New York Community Bancorp. (NYCB) plunged in trading after the bank reported a fourth straight quarter of loss in the third quarter. However, the bank’s adjusted loss narrowed to $0.69 per diluted share in the third quarter, compared to a loss of $1.09 per diluted share in the same period last year. Disappointingly, this figure still fell short of consensus estimates of a loss of $0.41 per share.
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Furthermore, the bank’s total revenues plummeted by 40% year-over-year to $623 million but exceeded analysts’ estimates of $611.9 million. Additionally, NYCB’s net interest income (NII) plunged by 42% year-over-year to $510 million. NII is the difference between what the bank earns on loans and pays on deposits.
Why Is NYCB Posting a Loss for the Fourth Straight Quarter?
The bank’s loss in the third quarter is due to its heavy exposure to commercial real estate (CRE), despite ongoing efforts to reduce expenses and offload non-core assets. Furthermore, the challenges facing NYCB stem largely from borrowers feeling the effects of reduced office demand, fueled by the rise of remote work, as well as high interest rates impacting multi-family loans. As a result, NYCB’s loan-loss provisions quadrupled to $242 million in the third quarter.
These problems have led lenders like NYCB to increasingly write off CRE debts as unrecoverable. In fact, in the third quarter, NYCB reported $388 million in net charge-offs from its office portfolio.
NYCB Delays Profit Goal to 2026
As a result of these problems, NYCB now expects a loss in the range of $0.30 to $0.35 per share in 2025, while earlier it was projecting to break even or earn a profit of $0.50 per share. In addition, the bank trimmed its forecast for 2026 and now estimates earnings between $0.75 and $0.80 per share, down from its prior outlook in the range of $1.25 to $1.30.
Is NYCB a Good Stock to Buy?
Analysts remain sidelined about NYCB stock, with a Hold consensus rating based on two Buys and eight Holds. Over the past year, NYCB has plunged by more than 60%, and the average NYCB price target of $12.16 implies an upside potential of 15.2% from current levels. These analyst ratings are likely to change following NYCB’s results today.
