The Bank Slate


Two CRE loans lead to NPL spike at New York Community

Issues with two commercial real estate loans caused a spike in nonperforming loans at New York Community Bancorp in Hicksville, N.Y.

The $111 billion-asset company said in a press release that NPLs increased by 68% from a quarter earlier, to $392 million. New York Community noted that NPLs to total loans remains low by historical standards, at 47 basis points.

Still, New York Community joins a growing list of lenders reporting what they consider isolated credit issues. Industry observers are keeping an eye on such disclosures to see if one-off issues become a bigger challenge for the banking industry.

New York Community noted that it had a “significant decline in early-stage delinquencies” compared to the second quarter.

“Our asset quality metrics continue to be among the best in the industry,” Thomas Cangemi, the company’s president and CEO, said in the release. “This reflects our conservative underwriting practices.”

Net income available to common stockholders was half that of a quarter earlier, at $199 million. The second quarter included a $141 million bargain purchase gain after New York Community bought the failed Signature Bank from the Federal Deposit Insurance Corp.

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