Not for the first time this young year, troubled lender New York Community Bancorp (NYSE: NYCB) had a lousy day on the stock market Tuesday. The company’s shares lost 22% of their value, plunging to a more than 25-year low. This was on a day when the S&P 500 index landed in positive territory, creeping up at a 0.2% pace.
Apparent regulatory pressure
The latest blow to New York Community Bancorp came after hours on Monday. A Bloomberg report said the bank’s surprise dividend cut and sharply higher provisioning it showed in its fourth quarter were directly influenced by pressure from a federal regulator.
Citing unidentified “people with direct knowledge of the matter,” Bloomberg said that New York Community Bancorp executives had held “behind-the-scenes conversations” with officials at the government’s Office of the Comptroller of the Currency (OCC), which is the branch of the Department of the Treasury tasked with supervising the nation’s banks and federal savings associations.
Neither the bank nor the OCC had publicly commented on the Bloomberg story as of this writing.
On Monday, New York Community Bancorp had confirmed media reports that Chief Risk Officer Nicholas Munson had departed the company. According to Bloomberg, his departure actually occurred “in the months before” the bank reported the dividend cut and the increase in provisioning when reporting its fourth-quarter earnings. Former chief audit executive Meagan Belfinger also left the bank at that time, Bloomberg wrote.
New York Community Bancorp did not publicly announce the departure of either executive at the time they left, which raises concerns about its transparency with investors. The alleged meetings with an important federal agency that Bloomberg reported are also cause for concern. It seems there’s much more to the story of the bank’s sudden decline in fortunes, so investors would be wise to avoid it for now.
Should you invest $1,000 in New York Community Bancorp right now?
Before you buy stock in New York Community Bancorp, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and New York Community Bancorp wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of February 5, 2024
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why New York Community Bancorp Stock Plummeted Today was originally published by The Motley Fool
Credit: Source link
