WESTBURY, N.Y., Jan. 30, 2019 /PRNewswire/ --

New York Community Bancorp, Inc. (NYSE: NYCB) (the "Company") today reported net income for the three months ended December 31, 2018 of $101.7 million, down from the $106.8 million reported for the three months ended September 30, 2018. Net income available to common shareholders for the three months ended December 31, 2018 was $93.5 million, down from the $98.6 million reported for the three months ended September 30, 2018.

Diluted earnings per common share ("EPS") for the three months ended December 31, 2018 were $0.19 compared to $0.20 for the three months ended September 30, 2018.

For the twelve months ended December 31, 2018, the Company reported net income of $422.4 million, compared to the $466.2 million reported for the twelve months ended December 31, 2017. Net income available to common shareholders in the comparable period was $389.6 million, versus $441.6 million for the twelve months ended December 31, 2017.

Pre-tax income for the twelve months ended December 31, 2018 totaled $557.7 million compared to $668.2 million for the twelve months ended December 31, 2017. Full year 2017 results included an $82.0 million gain on the sale of our covered loan portfolio and mortgage banking operations. Taking this into consideration, pre-tax income for 2017 would have been $586.2 million compared to $557.7 million for 2018.

Commenting on the Company's fourth quarter and full year performance, President and Chief Executive Officer Joseph R. Ficalora stated, "Our fourth quarter and full year 2018 performance largely reflects the successful execution of the strategy we put into place in late 2017. It also is a reflection of the changed regulatory environment since early 2018, which came by way of the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act. Among other things, the Act re-defines the manner by which banks are designated as a SIFI, by increasing the asset threshold to $250 billion from $50 billion. This is key for the Company as it allows us to resume our balance sheet growth and reduce operating expenses, especially those related to regulatory compliance for SIFI institutions.

"To that end, in 2018, we grew our balance sheet by originating loans with higher coupons than those currently in our loan portfolio, we redeployed over $2.0 billion of cash over the course of the year into higher yielding investment securities, and we reduced our expense base by a significant amount.

"Our loan portfolio increased $1.8 billion or 5% for the full year, surpassing the $40 billion mark at the end of the year and pushing our total assets to just under $52 billion. Loan growth has been, and continues to be driven by our flagship multi-family loan product, which increased 6% during the year and currently stands at just under $30 billion.

"While we expect to continue to grow our loan portfolio at a mid-single digit pace, we continue to adhere to our strict underwriting standards. As witnessed in both our current quarter and full year results, asset quality continues to improve and our credit metrics are among the best in the industry.

"We also continued to redeploy our cash position by reinvesting most of our liquidity into investment securities at better yields.

"We also remain focused on expense controls. Operating expenses declined 15% on a year-over-year basis, and we expect a further decline in our operating expenses in 2019.

"Another positive for us in 2018 has been on the deposit front. It has been a key focus of ours during the year to grow our deposits organically. Fueled by growth in CDs, total deposits increased $1.7 billion or 6% in 2018.

"Lastly, during the fourth quarter, we closed on the previously announced merger of our two subsidiary banks. More importantly we commenced our share repurchase program, buying back nearly 17 million shares during the quarter."

CAPITAL MANAGEMENT

Reflecting our earnings, capital position, and asset quality, the Board of Directors yesterday declared a quarterly cash dividend on the Company's common stock of $0.17 per share. This represents an annualized dividend yield of 6.3% based on the closing price as of January 29, 2019. The dividend is payable on February 26, 2019 to common shareholders of record as of February 12, 2019.

Additionally, during the fourth quarter, the Company initiated a $300 million common share repurchase program. As of December 31, 2018, the Company repurchased 16.8 million shares at an average price of $9.57 per share.

BALANCE SHEET SUMMARY

Total assets at December 31, 2018 were $51.9 billion, a year-over-year increase of $2.8 billion or 6%. Consistent with our strategy, this increase was driven by securities and loan growth which was funded through deposits and to a lesser extent borrowed funds.

