Good morning. And thank you all for joining the management team of New York Community Bancorp for its quarterly post-earnings release conference call. Today's discussion of the company's Fourth Quarter 2014 performance will be led by President and Chief Executive Officer, Joseph Ficalora, together with Chief Financial Officer, Thomas Cangemi. Also joining in on the call is Chief Operating Officer, Robert Wann. Certain of the comments made by the company's statement -- by the company's management today will contain forward-looking statements, which are intended to be covered by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those the company currently anticipates due to a number of factors, many of which are beyond its control. Among these factors are: general economic conditions and trends, both nationally and in the company's local markets; changes in interest rates, which may affect the company's net income, prepayment, penalty income, mortgage banking income and other future cash flows or the market value of its assets, including its investment securities; changes in the demand for deposit, loan and investment products, and other financial services; and changes in legislation, regulation and policies. You will find more about the risk factors associated with the company's forward-looking statements beginning on page seven of this morning's earnings release and in its SEC filings, including its 2013 annual report on Form 10-K and it's first, second and third quarter 2014 reports on Form 10-Q. The release also includes reconciliations of certain GAAP and non-GAAP earnings and capital measures, which will be discussed during this conference call. If you would like a copy of the earnings release, please call the company's Investor Relations department at (516) 683-4420 or visit ir.mynycb.com. After the prepared remarks, we will have a question-and-answer period. [Operator Instructions] To start the discussion, I will now turn this call over to Mr. Ficalora, who will provide a brief overview of the company's fourth quarter performance before opening the lines for Q&A. Mr. Ficalora?

Thank you, Kevin. And thank you, all, for joining us this morning as we discuss our fourth quarter 2014 performance and also touch on some highlights of our performance for the year. At the risk of sounding repetitive, I have to say that our 2014 highlights are much the same as those I’d mentioned on previous conference calls. These include the record of volume of multifamily loans we produced, the high quality of our assets and the exceptional level of our efficiency. These, of course, are three of the cornerstones of our business model and all three contributed to the solid earnings we reported earlier today. Nonetheless, they were not the only highlights of the year or for that matter the quarter. We also transitioned our funding mix by growing our deposits and maintained our record of consistent capital strength. In addition, we contain the growth of our assets on the linked quarter basis or growing our assets significantly year-over-year. This was clearly consistent with the plans I spoke of in October -- well actively manage our assets below the current SIFI threshold of an average $50 billion over four consecutive quarters. Before I discuss these accomplishments in greater detail, let me first say, that the 12 months ended December 31, 2014, we generated GAAP earnings of $485.4 million, providing a 1.08% return on average tangible assets and a 14.77% return on average tangible stockholders equity. In the fourth quarter of the year, we generated GAAP earnings of $131.2 million, providing a 1.14% return on average tangible assets and a 15.79% return on average tangible stockholders equity. In the year and a quarter, when margins declined as the yield curve continued to flatten, our GAAP earnings rose to a $1.09 and $0.30 per diluted share, respectively. Our cash earnings also…

[Operator Instructions] Thank you. Our first question is coming from Ken Zerbe with Morgan Stanley. Your line is now open.

Great. Thank you. Good morning guys.

Good morning, Ken.

I guess, first question just in terms of balance sheet growth from here, obviously we know that you are pulling -- you’re keeping your growth very modest, right because you don’t want to cross over that $50 billion mark. But at this point, right, if the -- so the real measures of the four quarter rolling average of when you're over $50 billion, are we late enough in the process or late enough in the year that now you can actually start growing your balance sheet and cross over the $50 billion of the four quarter average such that assuming nothing changes with the CCAR limit that you actually get lumped into the 2017 CCAR?

