 Fourth
Quarter 2016 Investor Presentation
Exhibit 99.1 |
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2 Cautionary Statements
Forward-Looking Information Our Supplemental Use of Non-GAAP Financial Measures
This presentation may contain certain non-GAAP
financial measures which management believes to be useful to investors in understanding the Company’s performance and financial condition, and in comparing our performance and financial condition with those of other
banks. Such non-GAAP financial measures are
supplemental to, and are not to be considered in isolation or as a substitute for, measures calculated in accordance with GAAP. This presentation may include forward-looking statements by the Company and our
authorized officers pertaining to such matters as our goals,
intentions, and expectations regarding revenues, earnings, loan production,
asset quality, capital levels, and acquisitions, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of probable losses on loans; our assessments of
interest rate and other market risks; and our ability to achieve
our financial and other strategic goals. Forward-looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,”
“forecast,” “project,” and other similar words
and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward-looking statements speak only as of the date they are made; the
Company does not assume any duty, and does not undertake, to
update our forward-looking statements. Furthermore, because forward-looking statements are subject to assumptions and
uncertainties, actual results or future events could differ, possibly
materially, from those anticipated in our statements, and our future
performance could differ materially from our historical results.
Our
forward-looking statements are subject to the following principal risks and uncertainties: general economic conditions and trends, either
nationally or locally; conditions in the securities markets; changes in interest
rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or
investment portfolios; changes in competitive pressures among
financial institutions or from non-financial institutions; our ability to obtain the necessary shareholder and regulatory approvals of any acquisitions we may propose, our ability to successfully integrate any assets,
liabilities, customers, systems, and management personnel we may
acquire into our operations, and our ability to realize related revenue synergies and cost savings within expected time frames; changes in legislation, regulations, and policies; and a variety of other matters which, by their
nature, are subject to significant uncertainties and/or are beyond
our control. More information regarding some of these
factors is provided in the Risk Factors section of our Form 10-K for the year ended December 31, 2015, our Form 10-Q for the three months ended September 30, 2016, and in other SEC reports we file. Our forward-looking statements may also be subject to other risks and uncertainties, including those we may discuss in this presentation, or in our SEC filings, which are accessible
on our website and at the SEC’s website, www.sec.gov.
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3 ASSETS
DEPOSITS
MULTI-FAMILY
LOANS
MARKET
CAP
TOTAL
RETURN
ON INVESTMENT $48.9 billion $28.9 billion $26.7 billion $7.7 billion 4,784% With assets of $48.9 billion at
12/31/16, we are the 22nd largest U.S. bank holding company. With deposits of $28.9 billion and
255 branches in Metro New York, New Jersey, Ohio, Florida, and Arizona at 12/31/16, we rank 27th among the nation’s largest depositories. With a portfolio of $26.7 billion at
the end of December, we are a leading producer of multi-family loans in New York City. With a market cap of $7.7 billion
at 12/31/16, we rank 23rd among the nation’s publicly traded banks and thrifts. From 11/23/93 through 12/31/16, we provided our charter investors with a total return on investment of 4,784%.
(a) We rank among the largest U.S. bank holding companies. (a) Bloomberg Note: Except as otherwise indicated, all industry data was provided by SNL Financial as of 2/1/17. |
 OUR
BUSINESS
MODEL |
 STRATEGIC
LOAN
PRODUCTION |
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6 $18,605
$20,714 $23,849 $25,989 $26,961 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 PORTFOLIO STATISTICS AT OR FOR THE 12 MOS. ENDED
12/31/16 % of non-covered loans held for investment = 72.1% Average principal balance = $5.5 million Weighted average life = 2.9 years % of our multi-family loans located in Metro New York = 77.6% % of HFI loan originations = 61.9% MULTI-FAMILY
LOAN
PORTFOLIO
(in millions) Originations: $5,791 $7,417 $7,584 $9,214 $5,685 NCOs*: $26 $11 $(0) $(4) $(0) The vast majority of our multi-family loans are collateralized by non-luxury buildings in NYC with rent-regulated units. * Net charge-offs |
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7 Of the loans in our portfolio that are collateralized by
multi-family buildings in the five boroughs of New York City, 88%
are collateralized by buildings with rent- regulated units featuring
below-market rents. Rent-regulated
buildings are more likely to retain their tenants – and, therefore, their revenue stream – in downward credit cycles. Together with our conservative underwriting standards, our focus on multi-family
lending in this niche market has resulted in our record of superior asset quality. Over the course of our public life, losses on multi-family loans have amounted to a
mere $145.5 million, representing 0.20% of all the multi-family loans we have
originated since 1993.
