New York Community Bancorp continues to accelerate its asset and loan growth now that
The Westbury, N.Y., company said Wednesday that total assets increased 6% in 2018 from a year earlier, to $51.9 billion, as it boosted total loans held for investment by 5% to $40.2 billion and increased its investments in securities by 60% to more than $5.6 billion.
For several years the company had tapped the brakes on balance-sheet growth to avoid crossing the $50 billion-asset mark.
The lifting of the asset cap also has helped to lower expenses, as the company no longer has to prepare for the added regulatory scrutiny that would have come with becoming a so-called systemically important financial institution, or SIFI. Noninterest expenses in the fourth quarter fell 13% year over year to $134.9 million, due mostly to a decline in administrative costs.
President and CEO Joseph Ficalora said in a news release that the fourth-quarter and full-year results in large part are “a reflection of the changed regulatory environment.”
“We grew our balance sheet by originating loans with higher-yield coupons than those currently in our loan portfolio, we redeployed over $2 billion of cash … into higher-yielding investment securities and we reduced our expense base by a significant amount,” Ficalora said.
For the quarter, New York Community reported net income available to common shareholders of $93.5 million, or 19 cents a share, in line with the mean estimates of analysts polled by FactSet Research Systems.
The company said that loan growth in the quarter was driven by a 6% increase in multifamily loans, its core business line, and a 17% increase in its commercial and industrial loans.
Despite the loan and balance sheet growth, net interest income declined 1% year over year to $247.2 million as growth in interest revenue was blunted by rising deposit costs. Interest expenses climbed 11% year over year to $195.6 million, mostly due to higher rates the company is paying on certificates of deposit.
The quarterly results appeared to cheer investors. New York Community’s shares were trading at $11.24 late Wednesday morning, up 3.4% from Tuesday’s closing price.
