NY Community Bancorp replaces borrowings, sees long-term benefit

SAN FRANCISCO, Jul 02, 2008 (Thomson Financial via COMTEX) -- NYB | Quote | Chart | News | PowerRating -- New York Community Bancorp Inc. said Tuesday it repositioned $4 billion of borrowings in the second quarter, with an expected weighted average interest rate of 5.19%, and replaced it with wholesale borrowings with lower rates, resulting in an improvement of roughly 200 basis points.

The company said the prepayment of borrowings will reduce the its second-quarter earnings by around $200 million, but that the impact on stockholders' equity will be more than offset by net proceeds of $339.1 million from the company's offering of 17.87 million shares on May 23.

The Westbury, N.Y.-based bank expects the combination of the stock offering and the reduction in wholesale funding costs to add roughly 12 to 14 cents to earnings per share over the next 12 months.

""While the prepayment of higher-cost wholesale borrowings will result in a second quarter loss on a GAAP basis, the replacement of these liabilities with substantially lower-cost funding will result in double-digit margin expansion and earnings growth in the quarters ahead," said Chairman and CEO Joseph Ficalora in a statement.

The company's shares fell 12 cents to $17.72. Gabriel Madway gm

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