Total loans held for investment grew $1.8 billion or 5% from year-end 2017. The majority of this growth was fueled by growth in our flagship multi-family loan portfolio.

During the year, we continued to redeploy our cash position by reinvesting cash into securities. Accordingly, the balance of available-for-sale securities increased $2.1 billion or 60%, to $5.6 billion, including $848.1 million of growth during the fourth quarter of the year.

Total deposits increased $1.7 billion or 6% from year-end 2017, to $30.8 billion, with $445.1 million of this growth occurring during the fourth quarter of 2018. Borrowed funds totaled $14.2 billion at year-end 2018, up $1.3 billion or 10%, compared to year-end 2017.

Loans

Loans held for investment, net totaled $40.0 billion at December 31, 2018, a $1.8 billion or 5% increase from the balance at December 31, 2017. On a linked quarter basis loans held for investment, net increased $327.5 million or 3% on an annualized basis.

Overall loan growth was driven by growth in the Company's multi-family and commercial and industrial ("C&I") loan portfolios. Multi-family loans increased $1.8 billion or 6% to $29.9 billion for the full year.

The C&I portfolio, which largely consists of our specialty finance loans and leases rose $348.3 million or 17% to $2.4 billion on a year-over-year basis. At December 31, 2018, the commercial real estate ("CRE") loan portfolio totaled $7.0 billion, relatively unchanged compared to the third quarter of 2018.

Originations
Loans originated for investment for the twelve months ended December 31, 2018 totaled $10.1 billion (including $2.2 billion originated during fourth quarter 2018), up $1.1 billion or 13% compared to total loan originations of $8.9 billion for the twelve months ended December 31, 2017. For full year 2018, multi-family originations increased 23% compared to full year 2017, while specialty finance originations increased 7%.

Pipeline
The current loan pipeline stands at $1.1 billion. This includes $800 million in multi-family loans, $94 million in CRE loans, and $182 million in specialty finance loans.

Funding

Deposits
Throughout 2018, it has been the Company's strategy to increase deposits organically. To this end, total deposits increased $1.7 billion or 6% on a year-over-year basis to $30.8 billion. On a linked quarter basis, total deposits increased $445.1 million or 6% annualized.

Deposit growth was driven by certificates of deposit ("CDs") and to a lesser extent by growth in non-interest bearing accounts. Compared to the fourth quarter of last year, CDs rose $3.6 billion or 41% to $12.2 billion, while non-interest bearing deposits increased over the same timeframe by $84.6 million or 4% to $2.4 billion.

Borrowed Funds
At December 31, 2018, total borrowed funds increased $1.3 billion or 10% to $14.2 billion compared to the balance at December 31, 2017. The bulk of the year-over-year increase was driven by a $999.2 million or 8% increase in the balance of wholesale borrowings, which consist primarily of borrowings from the Federal Home Loan Bank of New York. The remainder of the increase was due to the Company's issuance in the fourth quarter of $300 million of subordinated notes.

Asset Quality
The Company's already pristine asset quality continued to improve during 2018. Total non-performing assets ("NPAs") declined $33.8 million or 38% on a year-over-year basis to $56.3 million or 0.11% of total assets at December 31, 2018. During the same timeframe, total non-accrual mortgage loans declined $17.0 million or 66% to $8.9 million, while other non-accrual loans, which largely consist of taxi medallion-related loans, decreased $11.2 million or 23%.

Repossessed assets totaled $10.8 million, representing a $5.6 million or 34% decrease compared to the level at December 31, 2017. As with non-accrual loans, the majority of our repossessed assets consist of taxi medallions, which were $8.2 million of total repossessed assets at year-end 2018.

Excluding taxi medallion-related assets, NPAs declined 29.5% to $12.6 million or 0.02% of total assets at December 31, 2018 compared to $17.9 million or 0.03% of total assets at September 30, 2018 and declined 64.2% compared to $35.2 million or 0.07% of total assets at December 31, 2017.

At December 31, 2018, total remaining taxi medallion-related loans were $73.7 million compared to $99.1 million at December 31, 2017.

