Astoria Financial (AF) in Lake Success, N.Y., boosted its quarterly profit nearly 40% by reining in costs.

The $16.2 billion-asset lender announced Wednesday that it earned $13.9 million, or 14 cents a share, in the first quarter, 29% more than in the first quarter of 2012 and 1 cent more than analysts polled by Bloomberg expected.

Astoria cut its quarterly expenses by 13%, to $71.2 million. The company slashed compensation and benefit costs by more than $10 million, to $31.2 million. Astoria implemented a cost-control initiative in the first quarter of 2012 that has lowered expenses in subsequent quarters, it said in its earnings release.

Net interest income fell 5%, to $84 million, as its net interest margin contracted by 1 basis point, to 2.19%. Provisions for loan losses fell by 9%, to $9.1 million.

Astoria, which has historically been a single-family lender, originated $346 million in commercial and multifamily loans in the quarter as it continues its efforts to reposition its balance sheet. Its interest income from its commercial and multifamily portfolio increased by 6% compared with a year earlier, to $38.6 million.

Noninterest income fell 7%, to $13.3 million, as fees and gains on loan sales declined. But a 250% rise in mortgage-banking income, to $4.8 million, partially offset those declines.

Earlier this month Astoria  announced that would sell preferred shares to redeem $125 million of debt in order to reduce its debt costs.

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