New York Community Bancorp said it received preliminary approval for $596 million in financial assistance under the U.S. Treasury Department’s Troubled Asset Relief Program.
The Westbury, N.Y.-based parent of New York Community Bank and New York Commercial Bank, said it has not made a final decision on whether to accept the funding, as it does not believe the funds are “necessary” to bolster its lending operations.
“We have a very good loan portfolio,” said a bank official who asked not to be identified. “We haven’t gotten to the point whether we’re going to accept it or whether it’s going to be used.”
Bank officials, while insisting that the bailout money was not essential, would not elaborate on how they were able to qualify for the money if they did not need it.
About 70 percent of New York Community Bancorp’s loans are for multi-family buildings in the New York City area, particularly rent-regulated apartments.
At the end of the third quarter, the New York Community Bancorp reported $51 million in delinquent loans, which are 30 to 89 days late, and $61 million in non-performing loans, which are more than 90 days late. However, the bank said its ratio of bad loans was much less than other lenders. Its index of non-performing loans to total loans is 0.29 percent, compared with the SNL Bank and Thrift Index weighted average of 1.86 percent.
Under the agreement, New York Community would sell $596 million in preferred shares and warrants to the U.S. Treasury, in return for the cash infusion. The funds are part of the $700 billion in bailout money approved by Congress last year.
As of December 23, the Treasury Department had invested $162 billion in various financial institutions, ranging from $1.5 million to $25 billion per company.
New York Community Bancorp said that as of the third-quarter, it was the 29th largest bank holding company in the country, and one of the largest multi-family lenders in New York City, with a portfolio of $15.2 billion.
New York Commercial Bank has 38 branches in New York City, Long Island and Westchester and New York Community Bank has 178 branches in New York and New Jersey, made up of six banking units, including Queens County Savings Bank, Richmond County Savings Bank, Roslyn Savings Bank, Roosevelt Savings Bank, Synergy Bank and Garden State Community Bank.