On Friday, it was New York Community Bancorp's (NYSE: NYCB) turn to present its third-quarter financial results. This was met with a fairly sharp and negative reaction from the market, which wasted little time in selling off the stock to the point where it closed more than 8% lower. That was notably worse than the essentially flat performance of the bellwether S&P 500 index on the day.
Deep in the red
For the quarter, New York Community Bancorp saw its revenue fall 7% year over year to $623 million. That was on the back of a 5% slide in total loans and leases, and, heading in the other direction, 5% growth in deposits. As for the bottom line, the bank posted a generally accepted accounting principles (GAAP) loss of $280 million, or $0.79 per share. That was in sharp contrast to the Q3 2023 profit of $207 million.
Citing data compiled by S&P, American Banker said that analysts were collectively expecting only a $141 million loss for the period.
New York Community Bancorp is a major lender for real estate projects in its namesake city. Weakness in that market has badly affected the lender, which continues to provision heavily against real estate loan losses. The company's overall provisioning reached $242 million for the quarter against only $62 million in the year-ago period.
Hello, Flagstar Financial
New York Community Bancorp is in the process of renaming itself; one likely reason is to help put its recently troubled past behind it. The company will be known as Flagstar Financial, and its stock will begin trading under a new ticker symbol (FLG) starting at 5 p.m. ET on Friday.
This is symbolic of the bank it would like to be -- a more diversified lender less dependent on a real estate market that can be volatile. Until it proves that it can successfully morph into such a business, though, I personally would stay on the sidelines with its stock.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
