CVNA - New York Community Bancorp: Hardly The Opportunity Of A Lifetime
2024-03-05 07:57:05 ET
Summary
- New York Community Bancorp's stock price has dropped over -20% on March 4, bringing its year-to-date performance to -71%.
- Banks generally rely on stakeholder faith, good management, and liquidity to be successful, but these main pillars are crumbling fast for NYCB.
- The bank's net interest margin is decreasing, and its loan portfolio yield is slow to change, leading to concerns about its profitability in 2024.
- NYCB is now rated junk by both Moody's and Fitch, leading to an ever-increasing cost of funds and pressure on transactions and liquidity.
- The bank's new CEO was contested by a former member of the NYCB's management committee, which subsequently left.
Thesis
It is surprising to see the market shrug off so easily another slow motion train wreck as witnessed in the New York Community Bancorp's ( NYCB ) stock price. The name was down over -20% on March 4th, bringing its year to date performance to a staggering -71%:
Banks rely on faith to exist, and NYCB is losing that quite fast. In fact (as we are going to further explore in this article) banks rely mainly on three pillars in order to be successful:
- faith (of all involved stakeholders - i.e. depositors, counterparts, borrowers)
- good management
- liquidity