The bank that bailed out Signature Bank (which closed Donald Trump's accounts) may need a bailout

Politics
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1) Jan. 12, 2021

From NBC

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In the wake of the deadly riots on Capitol Hill last week, Deutsche Bank and Signature Bank have said they are cutting future ties with President Donald Trump.

(Oh the murderous rampage, roll eyes)

2) March 12, 2023,

Signature Bank died. (Go woke go broke,) it was closed by the New York State Department of Financial Services and the Federal Deposit Insurance Corporation (FDIC) was named Receiver.

Seven days later (a remarkably short time) Long Island based New York Community Bank (NYCB) absorbed Signature Banks assets and ongoing business.

According to industry newsletter “The Financial Brand” (March 24, 2023)

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. . . the deal is perhaps the greatest staff liftout of all time — Signature’s vaunted private client banking teams. NYCB sees them as a not-so-secret weapon for continuously growing deposits. . . .

. . .From a strategic perspective, the government-assisted acquisition dovetails with NYCB’s plans to transition away from a savings institution to more of a commercial banking model. . . .

3) This morning

NYCB stock has been in trouble for a week and this morning in the WSJ

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Moody’s Cuts NYCB to Junk, Extending Sharp Decline in Shares

Moody’s Investors Service cut New York Community Bancorp’s NYCB credit rating two notches to junk late Tuesday, delivering another blow to the besieged Hicksville, N.Y., lender.

Moody’s cited “financial, risk-management and governance challenges” for NYCB, which reported a surprise quarterly loss and slashed its dividend last week, as the ratings firm downgraded the bank to Ba2 from Baa3. Fitch Ratings on Friday downgraded NYCB to the lowest possible investment-grade rating.

NYCB plunged 15% after hours. The stock hit its lowest close since 1997 on Tuesday, tumbling 22% on the day, having lost more than half its value since the loss was reported.

When it reported fourth-quarter results, the bank said it was shoring up its balance sheet after its acquisition of Signature Bank last year and losses on its commercial real-estate book.

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In the wake of the deadly riots on Capitol Hill last week,

When you base your decisions on fake news lies, it reveals the business IQ of those making them at the top and a highly probable bad ending. IOW…this was predictable.

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Sounds like the commercial real estate debt market is getting ready for a reconning.

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Yep the value of their real estate loan assets a collapsed. Interesting

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Love the ribbing. Almost like there is an innate need :blush:

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That, or more importantly, a “missed prediction” related to it seems to be at the core.

When NYCB made the acquisition 10 months ago, it made some set asides.
In its recent earnings announcement, it turned out those set asides were inadequate.
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It also turns out two of the banks officers departed in Q4 2023.
Had the bank reported that clearly at the same time it reported the other news, the 1-2 day slide might have stopped there.

But both their risk office and their audit officer quietly left the company in Q3 and investors “discovered it” only days after the stock slide had begin.

New York Community Bank’s chief risk officer and chief audit officer left the bank in the months leading up to the surprise fourth-quarter loss that has sent the bank’s stock tumbling 48% in less than a week, according to comparisons of NYCB’s leadership web page via online archive.

Nicholas Munson, who led the bank’s risk effort, was listed among the bank’s executives in October 2023, but not in December.

“We can confirm that Nick Munson left the company in early 2024,” NYCB told the Financial Times in a Monday report. But the bank declined to say whether another executive had taken up the CRO post. The publication could not confirm why Munson left. Munson declined to comment to Bloomberg.

Likewise, NYCB’s most recent chief auditing officer, Meagan Belfinger, is listed on the October version of the bank’s website but not December’s. Belfinger also declined to comment to Bloomberg.

The departures, which the bank had not publicly announced, strike a parallel in that Silicon Valley Bank — which failed last year, spurring crisis of confidence in regional banks — had operated for nearly a year without a CRO ahead of its demise. . . .

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