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Share Name | Share Symbol | Market | Type |
---|---|---|---|
New York Community Bancorp Inc | NYSE:NYCB | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.1401 | 4.16% | 3.5101 | 3.65 | 3.40 | 3.40 | 26,530,055 | 00:58:52 |
Board of Directors Declares $0.17 per Share Quarterly Cash Dividend
Third Quarter 2016 Highlights
New York Community Bancorp, Inc. (NYSE:NYCB) (the “Company”) today reported GAAP earnings of $125.3 million, or $0.26 per diluted share, for the three months ended September 30, 2016 and $381.7 million, or $0.78 per diluted share, for the nine months ended at that date.
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(1) “Tangible assets” and “tangible stockholders’ equity” are non-GAAP financial measures. Please see the discussion and reconciliations of these non-GAAP measures with the comparable GAAP measures on page 12 of this release. (2) “Adjusted net interest margin” is a non-GAAP financial measure. Please see the discussion and reconciliation of our adjusted net interest margin to our GAAP net interest margin on page 7 of this release. (3) We calculate our efficiency ratio by dividing our operating expenses by the sum of our net interest income and non-interest income.Commenting on the Company’s third quarter performance, President and Chief Executive Officer Joseph R. Ficalora stated, “As we near the one-year mark of announcing our plans to merge with Astoria Financial Corporation, we continue to manage our balance sheet to stay below the current threshold for designation as a SIFI bank. At the same time, we continue to focus on the core components of our business model: producing loans for investment, as well as for sale; maintaining our record of high quality assets; and striving to maintain a high level of efficiency.
“Our third-quarter performance was indicative of that focus, as well as our preparations to become a SIFI bank. In an interest rate environment that continues to be a challenge, we generated earnings of $125.3 million, or $0.26 per diluted share.
“Most notable in the quarter was an increase in mortgage banking income, as a linked-quarter and year-over-year rise in income from originations was coupled with an increase in income from servicing. Originations of loans for sale totaled $1.4 billion, the highest volume in six quarters, as residential mortgage loan demand increased.
“While the production of held-for-investment loans declined sequentially and from the year-earlier level, originations totaled $2.3 billion in the quarter, including $1.3 billion of multi-family loans. Absent the sale of multi-family loan participations totaling $1.1 billion, the portfolio would have grown at an annualized rate of 11.1% over the past nine months.
“While growing our loan portfolio, we’ve also maintained the quality of our assets, with non-performing non-covered loans representing 0.12% of total non-covered loans at the end of September, and non-performing non-covered assets representing 0.12% of total non-covered assets at that date.”
Board of Directors Declares $0.17 per Share Dividend Payable on November 18, 2016
“In view of the strength of our earnings and our solid capital position, the Board of Directors last night declared a quarterly cash dividend of $0.17 per share. The dividend will be payable on November 18, 2016 to shareholders of record as of November 7th, and represents a dividend yield of 4.7% based on last night’s closing price,” Mr. Ficalora said.
BALANCE SHEET SUMMARY
The Company recorded total assets of $49.5 billion at the end of September, reflecting a $426.9 million increase from the June 30th balance and an $855.2 million reduction from the balance at December 31st. The linked-quarter rise was primarily due to a $549.6 million increase in total loans, net, to $39.7 billion, which was tempered by a $163.8 million decline in securities to $3.8 billion. While loans, net, rose $1.7 billion in the nine months ended September 30, 2016, the increase was exceeded by a $2.4 billion decline in securities, largely reflecting first-quarter calls.
For the four quarters ended September 30, 2016, the Company’s total consolidated assets averaged $49.3 billion, below the current SIFI threshold of $50.0 billion.
Loans
Covered Loans
Covered loans, net, represented $1.8 billion, or 4.4%, of total loans, net, at the end of September, a $264.9 million reduction from the balance at December 31st. The nine-month decline was primarily due to repayments.
Accretion on the covered loan portfolio was $32.8 million in the current third quarter, as compared to $32.9 million and $33.5 million, respectively, in the trailing and year-earlier three months.
Non-Covered Loans Held for Investment
Non-covered loans held for investment rose $560.2 million and $1.6 billion, respectively, to $37.4 billion in the three and nine months ended September 30, 2016. Including third-quarter originations of $2.3 billion, the Company originated $7.2 billion of held-for-investment loans in the current nine-month period, with multi-family loans representing 63.3% of the total and commercial real estate (“CRE”) loans representing 12.5%.
