New York Community Bank (NYCB), which took over the failed Signature Bank in 2023, has witnessed a significant drop in its shares following the announcement of a $260 million loss in the fourth quarter of 2023 and a dividend cut. Signature Bank, known for its crypto-friendly stance, collapsed in March 2023 and was acquired by the New York Department of Financial Services (NYDFS). NYCB purchased Signature Bank's non-cryptocurrency deposits and loans a week after the collapse.
After the acquisition, NYCB shares initially rose to $9.19 on March 21, reaching a high of $13.87 on July 31. NYCB President and CEO Thomas Cangemi viewed Signature Bank's assets and liabilities as strategically and financially attractive, emphasizing the unique opportunity the acquisition presented. The move was intended to strengthen NYCB's balance sheet by incorporating a significant number of low-cost deposits and a middle-market business with over 130 private banking teams.
However, recent developments have seen NYCB's shares plummet, erasing gains made following the Signature Bank acquisition. The bank reported a loss of $260 million in Q4 2023, compared to a $164 million profit in the same period in 2022. In response, Cangemi announced decisive actions to build capital, including a reduction in the quarterly ordinary dividend to $0.05 per share. Following this announcement, NYCB shares dropped from $10.37 to a low of $6.34 on January 31, recovering slightly to $7.12 and currently trading at $6.49.
FDIC Chairman Martin Gruenberg attributed Signature Bank's collapse in May 2023 to its failure to understand the risks associated with cryptocurrencies. However, NYDFS Director Adrienne Harris disagreed, stating on April 5, 2023, that Signature Bank's collapse had nothing to do with its exposure to digital assets. U.S. Senator Cynthia Lummis criticized former Signature Bank executive Scott Shay for blaming cryptocurrencies for the collapse, asserting that he had not taken any personal responsibility for the bank's failure.
