NYCB’s stock is under pressure after the bank said it doesn’t expect more office and multifamily loans to be paid back.
New York Community Bancorp Inc.’s stock fell about 5% on Thursday after the lender reported a second-quarter loss and larger-than-expected charge-offs mostly on office and multifamily property loans that it doesn’t expect to be paid back.
On the plus side, the bank
managed to report an increase in deposits as well as up to $5 billion in potential proceeds from asset sales that it’s considering.Separately, the NYCB announced the sale of its Flagstar Bank unit’s mortgage-servicing business to Mr. Cooper Group Inc.
for $1.4 billion in a move to strengthen its balance sheet and sharpen its focus on commercial lending. It has also closed its $5.9 billion loan-portfolio sale to JPMorgan Chase & Co.“Our second-quarter performance reflects the ongoing actions management is taking during this transitional year as we reposition the bank for long-term success,” NYCB Chief Executive Joseph Otting said in a statement.
NYCB’s stock was down 54 cents to $10.41 as it pared deeper losses from earlier in the day as the broader equities market rallied.
Revenue fell 44% to $671 million, below the analyst estimate of $722.5 million. In the first quarter, NYCB’s revenue was $633 million.
Positives for the quarter included a 4% rise in total deposits from the previous quarter to $3.7 billion. The bank is also considering sales of business units that could raise $2 billion to $5 billion.
NYCB’s stock is down 64% so far in 2024 after the company disclosed a surprise loss earlier this year and changed its ownership structure with an investment from former U.S. Treasury Secretary Steven Mnuchin’s private-equity firm. Joseph Otting was named chief executive of the company in March.
NYCB closed a 3-for-1 reverse stock split on July 11.
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