UPDATE 1-Astoria Financial Q4 profit tops view, CEO steps down

* Q4 EPS $0.25 vs est $0.21

* Bad loan provisioning falls 70 pct

* Net interest margin up 17 bps

* Names COO Monte Redman as CEO

Jan 26 (Reuters) - Astoria Financial (AF.N), which runs a large New York thrift, posted a quarterly profit that beat Wall Street estimates as it set aside less money to cover bad loans, and named replacement for its Chief Executive George Engelke.

The company said Chief Operating Officer Monte Redman will replace Engelke effective July 1. Engelke will continue to serve as chairman of the board.

For the October-December period, net income for the Lake Success, New York-based parent of Astoria Federal Savings and Loan rose to $23.8 million, or 25 cents a share, compared with $8.1 million, or 9 cents a share, a year earlier.

Analysts were expecting earnings of 21 cents a share, according to Thomson Reuters I/B/E/S.

Net interest income fell to $101.2 million from $105 million and bad loans provision fell to less than a third at $15 million.

Net interest margin, the difference between the interest a bank earns on loans and pays out on deposits, rose 17 basis points to 2.32 percent.

"Improvements are due primarily to lower credit costs, reflecting an overall improvement in asset quality, particularly lower loan delinquencies and non-performing loans," Engelke said.

The lender's shares, which have gained more than 14 percent in value in the past three months, closed at $13.91 Wednesday on the New York Stock Exchange. (Reporting by Abhinav Sharma in Bangalore; Editing by Joyjeet Das)