New York Community Bancorp Inc. Addresses Investor Concerns
New York Community Bancorp Inc. (NYCB), in an effort to reassure investors, provided an update on its recent performance and liquidity. This follows a credit rating downgrade by Moody's Investors Services, which classified the bank's rating as speculative or "junk."
Increased Deposits and Ample Liquidity
NYCB stated that it has observed an increase in total deposits over the past few weeks and confirmed having "ample" liquidity. The bank's total deposits stood at $83.0 billion as of February 5, up from $81.4 billion as of December 31. Furthermore, NYCB's total liquidity is reported to be $37.3 billion, exceeding uninsured deposits of $22.9 billion, with a coverage ratio of 163%. The bank holds $17.0 billion in cash on its balance sheet.
Rating Downgrade Impact
Despite the ratings downgrade, NYCB emphasizes that it maintains investment-grade deposit ratings from Moody's, Fitch, and DBRS. CEO Thomas Cangemi does not expect this downgrade to significantly affect the bank's contractual arrangements.
Market Reaction
In response to the Moody's downgrade, NYCB's stock experienced a 7.9% drop during premarket trading, with a maximum decline of 16.7% during Tuesday's after-hours session. Over the past three months, the stock has experienced a significant decline of 56.3%, while the S&P 500 has shown a gain of 13.2%.
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