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FDIC Offers New York Community Bancorp's (NYCB) Shares
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New York Community Bancorp, Inc’s (NYCB - Free Report) 39,032,006 shares has been announced for sale by Federal Deposit Insurance Corporation (“FDIC”) in an underwritten public offering. The offering, which is expected to close on May 19, subjects to certain customary closing conditions.
Upon completion of the stock offering, FDIC is expected to own no share of New York Community Bancorp. NYCB is neither selling nor will it receive any share in the entire procedure.
FDIC received these shares as a consideration for NYCB’s acquisition of Signature Bank. The acquisition deal came after Signature Bank was closed by the regulators, following the collapse of Silicon Valley Bank.
New York Community Bancorp through its bank subsidiary, Flagstar Bank, had acquired $38 billion in assets and assumed $36 billion of liabilities of Signature Bank, from FDIC on Mar 20. It did not buy any digital asset banking, crypto-related assets or the fund banking business.
The deal is expected to facilitate Flagstar Bank’s transformation from a multi-family lender to a diversified full-service commercial bank. It is likely to increase the bank’s deposit base to around $91 billion, reducing the loan-to-deposit ratio to 88% from 120%.
Subsequent to this acquisition, NYCB planned to use its significant liquidity position to pay a substantial amount of its wholesale borrowing. Also, the addition of low-cost deposits is expected to reduce funding costs, which in turn, may expand the net interest margin (NIM). In fact, NIM for first-quarter 2023 was increased to 2.60% from 2.28% as on Dec 31, 2022.
Also, NYCB’s liquidity position was enhanced by $25 billion in cash received from the Signature Bank transaction.
When the deal was announced, management had expected the buyout to be accretive to earnings per share and tangible book value by 20% and 15%, respectively. In fact, the tangible book value per share jumped 20% sequentially to $9.86 at the end of first-quarter 2023.
Over the past three months, shares of NYCB have gained 8.4% against the industry’s 32.9% decline.
JPMorgan (JPM - Free Report) bought the bulk of First Republic’s $228 billion of assets (adding to its huge $3.7 trillion assets balance) and assumed deposits worth $92 billion by paying $10.6 billion earlier this month.
First Republic Bank was seized by FDIC after almost two months of efforts to save the flagging institution. The nation’s biggest banks, including JPM, had tried to support First Republic Bank by infusing $30 billion worth of deposits (in aggregate) to restore investors’ confidence in the banking system.
First Citizens BancShares, Inc.’s (FCNCA - Free Report) subsidiary, First-Citizens Bank & Trust Company, purchased all loans and other assets, and assumed all customer deposits and rest liabilities of Silicon Valley Bank, from FDIC. The transaction was structured as a whole bank purchase with loss-share coverage.
FCNCA’s subsidiary assumed Silicon Valley Bank’s assets worth $110 billion, deposits worth $56 billion and loans worth $72 billion on Mar 27.
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FDIC Offers New York Community Bancorp's (NYCB) Shares
New York Community Bancorp, Inc’s (NYCB - Free Report) 39,032,006 shares has been announced for sale by Federal Deposit Insurance Corporation (“FDIC”) in an underwritten public offering. The offering, which is expected to close on May 19, subjects to certain customary closing conditions.
Upon completion of the stock offering, FDIC is expected to own no share of New York Community Bancorp. NYCB is neither selling nor will it receive any share in the entire procedure.
FDIC received these shares as a consideration for NYCB’s acquisition of Signature Bank. The acquisition deal came after Signature Bank was closed by the regulators, following the collapse of Silicon Valley Bank.
New York Community Bancorp through its bank subsidiary, Flagstar Bank, had acquired $38 billion in assets and assumed $36 billion of liabilities of Signature Bank, from FDIC on Mar 20. It did not buy any digital asset banking, crypto-related assets or the fund banking business.
The deal is expected to facilitate Flagstar Bank’s transformation from a multi-family lender to a diversified full-service commercial bank. It is likely to increase the bank’s deposit base to around $91 billion, reducing the loan-to-deposit ratio to 88% from 120%.
Subsequent to this acquisition, NYCB planned to use its significant liquidity position to pay a substantial amount of its wholesale borrowing. Also, the addition of low-cost deposits is expected to reduce funding costs, which in turn, may expand the net interest margin (NIM). In fact, NIM for first-quarter 2023 was increased to 2.60% from 2.28% as on Dec 31, 2022.
Also, NYCB’s liquidity position was enhanced by $25 billion in cash received from the Signature Bank transaction.
When the deal was announced, management had expected the buyout to be accretive to earnings per share and tangible book value by 20% and 15%, respectively. In fact, the tangible book value per share jumped 20% sequentially to $9.86 at the end of first-quarter 2023.
Over the past three months, shares of NYCB have gained 8.4% against the industry’s 32.9% decline.
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Currently, NYCB carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Firms
JPMorgan (JPM - Free Report) bought the bulk of First Republic’s $228 billion of assets (adding to its huge $3.7 trillion assets balance) and assumed deposits worth $92 billion by paying $10.6 billion earlier this month.
First Republic Bank was seized by FDIC after almost two months of efforts to save the flagging institution. The nation’s biggest banks, including JPM, had tried to support First Republic Bank by infusing $30 billion worth of deposits (in aggregate) to restore investors’ confidence in the banking system.
First Citizens BancShares, Inc.’s (FCNCA - Free Report) subsidiary, First-Citizens Bank & Trust Company, purchased all loans and other assets, and assumed all customer deposits and rest liabilities of Silicon Valley Bank, from FDIC. The transaction was structured as a whole bank purchase with loss-share coverage.
FCNCA’s subsidiary assumed Silicon Valley Bank’s assets worth $110 billion, deposits worth $56 billion and loans worth $72 billion on Mar 27.