New York Community Bancorp, Inc.
) reported second-quarter 2013 adjusted earnings of 30 cents per
share, beating the Zacks Consensus Estimate by a nickel. However,
results came in below $0.32 earned in the year-ago quarter.
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Better-than-expected results were driven by an increase in net
interest income and lower expenses. However, a drop in revenues
due to lower non-interest income was a headwind.
Considering amortization and appreciation of shares held in
stock-related benefit plans, associated tax effects and
amortization of core deposit intangibles, the company reported
net income of $122.5 million or 28 cents per share. Taking into
account the impact of comparable items, earnings were $131.2
million or 30 cents per share in the prior-year quarter.
Quarter in Detail
Total revenue was $441.9 million, down 12% from the year-ago
quarter. However, revenues exceeded the Zacks Consensus Estimate
of $337.0 million.
New York Community Bancorp's net interest income inched up 1%
year over year to $299.9 million. The rise was mainly due to a
decline in interest expenses, partly offset by lower interest
income. Net interest margin (NIM) fell 15 basis points year over
year to 3.15%.
The company's non-interest income came in at $53.7 million, down
45% year over year. The decline was mainly due to lower mortgage
banking income, lower Federal Deposit Insurance Corporation
(FDIC) indemnification income and lower net gain on sale of
securities, partially offset by increased bank-owned life
insurance, fee income and other income.
Non-interest expense totaled $151.7 million, down 2% from the
prior-year quarter. The decline was due to lower general and
administrative costs, partly offset by a rise in compensation and
benefit expenses as well as occupancy and equipment expenses.
Efficiency ratio was recorded at 41.71%, compared with 38.12% in
the prior-year quarter. An increase in efficiency ratio indicates
decline in profitability.
Credit quality continued to improve at New York Community
Bancorp. Nonperforming non-covered loans were 0.54% of total
loans as of Jun 30, 2013, down from 0.62% as of Mar 31, 2013. At
the end of Jun 30, 2013, nonperforming non-covered assets to
total assets were 0.57%, down from 0.59% at the prior
Allowance for losses on non-covered loans to total non-covered
loans were 0.50%, stable from the prior quarter.
The ratio of net charge-offs to average loans on a non-annualized
basis was 0.01%, down from 0.02% in the prior quarter. Provision
for loan losses was $5 million, down from $15 million from the
Capital ratios improved in the reported quarter. As of Jun 30,
2013, stockholders' equity to total assets was 12.87%, up from
12.73% as of Mar 31, 2013. Moreover, tangible stockholders'
equity to tangible assets was 7.74%, up from 7.61% from the prior
quarter. As of Jun 30, 2013, book value per share was $12.90,
compared with $12.85 in the prior quarter.
Along with the earnings release, New York Community Bancorp's
board of directors declared a quarterly dividend of 25 cents per
share, payable on Aug 16 to shareholders of record on Aug 7.
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.
However, a volatile economy, low interest rate environment and
stringent regulations remain plausible concerns.
New York Community Bancorp currently carries a Zacks Rank #3
(Hold). Stocks that are performing well and can be recommended
for investment in the financial loan and savings sector include
First Defiance Financial Corp.
Fox Chase Bancorp, Inc.
). All these companies carry a Zacks Rank #2 (Buy).