Kenneth, I would say that it’s conceivable by the end of this year, you will see more ramped up balance sheet growth obviously as we planned for LCR. We do have a project plan in place to be executed in 2015. Our asset purchases for LCR probably won’t take prices until we cross the four quarter average to implement the LCR requirements. So it’s feasible to say you have some back-ended growth for the balance sheet. I think given the interest rate environment and then looking how we’re looking at the growth on the multi-family CRE side. The cash flow that we expect potentially on the CRE portfolio could be significant given that rates are potentially lower. We’re expecting to see some more car activity, which will be helpful at much lower yield. So as far as calls and cash flows for the portfolio, we should be able to see reasonably good growth for the year on the core asset class and modest balance sheet growth going to the back end of the year.

Kenneth, there is no question that there is wide speculation that the bar will be raised. We are not counting on that. And more importantly, we are overly aware of the specific needs we have to actually be a SIFI institution and we’re working very closely with our regulators to be in the position to actually take advantage of a very large deal as soon all the pieces actually align themselves. So the growth of the company by our choice would be by acquisition. The reality is that there is no certainty as to when all the pieces come together.

Got it. Okay. And then Tom, new updates on your NIM expectations for the next quarter please?

Unfortunately, it feels like it’s a repetitive comment of quarter-over-quarter but rates as you’re fully aware have come down substantially. So we’re still guiding slightly lower for Q1 2015. My initial forecast would be down 3 to 5 consistent with the previous quarter.

Got it. And just…

[Indiscernible] similar to the previous quarter.

Understood. And then last question, some of the banks talk about seeing a resurgence in mortgage banking in the first quarter given rates. So you guys are seeing a similar improvement in the mortgage banking so far?

Interesting that we saw the -- see the increase in the latter half of the fourth quarter going into Q1, let’s say, January which we’re lapping up right now, very optimistic as far as lock volume. And in addition to that, our margin, I think has improved quite a bit, approximately 25 basis points increase since the margin, probably 80 to 95 basis points. That range in the margin which is substantial change, again our margin as well as lock volume. So it’s encouraging, it’s one month for the quarter but it looks it started early. I’d say in the middle of the fourth quarter 2014.

Great. Thank you very much.

You bet.

Our next question comes from Collyn Gilbert with KBW. Your line is open.

Good morning, Collyn.

Thanks. Good morning. Good morning, guys.

Good. Thanks. Tom, can you just give us a little bit of color as to what the new origination yields are versus what’s rolling off and then what you are anticipating the dropping rates will do to sort of flow through rates as we look out for the remainder of the year?

That’s right. As discussed, we have a much lower rate environment and I guess everyone is really forecasted looking at the beginning of ’14, going into ’15. What are we seeing today our current pipeline that we announced this morning, the CRE books is right at 3.60 and the multi-family is at 3.25, so average amount of 3.36 on that pipeline. So as far as the current market yield is slightly lower, I mean, obviously we had a significant market change in interest rates. We are still holding on the five-year, approximately 3%, slightly north of that and a seven-year product around the 3 and 3.38s and the 10-year close to 4.388 or 3.78s in the 10-year multi-families, typical callout type structure. On the CRE side, we are looking at around 3.5% for the five-year type products and seven year product between 3 and 3.25.

Okay. So not too much of a material movement in offering rates?

Yes. We are not putting this. The spreads held up very well. We have been holding the line north of 3% on our best offering. So we’ve been very focused towards not costing below that threshold but profits have changed and we are going to be lending into the market. But we’ve been very resistant on breaking that line of the fence.

Okay. Okay. That’s helpful. And then just a question on the reserve, it looks like there was less reserve decline this quarter. Why was that? Because it seems -- credit metrics are still really strong and then how does that tie into sort of your outlook for where -- I guess thinking about the dollar amount of reserves shakes out for ’15?

Looking at where we were in the beginning of the year, I said 49. I don’t expect to see any provisions. We did very well on asset quality. It continues to improve. Growth is reasonable. It’s going to change in the asset class and as you can see, we moved out some assets. So the CRE and multi-family, all continue to build. The MTA book has substantially been reduced. My initial forecast for 2015 is I don’t expect a provision, assuming asset quality remains at these levels.

Okay. Okay. That’s helpful. I will stop there. Thanks guys.

