NY Community Bancorp's Crypto Dip: Earnings Miss & 71% Dividend Cut

• New York Community Bancorp Experiences Major Loss
• Earnings Estimates Missed
• Prior Acquisition of Signature Bank's Non-Crypto Deposits
• Reduction in Quarterly Dividends
• Closure of Signature Bank Not Due to Crypto

New York Community Bancorp Experiences Major Loss

New York Community Bancorp (NYCB), a banking institution known for its acquisition of non crypto-related deposits of the now defunct Signature Bank, encountered a remarkable drop of 42% in value on Wednesday. This significant decrease was due to the bank falling short of earnings predictions and making drastic cuts to its dividends.

Earnings Estimates Missed

For the final quarter, the bank showed a loss of $0.36 per share, a sharp contrast to the predicted earnings of $0.27 per share, as per FactSet data. In an official statement, the company pointed at merger-related items and a FDIC special assessment as the reasons behind the net income and diluted EPS for the fourth quarter taking a hit.

Prior Acquisition of Signature Bank's Non-Crypto Deposits

In the preceding year, NYCB's Flagstar Bank division took over non-crypto associated deposits held by Signature Bank. This step was taken after state regulators closed down the crypto-friendly bank. Signature Bank was among the casualties of the 2023 banking crisis, which also led to the voluntary liquidation of Silvergate Bank and the closure of Silicon Valley Bank.

Reduction in Quarterly Dividends

The quarterly dividends of NYCB were also reduced to $0.05, which is approximately a 71% decrease from the previous quarter. President and CEO Thomas Cangemi, while aware of the significant effect this would have on all stockholders, stated in a press release that this was a measured decision. It would provide the opportunity to quickly boost capital to bolster the balance sheet of the Category IV bank.

Closure of Signature Bank Not Due to Crypto

Despite prevalent rumors, the closure of Signature Bank was not due to its affiliation with cryptocurrencies.

Edited by Jonathan Stoker