Keefe Bruyette & Woods Comments On Provident Financial Services, Anworth Mortgage Asset Corp. Following Earnings Announcements

Operating results for Provident Financial Services PFS were in-line with Street expectations and beat Keefe Bruyette & Woods estimate by $0.02/sh. The quarter was marked by stronger spread income and a modestly lower provision, both of which were somewhat offset by weaker fee income. Additionally, credit trends softened as NPAs spiked 17% QoQ. Raising estimates and target; maintaining a Market Perform rating and $15 PT. There are risks to achieving our price target, including but not limited to the bank's ability to manage its interest rate exposure and the bank's ability to manage excess capital through continued dividends and future share repurchases. Anworth Mortgage Asset Corp. ANH reported 4Q GAAP EPS of $0.24, in line with KBW's estimate and up from $0.21 in 4Q. The QoQ increase reflects portfolio growth and a stronger net spread. Book value increased to $6.92 from $6.78. Operating results were largely in line with expectations. Keefe Bruyette & Woods is increasing its 2011 EPS estimate to $0.96 from $0.92. KBW maintains an Outperform rating and $8 PT. The primary risks that could affect our earnings outlook and target price for Anworth include: a sharp rise in interest rates, especially short-term rates; a sharp decline in the availability of repo funding or a sharp increase in margin requirement; and a change in government policy that results in materially higher prepayments. ANH closed Friday at $7.18 PFS closed Friday at $14.52