New York Community Bancorp, Inc. Reports Second Quarter 2020 Diluted EPS Of $0.21 On Double-Digit NIM Improvement, Strong Growth In Net Interest Income, And Higher PPNR

WESTBURY, N.Y., July 29, 2020

Second Quarter 2020 Summary
•	Earnings:
	-	Diluted EPS of $0.21, up 11% compared to the second quarter of 2019 and up 5% compared to the first quarter of this year. ARIVA.DE Börsen-Geflüster Kurse New York Community Bancorp 3,18 $ 0,00%
	-	Net income available to common shareholders for the second quarter was $97.1 million, up 5% on a sequential basis and up 9% compared to the year-ago quarter.
	-	Pre-provision net revenue for the second quarter of 2020 totaled $157.7 million, up 16% relative to the prior quarter and up 19% compared to the second quarter of last year. (1)
	-	Second quarter results included a provision for credit losses of $17.6 million, down 15% compared to the previous quarter.
	-	Return on average assets was 0.78% for the quarter, while return on average common stockholders' equity was 6.31%. (2)
	-	Return on average tangible assets was 0.82% for the quarter, while return on average tangible common stockholders' equity was 10.42%. (2)(3)
•	Net Interest Margin/Income:
	-	The net interest margin increased 17 bps to 2.18% compared to the previous quarter and was up 18 bps on a year-over-year basis.
	-	Prepayment income added nine bps to the second quarter NIM, unchanged from the previous quarter and down two bps compared to the year-ago quarter.  Excluding the impact from prepayments, the NIM on a non-GAAP basis was 2.09%, up 17 bps on a sequential basis and up 20 bps on a year-ago basis.
	-	Net interest income for the second quarter increased 9% to $265.9 million compared to the previous quarter and was up 12% compared to the year-ago quarter.
•	Balance Sheet:
	-	Total loans held for investment grew $412 million during the first half of 2020 to $42.3 billion, up 2% annualized, but were flat on a sequential basis as growth in the multi-family portfolio was offset by declines in the rest of the portfolios.
	-	During the first six months of 2020, multi-family loans increased 3% annualized to $31.6 billion and increased $325 million or 4% annualized on a sequential basis.
	-	Specialty finance loans and leases totaled $2.9 billion, down modestly compared to the $3.0 billion in the prior quarter, but are up $301 million or 23% on a year-to-date basis.
	-	Total deposits of $31.7 billion were relatively unchanged on both a linked-quarter and year-to-date basis.
•	Asset Quality:
	-	Non-performing assets totaled $63.2 million or 0.12% of total assets, compared to $58.8 million or 0.11% of total assets as of March 31, 2020; NPAs included $33.6 million of non-performing taxi medallion assets compared to $30.5 million in the previous quarter.
	-	The allowance for loan and lease losses increased $12.0 million to $174.3 million at June 30, 2020, compared to the previous quarter.
	-	The weighted average LTV for NYS rent-regulated multi-family portfolio was 53.51%.
•	Capital Position at June 30, 2020:
	-	Common Equity Tier 1 Capital Ratio was 9.77%.
	-	Tier 1 Risk-Based Capital Ratio was 11.06%.
	-	Total Risk-Based Capital Ratio was 13.13%.
	-	Leverage Capital Ratio was 8.42%.

New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company") today reported net income for the three months ended June 30, 2020 of $105.3 million, up 5% compared to the $100.3 million reported for the three months ended March 31, 2020 and up 8% compared to the $97.2 million reported for the three months ended June 30, 2019.  For the six months ended June 30, 2020, net income increased 6% to $205.7 million compared to the $194.8 million reported for the six months ended June 30, 2019.

Net income available to common shareholders for the three months ended June 30, 2020, totaled $97.1 million, up 5% compared to the $92.1 million reported for the three months ended March 31, 2020 and up 9% compared to the $89.0 million reported for the three months ended June 30, 2019.  On a year-to-date basis, net income available to common shareholders was $189.3 million, up 6% compared to the $178.4 million reported in the first six months of 2019.

On a per share basis, the Company reported diluted earnings per share of $0.21 for the second quarter of 2020, up 5% compared to the previous quarter's diluted earnings per share of $0.20 and up 11% compared to the $0.19 reported in the second quarter of 2019.  For the first six months of 2020, the Company reported diluted earnings per share of $0.40, up 5% compared to the $0.38 reported in the first six months of 2019.

