Astoria in N.Y. Faces Pressure from Investor to Explore Options
Astoria Financial in Lake Success, N.Y., set out a few years ago to become more commercially focused by going after more multifamily and commercial real estate loans. The goal is for such loans to make up 50% and at the end of the third quarter they were 38%.
F.N.B. Corp. in Pittsburgh has agreed to buy Metro Bancorp in Harrisburg, Pa.
An Astoria Financial investor is demanding that the Lake Success, N.Y., company explore a possible sale or other ways to increase shareholder value.
The investor, Basswood Capital Management in New York, is also seeking a board seat at the $15.3 billion-asset company, according to a regulatory filing.
Astoria "has substantial opportunities in the current environment to take steps to enhance shareholder value, either on a stand-alone basis or in a business combination or sale transaction," Basswood said in the filing.
Matthew Lindenbaum, a managing member at Basswood, met with Astoria's chief executive, Monte Redman, on Thursday and proposed giving Basswood a board seat. Basswood had not received a response from Astoria as of Tuesday.
Redman said in an interview that he has been in contact with Basswood for several years and that the investor's request for a board seat will be handled "within our normal governance process."
"Basswood has been a long-term investor in Astoria," Redman said.
Basswood owns about 9.2% of Astoria, or about 9.3 million shares. Basswood paid a total of about $114.5 million to acquire about 8.2 million shares; it also obtained an additional 1.1 million shares from its previous ownership of shares in Long Island Bancorp. Astoria acquired Long Island in 1998.
Astoria last month reported higher second-quarter profit of $31.4 million, compared to a year earlier, as it was boosted by growth in mortgage banking and commercial lending. Astoria's shares have risen 26% over the past morning and traded at $16.11 per share, in late trading Tuesday.