New York Community Bancorp (NYCB), which purchased the collapsed crypto-friendly Signature Bank last year, showed a massive drop in shares after the company reported it had incurred a $260 million loss in the fourth quarter of 2023 and reduced its dividend. 

In March 2023, Signature Bank officially closed down and was taken over by the New York Department of Financial Services (NYDFS). A week after the collapse, the NYCB swooped in to buy the non-crypto deposits and loans of the failed bank. 

On March 20, the United States Federal Deposit Insurance Corporation (FDIC) announced that Signature Bank’s 40 branches will operate as Flagstar Bank , a wholly-owned subsidiary of the NYCB.

Today, we entered into an agreement with a subsidiary of New York Community Bancorp, Inc., to purchase and assume deposits and assets out of Signature Bridge Bank. Read more ➡️ https://t.co/bSshY93lBh . pic.twitter.com/b9RBvYtGF7

— FDIC (@FDICgov) March 19, 2023

Following its acquisition of Signature Bank, the NYCB stock went up to $9.19 on March 21, even going up to a high of $13.87 on July 31. NYCB president and CEO Thomas Cangemi said that the assets and liabilities of Signature Bank were “strategically and financially attractive.” The executive described buying Signature Bank as a "unique opportunity.” The executive said it strengthened their balance sheet by “adding a significant amount of low-cost deposits and a middle-market business supported by over 130 private banking teams.” 

However, a recent sell-off erased all of the stock’s gains from its Signature Bank acquisition. On Jan. 31, NYCB released its report for the last three months of 2023. Within the quarterly report, the company shared that it lost $260 million in the quarter, down from 2022’s $164 million gain in the same time period. NYCB president and CEO Thomas Cangemi announced that they “took decisive actions to build capital,” and this includes reducing its quarterly common dividend to $0.05 per common share.  

New York Community Bank plunges 40% after reporting $260M loss image 0 NYCB shares dropped 40% after releasing its quarterly report. Source: TradingView 

Following the announcement, the NYCB stock dropped from $10.37 to a low of $6.34 on Jan. 31 before slightly recovering to $7.12. At the time of writing, the stock price is at $6.49, according to stock analysis platform TradingView.

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In May 2023, FDIC chairman Martin Gruenberg said in a hearing that the Signature Bank collapse last year stems from its failure to understand risks associated with crypto. However, other parties disagreed that the collapses had anything to do with crypto at all. On April 5, NYDFS superintendent Adrienne Harris said that the collapse of Signature Bank had nothing to do with its exposure to digital assets .

In May, United States Senator Cynthia Lummis lashed out at former Signature Bank executive Scott Shay for blaming the banks collapse on crypto. According to Lummis, the executive has been deflecting blame onto digital assets and haven't accepted any blame himself.

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