Recent steps by New York Community Bancorp to lower its borrowing costs paid off last quarter in higher net interest income and profits.

The $48.5 billion-asset company said Wednesday that it earned $129.9 million, up roughly 9% from a year earlier.

Net interest income rose about 12% to $327.9 million, while the net interest margin climbed 26 basis points to 2.94% year over year. Those increases largely stemmed from a 125-basis-point decline in the average cost of the company’s borrowed funds. New York Community prepaid roughly $10 billion of wholesale borrowings late last year.

However, noninterest income fell more than 32%, to $35.2 million, as mortgage banking income dropped 77%, to $4.1 million, and fee income slid almost 6%, to $7.9 million. This was partially offset by a 39% increase in income from bank-owned life insurance.

Noninterest expenses totaled $158.4 million, up roughly 1% from a year earlier. Compensation and benefits rose roughly 2%, to $89.3 million.

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