New York Community Bank (NYCB) had a tough quarter, losing $335 million because many commercial loans went bad and expenses went up. But the bank’s stock went up because of its new goals.
In the first quarter, they lost 45 cents per share, compared to making $2 billion, or $2.87 per share, the year before. If we take out some costs, they lost $182 million, or 25 cents per share, which is worse than the expected loss of 15 cents per share.
The CEO, Joseph Otting, said they’re trying to turn the bank into a strong regional bank. He thinks they can start making money again in two years.
By the end of 2026, the bank plans to make more money and have more capital. They want to make 1% of what they earn and have 11% to 12% of their money in reserve.
The bank’s stock went up by 33% in early trading.
Otting started leading the bank in April, after a group of investors, including Steven Mnuchin, put more than $1 billion into it. The bank started having trouble in January when it shocked people with how much money it lost on loans. Since then, they’ve had many management changes and lost ratings from agencies.
The bank plans to sell $5 billion in assets to have more money on hand. This might happen in the next few months.
They set aside $315 million for loans that might not get paid back, compared to $170 million last year. They think they’ll need to set aside more money for bad loans for the rest of 2024.
More loans went bad, with $798 million not being paid back, up by $370 million from last year. This happened because interest rates went up, and it was hard for people to pay back loans on offices and apartments.
The bank thinks office buildings are losing 42% of their value, and apartments are losing about 30%. Otting said they will try to avoid giving loans to offices and apartments and might stop working with clients who don’t keep their money in the bank.
The bank’s results and goals were better than what many thought, which made analysts happy. They didn’t announce the results until late Tuesday, which worried some people. But overall, things seem better than expected.