For the twelve months ended December 31, 2018, the Company recorded net charge-offs of $16.5 million or 0.04% of average loans, down $44.7 million or 73% compared to the $61.2 million or 0.16% of average loans recorded for the twelve months ended December 31, 2017. In both years, the majority of net charge-offs arose primarily from taxi medallion-related loans. In full year 2018, taxi medallion related charge-offs were $12.8 million down 78.5% from the $59.6 million recorded in full year 2017.

EARNINGS SUMMARY FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2018

Net Interest Income
Net interest income for the three months ended December 31, 2018 totaled $247.2 million, down 1% from $249.5 million sequentially. Interest income increased 4% on a linked quarter basis, but this was offset by higher levels of interest expense, which increased 11%. The increased level of interest expense compared to the prior quarter-end was the result of the growth in our CD balances and wholesale borrowings, along with higher interest rates on those balances due to the Federal Reserve having raised interest rates four times over the course of 2018.

For the twelve months ended December 31, 2018, net interest income decreased $99.0 million or 9% to $1.0 billion compared to $1.1 billion for the twelve months ended December 31, 2017. Interest income increased $107.4 million or 6.8% to $1.7 billion compared to $1.6 billion for the twelve months ended December 31, 2017. This increase was largely driven by loan growth and by growth in the securities portfolio as the Company redeployed its cash. This was offset by an increase in interest expense. Interest expense increased $206.4 million or 45.6% to $658.7 million during 2018. The increase was the result of the same factors as those that impacted fourth quarter 2018 net interest income.

Net Interest Margin
The net interest margin ("NIM") for the current fourth quarter was 2.09%, a seven basis point decline compared to the previous quarter. The decline was attributable to higher funding costs driven by four Federal Reserve interest rate increases over the past year. Prepayment income added eight basis points to the NIM, same as in the prior quarter. During the fourth quarter of 2018, the Company raised $300 million of subordinated notes with a coupon of 5.90%. This reduced the NIM by three basis points. Excluding the impact of the prepayments and the subordinated notes offering to net interest income, the fourth quarter NIM would have been 2.04%, down only four basis points compared to the prior quarter.

For the twelve months ended December 31, 2018, the NIM was 2.25% down 34 basis points compared to the 2.59% recorded for the twelve months ended December 31, 2017. Prepayment income added 11 basis points to this year's NIM, compared to 13 basis points in 2017.

Provision for Loan Losses
The provision for loan losses for the fourth quarter of 2018 was $2.8 million, up $1.6 million or 131% compared to the third quarter of this year.

For the twelve months ended December 31, 2018, the Company reported a provision for loan losses of $18.3 million, down $42.7 million or 70% compared to $60.9 million for the twelve months ended December 31, 2017. In the third quarter of 2017, the Company recorded a $44.6 million provision for loan losses, related largely to its taxi medallion portfolio.

Also in 2017, the Company recovered $23.7 million on certain pools of acquired loans covered by FDIC loss-sharing agreements. The recovery was largely offset by FDIC indemnification expenses of $19.0 million recorded in "Non-interest income." During the third quarter of 2017, the Company sold its covered loan portfolio. Accordingly, the Company no longer has any covered loans and related FDIC loss share receivable on its balance sheet.

Non-Interest Income
Non-interest income during the fourth quarter of 2018 was $23.1 million compared to $22.9 million for the third quarter of 2018. The current fourth quarter included a net loss on securities of $1.2 million compared to a net loss of $41,000 in the prior quarter.

For the twelve months ended December 31, 2018, non-interest income fell $125.3 million or 57.8% to $91.6 million compared to $216.9 million for the twelve months ended December 31, 2017. Full year 2017 included items related to the sale of our covered loan portfolio and the sale of our mortgage banking business. This included an $82.0 million gain on the sale of covered loans and mortgage banking operations and $19.0 million of FDIC indemnification expense. Additionally, we recorded $19.3 million of mortgage banking income during the twelve months ended December 31, 2017 and a $29.9 million net gain on securities compared to a net loss of $2.0 million in 2018.

