New York Community Bancorp (NYSE: NYCB) stock soared about 30% in intraday trading Wednesday. The surge comes after the bank provided a better-than-expected profit forecast for the next two years. In addition, it revealed plans to sell $5 billion in assets.
Despite posting a first-quarter loss, New York Community Bancorp (NYCB) delivered a far better-than-expected profit outlook for 2025 and 2026. The bank anticipates earnings per share (EPS) between 35 and 40 cents for 2025, surpassing the average estimate of 28 cents, as per LSEG data. Moreover, it expects EPS for 2026 to range between 50 and 60 cents, well above estimates of 36 cents.
The upbeat forecast instilled confidence in the bank, which has grappled with a tumultuous start to the year, marked by a 70% decline in its shares since January following a dividend cut and a surprising loss attributed to its exposure to commercial real estate loans.
CEO Confidence and Strategic Roadmap
The newly appointed CEO Joseph Otting expressed confidence in the bank’s trajectory, saying,
“We have a clear path to profitability over the following two years.”
Otting also outlined the bank’s strategic roadmap for the coming years. He highlighted the diversification of NYCB’s loan portfolio as a key objective for the medium term, signaling the bank’s intention to reduce its exposure to the commercial real estate sector. NYCB disclosed plans to sell approximately $5 billion worth of assets in the near term, reflecting its proactive approach to optimizing its balance sheet and enhancing operational efficiency.
The bank aims to reduce its loans to the commercial real estate sector to around $30 billion from nearly $47 billion as of March-end. This strategic shift aims to mitigate risks from expensive borrowing and low occupancy in commercial real estate. In addition, NYCB plans to expand its presence in the commercial and industrial lending space, addressing investor concerns regarding its heavy exposure to rent-regulated multi-family properties and office buildings in New York.
New York Community Bancorp (NYSE: NYCB) reported a first-quarter loss of $327 million, or 45 cents per share, compared to a profit of $2.01 billion, or $2.87 per share, in the same period last year. The net loss was attributed, in part, to increased provisions set aside for future loan losses, which rose to $315 million from $170 million in the year-ago period.
New York Community Bancorp (NYSE: NYCB) Stock Movement
NYCB stock surged 28.30% to close at $3.40 on Wednesday. Its value has risen by 11.11% this week. Trading activity has witnessed 94,590,234 (94.59 million) shares changing hands, well above the average daily volume of 42.23 million.
Zabih Ullah is a seasoned finance writer with more than ten years of experience. He is highly skilled at analyzing market trends, decoding economic data, and providing insightful commentary on various financial topics. Driven by his curiosity, Zabih stays updated with the latest developments in the finance industry, ensuring that his readers receive timely and relevant news and analysis.
