Magazine article American Banker

4Q RESULTS: NYCB Loans to Landlords Helps Lift Its Bottom Line

Magazine article American Banker

4Q RESULTS: NYCB Loans to Landlords Helps Lift Its Bottom Line

Article excerpt

Byline: Matthew Monks

A surge in lending to apartment building owners in the New York area offset a decline in home mortgage revenue at New York Community Bancorp Inc. in the fourth quarter.

Paying less money to borrow from depositors and wholesale sources also helped drive the Westbury thrift's net income up 10.5% from the prior quarter, to $149.8 million. Year-earlier net income of $154.9 million reflected a $140 million gain on the purchase of the failed AmTrust Bank in Cleveland in December 2009.

The $41.2 billion-asset company's results improved in two crucial areas, Chief Executive Joseph Ficalora told analysts: making more money on new loans and losing less money on old, bad ones.

Interest collected from business-property mortgages and other loans rose 5%, or $19 million, from the prior quarter as more New York-area landlords took out loans to buy properties or refinance existing loans at lower rates.

Fees from borrowers paying down their loans early rose to $11.2 million from $4 million in the prior quarter. Production of new so-called multifamily loans - essentially mortgages on apartment buildings - rose 73% quarter to quarter. Nearly three fourths of New York Community's loans are multifamily loans. The bulk of them are in New York City, where vacancy rates and property values tend to hold up better than in other parts of the country.

The loan demand enabled New York Community to invest in fewer lower-yielding securities. …

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