Astoria Financial's plan to become more commercially focused is starting to pay off.

The $15.5 billion-asset company in Lake Success, N.Y., ended the third quarter with $4.5 billion in multifamily and commercial real estate loans, up 17% from a year earlier, it reported Wednesday. Of the $664 million in loans added in the last year, $93 million were originated in the third quarter.

The company's pipeline of potential loans increased more than $150 million in the quarter to $503 million, said Monte Redman, president and chief executive, in a Thursday conference call.

"We are on track toward our goal of having [the multifamily and commercial real estate] portfolio represent between 45% and 50% of our total loans by year-end 2015," he said. At the end of the quarter, such loans made up 38%. A year earlier, they made up about 30%.

Mark Fitzgibbon, an analyst with Sandler O'Neill, said that Astoria's attempts to shift the company's focus are starting to pay off.

"They have a strong pipeline and are pushing hard to transform their balance sheet," Fitzgibbon said. "Two years ago they embarked on a mission to go from a thrift to a bank and in another two years we will know if it worked. The early results are good, but it is still early."

Fitzgibbon added that several banks have become bullish on multifamily lending in New York City and that has made an already fiercely competitive market even tougher.

"We are hearing some of the others, like People's United, saying they are pulling back from multifamily because it has gotten too competitive," Fitzgibbon said.

During the call, Redman was asked about how the competition for such loans compared to a year earlier.

"It's a very competitive market," Redman said. "It's kind of hard to say it's more competitive than it was a year ago. It was very competitive a year ago."

He added that although most lenders remain conservative, there are "some people out there lending more on properties."

Astoria reported an average loan-to-value ratio of 52% on multifamily loans in the first nine months of 2014.

Another prong of Astoria's plan to become more bank-like included adding eight commercial-focused branches. Earlier this year the company opened one in Manhattan and Redman said on the call that another in Melville, N.Y., is expected to open in December. It is planning to open three in 2015 and three in 2016, Redman said on the call.

Astoria reported earnings of $16.6 million in the quarter, up roughly 13% from a year earlier. The year-over-year improvement was largely driven by a $3 million reserve release, compared to $2.5 million set aside to for loan losses a year earlier.

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