{"id":1698,"date":"2024-03-02T12:03:44","date_gmt":"2024-03-02T12:03:44","guid":{"rendered":"https:\/\/businesstriumphs.com\/index.php\/2024\/03\/02\/a-year-after-silicon-valley-bank-failed-another-regional-lender-flashes-warning-signs\/"},"modified":"2024-03-02T12:03:44","modified_gmt":"2024-03-02T12:03:44","slug":"a-year-after-silicon-valley-bank-failed-another-regional-lender-flashes-warning-signs","status":"publish","type":"post","link":"https:\/\/businesstriumphs.com\/index.php\/2024\/03\/02\/a-year-after-silicon-valley-bank-failed-another-regional-lender-flashes-warning-signs\/","title":{"rendered":"A year after Silicon Valley Bank failed, another regional lender flashes warning signs"},"content":{"rendered":"
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Regional lender\u00a0New York Community Bank\u00a0finds itself in an apparently worsening predicament, just as the\u00a0anniversary\u00a0of last year\u2019s banking turmoil nears.<\/p>\n

Shares of the troubled lender plunged 25% Friday\u00a0to below $4 apiece after NYCB\u00a0restated\u00a0recent quarterly earnings lower by $2.4 billion, formally\u00a0replaced\u00a0its CEO and\u00a0delayed\u00a0the release of a key annual report.<\/p>\n

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The most worrying development, though, is directly tied to investors\u2019 fears about commercial real estate and shortfalls the bank reported in a key aspect of its business: NYCB said that poor oversight led to \u201cmaterial weaknesses\u201d in the way it reviewed its portfolio of loans.<\/p>\n

The disclosure is a \u201csignificant concern that suggests credit costs could be higher for an extended period,\u201d Raymond James analyst Steve Moss said Thursday in a research note. \u201cThe disclosures add to our concern about NYCB\u2019s interest-only multi-family portfolio, which may require a long workout period unless interest rates decline.\u201d<\/p>\n

In a remarkable reversal of fortunes, a year after deposit runs consumed regional lenders including\u00a0Silicon Valley Bank, NYCB \u2014 one of the perceived winners from that period after\u00a0acquiring\u00a0a chunk of the assets of Signature Bank following government seizure \u2014 is now facing existential questions of its own.<\/p>\n

The bank\u2019s trajectory shifted suddenly a month ago after a\u00a0disastrous\u00a0fourth-quarter report in which it posted a surprise loss, slashed its dividend and shocked analysts with its level of loan-loss provisions.<\/p>\n

Days later, ratings agency Moody\u2019s cut the bank\u2019s credit ratings\u00a0two notches to junk\u00a0on concerns over the bank\u2019s risk management capabilities after the departure of NYCB\u2019s chief risk officer and chief audit executive.<\/p>\n

At the time, some analysts were comforted by the steps NYCB took to shore up its capital, and noted that the\u00a0promotion\u00a0of former Flagstar CEO Alessandro DiNello to executive chairman boosted confidence in management. The bank\u2019s stock was briefly buoyed by a flurry of insider\u00a0purchases\u00a0indicating executives\u2019 confidence in the bank.<\/p>\n

More from CNBC:<\/strong><\/p>\n

DiNello became CEO as of Thursday after his predecessor stepped down.<\/p>\n

Now, some are questioning the stability of NYCB\u2019s deposits amid the tumult. Last month, the bank\u00a0said\u00a0it had $83 billion in deposits as of February 5, a slight increase from year-end. Most of those deposits were insured, and it had ample resources to tap if uninsured deposits left the bank, it said.<\/p>\n

\u201cNYCB still has not provided an update on deposits, which we can only infer they are down,\u201d D.A. Davidson analyst Peter Winter said Thursday in a note.<\/p>\n

\u201cThe question is, by how much?\u201d Winter asked. \u201cIn our view, corporate treasurers were reassessing if they are going to keep deposits at NYCB when their debt rating was downgraded to junk.\u201d<\/p>\n

In a\u00a0statement\u00a0released Friday announcing a new chief risk officer and chief audit executive, NYCB CEO DiNello noted that he had identified the material weaknesses disclosed Thursday and is \u201ctaking the necessary steps to address them, including appointing new executives.\u201d<\/p>\n

The bank\u2019s allowance for credit losses isn\u2019t expected to change, he added.<\/p>\n

\u201cThe company has strong liquidity and a solid deposit base, and I am confident we will execute on our turnaround plan,\u201d DiNello said.<\/p>\n

The pressure on NYCB\u2019s operations and profitability amid elevated interest rates and a murky outlook for loan defaults has raised questions as to whether NYCB, a serial acquirer of banks until recently, will be forced to sell itself to a more stable partner.<\/p>\n

Ben Emons, head of fixed income for NewEdge Wealth, noted that banks trading for less than $5 a share are perceived by markets as being at risk for government seizure.<\/p>\n

NYCB stock notched a 52-week low of $3.32 per share on Friday.<\/p>\n

\u201cWe expect more questions on whether NYCB will sell,\u201d Citigroup analyst Keith Horowitz said in a note. \u201cBut we do not see a lot of potential buyers here even at this price due to the uncertainty \u2026 in our view, NYCB is on its own.\u201d<\/p>\n

A NYCB representative didn\u2019t immediately return a request for comment.<\/p>\n<\/p>\n

This post appeared first on NBC NEWS<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Regional lender\u00a0New York Community Bank\u00a0finds itself in an apparently worsening predicament, just as the\u00a0anniversary\u00a0of last year\u2019s banking turmoil nears. Shares of the troubled lender plunged 25% Friday\u00a0to below $4 apiece after NYCB\u00a0restated\u00a0recent quarterly earnings lower by $2.4 billion, formally\u00a0replaced\u00a0its CEO and\u00a0delayed\u00a0the release of a key annual report. The most worrying development, though, is directly tied […]<\/p>\n","protected":false},"author":0,"featured_media":1699,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1698","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=1698"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/1698\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/1699"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=1698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=1698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=1698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}