain on sale of securities and other non-interest income.

Gross realized gains on sales of securities totaled $141,000 for the nine months ended September 30, 2014, compared to $2.1 million for the nine months ended September 30, 2013. These gains were the result of sales of mortgage-backed securities from the available-for-sale portfolio with an amortized cost of $14.3 million during the nine months ended September 30, 2014 and $39.5 million during the nine months ended September 30, 2013.

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Mortgage banking income, net, which includes loan servicing fees, net gain on sales of loans, amortization of MSR and valuation allowance adjustments for the impairment of MSR, decreased $636,000 to $1.3 million for the three months ended September 30, 2014, from $1.9 million for the three months ended September 30, 2013, and decreased $7.4 million to $2.7 million for the nine months ended September 30, 2014, from $10.1 million for the nine months ended September 30, 2013. These decreases were primarily due to declines in net gain on sales of loans and, for the nine month period, a recovery recorded in the valuation allowance for the impairment of MSR. Net gain on sales of loans totaled $485,000 for the three months ended September 30, 2014 and $1.3 million for the nine months ended September 30, 2014, compared to $952,000 for the three months ended September 30, 2013 and $6.4 million for the nine months ended September 30, 2013. The declines in net gain on sales of loans primarily reflected a decrease in the volume of loans sold during the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013, attributable to a decline in the levels of originations of such loans in 2014 compared to 2013. In addition, during the 2013 first quarter, we eliminated the backlog of loan sale closings that existed at December 31, 2012, resulting from delays in the 2012 fourth quarter as the New York metropolitan area recovered from Hurricane Sandy. The recovery of the valuation allowance for the impairment of MSR totaled $290,000 for the nine months ended September 30, 2014, compared to $3.1 million for the nine months ended September 30, 2013. The recovery recorded in 2013 was primarily the result of a significant decrease in the estimated weighted average constant prepayment rate on mortgages and a corresponding increase in the estimated weighted average life of the servicing portfolio at September 30, 2013 compared to December 31, 2012 reflecting the increase in the U.S. Treasury rates in the latter part of the 2013 second quarter and continuing into the 2013 third quarter.

Other non-interest income declined $865,000 to $436,000 for the 2014third quarter, compared to $1.3 million for the 2013third quarter, and declined $1.4 million to $3.1 million for the nine months ended September 30, 2014, compared to $4.5 million for the nine months ended September 30, 2013. These declines were primarily attributable to the $920,000 loss recognized in the 2014 third quarter on the sale of non-performing residential mortgage loans held-for-sale with a carrying value of $4.0 million that were not sold in the bulk sale transaction that closed on July 31, 2014 and were not otherwise resolved through either foreclosure and transfer to REO or satisfaction via short sales or payoffs.

Non-Interest Expense

Non-interest expense decreased slightly to $72.4 million for the three months ended September 30, 2014, compared to $72.5 million for the three months ended September 30, 2013, as decreases in federal deposit insurance premium expense and other non-interest expense, primarily foreclosure and REO related expenses, were substantially offset by increases in advertising expense and occupancy, equipment and systems expense. For the nine months ended September 30, 2014, non-interest expense decreased $4.3 million to $214.2 million, from $218.5 million for the nine months ended September 30, 2013, primarily due to a reduction in federal deposit insurance premium expense in 2014 compared to 2013 and a $4.3 million prepayment charge for the early extinguishment of our junior subordinated debentures recognized in the 2013 nine month period, partially offset by increases in advertising expense and compensation and benefits expense. Our percentage of general and administrative expense to average assets, annualized, increased to 1.86% for the three months ended September 30, 2014, compared to 1.81% for the three months ended September 30, 2013, primarily due to the decline in average assets. For the nine months ended September 30, 2014, our percentage of general and administrative expense to average assets, annualized, increased to 1.82%, compared to 1.80% for the nine months ended September 30, 2013, primarily due to the decline in average assets, partially offset by the decline in general and administrative expense.

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Compensation and benefits expense increased $2.7 million to $102.0 million for the nine months ended September 30, 2014, from $99.3 million for the nine months ended September 30, 2013, reflecting higher salaries, incentive compensation and stock-based compensation costs in 2014 compared to 2013 and a $3.1 million reduction in compensation and benefits expense in the 2013 first quarter to reflect changes in certain compensation policies which became effective January 1, 2013. The absence of costs related to the Employee Stock Ownership Plan, or ESOP, and lower pension related expenses in 2014 compared to 2013 partially offset these increases. There were no ESOP related expenses in 2014 as a result of the final allocation of shares to participant accounts as of December 31, 2013, compared to $8.0 million for the nine months ended September 30, 2013. Effective April 1, 2014, the ESOP was merged into the incentive savings plan. The decline in pension related expenses in 2014 reflected the recognition of a net periodic benefit for our defined benefit pension plans of $2.1 million for the nine months ended September 30, 2014, compared to a net periodic cost of $110,000 for the nine months ended September 30, 2013, primarily due to an improvement in the expected return on pension plan assets, coupled with lower other postretirement benefit plan costs.

Occupancy, equipment and systems expense increased $1.0 million to $18.0 million for the three months ended September 30, 2014, compared to $17.0 million for the three months ended September 30, 2013, primarily due to rental expense for the Manhattan branch which opened on March 31, 2014, coupled with increases in equipment expenses, data processing charges and depreciation expense.

Federal deposit insurance premium expense decreased $2.6 million to $6.6 million for the three months ended September 30, 2014, compared to $9.2 million for the three months ended September 30, 2013, and decreased $6.0 million to $22.4 million for the nine months ended September 30, 2014, compared to $28.4 million for the nine months ended September 30, 2013. These declines reflected reductions in both our assessment base and assessment rate. As a result of the sales of non-performing residential mortgage loans in the 2014 third quarter, we expect future federal deposit insurance premium expense, as well as foreclosure related expenses, to decline.

Advertising expense increased $2.9 million to $5.0 million for the 2014third quarter, compared to $2.1 million for the 2013third quarter, and increased $3.0 million to $9.2 million for the nine months ended September 30, 2014, compared to $6.2 million for the nine months ended September 30, 2013. These increases reflect our continued advertising and branding expenses related to both the Manhattan branch which opened earlier this year and our continued focus on growing business banking and included significant brand awareness advertising in one of the busiest commuter travel hubs in New York City, Penn Station, during the entire month of September 2014.

Income Tax Expense

For the three months ended September 30, 2014, income tax expense totaled $10.3 million, representing an effective tax rate of 35.3%, compared to $9.5 million for the three months ended September 30, 2013, representing an effective tax rate of 36.0%. For the nine months ended September 30, 2014, income tax expense totaled $20.0 million. On March 31, 2014, NYS tax legislation was signed into law in connection with the approval of the NYS 2014-2015 budget. Portions of the new legislation will result in significant changes in the calculation of income taxes imposed on banks and thrifts operating in NYS, including changes to (1) future period NYS tax rates, (2) rules related to sourcing of revenue for NYS tax purposes and (3) the NYS taxation of entities within one corporate structure, among other provisions. In recent years, we have been subject to taxation in NYS under an alternative taxation method. The new legislation, among other things, removes that alternative method. Further, the new law (1) requires that we will be taxed in a manner that we believe may result in an increase in our tax expense beginning in 2015 and (2) caused us to recognize temporary differences and net operating loss carry-forward benefits in 2014 which we were unable to

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recognize previously. The result of this legislative change as of March 31, 2014 was an increase in our net deferred tax asset with a corresponding reduction in income tax expense of $11.5 million in the 2014 first quarter. The impact of this change in tax legislation partially offset our income tax expense of $31.4 million resulting from current operations for the nine months ended September 30, 2014, representing an effective tax rate of 34.0%. This compares to an income tax expense of $26.2 million for the nine months ended September 30, 2013, representing an effective tax rate of 36.1%. The decline in the effective tax rate for the three and nine months ended September 30, 2014, compared to the three and nine months ended September 30, 2013, primarily reflects the absence of ESOP expense in 2014, a portion of which is not deductible for tax purposes. We anticipate that our effective tax rate will increase in 2015 and 2016 as the provisions of the recent tax legislation become applicable to us. We are continuing to evaluate and interpret the new legislation and the impact on our income tax expense in future periods.

Asset Quality

One of our key operating objectives has been and continues to be to maintain a high level of asset quality.  We continue to employ sound underwriting standards for new loan originations.  Through a variety of strategies, including, but not limited to, collection efforts and the marketing of delinquent and non-performing loans and foreclosed properties, we have been proactive in addressing problem and non-performing assets which, in turn, has helped to maintain the strength of our financial condition.

As part of our ongoing efforts to reduce the level of our non-performing residential mortgage loans, from time to time, we have given consideration to a potential bulk sale.  However, prior to the 2014 second quarter, market conditions typically indicated that bulk sales could result in losses in excess of those which we would anticipate via our traditional approach of working out loans individually through a combination of loan modifications, short sales and the foreclosure process.  Therefore, we did not pursue a potential bulk sale, as continuation of our traditional approach was considered to be economically more favorable in terms of value maximization.

In the 2014 second quarter, we conducted an evaluation of our residential mortgage loans 90 days or more past due for the purpose of determining whether a greater value could be derived in a potential bulk sale, should such be sought, in excess of that which we have realized in recent periods through our traditional approach of working loans out individually.  This evaluation indicated that market conditions at that time could be favorable for a potential bulk sale and, in June 2014, we sought indicative bid values on a designated pool of our non-performing residential mortgage loans from multiple potential investors, and we designated the pool as non-performing loans held-for-sale.

In connection with the designation of the pool of loans as held-for-sale, we recorded a loan charge-off of $8.7 million against the allowance for loan losses during the 2014 second quarter to write down the pool of loans from its immediately previous aggregate recorded investment of $195.0 million to its estimated fair value at that time of $186.3 million. As a result of our quarterly review of the adequacy of the allowance for loan losses as of June 30, 2014, $5.7 million of reserves previously attributable to this pool of loans was deemed no longer required and was credited to the provision for loan losses as a reserve release in the 2014 second quarter. On July 31, 2014, we completed a bulk sale transaction of substantially all of the non-performing residential mortgage loans held-for-sale at terms approximating their carrying value at June 30, 2014. Total loans sold in that transaction had a carrying value of $173.7 million, reflecting the previous write down to the estimated fair value through June 30, 2014. The majority of the remaining loans from the pool designated as held-for-sale as of June 30, 2014 were either foreclosed upon and transferred to REO or were satisfied via short sales or payoffs during the 2014 third quarter with no material impact on our financial condition or results of operations. On September 12, 2014, we completed a second sale transaction, with

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the same counterparty as the bulk sale transaction, in which we sold all of the remaining non-performing residential mortgage loans held-for-sale with a carrying value of $4.0 million, reflecting the previous write down to the estimated fair value through June 30, 2014, and recorded a loss on the sale of such loans in the 2014 third quarter of $920,000, which is included in other non-interest income in the consolidated statements of income for the three and nine months ended September 30, 2014.

The loan sale agreements governing the sale transactions contain usual and customary indemnification provisions protecting the purchaser from breaches of our representations, warranties and covenants. The indemnification protection expires 180 days after the closing. In addition, the loan sale agreements contain customary provisions obligating us to cure certain document deficiencies with respect to the loans that the purchaser identified to us prior to the closing. We have agreed that if we are unable to cure such deficiencies within 90 days after the closing or if we receive a valid indemnification claim with respect to a loan within 180 days after the closing, we will negotiate an adjustment to the purchase price for such loans, or, if we prefer, repurchase such loans. We do not believe that the indemnification and document cure provisions will have a material impact on the overall sale transactions.

As a result of our continuing efforts to reposition the asset mix of our balance sheet, we have experienced increases in our multi-family and commercial real estate mortgage loan portfolios and a decline in our residential mortgage loan portfolio. Our multi-family mortgage loan portfolio increased to represent 31% of our total loan portfolio at September 30, 2014, compared to 26% at December 31, 2013, and our commercial real estate mortgage loan portfolio also increased and represented 7% of our total loan portfolio at September 30, 2014 and December 31, 2013. In contrast, our residential mortgage loan portfolio decreased to represent 60% of our total loan portfolio at September 30, 2014, compared to 65% at December 31, 2013. At September 30, 2014 and December 31, 2013, the remaining 2% of our total loan portfolio was comprised of consumer and other loans.

We continue to adhere to prudent underwriting standards.  We underwrite our residential mortgage loans primarily based upon our evaluation of the borrower’s ability to pay.  We do not originate negative amortization loans, payment option loans or other loans with short-term interest-only periods.  Additionally, we do not originate one-year ARM loans.  The ARM loans in our portfolio which currently reprice annually represent hybrid ARM loans (interest-only and amortizing) which have passed their initial fixed rate period.  In 2006, we began underwriting our residential interest-only hybrid ARM loans based on a fully amortizing loan (in effect, underwriting interest-only hybrid ARM loans as if they were amortizing hybrid ARM loans).  Prior to 2007, we would underwrite our residential interest-only hybrid ARM loans using the initial note rate, which may have been a discounted rate.  In 2007, we began underwriting our residential interest-only hybrid ARM loans at the higher of the fully indexed rate or the initial note rate.  In 2009, we began underwriting our residential interest-only and amortizing hybrid ARM loans at the higher of the fully indexed rate, the initial note rate or 6.00%.  During the 2010 second quarter, we reduced the underwriting interest rate floor from 6.00% to 5.00% to reflect the interest rate environment.  During the 2010 third quarter, we stopped offering interest-only loans.  Our reduced documentation loans are comprised primarily of SIFA (stated income, full asset) loans.  To a lesser extent, reduced documentation loans in our portfolio also include SISA (stated income, stated asset) loans.  During the 2007 fourth quarter, we stopped offering reduced documentation loans.

Effective January 2014, we became subject to rules adding restrictions and requirements to mortgage origination and servicing practices and establishing certain protections from liability for loans that meet the requirements of a “Qualified Mortgage.”  Under the rules, “Qualified Mortgages” are residential mortgage loans that meet standards prohibiting or limiting certain high risk products and features. Our current policy is to only originate residential mortgage loans that meet the requirements of a “Qualified Mortgage.”  For

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additional information, see Item 1, “Business - Regulation and Supervision - Consumer Financial Protection Bureau Regulation of Mortgage Origination and Servicing,” in our 2013 Annual Report on Form 10-K.

Full documentation loans comprised 91% of our total mortgage loan portfolio at September 30, 2014, compared to 90% at December 31, 2013, and comprised 85% of our residential mortgage loan portfolio at September 30, 2014 and December 31, 2013.  The following table provides further details on the composition of our residential mortgage loan portfolio in dollar amounts and percentages of the portfolio at the dates indicated.

	At September 30, 2014				At December 31, 2013
(Dollars in Thousands)	Amount		Percent of Total		Amount		Percent of Total
Residential mortgage loans:
Full documentation interest-only (1)	$	993,231	14.02	%	$	1,382,201	17.20	%
Full documentation amortizing	5,048,243		71.28		5,419,457		67.42
Reduced documentation interest-only (1)(2)	648,866		9.17		839,661		10.45
Reduced documentation amortizing (2)	391,884		5.53		395,957		4.93
Total residential mortgage loans	$	7,082,224	100.00	%	$	8,037,276	100.00	%

(1) Interest-only loans require the borrower to pay interest only during the first ten years of the loan term.  After the tenth anniversary of the loan, principal and interest payments are required to amortize the loan over the remaining loan term.  Includes interest-only hybrid ARM loans originated prior to 2007 which were underwritten at the initial note rate, which may have been a discounted rate, totaling $1.21 billion at September 30, 2014 and $1.66 billion at December 31, 2013.

(2) Includes SISA loans totaling $152.4 million at September 30, 2014 and $193.0 million at December 31, 2013.

Non-Performing Assets

The following table sets forth information regarding non-performing assets at the dates indicated.

(Dollars in Thousands)	At September 30, 2014				At December 31, 2013
Non-performing loans (1):
Mortgage loans:
Residential		$	92,797			$	305,626
Multi-family		10,003				12,539
Commercial real estate		5,944				7,857
Consumer and other loans		6,323				5,980
Total non-performing loans		115,067				332,002
REO, net (2)		42,458				42,636
Total non-performing assets		$	157,525			$	374,638
Non-performing loans to total loans		0.97		%		2.67		%
Non-performing loans to total assets		0.74				2.10
Non-performing assets to total assets		1.02				2.37
Allowance for loan losses to non-performing loans		98.73				41.87
Allowance for loan losses to total loans		0.95				1.12

(1) Non-performing loans, substantially all of which are non-accrual loans, included loans modified in a TDR totaling $71.9 million at September 30, 2014 and $109.8 million at December 31, 2013. Non-performing loans exclude loans which have been modified in a TDR that have been returned to accrual status.

(2) REO, substantially all of which are residential properties at September 30, 2014 and all of which are residential properties at December 31, 2013, is net of a valuation allowance which totaled $847,000 at September 30, 2014 and $834,000 at December 31, 2013.

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Total non-performing assets decreased $182.7 million to $157.5 million at September 30, 2014 compared to $340.2 million at June 30, 2014. This decline is primarily attributable to the previously discussed sale in the 2014 third quarter of substantially all of the non-performing residential mortgage loans which were designated as held-for-sale and were included in total non-performing assets as of June 30, 2014. Total non-performing assets decreased $217.1 million at September 30, 2014 compared to $374.6 million at December 31, 2013. This decline also reflects in large part the previously discussed sale of the non-performing residential mortgage loans in the 2014 third quarter.  Non-performing loans, which are comprised primarily of mortgage loans and exclude loans held-for-sale, totaled $115.1 million at September 30, 2014, up $5.4 million compared to $109.7 million at June 30, 2014 and down $216.9 million compared to $332.0 million at December 31, 2013. The ratio of non-performing loans to total loans was 0.97% at September 30, 2014, compared to 0.91% at June 30, 2014 and 2.67% at December 31, 2013. The decline in this ratio as of September 30, 2014, compared to December 31, 2013, was primarily attributable to the decline in non-performing loans, while the increase in this ratio as of September 30, 2014 compared to June 30, 2014 reflects the increase in non-performing loans in the 2014 third quarter. The ratio of non-performing assets to total assets was 1.02% at September 30, 2014, compared to 2.16% at June 30, 2014 and 2.37% at December 31, 2013. The decline in this ratio as of September 30, 2014, compared to June 30, 2014 and December 31, 2013, was primarily attributable to the decline in non-performing assets.

We may agree, in certain instances, to modify the contractual terms of a borrower’s loan.  In cases where such modifications represent a concession to a borrower experiencing financial difficulty, the modification is considered a TDR.  Modifications as a result of a TDR may include, but are not limited to, interest rate modifications, payment deferrals, restructuring of payments to interest-only from amortizing and/or extensions of maturity dates.  Modifications which result in insignificant payment delays and payment shortfalls are generally not classified as a TDR.  Bankruptcy loans, in addition to being placed on non-accrual status and reported as non-performing loans, are also reported as loans modified in a TDR as relief granted by a court is also viewed as a concession to the borrower in the loan agreement.  Loans modified in a TDR are individually classified as impaired and are initially placed on non-accrual status regardless of their delinquency status.  Loans modified in a TDR which are included in non-performing loans totaled $71.9 million at September 30, 2014, $72.0 million at June 30, 2014 and $109.8 million at December 31, 2013, of which $67.2 million at September 30, 2014, $67.6 million at June 30, 2014 and $79.4 million at December 31, 2013 were current or less than 90 days past due. The sale of non-performing residential mortgage loans, previously discussed, included loans that had been modified in a TDR and contributed to the decline in non-performing loans modified in a TDR at September 30, 2014, compared to December 31, 2013. Loans modified in a TDR remain as non-performing loans in non-accrual status until we determine that future collection of principal and interest is reasonably assured.  Where we have agreed to modify the contractual terms of a borrower’s loan, we require the borrower to demonstrate performance according to the restructured terms, generally for a period of six months, prior to returning the loan to accrual status.  Loans modified in a TDR which have been returned to accrual status are excluded from non-performing loans.  As a result of the migration of restructured loans from non-accrual to accrual status as borrowers complied with the terms of their restructure agreement for a satisfactory period of time, restructured accruing loans increased to $110.5 million at September 30, 2014, compared to $108.5 million at June 30, 2014 and $100.5 million at December 31, 2013.

We discontinue accruing interest on loans when they become 90 days past due as to their payment due date and at the time a loan is deemed a TDR.  We may also discontinue accruing interest on certain other loans because of deterioration in financial or other conditions of the borrower.  In addition, we reverse all previously accrued and uncollected interest through a charge to interest income.  While loans are in non-accrual status, interest due is monitored and, presuming we deem the remaining recorded investment in the loan to be fully

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collectible, income is recognized only to the extent cash is received until a return to accrual status is warranted.  In some circumstances, we may continue to accrue interest on mortgage loans 90 days or more past due, primarily as to their maturity date but not their interest due.  In other cases, we may defer recognition of income until the principal balance has been recovered.  If all non-accrual loans at September 30, 2014 and 2013 had been performing in accordance with their original terms, we would have recorded interest income, with respect to such loans, of $3.8 million for the nine months ended September 30, 2014 and $12.5 million for the nine months ended September 30, 2013.  The decline in interest income that would have been recorded with respect to such loans for the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013, primarily reflects the reduction in the level of non-accrual loans at September 30, 2014, due in large part to the previously discussed sale of non-performing residential mortgage loans in 2014. Actual payments recorded as interest income, with respect to such loans, totaled $2.4 million for the nine months ended September 30, 2014 and $4.9 million for the nine months ended September 30, 2013.

In addition to non-performing loans, we had $141.3 million of potential problem loans at September 30, 2014, compared to $182.0 million at December 31, 2013. Such loans include loans 60-89 days past due and accruing interest and certain other internally adversely classified loans.

Non-performing residential mortgage loans continue to include a greater concentration of reduced documentation loans as compared to the entire residential mortgage loan portfolio. Reduced documentation loans represented only 15% of the residential mortgage loan portfolio, yet represented 50% of non-performing residential mortgage loans at September 30, 2014. The following table provides further details on the composition of our non-performing residential mortgage loans in dollar amounts and percentages of the portfolio, at the dates indicated.

	At September 30, 2014				At December 31, 2013
(Dollars in Thousands)	Amount		Percent of Total		Amount		Percent of Total
Non-performing residential mortgage loans:
Full documentation interest-only	$	30,433	32.80	%	$	100,228	32.79	%
Full documentation amortizing	15,603		16.81		54,909		17.97
Reduced documentation interest-only	39,870		42.96		118,158		38.66
Reduced documentation amortizing	6,891		7.43		32,331		10.58
Total non-performing residential mortgage loans (1)	$	92,797	100.00	%	$	305,626	100.00	%

(1) Includes $61.0 million of loans less than 90 days past due at September 30, 2014, of which $52.3 million were current, and includes $71.2 million of loans less than 90 days past due at December 31, 2013, of which $62.8 million were current.

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The following table provides details on the geographic composition of both our total and non-performing residential mortgage loans at September 30, 2014.

		Residential Mortgage Loans At September 30, 2014
(Dollars in Millions)	Total Loans			Percent of Total Loans			Total Non-Performing Loans (1)			Percent of Total Non-Performing Loans			Non-Performing Loans as Percent of State Totals
State:
New York		$	2,098.1		29.6	%		$	9.5		10.2	%		0.45	%
Connecticut		705.5			10.0			4.5			4.8			0.64
Illinois		624.6			8.8			13.6			14.7			2.18
Massachusetts		617.1			8.7			4.5			4.8			0.73
Virginia		520.2			7.3			10.4			11.2			2.00
New Jersey		482.7			6.8			11.8			12.7			2.44
Maryland		447.7			6.3			14.3			15.6			3.19
California		409.1			5.8			10.9			11.7			2.66
Washington		211.8			3.0			—			—			—
Texas		189.3			2.7			—			—			—
All other states (2)(3)		776.1			11.0			13.3			14.3			1.71
Total		$	7,082.2		100.0	%		$	92.8		100.0	%		1.31	%

(1) Includes $61.0 million of loans which were current or less than 90 days past due.

(2)Includes 25 states and Washington, D.C.

(3)Includes Florida with $124.8 million of total loans, of which $3.0 million were non-performing loans.

At September 30, 2014, substantially all of our multi-family and commercial real estate mortgage loans were secured by properties located in the New York metropolitan area. At September 30, 2014, 90% of the non-performing multi-family and commercial real estate mortgage loans were secured by properties located in the New York metropolitan area with the remainder in Pennsylvania.

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Delinquent Loans

The following table shows a comparison of delinquent loans at the dates indicated.  Delinquent loans are reported based on the number of days the loan payments are past due.

		30-59 Days Past Due					60-89 Days Past Due					90 Days or More Past Due
(Dollars in Thousands)	Number of Loans		Amount			Number of Loans		Amount			Number of Loans		Amount
At September 30, 2014:
Mortgage loans:
Residential		251	$	76,176			66	$	18,702			108	$	31,869
Multi-family		27	4,780				7	506				21	6,641
Commercial real estate		6	4,556				1	495				—	—
Consumer and other loans		45	1,698				10	171				57	6,323
Total delinquent loans		329	$	87,210			84	$	19,874			186	$	44,833
Delinquent loans to total loans			0.73		%			0.17		%			0.38		%
At December 31, 2013:
Mortgage loans:
Residential		316	$	96,302			62	$	22,393			784	$	234,378
Multi-family		52	13,844				6	1,327				24	9,054
Commercial real estate		6	2,659				3	1,690				3	1,154
Consumer and other loans		76	3,177				24	1,340				48	5,948
Total delinquent loans		450	$	115,982			95	$	26,750			859	$	250,534
Delinquent loans to total loans			0.93		%			0.21		%			2.01		%

Delinquent loans totaled $151.9 million at September 30, 2014, a decline of $8.5 million compared to $160.4 million at June 30, 2014, excluding the non-performing residential mortgage loans held-for-sale at June 30, 2014, and a decline of $241.4 million compared to $393.3 million at December 31, 2013. The decline in total delinquent loans at September 30, 2014 compared to December 31, 2013 is primarily attributable to a decline in delinquent residential mortgage loans, particularly residential mortgage loans 90 days or more past due, reflecting in large part the impact of the previously discussed sale of the non-performing residential mortgage loans, substantially all of which were 90 days or more past due.

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Allowance for Loan Losses

The following table summarizes activity in the allowance for loan losses.

(In Thousands)	For the Nine Months Ended September 30, 2014
Balance at January 1, 2014		$	139,000
Provision credited to operations		(7,153		)
Charge-offs:
Residential		(19,061		)
Multi-family		(3,414		)
Commercial real estate		(3,119		)
Consumer and other loans		(1,776		)
Total charge-offs		(27,370		)
Recoveries:
Residential		8,281
Multi-family		561
Consumer and other loans		281
Total recoveries		9,123
Net charge-offs (1)		(18,247		)
Balance at September 30, 2014		$	113,600

(1) Includes $8.7 million related to the non-performing residential mortgage loans designated as held-for-sale at June 30, 2014, $683,000 related to certain delinquent and non-performing multi-family mortgage loans designated as held-for-sale and $189,000 related to reduced documentation residential mortgage loans.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

As a financial institution, the primary component of our market risk is interest rate risk.  The objective of our interest rate risk management policy is to maintain an appropriate mix and level of assets, liabilities and off-balance sheet items to enable us to meet our earnings and/or growth objectives, while maintaining specified minimum capital levels as required by our primary banking regulator, in the case of Astoria Bank, and as established by our Board of Directors.  We use a variety of analyses to monitor, control and adjust our asset and liability positions, primarily interest rate sensitivity gap analysis, or gap analysis, and net interest income sensitivity analysis.  Additional interest rate risk modeling is done by Astoria Bank in conformity with regulatory requirements.

Gap Analysis

Gap analysis measures the difference between the amount of interest-earning assets anticipated to mature or reprice within specific time periods and the amount of interest-bearing liabilities anticipated to mature or reprice within the same time periods.  Gap analysis does not indicate the impact of general interest rate movements on our net interest income because the actual repricing dates of various assets and liabilities will differ from our estimates and it does not give consideration to the yields and costs of the assets and liabilities or the projected yields and costs to replace or retain those assets and liabilities.  Callable features of certain assets and liabilities, in addition to the foregoing, may also cause actual experience to vary from the analysis.

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The following table, referred to as the Gap Table, sets forth the amount of interest-earning assets and interest-bearing liabilities outstanding at September 30, 2014 that we anticipate will reprice or mature in each of the future time periods shown using certain assumptions based on our historical experience and other market-based data available to us.  The Gap Table includes $900.0 million of borrowings which are callable within one year and on a quarterly basis thereafter classified according to their maturity dates primarily in the more than one year to three years and more than three years to five years categories; and $1.05 billion of borrowings callable in more than one year to three years classified according to their maturity dates in the more than five years category.  In addition, the Gap Table includes callable securities with an amortized cost of $189.6 million which are callable within one year and at various times thereafter classified according to their maturity dates in the more than five years category.  The classification of callable borrowings and securities according to their maturity dates is based on our experience with, and expectations of, the behavior of these types of instruments in the current interest rate environment.  As indicated in the Gap Table, our one-year interest rate sensitivity gap at September 30, 2014 was negative 0.73% compared to positive 2.59% at December 31, 2013.

	At September 30, 2014
(Dollars in Thousands)	One Year or Less			More than One Year to Three Years			More than Three Years to Five Years			More than Five Years			Total
Interest-earning assets:
Mortgage loans (1)	$	3,742,325		$	3,043,838		$	3,503,905		$	1,291,513		$	11,581,581
Consumer and other loans (1)	213,523			18,012			2,481			4,657			238,673
Interest-earning cash accounts	120,096			—			—			—			120,096
Securities available-for-sale	71,100			74,257			95,350			123,857			364,564
Securities held-to-maturity	221,499			365,840			492,255			945,736			2,025,330
FHLB-NY stock	—			—			—			133,398			133,398
Total interest-earning assets	4,368,543			3,501,947			4,093,991			2,499,161			14,463,642
Net unamortized purchase premiums and deferred costs (2)	20,334			18,570			22,375			19,570			80,849
Net interest-earning assets (3)	4,388,877			3,520,517			4,116,366			2,518,731			14,544,491
Interest-bearing liabilities:
Savings	298,301			359,953			359,953			1,268,140			2,286,347
Money market	1,363,471			461,960			461,960			44,478			2,331,869
NOW and demand deposit	109,766			219,552			219,552			1,597,535			2,146,405
Certificates of deposit	1,767,915			814,016			266,209			—			2,848,140
Borrowings, net	962,472			1,399,087			400,000			1,150,000			3,911,559
Total interest-bearing liabilities	4,501,925			3,254,568			1,707,674			4,060,153			13,524,320
Interest rate sensitivity gap	(113,048		)	265,949			2,408,692			(1,541,422		)	$	1,020,171
Cumulative interest rate sensitivity gap	$	(113,048	)	$	152,901		$	2,561,593		$	1,020,171
Cumulative interest rate sensitivity gap as a percentage of total assets	(0.73		)%	0.99		%	16.57		%	6.60		%
Cumulative net interest-earning assets as a percentage of interest-bearing liabilities	97.49		%	101.97		%	127.07		%	107.54		%

(1) Mortgage loans and consumer and other loans include loans held-for-sale and exclude the allowance for loan losses and non-performing loans, except non-performing residential mortgage loans which are current or less than 90 days past due.

(2) Net unamortized purchase premiums and deferred costs are prorated.

(3) Includes securities available-for-sale at amortized cost.

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Net Interest Income Sensitivity Analysis

In managing interest rate risk, we also use an internal income simulation model for our net interest income sensitivity analyses.  These analyses measure changes in projected net interest income over various time periods resulting from hypothetical changes in interest rates.  The interest rate scenarios most commonly analyzed reflect gradual and reasonable changes over a specified time period, which is typically one year.  The base net interest income projection utilizes similar assumptions as those reflected in the Gap Table, assumes that cash flows are reinvested in similar assets and liabilities and that interest rates as of the reporting date remain constant over the projection period.  For each alternative interest rate scenario, corresponding changes in the cash flow and repricing assumptions of each financial instrument, consisting of all our interest-earning assets and interest-bearing liabilities included in the Gap Table, are made to determine the impact on net interest income.

We perform analyses of interest rate increases and decreases of up to 400 basis points (when reasonably practical) over various time horizons although changes in interest rates of 200 basis points over a one year horizon is a more common and reasonable scenario for analytical purposes. Assuming the entire yield curve was to increase 200 basis points, through quarterly parallel increments of 50 basis points, our projected net interest income for the twelve month period beginning October 1, 2014 would decrease by approximately 6.51% from the base projection. At December 31, 2013, in the up 200 basis point scenario, our projected net interest income for the twelve month period beginning January 1, 2014 would have decreased by approximately 4.00% from the base projection. The current low interest rate environment prevents us from performing an income simulation for a decline in interest rates of the same magnitude and timing as our rising interest rate simulation, since certain asset yields, liability costs and related indices are below 2.00%. However, assuming the entire yield curve was to decrease 100 basis points, through quarterly parallel decrements of 25 basis points, our projected net interest income for the twelve month period beginning October 1, 2014 would decrease by approximately 1.98% from the base projection. At December 31, 2013, in the down 100 basis point scenario, our projected net interest income for the twelve month period beginning January 1, 2014 would have decreased by approximately 1.99% from the base projection. The down 100 basis point scenarios include some limitations as well since certain indices, yields and costs are already below 1.00%.

Various shortcomings are inherent in both gap analyses and net interest income sensitivity analyses.  Certain assumptions may not reflect the manner in which actual yields and costs respond to market changes.  Similarly, prepayment estimates and similar assumptions are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in interest rates may also affect our operating environment and operating strategies as well as those of our competitors.  In addition, certain adjustable rate assets have limitations on the magnitude of rate changes over specified periods of time.  Accordingly, although our net interest income sensitivity analyses may provide an indication of our interest rate risk exposure, such analyses are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and our actual results will differ.  Additionally, certain assets, liabilities and items of income and expense which may be affected by changes in interest rates, albeit to a much lesser degree, and which do not affect net interest income, are excluded from this analysis.  These include income from bank owned life insurance and changes in the fair value of MSR.  With respect to these items alone, and assuming the entire yield curve was to increase 200 basis points, through quarterly parallel increments of 50 basis points, our projected net income for the twelve month period beginning October 1, 2014 would increase by approximately $3.4 million.  Conversely, assuming the entire yield curve was to decrease 100 basis points, through quarterly parallel decrements of 25 basis points, our projected net income for the twelve month period beginning October 1, 2014 would decrease by approximately $3.4 million with respect to these items alone.

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For further information regarding our market risk and the limitations of our gap analysis and net interest income sensitivity analysis, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” included in our 2013 Annual Report on Form 10-K.

ITEM 4. Controls and Procedures

Monte N. Redman, our President and Chief Executive Officer, and Frank E. Fusco, our Senior Executive Vice President and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of September 30, 2014.  Based upon their evaluation, they each found that our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required and that such information is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II -OTHER INFORMATION

ITEM 1. Legal Proceedings

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010 and August 26, 2011, the City of New York notified us of alleged tax deficiencies in the amount of $13.3 million, including interest and penalties, related to our 2006 through 2008 tax years.  The deficiencies related to our operation of two subsidiaries of Astoria Bank, Fidata and AF Mortgage.  We disagree with the assertion of the tax deficiencies.  Hearings in this matter were held before the NYC Tax Appeals Tribunal in March and April 2013.  On October 29, 2014, the NYC Tax Appeals Tribunal issued a decision favorable to us canceling the 2010 and 2011 Notices of Determination.

No assurance can be given that the City of New York will not appeal the decision of the NYC Tax Appeals Tribunal, that such an appeal will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

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ITEM 1A.  Risk Factors

For a summary of risk factors relevant to our operations, see Part I, Item 1A, “Risk Factors,” in our 2013 Annual Report on Form 10-K and Part II, Item 1A, “Risk Factors,” in our March 31, 2014 Quarterly Report on Form 10-Q.  There were no material changes in risk factors relevant to our operations since March 31, 2014.

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Our twelfth stock repurchase plan, approved by our Board of Directors on April 18, 2007, authorized the purchase of 10,000,000 shares, or approximately 10% of our common stock then outstanding, in open-market or privately negotiated transactions.  At September 30, 2014, a maximum of 8,107,300 shares may yet be purchased under this plan.  However, we are not currently repurchasing additional shares of our common stock and have not since the 2008 third quarter.

ITEM 3.  Defaults Upon Senior Securities

Not applicable.

ITEM 4.  Mine Safety Disclosures

Not applicable.

ITEM 5.  Other Information

Not applicable.

ITEM 6.  Exhibits

See Index of Exhibits on page 79.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				Astoria Financial Corporation
Dated:	November 6, 2014	By:	/s/	Monte N. Redman
				Monte N. Redman
				President and Chief Executive Officer
Dated:	November 6, 2014	By:	/s/	Frank E. Fusco
				Frank E. Fusco
				Senior Executive Vice President and
				Chief Financial Officer
				(Principal Accounting Officer)
Dated:	November 6, 2014	By:	/s/	John F. Kennedy
				John F. Kennedy
				Senior Vice President and
				Chief Accounting Officer

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ASTORIA FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX OF EXHIBITS

Exhibit No.	Identification of Exhibit
10.1	Astoria Financial Corporation Employment Agreement with Hugh J. Donlon, entered into as of October 14, 2014.
10.2	Astoria Bank Employment Agreement with Hugh J. Donlon, entered into as of October 14, 2014.
10.3	Astoria Financial Corporation Amended and Restated Employment Agreement with Gerard C. Keegan, entered into as of October 16, 2014.
10.4	Astoria Bank Amended and Restated Employment Agreement with Gerard C. Keegan, entered into as of October 16, 2014.
10.5	Astoria Financial Corporation Amended and Restated Employment Agreement with Monte N. Redman, entered into as of October 16, 2014.
10.6	Astoria Bank Amended and Restated Employment Agreement with Monte N. Redman, entered into as of October 16, 2014.
10.7	Astoria Financial Corporation Amended and Restated Employment Agreement with Alan P. Eggleston, entered into as of October 16, 2014.
10.8	Astoria Bank Amended and Restated Employment Agreement with Alan P. Eggleston, entered into as of October 16, 2014.
10.9	Astoria Financial Corporation Amended and Restated Employment Agreement with Frank E. Fusco, entered into as of October 16, 2014.
10.10	Astoria Bank Amended and Restated Employment Agreement with Frank E. Fusco, entered into as of October 16, 2014.
31.1	Certifications of Chief Executive Officer.
31.2	Certifications of Chief Financial Officer.
32.1	Written Statement of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Pursuant to SEC rules, this exhibit will not be deemed filed for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

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101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

80

EX-10.1

EXHIBIT 10.1

ASTORIA FINANCIAL CORPORATION

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 14, 2014 by and between ASTORIA FINANCIAL CORPORATION, a business corporation organized and operating under the laws of the State of Delaware and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Company”), and Hugh J. Donlon, an individual residing at 55 Meeker Road, Basking Ridge, New Jersey 07920 (the “Executive”).

WITNESSETH:

WHEREAS, commencing on the date of this Agreement, the Executive shall serve the Company in the capacity of Senior Executive Vice President and Chief Lending Officer and as Senior Executive Vice President and Chief Lending Officer of its wholly owned subsidiary, ASTORIA BANK (the “Bank”); and

WHEREAS, the Company desires to assure for itself the availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to serve the Company on the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company and the Executive hereby enter into this Employment Agreement by and between the Company and the Executive so as to provide as follows from and after the date hereof:

Section 1. Employment.

The Company agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2. Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the day before the third anniversary date of the Initial Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Company (the “Board”) pursuant to Section 2(b).

(b)    Beginning on the Initial Effective Date, the Employment Period shall automatically be extended for one (1) additional day each day until the Executive attains the

age of sixty-seven (67), unless either the Company or the Executive elects not to extend the Agreement further by giving written notice to the other party, in which case the Employment Period shall end on the day before the third anniversary of the date on which such written notice is given. When the Executive attains the age of sixty-seven (67), the daily extensions will cease automatically and without notice or other action, the Employment Period shall be for a fixed term of three years thereafter, and this Agreement will expire when the Executive attains the age of seventy (70). For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on:

(i)    if extensions have ceased in accordance with this Section 2(b), the day before the third anniversary of the date on which extensions were discontinued; and

(ii)    in all other cases, the day before the third anniversary of the date as of which the Remaining Unexpired Employment Period is being determined.

Upon termination of the Executive’s employment with the Company for any reason whatsoever, any daily extensions provided pursuant to this Section 2(b), if not previously discontinued, shall automatically cease.

(c)    Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Company and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3. Duties.

The Executive shall serve as Senior Executive Vice President and Chief Lending Officer of the Company, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Company and as are customarily associated with such position and reporting directly to the Chief Operating Officer or higher ranked officer of the Company. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Company, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Company.

Section 4. Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him or her a salary at an initial annual rate of FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000.00), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach

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of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5. Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices.

Section 6. Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Company shall indemnify the Executive against, defend and hold him or her harmless from, and advance any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Company or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7. Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and

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investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Bank on such terms and conditions as the Company and the Bank may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he or she shall (subject to the Company’s powers of termination hereunder) continue to perform services for the Company in accordance with this Agreement but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Section 8. Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Company’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Company shall maintain its principal executive offices, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Company and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Company shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Company and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Company shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Company shall mutually agree are appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Company and on account of any other benefit provided herein.

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Section 9. Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Company terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Company within six (6) months following:

(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Senior Executive Vice President and Chief Lending Officer (or a more senior office) of the Company;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Company to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material failure, whether by amendment of the Company’s Certificate of Incorporation or By-laws, action of the Board or the Company’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Company for any other reason not described in Section 10(a).

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In such event, the Company shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Company under circumstances described in Section 9(a) of this Agreement, the Company shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Company, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Company) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

(iv)    thirty (30) days following the Executive’s termination of employment with the Company, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Company during the Remaining Unexpired

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Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Company or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Company during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP    =    (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the “Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Company;

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“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Company, the Company shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Company during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP    =    (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Company; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

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“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Company, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP    =    (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, even if he or she is not vested under such plan or program;

(viii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the

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Company, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP    =    FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he or she is not vested under such plan; provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Company by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

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The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Company notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

Section 10. Termination without Additional Company Liability.

