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
Open account Try 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
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