The following table summarizes the Company’s production of loans held for investment for the three months ended September 30, 2016, June 30, 2016, and September 30, 2015 and for the nine months ended September 30, 2016 and 2015:
For the Three Months Ended For the Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (in thousands) 2016 2016 2015 2016 2015 Mortgage Loans Originated for Investment: Multi-family $ 1,276,358 $ 1,672,759 $ 2,179,280 $ 4,529,904 $ 6,435,713 Commercial real estate 345,543 465,710 254,041 892,676 1,349,179 One-to-four family 101,365 71,448 2,424 248,020 8,402 Acquisition, development, and construction 17,855 66,849 27,628 123,849 141,879 Total mortgage loans originated for investment $ 1,741,121 $ 2,276,766 $ 2,463,373 $ 5,794,449 $ 7,935,173 Other Loans Originated for Investment: Specialty finance $ 369,308 $ 341,031 $ 206,108 $ 907,551 $ 733,147 Other commercial and industrial 151,279 129,702 116,338 451,340 280,698 Other 894 1,206 804 3,010 3,666 Total other loans originated for investment $ 521,481 $ 471,939 $ 323,250 $ 1,361,901 $ 1,017,511 Total loans originated for investment $ 2,262,602 $ 2,748,705 $ 2,786,623 $ 7,156,350 $ 8,952,684The following table provides additional information about the Company’s multi-family and CRE loan portfolios at September 30, 2016, June 30, 2016, and December 31, 2015:
(dollars in thousands)September 30,2016
June 30, 2016
December 31,2015
Multi-Family Loan Portfolio: Loans outstanding $27,083,291 $26,767,207 $25,989,100 Percent of total held-for-investment loans 72.5 % 72.7 % 72.7 % Average principal balance $5,384 $5,368 $5,307 Weighted average life 2.9 years 2.8 years 2.8 years Commercial Real Estate Loan Portfolio: Loans outstanding $7,767,144 $7,796,568 $7,860,162 Percent of total held-for-investment loans 20.8 % 21.2 % 22.0 % Average principal balance $5,600 $5,482 $5,376 Weighted average life 3.3 years 3.3 years 3.2 yearsThe growth of the multi-family loan portfolio reflected in the preceding table was tempered by sales of loans totaling $206.0 million in the current third quarter and $1.1 billion in the first nine months of this year. Absent the sale of multi-family loans through the end of September, the portfolio would have grown at an annualized rate of 11.1% year-to-date. The modest declines in CRE loans reflected in the table partly reflect third-quarter sales of $107.6 million and sales of $268.5 million over the first nine months of the year.
In addition, the balance of held-for-investment loans at the end of September reflected the following activity:
Non-Covered Loans Held for Sale
Reflecting an increase in residential mortgage loan demand, the Company originated $1.4 billion of loans held for sale in the current third quarter, exceeding the trailing-quarter volume by $126.1 million and the year-earlier third-quarter volume by $442.5 million. Notwithstanding these sequential and year-over-year increases, the volume of loans held for sale produced in the current nine-month period fell $268.3 million to $3.6 billion from the volume produced in the year-earlier nine months.
Non-covered loans held for sale totaled $701.4 million at the end of September, $91.5 million higher than the balance at the end of the second quarter and $334.2 million higher than the balance at December 31st. In the three months ended September 30, 2016, the average balance of loans held for sale was $617.5 million, as compared to $492.1 million and $389.7 million, respectively, in the three months ended June 30, 2016 and September 30, 2015.
Pipeline
The Company has approximately $2.5 billion of loans in its current pipeline, including loans held for investment of approximately $1.6 billion and one-to-four family loans held for sale of approximately $900 million.
Asset Quality
The following discussion pertains only to the Company's portfolio of non-covered loans held for investment (excluding purchased credit-impaired, or “PCI,” loans) and non-covered other real estate owned ("OREO").
The quality of the Company’s assets was reflected in the September 30, 2016 balances of non-performing non-covered assets and loans, as compared to the respective balances at June 30, 2016 and December 31, 2015.
Non-performing non-covered assets represented $56.0 million or 0.12%, of total non-covered assets at the end of September, down $2.7 million from the June 30th balance and $4.9 million from the balance at December 31, 2015. Non-performing non-covered loans represented $43.4 million, or 0.12%, of total non-covered loans at the end of the current third quarter, reflecting respective declines of $2.5 million and $3.4 million over the corresponding periods. The remainder of the linked-quarter decline in non-performing non-covered assets was attributable to a $206,000 decrease in non-covered OREO to $12.6 million; over the nine-month period, the balance of non-covered OREO declined by $1.5 million.
The following table presents the Company’s non-performing non-covered loans and assets at September 30, 2016, June 30, 2016, and December 31, 2015:
(in thousands)
September 30,2016
June 30,2016
December 31,2015
Non-Performing Non-Covered Assets: Non-accrual non-covered mortgage loans: Multi-family $ 10,769 $ 13,771 $ 13,904 Commercial real estate 10,628 11,811 14,920 One-to-four family 9,790 9,952 12,259 Acquisition, development, and construction -- -- 27 Total non-accrual non-covered mortgage loans $ 31,187 $ 35,534 $ 41,110 Other non-accrual non-covered loans 12,214 10,369 5,715 Total non-performing non-covered loans $ 43,401 $ 45,903 $ 46,825 Non-covered other real estate owned 12,608 12,814 14,065 Total non-performing non-covered assets $ 56,009 $ 58,717 $ 60,890As indicated in the preceding table, the balance of non-accrual non-covered mortgage loans fell $9.9 million from the balance at the end of December to $31.2 million at September 30, 2016. The benefit of this reduction was largely offset by a $6.5 million increase in other non-accrual non-covered loans to $12.2 million during the same time. The latter increase was primarily due to the transition to non-performing status of $7.4 million of New York City taxi medallion loans over the past nine months.
