Worry over the Div & SIFI (systematically important financial institution AKA Too Big To Fail)
If and when NYCB crosses over the line of $50B in assetts(currently at $45B), they become a SIFI in the eyes of the government. They will be subjected to extra government oversight. One of these oversights will be that they will then have to get approval for their Div payout. Typically the Gov approves Divs in the 30-35% range. NYCB has been giving out 93% in Div. This all leads to alot of speculation on the Div shrinking and volatility in price.
My opinion on this is, that while most times a company shrinks its Div because of financial weakness, NYCB could be forced to shrink its Div because of financial growth and strength! So, a Div decrease might lead to a short term drop in price, as high Div seekers flee, but not a drop in value!
I am 82 yrs old Somewhat familiar to LISTENING This mornings conference call JOE F clearly said that the dividend would be secure even if they passed the 50 B dollar remark He said they were in constant communication with the regulators... My listening also indicators that a deal will be done before the end of the year
This is a bank that did not require a government bailout and does not do investment banking or any of the riskier actions that a BAC does. Should they get into the SIFI area - and there are other ways around that -
the govt rules might not be as bad as how they are treating the banks that needed a bailout.