Fitch affirms NY Community Bancorp

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.