Non-Interest Expense
Total non-interest expense for the fourth quarter of 2018 was $134.9 million, relatively unchanged from the $134.4 million reported in the third quarter of 2018, but down $13.5 million or 9% compared to the fourth quarter of 2017. The year-over-year improvement was driven by a $6.8 million or 8% decrease in compensation and benefits expense and a $7.2 million or 17% decrease in general and administrative expense. The efficiency ratio for the fourth quarter was 49.92%.

Total non-interest expense for the twelve months ended December 31, 2018 was $546.6 million, down $94.8 million or 14.8% compared to the $641.4 million reported for the twelve months ended December 31, 2017. The year-over-year improvement was the result of a $46.2 million or 12.7% decrease in compensation and benefits expense and by a $49.5 million or 27.7% decrease in general and administrative expense. This was driven by the sale of our mortgage banking business and lower regulatory compliance-related costs. The efficiency ratio for full year 2018 increased modestly to 48.70% compared to 47.61% for full year 2017.

Income Taxes
Income tax expense for the three months ended December 31, 2018 totaled $30.9 million, up modestly compared to the $30.0 million reported for the three months ended September 30, 2018 and up $22.5 million or 268% compared to the three months ended December 31, 2017. In the year-ago quarter, the Company recorded a one-time tax benefit of $42.0 million due to the passage of the Tax Cuts and Jobs Act in December of 2017. The effective tax rate for the current fourth quarter was 23.27% compared to 21.95% in the prior quarter and 5.8% compared to the year-ago quarter.

For the twelve months ended December 31, 2018, income tax expense declined $66.8 million or 33.0% to $135.3 million compared to the twelve months ended December 31, 2017. The effective tax rate for full year 2018 was 24.25% compared to 30.23% for full year 2017.

About New York Community Bancorp, Inc.
Based in Westbury, NY, New York Community Bancorp, Inc. is a leading producer of multi-family loans on non-luxury, rent-regulated apartment buildings in New York City, and the parent of New York Community Bank. At December 31, 2018, the Company reported assets of $51.9 billion, loans of $40.2 billion, deposits of $30.8 billion, and stockholders' equity of $6.7 billion.

Reflecting our growth through a series of acquisitions, the Company operates 252 branches through eight local divisions, each with a history of service and strength: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt Savings Bank, and Atlantic Bank in New York; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona.

Post-Earnings Release Conference Call
The Company will host a conference call on Wednesday, January 30, 2019, at 8:30 a.m. (Eastern Time) to discuss its fourth quarter 2018 performance. The conference call may be accessed by dialing (877) 407-8293 (for domestic calls) or (201) 689-8349 (for international calls) and asking for "New York Community Bancorp" or "NYCB." A replay will be available approximately three hours following completion of the call through 11:59 p.m. on February 3, 2019 and may be accessed by calling (877) 660-6853 (domestic) or (201) 612-7415 (international) and providing the following conference ID: 13685972. In addition, the conference call will be webcast at ir.myNYCB.com, and archived through 5:00 p.m. on February 27, 2019.

Cautionary Statements Regarding Forward-Looking Information
This earnings release and the associated conference call may include forward�looking statements by the Company and our authorized officers pertaining to such matters as our goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of probable losses on loans; our assessments of interest rate and other market risks; and our ability to achieve our financial and other strategic goals.

Forward�looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward�looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward�looking statements. Furthermore, because forward�looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.

Our forward�looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios; changes in competitive pressures among financial institutions or from non�financial institutions; our ability to obtain the necessary shareholder and regulatory approvals of any acquisitions we may propose; our ability to successfully integrate any assets, liabilities, customers, systems, and management personnel we may acquire into our operations, and our ability to realize related revenue synergies and cost savings within expected time frames; changes in legislation, regulations, and policies; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control.

More information regarding some of these factors is provided in the Risk Factors section of our Form 10�K for the year ended December 31, 2017 and in other SEC reports we file. Our forward�looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC's website, www.sec.gov.

- Financial Statements and Highlights Follow -