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Why Is New York Community Bancorp (NYCB) Down 1.8% Since Last Earnings Report?
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A month has gone by since the last earnings report for New York Community Bancorp (NYCB - Free Report) . Shares have lost about 1.8% 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 its most recent earnings report in order to get a better handle on the important drivers.
New York Community Reports Loss in Q1, Revenues Decline
New York Community reported the first-quarter 2024 loss of 25 cents per share compared with the Zacks Consensus Estimate of a loss of 13 cents. It reported earnings of 23 cents in the year-ago quarter.
The results were primarily affected by a significant rise in provisions for credit losses and expenses. A fall in non-interest income and lower deposit balance were additional concerns. However, substantial growth in NII acted as a tailwind.
The net loss to common stockholders was $335 million against a net income of $1.99 billion in the prior-year quarter.
Revenues Decline, Expenses Rise
Quarterly revenues were $633 million, which declined 76% from the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $779.5 million.
NII was $624 million, up 12% from the prior-year quarter. The net interest margin of 2.28% was down 32 basis points.
Non-interest income was $9 million, down year over year from $2.09 billion.
Non-interest expenses of $699 million jumped 47% from the year-ago quarter.
The efficiency ratio was 82.47%, up year over year from 60.21%. A rise in the efficiency ratio indicates deteriorating profitability.
Total loans and leases held for investment declined 3% sequentially to $82.3 billion as of Dec 31, 2023. As of Dec 31, 2024, total deposits decreased 8% sequentially to $84.8 billion.
Credit Quality Deteriorates
Non-performing assets were $811 million, which increased significantly from $174 million as of Mar 31, 2023.
Also, the provision for credit losses was $315 million, which increased substantially from $170 million in the prior-year quarter. Net charge-offs were $81 million, while the company did not record any net charge-offs in the prior-year quarter.
Capital Ratios Improve
As of Dec 31, 2024, the common equity tier 1 ratio was 9.45%, which increased from 9.05% as of Dec 31, 2023. The total risk-based capital ratio was 13.09%, which rose from 11.77%.
The leverage capital ratio was 7.90%, which improved from 7.75%.
Outlook
By the end of 2026, the company is targeting a return on average earnings assets of 1%, a return on average tangible common equity of 11, and a CET 1 capital ratio in the range of 11.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -565.69% due to these changes.
VGM Scores
At this time, New York Community Bancorp has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, New York Community Bancorp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is New York Community Bancorp (NYCB) Down 1.8% Since Last Earnings Report?
A month has gone by since the last earnings report for New York Community Bancorp (NYCB - Free Report) . Shares have lost about 1.8% 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 its most recent earnings report in order to get a better handle on the important drivers.
New York Community Reports Loss in Q1, Revenues Decline
New York Community reported the first-quarter 2024 loss of 25 cents per share compared with the Zacks Consensus Estimate of a loss of 13 cents. It reported earnings of 23 cents in the year-ago quarter.
The results were primarily affected by a significant rise in provisions for credit losses and expenses. A fall in non-interest income and lower deposit balance were additional concerns. However, substantial growth in NII acted as a tailwind.
The net loss to common stockholders was $335 million against a net income of $1.99 billion in the prior-year quarter.
Revenues Decline, Expenses Rise
Quarterly revenues were $633 million, which declined 76% from the prior-year quarter. The top line also missed the Zacks Consensus Estimate of $779.5 million.
NII was $624 million, up 12% from the prior-year quarter. The net interest margin of 2.28% was down 32 basis points.
Non-interest income was $9 million, down year over year from $2.09 billion.
Non-interest expenses of $699 million jumped 47% from the year-ago quarter.
The efficiency ratio was 82.47%, up year over year from 60.21%. A rise in the efficiency ratio indicates deteriorating profitability.
Total loans and leases held for investment declined 3% sequentially to $82.3 billion as of Dec 31, 2023. As of Dec 31, 2024, total deposits decreased 8% sequentially to $84.8 billion.
Credit Quality Deteriorates
Non-performing assets were $811 million, which increased significantly from $174 million as of Mar 31, 2023.
Also, the provision for credit losses was $315 million, which increased substantially from $170 million in the prior-year quarter. Net charge-offs were $81 million, while the company did not record any net charge-offs in the prior-year quarter.
Capital Ratios Improve
As of Dec 31, 2024, the common equity tier 1 ratio was 9.45%, which increased from 9.05% as of Dec 31, 2023. The total risk-based capital ratio was 13.09%, which rose from 11.77%.
The leverage capital ratio was 7.90%, which improved from 7.75%.
Outlook
By the end of 2026, the company is targeting a return on average earnings assets of 1%, a return on average tangible common equity of 11, and a CET 1 capital ratio in the range of 11.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -565.69% due to these changes.
VGM Scores
At this time, New York Community Bancorp has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, New York Community Bancorp has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.