Englund

NYCB, buffeted by fears over potential real-estate loan losses, weaknesses in its internal controls and a sharp drop in its stock price, has dispatched bankers to gauge investors’ interest in buying stock in the company, people familiar with the matter said.  There is no guarantee there will be a deal, or that one would succeed in addressing the bank’s challenges, which as of Wednesday morning had led to a roughly 70% decline in its stock price since January. NYCB has been in crisis mode since the bank in January revealed signs of trouble in its commercial real-estate books, swung to a fourth-quarter loss and slashed its dividend.  Then last week, the bank disclosed that it had found “material weaknesses” in the way it assesses and monitors loans.  The disclosures have triggered several credit downgrades. Wall Street Journal 6 March 2024  https://www.wsj.com/finance/new-york-community-bancorp-seeks-cash-infusion-6e4c0083 NYCB Raises More Than $1 Billion in Equity Led...

  Moody’s cuts New York Community Bancorp’s credit rating to junk Last Updated: Feb. 7, 2024 at 5:58 a.m. ET Also Tuesday, Treasury Secretary Janet Yellen told lawmakers on Capitol Hill that she was “concerned” about risks to the commercial real-estate market, noting that “there may be some institutions that are quite stressed by this problem.” Moody’s cuts New York Community Bancorp’s credit rating to junk - MarketWatch New York Community Bancorp Shares Continue Plunge Wall Street Journal 6 February 2024 Englund: New York Community Bancorp Shares Continue Plunge (englundmacro.blogspot.com) See if it works. (5) The Kobeissi Letter på X: ”BREAKING: New York Community Bank stock, $NYCB, the bank that acquired the collapsed Signature Bank, crashes another 25% today. The stock is now down a massive 61% in 2024 to its lowest level since June 2000. Currently, roughly 40% of NYCB's assets are not under FDIC insurance.… https://t.co/HySca0fX3f” / X (twitter.com)

 after more signs of trouble at that lender and a smaller peer revived fears about the stability of the sector a year after a string of high-profile failures.  Now waves of commercial real-estate loans are set to come due, threatening to put more pressure on the smaller banks that hold high concentrations of them.  NYCB shares traded below $4 a piece on Friday, down from around $10 earlier this year. Wall Street Journal 1 March 2024  https://www.wsj.com/finance/banking/new-york-community-bancorp-names-new-risk-and-audit-executives-10d6b9cc Moody’s cuts New York Community Bancorp’s credit rating to junk https://englundmacro.blogspot.com/2024/02/moodys-cuts-new-york-community-bancorps.html

The problems at New York Community Bancorp have reignited fears about commercial real estate across the globe. More than $1 trillion in commercial mortgages will come due in the next two years and analysts are concerned about what could happen to other banks that have lent money for commercial buildings, many of which have tumbled in value as borrowing costs climbed. The basic problem? The banks hold debt on buildings that are no longer worth what they were just a few years ago, but no one is exactly sure which loans might unravel. And even as stocks trade at all-time highs, there is looming concern that commercial real estate distress could derail the US economy. Bloomberg 10 February 2024 https://www.bloomberg.com/news/articles/2024-02-10/nycb-problems-fuel-investor-fears-should-i-worry-about-commercial-real-estate How Scared Should You Be About Commercial Real Estate? Federal Reserve’s bank stress test released this week assumed a worst-case scenario where commercial real-estate pri...

New York Community Bancorp NYCB -24.54%decrease; red down pointing triangle shares plunged around 14% Tuesday,  Wall Street Journal 6 February 2024 https://www.wsj.com/finance/banking/new-york-community-bancorp-stock-dropping-again-fb7b948c New York Community Bancorp Stock Plunges 35% Wall Street Journal 31 January 2024 https://englundmacro.blogspot.com/2024/01/new-york-community-bancorp-stock.html

Loan losses surged, and the bank set aside millions of dollars more to prepare for future potential losses. Chief Executive Thomas Cangemi said the company is adjusting to the regulatory demands of being a large bank after its purchase of assets and liabilities from Signature Bank,  one of three banks that failed in rapid succession in early 2023 after spooked customers pulled cash en masse.  With the Signature deal, which closed last March, NYCB’s total assets surpassed $100 billion, a key regulatory threshold that comes with stricter capital and liquidity standards The results took some investors back to the bank crisis in early 2023, when Signature, Silicon Valley Bank and First Republic Bank all failed within a span of weeks.  Wall Street Journal 31 January 2024 https://www.wsj.com/finance/banking/new-york-community-bancorp-stock-plunges-35-reigniting-fears-for-regional-banks-7bf74972 Dodd-Frank lets the Federal Deposit Insurance Corp. guarantee uninsured deposits und...

Lenders with a lot of uninsured deposits should be required to have high-quality assets ready at the Fed’s emergency lending facility. Bank runs remain thankfully rare, largely because deposits up to $250,000 are guaranteed by the Federal Deposit Insurance Corp.  Yet customers with larger, uninsured balances are still prone to flee at signs of danger.  Those deposits amounted to almost 45% of the total as of 2022. (In NYCB’s case, the latest figures were $22.9 billion, or 28%.)  Some uninsured deposits are in business accounts used to pay workers and suppliers; it’s the other, nonoperational accounts that tend to be flightiest in a crisis. The Federal Reserve’s traditional tool for this task is the discount window. The problem is that the window has acquired a stigma over the years, making banks reluctant to access it for fear of spooking creditors, depositors and investors.  Instead, they’ve turned to alternative lenders such as the Federal Home Loan Banks, public-p...

Lenders face debt maturities, lower values after thaw in deals The US commercial real estate market has been in turmoil since the onset of the Covid-19 pandemic. But New York Community Bancorp and Japan’s Aozora Bank Ltd. delivered a reminder that some lenders are only just beginning to feel the pain. Banks are facing roughly $560 billion in commercial real estate maturities by the end of 2025, Regional lenders in particular are more exposed to the industry, and stand to be hit harder than their larger peers because they lack the large credit card portfolios or investment-banking businesses that can insulate them. The KBW Regional Banking Index slumped 6% Wednesday, its worst performance since the collapse of Silicon Valley Bank last March. The gauge dropped an additional 3.2% Thursday. Bloomberg 1 February 2024 https://www.bloomberg.com/news/articles/2024-01-31/nycb-plunge-flashes-a-560-billion-real-estate-warning-for-banks https://www.bloomberg.com/opinion/articles/2024-02-02/big-tec...