Community Bank of New York fell 40% after reporting a $260 million loss

Shares of New York Community Bancorp (NYCB), which bought the defunct crypto-friendly signature bank last year, posted a $260 million loss in the fourth quarter of 2023 and cut its dividend.

In March 2023, Signature Bank officially closed and was taken over by the New York Department of Financial Services (NYDFS). A week after the collapse, NYCB stepped in to buy the failed bank's deposits and loans.

On March 20, the United States Federal Deposit Insurance Corporation (FDIC) announced that 40 branches of Signature Bank will operate as NYCB's wholly-owned flagship bank.

Today, we entered into an agreement with New York Community Bancorp, Inc., to purchase and take over the deposits and assets from Signature Bridge Bank. Read more ➡️ pic.twitter.com/b9RBvYtGF7

— FDIC (@FDICgov) March 19, 2023

Following the acquisition of Signature Bank, NYCB's stock rose to $9.19 on March 21, and even rose to $13.87 on July 31. “Attractive,” the executive described the acquisition of Signature Bank as a “special opportunity.” The executive said it has “strengthened its balance sheet by adding a large volume of deposits at low costs and middle market business supported by more than 130 private banking groups.”

However, a recent selloff wiped out all of the stock gains from the Signature Bank acquisition. On January 31, NYCB released its report for the last three months of 2023. In its quarterly report, the company shared that it lost $260 million in the quarter, down from a $164 million profit in 2022 during the same period. NYCB President and CEO Thomas Kangemi announced that they have “taken significant steps to build capital,” which includes reducing the common stock to $0.05 per share each quarter.

Following the announcement, NYCB stock fell from $10.37 to a low of $6.34 on Jan. 31 before recovering slightly to $7.12. Shares are trading at $6.49 at the time of writing, according to stock analysis platform TradingView.

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In May 2023, FDIC Chairman Martin Grunberg said at a hearing that Signature Bank's collapse last year stemmed from a lack of understanding of the risks associated with crypto. However, other parties disagreed that the failures had nothing to do with crypto. On April 5, NYDFS Superintendent Adrian Harris said Signature Bank's failure had nothing to do with exposure to digital assets.

In May, U.S. Senator Cynthia Lammis accused former Signature Bank CEO Scott Shay of banking on crypto. According to Lummis, the executive is shifting the blame to digital assets and has pleaded not guilty.

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