Multi-family loans are less costly to produce and service than other types of
loans, and
therefore contribute to our superior efficiency.
The way we lend in this market niche has distinguished our
performance from that of other producers of multi-family loans.
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8 $7,436
$7,366 $7,637 $7,860 $7,727 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 COMMERCIAL REAL ESTATE LOAN PORTFOLIO (in millions) Originations: $2,401 $2,168 $1,661 $1,842 $1,180 NCOs: $5 $0 $1 $(1) $(1) Commercial real estate lending has been a logical extension of our emphasis on multi-family loans. PORTFOLIO STATISTICS AT OR FOR THE 12 MOS. ENDED
12/31/16 % of non-covered loans held for investment = 20.7% Average principal balance = $5.6 million Weighted average life = 3.4 years % of our CRE loans located in Metro New York = 90.1% % of HFI loan originations = 12.9% |
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9 $172 $635 $895 $1,286 12/31/13 12/31/14 12/31/15 12/31/16 SPECIALTY FINANCE LOAN AND LEASE PORTFOLIO (in millions) Originations: $258 $848 $1,068 $1,266 Charge-offs: $0 $0 $0 $0 The launch of our specialty finance business provided us with another lending niche of high quality. LOAN TYPES Syndicated asset-based (ABLs) and dealer floor-plan (DFPLs) loans Equipment loan and lease financing (EF) CLIENT CHARACTERISTICS Large corporate obligors Investment grade or near-investment grade ratings Mostly publicly traded Participants in stable, nationwide industries PRICING Floating rates tied to LIBOR (ABLs and DFPLs) Fixed rates at a spread over treasuries (EF) RISK-AVERSE
CREDIT
& UNDERWRITING STANDARDS We require a perfected first-security interest in or outright ownership of the underlying collateral Loans are structured as senior debt or as non- cancellable leases Transactions are re-underwritten in-house Underlying documentation reviewed by counsel |
 ASSET
QUALITY |
 2.91% 4.00% 4.05% 3.41% 2.35% 1.46% 2.48% 2.10% 2.83% 1.51% 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 (a) Non-performing loans and total loans exclude covered loans and non-covered purchased credit-impaired (“PCI”) loans.
(b) Non-performing loans are defined as non-accrual loans and loans 90 days or more past due but still accruing interest.
Our record of asset quality in downward credit cycles has
consistently distinguished us from our industry peers.
S & L CRISIS
GREAT
RECESSION
CURRENT
CREDIT
CYCLE
1.11%
2.71%
4.17%
3.56%
0.11%
0.51%
2.47%
2.63%
12/31/07
12/31/08
12/31/09
12/31/10
2.60%
2.22%
1.66%
1.26%
1.07%
0.77%
1.28%
0.96%
0.35%
0.23%
0.13%
0.15%
12/31/11
12/31/12
12/31/13
12/31/14
12/31/15
12/31/16
Average NPLs/Total Loans
NYCB: 2.08% SNL U.S. Bank and Thrift Index: 3.34% Average NPLs/Total Loans NYCB: 1.43% SNL U.S. Bank and Thrift Index: 2.89% Average NPLs/Total Loans NYCB: 0.52% SNL U.S. Bank and Thrift Index: 1.60% NON-PERFORMING
LOANS
(a)(b) / TOTAL LOANS (a) SNL U.S. Bank and Thrift Index NYCB Page 11 |
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12 S & L CRISIS
0.68%
1.63%
2.83%
2.89%
0.00%
0.03%
0.13%
0.21%
2007 2008 2009 2010 Few of our non-performing loans have resulted in actual losses. SNL U.S. Bank and Thrift Index NYCB GREAT RECESSION CURRENT CREDIT CYCLE NET
CHARGE-OFFS
/ AVERAGE
LOANS 0.54% 1.28% 1.50% 1.17% 0.91% 0.00% 0.00% 0.04% 0.07% 0.06% 1989 1990 1991 1992 1993 5-Year Total NYCB: 17 bp SNL U.S. Bank and Thrift Index: 540 bp 4-Year Total NYCB: 37 bp SNL U.S. Bank and Thrift Index: 803 bp 6-Year Total NYCB: 52 bp SNL U.S. Bank and Thrift Index: 517 bp 1.77% 1.24% 0.76% 0.53% 0.46% 0.41% 0.35% 0.13% 0.05% 0.01% 2011 2012 2013 2014 2015 2016 (0.02)% 0.00% |
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13 CONSERVATIVE
UNDERWRITING
Conservative loan-to-value ratios
Conservative debt service coverage ratios: 120% for multi-family loans and 130%
for CRE loans
Multi-family and CRE loans are based on the lower of economic or market
value. ACTIVE
BOARD
INVOLVEMENT
All loans originated for portfolio are presented to the Mortgage or Credit Committee
of the Community Bank Board or Commercial Bank Board.
