New York Community Bancorp's profit rose 22% in the first quarter despite the recession's impact on its most important clients, New York City landlords.
Joseph Ficalora, New York Community's chief executive, said its $88.7 million profit underscores the strength of the Westbury company's main business of extending conservative loans to the owners of rent-controlled apartment buildings.
New York Community charged off just $5.1 million, or 0.02% of average loans, in the quarter, though its nonperforming loans rose 54% from a quarter earlier, to $175.3 million. About $76 million of the nonperformers are in its multifamily lending book, which at $15.9 billion accounts for 71% of its total loans.
The $32 billion-asset company has not charged off a multifamily loan for 29 years, Ficalora said. Its chargeoffs in the quarter were still well under those it booked during the height of the last major recession in the early 1990s, he said.
"The portfolio itself … has an incredibly strong track record," Ficalora said. It "provides a great deal of comfort that we should perform extremely well in the cycle ahead."
Not everyone is as optimistic.
Matthew Kelley, a senior research analyst with Sterne, Agee & Leach Inc., noted an increase in nonperforming loans and loans 30 to 90 days past due, which nearly doubled during the quarter, to about $200 million.
"You are seeing really significant growth in problem assets, but the chargeoffs remain contained at this point," Kelley said. "Rents are down. Income on these properties is down. We're going to find out in the coming quarter just how good their underwriting is."
Anthony Polini, an analyst with Raymond James & Associates, said New York Community still stands apart from other banking companies in that it is losing relatively little money on its mounting bad loans.
"We couldn't be more pleased with" its credit quality, he said. "The loans are so conservatively underwritten that they don't lose money" but "if I saw $20 million in chargeoffs I'd be concerned."
New York Community shares rose 1.45% to $11.90 Wednesday.
BOK FINANCIAL
BOK Financial Corp. in Tulsa said Wednesday that first-quarter net income fell 7.3% from a year earlier, to $55 million, or 81 cents a share, but easily beat analysts' estimates by 24 cents. Its first-quarter 2008 net income included a one-time gain of $6.2 million related to the sale of Visa stock.
The $23.3 billion-asset company said its pretax net operating income in the first quarter rose 13% from a year earlier, to $1$23.6 million. In particular, mortgage banking revenue more than doubled from a year earlier, to $18.5 million.
BOK's loan-loss provision more than doubled from a year earlier, to $45 million. Nonperforming assets more than tripled, to $414 million, or 3.26% of outstanding loans and repossessed assets.
The company said it was increasing its dividend 7%, to 24 cents, beginning in the second quarter.
BOK's stock rose 4% to $28.69 Wednesday.— Katie Kuehner-HebertWINTRUST FINANCIAL
Wintrust Financial Corp. in Lake Forest, Ill., surprised analysts with a profitable first quarter on strong loan and deposit growth.
The $10.8 billion-asset company said net income fell 34% from a year earlier, to $6.4 million, or 6 cents a share.
Its average earning assets were boosted by a 14% rise in loans from a year earlier, to $7.8 billion. Deposits rose 15.2%, to $8.6 billion, buoyed in part by an 11% increase in no-interest deposits, to $745 million.
Its provision for credit losses rose 69% from a year earlier, to $14.5 million, but was flat from the fourth quarter.
Wintrust's stock rose 10.7% to $17.17 Wednesday.— Katie Kuehner-HebertE-TRADE FINANCIAL
Shares of E-Trade Financial Corp. plunged Wednesday, a day after the online broker posted a larger-than-expected first-quarter loss and said regulators told it that it needs to raise additional capital.
The New York company said late Tuesday that it plans to pursue a "public market issuance and/or private investors" that would "create significant dilution to current shareholders."
Several Wall Street analysts cut their estimates on E-Trade, reduced ratings on its stock and expressed concerns about its future.
E-Trade applied for an $800 million investment from the Treasury Department's Troubled Asset Relief Program, but has yet to receive approval. The company said its primary banking regulator, the Office of Thrift Supervision, advised it to address capital requirements "in the near term" and reduce the leverage of the parent holding company.
E-Trade reported a net loss of $232.7 million, or 41 cents a share, compared with a year-earlier net loss of $91.2 million, or 20 cents a share. It set aside $454 million to offset current and future losses from bad loans, up 94% from a year earlier but down from $512.9 million in the fourth quarter.
Shares of E-Trade closed down 83 cents to $1.63 Wednesday.— Dow JonesTRUSTMARK
An improved net interest margin helped Trustmark Corp. of Jackson, Miss., offset lower fee income and increased credit costs in the first quarter.
After the dividend payment on its government capital, its net income fell 10% from a year earlier, to $23.3 million.
The $9.7 billion-asset company reported net interest income of $90.9 million, up 18% from a year earlier. It attributed the increase to cheaper funding costs. No-interest deposits rose 5.75%, to $1.47 billion.
The provision for loan losses rose 18%, to $16.9 million. Nonperforming assets doubled, to $176.6 million, making up 2.53% of total loans. The nonperformers were concentrated in Florida residential real estate. Trustmark rose 10.54% to $21.82 Wednesday.— Robert Barba
