Less than a year ago, New York Community Bancorp looked like one of the big beneficiaries of a crisis among its peers when it swooped in to take over most of the assets of ailing Signature Bank and catapulted to over $100 billion in assets.
The cost of that decision reverberated on Wednesday when the bank, which has 420 branches, posted a $252 million loss in its latest quarter, slashed its dividend and set aside a significant amount of reserves to cover any future losses. Its stock plummeted 38 percent to a 25-year low, dragging down shares of other regional banks 6 percent on average.
New York Community Bancorp tried to put a brave face on the news — an accompanying release included the headline “Record Results for 2023,” true inasmuch as the bank is now much larger than before the Signature acquisition — but analysts and investors quickly zeroed in the weaknesses.
It was an uneasy reminder of last March’s tumult, when problems at Silicon Valley Bank spilled over into the industry, felling among others Signature, a bank known for its real estate, legal and cryptocurrency lending. New York Community Bancorp bought much of Signature out of federal receivership.
Some of New York Community Bancorp’s problems are of its own making, while others reflect its absorption of Signature. The bank’s executives said they would have to sock away more money for losses in loans in commercial real estate, partly because of a souring investment environment for office space. (One executive said there was “no real property activity happening right now.”)
The bank did not respond to a request for comment.
As analysts peppered the bank’s executives on their regularly scheduled call to review results, the questioning turned unusually sharp. Steven Alexopoulos of J.P. Morgan asked why the bank would not disclose more details on the effect on its future profitability.
“Why not give us the number?” Mr. Alexopoulos asked. “Your stock is at a 25-year low. I can’t imagine you’re happy with this.” He added, “I don’t know why you wouldn’t take this opportunity to level-set expectations.”
Executives declined to specify, again and again tying their malaise to regulations that force banks with more than $100 billion in assets to hold more money in reserve than smaller lenders, as New York Community Bancorp was earlier. On the dividend cut, the bank’s president, Thomas R. Cangemi, said, “There’s no question that this was a difficult decision as a firm, but clearly necessary.”
One important difference between last year’s crisis and what is befalling New York Community Bancorp: The bank’s deposits appear to be relatively stable. Deposits slipped 2 percent in the fourth quarter to $81.4 billion.