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New York Community Bancorp tumbles 40% and is halted as troubled bank reportedly seeking cash infusion

New York Community Bancorp tumbles 40% and is halted as troubled bank reportedly seeking cash infusion
New York Community Bancorp tumbles 40% and is halted as troubled bank reportedly seeking cash infusion


A sign is pictured above a branch of New York Community Bank in Yonkers, New York, on Jan. 31, 2024.

Mike Segar | Reuters

Shares of struggling New York Community Bancorp. fell more than 40% on Wednesday amid reports that the regional bank is seeking a cash infusion.

Reuters and the Wall Street Journal reported Wednesday that the bank was looking to outside investors for cash to shore up its balance sheet.

NYCB did not immediately respond to a request for comment from CNBC.

Shares of the bank were halted multiple times during Wednesday’s trading session, and were already down sharply on the day before the reports. The stock is now below $2 per share after starting the year above $10.

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Shares of NYCB fell sharply on Wednesday.

A cash infusion would be the latest development in a turbulent start to the year for NYCB. The bank disclosed in late January that it was dramatically raising the allowance for potential loan losses on its balance sheet. That was followed shortly by Moody’s Investors Service downgrading the bank’s credit rating to junk status.

Then last week, NYCB disclosed that it had “identified material weaknesses in the company’s internal controls related to internal loan review” and replaced its CEO.

The questions surrounding NYCB are reminiscent of those that swirled around Silicon Valley Bank, Signature Bank and First Republic before all three failed in the spring of 2023. They were among several regional banks that struggled as higher interest rates pushed down the value of older Treasury holdings and led some depositors to move their accounts elsewhere.

With the U.S. economy continuing to show surprising strength and inflation still above the Federal Reserve’s 2% target, traders have been dialing back expectations for interest rate cuts this year. Those higher rates could keep pressure on the banks themselves and on commercial real estate, which is a key business for NYCB and many other regional lenders.

This is breaking news. Please check back for updates.

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