3 Liquid Bank Stocks With Highest Dividend Yields (Update 1)

1. New York Community Bancorp

Shares of New York Community Bancorp of Westbury closed at $13.50 Monday, returning 18% year-to-date, following a 30% decline during 2011.

Based on a quarterly payout of 25 cents, the shares have a dividend yield of 7.41%.

The shares trade for 1.9 times tangible book value, and for 13 times the consensus 2013 EPS estimate of $1.03.

New York Community Bancorp reported third-quarter earnings of $128.8 million, or 29 cents a share, declining from $131.2 million, or 30 cents a share, in the second quarter, but increasing from $119.8 million, or 27 cents a share, in the third quarter of 2011.

The company's third-quarter net interest income declined to $285.0 million, from $296.7 million in the second quarter, and $295.0 million in the third quarter of last year, while the net interest margin narrowed to 3.17% in the third quarter, from 3.30% the previous quarter, and 3.33% a year earlier.

New York Community Bancorp also said in its earnings release that "although loan production rose as the low level of market interest rates prompted a rise in refinancing activity, the replenishment of the loan portfolio occurred at lower yields," and that "the impact was somewhat tempered by the high level of prepayment penalty income from multi-family and [commercial real estate] loans held for investment, and by a meaningful increase in the average balance of loans." The company added that it "continued to reduce its cost of interest-bearing deposits, largely reflecting the benefit of its [acquisition of] Aurora Bank."

During New York Community's earnings conference call, CFO Thomas Cangemi said that "looking at Q2 versus Q3 our guidance was down 12 to 15 [basis points] and thus we came in at the low end our range," and that "my guess is that where we sit today, given where the interest rate environment is and looking at the [loan] pipeline, we are probably going to be on that same level, so probably down 12 to 15 in Q4," excluding loan prepayments.

Cangemi also said he expected the company to "see the bottom of the margin... well within 2013."

New York Community Bancorp continued its strong earnings performance, with a third-quarter operating return on average assets of 1.19%, according to Thomson Reuters Bank Insight, and a return on tangible equity of 18.06%, some analysts over the years have repeatedly questioned the attractive quarterly dividend payout of 25 cents, which the company has maintained for 35 consecutive quarters.

Fitzgibbon said on Oct. 24 that during the third quarter, "the dividend payout ratio [declined] to 78% (currently a 6.9% dividend yield). However, we remain concerned that over time banking regulators will pressure institutions with high payout ratios to right-size their distributions."

Fitzgibbon rates New York Community Bancorp a "Hold," with a 12-month price target of $14.50.

The analyst said "in light of the quarterly results and updated guidance from management, we are raising our 2012 core EPS estimate by a $0.06 to $1.17, but lowering our 2013 EPS estimate by $0.07 to $0.98," adding that "we continue to believe that shares of NYB are approaching fair value at just over 2x tangible book value versus the peer group median of about 1.5 times TBV," and that "on a forward earnings basis, shares are currently trading at 14.9x our 2013 EPS estimate versus the peer group median of 12.8x."

NYB data by YCharts

Interested in more on New York Community Bancorp? See TheStreet Ratings' report card for this stock.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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