Current:Home > NewsNew York Community Bancorp's stock tanks, stoking regional bank concerns after 2023 crisis-LoTradeCoin
New York Community Bancorp's stock tanks, stoking regional bank concerns after 2023 crisis
View Date:2024-12-24 00:49:02
New York Community Bancorp’s shares have taken a nosedive this week, stoking fears about regional banks less than one year after a short-lived banking crisis.
The regional bank on Wednesday announced a net loss of $252 million last quarter, compared to a net income of $172 million the year prior. Dividends were slashed from 17 cents per share to 5 cents.
The financial loss comes less than a year after the bank purchased the assets and liabilities of Signature Bank, one of the regional banks that collapsed in early 2023. That acquisition – along with the acquisition of Flagstar Bank which closed in 2022 – pushed New York Community Bank’s assets over the $100 billion mark to make it qualify as a Category IV “large bank” – a designation that comes with more stringent regulations around liquidity. CEO Thomas Cangemi said that made steps like slashing dividends "necessary" to rightsize the business.
Ratings agency Moody’s warned on Wednesday that it may cut the bank’s rating to “junk," noting that it expects capitalization and funding to remain “under pressure” now that the institution is transitioning to higher regulatory standards.
But the bank's troubles aren't expected to negatively impact the banking sector at large, according to David Sacco, an instructor in finance and economics at the University of New Haven's Pompea College of Business.
Learn more: Best current CD rates
"It's more that the banks that bought these assets, basically a year later, they're still digesting them and having problems," Sacco said. "It's just the kind of thing that can happen when a smaller bank grabs assets of a bank that was having some troubles."
New York Community Bankcorp stock price
The bank’s stock closed at $5.75 Thursday, down 11.1%, after plummeting 38% Wednesday.
Other regional bank stocks also dipped in light of the news, with the KBW Regional Banking Index down 2.3% Thursday after closing down 6% Wednesday.
No quick relief:Why Fed rate cuts won't make borrowing easier anytime soon
What does this mean for you?
Experts say there’s no reason customers should worry about money kept in banks covered by the Federal Deposit Insurance Corporation, especially since very few depositors surpass the $250,000 limit on the insurance.
And while the bank's slump caused other regional bank shares to dip, the reaction was "likely overdone," according to a Bank of America analyst note issued Wednesday.
"Just like the initial event (in 2023) I didn't think was going to cause a contagion, I don't think this will either," Succo said. "I think it'll be less impactful than the original (banking crisis)."
veryGood! (7)
Related
- OneTaste Founder Nicole Daedone Speaks Out on Sex Cult Allegations Against Orgasmic Meditation Company
- Southern Baptists condemn use of IVF in high-profile debate over reproductive rights
- Man charged with robbing a California bank was released from prison a day earlier, prosecutors say
- 'House of the Dragon' review: Season 2 is good, bad and very ugly all at once
- Chipotle unveils cilantro-scented soap, 'water' cup candles in humorous holiday gift line
- Mississippi woman who oversaw drug trafficking is sentenced to prison, prosecutor says
- The Brat Pack but no Breakfast Club? Why Andrew McCarthy documentary is missing members
- Inflation is still too high for the Fed. Here's how the rest of the economy doing
- J.Crew Outlet Quietly Drops Their Black Friday Deals - Save Up to 70% off Everything, Styles Start at $12
- Louisville’s police chief is suspended over her handling of sexual harassment claim against officer
Ranking
- Noem’s Cabinet appointment will make a plain-spoken rancher South Dakota’s new governor
- Nicola Coughlan Is a Blushing Bride at Bridgerton Red Carpet in London
- Atlanta Falcons forfeit fifth-round pick, fined for tampering with Kirk Cousins
- Tennessee sheriff indicted for profiting from inmate labor, misusing funds
- Detroit-area police win appeal over liability in death of woman in custody
- Entrapment in play as appeals court looks at plot to kidnap Michigan governor
- Transgender swimmer Lia Thomas loses legal challenge in CAS ruling
- Four Tops singer sues Michigan hospital for racial discrimination, says they didn't believe his identity
Recommendation
-
Skiing legend Lindsey Vonn ends retirement, plans to return to competition
-
Multiple people reported shot in northern Illinois in a ‘mass casualty incident,’ authorities say
-
Democrats are forcing a vote on women’s right to IVF in an election-year push on reproductive care
-
Report: Crash that destroyed I-95 bridge in Philly says unsecured tanker hatch spilled out gasoline
-
Police capture Tennessee murder suspect accused of faking his own death on scenic highway
-
Planned Parenthood Oregon leaders plan to dissolve political arm, sparking concerns about advocacy
-
Teen Mom Star Amber Portwood Tearfully Breaks Silence on Fiancé Gary Wayt’s Disappearance
-
Ukrainian winemakers visit California’s Napa Valley to learn how to heal war-ravaged vineyards