(a)    In the event that the Executive’s employment with the Company shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean:

(A)    the Executive intentionally engages in dishonest conduct in connection with the Executive’s performance of services for the Company resulting in the Executive’s conviction of a felony;

(B)    the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(C)    the Executive willfully fails or refuses to perform the Executive’s duties under this Agreement and fails to cure such breach within sixty (60) days following written notice thereof from the Company;

(D)    the Executive breaches the Executive’s fiduciary duties to the Company for personal profit;

(E)    the Executive’s willful breach or violation of any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with the Executive’s performance of services for the Company; or

(F)    the Executive’s material breach of any material provision of this Agreement which is not substantially cured within 60 days after written notice of such breach is received by the Executive from the Company.

(ii)    the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

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(iii)    the Executive’s death;

(iv)    a determination that the Executive is Disabled;

then the Company, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    For purposes of Section 10(a)(i), no act or failure to act, on the part of the Executive, shall be considered “intentional” or “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Except as specifically provided below, the cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)    the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)    prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Company’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)    after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)    after the vote contemplated by Section 10(b)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

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If the Executive, during the ninety (90) day period commencing on the delivery by the Company to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Company prior to the delivery to the Executive by the Company of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Company may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor, acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

(A)    The Company shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Company shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

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(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11. Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Company (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Company;

(ii)    the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

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(iii)    a complete liquidation or dissolution of the Company, or approval by the stockholders of the Company of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Company to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein or the term “Board of Directors of the Bank” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or an affiliate or subsidiary of either of them, by the Company, the Bank, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Company under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

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(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Company which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12. Tax Indemnification.

(a)    This Section 12 shall apply if the Executive’s employment is terminated upon or following:

(i)    a Change of Control (as defined in Section 11 of this Agreement); or

(ii)    a change “in the ownership or effective control” of the Company or the Bank or “in the ownership of a substantial portion of the assets” of the Company or the Bank within the meaning of Section 280G of the Code.

If this Section 12 applies, then, if for any taxable year, the Executive shall be liable for the payment of an excise tax under Section 4999 of the Code with respect to any payment in the nature of compensation made by the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank to (or for the benefit of) the Executive, the Company shall pay to the Executive an amount intended to indemnify the Executive against the financial effects of the excise tax imposed on excess parachute payments under Section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

E x P

TIP    =    ----------------------------------------

1 - (( FI x ( 1 - SLI )) + SLI + E + M )

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where:

“TIP” is the Tax Indemnity Payment, before the deduction of applicable federal, state and local withholding taxes;

“E” is the percentage rate at which an excise tax is assessed under Section 4999 of the Code;

“P” is the amount with respect to which such excise tax is assessed, determined without regard to any amount payable pursuant to this Section 12;

“FI” is the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

“SLI” is the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

“M” is the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

(b)    The computation of the Tax Indemnity Payment shall be made at the expense of the Company by the Computation Advisor and shall be based on the following assumptions:

(i)    that a change in ownership, a change in effective ownership or control or a change in the ownership of a substantial portion of the assets of the Bank or the Company has occurred within the meaning of Section 280G of the Code (a “280G Change of Control”);

(ii)    that all direct or indirect payments made to or benefits conferred upon the Executive on account of the Executive’s termination of employment are “parachute payments” within the meaning of Section 280G of the Code; and

(iii)    that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

(c)    With respect to any payment that is presumed to be a parachute payment for purposes of Section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the Executive the written opinion (the “Opinion Letter”), in form and substance reasonably satisfactory to the Executive, of the Computation Advisor or, if the Computation Advisor is unable to provide such opinion, of an attorney or firm of independent certified public accountants

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selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that:

(i)    no 280G Change in Control has occurred, or

(ii)    all or part of the payment or benefit in question is not a parachute payment for purposes of Section 280G of the Code, or

(iii)    all or part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or

(iv)    for some other reason which shall be set forth in detail in such letter, no excise tax is due under Section 4999 of the Code with respect to such payment or benefit.

If the Company delivers an Opinion Letter, the Computation Advisor shall re-compute, and the Company shall make, the Tax Indemnity Payment, if any, in reliance on the information contained in the Opinion Letter.

(d)    In the event that the Executive’s liability for the excise tax under Section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made pursuant to Sections 12(a) and 12(c), when increased by the amount of the payment made to the Executive pursuant to this Section 12(d), or when reduced by the amount of the payment made to the Company pursuant to this Section 12(d), equals the amount that should have properly been paid to the Executive under Sections 12(a) and 12(c). The interest paid to the Company under this Section 12(d) shall be determined at the rate provided under Section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this Section 12, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or proceeding to which the Executive is a party as a result of positions taken on the Executive’s federal income tax return with respect to the Executive’s liability for excise taxes under Section 4999 of the Code. Any payment pursuant to this Section 12(d) shall be made promptly following the relevant subsequent determination, and shall in any case be made no later than the last day of the calendar year following the calendar year in which any additional taxes for which the Tax Indemnity Payment is to be made are remitted to the Internal Revenue Service.

(e)    The provisions of this Section 12 are designed to reflect the provisions of applicable federal, state and local tax laws in effect on the date of this Agreement. If, after the date hereof, there shall be any change in any such laws, this Section 12 shall be modified

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in such manner as the Executive and the Company may mutually agree upon if and to the extent necessary to assure that the Executive is fully indemnified against the economic effects of the tax imposed under Section 4999 of the Code or any similar federal, state or local tax.

Section 13. Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Company prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Company (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 13 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a) and for avoidance of doubt including 11(b); and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13 shall not prevent the Executive from accepting any position or performing any services if:

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Company on substantially the same terms and conditions and

(b)    the Company declines to accept such offer within ten (10) days after such notice is given.

Section 14. Confidentiality.

Unless the Executive obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Company, any entity which is a subsidiary of the Company or any entity which the Company is a subsidiary of, any material document or information obtained from the Company, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this Section 14 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

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Section 15. Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Company, he or she shall not, without the written consent of the Company, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company, the Bank, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Company, the Bank, or any affiliate or subsidiary of either of them.

Section 16. No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability

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insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time.

Section 17. Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 18. Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Hugh J. Donlon
55 Meeker Road
Basking Ridge, New Jersey 07920

If to the Company:

Astoria Financial Corporation
One Astoria Bank Plaza
Lake Success, New York 11042-1085
Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022
Attention:    Robert C. Azarow, Esq.

Section 19. Indemnification for Attorneys’ Fees.

The Company shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of

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his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Company’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 20. Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 21. Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 22. Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 23. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 24. Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

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Section 25. Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Company shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis. Notwithstanding this Section 25, the terms of the Offer of Employment to Hugh J. Donlon date September 11, 2014 shall remain in full force and effect.

Section 26. Guarantee.

The Company hereby agrees to guarantee the payment by the Bank of any benefits and compensation to which the Executive is or may be entitled to under the terms and conditions of the Amended and Restated Employment Agreement dated as of the 14th day of October, 2014 between the Bank and the Executive.

Section 27. Non-duplication.

In the event that the Executive shall perform services for the Bank or any other affiliate or subsidiary of the Company, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company and all of its affiliates and subsidiaries.

Section 28. Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 29. Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 13, 14 or 15 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 30. Required Regulatory Provisions.

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and

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conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

Section 31. No Offset or Recoupment; No Attachment.

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 32. Compliance with Section 409A of the Code.

The Executive and the Company acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in Section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 19 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c) the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare

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benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income;

(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5); and

(g)    the Tax Indemnity Payment provided under section 12 is intended to satisfy the requirements for a “tax gross-up payment” described in Treasury Regulation section 1.409A-3(i)(1)(v).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Company would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Company with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA FINANCIAL CORPORATION
Name:	/s/ Alan P. Eggleston	By:	/s/ Gerard C. Keegan
	Alan P. Egglston	Name:	Gerard C. Keegan
		Title:	Vice Chairman, Senior Executive
			Vice President & Chief Operating
			Officer
			/s/ Hugh J. Donlon
			Hugh J. Donlon

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68243715v4

STATE OF NEW YORK ) )    ss.:

COUNTY OF NASSAU )

On this 14^TH day of October, 2014 before me, the undersigned, personally appeared Hugh J. Donlon, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice                

Notary Public, State of New York

No. 4980431                    

Qualified in Suffolk County

Commission Expires: April 22, 2015        

STATE OF NEW YORK ) )    ss.:

COUNTY OF NASSAU )

On this 15th day of October, 2014 before me, the undersigned, personally appeared Gerard C. Keegan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Michele M. Weber                

Name: Michele M. Weber            

Notary Public, State of New York

No. 5029644                    

Qualified in Nassau County

Commission Expires: 6/27/18            

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68243715v4

EX-10.2

EXHIBIT 10.2

ASTORIA BANK

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 14, 2014 by and between ASTORIA BANK, a savings association organized and operating under the federal laws of the United States and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Bank”) and, Hugh J. Donlon, an individual residing at 55 Meeker Road, Basking Ridge, New Jersey 07920 (the “Executive”).

WITNESSETH:

WHEREAS, commencing on the date of this Agreement, the Executive shall serve the Bank in the capacity of Senior Executive Vice President and Chief Lending Officer and as Senior Executive Vice President and Chief Lending Officer of the Bank’s savings and loan holding company, ASTORIA FINANCIAL CORPORATION, a publicly held business corporation organized and operating pursuant to the laws of the State of Delaware (the “Company”); and

WHEREAS, the Bank desires to assure for itself the availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to serve the Bank on the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Bank and the Executive hereby enter into this Employment Agreement by and between the Bank and the Executive so as to provide as follows from and after the date hereof:

Section 1.    Employment.

The Bank agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.    Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the third anniversary date of the Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Bank (the “Board”) as provided below. Prior to the first anniversary of the date of this Agreement and on each anniversary date thereafter (each an “Anniversary Date), the Board shall review the terms of this Agreement and the Executive’s performance of services hereunder and may, in the absence

of objection from the Executive, approve an extension of the Employment Period. In such event, the Employment Period shall be extended to the third anniversary of the relevant Anniversary Date (or, if earlier the Executive’s seventieth (70^th) birthday. In no event shall any extension cause the Employment Period to end later than the Executive’s seventieth (70^th) birthday. Unless sooner terminated by non-extension, the Employment Period will end automatically, and without the requirement of any notice or other action, on the Executive’s seventieth (70^th) birthday.

(b)    For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the earlier of (i) the Anniversary Date on which the Employment Period (as extended pursuant to Section 2(a) of this Agreement) is then scheduled to expire and (ii) the Executive’s seventieth (70^th) birthday.

(c)    Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Bank and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.Duties.

The Executive shall serve as Senior Executive Vice President and Chief Lending Officer of the Bank, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Bank and as are customarily associated with such position and reporting directly to the Chief Operating Officer or higher ranked officer of the Bank. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Bank and shall use his or her best efforts to advance the interests of the Bank.

Section 4.Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him or her a salary at an initial annual rate of FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000.00), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

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Section 5.Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Bank’s customary practices.

Section 6.Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Bank shall indemnify the Executive against, defend and hold him or her harmless from and advance any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the charter or a bylaw of the Bank by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

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(b)    The Executive may also serve as an officer or director of the Company on such terms and conditions as the Bank and the Company may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement.

Section 8.Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Bank shall maintain its principal executive offices, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Bank and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Bank shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Bank and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Bank shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Bank shall mutually agree are appropriate for business purposes, in each case upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Bank and on account of any other benefit provided herein.

Section 9.Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Bank terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Bank within six (6) months following:

(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Senior Executive Vice President and Chief Lending Officer (or a more senior office) of the Bank;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Bank to elect or re-elect the

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Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material failure, whether by amendment of the Bank’s Charter or By-laws, action of the Board or the Bank’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Bank for any other reason not described in Section 10(a).

In such event and subject to Section 27 of this Agreement, the Bank shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Bank under circumstances described in Section 9(a) of this Agreement, the Bank shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Bank, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

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(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Bank) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

(iv)    thirty (30) days following the Executive’s termination of employment with the Bank, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

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“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Bank or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Bank during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP = (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the ”Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Bank, the Bank shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working

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for the Bank during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP = (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Bank; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Bank, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP = (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly

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traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Bank’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan or program;

(viii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Bank, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP = FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Bank’s common stock, the fair market value of a share of stock of the same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment

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with the Bank to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Bank by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Bank (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Bank, the Company or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Bank notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

Section 10.Termination without Additional Bank Liability.

(a)    In the event that the Executive’s employment with the Bank shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of this Agreement, in each case measured

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against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     the Executive’s voluntary resignation from employment with the Bank for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)     a determination that the Executive is Disabled;

then the Bank, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    The cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)     the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Bank’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)     after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)     after the vote contemplated by Section 10(b)(i), the Bank has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Bank to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Bank prior to the delivery to the Executive by the Bank of the Final

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Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Bank may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

(A)    The Bank shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Bank shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

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(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Bank (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Bank;

(ii)    the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Bank, or approval by the stockholders of the Bank of a plan for such liquidation or dissolution;

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(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Bank to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein or the term “Board of Directors of the Company” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Bank, the Company, or an affiliate or subsidiary of either of them, by the Bank, the Company, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Bank under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

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(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Bank in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Bank which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Bank (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Bank, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 12 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a) and for avoidance of doubt including 11(b); and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 12 shall not prevent the Executive from accepting any position or performing any services if:

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Bank on substantially the same terms and conditions and

(b)    the Bank declines to accept such offer within ten (10) days after such notice is given.

Section 13.Confidentiality.

Unless the Executive obtains the prior written consent of the Bank, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person

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or entity other than the Bank, any entity which is a subsidiary of the Bank or any entity which the Bank is a subsidiary of, any material document or information obtained from the Bank, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however that nothing in this Section 13 shall prevent the Executive, with or without the Bank’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

Section 14.Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Bank, he or she shall not, without the written consent of the Bank, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any

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customer of the Bank, the Company, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Bank, the Company, or any affiliate or subsidiary of either of them.

Section 15.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time.

Section 16.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 17.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Hugh J. Donlon55 Meeker RoadBasking Ridge, New Jersey 07920

If to the Bank:

Astoria Bank
One Astoria Bank Plaza
Lake Success, New York 11042-1085

Attention: General Counsel

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with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022

Attention:    Robert C. Azarow, Esq.

Section 18.Indemnification for Attorneys’ Fees.

The Bank shall advance indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 19.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 20.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 21.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

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Section 22.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 23.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

Section 24.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Bank shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis. Notwithstanding this Section 24, the terms of the Offer of Employment to Hugh J. Donlon dated September 11, 2014 shall remain in full force and effect.

Section 25.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26, 27, 28, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 26.Equitable Remedies.

The Bank and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 27.Required Regulatory Provisions.

The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

(a)    Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive pursuant to Section 9(b)

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of this Agreement (exclusive of amounts described in Section 9(b)(i), (ii), (viii) or (ix)) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to the Executive’s termination of employment with the Bank (or for the Executive’s entire period of employment with the Bank if less than five calendar years).

(b)    Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated thereunder.

(c)    Notwithstanding anything herein contained to the contrary, if the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

(d)    Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights and obligations of the Bank and the Executive shall not be affected.

(e)    Notwithstanding anything herein contained to the contrary, if the Bank is in default (within the meaning of Section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights and obligations of the Bank and the Executive shall not be affected.

(f)    Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Comptroller of the Currency or his or her designee or the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDI Act, 12 U.S.C. §1823(c); or (ii) by the Comptroller of the Currency or his or her designee at the time such Comptroller or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Comptroller to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as though eliminated by formal amendment of this Agreement.

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Section 28.No Offset or Recoupment; No Attachment.

The Bank’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Bank or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 29.Compliance with Section 409A of the Code.

The Executive and the Bank acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 18 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)    the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event

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within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Bank would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Bank with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA BANK
Name:	/s/ Alan P. Eggleston	By:	/s/ Gerard C. Keegan
	Alan P. Egglston	Name:	Gerard C. Keegan
		Title:	Vice Chairman, Senior Executive
			Vice President & Chief Operating
			Officer
			/s/ Hugh J. Donlon
			Hugh J. Donlon

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STATE OF NEW YORK )) ss.:

COUNTY OF NASSAU )

On this 14th day of October, 2014, before me, the undersigned, personally appeared Hugh J. Donlon, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK )) ss.:

COUNTY OF NASSAU )

On this 15th day of October, 2014, before me, the undersigned, personally appeared Gerard C. Keegan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Michele M. Weber     

Michel M. Weber

Notary Public, State of New York

No. 5029644

Qualified in Nassau County

Commission Expires June 27, 2018

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EX-10.3

EXHIBIT 10.3

ASTORIA FINANCIAL CORPORATION

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA FINANCIAL CORPORATION, a business corporation organized and operating under the laws of the State of Delaware and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Company”), and Gerard C. Keegan, an individual residing at 89 Eleventh Street, Garden City, New York 11530 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Company in the capacity of Vice Chairman, Senior Executive Vice President and Chief Operating Officer and as Vice Chairman, Senior Executive Vice President and Chief Operating Officer of its wholly owned subsidiary, ASTORIA BANK (the “Bank”); and

WHEREAS, the Company desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Company on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Company entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Company and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1. Employment.

The Company agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2. Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”).

The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the day before the third anniversary date of the Initial Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Company (the “Board”) pursuant to Section 2(b).

(b)    Beginning on the Initial Effective Date, the Employment Period shall automatically be extended for one (1) additional day each day until the Executive attains the age of sixty-seven (67), unless either the Company or the Executive elects not to extend the Agreement further by giving written notice to the other party, in which case the Employment Period shall end on the day before the third anniversary of the date on which such written notice is given. When the Executive attains the age of sixty-seven (67), the daily extensions will cease automatically and without notice or other action, the Employment Period shall be for a fixed term of three years thereafter, and this Agreement will expire when the Executive attains the age of seventy (70). For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on:

(i)    if extensions have ceased in accordance with this Section 2(b), the day before the third anniversary of the date on which extensions were discontinued; and

(ii)    in all other cases, the day before the third anniversary of the date as of which the Remaining Unexpired Employment Period is being determined.

Upon termination of the Executive’s employment with the Company for any reason whatsoever, any daily extensions provided pursuant to this Section 2(b), if not previously discontinued, shall automatically cease.

(c)    Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Company and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3. Duties.

The Executive shall serve as Vice Chairman, Senior Executive Vice President and Chief Operating Officer of the Company, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Company and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Company, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Company.

Section 4. Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him or her a salary at an initial annual rate of SIX HUNDRED TWENTY-

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FIVE THOUSAND DOLLARS ($625,000.00), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5. Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices.

Section 6. Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Company shall indemnify the Executive against, defend and hold him or her harmless from, and advance any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Company or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

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Section 7. Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Bank on such terms and conditions as the Company and the Bank may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he or she shall (subject to the Company’s powers of termination hereunder) continue to perform services for the Company in accordance with this Agreement but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Section 8. Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Company’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Company shall maintain its principal executive offices, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Company and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Company shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Company and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Company shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Company shall mutually agree are appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was

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incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Company and on account of any other benefit provided herein.

Section 9. Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Company terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Company within six (6) months following:

(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Vice Chairman, Senior Executive Vice President and Chief Operating Officer (or a more senior office) of the Company;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Company to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material failure, whether by amendment of the Company’s Certificate of Incorporation or By-laws, action of the Board or the Company’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

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(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Company for any other reason not described in Section 10(a).

In such event, the Company shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Company under circumstances described in Section 9(a) of this Agreement, the Company shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Company, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Company) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment

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Period which is prior to the Executive’s termination of employment with the Company;

(iv)    thirty (30) days following the Executive’s termination of employment with the Company, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Company or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Company during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP    =    (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

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“401KC” is the sum of the “Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Company, the Company shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Company during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP    =    (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Company; provided, however, that in the event of the Executive’s

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voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Company, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP    =    (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Separation Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in

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all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, even if he or she is not vested under such plan or program;

(viii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Company, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP    =    FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he or she is not vested under such plan; provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at

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the expense of the Company by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Company notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

Section 10. Termination without Additional Company Liability.

(a)    In the event that the Executive’s employment with the Company shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean:

(A)    the Executive intentionally engages in dishonest conduct in connection with the Executive’s performance of services for the Company resulting in the Executive’s conviction of a felony;

(B)    the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(C)    the Executive willfully fails or refuses to perform the Executive’s duties under this Agreement and fails to cure such breach within sixty (60) days following written notice thereof from the Company;

(D)    the Executive breaches the Executive’s fiduciary duties to the Company for personal profit;

(E)    the Executive’s willful breach or violation of any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with the Executive’s performance of services for the Company; or

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(F)    the Executive’s material breach of any material provision of this Agreement which is not substantially cured within 60 days after written notice of such breach is received by the Executive from the Company.

(ii)    the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)    a determination that the Executive is Disabled;

then the Company, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    For purposes of Section 10(a)(i), no act or failure to act, on the part of the Executive, shall be considered “intentional” or “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Except as specifically provided below, the cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)    the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)    prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Company’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)    after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)    after the vote contemplated by Section 10(b)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which

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shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Company to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Company prior to the delivery to the Executive by the Company of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Company may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor, acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Company shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Company shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11. Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Company (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Company;

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(ii)    the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Company, or approval by the stockholders of the Company of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Company to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein or the term “Board of Directors of the Bank” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or an affiliate or subsidiary of either of them, by the Company, the Bank, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Company under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Company which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12. Tax Indemnification.

(a)    This Section 12 shall apply if the Executive’s employment is terminated upon or following:

(i)    a Change of Control (as defined in Section 11 of this Agreement); or

(ii)    a change “in the ownership or effective control” of the Company or the Bank or “in the ownership of a substantial portion of the assets” of the Company or the Bank within the meaning of Section 280G of the Code.

If this Section 12 applies, then, if for any taxable year, the Executive shall be liable for the payment of an excise tax under Section 4999 of the Code with respect to any payment in the nature of compensation made by the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank to (or for the benefit of) the Executive, the Company shall pay to the Executive an amount intended to indemnify the Executive against the financial effects of the excise tax imposed on excess parachute payments under Section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

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E x P

TIP    =    ----------------------------------------

1 - (( FI x ( 1 - SLI )) + SLI + E + M )

where:

“TIP” is the Tax Indemnity Payment, before the deduction of applicable federal, state and local withholding taxes;

“E” is the percentage rate at which an excise tax is assessed under Section 4999 of the Code;

“P” is the amount with respect to which such excise tax is assessed, determined without regard to any amount payable pursuant to this Section 12;

“FI” is the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

“SLI” is the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

“M” is the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

(b)    The computation of the Tax Indemnity Payment shall be made at the expense of the Company by the Computation Advisor and shall be based on the following assumptions:

(i)    that a change in ownership, a change in effective ownership or control or a change in the ownership of a substantial portion of the assets of the Bank or the Company has occurred within the meaning of Section 280G of the Code (a “280G Change of Control”);

(ii)    that all direct or indirect payments made to or benefits conferred upon the Executive on account of the Executive’s termination of employment are “parachute payments” within the meaning of Section 280G of the Code; and

(iii)    that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

(c)    With respect to any payment that is presumed to be a parachute payment for purposes of Section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the

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Executive the written opinion (the “Opinion Letter”), in form and substance reasonably satisfactory to the Executive, of the Computation Advisor or, if the Computation Advisor is unable to provide such opinion, of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that:

(i)    no 280G Change in Control has occurred, or

(ii)    all or part of the payment or benefit in question is not a parachute payment for purposes of Section 280G of the Code, or

(iii)    all or part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or

(iv)    for some other reason which shall be set forth in detail in such letter, no excise tax is due under Section 4999 of the Code with respect to such payment or benefit.

If the Company delivers an Opinion Letter, the Computation Advisor shall re-compute, and the Company shall make, the Tax Indemnity Payment, if any, in reliance on the information contained in the Opinion Letter.

(d)    In the event that the Executive’s liability for the excise tax under Section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made pursuant to Sections 12(a) and 12(c), when increased by the amount of the payment made to the Executive pursuant to this Section 12(d), or when reduced by the amount of the payment made to the Company pursuant to this Section 12(d), equals the amount that should have properly been paid to the Executive under Sections 12(a) and 12(c). The interest paid to the Company under this Section 12(d) shall be determined at the rate provided under Section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this Section 12, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or proceeding to which the Executive is a party as a result of positions taken on the Executive’s federal income tax return with respect to the Executive’s liability for excise taxes under Section 4999 of the Code. Any payment pursuant to this Section 12(d) shall be made promptly following the relevant subsequent determination, and shall in any case be made no later than the last day of the calendar year following the calendar year in which any additional taxes for which the Tax Indemnity Payment is to be made are remitted to the Internal Revenue Service.

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(e)    The provisions of this Section 12 are designed to reflect the provisions of applicable federal, state and local tax laws in effect on the date of this Agreement. If, after the date hereof, there shall be any change in any such laws, this Section 12 shall be modified in such manner as the Executive and the Company may mutually agree upon if and to the extent necessary to assure that the Executive is fully indemnified against the economic effects of the tax imposed under Section 4999 of the Code or any similar federal, state or local tax.

Section 13. Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Company prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Company (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 13 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b) and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13 shall not prevent the Executive from accepting any position or performing any services if:

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Company on substantially the same terms and conditions and

(b)    the Company declines to accept such offer within ten (10) days after such notice is given.

Section 14. Confidentiality.

Unless the Executive obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Company, any entity which is a subsidiary of the Company or any entity which the Company is a subsidiary of, any material document or information obtained from the Company, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this Section 14 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

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Section 15. Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Company, he or she shall not, without the written consent of the Company, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company, the Bank, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Company, the Bank, or any affiliate or subsidiary of either of them.

Section 16. No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability

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insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time.

Section 17. Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 18. Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Gerard C. Keegan
89 Eleventh Street
Garden City, New York 11530

If to the Company:

Astoria Financial Corporation
One Astoria Bank Plaza
Lake Success, New York 11042-1085
Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022
Attention:    Robert C. Azarow, Esq.

Section 19. Indemnification for Attorneys’ Fees.

The Company shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of

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his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Company’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 20. Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 21. Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 22. Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 23. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 24. Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

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Section 25. Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Company shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 26. Guarantee.

The Company hereby agrees to guarantee the payment by the Bank of any benefits and compensation to which the Executive is or may be entitled to under the terms and conditions of the Amended and Restated Employment Agreement dated as of the 16th day of October, 2014 between the Bank and the Executive.

Section 27. Non-duplication.

In the event that the Executive shall perform services for the Bank or any other affiliate or subsidiary of the Company, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company and all of its affiliates and subsidiaries.

Section 28. Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 29. Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 13, 14 or 15 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 30. Required Regulatory Provisions.

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

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Section 31. No Offset or Recoupment; No Attachment.

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 32. Compliance with Section 409A of the Code.

The Executive and the Company acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in Section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 19 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c) the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income;

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(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5); and

(g)    the Tax Indemnity Payment provided under section 12 is intended to satisfy the requirements for a “tax gross-up payment” described in Treasury Regulation section 1.409A-3(i)(1)(v).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Company would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Company with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA FINANCIAL CORPORATION
Name:	/s/ David J. DeBaun	By:	/s/ Monte N. Redman
	David J. DeBaun	Name:	Monte N. Redman
		Title:	President and Chief Executive Officer
[Seal]
			/s/ Gerard C. Keegan
			Gerard C. Keegan

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STATE OF NEW YORK          )    ss.:

COUNTY OF NASSAU         )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK          )    ss.:

COUNTY OF NASSAU         )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Gerard C. Keegan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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68243715v4

EX-10.4

EXHIBIT 10.4

ASTORIA BANK

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA BANK, a savings association organized and operating under the federal laws of the United States and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Bank”) and, Gerard C. Keegan, an individual residing at 89 Eleventh Street, Garden City, New York 11530 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Bank in the capacity of Vice Chairman, Senior Executive Vice President and Chief Operating Officer and as Vice Chairman, Senior Executive Vice President and Chief Operating Officer of the Bank’s savings and loan holding company, ASTORIA FINANCIAL CORPORATION, a publicly held business corporation organized and operating pursuant to the laws of the State of Delaware (the “Company”); and

WHEREAS, the Bank desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Bank on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Bank entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Bank and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Bank and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1.    Employment.

The Bank agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the third anniversary date of the Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Bank (the “Board”) as provided below. Prior to the first anniversary of the date of this Agreement and on each anniversary date thereafter (each an “Anniversary Date), the Board shall review the terms of this Agreement and the Executive’s performance of services hereunder and may, in the absence of objection from the Executive, approve an extension of the Employment Period. In such event, the Employment Period shall be extended to the third anniversary of the relevant Anniversary Date (or, if earlier the Executive’s seventieth (70^th) birthday. In no event shall any extension cause the Employment Period to end later than the Executive’s seventieth (70^th) birthday. Unless sooner terminated by non-extension, the Employment Period will end automatically, and without the requirement of any notice or other action, on the Executive’s seventieth (70^th) birthday.

(b)    For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the earlier of (i) the Anniversary Date on which the Employment Period (as extended pursuant to Section 2(a) of this Agreement) is then scheduled to expire and (ii) the Executive’s seventieth (70^th) birthday.

(c)    Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Bank and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.Duties.

The Executive shall serve as Vice Chairman, Senior Executive Vice President and Chief Operating Officer of the Bank, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Bank and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Bank and shall use his or her best efforts to advance the interests of the Bank.

Section 4.Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him or her a salary at an initial annual rate of SIX HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($625,000.00), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate

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of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5.Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Bank’s customary practices.

Section 6.Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Bank shall indemnify the Executive against, defend and hold him or her harmless from any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the charter or a bylaw of the Bank by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed);

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provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Company on such terms and conditions as the Bank and the Company may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement.

Section 8.Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Bank shall maintain its principal executive offices, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Bank and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Bank shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Bank and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Bank shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Bank shall mutually agree are appropriate for business purposes, in each case upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Bank and on account of any other benefit provided herein.

Section 9.Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Bank terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Bank within six (6) months following:

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(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Vice Chairman, Senior Executive Vice President and Chief Operating Officer (or a more senior office) of the Bank;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Bank to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material failure, whether by amendment of the Bank’s Charter or By-laws, action of the Board or the Bank’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Bank for any other reason not described in Section 10(a).

In such event and subject to Section 27 of this Agreement, the Bank shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Bank under circumstances described in Section 9(a) of this Agreement, the Bank shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

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(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Bank, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Bank) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

(iv)    thirty (30) days following the Executive’s termination of employment with the Bank, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

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“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Bank or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Bank during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP = (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the ”Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the

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corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Bank, the Bank shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Bank during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP = (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Bank; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Bank, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP = (FMV - EP) x N

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where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Bank’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan or program;

(viii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Bank, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP = FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Bank’s common stock, the fair market value of a share of stock of the

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same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Bank by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Bank (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Bank, the Company or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Bank notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

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Section 10.Termination without Additional Bank Liability.

(a)    In the event that the Executive’s employment with the Bank shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of this Agreement, in each case measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     the Executive’s voluntary resignation from employment with the Bank for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)     a determination that the Executive is Disabled;

then the Bank, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    The cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)     the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Bank’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)     after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)     after the vote contemplated by Section 10(b)(i), the Bank has furnished to the Executive a notice of termination which shall specify the

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effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Bank to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Bank prior to the delivery to the Executive by the Bank of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Bank may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Bank shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Bank shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Bank (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Bank;

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(ii)    the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Bank, or approval by the stockholders of the Bank of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Bank to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein or the term “Board of Directors of the Company” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Bank, the Company, or an affiliate or subsidiary of either of them, by the Bank, the Company, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Bank under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Bank in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Bank which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Bank (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Bank, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 12 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b); and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 12 shall not prevent the Executive from accepting any position or performing any services if:

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(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Bank on substantially the same terms and conditions and

(b)    the Bank declines to accept such offer within ten (10) days after such notice is given.

Section 13.Confidentiality.

Unless the Executive obtains the prior written consent of the Bank, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Bank, any entity which is a subsidiary of the Bank or any entity which the Bank is a subsidiary of, any material document or information obtained from the Bank, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however that nothing in this Section 13 shall prevent the Executive, with or without the Bank’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

Section 14.Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Bank, he or she shall not, without the written consent of the Bank, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like

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circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Bank, the Company, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Bank, the Company, or any affiliate or subsidiary of either of them.

Section 15.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time.

Section 16.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 17.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

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If to the Executive:

Gerard C. Keegan
89 Eleventh Street
Garden City, New York 11530

If to the Bank:

Astoria Bank
One Astoria Bank Plaza
Lake Success, New York 11042-1085

Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022

Attention:    Robert C. Azarow, Esq.

Section 18.Indemnification for Attorneys’ Fees.

The Bank shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 19.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

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Section 20.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 21.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 22.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 23.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

Section 24.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Bank shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 25.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26, 27, 28, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

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Section 26.Equitable Remedies.

The Bank and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 27.Required Regulatory Provisions.

The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

(a)    Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive pursuant to Section 9(b) of this Agreement (exclusive of amounts described in Section 9(b)(i), (ii), (viii) or (ix)) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to the Executive’s termination of employment with the Bank (or for the Executive’s entire period of employment with the Bank if less than five calendar years).

(b)    Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated thereunder.

(c)    Notwithstanding anything herein contained to the contrary, if the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

(d)    Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights and obligations of the Bank and the Executive shall not be affected.

(e)    Notwithstanding anything herein contained to the contrary, if the Bank is in default (within the meaning of Section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights and obligations of the Bank and the Executive shall not be affected.

(f)    Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a

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continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Comptroller of the Currency or his or her designee or the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDI Act, 12 U.S.C. §1823(c); or (ii) by the Comptroller of the Currency or his or her designee at the time such Comptroller or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Comptroller to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as though eliminated by formal amendment of this Agreement.

Section 28.No Offset or Recoupment; No Attachment.

The Bank’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Bank or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 29.Compliance with Section 409A of the Code.

The Executive and the Bank acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 18 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)    the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

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(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Bank would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Bank with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA BANK
Name:	/s/ David J. DeBaun	By:	/s/ Monte N. Redman
	David J. DeBaun	Name:	Monte N. Redman
		Title:	President and Chief Executive Officer
[Seal]
			/s/ Gerard C. Keegan
			Gerard C. Keegan

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STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16^th day of October, 2014, before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Notary Public

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16th day of October, 2014, before me, the undersigned, personally appeared Gerard C. Keegan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Notary Public

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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EX-10.5

EXHIBIT 10.5

ASTORIA FINANCIAL CORPORATION

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA FINANCIAL CORPORATION, a business corporation organized and operating under the laws of the State of Delaware and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Company”), and Monte N. Redman, an individual residing at 69 Third Street, Garden City, New York 11530 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Company in the capacity of President and Chief Executive Officer and as President and Chief Executive Officer of its wholly owned subsidiary, ASTORIA BANK (the “Bank”); and

WHEREAS, the Company desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Company on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Company entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Company and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1. Employment.

The Company agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2. Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial

Effective Date and ending on the day before the third anniversary date of the Initial Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Company (the “Board”) pursuant to Section 2(b).

(b)    Beginning on the Initial Effective Date, the Employment Period shall automatically be extended for one (1) additional day each day until the Executive attains the age of sixty-seven (67), unless either the Company or the Executive elects not to extend the Agreement further by giving written notice to the other party, in which case the Employment Period shall end on the day before the third anniversary of the date on which such written notice is given. When the Executive attains the age of sixty-seven (67), the daily extensions will cease automatically and without notice or other action, the Employment Period shall be for a fixed term of three years thereafter, and this Agreement will expire when the Executive attains the age of seventy (70). For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on:

(i)    if extensions have ceased in accordance with this Section 2(b), the day before the third anniversary of the date on which extensions were discontinued; and

(ii)    in all other cases, the day before the third anniversary of the date as of which the Remaining Unexpired Employment Period is being determined.

Upon termination of the Executive’s employment with the Company for any reason whatsoever, any daily extensions provided pursuant to this Section 2(b), if not previously discontinued, shall automatically cease.

(c)    Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Company and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3. Duties.

The Executive shall serve as President and Chief Executive Officer of the Company, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Company and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Company, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Company.

Section 4. Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him or her a salary at an initial annual rate of NINE HUNDRED SIXTY THOUSAND DOLLARS ($960,000.00), payable in approximately equal installments in

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68243715v4

accordance with the Company’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5. Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices.

Section 6. Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Company shall indemnify the Executive against, defend and hold him or her harmless from, and advance any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Company or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

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68243715v4

Section 7. Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Bank on such terms and conditions as the Company and the Bank may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he or she shall (subject to the Company’s powers of termination hereunder) continue to perform services for the Company in accordance with this Agreement but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Section 8. Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Company’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Company shall maintain its principal executive offices, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Company and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Company shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Company and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Company shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Company shall mutually agree are appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was

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incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Company and on account of any other benefit provided herein.

Section 9. Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Company terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Company within six (6) months following:

(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of President and Chief Executive Officer (or a more senior office) of the Company;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Company to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material failure, whether by amendment of the Company’s Certificate of Incorporation or By-laws, action of the Board or the Company’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

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(ii)    the termination of the Executive’s employment with the Company for any other reason not described in Section 10(a).

In such event, the Company shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Company under circumstances described in Section 9(a) of this Agreement, the Company shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Company, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Company) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

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(iv)    thirty (30) days following the Executive’s termination of employment with the Company, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Company or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Company during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP    =    (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the “Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another

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defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Company, the Company shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Company during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP    =    (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Company; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that

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results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Company, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP    =    (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program

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maintained by, or covering employees of, the Company, even if he or she is not vested under such plan or program;

(viii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Company, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP    =    FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he or she is not vested under such plan; provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Company by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue,

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New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Company notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

Section 10. Termination without Additional Company Liability.

(a)    In the event that the Executive’s employment with the Company shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean:

(A)    the Executive intentionally engages in dishonest conduct in connection with the Executive’s performance of services for the Company resulting in the Executive’s conviction of a felony;

(B)    the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(C)    the Executive willfully fails or refuses to perform the Executive’s duties under this Agreement and fails to cure such breach within sixty (60) days following written notice thereof from the Company;

(D)    the Executive breaches the Executive’s fiduciary duties to the Company for personal profit;

(E)    the Executive’s willful breach or violation of any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with the Executive’s performance of services for the Company; or

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(F)    the Executive’s material breach of any material provision of this Agreement which is not substantially cured within 60 days after written notice of such breach is received by the Executive from the Company.

(ii)    the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)    a determination that the Executive is Disabled;

then the Company, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    For purposes of Section 10(a)(i), no act or failure to act, on the part of the Executive, shall be considered “intentional” or “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Except as specifically provided below, the cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)    the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)    prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Company’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)    after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)    after the vote contemplated by Section 10(b)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which

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shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Company to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Company prior to the delivery to the Executive by the Company of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Company may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Company shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Company shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11. Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Company (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Company;

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(ii)    the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Company, or approval by the stockholders of the Company of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Company to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein or the term “Board of Directors of the Bank” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or an affiliate or subsidiary of either of them, by the Company, the Bank, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Company under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Company which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12. Tax Indemnification.

(a)    This Section 12 shall apply if the Executive’s employment is terminated upon or following:

(i)    a Change of Control (as defined in Section 11 of this Agreement); or

(ii)    a change “in the ownership or effective control” of the Company or the Bank or “in the ownership of a substantial portion of the assets” of the Company or the Bank within the meaning of Section 280G of the Code.

If this Section 12 applies, then, if for any taxable year, the Executive shall be liable for the payment of an excise tax under Section 4999 of the Code with respect to any payment in the nature of compensation made by the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank to (or for the benefit of) the Executive, the Company shall pay to the Executive an amount intended to indemnify the Executive against the financial effects of the excise tax imposed on excess parachute payments under Section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

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E x P

TIP    =    ----------------------------------------

1 - (( FI x ( 1 - SLI )) + SLI + E + M )

where:

“TIP” is the Tax Indemnity Payment, before the deduction of applicable federal, state and local withholding taxes;

“E” is the percentage rate at which an excise tax is assessed under Section 4999 of the Code;

“P” is the amount with respect to which such excise tax is assessed, determined without regard to any amount payable pursuant to this Section 12;

“FI” is the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

“SLI” is the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

“M” is the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

(b)    The computation of the Tax Indemnity Payment shall be made at the expense of the Company by the Computation Advisor and shall be based on the following assumptions:

(i)    that a change in ownership, a change in effective ownership or control or a change in the ownership of a substantial portion of the assets of the Bank or the Company has occurred within the meaning of Section 280G of the Code (a “280G Change of Control”);

(ii)    that all direct or indirect payments made to or benefits conferred upon the Executive on account of the Executive’s termination of employment are “parachute payments” within the meaning of Section 280G of the Code; and

(iii)    that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

(c)    With respect to any payment that is presumed to be a parachute payment for purposes of Section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the

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Executive the written opinion (the “Opinion Letter”), in form and substance reasonably satisfactory to the Executive, of the Computation Advisor or, if the Computation Advisor is unable to provide such opinion, of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that:

(i)    no 280G Change in Control has occurred, or

(ii)    all or part of the payment or benefit in question is not a parachute payment for purposes of Section 280G of the Code, or

(iii)    all or part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or

(iv)    for some other reason which shall be set forth in detail in such letter, no excise tax is due under Section 4999 of the Code with respect to such payment or benefit.

If the Company delivers an Opinion Letter, the Computation Advisor shall re-compute, and the Company shall make, the Tax Indemnity Payment, if any, in reliance on the information contained in the Opinion Letter.

