New York Community Bancorp (NYSE:NYCB)

Date: Apr. 29, 2024

• The main risk is persistent undervaluation until rent-controlled loans are sold/managed.
• Backed by heavyweights:
  • S.M. led a $1B stake in common.
  • New CEO (J.O.) is a former comptroller of currency.
  • Both are high-trust, public individuals.
• S.M. wouldn't enter just to lose money and J.O. has no interest in looking dumb or failing to turn things around, so new management/board has every incentive to work hard and resolve issues.
• Unknown factor in the loans it bought from Signature Bank, lots of subjective judgement involved on the part of the accountants.
• Also there is incoming dilution from new shares being issued for S.M.'s stake.
• The risk/reward is very favourable in my view (~$6.3 tangible equity per share after large reserve building against ~$3 price per share).