Shares of New York Community Bancorp (NYSE: NYCB) were experiencing a decline in early Thursday trading as analysts expressed concern over the possibility of depositors withdrawing funds from the troubled lender.
The stock was down 5% to $4.25 in premarket trading. This drop followed a nearly 7% increase on Wednesday, which came after the bank announced the appointment of a new executive chairman and reassured investors about its liquidity. Unfortunately, the stock has been heavily impacted since last week's earnings report, which revealed significant write-downs for commercial property loans.
D.A. Davidson analyst, Peter Winter, responded to the recent developments by downgrading NYCB shares to "Neutral" on Thursday. He also set a price target of $5. In total, the stock has experienced a 56% decline this year.
Winter highlighted the potential risk of deposit outflows in light of the negative news, including Moody's downgrade of the company's debt earlier this week. According to his note, "there is a risk of deposit outflows going forward," and he argued that NYCB's current market value is no longer based on its fundamentals.
In premarket trading, the SPDR S&P Regional Banking ETF was down 0.4%. Meanwhile, Valley National Bancorp, another regional bank, saw little change in its stock price. M&T Bank also experienced a 0.4% decline.
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