New York Community Bancorp
stock extended its losses Monday after problems with commercial real estate loans prompted a 26% decline in its shares on Friday.
While shares of regional banks also slipped last week on concern that the problems may be widespread, it wasn’t nearly as bad for them as it was for NYCB. That suggests more caution than fear on the part of investors. Regional bank stocks were edging higher Monday.
Coming into Monday, NYCB had dropped 34% in the past month and 65% since the start of the year. Last week, NYCB, the lender perhaps most exposed to apartment buildings with rent controls in New York City, surprised markets with a new $2.4 billion charge related to past bank mergers. It also said it found “material weaknesses” in its loan-review process and changed its CEO.
NYCB stock fell 6.3% as the market opened Monday, while the
SPDR S&P Regional Banking ETF
advanced 1.8%.
Valley National Bancorp
dipped 0.8%, while
Bank OZK
rose 2.1%,
Citizens Financial Group
added 1.9%,
Zions Bancorp
gained 2.6, and
Regions Financial
rose 3%.
Late Friday, Fitch downgraded NYCB’s short- and long-term bonds to BB from BBB, putting it just below investment grade, with a Negative rating outlook.
Moody’s
downgraded the bonds to junk last month.
Corrections & Amplifications: NYCB took a new $2.4 billion charge related to past bank mergers on March 1. An earlier version of this article incorrectly stated it took new loan-loss provisions.
Write to Brian Swint at [email protected]
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