A member of the Mortgage or Credit Committee participates in inspections on
multi-family loans in excess of $7.5 million, and CRE and ADC loans
in excess of $4.0 million. All loans of $20 million or more originated by
the Community Bank and all loans of $10 million or more
originated by the Commercial Bank are reported to the Board.
MULTIPLE
APPRAISALS
All properties are appraised by independent appraisers.
All independent appraisals are reviewed by in-house appraisal
officers. A second independent appraisal review is performed on loans
that are large and complex. RISK-AVERSE
MIX
OF NON-COVERED
LOANS
HELD
FOR INVESTMENT Multi-family: 72.1% CRE: 20.7% One-to-Four Family: 1.0% ADC: 1.0% Commercial & Industrial: 5.1% The quality of our assets reflects the nature of our lending niche and our strong underwriting standards. (AT 12/31/16) |
 EFFICIENCY |
 60.58% 44.53% 2016 EFFICIENCY RATIO (a) Efficiency has been another hallmark of the Company. HISTORICAL DRIVERS OF OUR EFFICIENCY Multi-family and CRE lending are both broker-driven, with the borrower paying fees to the mortgage brokerage firm. Products and services are typically developed by third-party providers; their sales are a complementary source of revenues. Franchise expansion has largely stemmed from mergers and acquisitions; we rarely engage in de novo branch development. Most of our deposits have been acquired through earnings-accretive acquisitions. SNL U.S. Bank and Thrift Index NYCB (a) We calculate our efficiency ratio by dividing our operating expenses by the sum of our net interest income and our non-interest
income. Page 15 |
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16 36% 45% 2010 2016 NYCB EFFICIENCY RATIO PRIOR TO AND SINCE DODD-FRANK
SIFI COMPLIANCE
Key infrastructure investments to date include:
— Enhanced ERM and corporate governance frameworks — Bottom-up capital planning and stress testing capabilities — Substantial expansion of regulatory compliance staff Depending on when we cross the SIFI threshold, the cost of SIFI compliance may reflect: — Further investment in our IT infrastructure and personnel — Preparations for CCAR reporting in 2018 or 2019 — Development of a living will for 2018 or 2019 PREPARING FOR SIFI STATUS Following enactment of the Dodd-Frank Act, we began allocating significant resources
towards SIFI preparedness.
