NYCB: trouble. And knock-on effects for other regional banks

Crash

https://finance.yahoo.com/news/regional-bank-that-played-rescuer-in-2023-now-in-turmoil-163932844.html
It got too big for its britches. "Trouble in River City." Dividend suspended. And after the Flagstar AND Signature Bank acquisitions, it must meet more stringent capital reserve requirements. The bank doubled its own size in two years. "Superior planning!" .... So this explains in large part why my own Regional Bank holding has fallen like a rock in the past couple of days. BHB. I had considered throwing some money at NYCB. Glad I did not do it.

"...The stock of the Hicksville, N.Y.-based lender fell 46% Wednesday after it reported a surprise net loss of $252 million for the fourth quarter and announced a suspension of its dividend...The news sent new shockwaves through the regional banking world..."

Crash

2nd straight day:
https://www.cnbc.com/2024/02/01/us-regional-banking-shares-tumble-for-second-straight-day.html

yogibearbull

Regional bank KRE,
https://stockcharts.com/h-sc/ui?s=KRE&p=D&yr=1&mn=6&dy=0&id=p99852688028

yogibearbull

NYCB raised $1 billion from an equity issue at throwaway prices. These investors will make out like bandits, or will be fools, but only in hindsight.
News https://www.cnbc.com/2024/03/06/new-york-community-bancorp-tumbles-40percent-and-is-halted-as-troubled-bank-reportedly-seeking-cash-infusion.html
NYCB Chart https://stockcharts.com/h-sc/ui?s=NYCB&p=D&b=5&g=0&id=p31473357190

sma3

Munchin did such a great job as Sec Treasury too!

Can't wait to see how this turns out. But if I remember correctly, he has a lot of household expenses to pay for

MikeM

Carrying individual stocks is a high-risk game. If it's dividends you're after, there are plenty of lower risk baskets of dividend stock ETFs to use. Scwhab has a very good one, SCHD. Just my 2-cents.

sma3

I agree about SCHD A great fund and very cheap ER

I doubt there are any cockroaches in it!

BaluBalu

The Gang paid about $1.7 per share. So, they already made 100% return, with closing market price of $3.4, only if they can sell to cash out. Obviously, the gang did not do the deal just for 100% return.

sma3

For those of you with a greater risk tolerance than I, this is worth looking at. While I dislike Munchin's politics immensely and think is wife is a disguising, ethically challenged jerk, he did turn around IndyMac. Of course one of the ways he did it was foreclosing on thousands of homeowners when many people thought they should have offered modifications instead.

At least the CEO etc who destroyed this company got fired. I hope his options remain deep underwater

BaluBalu

@sma3,

The warrants they received in the deal are exercisable at $2.50, today’s closing price is $3.40.

I do not know anything about Indymac. If M did not do anything to drive stock price down and further dilute pre-existing shareholders, which some white knights and activist investors have done in deals, I agree this is worth a flyer and I can be persuaded to participate. At what price is an individual’s personal preference.

yogibearbull

After getting involved with NYCB rescue, Mnuchin is eying TikTok.
https://www.cnn.com/2024/03/14/business/steven-mnuchin-tiktok
https://www.cnbc.com/2024/03/14/former-treasury-secretary-mnuchin-is-putting-together-an-investor-group-to-buy-tiktok.html

Mark

"After getting involved with NYCB rescue, Mnuchin is eying TikTok."

Well now there's a conundrum. Do you want China to have your data or the Maga party?

Old_Joe

Hello Hobson. I guess that I'll have to go with China.