NYCB stock just popped 10%: what happened?

New York Community Bancorp (NYSE: NYCB) just named Alessandro DiNello its executive chairman – effective immediately. Shares of the financial services company are up 10% in premarket.

NYCB stock has been hit hard

DiNello was so far with NYCB as its non-executive chairman, as per the press release on Tuesday.

In his new role, he is now tasked with stabilising operations at the New York Community Bancorp that has been hit hard in recent sessions after reporting an unexpected loss for its fiscal fourth quarter.

The bank holding company also trimmed its dividend by an alarming 71% to beef up its cash stature last week – a move that pushed Moody’s into cutting it to junk as Invezz reported here.

NYCB stock is down over 50% versus its year-to-date high even after the gain this morning.

NYCB says it has sufficient liquidity

Note that New York Community Bancorp does not expect the credit rating downgrade to materially affect its contractual agreements.

Its unaudited financial update this week also confirmed that the bank has sufficient liquidity for uninsured deposits. 72% of the total deposits, it added, are insured/collateralized in the first place. According to CEO Thomas Cangemi:

We took decisive actions to fortify our balance sheet and strengthen our risk management processes during Q4. Our actions are investment in enhancing a risk management framework commensurate with size and complexity of our bank.

New York Community Bank is currently searching for a new chief audit executive and chief risk officer with ample banking experience. Wall Street currently rates NYCB stock at “hold”.