Factbox: New York Community Bank's path to $100 bln club and share slide

Signature Bank

01/02/2024 11:00

(Repeats factbox from Jan. 31, no changes to text)
    By Nupur Anand
       NEW YORK, Jan 31 (Reuters) - Nearly a year ago, New York
Community Bank  NYCB.N  waded into the regional bank crisis,
buying up assets in failed Signature Bank, helping secure a spot
in the list of banks with over $100 billion in assets.
    On Wednesday, the bank became the one under investor
scrutiny after it posted an unexpected quarterly loss and its
shares sank nearly 40%.
    The surprise loss drove down other regional bank shares,
dragging the KBW regional index  .KRX  down 6%, as it reignited
concerns over the health of smaller lenders some of which are
still recovering from bank failures in the U.S. last year. 
    Here are key facts about NYCB. The bank did not respond to
an email request seeking comment.
    
    * Thomas Cangemi, the CEO of NYCB, a long time bank veteran
took over its reins in December 2020 and has been working to
transition NYCB into a full-service commercial bank. 
    
    * Founded in 1859, the bank long served as a small regional
bank. Between 2000 and 2023, NYCB completed 13 acquisitions.
With two recent acquisitions, including Flagstar Bank, it
expanded its footprint across the country. 
    
    * As of Dec. 31, the bank had $116.3 billion in total
assets, $85.8 billion of loans, and $81.4 billion of deposits. 
    
    * In 2023, NYCB emerged as a buyer of failed Signature bank
that was shuttered after unsustainable deposit outflows. NYCB
acquired $34 billion of deposits, $13 billion in loans and $25
billion in cash from the failed bank, catapulting it into the
over-$100 billion-in-assets club. These banks are required to
follow stricter capital and liquidity requirements as mandated
by the regulators. 
    Cangemi said on Wednesday the changes in its financial
profile that pushed it into the new category occurred faster
than expected. 
    "This (Signature's) acquisition allows us to advance our
strategy while strengthening and diversifying our balance sheet.
However, we will become a $100 billion-plus bank sooner than we
had anticipated," Cangemi said on an analyst call on Wednesday.
The bank crossed the $50 billion asset threshold in 2018.
    
    * The bank had to set aside a higher sum to meet the
regulatory requirements this quarter along with parking more
money in its rainy day funds to cover potential losses, which
led to an adjusted loss of $185 billion. The bank also slashed
its dividend by 70%.
    
    * Regional banks that have a higher share of commercial real
estate loans have been in the spotlight as concerns around these
loans going sour have remained elevated since the March 2023
banking crisis. NYCB made increased provisions around its CRE
loan books which once again raised concerns around this
portfolio, said Ken Usdin, an analyst at Jefferies.
    
    * A sluggish and cloudy outlook for 2024 also weighed on the
bank's stock performance. Despite a few repeated requests for
clear guidance on net interest income by analyst Steven
Alexopoulos at JPMorgan, management did not provide a number.
JPMorgan declined to comment.
    Keith Horowitz, analyst at Citigroup said there was a lot of
uncertainty about the guidance due to missing pieces of
information on net interest income and credit. 
    It is likely the stock will remain under pressure as a
result of the dividend cut and the poor outlook, said
Christopher McGratty, an analyst at KBW. 

 (Reporting by Nupur Anand in New York; editing by Megan Davies
and Sonali Paul)
 ((Nupur.Anand@thomsonreuters.com; +1 646 240 2975))