4 Banks With Growing Revenue

New York Community Bancorp

New York Community Bancorp (NYB) hit a home run with its fourth-quarter 2009 purchase of the failed AmTrust Bank of Cleveland from the Federal Deposit Insurance Corp. Mainly because of the new mortgage business acquired in the AmTrust, NYB's fourth-quarter pre-provision net revenue increased 41% year-over-year to $266.3 million.

Net interest income increased 20% year-over-year to $305 million in the fourth quarter, as the company increased its net interest margin by 33 basis points to 3.45%, with increased core deposits replacing CDs and wholesale funding.

Noninterest income increased 148% year-over-year to $103.3 million, including $40.4 million in mortgage banking revenue, which was only $12.1 million a year earlier.

Bottom-line fourth-quarter net income was $149.8 million in the fourth quarter, declining from $154.9 million a year earlier, when the company booked a $139.6 million bargain purchase gain on the AmTrust acquisition.

New York Community's shares closed at $18.62 Tuesday, returning 52% over the previous year. Based on a quarterly payout of 25 cents, the shares had a dividend yield of 5.37%. The shares trade for 13 times the consensus 2012 earnings estimate of $1.48 a share.

Out of 19 analysts covering New York Community Bancorp, 11 rate the shares a buy, while seven have neutral ratings and one analyst recommends selling the shares. New York Community's dividend yield is very attractive, especially in such a low interest rate environment, and the dividend is well-supported by earnings. The company's management has been shrewd in taking advantage of market conditions to significantly increase its earnings potential. While the shares are probably not for investors looking for a quick killing after such an amazing run, they aren't price overly high to earnings when you consider the dividend, and you're paying for quality after all.

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-- Written by Philip van Doorn in Jupiter, Fla. and Maria Woehr in New York.

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