This earnings report highlights the huge drag that the cost of borrowed funds is having on NYCB's NIM & EPS. They are paying 2.66% for $15 billion in borrowed funds, while paying less than 0.4% on their $22 billion in deposits!
NYCB may reach the $50 billion asset threshold by the end of this year organically (they are at $46.7 billion currently). It surely looks like now is the time for NYCB to acquire a deposit-rich franchise. If they are going to have to adhere to the $50 billion+ rules anyway, they will be far better off getting there through a strategic purchase rather than by simply backing into it.
I don't know whether the borrowed funds issue is the cause of today's weakness. However, Joe F has spoken several times about his desire to make an acquisition that will put NYCB over the $50b threshold & be accretive to earnings. He's been quizzed by analysts about the regulatory implications of such an action on NYCB's dividend level (which I'm sure he wants to maintain). He contended that there shouldn't be an impact (not the same as there won't be).
In my view, the fact that there hasn't been an acquisition recently suggests to Wall St that there may be a regulatory issue at work. Otherwise, the benefits of replacing borrowed funds with deposits would have prompted a buy-out by now. Perhaps that's contributing to the weakness in the stock, despite its good earnings this quarter. (Personally, I think AF would be a great fit; but it may not be for sale ).