NYCB
Here is my complete run down on NYCB.
1) NYCB Earned .36 this past quarter adjusted. Which makes it look cheap. I do expect q4 to come in a bit to say .30, because of lower interest earning assets and lower nims which the company guided for. Hence if you annaulize about $1.20 it is not the cheapest bank in the world. Hence we will have some tough comps, which is not a plus going foward.
2) NYCB had a decline in interest earning assets and a decline in deposits this quarter neither of which is a positive. They did have slight loan growth so that is a slight plus.
3) NYCB Trades at slight discount too book value and has a yield at this point they should be able to pay and is north of 7.3%. Hence Those are both pluses.
4) Asset health is still very good. But the trend is starting to show negative signs. Started the year with NPA at 0.17%. As of q2 it was 0.21%, and of q3 it was 0.36%. Don't get me wrong the numbers are good, but the trend is not great and needs to be watched.
5) NYCB Like every regional bank has commercial exposure. They have 3.4 Billion in office exposure. Keep in Mind most of this is NY office exposure, Not really loving that to be honest. But 4% is not outrageous % of total loans for a regional bank. But they have about 16% total commercial exposure, which is not outrageous or out of the norm either. As of 6/30 office had no nonperformers, as of 9/30 they had 124 million in non performing lonas. The Substandard or special mention loans have went from 15.5 to 26% in just 1 quarter. Alot of NYC office space which is not the best place in my opinion to be.
Conclusion: As of right now NYCB can easily pay there dividend, but the concern is there seems to be more loans going bad, don't love the location of the commercial loan portfolio. Not my favorite bank. To each there own. I will pass at this point, they are not as well reserved as I would like to there peers and it seems like albeit it on a lower absolute level, that the trend is starting to pick up and nonperforming assets although lower are up 166% since the start of the year. And up almost 65% quarter on quarter, yes small numbers, but didn't see other banks with this kind of accelaration. I didn't like the jump in the substandard loans on office, that concerns me, thinking we will see another jump of NPA in q4 over q3. I will pass plenty of other better banks, might not get as great of dividend, but just feel stronger about the overall potential of the stock. Time will tell. All is just my opinion, and I could always be wrong though.
