New York Community Bancorp's 'Credit Story Remains Fluid': Analysts React To Q2 Results

Shares of New York Community Bancorp, Inc. NYCB were climbing on Friday, after the company reported its second-quarter results. The company had agreed in May to sell around $5 billion in mortgage warehouse loans to JPMorgan Chase & Co JPM.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

JPMorgan On New York Community Bancorp

Analyst Steven Alexopoulos reiterated a Neutral rating, while reducing the price target from $12.50 to $10.50.

New York Community Bancorp reported a larger-than-expected loss for the second quarter, while "fairly meaningfully" lowering its baseline forecasts for 2024-2026 PTPP (pre-tax pre-provision profit), a quarter after the new management laid out strategic targets, Alexopoulos said in a note.

"With the baseline forecasts for 2024-2026 provision having also increased versus the prior quarter, the second quarter results largely reaffirmed our prior view that the credit risk profile of the company remains elevated," the analyst wrote. The company is unlikely to reach peer-level of profitability by 2026, he added.

Check out other analyst stock ratings.

Wedbush On New York Community Bancorp

Analyst David Chiaverini maintained a Neutral rating and price target of $10.50.

New York Community Bancorp reported a weaker-than-expected quarter and lowered its near- and long-term guidance, Chiaverini said.

"2024 continues to be a bumpy transition year for NYCB, and along with earnings, the company announced that it would be divesting its Flagstar mortgage servicing and third party origination platform in a sale to Mr. Cooper for $1.4 billion," he added.

While deposit growth was positive is the second quarter, most of it was generated on the interest-bearing side, the analyst stated. "The credit story remains fluid with large sequential increases in both net charge-offs and nonperforming loans," he further wrote.

NYCB Price Action: Shares of New York Community Bancorp were up 3.49% to $10.98 at the time of publication on Friday.

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