Some might have thought the worst was behind for bank stock New York Community Bancorp (NYSE:NYCB). Sadly, they would have been wrong. New York Community stock lost 42% at one point in Wednesday afternoon’s trading and was even halted for a time as new reports suggest the bank is desperately seeking cash. However, it ended up recovering and turning positive after it received funding.
Apparently, New York Community was on the prowl, looking for outside investors willing to pump a little dough into its sagging bottom line. This is perhaps the last thing anyone wants to hear a bank say, particularly for anyone who’s got deposits with such a bank. But part of the reason that New York Community was hurting was that it’s currently putting a lot of cash into its potential loan loss accounts. It didn’t help when Moody’s declared New York Community’s credit rating to be full-on junk status, making it that much tougher to find additional sources of funding.
A Last-Minute Reprieve
The good news, if it can be called that, is that it did manage to find a last-minute funding source, bringing in a full billion dollars in capital from a variety of venture capital firms. One of them is none other than former Treasury Secretary and “Suicide Squad” producer Steve Mnuchin, whose Liberty Strategic Capital took a stake in exchange for equity and for Mnuchin himself to land a board seat.
What Is the Fair Value of NYCB?
Turning to Wall Street, analysts have a Hold consensus rating on NYCB stock based on 13 Holds and one Sell, assigned in the past three months, as indicated by the graphic below. After a 76.4% loss in its share price over the past year, the average NYCB price target of $5.71 per share implies 36.6% upside potential.
