In addition to the high dividend, New York Community also stands out as one of the most efficient banks in the country, with a second-quarter efficiency ratio of 41.71%, improving from 43.25% during the first quarter. The efficiency ratio is, essentially, the number of pennies of overhead expense for each dollar of revenue.
Confidence in the Dividend
According to Gilbert, the "dividend payment doesn't seem threatened."
"While the market may view New York Community's dividend payout ratio as stressed, given its earnings flexibility (barbell effect of mortgage banking and spread income), regulatory capital position, and de minimis historical credit losses in conjunction with strong (and improving) credit results, we continue to believe that the dividend is safe," she wrote.
Gilbert also wrote that during her meeting with Ficalora and Cangemi, "They reiterated their comfort with maintaining their current dividend, as regulators continue to signal that the company's capital deployment strategies are well within an acceptable range."
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