New York Community Bank (NYCB.US) is one of the worst performing US stocks today, launching cash session with an over-40% bearish price gap. Bank's shares are trading under pressure today, following release of disappointing Q4 2023 earnings. A big reserve build and deteriorating earnings outlook forced the company to cut quarterly dividend by around 70%!
New York Community Bank Q4 2023 earnings
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Create account Try a demo Download mobile app Download mobile app- Total revenue: $886 million vs $932 million expected
- Net interest income: $740 million vs $792 million expected
- Net interest margin: 2.82% vs 3.05% expected
- Adjusted EPS: -$0.27 vs +$0.29 expected
- Net income: -$252 million vs +$206 million expected
- Total deposits: $81.37 billion vs $82.02 billion expected
- Total loans and leases: $84.62 billion vs $84.28 billion expected
- Efficiency ratio: 67.9% vs 63.7% expected
- Cash and cash equivalents: $11.49 billion
- Provision for credit losses: $552 million vs $45 million expected
2024 guidance
- Net interest margin: 2.4-2.5%
- Total loans at year's end: -3-5%
- Total deposits at year's end: +3-5%
- Non-interest income: $570-620 million
Q4 2023 earnings report from New York Community Bank was weaker-than-expected almost all across the board. Company reported lower revenue than expected as well as unexpected adjusted loss per share. A big source of concern is a massive reserve build with provisions for credit losses coming in at $552 million, over $500 million more than market expected. A point to note is that NYCB loan-to-deposit ratio exceeds 100%, meaning that the company does not have much liquidity reserve to cope with unexpected contingencies.
Bank said that it has moved to a stricter regulatory category following acquisition of collapsed Signature Bank's deposit, and it was one of the reasons for a boost to provision for loan losses. Weaker credit outlook, weighting on earnings, as well as higher reserve build led to an around-70% dividend cut, with quarterly payout shrinking from $0.17 per share to $0.05 per share. Nevertheless, bank's authorities believe that those actions will better align the bank with peers and provide a solid foundation for the future.
Shares of New York Community Bank (NYCB.US) launched today's over 40% lower and briefly traded below an intraday low from March 2023. Source: xStation5
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