You bet.

Our next question comes from Dave Rochester with Deutsche Bank. Your line is now open.

Hey. Good morning, guys.

Good morning, David.

So, did I hear you guys right that you plan to grow the securities books by year end to become LCR compliance, no matter what happens with Congress and $50 billion in asset thresholds? You are going to cover that threshold this year.

Let me rephrase that. What we are saying we have a project plan that we expect to implement in 2015, until we cross the fourth quarter average of $50 billion then we will execute on our LCR requirements. I don’t envision that happening in 2015. However, our projects plan will be complete. That means people will be hired, the systems will be purchased. We will be closing our general ledger, as if we were an LCR requirement. However, we will not have the asset until we cross over to $50 billion. So we are still managing ourselves below $50 billion in a current environment.

They are readily attainable.

Got you. Great. And…

We’ve got low yield.

What’s that?

Unfortunately, our much lower yields in the market.

Right. Everybody is dealing with that unfortunately. Just switching to operating expenses, sorry if I missed this part. But can you just talk about where you see those going next quarter? It seem like maybe they were little bit higher than expected this quarter but I know you have some one-time office relocation expenses in there.

Yes. Absent that and we were probably off about a $1 million and $2 million based on our forecast in fourth quarter because of the significant relocation expenses and advertising expenses that we had in Q4. Looking at the first quarter ’15, my gut tells me around $145 million for the quarter and I will use that as an average for the year per quarter, around $145 million, just slightly down of the Q4, about a $1 million bucks.

Great. And then just where are you seeing HQLA type reinvestment rates these days for some of the things that you might ultimately end up buying?

Again, we haven’t yet been in the market of bidding assets. Unfortunately, our asset yields are extremely lower. It’s going to be low 3% for the typical Ginnie Mae structure longer duration assets, which we are reluctant to buy given the duration risk. So we’ve been -- obviously our treasury yields offer that significantly lower than adds. We’ve been clearly out of the market in terms of anything you will see our securities portfolio will most likely decline in 2015, assuming rates stay where the are. You have a high probability of some lower yielding securities to be call the way on the corridor or debenture book. But our portfolio does secures in holding a very nice, the high yielding securities. So the average yields about 316. In the portfolio, we have a large book of callable debentures around 2.5% to may get called depending if rates get lower. That will last down a month.

We maybe a little preliminary because I know you are working through the plan, but is there thought of potentially swap out some of those tough securities for HQLA, or are you just going to build on top of this?

Again, we wouldn’t rebuild that. Again, It’s too soon to tell. But we are always looking at our balance sheet options.

Okay. All right. Great. Thanks guys.

You bet.

Our next question comes from Steven Alexopoulos with J.P. Morgan. Your line is now open.

Good morning.

Good morning, guys.

Hello, Steve and how are you?

I’d have to start, Joe, regarding this line in the release, which says you continue to take appropriate steps and prepare for SIFI status in the event that you should reach it. Are you signaling to us that you are more open now that you are crossing $50 billion organically?

No, I think that as I have said consistently, our goal would be to cross that particular line with a large transaction. So we need to do all the necessary work, whether we keep selling over or jumping over. So, that work has been something that we’ve been diligently preparing for over the course of all of these months. As I’m sure you are aware, there is a great deal of time and money that goes into being ready to be a SIFI. So that effort has been one of the priorities of the company. So we believe that we are very, very close of actually having everybody lined up so that we can make that step a reality and particular in discussing a combination of our balance sheet with a loss balance sheet.

Okay. Got you. I wanted to ask, just looking at the borrowed fund maturity schedule, looking at the Q and the K which is dated. It appears that the schedule maturities and available calls on borrowed funds drop off a lot in 2015. Tom, I was hoping maybe you could give us an update in terms of repos and borrowings that are scheduled to mature this year?

