New York Community Bancorp Stock Is Diving Wednesday: What's Going On?

New York Community Bancorp Inc NYCB shares are falling Wednesday after the company reported worse-than-expected financial results and reduced its quarterly dividend. Here’s what you need to know.

What To Know: New York Community Bancorp reported fourth-quarter revenue of $740 million, which missed the consensus estimate of $811.07 million, according to Benzinga Pro.

The bank holding company also reported an adjusted loss of 27 cents per share, which missed estimates for positive earnings of 28 cents per share.

President and CEO Thomas Cangemi noted that the company is adjusting to the demands of being a large bank after it was selected by the FDIC to purchase certain strategically and financially attractive assets and liabilities of Signature Bank following its collapse last year.

“The transaction also put us over $100 billion in total assets, placing us firmly in the Category IV large bank class of banks between $100 billion and $250 billion in assets and subjecting us to enhanced prudential standards, including risk-based and leverage capital requirements, liquidity standards, requirements for overall risk management and stress testing,” Cangemi said.

“With this in mind, during the fourth quarter, we took decisive actions to build capital, reinforce our balance sheet, strengthen our risk management processes, and better align ourselves with the relevant bank peers.”

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New York Community Bancorp said it recorded a $552 million provision for loan losses in the fourth quarter and cut its quarterly dividend to 5 cents per common share to help accelerate the building of capital to support its balance sheet.

“While these necessary actions negatively impacted our fourth quarter results, we are confident they better align our larger organization with our new peers and provide a solid foundation going forward,” Cangemi added.

Several other regional bank stocks are trading lower following New York Community Bancorp’s quarterly results. Signature Bank was one of three U.S. banks that collapsed last year as part of a banking crisis that was spurred by a rapid increase in interest rates. The SPDR S&P Regional Banking ETF KRE was down 3.52% at $50.93 at last check.

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NYCB Price Action: New York Community Bancorp shares were halted on a circuit breaker to the downside in early trading Wednesday. The stock has trended lower for most of the day and was down 36.7% at $6.57 at the time of writing, according to Benzinga Pro.

Photo: Shutterstock.