Astoria Needs a Friend
Astoria Financial(AF) is in desperate need of a white knight.
The 118-year-old New York metropolitan-area lender continues to struggle, even as several of its local competitors have been snatched up in deals that have fetched lofty premiums. Investors in the forlorn thrift are hoping it won't be long before some suitor comes knocking on Astoria's door. That's because after Astoria's most recent earnings report, there's a big question about how much longer it can remain independent. Astoria's 86 branches in New York City's outer boroughs and Long Island would be an attractive pickup for a number of banks eager to build market share in New York. Last week, the Lake Success, N.Y., thrift reported its fourth straight disappointing quarter. In the third quarter, the thrift said profit fell 31% to $41 million, or 43 cents a share -- falling 2 cents short of the Thomson Financial consensus forecast. On Friday, shares fell 43 cents, or 1.4%, to $29.57. To make matters worse, the lender's net interest margin -- a measurement of the profitability of its lending and deposit business -- shrunk to 1.75%, one of the skimpiest in the banking sector. Banks such as Astoria, which make a majority of their profits from lending to consumers and commercial businesses, have seen earnings decline over the past two years as a result of the flattening yield curve -- or the narrowing of the spread between short-term and long-term rates. The narrow spread has been making it difficult for Astoria to generate meaningful profits by reinvesting customer deposits into higher-yielding assets.TheStreet Premium Services For Personal Service: 877-471-2967
Jim Cramer's Action Alerts PLUS:
Trade right alongside a Wall Street pro — enjoy access to his Charitable Trust portfolio and be sent trade alerts BEFORE he makes a move. Learn MoreETF Profits:
Get money-making ideas from the hottest investment vehicle on the planet. Our experts show you how to play various ETF sectors to help pump-up your portfolio. Learn MoreOptionsProfits:
Get 50+ trade ideas a week from the industry's top options experts. Plus — exclusive commentary on market trends and essential trading tools. Learn MoreReal Money:
Our team of professional Wall Street Pros — including Jim Cramer, Doug Kass, and Nicholas Vardy — delivers intelligent analysis, timely trade ideas, and colorful commentary. Learn MoreStocks Under $10:
Break into the market with small- and mid-cap stocks... all $10 or less! David Peltier tells you exactly which low-priced stocks he's buying and selling. Learn MoreTo begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
blog comments powered by Disqus
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 12,890.46 | 1,351.95 | 2,927.23 | 20.47 |
Oil *
118.75
|
|
UP
6.51 |
UP
1.99 |
UP
11.37 |
UP
0.72 |
10 Yr
2.05%
SPDR Gold
168.02
|
|
+0.05%
|
+0.15%
|
+0.39%
|
+3.65%
|
Data delayed 20 minutes |

Connect with TheStreet