Commenting on the Company's performance this quarter, President and Chief Executive Officer Joseph R. Ficalora stated: "Despite the continuing effects of the COVID-19 pandemic and its impact on the national and local economies, our performance during the current quarter was impressive.  Our positive momentum continued and resulted in strong EPS and net income growth.  This growth was in large part, the result of significant expansion in our net interest margin, which led to solid top-line revenue growth.  At the same time, our provision for credit losses declined compared to the previous quarter, as our asset quality metrics remained strong and operating expenses declined, while multi-family loan growth continued.

"The net interest margin expanded 17 basis points to 2.18% during the second quarter. Excluding the impact of prepayment income, the net interest margin was 2.09%, also up 17 basis points. This was driven mostly by a sharp decline in our funding costs as approximately $6 billion in certificates of deposits with rates over 2.00% reached their contractual maturity during the quarter.  As a result, our net interest income rose $21.4 million or 9% on a sequential basis, while the cost of deposits dropped 46 basis points compared to the prior quarter.

"While overall loan growth on a sequential basis was relatively unchanged, our core multi-family portfolio grew 4% annualized compared to the previous quarter, which was offset by declines in our other portfolios.  Some of the decline was in the specialty finance portfolio, as some larger borrowers used the favorable interest rate environment to access the capital markets and used the proceeds to pay down debt, while some others reduced their inventory levels.  That notwithstanding, we ended the quarter with a robust pipeline and expect stronger loan growth in the second half of the year.

"Our asset quality metrics continue to be very strong and continue to rank among the best in the industry. Non-performing assets remained low and net charge-offs declined compared to both the previous quarter and the year earlier quarter, to one basis point of average loans.  The amount of loans in payment deferral increased in-line with expectations and remain at a manageable level.  We look forward to these loans returning to their normal payment schedules which we expect will occur beginning in October.  We continue to closely monitor our entire loan portfolio for any signs of stress.

"Lastly, reflecting our strong capital position, solid asset quality metrics, and earnings growth, yesterday the Board of Directors declared a quarterly cash dividend of $0.17 per common share."

DIVIDEND DECLARATION

The Board of Directors yesterday declared a quarterly cash dividend of $0.17 per share on the Company's common stock.  Based on a closing price of $10.24 as of July 28, 2020, this represents an annualized dividend yield of 6.6%.  The dividend is payable on August 18, 2020 to common shareholders of record as of August 8, 2020.

BALANCE SHEET SUMMARY

As of June 30, 2020, total assets were $54.2 billion, up $570 million or 2% annualized compared to total assets at December 31, 2019.  The year-to-date increase was driven by loan growth, primarily in the specialty finance portfolio and in the multi-family portfolio, offset by a decline in the commercial real estate ("CRE") loan portfolio, while the securities portfolio declined and cash balances rose.  On the liability side, total deposits rose $72 million or 0.5% annualized to $31.7 billion, while borrowings rose $450 million or 6% annualized, to $15.0 billion.

Loans

Total loans and leases held for investment were $42.3 billion at June 30, 2020, up $412.0 million or 2% annualized compared to December 31, 2019.  On a sequential basis, total loans and leases held for investment were unchanged as good growth in the multi-family portfolio was offset by declines in other categories.

Total multi-family loans increased $438 million or 3% on an annualized basis to $31.6 billion compared to the balance at December 31, 2019.  On a sequential basis, total multi-family loans rose $325 million or 4% annualized.

Total CRE loans declined to $6.9 billion, down $152 million or 4% annualized compared to the level at December 31, 2019, but down $105 million or 6% annualized compared to the level at March 31, 2020.

The specialty finance portfolio increased $301 million or 23% annualized during the first six months of the year, but declined $114 million compared to the previous quarter or 15% annualized.  The linked-quarter decrease was primarily due to commercial borrowers reducing inventory and some larger borrowers taking advantage of the low interest rate environment to access the capital markets, using the proceeds to pay down debt.

In addition, the Company had $103.4 million of loans held for sale at June 30, 2020.  All of these loans were part of the Paycheck Protection Program (the "PPP") originated during the current second quarter.  At both March 31, 2020 and December 31, 2019, the Company did not have any loans held for sale.

