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Analysis

The Banks Are Not Okay

Markets are recognizing how precarious conditions for banks can be.

“Bad” doesn’t adequately express the last few days for New York Community Bancorp. As the close of Thursday, shares were down 44.6% after the bank revealed a 2023 Q4 loss of $252 million rather than the Q3 $207 million gain. Markets remembered that there are still significant concerns about commercial real estate and its loans.

New York Community had acquired much of the deposits and loan assets from failed Signature Bank, and it added a $552 million provision for future credit losses, plus $185 million in net charge-offs, plus cut dividends by 70% to bolster capital.

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Erik Sherman

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