Feb 27,2009 Stress Testing Reserve
INVESTMENT CONCLUSION:New York Community Bancorp is a pofitable thrift. Asset quality at New York Community is superior to that of mouch of the industry due to its rent-controlled multi-family lending concentration along with prudent underwriting practices. The company, moreover, is an experienced acquirer and one of the few institutions with the capacity to take advantage of potential opportunities.New York Community has long pursued a strategy to purchase deposits versus establishing de novo branches. Management remains committed to its lofty dividend despite the relatively high payout ratio, but we faver a dividend cut given the desirability of higher capital ratios and the opportunity to use such capital to further support multi-family loan growth. We maintain our BUY rating and 12-month fair value estimate of $14.
At a current price of $10.44, the stock trades at a price-to-earnings multiple of approximately 9.5 times our 2009 earnings of $1.10 per share, which is a 25% discount to its peers.
A lot of rent stabilized properties were bought with the intent to decontrol the apartments to market rate. Much of this was successful, some wasn't. It's bad news in both scenarios. If the apartments were decontrolled, they're now market rate and subject to a higher potential vacancy rate. If they weren't decontrolled, in all likelihood the building is not meeting its income objectives under the purchase assumptions. I can't see how any of this is good news. Storefronts will likely be vacant for years. In most cases half or more of the income of a building is tied to the storefront.
NYB has short term (5 year loans) that are coming up for refi in the next few years under a scenario of lower rents, vacant commercial spaces, and higher vacancy rates. Not a pretty picture.
true the ones with stores in front are having trouble
some but not all are closing and not getting refilled
as fast as they used have seen some empty for 1 years time
i guess store fronts are the first to go empty
nyc housing is still very tight so a rent controlled apt can get rented esp if marked down 10% rental shortage here
but the store fronts not as easy
Commercial spaces in mixed use buildings are going vacant, and the pace is accelerating. Vacant spaces are not renting, even at lower rents. These are the so called mixed use properties that NYB loans on. Good luck longs.
i know a local food merchant who getting his rent lowered by the landlord several other business have closed their doors on the block
how much he will be able to lower his rent ?
perhaps 10% perhaps as much as 25% i do not know
a little belt tightening wont hurt banks much
a lot will hurt them in a big way
i do wonder of landlords just cut price by 20%
might be a good way to hang on in these tough times
i do not see stores getting re rented at all
once someone leaves seems to stay unrented
id keep the people in by lowering rent now to provide steady flow of reduced cash flow
I'm posting facts, why do you feel the need for personal attacks. Anyone here who has been long has lost money on this stock. I am trying to post facts to help people understand if they are long they should sell in order not to lose more money. Or do you hate money?
Risk is clearly to the downside, who knows how low? Market has given NYB a pass to date. Once the NYC real estate market starts to really take it on the chin, the second largest thrift in the country, which happens to be located in NYC, will find the market will not be so kind. All these longs that think 9 dollars is "cheap" will have another think coming.
Where can I access this article from Janney Montgomery Scott, on NYB?
What do you make of this sell-off in NYB stock? I could see if all of the better community banks were selling off, but I see thst PBCT and VLY are performing well today. It is kind of depressing. NYB appears to be a great fundamental story and yet, the stock price does not respon. I am not giving up the ship but need to express my frustration.
Koleff, as you may understand i don't like to post to mouch personal info, but you have been a gentleman so i will give you what i can. my system shows heavy short volume increase when the GE news came out. You can see what I mean on a intraday chart. The sellers just leaned on us hard. For 1, they took advantage of the GE news and 2,this government is no friend to the market "bad legislation Ext.And 3, Its a friday so if you can, you squeeze harder. Why? because people-mom and pop read the paper on the weekend and it gives these people time to think. Remember what i said in the past ? "Perseption" Try to instill an element of doubt, "what do they know that we don't ?." And the answar in nothing. GLTA
Koleff,I understand. most of the things i post are mostly sent to institutional investors,If you can figure out a way to get me your email safely I would be more then happy to get this report to you.
In the meantime i will do my best to type this stuff without to many type Os. PS I HATE TYPING!