New York Community Bancorp (NYCB) in Westbury, N.Y., reported earnings that were short of analysts' expectations because a surge in refinancing cut its net interest margin.
The $44.1 billion-asset company's earnings rose 5% from a year earlier, to $122.8 million. At 28 cents a share, the results were 2 cents below the expectations of analysts polled by Bloomberg.
Net interest income fell 3% from a year earlier, to $290 million. The margin contracted by 30 basis points from a year earlier, to 3.15%. The company attributed the declines in part to lower interest rates that spurred refinancing. The average rates for loans and deposits fell in the fourth quarter. But prepayment penalty income rose as refinancing increased, adding $39.3 million to the company's quarterly interest income.
The loan-loss provision fell dramatically from a year earlier, to $1.7 million from $32.7 million a year earlier. Net chargeoffs fell $5.8 million from the third quarter, to $3.1 million.
Noninterest income fell 7% from a year earlier, to $55.5 million. Mortgage-banking income rose 32% from the fourth quarter of 2011, to $32.6 million, but losses on debt redemption and Federal Deposit Insurance Corp. indemnification expenses wiped out that gain.
New York Community's noninterest expenses rose 6% from a year earlier because of higher compensation and benefit costs.
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