New York Community Increases Profits, Misses on Margin

New York Community Bancorp (NYB) in Westbury, N.Y., barely beat expectations for its third-quarter earnings and reported a lower net interest margin.

The $44.1 billion-asset company posted income of $128.8 million, up more than 7% from a year earlier. Its 29 cents per share beat by a penny earnings estimates from analysts polled by Bloomberg.

New York Community's net interest margin was 3.17%, down 16 basis points from a year earlier and 13 basis points from the second quarter. This missed a forecast from Keefe, Bruyette & Woods that predicted the company would report a net interest margin of 3.19%.

New York Community's shares were trading at $14.03 Wednesday morning, down more than 4%.

Mortgage banking income continued to be the company's largest source of noninterest income. Income from originations rose 115%, to $66.5 million, year over year; it saw significant volume in one-to-four family loans produced for sale during the quarter as low interest rates sustained a high level of refinancings. Mortgage banking income reached $52.6 million, up 116% from a year earlier.

Net interest income fell about 3%, to $285 million, as securities and money market investments declined almost 23%, to $47.8 million.

New York Community originated $5 billion of loans in the quarter, including $2.1 billion of loans held for investment and $2.9 billion of loans held for sale. Total loans were up almost 4%, to $31.2 billion, from Dec. 31.

Its provision for losses on noncovered loans fell 44%, to $10 million, from a year earlier. Nonperforming, noncovered loans fell to o.82% of total loans from 1.11% at Dec. 31.