New York Community Bancorp downgraded to Underperform at Raymond James

Raymond James downgraded New York Community Bancorp to Underperform from Market Perform with a fair value estimate of $3. The bank’s credit costs are likely to impair earnings for the next several years, as incremental disclosures in its annual filing suggest that several years of earnings will be needed to support the balance sheet remix, the analyst tells investors in a research note. The firm says that while the $1.05B equity raise brought New York Community’s CET1 ratio in-line with peers and bought the bank time to work through its credit issues, the filing confirmed its suspicion that the bank’s interest-only, rent-regulated multi-family exposure is significant at $7B. Raymond James believes New York Community’s tangible book value growth will likely be a challenge at best for the next several years.