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Regional bank stocks were lower across the board early Friday, dragged down by the latest bad news from New York Community Bancorp Inc. that included the disclosure of ”material weaknesses” in its accounting.
NYCB
NYCB,
was down 25%, after it announced an immediate leadership shakeup, including a new CEO, after booking a big hit to its profits last year.
Thursday’s disclosures marked the latest drama for the Long Island, N.Y.-based bank, which has struggled with its exposure to an ailing commercial real-estate market. The bank operates Flagstar Bank in several states and picked up some of the leftover assets from the failed Signature Bank last year.
While the accounting issues are likely company-specific, NYCB’s loan issues have sparked concerns that other banks are also struggling with real-estate loans after the Federal Reserve’s interest rate increases over the last two years.
The bank is especially exposed to real estate in New York City and its rent controls that have prevented landlords from imposing higher rents to combat the effects of higher interest rates.
Other regional banks with exposure to New York City were lower early Friday, with Customers Bancorp.
CUBI,
down 1.4%, Valley National Bancorp
VLY,
down 2.6%, Webster Financial Corp.
WBS,
down 1.6%, Bank United Inc.
BKU,
down 0.8% and Citizens Financial Group Inc.
CFG,
down 1.1%. Axos Financial Inc.
AX,
was not yet traded.
But other regional banks were also lower. Zions Bancorp
ZION,
was down 1.6% and was third-biggest decliner among S&P 500 companies. Comerica Inc.
CMA,
was down 1.5%, Fifth Third Bancorp.
FITB,
was down 1.4%, KeyCorp. and Truist Financial Corp.
TFC,
were down 1.3%.
Regional banks accounted for five of the top 10 S&P 500
SPX
decliners. The SPDR S&P Regional Banking ETF
KRE
was down 1.2%.
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