Profits fell at New York Community Bancorp in Westbury, N.Y., as it continued to manage its balance sheet to stay below a key regulatory threshold.
The $49 billion-asset company earned $115.7 million in the third quarter, 5% less than the same quarter last year, it announced Wednesday. Per-share earnings were 26 cents, matching analysts' forecasts.
New York Community's lending and fee income both fell, while its expenses rose.
Net interest income fell 3%, to $279.4 million, as the net interest margin contracted by 13 basis points, to 2.56%. The company recovered $8.5 million in previously charged-off loans, compared to $3.9 million in recoveries a year earlier, due to the improving credit quality of loans it acquired in failed-bank deals.
Noninterest income was down 9%, to $37.6 million. New York Community's mortgage-banking revenue dropped 55% due to lower originations and sales, its fee income dropped 5%, and its Federal Deposit Insurance Corp. indemnification costs more than doubled, to $6.8 million. Higher income from loan sales made up some of the lost ground.
As it has for several quarters, New York Community used loan sales to stay below the $50 billion-asset threshold that would make it a systemically important financial institution and subject it to increased regulatory requirements. In a press release Wednesday, Chief Executive Joe Ficalora said the plan is to pass the threshold in the second quarter of 2016 at the earliest.
Ficalora has long said he wants to pass the threshold with a large acquisition, though he has been unable to seal a deal after looking for several years.