Again, call versus maturity are completely two different concepts. I mean, there is a substantial amount that are callable but in this environment will not be called given where rates are. So our maturities and it’s an insignificant amount in 2015. I think it was about $3 million in total. So we are not getting a substantial amount of maturity with the exception of our short-term book, which is maturing everyday or every 30 day. So a true long-term maturities that are coming due would be the approximately $300 million to $350 million in 2015. And we’ve always discussed in previous calls, in the event, locking conditions warrant and we will evaluate our entire wholesale liability books in the event we have opportunities to think about maybe expanding out and blending the composite into more affordable structure, we will consider that. We look that on a quarterly basis and still we are significantly out of the money right now. So in this environment, we haven’t seen yet that compelling opportunity to do a blended extension.

Okay. And just a final one, with the loans you are participating out, do you guys have the right to take those back at a later date if you choose?

All the deals that were structured, we are controlling the asset classes and servicing these loans under our terms. So we have very good structure. We have some great partners and they are very confident that together, we have the relationship and we will continue to work on selective opportunities in the marketplace that understand that we are very protective on our customer base. So we have control of the assets. Yeah, so there is no need for us to take it back. It’s part of our structured asset lending.

Right. Okay. Thanks for the color.

My pleasure.

Our next question comes from Mark Fitzgibbon with Sandler O'Neill. Your line is now open.

Good morning, Joe.

Thank you, Mark.

I assume you guys have had some conversations with groups lobbying in Washington to lift the $50 billion threshold. How likely you think it is that it would be raised?

I think that probably at the moment in time we are closer to actually having that happen than we’ve been at any other time. There is active discussion in a broad range. There are many senators that are hearing from their constituents and we are talking about community banks from all over the country that have made the case that these numbers are not the best way to determine risk, but rather an actual assessment of the balance sheet. And clearly as a result, there are both democrats and republicans that are advocating that we move the bar. So it could happen relatively quickly.

Okay. And then separately, Tom, I wondered if you could share with us your outlook for prepayment penalty income in the first quarter, do you think it will look a lot like 4Q?

So Mark, we never give specific guidance on prepayments, but I will say the environment is very healthy. We had a good year last year. It wasn’t a record year. We had three years back to back of record. We still had a very strong year in 2014. And the fourth quarter was a very strong quarter, slightly around the same level of the Q3, which is in the north of $20 million. But given where rates are, my expectation that prepays will remain highly elevated in 2015. So we feel pretty confident that this is a unique environment. Once again, we have rates lower for longer which will drive a lot of prepayment within all the portfolio, including the multi-family.

Okay. And then lastly, I wondered if you could just update us on what remains to be done from an infrastructure compliance standpoint before going over the $50 billion, what are kind of the key remaining things you couldn’t play?

Yes. As indicated in the previous questions, our LCR project plan will be implemented in 2015 and ready to be executed, with the exception of buying assets that will be when we cross over down the road. As far as CCAR reporting, we are in a very good position to -- in the next foreseeable few quarters ahead to be in a position to do a monthly reporting mechanism back to Washington, that’s the next stage for CCAR reporting versus DFAST. That’s open. And the third item will be living will. Living will is probably the least of the concern given that we have little bit more time for that and that will be something that will be done in the future and that will be an immaterial cost given the nature of our business.

Thank you.

Thank you, Mark.

Our next question comes from Matthew Kelley with Sterne, Agee. Your line is now open.

Good morning, Matt.

Good. With the decline in rates we’ve seen just over the last month here, do you think that the sequential decrease in the securities book could be greater than what we saw in the fourth quarter or you were down about 5.5%, I mean 5.5, what your thinking is there?

So Matt, we had a -- we took advantage of the marketplace given the fourth quarter. We executed about $209 million of actual sales of securities. Those yields were slightly higher than the portfolio yields. All in between that and call, there was around 360 type yield that we had runoff. We had about $145 million of repayments, that was the call that came and took place, as well as some repayments of about another $100 million. So going into 2015, the vast majority of our securities are DUS securities which typically don’t get called out, they get prepaid. And when they get prepaid, since we have them either at a discount or close to par, we have a benefit on the prepayment. In addition to that, we get yield maintenance, which is very lucrative. So that will be a win, win for the company. We are not planning on DUS prepayments. We are planning however if rates stay low, calls on the debenture portfolio and the average yields of the debenture portfolio remaining are in the mid 2. So that will be positive to the margin assuming we are putting a loan as a replacement. There is going to be a point in time we have to manage our collateral position. We believe we have some room there so we can shrink the portfolio further.

