Months ago I was going to invest in this bank. Then I read an article that said the bank is reaching the size where the government can control dividend payouts. I figured anytime the government gets their hands in the pie they will mess it up, so I did not invest. Like the bank though
I don't think it is at all a concern for investors but it could in fact happen any day.
The situation is the following:
Firms over $50 billion in assets are subject to control by the FSOC, and NYCB is just a little under that total. There is significant discussion about a potential acquisition, and if it is at all materiel to total assets, will put NYCB over the $50 billion mark. Then the FSOC could potentially restrict the amount of dividends that NYCB pays.
(a) no guarantee that an acquisition is made any time soon.
(b) if one is made, management has said it will be accretive to earnings, and thus should improve the cover ratio of earnings to dividends.
(c) even if the cover ratio stayed at close to 100% of earnings, there is no reason to be sure that FSOC would restrict dividend payouts as NYCB is in fact a fairly conservative business that is neither a threat to the country's financial stability or to its own stability.
Full disclosure: bought in at 14.45 2 years ago, accumulating additional shares through dividend share purchases. Holding until stock reaches 30 unless there is a short-term surge to 20 or crash to 10.