New York Community Bancorp Worth Another Look

As bank stock prices slipped into the drain pipes last year, New York Community Bancorp (NYB) seems to be one of the proverbial babies thrown out with the bathwater.

NYB doesn't own European debt. NYB never engaged in subprime lending. NYB doesn't have a large, speculative derivatives portfolio. NYB doesn't have conflict-of-interest problems with investment banking clients. Yet, NYB's one-year chart looks just like all of the other large banks plagued by those issues.

To be fair, NYB is a bank and will have to cope with uncertainties and obstacles presented by implementation of Dodd Frank. But NYB's sell-off seems overdone, the shares trade at a very attractive valuation, and the dividend is sustainable in my opinion.

One legitimate concern about NYB was their uncharacteristically elevated level of non-performing assets (NPAs),which caused some investors to wonder if management had strayed too far outside their bread-and-butter NY market area with some