Company Overview: New York Community Bancorp, Inc. (NYSE: NYCB) is the holding company of New York Community Bank holding company, a New York-based state-chartered savings bank that operates 236 branches. Out of which 19 operate directly under Community Bank, the remaining 217 operate through eight divisional banks. It provides loan and deposit products and other related financial services to individuals and businesses.
Key Takeaways from FY21 (ended December 31, 2021)
Revenue & Net Income Key Highlights; Analysis by Kalkine Group
Balance Sheet & Liquidity Position
Key Metrics: In FY21, NYCB's Net Interest Margin and Loan Growth were 2.47% and 6.7%, higher than previous FY of 2.24% and 2.3%, respectively. Nonperforming Loans stood at 0.28%, 10 bps less than the FY21. Deposit growth was 8.1% as of FY21, higher than 2.5% on December 31, 2020.
Growth Metrics; Analysis by Kalkine Group
Top 10 Shareholders: The top 10 shareholders together form around 33.61% of the total shareholding, while the top 4 constitute the maximum holding. BlackRock Institutional Trust Company, N.A. and The Vanguard Group, Inc. hold the maximum stake in the company at 9.90% and 9.29%, respectively, as also highlighted in the chart below:
Top 10 Shareholders; Analysis by Kalkine Group
Valuation Methodology: Price/Earnings Per Share Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: NYCB’s share price has corrected 28.19% over the past six months. The stock is currently leaning towards the lower band of its 52-week range of USD 9.86 to USD 14.33. We have valued the stock using the Price/Earnings multiple-based illustrative relative valuation method and arrived at a target price with an upside of mid-twenties (in percentage terms). We believe that the company can trade at a premium compared to its peer's average, considering its growth in loans and deposits, improvement in net interest income, and industry below nonperforming loans. We have taken peers like Customers Bancorp Inc (NYSE: CUBI.PRE) and Patrick Industries, Inc. (NYSE: WAL.PRA). Considering the solid financial performance, growth in Net interest margin, associated risks, and current valuation, we give a "Buy" recommendation on the stock at the current price of USD 9.91, up 0.15% as of April 13, 2022, 07:36 AM PDT.
NYCB Technical Chart, Data Source: REFINITIV
Technical Indicators Defined
Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decision should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
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