The company had net income of $123 million for the quarter and $501 million for the year, up from $118 million and $480 million for the same periods in 2011.
NYCB is also a commercial/multifamily lender and one of the things which boosted its income during the period was record prepayment penalty income of $120 million during the year. The loans held for investment portfolio increased $1.8 billion during the year to $27.3 billion as of Dec. 31. Originations of loans held for investment was $2.8 billion in 4Q12 and $9 billion for the year.
Multifamily made up $1.8 billion of the quarterly volume and $5.8 billion of the full-year volume, while CRE totaled $664 million and $2.4 billion. Its fourth-quarter volume benefitted from an increase in property transactions in anticipation of a U.S. tax code change in 2013.
Residential mortgage banking income in the fourth quarter was hurt by $1.1 million loss on servicing.
Another institution in the New York area, Hudson City Bancorp Inc., Paramus, N.J., earned $48 million in 4Q12 and $249 million for the full year.
Hudson City is in the process of merging with M&T Bank Corp., Buffalo, N.Y.
Ronald E. Hermance Jr., chairman and CEO, said that in the wake of the merger, all initiatives the bank was implementing have been suspended. Last year, Hudson City said it was moving into becoming a secondary market mortgage seller rather than trying to remain a portfolio lender.
As for the current quarter, Hermance commented, "In the days following Hurricane Sandy, we identified our mortgage loans that were in the areas most affected by the storm. We performed property inspections on these homes and evaluated the potential impact to the collateral, taking into account flood insurance coverage and land values.
“We estimate that our loss exposure to these loans is less than $6 million. As a result we increased our loan loss provision to $25 million during the fourth quarter as compared to $20 million for the linked third quarter.”
NYCB competitor Valley National Bancorp., Wayne, N.J., said residential mortgage loan originations totaled a record $531 million for the fourth quarter.
Valley sold approximately $389 million of residential mortgages during the fourth quarter, up slightly from the third quarter of 2012. However, gains on sales of residential mortgage loans fell by $9.5 million to $15.6 million mainly due to a decline in mark to market gains on loans held for sale carried at fair value. This is caused by changes in the volume of such loans held at the beginning and end of each quarter.
Gerald H. Lipkin, chairman, president and CEO, commented, "We are pleased to report solid earnings for the fourth quarter of 2012, which continued to be positively impacted by our residential mortgage refinance program, as well as the strong performance of our balance sheet despite a very difficult interest rate environment.
"Our loan originations continued at record levels during the quarter, even though we believe the level of refinanced loans was actually somewhat slowed due to the negative effects of Hurricane Sandy and consumer distractions related to the holidays and other political and economic concerns. However, our mortgage banking business continues to experience significant application inflows at this time and loan originations are expected to remain at or near the current record levels during 2013.”
He added Valley had record commercial lending originations for 2012 in the face of very strong competition.