(Bloomberg) — New York Community Bancorp dropped as much as 32% on a report that the beleaguered regional bank is trying to raise equity capital to restore confidence.
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Bankers are gauging investors’ interest in buying stock, the Wall Street Journal reported Wednesday, citing people familiar with the matter. Representatives for the company didn’t immediately respond to calls and messages seeking comment.
The shares have lost more than three-quarters of their value this year after NYCB slashed its dividend and set aside more provisions than expected for loan losses. Last week, it announced it was replacing its chief executive officer and had identified “material weaknesses” in how it tracks loan risks.
Read More: NYCB Ballooned Despite Real Estate Warnings in Years Before Fall
NYCB is a major lender to owners of apartment buildings subject to tough New York rent laws, limiting the revenue units can generate. It also financed offices in a region beset by vacancies in the work-from-home era.
Credit-rating firms have slashed the company’s grades to junk, with Moody’s Investors Service predicting the bank may set aside more money for souring loans over the next two years.
Some of the pressure on NYCB was exacerbated by its rapid growth through acquisitions in recent years. Takeovers of rival lender Flagstar Bancorp and parts of Signature Bank almost doubled the firm’s size. As its assets swelled beyond $100 billion, NYCB faced more stringent capital requirements for so-called Category IV banks in light of their systemic importance.
Shares of the New York-based bank slumped to $2.23 at 12:16 p.m. in New York, extending this year’s decline to 78%.
–With assistance from David Scheer and Bre Bradham.
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