The following table presents the Company's asset quality measures at September 30, 2016, June 30, 2016, and December 31, 2015:
September 30, 2016
June 30,2016
December 31,2015
Non-performing non-covered loans to total non-covered loans
0.12 % 0.12 % 0.13 %Non-performing non-covered assets to total non-covered assets
0.12 0.12 0.13 Allowance for losses on non-covered loans to non-performing non-covered loans (1) 352.43 329.67 310.08 Allowance for losses on non-covered loans to total non-covered loans (1) 0.41 0.41 0.41 (1) Excludes the allowance for losses on PCI loans.The following table summarizes the Company’s net (recoveries) charge-offs for the three months ended September 30, 2016, June 30, 2016, and September 30, 2015 and for the nine months ended September 30, 2016 and 2015:
For the Three Months Ended For the Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (in thousands) 2016 2016 2015 2016 2015 Charge-offs: Multi-family $ -- $ -- $ 13 $ -- $ 86 Commercial real estate -- -- 8 -- 273 One-to-four family 17 107 259 170 576 Acquisition, development, and construction -- -- -- -- -- Other 57 950 13 1,155 388 Total charge-offs $ 74 $ 1,057 $ 293 $ 1,325 $ 1,323 Recoveries: Multi-family $ (78 ) $ -- $ (2,354 ) $ (78 ) $ (3,723 ) Commercial real estate (33 ) (35 ) (154 ) (780 ) (325 ) One-to-four family -- (226 ) (49 ) (226 ) (49 ) Acquisition, development, and construction -- -- -- (167 ) (100 ) Other (375 ) (333 ) (2,945 ) (956 ) (4,152 ) Total recoveries $ (486 ) $ (594 ) $ (5,502 ) $ (2,207 ) $ (8,349 )Net (recoveries) charge-offs
$ (412 ) $ 463 $ (5,209 ) $ (882 ) $ (7,026 )Net (recoveries) charge-offs to average loans (1)
(0.00 )% 0.00 % (0.01 )% (0.00 )% (0.02 )% (1) Non-annualizedThe following table presents the Company’s non-covered loans 30 to 89 days past due at September 30, 2016, June 30, 2016, and December 31, 2015:
(in thousands)
September 30,2016
June 30,2016
December 31,2015
Non-Covered Loans 30 to 89 Days Past Due: Multi-family $ 2,948 $ 2,253 $ 4,818 Commercial real estate -- -- 178 One-to-four family 1,495 574 1,117 Acquisition, development, and construction 6,200 -- -- Other 15,929 2,005 492 Total non-covered loans 30 to 89 days past due $ 26,572 $ 4,832 $ 6,605The three- and nine-month increases in total non-covered loans 30 to 89 days past due reflected in the preceding table were primarily attributable to a single construction loan of $6.2 million, and New York City taxi medallion loans totaling $15.7 million.
Securities
Securities represented $3.8 billion, or 7.7%, of total assets at the end of September, a $163.8 million decrease from the June 30th balance and a $2.4 billion reduction from the balance at December 31st. The bulk of the nine-month decline occurred in the first quarter, when a decline in market interest rates triggered a high volume of securities calls.
Funding Sources
Deposits totaled $29.1 billion at the end of this September, a $256.6 million increase from the June 30th balance and a $712.8 million increase from the balance at year-end 2015. The nine-month increase was primarily driven by a $424.9 million rise in non-interest-bearing accounts to $2.9 billion and a $265.6 million rise in NOW and money market accounts to $13.3 billion. While the balance of certificates of deposit (“CDs”) rose $2.1 billion during this time to $7.4 billion, the benefit was largely offset by a $2.0 billion reduction in savings accounts to $5.5 billion.
While borrowed funds rose modestly quarter-over-quarter, the balance recorded at the end of September was $1.7 billion lower than the balance at year-end. Specifically, borrowed funds totaled $14.0 billion at the end of the third quarter and represented 28.3% of total assets; the December 31st balance represented 31.3% of total assets by comparison.
Stockholders’ Equity
In the nine months ended September 30, 2016, stockholders’ equity rose $155.8 million to $6.1 billion, representing 12.31% of total assets and a book value per share of $12.50. At December 31, 2015, stockholders’ equity totaled $5.9 billion, representing 11.79% of total assets and a book value per share of $12.24.
Excluding goodwill of $2.4 billion and core deposit intangibles (“CDI”) of $605,000 from the respective balances of stockholders’ equity and total assets, tangible stockholders’ equity rose $157.8 million in the first nine months of the year to $3.7 billion, representing 7.77% of tangible assets and a tangible book value per share of $7.50 at September 30, 2016. Excluding goodwill of $2.4 billion and CDI of $2.6 million, tangible stockholders’ equity totaled $3.5 billion at the end of December, representing 7.30% of tangible assets and a tangible book value per share of $7.21.(1)
In addition, the regulatory capital ratios for the Company and its subsidiary banks continued to exceed the regulatory requirements for “well capitalized” classification, as indicated in the table located on the last page of this release.
EARNINGS SUMMARY FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2016
The Company generated GAAP earnings of $125.3 million in the current third quarter, as compared to $126.5 million and $114.7 million, respectively, in the trailing and year-earlier three months. All three quarter’s earnings were equivalent to $0.26 per diluted share.
The number of shares used in the computation of diluted earnings per share in the current third and trailing quarters reflects the issuance of 40,625,000 shares in the fourth quarter of 2015 in connection with the strategic debt repositioning and the merger with Astoria Financial Corporation (NYSE:AF) announced on October 29, 2015.
Net Interest Income
Net interest income totaled $318.4 million in the current third quarter, reflecting a sequential decrease of $7.2 million and a year-over-year increase of $39.0 million. The linked-quarter decline was the net effect of a $3.5 million drop in interest income and a $3.6 million increase in interest expense. In contrast, the year-over-year increase was largely due to a $39.5 million reduction in interest expense, as the benefit of the debt repositioning that took place in last year’s fourth quarter resulted in a lower cost of borrowed funds.
The linked-quarter decline in net interest income reflects the following factors:
In contrast, the year-over-year increase in net interest income reflects the following factors:
Net Interest Margin
The direction of the Company’s net interest margin mirrored that of its net interest income in the three months ended September 30, 2016. At 2.91%, the margin was eight basis points narrower than the trailing-quarter measure and 35 basis points wider than the margin in the third quarter of last year.
While the linked-quarter decline was largely attributable to the drop in the average yield on interest-earning assets and the higher average cost of interest-bearing deposits, the year-over-year increase primarily reflects the benefit of the strategic debt repositioning and the resultant decline in the average cost of borrowed funds. In addition, prepayment income contributed 20 basis points to the margin in the current third quarter, as compared to 24 basis points and 22 basis points, respectively, in the trailing and year-earlier three months.
