Safe and Sound

New York Community Bank

Westbury, NY
4
Star Rating
New York Community Bank is an FDIC-insured bank founded in 1859 and currently headquartered in Westbury, NY. Regulatory filings show the bank having equity of $6.44 billion on assets of $45.46 billion, as of December 31, 2017.

With 1,640 full-time employees in 231 offices in multiple states, the bank currently holds loans and leases worth $35.79 billion, including real estate loans of $34.29 billion. U.S. bank customers currently have $26.43 billion in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, New York Community Bank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank fared on the three important criteria Bankrate used to score American banks.

WHAT IS
SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital works as a buffer against losses and provides protection for account holders when a bank is struggling financially. It follows then that a bank's level of capital is a useful measurement of a bank's financial resilience. From a safety and soundness perspective, the higher the capital, the better.

New York Community Bank scored below the national average of 13.13 on our test to measure capital adequacy, achieving a score of 10 out of a possible 30 points.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. New York Community Bank's Tier 1 capital ratio was 13.43 percent, above the 6 percent level regulators consider adequate, but under the national average of 25.65 percent. A higher capital ratio suggests the bank will be better able to stand up to economic downturns.

Overall, New York Community Bank held equity amounting to 14.17 percent of its assets, which exceeded the national average of 12.03 percent.

Asset Quality Score

This test's purpose is to estimate how the bank's capitalization and allocated loan loss reserves could be affected by problem assets, such as past-due mortgages.

Having extensive holdings of these types of assets suggests a bank may have to use capital to absorb losses, diminishing its buffer of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a failure in the future.

New York Community Bank scored 40 out of a possible 40 points on Bankrate's test of asset quality, better than the national average of 37.49.

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 0.05 percent of New York Community Bank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks maintain a reserve to handle problem assets known as an "allowance for loan and lease losses." The size of that reserve can be a useful indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on New York Community Bank's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance affects its safety and soundness. Earnings can be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better able to withstand economic shocks. Banks that are losing money, however, have less ability to do those things.

New York Community Bank scored 16 out of a possible 30 on Bankrate's earnings test, beating out the national average of 15.12.

Return on equity, calculated by dividing net income (essentially, profit) by the total amount of equity, is one key measure of a bank's earnings. The most recent annualized quarterly return on equity for New York Community Bank was 8.13 percent, above the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $507.9 million on total equity of $6.44 billion. The bank had an annualized return on average assets, or ROA, of 1.12 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.