New York Community Bancorp's turnaround will likely take a long time as analysts expect profits to remain under pressure from the lender's efforts to boost reserves for potential bad loans in its commercial real estate portfolio, Reuters reported. This week's $1.05 billion capital raise has helped stem the rout in its stock and assuage near-term worries, but exposure to New York's rent-controlled multi-family properties — apartment buildings with more than four units — remains an overhang. Loans tied to multi-family properties, NYCB's primary focus for five decades, made up 44% of its $84.6 billion portfolio as of Dec. 31. Nearly 8.3% of such loans were "criticized", meaning at higher risk of default, the bank disclosed in January. "We are somewhat encouraged that overall credit quality trends could remain manageable in the near-term, though we would expect the company to seriously examine reserve levels for adequacy," analysts at RBC Capital Markets said in a note. The multi-family portfolio includes properties subject to rent control regulations, which limit landlords' freedom to increase rents at a time when borrowing rates remain high. Office loans accounted for 4% of the total portfolio, NYCB said. More than half of the office portfolio is in Manhattan, where the vacancy rate is 15%, according to Moody's.
