NYCB stock cheapest among US lenders with over $3 bln in assets, S&P Global says

Mechanics Bancorp

08/05/2024 16:19

May 8 (Reuters) - 
    New York Community Bancorp  NYCB.N  was the cheapest U.S.
bank stock among lenders with more than $3 billion in assets for
the  second straight month, an analysis by S&P Global Market
Intelligence showed on Wednesday.
  
        The evaluation based on adjusted tangible book value
(TBV) showed that as of April 30, the troubled lender was
trading at 30% of the metric that indicates the per-share value
of its equity after excluding its intangible assets. 
    
   WHY IT'S IMPORTANT 
   The bank has been struggling to stem a stock rout that has
wiped billions off its value since January when it cut its
dividend and reported a surprise quarterly loss tied to its loan
exposure to distressed commercial real estate.
    Its shares have so far this year lost 64% of their value and
were trading at levels last seen in 1996. 
    Last week, the lender reported a first-quarter loss and said
it will report an annual loss much bigger than estimates due to
higher provisions for potential loan loss. 
    
    KEY QUOTE
    "The company still needs to execute on its strategic plan to
increase diversification and become a higher performing regional
bank with long-term sustainable profitability," analysts at
Morningstar DBRS had earlier this month said. 
    
    BY THE NUMBERS 
    NYCB's adjusted TBV of 30% is followed by First Foundation
 FFWM.N  and HomeStreet  HMST.O  at 35.7% and 45.7%,
respectively, according to S&P. 
    Citigroup  C.N  was the only big bank in the top 20 at
71.9%. The third-largest U.S. lender recently finished 
restructuring its lending-to-trading business to improve its
profitability and valuation. 
    Earlier this month, NYCB said it was trading at about 0.42
times its fully converted tangible book value, much lower than
the 1.48 times multiple for banks with assets between $100
billion and $250 billion. 
    The lender, which had $112.90 billion in total assets as of
March 31, said it aims to close the valuation gap over time.
    
    MARKET REACTION 
    The lender has been subject to a slew of downgrades by
ratings agencies since January. The latest by Fitch is its third
downgrade to the bank's credit rating, which pushed its stock
down 4% on Wednesday. 
    The agency cited weaker earnings coupled with the execution
risk associated with its recently unveiled restructuring plan.  
 
    
    GRAPHIC   

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 (Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by
Arun Koyyur)
 ((JaiveerSingh.Shekhawat@thomsonreuters.com;))