New York Community Bancorp, Inc
) reported fourth quarter 2012 adjusted earnings of 30 cents per
share, marginally beating both the Zacks Consensus Estimate and
the year-ago earnings by a penny.
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The company's results reflect a fall in revenue and hike in
operating expenses. Improvement in credit quality was a positive
but capital ratios showed mixed trend.
For 2012, the adjusted earnings came in at $1.24 per share,
beating the 2011 earnings of $1.23 by a cent.
Considering amortization and appreciation of shares held in
stock-related benefit plans and amortization of core deposit
intangibles, the company reported net income of $122.8 million or
28 cents per share. Taking into account the impact of the
comparable items, earnings came in at $117.7 million or 27 cents
per share in the prior-year quarter.
Quarter in Detail
Total revenue was $502 .3 million, down 4.3% from the year-ago
quarter. For 2012, total revenue stood at $ 2,088.5 million, down
0.6% from $2,102.0 million.
New York Community Bancorp's net interest income decreased 3.4%
year over year to $290.0 million. The decline was mainly due to a
fall in interest income. Net interest margin fell 30 basis points
(bps) year over year to 3.15%.
New York Community Bancorp's non-interest income came in at $55.5
million, down 7.1% year over year. The decline
was mainly due to higher Federal Deposit Insurance Corporation
(FDIC) indemnification expense and lower net gain on sale of
securities, partially offset by increased mortgage income, fee
income and other income.
Non-interest expense totaled $154.6 million, up 5.6% from the
prior-year quarter. The increase was due to higher compensation
and benefit expenses, occupancy and equipment expenses along with
general and administrative costs.
Efficiency ratio was recorded at 43.37% compared with 39.15% in
the prior-year quarter. The hike indicates a decline in
Credit quality continued to improve at New York Community
Bancorp. Non-performing non-covered loans were 0.85% of total
loans as of Dec 31, 2012, down from 1.11% as of Dec 31, 2011. At
the end of 2012, non-performing non-covered assets to total
assets were 0.66%, reflecting a decline from 0.98% at the end of
Allowance for losses on non-covered loans to total non-covered
loans were 0.52%, marginally decreasing from 0.54% at the end of
The ratio of net charge-offs to average loans on a non-annualized
basis was 0.13%, falling from 0.35% in the preceding year.
Provision for loan losses was $5 million in the reported quarter,
reducing $15 million from the prior-year quarter.
Capital ratios displayed a marginal decline in the reported
quarter. As of Dec 31, 2012, stockholders' equity to total assets
was 12.81%, dipping from 13.24% as of Dec 31, 2011. Moreover,
tangible stockholders' equity to tangible assets was 7.65%,
declining from 7.78% from the year-ago period. As of Dec 31,
2012, book value per share was $12.88 compared with $12.73 in the
Concurrent with the earnings release, New York Community
Bancorp's board of directors declared a quarterly dividend of 25
cents per share, payable on Feb 22 to shareholders of record on
Going forward, we believe New York Community Bancorp's varied
revenue stream and robust asset quality will benefit its
financials. Further, strong liquidity and a sound dividend policy
will boost investors' confidence in the stock.
Yet, the unsettled economic environment, a low interest rate and
stringent regulatory issues remain concerns.
New York Community Bancorp currently retains a Zacks Rank #3
(Hold). Stocks that are performing well and can be recommended
for investment in the financial loan and savings sector include
Bank Mutual Corporation
Home Federal Bancorp, Inc.
First Financial Holdings, Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).