New York Community Bancorp, Inc.’s NYCB fourth-quarter 2021 earnings per share (non-GAAP) of 31 cents were in line with the Zacks Consensus Estimate. However, the bottom line rose 15% year over year.
Results excluded merger-related expenses pertaining to the agreement with Flagstar Bancorp, Inc. FBC.
NYCB’s results were supported by higher net interest income and non-interest income. Loans and deposits improvement, and lower provision were other tailwinds. A moderate increase in expenses and decrease in net interest margin were headwinds. Shares of the company were down 1.5% following the earnings release.
Net income available to common shareholders, $142 million, plunged 21.5% from the prior-year quarter.
In 2021, earnings per share (non-GAAP) of $1.24 matched the consensus estimate and increased 42.5% from 2020. Net income of $563 million was up 17.8% from 2020.
Revenues & Expenses Rise
Total revenues were $338 million, up 4.6% year over year. However, the top line lagged the Zacks Consensus Estimate of $339.15 million.
In 2021, total revenues increased 16.3% to $1.35 billion, matching the consensus estimate.
Net interest income grew 4.5% year over year to $322 million. The rise mainly resulted from lower interest expenses.
Net interest margin of 2.44% was down 3 basis points (bps).
Non-interest income was $16 million, up 6.7%. The rise was primarily driven by higher other income.
Non-interest expenses of $135 million increased marginally from $134 million in the fourth quarter of 2020. Higher compensation and benefits, and a $7-million merger-related expense resulted in the rise. This was partially offset by lower general and administrative expenses. Total operating expenses (excluding merger-related expenses) decreased 4.5% at $128 million.
The efficiency ratio was 37.70%, down from 41.36% in the year-ago quarter. A fall in efficiency ratio indicates improving profitability.
Loans & Deposit Balance Climb
As of Dec 31, 2021, total deposits improved 1.3% sequentially to $35.1 billion. Total loans rose 4.6% to $45.5 billion.
In the fourth quarter, loan originations were $4.6 billion, up 53.3% sequentially. The rise was driven by a 62% increase in multi-family originations, and a 52% rise in specialty finance originations.
The company has $2.2 billion of loans in its current pipeline, including $1.7 billion of multi-family loans, $129 million of commercial real estate loans, $251 million in specialty finance loans, and $42 million in commercial and industrial loans.
Credit Quality Improves
Non-performing assets plunged 10.9% year over year to $41 million. Provision for credit losses was $4 million compared with $11 million in the prior-year quarter.
Net charge-offs were $5 million compared with $6 million in the prior-year quarter.