New York Community Bancorp’s stock rebounds on bullish outlook for net interest income

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New York Community Bancorp Inc.’s stock moved up premarket Thursday after its largest-ever one-day loss in the previous session, after the bank said it would beat analyst estimates for 2024 net interest income.

New York Community Bancorp’s

stock was up by 2.3% on volume of nearly 300,00 shares.

After the close of trading on Wednesday, New York Community Bancorp said it expects 2024 net interest income of $2.8 billion to $2.9 billion, which is ahead of the FactSet consensus estimate of $2.76 billion.

Net interest income reflects a bank’s profit from loans minus money it pays out in the form of interest for savings accounts.

New York Community Bancorp also expects net interest margin of 2.4% to 2.5%, below the analyst estimate of 2.55%. But its outlook includes actions to increase its balance sheet liquidity and regulatory compliance.

It’s also projecting loans to drop by 3% to 5% in 2024, while its deposits are expected to increase by 3% to 5%.

The bank expects cash and securities to increase by $7.5 billion on a combined basis in 2024.

Crunching the new numbers, Wedbush analyst David J. Chiaverini reiterated his underperform rating on New York Community Bancorp but said its net interest income outlook is above his prior forecast of $2.7 billion.

Wedbush raised its 2024 earnings-per-share estimate for New York Community Bancorp to 80 cents a share from 65 cents a share, “owing mainly to higher average earning asset and net interest income assumptions following the company’s guidance update.”

Wedbush’s underperform rating on New York Community Bancorp is based on the bank’s above-average commercial real estate exposure and the risk posed as these loans mature or reset/reprice at higher rates, he said.

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