Okay. But I guess what I am hearing on these securities book is it’s going to be another couple of quarters of sequential decline before the LCR plan goes into effect, the kind of second half of the year, is that your assessment?

LCR, as far as execution, the execution of the process plan, we have a project plan to be implemented. That’s more operational. As far as assets being executed, that will not take place until we require to be a SIFI reporting entity which could be used down the road or could be depending if we announce the transaction it could be subsequently their assets. But my guess is that given where we are, we should be in place on execution basis for the companies on. It’s a project plan in 2015. However, LCR asset purchase will not take until we are a SIFI bank.

Okay. God you. And then how big is the specialty finance loan portfolio now, what’s the dollar…?

It’s just south of $700, like $660 million and growing very nicely and we are very pleased with the overall yield in that book. Overall yield in that book is around 380, so it’s a nice yielding asset and mostly adjustable rate and is performing extremely well as Mr. Ficalora indicated the pristine asset quality, 100% performance, very selective, we turned down approximately 97% of that deals that we see. So we are kind of more of a credit buy up shop, we pick our deals and we are very selective. We anticipate the good growth there as well, they are doing extremely well for us, and we are happy with the results.

And that’s ABL leasing type credit, is that right?

Yes.

Okay. And maybe just walk us through why that particular book doesn’t need any provision associated with it as you grow?

I mean it’s very simplistic, these are highly secured assets. And when you go through the credit parameters, if you look at where our overall credit exposure there, it’s de minimis. We have a strong history here with this group. I think they have 20 some odd year history of no loss, but I think the total loss they have had historically is about $124 million and that was during the great recession. So we are very pleased based on the seniority of the credits, these are highly secured assets and have constantly evolving short-term, so we believe that there will be very, very little exposure if any at all in that portfolio.

Okay. And just last question, what percent of the fourth quarter commercial real estate multi-family originations were in maturities beyond 5 years?

I would say probably 30% to 40%, a lot of seven year paper, and some 10, some co-op underlying, not much, very little. We’ve seen a lot of these bread and butter deals. I guess we are trying real hard to hold the line in sand. We were getting some nice spread given where rates are. We are getting a nice spread up to five year strategy. We are still holding north of 3%. As indicated, the portfolio yield going into Q1, it is just under 3.40 with the multi-family being 3.25 and the commercial 3.60. So overall, we are feeling pretty good about things, but look rates are lower, but we are still holding the line in sand of 3%.

But the actual change in rate would suggest that there is going to be activity in repricing, much of the portfolio, not necessarily the assets that we’ve just created, but those assets will reprice as well if in fact it becomes evident over the quarters ahead that rates are substantially lower than they were when those loans were actually made.

I think also given where rates are, this clearly will give the company substantial cash flow to be more -- I would say more manageable on looking at the fourth quarter look back on the SIFI. This is obviously a positive impact. To go back to when the company was reporting substantial mortgage banking income, it feels like mortgage banking income could be a very substantial catalyst in 2015, if rates stay lower for longer. So we will have that broad [indiscernible] strategy going into '15. Obviously, we can’t predict where rates are going, but given where rates today, this could have [indiscernible] strategy for the company if we do when rates were at these levels and we had.

We will take our final question from David Hochstim with Buckingham Research. Your line is now open.

Good morning, guys.

Good morning, David.

How are you, Dave?

Good. Thanks. How are you? Wonder, could you give us any update on the M&A environment?

I think the M&A environment is definitely looking up. There is no question there are banks throughout the country that have been actively considering the possibility of combination and this environment does lend itself to that decision being made by Board of Directors. So I would suggest that there’s going to be more activity in the period ahead and we’ve seen over the last couple of years.

