Barclays Maintains an 'Overweight' on Astoria Financial (AF); 3Q11 Initial Look: Still Shrinking

Barclays maintains an 'Overweight' on Astoria Financial (NYSE: AF) price target of $13.00.

Barclays analyst says, "AF reported 3Q11 EPS of $0.12, well below our $0.19 estimate and consensus of $0.18. The miss was the result of continued portfolio run-off (loans down $385.5M or 2.4%) and a 7bps NIM drop to 2.27%. Provision expense was steady at $10M and non-interest expense rose $2.6M, with a $3M+ increase in ESOP expense due to a lower stock price. Even if we add back the ESOP expense (brings EPS to ~$0.14), AF would only have earned slightly more than the $0.13/share dividend, due to run-off and NIM pressure."

"While we had expected shrinkage to continue in 3Q11, the impact from elevated
prepayment activity was more significant than we modeled. We continue to look for loan growth in coming quarters and find the disclosure of $10B residential
(ex-existing customer refis) and $253M multi-family family pipelines promising."

For more ratings news on Astoria Financial click here and for the rating history of Astoria Financial click here.

Shares of Astoria Financial closed at $8.57 yesterday.

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