The following table summarizes the contribution of prepayment income from loans and securities to the Company’s interest income and net interest margin in the three months ended September 30, 2016, June 30, 2016, and September 30, 2015:
(in thousands)
September 30,2016
June 30,2016
September 30,2015
Total interest income $416,096 $419,615 $416,550 Prepayment income: From loans $13,422 $18,192 $23,076 From securities 8,947 8,052 1,409 Total prepayment income $22,369 $26,244 $24,485Net interest margin (including the contribution of prepayment income)
2.91 % 2.99 % 2.56 % Less:Contribution of prepayment income to net interest margin:
From loans
12 bps 16 bps 21 bpsFrom securities
8 8 1 Total contribution of prepayment income to net interest margin20 bps 24 bps 22 bps Adjusted net interest margin (i.e., excluding the contribution of prepayment income)
2.71 % 2.75 % 2.34 %
While our net interest margin, including the contribution of prepayment income, is recorded in accordance with GAAP, adjusted net interest margin, which excludes the contribution of prepayment income, is not. Nevertheless, management uses this non-GAAP measure in its analysis of our performance, and believes that this non-GAAP measure should be disclosed in our earnings releases and other investor communications for the following reasons:
1. Prepayment income in any given period depends on the volume of loans that refinance or prepay, or securities that prepay, during that period. Such activity is largely dependent on external factors such as current market conditions, including real estate values, and the perceived or actual direction of market interest rates. Identifying and excluding the contribution of prepayment income to our net interest income and margin, and reporting our “adjusted net interest margin,” enables us to provide investors with a better understanding of that contribution. 2. Adjusted net interest margin is among the measures considered by current and prospective investors, both independent of, and in comparison with, the Company’s peers.Adjusted net interest margin should not be considered in isolation or as a substitute for net interest margin, which is calculated in accordance with GAAP. Moreover, the manner in which we calculate this non-GAAP measure may differ from that of other companies reporting a non-GAAP measure with a similar name.
Provision for (Recovery of) Loan Losses
Provision for (Recovery of) Losses on Non-Covered Loans
Reflecting management’s assessment of the adequacy of the non-covered loan loss allowance, the Company recorded provisions for non-covered loan losses of $1.2 million and $2.7 million in the three months ended September 30, 2016 and June 30, 2016, respectively. By comparison, the Company recovered $512,000 from the non-covered loan loss allowance in the third quarter of 2015.
Recovery of Losses on Covered Loans
Reflecting an increase in the cash flows expected from certain pools of acquired loans covered by FDIC loss-sharing agreements, the Company recovered $1.3 million, $1.8 million, and $8.5 million from the allowance for covered loan losses in the three months ended September 30, 2016, June 30, 2016, and September 30, 2015, respectively.
The recoveries recorded in the respective quarters were largely offset by FDIC indemnification expense of $1.0 million, $1.5 million, and $6.8 million recorded in “Non-interest income” as further discussed below.
Non-Interest Income
Non-interest income rose $3.2 million sequentially and $3.0 million year-over-year to $40.6 million in the three months ended September 30, 2016. The respective increases were driven by mortgage banking income, which rose $6.0 million and $5.5 million, respectively, to $12.9 million from the levels recorded in the trailing and year-earlier three months.
The following table summarizes our mortgage banking income for the periods indicated:
For the Three Months Ended For the Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (in thousands) 2016 2016 2015 2016 2015 Mortgage Banking Income: Income from originations $ 10,884 $ 10,194 $ 7,524 $ 34,691 $ 33,599 Servicing income (loss) 2,041 (3,237 ) (50 ) (10,671 ) 8,249 Total mortgage banking income $ 12,925 $ 6,957 $ 7,474 $ 24,020 $ 41,848As reflected in the preceding table, income from originations accounted for $10.9 million of mortgage banking income in the current third quarter, while servicing income accounted for the remaining $2.0 million. In the trailing and year-earlier quarters, income from originations was tempered by servicing losses as the effectiveness of hedging was adversely impacted by the volatility of mortgage interest rates.
In addition to the increase in mortgage banking income, the linked-quarter rise in non-interest income reflects modest gains in fee income and BOLI income, together with a modest reduction in FDIC indemnification expense. These contributing factors were nonetheless offset by a $2.4 million decline in the gain on sales of loans to $3.5 million and a $1.9 million decrease in other non-interest income to $9.3 million.
While mortgage banking income contributed substantially to the year-over-year rise in non-interest income, so too did a $5.8 million reduction in FDIC indemnification expense. The combined benefit of this decline and the rise in mortgage banking income was largely tempered by the combination of a $3.5 million reduction in the gain on sales of loans from the year-earlier level and by a $4.6 million decline in other non-interest income from the year-earlier amount.
Non-Interest Expense
Non-interest expense totaled $161.7 million in the current third quarter, modestly higher than the trailing-quarter level and $14.4 million higher than the year-earlier amount. Operating expenses accounted for $158.9 million of the current third-quarter total, consistent with the level recorded in the second quarter of this year. While compensation and benefits expense and occupancy and equipment expense rose modestly quarter-over-quarter, the combined increase was exceeded by a $1.0 million decline in general and administrative (“G&A”) expense.
Year-over-year, operating expenses were up $12.9 million in the current third quarter, largely reflecting a $12.6 million rise in G&A expense that was primarily attributable to an increase in FDIC deposit insurance premiums and a rise in professional service fees. While compensation and benefits expense rose $1.9 million year-over-year, to $86.1 million, the impact of said increase was largely offset by a $1.6 million decline in occupancy and equipment expense to $24.3 million. Compensation and benefits expense rose year-over-year as the Company continued to expand certain back-office departments in connection with the expectation of becoming a SIFI bank.
