Since it reported a big surprise loss on problem commercial real-estate loans a week ago, events have been moving fast at New York Community Bancorp.
First, the share price suffered a near 40% fall on the news.
Then came the downgrades. First was Fitch, which on Friday downgraded NYCB’s issuer default rating from BBB to BBB- and kept even that on negative outlook.
More troubling, on Tuesday, Moody’s took the bank’s baseline credit assessment down by two notches from baa2 to ba1. That is below investment grade, where it becomes tough for a mortgage lender striving to become a commercial bank to generate margin on lending to investment-grade borrowers.
Chief executive Thomas Cangemi tried to reassure investors by putting out a statement that the Moody’s downgrade “is not expected to have a material impact on our contractual arrangements”, while also reporting that total deposits have gone up since the end of 2023 to $83 billion, of which 72% are insured or collateralized.
But the share price falls resumed; the stock is now down 58% from the eve of earnings.
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