New York Community Bancorp, Inc. Reports First Quarter 2018 Diluted Earnings Per Common Share Of $0.20 On Continued Loan Growth And Lower Expenses

WESTBURY, N.Y., April 25, 2018 /PRNewswire/ --

New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company") today reported net income of $106.6 million for the three months ended March 31, 2018, up 2% from the $104.0 million reported for the three months ended March 31, 2017.  Net income available to common shareholders was $98.3 million, down 5% compared to $104.0 million in the year-ago first quarter.  In the current first quarter period, the Company paid $8.2 million in preferred stock dividends, whereas there was no such payment in the first quarter of last year.  Diluted earnings per common share for the three months ended March 31, 2018 was $0.20 as compared to $0.21 for the three months ended March 31, 2017.

Commenting on the Company's first quarter performance, President and Chief Executive Officer Joseph R. Ficalora stated, "In several ways, the Company's first quarter 2018 performance picks up where our fourth quarter 2017 performance left off. Our loan growth continued into the new year, our operating expenses were lower than expected, asset quality was stable, and despite a sharp increase in short-term interest rates, the net interest margin held up relatively well.

"Despite beginning of the year seasonality, we originated $2.4 billion of loans held for investment during the quarter and we grew our loan portfolio by $501 million compared to the fourth quarter of last year, or 5% on an annualized basis. Once again, the growth was driven by our core multi-family loan portfolio which increased $582 million or an 8% annualized rate of growth.

"Our loan production continues to adhere to our strict underwriting standards. Asset quality during the first quarter remained strong and all of our asset quality metrics were relatively unchanged compared to the fourth quarter.

"The net interest margin was 2.42% during the quarter, down six basis points relative to the fourth quarter of 2017. Excluding the contribution from prepayment income, the margin would have been 2.29% compared to 2.37% in the prior quarter. In addition to the impact from the Fed's 25-basis point rate increases in December 2017 and March 2018, the margin was also impacted by the industry-wide increase in retail deposit costs.

"Lastly, non-interest expenses came in at $139.1 million for the quarter. This is down $27.8 million or 17% from the year-ago quarter and down $9.4 million or 6% from the prior quarter. As a result, our efficiency ratio dropped below the 50% level, improving to 47.45% during the quarter.

"All things considered, we believe that 2018 is off to a good start, especially as it pertains to loan growth and expenses."

Board of Directors Declares $0.17 per Common Share Dividend Payable on May 22, 2018 
Reflecting our earnings and our capital position, the Board of Directors yesterday declared a quarterly cash dividend on the Company's common stock of $0.17 per share. The dividend is payable on May 22, 2018 to common shareholders of record as of May 8, 2018, and represents a dividend yield of 5.2% based on yesterday's closing price.

BALANCE SHEET SUMMARY

The Company recorded total assets at March 31, 2018 of $49.7 billion, up 2% on a year-over-year basis and up 4% annualized from the balance at December 31, 2017.  Total non-covered loans held for investment increased $1.6 billion or 4% to $38.9 billion compared to the balance at March 31, 2017, and $501 million or 5% annualized compared to the balance at December 31, 2017.  The growth during the current first quarter was funded primarily through wholesale borrowings, which increased $430 million sequentially, or 14% annualized.  Deposits totaled $29.2 billion, up 2% compared to the year ago quarter-end and 2% annualized compared to the prior quarter-end.

For the four quarters ended March 31, 2018, the Company's total consolidated assets averaged $48.9 billion, which was below the current SIFI threshold of $50.0 billion.  Given where average total consolidated assets stood at the end of the current first quarter, the Company has the ability to grow the balance sheet by approximately $3 billion without breaching the current SIFI threshold, based on the four quarter trailing average of total assets.

