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
Start investing today or test a free demo
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
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.