Fitch Revises Astoria Outlook to Negative

Fitch Ratings has affirmed the long-term issuer default and short-term issuer ratings (BBB-plus and F2, respectively) for Astoria Financial Corp. and Astoria Savings and Loan, but the rating outlook has been revised from stable to negative.Fitch said the negative outlook reflects the "profitability pressure" on the Lake Success, N.Y.-based mortgage lender stemming from an adverse interest rate environment that has caused "significant net interest margin compression" over the past three years. "Capital levels have declined as a result of fairly aggressive stock repurchases, while equity generation remains modest," Fitch said. "Although capital measures are sound from a regulatory perspective, Fitch views negatively the decline in capitalization, particularly in light of [Astoria Financial's] increased mix of reduced- and no-documentation loans." Astoria can be found on the Web at http://www.astoriafederal.com.