(d)    In the event that the Executive’s liability for the excise tax under Section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made pursuant to Sections 12(a) and 12(c), when increased by the amount of the payment made to the Executive pursuant to this Section 12(d), or when reduced by the amount of the payment made to the Company pursuant to this Section 12(d), equals the amount that should have properly been paid to the Executive under Sections 12(a) and 12(c). The interest paid to the Company under this Section 12(d) shall be determined at the rate provided under Section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this Section 12, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or proceeding to which the Executive is a party as a result of positions taken on the Executive’s federal income tax return with respect to the Executive’s liability for excise taxes under Section 4999 of the Code. Any payment pursuant to this Section 12(d) shall be made promptly following the relevant subsequent determination, and shall in any case be made no later than the last day of the calendar year following the calendar year in which any additional taxes for which the Tax Indemnity Payment is to be made are remitted to the Internal Revenue Service.

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(e)    The provisions of this Section 12 are designed to reflect the provisions of applicable federal, state and local tax laws in effect on the date of this Agreement. If, after the date hereof, there shall be any change in any such laws, this Section 12 shall be modified in such manner as the Executive and the Company may mutually agree upon if and to the extent necessary to assure that the Executive is fully indemnified against the economic effects of the tax imposed under Section 4999 of the Code or any similar federal, state or local tax.

Section 13. Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Company prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Company (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 13 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b) and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13 shall not prevent the Executive from accepting any position or performing any services if:

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Company on substantially the same terms and conditions and

(b)    the Company declines to accept such offer within ten (10) days after such notice is given.

Section 14. Confidentiality.

Unless the Executive obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Company, any entity which is a subsidiary of the Company or any entity which the Company is a subsidiary of, any material document or information obtained from the Company, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this Section 14 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

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Section 15. Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Company, he or she shall not, without the written consent of the Company, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company, the Bank, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Company, the Bank, or any affiliate or subsidiary of either of them.

Section 16. No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability

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insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time.

Section 17. Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 18. Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Monte N. Redman69 Third StreetGarden City, New York 11530

If to the Company:

Astoria Financial Corporation
One Astoria Bank Plaza
Lake Success, New York 11042-1085
Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022
Attention:    Robert C. Azarow, Esq.

Section 19. Indemnification for Attorneys’ Fees.

The Company shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of

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his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Company’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 20. Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 21. Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 22. Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 23. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 24. Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

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Section 25. Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Company shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 26. Guarantee.

The Company hereby agrees to guarantee the payment by the Bank of any benefits and compensation to which the Executive is or may be entitled to under the terms and conditions of the Amended and Restated Employment Agreement dated as of the 16th day of October, 2014 between the Bank and the Executive.

Section 27. Non-duplication.

In the event that the Executive shall perform services for the Bank or any other affiliate or subsidiary of the Company, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company and all of its affiliates and subsidiaries.

Section 28. Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 29. Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 13, 14 or 15 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 30. Required Regulatory Provisions.

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

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Section 31. No Offset or Recoupment; No Attachment.

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 32. Compliance with Section 409A of the Code.

The Executive and the Company acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in Section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 19 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c) the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income;

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(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5); and

(g)    the Tax Indemnity Payment provided under section 12 is intended to satisfy the requirements for a “tax gross-up payment” described in Treasury Regulation section 1.409A-3(i)(1)(v).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Company would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Company with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA FINANCIAL CORPORATION
Name:	/s/ David J. DeBaun	By:	/s/ Gerard C. Keegan
	David J. DeBaun	Name:	Gerard C. Keegan
		Title:	Vice Chairman, Senior Executive
[Seal]			Vice President & Chief Operating
			Officer
			/s/ Monte N. Redman
			Monte N. Redman

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STATE OF NEW YORK          )     ss.:

COUNTY OF NASSAU         )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Gerard C. Keegan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK          )     ss.:

COUNTY OF NASSAU         )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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EX-10.6

EXHIBIT 10.6

ASTORIA BANK

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA BANK, a savings association organized and operating under the federal laws of the United States and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Bank”) and, Monte N. Redman, an individual residing at 69 Third Street, Garden City, New York 11530 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Bank in the capacity of President and Chief Executive Officer and as President and Chief Executive Officer of the Bank’s savings and loan holding company, ASTORIA FINANCIAL CORPORATION, a publicly held business corporation organized and operating pursuant to the laws of the State of Delaware (the “Company”); and

WHEREAS, the Bank desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Bank on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Bank entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Bank and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Bank and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1.    Employment.

The Bank agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the third anniversary date of the Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Bank (the “Board”) as provided below. Prior to the first anniversary of the date of this Agreement and on each anniversary date thereafter (each an “Anniversary Date), the Board shall review the terms of this Agreement and the Executive’s performance of services hereunder and may, in the absence of objection from the Executive, approve an extension of the Employment Period. In such event, the Employment Period shall be extended to the third anniversary of the relevant Anniversary Date (or, if earlier the Executive’s seventieth (70^th) birthday. In no event shall any extension cause the Employment Period to end later than the Executive’s seventieth (70^th) birthday. Unless sooner terminated by non-extension, the Employment Period will end automatically, and without the requirement of any notice or other action, on the Executive’s seventieth (70^th) birthday.

(b)    For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the earlier of (i) the Anniversary Date on which the Employment Period (as extended pursuant to Section 2(a) of this Agreement) is then scheduled to expire and (ii) the Executive’s seventieth (70^th) birthday.

(c)    Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Bank and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.Duties.

The Executive shall serve as President and Chief Executive Officer of the Bank, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Bank and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Bank and shall use his or her best efforts to advance the interests of the Bank.

Section 4.Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him or her a salary at an initial annual rate of NINE HUNDRED SIXTY THOUSAND DOLLARS ($960,000.00), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate

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of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5.Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Bank’s customary practices.

Section 6.Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Bank shall indemnify the Executive against, defend and hold him or her harmless from any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the charter or a bylaw of the Bank by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed);

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provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Company on such terms and conditions as the Bank and the Company may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement.

Section 8.Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Bank shall maintain its principal executive offices, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Bank and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Bank shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Bank and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Bank shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Bank shall mutually agree are appropriate for business purposes, in each case upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Bank and on account of any other benefit provided herein.

Section 9.Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Bank terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Bank within six (6) months following:

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(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of President and Chief Executive Officer (or a more senior office) of the Bank;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Bank to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material failure, whether by amendment of the Bank’s Charter or By-laws, action of the Board or the Bank’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Bank for any other reason not described in Section 10(a).

In such event and subject to Section 27 of this Agreement, the Bank shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Bank under circumstances described in Section 9(a) of this Agreement, the Bank shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

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(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Bank, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Bank) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

(iv)    thirty (30) days following the Executive’s termination of employment with the Bank, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

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“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Bank or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Bank during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP = (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the ”Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the

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corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Bank, the Bank shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Bank during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP = (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Bank; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Bank, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP = (FMV - EP) x N

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where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Bank’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan or program;

(viii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Bank, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP = FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Bank’s common stock, the fair market value of a share of stock of the

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same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Bank by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Bank (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Bank, the Company or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Bank notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

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Section 10.Termination without Additional Bank Liability.

(a)    In the event that the Executive’s employment with the Bank shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of this Agreement, in each case measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     the Executive’s voluntary resignation from employment with the Bank for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)     a determination that the Executive is Disabled;

then the Bank, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    The cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)     the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Bank’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)     after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)     after the vote contemplated by Section 10(b)(i), the Bank has furnished to the Executive a notice of termination which shall specify the

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effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Bank to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Bank prior to the delivery to the Executive by the Bank of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Bank may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Bank shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Bank shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Bank (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Bank;

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(ii)    the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Bank, or approval by the stockholders of the Bank of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Bank to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein or the term “Board of Directors of the Company” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Bank, the Company, or an affiliate or subsidiary of either of them, by the Bank, the Company, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Bank under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Bank in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Bank which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Bank (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Bank, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 12 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b); and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 12 shall not prevent the Executive from accepting any position or performing any services if:

Page 15 of 24

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Bank on substantially the same terms and conditions and

(b)    the Bank declines to accept such offer within ten (10) days after such notice is given.

Section 13.Confidentiality.

Unless the Executive obtains the prior written consent of the Bank, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Bank, any entity which is a subsidiary of the Bank or any entity which the Bank is a subsidiary of, any material document or information obtained from the Bank, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however that nothing in this Section 13 shall prevent the Executive, with or without the Bank’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

Section 14.Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Bank, he or she shall not, without the written consent of the Bank, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like

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circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Bank, the Company, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Bank, the Company, or any affiliate or subsidiary of either of them.

Section 15.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time.

Section 16.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 17.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

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If to the Executive:

Monte N. Redman69 Third StreetGarden City, New York 11530

If to the Bank:

Astoria Bank
One Astoria Bank Plaza
Lake Success, New York 11042-1085

Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022

Attention:    Robert C. Azarow, Esq.

Section 18.Indemnification for Attorneys’ Fees.

The Bank shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 19.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

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Section 20.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 21.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 22.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 23.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

Section 24.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Bank shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 25.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26, 27, 28, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

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Section 26.Equitable Remedies.

The Bank and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 27.Required Regulatory Provisions.

The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

(a)    Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive pursuant to Section 9(b) of this Agreement (exclusive of amounts described in Section 9(b)(i), (ii), (viii) or (ix)) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to the Executive’s termination of employment with the Bank (or for the Executive’s entire period of employment with the Bank if less than five calendar years).

(b)    Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated thereunder.

(c)    Notwithstanding anything herein contained to the contrary, if the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

(d)    Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights and obligations of the Bank and the Executive shall not be affected.

(e)    Notwithstanding anything herein contained to the contrary, if the Bank is in default (within the meaning of Section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights and obligations of the Bank and the Executive shall not be affected.

(f)    Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a

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continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Comptroller of the Currency or his or her designee or the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDI Act, 12 U.S.C. §1823(c); or (ii) by the Comptroller of the Currency or his or her designee at the time such Comptroller or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Comptroller to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as though eliminated by formal amendment of this Agreement.

Section 28.No Offset or Recoupment; No Attachment.

The Bank’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Bank or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 29.Compliance with Section 409A of the Code.

The Executive and the Bank acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 18 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)    the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

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(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Bank would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Bank with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA BANK
Name:	/s/ David J. DeBaun	By:	/s/ Gerard C. Keegan
	David J. DeBaun	Name:	Gerard C. Keegan
		Title:	Vice Chairman, Senior Executive
[Seal]			Vice President & Chief Operating
			Officer
			/s/ Monte N. Redman
			Monte N. Redman

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STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16th day of October, 2014, before me, the undersigned, personally appeared Gerard C. Keegan, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16th day of October, 2014, before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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EX-10.7

EXHIBIT 10.7

ASTORIA FINANCIAL CORPORATION

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA FINANCIAL CORPORATION, a business corporation organized and operating under the laws of the State of Delaware and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Company”), and Alan P. Eggleston, an individual residing at 28 Croft Place, Huntington, New York 11743 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Company in the capacity of Senior Executive Vice President and Chief Risk Officer and as Senior Executive Vice President and Chief Risk Officer of its wholly owned subsidiary, ASTORIA BANK (the “Bank”); and

WHEREAS, the Company desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Company on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Company entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Company and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1. Employment.

The Company agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2. Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial

Effective Date and ending on the day before the third anniversary date of the Initial Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Company (the “Board”) pursuant to Section 2(b).

(b)    Beginning on the Initial Effective Date, the Employment Period shall automatically be extended for one (1) additional day each day until the Executive attains the age of sixty-seven (67), unless either the Company or the Executive elects not to extend the Agreement further by giving written notice to the other party, in which case the Employment Period shall end on the day before the third anniversary of the date on which such written notice is given. When the Executive attains the age of sixty-seven (67), the daily extensions will cease automatically and without notice or other action, the Employment Period shall be for a fixed term of three years thereafter, and this Agreement will expire when the Executive attains the age of seventy (70). For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on:

(i)    if extensions have ceased in accordance with this Section 2(b), the day before the third anniversary of the date on which extensions were discontinued; and

(ii)    in all other cases, the day before the third anniversary of the date as of which the Remaining Unexpired Employment Period is being determined.

Upon termination of the Executive’s employment with the Company for any reason whatsoever, any daily extensions provided pursuant to this Section 2(b), if not previously discontinued, shall automatically cease.

(c)    Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Company and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3. Duties.

The Executive shall serve as Senior Executive Vice President and Chief Risk Officer of the Company, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Company and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Company, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Company.

Section 4. Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him or her a salary at an initial annual rate of FIVE HUNDRED THIRTY FIVE THOUSAND DOLLARS ($535,000.00), payable in approximately equal installments in

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accordance with the Company’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5. Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices.

Section 6. Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Company shall indemnify the Executive against, defend and hold him or her harmless from, and advance any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Company or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

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Section 7. Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Bank on such terms and conditions as the Company and the Bank may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he or she shall (subject to the Company’s powers of termination hereunder) continue to perform services for the Company in accordance with this Agreement but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Section 8. Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Company’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Company shall maintain its principal executive offices, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Company and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Company shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Company and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Company shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Company shall mutually agree are appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was

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incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Company and on account of any other benefit provided herein.

Section 9. Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Company terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Company within six (6) months following:

(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Senior Executive Vice President and Chief Risk Officer (or a more senior office) of the Company;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Company to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material failure, whether by amendment of the Company’s Certificate of Incorporation or By-laws, action of the Board or the Company’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

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(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Company for any other reason not described in Section 10(a).

In such event, the Company shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Company under circumstances described in Section 9(a) of this Agreement, the Company shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Company, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Company) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment

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Period which is prior to the Executive’s termination of employment with the Company;

(iv)    thirty (30) days following the Executive’s termination of employment with the Company, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Company or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Company during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP    =    (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

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“401KC” is the sum of the “Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Company, the Company shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Company during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP    =    (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Company; provided, however, that in the event of the Executive’s

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voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Company, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP    =    (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and

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appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, even if he or she is not vested under such plan or program;

(viii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Company, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP    =    FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he or she is not vested under such plan; provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense

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of the Company by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Company notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

Section 10. Termination without Additional Company Liability.

(a)    In the event that the Executive’s employment with the Company shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean:

(A)    the Executive intentionally engages in dishonest conduct in connection with the Executive’s performance of services for the Company resulting in the Executive’s conviction of a felony;

(B)    the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(C)    the Executive willfully fails or refuses to perform the Executive’s duties under this Agreement and fails to cure such breach within sixty (60) days following written notice thereof from the Company;

(D)    the Executive breaches the Executive’s fiduciary duties to the Company for personal profit;

(E)    the Executive’s willful breach or violation of any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with the Executive’s performance of services for the Company; or

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(F)    the Executive’s material breach of any material provision of this Agreement which is not substantially cured within 60 days after written notice of such breach is received by the Executive from the Company.

(ii)    the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)    a determination that the Executive is Disabled;

then the Company, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    For purposes of Section 10(a)(i), no act or failure to act, on the part of the Executive, shall be considered “intentional” or “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Except as specifically provided below, the cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)    the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)    prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Company’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)    after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)    after the vote contemplated by Section 10(b)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which

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shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Company to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Company prior to the delivery to the Executive by the Company of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Company may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor, acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Company shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Company shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11. Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Company (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Company;

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(ii)    the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Company, or approval by the stockholders of the Company of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Company to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein or the term “Board of Directors of the Bank” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or an affiliate or subsidiary of either of them, by the Company, the Bank, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Company under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Company which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12. Tax Indemnification.

(a)    This Section 12 shall apply if the Executive’s employment is terminated upon or following:

(i)    a Change of Control (as defined in Section 11 of this Agreement); or

(ii)    a change “in the ownership or effective control” of the Company or the Bank or “in the ownership of a substantial portion of the assets” of the Company or the Bank within the meaning of Section 280G of the Code.

If this Section 12 applies, then, if for any taxable year, the Executive shall be liable for the payment of an excise tax under Section 4999 of the Code with respect to any payment in the nature of compensation made by the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank to (or for the benefit of) the Executive, the Company shall pay to the Executive an amount intended to indemnify the Executive against the financial effects of the excise tax imposed on excess parachute payments under Section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

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E x P

TIP    =    ----------------------------------------

1 - (( FI x ( 1 - SLI )) + SLI + E + M )

where:

“TIP” is the Tax Indemnity Payment, before the deduction of applicable federal, state and local withholding taxes;

“E” is the percentage rate at which an excise tax is assessed under Section 4999 of the Code;

“P” is the amount with respect to which such excise tax is assessed, determined without regard to any amount payable pursuant to this Section 12;

“FI” is the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

“SLI” is the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

“M” is the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

(b)    The computation of the Tax Indemnity Payment shall be made at the expense of the Company by the Computation Advisor and shall be based on the following assumptions:

(i)    that a change in ownership, a change in effective ownership or control or a change in the ownership of a substantial portion of the assets of the Bank or the Company has occurred within the meaning of Section 280G of the Code (a “280G Change of Control”);

(ii)    that all direct or indirect payments made to or benefits conferred upon the Executive on account of the Executive’s termination of employment are “parachute payments” within the meaning of Section 280G of the Code; and

(iii)    that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

(c)    With respect to any payment that is presumed to be a parachute payment for purposes of Section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the

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Executive the written opinion (the “Opinion Letter”), in form and substance reasonably satisfactory to the Executive, of the Computation Advisor or, if the Computation Advisor is unable to provide such opinion, of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that:

(i)    no 280G Change in Control has occurred, or

(ii)    all or part of the payment or benefit in question is not a parachute payment for purposes of Section 280G of the Code, or

(iii)    all or part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or

(iv)    for some other reason which shall be set forth in detail in such letter, no excise tax is due under Section 4999 of the Code with respect to such payment or benefit.

If the Company delivers an Opinion Letter, the Computation Advisor shall re-compute, and the Company shall make, the Tax Indemnity Payment, if any, in reliance on the information contained in the Opinion Letter.

(d)    In the event that the Executive’s liability for the excise tax under Section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made pursuant to Sections 12(a) and 12(c), when increased by the amount of the payment made to the Executive pursuant to this Section 12(d), or when reduced by the amount of the payment made to the Company pursuant to this Section 12(d), equals the amount that should have properly been paid to the Executive under Sections 12(a) and 12(c). The interest paid to the Company under this Section 12(d) shall be determined at the rate provided under Section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this Section 12, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or proceeding to which the Executive is a party as a result of positions taken on the Executive’s federal income tax return with respect to the Executive’s liability for excise taxes under Section 4999 of the Code. Any payment pursuant to this Section 12(d) shall be made promptly following the relevant subsequent determination, and shall in any case be made no later than the last day of the calendar year following the calendar year in which any additional taxes for which the Tax Indemnity Payment is to be made are remitted to the Internal Revenue Service.

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(e)    The provisions of this Section 12 are designed to reflect the provisions of applicable federal, state and local tax laws in effect on the date of this Agreement. If, after the date hereof, there shall be any change in any such laws, this Section 12 shall be modified in such manner as the Executive and the Company may mutually agree upon if and to the extent necessary to assure that the Executive is fully indemnified against the economic effects of the tax imposed under Section 4999 of the Code or any similar federal, state or local tax.

Section 13. Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Company prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Company (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 13 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b) and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13 shall not prevent the Executive from accepting any position or performing any services if:

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Company on substantially the same terms and conditions and

(b)    the Company declines to accept such offer within ten (10) days after such notice is given.

Section 14. Confidentiality.

Unless the Executive obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Company, any entity which is a subsidiary of the Company or any entity which the Company is a subsidiary of, any material document or information obtained from the Company, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this Section 14 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

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Section 15. Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Company, he or she shall not, without the written consent of the Company, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company, the Bank, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Company, the Bank, or any affiliate or subsidiary of either of them.

Section 16. No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability

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insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time.

Section 17. Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 18. Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Alan P. Eggleston28 Croft PlaceHuntington, New York 11743

If to the Company:

Astoria Financial Corporation
One Astoria Bank Plaza
Lake Success, New York 11042-1085
Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022
Attention:    Robert C. Azarow, Esq.

Section 19. Indemnification for Attorneys’ Fees.

The Company shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of

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his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Company’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 20. Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 21. Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 22. Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 23. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 24. Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

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Section 25. Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Company shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 26. Guarantee.

The Company hereby agrees to guarantee the payment by the Bank of any benefits and compensation to which the Executive is or may be entitled to under the terms and conditions of the Amended and Restated Employment Agreement dated as of the 16th day of October, 2014 between the Bank and the Executive.

Section 27. Non-duplication.

In the event that the Executive shall perform services for the Bank or any other affiliate or subsidiary of the Company, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company and all of its affiliates and subsidiaries.

Section 28. Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 29. Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 13, 14 or 15 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 30. Required Regulatory Provisions.

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

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Section 31. No Offset or Recoupment; No Attachment.

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 32. Compliance with Section 409A of the Code.

The Executive and the Company acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in Section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 19 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c) the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income;

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(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5); and

(g)    the Tax Indemnity Payment provided under section 12 is intended to satisfy the requirements for a “tax gross-up payment” described in Treasury Regulation section 1.409A-3(i)(1)(v).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Company would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Company with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA FINANCIAL CORPORATION
Name:	/s/ David J. DeBaun	By:	/s/ Monte N. Redman
	David J. DeBaun	Name:	Monte N. Redman
		Title:	President and Chief Executive Officer
[Seal]
			/s/ Alan P. Eggleston
			Alan P. Eggleston

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STATE OF NEW YORK ) )    ss.:

COUNTY OF NASSAU )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Alan P. Eggleston, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK ) )    ss.:

COUNTY OF NASSAU )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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68243715v4

EX-10.8

EXHIBIT 10.8

ASTORIA BANK

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA BANK, a savings association organized and operating under the federal laws of the United States and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Bank”) and, Alan P. Eggleston, an individual residing at 28 Croft Place, Huntington, New York (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Bank in the capacity of Senior Executive Vice President and as Chief Risk Officer of the Bank’s savings and loan holding company, ASTORIA FINANCIAL CORPORATION, a publicly held business corporation organized and operating pursuant to the laws of the State of Delaware (the “Company”); and

WHEREAS, the Bank desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Bank on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Bank entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Bank and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Bank and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1.    Employment.

The Bank agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”).

The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the third anniversary date of the Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Bank (the “Board”) as provided below. Prior to the first anniversary of the date of this Agreement and on each anniversary date thereafter (each an “Anniversary Date), the Board shall review the terms of this Agreement and the Executive’s performance of services hereunder and may, in the absence of objection from the Executive, approve an extension of the Employment Period. In such event, the Employment Period shall be extended to the third anniversary of the relevant Anniversary Date (or, if earlier the Executive’s seventieth (70^th) birthday. In no event shall any extension cause the Employment Period to end later than the Executive’s seventieth (70^th) birthday. Unless sooner terminated by non-extension, the Employment Period will end automatically, and without the requirement of any notice or other action, on the Executive’s seventieth (70^th) birthday.

(b)    For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the earlier of (i) the Anniversary Date on which the Employment Period (as extended pursuant to Section 2(a) of this Agreement) is then scheduled to expire and (ii) the Executive’s seventieth (70^th) birthday.

(c)    Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Bank and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.Duties.

The Executive shall serve as Senior Executive Vice President and Chief Risk Officer of the Bank, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Bank and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Bank and shall use his or her best efforts to advance the interests of the Bank.

Section 4.Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him or her a salary at an initial annual rate of FIVE HUNDRED THIRTY FIVE THOUSAND DOLLARS ($535,000.00), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation

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from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5.Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Bank’s customary practices.

Section 6.Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Bank shall indemnify the Executive against, defend and hold him or her harmless from any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the charter or a bylaw of the Bank by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties

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hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Company on such terms and conditions as the Bank and the Company may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement.

Section 8.Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Bank shall maintain its principal executive offices, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Bank and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Bank shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Bank and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Bank shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Bank shall mutually agree are appropriate for business purposes, in each case upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Bank and on account of any other benefit provided herein.

Section 9.Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Bank terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Bank within six (6) months following:

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(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Senior Executive Vice President and Chief Risk Officer (or a more senior office) of the Bank;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Bank to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material failure, whether by amendment of the Bank’s Charter or By-laws, action of the Board or the Bank’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Bank for any other reason not described in Section 10(a).

In such event and subject to Section 27 of this Agreement, the Bank shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Bank under circumstances described in Section 9(a) of this Agreement, the Bank shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

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(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Bank, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Bank) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

(iv)    thirty (30) days following the Executive’s termination of employment with the Bank, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

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“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Bank or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Bank during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP = (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the ”Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the

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corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Bank, the Bank shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Bank during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP = (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Bank; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Bank, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP = (FMV - EP) x N

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where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Bank’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan or program;

(viii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Bank, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP = FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Bank’s common stock, the fair market value of a share of stock of the

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same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Bank by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Bank (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Bank, the Company or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Bank notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

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Section 10.Termination without Additional Bank Liability.

(a)    In the event that the Executive’s employment with the Bank shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of this Agreement, in each case measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     the Executive’s voluntary resignation from employment with the Bank for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)     a determination that the Executive is Disabled;

then the Bank, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    The cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)     the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Bank’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)     after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)     after the vote contemplated by Section 10(b)(i), the Bank has furnished to the Executive a notice of termination which shall specify the

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effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Bank to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Bank prior to the delivery to the Executive by the Bank of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Bank may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Bank shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Bank shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Bank (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Bank;

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(ii)    the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Bank, or approval by the stockholders of the Bank of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Bank to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein or the term “Board of Directors of the Company” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Bank, the Company, or an affiliate or subsidiary of either of them, by the Bank, the Company, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Bank under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Bank in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Bank which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Bank (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Bank, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 12 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b); and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 12 shall not prevent the Executive from accepting any position or performing any services if:

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(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Bank on substantially the same terms and conditions and

(b)    the Bank declines to accept such offer within ten (10) days after such notice is given.

Section 13.Confidentiality.

Unless the Executive obtains the prior written consent of the Bank, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Bank, any entity which is a subsidiary of the Bank or any entity which the Bank is a subsidiary of, any material document or information obtained from the Bank, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however that nothing in this Section 13 shall prevent the Executive, with or without the Bank’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

Section 14.Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Bank, he or she shall not, without the written consent of the Bank, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like

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circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Bank, the Company, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Bank, the Company, or any affiliate or subsidiary of either of them.

Section 15.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time.

Section 16.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 17.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

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If to the Executive:

Alan P. Eggleston28 Croft PlaceHuntington, New York 11743

If to the Bank:

Astoria Bank
One Astoria Bank Plaza
Lake Success, New York 11042-1085

Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022

Attention:    Robert C. Azarow, Esq.

Section 18.Indemnification for Attorneys’ Fees.

The Bank shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 19.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

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Section 20.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 21.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 22.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 23.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

Section 24.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Bank shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 25.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26, 27, 28, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

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Section 26.Equitable Remedies.

The Bank and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 27.Required Regulatory Provisions.

The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

(a)    Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive pursuant to Section 9(b) of this Agreement (exclusive of amounts described in Section 9(b)(i), (ii), (viii) or (ix)) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to the Executive’s termination of employment with the Bank (or for the Executive’s entire period of employment with the Bank if less than five calendar years).

(b)    Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated thereunder.

(c)    Notwithstanding anything herein contained to the contrary, if the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

(d)    Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights and obligations of the Bank and the Executive shall not be affected.

(e)    Notwithstanding anything herein contained to the contrary, if the Bank is in default (within the meaning of Section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights and obligations of the Bank and the Executive shall not be affected.

(f)    Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a

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continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Comptroller of the Currency or his or her designee or the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDI Act, 12 U.S.C. §1823(c); or (ii) by the Comptroller of the Currency or his or her designee at the time such Comptroller or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Comptroller to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as though eliminated by formal amendment of this Agreement.

Section 28.No Offset or Recoupment; No Attachment.

The Bank’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Bank or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 29.Compliance with Section 409A of the Code.

The Executive and the Bank acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 18 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)    the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

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(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Bank would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Bank with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA BANK
Name:	/s/ David J. DeBaun	By:	/s/ Monte N. Redman
	David J. DeBaun	Name:	Monte N. Redman
		Title:	President and Chief Executive Officer
[Seal]
			/s/ Alan P. Eggleston
			Alan P. Eggleston

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STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16th day of October, 2014, before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                

Notary Public

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16th day of October, 2014, before me, the undersigned, personally appeared Alan P. Eggleston, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                

Notary Public

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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EX-10.9

EXHIBIT 10.9

ASTORIA FINANCIAL CORPORATION

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA FINANCIAL CORPORATION, a business corporation organized and operating under the laws of the State of Delaware and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Company”), and Frank E. Fusco, an individual residing at 6 Philson Court, Commack, New York 11725 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Company in the capacity of Senior Executive Vice President, Treasurer and Chief Financial Officer and as Senior Executive Vice President, Treasurer and Chief Financial Officer of its wholly owned subsidiary, ASTORIA BANK (the “Bank”); and

WHEREAS, the Company desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Company on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Company entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Company and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Company and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1. Employment.

The Company agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2. Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”).

The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the day before the third anniversary date of the Initial Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Company (the “Board”) pursuant to Section 2(b).

(b)    Beginning on the Initial Effective Date, the Employment Period shall automatically be extended for one (1) additional day each day until the Executive attains the age of sixty-seven (67), unless either the Company or the Executive elects not to extend the Agreement further by giving written notice to the other party, in which case the Employment Period shall end on the day before the third anniversary of the date on which such written notice is given. When the Executive attains the age of sixty-seven (67), the daily extensions will cease automatically and without notice or other action, the Employment Period shall be for a fixed term of three years thereafter, and this Agreement will expire when the Executive attains the age of seventy (70). For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on:

(i)    if extensions have ceased in accordance with this Section 2(b), the day before the third anniversary of the date on which extensions were discontinued; and

(ii)    in all other cases, the day before the third anniversary of the date as of which the Remaining Unexpired Employment Period is being determined.

Upon termination of the Executive’s employment with the Company for any reason whatsoever, any daily extensions provided pursuant to this Section 2(b), if not previously discontinued, shall automatically cease.

(c)    Nothing in this Agreement shall be deemed to prohibit the Company from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Company and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3. Duties.

The Executive shall serve as Senior Executive Vice President, Treasurer and Chief Financial Officer of the Company, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Company and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Company, its affiliates and subsidiaries and shall use his or her best efforts to advance the interests of the Company.

Section 4. Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Company shall pay to him or her a salary at an initial annual rate of FIVE HUNDRED THIRTY

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FIVE THOUSAND DOLLARS ($535,000.00), payable in approximately equal installments in accordance with the Company’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Company for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5. Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Company and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Company, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Company’s customary practices.

Section 6. Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Company shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Company.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Company shall indemnify the Executive against, defend and hold him or her harmless from, and advance any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Company or service in other capacities at the request of the Company, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Company or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw of the Company by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

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Section 7. Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed); provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Company and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Bank on such terms and conditions as the Company and the Bank may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement. If the Executive is discharged or suspended, or is subject to any regulatory prohibition or restriction with respect to participation in the affairs of the Bank, he or she shall (subject to the Company’s powers of termination hereunder) continue to perform services for the Company in accordance with this Agreement but shall not directly or indirectly provide services to or participate in the affairs of the Bank in a manner inconsistent with the terms of such discharge or suspension or any applicable regulatory order.

Section 8. Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Company’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Company shall maintain its principal executive offices, or at such other location as the Company and the Executive may mutually agree upon. The Company shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Company and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Company shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Company and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes.. The Company shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Company shall mutually agree are appropriate for business purposes, in each case upon presentation to the Company of an itemized account of such expenses in such form as the Company may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was

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incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Company and on account of any other benefit provided herein.

Section 9. Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Company terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Company within six (6) months following:

(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Senior Executive Vice President, Treasurer and Chief Financial Officer (or a more senior office) of the Company;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Company to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material failure, whether by amendment of the Company’s Certificate of Incorporation or By-laws, action of the Board or the Company’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Company of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Company cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

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(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Company for any other reason not described in Section 10(a).

In such event, the Company shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Company under circumstances described in Section 9(a) of this Agreement, the Company shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Company, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Company’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Company) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment

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Period which is prior to the Executive’s termination of employment with the Company;

(iv)    thirty (30) days following the Executive’s termination of employment with the Company, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Company during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Company or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Company during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP    =    (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

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“401KC” is the sum of the “Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Company;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Company, the Company shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Company during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP    =    (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Company;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Company; provided, however, that in the event of the Executive’s

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voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Company, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP    =    (FMV - EP) x N

where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and

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appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Company, even if he or she is not vested under such plan or program;

(viii)    at the election of the Company made within thirty (30) days following the Executive’s termination of employment with the Company, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Company, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP    =    FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Company’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Company’s common stock, the fair market value of a share of stock of the same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Company to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Company, even if he or she is not vested under such plan; provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at

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the expense of the Company by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Company (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Company and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Company and the Executive further agree that the Company may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Company, the Bank or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Company notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

Section 10. Termination without Additional Company Liability.

(a)    In the event that the Executive’s employment with the Company shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean:

(A)    the Executive intentionally engages in dishonest conduct in connection with the Executive’s performance of services for the Company resulting in the Executive’s conviction of a felony;

(B)    the Executive is convicted of, or pleads guilty or nolo contendere to, a felony or any crime involving moral turpitude;

(C)    the Executive willfully fails or refuses to perform the Executive’s duties under this Agreement and fails to cure such breach within sixty (60) days following written notice thereof from the Company;

(D)    the Executive breaches the Executive’s fiduciary duties to the Company for personal profit;

(E)    the Executive’s willful breach or violation of any law, rule or regulation (other than traffic violations or similar offenses), or final cease and desist order in connection with the Executive’s performance of services for the Company; or

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(F)    the Executive’s material breach of any material provision of this Agreement which is not substantially cured within 60 days after written notice of such breach is received by the Executive from the Company.

(ii)    the Executive’s voluntary resignation from employment with the Company for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)    a determination that the Executive is Disabled;

then the Company, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    For purposes of Section 10(a)(i), no act or failure to act, on the part of the Executive, shall be considered “intentional” or “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon the written advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company. Except as specifically provided below, the cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)    the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)    prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Company’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)    after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)    after the vote contemplated by Section 10(b)(i), the Company has furnished to the Executive a notice of termination which shall specify the effective date of the Executive’s termination of employment (which

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shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Company to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Company prior to the delivery to the Executive by the Company of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Company may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Company does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Company may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Company shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Company shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Company and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11. Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Company (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Company with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Company; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Company;

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(ii)    the acquisition of all or substantially all of the assets of the Company or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Company entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Company, or approval by the stockholders of the Company of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Company to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Bank” were substituted for the term “Company” therein or the term “Board of Directors of the Bank” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Company, the Bank, or an affiliate or subsidiary of either of them, by the Company, the Bank, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

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(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Company under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Company in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Company which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12. Tax Indemnification.

(a)    This Section 12 shall apply if the Executive’s employment is terminated upon or following:

(i)    a Change of Control (as defined in Section 11 of this Agreement); or

(ii)    a change “in the ownership or effective control” of the Company or the Bank or “in the ownership of a substantial portion of the assets” of the Company or the Bank within the meaning of Section 280G of the Code.

If this Section 12 applies, then, if for any taxable year, the Executive shall be liable for the payment of an excise tax under Section 4999 of the Code with respect to any payment in the nature of compensation made by the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank to (or for the benefit of) the Executive, the Company shall pay to the Executive an amount intended to indemnify the Executive against the financial effects of the excise tax imposed on excess parachute payments under Section 280G of the Code (the “Tax Indemnity Payment”). The Tax Indemnity Payment shall be determined under the following formula:

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E x P

TIP    =    ----------------------------------------

1 - (( FI x ( 1 - SLI )) + SLI + E + M )

where:

“TIP” is the Tax Indemnity Payment, before the deduction of applicable federal, state and local withholding taxes;

“E” is the percentage rate at which an excise tax is assessed under Section 4999 of the Code;

“P” is the amount with respect to which such excise tax is assessed, determined without regard to any amount payable pursuant to this Section 12;

“FI” is the highest marginal rate of income tax applicable to the Executive under the Code for the taxable year in question;

“SLI” is the sum of the highest marginal rates of income tax applicable to the Executive under all applicable state and local laws for the taxable year in question; and

“M” is the highest marginal rate of Medicare tax applicable to the Executive under the Code for the taxable year in question.

(b)    The computation of the Tax Indemnity Payment shall be made at the expense of the Company by the Computation Advisor and shall be based on the following assumptions:

(i)    that a change in ownership, a change in effective ownership or control or a change in the ownership of a substantial portion of the assets of the Bank or the Company has occurred within the meaning of Section 280G of the Code (a “280G Change of Control”);

(ii)    that all direct or indirect payments made to or benefits conferred upon the Executive on account of the Executive’s termination of employment are “parachute payments” within the meaning of Section 280G of the Code; and

(iii)    that no portion of such payments is reasonable compensation for services rendered prior to the Executive’s termination of employment.

(c)    With respect to any payment that is presumed to be a parachute payment for purposes of Section 280G of the Code, the Tax Indemnity Payment shall be made to the Executive on the earlier of the date the Company, the Bank or any direct or indirect subsidiary or affiliate of the Company or the Bank is required to withhold such tax or the date the tax is required to be paid by the Executive, unless, prior to such date, the Company delivers to the

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Executive the written opinion (the “Opinion Letter”), in form and substance reasonably satisfactory to the Executive, of the Computation Advisor or, if the Computation Advisor is unable to provide such opinion, of an attorney or firm of independent certified public accountants selected by the Company and reasonably satisfactory to the Executive, to the effect that the Executive has a reasonable basis on which to conclude that:

(i)    no 280G Change in Control has occurred, or

(ii)    all or part of the payment or benefit in question is not a parachute payment for purposes of Section 280G of the Code, or

(iii)    all or part of such payment or benefit constitutes reasonable compensation for services rendered prior to the 280G Change of Control, or

(iv)    for some other reason which shall be set forth in detail in such letter, no excise tax is due under Section 4999 of the Code with respect to such payment or benefit.

If the Company delivers an Opinion Letter, the Computation Advisor shall re-compute, and the Company shall make, the Tax Indemnity Payment, if any, in reliance on the information contained in the Opinion Letter.

(d)    In the event that the Executive’s liability for the excise tax under Section 4999 of the Code for a taxable year is subsequently determined to be different than the amount with respect to which the Tax Indemnity Payment is made, the Executive or the Company, as the case may be, shall pay to the other party at the time that the amount of such excise tax is finally determined, an appropriate amount, plus interest, such that the payment made pursuant to Sections 12(a) and 12(c), when increased by the amount of the payment made to the Executive pursuant to this Section 12(d), or when reduced by the amount of the payment made to the Company pursuant to this Section 12(d), equals the amount that should have properly been paid to the Executive under Sections 12(a) and 12(c). The interest paid to the Company under this Section 12(d) shall be determined at the rate provided under Section 1274(b)(2)(B) of the Code. The payment made to the Executive shall include such amount of interest as is necessary to satisfy any interest assessment made by the Internal Revenue Service and an additional amount equal to any monetary penalties assessed by the Internal Revenue Service on account of an underpayment of the excise tax. To confirm that the proper amount, if any, was paid to the Executive under this Section 12, the Executive shall furnish to the Company a copy of each tax return which reflects a liability for an excise tax, at least 20 days before the date on which such return is required to be filed with the Internal Revenue Service. Nothing in this Agreement shall give the Company any right to control or otherwise participate in any action, suit or proceeding to which the Executive is a party as a result of positions taken on the Executive’s federal income tax return with respect to the Executive’s liability for excise taxes under Section 4999 of the Code. Any payment pursuant to this Section 12(d) shall be made promptly following the relevant subsequent determination, and shall in any case be made no later than the last day of the calendar year following the calendar year in which any additional taxes for which the Tax Indemnity Payment is to be made are remitted to the Internal Revenue Service.

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(e)    The provisions of this Section 12 are designed to reflect the provisions of applicable federal, state and local tax laws in effect on the date of this Agreement. If, after the date hereof, there shall be any change in any such laws, this Section 12 shall be modified in such manner as the Executive and the Company may mutually agree upon if and to the extent necessary to assure that the Executive is fully indemnified against the economic effects of the tax imposed under Section 4999 of the Code or any similar federal, state or local tax.

Section 13. Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Company prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Company (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Company, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 13 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b) and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 13 shall not prevent the Executive from accepting any position or performing any services if:

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Company on substantially the same terms and conditions and

(b)    the Company declines to accept such offer within ten (10) days after such notice is given.

Section 14. Confidentiality.

Unless the Executive obtains the prior written consent of the Company, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Company, any entity which is a subsidiary of the Company or any entity which the Company is a subsidiary of, any material document or information obtained from the Company, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however, that nothing in this Section 14 shall prevent the Executive, with or without the Company’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

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Section 15. Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Company, he or she shall not, without the written consent of the Company, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Company, the Bank, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Company, the Bank, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Company, the Bank, or any affiliate or subsidiary of either of them.

Section 16. No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Company or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Company’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability

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insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Company from time to time.

Section 17. Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Company and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Company may be sold or otherwise transferred. Failure of the Company to obtain from any successor its express written assumption of the Company’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 18. Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

If to the Executive:

Frank E. Fusco6 Philson CourtCommack, New York 11725

If to the Company:

Astoria Financial Corporation
One Astoria Bank Plaza
Lake Success, New York 11042-1085
Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022
Attention:    Robert C. Azarow, Esq.

Section 19. Indemnification for Attorneys’ Fees.

The Company shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of

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his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Company’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 20. Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Section 21. Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 22. Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 23. Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 24. Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

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Section 25. Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Company shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 26. Guarantee.

The Company hereby agrees to guarantee the payment by the Bank of any benefits and compensation to which the Executive is or may be entitled to under the terms and conditions of the Amended and Restated Employment Agreement dated as of the 16th day of October, 2014 between the Bank and the Executive.

Section 27. Non-duplication.

In the event that the Executive shall perform services for the Bank or any other affiliate or subsidiary of the Company, any compensation or benefits provided to the Executive by such other employer shall be applied to offset the obligations of the Company hereunder, it being intended that this Agreement set forth the aggregate compensation and benefits payable to the Executive for all services to the Company and all of its affiliates and subsidiaries.

Section 28. Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21, 26, 27, 29, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Section 29. Equitable Remedies.

The Company and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 13, 14 or 15 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 30. Required Regulatory Provisions.

Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Company, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and any regulations promulgated thereunder.

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Section 31. No Offset or Recoupment; No Attachment.

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 32. Compliance with Section 409A of the Code.

The Executive and the Company acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in Section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 19 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c) the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income;

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(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5); and

(g)    the Tax Indemnity Payment provided under section 12 is intended to satisfy the requirements for a “tax gross-up payment” described in Treasury Regulation section 1.409A-3(i)(1)(v).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Company would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Company with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA FINANCIAL CORPORATION
Name:	/s/ David J. DeBaun	By:	/s/ Monte N. Redman
	David J. DeBaun	Name:	Monte N. Redman
		Title:	President and Chief Executive Officer
[Seal]
			/s/ Frank E. Fusco
			Frank E. Fusco

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STATE OF NEW YORK          )     ss.:

COUNTY OF NASSAU         )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK          )     ss.:

COUNTY OF NASSAU         )

On this 16^TH day of October, 2014 before me, the undersigned, personally appeared Frank E. Fusco, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                    

Name: Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

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68243715v4

EX-10.10

EXHIBIT 10.10

ASTORIA BANK

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT WITH EXECUTIVE OFFICER

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of October 16, 2014 by and between ASTORIA BANK, a savings association organized and operating under the federal laws of the United States and having an office at One Astoria Bank Plaza, Lake Success, New York 11042-1085 (the “Bank”) and, Frank E. Fusco, an individual residing at 6 Philson Court, Commack, New York 11725 (the “Executive”).

WITNESSETH:

WHEREAS, the Executive currently serves the Bank in the capacity of Senior Executive Vice President, Treasurer and Chief Financial Officer and as Senior Executive Vice President, Treasurer and Chief Financial Officer of the Bank’s savings and loan holding company, ASTORIA FINANCIAL CORPORATION, a publicly held business corporation organized and operating pursuant to the laws of the State of Delaware (the “Company”); and

WHEREAS, the Bank desires to assure for itself the continued availability of the Executive’s services and the ability of the Executive to perform such services with a minimum of personal distraction in the event of a pending or threatened Change of Control (as hereinafter defined); and

WHEREAS, the Executive is willing to continue to serve the Bank on the terms and conditions hereinafter set forth; and

WHEREAS, the Executive currently has an Employment Agreement with the Bank entered into on January 1, 1996 (the “Initial Effective Date”), amended and restated on January 1, 2000, further amended as of August 15, 2007, further amended and restated as of January 1, 2009 and further amended as of April 21, 2010 (such agreement, as amended, the “Prior Agreement”);

NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, the Bank and the Executive hereby amend and restate in its entirety the Employment Agreement by and between the Bank and the Executive as amended through April 21, 2010 so as to provide as follows from and after the date hereof:

Section 1.    Employment.

The Bank agrees to continue to employ the Executive, and the Executive hereby agrees to such continued employment, during the period and upon the terms and conditions set forth in this Agreement.

Section 2.Employment Period; Remaining Unexpired Employment Period.

(a)    The terms and conditions of this Agreement shall be and remain in effect during the period of employment established under this Section 2 (the “Employment Period”). The Employment Period shall be for an initial term of three years beginning on the Initial Effective Date and ending on the third anniversary date of the Effective Date, plus such extensions, if any, as are provided by the Board of Directors of the Bank (the “Board”) as provided below. Prior to the first anniversary of the date of this Agreement and on each anniversary date thereafter (each an “Anniversary Date), the Board shall review the terms of this Agreement and the Executive’s performance of services hereunder and may, in the absence of objection from the Executive, approve an extension of the Employment Period. In such event, the Employment Period shall be extended to the third anniversary of the relevant Anniversary Date (or, if earlier the Executive’s seventieth (70^th) birthday. In no event shall any extension cause the Employment Period to end later than the Executive’s seventieth (70^th) birthday. Unless sooner terminated by non-extension, the Employment Period will end automatically, and without the requirement of any notice or other action, on the Executive’s seventieth (70^th) birthday.

(b)    For all purposes of this Agreement, the term “Remaining Unexpired Employment Period” as of any date shall mean the period beginning on such date and ending on the earlier of (i) the Anniversary Date on which the Employment Period (as extended pursuant to Section 2(a) of this Agreement) is then scheduled to expire and (ii) the Executive’s seventieth (70^th) birthday.

(c)    Nothing in this Agreement shall be deemed to prohibit the Bank from terminating the Executive’s employment at any time during the Employment Period with or without notice for any reason; provided, however, that the relative rights and obligations of the Bank and the Executive in the event of any such termination shall be determined pursuant to this Agreement.

Section 3.Duties.

The Executive shall serve as Senior Executive Vice President, Treasurer and Chief Financial Officer of the Bank, having such power, authority and responsibility and performing such duties as are prescribed by or pursuant to the By-Laws of the Bank and as are customarily associated with such position. The Executive shall devote his or her full business time and attention (other than during weekends, holidays, approved vacation periods, and periods of illness or approved leaves of absence) to the business and affairs of the Bank and shall use his or her best efforts to advance the interests of the Bank.

Section 4.Cash Compensation.

In consideration for the services to be rendered by the Executive hereunder, the Bank shall pay to him or her a salary at an initial annual rate of FIVE HUNDRED THIRTY FIVE THOUSAND DOLLARS ($535,000.00), payable in approximately equal installments in accordance with the Bank’s customary payroll practices for senior officers. At least annually during the Employment Period, the Board shall review the Executive’s annual rate of salary and may, in its discretion, approve an increase therein. In no event shall the Executive’s annual rate

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of salary under this Agreement in effect at a particular time be reduced without his or her prior written consent and any such reduction in the absence of such consent shall be a material breach of this Agreement. In addition to salary, the Executive may receive other cash compensation from the Bank for services hereunder at such times, in such amounts and on such terms and conditions as the Board may determine from time to time.

Section 5.Employee Benefit Plans and Programs.

During the Employment Period, the Executive shall be treated as an employee of the Bank and shall be entitled to participate in and receive benefits under any and all qualified and non-qualified retirement, pension, savings, profit-sharing or stock bonus plans, any and all group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans, and any other employee benefit and compensation plans (including, but not limited to, any incentive compensation plans or programs, stock option and appreciation rights plans and restricted stock plans) as may from time to time be maintained by, or cover employees of, the Bank, including those for Senior Executive Vice Presidents, in accordance with the terms and conditions of such employee benefit plans and programs and compensation plans and programs and consistent with the Bank’s customary practices.

Section 6.Indemnification and Insurance.

(a)    During the Employment Period and for a period of six (6) years thereafter, the Bank shall cause the Executive to be covered by and named as an insured under any policy or contract of insurance obtained by it to insure its directors and officers against personal liability for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank. The coverage provided to the Executive pursuant to this Section 6 shall be of the same scope and on the same terms and conditions as the coverage (if any) provided to other officers or directors of the Bank.

(b)    To the maximum extent permitted under applicable law, during the Employment Period and for the maximum period allowed under applicable law thereafter, the Bank shall indemnify the Executive against, defend and hold him or her harmless from any costs, liabilities, losses and exposures for acts or omissions in connection with service as an officer or director of the Bank or service in other capacities at the request of the Bank, to the fullest extent and on the most favorable terms and conditions that similar indemnification is offered to any director or officer of the Bank or any subsidiary or affiliate thereof. No provision of this Agreement nor any termination or expiration of this Agreement is intended to authorize the elimination or impairment of any right to indemnification or to advancement of expenses arising under a provision of the charter or a bylaw of the Bank by amendment to such a provision after the occurrence of an act or omission that is the subject of an action, suit or proceeding for which indemnification is sought.

Section 7.Other Activities.

(a)    The Executive may serve as a member of the board of directors of such business, community and charitable organizations as he or she may disclose to and as may be approved by the Board (which approval shall not be unreasonably withheld or delayed);

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provided, however, that such service shall not materially interfere with the performance of his or her duties under this Agreement. The Executive may also engage in personal business and investment activities which do not materially interfere with the performance of his or her duties hereunder; provided, however, that such activities are not prohibited under any code of conduct or investment or securities trading policy established by the Bank and generally applicable to all similarly situated executives.

(b)    The Executive may also serve as an officer or director of the Company on such terms and conditions as the Bank and the Company may mutually agree upon, and such service shall not be deemed to materially interfere with the Executive’s performance of his or her duties hereunder or otherwise result in a material breach of this Agreement.

Section 8.Working Facilities and Expenses.

The Executive’s principal place of employment shall be at the Bank’s executive offices at the address first above written, or at such other location within Queens County or Nassau County, New York at which the Bank shall maintain its principal executive offices, or at such other location as the Bank and the Executive may mutually agree upon. The Bank shall provide the Executive at his or her principal place of employment with a private office, secretarial services and other support services and facilities suitable to his or her position with the Bank and necessary or appropriate in connection with the performance of his or her assigned duties under this Agreement. The Bank shall provide to the Executive for his or her exclusive use an automobile owned or leased by the Bank and appropriate to his or her position, to be used in the performance of his or her duties hereunder, including commuting to and from his or her personal residence and which may be used by Executive for personal purposes. The Bank shall (i) reimburse the Executive for all expenses associated with his or her business use of the aforementioned automobile; (ii) reimburse the Executive for his or her ordinary and necessary business expenses incurred in the performance of his or her duties under this Agreement (including but not limited to travel and entertainment expenses) that are excludible from the Executive’s gross income for federal income tax purposes; (iii) reimburse the Executive for fees for memberships in such clubs and organizations and such other expenses as the Executive and the Bank shall mutually agree are appropriate for business purposes, in each case upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require, each such reimbursement payment to be made promptly following receipt of the itemized account and in any event not later than the last day of the calendar year following the calendar year in which the expense was incurred. The Executive shall be responsible for the payment of any taxes on account of his or her personal use of the automobile provided by the Bank and on account of any other benefit provided herein.

Section 9.Termination of Employment with Separation Benefits.

(a)    The Executive shall be entitled to the Separation benefits described herein in the event that his or her employment with the Bank terminates during the Employment Period under any of the following circumstances:

(i)    the Executive’s voluntary resignation from employment with the Bank within six (6) months following:

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(A)    the failure of the Board to appoint or re-appoint or elect or re-elect the Executive to the office of Senior Executive Vice President, Treasurer and Chief Financial Officer (or a more senior office) of the Bank;

(B)    if the Executive is or becomes a member of the Board, the failure of the stockholders of the Bank to elect or re-elect the Executive to the Board or the failure of the Board (or the nominating committee thereof) to nominate the Executive for such election or re-election;

(C)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material failure, whether by amendment of the Bank’s Charter or By-laws, action of the Board or the Bank’s stockholders or otherwise, to vest in the Executive the functions, duties, or responsibilities prescribed in Section 3 of this Agreement as of the date hereof, unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory;

(D)    the expiration of a thirty (30) day period following the date on which the Executive gives written notice to the Bank of its material breach of any term, condition or covenant contained in this Agreement (including, without limitation, any reduction of the Executive’s rate of base salary in effect from time to time and any change in the terms and conditions of any compensation or benefit program in which the Executive participates which, either individually or together with other changes, has a material adverse effect on the aggregate value of his or her total compensation package), unless, during such thirty (30) day period, the Bank cures such failure in a manner determined by the Executive, in his or her discretion, to be satisfactory; or

(E)    the relocation of the Executive’s principal place of employment, without his or her written consent, to a location outside of Nassau County and Queens County, New York;

(ii)    the termination of the Executive’s employment with the Bank for any other reason not described in Section 10(a).

In such event and subject to Section 27 of this Agreement, the Bank shall provide the benefits and pay to the Executive the amounts described in Section 9(b).

(b)    Upon the termination of the Executive’s employment with the Bank under circumstances described in Section 9(a) of this Agreement, the Bank shall pay and provide to the Executive (or, in the event of the Executive’s death following the Executive’s termination of employment, to his or her estate):

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(i)    his or her earned but unpaid compensation (including, without limitation, all items which constitute wages under Section 190.1 of the New York Labor Law and the payment of which is not otherwise provided for under this Section 9(b)) as of the date of the termination of his or her employment with the Bank, such payment to be made at the time and in the manner prescribed by law applicable to the payment of wages but in any event not later than thirty (30) days after termination of employment;

(ii)    the benefits, if any, to which he or she is entitled as a former employee under the employee benefit plans and programs and compensation plans and programs maintained for the benefit of the Bank’s officers and employees, including the annual bonus (if any) to which he or she is entitled under any cash-based annual bonus or performance compensation plan in effect for the year in which his or her termination occurs, to be paid at the same time and on the terms and conditions (including but not limited to achievement of performance goals) applicable under the relevant plan;

(iii)    continued group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance benefits, in addition to that provided pursuant to Section 9(b)(ii), and after taking into account the coverage provided by any subsequent employer, if and to the extent necessary to provide for the Executive, for the Remaining Unexpired Employment Period, coverage (including any co-payments and deductibles, but excluding any premium sharing arrangements, it being the intention of the parties to this Agreement that the premiums for such insurance benefits shall be the sole cost and expense of the Bank) equivalent to the coverage to which he or she would have been entitled under such plans (as in effect on the date of his or her termination of employment, or, if his or her termination of employment occurs after a Change of Control, on the date of such Change of Control, whichever benefits are greater), if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary or compensation, as applicable, achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

(iv)    thirty (30) days following the Executive’s termination of employment with the Bank, a lump sum payment in an amount representing an estimate of the salary that the Executive would have earned if he or she had continued working for the Bank during the Remaining Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Salary Separation Payment”). The Salary Separation Payment shall be computed using the following formula:

SSP    =    BS x NY

where:

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“SSP” is the amount of the Salary Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

The Salary Separation Payment shall be paid in lieu of all other payments of salary provided for under this Agreement in respect of the period following any such termination.

(v)    a lump sum payment (the “401(k) Separation Payment”) equal to an estimate of the additional employer contributions to which he or she would have been entitled under any and all qualified and non-qualified defined contribution pension plans, excluding the employee stock ownership plans, maintained by, or covering employees of, the Bank or any of its affiliates or subsidiaries as if he or she were 100% vested thereunder and had continued working for the Bank during the Remaining Unexpired Employment Period.

The 401(k) Separation Payment shall be calculated as follows:

401KSP = (401KC x NY) + UVB

where:

“401KSP” is the amount of the 401(k) Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“401KC” is the sum of the ”Company Contributions” as defined in the Bank’s Incentive Savings Plan or, if made under another defined contribution pension plan other than an employee stock ownership plan, the comparable contribution made for the benefit of the Executive during the one year period which shall end on the date of his or her termination of his or her employment with the Bank;

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years; and

“UVB” is the actual balance credited to the Executive’s account under the applicable plan at the date of his or her termination of employment that is not vested and does not become vested as a consequence of such termination of employment.

The 401(k) Separation Payment shall be converted into the same form, and paid at the same time, and in the same manner, as benefits under the

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corresponding non-qualified plan. and, if there is no such non-qualified plan in effect on the date of this Agreement, in a lump sum.

(vi)    thirty (30) days following the Executive’s termination of employment with the Bank, the Bank shall make a lump sum payment to the Executive in an amount equal to the estimated potential annual bonuses or incentive compensation that the Executive was targeted to have earned if the Executive had continued working for the Bank during the Unexpired Employment Period at the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank (the “Bonus Separation Payment”). The Bonus Separation Payment shall be computed using the following formula:

BSP = (BS x TIO x NY)

where:

“BSP” is the amount of the Bonus Separation Payment, before the deduction of applicable federal, state and local withholding taxes;

“BS” is the highest annual rate of salary achieved during that portion of the Employment Period which is prior to the Executive’s termination of employment with the Bank;

“TIO” is the target incentive opportunity (expressed as a percentage of base salary) established by the Compensation Committee of the Board for the Executive pursuant to the Astoria Financial Corporation Executive Officer Annual Incentive Plan in effect at the time immediately prior to the Executive’s termination of employment with the Bank; provided, however, that in the event of the Executive’s voluntary resignation pursuant to Section 9(a)(i) above following written notice of a reduction in the Executive’s target incentive opportunity that results in or contributes to a material adverse effect on the aggregate value of the Executive’s total compensation package, that is the basis for such resignation under Section 9(a)(i)(D) above, “TIO” is the target incentive opportunity in effect at the time immediately prior to the reduction that is the subject of such written notice; and

“NY” is the Remaining Unexpired Employment Period expressed as a number of years and fractions of years.

(vii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of options or appreciation rights issued to the Executive under any stock option and appreciation rights plan or program maintained by, or covering employees of, the Bank, a lump sum payment (the “Option Surrender Payment”). The Option Surrender Payment shall be calculated as follows:

OSP = (FMV - EP) x N

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where:

“OSP” is the amount of the Option Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the most recent preceding trading day on which a trade occurs, provided however that if the option or stock appreciation right is for a security other than the Bank’s common stock, the fair market value of a share of stock of the same class as the stock subject to the option or appreciation right, determined as of the date of termination of employment shall be utilized;

“EP” is the exercise price per share for such option or appreciation right, as specified in or under the relevant plan or program; and

“N” is the number of shares with respect to which options or appreciation rights are being surrendered.

For purposes of determining the Option Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to exercise any options or appreciation rights not surrendered pursuant hereto, the Executive shall be deemed fully vested in all options and appreciation rights under any stock option or appreciation rights plan or program maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan or program;

(viii)    at the election of the Bank made within thirty (30) days following the Executive’s termination of employment with the Bank, upon the surrender of any shares or share units awarded to the Executive under any equity compensation plan maintained by, or covering employees of, the Bank, a lump sum payment (the “RRP Surrender Payment”) The RRP Surrender Payment shall be calculated as follows:

RSP = FMV x N

where:

“RSP” is the amount of the RRP Surrender Payment, before the deduction of applicable federal, state and local withholding taxes;

“FMV” is the closing price of the Bank’s common stock on the NYSE, or on whatever other stock exchange or market such stock is publicly traded, on the date the Executive’s employment terminates or, if such day is not a day on which such securities are traded, on the preceding trading day on which a trade occurs, provided however that if the restricted stock is a security other than the Bank’s common stock, the fair market value of a share of stock of the

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same class as the stock granted under such plan, determined as of the date of termination of employment shall be utilized; and

“N” is the number of shares or share units which are being surrendered.

For purposes of determining the RRP Surrender Payment and for purposes of determining the Executive’s right following his or her termination of employment with the Bank to any stock not surrendered pursuant hereto, the Executive shall be deemed fully vested in all shares awarded under any restricted stock plan maintained by, or covering employees of, the Bank, even if he or she is not vested under such plan provided, however, that any shares of restricted stock for which vesting is conditioned on the attainment of one or more performance goals, with the intent that the award of such shares should satisfy the requirements of qualified performance-based compensation (within the meaning of Treasury Regulation section 1.162-27(e)), shall vest only in accordance with the terms of the associated plan and award, and the Company’s right to elect to purchase such shares pursuant to this Section 9(b)(ix) shall not expire until thirty (30) days after such time as the vesting of such shares is no longer conditioned on the attainment of any such performance goal.

The Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment shall be computed at the expense of the Bank by an attorney of the firm of Arnold & Porter LLP, 399 Park Avenue, New York, New York 10022 or, if such firm is unavailable or unwilling to perform such calculation, by a firm of independent certified public accountants selected by the Executive and reasonably satisfactory to the Bank (the “Computation Advisor”). The determination of the Computation Advisor as to the amount of such payments shall be final and binding in the absence of manifest error.

The Bank and the Executive hereby stipulate that the damages which may be incurred by the Executive following any such termination of employment are not capable of accurate measurement as of the date first above written and that the payments and benefits contemplated by this Section 9(b) constitute reasonable damages under the circumstances and shall be payable without any requirement of proof of actual damage and without regard to the Executive’s efforts, if any, to mitigate damages. The Bank and the Executive further agree that the Bank may elect to condition the payment of the Salary Separation Payment, the 401(k) Separation Payment, the Bonus Separation Payment, the Option Surrender Payment and the RRP Surrender Payment on the receipt of the Executive’s resignation from any and all positions which he or she holds as an officer, director or committee member with respect to the Bank, the Company or any subsidiary or affiliate of either of them; provided, however, that such election will only be effective if the Bank notifies the Executive of its election in writing within five (5) days of the Executive’s termination of employment.

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Section 10.Termination without Additional Bank Liability.

(a)    In the event that the Executive’s employment with the Bank shall terminate during the Employment Period on account of:

(i)    the discharge of the Executive for Cause, which, for purposes of this Agreement shall mean personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of this Agreement, in each case measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     the Executive’s voluntary resignation from employment with the Bank for reasons other than those specified in Section 9(a) or 11(b);

(iii)    the Executive’s death;

(iv)     a determination that the Executive is Disabled;

then the Bank, except as otherwise specifically provided herein, shall have no further obligations under this Agreement, other than the payment to the Executive (or, in the event of his or her death, to his or her estate) of the amounts or benefits provided in Section 9(b)(i) and (ii) of this Agreement (the “Standard Termination Entitlements”).

(b)    The cessation of employment of the Executive shall not be deemed to be for Cause within the meaning of Section 10(a)(i) unless and until:

(i)     the Board, by the affirmative vote of 75% of its entire membership, determines that the Executive is guilty of the conduct described in Section 10(a)(i) above measured against standards generally prevailing at the relevant time in the savings and community banking industry;

(ii)     prior to the vote contemplated by Section 10(b)(i), the Board shall provide the Executive with notice of the Bank’s intent to discharge the Executive for Cause, detailing with particularity the facts and circumstances which are alleged to constitute Cause (the “Notice of Intent to Discharge”); and

(iii)     after the giving of the Notice of Intent to Discharge and before the taking of the vote contemplated by Section 10(b)(i), the Executive, together with the Executive’s legal counsel, if the Executive so desires, are afforded a reasonable opportunity to make both written and oral presentations before the Board for the purpose of refuting the alleged grounds for Cause for the Executive’s discharge; and

(iv)     after the vote contemplated by Section 10(b)(i), the Bank has furnished to the Executive a notice of termination which shall specify the

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effective date of the Executive’s termination of employment (which shall in no event be earlier than the date on which such notice is deemed given) and include a copy of a resolution or resolutions adopted by the Board, certified by its corporate secretary, authorizing the termination of the Executive’s employment with Cause and stating with particularity the facts and circumstances found to constitute Cause for the Executive’s discharge (the “Final Discharge Notice”).

If the Executive, during the ninety (90) day period commencing on the delivery by the Bank to the Executive of the Notice of Intent to Discharge specified in Section 10(b)(ii), resigns his or her employment with the Bank prior to the delivery to the Executive by the Bank of the Final Discharge Notice specified in Section 10(b)(iv), then the cessation of employment of the Executive shall be deemed to be for Cause.

Following the giving of a Notice of Intent to Discharge, the Bank may temporarily suspend the Executive’s duties and authority and, in such event, may also suspend the payment of salary and other cash compensation, but not the Executive’s participation in retirement, insurance and other employee benefit plans. If the Executive is not discharged or is discharged without Cause within forty-five (45) days after the giving of a Notice of Intent to Discharge, payments of salary and cash compensation shall resume, and all payments withheld during the period of suspension shall be promptly restored. If the Executive is discharged with Cause not later than forty-five (45) days after the giving of the Notice of Intent to Discharge, all payments withheld during the period of suspension shall be deemed forfeited and shall not be included in the Standard Termination Entitlements. If a Final Discharge Notice is given later than forty-five (45) days, but sooner than ninety (90) days, after the giving of the Notice of Intent to Discharge, all payments made to the Executive during the period beginning with the giving of the Notice of Intent to Discharge and ending with the Executive’s discharge with Cause shall be retained by the Executive and shall not be applied to offset the Standard Termination Entitlements. If the Bank does not give a Final Discharge Notice to the Executive within ninety (90) days after giving a Notice of Intent to Discharge, the Notice of Intent to Discharge shall be deemed withdrawn and any future action to discharge the Executive with Cause shall require the giving of a new Notice of Intent to Discharge. If the Executive resigns pursuant to Section 10(b), the Executive shall forfeit his or her right to suspended amounts that have not been restored as of the date of the Executive’s resignation or notice of resignation, whichever is earlier.

(c)    The Bank may terminate the Executive’s employment on the basis that the Executive is Disabled during the Employment Period upon a determination by the Board, by the affirmative vote of 75% of its entire membership, acting in reliance on the written advice of a New York State licensed medical doctor acceptable to it, that the Executive is suffering from a physical or mental impairment which, at the date of the determination, has prevented the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year ending with the date of the determination or is likely to result in death or prevent the Executive from performing the Executive’s assigned duties on a substantially full-time basis for a period of at least one hundred and eighty (180) days during the period of one (1) year beginning with the date of the determination. In such event:

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(A)    The Bank shall pay and provide the Standard Termination Entitlements to the Executive;

(B)    In addition to the Standard Termination Entitlements, the Bank shall continue to pay to the Executive the Executive’s base salary, at the annual rate in effect for the Executive immediately prior to the termination of the Executive’s employment, during a period ending on the earliest of:

(I)    the expiration of one hundred and eighty (180) days after the date of termination of the Executive’s employment;

(II)    the date on which long-term disability insurance benefits are first payable to the Executive under any long-term disability insurance plan covering the Executive; or

(III)    the date of the Executive’s death.

A termination of employment due to Disability under this Section shall be effected by a notice of termination given to the Executive by the Bank and shall take effect on the later of the effective date of termination specified in such notice or, if no such date is specified, the date on which the notice of termination is deemed given to the Executive.

Section 11.Termination Upon or Following a Change of Control.

(a)    A Change of Control of the Bank (“Change of Control”) shall be deemed to have occurred upon the happening of any of the following events:

(i)    the consummation of a transaction that results in the reorganization, merger or consolidation of the Bank with one or more other persons, other than a transaction following which:

(A)    at least 51% of the equity ownership interests of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51% of the outstanding equity ownership interests in the Bank; and

(B)    at least 51% of the securities entitled to vote generally in the election of directors of the entity resulting from such transaction are beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) in substantially the same relative proportions by persons who, immediately prior to such transaction, beneficially owned (within the meaning of Rule 13d-3 promulgated under the Exchange Act) at least 51 % of the securities entitled to vote generally in the election of directors of the Bank;

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(ii)    the acquisition of all or substantially all of the assets of the Bank or beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the outstanding securities of the Bank entitled to vote generally in the election of directors by any person or by any persons acting in concert;

(iii)    a complete liquidation or dissolution of the Bank, or approval by the stockholders of the Bank of a plan for such liquidation or dissolution;

(iv)    the occurrence of any event if, immediately following such event, at least 50% of the members of the Board do not belong to any of the following groups:

(A)    individuals who were members of the Board on the Initial Effective Date; or

(B)    individuals who first became members of the Board after the Initial Effective Date either:

(I)    upon election to serve as a member of the Board by affirmative vote of three-quarters of the members of such Board, or of a nominating committee thereof, in office at the time of such first election; or

(II)    upon election by the stockholders of the Bank to serve as a member of the Board, but only if nominated for election by affirmative vote of three-quarters of the members of the Board, or of a nominating committee thereof, in office at the time of such first nomination;

provided, however, that such individual’s election or nomination did not result from an actual or threatened election contest (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents (within the meaning of Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) other than by or on behalf of the Board; or

(v)    any event which would be described in Section 11(a)(i), (ii), (iii) or (iv) if the term “Company” were substituted for the term “Bank” therein or the term “Board of Directors of the Company” were substituted for the term “Board”.

In no event, however, shall a Change of Control be deemed to have occurred as a result of any acquisition of securities or assets of the Bank, the Company, or an affiliate or subsidiary of either of them, by the Bank, the Company, or a subsidiary of either of them, or by any employee benefit plan maintained by any of them. For purposes of this Section 11 (a), the term “person” shall have the meaning assigned to it under Sections 13(d)(3) or 14(d)(2) of the Exchange Act.

Page 14 of 24

(b)    In the event of a Change of Control, the Executive shall be entitled to the payments and benefits contemplated by Section 9(b) in the event of his or her termination of employment with the Bank under any of the circumstances described in Section 9(a) of this Agreement or under any of the following circumstances:

(i)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following his or her demotion, loss of title, office or significant authority or responsibility or following any reduction in any element of his or her package of compensation and benefits;

(ii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following any relocation of his or her principal place of employment or any change in working conditions at such principal place of employment which the Executive, in his or her reasonable discretion, determines to be embarrassing, derogatory or otherwise adverse;

(iii)    resignation, voluntary or otherwise, by the Executive at any time during the Employment Period within six (6) months following the failure of any successor to the Bank in the Change of Control to include the Executive in any compensation or benefit program maintained by it or covering any of its executive officers, unless the Executive is already covered by a substantially similar plan of the Bank which is at least as favorable to him or her; or

(iv)    resignation, voluntary or otherwise, for any reason whatsoever during the Employment Period within six months following the effective date of the Change of Control.

Section 12.Covenant Not To Compete.

The Executive hereby covenants and agrees that, in the event of his or her termination of employment with the Bank prior to the expiration of the Employment Period, for a period of one (1) year following the date of his or her termination of employment with the Bank (or, if less, for the Remaining Unexpired Employment Period), the Executive shall not, without the written consent of the Bank, become an officer, employee, consultant, director or trustee of any savings bank, savings and loan association, savings and loan holding company, bank or bank holding company, or any direct or indirect subsidiary or affiliate of any such entity, that entails working in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office, determined as of the effective date of the Executive’s termination of employment; provided, however, that this Section 12 shall not apply if the Executive’s employment is terminated for the reasons set forth in Section 9(a); and for avoidance of doubt including 11(b); and provided, further, that if the Executive’s employment shall be terminated on account of Disability as provided in Section 10(c) of this Agreement, this Section 12 shall not prevent the Executive from accepting any position or performing any services if:

Page 15 of 24

(a)    he or she first offers, by written notice, to accept a similar position with or perform similar services for the Bank on substantially the same terms and conditions and

(b)    the Bank declines to accept such offer within ten (10) days after such notice is given.

Section 13.Confidentiality.

Unless the Executive obtains the prior written consent of the Bank, the Executive shall keep confidential and shall refrain from using for the benefit of the Executive or any person or entity other than the Bank, any entity which is a subsidiary of the Bank or any entity which the Bank is a subsidiary of, any material document or information obtained from the Bank, or from its affiliates or subsidiaries, in the course of the Executive’s employment with any of them concerning their properties, operations or business (unless such document or information is readily ascertainable from public or published information or trade sources or has otherwise been made available to the public through no fault of his or her own) until the same ceases to be material (or becomes so ascertainable or available); provided, however that nothing in this Section 13 shall prevent the Executive, with or without the Bank’s consent, from participating in or disclosing documents or information in connection with any judicial or administrative investigation, inquiry or proceeding to the extent that such participation or disclosure is required under applicable law.

Section 14.Solicitation.

The Executive hereby covenants and agrees that, for a period of one (1) year following the Executive’s termination of employment with the Bank, he or she shall not, without the written consent of the Bank, either directly or indirectly:

(a)    solicit, offer employment to or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office;

(b)    provide any information, advice or recommendation with respect to any such officer or employee to any savings bank, savings and loan association, bank, bank holding company, savings and loan holding company, or other institution engaged in the business of accepting deposits and making loans, doing business in any city, town or county in which the Bank or the Company has an office or has filed an application for regulatory approval to establish an office that is intended, or that a reasonable person acting in like

Page 16 of 24

circumstances would expect, to have the effect of causing any officer or employee of the Bank, the Company, or any affiliate or subsidiary of either of them, to terminate his or her employment and accept employment, become affiliated with or provide services for compensation in any capacity whatsoever to any such savings bank, savings and loan association, bank, bank holding company, savings and loan holding company or other institution engaged in the business of accepting deposits and making loans; or

(c)    solicit, provide any information, advice or recommendation or take any other action intended, or that a reasonable person acting in like circumstances would expect, to have the effect of causing any customer of the Bank, the Company, or any affiliate or subsidiary of either of them to terminate an existing business or commercial relationship with the Bank, the Company, or any affiliate or subsidiary of either of them.

Section 15.No Effect on Employee Benefit Plans or Programs.

The termination of the Executive’s employment during the term of this Agreement or thereafter, whether by the Bank or by the Executive, shall have no effect on the rights and obligations of the parties hereto under the Bank’s qualified or non-qualified retirement, pension, savings, thrift, profit-sharing or stock bonus plans, group life, health (including hospitalization, medical and major medical), dental, accident and long term disability insurance plans or such other employee benefit plans or programs, or compensation plans or programs, as may be maintained by, or cover employees of, the Bank from time to time.

Section 16.Successors and Assigns.

This Agreement will inure to the benefit of and be binding upon the Executive, his or her legal representatives and testate or intestate distributees, and the Bank and its successors and assigns, including any successor by merger or consolidation or a statutory receiver or any other person or firm or corporation to which all or substantially all of the assets and business of the Bank may be sold or otherwise transferred. Failure of the Bank to obtain from any successor its express written assumption of the Bank’s obligations under this Agreement at least sixty (60) days in advance of the scheduled effective date of any such succession shall be deemed a material breach of this Agreement.

Section 17.Notices.

Any communication required or permitted to be given under this Agreement, including any notice, direction, designation, consent, instruction, objection or waiver, shall be in writing and shall be deemed to have been given at such time as it is delivered personally, or five (5) days after mailing if mailed, postage prepaid, by registered or certified mail, return receipt requested, addressed to such party at the address listed below or at such other address as one such party may by written notice specify to the other party:

Page 17 of 24

If to the Executive:

Frank E. Fusco6 Philson CourtCommack, New York 11725

If to the Bank:

Astoria Bank
One Astoria Bank Plaza
Lake Success, New York 11042-1085

Attention: General Counsel

with a copy to:

Arnold & Porter LLP
399 Park Avenue
New York, New York 10022

Attention:    Robert C. Azarow, Esq.

Section 18.Indemnification for Attorneys’ Fees.

The Bank shall advance, indemnify, hold harmless and defend the Executive against reasonable costs, including legal fees, incurred by him or her in connection with or arising out of any action, suit or proceeding in which he or she may be involved, as a result of his or her efforts, in good faith, to defend or enforce the terms of this Agreement; provided, however, that in the case of any action, suit or proceeding instituted prior to a Change of Control, the Executive shall have substantially prevailed on the merits pursuant to a judgment, decree or order of a court of competent jurisdiction or of an arbitrator in an arbitration proceeding, or in a settlement. For purposes of this Agreement, any settlement agreement which provides for payment of any amounts in settlement of the Bank’s obligations hereunder shall be conclusive evidence of the Executive’s entitlement to indemnification hereunder, and any such indemnification payments shall be in addition to amounts payable pursuant to such settlement agreement, unless such settlement agreement expressly provides otherwise. Any payment or reimbursement to effect such indemnification shall be made no later than the last day of the calendar year following the calendar year in which the Executive incurs the expense or, if later, within sixty (60) days after the settlement or resolution that gives rise to the Executive’s right to reimbursement; provided, however, that the Executive shall have submitted to the Company documentation supporting such expenses at such time and in such manner as the Company may reasonably require.

Section 19.Severability.

A determination that any provision of this Agreement is invalid or unenforceable shall not affect the validity or enforceability of any other provision hereof.

Page 18 of 24

Section 20.Waiver.

Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition. A waiver of any provision of this Agreement must be made in writing, designated as a waiver, and signed by the party against whom its enforcement is sought. Any waiver or relinquishment of any right or power hereunder at any one or more times shall not be deemed a waiver or relinquishment of such right or power at any other time or times.

Section 21.Counterparts.

This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

Section 22.Governing Law.

This Agreement shall be governed by and construed and enforced in accordance with the federal laws of the United States and, to the extent that federal law is inapplicable, in accordance with the laws of the State of New York applicable to contracts entered into and to be performed entirely within the State of New York.

Section 23.Headings and Construction.

The headings of sections in this Agreement are for convenience of reference only and are not intended to qualify the meaning of any section. Any reference to a section number shall refer to a section of this Agreement, unless otherwise stated.

Section 24.Entire Agreement: Modifications.

This instrument contains the entire agreement of the parties relating to the subject matter hereof, and supersedes in its entirety any and all prior agreements, understandings or representations relating to the subject matter hereof. No modifications of this Agreement shall be valid unless made in writing and signed by the parties hereto; provided, however, that this Agreement shall be subject to amendment in the future in such manner as the Bank shall reasonably deem necessary or appropriate to effect compliance with Section 409A of the Code and the regulations thereunder, and to avoid the imposition of penalties and additional taxes under Section 409A of the Code, it being the express intent of the parties that any such amendment shall not diminish the economic benefit of the Agreement to the Executive on a present value basis.

Section 25.Survival.

The provisions of any sections of this Agreement which by its terms contemplates performance after the expiration or termination of this Agreement (including, but not limited to, Sections 6, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 26, 27, 28, 30 and 31) shall survive the expiration of the Employment Period or termination of this Agreement.

Page 19 of 24

Section 26.Equitable Remedies.

The Bank and the Executive hereby stipulate that money damages are an inadequate remedy for violations of Sections 6(a), 12, 13 or 14 of this Agreement and agree that equitable remedies, including, without limitations, the remedies of specific performance and injunctive relief, shall be available with respect to the enforcement of such provisions.

Section 27.Required Regulatory Provisions.

The following provisions are included for the purposes of complying with various laws, rules and regulations applicable to the Bank:

(a)    Notwithstanding anything herein contained to the contrary, in no event shall the aggregate amount of compensation payable to the Executive pursuant to Section 9(b) of this Agreement (exclusive of amounts described in Section 9(b)(i), (ii), (viii) or (ix)) exceed three times the Executive’s average annual total compensation for the last five consecutive calendar years to end prior to the Executive’s termination of employment with the Bank (or for the Executive’s entire period of employment with the Bank if less than five calendar years).

(b)    Notwithstanding anything herein contained to the contrary, any payments to the Executive by the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act (“FDI Act”), 12 U.S.C. §1828(k), and any regulations promulgated thereunder.

(c)    Notwithstanding anything herein contained to the contrary, if the Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the affairs of the Bank pursuant to a notice served under Section 8(e)(3) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(3) or 1818(g)(1), the Bank’s obligations under this Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in such notice are dismissed, the Bank, in its discretion, may (i) pay to the Executive all or part of the compensation withheld while the Bank’s obligations hereunder were suspended and (ii) reinstate, in whole or in part, any of the obligations which were suspended.

(d)    Notwithstanding anything herein contained to the contrary, if the Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDI Act, 12 U.S.C. §1818(e)(4) or (g)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights and obligations of the Bank and the Executive shall not be affected.

(e)    Notwithstanding anything herein contained to the contrary, if the Bank is in default (within the meaning of Section 3(x)(1) of the FDI Act, 12 U.S.C. §1813(x)(1), all prospective obligations of the Bank under this Agreement shall terminate as of the date of default, but vested rights and obligations of the Bank and the Executive shall not be affected.

(f)    Notwithstanding anything herein contained to the contrary, all prospective obligations of the Bank hereunder shall be terminated, except to the extent that a

Page 20 of 24

continuation of this Agreement is necessary for the continued operation of the Bank: (i) by the Comptroller of the Currency or his or her designee or the Federal Deposit Insurance Corporation (“FDIC”), at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDI Act, 12 U.S.C. §1823(c); or (ii) by the Comptroller of the Currency or his or her designee at the time such Comptroller or designee approves a supervisory merger to resolve problems related to the operation of the Bank or when the Bank is determined by such Comptroller to be in an unsafe or unsound condition. The vested rights and obligations of the parties shall not be affected.

If and to the extent that any of the foregoing provisions shall cease to be required or by applicable law, rule or regulation, the same shall become inoperative as though eliminated by formal amendment of this Agreement.

Section 28.No Offset or Recoupment; No Attachment.

The Bank’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Bank or any of its affiliates or subsidiaries may have against the Executive. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to affect any such action shall be null, void, and of no effect.

Section 29.Compliance with Section 409A of the Code.

The Executive and the Bank acknowledge that each of the payments and benefits promised to the Executive under this Agreement must either comply with the requirements of Section 409A of the Code (“Section 409A”) and the regulations thereunder or qualify for an exception from compliance. To that end, the Executive and the Company agree that

(a)    the insurance benefits provided in Section 6(a) and the indemnification provided in section 6(b) are intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(10) as insurance and indemnification against claims based on acts or omissions as a service provider;

(b)    the expense reimbursements described in Section 8 and legal fee reimbursements described in Section 18 are intended to satisfy the requirements for a “reimbursement plan” described in Treasury Regulation section 1.409A-3(i)(1)(iv)(A) and shall be administered to satisfy such requirements;

(c)    the payment described in Section 9(b)(i) is intended to be excepted from compliance with Section 409A pursuant to Treasury Regulation section 1.409A-1(b)(3) as payment made pursuant to the Company’s customary payment timing arrangement;

Page 21 of 24

(d)    the benefits and payments described in Section 9(b)(ii) are expected to comply with or be excepted from compliance with Section 409A on their own terms;

(e)    the welfare benefits provided in kind under Section 9(b)(iii) are intended to be excepted from compliance with Section 409A as welfare benefits pursuant to Treasury Regulation Section 1.409A-1(a)(5) and/or as benefits not includible in gross income; and

(f)    the benefits and payments on a disability described in Section 10(c) are expected to be excepted from compliance with Section 409A as “disability pay” pursuant to Treasury Regulation section 1.409A-1(a)(5).

In the case of a payment that is not excepted from compliance with Section 409A, and that is not otherwise designated to be paid immediately upon a permissible payment event within the meaning of Treasury Regulation Section 1.409A-3(a), the payment shall not be made prior to, and shall, if necessary, be deferred (with interest at the annual rate of 6%, compounded monthly from the date of the Executive’s termination of employment to the date of actual payment) to and paid on the later of the date sixty (60) days after the Executive’s earliest separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)) and, if the Executive is a specified employee (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of his or her separation from service, the first day of the seventh month following the Executive’s separation from service. Each amount payable under this plan that is required to be deferred beyond the Executive’s separation from service, shall be deposited on the date on which, but for such deferral, the Bank would have paid such amount to the Executive, in a grantor trust which meets the requirements of Revenue Procedure 92-65 (as amended or superseded from time to time), the trustee of which shall be a financial institution selected by the Bank with the approval of the Executive (which approval shall not be unreasonably withheld or delayed), pursuant to a trust agreement the terms of which are approved by the Executive (which approval shall not be unreasonably withheld or delayed) (the “Rabbi Trust”), and payments made shall include earnings on the investments made with the assets of the Rabbi Trust, which investments shall consist of short-term investment grade fixed income securities or units of interest in mutual funds or other pooled investment vehicles designed to invest primarily in such securities. Furthermore, this Agreement shall be construed and administered in such manner as shall be necessary to effect compliance with Section 409A.

Page 22 of 24

IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed and the Executive has hereunto set his or her hand, all as of the day and year first above written.

ATTEST:		ASTORIA BANK
Name:	/s/ David J. DeBaun	By:	/s/ Monte N. Redman
	David J. DeBaun	Name:	Monte N. Redman
		Title:	President and Chief Executive Officer
[Seal]
			/s/ Frank E. Fusco
			Frank E. Fusco

Page 23 of 24

STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16th day of October, 2014, before me, the undersigned, personally appeared Monte N. Redman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                

Notary Public

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

STATE OF NEW YORK ) ss.:

COUNTY OF NASSAU )

On this 16^th day of October, 2014, before me, the undersigned, personally appeared Frank E. Fusco, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

/s/ Anna Knice                

Notary Public

Anna Knice

Notary Public, State of New York

No. 4980431

Qualified in Suffolk County

Commission Expires: April 22, 2015

Page 24 of 24

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Monte N. Redman, certify that:
1.	I have reviewed this Quarterly Report on Form 10-Q of Astoria Financial Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 6, 2014
/s/   Monte N. Redman
Monte N. Redman
President and Chief Executive Officer
Astoria Financial Corporation

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Frank E. Fusco, certify that:
1.	I have reviewed this Quarterly Report on Form 10-Q of Astoria Financial Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 6, 2014
/s/   Frank E. Fusco
Frank E. Fusco
Senior Executive Vice President and Chief Financial Officer
Astoria Financial Corporation

EX-32.1

Exhibit 32.1

STATEMENT FURNISHED PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

This statement is being furnished in connection with the filing by Astoria Financial Corporation (the “Company”) of the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2014 (the “Report”).

By execution of this statement, the undersigned, Monte N. Redman, as President and Chief Executive Officer of the Company, and Frank E. Fusco, as Senior Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(A) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)) and

(B) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.

November 6, 2014	/s/	Monte N. Redman
Dated		Monte N. Redman
		President and Chief Executive Officer
November 6, 2014	/s/	Frank E. Fusco
Dated		Frank E. Fusco
		Senior Executive Vice President and
		Chief Financial Officer

XML

Loans Receivable and Allowance for Loan Losses (TDR Mortgage Loans Receivable) (Details) (Mortgage loans (gross), USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014 loan	Sep. 30, 2013 loan	Sep. 30, 2014 loan	Sep. 30, 2013 loan
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	16	29	51	75
Pre-modification recorded investment	$ 8,324	$ 16,238	$ 21,230	$ 34,862
Recorded investment	7,933	15,002	20,109	32,941
Residential Mortgage Loans | Full documentation interest-only
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	3	7	21	18
Pre-modification recorded investment	1,447	2,128	9,244	4,579
Recorded investment	1,447	2,127	8,776	4,577
Residential Mortgage Loans | Full documentation amortizing loans
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans		1	3	6
Pre-modification recorded investment		161	519	1,662
Recorded investment		161	485	1,682
Residential Mortgage Loans | Reduced documentation interest-only
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	9	10	17	28
Pre-modification recorded investment	3,585	3,107	5,885	8,957
Recorded investment	3,581	3,096	5,860	8,921
Residential Mortgage Loans | Reduced documentation amortizing
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	1	2	3	8
Pre-modification recorded investment	282	387	599	2,470
Recorded investment	281	386	541	2,408
Multi-family
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	2	5	4	8
Pre-modification recorded investment	1,441	3,967	2,501	6,751
Recorded investment	1,055	3,774	1,994	6,228
Commercial real estate
Information about mortgage loans receivable by segment and class modified in troubled debt restructuring
Number of Loans	1	4	3	7
Pre-modification recorded investment	1,569	6,488	2,482	10,443
Recorded investment	$ 1,569	$ 5,458	$ 2,453	$ 9,125

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Fair Value of Financial Instruments
Total available-for-sale securities	$ 366,026	$ 401,690
Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	366,026	401,690
Total residential mortgage-backed securities
Fair Value of Financial Instruments
Total available-for-sale securities	270,484	310,534
Total residential mortgage-backed securities | Recurring basis
Fair Value of Financial Instruments
Percentage of debt securities comprising available-for-sale portfolio	74.00%	77.00%
Available-for-sale residential mortgage-backed securities portfolio which are GSE securities (as a percent)	98.00%	98.00%
GSE issuance REMICs and CMOs
Fair Value of Financial Instruments
Total available-for-sale securities	250,746	286,074
GSE issuance REMICs and CMOs | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	250,746	286,074
Non-GSE issuance REMICs and CMOs
Fair Value of Financial Instruments
Total available-for-sale securities	5,727	7,572
Non-GSE issuance REMICs and CMOs | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	5,727	7,572
GSE pass-through certificates
Fair Value of Financial Instruments
Total available-for-sale securities	14,011	16,888
GSE pass-through certificates | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	14,011	16,888
Obligations of GSEs
Fair Value of Financial Instruments
Total available-for-sale securities	95,539	91,153
Obligations of GSEs | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	95,539	91,153
Percentage of debt securities comprising available-for-sale portfolio	26.00%	23.00%
Fannie Mae stock
Fair Value of Financial Instruments
Total available-for-sale securities	3	3
Fannie Mae stock | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	3	3
Level 1 | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	3	3
Level 1 | Fannie Mae stock | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	3	3
Level 2 | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	366,023	401,687
Level 2 | GSE issuance REMICs and CMOs | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	250,746	286,074
Level 2 | Non-GSE issuance REMICs and CMOs | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	5,727	7,572
Level 2 | GSE pass-through certificates | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	14,011	16,888
Level 2 | Obligations of GSEs | Recurring basis
Fair Value of Financial Instruments
Total available-for-sale securities	$ 95,539	$ 91,153

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Stock Incentive Plans (Details) (USD $)	3 Months Ended		9 Months Ended				9 Months Ended		9 Months Ended								0 Months Ended				6 Months Ended	9 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Restricted common stock	Dec. 31, 2013 Restricted common stock	Sep. 30, 2014 Performance-based restricted stock units	Dec. 31, 2013 Performance-based restricted stock units	Sep. 30, 2014 Performance-based restricted stock units Vest on February 1, 2017, performance level one	Sep. 30, 2014 Performance-based restricted stock units Vest on February 1, 2017, performance level two	Sep. 30, 2014 Performance-based restricted stock units Vest on February 1, 2017, performance level three	Sep. 30, 2014 Performance-based restricted stock units Vest on February 1, 2017, performance level four	Sep. 30, 2014 Performance-based restricted stock units Vest on February 1, 2017, performance level five	Sep. 30, 2014 Restricted common stock and restricted stock units	Sep. 30, 2014 Performance-based restricted common stock and performance-based restricted stock units	Sep. 30, 2014 Performance-based restricted common stock	May 21, 2014 Employee Stock Plan, 2014 Plan	Sep. 30, 2014 Employee Stock Plan, 2014 Plan	Sep. 30, 2014 Employee Stock Plan, 2005 Plan	May 21, 2014 Employee Stock Plan, 2005 Plan	Jun. 30, 2014 Employee Stock Plan, 2005 Plan Restricted common stock	Sep. 30, 2014 Employee Stock Plan, 2005 Plan Restricted common stock	Sep. 30, 2014 Employee Stock Plan, 2005 Plan Restricted common stock Shares vesting in December 2014	Sep. 30, 2014 Employee Stock Plan, 2005 Plan Restricted common stock Shares vesting in December 2015	Sep. 30, 2014 Employee Stock Plan, 2005 Plan Restricted common stock Shares vesting in December 2016	Jun. 30, 2014 Employee Stock Plan, 2005 Plan Performance-based restricted stock units	Sep. 30, 2014 Employee Stock Plan, 2005 Plan Performance-based restricted stock units	Sep. 30, 2014 Directors Stock Plan, 2007 Plan Restricted common stock	Sep. 30, 2014 Directors Stock Plan, 2007 Plan Restricted common stock Vesting in February 2017
Stock Incentive Plans
Additional shares authorized for future grants																	3,250,000
Shares available for future grants																		3,757,925	0	507,925
Forfeited (in shares)					23,590		20,600															9,420
Share of common stock to be paid for each restricted stock unit																											1
Shares to be issued on vest date as percentage of units granted based on actual performance									125.00%	100.00%	75.00%	50.00%	0.00%
Shares to be issued as a percentage of units granted in the event of change in control									100.00%
Vesting percentage																													100.00%
Outstanding (in shares)					1,132,232	781,644	784,400	409,100																			386,300	28,148
Restricted common stock granted (in shares)					429,346		395,900														396,840		128,340	128,940	130,140	395,900		32,506
Vested (in shares)					55,168
Granted (in dollars per share)					$ 12.63		$ 12.14
Stock-based compensation expense, net of taxes	$ 1,400,000	$ 1,200,000	$ 4,200,000	$ 3,400,000
Stock-based compensation expense, taxes	789,000	636,000	2,300,000	1,900,000
Pre-tax compensation cost related to share-based compensation awards not yet recognized														12,400,000
Pre-tax compensation cost, weighted average recognition period														1 year 10 months 25 days
Pre-tax compensation cost related to non-vested performance-based stock awards and units															$ 1,800,000
Restricted shares or units for which compensation cost will be excluded until the achievement of the performance conditions become probable							99,525									65,000

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Loans Receivable and Allowance for Loan Losses (Residential Interest-Only Mortgage Loans, Amortization Period) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Recorded Investment
Total	$ 11,866,764	$ 12,386,378
Residential Mortgage Loans | Interest-only loans
Recorded Investment
Twelve months or less	494,856
Thirteen to twenty-four months	544,435
Twenty-five to thirty-six months	443,464
Over thirty-six months	159,342
Total	$ 1,642,097

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of carrying values of assets measured at estimated fair value on recurring basis and level within the fair value hierarchy

The following tables set forth the carrying values of our assets measured at estimated fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	Carrying Value at September 30, 2014
(In Thousands)	Total		Level 1		Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	250,746	$	—	$	250,746
Non-GSE issuance REMICs and CMOs	5,727		—		5,727
GSE pass-through certificates	14,011		—		14,011
Obligations of GSEs	95,539		—		95,539
Fannie Mae stock	3		3		—
Total securities available-for-sale	$	366,026	$	3	$	366,023
	Carrying Value at December 31, 2013
(In Thousands)	Total		Level 1		Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	286,074	$	—	$	286,074
Non-GSE issuance REMICs and CMOs	7,572		—		7,572
GSE pass-through certificates	16,888		—		16,888
Obligations of GSEs	91,153		—		91,153
Fannie Mae stock	3		3		—
Total securities available-for-sale	$	401,690	$	3	$	401,687

Schedule of carrying values of assets measured at fair value on non-recurring basis which fall within Level 3 of the fair value hierarchy

The following table sets forth the carrying values of those of our assets which were measured at fair value on a non-recurring basis at the dates indicated.  The fair value measurements for all of these assets fall within Level 3 of the fair value hierarchy.

		Carrying Value
(In Thousands)	At September 30, 2014			At December 31, 2013
Non-performing loans held-for-sale, net		$	154		$	791
Impaired loans		144,258			271,408
MSR, net		11,905			12,800
REO, net		19,971			27,101
Total		$	176,288		$	312,100

Schedule of losses recognized on assets measured at fair value on non-recurring basis

The following table provides information regarding the losses recognized on our assets measured at fair value on a non-recurring basis for the periods indicated.

	For the Nine Months Ended September 30,
(In Thousands)		2014		2013
Non-performing loans held-for-sale, net (1)		$	—	$	567
Impaired loans (2)		5,187		16,698
MSR, net (3)		—		—
REO, net (4)		1,811		2,630
Total		$	6,998	$	19,895

(1) Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

(2) Losses are charged against the allowance for loan losses.

(3) Losses are charged to mortgage banking income, net.

(4) Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

Schedule of carrying values and estimated fair values of financial instruments

The following tables set forth the carrying values and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value in accordance with GAAP, and are not measured or recorded at fair value on a recurring basis, and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	At September 30, 2014
	Carrying		Estimated Fair Value
(In Thousands)	Value		Total		Level 2		Level 3
Financial Assets:
Securities held-to-maturity	$	2,053,337	$	2,035,378	$	2,035,378	$	—
FHLB-NY stock	133,398		133,398		133,398		—
Loans held-for-sale, net (1)	7,629		7,849		—		7,849
Loans receivable, net (1)	11,802,335		11,906,833		—		11,906,833
MSR, net (1)	11,905		11,909		—		11,909
Financial Liabilities:
Deposits	9,612,761		9,648,916		9,648,916		—
Borrowings, net	3,911,559		4,115,223		4,115,223		—

	At December 31, 2013
	Carrying		Estimated Fair Value
(In Thousands)	Value		Total		Level 2		Level 3
Financial Assets:
Securities held-to-maturity	$	1,849,526	$	1,811,122	$	1,811,122	$	—
FHLB-NY stock	152,207		152,207		152,207		—
Loans held-for-sale, net (1)	7,375		7,436		—		7,436
Loans receivable, net (1)	12,303,066		12,480,533		—		12,480,533
MSR, net (1)	12,800		12,804		—		12,804
Financial Liabilities:
Deposits	9,855,310		9,922,631		9,922,631		—
Borrowings, net	4,137,161		4,376,336		4,376,336		—

(1) Includes assets measured at fair value on a non-recurring basis.

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Fair Value Measurements (Details 3) (Measured on a non-recurring basis, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	$ 6,998	$ 19,895
Non-performing loans held-for-sale, net
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis		567
Impaired loans
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	5,187	16,698
REO, net
Fair Value of Financial Instruments
Losses recognized on assets measured at fair value on a non-recurring basis	$ 1,811	$ 2,630

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Other Comprehensive Income/Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	$ (30,201)	$ (79,787)	$ (38,250)	$ (73,090)
Other comprehensive income, net of tax	(333)	(667)	7,716	(7,364)
Balance at the end of the period	(30,534)	(80,454)	(30,534)	(80,454)
Net unrealized (loss) gain on securities available-for-sale
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	3,326	(484)	(4,366)	7,451
Other comprehensive income, net of tax	(511)	(1,286)	7,181	(9,221)
Balance at the end of the period	2,815	(1,770)	2,815	(1,770)
Net actuarial loss on pension plans and other postretirement benefits
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	(30,304)	(75,946)	(30,600)	(77,115)
Other comprehensive income, net of tax	147	585	443	1,754
Balance at the end of the period	(30,157)	(75,361)	(30,157)	(75,361)
Prior service cost on pension plans and other postretirement benefits
Changes in accumulated other comprehensive loss components
Balance at the beginning of the period	(3,223)	(3,357)	(3,284)	(3,426)
Other comprehensive income, net of tax	31	34	92	103
Balance at the end of the period	$ (3,192)	$ (3,323)	$ (3,192)	$ (3,323)

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Loans Receivable and Allowance for Loan Losses (Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Financing receivable, impaired
Unpaid Principal Balance	$ 293,051	$ 483,132
Recorded Investment	250,749	384,522
Related Allowance	(19,885)	(21,531)
Net Investment	230,864	362,991
Consumer and other loans | Home equity lines of credit
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	6,051
Recorded Investment, Loans with an allowance recorded	5,768
Related Allowance	(4,340)
Net Investment, Loans with an allowance recorded	1,428
Mortgage loans | Residential | Full documentation interest-only
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	62,496	142,659
Recorded Investment, Loans with an allowance recorded	53,319	109,877
Related Allowance	(3,052)	(6,019)
Net Investment, Loans with an allowance recorded	50,267	103,858
Mortgage loans | Residential | Full documentation amortizing loans
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	35,521	41,136
Recorded Investment, Loans with an allowance recorded	33,189	36,091
Related Allowance	(1,043)	(2,458)
Net Investment, Loans with an allowance recorded	32,146	33,633
Mortgage loans | Residential | Reduced documentation interest-only
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	91,461	183,280
Recorded Investment, Loans with an allowance recorded	77,977	140,357
Related Allowance	(4,836)	(7,673)
Net Investment, Loans with an allowance recorded	73,141	132,684
Mortgage loans | Residential | Reduced documentation amortizing
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	18,298	30,660
Recorded Investment, Loans with an allowance recorded	17,001	25,605
Related Allowance	(858)	(2,202)
Net Investment, Loans with an allowance recorded	16,143	23,403
Mortgage loans | Multi-family
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	36,424	19,748
Unpaid Principal Balance, Loans without an allowance recorded	16,670	39,871
Recorded Investment, Loans with an allowance recorded	29,043	19,748
Recorded Investment, Loans without an allowance recorded	15,269	32,790
Related Allowance	(3,448)	(2,877)
Net Investment, Loans with an allowance recorded	25,595	16,871
Net Investment, Loans without an allowance recorded	15,269	32,790
Mortgage loans | Commercial real estate
Financing receivable, impaired
Unpaid Principal Balance, Loans with an allowance recorded	26,130	5,790
Unpaid Principal Balance, Loans without an allowance recorded		19,988
Recorded Investment, Loans with an allowance recorded	19,183	5,790
Recorded Investment, Loans without an allowance recorded		14,264
Related Allowance	(2,308)	(302)
Net Investment, Loans with an allowance recorded	16,875	5,488
Net Investment, Loans without an allowance recorded		$ 14,264

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Fair Value Measurements (Details 5) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Mortgage loans held-for-sale Minimum	Sep. 30, 2014 Mortgage loans held-for-sale Maximum	Sep. 30, 2014 Total fair value	Dec. 31, 2013 Total fair value	Sep. 30, 2014 Level 2 fair value	Dec. 31, 2013 Level 2 fair value	Sep. 30, 2014 Level 3 fair value	Dec. 31, 2013 Level 3 fair value	Sep. 30, 2014 Carrying value	Dec. 31, 2013 Carrying value
Financial Assets:
Securities held-to-maturity	$ 2,053,337	$ 1,849,526			$ 2,035,378	$ 1,811,122	$ 2,035,378	$ 1,811,122			$ 2,053,337	$ 1,849,526
FHLB-NY stock	133,398	152,207			133,398	152,207	133,398	152,207			133,398	152,207
Loans held-for-sale, net					7,849	7,436			7,849	7,436	7,629	7,375
Loans receivable, net					11,906,833	12,480,533			11,906,833	12,480,533	11,802,335	12,303,066
MSR, net	11,905	12,800			11,909	12,804			11,909	12,804	11,905	12,800
Mortgage loan, original term			15 years	30 years
Financial Liabilities:
Deposits					9,648,916	9,922,631	9,648,916	9,922,631			9,612,761	9,855,310
Borrowings, net					$ 4,115,223	$ 4,376,336	$ 4,115,223	$ 4,376,336			$ 3,911,559	$ 4,137,161

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Stock Incentive Plans (Details 2) (USD $)	9 Months Ended
	Sep. 30, 2014
Restricted Common Stock
Number of Units
Unvested at the beginning of the period (in shares)	781,644
Granted (in shares)	429,346
Vested (in shares)	(55,168)
Forfeited (in shares)	(23,590)
Unvested at the end of the period (in shares)	1,132,232
Weighted Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share)	$ 11.46
Granted (in dollars per share)	$ 12.63
Vested (in dollars per share)	$ (11.04)
Forfeited (in dollars per share)	$ (11.93)
Unvested at the end of the period (in dollars per share)	$ 11.91
Restricted Stock Units
Number of Units
Unvested at the beginning of the period (in shares)	409,100
Granted (in shares)	395,900
Forfeited (in shares)	(20,600)
Unvested at the end of the period (in shares)	784,400
Weighted Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share)	$ 9.22
Granted (in dollars per share)	$ 12.14
Forfeited (in dollars per share)	$ (10.58)
Unvested at the end of the period (in dollars per share)	$ 10.66

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Basis of Presentation

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

 Basis of Presentation

The accompanying consolidated financial statements include the accounts of Astoria Financial Corporation and its wholly-owned subsidiaries: Astoria Bank (formerly known as Astoria Federal Savings and Loan Association) and its subsidiaries, referred to as Astoria Bank, and AF Insurance Agency, Inc.  As used in this quarterly report, “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 September 30, 2014 and December 31, 2013, our results of operations and other comprehensive income/loss for the three and nine months ended September 30, 2014 and 2013, changes in our stockholders’ equity for the nine months ended September 30, 2014 and our cash flows for the nine months ended September 30, 2014 and 2013.  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 September 30, 2014 and December 31, 2013, and amounts of revenues, expenses and other comprehensive income/loss in the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2014 and 2013.  The results of operations and other comprehensive income/loss for the three and nine months ended September 30, 2014 are not necessarily indicative of the results of operations and other comprehensive income/loss 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.  Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

These consolidated financial statements should be read in conjunction with our December 31, 2013 audited consolidated financial statements and related notes included in our 2013 Annual Report on Form 10-K.

Change in New York State Tax Legislation

New York State, or NYS, tax legislation was signed into law on March 31, 2014.  While the law generally becomes effective in 2015, the nature of the changes resulted in the recording of certain deferred tax assets in the first quarter of 2014.  In recent years, we have been subject to taxation in NYS under an alternative taxation method.  The new legislation, among other things, removes that alternative method.  Further, the new law (1) requires that we will be taxed in a manner that we believe may result in an increase in our tax expense beginning in 2015 and (2) caused us to recognize temporary differences and net operating loss carry-forward benefits in 2014 which we were unable to recognize previously.  The result of this legislative change as of March 31, 2014 was an increase in our net deferred tax asset with a corresponding reduction in income tax expense of $11.5 million in the 2014 first quarter.

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Other Comprehensive Income/Loss (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Net unrealized gain on securities available-for-sale before tax amount:
Net unrealized holding gain on securities available-for-sale arising during the period	$ (649)		$ 11,242	$ (12,180)
Reclassification adjustment for gain on sales of securities included in net income	(141)		(141)	(2,057)
Net unrealized loss on securities available-for-sale	(790)	(1,984)	11,101	(14,237)
Net actuarial loss adjustment on pension plans and other postretirement benefits before tax amount:
Reclassification adjustment for net actuarial loss included in net income	228	903	685	2,708
Prior service cost adjustment on pension plans and other postretirement benefits before tax amount:
Reclassification adjustment for prior service cost included in net income	47	53	142	159
Total other comprehensive income, before tax amount	(515)	(1,028)	11,928	(11,370)
Net unrealized gain on securities available-for-sale, tax expense:
Net unrealized holding gain on securities available-for-sale arising during the period	229		(3,970)	4,291
Reclassification adjustment for gains included in net income	50		50	725
Net unrealized loss on securities available-for-sale	279	698	(3,920)	5,016
Net actuarial loss adjustment on pension plans and other postretirement benefits, tax expense:
Reclassification adjustment for net actuarial loss included in net income	(81)	(318)	(242)	(954)
Prior service cost adjustment on pension plans and other postretirement benefits, tax expense:
Reclassification adjustment for prior service cost included in net income	(16)	(19)	(50)	(56)
Total other comprehensive income, tax expense	182	361	(4,212)	4,006
Net unrealized gain on securities available-for-sale:
Net unrealized holding gain on securities available-for-sale arising during the period	(420)	(1,286)	7,272	(7,889)
Reclassification adjustment for gains included in net income	(91)		(91)	(1,332)
Net unrealized (loss) gain on securities available-for-sale	(511)	(1,286)	7,181	(9,221)
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income	147	585	443	1,754
Prior service cost adjustment on pension plans and other postretirement benefits:
Reclassification adjustment for prior service cost included in net income	31	34	92	103
Total other comprehensive (loss) income, net of tax	$ (333)	$ (667)	$ 7,716	$ (7,364)

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Securities (Details 3) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2014 security	Sep. 30, 2014 security	Sep. 30, 2013	Dec. 31, 2013 security
Securities
Number of securities held with unrealized loss	101	101		109
Proceeds from sales of securities from the available-for-sale portfolio		$ 14,447,000	$ 41,640,000
Gross realized gains from sale of available for sale securities	141,000	141,000	2,057,000
Total available-for-sale securities	366,026,000	366,026,000		401,690,000
Held-to-maturity, amortized cost	2,053,337,000	2,053,337,000		1,849,526,000
Held-to-maturity, fair value	2,035,378,000	2,035,378,000		1,811,122,000
Callable securities, amortized cost	189,600,000	189,600,000
Accrued interest receivable for securities	6,300,000	6,300,000		6,300,000
Available-for-sale debt securities, excluding mortgage-backed securities
Securities
Available-for-sale debt securities, amortized cost	98,700,000	98,700,000
Total available-for-sale securities	95,500,000	95,500,000
Held-to-maturity debt securities, excluding mortgage-backed securities
Securities
Held-to-maturity, amortized cost	91,500,000	91,500,000
Held-to-maturity, fair value	$ 89,000,000	$ 89,000,000

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Securities (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Securities
Available-for-sale, less than twelve months, estimated fair value	$ 23,010	$ 334,474
Available-for-sale, less than twelve months, gross unrealized losses	(140)	(14,657)
Available-for-sale, twelve months or longer, estimated fair value	193,495	205
Available-for-sale, twelve months or longer, gross unrealized losses	(5,781)	(14)
Available-for-sale, total, estimated fair value	216,505	334,679
Available-for-sale, total, gross unrealized losses	(5,921)	(14,671)
Held-to-maturity, less than twelve months, estimated fair value	373,430	1,031,627
Held-to-maturity securities, continuous unrealized loss position, less than 12 months, accumulated loss	(3,915)	(43,112)
Held-to-maturity, twelve months or longer, estimated fair value	730,770	151,609
Held-to-maturity securities, continuous unrealized loss position, 12 months or longer, accumulated loss	(28,354)	(8,315)
Held-to-maturity, total, estimated fair value	1,104,200	1,183,236
Held-to-maturity, total, gross unrealized losses	(32,269)	(51,427)
GSE issuance REMICs and CMOs
Securities
Available-for-sale, less than twelve months, estimated fair value	22,413	243,149
Available-for-sale, less than twelve months, gross unrealized losses	(136)	(7,134)
Available-for-sale, twelve months or longer, estimated fair value	97,773
Available-for-sale, twelve months or longer, gross unrealized losses	(2,627)
Available-for-sale, total, estimated fair value	120,186	243,149
Available-for-sale, total, gross unrealized losses	(2,763)	(7,134)
Held-to-maturity, less than twelve months, estimated fair value	300,843	719,715
Held-to-maturity securities, continuous unrealized loss position, less than 12 months, accumulated loss	(3,374)	(25,611)
Held-to-maturity, twelve months or longer, estimated fair value	483,810	151,581
Held-to-maturity securities, continuous unrealized loss position, 12 months or longer, accumulated loss	(20,456)	(8,314)
Held-to-maturity, total, estimated fair value	784,653	871,296
Held-to-maturity, total, gross unrealized losses	(23,830)	(33,925)
Non-GSE issuance REMICs and CMOs
Securities
Available-for-sale, twelve months or longer, estimated fair value	102	132
Available-for-sale, twelve months or longer, gross unrealized losses	(1)	(1)
Available-for-sale, total, estimated fair value	102	132
Available-for-sale, total, gross unrealized losses	(1)	(1)
Held-to-maturity, less than twelve months, estimated fair value		392
Held-to-maturity securities, continuous unrealized loss position, less than 12 months, accumulated loss		(10)
Held-to-maturity, twelve months or longer, estimated fair value	296
Held-to-maturity securities, continuous unrealized loss position, 12 months or longer, accumulated loss	(7)
Held-to-maturity, total, estimated fair value	296	392
Held-to-maturity, total, gross unrealized losses	(7)	(10)
GSE pass-through certificates
Securities
Available-for-sale, less than twelve months, estimated fair value	597	172
Available-for-sale, less than twelve months, gross unrealized losses	(4)	(1)
Available-for-sale, twelve months or longer, estimated fair value	78	70
Available-for-sale, twelve months or longer, gross unrealized losses	(1)	(1)
Available-for-sale, total, estimated fair value	675	242
Available-for-sale, total, gross unrealized losses	(5)	(2)
Held-to-maturity, less than twelve months, estimated fair value		230,795
Held-to-maturity securities, continuous unrealized loss position, less than 12 months, accumulated loss		(10,088)
Held-to-maturity, twelve months or longer, estimated fair value	168,261	28
Held-to-maturity securities, continuous unrealized loss position, 12 months or longer, accumulated loss	(5,360)	(1)
Held-to-maturity, total, estimated fair value	168,261	230,823
Held-to-maturity, total, gross unrealized losses	(5,360)	(10,089)
Obligations of GSEs
Securities
Available-for-sale, less than twelve months, estimated fair value		91,153
Available-for-sale, less than twelve months, gross unrealized losses		(7,522)
Available-for-sale, twelve months or longer, estimated fair value	95,539
Available-for-sale, twelve months or longer, gross unrealized losses	(3,140)
Available-for-sale, total, estimated fair value	95,539	91,153
Available-for-sale, total, gross unrealized losses	(3,140)	(7,522)
Held-to-maturity, less than twelve months, estimated fair value		80,725
Held-to-maturity securities, continuous unrealized loss position, less than 12 months, accumulated loss		(7,403)
Held-to-maturity, twelve months or longer, estimated fair value	78,403
Held-to-maturity securities, continuous unrealized loss position, 12 months or longer, accumulated loss	(2,531)
Held-to-maturity, total, estimated fair value	78,403	80,725
Held-to-maturity, total, gross unrealized losses	(2,531)	(7,403)
Fannie Mae stock
Securities
Available-for-sale, twelve months or longer, estimated fair value	3	3
Available-for-sale, twelve months or longer, gross unrealized losses	(12)	(12)
Available-for-sale, total, estimated fair value	3	3
Available-for-sale, total, gross unrealized losses	(12)	(12)
Multi-family mortgage-backed securities:
Securities
Held-to-maturity, less than twelve months, estimated fair value	72,587
Held-to-maturity securities, continuous unrealized loss position, less than 12 months, accumulated loss	(541)
Held-to-maturity, total, estimated fair value	72,587
Held-to-maturity, total, gross unrealized losses	$ (541)

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Other Comprehensive Income/Loss (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Amounts reclassified from accumulated other comprehensive loss to the consolidated statements of income
Reclassification adjustment for gain on sales of securities	$ (141)		$ (141)	$ (2,057)
Reclassification adjustment for net actuarial loss	228	903	685	2,708
Reclassification adjustment for prior service cost	47	53	142	159
Income before income tax expense	29,064	26,438	92,617	72,631
Income tax effect	(10,256)	(9,514)	(19,960)	(26,190)
Net income	18,808	16,924	72,657	46,441
Amount Reclassified from Accumulated Other Comprehensive Loss
Amounts reclassified from accumulated other comprehensive loss to the consolidated statements of income
Income before income tax expense	(134)	(956)	(686)	(810)
Income tax effect	47	337	242	285
Net income	(87)	(619)	(444)	(525)
Gain on sales of securities | Amount Reclassified from Accumulated Other Comprehensive Loss
Amounts reclassified from accumulated other comprehensive loss to the consolidated statements of income
Reclassification adjustment for gain on sales of securities	141		141	2,057
Compensation and benefits | Amount Reclassified from Accumulated Other Comprehensive Loss
Amounts reclassified from accumulated other comprehensive loss to the consolidated statements of income
Reclassification adjustment for net actuarial loss	(228)	(903)	(685)	(2,708)
Reclassification adjustment for prior service cost	$ (47)	$ (53)	$ (142)	$ (159)

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Loans Receivable and Allowance for Loan Losses (Composition of Loans Receivable) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Loans receivable and allowance for loan losses
30-59 Days	$ 87,210		$ 115,982
60-89 Days	19,874		26,750
90 Days or More	44,833		250,534
Total Past Due	151,917		393,266
Current	11,714,847		11,993,112
Total	11,866,764		12,386,378
Net unamortized premiums and deferred loan origination costs	49,171		55,688
Loans receivable	11,915,935		12,442,066
Allowance for loan losses	(113,600)	(118,600)	(139,000)	(143,000)	(143,900)	(145,501)
Loans receivable, net	11,802,335		12,303,066
Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	78,009		107,754
60-89 Days	17,635		24,154
90 Days or More	152		384
Total Past Due	95,796		132,292
Current	11,656,053		11,922,468
Total	11,751,849		12,054,760
Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	9,201		8,228
60-89 Days	2,239		2,596
90 Days or More	44,681		250,150
Total Past Due	56,121		260,974
Current	58,794		70,644
Total	114,915		331,618
Consumer and Other Loans
Loans receivable and allowance for loan losses
30-59 Days	1,698		3,177
60-89 Days	171		1,340
90 Days or More	6,323		5,948
Total Past Due	8,192		10,465
Current	236,804		229,216
Total	244,996		239,681
Allowance for loan losses	(9,426)	(9,540)	(8,824)	(7,327)	(7,605)	(6,316)
Consumer and Other Loans | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	1,698		3,177
60-89 Days	171		1,340
Total Past Due	1,869		4,517
Current	236,804		229,184
Total	238,673		233,701
Consumer and Other Loans | Non-accrual loans:
Loans receivable and allowance for loan losses
90 Days or More	6,323		5,948
Total Past Due	6,323		5,948
Current			32
Total	6,323		5,980
Consumer and Other Loans | Home equity lines of credit
Loans receivable and allowance for loan losses
30-59 Days	1,656		3,000
60-89 Days	159		1,321
90 Days or More	6,289		5,916
Total Past Due	8,104		10,237
Current	173,747		189,572
Total	181,851		199,809
Consumer and Other Loans | Home equity lines of credit | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	1,656		3,000
60-89 Days	159		1,321
Total Past Due	1,815		4,321
Current	173,747		189,540
Total	175,562		193,861
Consumer and Other Loans | Home equity lines of credit | Non-accrual loans:
Loans receivable and allowance for loan losses
90 Days or More	6,289		5,916
Total Past Due	6,289		5,916
Current			32
Total	6,289		5,948
Consumer and Other Loans | Other
Loans receivable and allowance for loan losses
30-59 Days	42		177
60-89 Days	12		19
90 Days or More	34		32
Total Past Due	88		228
Current	63,057		39,644
Total	63,145		39,872
Consumer and Other Loans | Other | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	42		177
60-89 Days	12		19
Total Past Due	54		196
Current	63,057		39,644
Total	63,111		39,840
Consumer and Other Loans | Other | Non-accrual loans:
Loans receivable and allowance for loan losses
90 Days or More	34		32
Total Past Due	34		32
Total	34		32
Mortgage loans (gross)
Loans receivable and allowance for loan losses
30-59 Days	85,512		112,805
60-89 Days	19,703		25,410
90 Days or More	38,510		244,586
Total Past Due	143,725		382,801
Current	11,478,043		11,763,896
Total	11,621,768		12,146,697
Mortgage loans (gross) | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	76,311		104,577
60-89 Days	17,464		22,814
90 Days or More	152		384
Total Past Due	93,927		127,775
Current	11,419,249		11,693,284
Total	11,513,176		11,821,059
Mortgage loans (gross) | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	9,201		8,228
60-89 Days	2,239		2,596
90 Days or More	38,358		244,202
Total Past Due	49,798		255,026
Current	58,794		70,612
Total	108,592		325,638
Mortgage loans (gross) | Residential
Loans receivable and allowance for loan losses
30-59 Days	76,176		96,302
60-89 Days	18,702		22,393
90 Days or More	31,869		234,378
Total Past Due	126,747		353,073
Current	6,955,477		7,684,203
Total	7,082,224		8,037,276
Allowance for loan losses	(49,332)	(56,552)	(80,337)	(83,424)	(78,788)	(89,267)
Mortgage loans (gross) | Residential | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	69,761		90,108
60-89 Days	16,463		20,154
90 Days or More			151
Total Past Due	86,224		110,413
Current	6,903,203		7,621,388
Total	6,989,427		7,731,801
Mortgage loans (gross) | Residential | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	6,415		6,194
60-89 Days	2,239		2,239
90 Days or More	31,869		234,227
Total Past Due	40,523		242,660
Current	52,274		62,815
Total	92,797		305,475
Mortgage loans (gross) | Residential | Full documentation interest-only
Loans receivable and allowance for loan losses
30-59 Days	17,683		29,476
60-89 Days	5,292		5,802
90 Days or More	9,268		78,271
Total Past Due	32,243		113,549
Current	960,988		1,268,652
Total	993,231		1,382,201
Mortgage loans (gross) | Residential | Full documentation interest-only | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	14,725		27,291
60-89 Days	5,115		5,220
Total Past Due	19,840		32,511
Current	942,958		1,249,462
Total	962,798		1,281,973
Mortgage loans (gross) | Residential | Full documentation interest-only | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	2,958		2,185
60-89 Days	177		582
90 Days or More	9,268		78,271
Total Past Due	12,403		81,038
Current	18,030		19,190
Total	30,433		100,228
Mortgage loans (gross) | Residential | Full documentation amortizing
Loans receivable and allowance for loan losses
30-59 Days	33,200		32,516
60-89 Days	5,424		8,068
90 Days or More	9,549		42,085
Total Past Due	48,173		82,669
Current	5,000,070		5,336,788
Total	5,048,243		5,419,457
Mortgage loans (gross) | Residential | Full documentation amortizing | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	32,652		31,189
60-89 Days	5,140		7,415
90 Days or More			151
Total Past Due	37,792		38,755
Current	4,994,848		5,325,944
Total	5,032,640		5,364,699
Mortgage loans (gross) | Residential | Full documentation amortizing | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	548		1,327
60-89 Days	284		653
90 Days or More	9,549		41,934
Total Past Due	10,381		43,914
Current	5,222		10,844
Total	15,603		54,758
Mortgage loans (gross) | Residential | Reduced documentation interest-only
Loans receivable and allowance for loan losses
30-59 Days	17,676		24,700
60-89 Days	5,482		5,787
90 Days or More	11,920		87,910
Total Past Due	35,078		118,397
Current	613,788		721,264
Total	648,866		839,661
Mortgage loans (gross) | Residential | Reduced documentation interest-only | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	15,566		22,635
60-89 Days	4,258		5,208
Total Past Due	19,824		27,843
Current	589,172		693,660
Total	608,996		721,503
Mortgage loans (gross) | Residential | Reduced documentation interest-only | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	2,110		2,065
60-89 Days	1,224		579
90 Days or More	11,920		87,910
Total Past Due	15,254		90,554
Current	24,616		27,604
Total	39,870		118,158
Mortgage loans (gross) | Residential | Reduced documentation amortizing
Loans receivable and allowance for loan losses
30-59 Days	7,617		9,610
60-89 Days	2,504		2,736
90 Days or More	1,132		26,112
Total Past Due	11,253		38,458
Current	380,631		357,499
Total	391,884		395,957
Mortgage loans (gross) | Residential | Reduced documentation amortizing | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	6,818		8,993
60-89 Days	1,950		2,311
Total Past Due	8,768		11,304
Current	376,225		352,322
Total	384,993		363,626
Mortgage loans (gross) | Residential | Reduced documentation amortizing | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	799		617
60-89 Days	554		425
90 Days or More	1,132		26,112
Total Past Due	2,485		27,154
Current	4,406		5,177
Total	6,891		32,331
Mortgage loans (gross) | Multi-family
Loans receivable and allowance for loan losses
30-59 Days	4,780		13,844
60-89 Days	506		1,327
90 Days or More	6,641		9,054
Total Past Due	11,927		24,225
Current	3,647,309		3,272,230
Total	3,659,236		3,296,455
Allowance for loan losses	(38,307)	(37,075)	(36,703)	(38,245)	(40,865)	(35,514)
Mortgage loans (gross) | Multi-family | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	4,351		12,740
60-89 Days	506		970
90 Days or More	152
Total Past Due	5,009		13,710
Current	3,644,376		3,270,206
Total	3,649,385		3,283,916
Mortgage loans (gross) | Multi-family | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	429		1,104
60-89 Days			357
90 Days or More	6,489		9,054
Total Past Due	6,918		10,515
Current	2,933		2,024
Total	9,851		12,539
Mortgage loans (gross) | Commercial real estate
Loans receivable and allowance for loan losses
30-59 Days	4,556		2,659
60-89 Days	495		1,690
90 Days or More			1,154
Total Past Due	5,051		5,503
Current	875,257		807,463
Total	880,308		812,966
Allowance for loan losses	(16,535)	(15,433)	(13,136)	(14,004)	(16,642)	(14,404)
Mortgage loans (gross) | Commercial real estate | Accruing loans:
Loans receivable and allowance for loan losses
30-59 Days	2,199		1,729
60-89 Days	495		1,690
90 Days or More			233
Total Past Due	2,694		3,652
Current	871,670		801,690
Total	874,364		805,342
Mortgage loans (gross) | Commercial real estate | Non-accrual loans:
Loans receivable and allowance for loan losses
30-59 Days	2,357		930
90 Days or More			921
Total Past Due	2,357		1,851
Current	3,587		5,773
Total	$ 5,944		$ 7,624

