Moody's puts New York Community Bancorp on review for downgrade (updated)

Signature Bank

01/02/2024 24:48

(Adds details in paragraph 2, background in paragraph 3 to 7)
       Jan 31 (Reuters) - Ratings agency Moody's on Wednesday
placed all long-term and short-term ratings and assessments of
New York Community Bancorp  NYCB.N  and its subsidiary, Flagstar
Bank, on review for a downgrade.
    Moody's said the ratings action reflected NYCB's
unanticipated loss in its New York office and multifamily
properties, weak earnings, material decline in its
capitalization, and its growing reliance on wholesale funding.
        The review came after the bank, which bought some of
Signature Bank's assets last year, said it was cutting its
dividend by 70% and building capital to bolster its balance
sheet.
  
        NYCB's shares fell as much as 46% in morning trading,
but later pared losses.
  
        The Signature Bank purchases, along with its 2022
acquisition of Flagstar Bank, pushed NYCB's 
    balance sheet
     above a $100 billion regulatory threshold that is subject
to stricter capital and liquidity requirements. It had assets of
$116.3 billion as of December.
  
        The dividend cut and the surprise loss from NYCB dragged
regional U.S. bank stocks, renewing fears over the health of
similar lenders.
  

 (Reporting by Baranjot Kaur in Bengaluru; Editing by Sherry
Jacob-Phillips and Diane Craft)
 ((Baranjot.Kaur@thomsonreuters.com; +91 86990 46242;))