Q2 2024 New York Community Bancorp Inc Earnings Call Transcript
Key Points
- Significant transaction: Sale of mortgage servicing businesses and third-party origination platform to Mr. Cooper, enhancing liquidity and capital ratios.
- Strong deposit growth: Deposits grew by 5.6% in the quarter, driven by both private and retail banking.
- Board transformation: Completed Board transformation with the addition of nine senior executives, enhancing governance and strategic oversight.
- Improved capital ratios: Strategic sales added 130 basis points to CET1 ratio, pro forma CET1 at 11.2%, above peers.
- Positive momentum in C&I franchise: Focus on growing C&I assets to $30 billion to $35 billion in the next three to five years, with experienced hires to drive growth.
- High provision expense: Recorded $390 million in provision expense for the quarter, with expectations of $900 million to $1 billion for the year.
- Increased non-accrual loans: Non-accrual loans rose to just shy of $2 billion, a significant increase from the previous quarter.
- High-cost deposits: The sale of mortgage servicing business will result in the loss of $3.7 billion in high-cost deposits.
- Potential future credit risk: Continued focus on identifying and managing problem loans, with 75% of the CRE portfolio reviewed and 80% of office and multifamily loans reviewed.
- Expense reduction challenges: Targeting $300 million in net cost takeouts, but also facing cost builds in risk infrastructure and C&I growth.
Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. This time, I would like to welcome everyone to the New York Community Bancorp, Inc. second-quarter 2024 earnings conference call.
(Operator Instructions)
I would now like to turn the conference over to Sal DiMartino, Director of Investor Relations. Please go ahead.
Thank you, Regina, and good morning, everyone. Thank you for joining the management team of New York Community Bancorp for today's call.
Our discussion today will be led by Chairman, President, and CEO, Joseph Otting, along with the company's Chief Financial Officer, Craig Gifford. Before the discussion begins, I would like to remind everyone that our press releases and investor presentation can be found on the Investor Relations section of our company website at ir.mynycb.com. Also, certain comments made today by the management team of New York Community may include forward-looking statements within the
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