Loans

Non-Covered Loans Held for Investment 
Non-covered loans held for investment, net totaled $38.7 billion, representing a $1.6 billion increase or 4% from the year-ago quarter and a $498 million increase or 5% annualized growth compared to the prior quarter.  Total non-covered mortgage loans held for investment increased $1.4 billion or 4% from March 31, 2017 and $507 million or 6% annualized from December 31, 2017.  Once again, this growth was centered in the multi-family loan portfolio.  Total multi-family loans increased $1.6 billion to $28.7 billion or 6% from the year-ago quarter and $582 million or 8% annualized from the prior quarter.

Commercial real estate ("CRE") loans declined $281 million to $7.3 billion or 4% compared to the balance at March 31, 2017.  One-to-four family loans totaled $466.0 million as of the current first quarter, compared to $417.0 million in the first quarter of the prior year and $477.2 million compared to the fourth quarter of last year. Acquisition, development, and construction ("ADC") loans were $441.6 million for the three months ended March 31, 2018, up $59.3 million or 16% compared to the three months ended March 31, 2017 and up a modest $5.9 million or 5% annualized, compared to the three months ended December 31, 2017. 

Originations 
Total loans originated for investment increased 46% on a year-over-year basis to $2.4 billion, but declined 22% from the seasonally strong fourth quarter.  The year-over-year growth in originations was driven by our core multi-family loans and to a lesser extent, growth in our specialty finance business.

Pipeline 
The current pipeline stands at $2.0 billion.  This includes $1.3 billion in multi-family loans, $279 million in CRE loans, and $319 million in specialty finance loans.

Funding Sources

Deposits 
Total deposits at March 31, 2018 were $29.2 billion, up $509 million or 2% compared to the balance at March 31, 2017 and up $133 million or 2% annualized compared to the balance at December 31, 2017.  The general trend in our deposit composition over the last several quarters has been a shift into certificates of deposit ("CDs").  Accordingly, this quarter, CDs increased $1.5 billion to $9.1 billion or 20% compared to the year-ago quarter and rose $419.7 million or 19% annualized compared to the prior quarter.  All other categories of deposits declined on both a year-over-year and sequential basis, except for non-interest bearing accounts, which increased $206 million to $2.5 billion or 36% annualized versus the prior quarter, but declined $338 million from the year-ago quarter.

Borrowed Funds 
Borrowed funds totaled $13.3 billion and were up $430 million or 13% annualized compared to the prior quarter and up $130 million or 1% compared to the year-ago quarter.  The majority of the increases were in wholesale borrowings, which rose by the same amounts in both periods.

Stockholders' Equity 
Total stockholders' equity at the end of the first quarter of 2018 was $6.8 billion, virtually unchanged from the fourth quarter of 2017, and up $133 million or 2% from the first quarter of 2017.

Common stockholders' equity to total assets represented 12.64%, 12.81%, and 12.58%, respectively, at March 31, 2018, December 31, 2017, and March 31, 2017.

Book value per common share was $12.80 at March 31, 2018, $12.88 at December 31, 2017, and $12.57 at March 31, 2017.

Excluding goodwill of $2.4 billion, tangible common stockholders' equity equaled $3.8 billion, virtually unchanged from the previous quarter, and up from $3.7 billion in the year-ago quarter.  Tangible common stockholders' equity to tangible assets was 8.14%, 8.26%, and 7.99%, respectively, at March 31, 2018, December 31, 2017, and March 31, 2017.

Tangible book value per common share was $7.83 at March 31, 2018, $7.89 at December 31, 2017, and $7.58 at March 31, 2017.

Asset Quality 
The following discussion pertains only to the Company's portfolio of non-covered loans held for investment (excluding purchased credit-impaired, or "PCI," loans) and non-covered repossessed assets.

Total non-performing assets declined modestly to $88.8 million or 0.18% of total assets at March 31, 2018 as compared to $90.1 million or 0.18% at December 31, 2017, and increased $18.4 million from $70.4 million or 0.15% of total non-covered assets at March 31, 2017.

