NYCB discloses loan sales, looks to integrate Signature into financial reporting

NYCB had earlier this month said it was getting interest from non-bank bidders for some of its loans and will outline a new business plan in April as it cut its dividend again and disclosed deposits fell 7%. The lender had on Feb.29 delayed its annual report as it revised its quarterly loss 10 times higher than earlier due to a goodwill impairment charge and warned of "material weakness" in internal controls.

New York Community Bancorp said on Thursday it had sold some loans at a gain and was working to integrate collapsed lender, Signature Bank, into its financial reporting process.

The bank said its first quarter will include the sale of consumer loans worth $899 million on March 13 and a commercial co-operative loan in late February. NYCB's stressed loan book due to its exposure to commercial real estate has led investors and analysts to worry that potential defaults due to high borrowing costs and low occupancy rates would trigger a contagion.

The lender's multi-family portfolio includes properties subject to rent control regulations, which limit landlords' freedom to increase rents when interest rates remain high. NYCB had earlier this month said it was getting interest from non-bank bidders for some of its loans and will outline a new business plan in April as it cut its dividend again and disclosed deposits fell 7%.

The lender had on Feb.29 delayed its annual report as it revised its quarterly loss 10 times higher than earlier due to a goodwill impairment charge and warned of "material weakness" in internal controls. It followed a surprise quarterly loss and a 70% dividend cut in January. NYCB last week named Joseph Otting, former Comptroller of the Currency in the Trump administration, as CEO as part of a $1 billion capital injection from a group of investors that included former Treasury Secretary Steven Mnuchin.

Developments related to the capital infusion came about a year after the failures of Silicon Valley Bank and Signature Bank, which precipitated the regional banking crisis. The lender also estimated a rise in the special assessment fees by the Federal Deposit Insurance Corporation to cover a hole in the deposit insurance fund that was drained in the regional banking turmoil of March 2023, but said it was not expected to be material.

Shares of NYCB reversed course to trade 1.9% lower on Thursday.

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