This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

'Storm Is Brewing' for Banks

Astoria Financial
Shares of Astoria Financial (AF - Get Report) of Lake Success, N.Y., closed at $10.01 Monday, returning 20% year-to-date, following a 36% decline during 2011. AF Chart AF data by YCharts

The shares trade for 0.9 times their reported March 31 tangible book value of $11.22, and for 15 times the consensus 2013 EPS estimate of 65 cents. The consensus 2012 EPS estimate is 53 cents.

Astoria during the first quarter cut its quarterly dividend to four cents from 13 cents, as the company suffered year-over-year declines in net interest income and margin. Based on the current payout the shares have a dividend yield of 1.60%.

The company will report its second-quarter results on July 18, with analysts expecting a 13-cent profit, following EPS of 11 cents the previous quarter and 18 cents a year earlier.

The company's first-quarter net interest margin was a relatively narrow 2.20%, unchanged from the fourth quarter, but declining from 2.40% during the first quarter of 2011.

Alexopoulos rates Astoria "Underweight," and on Tuesday called the company one of his "top shorts," and said he expects the second-quarter net interest margin to contract by two basis points to 2.18%, and with the dividend cut, expects the company's tangible common equity ratio "to improve modestly to ~6.5%."

Alexopoulos expects Astoria to earn 46 cents a share this year, followed by 2013 EPS of 52 cents.

The analyst said on Tuesday that "even looking all the way to 2016, [there is] still no clear path to AF earning above its cost of capital," and with "AF now under the regulatory guidance [for capital ratios] of one of the toughest regulators, the OCC, in our view, it's very unlikely that the company will return to [its] previously thin level of tangible common equity."

Interested in more on Astoria Financial? See TheStreet Ratings' report card for this stock.


-- Written by Philip van Doorn in Jupiter, Fla.

>Contact by Email.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.
7 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AF $14.64 1.46%
BXS $19.87 4.80%
FRC $58.39 3.18%
FHN $12.15 4.56%
SBNY $126.42 5.45%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs