On Friday night, Fitch Ratings reduced NYCB and Flagstar Bank to 'BB+'/'B' from 'BBB-'/'F3'. The bank has been downgraded by Moody's and Morningstar DBRS since its earnings.
On Friday evening, Moody's reduced the NYCB's long-term issuer rating to 'B3' from 'Ba2,' citing Thursday's submissions. NYCB's flagship bank, Flagstar Bank, had its long-term deposits reduced to 'Ba3' from 'Baa2.'
According to Janney Montgomery Scott director of research Chris Marinac, the bank has undertaken many board and management changes to boost investor trust.
NYCB named financial services veteran George Buchanan chief risk officer and Collen McCullum chief audit executive on Friday. DiNello, appointed executive chairman last month, became president and CEO on Thursday.
DiNello was Flagstar Bank's CEO before NYCB bought it in 2022. "The appointment will be viewed favorably given DiNello's prior history of turning around Flagstar," said Raymond James analyst Steve Moss.
DiNello led Flagstar to withdraw a 2016 regulator consent order. NYCB's balance sheet exceeds the $100 billion regulatory barrier due to the acquisition of Flagstar and some Signature Bank assets, so it must follow tighter capital and liquidity standards.
As regional lenders' health was questioned, other U.S. regional banks' shares fell. Since NYCB's quarterly report on Jan. 31, the KBW Regional Banking index (.KRX) has lost nearly 10%, sliding 1.27% Friday.
J.P. Morgan analysts called NYCB's position unique. "We continue to view NYCB's situation as very specific and not representative of regional bank pressure and uncertainty," J.P. Morgan analyst Steven Alexopoulos said.
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