New York Community Bancorp, a regional bank, saw their stock crash on Wednesday morning after the bank signaled losses and slashed its dividend in order to shore up capital after it had purchased the assets of the shuttered Signature Bank. It also showed signs of deteriorating credit quality.
Bancorp reportedly services multi-family loans on rent-regulated apartment buildings. When New York state regulators closed Signature Bank in March of 2023, it was described by Reuters as the “next casualty of banking turmoil” after the collapse of Silicon Valley Bank (SVB).
The stock crash has revived fears for regional banks across the United States.
Its CEO Thomas Cangemi claimed the holding company is merely adjusting to its acquisition of Signature’s assets and liabilities. Bancorp’s asset portfolio ballooned to $100 billion with the purchase, which in Cangemi’s words is “subjecting [them] to enhanced prudential standards, including risk-based and leverage capital requirements, liquidity standards.”
As of 11:41 a.m., Bancorp stock had plummeted a historic 46 percent.
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Bancorp’s steps have so far included a cut to the company’s quarterly dividend from 17 cents to 5 cents a share of common stock.
According to The Wall Street Journal, Bancorp recorded a Q4 $552 million provision for loan losses (a massive jump from Q3’s $62 million), and saw $-252 million loss in Q4 compared to a $172 million profit in Q4 last year.
This is a developing story. Check back later for more updates.
Shane Devine is a writer covering politics, economics, and culture for Valuetainment. Follow Shane on X (Twitter).
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