Also included in non-interest expense in the current third quarter were merger-related expenses of $2.2 million in connection with the Company’s proposed merger with Astoria Financial Corporation. In the trailing quarter, merger-related expenses amounted to $1.3 million. There were no comparable expenses in the year-earlier three months.
Income Tax Expense
Income tax expense totaled $72.1 million in the current third quarter, $2.6 million lower than the trailing-quarter level and $8.1 million higher than the year-earlier amount. The linked-quarter decline was attributable to a $3.7 million drop in pre-tax income to $197.4 million and a decline in the effective tax rate to 36.52% from 37.13%. The year-over-year rise in income tax expense was attributable to an $18.7 million increase in pre-tax income to $197.4 million and an increase in the effective tax rate from 35.83%.
About New York Community Bancorp, Inc.
One of the largest U.S. bank holding companies, with assets of $49.5 billion, New York Community Bancorp, Inc. is a leading producer of multi-family loans on non-luxury, rent-regulated apartment buildings in New York City, and the parent of New York Community Bank and New York Commercial Bank. With deposits of $29.1 billion and 255 branches in Metro New York, New Jersey, Florida, Ohio, and Arizona, the Company also ranks among the largest depositories in the United States.
Reflecting its growth through a series of acquisitions, the Community Bank currently operates through seven local divisions, each with a history of service and strength: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, and Roosevelt Savings Bank in New York; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona. Similarly, New York Commercial Bank currently operates 18 of its 30 New York-based branches under the divisional name Atlantic Bank. Additional information about the Company and its bank subsidiaries is available at www.myNYCB.com and www.NewYorkCommercialBank.com.
Post-Earnings Release Conference Call
As previously announced, the Company will host a conference call on Wednesday, October 26, 2016, at 8:30 a.m. (Eastern Daylight Time) to discuss its third quarter 2016 earnings and strategies. The conference call may be accessed by dialing (877) 407‐8293 (for domestic calls) or (201) 689‐8349 (for international calls) and asking for “New York Community Bancorp” or “NYCB”. A replay will be available approximately three hours following completion of the call through 11:59 p.m. on October 30, 2016 and may be accessed by calling (877) 660‐6853 (domestic) or (201) 612‐7415 (international) and providing the following conference ID: 13646155. In addition, the conference call will be webcast at ir.myNYCB.com, and archived through 5:00 p.m. on November 23, 2016.
Cautionary Statements Regarding Forward-Looking Information
This earnings release and the associated conference call may include forward‐looking statements by the Company and our authorized officers pertaining to such matters as our goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among other matters, including the proposed merger with Astoria Financial; our estimates of future costs and benefits of the actions we may take; our assessments of probable losses on loans; our assessments of interest rate and other market risks; and our ability to achieve our financial and other strategic goals.
Forward‐looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.
Our forward‐looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios; changes in competitive pressures among financial institutions or from non‐financial institutions; our ability to obtain the necessary shareholder and regulatory approvals of any acquisitions we may propose, including regulatory approval of the proposed Astoria Financial merger; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations, and our ability to realize related revenue synergies and cost savings within expected time frames; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control.
More information regarding some of these factors is provided in the Risk Factors section of our Form 10‐K for the year ended December 31, 2015 and in other SEC reports we file. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC’s website, www.sec.gov.
- Financial Statements and Highlights Follow ‐
NEW YORK COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF CONDITION September 30, December 31, 2016 2015 (in thousands, except share data) (unaudited) Assets Cash and cash equivalents $ 771,782 $ 537,674 Securities: Available-for-sale 161,145 204,255 Held-to-maturity 3,651,925 5,969,390 Total securities 3,813,070 6,173,645 Loans held for sale 701,398 367,221 Non-covered mortgage loans held for investment: Multi-family 27,083,291 25,989,100 Commercial real estate 7,767,144 7,860,162 Acquisition, development, and construction 371,409 311,479 One-to-four family 331,617 116,841 Total non-covered mortgage loans held for investment 35,553,461 34,277,582 Other non-covered loans: Other commercial and industrial 1,781,549 1,453,039 Other loans 25,730 32,583 Total non-covered other loans held for investment 1,807,279 1,485,622 Total non-covered loans held for investment 37,360,740 35,763,204 Less: Allowance for losses on non-covered loans (154,705 ) (147,124 ) Non-covered loans held for investment, net 37,206,035 35,616,080 Covered loans 1,789,164 2,060,089 Less: Allowance for losses on covered loans (25,360 ) (31,395 ) Covered loans, net 1,763,804 2,028,694 Total loans, net 39,671,237 38,011,995 Federal Home Loan Bank stock, at cost 586,355 663,971 Premises and equipment, net 367,369 322,307 FDIC loss share receivable 263,639 314,915 Goodwill 2,436,131 2,436,131 Core deposit intangibles, net 605 2,599Other assets (includes $17,727 and $25,817, respectively, of other real estate owned covered by loss sharing agreements)
