My recent posts on NYCB (here and here) have generated quite a bit of inbound interest and some really fun discussions with readers, so I figured I’d do one follow up piece. I mentioned it in both posts, but NYCB today trades at ~50% of tangible book value; there’s plenty of questions about if they can make it to the other side of their current issues, but if they can their stock will probably do well (that’s a big if though!). Given the upside if they can make it through, NYCB could be an interesting investment worth looking at.
Another negative in this set up, low stock ownership vs high current comp, is you are less likely to see a bank sale out of this set up. I contend the set up to look for is : p:tbv <1, high CEO ownership, high % of commercial DDAs in deposits, and maybe most importantly CEO is older than 60. Great recipe for a sale
The NPA ratio (I guess it is non performing loans over total assets or loans) can also be depressed by growing the bank I guess, since most assets do not get non performing status immediately. (Same for growing insurance)
Another negative in this set up, low stock ownership vs high current comp, is you are less likely to see a bank sale out of this set up. I contend the set up to look for is : p:tbv <1, high CEO ownership, high % of commercial DDAs in deposits, and maybe most importantly CEO is older than 60. Great recipe for a sale
Liked the critical thoughts on incentives!
The NPA ratio (I guess it is non performing loans over total assets or loans) can also be depressed by growing the bank I guess, since most assets do not get non performing status immediately. (Same for growing insurance)