What's Going On With New York Community Bancorp Stock Today?

New York Community Bancorp Inc NYCB shares are trading higher Monday after the Federal Deposit Insurance Corporation (FDIC) announced NYCB subsidiary Flagstar Bank entered into a purchase agreement for Signature Bridge Bank. Multiple analysts upgraded the stock in the wake of the announcement.

What Happened: Signature Bank SBNY went under last week after the biggest banking collapse since the 2008 financial crisis was spearheaded by a series of bank runs. SBNY was closed and the FDIC was appointed receiver. To protect depositors, the FDIC transferred all deposits and assets of Signature Bank to Signature Bridge Bank. 

In a press release issued Sunday, the FDIC said it entered into a purchase and assumption agreement for substantially all deposits and certain loan portfolios of Signature Bridge Bank by Flagstar. 

On Monday, the 40 former branches of Signature Bank began operating under New York Community Bancorp's Flagstar Bank. 

Related Link: New York Community Bancorp Unit To Buy Deposits, Certain Assets Of Signature Bank: FDIC

Analyst Take: Following the takeover agreement, several analysts released positive coverage on NYCB stock. 

Keefe, Bruyette & Woods analyst Collyn Gilbert upgraded NYCB from Market Perform to Outperform and announced a $10.50 price target. 

Wedbush analyst David Chiaverini also upgraded NYCB from Neutral to Outperform and raised the price target from $10 to $11.

"In exchange for the $2.7 billion discount on acquired loans, plus the interest income earned on the loans and securities, NYCB will give up only $300 million in equity appreciation rights to the FDIC, which we view as very favorable terms," the Wedbush analyst wrote in a note to clients.

BofA reiterated its Buy rating and $8 price target on the stock Monday morning. In a new note to clients, analyst Ebrahim Poonawala also highlighted the $2.7 billion discount. The analyst believes the takeover could be a "significant strategic boost" to the firm's diversification strategy.

"The transaction also reflects a positive attitude among regulators towards NYCB," Poonawala wrote in the note.

NYCB Price Action: New York Community Bancorp shares are up 37.2% at $8.93 at time of publication, according to Benzinga Pro.

Photo: Michael Pewny from Pixabay.