The degree to which we have already leveraged the cost of SIFI compliance is reflected
in the ~ 900-basis point increase in our efficiency ratio since the
enactment of Dodd-Frank. Our efficiency ratio has increased significantly
since the enactment of Dodd-Frank. |
 RESIDENTIAL
MORTGAGE
BANKING |
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18 FEATURES
Loan production is driven by our proprietary real time, web-
accessible mortgage banking technology platform, which securely controls the lending process while mitigating business and regulatory risks. Approximately 900 approved clients include community banks, credit unions, mortgage companies, and mortgage brokers. 100% of loans funded are full documentation, prime credit loans. At 12/31/2016, loans serviced for GSEs totaled $21.2 billion. CREDIT QUALITY As of 12/31/2016, 99.7% of all funded loans were current. LIMITED REPURCHASE RISK Of the $47.0 billion of 1-4 family loans sold to GSEs since 2010 – when we launched our mortgage banking business – only 28 loans totaling $7.9 million (0.017%) have been repurchased. We are a nationwide producer of 1-4 family loans. |
 GROWTH
THROUGH
ACQUISITIONS |
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20 Transaction Type:
Savings Bank Commercial Bank Branch FDIC Deposit 1. Nov. 2000 Haven Bancorp (HAVN) Assets: $2.7 billion Deposits: $2.1 billion Branches: 25 2. July 2001 Richmond County Financial Corp. (RCBK) Assets: $3.7 billion Deposits: $2.5 billion Branches: 24
3. Oct. 2003
Roslyn Bancorp, Inc. (RSLN) Assets: $10.4 billion Deposits: $5.9 billion Branches: 38
4. Dec. 2005
Long Island Financial Corp. (LICB) Assets: $562 million Deposits: $434 million Branches: 9
5. April 2006
Atlantic Bank of New York (ABNY) Assets: $2.8 billion Deposits: $1.8 billion Branches: 14 6. April 2007 PennFed Financial Services, Inc. (PFSB) Assets: $2.3 billion Deposits: $1.6 billion Branches: 21 7. July 2007 NYC branch network of Doral Bank, FSB (Doral- NYC) Assets: $485 million Deposits: $370 million Branches: 11
8. Oct. 2007
Synergy Financial Group, Inc. (SYNF) Assets: $892 million Deposits: $564 million Branches: 16 9. Dec. 2009 AmTrust Bank Assets: $11.0 billion Deposits: $8.2 billion Branches: 64
10. March 2010
Desert Hills Bank Assets: $452 million Deposits: $375 million Branches: 3
11. June 2012
Aurora Bank FSB Assets: None Deposits: $2.2 billion Branches: 0
Payment Received: $24.0 million We have a long history of earnings-accretive transactions. The number of branches indicated for our transactions is the number of branches in our current franchise that stemmed from each.
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 2016
PERFORMANCE
HIGHLIGHTS |
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22 (dollars in thousands, except per share data)
4Q 2016 FY 2016 Strong Profitability Measures: Earnings $113,733 $495,501 EPS $0.23 $1.01 Return on average assets 0.92% 1.00% Return on average stockholders’ equity 7.43 8.19 Return on average tangible assets (a) 0.97 1.06 Return on average tangible stockholders’ equity (a) 12.36 13.75 Net interest margin 2.86 2.93 Efficiency ratio 47.20 44.53 Income Statement Highlights (a) ROTA and ROTE are non-GAAP financial measures. Please see page 29 for a discussion and reconciliation of these measures to our ROA and
ROE. |
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23 COMPANY
CAPITAL
12/31/16 Stockholders’ equity / total assets 12.52% Common equity tier 1 capital ratio 10.62 Tier 1 risk-based capital ratio 10.62 Total risk-based capital ratio 12.12 Leverage capital ratio 8.00 BANK CAPITAL 12/31/16 The Community Bank: Common equity tier 1 capital ratio 11.23% Leverage capital ratio 8.45 The Commercial Bank: Common equity tier 1 capital ratio 14.14% Leverage capital ratio 10.53 BALANCE SHEET 12/31/16 Loans, net / total assets 80.3% Securities / total assets 7.8 Deposits / total assets 59.0 Wholesale borrowings / total assets 27.2 ASSET QUALITY At or for the Three Months Ended 12/31/16 Non-performing loans (a) / total loans (a) 0.15% Non-performing assets (b) / total assets (b) 0.14 Net charge-offs / average loans (non- annualized) 0.00 Balance Sheet Highlights (a) Non-performing loans and total loans exclude covered loans and non-covered PCI loans.
(b) Non-performing assets and total assets exclude covered loans, covered OREO, and non-covered PCI loans.
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24 TOTAL
HFI LOANS: $39.1
BN
AVERAGE
YIELD
ON LOANS: 3.77% TOTAL DEPOSITS: $28.9 BN
AVERAGE
COST
OF INTEREST-BEARING
DEPOSITS: 0.65%
LOANS
AT 12/31/16 DEPOSITS AT 12/31/16 Loans and Deposits Multi- Family 69% CRE 20% ADC 1% C&I 5% 1-4 Family (Non- covered) 1% Covered Loans 4% Other 0% NOW and MMA 47% Savings 18% CDs 26% Non- Interest- Bearing 9% |
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25 STRATEGIC
ASSET
MANAGEMENT
Total Assets at 9/30/14: $48.7 Billion Reduced securities by $3.7 billion through a combination of repayments, sales, and calls Sold loans of $4.3 billion: $2.6 billion of multi-family loans (largely through participations) $988.7 million of CRE loans (largely through participations) $631.3 million of 1–4 family loans $3.4 million of ADC loans Other net reductions of $12.1 billion (including loan satisfactions and refinancings) Total Assets at 12/31/16: $48.9 Billion Originated $16.8 billion of multi-family loans Originated $3.4 billion of CRE loans Result: A $247,000 increase in total assets from 9/30/14 – 12/31/16. Since 4Q 2014, we have been managing our assets below the current SIFI threshold. |
 The
cash-on-cash return on shares purchased by our charter investors was
1,607% as of 12/31/16. (a)
CASH-ON-
(a) To calculate cash-on-cash return, we divide the cumulative amount of dividends paid each year by the amount invested at the
time of our IPO on 11/23/93.
