Shares of New York Community Bancorp fell after the parent of Flagstar Bank swung to a fourth-quarter loss and slashed its dividend to shore up capital in the aftermath of its purchase of the assets of the collapsed Signature Bank.
The stock fell about 37% in morning trading. Through Tuesday's close, shares were up about 4% over the past 12 months.
Chief Executive Thomas Cangemi said the bank holding company is adjusting to the demands of being a large bank after its purchase of assets and liabilities from Signature Bank.
With the deal, the company's assets under management surpassed $100 billion, "subjecting us to enhanced prudential standards, including risk-based and leverage capital requirements, liquidity standards" and more, he said.
"We took decisive actions to build capital, reinforce our balance sheet, strengthen our risk management processes, and better align ourselves with the relevant bank peers," Cangemi said.
Those steps include cutting the company's quarterly dividend to 5 cents a share of common stock, from 17 cents a share.
For the fourth quarter, the company also recorded a $552 million provision for loan losses, up from $62 million in the third quarter. The increase reflects a jump in charge-offs that was driven by just two loans. The company said the increase also reflects weakness in office sector and other corners of real estate.
The company swung to a fourth-quarter loss of $252 million, or 36 cents a share, from a profit of $172 million, or 30 cents a share, in the same period a year earlier.