We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
New York Community Bancorp (NYCB) Down 4.3% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for New York Community Bancorp (NYCB - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is New York Community Bancorp due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
New York Community Q4 Earnings Meet, Revenue Lag Estimate
New York Community fourth-quarter 2021 earnings per share (non-GAAP) of 31 cents were in line with the Zacks Consensus Estimate. Nonetheless, the bottom line rose 15% year over year.
Results excluded merger-related expenses pertaining to the agreement with Flagstar Bancorp.
New York Community results were supported by higher net interest income (NII) and non-interest income. Loans and deposits improvement, and lower provision were other tailwinds. A moderate increase in expenses and decrease in net interest margin were headwinds.
Net income available to common shareholders, $142 million, plunged 21.5% from the prior-year quarter.
In 2021, earnings per share (non-GAAP) of $1.24 matched the consensus estimate and increased 42.5% from 2020. Net income of $563 million was up 17.8% from 2020.
Revenues & Expenses Rise
Total revenues for fourth quarter were $338 million, up 4.6% year over year. However, the top line lagged the Zacks Consensus Estimate of $339.2 million.
In 2021, total revenues increased 16.3% to $1.35 billion, matching the consensus estimate.
NII grew 4.5% year over year to $322 million. The rise mainly resulted from lower interest expenses. NIM of 2.44% was down 3 basis points (bps).
Non-interest income was $16 million, up 6.7%. The rise was primarily driven by higher other income.
Non-interest expenses of $135 million increased marginally from $134 million in the fourth quarter of 2020. Higher compensation and benefits, and a $7-million merger-related expense resulted in the rise. This was partially offset by lower general and administrative expenses. Total operating expenses (excluding merger-related expenses) decreased 4.5% at $128 million.
The efficiency ratio was 37.70%, down from 41.36% in the year-ago quarter. A fall in efficiency ratio indicates improving profitability.
Loans & Deposit Balance Climb
As of Dec 31, 2021, total deposits improved 1.3% sequentially to $35.1 billion. Total loans rose 4.6% to $45.5 billion.
In the fourth quarter, loan originations were $4.6 billion, up 53.3% sequentially. The rise was driven by a 62% increase in multi-family originations, and a 52% rise in specialty finance originations.
The company has $2.2 billion of loans in its current pipeline, including $1.7 billion of multi-family loans, $129 million of commercial real estate loans, $251 million in specialty finance loans, and $42 million in commercial and industrial loans.
Credit Quality Improves
Non-performing assets plunged 10.9% year over year to $41 million. Provision for credit losses was $4 million compared with $11 million in the prior-year quarter. Net charge-offs were $5 million compared with $6 million in the prior-year quarter.
Profitability and Capital Ratios Weak
As of Dec 31, 2021, return on average assets and return on average common stockholders’ equity was 1.03% and 8.71%, declining from 1.38% and 11.60%, respectively, in the year-ago quarter.
The common equity tier 1 ratio was 9.68%, down from 9.72% as of Dec 31, 2020. The total risk-based capital ratio was 12.73%, falling from 12.97% in the year-ago quarter. The leverage capital ratio was 9.33%, down from 9.48%.
Outlook
Core NIM is expected to expand by 3 bps for the first quarter.
Management expects strong loan growth for 2022, given the amount of unused commitments and ease in supply chain issues. It anticipates upper-single-digit loan growth for the first quarter.
Non-interest expenses are anticipated to be $540 million for 2022. It is expected to be higher for the first quarter at $135 million due to FICA and payroll taxes.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, New York Community Bancorp has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
New York Community Bancorp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
New York Community Bancorp (NYCB) Down 4.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for New York Community Bancorp (NYCB - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is New York Community Bancorp due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
New York Community Q4 Earnings Meet, Revenue Lag Estimate
New York Community fourth-quarter 2021 earnings per share (non-GAAP) of 31 cents were in line with the Zacks Consensus Estimate. Nonetheless, the bottom line rose 15% year over year.
Results excluded merger-related expenses pertaining to the agreement with Flagstar Bancorp.
New York Community results were supported by higher net interest income (NII) and non-interest income. Loans and deposits improvement, and lower provision were other tailwinds. A moderate increase in expenses and decrease in net interest margin were headwinds.
Net income available to common shareholders, $142 million, plunged 21.5% from the prior-year quarter.
In 2021, earnings per share (non-GAAP) of $1.24 matched the consensus estimate and increased 42.5% from 2020. Net income of $563 million was up 17.8% from 2020.
Revenues & Expenses Rise
Total revenues for fourth quarter were $338 million, up 4.6% year over year. However, the top line lagged the Zacks Consensus Estimate of $339.2 million.
In 2021, total revenues increased 16.3% to $1.35 billion, matching the consensus estimate.
NII grew 4.5% year over year to $322 million. The rise mainly resulted from lower interest expenses. NIM of 2.44% was down 3 basis points (bps).
Non-interest income was $16 million, up 6.7%. The rise was primarily driven by higher other income.
Non-interest expenses of $135 million increased marginally from $134 million in the fourth quarter of 2020. Higher compensation and benefits, and a $7-million merger-related expense resulted in the rise. This was partially offset by lower general and administrative expenses. Total operating expenses (excluding merger-related expenses) decreased 4.5% at $128 million.
The efficiency ratio was 37.70%, down from 41.36% in the year-ago quarter. A fall in efficiency ratio indicates improving profitability.
Loans & Deposit Balance Climb
As of Dec 31, 2021, total deposits improved 1.3% sequentially to $35.1 billion. Total loans rose 4.6% to $45.5 billion.
In the fourth quarter, loan originations were $4.6 billion, up 53.3% sequentially. The rise was driven by a 62% increase in multi-family originations, and a 52% rise in specialty finance originations.
The company has $2.2 billion of loans in its current pipeline, including $1.7 billion of multi-family loans, $129 million of commercial real estate loans, $251 million in specialty finance loans, and $42 million in commercial and industrial loans.
Credit Quality Improves
Non-performing assets plunged 10.9% year over year to $41 million. Provision for credit losses was $4 million compared with $11 million in the prior-year quarter. Net charge-offs were $5 million compared with $6 million in the prior-year quarter.
Profitability and Capital Ratios Weak
As of Dec 31, 2021, return on average assets and return on average common stockholders’ equity was 1.03% and 8.71%, declining from 1.38% and 11.60%, respectively, in the year-ago quarter.
The common equity tier 1 ratio was 9.68%, down from 9.72% as of Dec 31, 2020. The total risk-based capital ratio was 12.73%, falling from 12.97% in the year-ago quarter. The leverage capital ratio was 9.33%, down from 9.48%.
Outlook
Core NIM is expected to expand by 3 bps for the first quarter.
Management expects strong loan growth for 2022, given the amount of unused commitments and ease in supply chain issues. It anticipates upper-single-digit loan growth for the first quarter.
Non-interest expenses are anticipated to be $540 million for 2022. It is expected to be higher for the first quarter at $135 million due to FICA and payroll taxes.
How Have Estimates Been Moving Since Then?
It turns out, estimates review flatlined during the past month.
VGM Scores
At this time, New York Community Bancorp has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
New York Community Bancorp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.