Current:Home > FinanceNew York Community Bancorp's stock tanks, stoking regional bank concerns after 2023 crisis -FinanceCore
New York Community Bancorp's stock tanks, stoking regional bank concerns after 2023 crisis
View
Date:2025-04-13 08:49:01
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! (9169)
Related
- Romantasy reigns on spicy BookTok: Recommendations from the internet’s favorite genre
- Gay men can newly donate blood. They're feeling 'joy and relief.'
- Princess Anne Released From Hospital After Sustaining Head Injury
- JoJo Siwa Unveils New Arm Tattoo Featuring a Winged Teddy Bear
- Warm inflation data keep S&P 500, Dow, Nasdaq under wraps before Fed meeting next week
- Lawmakers advance proposal to greatly expand Sunday hunting in Pennsylvania
- Supreme Court makes it harder to charge Capitol riot defendants with obstruction, charge Trump faces
- Debate-watchers in the Biden and Trump camps seem to agree on something. Biden had a bad night
- 'Kraven the Hunter' spoilers! Let's dig into that twisty ending, supervillain reveal
- 4 bodies recovered on Mount Fuji after missing climber sent photos from summit to family
Ranking
- South Korea's acting president moves to reassure allies, calm markets after Yoon impeachment
- Kourtney Kardashians Details Her Attachment Parenting Approach for Baby Rocky
- 'Buffy' star Sarah Michelle Gellar to play 'Dexter: Original Sin' boss
- Knicks see window to play for NBA title and take a swing. Risk is worth it.
- California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
- Jenni Rivera's children emotionally accept posthumous Hollywood star
- Which Hooters locations are closed? Our map shows over 40 shuttered restaurants nationwide
- Beyond Yoga Sale: The Jumpsuit That Makes Me Look 10 Pounds Slimmer Is 50% Off & More Deals
Recommendation
Chuck Scarborough signs off: Hoda Kotb, Al Roker tribute legendary New York anchor
Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Back End
Former Chattanooga police chief indicted on illegal voter registration, perjury charges
School’s out and NYC migrant families face a summer of uncertainty
Gen. Mark Milley's security detail and security clearance revoked, Pentagon says
Arkansas panel awards Cherokee Nation license to build casino in state
Boeing sanctioned by NTSB for releasing details of Alaska Airlines door blowout investigation
The Daily Money: Peeling back the curtain on Boeing