New York Community Bancorp plummeted Wednesday after reporting a surprise loss and slashing its dividend as it preps for stricter capital requirements. Several other regional banks retreated modestly while Treasury yields fell.
The New York-area bank lost 27 cents a share in Q4 vs. views for a 29-cent gain. Credit loss provisions soared to $552 million from $62 million in Q3, bringing those reserves more in line with peers, NYCB said.
New York Community Bancorp rose above the $100 billion asset threshold with the December 2022 acquisition of Flagstar Bank followed by the March 2023 rescue of Signature Bank.
NYCB also slashed its dividend to 5 cents a share from 17 cents to shore up capital.
NYCB Stock
NYCB stock dived 34.5% to 6.80 in Wednesday's market trading. Shares hit a record low of 5.58 intraday.
Regional banks fell, but so far aren't suggesting a return to last year's crisis sell-off.
Valley National Bancorp tumbled 4.9%, gapping below its 50-day line, but well off intraday lows. Western Alliance Bancorp sank 3.8%, but also far off lows. WAL stock was one of the most embattled during last spring's regional bank crisis.
There was less impact on superregional banks. U.S. Bancorp slipped 2.2%. PNC Financial Services edged down just 0.5%.
The SPDR S&P Regional Banking ETF slumped 3.6%, but has rebounded from support at the 50-day line.
Treasury Yields, Fed Odds Shift
Still, the 10-year Treasury yield tumbled 11 basis points to 3.95%, undercutting 4% for the first time in over two weeks. The yield had come down to 4.01% before the open on a weak ADP employment report.
Markets now see a 60.2% chance of a Fed rate cut in March, up from 40% on Tuesday. There's now a 97.1% chance of a rate cut by early May, with a 56% chance of a cumulative 50 basis points.
The Federal Reserve wraps up its two-day meeting at 2 p.m. ET, with Fed chief Jerome Powell speaking at 2:30 p.m. ET.
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