Market Overview

New York Community Bancorp, Inc. Reports 4Q 2016 Diluted EPS of $0.23 and 2016 Diluted EPS of $1.01


New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company") today reported earnings of $113.7 million, or $0.23 per diluted share, for the three months ended December 31, 2016 and $495.4 million, or $1.01 per diluted share, for the twelve months ended at that date.



"Tangible assets" and "tangible stockholders' equity" are non-GAAP financial measures. Please see the discussion and reconciliations of these non-GAAP measures to the comparable GAAP measures on page 13 of this release.

(2) "Adjusted net interest margin" is a non-GAAP financial measure. Please see the reconciliation and discussion of our GAAP and non-GAAP net interest margins beginning on page 7 of this release.
(3) We calculate our efficiency ratio by dividing our operating expenses by the sum of our net interest income and non-interest income.

Commenting on the quarter, President and Chief Executive Officer Joseph R. Ficalora addressed the termination of the merger agreement with Astoria Financial Corporation, noting "It is our continued desire to control the Company's growth under the SIFI threshold as that threshold is currently, or prospectively, defined by our regulators. A large deal is still the best way for us to become a SIFI, and we remain encouraged by the reality that 97% of the votes cast by our investors were voted in favor of the Astoria deal.

"Accordingly, it still would be fair to expect our transition to SIFI status to occur in conjunction with a transaction of some size. While we expect to invest more of our resources into becoming SIFI-compliant, we will be monitoring any changes in the regulatory landscape that could influence our plans.

"We'll also be doing more of what we do best with regard to our core business model: producing multi-family loans while maintaining high credit standards and, at the same time, diversifying our loan portfolio and our funding mix.

"With regard to our performance, the most notable feature was, again, our exceptional asset quality. The significant strength of our assets continues to be a Company hallmark, and losses--which were de minimus--were unrelated to our core business lines. The quality of our multi-family and commercial real estate loans was reflected in the absence of any charge-offs over the past four quarters, and our specialty finance portfolio performed flawlessly as well.

"While the growth of our loan portfolio was tempered by sales of participations, we continued to grow our share of our niche lending market, which is something we will continue to do over the course of this year."

Board of Directors Declares $0.17 per Share Dividend Payable on February 22, 2017

"With earnings of $0.23 per diluted share recorded in the fourth quarter, the Board of Directors last night declared a quarterly cash dividend of $0.17 per share. The dividend will be payable on February 22, 2017 to shareholders of record as of February 7, and represents a dividend yield of 4.2% based on last night's closing price," Mr. Ficalora said.


The Company recorded total assets of $48.9 billion and $50.3 billion at December 31, 2016 and 2015, respectively. The $1.4 billion reduction was largely due to a $2.4 billion decline in total securities, to $3.8 billion, which was tempered by a $1.3 billion increase in total loans, net, to $39.3 billion.

For the four quarters ended December 31, 2016, the Company's total consolidated assets averaged $49.0 billion, below the current SIFI threshold of $50.0 billion.


Covered Loans

Primarily reflecting repayments, covered loans, net, fell $354.3 million year-over-year to $1.7 billion, representing 4.3% of total loans, net, at December 31, 2016.

Accretion on the covered loan portfolio totaled $32.3 million and $33.9 million, respectively, in the current and year-earlier fourth quarters, and $131.3 million and $137.1 million, respectively, in the twelve months ended December 31, 2016 and 2015.

Non-Covered Loans Held for Investment

Non-covered loans held for investment totaled $37.4 billion at the end of this December, reflecting a linked-quarter increase of $22.0 million and a $1.6 billion increase year-over-year. While originations totaled $2.0 billion and $9.2 billion, respectively, in the three and twelve months ended December 31, 2016, loan growth was tempered by prepayments, and by sales of participations totaling $320.1 million and $1.7 billion in the respective periods.

Multi-family loans, commercial real estate ("CRE") loans, and acquisition, development, and construction ("ADC") loans accounted for $246.4 million, $70.3 million, and $3.4 million, respectively, of loans sold in the current fourth quarter, and for $1.3 billion, $338.7 million, and $3.4 million, respectively, of loans that were sold over the course of the year.

Reflecting the loan sales cited above, multi-family loans rose 3.7% year-over-year to $27.0 billion, while CRE loans fell 1.7% during that time to $7.7 billion. Absent the respective sales of such loans over the last four quarters, the balance of multi-family loans would have grown 8.8% year-over-year to $28.3 billion and the CRE loan portfolio would have grown 2.6% to $8.1 billion at year-end.

The following table summarizes the Company's production of loans held for investment for the three months ended December 31, 2016, September 30, 2016, and December 31, 2015 and for the twelve months ended December 31, 2016 and 2015:

    For the Three Months Ended     For the Twelve Months Ended
Dec. 31,     Sept. 30,     Dec. 31, Dec. 31,     Dec. 31,
(in thousands) 2016 2016 2015 2016 2015
Mortgage Loans Originated for Investment:          
Multi-family $ 1,154,934 $ 1,276,358 $ 2,778,623 $ 5,684,838 $ 9,214,336
Commercial real estate 287,754 345,543 492,883 1,180,430 1,842,062
One-to-four family 55,857 101,365 12,863 303,877 21,265
Acquisition, development, and construction   26,328   17,855   13,433   150,177   155,312
Total mortgage loans originated for investment $ 1,524,873 $ 1,741,121 $ 3,297,802 $ 7,319,322 $ 11,232,975
Other Loans Originated for Investment:
Specialty finance $ 358,811 $ 369,308 $ 334,525 $ 1,266,362 $ 1,067,672
Other commercial and industrial 140,910 151,279 87,001 592,250 367,699
Other   846   894   1,008   3,856   4,674
Total other loans originated for investment $ 500,567 $ 521,481 $ 422,534 $ 1,862,468 $ 1,440,045
Total loans originated for investment $ 2,025,440 $ 2,262,602 $ 3,720,336 $ 9,181,790 $ 12,673,020

A number of factors contributed to the decline in multi-family and CRE loan originations reflected in the preceding table, starting with a general decline in loan demand from the prior year's record levels, as the volume of new transactions and refinancing activity waned. The slowdown of the market was exacerbated by the rise in market interest rates that followed the November election.

The following table provides additional information about the Company's multi-family and CRE loan portfolios at December 31, 2016, September 30, 2016, and December 31, 2015:

(dollars in thousands)     December 31,


    September 30,


    December 31,


Multi-Family Loan Portfolio:
Loans outstanding $26,961,486 $27,083,291 $25,989,100
Percent of total held-for-investment loans 72.1 % 72.5 % 72.7 %
Average principal balance $5,454 $5,384 $5,307
Weighted average life 2.9
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