Ongoing problems in the taxi medallion portfolio of New York Community Bancorp in Westbury, N.Y., put a big dent in its third-quarter profits.
The $48.4 billion-asset company reported earnings of $102.3 million, or 18% lower than a year earlier. Earnings per share were 21 cents, or 8 cents below the median of analysts' estimates compiled by FactSet Research Systems.
Provision costs surged to $44.5 million, compared with $1.2 million in the third quarter of 2016. The company attributed that increase to higher chargeoffs in its taxi book.
Total chargeoffs were $40.8 million, up from $74,000. Virtually all of them were taxi-related: $40.6 million compared with $49,000 a year earlier.
New York Community’s taxi book had $99.1 million in loans as of Sept. 30, accounting for 0.3% of its total portfolio.
Net interest income dropped 18% to $102.3 million due to an increase in deposit costs. Additionally, the company invested the proceeds from the July sale of its single-family mortgage business in lower-yielding securities.
Total loans dipped 5% to $37.4 million. The net interest margin fell 38 basis points to 2.53%.
Noninterest income jumped to $108.9 million, mostly on proceeds from the sale of the mortgage unit, as well as its September sale of a mortgage servicing portfolio to Freedom Mortgage.
Noninterest expenses were flat at $162.2 million.