The head of New York Community Bancorp Inc. said a high-profile court ruling unfavorable to some owners of rent-controlled apartment buildings in New York should have little impact on its bread-and-butter business of loans to local landlords.

"It is not likely to be a big deal," Joseph Ficalora, the chairman and chief executive of the Westbury company, said in a conference call with analysts Wednesday.

The $32.9 billion-asset company, which has stayed profitable through the downturn on the durability of its $16.5 billion multifamily housing portfolio, reported third-quarter profits of $98.6 million, up 70% from a year earlier and in line with analysts' projections.

Industry watchers have worried that New York Community's resilient multifamily book — which accounts for more than 70% of its loans — could be hurt by a New York State Court of Appeals ruling last week that threw the city's apartment market into turmoil. The court ruled that the owners of two massive housing complexes that received special tax breaks illegally raised rents, setting a precedent that could affect as many as 80,000 tenants.

Ficalora sought to allay those concerns, saying New York Community will see no "significant impact from this decision" as it has little exposure to borrowers that raised rents to illegal levels after receiving tax breaks.

Since New York Community does not factor tax breaks into its lending criteria, borrowers eligible for them tended to seek out other lenders, Ficalora said.

Also, most of the borrowers that may have to roll back rents following the court decision own large properties in Manhattan. About 27% of its multifamily loans are in Manhattan, and they tend to be smaller credits of about $4 million, he said.

Still, Matthew Clark, an analyst with Keefe, Bruyette & Woods Inc., said New York Community may not be entirely unscathed by the ruling.

"They downplayed it, which is not a surprise," Clark said. "Nonetheless the court ruling set a precedent, and could make it more difficult for some of these building owners to convert rent stabilized apartments to market" rates.

Apartment conversions are good for banks because landlords tend to take out loans to refurbish apartments before rerenting them at higher rates. Borrowers are also healthier when their properties generate more cash. Overall, Clark said New York Community showed "slight improvement" in the quarter on the earnings front, thanks to boosted net interest margins on lower funding costs. Though nonperforming assets rose, they did so at a slower pace than in the prior quarter. Its credit costs also remained well below those of most lenders of its size, with provisions of $15 million and chargeoffs of $6.4 million. That meant New York Community charged off just 0.03% of its total loans in the quarter.

Ficalora said the company is eager to take advantage of its relative financial health by seeking out federally assisted acquisitions, possibly outside of its core market.

"There is no question that in the event that we do a large deal, we will go the market and raise a lot of capital," he said. "And there are many, many, many investors that have indicated a strong desire to be involved in our issuance of capital."

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