New York Community Bancorp (NYCB) experienced a decline in stock value on Thursday following a downgrade by an analyst. Concerns have arisen that depositors may start withdrawing funds from the troubled lender.
In premarket trading, NYCB stock was down 2.7% to $4.35 after seeing a nearly 7% increase on Wednesday. This increase came after the bank announced the appointment of a new executive chairman and assured investors of ample liquidity. The SPDR S&P Regional Banking ETF also saw a 0.4% decrease in premarket trading.
The stock has been profoundly affected since last week’s earnings report, which revealed substantial write-downs for commercial property loans. As a result, shares have fallen by 56% this year.
D.A. Davidson analyst Peter Winter made the decision to downgrade NYCB shares to Neutral with a price target of $5. Winter expressed concerns about potential deposit outflows and bankers abandoning the bank due to negative reports and the Moody’s downgrade to junk status. Additionally, NYCB’s heavy exposure to commercial real estate is seen as contributing to the risks. Winter emphasized that transforming the balance sheet will be a long-term process, acknowledging that more challenges lie ahead after the fourth-quarter earnings call.
In these turbulent times, NYCB must navigate a challenging path towards stability.