The Federal Deposit Insurance Corporation (FDIC) is selling its stake in New York Community Bancorp (NYSE:NYCB), which after taking assets from the failed Signature Bank (OTCMKTS:SBNY).
The sale will occur through a public underwriting. The offering will be held on May 19, closing before June 8. Barclays (NYSE:BCS) . NYCB is not selling any shares in the FDIC offering.
New York Community’s bank in Hicksville, on Long Island, acquired $38 billion of Signature Bank assets in March, . NYCB is up 59% since it acquired the assets. Its stock rose 5% overnight, opening at about $10.70 per share, representing a market capitalization of $7.3 billion.
Is There a Happy Ending for NYCB Stock?
Signature Bank’s collapse, which the FDIC now blames on
caused a regional banking crisis that is only now ebbing. The FDIC’s report said Signature’s investments in cryptocurrencies helped cause its collapse.
But Signature was also heavily involved in commercial real estate. That industry remains in crisis as demand for office space has fallen, with many employees working from home. The failed bank still has $60 billion in loans to sell. However, it is its commercial real estate team at the end of the month. The layoffs were announced as at a congressional hearing.
NYCB itself may be in good shape. Morgan Stanley has kept its on the stock. Michael Burry’s Scion Asset Management recently bought shares.
CEO Thomas Cangemi said the bank is curtailing real estate lending and Analysts are coming to the bank’s defense, calling it and lauding its .
What Happens Next?
The happy ending for NYCB is a sad one for the region’s commercial real estate business, which must now find .
On the date of publication, Dana Blankenhorn held no positions in any companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
