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Fitch affirms Astoria Financial's ratings, removes rating watch positive

Fitch Ratings on Dec. 21 affirmed a number of Lake Success, N.Y.-based Astoria Financial Corp.'s ratings, removed them from rating watch positive and assigned a stable outlook.

The actions follow the termination of the company's deal with Westbury, N.Y.-based New York Community Bancorp Inc.

Affirmed were the company's long-term issuer default rating of BBB-, short-term issuer default rating of F3, senior debt at BBB-, preferred stock at B, "bbb-" viability rating, support rating of 5 and support rating floor of NF.

The rating agency also affirmed Astoria Bank's long-term issuer default rating of BBB-, short-term issuer default rating of F3, long-term deposits at BBB, short-term deposits at F2, "bbb-" viability rating, support rating of 5 and support rating floor of NF.

The rating agency said that it expects trends in the company's key credit metrics to continue in the near and medium-term. Fitch also noted that the company has profitability below its peers, liability-sensitive balance sheet positioning and relatively weaker liquidity profile compared to peers that have similar ratings. Earnings are also expected to continue to face pressure given balance sheet sensitivity and the expectation that the Federal Reserve will continue to raise rates in 2017 and beyond. Fitch also added that the regulatory issues that caused the termination casts a "degree of uncertainty" over the company's risk profile and risk management.