Shares of New York Community Bancorp experienced a decline in value following the parent company of Flagstar Bank's announcement of a fourth-quarter loss and dividend reduction. The loss and dividend adjustment were made to reinforce the company's capital position after acquiring assets from the failed Signature Bank.
The stock dropped approximately 16% to $8.75 in premarket trading. Despite this decline, shares were still up around 4% over the past year.
CEO Thomas Cangemi acknowledged that New York Community Bancorp is adapting to the challenges of operating as a large bank following the acquisition. The purchase brought its assets under management to over $100 billion, triggering additional regulatory requirements in various areas, including risk-based and leverage capital ratios.
Cangemi stated, "We have taken proactive measures to bolster our capital, strengthen our balance sheet, enhance our risk management procedures, and align ourselves more closely with our industry peers."
To address these objectives, New York Community Bancorp has reduced its quarterly dividend from 17 cents per share to 5 cents per share.
Furthermore, the company reported a $552 million provision for loan losses in the fourth quarter, compared to $62 million in the previous quarter. The increase was primarily due to higher charge-offs resulting from only two loans. Weaknesses in the office sector and other segments of the real estate market also contributed to the elevated provision.
As a result, New York Community Bancorp experienced a net loss of $252 million, or 36 cents per share, in the fourth quarter. This is a significant decrease compared to the $172 million net profit, or 30 cents per share, reported during the same period in the previous year.
