New York, March 10, 2017 -- Moody's Investors Service affirmed the ratings of New York Community Bancorp,
Inc. and its subsidiaries including New York Community Bank (collectively
NYCB). New York Community Bank has long- and short-term
bank deposit ratings of A2 and Prime-1, respectively.
Moody's also affirmed the bank's standalone baseline credit assessment
(BCA) of baa1 and its Counterparty Risk (CR) Assessment of A3 (cr)/Prime-2
(cr). New York Community Bancorp, Inc. has an issuer
rating of Baa2. Moody's also assigned a Ba1 (hyb) rating
to the holding company's announced noncumulative preferred stock
issuance. NYCB's rating outlook is stable.
Assignments:
..Issuer: New York Community Bancorp, Inc.
....Pref. Stock Shelf, Assigned
(P)Baa3
....Pref. Stock Non-cumulative
Preferred Stock, Assigned Ba1(hyb)
....Pref. Stock Non-cumulative
Shelf, Assigned (P)Ba1
....Subordinate Shelf, Assigned (P)Baa2
....Senior Unsecured Shelf, Assigned
(P)Baa2
Affirmations:
..Issuer: New York Community Bancorp, Inc.
.... Issuer Rating, Affirmed Baa2
..Issuer: New York Community Bank
.... Adjusted Baseline Credit Assessment,
Affirmed baa1
.... Baseline Credit Assessment, Affirmed
baa1
.... Counterparty Risk Assessment, Affirmed
A3(cr)
.... Counterparty Risk Assessment, Affirmed
P-2(cr)
.... Deposit Rating, Affirmed P-1
....Senior Unsecured Deposit Rating,
Affirmed A2
..Issuer: New York Community Capital Trust V
....Pref. Stock Preferred Stock,
Affirmed Baa3(hyb)
Outlook Actions:
..Issuer: New York Community Bancorp, Inc.
....Outlook, Remains Stable
..Issuer: New York Community Bank
....Outlook, Remains Stable
RATINGS RATIONALE
The ratings affirmation was based on NYCB's long-standing
business model, which has been well executed. Over an extended
period of time, the bank has consistently reported low credit losses
and this, in conjunction with relatively good operating efficiency,
has resulted in stable profitability. NYCB's most significant
credit challenge is its large commercial real estate (CRE) concentration,
which is primarily multi-family lending and constitutes the vast
majority of its loans. NYCB's CRE concentration, which
equals over nine times its tangible common equity, is the highest
among US rated banks.
A unique characteristic of NYCB's multifamily lending is that most
loans are collateralized by rent-regulated properties, which
has supported good asset quality performance through economic cycles.
The company's excellent asset quality record in its New York multifamily
lending niche and sound underwriting practices for this asset class helps
mitigate the significant concentration risk. NYCB's annual
net charge-offs peaked at 0.35% in 2011, which
was well below US peers. For the past three calendar years,
it had minimal net charge-offs or net recoveries.
Other key credit challenges for the company are maintaining its risk culture
as NYCB grows and lessening its relatively high reliance on wholesale
funding as compared with US regional bank peers. Moody's
noted that over the last year NYCB management has contained its growth
in response to regulatory thresholds.
The non-cumulative preferred stock rating of Ba1 (hyb) follows
Moody's notching practices under its Loss Given Failure analysis.
This considers NYCB's liability structure and the securities' dividend
deferral features.
WHAT COULD CHANGE THE RATING UP
For NYCB's standalone BCA to get upgraded, it would need to 1) successfully
diversify so as to reduce its commercial real estate exposure without
significantly increasing its asset risk and 2) improve its core funding
to levels comparable with peers.
WHAT COULD CHANGE THE RATING DOWN
Future downward rating pressure on NYCB's standalone BCA would emerge
if there are signals that NYCB's underwriting standards are slipping,
either because of looser internal practices or in response to a more competitive
market. Rapid growth, whether through acquisition or organic,
would also be negative.
The principal methodology used in these ratings was Banks published in
January 2016. Please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the credit rating action on the support provider and in relation to
each particular credit rating action for securities that derive their
credit ratings from the support provider's credit rating.
For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and
in relation to a definitive rating that may be assigned subsequent to
the final issuance of the debt, in each case where the transaction
structure and terms have not changed prior to the assignment of the definitive
rating in a manner that would have affected the rating. For further
information please see the ratings tab on the issuer/entity page for the
respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Rita Sahu
VP - Senior Credit Officer
Financial Institutions Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Robert Young
MD - Financial Institutions
Financial Institutions Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653