NYCB shows signs of fragility after acquiring Sign

NYCB's stock price plummeted after a disastrous fourth-quarter earnings report and the departure of several top executives.

A series of worrying recent events at New York Community Bank (NYCB) has many Bitcoin investors anticipating another crisis in the U.S. banking sector, which could lead to a renewed flow of funds into the digital currency.

The bank's shares have fallen 41% in the past month, including a 28% plunge last Friday alone. As of writing, it's trading at $3.55, its lowest share price since 1996.

What happened to NYCB?

NYCB already suffered significant losses after it revealed in early February that CEO Thomas Cangemi had resigned. Effective February 6, Executive Chairman Alessandro DiNello has effectively become the bank's new leader.

On February 25, NYCB director Hanif “Wally” Dahya said in a letter that he “does not support the nomination of DiNello as CEO.” Dahya also resigned from the board of directors.

The latest development came late on Thursday, when the bank revealed that its previously disclosed fourth-quarter loss of $252 million had been revised tenfold to $2.7 billion.

The widening losses were related to a $2.4 billion non-cash impairment charge on "goodwill" related to decades-old transactions, which the bank said would not affect regulatory capital.

However, in a separate statement, bank management said it had identified "significant weaknesses in internal controls" due to "ineffective oversight, risk assessment and monitoring activities".

On Friday, NYCB sought to appease investors by announcing a new chief risk officer and chief accounting executive to compensate for the recent departures. According to Bloomberg, CEO DiNello added:

"The company has strong liquidity and a stable deposit base, and I am confident that we will execute our turnaround plan to increase shareholder value."

Banking Crisis 2.0?

NYCB was responsible for acquiring Signature Bank, a cryptocurrency-backed firm that was forced to close in March 2023 amid a wave of divestments that affected regional banks across the country.

Other major cryptocurrency banks, including Silvergate Bank and Silicon Valley Bank, were also forced to close at the time. When the US government chose to bail out the latter's depositors, the price of Bitcoin rose from $19,000 to $30,000 in the following days.

BitMEX co-founder Arthur Hayes posted to / #股价

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