New York Community Bank on Wednesday posted a quarterly loss of $335 million on a rising tide of soured commercial loans and higher expenses, but the lender’s stock surged on its new performance targets.
The first-quarter loss, equal to 45 cents per share, compared to net income of $2.0 billion, or $2.87 per share a year earlier. When adjusted for charges including merger-related items, the loss was $182 million, or 25 cents per share, deeper than the estimate of a loss of 15 cents per share from LSEG.
“Since taking on the CEO role, my focus has been on transforming New York Community Bank into a high-performing, well-diversified regional bank,” CEO Joseph Otting said in the release. “While this year will be a transitional year for the company, we have a clear path to profitability over the following two years.”
The bank will have higher profitability and capital levels by the end of 2026, Otting said. That includes a return on average earning assets of 1% and a targeted common equity tier 1 capital level of 11% to 12%.
Shares of the bank jumped 33% in early trading.
Otting took over at the beleaguered regional bank at the start of April after an investor group led by former Treasury Secretary Steven Mnuchin injected more than $1 billion into the lender. NYCB’s troubles began in late January with a disastrous fourth-quarter earnings report when it shocked analysts with its level of loan loss provisions. The bank’s stock plunged amid multiple management changes and rating agency downgrades.
Source: CNBC
