New Chairman, Credit Downgrade Impact Bank Stock

Moody's downgraded all long-term and some short-term rating and assessments from Baa3 to Ba2

Deputy Editor
Feb 7, 2024 at 8:59 AM
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Shares of New York Community Bancorp, Inc. (NYSE:NYCB) are rebounding from yesterday's 22.2% dip, last seen up 8.1% in premarket trading after a c-suite shakeup. Specifically, per the company's statement, the regional bank promoted Alessandro DiNello from nonexecutive chairman to chairman in order to work with the company's CEO to "improve all aspects of the Bank's operations."

In addition, Moody's last night downgraded all long-term and some short-term rating and assessments to Baa3 from Ba2, saying NYCB faced "multi-faceted financial, risk-management, and governance challenges." Coming into today, 10 analysts rate the security a "hold," with one a "strong sell," and five a "strong buy."

It's worth noting that the security's Schaeffer's Volatility Scorecard (SVS) sits at 96 out of 100, meaning it has exceeded option traders' volatility expectations during the past year -- a boon for options buyers. 

Following a disappointing Jan. 31 fourth-quarter report, New York Community Bancorp suffered a massive bear gap on the charts, followed by a series of losses that yesterday sent it to its lowest level since 2000. A month into 2024, NYCB sports a nearly 60% year-to-date deficit, with pressure looming overhead from all noteworthy short- and long-term moving averages.

It's worth noting that the equity's 14-day relative strength index (RSI) of 11.6 is firmly in "oversold" territory. This low of a reading typically precedes a short-term bounce.  


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