NEW YORK COMMUNITY BANCORP, INC. (NYCB)·Q4 2023 Earnings Summary

Executive Summary

• Q4 2023 was a reset quarter: NYCB reported a net loss to common of $260M ($0.36 diluted EPS) driven by a $552M provision to build reserves (office and multifamily repricing risk) and by actions to add on-balance-sheet liquidity for Category IV compliance, compressing NIM to 2.82% .
• Management cut the quarterly common dividend to $0.05 to accelerate CET1 build (target ~10% by YE24) and guided 2024 NIM to 2.40–2.50% as loans shrink 3–5%, deposits grow 3–5%, and cash+securities rise ~$7.5B to meet Reg YY—implying lower near-term earnings power but stronger liquidity/capital .
• NIM undershot prior Q4 guidance (came in 18 bps below) due to liquidity build and higher deposit costs; NII fell to $740M. Reserve coverage rose to 1.17% of loans (1.26% ex. government-guaranteed and warehouse), and office ACL coverage was raised to ~8% portfolio-level, mitigating forward credit risk .
• Analyst Q&A centered on NII transparency and earnings trajectory; shares were indicated around $7 premarket per an analyst on the call, reflecting concern that 2024 earnings could be down materially vs. run-rate implied by the guidance mix .
• 2023 full-year reported EPS was $3.24 including the Signature bargain purchase gain; as adjusted EPS was $0.80, with 4Q loss (as adjusted) of $0.27 reflecting reserve build and FDIC special assessment .

What Went Well and What Went Wrong

• What Went Well

  • Decisive capital/liquidity actions for Category IV readiness: dividend reset to $0.05 and explicit 2024 capital plan target (CET1 ~10%), plus ~$7.5B liquidity build plan; management framed these as prudent foundational steps .
  • Balance sheet diversification continued: commercial loans 46% of LHFI (up from 33% YoY); multifamily down to 44%; C&I grew to $25.3B in Q4 .
  • Clear reserve strengthening: ACL to 1.17% of loans (1.26% ex. government-guaranteed and warehouse), 232% of NPLs; office portfolio ACL coverage lifted to ~800 bps, addressing sector stress .

• What Went Wrong

  • NIM miss vs guidance and sharp compression: Q4 NIM 2.82% (down 45 bps QoQ) and ~18 bps below guide due to accelerated liquidity build and higher deposit costs; NII fell to $740M .
  • Elevated credit costs and NCOs: $552M provision and $185M net charge-offs, driven by two credits (co-op loan moved to HFS; additional office loan charge), producing a Q4 net loss .
  • Investor confidence hit by limited NII quantification: Analysts pressed for explicit 2024 NII; management declined to give a number. One analyst cited the stock at ~25-year lows premarket amid fears of ~40% earnings decline implied by guidance mix .

Financial Results

Segment/Portfolio Mix

Key KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are taking decisive actions to build capital, strengthen our balance sheet and risk management processes… We are also accelerating our capital build by reducing our common stock dividend to $0.05 per share.” — CEO Thomas Cangemi .
• “The fourth quarter net interest margin came in at 2.82%… 18 basis points lower than our guide… largely due to actions related to increase our on-balance sheet liquidity and higher deposit costs.” — Management .
• “We significantly built our reserve levels by recording a $552 million provision… bringing our ACL coverage more in line with… Category IV banks.” — CEO .
• “On the office [portfolio]… [coverage is] 800 basis points… we’re comfortable with where that is.” — CFO John Pinto .
• “We expect our CET1… to be at 10% by year-end 2024.” — Management .

Q&A Highlights

• NII/NIM transparency: Analysts asked for explicit 2024 NII; management reiterated NIM guide (2.40–2.50%) and balance sheet actions but did not quantify NII, prompting concern about earnings down ~40% implied by inputs; one analyst cited stock near $7 premarket .
• Credit provisioning: Management said Q4 reserve build captures emerging risks (office and multifamily repricing); do not expect 2024 provisions anywhere near 2H23 levels absent macro deterioration .
• Capital path: Dividend cut and RWA reduction (loan shrink, cash/HQLA build) to drive CET1 to ~10% by YE24; goodwill impairment under evaluation but would not impact regulatory capital .
• Liquidity and deposit mix: Brokered CDs rose ~$1B; retail raised ~$2B CDs (mostly new-to-bank), targeting conversion to DDAs; uninsured deposits ~32.7% (not predominantly institutional) .
• Office/multifamily details: Office ACL coverage ~8%; multifamily reserve coverage increased (42 bps to 82 bps QoQ in that category); watch-list driven by repricing risk more than current delinquencies .

Estimates Context

• S&P Global consensus estimates could not be retrieved due to a data mapping error for NYCB (SPGI/CIQ identifier unavailable in the tool). As a result, we cannot present authoritative Wall Street EPS/revenue consensus for Q4 2023 or Q3 2023. We note that management stated Q3 2023 EPS (as adjusted) was $0.02 above consensus, but we cannot independently verify via S&P Global in this report .
• Where “vs. estimates” comparisons would normally appear, we show “N/A” and rely on qualitative guidance commentary.

Key Takeaways for Investors

• Balance sheet first: The dividend cut, liquidity build, and RWA reduction are deliberate to meet Category IV standards; near-term earnings are sacrificed to fortify capital/liquidity with CET1 ~10% targeted by YE24 .
• Expect margin pressure through 2024: Management’s NIM guide (2.40–2.50%) embeds cash/HQLA build and loan shrink; deposit costs and competitive CDs also weigh. NIM under-shot Q4 guidance, reflecting the speed of liquidity actions .
• Credit is being pre-emptively addressed: A large Q4 provision raised ACL to 1.17% of loans (1.26% ex. gov’t/warehouse); office-specific coverage (~8%) and two disclosed NCOs provide transparency on pain points .
• Deposit engines intact: Private banking and retail/warehouse ecosystems are expected to drive 3–5% deposit growth in 2024; conversion of CD inflows to operating/DDAs is a lever to improve funding mix over time .
• Watch the pivot from low-coupon multifamily: As repricings accelerate and activity resumes, non-relationship loans may migrate off-balance sheet; strategy prioritizes relationship lending with deposits attached, supporting longer-term ROE normalization .
• Execution risks remain: Rebuilding NIM after liquidity normalization, managing criticized assets through repricing, and retaining/growing low-cost deposits are critical to restoring earnings power.
• Trading lens: The quarter’s surprise NIM shortfall and dividend cut are near-term stock overhangs, but they de-risk capital and liquidity heading into stress testing; trajectory updates on NIM, deposit remix, and credit should be near-term catalysts.

Additional Press Releases (Q4 2023)

• The earnings 8‑K included the dividend declaration and full release; no separate stand-alone press releases were listed for the period in our document set .

Prior Two Quarters’ Reference (for trend)

• Q3 2023: EPS $0.27 (as adjusted $0.36); NIM 3.27%; NII $882M; deposits $82.7B; provision $62M; emerging office NPLs .
• Q2 2023: EPS $0.55 (as adjusted $0.47); NIM 3.21%; NII $900M; deposits $88.5B; provision $49M; custodial deposits boosted NIM temporarily .

Notes: All figures are as reported in company filings and transcripts. Estimates comparisons to Wall Street consensus are “N/A” due to S&P Global data unavailability for this ticker in our tool at the time of analysis.