Astoria Financial (AF) in Lake Success, N.Y., reported higher quarterly profit aided by state income tax breaks.

The $15.7 billion-asset company's first-quarter earnings more than doubled from a year earlier, to $29.4 million. The results included $11.5 million in income tax expense reductions related to New York's tax legislation that was signed into law on March 31. The law influences the calculation of income taxes imposed on banks and thrifts operating in the state.

Quarter highlights include an ongoing shift in the bank's strategy that aims to simultaneously increase business lending, reduce residential mortgage originations and efforts to improve asset quality.

Multifamily and commercial real estate mortgage loans became a bigger part of Astoria's loan portfolio, comprising 34% of total loans at March 31. They made up about 26% of total loans a year earlier.

"The strategic repositioning of our balance sheet continues to move forward," Monte Redman, Astoria's president and chief executive, said in a press release Wednesday. The company plans to increase the number of the multifamily and commercial real estate loans in its portfolio, targeting 45% of total loans by the end of next year.

Astoria opened its first Manhattan branch last month as part of a "strong push on building our business banking operation," Redman said. The company plans to open two more branches in Manhattan by the end of this year.

Core deposits represented 68% of all deposits at March 31, an improvement from 64% a year earlier. Net interest income rose 5%, to $88 million.

Noninterest income fell 25%, to $13.7 million, largely because of decreases in mortgage banking revenue.

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