Traditional Banking business is supposed to be old-fashion, stable and boring as compared to what was going on these last few years with investment banking running amok on Wall Street. From 2002-2008, banks were essentially "gambling" on Wall Street with unrealistic loan leverages and risky accounting. After the 2008 financial crisis and subsequent government bailouts of too-big-to-fail (TBTF) financial companies, tighter banking regulations were passed.
Today banks are once again showing they are growing and profitable. NYCB is one such well-run bank and with fed interest rate anticipated to rise, their business growth prospect looks bright. In addition, their ~4% dividend makes them a decent income investment while growing into a major player (TBTF) in their banking neighborhood.
NYCB stock price recently took a hit (over-reaction in my opinion) because they bought over another a less well-run bank Astoria Financial (NYSE:AF) at a supposedly high price (x1.5 premium). The pros and cons of this merger is still up for debate. However one unfortunate outcome of this merger is the reduction of their dividend from previously 6+% to ~4% starting next year to shore up their cash balance sheet. Time will tell if this acquisition turns out to be a good or bad move long term.
This purchase will add $34/yr to the dividend income portfolio
Basic info:
Market CAP: 7.5B EPS: $1.09 Dividend: $0.68 (~4%) 1st qtr 2016 estimate
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