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Loans Receivable and Allowance for Loan Losses (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended	6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Residential Non-performing loans held-for-sale, net	Jun. 30, 2014 Residential Non-performing loans held-for-sale, net	Sep. 12, 2014 Residential Non-performing loans held-for-sale, net	Jul. 31, 2014 Residential Non-performing loans held-for-sale, net
Loans receivable and allowance for loan losses
Amount of loan charge-off	$ 4,904,000	$ 6,496,000	$ 27,370,000	$ 27,954,000		$ 8,700,000
Loans held-for-sale, recorded investment						195,000,000
Non-performing residential mortgage loans held-for-sale						186,300,000
Provision (credited) charged to operations	(3,042,000)	2,541,000	(7,153,000)	16,193,000		(5,700,000)
Carrying value, loans sold							4,000,000	173,700,000
Loss on sale of loans					920,000
Length of period one over which the historical loss experience is analyzed			12 months
Length of period two over which the historical loss experience is analyzed			15 months
Length of period three over which the historical loss experience is analyzed			18 months
Length of period four over which the historical loss experience is analyzed			24 months
Minimum length of period over which the historical loss experience is analyzed for a particular loan type that may not have sufficient loss history			2 years
Extended prior period over which loss experience factors are evaluated to consider trends for the majority of loan portfolio			2 years
Loans, in foreclosure	$ 18,700,000		$ 18,700,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net income	$ 72,657	$ 46,441
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization on loans	8,905	16,966
Net amortization on securities and borrowings	6,947	13,084
Net provision for loan and real estate losses (credited) charged to operations	(6,137)	17,135
Depreciation and amortization	8,889	8,653
Net gain on sales of loans and securities	(528)	(8,595)
Mortgage servicing rights amortization and valuation allowance adjustments, net	1,681	(512)
Stock-based compensation and allocation of ESOP stock	6,488	13,121
Originations of loans held-for-sale	(73,653)	(229,041)
Proceeds from sales and principal repayments of loans held-for-sale	73,289	295,076
Decrease in accrued interest receivable	290	2,038
Bank owned life insurance income and insurance proceeds received, net	(5,195)	(3,027)
Decrease in other assets	7,162	31,619
Increase (decrease) in accrued expenses and other liabilities	32,159	(13,902)
Net cash provided by operating activities	132,954	189,056
Cash flows from investing activities:
Originations of loans receivable	(1,062,910)	(1,782,858)
Loan purchases through third parties	(141,033)	(348,550)
Principal payments on loans receivable	1,482,443	2,724,868
Proceeds from sales of delinquent and non-performing loans	178,470	18,501
Purchases of securities held-to-maturity	(459,943)	(828,835)
Purchases of securities available-for-sale		(221,080)
Principal payments on securities held-to-maturity	250,468	602,321
Principal payments on securities available-for-sale	31,031	86,270
Proceeds from sales of securities available-for-sale	14,447	41,640
Net redemptions of Federal Home Loan Bank of New York stock	18,809	17,977
Redemption of Astoria Capital Trust I common securities		3,866
Proceeds from sales of real estate owned, net	40,718	29,560
Purchases of premises and equipment, net of proceeds from sales	6,945	6,092
Net cash provided by investing activities	345,555	337,588
Cash flows from financing activities:
Net decrease in deposits	(242,549)	(383,584)
Net (decrease) increase in borrowings with original terms of three months or less	(76,000)	189,000
Repayments of borrowings with original terms greater than three months	(150,000)	(453,866)
Net increase in mortgage escrow funds	28,885	24,147
Proceeds from sales of treasury stock	6,092
Proceeds from issuance of preferred stock		135,000
Cash payments for preferred stock issuance costs		(5,204)
Cash dividends paid to stockholders	(18,511)	(14,577)
Net tax benefit excess (shortfall) from stock-based compensation	51	(1,296)
Net cash used in financing activities	(452,032)	(510,380)
Net increase in cash and cash equivalents	26,477	16,264
Cash and cash equivalents at beginning of period	121,950	121,473
Cash and cash equivalents at end of period	148,427	137,737
Supplemental disclosures:
Interest paid	110,171	137,551
Income taxes paid	10,665	13,455
Additions to real estate owned	41,556	36,962
Loans transferred to held-for-sale	$ 187,769	$ 15,642

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Loans Receivable and Allowance for Loan Losses (Allowance for Loan Losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Loans receivable and allowance for loan losses
Balance at the beginning of the period	$ 118,600	$ 143,900	$ 139,000	$ 145,501
Provision (credited) charged to operations	(3,042)	2,541	(7,153)	16,193
Charge-offs	(4,904)	(6,496)	(27,370)	(27,954)
Recoveries	2,946	3,055	9,123	9,260
Balance at the end of the period	113,600	143,000	113,600	143,000
Consumer and Other Loans
Loans receivable and allowance for loan losses
Balance at the beginning of the period	9,540	7,605	8,824	6,316
Provision (credited) charged to operations	147	(5)	2,097	2,196
Charge-offs	(352)	(544)	(1,776)	(1,672)
Recoveries	91	271	281	487
Balance at the end of the period	9,426	7,327	9,426	7,327
Mortgage loans (gross) | Residential
Loans receivable and allowance for loan losses
Balance at the beginning of the period	56,552	78,788	80,337	89,267
Provision (credited) charged to operations	(7,617)	7,659	(20,225)	7,488
Charge-offs	(2,134)	(5,560)	(19,061)	(20,332)
Recoveries	2,531	2,537	8,281	7,001
Balance at the end of the period	49,332	83,424	49,332	83,424
Mortgage loans (gross) | Multi-family
Loans receivable and allowance for loan losses
Balance at the beginning of the period	37,075	40,865	36,703	35,514
Provision (credited) charged to operations	3,183	(2,521)	4,457	5,131
Charge-offs	(2,275)	(99)	(3,414)	(3,637)
Recoveries	324		561	1,237
Balance at the end of the period	38,307	38,245	38,307	38,245
Mortgage loans (gross) | Commercial real estate
Loans receivable and allowance for loan losses
Balance at the beginning of the period	15,433	16,642	13,136	14,404
Provision (credited) charged to operations	1,245	(2,592)	6,518	1,378
Charge-offs	(143)	(293)	(3,119)	(2,313)
Recoveries		247		535
Balance at the end of the period	$ 16,535	$ 14,004	$ 16,535	$ 14,004

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Loans Receivable and Allowance for Loan Losses (TDR Mortgage Loans, Subsequent Payment Default) (Details) (USD $) In Thousands, unless otherwise specified			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2014 Mortgage loans (gross) loan	Sep. 30, 2013 Mortgage loans (gross) loan	Sep. 30, 2014 Mortgage loans (gross) loan	Sep. 30, 2013 Mortgage loans (gross) loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Full documentation interest-only loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Full documentation interest-only loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Full documentation interest-only loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Full documentation interest-only loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Full documentation amortizing loans loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Full documentation amortizing loans loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Full documentation amortizing loans loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Full documentation amortizing loans loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation interest-only loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation interest-only loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation interest-only loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation interest-only loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation amortizing loan	Sep. 30, 2014 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation amortizing loan	Sep. 30, 2013 Mortgage loans (gross) Residential Mortgage Loans Reduced documentation amortizing loan	Sep. 30, 2013 Mortgage loans (gross) Multi-family loan	Sep. 30, 2013 Mortgage loans (gross) Multi-family loan
Information about loans receivable by segment and class modified in troubled debt restructuring
Loans receivable	$ 11,915,935	$ 12,442,066
Number of Loans			7	45	12	62	2	14	3	22	3	8	4	10	2	20	4	24	2	1	5	1	1
Recorded Investment			$ 2,476	$ 12,227	$ 3,802	$ 16,190	$ 714	$ 3,365	$ 854	$ 5,343	$ 852	$ 2,159	$ 1,057	$ 2,589	$ 910	$ 5,729	$ 1,799	$ 6,707	$ 303	$ 92	$ 880	$ 671	$ 671

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Litigation (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2014 subsidiary
Commitments and Contingencies Disclosure [Abstract]
Alleged tax deficiency including interest and penalties related to 2006 through 2008 tax years	$ 13.3
Number of subsidiaries to which alleged tax deficiencies are related	2

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Consolidated Statements of Financial Condition (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Assets:
Cash and due from banks	$ 148,427	$ 121,950
Available-for-sale securities:
Encumbered	103,554	105,234
Unencumbered	262,472	296,456
Total available-for-sale securities	366,026	401,690
Held-to-maturity securities, fair value of $2,035,378 and $1,811,122, respectively:
Encumbered	1,139,036	1,150,315
Unencumbered	914,301	699,211
Total held-to-maturity securities	2,053,337	1,849,526
Federal Home Loan Bank of New York stock, at cost	133,398	152,207
Loans held-for-sale, net	7,629	7,375
Loans receivable	11,915,935	12,442,066
Allowance for loan losses	(113,600)	(139,000)
Loans receivable, net	11,802,335	12,303,066
Mortgage servicing rights, net	11,905	12,800
Accrued interest receivable	37,636	37,926
Premises and equipment, net	110,586	112,530
Goodwill	185,151	185,151
Bank owned life insurance	428,570	423,375
Real estate owned, net	42,458	42,636
Other assets	132,823	143,490
Total assets	15,460,281	15,793,722
Deposits:
Savings	2,286,347	2,493,899
Money market	2,331,869	1,972,136
NOW and demand deposit	2,146,405	2,097,478
Certificates of deposit	2,848,140	3,291,797
Total deposits	9,612,761	9,855,310
Federal funds purchased	338,000	335,000
Reverse repurchase agreements	1,100,000	1,100,000
Federal Home Loan Bank of New York advances	2,225,000	2,454,000
Other borrowings, net	248,559	248,161
Mortgage escrow funds	138,343	109,458
Accrued expenses and other liabilities	203,612	172,280
Total liabilities	13,866,275	14,274,209
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 99,707,552 and 98,841,960 shares outstanding, respectively)	1,665	1,665
Additional paid-in capital	895,684	894,297
Retained earnings	1,977,529	1,930,026
Treasury stock (66,787,336 and 67,652,928 shares, at cost, respectively)	(1,380,134)	(1,398,021)
Accumulated other comprehensive loss	(30,534)	(38,250)
Total stockholders’ equity	1,594,006	1,519,513
Total liabilities and stockholders’ equity	$ 15,460,281	$ 15,793,722

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Pension Plans and Other Postretirement Benefits (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Pension benefits
Pension plans and other postretirement benefits
Interest cost	$ 2,613	$ 2,387	$ 7,838	$ 7,162
Expected return on plan assets	(3,710)	(3,188)	(11,132)	(9,565)
Recognized net actuarial loss (gain)	350	785	1,051	2,354
Amortization of prior service cost	47	53	142	159
Net periodic (benefit) cost	(700)	37	(2,101)	110
Other postretirement benefits
Pension plans and other postretirement benefits
Service cost	309	396	930	1,185
Interest cost	233	319	698	959
Recognized net actuarial loss (gain)	(122)	118	(366)	354
Net periodic (benefit) cost	$ 420	$ 833	$ 1,262	$ 2,498

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Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss
Balance at beginning of period at Dec. 31, 2013	$ 1,519,513	$ 129,796	$ 1,665	$ 894,297	$ 1,930,026	$ (1,398,021)	$ (38,250)
Increase (Decrease) in Stockholders' Equity
Net income	72,657				72,657
Other comprehensive income, net of tax	7,716						7,716
Dividends on preferred stock ($48.75 per share)	(6,582)				(6,582)
Dividends on common stock ($0.12 per share)	(11,929)				(11,929)
Sales of treasury stock (459,836 shares)	6,092				(3,410)	9,502
Restricted stock grants (429,346 shares)				(5,422)	(3,450)	8,872
Forfeitures of restricted stock (23,590 shares)				281	206	(487)
Stock-based compensation	6,488			6,477	11
Net tax benefit excess from stock-based compensation	51			51
Balance at end of period at Sep. 30, 2014	$ 1,594,006	$ 129,796	$ 1,665	$ 895,684	$ 1,977,529	$ (1,380,134)	$ (30,534)

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Loans Receivable and Allowance for Loan Losses (Multi-Family and Commercial Real Estate Loans, by Credit Quality Indicator) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	$ 11,866,764	$ 12,386,378
Mortgage loans (gross)
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	11,621,768	12,146,697
Mortgage loans (gross) | Multi-family
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	3,659,236	3,296,455
Mortgage loans (gross) | Multi-family | Not criticized
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	3,604,937	3,209,786
Mortgage loans (gross) | Multi-family | Special mention
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	22,390	14,063
Mortgage loans (gross) | Multi-family | Substandard
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	31,157	72,606
Mortgage loans (gross) | Multi-family | Doubtful
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	752
Mortgage loans (gross) | Commercial real estate
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	880,308	812,966
Mortgage loans (gross) | Commercial real estate | Not criticized
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	825,089	759,114
Mortgage loans (gross) | Commercial real estate | Special mention
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	16,578	9,760
Mortgage loans (gross) | Commercial real estate | Substandard
Balances of multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator
Total	$ 38,641	$ 44,092

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Other Comprehensive Income/Loss (Tables)

9 Months Ended

Sep. 30, 2014

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Components of and Changes in Accumulated Other Comprehensive Loss net of tax

The following tables set forth the components of accumulated other comprehensive loss, net of related tax effects, at the dates indicated and the changes during the three and nine months ended September 30, 2014 and 2013.

(In Thousands)	At    June 30, 2014				Other Comprehensive (Loss) Income				At   September 30, 2014
Net unrealized gain on securities available-for-sale		$	3,326			$	(511	)		$	2,815
Net actuarial loss on pension plans and other postretirement benefits		(30,304		)		147				(30,157		)
Prior service cost on pension plans and other postretirement benefits		(3,223		)		31				(3,192		)
Accumulated other comprehensive loss		$	(30,201	)		$	(333	)		$	(30,534	)
(In Thousands)	At   December 31, 2013				Other Comprehensive Income				At   September 30, 2014
Net unrealized (loss) gain on securities available-for-sale		$	(4,366	)		$	7,181			$	2,815
Net actuarial loss on pension plans and other postretirement benefits		(30,600		)		443				(30,157		)
Prior service cost on pension plans and other postretirement benefits		(3,284		)		92				(3,192		)
Accumulated other comprehensive loss		$	(38,250	)		$	7,716			$	(30,534	)
(In Thousands)	At   June 30, 2013				Other Comprehensive (Loss) Income				At   September 30, 2013
Net unrealized loss on securities available-for-sale		$	(484	)		$	(1,286	)		$	(1,770	)
Net actuarial loss on pension plans and other postretirement benefits		(75,946		)		585				(75,361		)
Prior service cost on pension plans and other postretirement benefits		(3,357		)		34				(3,323		)
Accumulated other comprehensive loss		$	(79,787	)		$	(667	)		$	(80,454	)

(In Thousands)	At   December 31, 2012				Other Comprehensive (Loss) Income				At   September 30, 2013
Net unrealized gain (loss) on securities available-for-sale		$	7,451			$	(9,221	)		$	(1,770	)
Net actuarial loss on pension plans and other postretirement benefits		(77,115		)		1,754				(75,361		)
Prior service cost on pension plans and other postretirement benefits		(3,426		)		103				(3,323		)
Accumulated other comprehensive loss		$	(73,090	)		$	(7,364	)		$	(80,454	)

Schedule of Components of Other Comprehensive Income/Loss

The following tables set forth the components of other comprehensive income/loss for the periods indicated.

		For the Three Months Ended   September 30, 2014
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized loss on securities available-for-sale:
Net unrealized holding loss on securities arising during the period		$	(649	)		$	229			$	(420	)
Reclassification adjustment for gain on sales of securities included in net income		(141		)		50				(91		)
Net unrealized loss on securities available-for-sale		(790		)		279				(511		)
Reclassification adjustment for net actuarial loss included in net income		228				(81		)		147
Reclassification adjustment for prior service cost included in net income		47				(16		)		31
Other comprehensive loss		$	(515	)		$	182			$	(333	)

		For the Nine Months Ended   September 30, 2014
(In Thousands)	Before Tax Amount				Tax(Expense) Benefit				After Tax Amount
Net unrealized gain on securities available-for-sale:
Net unrealized holding gain on securities arising during the period		$	11,242			$	(3,970	)		$	7,272
Reclassification adjustment for gain on sales of securities included in net income		(141		)		50				(91		)
Net unrealized gain on securities available-for-sale		11,101				(3,920		)		7,181
Reclassification adjustment for net actuarial loss included in net income		685				(242		)		443
Reclassification adjustment for prior service cost included in net income		142				(50		)		92
Other comprehensive income		$	11,928			$	(4,212	)		$	7,716

		For the Three Months Ended   September 30, 2013
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized holding loss on securities available-for-sale arising during the period		$	(1,984	)		$	698			$	(1,286	)
Reclassification adjustment for net actuarial loss included in net income		903				(318		)		585
Reclassification adjustment for prior service cost included in net income		53				(19		)		34
Other comprehensive loss		$	(1,028	)		$	361			$	(667	)

		For the Nine Months Ended   September 30, 2013
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized loss on securities available-for-sale:
Net unrealized holding loss on securities arising during the period		$	(12,180	)		$	4,291			$	(7,889	)
Reclassification adjustment for gain on sales of securities included in net income		(2,057		)		725				(1,332		)
Net unrealized loss on securities available-for-sale		(14,237		)		5,016				(9,221		)
Reclassification adjustment for net actuarial loss included in net income		2,708				(954		)		1,754
Reclassification adjustment for prior service cost included in net income		159				(56		)		103
Other comprehensive loss		$	(11,370	)		$	4,006			$	(7,364	)

Information About Amounts Reclassified From Accumulated Other Comprehensive Loss to the Consolidated Statements of Income

The following tables set forth information about amounts reclassified from accumulated other comprehensive loss to, and the affected line items in, the consolidated statements of income for the periods indicated.

(In Thousands)	For the   Three Months Ended   September 30, 2014				For the   Three Months Ended   September 30, 2013				Income Statement Line Item
Reclassification adjustment for gain on sales of securities		$	141			$	—		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(228		)		(903		)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(47		)		(53		)	Compensation and benefits
Total reclassifications, before tax		(134		)		(956		)
Income tax effect		47				337			Income tax expense
Total reclassifications, net of tax		$	(87	)		$	(619	)	Net income

(In Thousands)	For the   Nine Months Ended   September 30, 2014				For the   Nine Months Ended   September 30, 2013				Income Statement Line Item
Reclassification adjustment for gain on sales of securities		$	141			$	2,057		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(685		)		(2,708		)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(142		)		(159		)	Compensation and benefits
Total reclassifications, before tax		(686		)		(810		)
Income tax effect		242				285			Income tax expense
Total reclassifications, net of tax		$	(444	)		$	(525	)	Net income

(1) These other comprehensive income/loss components are included in the computations of net periodic (benefit) cost for our defined benefit pension plans and other postretirement benefit plan. See Note 6 for additional details.

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Loans Receivable and Allowance for Loan Losses (Loans Receivable and Related Allowance by Impairment Methodology) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	$ 250,749		$ 384,522
Loans collectively evaluated for impairment	11,616,015		12,001,856
Total	11,866,764		12,386,378
Loans individually evaluated for impairment, allowance for loan losses	19,885		21,531
Loans collectively evaluated for impairment, allowance for loan losses	93,715		117,469
Total allowance for loan losses	113,600	118,600	139,000	143,000	143,900	145,501
Consumer and Other Loans
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	5,768
Loans collectively evaluated for impairment	239,228		239,681
Total	244,996		239,681
Loans individually evaluated for impairment, allowance for loan losses	4,340
Loans collectively evaluated for impairment, allowance for loan losses	5,086		8,824
Total allowance for loan losses	9,426	9,540	8,824	7,327	7,605	6,316
Mortgage loans (gross)
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Total	11,621,768		12,146,697
Mortgage loans (gross) | Residential
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	181,486		311,930
Loans collectively evaluated for impairment	6,900,738		7,725,346
Total	7,082,224		8,037,276
Loans individually evaluated for impairment, allowance for loan losses	9,789		18,352
Loans collectively evaluated for impairment, allowance for loan losses	39,543		61,985
Total allowance for loan losses	49,332	56,552	80,337	83,424	78,788	89,267
Mortgage loans (gross) | Multi-family
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	44,312		52,538
Loans collectively evaluated for impairment	3,614,924		3,243,917
Total	3,659,236		3,296,455
Loans individually evaluated for impairment, allowance for loan losses	3,448		2,877
Loans collectively evaluated for impairment, allowance for loan losses	34,859		33,826
Total allowance for loan losses	38,307	37,075	36,703	38,245	40,865	35,514
Mortgage loans (gross) | Commercial real estate
Balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses
Loans individually evaluated for impairment	19,183		20,054
Loans collectively evaluated for impairment	861,125		792,912
Total	880,308		812,966
Loans individually evaluated for impairment, allowance for loan losses	2,308		302
Loans collectively evaluated for impairment, allowance for loan losses	14,227		12,834
Total allowance for loan losses	$ 16,535	$ 15,433	$ 13,136	$ 14,004	$ 16,642	$ 14,404

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Stock Incentive Plans (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of restricted common stock and performance based restricted stock unit in stock incentive plans

The following table summarizes restricted common stock and performance-based restricted stock unit activity in our stock incentive plans for the nine months ended September 30, 2014.

	Restricted Common Stock						Restricted Stock Units
	Number of Units		Weighted Average Grant Date Fair Value				Number of Units			Weighted Average Grant Date Fair Value
Unvested at January 1, 2014	781,644			$	11.46			409,100			$	9.22
Granted	429,346			12.63				395,900			12.14
Vested	(55,168	)		(11.04		)		—			—
Forfeited	(23,590	)		(11.93		)		(20,600	)		(10.58		)
Unvested at September 30, 2014	1,132,232			11.91				784,400			10.66

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Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) (USD $)	9 Months Ended
	Sep. 30, 2014
Statement of Stockholders' Equity [Abstract]
Dividends on preferred stock (in dollars per share)	$ 48.75
Dividends on common stock (in dollars per share)	$ 0.12
Sale of treasury stock (in shares)	459,836
Restricted stock grants, shares	429,346
Forfeitures of restricted stock, shares	23,590

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Consolidated Statements of Financial Condition (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Held-to-maturity securities, fair value (in dollars)	$ 2,035,378	$ 1,811,122
Preferred stock, par value (in dollars per share)	$ 1.00	$ 1.00
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	166,494,888	166,494,888
Common stock, shares outstanding	99,707,552	98,841,960
Treasury stock, shares	66,787,336	67,652,928
Series C Preferred Stock
Preferred stock, shares authorized	150,000	150,000
Preferred stock, shares issued	135,000	135,000
Preferred stock, shares outstanding	135,000	135,000

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Litigation

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Litigation

Litigation

In the ordinary course of our business, we are routinely made a defendant in or a party to pending or threatened legal actions or proceedings which, in some cases, seek substantial monetary damages from or other forms of relief against us.  In our opinion, after consultation with legal counsel, we believe it unlikely that such actions or proceedings will have a material adverse effect on our financial condition, results of operations or liquidity.

City of New York Notice of Determination

By “Notice of Determination” dated September 14, 2010 and August 26, 2011, the City of New York notified us of alleged tax deficiencies in the amount of $13.3 million, including interest and penalties, related to our 2006 through 2008 tax years.  The deficiencies related to our operation of two subsidiaries of Astoria Bank, Fidata Service Corp., or Fidata, and Astoria Federal Mortgage Corp., or AF Mortgage.  We disagree with the assertion of the tax deficiencies.  Hearings in this matter were held before the New York City Tax Appeals Tribunal, or the NYC Tax Appeals Tribunal, in March and April 2013.  On October 29, 2014, the NYC Tax Appeals Tribunal issued a decision favorable to us canceling the 2010 and 2011 Notices of Determination.

No assurance can be given that the City of New York will not appeal the decision of the NYC Tax Appeals Tribunal, that such an appeal will not be costly to oppose, that this matter will not have an impact on our financial condition or results of operations or that, ultimately, any such impact will not be material.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information
Entity Registrant Name	ASTORIA FINANCIAL CORP
Entity Central Index Key	0000910322
Trading Symbol	AF
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		99,792,858
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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Impact of Accounting Standards and Interpretations

9 Months Ended

Sep. 30, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Impact of Accounting Standards and Interpretations

Impact of Accounting Standards and Interpretations

In January 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-04, “Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure,” and in August 2014 the FASB issued ASU 2014-14, “Receivables - Troubled Debt Restructurings by Creditors (Subtopic 310-40) - Classification of Certain Government-Guaranteed Mortgage Loans upon Foreclosure.” ASU 2014-04 applies to all creditors who obtain physical possession of residential real estate property collateralizing a consumer mortgage loan in satisfaction of a receivable. The amendments in ASU 2014-04 clarify when an in substance repossession or foreclosure occurs and requires disclosure of both (1) the amount of foreclosed residential real estate property held by a creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. ASU 2014-14 applies to creditors that hold government-guaranteed mortgage loans. The amendments in ASU 2014-14 require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if (1) the loan has a government guarantee that is not separable from the loan before foreclosure, (2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim and (3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. Effective July 1, 2014 we adopted the guidance in ASU 2014-04 and effective October 1, 2014 we adopted the guidance in ASU 2014-14 using the prospective transition method. Our adoption of the guidance in ASU 2014-04 and ASU 2014-14 did not have a material impact on our financial condition or results of operations.

In January 2014, the FASB issued ASU 2014-01, “Investments — Equity Method and Joint Ventures (Topic 323) Accounting for Investments in Qualified Affordable Housing Projects,” which applies to all reporting entities that invest in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Currently under GAAP, a reporting entity that invests in a qualified affordable housing project may elect to account for that investment using the effective yield method if all of the conditions are met. For those investments that are not accounted for using the effective yield method, GAAP requires that they be accounted for under either the equity method or the cost method. Certain of the conditions required to be met to use the effective yield method were restrictive and thus prevented many such investments from qualifying for the use of the effective yield method. The amendments in this update modify the conditions that a reporting entity must meet to be eligible to use a method other than the equity or cost methods to account for qualified affordable housing project investments. If the modified conditions are met, the amendments permit an entity to use the proportional amortization method to amortize the initial cost of the investment in proportion to the amount of tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). Additionally, the amendments introduce new recurring disclosures about all investments in qualified affordable housing projects irrespective of the method used to account for the investments. The amendments in ASU 2014-01 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014. Early adoption is permitted. This guidance will not have an impact on our financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-11, “Transfers and Servicing (Topic 860) — Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures” which applies to all entities that enter into repurchase-to-maturity transactions or repurchase financings (reverse repurchase agreements or securities sold under agreements to repurchase).  The amendments in this update change the accounting for repurchase-to-maturity transactions and linked repurchase financings (a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty) to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements.  In addition, the amendments in this update require an entity to disclose information on transfers accounted for as sales in transactions that are economically similar to repurchase agreements and provide disclosures to increase transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.  The amendments in ASU 2014-11 are effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2014.  Early application for a public business entity is prohibited.  All of our repurchase agreements (reverse repurchase agreements) are accounted for as secured borrowings.  Therefore, this guidance will not have an impact on our financial condition or results of operations.

In June 2014, the FASB issued ASU 2014-12, “Compensation — Stock Compensation (Topic 718) — Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period,” which applies to all entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period.  The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition.  As such, the performance target should not be reflected in estimating the grant date fair value of the award.  The amendments in ASU 2014-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015 and may be applied either prospectively to all awards granted or modified after the effective date, or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.  Early adoption is permitted. The terms of our share-based payment awards currently do not provide that a performance target that affects vesting could be achieved after the requisite service period. Therefore, this guidance is not expected to have an impact on our financial condition or results of operations.

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Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Interest income:
Residential mortgage loans	$ 58,268	$ 69,158	$ 185,516	$ 222,994
Multi-family and commercial real estate mortgage loans	45,693	41,450	132,430	120,463
Consumer and other loans	2,157	2,175	6,328	6,611
Mortgage-backed and other securities	14,528	13,247	42,321	36,003
Interest-earning cash accounts	83	67	232	192
Federal Home Loan Bank of New York stock	1,486	1,498	4,777	5,147
Total interest income	122,215	127,595	371,604	391,410
Interest expense:
Deposits	12,804	15,156	38,856	48,166
Borrowings	24,791	26,235	74,384	88,107
Total interest expense	37,595	41,391	113,240	136,273
Net interest income	84,620	86,204	258,364	255,137
Provision for loan losses (credited) charged to operations	(3,042)	2,541	(7,153)	16,193
Net interest income after provision for loan losses	87,662	83,663	265,517	238,944
Non-interest income:
Customer service fees	9,183	9,550	27,233	27,718
Other loan fees	591	598	1,846	1,588
Gain on sales of securities	141		141	2,057
Mortgage banking income, net	1,252	1,888	2,662	10,060
Income from bank owned life insurance	2,150	1,972	6,278	6,211
Other	436	1,301	3,107	4,535
Total non-interest income	13,753	15,309	41,267	52,169
General and administrative:
Compensation and benefits	34,191	33,879	101,994	99,262
Occupancy, equipment and systems	18,048	17,022	54,015	53,669
Federal deposit insurance premium	6,558	9,166	22,404	28,359
Advertising	5,023	2,074	9,173	6,225
Extinguishment of debt				4,266
Other	8,531	10,393	26,581	26,701
Total non-interest expense	72,351	72,534	214,167	218,482
Income before income tax expense	29,064	26,438	92,617	72,631
Income tax expense	10,256	9,514	19,960	26,190
Net income	18,808	16,924	72,657	46,441
Preferred stock dividends	2,194	2,194	6,582	5,021
Net income available to common shareholders	$ 16,614	$ 14,730	$ 66,075	$ 41,420
Basic earnings per common share (in dollars per share)	$ 0.17	$ 0.15	$ 0.66	$ 0.42
Diluted earnings per common share (in dollars per share)	$ 0.17	$ 0.15	$ 0.66	$ 0.42
Basic weighted average common shares outstanding (in shares)	98,453,265	97,199,329	98,279,671	96,967,052
Diluted weighted average common shares outstanding (in shares)	98,453,265	97,199,329	98,279,671	96,967,052

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

The following table is a reconciliation of basic and diluted earnings per common share, or EPS.

	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
(In Thousands, Except Share Data)		2014						2013						2014						2013
Net income		$	18,808					$	16,924					$	72,657					$	46,441
Preferred stock dividends		(2,194				)		(2,194				)		(6,582				)		(5,021				)
Net income available to common shareholders		16,614						14,730						66,075						41,420
Income allocated to participating securities		(187				)		(195				)		(742				)		(508				)
Net income allocated to common shareholders		$	16,427					$	14,535					$	65,333					$	40,912
Basic weighted average common shares outstanding	98,453,265						97,199,329						98,279,671						96,967,052
Dilutive effect of stock options and restricted stock units (1) (2)	—						—						—						—
Diluted weighted average common shares outstanding	98,453,265						97,199,329						98,279,671						96,967,052
Basic EPS				$	0.17					$	0.15					$	0.66					$	0.42
Diluted EPS				$	0.17					$	0.15					$	0.66					$	0.42

(1) Excludes options to purchase 988,050 shares of common stock which were outstanding during the three months ended September 30, 2014; options to purchase 1,871,935 shares of common stock which were outstanding during the three months ended September 30, 2013; options to purchase 1,016,451 shares of common stock which were outstanding during the nine months ended September 30, 2014; and options to purchase 2,215,820 shares of common stock which were outstanding during the nine months ended September 30, 2013 because their inclusion would be anti-dilutive.

(2) Excludes 788,874 unvested restricted stock units which were outstanding during the three months ended September 30, 2014; 415,900 unvested restricted stock units which were outstanding during the three months ended September 30, 2013; 751,149 unvested restricted stock units which were outstanding during the nine months ended September 30, 2014; and 379,602 unvested restricted stock units which were outstanding during the nine months ended September 30, 2013 because the performance conditions have not been satisfied.

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Loans Receivable and Allowance for Loan Losses

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Loans Receivable and Allowance for Loan Losses

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 September 30, 2014
	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	$	14,725	$	5,115	$	—	$	19,840	$	942,958	$	962,798
Full documentation amortizing	32,652		5,140		—		37,792		4,994,848		5,032,640
Reduced documentation interest-only	15,566		4,258		—		19,824		589,172		608,996
Reduced documentation amortizing	6,818		1,950		—		8,768		376,225		384,993
Total residential	69,761		16,463		—		86,224		6,903,203		6,989,427
Multi-family	4,351		506		152		5,009		3,644,376		3,649,385
Commercial real estate	2,199		495		—		2,694		871,670		874,364
Total mortgage loans	76,311		17,464		152		93,927		11,419,249		11,513,176
Consumer and other loans (gross):
Home equity lines of credit	1,656		159		—		1,815		173,747		175,562
Other	42		12		—		54		63,057		63,111
Total consumer and other loans	1,698		171		—		1,869		236,804		238,673
Total accruing loans	$	78,009	$	17,635	$	152	$	95,796	$	11,656,053	$	11,751,849
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,958	$	177	$	9,268	$	12,403	$	18,030	$	30,433
Full documentation amortizing	548		284		9,549		10,381		5,222		15,603
Reduced documentation interest-only	2,110		1,224		11,920		15,254		24,616		39,870
Reduced documentation amortizing	799		554		1,132		2,485		4,406		6,891
Total residential	6,415		2,239		31,869		40,523		52,274		92,797
Multi-family	429		—		6,489		6,918		2,933		9,851
Commercial real estate	2,357		—		—		2,357		3,587		5,944
Total mortgage loans	9,201		2,239		38,358		49,798		58,794		108,592
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,289		6,289		—		6,289
Other	—		—		34		34		—		34
Total consumer and other loans	—		—		6,323		6,323		—		6,323
Total non-accrual loans	$	9,201	$	2,239	$	44,681	$	56,121	$	58,794	$	114,915
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	17,683	$	5,292	$	9,268	$	32,243	$	960,988	$	993,231
Full documentation amortizing	33,200		5,424		9,549		48,173		5,000,070		5,048,243
Reduced documentation interest-only	17,676		5,482		11,920		35,078		613,788		648,866
Reduced documentation amortizing	7,617		2,504		1,132		11,253		380,631		391,884
Total residential	76,176		18,702		31,869		126,747		6,955,477		7,082,224
Multi-family	4,780		506		6,641		11,927		3,647,309		3,659,236
Commercial real estate	4,556		495		—		5,051		875,257		880,308
Total mortgage loans	85,512		19,703		38,510		143,725		11,478,043		11,621,768
Consumer and other loans (gross):
Home equity lines of credit	1,656		159		6,289		8,104		173,747		181,851
Other	42		12		34		88		63,057		63,145
Total consumer and other loans	1,698		171		6,323		8,192		236,804		244,996
Total loans	$	87,210	$	19,874	$	44,833	$	151,917	$	11,714,847	$	11,866,764
Net unamortized premiums and deferred loan origination costs											49,171
Loans receivable											11,915,935
Allowance for loan losses											(113,600		)
Loans receivable, net											$	11,802,335

	At December 31, 2013
	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	$	27,291	$	5,220	$	—	$	32,511	$	1,249,462	$	1,281,973
Full documentation amortizing	31,189		7,415		151		38,755		5,325,944		5,364,699
Reduced documentation interest-only	22,635		5,208		—		27,843		693,660		721,503
Reduced documentation amortizing	8,993		2,311		—		11,304		352,322		363,626
Total residential	90,108		20,154		151		110,413		7,621,388		7,731,801
Multi-family	12,740		970		—		13,710		3,270,206		3,283,916
Commercial real estate	1,729		1,690		233		3,652		801,690		805,342
Total mortgage loans	104,577		22,814		384		127,775		11,693,284		11,821,059
Consumer and other loans (gross):
Home equity lines of credit	3,000		1,321		—		4,321		189,540		193,861
Other	177		19		—		196		39,644		39,840
Total consumer and other loans	3,177		1,340		—		4,517		229,184		233,701
Total accruing loans	$	107,754	$	24,154	$	384	$	132,292	$	11,922,468	$	12,054,760
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,185	$	582	$	78,271	$	81,038	$	19,190	$	100,228
Full documentation amortizing	1,327		653		41,934		43,914		10,844		54,758
Reduced documentation interest-only	2,065		579		87,910		90,554		27,604		118,158
Reduced documentation amortizing	617		425		26,112		27,154		5,177		32,331
Total residential	6,194		2,239		234,227		242,660		62,815		305,475
Multi-family	1,104		357		9,054		10,515		2,024		12,539
Commercial real estate	930		—		921		1,851		5,773		7,624
Total mortgage loans	8,228		2,596		244,202		255,026		70,612		325,638
Consumer and other loans (gross):
Home equity lines of credit	—		—		5,916		5,916		32		5,948
Other	—		—		32		32		—		32
Total consumer and other loans	—		—		5,948		5,948		32		5,980
Total non-accrual loans	$	8,228	$	2,596	$	250,150	$	260,974	$	70,644	$	331,618
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	29,476	$	5,802	$	78,271	$	113,549	$	1,268,652	$	1,382,201
Full documentation amortizing	32,516		8,068		42,085		82,669		5,336,788		5,419,457
Reduced documentation interest-only	24,700		5,787		87,910		118,397		721,264		839,661
Reduced documentation amortizing	9,610		2,736		26,112		38,458		357,499		395,957
Total residential	96,302		22,393		234,378		353,073		7,684,203		8,037,276
Multi-family	13,844		1,327		9,054		24,225		3,272,230		3,296,455
Commercial real estate	2,659		1,690		1,154		5,503		807,463		812,966
Total mortgage loans	112,805		25,410		244,586		382,801		11,763,896		12,146,697
Consumer and other loans (gross):
Home equity lines of credit	3,000		1,321		5,916		10,237		189,572		199,809
Other	177		19		32		228		39,644		39,872
Total consumer and other loans	3,177		1,340		5,948		10,465		229,216		239,681
Total loans	$	115,982	$	26,750	$	250,534	$	393,266	$	11,993,112	$	12,386,378
Net unamortized premiums and deferred loan origination costs											55,688
Loans receivable											12,442,066
Allowance for loan losses											(139,000		)
Loans receivable, net											$	12,303,066

At June 30, 2014, we designated a pool of non-performing one-to-four family, or residential, mortgage loans, substantially all of which were 90 days or more past due, as held-for-sale. In connection with the designation of the pool of loans as held-for-sale, we recorded a loan charge-off of $8.7 million against the allowance for loan losses during the 2014 second quarter to write down the pool of loans from its immediately previous aggregate recorded investment of $195.0 million to its estimated fair value at that time of $186.3 million. As a result of our quarterly review of the adequacy of the allowance for loan losses as of June 30, 2014, $5.7 million of reserves previously attributable to this pool of loans was deemed no longer required and was credited to the provision for loan losses as a reserve release in the 2014 second quarter. On July 31, 2014, we completed a bulk sale transaction of substantially all of the non-performing residential mortgage loans held-for-sale at terms approximating their carrying value at June 30, 2014. Total loans sold in that transaction had a carrying value of $173.7 million, reflecting the previous write down to the estimated fair value through June 30, 2014. The majority of the remaining loans from the pool designated as held-for-sale as of June 30, 2014 were either foreclosed upon and transferred to real estate owned, or REO, or were satisfied via short sales or payoffs during the 2014 third quarter with no material impact on our financial condition or results of operations. On September 12, 2014, we completed a second sale transaction, with the same counterparty as the bulk sale transaction, in which we sold all of the remaining non-performing residential mortgage loans held-for-sale with a carrying value of $4.0 million, reflecting the previous write down to the estimated fair value through June 30, 2014, and recorded a loss on the sale of such loans in the 2014 third quarter of $920,000, included in other non-interest income.

We segment our residential mortgage loan portfolio by interest-only and amortizing loans, full documentation and reduced documentation loans and origination time periods and analyze our historical loss experience and delinquency levels and trends of these segments.  We analyze multi-family and commercial real estate mortgage loans by portfolio, geographic location and origination time periods.  We analyze our consumer and other loan portfolio by home equity lines of credit, commercial loans, revolving credit lines and installment loans and perform similar historical loss analyses.

We analyze our historical loss experience over twelve, fifteen, eighteen and twenty-four month periods.  The loss history used in calculating our quantitative allowance coverage percentages varies based on loan type.  Also, for a particular loan type we may not have sufficient loss history to develop a reasonable estimate of loss and consider our loss experience for other, similar loan types and may evaluate those losses over a longer period than two years.  Additionally, multi-family and commercial real estate loss experience may be adjusted based on the composition of the losses (loan sales, short sales and partial charge-offs).  Our evaluation of loss experience factors considers trends in such factors over the prior two years for substantially all of the loan portfolio, with the exception of multi-family and commercial real estate loans originated after 2010, for which our evaluation includes detailed modeling techniques.  We update our historical loss analyses quarterly and evaluate the need to modify our quantitative allowances as a result of our updated charge-off and loss analyses.  We also consider qualitative factors with the purpose of assessing the adequacy of the overall allowance for loan losses as well as the allocation of the allowance for loan losses by portfolio.

Allowance adequacy calculations are adjusted quarterly, based on the results of our quantitative and qualitative analyses, to reflect our current estimates of the amount of probable losses inherent in our loan portfolio in determining our allowance for loan losses.  The portion of the allowance allocated to each loan category does not represent the total available to absorb losses which may occur within the loan category, since the total allowance for loan losses is available for losses applicable to the entire loan portfolio.

The following tables set forth the changes in our allowance for loan losses by loan receivable segment for the periods indicated.

		For the Three Months Ended September 30, 2014
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at July 1, 2014		$	56,552		$	37,075			$	15,433			$	9,540		$	118,600
Provision (credited) charged to operations		(7,617		)	3,183				1,245				147			(3,042		)
Charge-offs		(2,134		)	(2,275		)		(143		)		(352		)	(4,904		)
Recoveries		2,531			324				—				91			2,946
Balance at September 30, 2014		$	49,332		$	38,307			$	16,535			$	9,426		$	113,600
		For the Nine Months Ended September 30, 2014
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at January 1, 2014		$	80,337		$	36,703			$	13,136			$	8,824		$	139,000
Provision (credited) charged to operations		(20,225		)	4,457				6,518				2,097			(7,153		)
Charge-offs		(19,061		)	(3,414		)		(3,119		)		(1,776		)	(27,370		)
Recoveries		8,281			561				—				281			9,123
Balance at September 30, 2014		$	49,332		$	38,307			$	16,535			$	9,426		$	113,600
		For the Three Months Ended September 30, 2013
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at July 1, 2013		$	78,788		$	40,865			$	16,642			$	7,605		$	143,900
Provision charged (credited) to operations		7,659			(2,521		)		(2,592		)		(5		)	2,541
Charge-offs		(5,560		)	(99		)		(293		)		(544		)	(6,496		)
Recoveries		2,537			—				247				271			3,055
Balance at September 30, 2013		$	83,424		$	38,245			$	14,004			$	7,327		$	143,000
		For the Nine Months Ended September 30, 2013
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at January 1, 2013		$	89,267		$	35,514			$	14,404			$	6,316		$	145,501
Provision charged to operations		7,488			5,131				1,378				2,196			16,193
Charge-offs		(20,332		)	(3,637		)		(2,313		)		(1,672		)	(27,954		)
Recoveries		7,001			1,237				535				487			9,260
Balance at September 30, 2013		$	83,424		$	38,245			$	14,004			$	7,327		$	143,000

The following table sets forth the balances of our residential interest-only mortgage loans at September 30, 2014 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin in:
Twelve months or less	$	494,856
Thirteen to twenty-four months	544,435
Twenty-five to thirty-six months	443,464
Over thirty-six months	159,342
Total	$	1,642,097

The following tables set forth the balances of our residential mortgage and consumer and other loan receivable segments by class and credit quality indicator at the dates indicated.

