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A new report has caused New York Community Bank’s stock price to plummet.
new york
CNN
—
Shares of New York Community Bank (NYCB) plunged more than 40% Wednesday afternoon after the Wall Street Journal reported that the troubled community financial institution was seeking a large infusion of capital.
The report, citing people familiar with the matter, said bankers were actively working to “gauge investor interest in purchasing the company’s stock.”
At approximately 12:30 p.m. ET, the stock was suspended from trading pending impending news.
All of this raises further questions about whether the Long Island-based bank is seeing depositors withdrawing their funds.
The bank is under immense pressure after reporting an unexpected loss last quarter due in part to a deterioration in commercial real estate loans. And last week, the bank announced in a filing that it had identified “material weaknesses” in its management. NYCB said the issue cost shareholders $2.4 billion in the last quarter.
We have postponed the publication of our annual financial disclosure requirements, known as a 10-K, to focus on addressing the issues we have identified. The bank said it currently plans to file the 10-K by March 15. Unless the company provides additional updates, the 10-K will be the most up-to-date source of information on whether depositors are withdrawing their funds. The delay bears eerie similarities to First Republic Bank, which postponed reporting its quarterly results just before it collapsed last year.
First Republic Bank similarly needed an emergency cash injection shortly before it went bankrupt.
NYCB did not immediately respond to CNN’s request for comment, and the U.S. Treasury Department declined to comment.
On top of that, the bank has been in turmoil, causing an uproar at its board meeting last week. The bank has announced the resignation of Alessandro Dinero, recently appointed chairman, president and CEO and independent director, over his opposition to the promotion.
At less than $2 a share, the stock is near all-time lows. It has fallen more than 80% since the beginning of the year.
This is a developing story and will be updated.
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