Non-performing loans exhibited the same trends as mentioned above, as total non-accrual mortgage loans increased slightly due to a $6.2 million decline in non-accrual ADC loans offset by a $7.0 million increase in non-accrual CRE loans.

Other non-accrual loans (consisting primarily of taxi medallion-related loans) declined 4% compared to the previous quarter to $45.9 million, but increased 59% compared to the year-ago quarter.

Non-covered repossessed assets of $15.5 million were down 6% compared to the prior quarter but rose 51% compared to the year-ago quarter.

The Company recorded net charge-offs of $6.5 million or 0.02% of average loans during the first quarter of 2018, which was up 71% compared to the $3.8 million or 0.01% recorded during the fourth quarter of 2017, and up 15% compared to the $5.6 million or 0.01% reported during the first quarter of 2017.

At March 31, 2018, the Company's total taxi medallion-related exposure was $95.4 million compared to $99.1 million at year-end 2017.

EARNINGS SUMMARY FOR THE THREE MONTHS ENDED MARCH 31, 2018

The Company reported net income of $106.6 million for the three months ended March 31, 2018, up 2% from the $104.0 million reported for the three months ended March 31, 2017.  Net income available to common shareholders was $98.3 million, down 5% compared to $104.0 million in the year-ago first quarter.  In the current first quarter period, the Company paid $8.2 million in preferred stock dividends, whereas there was no such payment in the first quarter of last year.  Diluted earnings per common share for the three months ended March 31, 2018 was $0.20 as compared to $0.21 for the three months ended March 31, 2017.

Net Interest Income  
Net interest income for the three months ended March 31, 2018 of $270.3 million was relatively unchanged compared to the trailing three month period and decreased 8% from the year-ago quarter.  Both the sequential and year-over-year comparisons were impacted by higher levels of interest expense driven by a combination of higher deposit and wholesale borrowings balances along with higher rates being paid on those balances.  This was offset somewhat by higher interest income during the current first quarter, as we resumed our balance sheet growth strategy.

Net Interest Margin 
The net interest margin for the current first quarter declined six basis points sequentially and 29 basis points from the year-ago first quarter.  Excluding the 13-basis point contribution to the net interest margin from prepayment income (compared to 11 basis points for both the prior quarter and year-ago quarter), the first quarter net interest margin would have declined eight basis points sequentially and 31 basis points year-over-year to 2.29%.

Provision for Loan Losses 
The Company reported a $9.6 million provision for losses on non-covered loans for the first quarter of 2018 as compared to a $2.9 million provision for the fourth quarter of 2017 and a $1.8 million provision for the first quarter of 2017.  The higher provision during the current quarter was related to the higher level of charge-offs during the quarter.

Non-Interest Income 
Non-interest income for the first quarter of 2018 totaled $22.9 million, down 10% from the trailing quarter and down 29% from the year-ago quarter.  The sequential decline was the result of seasonality in some of our fee business and a net loss on securities compared to a net gain on securities in the previous quarter.  The year-over-year decline was impacted by the sale of our mortgage banking operations and covered loans portfolio during the third quarter of 2017.

Non-Interest Expense 
Total non-interest expense was $139.1 million during the current first quarter, down $9.4 million or 6% from the prior quarter and down $27.8 million or 17% compared to the year-ago quarter.  The primary driver for the lower expenses was a decline in general and administrative ("G&A") expense.  G&A expense declined $11.1 million or 27% compared to the previous quarter and $15.3 million or 34% compared to the year-ago quarter.  The linked-quarter improvement was primarily the result of lower FDIC premium expense and decreases in professional fees.  These decreases were partially offset by a $2.2 million increase in compensation and benefits expense due to higher FICA and medical expenses.

Largely reflecting our lower expenses, the efficiency ratio improved to 47.45% during the first quarter of 2018, as compared to 50.11% in the fourth quarter of 2017 and 50.99% in the first quarter of 2017.

