Fitch af­firms NY Com­mu­nity Ban­corp

The Pak Banker - - COMPANIES/BOSS -

Global rat­ing agency Fitch to­day af­firmed the long-term and short-term Is­suer De­fault Rat­ings (IDRs) of New York Com­mu­nity Bank at 'BBB+/F2'. The Rat­ing Out­look re­mains Sta­ble.

To­day's rat­ing af­fir­ma­tion re­flects NYCB's strong track record im­ple­ment­ing its fo­cused mul­ti­fam­ily lend­ing strat­egy in the New York City area as well as its solid earn­ings and as­set qual­ity. Th­ese strengths are balanced against NYCB's rel­a­tively higher risk fund­ing pro­file and mod­est fran­chise.

Loss his­tory con­tin­ues to be a rat­ing strength for the in­stitu t ion . Through the credit cy­cle, NCOs peaked at 34bps and to­taled just 13bps in 2012. Low losses are at­trib­ut­able to NYCB's abil­ity to ex­e­cute its core strat­egy of rent-reg­u­lated, multi-fam­ily lend­ing pre­dom­i­nantly in NYCB's core mar­ket in New York City. How­ever, NPAs for the in­sti­tu­tion re­main el­e­vated com­pared to pre-cri­sis lev- els at 2.36. Fitch ex­pects the level of NPAs to con­tinue to de­cline while NCOs re­main low.

NYCB's ROA of 1.18% com­pares fa­vor­ably with sim­i­larly rated in­sti­tu­tions. NYCB's prof­itabil­ity is a func­tion of low credit costs, low over­head ex­penses and a bal­ance sheet which has a greater per­cent­age loans than most banks. Fitch ex­pects NYCB's prof­itabil­ity to face head­winds in 2013 as the low rate en­vi­ron­ment and in­creas­ing com­pe­ti­tion for multi-fam­ily loans pres­sures net in­ter­est mar­gin. Ad­di­tion­ally, mort­gage bank­ing could also see some con­trac­tion as many bor­row­ers no longer have eco­nomic in­cen­tive to re­fi­nance their

home mort­gages.

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