New York Community Bancorp, Inc.
NYCB Details
New York Community Bancorp, Inc. (NYSE: NYCB) is the holding company for the New York Community Bank holding business, a state-chartered savings bank with 236 locations in New York. The rest 217 operate through eight divisional banks, with 19 operating directly under Community Bank. Individuals and companies can use its loan and deposit products and other financial services.
Latest News:
- NYCB to Eliminate Non-Sufficient Fund Fees and Roll Out Early Pay Product: Effective August 1, 2022, NYCB, the parent holding company of New York Community Bank, announced on June 6, 2022, to eliminate non-sufficient ("NSF"), uncollected, and unavailable funds fees on all its consumer and commercial checking products, as well as transfer costs on its overdraft shield product.
- Dividend Announcement: On May 23, 2022, the Board of NYCB declared a quarterly cash dividend of USD 15.94 per preferred share, or USD 0.3984 per depositary share, on its Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A (NYSE: NYCB PA).
Q1 FY22 Results:
- Increase in Net Income: On a GAAP basis, net income available to common stockholders in Q1 FY22 was USD 147 million, up 7% from USD 137 million in Q1 FY21.
- Asset Quality Key Returns and Efficiency Ratio: During Q1 FY22, the efficiency ratio was 38.65%, down from 39.87% in Q1 FY21. Moreover, the return on average assets and return on average common equity were 1.04% and 8.98% in Q1 FY22, compared to 1.03% and 8.63% in Q1 FY21.
- NIM and Net Interest Income: In Q1 FY22, NIM remained broadly steady at 2.43%, compared to 2.44% in Q1 FY21. Net interest income in Q1 FY22 was USD 332 million, up USD 14 million or 4% on a YoY basis,
Key Risks:
- Interest Rate Risk: Interest rate changes might lower net interest income and hurt the value of loans, securities, and other assets. This might significantly impact cash flows, financial situation, operating results, and capital.
- Macro-Economic Risks: Inflation is increasing, lowering purchasing power and allowing central banks to hike interest rates and drain liquidity. Reduced liquidity will put downward pressure on borrowing costs in short to medium term, putting bank profitability at risk.
Valuation Methodology: Price/ Earnings Per Share-Based Relative Valuation
Source: Analysis by Kalkine Group
Stock Recommendation:
NYCB recorded decent performance in Q1FY22, with deposits grew by 13% on a YoY, NPA remains low as a percentage to total asset and net income grew by 7% on a YoY. Further, the bank is offering a lucrative dividend yield of 7.07%, which is very lucrative from an income seeking investor’s standpoint. Also, the company is trading at a single digit Price to Earnings multiple, which makes NYCB shares quite attractive at the current levels.
Considering the Strong Net Income, Lower NPAs, robust growth in deposits, robust risk protection metrices, and present valuation. We recommend a “Buy" rating on the stock at the current market price of USD 9.55 as of June 09, 2022, at 07:40 AM PDT.
1-year technical chart as of June 9, 2022, at 07:40 AM PDT, Source: REFINITIV. Analysis by Kalkine group
Technical Summary Analysis
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Note 3: The report publishing date is as per the Pacific Time Zone.
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