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Astoria Bank Chief Executive Monte Redman is the son of a plumber who worked at the Brooklyn Navy Yard until it closed in 1966. Today, Mr. Redman is fighting hard to defy critics who contend his company is as obsolete as the old shipbuilding factory.
Mr. Redman is trying to radically revamp Astoria, which has long catered to Queens and Long Island homeowners, by emphasizing business lending. Nearly half of the institution's 350 top officers have left, and he has brought in dozens of commercial bankers. Earlier this year, Astoria opened its first branch in Manhattan and changed its name from Astoria Federal Savings to reflect its new direction. In September, Astoria ads covered the walls of Penn Station in a marketing blitz that was unprecedented for the institution.
"We are not your father's thrift," Mr. Redman said in an interview. "We have moved forward and done it the right way."
Yet growth remains elusive. Business loans aren't growing fast enough to offset the steady decline in Astoria's core residential mortgage business. Meanwhile, new regulations have driven up costs.
The result is that Astoria is a laggard by most any financial measure for a publicly traded bank. Its return on equity, a key measure of profitability, is a paltry 5%, or about half the industry average, and its stock has returned only 2% during the past 12 months, well below the 13% seen for its peer group. Revenue has slipped about 20% in the past five years, while the stock price has returned a little more than half that of its peers.
Many shareholders think it's time for the 126-year-old institution to wave the white flag and sell...