1,552,432 1,854,559 Total assets $ 49,462,620 $ 50,317,796 Liabilities and Stockholders’ Equity Deposits: NOW and money market accounts $ 13,334,653 $ 13,069,019 Savings accounts 5,492,594 7,541,566 Certificates of deposit 7,383,730 5,312,487 Non-interest-bearing accounts 2,928,622 2,503,686 Total deposits 29,139,599 28,426,758 Borrowed funds: Wholesale borrowings 13,643,000 15,389,800 Junior subordinated debentures 358,809 358,605 Total borrowed funds 14,001,809 15,748,405 Other liabilities 230,700 207,937 Total liabilities 43,372,108 44,383,100 Stockholders’ equity: Preferred stock at par $0.01 (5,000,000 shares authorized; none issued) -- -- Common stock at par $0.01 (900,000,000 shares authorized; 487,067,889 and 484,968,024 shares issued; and 487,066,151 and 484,943,308 shares outstanding, respectively)4,871 4,850 Paid-in capital in excess of par 6,039,508 6,023,882 Retained earnings (accumulated deficit) 97,431 (36,568 ) Treasury stock, at cost (1,738 and 24,716 shares, respectively) (25 ) (447 ) Accumulated other comprehensive loss, net of tax: Net unrealized gain on securities available for sale, net of tax 4,715 3,031 Net unrealized loss on the non-credit portion of other-than-temporary impairment losses, net of tax
(5,261 ) (5,318 ) Pension and post-retirement obligations, net of tax (50,727 ) (54,734 ) Total accumulated other comprehensive loss, net of tax (51,273 ) (57,021 ) Total stockholders’ equity 6,090,512 5,934,696 Total liabilities and stockholders’ equity $ 49,462,620 $ 50,317,796
NEW YORK COMMUNITY BANCORP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) For the Three Months Ended For the Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2016 2016 2015 2016 2015 Interest Income: Mortgage and other loans $ 367,932 $ 370,482 $ 357,916 $ 1,099,137 $ 1,080,419 Securities and money market investments 48,164 49,133 58,634 160,384 186,664 Total interest income 416,096 419,615 416,550 1,259,521 1,267,083 Interest Expense: NOW and money market accounts 15,866 15,286 11,770 45,771 34,549 Savings accounts 7,439 7,354 12,739 25,001 37,997 Certificates of deposit 20,501 18,738 15,539 55,129 48,384 Borrowed funds 53,867 52,664 97,090 161,758 288,876 Total interest expense 97,673 94,042 137,138 287,659 409,806 Net interest income 318,423 325,573 279,412 971,862 857,277 Provision for (recovery of) losses on non-covered loans 1,234 2,744 (512 ) 6,699 (3,254 ) Recovery of losses on covered loans (1,289 ) (1,849 ) (8,516 ) (6,035 ) (5,433 ) Net interest income after provision for (recovery of) loan losses 318,478 324,678 288,440 971,198 865,964 Non-Interest Income: Mortgage banking income 12,925 6,957 7,474 24,020 41,848 Fee income 8,640 7,917 8,765 24,480 25,937 Bank-owned life insurance 7,029 6,843 7,117 23,208 20,595 Net gain on sales of loans 3,465 5,878 7,013 15,118 21,716 Net gain on sales of securities 237 13 140 413 943 FDIC indemnification expense (1,031 ) (1,479 ) (6,813 ) (4,828 ) (4,347 ) Other income 9,330 11,237 13,891 30,787 45,030 Total non-interest income 40,595 37,366 37,587 113,198 151,722 Non-Interest Expense: Operating expenses: Compensation and benefits 86,079 85,847 84,177 261,230 254,453 Occupancy and equipment 24,347 23,675 25,976 73,837 77,216 General and administrative 48,506 49,533 35,875 139,309 120,196 Total operating expenses 158,932 159,055 146,028 474,376 451,865 Amortization of core deposit intangibles 542 606 1,280 1,994 4,209 Merger-related expenses 2,211 1,250 -- 4,674 -- Total non-interest expense 161,685 160,911 147,308 481,044 456,074 Income before income taxes 197,388 201,133 178,719 603,352 561,612 Income tax expense 72,089 74,673 64,031 221,684 203,961 Net Income $ 125,299 $ 126,460 $ 114,688 $ 381,668 $ 357,651 Basic earnings per share
$0.26
$0.26
$0.26
$0.78
$0.80
Diluted earnings per share
$0.26
$0.26
$0.26
$0.78
$0.80
NEW YORK COMMUNITY BANCORP, INC.
RECONCILIATIONS OF CERTAIN GAAP AND NON-GAAP FINANCIAL MEASURES
(unaudited)
While stockholders’ equity, total assets, and book value per share are financial measures that are recorded in accordance with U.S. generally accepted accounting principles (“GAAP”), tangible stockholders’ equity, tangible assets, and the related measures are not. Nevertheless, it is management’s belief that these non-GAAP measures should be disclosed in our earnings releases and other investor communications for the following reasons:
1. Tangible stockholders’ equity is an important indication of the Company’s ability to grow organically and through business combinations, as well as its ability to pay dividends and to engage in various capital management strategies.2.
Returns on average tangible assets and average tangible stockholders’ equity are among the profitability measures considered by current and prospective investors, both independent of, and in comparison with, the Company’s peers.
3. Tangible book value per share and the ratio of tangible stockholders’ equity to tangible assets are among the capital measures considered by current and prospective investors, both independent of, and in comparison with, its peers.Tangible stockholders’ equity, tangible assets, and the related non-GAAP profitability and capital measures should not be considered in isolation or as a substitute for stockholders’ equity, total assets, or any other profitability or capital measure calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP measures may differ from that of other companies reporting non-GAAP measures with similar names.
