Shares of New York Community Bancorp, which touched a 27-year low on Tuesday, climbed after the company said deposits have increased since the end of last year and liquidity remains “ample.”
The stock advanced 7.4% in early New York trading, paring a drop of about 60% since last week, when NYCB announced plans to slash its dividend and stockpile reserves for troubled loans tied to commercial real estate.
“The company’s liquidity and deposit positions are markedly better than almost anybody thought yesterday,” Piper Sandler & Co. analysts Mark Fitzgibbon and Gregory Zingone wrote in a note Wednesday.
Recent acquisitions catapulted NYCB’s assets beyond $100 billion, a level that triggers additional regulatory scrutiny and capital requirements. The bank took steps to shore up capital after mounting behind-the-scenes pressure from the Office of the Comptroller of the Currency, Bloomberg reported late Monday. Two executives overseeing risk and auditing left their posts in recent months.
Total liquidity of $37.3 billion exceeds uninsured deposits of about $22.9 billion, excluding collateralized and internal deposits, NYCB said in a statement late Tuesday. Total deposits of $83 billion represent an increase from the end of last year, according to the statement.
The firm also said on Wednesday that it appointed Alessandro DiNello as executive chairman to work with Chief Executive Officer Thomas R. Cangemi and the rest of the senior executive leadership team “to improve all aspects of the bank’s operations.” DiNello had been non-executive chairman and previously ran Flagstar Bancorp Inc., which NYCB bought in late 2022.
Moody’s Investors Service cut the bank’s credit rating to junk late Tuesday, citing “multifaceted” financial risks and governance challenges. In its statement, NYCB said Moody’s action isn’t expected to have a material impact on its contractual arrangements. The bank’s deposit ratings from Moody’s and others remain investment grade, it said.
(Adds analysts’ comments in third paragraph.)
