During last spring’s banking crisis, when a competing lender went under, New York Community Bank pounced, acquiring a big chunk of its business. Now, it is paying dearly for that decision.
The pain stems largely from a weakening commercial real estate market that impelled NYCB — which operates more than 400 branches under brands including Flagstar Bank — to admit to mounting losses. In a piece of symmetry with last year’s crisis, the bank said its newfound size after the acquisition of Signature Bank, had accelerated its troubles by forcing it to keep more money on hand, crimping its profitability and prompting it to consider selling distressed assets sooner than it might have preferred.
Over the past week, fears that such pressure could be too much for the bank to bear broke into the open, with NYCB’s stock shedding nearly two-thirds of its value as investors sold in droves after a dismal earnings report. After the bank rushed to project stability, including by releasing a new set of financial disclosures on Tuesday evening that one analyst termed a “late night news dump,” shares rose 7 percent on Wednesday.
Whether its efforts will stick is an open question. NYCB executives, who just a week ago had been tight-lipped about the bank’s finances, opened up the books on Wednesday and laid out turnaround plans on a public conference call.
The bank appointed a new executive chairman, Alessandro DiNello, who ran Flagstar before NYCB bought it in 2022. On the call, Mr. DiNello said he and NYCB’s chief executive, Thomas R. Cangemi, would steer the company back to financial health.
The 164-year-old institution, which was founded in Queens, boasts on its website that “the opening of the borough’s first local bank was accordingly met with elation and relief.” Now based on Long Island, it also operates branches across the Midwest and elsewhere.
Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.
Thank you for your patience while we verify access.
Already a subscriber? Log in.
Want all of The Times? Subscribe.