0% 1% 2% 9% 20% 38% 65% 92% 125% 171% 242% 346% 454% 562% 670% 778% 886% 994% 1102% 1210% 1318% 1426% 1534% 1607% Page 26 CASH
RETURN |
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27 2/1/17
VISIT
OUR WEBSITE : ir.myNYCB.com E-MAIL REQUESTS TO : ir@myNYCB.com CALL INVESTOR RELATIONS AT : (516) 683-4420 WRITE TO : Investor Relations New York Community Bancorp, Inc. 615 Merrick Avenue Westbury, NY 11590 For More Information |
 APPENDIX |
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29 While average stockholders’ equity, average assets, return on average assets, and return on average stockholders’ equity are financial measures that are recorded in accordance with U.S. generally accepted accounting principles ("GAAP"), average tangible stockholders’ equity, average tangible assets, return on average
tangible assets, and return on average tangible stockholders’ equity
are not. Nevertheless, it is management’s belief that these non-GAAP measures should be disclosed in our SEC filings, earnings releases, and other investor communications, for the following reasons: 1. Average tangible stockholders’ equity is an important indication of the Company’s ability to grow organically and through business
combinations, as well as our ability to pay dividends and to engage in
various capital management strategies. 2.
Returns on average tangible assets and average tangible stockholders’ equity are
among the profitability measures considered by current and prospective investors, both independent of, and in comparison with, our peers. We calculate average tangible stockholders’ equity by subtracting from average stockholders’ equity the sum of our average goodwill and
core deposit intangibles (“CDI”), and calculate average
tangible assets by subtracting the same sum from our average assets.
Average tangible stockholders’ equity, average tangible assets, and the related
non-GAAP profitability measures should not be considered in isolation or as a substitute for average stockholders’ equity, average assets, or any other profitability or capital measure calculated in accordance with GAAP. Moreover, the
manner in which we calculate these non-GAAP measures may differ from
that of other companies reporting non-GAAP measures with similar names. The following table presents reconciliations of our average stockholders’ equity and average tangible stockholders’ equity, our average assets and average tangible assets, and the related GAAP and non-GAAP profitability measures for the three and twelve months ended December 31, 2016:
(1) To calculate our returns on average assets and average stockholders’ equity for a period, we divide the net income generated during that period by the average assets and the average stockholders’ equity recorded during that time. (2) To calculate our returns on average tangible assets and average tangible stockholders’ equity for a period, we adjust the net income generated during that period by adding back the amortization of CDI, net of tax, and then divide that adjusted net income by the average tangible assets and the average tangible stockholders’ equity recorded during that
time. Reconciliations of GAAP and Non-GAAP Measures
(dollars in thousands)
For the Three Months Ended For the Twelve Months Ended December 31, 2016 Average stockholders’ equity $ 6,123,550 $ 6,052,051 Less: Average goodwill and core deposit intangibles (2,436,559) (2,437,433) Average tangible stockholders’ equity $ 3,686,991 $ 3,614,618 Average assets $49,388,513 $49,299,601 Less: Average goodwill and core deposit intangibles (2,436,559) (2,437,433) Average tangible assets $46,951,954 $46,862,168 Net income (1) $113,733 $495,401 Add back: Amortization of core deposit intangibles, net of tax 238 1,435 Adjusted net income (2) $113,971 $496,836 GAAP: Return on average assets 0.92% 1.00% Return on average stockholders’ equity 7.43 8.19 Non-GAAP: Return on average tangible assets 0.97 1.06 Return on average tangible stockholders’ equity 12.36 13.75 December 31, 2016 |