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New York Community Bancorp Inc. Message Board

  • rfriedpe rfriedpe Jun 18, 2012 1:48 PM Flag

    Can NYB support 8% Div?

    IMO the Bored of Directors are pondering that question NOW!!This bank needs a takeout!

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    • Report summary from Janney Montgomery Scott analyst 6/20/2012

      Dependable through different credit cycles, New York Community’s niche multi-family lending business drives franchise value, rather than its funding base as is typically the case for community banks.

      Spreads related to multi-family loans are under pressure due
      to more unfavorable interest rates, but the company historically does not sacrifice underwriting standards to reach for loan volume. Our analysis suggests, however, that the pickup in mortgage banking income will be sufficient to support management’s commitment to maintain its cash dividend, although the payout ratio remains
      uncomfortably tight.

      Despite this high ratio, we still believe that regulators will not
      ignore their guidelines and force well-capitalized banks with good earnings and few asset quality problems to reduce dividends. We, therefore, reiterate our BUY rating, but trim our 12-month fair value estimate by a dollar to $14, to reflect our reduced 2013 earnings per share estimate.


      • 2 Replies to ralph_sutex
      • They predict an increase to $14. A share price of $14 means a significant percentage increase and with a dividend of 8%, this is a very good investment.

        I own another small regional bank (NKSH) that increased the dividend in June. These small well managed banks are doing just fine.

        Even if the dividend is reduced somewhat, it is still a very nice return.

        Good luck.

      • Mgt has to make the tough
        decision--are we better off
        paying out all our earnings
        as dividends, or should we be
        reinvesting for growth. With interest
        rates set to continue at a very low level, the 1.00 div
        may be impossible to maintain.

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