And your preference for big -- a large deal versus…

We’re focused on a large deal. Obviously, if the rules change, we could have obtain a small deal, but we’re still focused on a large deal. And that is exactly where we’re planning and working with our regulators in doing a large deal.

Yeah. And Tom, could you give us a breakdown of mortgage servicing income, is that coming...

Yeah. Sure. Sure. So for the quarter, we had servicing income total for the quarter $7.688 million, broken down by loan servicing fees of $13.068 million, change in MSR value of a negative $21.124 million and a positive hedge effectiveness of $15.2744 million, when you summarize those three components, you get the $7.680 million. Origination revenue for the quarter was $8.758 million. So for the total quarter you had a mortgage banking revenue of $16.4 million versus $16.6 million sequential. So probably better than what we expected going into, I’d say that was back half loaded in fourth quarter of ’14.

So first quarter should look a little better?

Absolutely. I mean, right now, January was a very strong month, rate locks are up significantly and gain wholesale margins have improved and that’s 25 basis points over the quarter.

Okay. Thanks a lot.

Welcome. Very welcome.

And we’ll take one last question from Matthew Keating with Barclays. Your line is now open.

Yes. Thank you. I just want to follow-up...

Good morning.

Hi, Matt.

Good morning. On the M&A discussion, I think, you mentioned that, you are still looking, obviously, for the large deal, you talked about when sort of all the pieces are wind themselves? And then you just mentioned the previous question about working with regulators? At this point, is the main stumbling block to completing a large deal, regulatory concerns over such transactions or is it more just finding a willing partner? Maybe you could just talk about how that process is evolved?

I think that the environment we’re in today has explicit requirements that deals are discussed with regulators before they’re definitively move to a [healthy] [ph] and a discussion to actually do the deal with the Board of Directors of the other institution. So a little Boards may have a willingness to do deal. The reality is that the regulators need to discuss those deals in advance of the deal actually materializing. So they will be and there are discussions between us and our regulators with regard to the specific nature of doing transactions of size and certainly, we need to demonstrate the capacity to execute on the new requirements that will represent. So this is not the same as they had been years ago. And certainly, we’ve been working with this now four years. And I think that we’re in a very good place with all the people involved in making these decisions, so that we can literally come to a place in which we’re publicly discussing a deal.

Great. Thank you.

You’re welcome.

We’ll take one final question from Peter Winter with BMO Capital Markets. Your line is now open.

Thanks. Good morning.

Hi, Peter.

Just, I know it’s a small portfolio, but can you just give an update on the Taxi Medallion business?

Well, we still manage it and we still have it with a couple of $100 million in total balance sheet footing. 100% performing, we haven’t had any credit issues with that. We bought it in a portfolio for sale. We all working with some selected partners to sell those assets but we haven’t yet actually close on the sale, but we would consider selling. By the meantime we have 100% performing portfolio, just south of $200 million and we’re looking at a situation that’s high yielding and short maturity.

It’s relatively less than two year in remaining last…

Like three or four yields in two years -- by approximately two years average life.

Okay. So if you don’t get an acceptable offer you’ll just run it off.

I think right now it is still performing 100%. We marketed. We had in transaction that just didn’t close and we’re still expecting a bit -- potentially sell it in 2015, if it doesn’t get sold then we’ll move it from held for sales back to held for maturity, I think, the two-year average life remaining.

Got it. Thanks guys.

Thanks.

Welcome, Peter.

And we have no further questions at this time. I’ll turn it back to Mr. Ficalora for any closing remarks.

Thank you. On behalf of our Board and management team I thank you for your interest in the company, our strategies and our performance. We look forward to discussing our first quarter performance with you in April 2015. Thanks.

Thank you. This does conclude today's fourth quarter 2014 earnings conference call with the management team of New York Community Bancorp. Please disconnect your lines at this time and have a wonderful day.