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New York Community Bancorp's latest troubles

Published 02/09/2024, 01:18 PM
Updated 02/09/2024, 01:20 PM
© Reuters. A man walks past a closed branch of the New York Community Bank in New York City, U.S., January 31, 2024. REUTERS/Mike Segar/File Photo

(Reuters) -New York Community Bancorp (NASDAQ:CTBI) cut its dividend last week and recorded a surprise quarterly loss on the hit from the beleaguered commercial real estate (CRE) sector, reviving fears about the health of regional banks that have similar exposure.

The dividend cut, which was meant to bolster capital to meet stricter regulation after NYCB's assets crossed $100 billion, prompted a series of downgrades and sparked an over 60% drop in shares since then.

In a bid to revive investor confidence in the bank, its top executives, including newly appointed Executive Chairman Alessandro DiNello, disclosed they had bought shares together worth more than $850,000.

Here is a timeline of key events surrounding NYCB:

Date Development

March NYCB subsidiary Flagstar Bank enters agreement with

19, 2023 U.S. regulators to buy deposits and loans from

failed lender Signature Bank (OTC:SBNY).

Jan. 31, NYCB shares slump 37.7% after the lender slashed

2024 its dividend by 70% and posted a surprise loss for

the fourth quarter, pressured by stress in its CRE

portfolio.

Moody's (NYSE:MCO) places all long-term and short-term ratings

as well as assessments of NYCB and its subsidiary

Flagstar Bank on review for a downgrade.

Feb. 1, NYCB shares tumble another 11.1%, dragging down

2024 U.S. regional bank stocks amid a frenzied selling

in banking shares. Bank says it believes stock

price will recover as the market sees "value

enhancing actions" being taken.

Feb. 2, The bank's shares enjoy a reprieve, inching up 5%

2024 after sinking 45% in the past two sessions. After

market close, Fitch downgrades long-term issuer

default ratings for NYCB and its subsidiary

Flagstar Bank.

Feb. 5, Shares of NYCB resume their descent. NYCB confirms

2024 its chief risk officer Nick Munson had left the

company after a report from the Financial Times.

Feb. 6, U.S. Treasury Secretary Janet Yellen tells a House

2024 Financial Services Committee hearing that she was

concerned about looming CRE stresses on banks, but

believed the situation is manageable with

assistance from banking regulators.

Shareholders file a class action suit accusing the

regional bank of defrauding them by failing to

disclose that it would set aside more money for

credit losses.

Moody's downgrades all long-term and some

short-term issuer ratings of NYCB as well as

assessments of its subsidiary Flagstar Bank to junk

and warned of further downgrades.

NYCB says total deposits rose slightly to $83

billion as of Feb 5. compared to $81.4 billion at

the end of 2023. Adds that it is in the process of

bringing in a new chief risk officer and chief

audit executive.

Feb. 7, Analysts express concerns about "governance risks",

2024 citing the bank's choice to not disclose the

departure of key executives earlier, but cheer the

strong liquidity position.

NYCB names banking veteran Alessandro DiNello as

its executive chairman and vowed to cut down the

lender's exposure to the troubled CRE segment.

Feb. 8, Morningstar DBRS

2024 downgrades

NYCB's credit rating to "BBB" from

"BBB (high)," citing the lender's "outsized"

exposure to commercial real estate loans compared

to its peers.

Feb. 9, Top executives of the bank including newly

2024 appointed Executive Chairman Alessandro DiNello and

CEO Thomas Cangemi disclose they bought stakes in

© Reuters. A man walks past a closed branch of the New York Community Bank in New York City, U.S., January 31, 2024. REUTERS/Mike Segar/File Photo

NYCB, helping its stock rally.

Sources: Company statements, conference call, media reports

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