Is New York Community Bancorp the Best Dividend Stock for You?
Regional banks were hammered in early 2023, thanks to troubles at a small number of banks. New York Community Bancorp (NYSE: NYCB) was actually one of the better performers through that difficult and uncertain period. But when the bank reported full-year 2024 earnings, it shocked investors by cutting the quarterly dividend from $0.17 per share to just $0.05. That's a 70% decline in the dividend -- and a warning sign that this may not be the right dividend stock for conservative investors.
In early 2023, fast-rising interest rates created a timing problem for some banks. They had bonds on their balance sheets that were intended to be held to maturity, but the value of those bonds had declined because of the swift change in rates. If the assets had been held to maturity, there would have been no problem, but for various reasons a small number of banks experienced a high level of customer withdrawals. That required these banks to sell the bonds that had fallen in value and, thus, they were suddenly not as well capitalized as investors thought.
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Source Fool.com