		At September 30, 2014
		Residential Mortgage Loans									Consumer and Other Loans
		Full Documentation					Reduced Documentation				Home Equity Lines of Credit
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing					Other
Performing		$	962,798	$	5,032,640		$	608,996	$	384,993		$	175,562	$	63,111
Non-performing:
Current or past due less than 90 days		21,165		6,054			27,950		5,759			—		—
Past due 90 days or more		9,268		9,549			11,920		1,132			6,289		34
Total		$	993,231	$	5,048,243		$	648,866	$	391,884		$	181,851	$	63,145
		At December 31, 2013
		Residential Mortgage Loans									Consumer and Other Loans
		Full Documentation					Reduced Documentation				Home Equity Lines of Credit
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing					Other
Performing		$	1,281,973	$	5,364,548		$	721,503	$	363,626		$	193,861	$	39,840
Non-performing:
Current or past due less than 90 days		21,957		12,824			30,248		6,219			32		—
Past due 90 days or more		78,271		42,085			87,910		26,112			5,916		32
Total		$	1,382,201	$	5,419,457		$	839,661	$	395,957		$	199,809	$	39,872

The following table sets forth the balances of our multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator at the dates indicated.

		At September 30, 2014						At December 31, 2013
				Commercial Real Estate						Commercial Real Estate
(In Thousands)	Multi-Family						Multi-Family
Not criticized		$	3,604,937		$	825,089		$	3,209,786		$	759,114
Criticized:
Special mention		22,390			16,578			14,063			9,760
Substandard		31,157			38,641			72,606			44,092
Doubtful		752			—			—			—
Total		$	3,659,236		$	880,308		$	3,296,455		$	812,966

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.

	At September 30, 2014
	Mortgage Loans							Consumer and Other Loans
			Multi-Family		Commercial Real Estate
(In Thousands)	Residential									Total
Loans:
Individually evaluated for impairment	$	181,486	$	44,312		$	19,183	$	5,768	$	250,749
Collectively evaluated for impairment	6,900,738		3,614,924			861,125		239,228		11,616,015
Total loans	$	7,082,224	$	3,659,236		$	880,308	$	244,996	$	11,866,764
Allowance for loan losses:
Individually evaluated for impairment	$	9,789	$	3,448		$	2,308	$	4,340	$	19,885
Collectively evaluated for impairment	39,543		34,859			14,227		5,086		93,715
Total allowance for loan losses	$	49,332	$	38,307		$	16,535	$	9,426	$	113,600

	At December 31, 2013
	Mortgage Loans							Consumer and Other Loans
			Multi-Family		Commercial Real Estate
(In Thousands)	Residential									Total
Loans:
Individually evaluated for impairment	$	311,930	$	52,538		$	20,054	$	—	$	384,522
Collectively evaluated for impairment	7,725,346		3,243,917			792,912		239,681		12,001,856
Total loans	$	8,037,276	$	3,296,455		$	812,966	$	239,681	$	12,386,378
Allowance for loan losses:
Individually evaluated for impairment	$	18,352	$	2,877		$	302	$	—	$	21,531
Collectively evaluated for impairment	61,985		33,826			12,834		8,824		117,469
Total allowance for loan losses	$	80,337	$	36,703		$	13,136	$	8,824	$	139,000

The following table summarizes information related to our impaired loans by segment and class at the dates indicated.

	At September 30, 2014									At December 31, 2013
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	62,496	$	53,319	$	(3,052	)	$	50,267	$	142,659	$	109,877	$	(6,019	)	$	103,858
Full documentation amortizing	35,521		33,189		(1,043		)	32,146		41,136		36,091		(2,458		)	33,633
Reduced documentation interest-only	91,461		77,977		(4,836		)	73,141		183,280		140,357		(7,673		)	132,684
Reduced documentation amortizing	18,298		17,001		(858		)	16,143		30,660		25,605		(2,202		)	23,403
Multi-family	36,424		29,043		(3,448		)	25,595		19,748		19,748		(2,877		)	16,871
Commercial real estate	26,130		19,183		(2,308		)	16,875		5,790		5,790		(302		)	5,488
Consumer and other loans:
Home equity lines of credit	6,051		5,768		(4,340		)	1,428		—		—		—			—
Without an allowance recorded:
Mortgage loans:
Multi-family	16,670		15,269		—			15,269		39,871		32,790		—			32,790
Commercial real estate	—		—		—			—		19,988		14,264		—			14,264
Total impaired loans	$	293,051	$	250,749	$	(19,885	)	$	230,864	$	483,132	$	384,522	$	(21,531	)	$	362,991

The following tables set forth the average recorded investment, interest income recognized and cash basis interest income related to our impaired loans by segment and class for the periods indicated.

	For the Three Months Ended September 30,
	2014						2013
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	78,799	$	440	$	461	$	107,893	$	762	$	763
Full documentation amortizing	38,051		289		283		31,128		218		220
Reduced documentation interest-only	104,522		782		814		144,468		1,171		1,174
Reduced documentation amortizing	20,781		141		147		24,452		158		152
Multi-family	33,013		329		328		19,557		34		169
Commercial real estate	19,673		289		261		7,604		56		66
Consumer and other loans:
Home equity lines of credit	5,546		5		13		—		—		—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	—		—		—		9,075		—		—
Full documentation amortizing	314		—		—		2,968		—		—
Multi-family	13,419		175		175		31,464		401		416
Commercial real estate	—		—		—		11,252		112		131
Total impaired loans	$	314,118	$	2,450	$	2,482	$	389,861	$	2,912	$	3,091
	For the Nine Months Ended September 30,
	2014						2013
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	93,748	$	1,644	$	1,695	$	105,931	$	2,114	$	2,229
Full documentation amortizing	37,926		993		992		29,465		623		639
Reduced documentation interest-only	120,976		2,922		2,939		146,773		3,053		3,205
Reduced documentation amortizing	23,142		478		482		25,424		464		493
Multi-family	30,836		952		970		18,975		659		722
Commercial real estate	16,859		748		813		8,692		253		285
Consumer and other loans:
Home equity lines of credit	5,215		37		51		—		—		—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	—		—		—		14,433		—		—
Full documentation amortizing	457		—		—		4,396		—		—
Reduced documentation interest-only	—		—		—		2,086		—		—
Multi-family	17,906		529		530		33,294		1,165		1,229
Commercial real estate	3,566		—		—		10,118		286		319
Total impaired loans	$	350,631	$	8,303	$	8,472	$	399,587	$	8,617	$	9,121

The following tables set forth information about our mortgage loans receivable by segment and class at September 30, 2014 and 2013 which were modified in a troubled debt restructuring, or TDR, during the periods indicated.

	Modifications During the Three Months Ended September 30,
	2014								2013
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2013
Residential:
Full documentation interest-only		3		$	1,447		$	1,447		7		$	2,128		$	2,127
Full documentation amortizing		—		—			—			1		161			161
Reduced documentation interest-only		9		3,585			3,581			10		3,107			3,096
Reduced documentation amortizing		1		282			281			2		387			386
Multi-family		2		1,441			1,055			5		3,967			3,774
Commercial real estate		1		1,569			1,569			4		6,488			5,458
Total		16		$	8,324		$	7,933		29		$	16,238		$	15,002

	Modifications During the Nine Months Ended September 30,
	2014								2013
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2013
Residential:
Full documentation interest-only		21		$	9,244		$	8,776		18		$	4,579		$	4,577
Full documentation amortizing		3		519			485			6		1,662			1,682
Reduced documentation interest-only		17		5,885			5,860			28		8,957			8,921
Reduced documentation amortizing		3		599			541			8		2,470			2,408
Multi-family		4		2,501			1,994			8		6,751			6,228
Commercial real estate		3		2,482			2,453			7		10,443			9,125
Total		51		$	21,230		$	20,109		75		$	34,862		$	32,941

The following tables set forth information about our mortgage loans receivable by segment and class at September 30, 2014 and 2013 which were modified in a TDR during the twelve month periods ended September 30, 2014 and 2013 and had a payment default subsequent to the modification during the periods indicated.

	For the Three Months Ended September 30,
	2014					2013
(Dollars In Thousands)	Numberof Loans		RecordedInvestment at September 30, 2014			Numberof Loans		RecordedInvestment at September 30, 2013
Residential:
Full documentation interest-only		2		$	714		14		$	3,365
Full documentation amortizing		3		852			8		2,159
Reduced documentation interest-only		2		910			20		5,729
Reduced documentation amortizing		—		—			2		303
Multi-family		—		—			1		671
Total		7		$	2,476		45		$	12,227

	For the Nine Months Ended September 30,
	2014					2013
(Dollars In Thousands)	Numberof Loans		RecordedInvestment at September 30, 2014			Numberof Loans		RecordedInvestment at September 30, 2013
Residential:
Full documentation interest-only		3		$	854		22		$	5,343
Full documentation amortizing		4		1,057			10		2,589
Reduced documentation interest-only		4		1,799			24		6,707
Reduced documentation amortizing		1		92			5		880
Multi-family		—		—			1		671
Total		12		$	3,802		62		$	16,190

Included in loans receivable at September 30, 2014 are loans in the process of foreclosure collateralized by residential real estate property with a recorded investment of $18.7 million.

For additional information regarding our loans receivable and allowance for loan losses, see “Asset Quality” and “Critical Accounting Policies” in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or “MD&A.”

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Pension Plans and Other Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of net periodic (benefit) cost for defined benefit pension plans and other postretirement benefit plan

The following tables set forth information regarding the components of net periodic (benefit) cost for our defined benefit pension plans and other postretirement benefit plan for the periods indicated.

		Pension Benefits							Other Postretirement Benefits
	For the Three Months Ended September 30,							For the Three Months Ended September 30,
(In Thousands)		2014			2013				2014			2013
Service cost		$	—		$	—			$	309		$	396
Interest cost		2,613			2,387				233			319
Expected return on plan assets		(3,710		)	(3,188		)		—			—
Recognized net actuarial loss (gain)		350			785				(122		)	118
Amortization of prior service cost		47			53				—			—
Net periodic (benefit) cost		$	(700	)	$	37			$	420		$	833
		Pension Benefits							Other Postretirement Benefits
	For the Nine Months Ended September 30,							For the Nine Months Ended September 30,
(In Thousands)		2014			2013				2014			2013
Service cost		$	—		$	—			$	930		$	1,185
Interest cost		7,838			7,162				698			959
Expected return on plan assets		(11,132		)	(9,565		)		—			—
Recognized net actuarial loss (gain)		1,051			2,354				(366		)	354
Amortization of prior service cost		142			159				—			—
Net periodic (benefit) cost		$	(2,101	)	$	110			$	1,262		$	2,498

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Securities (Tables)

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost and Estimated Fair Value of Securities Available-For-Sale and Held-to-Maturity

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 September 30, 2014
(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)	$	250,318		$	3,191		$	(2,763	)	$	250,746
Non-GSE issuance REMICs and CMOs	5,685			43			(1		)	5,727
GSE pass-through certificates	13,538			478			(5		)	14,011
Total residential mortgage-backed securities	269,541			3,712			(2,769		)	270,484
Obligations of GSEs	98,679			—			(3,140		)	95,539
Fannie Mae stock	15			—			(12		)	3
Total securities available-for-sale	$	368,235		$	3,712		$	(5,921	)	$	366,026
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,562,719		$	12,793		$	(23,830	)	$	1,551,682
Non-GSE issuance REMICs and CMOs	2,669			37			(7		)	2,699
GSE pass-through certificates	290,152			1,168			(5,360		)	285,960
Total residential mortgage-backed securities	1,855,540			13,998			(29,197		)	1,840,341
Multi-family mortgage-backed securities:
GSE issuance REMICs	106,326			260			(541		)	106,045
Obligations of GSEs	90,934			52			(2,531		)	88,455
Other	537			—			—			537
Total securities held-to-maturity	$	2,053,337		$	14,310		$	(32,269	)	$	2,035,378

(1) Government-sponsored enterprise

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

	At December 31, 2013
(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	$	292,131		$	1,077		$	(7,134	)	$	286,074
Non-GSE issuance REMICs and CMOs	7,516			57			(1		)	7,572
GSE pass-through certificates	16,120			770			(2		)	16,888
Total residential mortgage-backed securities	315,767			1,904			(7,137		)	310,534
Obligations of GSEs	98,675			—			(7,522		)	91,153
Fannie Mae stock	15			—			(12		)	3
Total securities available-for-sale	$	414,457		$	1,904		$	(14,671	)	$	401,690
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,474,506		$	12,877		$	(33,925	)	$	1,453,458
Non-GSE issuance REMICs and CMOs	3,833			61			(10		)	3,884
GSE pass-through certificates	282,473			85			(10,089		)	272,469
Total residential mortgage-backed securities	1,760,812			13,023			(44,024		)	1,729,811
Obligations of GSEs	88,128			—			(7,403		)	80,725
Other	586			—			—			586
Total securities held-to-maturity	$	1,849,526		$	13,023		$	(51,427	)	$	1,811,122

Schedule of Estimated Fair Values of Securities with Gross Unrealized Losses in Continuous Unrealized Loss Position for Less Than Twelve Months and for Twelve Months or Longer

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 September 30, 2014
	Less Than Twelve Months						Twelve Months or Longer						Total
(In Thousands)	Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		GrossUnrealized Losses				Estimated Fair Value		GrossUnrealized Losses
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	22,413		$	(136	)	$	97,773		$	(2,627	)	$	120,186		$	(2,763	)
Non-GSE issuance REMICs and CMOs	—			—			102			(1		)	102			(1		)
GSE pass-through certificates	597			(4		)	78			(1		)	675			(5		)
Obligations of GSEs	—			—			95,539			(3,140		)	95,539			(3,140		)
Fannie Mae stock	—			—			3			(12		)	3			(12		)
Total temporarily impaired securities available-for-sale	$	23,010		$	(140	)	$	193,495		$	(5,781	)	$	216,505		$	(5,921	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	300,843		$	(3,374	)	$	483,810		$	(20,456	)	$	784,653		$	(23,830	)
Non-GSE issuance REMICs and CMOs	—			—			296			(7		)	296			(7		)
GSE pass-through certificates	—			—			168,261			(5,360		)	168,261			(5,360		)
Multi-family mortgage-backed securities:
GSE issuance REMICs	72,587			(541		)	—			—			72,587			(541		)
Obligations of GSEs	—			—			78,403			(2,531		)	78,403			(2,531		)
Total temporarily impaired securities held-to-maturity	$	373,430		$	(3,915	)	$	730,770		$	(28,354	)	$	1,104,200		$	(32,269	)

	At December 31, 2013
	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	$	243,149		$	(7,134	)	$	—		$	—		$	243,149		$	(7,134	)
Non-GSE issuance REMICs and CMOs	—			—			132			(1		)	132			(1		)
GSE pass-through certificates	172			(1		)	70			(1		)	242			(2		)
Obligations of GSEs	91,153			(7,522		)	—			—			91,153			(7,522		)
Fannie Mae stock	—			—			3			(12		)	3			(12		)
Total temporarily impaired securities available-for-sale	$	334,474		$	(14,657	)	$	205		$	(14	)	$	334,679		$	(14,671	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	719,715		$	(25,611	)	$	151,581		$	(8,314	)	$	871,296		$	(33,925	)
Non-GSE issuance REMICs and CMOs	392			(10		)	—			—			392			(10		)
GSE pass-through certificates	230,795			(10,088		)	28			(1		)	230,823			(10,089		)
Obligations of GSEs	80,725			(7,403		)	—			—			80,725			(7,403		)
Total temporarily impaired securities held-to-maturity	$	1,031,627		$	(43,112	)	$	151,609		$	(8,315	)	$	1,183,236		$	(51,427	)

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Stock Incentive Plans

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Incentive Plans

Stock Incentive Plans

On May 21, 2014, our shareholders approved the 2014 Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2014 Plan, which amended and restated the Re-designated, Amended and Restated Stock Incentive Plan for Officers and Employees of Astoria Financial Corporation, or the 2005 Employee Stock Plan, as of that date, or the Effective Date.  The 2014 Plan authorized 3,250,000 shares of common stock for future grants to officers and employees on and after the Effective Date.  In addition, immediately prior to the approval of the 2014 Plan, there remained 507,925 shares available for future grants under the 2005 Employee Stock Plan which were carried over to the 2014 Plan.  There were no grants under the 2014 Plan during the 2014 third quarter. Accordingly, at September 30, 2014, 3,757,925 shares of common stock remain available for future grants under the 2014 Plan and no further grants may be made under the 2005 Employee Stock Plan.

During the six months ended June 30, 2014, 396,840 shares of restricted common stock were granted to select officers under the 2005 Employee Stock Plan, of which 128,340 shares vest on December 15, 2014, 128,940 shares vest on December 14, 2015, 130,140 shares vest on December 14, 2016 and 9,420 shares were forfeited as of September 30, 2014.  In the event the grantee terminates his/her employment due to death or disability, or in the event we experience a change in control, as defined and specified in the 2005 Employee Stock Plan, all restricted common stock granted pursuant to such plan immediately vests.  Also, during the six months ended June 30, 2014, 395,900 performance-based restricted stock units were granted to select officers under the 2005 Employee Stock Plan, of which 386,300 units remain outstanding at September 30, 2014.  Each restricted stock unit granted represents a right, under the 2005 Employee Stock Plan, to receive one share of our common stock in the future, subject to meeting certain criteria.  The restricted stock units have specified performance objectives within a specified performance measurement period and no voting or dividend rights prior to vesting and delivery of shares.  The performance measurement period for these restricted stock units is the fiscal year ending December 31, 2016 and the vest date is February 1, 2017.  Shares will be issued on the vest date at either 125%, 100%, 75%, 50% or 0% of units granted based on actual performance during the performance measurement period.  However, in the event of a change in control during the performance measurement period, the restricted stock units will vest on the change in control date and shares will be issued at 100% of units granted.  Absent a change in control, if a grantee’s employment terminates prior to December 31, 2016 all restricted stock units will be forfeited.  In the event a grantee’s employment terminates during the period on or after December 31, 2016 through February 1, 2017 due to death, disability, retirement or a change in control, the grantee will remain entitled to the shares otherwise earned. 

During the nine months ended September 30, 2014, 32,506 shares of restricted common stock were granted to directors under the Astoria Financial Corporation 2007 Non-Employee Directors Stock Plan, as amended, of which 28,148 remain outstanding at September 30, 2014 and vest 100% in February 2017, although awards immediately vest upon death, disability, mandatory retirement, involuntary termination or a change in control, as such terms are defined in the plan.

The following table summarizes restricted common stock and performance-based restricted stock unit activity in our stock incentive plans for the nine months ended September 30, 2014.

	Restricted Common Stock						Restricted Stock Units
	Number of Units		Weighted Average Grant Date Fair Value				Number of Units			Weighted Average Grant Date Fair Value
Unvested at January 1, 2014	781,644			$	11.46			409,100			$	9.22
Granted	429,346			12.63				395,900			12.14
Vested	(55,168	)		(11.04		)		—			—
Forfeited	(23,590	)		(11.93		)		(20,600	)		(10.58		)
Unvested at September 30, 2014	1,132,232			11.91				784,400			10.66

Stock-based compensation expense is recognized on a straight-line basis over the vesting period and totaled $1.4 million, net of taxes of $789,000, for the three months ended September 30, 2014 and $4.2 million, net of taxes of $2.3 million, for the nine months ended September 30, 2014.  Stock-based compensation expense totaled $1.2 million, net of taxes of $636,000, for the three months ended September 30, 2013 and $3.4 million, net of taxes of $1.9 million, for the nine months ended September 30, 2013.  At September 30, 2014, pre-tax compensation cost related to all nonvested awards of restricted common stock and restricted stock units not yet recognized totaled $12.4 million and will be recognized over a weighted average period of approximately 1.9 years, which excludes $1.8 million of pre-tax compensation cost related to 65,000 shares of performance-based restricted common stock and 99,525 performance-based restricted stock units, for which compensation cost will begin to be recognized when the achievement of the performance conditions becomes probable.

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Other Comprehensive Income/Loss

9 Months Ended

Sep. 30, 2014

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Other Comprehensive Income/Loss

Other Comprehensive Income/Loss

The following tables set forth the components of accumulated other comprehensive loss, net of related tax effects, at the dates indicated and the changes during the three and nine months ended September 30, 2014 and 2013.

(In Thousands)	At    June 30, 2014				Other Comprehensive (Loss) Income				At   September 30, 2014
Net unrealized gain on securities available-for-sale		$	3,326			$	(511	)		$	2,815
Net actuarial loss on pension plans and other postretirement benefits		(30,304		)		147				(30,157		)
Prior service cost on pension plans and other postretirement benefits		(3,223		)		31				(3,192		)
Accumulated other comprehensive loss		$	(30,201	)		$	(333	)		$	(30,534	)
(In Thousands)	At   December 31, 2013				Other Comprehensive Income				At   September 30, 2014
Net unrealized (loss) gain on securities available-for-sale		$	(4,366	)		$	7,181			$	2,815
Net actuarial loss on pension plans and other postretirement benefits		(30,600		)		443				(30,157		)
Prior service cost on pension plans and other postretirement benefits		(3,284		)		92				(3,192		)
Accumulated other comprehensive loss		$	(38,250	)		$	7,716			$	(30,534	)
(In Thousands)	At   June 30, 2013				Other Comprehensive (Loss) Income				At   September 30, 2013
Net unrealized loss on securities available-for-sale		$	(484	)		$	(1,286	)		$	(1,770	)
Net actuarial loss on pension plans and other postretirement benefits		(75,946		)		585				(75,361		)
Prior service cost on pension plans and other postretirement benefits		(3,357		)		34				(3,323		)
Accumulated other comprehensive loss		$	(79,787	)		$	(667	)		$	(80,454	)

(In Thousands)	At   December 31, 2012				Other Comprehensive (Loss) Income				At   September 30, 2013
Net unrealized gain (loss) on securities available-for-sale		$	7,451			$	(9,221	)		$	(1,770	)
Net actuarial loss on pension plans and other postretirement benefits		(77,115		)		1,754				(75,361		)
Prior service cost on pension plans and other postretirement benefits		(3,426		)		103				(3,323		)
Accumulated other comprehensive loss		$	(73,090	)		$	(7,364	)		$	(80,454	)

The following tables set forth the components of other comprehensive income/loss for the periods indicated.

		For the Three Months Ended   September 30, 2014
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized loss on securities available-for-sale:
Net unrealized holding loss on securities arising during the period		$	(649	)		$	229			$	(420	)
Reclassification adjustment for gain on sales of securities included in net income		(141		)		50				(91		)
Net unrealized loss on securities available-for-sale		(790		)		279				(511		)
Reclassification adjustment for net actuarial loss included in net income		228				(81		)		147
Reclassification adjustment for prior service cost included in net income		47				(16		)		31
Other comprehensive loss		$	(515	)		$	182			$	(333	)

		For the Nine Months Ended   September 30, 2014
(In Thousands)	Before Tax Amount				Tax(Expense) Benefit				After Tax Amount
Net unrealized gain on securities available-for-sale:
Net unrealized holding gain on securities arising during the period		$	11,242			$	(3,970	)		$	7,272
Reclassification adjustment for gain on sales of securities included in net income		(141		)		50				(91		)
Net unrealized gain on securities available-for-sale		11,101				(3,920		)		7,181
Reclassification adjustment for net actuarial loss included in net income		685				(242		)		443
Reclassification adjustment for prior service cost included in net income		142				(50		)		92
Other comprehensive income		$	11,928			$	(4,212	)		$	7,716

		For the Three Months Ended   September 30, 2013
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized holding loss on securities available-for-sale arising during the period		$	(1,984	)		$	698			$	(1,286	)
Reclassification adjustment for net actuarial loss included in net income		903				(318		)		585
Reclassification adjustment for prior service cost included in net income		53				(19		)		34
Other comprehensive loss		$	(1,028	)		$	361			$	(667	)

		For the Nine Months Ended   September 30, 2013
(In Thousands)	Before Tax Amount				Tax Benefit (Expense)				After Tax Amount
Net unrealized loss on securities available-for-sale:
Net unrealized holding loss on securities arising during the period		$	(12,180	)		$	4,291			$	(7,889	)
Reclassification adjustment for gain on sales of securities included in net income		(2,057		)		725				(1,332		)
Net unrealized loss on securities available-for-sale		(14,237		)		5,016				(9,221		)
Reclassification adjustment for net actuarial loss included in net income		2,708				(954		)		1,754
Reclassification adjustment for prior service cost included in net income		159				(56		)		103
Other comprehensive loss		$	(11,370	)		$	4,006			$	(7,364	)

The following tables set forth information about amounts reclassified from accumulated other comprehensive loss to, and the affected line items in, the consolidated statements of income for the periods indicated.

(In Thousands)	For the   Three Months Ended   September 30, 2014				For the   Three Months Ended   September 30, 2013				Income Statement Line Item
Reclassification adjustment for gain on sales of securities		$	141			$	—		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(228		)		(903		)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(47		)		(53		)	Compensation and benefits
Total reclassifications, before tax		(134		)		(956		)
Income tax effect		47				337			Income tax expense
Total reclassifications, net of tax		$	(87	)		$	(619	)	Net income

(In Thousands)	For the   Nine Months Ended   September 30, 2014				For the   Nine Months Ended   September 30, 2013				Income Statement Line Item
Reclassification adjustment for gain on sales of securities		$	141			$	2,057		Gain on sales of securities
Reclassification adjustment for net actuarial loss (1)		(685		)		(2,708		)	Compensation and benefits
Reclassification adjustment for prior service cost (1)		(142		)		(159		)	Compensation and benefits
Total reclassifications, before tax		(686		)		(810		)
Income tax effect		242				285			Income tax expense
Total reclassifications, net of tax		$	(444	)		$	(525	)	Net income

(1) These other comprehensive income/loss components are included in the computations of net periodic (benefit) cost for our defined benefit pension plans and other postretirement benefit plan. See Note 6 for additional details.

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Pension Plans and Other Postretirement Benefits

9 Months Ended

Sep. 30, 2014

Compensation and Retirement Disclosure [Abstract]

Pension Plans and Other Postretirement Benefits

Pension Plans and Other Postretirement Benefits

The following tables set forth information regarding the components of net periodic (benefit) cost for our defined benefit pension plans and other postretirement benefit plan for the periods indicated.

		Pension Benefits							Other Postretirement Benefits
	For the Three Months Ended September 30,							For the Three Months Ended September 30,
(In Thousands)		2014			2013				2014			2013
Service cost		$	—		$	—			$	309		$	396
Interest cost		2,613			2,387				233			319
Expected return on plan assets		(3,710		)	(3,188		)		—			—
Recognized net actuarial loss (gain)		350			785				(122		)	118
Amortization of prior service cost		47			53				—			—
Net periodic (benefit) cost		$	(700	)	$	37			$	420		$	833
		Pension Benefits							Other Postretirement Benefits
	For the Nine Months Ended September 30,							For the Nine Months Ended September 30,
(In Thousands)		2014			2013				2014			2013
Service cost		$	—		$	—			$	930		$	1,185
Interest cost		7,838			7,162				698			959
Expected return on plan assets		(11,132		)	(9,565		)		—			—
Recognized net actuarial loss (gain)		1,051			2,354				(366		)	354
Amortization of prior service cost		142			159				—			—
Net periodic (benefit) cost		$	(2,101	)	$	110			$	1,262		$	2,498

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Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures.  We group our assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value.  These levels are:

• Level 1 – Valuation is based upon quoted prices for identical instruments traded in active markets.

• Level 2 – Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market.

• Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.

We base our fair values on the estimated price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, with additional considerations when the volume and level of activity for an asset or liability have significantly decreased and on identifying circumstances that indicate a transaction is not orderly.  We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Recurring Fair Value Measurements

Our securities available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity.  Additionally, in connection with our mortgage banking activities we have commitments to fund loans held-for-sale and commitments to sell loans, which are considered free-standing derivative financial instruments, the fair values of which are not material to our financial condition or results of operations.

The following tables set forth the carrying values of our assets measured at estimated fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	Carrying Value at September 30, 2014
(In Thousands)	Total		Level 1		Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	250,746	$	—	$	250,746
Non-GSE issuance REMICs and CMOs	5,727		—		5,727
GSE pass-through certificates	14,011		—		14,011
Obligations of GSEs	95,539		—		95,539
Fannie Mae stock	3		3		—
Total securities available-for-sale	$	366,026	$	3	$	366,023
	Carrying Value at December 31, 2013
(In Thousands)	Total		Level 1		Level 2
Securities available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	286,074	$	—	$	286,074
Non-GSE issuance REMICs and CMOs	7,572		—		7,572
GSE pass-through certificates	16,888		—		16,888
Obligations of GSEs	91,153		—		91,153
Fannie Mae stock	3		3		—
Total securities available-for-sale	$	401,690	$	3	$	401,687

The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis.

Residential mortgage-backed securities

Residential mortgage-backed securities comprised 74% of our securities available-for-sale portfolio at September 30, 2014 and 77% at December 31, 2013.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service uses various modeling techniques to determine pricing for our mortgage-backed securities, including option pricing and discounted cash flow models.  The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, reference data, monthly payment information and collateral performance.  GSE securities, for which an active market exists for similar securities making observable inputs readily available, comprised 98% of our available-for-sale residential mortgage-backed securities portfolio at September 30, 2014 and December 31, 2013.

We review changes in the pricing service fair values from month to month taking into consideration changes in market conditions including changes in mortgage spreads, changes in treasury yields and changes in generic pricing on fifteen and thirty year securities.  Significant month over month price changes are analyzed further using discounted cash flow models and, on occasion, third party quotes.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Obligations of GSEs

Obligations of GSEs comprised 26% of our securities available-for-sale portfolio at September 30, 2014 and 23% at December 31, 2013 and consisted of debt securities issued by GSEs.  The fair values for these securities are obtained from an independent nationally recognized pricing service.  Our pricing service gathers information from market sources and integrates relative credit information, observed market movements and sector news into their pricing applications and models.  Spread scales, representing credit risk, are created and are based on the new issue market, secondary trading and dealer quotes.  Option adjusted spread, or OAS, models are incorporated to adjust spreads of issues that have early redemption features.  Based upon our review of the prices provided by our pricing service, the estimated fair values incorporate observable market inputs commonly used by buyers and sellers of these types of securities at the measurement date in orderly transactions between market participants, and, as such, are classified as Level 2.

Fannie Mae stock

The fair value of the Fannie Mae stock in our available-for-sale securities portfolio is obtained from quoted market prices for identical instruments in active markets and, as such, is classified as Level 1.

Non-Recurring Fair Value Measurements

From time to time, we may be required to record at fair value assets or liabilities on a non-recurring basis, such as mortgage servicing rights, or MSR, loans receivable, certain assets held-for-sale and REO.  These non-recurring fair value adjustments involve the application of lower of cost or market accounting or impairment write-downs of individual assets.

The following table sets forth the carrying values of those of our assets which were measured at fair value on a non-recurring basis at the dates indicated.  The fair value measurements for all of these assets fall within Level 3 of the fair value hierarchy.

		Carrying Value
(In Thousands)	At September 30, 2014			At December 31, 2013
Non-performing loans held-for-sale, net		$	154		$	791
Impaired loans		144,258			271,408
MSR, net		11,905			12,800
REO, net		19,971			27,101
Total		$	176,288		$	312,100

The following table provides information regarding the losses recognized on our assets measured at fair value on a non-recurring basis for the periods indicated.

	For the Nine Months Ended September 30,
(In Thousands)		2014		2013
Non-performing loans held-for-sale, net (1)		$	—	$	567
Impaired loans (2)		5,187		16,698
MSR, net (3)		—		—
REO, net (4)		1,811		2,630
Total		$	6,998	$	19,895

(1) Losses are charged against the allowance for loan losses in the case of a write-down upon the reclassification of a loan to held-for-sale. Losses subsequent to the reclassification of a loan to held-for-sale are charged to other non-interest income.

(2) Losses are charged against the allowance for loan losses.

(3) Losses are charged to mortgage banking income, net.

(4) Losses are charged against the allowance for loan losses in the case of a write-down upon the transfer of a loan to REO. Losses subsequent to the transfer of a loan to REO are charged to REO expense which is a component of other non-interest expense.

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

Loans held-for-sale, net (non-performing loans held-for-sale)

Included in loans held-for-sale, net, are non-performing loans held-for-sale for which fair values are estimated through either preliminary bids from potential purchasers of the loans or the estimated fair value of the underlying collateral discounted for factors necessary to solicit acceptable bids, and adjusted as necessary based on management’s experience with sales of similar types of loans and, as such, are classified as Level 3.  All of the non-performing loans held-for-sale included in loans held-for-sale, net, at September 30, 2014, and substantially all at December 31, 2013, were multi-family mortgage loans.

Loans receivable, net (impaired loans)

Loans which meet certain criteria are evaluated individually for impairment.  A loan is considered impaired when, based upon current information and events, it is probable that we will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the loan agreement.  Impaired loans were comprised of 73% residential mortgage loans, 25% multi-family and commercial real estate mortgage loans and 2% home equity lines of credit at September 30, 2014 and 81% residential mortgage loans and 19% multi-family and commercial real estate mortgage loans at December 31, 2013.  Impaired loans for which a fair value adjustment was recognized were comprised of 66% residential mortgage loans, 33% multi-family and commercial real estate mortgage loans and 1% home equity lines of credit at September 30, 2014 and 83% residential mortgage loans and 17% multi-family and commercial real estate mortgage loans at December 31, 2013.  Our impaired loans are generally collateral dependent and, as such, are generally carried at the estimated fair value of the underlying collateral less estimated selling costs.

We obtain updated estimates of collateral values on residential mortgage loans at 180 days past due and earlier in certain instances, including for loans to borrowers who have filed for bankruptcy, and, to the extent the loans remain delinquent, annually thereafter.  Updated estimates of collateral value on residential loans are obtained primarily through automated valuation models. Additionally, our loan servicer performs property inspections to monitor and manage the collateral on our residential loans when they become 45 days past due and monthly thereafter until the foreclosure process is complete.  We obtain updated estimates of collateral value using third party appraisals on non-performing multi-family and commercial real estate mortgage loans when the loans initially become non-performing and annually thereafter and multi-family and commercial real estate loans modified in a TDR at the time of the modification and annually thereafter.  Appraisals on multi-family and commercial real estate loans are reviewed by our internal certified appraisers.  Adjustments to final appraised values obtained from independent third party appraisers and automated valuation models are not made.  The fair values of impaired loans cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the loan and, as such, are classified as Level 3.

MSR, net

The right to service loans for others is generally obtained through the sale of residential mortgage loans with servicing retained.  MSR are carried at the lower of cost or estimated fair value.  The estimated fair value of MSR is obtained through independent third party valuations through an analysis of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3.  At September 30, 2014, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 9.48%, a weighted average constant prepayment rate on mortgages of 11.77% and a weighted average life of 5.9 years.  At December 31, 2013, our MSR were valued based on expected future cash flows considering a weighted average discount rate of 9.45%, a weighted average constant prepayment rate on mortgages of 10.52% and a weighted average life of 6.3 years.  Management reviews the assumptions used to estimate the fair value of MSR to ensure they reflect current and anticipated market conditions.

REO, net

REO represents real estate acquired through foreclosure or by deed in lieu of foreclosure. At September 30, 2014, REO totaled $42.5 million, including residential properties with a carrying value of $40.4 million. At December 31, 2013, REO totaled $42.6 million, all of which were residential properties. REO is carried, net of allowances for losses, at the lower of cost or fair value less estimated selling costs.  The fair value of REO is estimated through current appraisals, in conjunction with a drive-by inspection and comparison of the REO property with similar properties in the area by either a licensed appraiser or real estate broker.  As these properties are actively marketed, estimated fair values are periodically adjusted by management to reflect current market conditions and, as such, are classified as Level 3.

Fair Value of Financial Instruments

Quoted market prices available in formal trading marketplaces are typically the best evidence of the fair value of financial instruments.  In many cases, financial instruments we hold are not bought or sold in formal trading marketplaces.  Accordingly, fair values are derived or estimated based on a variety of valuation techniques in the absence of quoted market prices.  Fair value estimates are made at a specific point in time, based on relevant market information about the financial instrument.  These estimates do not reflect any possible tax ramifications, estimated transaction costs, or any premium or discount that could result from offering for sale at one time our entire holdings of a particular financial instrument.  Because no market exists for a certain portion of our financial instruments, fair value estimates are based on judgments regarding future loss experience, current economic conditions, risk characteristics and other such factors.  These estimates are subjective in nature, involve uncertainties and, therefore, cannot be determined with precision.  Changes in assumptions could significantly affect the estimates.  For these reasons and others, the estimated fair value disclosures presented herein do not represent our entire underlying value.  As such, readers are cautioned in using this information for purposes of evaluating our financial condition and/or value either alone or in comparison with any other company.

The following tables set forth the carrying values and estimated fair values of our financial instruments which are carried on the consolidated statements of financial condition at either cost or at lower of cost or fair value in accordance with GAAP, and are not measured or recorded at fair value on a recurring basis, and the level within the fair value hierarchy in which the fair value measurements fall at the dates indicated.

	At September 30, 2014
	Carrying		Estimated Fair Value
(In Thousands)	Value		Total		Level 2		Level 3
Financial Assets:
Securities held-to-maturity	$	2,053,337	$	2,035,378	$	2,035,378	$	—
FHLB-NY stock	133,398		133,398		133,398		—
Loans held-for-sale, net (1)	7,629		7,849		—		7,849
Loans receivable, net (1)	11,802,335		11,906,833		—		11,906,833
MSR, net (1)	11,905		11,909		—		11,909
Financial Liabilities:
Deposits	9,612,761		9,648,916		9,648,916		—
Borrowings, net	3,911,559		4,115,223		4,115,223		—

	At December 31, 2013
	Carrying		Estimated Fair Value
(In Thousands)	Value		Total		Level 2		Level 3
Financial Assets:
Securities held-to-maturity	$	1,849,526	$	1,811,122	$	1,811,122	$	—
FHLB-NY stock	152,207		152,207		152,207		—
Loans held-for-sale, net (1)	7,375		7,436		—		7,436
Loans receivable, net (1)	12,303,066		12,480,533		—		12,480,533
MSR, net (1)	12,800		12,804		—		12,804
Financial Liabilities:
Deposits	9,855,310		9,922,631		9,922,631		—
Borrowings, net	4,137,161		4,376,336		4,376,336		—

(1) Includes assets measured at fair value on a non-recurring basis.

The following is a description of the methods and assumptions used to estimate fair values of our financial instruments which are not measured or recorded at fair value on a recurring or non-recurring basis.

Securities held-to-maturity

The fair values for substantially all of our securities held-to-maturity are obtained from an independent nationally recognized pricing service using similar methods and assumptions as used for our securities available-for-sale which are measured at fair value on a recurring basis.

Federal Home Loan Bank of New York, or FHLB-NY, stock

The fair value of FHLB-NY stock is based on redemption at par value.

Loans held-for-sale, net

Included in loans held-for-sale, net, are 15 and 30 year fixed rate residential mortgage loans originated for sale that conform to GSE guidelines (conforming loans) for which fair values are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the options and structural features embedded in loans.  This methodology involves generating simulated interest rates, calculating the OAS of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing for similar mortgage instruments whose prices are not known.

Loans receivable, net

Fair values of loans are estimated using an option-based pricing methodology designed to take into account interest rate volatility, which has a significant effect on the value of the options and structural features embedded in loans.  This pricing methodology involves generating simulated interest rates, calculating the OAS of a mortgage-backed security whose price is known, which serves as a benchmark price, and using the benchmark OAS to estimate the pricing for similar mortgage instruments whose prices are not known.

This technique of estimating fair value is extremely sensitive to the assumptions and estimates used.  While we have attempted to use assumptions and estimates which are the most reflective of the loan portfolio and the current market, a greater degree of subjectivity is inherent in determining these fair values than for fair values obtained from formal trading marketplaces.  In addition, our valuation method for loans, which is consistent with accounting guidance, does not fully incorporate an exit price approach to fair value.

Deposits

The fair values of deposits with no stated maturity, such as savings, money market and NOW and demand deposit accounts, are equal to the amount payable on demand.  The fair values of certificates of deposit are based on discounted contractual cash flows using the weighted average remaining life of the portfolio discounted by the corresponding LIBOR Swap Curve.

Borrowings, net

The fair values of borrowings are based upon third party dealers’ estimated market values which are reviewed by management quarterly using an OAS model.

Outstanding commitments

Outstanding commitments include commitments to extend credit and unadvanced lines of credit for which fair values were estimated based on an analysis of the interest rates and fees currently charged to enter into similar transactions.  The fair values of these commitments are immaterial to our financial condition.

