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New York Community Bancorp (NYCB) in Westbury, N.Y., reported a dip in fourth-quarter profit as mortgage banking revenue fell, but it still but still beat analysts' expectations.
January 29 -
The Buffalo, N.Y., company still has some goodwill from analysts based on its reputation as a skilled bank buyer, but it has become the poster child for the risks associated with M&A in a tough regulatory environment.
January 17 -
New York Community Bancorp CEO Joseph Ficalora continues to look for a transformative acquisition to cross $50 billion in assets -- even if it invites extra regulatory scrutiny.
January 13 -
Stiffer oversight of banks with assets of $50 billion or more will keep New York Community Bancorp, of Westbury, N.Y., out of the M&A game until a major acquisition comes along, CEO Joseph Ficalora says.
July 31
New York Community Bancorp (NYCB) may be lowering its M&A ambitions.
Chief Executive Joe Ficalora has long said he hopes to acquire a large company $20 billion or more in assets to vault New York Community well past the important $50 billion-asset threshold in the Dodd-Frank Act.
The additional regulatory costs that accompany status as a "systematically important" institution made smaller deals unappealing, he
But Ficalora seemed to reverse that position this week, calling a smaller deal a "definite possibility." With New York Community just $3 billion shy of the $50 billion threshold, it has already
"Whether we go over $50 billion by two [billion] or we go over $50 billion by $25 billion, it doesn't really matter," Ficalora said in a conference call Wednesday.
The Westbury, N.Y., company was once among the most active dealmakers in the industry, but its last sizable acquisition was the failed AmTrust in Cleveland in 2009.
Uncertainty among potential sellers was the main reason New York Community did not strike a deal last year, Ficalora said. Discussing the pitfalls to M&A, Chief Financial Officer Thomas Cangemi alluded to the deal between M&T Bank (MTB) and Hudson City Bancorp (HCBK), which is
"Jumping into a transaction and not being able to close the transaction is not where we want to be," Cangemi said.
New York Community's
It reported a quarterly profit of $120.2 million, down 2% from the same period in 2012. The dip was largely due to a 61% drop in mortgage banking revenue, to $12.8 million, as refinance volume slowed. Its efficiency ratio remained strong, at 41.88%, two basis points higher than in the fourth quarter of 2012.
And while a deal remains likely, New York Community could end up passing the $50 billion mark through organic growth, Ficalora said.
Interest-earning assets increased 10%, to $40.8 billion, thanks largely to an increase in securities and other investments. The company's book of loans held for investment grew 9%, to $29.8 billion. And it is winning market share in its lending niche, the New York City multifamily market, Ficalora said.
"We're doing a lot of work to be ready to be over 50 [billion] because even without a deal, we could cross over 50 [billion] the not-too-distant future," Ficalora said.
