NYCB Loses 7% of Deposits in Last Month

As troubling developments continue to seep out of New York Community Bank, so do the deposits.

NYCB disclosed on Thursday morning that it had $77.2 billion in deposits, Reuters reported. That represents a 7 percent decline from Feb. 5, when the bank counted $83 billion worth of deposits.

The withdrawal of money by panicked customers spelled doom for several banks last spring. Some landlords were pulling deposits, a source familiar with blank clientele said, but said that this is not another Signature Bank.

Still, the loss of nearly $6 billion in deposits over the course of a month isn’t the kind of news the bank needed after its wild Wednesday.

The bank’s stock plunged a staggering 47 percent by noon on Wednesday, prompting the New York Stock Exchange to halt trading of shares.

By the end of the day, NYCB announced a $1 billion equity infusion from a group of institutional investors, including former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital. The infusion led to a spike in the stock, only to slip significantly again only 20 minutes later.

Wednesday also brought another leadership change to the bank, which appointed former Comptroller of the Currency Joseph Otting to the role of chief executive officer, mere days after the bank replaced Thomas Cangemi with Alessandro DiNello, former leader of Flagstar Bank.

Part of the issue facing NYCB is the presence of rent-stabilized loans. The bank became the submarket’s largest lender upon Signature’s collapse last March, but it is a challenging market to navigate after the 2019 rent law change effectively capped revenues for rent-stabilized buildings, making it hard for owners to cover expenses such as debt service.

While observers wait to see how the chaos at NYCB gets handled — and if it spreads beyond the bank’s walls — the stock is again showing signs of life. In the first hour of trading on Thursday, NYCB’s stock rose roughly 12 percent.

— Holden Walter-Warner