The following table presents reconciliations of our stockholders’ equity and tangible stockholders’ equity, our total assets and tangible assets, and the related GAAP and non-GAAP profitability and capital measures at or for the three months ended September 30, 2016, June 30, 2016, and September 30, 2015 and the nine months ended September 30, 2016 and 2015:
At or for theThree Months Ended
At or for theNine Months Ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (dollars in thousands) 2016 2016 2015 2016 2015 Total Stockholders’ Equity $6,090,512 $6,039,112 $5,826,837 $6,090,512 $5,826,837 Less: Goodwill (2,436,131 ) (2,436,131 ) (2,436,131 ) (2,436,131 ) (2,436,131 ) Core deposit intangibles (605 ) (1,146 ) (3,734 ) (605 ) (3,734 ) Tangible stockholders’ equity $3,653,776 $3,601,835 $3,386,972 $3,653,776 $3,386,972 Total Assets $49,462,620 $49,035,747 $49,045,482 $49,462,620 $49,045,482 Less: Goodwill (2,436,131 ) (2,436,131 ) (2,436,131 ) (2,436,131 ) (2,436,131 ) Core deposit intangibles (605 ) (1,146 ) (3,734 ) (605 ) (3,734 ) Tangible assets $47,025,884 $46,598,470 $46,605,617 $47,025,884 $46,605,617 Average Stockholders’ Equity $6,081,003 $6,029,168 $5,822,699 $6,028,044 $5,811,673 Less: Average goodwill and core deposit intangibles (2,437,092 ) (2,437,655 ) (2,440,708 ) (2,437,726 ) (2,442,071 ) Average tangible stockholders’ equity $3,643,911 $3,591,513 $3,381,991 $3,590,318 $3,369,602 Average Assets $49,159,171 $48,699,341 $48,970,353 $49,269,748 $48,690,435 Less: Average goodwill and core deposit intangibles (2,437,092 ) (2,437,655 ) (2,440,708 ) (2,437,726 ) (2,442,071 ) Average tangible assets $46,722,079 $46,261,686 $46,529,645 $46,832,022 $46,248,364 Net Income (1) $125,299 $126,460 $114,688 $381,668 $357,651 Add back: Amortization of core deposit intangibles, net of tax 325 364 768 1,196 2,525 Adjusted net income (2) $125,624 $126,824 $115,456 $382,864 $360,176 GAAP MEASURES: Return on average assets 1.02 % 1.04 % 0.94 % 1.03 % 0.98 % Return on average stockholders’ equity 8.24 8.39 7.88 8.44 8.21 Book value per share $12.50 $12.40 $13.11 $12.50 $13.11 Stockholders’ equity to total assets 12.31 % 12.32 % 11.88 % 12.31 % 11.88 % Non-GAAP MEASURES: Return on average tangible assets 1.08 % 1.10 % 0.99 % 1.09 % 1.04 % Return on average tangible stockholders’ equity 13.79 14.12 13.66 14.22 14.25 Tangible book value per share $7.50 $7.40 $7.62 $7.50 $7.62 Tangible stockholders’ equity to tangible assets 7.77 % 7.73 % 7.27 % 7.77 % 7.27 % (1) To calculate our returns on average assets and average stockholders’ equity for a period, we divide the net income generated during that period by the average assets and the average stockholders’ equity recorded during that time. (2) To calculate our returns on average tangible assets and average tangible stockholders’ equity for a period, we adjust the net income generated during that period by adding back the amortization of CDI, net of tax, and then divide that adjusted net income by the average tangible assets and the average tangible stockholders’ equity recorded during that time.NEW YORK COMMUNITY BANCORP, INC. NET INTEREST INCOME ANALYSIS LINKED-QUARTER AND YEAR-OVER-YEAR COMPARISONS (unaudited) For the Three Months Ended September 30, 2016 June 30, 2016 September 30, 2015 Average Average Average Average Yield/ Average Yield/ Average Yield/ (dollars in thousands) Balance Interest Cost Balance Interest Cost Balance Interest Cost Assets: Interest-earning assets: Mortgage and other loans, net $ 39,337,380 $ 367,932 3.74 % $ 38,853,991 $ 370,482 3.82 % $ 36,435,984 $ 357,916 3.93 % Securities and money market investments 4,435,332 48,164 4.33 4,619,569 49,133 4.26 7,325,746 58,634 3.19 Total interest-earning assets 43,772,712 416,096 3.80 43,473,560 419,615 3.86 43,761,730 416,550 3.80 Non-interest-earning assets 5,386,459 5,225,781 5,208,623 Total assets $ 49,159,171 $ 48,699,341 $ 48,970,353 Liabilities and Stockholders’ Equity: Interest-bearing deposits: NOW and money market accounts $ 13,356,174 $ 15,866 0.47 % $ 13,406,017 $ 15,286 0.46 % $ 12,728,206 $ 11,770 0.37 % Savings accounts 5,629,135 7,439 0.53 5,849,980 7,354 0.51 7,446,936 12,739 0.68 Certificates of deposit 7,245,325 20,501 1.13 6,933,766 18,738 1.09 5,661,888 15,539 1.09 Total interest-bearing deposits 26,230,634 43,806 0.66 26,189,763 41,378 0.64 25,837,030 40,048 0.61 Borrowed funds 13,802,662 53,867 1.55 13,386,815 52,664 1.58 14,522,556 97,090 2.65 Total interest-bearing liabilities 40,033,296 97,673 0.97 39,576,578 94,042 0.96 40,359,586 137,138 1.35 Non-interest-bearing deposits 2,832,569 2,971,058 2,576,350 Other liabilities 212,303 122,537 211,718 Total liabilities 43,078,168 42,670,173 43,147,654 Stockholders’ equity 6,081,003 6,029,168 5,822,699 Total liabilities and stockholders’ equity $ 49,159,171 $ 48,699,341 $ 48,970,353 Net interest income/interest rate spread $ 318,423 2.83 % $ 325,573 2.90 % $ 279,412 2.45 % Net interest margin 2.91 % 2.99 % 2.56 % Ratio of interest-earning assets to interest-bearing liabilities 1.09 x 1.10 x 1.08 x
