New York Community Bancorp nyse Nycb Stock Slides on Q4 Loss and Dividend Cut

New York Community Bancorp (NYSE: NYCB) Stock Slides on Q4 Loss and Dividend Cut

New York Community Bancorp (NYSE: NYCB) shares plummeted on Wednesday following an unexpected quarterly loss, causing a ripple effect that impacted other regional bank stocks.

New York Community Bancorp (NYCB) witnessed a staggering 46% drop in its stock value on Wednesday, hitting a low of $5.58. This marks the lowest level since the regional banking crisis in March. The entire regional banking sector felt the impact, with the SPDR S&P Regional Banking ETF (KRE) declining by around 2%.

NYCB: Financial Performance Overview

NYCB, which recently acquired certain assets from Signature Bank, reported a net loss of $252 million in the fourth quarter. This is a significant setback, especially after earning $207 million in the third quarter and $172 million a year ago. Interest income declined by 4% to $1.45 billion, while interest expenses surged by 12% to $707 million. With a 790% increase in provisions for credit losses, net interest income after provisions plummeted by 77% quarter-over-quarter.

Net income for NYCB stood at $2.37 billion for 2023, a threefold increase from 2022. However, excluding one-time charges and a $2.2 billion windfall from the Signature Bank acquisition, net income dropped by 4% to $609 million.

Signature Bank acquisition propels NYCB’s assets past $100 billion, elevating it to Category IV banks with increased regulatory scrutiny. In response, NYCB strategically reduces its quarterly dividend by over 70% to 5 cents per share to meet stricter capital and liquidity requirements.

CEO Thomas Cangemi justified the move, stating in a press release,

“We believe this is the prudent decision as it will allow us to accelerate the building of capital to support our balance sheet as a Category IV bank.”

New York Community Bancorp (NYSE: NYCB) Stock Price Action

NYCB stock plunged -37.67% on Wednesday. The traders had exchanged hands with 127,142,957 (127.14 million) shares compared to the average daily trading volume of 8.93 million.