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Loans Receivable and Allowance for Loan Losses (Residential Mortgage, Consumer and Other Loans, by Class and Credit Quality Indicator) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Recorded Investment
Total	$ 11,866,764	$ 12,386,378
Past due 90 days or more	44,833	250,534
Consumer and Other Loans
Recorded Investment
Total	244,996	239,681
Past due 90 days or more	6,323	5,948
Consumer and Other Loans | Home equity lines of credit
Recorded Investment
Total	181,851	199,809
Past due 90 days or more	6,289	5,916
Consumer and Other Loans | Other loans
Recorded Investment
Total	63,145	39,872
Past due 90 days or more	34	32
Mortgage loans (gross)
Recorded Investment
Total	11,621,768	12,146,697
Past due 90 days or more	38,510	244,586
Mortgage loans (gross) | Residential Mortgage Loans
Recorded Investment
Total	7,082,224	8,037,276
Past due 90 days or more	31,869	234,378
Mortgage loans (gross) | Residential Mortgage Loans | Full documentation interest-only
Recorded Investment
Total	993,231	1,382,201
Past due 90 days or more	9,268	78,271
Mortgage loans (gross) | Residential Mortgage Loans | Full documentation amortizing loans
Recorded Investment
Total	5,048,243	5,419,457
Past due 90 days or more	9,549	42,085
Mortgage loans (gross) | Residential Mortgage Loans | Reduced documentation interest-only loans
Recorded Investment
Total	648,866	839,661
Past due 90 days or more	11,920	87,910
Mortgage loans (gross) | Residential Mortgage Loans | Reduced documentation amortizing loans
Recorded Investment
Total	391,884	395,957
Past due 90 days or more	1,132	26,112
Performing | Consumer and Other Loans | Home equity lines of credit
Recorded Investment
Total	175,562	193,861
Performing | Consumer and Other Loans | Other loans
Recorded Investment
Total	63,111	39,840
Performing | Mortgage loans (gross) | Residential Mortgage Loans | Full documentation interest-only
Recorded Investment
Total	962,798	1,281,973
Performing | Mortgage loans (gross) | Residential Mortgage Loans | Full documentation amortizing loans
Recorded Investment
Total	5,032,640	5,364,548
Performing | Mortgage loans (gross) | Residential Mortgage Loans | Reduced documentation interest-only loans
Recorded Investment
Total	608,996	721,503
Performing | Mortgage loans (gross) | Residential Mortgage Loans | Reduced documentation amortizing loans
Recorded Investment
Total	384,993	363,626
Non-performing: | Consumer and Other Loans | Home equity lines of credit
Recorded Investment
Current or past due less than 90 days		32
Past due 90 days or more	6,289	5,916
Non-performing: | Consumer and Other Loans | Other loans
Recorded Investment
Past due 90 days or more	34	32
Non-performing: | Mortgage loans (gross) | Residential Mortgage Loans | Full documentation interest-only
Recorded Investment
Current or past due less than 90 days	21,165	21,957
Past due 90 days or more	9,268	78,271
Non-performing: | Mortgage loans (gross) | Residential Mortgage Loans | Full documentation amortizing loans
Recorded Investment
Current or past due less than 90 days	6,054	12,824
Past due 90 days or more	9,549	42,085
Non-performing: | Mortgage loans (gross) | Residential Mortgage Loans | Reduced documentation interest-only loans
Recorded Investment
Current or past due less than 90 days	27,950	30,248
Past due 90 days or more	11,920	87,910
Non-performing: | Mortgage loans (gross) | Residential Mortgage Loans | Reduced documentation amortizing loans
Recorded Investment
Current or past due less than 90 days	5,759	6,219
Past due 90 days or more	$ 1,132	$ 26,112

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Fair Value Measurements (Details 4) (USD $) In Thousands, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Valuation methodologies used for assets measured at fair value
Impaired loans comprising residential mortgage loans (as a percent)	73.00%	81.00%
Impaired loans comprising multi-family and commercial real estate loans (as a percent)	25.00%	19.00%
Percentage of Impaired Loans Comprising home equity lines of credit	2.00%
Impaired loans for which fair value adjustment is recognized comprising residential mortgage loans (as a percent)	66.00%	83.00%
Impaired loans for which fair value adjustment is recognized comprising multi-family and commercial real estate loans (as a percent)	33.00%	17.00%
Impaired loans for which fair value adjustment is recognized comprising home equity lines of credit (as a percent)	1.00%
Real estate owned, net	$ 42,458	$ 42,636
Weighted average
Valuation methodologies used for assets measured at fair value
Assumption to estimate fair value of servicing asset, weighted average discount rate (as a percent)	9.48%	9.45%
Assumption to estimate fair value of servicing asset, weighted average constant prepayment rate (as a percent)	11.77%	10.52%
Assumption to estimate fair value of servicing asset, weighted average life	5 years 10 months 24 days	6 years 3 months 18 days
Residential Mortgage Loans
Valuation methodologies used for assets measured at fair value
Period after which loans are individually evaluated for impairment	180 days
Period past due when loan servicer performs property inspections	45 days
Real estate owned, net	$ 40,400

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Reconciliation of basic and diluted earnings per common share

The following table is a reconciliation of basic and diluted earnings per common share, or EPS.

	For the Three Months Ended September 30,												For the Nine Months Ended September 30,
(In Thousands, Except Share Data)		2014						2013						2014						2013
Net income		$	18,808					$	16,924					$	72,657					$	46,441
Preferred stock dividends		(2,194				)		(2,194				)		(6,582				)		(5,021				)
Net income available to common shareholders		16,614						14,730						66,075						41,420
Income allocated to participating securities		(187				)		(195				)		(742				)		(508				)
Net income allocated to common shareholders		$	16,427					$	14,535					$	65,333					$	40,912
Basic weighted average common shares outstanding	98,453,265						97,199,329						98,279,671						96,967,052
Dilutive effect of stock options and restricted stock units (1) (2)	—						—						—						—
Diluted weighted average common shares outstanding	98,453,265						97,199,329						98,279,671						96,967,052
Basic EPS				$	0.17					$	0.15					$	0.66					$	0.42
Diluted EPS				$	0.17					$	0.15					$	0.66					$	0.42

(1) Excludes options to purchase 988,050 shares of common stock which were outstanding during the three months ended September 30, 2014; options to purchase 1,871,935 shares of common stock which were outstanding during the three months ended September 30, 2013; options to purchase 1,016,451 shares of common stock which were outstanding during the nine months ended September 30, 2014; and options to purchase 2,215,820 shares of common stock which were outstanding during the nine months ended September 30, 2013 because their inclusion would be anti-dilutive.

(2) Excludes 788,874 unvested restricted stock units which were outstanding during the three months ended September 30, 2014; 415,900 unvested restricted stock units which were outstanding during the three months ended September 30, 2013; 751,149 unvested restricted stock units which were outstanding during the nine months ended September 30, 2014; and 379,602 unvested restricted stock units which were outstanding during the nine months ended September 30, 2013 because the performance conditions have not been satisfied.

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Basis of Presentation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred tax assets, net, increase resulting from state tax legislation	$ 11.5
Income tax expense decrease resulting from state tax legislation	$ 11.5

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Fair Value Measurements (Details 2) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Carrying value of assets
Impaired loans	$ 250,749	$ 384,522
MSR, net	11,905	12,800
REO, net	42,458	42,636
Carrying value
Carrying value of assets
Loans held-for-sale, net	7,629	7,375
MSR, net	11,905	12,800
Level 3
Carrying value of assets
Loans held-for-sale, net	7,849	7,436
MSR, net	11,909	12,804
Measured on a non-recurring basis | Level 3 | Carrying value
Carrying value of assets
Loans held-for-sale, net	154	791
Impaired loans	144,258	271,408
MSR, net	11,905	12,800
REO, net	19,971	27,101
Total	$ 176,288	$ 312,100

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Earnings Per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Earnings Per Share [Abstract]
Net income	$ 18,808	$ 16,924	$ 72,657	$ 46,441
Preferred stock dividends	(2,194)	(2,194)	(6,582)	(5,021)
Net income available to common shareholders	16,614	14,730	66,075	41,420
Income allocated to participating securities	(187)	(195)	(742)	(508)
Net income allocated to common shareholders	$ 16,427	$ 14,535	$ 65,333	$ 40,912
Basic weighted average common shares outstanding	98,453,265	97,199,329	98,279,671	96,967,052
Dilutive effect of stock options and restricted stock units	0	0	0	0
Diluted weighted average common shares outstanding	98,453,265	97,199,329	98,279,671	96,967,052
Basic EPS	$ 0.17	$ 0.15	$ 0.66	$ 0.42
Diluted EPS	$ 0.17	$ 0.15	$ 0.66	$ 0.42
Options
Antidilutive securities excluded from computation of earnings per share
Stock options excluded from computation of earnings per share (in shares)	988,050	1,871,935	1,016,451	2,215,820
Restricted stock units (RSUs)
Antidilutive securities excluded from computation of earnings per share
Restricted stock units excluded from the computation of earning per share (in shares)	788,874	415,900	751,149	379,602

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 18,808	$ 16,924	$ 72,657	$ 46,441
Net unrealized (loss) gain on securities available-for-sale:
Net unrealized holding (loss) gain on securities arising during the period	(420)	(1,286)	7,272	(7,889)
Reclassification adjustment for gain on sales of securities included in net income	(91)		(91)	(1,332)
Net unrealized (loss) gain on securities available-for-sale	(511)	(1,286)	7,181	(9,221)
Reclassification adjustment for net actuarial loss on pension plans and other postretirement benefits included in net income	147	585	443	1,754
Reclassification adjustment for prior service cost on pension plans and other postretirement benefits included in net income	31	34	92	103
Total other comprehensive (loss) income, net of tax	(333)	(667)	7,716	(7,364)
Comprehensive income	$ 18,475	$ 16,257	$ 80,373	$ 39,077

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Securities

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Securities

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 September 30, 2014
(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)	$	250,318		$	3,191		$	(2,763	)	$	250,746
Non-GSE issuance REMICs and CMOs	5,685			43			(1		)	5,727
GSE pass-through certificates	13,538			478			(5		)	14,011
Total residential mortgage-backed securities	269,541			3,712			(2,769		)	270,484
Obligations of GSEs	98,679			—			(3,140		)	95,539
Fannie Mae stock	15			—			(12		)	3
Total securities available-for-sale	$	368,235		$	3,712		$	(5,921	)	$	366,026
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,562,719		$	12,793		$	(23,830	)	$	1,551,682
Non-GSE issuance REMICs and CMOs	2,669			37			(7		)	2,699
GSE pass-through certificates	290,152			1,168			(5,360		)	285,960
Total residential mortgage-backed securities	1,855,540			13,998			(29,197		)	1,840,341
Multi-family mortgage-backed securities:
GSE issuance REMICs	106,326			260			(541		)	106,045
Obligations of GSEs	90,934			52			(2,531		)	88,455
Other	537			—			—			537
Total securities held-to-maturity	$	2,053,337		$	14,310		$	(32,269	)	$	2,035,378

(1) Government-sponsored enterprise

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

	At December 31, 2013
(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	$	292,131		$	1,077		$	(7,134	)	$	286,074
Non-GSE issuance REMICs and CMOs	7,516			57			(1		)	7,572
GSE pass-through certificates	16,120			770			(2		)	16,888
Total residential mortgage-backed securities	315,767			1,904			(7,137		)	310,534
Obligations of GSEs	98,675			—			(7,522		)	91,153
Fannie Mae stock	15			—			(12		)	3
Total securities available-for-sale	$	414,457		$	1,904		$	(14,671	)	$	401,690
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	1,474,506		$	12,877		$	(33,925	)	$	1,453,458
Non-GSE issuance REMICs and CMOs	3,833			61			(10		)	3,884
GSE pass-through certificates	282,473			85			(10,089		)	272,469
Total residential mortgage-backed securities	1,760,812			13,023			(44,024		)	1,729,811
Obligations of GSEs	88,128			—			(7,403		)	80,725
Other	586			—			—			586
Total securities held-to-maturity	$	1,849,526		$	13,023		$	(51,427	)	$	1,811,122

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 September 30, 2014
	Less Than Twelve Months						Twelve Months or Longer						Total
(In Thousands)	Estimated Fair Value		Gross Unrealized Losses				Estimated Fair Value		GrossUnrealized Losses				Estimated Fair Value		GrossUnrealized Losses
Available-for-sale:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	22,413		$	(136	)	$	97,773		$	(2,627	)	$	120,186		$	(2,763	)
Non-GSE issuance REMICs and CMOs	—			—			102			(1		)	102			(1		)
GSE pass-through certificates	597			(4		)	78			(1		)	675			(5		)
Obligations of GSEs	—			—			95,539			(3,140		)	95,539			(3,140		)
Fannie Mae stock	—			—			3			(12		)	3			(12		)
Total temporarily impaired securities available-for-sale	$	23,010		$	(140	)	$	193,495		$	(5,781	)	$	216,505		$	(5,921	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	300,843		$	(3,374	)	$	483,810		$	(20,456	)	$	784,653		$	(23,830	)
Non-GSE issuance REMICs and CMOs	—			—			296			(7		)	296			(7		)
GSE pass-through certificates	—			—			168,261			(5,360		)	168,261			(5,360		)
Multi-family mortgage-backed securities:
GSE issuance REMICs	72,587			(541		)	—			—			72,587			(541		)
Obligations of GSEs	—			—			78,403			(2,531		)	78,403			(2,531		)
Total temporarily impaired securities held-to-maturity	$	373,430		$	(3,915	)	$	730,770		$	(28,354	)	$	1,104,200		$	(32,269	)

	At December 31, 2013
	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	$	243,149		$	(7,134	)	$	—		$	—		$	243,149		$	(7,134	)
Non-GSE issuance REMICs and CMOs	—			—			132			(1		)	132			(1		)
GSE pass-through certificates	172			(1		)	70			(1		)	242			(2		)
Obligations of GSEs	91,153			(7,522		)	—			—			91,153			(7,522		)
Fannie Mae stock	—			—			3			(12		)	3			(12		)
Total temporarily impaired securities available-for-sale	$	334,474		$	(14,657	)	$	205		$	(14	)	$	334,679		$	(14,671	)
Held-to-maturity:
Residential mortgage-backed securities:
GSE issuance REMICs and CMOs	$	719,715		$	(25,611	)	$	151,581		$	(8,314	)	$	871,296		$	(33,925	)
Non-GSE issuance REMICs and CMOs	392			(10		)	—			—			392			(10		)
GSE pass-through certificates	230,795			(10,088		)	28			(1		)	230,823			(10,089		)
Obligations of GSEs	80,725			(7,403		)	—			—			80,725			(7,403		)
Total temporarily impaired securities held-to-maturity	$	1,031,627		$	(43,112	)	$	151,609		$	(8,315	)	$	1,183,236		$	(51,427	)

We held 101 securities which had an unrealized loss at September 30, 2014 and 109 at December 31, 2013.  At September 30, 2014 and December 31, 2013, substantially all of the securities in an unrealized loss position had a fixed interest rate and the cause of the temporary impairment was directly related to changes in interest rates.  We generally view changes in fair value caused by changes in interest rates as temporary, which is consistent with our experience.  None of the unrealized losses are related to credit losses.  Therefore, at September 30, 2014 and December 31, 2013, the impairments were deemed temporary based on (1) the direct relationship of the decline in fair value to movements in interest rates, (2) the estimated remaining life and high credit quality of the investments and (3) the fact that we had no intention to sell these securities and it was not more likely than not that we would be required to sell these securities before their anticipated recovery of the remaining amortized cost basis and we expected to recover the entire amortized cost basis of the security.

During the nine months ended September 30, 2014, proceeds from sales of securities from the available-for-sale portfolio totaled $14.4 million, resulting in gross realized gains totaling $141,000. During the nine months ended September 30, 2013, proceeds from sales of securities from the available-for-sale portfolio totaled $41.6 million, resulting in gross realized gains totaling $2.1 million.

At September 30, 2014, available-for-sale debt securities excluding mortgage-backed securities had an amortized cost of $98.7 million, a fair value of $95.5 million and contractual maturities in 2021 and 2022.  At September 30, 2014, held-to-maturity debt securities excluding mortgage-backed securities had an amortized cost of $91.5 million, a fair value of $89.0 million and contractual maturities primarily in 2023.  Actual maturities may differ from contractual maturities because issuers may have the right to prepay or call obligations with or without prepayment penalties.

At September 30, 2014, we held securities with an amortized cost of $189.6 million which were callable within one year and at various times thereafter.

The balance of accrued interest receivable for securities totaled $6.3 million at September 30, 2014 and December 31, 2013.

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Securities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Securities
Available-for-sale, amortized cost	$ 368,235	$ 414,457
Available-for-sale, gross unrealized gains	3,712	1,904
Available-for-sale, gross unrealized losses	(5,921)	(14,671)
Total available-for-sale securities	366,026	401,690
Total held-to-maturity securities	2,053,337	1,849,526
Held-to-maturity, gross unrealized gains	14,310	13,023
Held-to-maturity, gross unrealized losses	(32,269)	(51,427)
Held-to-maturity securities, fair value (in dollars)	2,035,378	1,811,122
GSE issuance REMICs and CMOs
Securities
Available-for-sale, amortized cost	250,318	292,131
Available-for-sale, gross unrealized gains	3,191	1,077
Available-for-sale, gross unrealized losses	(2,763)	(7,134)
Total available-for-sale securities	250,746	286,074
Total held-to-maturity securities	1,562,719	1,474,506
Held-to-maturity, gross unrealized gains	12,793	12,877
Held-to-maturity, gross unrealized losses	(23,830)	(33,925)
Held-to-maturity securities, fair value (in dollars)	1,551,682	1,453,458
Non-GSE issuance REMICs and CMOs
Securities
Available-for-sale, amortized cost	5,685	7,516
Available-for-sale, gross unrealized gains	43	57
Available-for-sale, gross unrealized losses	(1)	(1)
Total available-for-sale securities	5,727	7,572
Total held-to-maturity securities	2,669	3,833
Held-to-maturity, gross unrealized gains	37	61
Held-to-maturity, gross unrealized losses	(7)	(10)
Held-to-maturity securities, fair value (in dollars)	2,699	3,884
GSE pass-through certificates
Securities
Available-for-sale, amortized cost	13,538	16,120
Available-for-sale, gross unrealized gains	478	770
Available-for-sale, gross unrealized losses	(5)	(2)
Total available-for-sale securities	14,011	16,888
Total held-to-maturity securities	290,152	282,473
Held-to-maturity, gross unrealized gains	1,168	85
Held-to-maturity, gross unrealized losses	(5,360)	(10,089)
Held-to-maturity securities, fair value (in dollars)	285,960	272,469
Total residential mortgage-backed securities
Securities
Available-for-sale, amortized cost	269,541	315,767
Available-for-sale, gross unrealized gains	3,712	1,904
Available-for-sale, gross unrealized losses	(2,769)	(7,137)
Total available-for-sale securities	270,484	310,534
Total held-to-maturity securities	1,855,540	1,760,812
Held-to-maturity, gross unrealized gains	13,998	13,023
Held-to-maturity, gross unrealized losses	(29,197)	(44,024)
Held-to-maturity securities, fair value (in dollars)	1,840,341	1,729,811
Obligations of GSEs
Securities
Available-for-sale, amortized cost	98,679	98,675
Available-for-sale, gross unrealized losses	(3,140)	(7,522)
Total available-for-sale securities	95,539	91,153
Total held-to-maturity securities	90,934	88,128
Held-to-maturity, gross unrealized gains	52
Held-to-maturity, gross unrealized losses	(2,531)	(7,403)
Held-to-maturity securities, fair value (in dollars)	88,455	80,725
Fannie Mae stock
Securities
Available-for-sale, amortized cost	15	15
Available-for-sale, gross unrealized losses	(12)	(12)
Total available-for-sale securities	3	3
Multi-family mortgage-backed securities:
Securities
Total held-to-maturity securities	106,326
Held-to-maturity, gross unrealized gains	260
Held-to-maturity, gross unrealized losses	(541)
Held-to-maturity securities, fair value (in dollars)	106,045
Other
Securities
Total held-to-maturity securities	537	586
Held-to-maturity securities, fair value (in dollars)	$ 537	$ 586

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Loans Receivable and Allowance for Loan Losses (Average Recorded Investment, Interest Income Recognized and Cash Basis Interest Income on Impaired Loans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment	$ 314,118	$ 389,861	$ 350,631	$ 399,587
Interest income recognized	2,450	2,912	8,303	8,617
Cash basis interest income	2,482	3,091	8,472	9,121
Consumer and other loans | Home equity lines of credit
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	5,546		5,215
Interest income recognized, loans with an allowance recorded	5		37
Cash basis interest income, loans with an allowance recorded	13		51
Mortgage loans | Residential | Full documentation interest-only
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	78,799	107,893	93,748	105,931
Average recorded investment, loans without an allowance recorded		9,075		14,433
Interest income recognized, loans with an allowance recorded	440	762	1,644	2,114
Cash basis interest income, loans with an allowance recorded	461	763	1,695	2,229
Mortgage loans | Residential | Full documentation amortizing loans
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	38,051	31,128	37,926	29,465
Average recorded investment, loans without an allowance recorded	314	2,968	457	4,396
Interest income recognized, loans with an allowance recorded	289	218	993	623
Cash basis interest income, loans with an allowance recorded	283	220	992	639
Mortgage loans | Residential | Reduced documentation interest-only
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	104,522	144,468	120,976	146,773
Average recorded investment, loans without an allowance recorded				2,086
Interest income recognized, loans with an allowance recorded	782	1,171	2,922	3,053
Cash basis interest income, loans with an allowance recorded	814	1,174	2,939	3,205
Mortgage loans | Residential | Reduced documentation amortizing
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	20,781	24,452	23,142	25,424
Interest income recognized, loans with an allowance recorded	141	158	478	464
Cash basis interest income, loans with an allowance recorded	147	152	482	493
Mortgage loans | Multi-family
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	33,013	19,557	30,836	18,975
Average recorded investment, loans without an allowance recorded	13,419	31,464	17,906	33,294
Interest income recognized, loans with an allowance recorded	329	34	952	659
Interest income recognized, loans without an allowance recorded	175	401	529	1,165
Cash basis interest income, loans with an allowance recorded	328	169	970	722
Cash basis interest income, loans without an allowance recorded	175	416	530	1,229
Mortgage loans | Commercial real estate
Average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans by segment and class
Average recorded investment, loans with an allowance recorded	19,673	7,604	16,859	8,692
Average recorded investment, loans without an allowance recorded		11,252	3,566	10,118
Interest income recognized, loans with an allowance recorded	289	56	748	253
Interest income recognized, loans without an allowance recorded		112		286
Cash basis interest income, loans with an allowance recorded	261	66	813	285
Cash basis interest income, loans without an allowance recorded		$ 131		$ 319

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Loans Receivable and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2014

Receivables [Abstract]

Schedule of composition of loans receivable portfolio and an aging analysis by accruing and non-accrual loans and by segment and class

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 September 30, 2014
	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	$	14,725	$	5,115	$	—	$	19,840	$	942,958	$	962,798
Full documentation amortizing	32,652		5,140		—		37,792		4,994,848		5,032,640
Reduced documentation interest-only	15,566		4,258		—		19,824		589,172		608,996
Reduced documentation amortizing	6,818		1,950		—		8,768		376,225		384,993
Total residential	69,761		16,463		—		86,224		6,903,203		6,989,427
Multi-family	4,351		506		152		5,009		3,644,376		3,649,385
Commercial real estate	2,199		495		—		2,694		871,670		874,364
Total mortgage loans	76,311		17,464		152		93,927		11,419,249		11,513,176
Consumer and other loans (gross):
Home equity lines of credit	1,656		159		—		1,815		173,747		175,562
Other	42		12		—		54		63,057		63,111
Total consumer and other loans	1,698		171		—		1,869		236,804		238,673
Total accruing loans	$	78,009	$	17,635	$	152	$	95,796	$	11,656,053	$	11,751,849
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,958	$	177	$	9,268	$	12,403	$	18,030	$	30,433
Full documentation amortizing	548		284		9,549		10,381		5,222		15,603
Reduced documentation interest-only	2,110		1,224		11,920		15,254		24,616		39,870
Reduced documentation amortizing	799		554		1,132		2,485		4,406		6,891
Total residential	6,415		2,239		31,869		40,523		52,274		92,797
Multi-family	429		—		6,489		6,918		2,933		9,851
Commercial real estate	2,357		—		—		2,357		3,587		5,944
Total mortgage loans	9,201		2,239		38,358		49,798		58,794		108,592
Consumer and other loans (gross):
Home equity lines of credit	—		—		6,289		6,289		—		6,289
Other	—		—		34		34		—		34
Total consumer and other loans	—		—		6,323		6,323		—		6,323
Total non-accrual loans	$	9,201	$	2,239	$	44,681	$	56,121	$	58,794	$	114,915
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	17,683	$	5,292	$	9,268	$	32,243	$	960,988	$	993,231
Full documentation amortizing	33,200		5,424		9,549		48,173		5,000,070		5,048,243
Reduced documentation interest-only	17,676		5,482		11,920		35,078		613,788		648,866
Reduced documentation amortizing	7,617		2,504		1,132		11,253		380,631		391,884
Total residential	76,176		18,702		31,869		126,747		6,955,477		7,082,224
Multi-family	4,780		506		6,641		11,927		3,647,309		3,659,236
Commercial real estate	4,556		495		—		5,051		875,257		880,308
Total mortgage loans	85,512		19,703		38,510		143,725		11,478,043		11,621,768
Consumer and other loans (gross):
Home equity lines of credit	1,656		159		6,289		8,104		173,747		181,851
Other	42		12		34		88		63,057		63,145
Total consumer and other loans	1,698		171		6,323		8,192		236,804		244,996
Total loans	$	87,210	$	19,874	$	44,833	$	151,917	$	11,714,847	$	11,866,764
Net unamortized premiums and deferred loan origination costs											49,171
Loans receivable											11,915,935
Allowance for loan losses											(113,600		)
Loans receivable, net											$	11,802,335

	At December 31, 2013
	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	$	27,291	$	5,220	$	—	$	32,511	$	1,249,462	$	1,281,973
Full documentation amortizing	31,189		7,415		151		38,755		5,325,944		5,364,699
Reduced documentation interest-only	22,635		5,208		—		27,843		693,660		721,503
Reduced documentation amortizing	8,993		2,311		—		11,304		352,322		363,626
Total residential	90,108		20,154		151		110,413		7,621,388		7,731,801
Multi-family	12,740		970		—		13,710		3,270,206		3,283,916
Commercial real estate	1,729		1,690		233		3,652		801,690		805,342
Total mortgage loans	104,577		22,814		384		127,775		11,693,284		11,821,059
Consumer and other loans (gross):
Home equity lines of credit	3,000		1,321		—		4,321		189,540		193,861
Other	177		19		—		196		39,644		39,840
Total consumer and other loans	3,177		1,340		—		4,517		229,184		233,701
Total accruing loans	$	107,754	$	24,154	$	384	$	132,292	$	11,922,468	$	12,054,760
Non-accrual loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	2,185	$	582	$	78,271	$	81,038	$	19,190	$	100,228
Full documentation amortizing	1,327		653		41,934		43,914		10,844		54,758
Reduced documentation interest-only	2,065		579		87,910		90,554		27,604		118,158
Reduced documentation amortizing	617		425		26,112		27,154		5,177		32,331
Total residential	6,194		2,239		234,227		242,660		62,815		305,475
Multi-family	1,104		357		9,054		10,515		2,024		12,539
Commercial real estate	930		—		921		1,851		5,773		7,624
Total mortgage loans	8,228		2,596		244,202		255,026		70,612		325,638
Consumer and other loans (gross):
Home equity lines of credit	—		—		5,916		5,916		32		5,948
Other	—		—		32		32		—		32
Total consumer and other loans	—		—		5,948		5,948		32		5,980
Total non-accrual loans	$	8,228	$	2,596	$	250,150	$	260,974	$	70,644	$	331,618
Total loans:
Mortgage loans (gross):
Residential:
Full documentation interest-only	$	29,476	$	5,802	$	78,271	$	113,549	$	1,268,652	$	1,382,201
Full documentation amortizing	32,516		8,068		42,085		82,669		5,336,788		5,419,457
Reduced documentation interest-only	24,700		5,787		87,910		118,397		721,264		839,661
Reduced documentation amortizing	9,610		2,736		26,112		38,458		357,499		395,957
Total residential	96,302		22,393		234,378		353,073		7,684,203		8,037,276
Multi-family	13,844		1,327		9,054		24,225		3,272,230		3,296,455
Commercial real estate	2,659		1,690		1,154		5,503		807,463		812,966
Total mortgage loans	112,805		25,410		244,586		382,801		11,763,896		12,146,697
Consumer and other loans (gross):
Home equity lines of credit	3,000		1,321		5,916		10,237		189,572		199,809
Other	177		19		32		228		39,644		39,872
Total consumer and other loans	3,177		1,340		5,948		10,465		229,216		239,681
Total loans	$	115,982	$	26,750	$	250,534	$	393,266	$	11,993,112	$	12,386,378
Net unamortized premiums and deferred loan origination costs											55,688
Loans receivable											12,442,066
Allowance for loan losses											(139,000		)
Loans receivable, net											$	12,303,066

Schedule of changes in allowance for loan losses by loan receivable segment

The following tables set forth the changes in our allowance for loan losses by loan receivable segment for the periods indicated.

		For the Three Months Ended September 30, 2014
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at July 1, 2014		$	56,552		$	37,075			$	15,433			$	9,540		$	118,600
Provision (credited) charged to operations		(7,617		)	3,183				1,245				147			(3,042		)
Charge-offs		(2,134		)	(2,275		)		(143		)		(352		)	(4,904		)
Recoveries		2,531			324				—				91			2,946
Balance at September 30, 2014		$	49,332		$	38,307			$	16,535			$	9,426		$	113,600
		For the Nine Months Ended September 30, 2014
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at January 1, 2014		$	80,337		$	36,703			$	13,136			$	8,824		$	139,000
Provision (credited) charged to operations		(20,225		)	4,457				6,518				2,097			(7,153		)
Charge-offs		(19,061		)	(3,414		)		(3,119		)		(1,776		)	(27,370		)
Recoveries		8,281			561				—				281			9,123
Balance at September 30, 2014		$	49,332		$	38,307			$	16,535			$	9,426		$	113,600
		For the Three Months Ended September 30, 2013
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at July 1, 2013		$	78,788		$	40,865			$	16,642			$	7,605		$	143,900
Provision charged (credited) to operations		7,659			(2,521		)		(2,592		)		(5		)	2,541
Charge-offs		(5,560		)	(99		)		(293		)		(544		)	(6,496		)
Recoveries		2,537			—				247				271			3,055
Balance at September 30, 2013		$	83,424		$	38,245			$	14,004			$	7,327		$	143,000
		For the Nine Months Ended September 30, 2013
		Mortgage Loans										Consumer and Other Loans
					Multi-Family			Commercial Real Estate
(In Thousands)	Residential															Total
Balance at January 1, 2013		$	89,267		$	35,514			$	14,404			$	6,316		$	145,501
Provision charged to operations		7,488			5,131				1,378				2,196			16,193
Charge-offs		(20,332		)	(3,637		)		(2,313		)		(1,672		)	(27,954		)
Recoveries		7,001			1,237				535				487			9,260
Balance at September 30, 2013		$	83,424		$	38,245			$	14,004			$	7,327		$	143,000

Schedule of balances of residential interest-only mortgage loans by scheduled amortization period

The following table sets forth the balances of our residential interest-only mortgage loans at September 30, 2014 by the period in which such loans are scheduled to enter their amortization period.

(In Thousands)	Recorded Investment
Amortization scheduled to begin in:
Twelve months or less	$	494,856
Thirteen to twenty-four months	544,435
Twenty-five to thirty-six months	443,464
Over thirty-six months	159,342
Total	$	1,642,097

Schedule of balances of loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed

The following tables set forth the balances of our loans receivable and the related allowance for loan loss allocation by segment and by the impairment methodology followed in determining the allowance for loan losses at the dates indicated.

	At September 30, 2014
	Mortgage Loans							Consumer and Other Loans
			Multi-Family		Commercial Real Estate
(In Thousands)	Residential									Total
Loans:
Individually evaluated for impairment	$	181,486	$	44,312		$	19,183	$	5,768	$	250,749
Collectively evaluated for impairment	6,900,738		3,614,924			861,125		239,228		11,616,015
Total loans	$	7,082,224	$	3,659,236		$	880,308	$	244,996	$	11,866,764
Allowance for loan losses:
Individually evaluated for impairment	$	9,789	$	3,448		$	2,308	$	4,340	$	19,885
Collectively evaluated for impairment	39,543		34,859			14,227		5,086		93,715
Total allowance for loan losses	$	49,332	$	38,307		$	16,535	$	9,426	$	113,600

	At December 31, 2013
	Mortgage Loans							Consumer and Other Loans
			Multi-Family		Commercial Real Estate
(In Thousands)	Residential									Total
Loans:
Individually evaluated for impairment	$	311,930	$	52,538		$	20,054	$	—	$	384,522
Collectively evaluated for impairment	7,725,346		3,243,917			792,912		239,681		12,001,856
Total loans	$	8,037,276	$	3,296,455		$	812,966	$	239,681	$	12,386,378
Allowance for loan losses:
Individually evaluated for impairment	$	18,352	$	2,877		$	302	$	—	$	21,531
Collectively evaluated for impairment	61,985		33,826			12,834		8,824		117,469
Total allowance for loan losses	$	80,337	$	36,703		$	13,136	$	8,824	$	139,000

Summary of information related to impaired loans by segment and class

The following table summarizes information related to our impaired loans by segment and class at the dates indicated.

	At September 30, 2014									At December 31, 2013
(In Thousands)	Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment		Unpaid Principal Balance		Recorded Investment		Related Allowance			Net Investment
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	62,496	$	53,319	$	(3,052	)	$	50,267	$	142,659	$	109,877	$	(6,019	)	$	103,858
Full documentation amortizing	35,521		33,189		(1,043		)	32,146		41,136		36,091		(2,458		)	33,633
Reduced documentation interest-only	91,461		77,977		(4,836		)	73,141		183,280		140,357		(7,673		)	132,684
Reduced documentation amortizing	18,298		17,001		(858		)	16,143		30,660		25,605		(2,202		)	23,403
Multi-family	36,424		29,043		(3,448		)	25,595		19,748		19,748		(2,877		)	16,871
Commercial real estate	26,130		19,183		(2,308		)	16,875		5,790		5,790		(302		)	5,488
Consumer and other loans:
Home equity lines of credit	6,051		5,768		(4,340		)	1,428		—		—		—			—
Without an allowance recorded:
Mortgage loans:
Multi-family	16,670		15,269		—			15,269		39,871		32,790		—			32,790
Commercial real estate	—		—		—			—		19,988		14,264		—			14,264
Total impaired loans	$	293,051	$	250,749	$	(19,885	)	$	230,864	$	483,132	$	384,522	$	(21,531	)	$	362,991

Schedule of information related to average recorded investment, interest income recognized and cash basis interest income related to impaired mortgage loans

The following tables set forth the average recorded investment, interest income recognized and cash basis interest income related to our impaired loans by segment and class for the periods indicated.

	For the Three Months Ended September 30,
	2014						2013
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	78,799	$	440	$	461	$	107,893	$	762	$	763
Full documentation amortizing	38,051		289		283		31,128		218		220
Reduced documentation interest-only	104,522		782		814		144,468		1,171		1,174
Reduced documentation amortizing	20,781		141		147		24,452		158		152
Multi-family	33,013		329		328		19,557		34		169
Commercial real estate	19,673		289		261		7,604		56		66
Consumer and other loans:
Home equity lines of credit	5,546		5		13		—		—		—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	—		—		—		9,075		—		—
Full documentation amortizing	314		—		—		2,968		—		—
Multi-family	13,419		175		175		31,464		401		416
Commercial real estate	—		—		—		11,252		112		131
Total impaired loans	$	314,118	$	2,450	$	2,482	$	389,861	$	2,912	$	3,091
	For the Nine Months Ended September 30,
	2014						2013
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income
With an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	$	93,748	$	1,644	$	1,695	$	105,931	$	2,114	$	2,229
Full documentation amortizing	37,926		993		992		29,465		623		639
Reduced documentation interest-only	120,976		2,922		2,939		146,773		3,053		3,205
Reduced documentation amortizing	23,142		478		482		25,424		464		493
Multi-family	30,836		952		970		18,975		659		722
Commercial real estate	16,859		748		813		8,692		253		285
Consumer and other loans:
Home equity lines of credit	5,215		37		51		—		—		—
Without an allowance recorded:
Mortgage loans:
Residential:
Full documentation interest-only	—		—		—		14,433		—		—
Full documentation amortizing	457		—		—		4,396		—		—
Reduced documentation interest-only	—		—		—		2,086		—		—
Multi-family	17,906		529		530		33,294		1,165		1,229
Commercial real estate	3,566		—		—		10,118		286		319
Total impaired loans	$	350,631	$	8,303	$	8,472	$	399,587	$	8,617	$	9,121

Restructured Loans

Loans receivable and allowance for loan losses disclosures

Schedule of information about mortgage loans receivable by segment and class modified in troubled debt restructuring

The following tables set forth information about our mortgage loans receivable by segment and class at September 30, 2014 and 2013 which were modified in a troubled debt restructuring, or TDR, during the periods indicated.

	Modifications During the Three Months Ended September 30,
	2014								2013
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2013
Residential:
Full documentation interest-only		3		$	1,447		$	1,447		7		$	2,128		$	2,127
Full documentation amortizing		—		—			—			1		161			161
Reduced documentation interest-only		9		3,585			3,581			10		3,107			3,096
Reduced documentation amortizing		1		282			281			2		387			386
Multi-family		2		1,441			1,055			5		3,967			3,774
Commercial real estate		1		1,569			1,569			4		6,488			5,458
Total		16		$	8,324		$	7,933		29		$	16,238		$	15,002

	Modifications During the Nine Months Ended September 30,
	2014								2013
(Dollars In Thousands)	Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2014			Number of Loans		Pre- Modification Recorded Investment			Recorded Investment at September 30, 2013
Residential:
Full documentation interest-only		21		$	9,244		$	8,776		18		$	4,579		$	4,577
Full documentation amortizing		3		519			485			6		1,662			1,682
Reduced documentation interest-only		17		5,885			5,860			28		8,957			8,921
Reduced documentation amortizing		3		599			541			8		2,470			2,408
Multi-family		4		2,501			1,994			8		6,751			6,228
Commercial real estate		3		2,482			2,453			7		10,443			9,125
Total		51		$	21,230		$	20,109		75		$	34,862		$	32,941

Defaulted Loans

Loans receivable and allowance for loan losses disclosures

Schedule of information about mortgage loans receivable by segment and class modified in troubled debt restructuring

The following tables set forth information about our mortgage loans receivable by segment and class at September 30, 2014 and 2013 which were modified in a TDR during the twelve month periods ended September 30, 2014 and 2013 and had a payment default subsequent to the modification during the periods indicated.

	For the Three Months Ended September 30,
	2014					2013
(Dollars In Thousands)	Numberof Loans		RecordedInvestment at September 30, 2014			Numberof Loans		RecordedInvestment at September 30, 2013
Residential:
Full documentation interest-only		2		$	714		14		$	3,365
Full documentation amortizing		3		852			8		2,159
Reduced documentation interest-only		2		910			20		5,729
Reduced documentation amortizing		—		—			2		303
Multi-family		—		—			1		671
Total		7		$	2,476		45		$	12,227

	For the Nine Months Ended September 30,
	2014					2013
(Dollars In Thousands)	Numberof Loans		RecordedInvestment at September 30, 2014			Numberof Loans		RecordedInvestment at September 30, 2013
Residential:
Full documentation interest-only		3		$	854		22		$	5,343
Full documentation amortizing		4		1,057			10		2,589
Reduced documentation interest-only		4		1,799			24		6,707
Reduced documentation amortizing		1		92			5		880
Multi-family		—		—			1		671
Total		12		$	3,802		62		$	16,190

Performing, non-performing credit quality indicator

Loans receivable and allowance for loan losses disclosures

Schedule of loan receivable segments by class and credit quality indicator

The following tables set forth the balances of our residential mortgage and consumer and other loan receivable segments by class and credit quality indicator at the dates indicated.

		At September 30, 2014
		Residential Mortgage Loans									Consumer and Other Loans
		Full Documentation					Reduced Documentation				Home Equity Lines of Credit
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing					Other
Performing		$	962,798	$	5,032,640		$	608,996	$	384,993		$	175,562	$	63,111
Non-performing:
Current or past due less than 90 days		21,165		6,054			27,950		5,759			—		—
Past due 90 days or more		9,268		9,549			11,920		1,132			6,289		34
Total		$	993,231	$	5,048,243		$	648,866	$	391,884		$	181,851	$	63,145
		At December 31, 2013
		Residential Mortgage Loans									Consumer and Other Loans
		Full Documentation					Reduced Documentation				Home Equity Lines of Credit
(In Thousands)	Interest-only			Amortizing		Interest-only			Amortizing					Other
Performing		$	1,281,973	$	5,364,548		$	721,503	$	363,626		$	193,861	$	39,840
Non-performing:
Current or past due less than 90 days		21,957		12,824			30,248		6,219			32		—
Past due 90 days or more		78,271		42,085			87,910		26,112			5,916		32
Total		$	1,382,201	$	5,419,457		$	839,661	$	395,957		$	199,809	$	39,872

Criticized, Not Criticized

Loans receivable and allowance for loan losses disclosures

Schedule of loan receivable segments by class and credit quality indicator

The following table sets forth the balances of our multi-family and commercial real estate mortgage loan receivable segments by credit quality indicator at the dates indicated.

		At September 30, 2014						At December 31, 2013
				Commercial Real Estate						Commercial Real Estate
(In Thousands)	Multi-Family						Multi-Family
Not criticized		$	3,604,937		$	825,089		$	3,209,786		$	759,114
Criticized:
Special mention		22,390			16,578			14,063			9,760
Substandard		31,157			38,641			72,606			44,092
Doubtful		752			—			—			—
Total		$	3,659,236		$	880,308		$	3,296,455		$	812,966