NYCB woes reignite fears about shaky banks as anniversary of March crisis nears
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Embattled lender New York Community Bank disclosed a litany of financial metrics in the past 24 hours in a bid to soothe skittish investors.
But one of the most crucial resources for any bank appears to be in short supply for NYCB lately: confidence.
The regional bank late Tuesday said that deposits were stable at $83 billion and that the firm had ample resources to cover any possible flight of uninsured deposits. Hours later, it promoted chairman Alessandro DiNello to a more hands-on role in management.
The moves spurred a 6% jump Wednesday in NYCB shares, a small dent in the stock's more than 50% decline since the bank reported fourth-quarter results last week. On Thursday, shares of the Hicksville, New York-based lender resumed their decline, falling more than 6%.
«There's a confidence crisis here,» said Ben Emons, head of fixed income at NewEdge Wealth. «The market doesn't have belief in this management.»
Amid the freefall, ratings agency Moody's cut the bank's credit ratings two notches to junk, citing risk management challenges while the firm searches for a pair of key executives. Making matters worse, NYCB was hit with its first shareholder lawsuit Wednesday over the share collapse, alleging that executives misled investors about the state of its real estate holdings.
The sudden decline in NYCB, previously deemed one of last year's winners after acquiring the assets of Signature Bank, reignited fears over the state of medium-sized American banks. Investors have worried that losses on some of the $2.7 trillion in commercial real estate loans held by banks could trigger another round of turmoil after deposit runs consumed Silicon Valley Bank and Signature last March.
Last week, NYCB said it was
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