NEW YORK COMMUNITY BANCORP, INC. NET INTEREST INCOME ANALYSIS YEAR-OVER-YEAR COMPARISON (unaudited) For the Nine Months Ended September 30, 2016 2015 Average Average Average Yield/ Average Yield/ (dollars in thousands) Balance Interest Cost Balance Interest Cost Assets: Interest-earning assets: Mortgage and other loans, net $ 38,878,111 $ 1,099,137 3.77 % $ 36,041,137 $ 1,080,419 4.00 % Securities and money market investments 5,074,666 160,384 4.22 7,415,772 186,664 3.36 Total interest-earning assets 43,952,777 1,259,521 3.82 43,456,909 1,267,083 3.89 Non-interest-earning assets 5,316,971 5,233,526 Total assets $ 49,269,748 $ 48,690,435 Liabilities and Stockholders’ Equity: Interest-bearing deposits: NOW and money market accounts $ 13,349,201 $ 45,771 0.46 % $ 12,587,941 $ 34,549 0.37 % Savings accounts 6,112,342 25,001 0.55 7,535,136 37,997 0.67 Certificates of deposit 6,700,188 55,129 1.10 5,813,625 48,384 1.11 Total interest-bearing deposits 26,161,731 125,901 0.64 25,936,702 120,930 0.62 Borrowed funds 14,083,459 161,758 1.53 14,094,665 288,876 2.74 Total interest-bearing liabilities 40,245,190 287,659 0.95 40,031,367 409,806 1.37 Non-interest-bearing deposits 2,817,043 2,633,214 Other liabilities 179,471 214,181 Total liabilities 43,241,704 42,878,762 Stockholders’ equity 6,028,044 5,811,673 Total liabilities and stockholders’ equity $ 49,269,748 $ 48,690,435 Net interest income/interest rate spread $ 971,862 2.87 % $ 857,277 2.52 % Net interest margin 2.95 % 2.63 % Ratio of interest-earning assets to interest-bearing liabilities 1.09 x 1.09 x
NEW YORK COMMUNITY BANCORP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) For the Three Months Ended For the Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, (dollars in thousands except share and per share data) 2016 2016 2015 2016 2015 PROFITABILITY MEASURES: Net income
$125,299
$126,460
$114,688
$381,668
$357,651
Basic earnings per share 0.26 0.26 0.26 0.78 0.80 Diluted earnings per share 0.26 0.26 0.26 0.78 0.80 Return on average assets 1.02 % 1.04 % 0.94 % 1.03 % 0.98 % Return on average tangible assets (1) 1.08 1.10 0.99 1.09 1.04 Return on average stockholders’ equity 8.24 8.39 7.88 8.44 8.21 Return on average tangible stockholders’ equity (1) 13.79 14.12 13.66 14.22 14.25 Efficiency ratio (2) 44.27 43.82 46.07 43.72 44.78 Operating expenses to average assets 1.29 1.31 1.19 1.28 1.24 Interest rate spread 2.83 2.90 2.45 2.87 2.52 Net interest margin 2.91 2.99 2.56 2.95 2.63 Effective tax rate 36.52 37.13 35.83 36.74 36.32 Shares used for basic EPS computation 485,352,998 485,303,073 442,707,699 485,087,197 442,475,699 Shares used for diluted EPS computation 485,352,998 485,303,073 442,707,699 485,087,197 442,475,699 Shares outstanding at the respective period-ends 487,066,151 487,009,706 444,319,494 487,066,151 444,319,494 (1) Please see the reconciliations of these non-GAAP measures with the comparable GAAP measures on page 12 of this release. (2) We calculate our efficiency ratio by dividing our operating expenses by the sum of our net interest income and non-interest income.Sept. 30,2016
June 30,2016
Sept. 30,2015
CAPITAL MEASURES: Book value per share $ 12.50 $ 12.40 $ 13.11 Tangible book value per share (1) 7.50 7.40 7.62 Stockholders’ equity to total assets 12.31 % 12.32 % 11.88 % Tangible stockholders’ equity to tangible assets (1) 7.77 7.73 7.27 (1) Please see the reconciliations of these non-GAAP measures with the comparable GAAP measures on page 12 of this release.Sept. 30,2016
June 30,2016
Sept. 30,2015
REGULATORY CAPITAL RATIOS: (1) New York Community Bancorp, Inc. Common equity tier 1 ratio 10.25 % 10.12 % 10.68 % Tier 1 risk-based capital ratio 10.25 10.12 10.95 Total risk-based capital ratio 11.72 11.59 12.33 Leverage capital ratio 7.95 7.92 7.61 New York Community Bank Common equity tier 1 ratio 10.83 % 10.58 % 11.22 % Tier 1 risk-based capital ratio 10.83 10.58 11.22 Total risk-based capital ratio 11.31 11.08 11.79 Leverage capital ratio 8.43 8.32 7.80 New York Commercial Bank Common equity tier 1 ratio 13.31 % 14.30 % 13.31 % Tier 1 risk-based capital ratio 13.31 14.30 13.31 Total risk-based capital ratio 14.19 14.99 13.89 Leverage capital ratio 10.26 11.13 9.66 (1) The minimum regulatory requirements for classification as a well-capitalized institution are a common equity tier 1 capital ratio of 6.50%; a leverage capital ratio of 5.00%; a tier 1 risk-based capital ratio of 8.00%; and a total risk-based capital ratio of 10.00%.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161026005367/en/
For New York Community BancorpInvestors:Ilene A. Angarola, 516-683-4420orMedia:Kelly Maude Leung, 516-683-4032
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