The average loan size for multi-family loans during the second quarter of 2020 was $6.5 million and for CRE loans it was $6.7 million, relatively unchanged compared to the average loan size during the prior quarter.

The weighted average life of the multi-family portfolio remained under two years, at 1.9 years and for the CRE portfolio, it was 2.3 years, unchanged compared to the previous quarter.

Originations

For the three months ended June 30, 2020, total loan originations, excluding PPP loan originations, increased 21% on a linked-quarter basis and 10% on a year-over-year basis to $3.3 billion and exceeded the previous quarter's loan pipeline by $1.2 billion.  For the six months ended June 30, 2020, loan originations totaled $6.0 billion compared to $5.0 billion for the six months ended June 30, 2019, up 20%.

Pipeline

The current loan pipeline stands at $2.2 billion, of which approximately 60% is new money.  The pipeline includes $1.5 billion in multi-family loans, $447 million in specialty finance loans and leases, and $189 million in CRE loans.

Funding

Deposits

Total deposits for the six months ended June 30, 2020 increased $72 million to $31.7 billion compared to December 31, 2019, up 0.5% annualized.  On a linked-quarter basis, total deposits declined $243 million or 3% annualized.  Continuing the trend from the previous quarter, certificates of deposits ("CDs") declined $2.1 billion to $12.0 billion, primarily due to the drop in market interest rates and the Company's strategy to significantly reduce the rates it pays on CDs.

Much of this decline was offset by growth in other, lower-cost deposit categories.  Savings accounts increased $669 million or 14% to $5.6 billion; interest-bearing checking and money market accounts rose $960 million to $11.1 billion, while non-interest bearing accounts grew $228 million to $2.9 billion.

During the current quarter, our deposit costs declined 74 basis points to 1.16% compared to the year-ago quarter and 46 basis points compared to the previous quarter.  For the six months ended June 30, 2020, deposit costs declined 46 basis points to 1.39% compared to the six months ended June 30, 2019. We expect to see similar trends throughout the rest of the year.  Over the next two quarters, the Company has $10.7 billion of CDs at a weighted average interest rate of 1.73% which are scheduled to mature. 

Borrowed Funds

As of June 30, 2020, total borrowed funds increased $450 million or 6% annualized compared to the balance at December 31, 2019 and $75.2 million or 2% annualized compared to March 31, 2020.  This was entirely due to an increase in wholesale borrowings, consisting of Federal Home Loan Bank of New York ("FHLB-NY") advances, as the Company took advantage of the low interest rate environment to lock in long-term funding at attractive rates.

The FHLB-NY advances that we added during the current quarter had a blended cost of 55 basis points and a term of 1.8 years.  This compares to an overall average cost of borrowings of 2.06% during the current quarter.  During the second half of 2020, the Company has $975.0 million of wholesale borrowings set to contractually mature with an average cost of 1.78%.

Liquidity

The Company's liquidity position remained strong during the second quarter of 2020.  In addition to the liquidity provided from our deposits, other sources of liquidity available to us stems from our balance of cash and cash equivalents and the unencumbered portion of our securities portfolio.  Additional significant sources of liquidity available to the Company include approved lines of credit with various counterparties, including borrowing facilities with the FHLB-NY and with the Federal Reserve Bank of New York (the "FRB-NY").

At June 30, 2020, our available funding with the FHLB-NY was $7.7 billion and with the FRB-NY, it was $1.1 billion.  Additionally, the unencumbered portion of the securities portfolio totaled $3.9 billion.

Asset Quality

Non-Performing Assets

The Company's asset quality metrics were relatively stable compared to the previous quarter and remained strong overall.  Non-performing assets ("NPAs") at June 30, 2020 were $63.2 million, up $4 million or 7% compared to the level at March 31, 2020.  This translates into 12 basis points of total assets versus 11 basis points compared to first-quarter 2020.  Total non-accrual mortgage loans were $24.2 million, up $2 million or 10% compared to March 31, 2020.  Other non-accrual loans rose $2 million or 8% compared to first-quarter 2020.

Excluding the impact from non-performing and repossessed taxi medallion-related assets, second quarter 2020 NPAs would have been $29.6 million or 0.05% of total assets compared to $28.3 million or 0.05% of total assets for the first-quarter 2020.

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