New York Community Bancorp, a bank that has been going through a tough period recently, received a much-needed boost when insiders at the company purchased stock at prices not seen since 1997. This insider activity caused the stock to rally 17% at the closing bell on Friday.
The stock had been experiencing a decline in value since announcing a surprise loss on January 31. This was followed by a statement on the bank’s liquidity and the appointment of a new executive chairman. These events led to a series of ratings cuts from analysts, including a downgrade to junk by Moody’s.
However, the insider purchases brought some optimism to investors. Seven executives and directors of New York Community Bancorp bought a combined $865,170 worth of stock at prices ranging from $4.05 to $4.41 per share. Executive Chairman Alessandro DiNello, for example, purchased 50,000 shares at an average price of $4.19 each.
This insider buying activity is significant as the stock had not traded consistently at this level since 1997. It is also worth noting that the stock had lost about 60% of its value prior to these insider purchases.
Before this recent downfall, New York Community Bancorp’s stock had mostly stayed above $8 per share since 2000, with only brief dips in 2009 and 2020 during times of crisis in the U.S. stock markets.
The stock’s decline in value since January 30, just before the bank’s fourth-quarter loss disclosure, has been significant. It has lost 60.2% of its value, while the SPDR S&P Regional Banking (KRE) has fallen 11.1% and the S&P 500 has seen a modest increase of 1.6%.
Despite these challenges, New York Community Bancorp is taking steps to address its financial situation. The bank is looking to sell rent-regulated commercial real estate following its surprise quarterly loss. This move could potentially help improve its financial position and restore investor confidence.
Overall, the insider purchases at prices not seen since 1997 have provided a much-needed boost to New York Community Bancorp’s stock. While challenges still remain, the bank’s efforts to address its financial situation and the optimism from insider buying offer hope for the future. Investors will be closely watching how these developments unfold in the coming weeks.
