Gina Heeb

The downgrade is the latest blow to the besieged bank seeking to shore itself up after acquisitions and property losses. Recommended Stories

New York Community Bancorp closed a transformational deal in late 2022, buying mortgage lender Flagstar Bancorp to nearly double its size. Four months later, it struck again, buying parts of Signature Bank which had just been seized by regulators during a bank run. The deals catapulted NYCB from a relatively small lender focused on niche commercial real estate into the regulators’ group of big diversified commercial banks.

Bank shares dropped after [stronger-than-expected inflation data](https://www.wsj/economy/consumers/what-to-watch-in-the-cpi-report-will-inflation-fall-below-3-ffc5859a) diminished hopes that the Federal Reserve could soon deliver interest rate cuts that could relieve pressure on lenders.

Earlier this week, the North Carolina-based bank said it would sell its remaining stake in Truist Insurance Holdings to an investor group led by private equity firms Stone Point Capital and Clayton, Dubilier & Rice. Truist swung to a loss in the fourth quarter as higher interest rates hammered the bank. Moody’s Investors Service put the bank on review for a downgrade late Tuesday, saying the sale will mean Truist will be less diversified and have greater reliance on net interest income.

Regional bank stocks slid Friday, led by a roughly 20% decline in New York Community Bancorp's shares, [as signs of trouble at that bank](https://www.wsj/livecoverage/stock-market-today-dow-jones-03-01-2024/card/nycb-stock-sinks-after-bank-finds-material-weaknesses-in-loan-reviews-suwc4exadNQwHRtpYsv8) revived fears about the health of the sector nearly a year after three high-profile failures.

Bank stocks dropped Friday, led by a 23% decline in New York Community Bancorp after more signs of trouble at that lender and a smaller peer revived fears about the stability of the sector a year after a string of high-profile failures. NYCB disclosed late Thursday that management had identified “material weaknesses” in internal controls related to the way it monitors and assesses risk in its loan books. “That language is particularly troubling,” said Steve Moss, a director at Raymond James.

Struggling lender has contacted investment firms on potential equity raise New York Community Bancorp is seeking to raise equity capital in a bid to shore up confidence in the troubled regional lender.

Megabanks' mortgage businesses are still in the doldrums, even after a brief retreat in rates at the start of the year. + First-quarter originations were up 16% from a year earlier at JPMorgan, but down 38% at Wells Fargo. + Citigroup said originations in its consumer bank fell 6%.

JPMorgan Chase Wells Fargo and Citigroup all reported better-than-expected first-quarter profits and revenues, and executives said consumers and businesses are healthy. JPMorgan said its first-quarter profit rose 6% to $13.42 billion, while Wells Fargo earned $4.62 billion and Citigroup earned $3.37 billion, down 7% and 27%, respectively. JPMorgan shares fell 6.5% to $182.79, its biggest percentage decline in nearly four years.

Shares of regional banks fell after some of the larger players reported double-digit profit declines in the first quarter. **PNC Financial** said net income fell 22% from a year earlier to $1.2 billion, or $3.10 a share. At **M&T Bank**, net income dropped by a quarter to $505 million, the bank said Monday.