Income Tax Expense 
The Company recorded an effective tax rate of 26.25% during the current first quarter.  Accordingly, income tax expense declined 37% to $37.9 million compared to $60.2 million in the first quarter of 2017.  The income tax expense in the first quarter of last year reflected an effective tax rate of 36.67%.  The income tax expense of $8.4 million recorded in the fourth quarter of last year reflected a one-time net benefit of $42 million as a result of the Tax Cuts and Jobs Act.

About New York Community Bancorp, Inc. 
Based in Westbury, NY, New York Community Bancorp, Inc. is a leading producer of multi-family loans on non-luxury, rent-regulated apartment buildings in New York City, and the parent of New York Community Bank and New York Commercial Bank. At March 31, 2018, the Company reported assets of $49.7 billion, loans of $38.9 billion, deposits of $29.2 billion, and stockholders' equity of $6.8 billion.

Reflecting our growth through a series of acquisitions, the Community Bank operates 225 branches through seven local divisions, each with a history of service and strength: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, and Roosevelt Savings Bank in New York; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona, while the Commercial Bank operates 18 of its 30 New York-based branches under the divisional name Atlantic Bank. Additional information about the Company and its bank subsidiaries is available at www.myNYCB.com and www.NewYorkCommercialBank.com.

Post-Earnings Release Conference Call
The Company will host a conference call on Wednesday, April 25, 2018, at 8:30 a.m. (Eastern Time) to discuss its first quarter 2018 performance. The conference call may be accessed by dialing (877) 407-8293 (for domestic calls) or (201) 689-8349 (for international calls) and asking for "New York Community Bancorp" or "NYCB." A replay will be available approximately three hours following completion of the call through 11:59 p.m. on April 29, 2018 and may be accessed by calling (877) 660-6853 (domestic) or (201) 612-7415 (international) and providing the following conference ID: 13677891.  In addition, the conference call will be webcast at ir.myNYCB.com, and archived through 5:00 p.m. on May 23, 2018.

Cautionary Statements Regarding Forward-Looking Information 
This earnings release and the associated conference call may include forward‐looking statements by the Company and our authorized officers pertaining to such matters as our goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of probable losses on loans; our assessments of interest rate and other market risks; and our ability to achieve our financial and other strategic goals.

Forward‐looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.

Our forward‐looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios; changes in competitive pressures among financial institutions or from non‐financial institutions; our ability to obtain the necessary shareholder and regulatory approvals of any acquisitions we may propose; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations, and our ability to realize related revenue synergies and cost savings within expected time frames; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control.

More information regarding some of these factors is provided in the Risk Factors section of our Form 10‐K for the year ended December 31, 2017 and in other SEC reports we file. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC's website, www.sec.gov.

- Financial Statements and Highlights Follow -

NEW YORK COMMUNITY BANCORP, INC. 
RECONCILIATIONS OF CERTAIN GAAP AND NON-GAAP FINANCIAL MEASURES 
(unaudited)

While stockholders' equity, total assets, and book value per share are financial measures that are recorded in accordance with U.S. generally accepted accounting principles ("GAAP"), tangible stockholders' equity, tangible assets, and tangible book value per share are not.  Nevertheless, it is management's belief that these non-GAAP measures should be disclosed in our earnings releases and other investor communications for the following reasons:

Tangible stockholders' equity, tangible assets, and the related non-GAAP profitability and capital measures should not be considered in isolation or as a substitute for stockholders' equity, total assets, or any other profitability or capital measure calculated in accordance with GAAP.  Moreover, the manner in which we calculate these non-GAAP measures may differ from that of other companies reporting non-GAAP measures with similar names. 

The following table presents reconciliations of our common stockholders' equity and tangible common stockholders' equity, our total assets and tangible assets, and the related GAAP and non-GAAP profitability and capital measures at or for the three months ended March 31, 2018, December 31, 2017, and March 31, 2017: