By The Financial District
Feb 21 min
New York Community Bancorp faced a significant setback as its stock plummeted by 38% in one day following a dismal financial report, as reported by CNN.
The loss was attributed to the acquisition of assets from the now-failed Signature Bank, resulting in increased capital requirements and limiting lending capabilities. I Photo: Tdorante10 Wikimedia Commons
The regional bank reported an unexpected loss of $252 million for the last quarter, a stark contrast to the $172 million profit recorded in the previous year.
The surge in loan losses, totaling $552 million, contributed to the drastic decline in stock value, hitting a 25-year low. The loss was attributed to the acquisition of assets from the now-failed Signature Bank, resulting in increased capital requirements and limiting lending capabilities.
CEO Thomas Cangemi emphasized the necessity of difficult decisions such as dividend cuts to navigate through this challenging period.
Over time, Cangemi said, he hopes to “rightsize” the business. In the meantime, steps like slashing dividends are necessary to free up funds, he told analysts on a Wednesday morning call.
“There’s no question that this was a difficult decision, but clearly necessary,” he said.