NYCB credit rating downgraded to Junk by Moody's

New York Community Bancorp (NYCB) appoints Alessandro DiNello, the former CEO of Flagstar Bank, as its executive chairman. This comes as the regional bank's credit rating was cut to Junk by Moody's. Yahoo Finance Live monitors NYCB's stock, which has fallen nearly 60% in 2024.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

- Regional bank turmoil growing, New York Community Bank appointing Alessandro Dinello as the lender's executive chairman this morning, the leadership change up coming after the regional lender's credit rating was downgraded to junk at Moody's.

Last week, the bank posted a surprise net loss in its fourth quarter earnings and slashed its dividend. Shares are trading at their lowest level in more than 20 years here. More on this announcement specifically from New York City Bank.

And as we're tracking shares here this morning, which have been seesawing, especially over the past few trading sessions here, in addition to continuing this role-- or this roll on the board, Dinello is going to be working alongside the current president and CEO to try and improve some of the aspects of the bank's operations.

But this does not kind of glide past the fact that you have some core executive roles that apparently had been empty even prior into going into this report as well or recently that kind of spells out some of the larger question marks investors still had this week and even prior to that as well.

- Yeah, Brad. They released a presentation here for investors this morning up on their site. That's also adding to some of the maybe improved sentiment, if we want to call it, that surrounding New York Community Bankcorp.

At least right now, the company saying that their liquidity here-- excuse me-- company deposits have increased since the end of last year. Liquidity remains, quote, "ample" is the word that they use to describe their position right now. So that's helping to alleviate at least some of the fears that have been surrounding the bank.

But again, when you take a look at that longer-term chart, the massive drop that we have seen play out in over the last several trading days-- that the stock off about 60% following their surprise announcement here. Just in terms of their positioning, given the risk of their-- tied back to the exposure of commercial real estate.

So again, this is really just setting some jitters off throughout the market there. People still are very familiar with what played out less than a year ago going back to last March, when we did see the failure of a couple of regional banks. Some fear that we could potentially see something similar now. Still way too early to begin discussing that.

But I think when you look at a drop like this of about 60% here over the last several trading days, it really points to the fact that investors are very nervous about the positioning right now. And you're also seeing that reflected in the analyst calls.

14-- at least 14 brokerages have either cut their price targets or lowered their ratings on the stock in the last week.

- Yeah, it'll be interesting to see how this impacts some of those key metrics, especially deposits, that was a larger headwind for many of the regional banks and if there will be any further consolidation that takes place. We'll see how New York City Bancorp continues to navigate this environment.