NYB Beats on Lower Expenses - Analyst Blog
25 Octubre 2012 - 11:53AM
Zacks
New York Community Bancorp Inc. (NYB) reported
its third quarter 2012 adjusted earnings of 32 cents per share,
beating the Zacks Consensus Estimate of 29 cents. However, results
were in line with the prior quarter’s earnings.
The company’s results reflected a fall in expenses and stable
credit quality. However, a decline in the top line was the
dampener.
Considering amortization and appreciation of shares held in stock
related benefit plans and amortization of core deposit intangibles,
the company reported net income of $128.8 million or 29 cents per
share in the quarter under review. Taking into account the impact
of the comparable items, earnings came in at $131.2 million or 30
cents per share in the prior quarter.
Quarter in Detail
New York Community Bancorp’s net interest income declined 3.9%
sequentially to $285.0 million. The decline was mainly due to a
fall in interest income.
Net interest margin fell 13 basis points (bps) sequentially to
3.17%. The decline was primarily as a result of lower spread
between short term and intermediate term interest rates, which were
partially offset by prepayment penalty income.
New York Community Bancorp’s non-interest income came in at $81.7
million, down 16.9% sequentially. The decline was mainly
attributable to lower mortgage banking income and FDIC
indemnification income, partially offset by a rise in other
income.
Non-interest expense totaled $153.3 million, down 1.4%
sequentially. The decline in occupancy and equipment expenses and
general and administrative costs were partially mitigated by an
increase in compensation and benefit expenses.
Efficiency ratio was recorded at 40.50% compared with 38.12% in the
prior quarter. The hike indicated a decline in profitability.
Credit Quality
Credit quality remained stable at New York Community Bancorp.
Non-performing non-covered loans were 0.82% of total loans as of
September 30, 2012, compared with 0.84% as of June 30, 2012.
Non-performing non-covered assets to total assets were 0.66% versus
0.69% reported in the prior quarter.
Allowance for losses on non-covered loans to non-performing
non-covered loans was 56.38% in the reported quarter compared with
54.73% in the prior quarter. Allowance for losses on non-covered
loans to total non-covered loans remained flat at 0.52% compared
with the prior quarter.
The ratio of net charge-offs during the period to average loans on
a non-annualized basis was 0.03% compared with 0.05% in the prior
quarter.
Capital Position
During the reported quarter, New York Community Bancorp’s capital
levels remained strong. As of September 30, 2012, book value per
share was $12.85 compared with $12.78 in the prior quarter.
As of September 30, 2012, stockholders’ equity to total assets was
12.80% compared with12.90% as of June 30, 2012. Moreover, tangible
stockholders’ equity to tangible assets was 7.62% compared with
7.64% in the prior quarter.
Dividend Update
New York Community Bancorp’s Board of Directors declared dividend
of 25 cents per share for the reported quarter. The dividend will
be paid on November 16 to shareholders of record on November 7.
Our Take
Going forward, we believe New York Community Bancorp’s diverse
revenue stream and strong asset quality will benefit the company in
the future. Further, its strong capital position and regular
dividend payment will boost investors’ confidence in the stock.
Yet, the unsettled economic environment, low interest rate and
stringent regulatory issues are the matters of concern.
New York Community Bancorp currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. Among its peers,
Meridian Interstate Bancorp, Inc. (EBSB) retains a
Zacks #1 Rank, which translates into a short-term Strong Buy
rating.
MERIDIAN INTRST (EBSB): Free Stock Analysis Report
NEW YORK CMNTY (NYB): Free Stock Analysis Report
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