New York Community Bancorp Inc.’s stock is on the rise again after a significant drop. The bank has announced that it will surpass analyst expectations for net interest income in 2024.
Positive Stock Movement
New York Community Bancorp’s stock (NYSE: NYCB) has seen a 2.3% increase, with almost 300,000 shares traded in premarket trading.
Beating Expectations
After the market closed on Wednesday, New York Community Bancorp revealed its projected net interest income for 2024. The bank expects to generate between $2.8 billion and $2.9 billion, which is higher than the FactSet consensus estimate of $2.76 billion.
Understanding Net Interest Income
Net interest income is a crucial metric for banks and represents their profitability from loans, minus the interest paid out on savings accounts.
Favorable Outlook
While New York Community Bancorp’s projected net interest margin of 2.4% to 2.5% falls slightly below the analyst estimate of 2.55%, the bank remains optimistic. Its outlook includes strategies to enhance balance sheet liquidity and comply with regulatory requirements.
Loan and Deposit Projections
In 2024, the bank expects a 3% to 5% decrease in loans and a corresponding increase of 3% to 5% in deposits.
Strengthening Cash and Securities
New York Community Bancorp plans to bolster its cash and securities by $7.5 billion in total throughout 2024.
Analyst Perspective
Wedbush analyst David J. Chiaverini maintained an underperform rating on New York Community Bancorp, primarily due to the bank’s higher exposure to commercial real estate. However, he acknowledged that the projected net interest income surpasses his previous forecast of $2.7 billion. As a result, Wedbush raised its earnings-per-share estimate for 2024 from 65 cents to 80 cents.
Chiaverini highlighted the potential risk associated with commercial real estate loans maturing or resetting/repricing at higher interest rates.
