Customers are pulling their cash from NYCB, but it’s no bank run

Customers of New York Community Bank (NYCB) pulled $6 billion worth of deposits between February 5 and March 5, leaving the bank’s deposit base 7% lower, at $77 billion.

NYCB provided the updated figures on an investor conference call Thursday morning after it announced it secured a $1 billion investment from former Treasury Secretary Steven Mnuchin’s firm, Liberty Strategic Capital, among other private equity companies.

Before the company disclosed in a filing last Thursday it had identified “material weakness” in the company’s controls, there weren’t significant changes in the bank’s level of deposits, said Alessandro DiNello, NYCB’s outgoing CEO, appointed just last week.

“Friday was not a great day,” he said. “Over the weekend, Monday and Tuesday deposits were strong again.”

NYCB has been in crisis mode since the regional lender reported a surprise loss of $252 million last quarter, compared to a $172 million profit in the fourth quarter of 2022. That caused the stock to plunge, bringing it to its lowest level since 1997.

Additionally, NYCB was recently downgraded to junk status by both Moody’s Investors Service and Fitch Ratings. That’s significant because many depositors often require banks to have higher credit ratings considered “investment grade” to keep their money there.

On Thursday’s call, NYCB also announced it’s slashing its dividend to one penny a share. This comes after the company announced in January it was cutting its dividend from $0.17 a share to $0.05 a share.

Shares of NYCB opened 13% higher Thursday morning after a rollercoaster of a day Wednesday when the stock plunged more than 40% at one point.

This is a developing story and will be updated.