Why New York Community Bancorp Stock Is Plunging Today
New York Community Bancorp (NYSE: NYCB) stretched itself thin last year when it opportunistically expanded, and now the company plans to retrench to shore up its balance sheet. Shares of the banking company traded down 36% as of 10:30 a.m. ET Wednesday after New York Community said it would slash its dividend and take other steps to make sure it is on a firm footing.
Last year was a period of transformation for New York Community, which acquired Flagstar Bank to build its capabilities as a full-service commercial bank. Soon after that Flagstar deal closed, New York reached a deal to acquire assets and liabilities of the failed Signature Bank from the Federal Deposit Insurance Corp.
The transaction added a lot of low-cost deposits and new business relationships, but it came at a price. With the deal, New York Community went over $100 billion in total assets, placing it in a category that receives heightened scrutiny from regulators. It also stretched the company's resources.
Source Fool.com
