New York Community Bancorp Inc.’s stock fell sharply on heavy volume in premarket trading on Wednesday after it said it would cut its dividend by more than two-thirds as it builds up capital to meet regulatory requirements as a larger bank.
The bank also reported a surprise fourth-quarter loss and missed Wall Street’s revenue estimate.
New York Community Bancorp’s stock
fell by 27% in premarket trading on a volume of 3.4 million shares.
“We recognize the importance and impact of the dividend reduction on all of our stockholders and it was not made lightly,” said Chief Executive Thomas R. Cangemi. “We believe this is the prudent decision as it will allow us to accelerate the building of capital to support our balance sheet as a Category IV bank.”
After acquiring ailing Signature Bank and its $38 billion in assets last year, New York Community Bancorp now meets the regulatory definition of a Category IV bank with assets of $100 billion to $250 billion. It also closed its acquisition of Flagstar Bank in late 2022.
The bank said it’s cutting its dividend to 5 cents a share from 17 cents a share as it builds up capital and makes other moves to meet the requirements of a Category IV bank.
As of Dec. 31, total assets were $116.3 billion, up from $111.2 billion on Sept. 30 and $90.1 billion as of Dec. 31.
New York Community Bancorp reported a fourth-quarter loss of $260 million, or 36 cents a share. In the year-ago quarter, it reported net income of $199 million, or 27 cents a share.
Breaking out one-time items, New York Community Bancorp’s adjusted loss was 27 cents a share, below the FactSet consensus estimate for earnings of 26 cents a share.
Fourth-quarter revenue of $886 million rose from $577 million in the year-ago quarter but missed the analyst estimate of $929.5 million, according to FactSet data.